Social Economy: The Logic of Capitalist Development (Routledge Frontiers of Political Economy, 8)

SOCIAL ECONOMY Is socialism the antithesis of capitalism, or does it arise through the process of capitalism itself? Contrary to much Marxist thought, Everling does not view socialism as the antithesis of capitalism and argues that socialism is, among other things, an objective development of capitalism. As capitalism develops, it creates the premises for social development which are also the bases for a socialist and democratic construction of society. Drawing on economics, urban geography, political theory, and Marxism, Social Economy: • examines the evolution of capitalism from its early industrial form to its present urban and global ones; • shows how Marx understood the economy as a unity of production, distribution, exchange, and consumption engaged in social reproduction; • explores the contradictory evolution of US corporations and urban development from 1945 to the present; • argues that urban space involves requirements for social and individual reproduction which extend well beyond limits inherent in transnational corporate private appropriation. Using his unique arguments, Everling makes the case that economic expansion can now best be secured by forms of development that take us beyond the limits of capitalism and point towards a democratic and socialist society. Clark Everling is a Professor at Harry Van Arsdale Jr School of Labor Studies, Empire State College, State University of New York. He has written articles on trade unions, politics, and Marxism. He is a lifelong civil rights, trade union, and political activist and has been a labor educator for the last 25 years.

ROUTLEDGE FRONTIERS OF POLITICAL ECONOMY 1 EQUILIBRIUM VERSUS UNDERSTANDING Towards the Rehumanization of Economics within Social Theory Mark Addleson 2 EVOLUTION, ORDER AND COMPLEXITY Edited by Elias L.Khalil and Kenneth E.Boulding 3 INTERACTIONS IN POLITICAL ECONOMY Malvern after Ten Years Edited by Steven Pressman 4 THE END OF ECONOMICS Michael Perelman 5 PROBABILITY IN ECONOMICS Omar F.Hamouda and Robin Rowley 6 CAPITAL CONTROVERSY, POST KEYNESIAN ECONOMICS AND THE HISTORY OF ECONOMIC THEORY Essays in Honour of Geoff Harcourt, Volume One Edited by Philip Arestis, Gabriel Palma and Malcolm Sawyer 7 MARKETS, UNEMPLOYMENT AND ECONOMIC POLICY Essays in Honour of Geoff Harcourt, Volume Two Edited by Philip Arestis, Gabriel Palma and Malcolm Sawyer 8 SOCIAL ECONOMY The Logic of Capitalist Development Clark Everling

SOCIAL ECONOMY The logic of capitalist development

Clark Everling

London and New York

First published 1997 by Routledge 11 New Fetter Lane, London EC4P 4EE This edition published in the Taylor & Francis e-Library, 2005. “ To purchase your own copy of this or any of Taylor & Francis or Routledge’s collection of thousands of eBooks please go to http://www.ebookstore.tandf.co.uk/.” Simultaneously published in the USA and Canada by Routledge 29 West 35th Street, New York, NY 10001 © 1997 Clark Everling All rights reserved. No part of this book may be reprinted or reproduced or utilized in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloguing in Publication Data Everling, Clark, 1943– Social economy: the logic of capitalist development/ Clark Everling. (Routledge frontiers of political economy, ISSN 1359–7914; 8) Includes bibliographical references and index. 1. Capitalism—History. 2. Socialism—History. 3. Marxian economics. I. Title. II. Series. HB501.E79 1996 96–20205 330.12′2–dc20 CIP ISBN 0-203-44278-4 Master e-book ISBN

ISBN 0-203-75102-7 (Adobe e-Reader Format) ISBN 0-415-15336-0 (Print Edition)

To Ruth, Arthur, Janie, and Elana

CONTENTS Acknowledgements

vii

1

A THEORY OF THE SOCIAL ECONOMY

2

CAPITAL AND IMPERIALISM

20

3

THE PREMISES FOR POST-SECOND WORLD WAR IMPERIALIST EXPANSION

34

FROM THE MARSHALL PLAN TO INTERNATIONAL PRODUCTION

53

5

THE POSTWAR SYSTEM AGAINST ITSELF

68

6

DRAWING THE LINES: ECONOMIC INTERNATIONALIZATION AND SOCIAL POLARIZATION

85

4

7 8

1

SOCIAL AND ECONOMIC CONSTRAINTS/SOCIAL NECESSITIES AND POSSIBILITIES

103

THE SOCIAL ECONOMY, ECONOMIC DEVELOPMENT, AND SOCIALISM

115

APPENDIX: THE LOGIC OF DIALECTICAL MATERIALISM

126

Notes

141

Bibliography

153

Index

161

ACKNOWLEDGEMENTS The publishers indicated granted permission to quote from the following works: Cuomo Commission (1992) America’s Agenda: Rebuilding Economic Strength, Armonk, NY: Sharpe. Dicken, Peter (1988) Global Shift: Industrial Change in a Turbulent World, London: Paul Chapman. DuBoff, Richard (1989) Accumulation and Power: An Economic History of the United States, Armonk, NY: Sharpe. Garver, Newton and Lee, Seung-Chong (1994) Derrida and Wittgenstein, Philadelphia, Penn.: Temple University. Gottdeiner, Mark (1985) The Social Production of Urban Space, Austin, Tex.: University of Texas. Hanreider, Wolfram (1989) Germany, Europe, America: Forty Years of German Foreign Policy, New Haven, Conn.: Yale University. Kolko, Joyce (1988) Restructuring the World Economy, New York: Pantheon. Maier, Charles (1975) Recasting Bourgeois Europe: Stablization in France, Germany, and Italy in the Decade After World War I, Princeton, NJ: Princeton University Press. Marx, Karl (1976a) “Contribution to the Critique of Hegel’s Philosophy of Right,” in Karl Marx and Frederick Engels Collected Works (Vol. 3), New York: International. ——(1976b) “The Economic and Philosophical Manuscripts of 1844”, in Marx and Engels Collected Works (Vol. 3), New York: International. ——(1986) “Grundrisse,” in Marx and Engels Collected Works (Vol. 28), New York: International. Marx, Karl and Engels, Frederick (1968) The German Ideology, New York: International. Mishel, Lawrence and Frankel, David (1991) The State of Working America 1990–91, Armonk, NY: Sharpe. Reich, Robert (1991) The Work of Nations: Preparing for Twenty-first Century Capitalism, New York: Knopf. Rockmore, Tom (1992) On Heidegger’s Nazism and Philosophy, London: Harvester. Simons, Henry (1946) Economics for a Free Society, Chicago: University of Chicago. Sweezy, Paul and Bettleheim, Charles (1968) The Transition to Socialism, New York: Monthly Review.

1 A THEORY OF THE SOCIAL ECONOMY The whole question of socialism, and a central one for Marx, is the question of its origins. From where and under what circumstances does socialism arise? Does it arise through the processes of capitalism itself, and, if so, how? Or is capitalism entirely antithetical to socialism so that we must think of socialism as proceeding only through the creation of social relations entirely alien and opposed to capitalism, outside of and subsequent to capitalism? If we affirm this second approach, as has most of Western Marxism during the twentieth century, then socialism today, in this era of global capitalism, must seem very far away indeed (Eagleton 1991:146).1 Yet if we take the first approach, then where and how can socialism come to exist? How can the politics for socialist democracy, which Marx envisioned in his writings, be said to have any foundations within the present processes of capitalist development? I argue throughout this book that socialism is, among other things, an objective development of capitalism. That is, as capitalism develops it creates the premises for social reproduction which are also the bases for a socialist and democratic construction of society. Because capitalist private appropriation is more and more antithetical to social requirements, even as it extends them in its own reproduction, capitalism makes socialism both possible and necessary. Socialism requires the reproduction of social relations according to developed human requirements in their own right, independent of the requirements of private appropriation. The creation of common social requirements is the promise of capitalism, what Marx called its “historical task” (Marx 1986b, vol. III: 250). At the same time, however, because of its opposition to the very social requirements which its own concentration and centralization presuppose, capitalism becomes more reliant upon social exclusion and repression for its reproduction. This, in its most essential form, is capitalism’s threat to the human future. In this regard, the tasks of building socialism require a recognition that we, as human beings, are the creators of both sides of this opposition. The increasingly social character of capitalism requires the complicity of all of us in the political and social relations necessary to its reproduction. It is not my purpose in this book to discuss the details of a socialist economy or to present a “plan” for socialism. Nor will I elaborate here the social and political organization for achieving socialism or the role of the working class in this regard. Rather, my purpose is to show how the basis for socialism emerges, and is emerging, within the capitalist economy. I do this by examining the capitalist economy as a relation of social practical activities in the processes of human social reproduction. This, at least, has the virtue of assailing some of the notions that capitalists, the market, profit, and supply-side determined investment are at the core of economic development. It is my thesis in this book that economic development happens as a process of social development, through social reproduction as determined within a certain mode of existence. Capital and its priorities determine this mode of existence. But capital does this

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only by establishing a series of social relationships which form themselves as the bases for human social and individual reproduction. These social relationships form the bases for the organization of urban space which capital creates as the universal form of social reproduction. As capital develops its economy, and most especially its urban forms, the social content of that economy expresses itself in three major ways. First, the capitalist economy forms itself as a unity of production, distribution, exchange, and consumption. These are mutually created unities which arise and develop through the social interactions involved in urban development. Second, these unities are expressed in economies of scale, scope, and transaction costs. These economies arise from the social unities of production, distribution, exchange, and consumption. Corporations appropriate and build upon these social unities for their own cost advantages and seek to limit them to capital’s own forms of accumulation and appropriation. But seen from a social perspective, corporations and capital are themselves social products and have social requirements increasingly for their own content. Third, the social expansion of capital and urban space create universal forms of social requirements for human social and individual reproduction, including neighborhoods, housing, education, health care, recreation, and leisure. The more capital extends social requirements as it makes urban space universal in its forms, the less capital can develop these forms for all those who depend upon them. It is for this reason that capital becomes more and more antithetical to its own social requirements and to social reproduction as a whole, even as capital itself builds upon these forms. But it is for this reason, also, that the social economies and requirements for human social and individual reproduction which emerge through capitalism represent the objective bases for the creation of socialism. Social requirements under capitalism, of course, appear primarily in the form of commodities. To state that social relations carried on as commodity relations are irrational and vacuous, as do Paul Baran and Paul Sweezy (1966:336–67), among many others, is also captured in Marx’s concept of the fetishism of commodities. This perspective is correct, but it is also tautological since fetishism is the nature of commodity relations. More important, this perspective misses Marx’s other, and larger, concept of socialization. Understanding socialization means understanding the social requirements and developments which make commodities possible in given forms. Commodities are always a form of social organization involving ever wider connections among people. Marx argues that capitalist socialization develops as production, distribution, exchange, and consumption form ever deeper social unities through one another; as activities within each of these are subject and object for one another in the reproduction of human existence. These are subject as objective bases for human activities, i.e. for human subjective activities in our reproduction as human subjects in this form. And they are object as capital is the condition for those activities, i.e. as capital organizes human subjective activities in the processes of its own reproduction. I will summarize that unity of production, distribution, exchange, and consumption as it develops under capitalism and unifies urban social space as the bases for human individual and social reproduction. Capitalism makes urban space the primary condition for the reproduction of commodities and for the reproduction of human individual and social existence.2 Each level of development of commodity production and exchange involves new forms and levels of social reproduction. Capitalism develops through the exchange and

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production of commodities. But, as it does so, it develops also as a system of social reproduction. Capital in its development toward its early industrial forms defined urban social space as a relationship between the production and exchange of commodities. As capital developed commodified labor power to produce those commodities it also, consequently, created that urban space as a place for residence as well as for employment and work. Dependence of workers upon commodities made their needs an object for production and defined production as social production, increasingly industrial in its forms. Urban residential space required the development of housing and the production of physical infrastructure. Urban housing developed into a particular form as neighborhoods. By the beginning of the twentieth century, neighborhoods were themselves produced as large units for development within urban and suburban space. Production for urban infrastructure, neighborhoods and households then came to define the objects for capitalist production. Throughout the twentieth century,capitalist production, services, and technologies have more and more integrated themselves within, and defined, urban space. Urban space develops as the basis for capitalist reproduction and for human individual and social reproduction. Urban space forms unities with production as it furnishes the objects for production. These objects include the production of commodities for social and personal consumption, infrastructure, houses, household needs, whole neighborhoods, and social requirements beyond the household such as education, health care, recreation, and leisure. Urban space defines the products for production as conditions for its own reproduction. Each of these products and social requirements mentioned develops because it responds to certain needs of people within that common space for their social and individual reproduction. Capital defines the conditions for the development of urban space at all of its stages, but social and individual reproduction within that space increasingly cannot take place except on the basis of the conditions for life within urban space. As capital builds urban social space, it increasingly integrates itself within that space. Repeated production for urban space redefines production because it allows a concentration and centralization of the processes of production and corresponding technologies. At the turn of the twentieth century, this took the form of mass production assembly line technologies. Late in this century, this takes the form of computer-based technologies. Each of these reflected its development as a further refinement of production technologies in response to further refinements in products and further unities of production, distribution, exchange, and consumption. These unities are formed as economies of scale, scope, and transaction costs. Scale economies are achieved through the ability to lower the production or distribution costs of a single item through the increased capacities of processes within a single facility. These economies may be accomplished through increased output or a decrease in unit costs. Scope economies result from the reduction of costs among a variety of related items or multiple phases of production or distribution processes, through the increased capacities of a single facility. Scope economies presuppose scale economies because the former are the result of varieties which arise through the increased capacities of processes creating scale economies. Monopoly corporate assembly lines are a classic example of scale economies, such as in the automobile industry during most of the twentieth century. Varieties of products utilizing the internal combustion engine and assembly line

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processes, such as automobiles, trucks, buses, and tanks, are examples of scope economies (see Chandler 1990). Transaction costs arise in the transfer of goods or services from one operating unit to another (see Williamson 1985). Reductions of costs in production, such as through corporate internalization of supplies of rawmaterials or the movement of production into a single facility which achieves scale and/or scope economies, means that transaction costs move beyond the production processes themselves (i.e. where lowered transaction costs have already been attained) and into distribution where, for example, the ability to distribute large volumes of products must then be achieved. Lower transaction costs in distribution are accomplished, also, in part, by improvements in the abilities of consumers to exchange (e.g. money and credit facilities), and consume (e.g. the existence of a socially identified need, such as an automobile for urban transportation). Successive reductions of the costs of transactions in all these connections inform, modify, and redefine production in its ability to produce greater volumes and varieties. Computerbased production technologies achieve increased scale, scope, and transaction cost economies simultaneously through the ability to use single processes to produce almost any desired volume at low costs and in several varieties and through the ability to reduce the times involved in relations between production, distribution, exchange, and consumption. In the average chain clothing store, such as the Gap or the Limited, for example, the turnover time between customer purchase, computer communication of a reorder, manufacture, and resupply to the store is one week. These economies exist as bases for capitalist concentration and centralization because they are formed as a result of ever closer unities among production, distribution, exchange, and consumption. But those economies and those unities are also results of the development of urban space as the condition for human individual and social reproduction. Scale economies arise from repeated production for use within urban space, which refines both products and technologies. Scope economies arise from the interrelations of products and processes according to developed requirements within urban social existence. Transaction cost economies arise from the unities of production, distribution, exchange, and consumption as these develop through one another as the development of urban social space reflects ever more definite identities between production and consumption. These identities between production and consumption exist because urban space becomes ever more standard in its forms of reproduction of individual and social existence. By the late twentieth century, the forms for that reproduction are standardized within neighborhoods which include housing, education, health care, recreation, and leisure. But the more urban space multiplies its requirements for individual and social reproduction, the less capital in its concentrated and centralized forms provides within that common environment. Capital builds its concentration and centralization upon these requirements for human social and individual reproduction. But for capital these arerelations of commodities, money, and profit. Conversely, the more urban space develops standard forms for human individual and social reproduction, the more economies of scale, scope, and transaction costs arise through unified relationships of production, distribution, exchange, and consumption, and the more technologies of production and communication create relations of direct production for direct consumption, the more these are only commodity relations in the final analysis. They are

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ever more transparently social relations among people within a human-made environment of shared social space and shared requirements for human individual and social reproduction. They remain commodities because capital uses its economic, political, and social power to make and keep them commodities. I will first outline the principal elements in the evolution of human productive and social relations, then I will discuss the arguments that I present in this book as to the opposition between capitalist private appropriation and socialization.

THE SOCIAL PRODUCTION OF EXISTENCE Human existence is always social existence. Production, like language or any other human activity, exists for oneself because it exists for others. Production is always done by social individuals producing in society. Thus, the individual is a historical result rather than a starting point for investigating the development of production and human sociality. Marx calls the isolated individual, “Robinson Crusoe,” the unimaginative creation of eighteenth-century economists, who merely substituted the bourgeois individual of their own day for the historical human individual. The individual producing for him or herself in isolation, Marx states, is rare, and its occurrence always presupposes a certain level of human social development. Similarly, the individual of bourgeois society has that individuality as a result of her or his social presuppositions. Individuality is always created through the forms of social production and reproduction which make individuality possible in that way, in that form, at that time (Marx 1986a:18–19). Social relations in a given society are created by the ways in which those relations form places and purposes in the production and reproduction of that form of human existence. Human existence depends upon social production. Social relations develop from the general to the particular as they differentiate themselves within the processes of social production. Social divisions of labor, Marx and Engels tell us in The German Ideology, are only various forms of possession or ownership. The bases for differentiation between manual and mental labor necessary for expanded social production have also been the bases for the rule of the few over the many. For example, Marx and Engels state: The first form of property is tribal property. It corresponds to the undeveloped stage of production, at which a people lives by hunting and fishing, by cattle-raising or, at most, by agriculture. In the latter case it presupposes a great mass of uncultivated stretches of land. The division of labor is at this stage still very elementary and is confined to a further extension of the natural division of labor in the family. (Marx and Engels 1968:9) Agriculture, therefore, represented not only the tilling of the soil, but a division of mental and manual labor which made possible concepts of “cultivated” and “uncultivated” land and the planning for the use of that land as a form of production. Agriculture was not simply farming in general but a specific historical form in which agriculture was created through the family. The patriarchal division within the family was the basis for the division of labor within agriculture. In this particular form, agriculture and the family

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share direct and mutually creative identities. But agriculture was also the limit to those identities because, as Marx and Engels suggest here, the division of labor necessary to the development of agriculture extended well beyond the family. Agriculture was a means of accumulating wealth for the family and the family was simultaneously a limit to that accumulation. At the same time, agriculture relied upon the division of labor within the family and it was only from within the family and its activities that the division of labor could be further extended. This further division, consequently, was achieved by the social transformation and extension of patriarchy. Patriarchy, as embodied in the slavery already implicit in family relations, became the management, also, of social slavery. As Marx and Engels summarize these developments: “The slavery latent in the family only develops gradually with the increase of population, the growth of wants, and with the extension of external intercourse, both of war and of barter” (1968:21–2). The more the family strains at its limits to make agriculture the basis of its existence, the more the land occupied by the society is redefined as a vast preserve of cultivated and uncultivated land. The need for extended land cultivation changed relations with neighboring tribes. Slaves, as prisoners of war, became the bases, simultaneously, for both the extension of agriculture and for the further extension of patriarchal social relations. The point is that all of these relations were reproduced as universal and particular relations through one another. Their social reproduction on a new basis was, thus, not only their repetition, but also their extension and development in a new form and content (Marx and Engels 1968:8–10).3 The social division of labor through agriculture and slavery made possible the separation of country and town so that the latter involvedcommon forms of social and mental independence which allowed reflections upon social and mental activities as themselves, for their own sake. Social relations always depend upon social divisions of labor which are, again, various forms of possession or ownership. Historically, more and more concentrated, standardized, and universal forms of social production support more universal and relatively independent forms of social relations. And, conversely, that concentration of production is made possible by the extent to which those social relations make themselves subjects, as well as objects, for that production, i.e. in the increasingly social production and reproduction of human existence.

POLITICAL ECONOMY The task of political economy, Marx argued, was to understand all of the presuppositions within productive and social relations which made social life in a given form and content possible at a particular time. Instead, political economists relied upon one-sided abstractions from which they deduced a few principles, which, in turn, became the bases of their economics: It would seem right to start with the real and concrete, with the actual presupposition, e.g. in political economy to start with the population, which forms the basis and the subject of the whole social act of production. Closer consideration shows, however, that this is wrong. Population is an abstraction if, for instance, one disregards the classes of

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which it is composed. These classes in turn remain an empty phrase if one does not know the elements on which they are based, e.g. wage labour, capital, etc. These presuppose exchange, division of labour, prices, etc. For example, capital is nothing without wage labour, without value, money, price, etc…. [This]…course is the one taken by political economy at its inception. The 17th-century economists, for example, always started with the living whole, the population, the nation, the State, several States, etc., but analysis always led them in the end to the discovery of a few determining abstract, general relations, such as division of labour, money, value, etc. As soon as these individual moments were more or less clearly deduced and abstracted, economic systems were evolved which from the simple [concepts], such as labour, need, exchange value, advanced to the State, international exchange and world market. (Marx 1986a:37–8) Deducing all of the presuppositions of a given form of social production means understanding how certain relations within that production are created as more or less universal relations by the activities of particular groups of people. This means understanding how those particular social activities within that form of production bear logical and historical relationships to one another in their reproduction of those particular productive and social relations. Production is a meaningful abstraction, Marx states, so long as we understand that we are always discussing a particular form of production within a particular form and historical period of a human society. “If there is no production in general, there is also no general production” (Marx 1986a:23). We are always considering particular relations within human social activity as these are historically derived and reproduced through one another. The fact that production is always social production means that production and consumption as well as distribution and exchange are always subject and object for one another within the creation of social totality. Understanding how a given social totality expresses within itself the logical and historical relations of all its parts means understanding each of those parts as particular social activities, as they exist in relation to themselves, one another, and the totality, that is, their existence and development within human social practice. In general, as I have indicated, more and more concentrated production supports ever wider social relations (Marx and Engels 1968:16–26). Social relations, within Marx’s method, are not understood one-sidedly as, for example, simply reflections of a particular form of production. Rather, it is a question of how productive and social relations are created through one another according to the logic and history of their own development.

THE UNITY OF PRODUCTION, DISTRIBUTION, EXCHANGE, AND CONSUMPTION Throughout this book, my primary task is to detail the ways in which production, consumption, distribution, and exchange are subject and object for one another in the development of capitalist private appropriation and in the social requirements and conditions for human individuals. My goals are to demonstrate the fundamental

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opposition between private appropriation and socialization and to show that the developed requirements of human social relations increasingly posit themselves for their own development as relations of production and consumption in ever deeper contradiction to the requirements of developed capitalist private appropriation. Marx demonstrated in his introduction to the Grundrisse, as well as in his other writings, that human production and consumption, and their attendant processes, are always subject and object for one another in some form. They mutually define one another as social relationships, as particular social practices made through one another. As I have just indicated, there is no production in general but only particular historicalforms of production. Production furnishes the object for consumption, but there is no production without consumption: Production is thus directly consumption, consumption is directly production. Each is immediately its opposite. At the same time, however, a mediating movement takes place between the two. Production mediates consumption, for which it provides the material; consumption without production would have no object. But consumption also mediates production, by providing for the product the subject for whom they are products. The product only attains its final FINISH [sic] in consumption. A railway on which no one travels, which is therefore not used up, not consumed is only a railway [potentially], not in reality. Without production there is no consumption, but without consumption there is no production either, since in that case production would be useless. (Marx 1986a:28–9) Distribution, like production and consumption, involves mutually created social and historical relationships. In society, Marx states, “the relation of the producer to his [her] product, once it has been completed, is extrinsic, and the return of the product to the subject depends on his relations to other individuals” (1986a:31–2). Distribution depends upon the division of labor and is thus determined by production. Distribution is, therefore, a product of production because the mode of participation in production determines the specific forms of distribution, the ways in which one shares in the products of production. Under capitalism, Marx states: To the single individual distribution naturally appears as a social law which determines his [her] position within [the system of] production in which he produces; distribution thus being ante-cedent to production. The individual starts out with neither capital nor landed property. He is dependent by birth on wage labour as a consequence of social distribution. But this dependence is itself the result of the existence of capital and landed property as independent agents of production. (1986a:31–2) Exchange, as Marx demonstrates, appears to be an independent relation, indifferent to production, and to exist only in the last stage, when the product is exchanged for consumption. But, Marx says, there is no exchange without a division of labor; private

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exchange presupposes private production; and the intensity of exchange, its extent and nature, depends upon the development and structure of production (e.g. the extent to which exchange relations are developed between town and country and within town and country). “Thus exchange in all of its moments appears either to be directly comprised in production, or else determined by it” (1986a:36). In considering all of these moments of production and consumption together, Marx states: The result at which we arrive is, not that production, distribution, exchange, and consumption are identical, but that they are all elements of a totality, differences within a unity. Production is the dominant moment, both with regard to itself in the contradictory determination of production and with regard to the other moments. The process always starts afresh with production. That exchange and consumption cannot be the dominant moments is self-evident, and the same applies to distribution as the distribution of products. As distribution of the agents of production, however, it is itself a moment of production. A definite [mode of] production thus determines a definite [mode of] consumption, distribution, exchange, and definite relations of these different moments to one another. Production, in its one-sided form, however, is in turn also determined by the other moments. For example, if the market, i.e. the sphere of exchange, expands, production grows in volume, and becomes more differentiated. Changes in distribution, e.g. concentration of capital, different distribution of the population in town and country, and the like, entail changes in production. Lastly, production is determined by the needs of consumption. There is an interaction between the different moments. This is the case with any organic unity. (1986a:36–7; his emphasis) Production, distribution, exchange, and consumption always represent historically concrete and particular forms within an organic unity. As they develop through one another, they become universal in those particular forms which satisfy their requirements for one another and, therefore, also the social relationships which they reproduce. The more these forms posit themselves for extensive social development, the more they become universal social conditions. Based upon my discussion so far in this book and having elaborated the unity of production, distribution, exchange, and consumption which Marx defines, it is possible to summarize that unity as it exists under capitalism and as it will unfold in my discussion throughout this book. Capitalism is, of course, first and always a system of private production and private exchange. It establishes its social connections among people on the basis of money. Also, of course, capitalism’s system of distribution is the distribution of commodities. Early capitalist commodity exchange was established by “arm’s length” transactions, the relative anonymity of sellers and buyers. Early industrial capitalism was characterized by banking panics in which money suddenly lost value for no apparent reason other than the mysteries of exchange. It was only later, as industrialization expanded, that it became evident to all that these were really industrial crises arising from

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an excess supply of goods rather than something peculiar to the money commodity. Overproduction and underconsumption plague capitalism throughout its history, up to and including the present time, and are fundamental to its system of production and not simply to its depressions and recessions. But despite the persistence of the commodity form and its essentially private character, capitalism, in fact, develops social space as a unity of production, distribution, exchange, and consumption, and, therefore, as a unity of the social relationships required by these social forms. Every form of production, as Marx states above, is always somehow a form of consumption, and, similarly with exchange and distribution, each of these somehow implies the others in its form. Capitalism first steps most considerably beyond the anonymity and “arm’s length” character of commodity production and exchange with the formation of the working class. Once the working class exists as an empirical group of people who must sell their labor power for wages in order to live, then it is necessary for them to satisfy their necessities for the reproduction of their ability to labor through their purchase of commodities. Working-class consumption, as Marx demonstrates in Capital and I discuss in Chapter 2, then redefines production on a wide social scale. Industrial production becomes, above all in its initial stages, the production of commodities for workers, primarily apparel. Industrial production then redefines urban social space as a place for production and residence and it is on this basis that an urban distribution system becomes refined as an essential link between producers and consumers. Exchange is already less anonymous at this stage as consumer choice begins to distinguish the kinds and qualities of commodities that consumers prefer and thus helps decide the forms of products as well as the fates of some producers. Moreover, distributors at this point are able to modify the system of production by the alliances that they form with some producers as against others. Once capital has defined itself as an urban system of commodity production and exchange, it then becomes primarily a producer of urban space and its social relations. This includes the establishment of a transportation system, which is initially in the form of railroads, and the establishment of a system of urban housing. Both of these together, as I also discuss in Chapter 2, absorbed the lion’s share of investment capital throughout the second half of the nineteenth century. The development of urban space for production and residence increasingly required the creation of urban infrastructure and the development of materials, like iron and steel, necessary to that task. Industrial processes as machine processes not only made labor interchangeable in its various forms and reinforced wage- and salary-based employment and consumption. It meant also that urban space in its various forms was increasingly supplying the objects for production. The increasingly definite character of the objects for production, the efficiency and relative certainty of their distribution, exchange, and consumption, made possible an enormous concentration and centralization of production and its processes. Large concentrations of industrial and finance capital enabled further refinement of industrial processes and products. Increasingly these products centered around household use, involving everything from prepared foods to household cleaning supplies. The concentration and centralization of production in these ways also enabled a revolution in retail distribution as retailers responded to the relative samenesses of the national market for products and their distribution. These distributive scope, scale, and transaction cost economies took the forms of department stores and mail order catalogues.

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During the early twentieth century, as I discuss in Chapter 3, urban residence came to be increasingly centered in neighborhoods and production, distribution, exchange, and consumption became centered upon products for those spaces and the households and personal items of the people within them. By 1927, urban planners identified the neighborhood as the most universal and essential element in the development of urban space. But corporate organization of production, distribution, exchange, and consumption as an urban and national system and its further development of urban space as an area of work and residence were increasingly at odds within the capitalist system of exchange. The clear identities of consumption needs and products and the efficiencies of industrial systems of production and distribution were not matched by the ability to exchange. Consumers remained limited to their money incomes derived from private employment and their limits to consumption dampened prospects and enthusiasm for sustained investment and employment. Government fiscal policies (taxing and spending) as a means of expanding consumption and investment were, and are, peculiarly capitalist devices because they recognize the clear identity of social needs within a national system based upon universal forms of production, distribution, exchange, and consumption only by substituting money for those essential connections. By the end of the Second World War, with the enormously expanded industrial capacity created by military requirements, capital could avoid collapsing back into depression only by further producing neighborhoods and products for that space. But it could do so, and survive as an economic system, only by making access to developed forms of social existence available on the basis of private consumption and money, and it could achieve this relationship only through political alliance with large sections of the population. It is the forging of this alliance and the emergence of the postwar middle class within it that I discuss in Chapter 4. But the vast expansion of urban space and its social requirements, even in its middle-class forms, made capital and its forms of production ever more of a particular within the urbanized nations. As I demonstrate in Chapters 5 and 6, this was true in several ways. First, the efficiencies of production, distribution, exchange, and consumption systems, on their monopoly corporate bases, made possible enormous concentrations and centralizations of these operations. This made capitalist producers highly competitive and anxious to locate within one another’s markets, although in the first decade after the Second World War, of course, this favored primarily the United States. Second, competitive production came to center around a fairly narrow range of consumer durables and personal consumer products and this contributed to problems of market saturation by the late 1960s, in economies which were still constrained ultimately by monied forms of consumption. And, even more importantly, this competition developed and extended high technology forms of production which further extended, also, the globalization of production, especially toward East Asian countries. Since the early 1970s, when the “Golden Age” of capitalism ended and it began the great slowdown which has characterized it ever since, capital’s revolutions in production, distribution, exchange, and consumption have emphasized computer-based forms. This has resulted in further concentrations in production and employment and communication capabilities to link the consumer directly with production. This concentration of production and its emphasis upon communication linkages and the search for consumers has centered investment within neighborhoods and regions in the leading capitalist

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countries where capital can find the labor and urban resources (including social infrastructure and research and development) that it requires, along with consumers who can purchase its products. It is, therefore, possible to distinguish three “levels” or “periods” in the evolution of the identities of capitalist unities of production, distribution, exchange, and consumption through one another. Early capitalism, including its industrial period but prior to its monopoly forms, was the production of urban social space. It was in this period, as I have indicated, that capital produced those identities which its form of urban space came to contain and determined what would be produced and for what purpose. Monopoly capitalism, from the close of the nineteenth century to the early 1970s, became production, distribution, exchange, and consumption for urban social space. During this period, capitalist production was concentrated and centralized in the production of products which have their place and purpose within that space. Products and the processes for their creation, including extensive scientific and research and development connections were well known, as were the consumer needs and the ability to generate consumer desires through advertising and other forms of communication. Weaknesses of exchange, as well as the social need for expanded housing and developed social requirements of urban space, were met by the expansion of urban forms of existence with government fiscal policies playing a substantive supporting role. Since the early 1970s, upon which I focus in Chapters 6, 7, and 8, capitalist production, distribution, exchange, and consumption has come to form a unity within urban space. The extent of urban space as a universal form of existence and the concentration of high technology forms of production and communication mean that urban space itself, and the neighborhoods which compose it, become forms of production, distribution, exchange, and consumption. Urban neighborhoods and regions become forms of production because current technologies integrate relations between workplace, office, and residence both through the ways that production now integrates production and service operations within urban space and the ways that it relies upon varieties of consultants and temporary employees as well as making work possible from a variety of locations. Moreover, production and service operations within urban space depend upon the varieties of research and development, education, housing, and social services which they find there. Developed urban space is therefore presupposed as a requirement for productive investment. Urban neighborhoods and regions represent forms of distribution because products produced and distributed have increasingly definite places within urban space. It is possible to design and produce products directly to the taste of particular neighborhoods and regions, in the way, for example, that a US plumbing supply company produces replacement fixtures in and for the tastes of a particular region in Italy. Current production processes are increasingly customer-driven, with sales representatives acting as direct links between consumer and manufacturer in the design, development, and installation of products. Urban neighborhoods and regions form an identity with exchange relations because basic social requirements, including housing, education, health care, recreation, and leisure, are distributed on the bases of neighborhoods. The post-1945 expansion of neighborhoods in these forms made them decisive determinants of exchange and consumption relations. The local presence or absence of these requirements are essential not only to the quality of life. These requirements are major forms of employment and

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sources of incomes. The recirculation of incomes from these sources in neighborhoods and regions makes those areas self-sustaining and attractive for additional investment and development. The availability of these social requirements at sufficiently low cost, increases disposable incomes and thus the ability to consume and to posit additional needs, including those for additional forms of neighborhood development. In all of these ways, then, urban neighborhoods represent a unity with consumption. Direct consumption increasingly provides the basis for direct production, as the customer-driven relations and high technology communications between consumer purchase and re-manufacture typify. As neighborhoods supply the objects and bases for distribution and exchange, this further unifies them with consumption. Indeed, neighborhoods, complete with all socially developed requirements, are increasingly not only the basis for consumption, but for human existence in its urban forms.

THE PREMISES OF SOCIAL ECONOMICS I want now to summarize five premises of the social economic model upon which I rely throughout this book. Although I rely upon Marx extensively in the establishment of these premises, it is not my primary argument here that this is what Marx “meant” (although I think it is what he meant). Rather, my goal is to establish a working model of social economics which, similar to Keynes’s multiplier, is composed of a series of relationships which are themselves drawn from within a certain empirical form of development and represent premises for further development beyond that form.4 As I summarize these premises at this point, they represent first, and abstractly, premises within overall human existence and development, and then, and ever more concretely, social principles of capitalist and urban development. The first premise is that consciousness is always the consciousness of social existence. As Marx and Engels establish in The German Ideology: “The first premise of all human history is, of course, the existence of living human beings” (1968:7). Similarly, they state: “Consciousness can never be anything else than conscious existence, and the existence of [humans] is their actual life-process” (ibid.: 14). In other words, what I wish to establish here is that our consciousness is predicated upon our existence and not vice versa. Humans’ actual life-processes are their social practical activities in the processes of the production and reproduction of their existence. What exists for consciousness and its reflections includes those social practical activities. Any word, “object,” “thing,” “fact,” or “phenomenon” has its meaning according to its place and purpose within human practical activities. We locate meaning, therefore, not only in thought and language, communication, signs, and relations among these, but also in the practical activities which give our social existence and reproduction its particular forms and identities. Society, social practical activities in the processes of the production and reproduction of human existence, must always be understood as the premises for perception and conception (Marx 1986a:38–9). Second, existence is always the social production of existence, the social activities through which humans produce their existence and create the conditions for that existence and its reproduction. Humans do not produce singularly or in isolation, but socially, collectively. The social production of existence is not confined to production as

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a particular or to the creation of tools. Production is not one-sided, but involves a mutual creation with distribution, exchange, and consumption relations as these are associated with particular forms of human life. As I discuss above, production, distribution, exchange, and consumption form unities with one another as they are subject and object for one another in the development of a particular form of social reproduction. Activities of distribution, exchange, and consumption determine production as well as vice versa. Each of these forms its particular identity only in and through its relations to the others, as each requires them and as they require it. Each of these relations and identities is formed through empirical human activities as those activities are required within that unity of production, distribution, exchange, and consumption and as these represent particular forms of production and reproduction of human existence. Third, any particular form of human social reproduction is object as subject because it is the product of subjective activities. Every object within the process of social reproduction is object as subject because it is object for me and my subjective activities in the processes of my own reproduction. For example, I mention above that early industrialism makes workers’ apparel an object of production. This is the case because workers in the process of social reproduction require this apparel for their own social existence. Workers are subjects for this apparel as object not simply as consumers or as a consequence of their money wages. Workers define this as an object for production because their relation to production makes this form of consumption a condition for their own reproduction as active subjects. Moreover, in consuming this apparel, workers redefine the process of production because this apparel becomes an object of production which reinforces industrial processes and creates the need for standard forms of distribution. Similarly, each level of development within urban social space is the result of and premise for human subjective activity within the urban form of social reproduction. Urban space as a division between private production on the one hand, and private consumption on the other, makes residential development an object for that space. But that area of residence is object for my own subjective activity as my housing, for my own place of residence. The development of housing within urban residential space means that my subjective activities, my own reproduction and development, require additional items for that household and for that space. By the early twentieth century, the production of whole neighborhoods themselves became standard forms of social consumption, universal social requirements for the reproduction of human existence. Following the Second World War, these forms of urban social reproduction became so universal that neighborhoods became bases for social and political activities in the processes of shaping government policies important to neighborhoods as bases for social and individual reproduction. Moreover, neighborhoods increasingly became bases for further economic and social development within themselves insofar as they could make themselves subjects, economically and politically, for social requirements of education, health care, recreation, and leisure. All of these activities from workers’ apparel in the early nineteenth century to neighborhoods in the late twentieth are made object by human subjective activities. They are subjective activities in the processes of those human subjects’ own reproduction and development. And as they reproduce themselves as subjects through these objects, their previous levels of development create new levels of requirements, additional

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requirements for their social and individual reproduction in these forms. So, for example, it is commonplace today to imagine an individual in late twentieth-century urban capitalism as living in a certain kind of housing, having certain kinds of education, needing certain kinds of health care, and so on. The point is that each of these is an objective form of social existence because it is object as subject. It is object for our subjective activities in the processes of our own social reproduction in these forms. These forms of social reproduction are particular because they arose in and through capitalism as it develops urban social space. But these forms of social reproduction are also universal because they are the conditions for all people within that space. I know human universal needs as they develop through human practical activities in the processes of our own reproduction of ourselves as human subjects. Fourth, any particular form of social reproduction is subject as object because it is the object of those subjective activities; it is the condition for them and their reproduction. But all of the forms of subjective activities that I have just defined have the reproduction of capital as their object. Workers’ apparel in early industrialism could be consumed only as commodities which reinforced wage dependence. Workers’ demand for apparel expanded mass industrial production because it cheapened the value of reprodu-cing labor power and intensified work as it concentrated production into new forms and increased mass unemployment. The levels of development within urban social space became objects for production only in their most profitable forms. And the development of urban areas or neighborhoods in any given historical period, including during the latter half of the twentieth century, always extended only so far as it conformed to capital’s own configurations in its then forms of concentration and centralization. Capital has this social space as its content not only as products but in its own forms of organization of production, distribution, exchange, and consumption. Capital develops these as unities of social activities only so long as those unities conform to its own processes of appropriation and accumulation. Consequently, capitalism at the end of the twentieth century is very reliant upon urban space and internalizes this space and certain neighborhoods within it as parts of its own forms of production and service. The fact that urban space is built upon universal social requirements for its inhabitants only means that the levels of social deprivation become more widespread and deeper as capital declines to produce housing, education, health care, or any other requirement except in very limited, and increasingly privatized, forms. But the point is that these are not simply or only commodities. They are universal social requirements for processes of human subjects’ social and individual reproduction. Understanding these as subjective activities, claiming these for ourselves, means understanding how these requirements and urban development and its forms are historically and logically developed unities of social activities of reproduction. This means understanding how they can be produced in their own right, as themselves for the reproduction of human subjects. Understanding how capital opposes and constrains these forms of development, especially as capital uses and builds upon them, means understanding how profoundly capital as the object of human subjective activities has become antithetical to human existence. Fifth, as human social reproduction becomes universal in particular forms, the more universally a particular form of production then connects those human social activities

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and makes itself the object for their reproduction. This form of production is then the universal basis for all forms of human social reproduction. Capitalism evolves into a universal form of production which makes universal also its particular urban forms of human social reproduction. Capitalism universalizes urbanism as the predominant form of social existence. Capital long ago drove out precapitalist, rural, and alternative forms of social reproduction. In the United States, the most urbanized of all countries, 55 per cent of people live in settlements of more than one million and 78 per cent in settlements larger than 100,000 (Angotti 1992:36). Urban space is a universal form of social existence and a universal form of social activities in the processes of social reproduction. Each level of development of urban space reflects not only a relation to capital but a basis for subjective activities, human subjects’ reproduction of themselves in these forms. Capital develops a universal basis for social and individual reproduc-tion. Similar forms of existence in neighborhood, housing, education, health care, consumer products, recreation, and leisure become universal presuppositions of social existence and individual life. Capital’s forms of production, distribution, exchange, and consumption follow the paths of social economies of scale, scope, and transactions because of capital’s ability to organize its forms of appropriation and accumulation around the latest and most developed forms of social existence. Moreover, these forms are posited for development by the ways in which capital builds social space so these social forms appear as capital’s own products for its appropriation and use. But capital can develop these social developments and requirements only to the limits of its own profitability and its forms of organization of production, distribution, exchange, and consumption. It cannot develop them fully, socially, but only as a relation to its own forms of money, commodities, and profits. Consequently, even the vast social expansion of the middle class during capital’s “Golden Age” after 1945 was at bottom only government-enabled forms of expanded exchange and commodity relations. To say that capital’s forms of social development are presupposed and posited means that they arise through one another as social relations, as social practical activities in the production and reproduction of human individual and social existence. Each development within capitalist urban space is presupposed as a relation to the next level of social and individual reproductive activities, as they build upon one another. They are, therefore, posited in relation to one another because each level of development requires the next for its own development, as an extension of itself in its development as a form of reproduction. Urban space develops as a division between private exchange and private production. Social reproduction on the basis of commodities requires the commodification of labor, and workers then become an object for production and the exchange of commodities. Centralized production and exchange in these ways then require the construction of urban space as a basis for residence, and urban residential space becomes an object for the distribution of goods as well as for their production, exchange, and consumption. Neighborhood becomes the basic unit for urban planning, the “cell” of urban social existence, because it contains all of the essential elements of the urban form, from physical infrastructure through social services and leisure. As discussed previously, neighborhood becomes also a basis for the organization of production, the central form for the distribution of social resources, a basis for exchange through the ways that its activities generate employment and incomes, and the primary form of social

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consumption, as well as the basis upon which consumption makes itself the object for production, distribution, and exchange. Neighborhood includes all of the presuppositions of capitalist urban development because each of these presuppositions posits the next as an extension of itself, as the fulfillment of its own development: private exchange necessitates private production and the corresponding divisions within social space around wage labor and private employment. Urban social space as a division between production and residence then requires housing for that space, urban infrastructure, home-based consumption, and the development of neighborhoods as the basic unit for social existence. Neighborhoods are then themselves produced as mass forms, and existence within them requires standard forms of education and health care and increasingly posits the socialization of activities beyond the household for food preparation, and other previously household activities, and for recreation, and leisure. Each of these relations is, as it were, posited twice: once as a relation of social activity, the consequence of its evolution within a certain form of existence, as a form for the reproduction of individual and social existence. And once as a relation to money, as a requirement for the reproduction of these relations as commodities and as a requirement for the commodification of labor, for social access to these requirements as commodities. Each of these requirements in the evolution of urban space represents a subjective form of activity for its own realization and for development beyond itself: for employment as a source of productive activity and income, for education necessary to certain forms of employment and levels of social development, for health maintenance and community and social life; and within the neighborhood, for the ability to posit further socialization beyond the household and for the neighborhood’s own reproduction as a basis for individual and social existence. Neighborhood is a subjective unity of production, distribution, exchange, and consumption but capital makes that subjectivity primarily a relation to employment and thus to incomes and money. As Marx says in the 1844 Manuscripts, money is the “pimp between man’s [woman’s] needs and the object, between his [her] life and his [her] means of life” (1976b:165–6; his emphasis). Each of these social forms arises and develops according to its place and purpose within this social form of existence, as each of these social requirements is presupposed and posited in and through the others. But it develops simultaneously as a relation to money, and only secondarily, if at all, is it recognized as a social requirement and right. Even capitalist government funding of these requirements only politicizes the social dependence and precariousness inherent in the commodity form, as we see in the denial of “entitlements” and the privatization of government services. Part of the mythology of bourgeois economics in its neo-classical, supply-side, form, as Keynes exposed in his General Theory, is that capitalist investment is random and a product of savings which arise from the abstinence of capital holders. In that case, investment has no particular object and corresponds merely to some “market” determination by investors. Since private savings are the source of wealth, economic and government policies must favor private accumulation. Keynes refuted these notions by demonstrating that investment was dependent upon consumption and that investment would not be sustained without the ability of consumers to maintain and expand the economy. Moreover, Keynes showed that savings arose as a consequence of effective investment throughout all parts of the economy, including the necessity for government investment in physical and social infrastructure. Capitalists are dependent upon continued

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economic expansion and investment which corresponds to all parts of the economy in order to sustain and renew their own investments and to reap the benefits of social savings. Keynes was, of course, arguing for the recognition of the importance of consumption and government spending as a means of moving capitalism beyond economic depression and creating a more humane society. But once it is recognized that investment has definite objects and takes place along with consumption, as part of an evolving social whole, then it is necessary, as I am arguing in this book, to inquire into those objects for investment and the nature of this social totality. It is well recognized that social wealth under capitalism is held in two principal forms: as capital assets and as tangible assets (mainly houses and consumer durables). Moreover, it is recognized also that the inability of people to acquire tangible assets shifts wealth holding toward its more liquid forms and fuels capitalist speculation. In other words, tangible assets represent not only commodities and forms of wealth, but are themselves bases for economic expansion and development. This is another way of saying that if working people lack wages and salaries necessary to purchase commodities, their share of social wealth, held as tangible assets, declines and they lack the ability to sustain economic investment and expansion. They then lack basic necessities and the abilities to acquire still more commodities. But if we carry this discussion of the social totality beyond the relative anonymity of terms like “consumption,” “tangible assets,” and “commodities,” then it seems reasonable to assume that these objects of consumption have certain definite socially and historically developed forms. “Houses” and “consumer durables” do not exist in general but imply and express certain definite places and purposes within human activities, within a certain mode of human existence. And, if we admit this premise, then it would seem necessary to agree with Marx that the objects for consumption are not simply commodities but have certain logical and historical relations to one another as they have formed that mode of human existence and evolved their definite places and purposes within human activities. In this book, I examine the historical and logical evolution of production, distribution, exchange, and consumption through one another according to their premises within the social forms of capitalist urban development. I explore the interpenetration of their forms as social requirements and as money/commodity relations. In the Appendix, I establish, according to the principles of dialectical materialism, why it is reasonable to make such an inquiry at all. I discuss there the method of this study which, I argue, was also Marx’s method for understanding economic development as the logical and historical development of social practical activities. I have indicated above the contents of the other chapters. In general, these processes of historical and logical development of capitalism’s primary social forms bring us to the point where we are today. On the one hand, the extension of the urban form of social existence has meant that neighborhoods exist as units for human social reproduction within that space. To the extent that neighborhoods, and regions surrounding them, possess the developed social requirements that make the neighborhood the “cell” of urban space, they form a unity of production, distribution, exchange, and consumption, as I have discussed previously. I detail this unity in its present forms in Chapter 8. In this form, neighborhoods are capable of generating and retaining incomes and renewing the bases for human reproduction within themselves. To the extent that neighborhoods and the elements which compose them can be recognized

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as social requirements for human existence and reproduction, as human rights, society can move toward greater equality while expanding the economy beyond its present capitalist forms. To the extent that the political and social processes of achieving that economic renewal and greater equality make possible new political and social control over production, distribution, exchange, consumption, and their directions, we can achieve a democratic socialist future. On the other hand, to the extent that social space continues its development along the lines of present capitalist corporate concentration and centralization, development within urban social space will be defined, increasingly and ever more profoundly, against itself so that the bases for the development of some will become the bases for the underdevelopment and deprivation of ever larger numbers. Consequently, it is among the arguments of this book that these are our choices at this point in human history.

2 CAPITAL AND IMPERIALISM Capital, as a social and historical particular form of economic development, is the accumulation of money capital through its system of production, distribution, exchange, and consumption. In the three volumes of Capital, Marx examines the logical and historical evolution of this system from its emergence in its embryonic form in the commodity and its development through production, the circulation of capital, and, ultimately, the concentration and centralization of finance. Capital becomes, through all of these, a system of social administration. But capital has money as its own primary social connection and administrative tool. Capital is a system of investment as well as a system of accumulation. And reinvestment decisions are made in response to the highest rates of profit which emerge and contrast with those which have become socially average or below. The processes of accumulation and reinvestment follow the path of the concentration and centralization of ownership and control of capital. Reinvestment as social development then reflects the movement of capital into its latest forms which produce the highest rates of profit and into the interconnections, nationally and internationally, which are associated with those forms. The process of accumulation is continually a process of disinvestment and movement of capital out of previous social forms and into new ones. And, with the centralization of finance and the development of capital to a national level, that movement of investment becomes, also, the export of capital. Lenin analyzes this development in Imperialism. Capital is equally a system of social development. Marx defines the contradiction between private appropriation and socialization as the most fundamental within capitalism. Capital must be examined not only as a particular in relation to its own development of private appropriation, but in the ways in which it posits and is posited by social development. Capital reflects the social relations for which it is both subject for human subjective social reproduction of its own existence and development and object for the accumulation of capital. The forms through which capital evolves as a relation to the rate of profit express equally their formation within social space and relations in the reproduction of human subjects. I refer here not only to the ways that capital does or does not create social space. It is also the case that social relations, likewise, posit and create capital and its forms through themselves. The form and content which capital adopts are its own resolutions of its essential opposition to social requirements, the ways in which it is required to make itself compatible with social reproduction. Private appropriation is simultaneously the appropriation of social relationships. Capital appropriates social wealth and social possibilities for development. We see both sides of this dialectical relationship as capital extends itself within social space. If Marx’s Capital is understood as expressing the evolution of socialization as the process of human

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social reproduction, as well as that of private appropriation, then Capital is also a book about socialism. In this chapter, I examine the unity and opposition of private appropriation and socialization as Marx presented these in Capital. Because, with wage labor, capital becomes subject and object for itself as a social system of production and accumulation, it is necessary to understand capital as a system of social reproduction extending beyond its own secular relations of production and investment. I examine capital’s social evolution through three dimensions: social class, social productivity, and social space and time. Having considered the three volumes of Capital from these perspectives, I then examine Imperialism to show how Lenin discusses the same social forces which Marx defines.1 Marx states that any form of production always posits itself as a form of social production, as a relation to the social existence of all of those living within a given society. From its inception, the commodity form differentiates itself as a particular relation to all of those who are in a position to produce, exchange, and consume commodities at a given stage of social development. The commodity, and then capital, create themselves over and through previously existing social relations. Marx describes this relation in the Grundrisse: Bourgeois society is the most developed and many faceted historical organization of production. The categories which express its relations, an understanding of its structure, therefore, provide, at the same time, an insight into the structure and the relations of production of all previous forms of society the ruins and components of which were used in the creation of bourgeois society. Some of these remains are still dragged along within bourgeois society unassimilated, while elements which were barely indicated have developed and attained their full significance, etc. (Marx 1986a:42) Capital’s social extension as a system of production and consumption is equally its development as a system of social reproduction. Capital organizes and develops, appropriates and accumulates, is the object for the organization of human social reproduction, because it responds to and builds upon the conditions for human subjective activities, as humans seek to reproduce themselves within the social forms available. It is because capital is more and more antithetical to the requirements for social reproduction which it creates that the contradiction between socialization and private appropriation is so fundamental. This is Marx’s conception of capitalist socialization in its opposition to private appropriation, in their conditioning of each other. The notion of capital as, above all, a system of human individual and social reproduction differs from the prominent current concepts of development of social space. David Harvey defines capitalist social space as an extension of the means of production themselves. Manuel Castells argues that social space becomes primarily an area of consumption where struggles for social existence increasingly differentiate themselves from production.2

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SOCIAL SYSTEM AND SOCIAL CLASS My purpose in this chapter is to demonstrate how Marx and Lenin understood capital as an increasingly contradictory system of social reproduction. This entails examining how capital develops as a social system of accumulation and appropriation. In this portion of the chapter, I want to demonstrate how the social extension of capitalist production and consumption develops social class as a form of resolution of its social contradictions. The class divisions of capitalism are already implicit in the social extension of the commodity form itself. With the recognition of labor time as the basis for equivalence among commodities, the commodity relation is fully extended as a social relation of exchange because it then begins to redefine social production as the production of commodities according to socially necessary labor time. Commodity production and exchange, in this way, begin also to redefine social time as time spent in social production. With the defining of social relations through commodity production and exchange, the quantities and qualities of commodity transactions find in money a universal commodity which can extend exchange still further. This gives a new social prominence and power not simply to money, but to those who possess money. Money, as the possession of social wealth, bestows upon its possessors, whatever the sources of their holdings, a central position in the social direction and control of production and exchange. It is easy to make too much of the social control of money holders at this point. With the growing importance of money as a universal commodity in exchange, money only begins to reorganize production. Money is not yet capital and the capitalist, as Marx also notes, is not yet personified as a capitalist, does not yet have the social prerequisites for that role (Marx 1986b, vol. I: 145–53; 159–63). What transforms money into capital is the employment of labor power in production so that the value of commodities created is greater than the value of the labor power consumed in production. Capital is, from its beginning, and remains, the production of surplus value. It is central to understanding capitalism and Marx’s Capital to examine how surplus value arises and is reproduced as a social process. It is especially important to see this not as a unilateral process proceeding from the power of employers, or even, simply, a bilateral relation between employers and workers. Surplus value arises in a multilateral, mutually determining relation among the developed particulars existing in the commodity relation. Commodity exchange creates production as the production of commodities according to socially necessary labor time. Production in this form, in turn, expands commodity exchange. Commodity exchange is extended further through the use of money which means also generalized social dependence on commodity consumption. Production increasingly involves wage labor, i.e. the sale of labor power for money, which provides access to commodities. Wage labor productivity is the continual reduction of the socially necessary time which labor spends in producing each item. Reducing the cost of production means increasing the values which can be realized in exchange. The expansion of value in production is simultaneously expansion of the values produced as a ratio to the value of labor power consumed. Surplus value, therefore, arises from the

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interaction within production between the continual expansion of the value of the commodities produced and the value of the labor power purchased and used as a commodity in that process (Marx 1986b, vol. I: 181–92). The production of surplus value further defines social time as time in the production of commodities and standardizes the working day as a relation to value creation. Absolute surplus value arises from the extension of hours of work and the extension of wage labor to a mass of the population. Socially general wage labor makes itself object for the production of commodities. Reducing the cost of products lowers the cost of labor power and expands relative surplus value as a relation to the values produced within the limits of the working day (ibid.: 296–304). Marx demonstrates in the first volume of Capital that surplus value can only arise from living labor because, almost self-evidently, living labor is required for the creation of new value. Raw materials, machinery, and so on cannot be the initial premises for the expansion of value in production. But the three volumes of Capital are also the demonstration of the development of capital as a social system in which workers’ activities in production are continually objectified within the capitalist labor process and capital builds its social productivity by making its production, circulation, and finance subjects and objects in the development of social consumption and space. Therefore, capital becomes more efficient and creative of value by its appropriation of social relations in ways that complement the production and reproduction of surplus value. Consequently, Marx states in the third volume of Capital: In short, [surplus value] arises equally out of the fixed and circulating components of the utilised capital. The aggregate capital serves materially as the creator of products, the means of labour as well as the materials of production, and the labour. The total capital materially enters into the actual labour process, even though only a portion of it enters the process of self-expansion. That is, perhaps, the very reason why it contributes only in part to the formation of cost price, but totally to the formation of surplus-value. However that may be, the outcome is that surplus value springs simultaneously from all parts of invested capital. (Marx 1986b:36) Surplus value “springs” simultaneously from all of these relations because capital is a system of social subordination and exploitation of human social activity. Surplus value is always the object of capitalist production. Capitalism is a system of production which aims at the accumulation of money capital through all of its relations of production, circulation, and consumption. Living labor remains the creative side of this process both through its activity in the production of a mass of values at low wages and in all the developed forms of production in which technology represents the objectification and intensification of the activities of living labor. Capitalist processes of circulation, distribution, and consumption facilitate the realization and expansion of surplus value because they are all created as complements to capitalist production and accumulation. Capital creates itself continually as an ever wider set of social relationships to its system of production and to the accumulation of surplus value as the wealth created

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within that social system. Capitalism is, therefore, increasingly a process of social subordination. Its primary forms of social subordination are embodied in the wage relation, the labor process, and capital’s control of production and social development as the reproduction of its own existence. All of these forms of subordination represent, also, capital’s reproduction of the class relation. The wage system develops as an ever more social and class relation. The wage system, as Marx emphasizes in Capital, represents a form of access to the social system of production and consumption. Access in this form is at best tentative. Wages are “coupons,” as Marx calls them, for consumption, but they in no way represent access to the direction of production or any claim upon its future (1986b, vol. I: 412–16; 501–7). Moreover, the development of capitalist production makes the wage the basis for increasing divisions within the working class itself. The expansion of capitalist production as a condition for employment and consumption is accompanied by the concentration and centralization of capital and the diminishing of employment opportunities. This creates a social hierarchy among workers in their access to wages. Capital is increasingly class control and direction of social labor through the labor process. The production of commodities for their exchange value means the improvement of production by an ever-increasing transfer of skills in the labor process from the worker to the machine. Capitalist production becomes “for itself” with cooperation which involves the combination and standardization of workers’ activities into a common relation in the workplace. But cooperation is then overcome with machinery which objectifies the subjective activity of labor, subordinates labor as a still more decisively wage relation, and increasingly builds upon its own scientific processes for its development (Marx 1986b, vol. I: 305–85). Control of production as capitalist production reflects the social unity of capital and its control and management of the social bases for the capitalists’ own personification. It represents the bases for capital’s extended reproduction and social accumulation. It is the accumulation of surplus value which increasingly institutionalizes capital’s control of social reproduction in all of its forms as capital’s control of money. This social control is extended through the “doubling” of capitalist production as a relation to the circulation of capital and as a relation to finance. Control of finance and the credit system embodies the control of industrial capital and the control of social development. Value, surplus value, and labor under capitalism all express relations to social development. Consequently, all of them are also relations which define the bases of social production. But they lead, simultaneously, a dual existence. On the one hand, they develop as ever more social processes, as conditions of social existence. On the other, the corporation, as the primary mechanism of private appropriation, develops as the management and control of those social processes. This duality exemplifies what Marx defines as the “fetishism of commodities.” Marx said that under capitalism, relations appear as what they are: “a definite social relation between [people], that assumes, in their eyes the fantastic form of a relation between things” (1986b, vol. I: 77). Stated as a relation in social development, this means that our social activities posit themselves as relations of subordination to the processes of capitalist appropriation and that the bases of social appearances and social knowledge are derived from the premises for capital’s development. But this is a fetishized existence, because the requirements for social development, at any given time, are always actually the conditions for the development

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of the whole society. Social development, therefore, is the condition for our relationship to ourselves and to one another. The “fetishism of commodities” expresses this condition as a relation of opposition because it is exactly the subordination of some social individuals to others which creates this social appearance and gives control of our requirements for social development to the mechanisms of capitalist appropriation. Alienated social appearance expresses alienated social relations and the limits upon the social activities of each of us as the limits of our positions within, and access to, the conditions of our social life. Marx states that in terms of social and empirical appearance, with the creation of the financial system to guide and control the social averages of industrial profits, the role of surplus value in these relations has long since disappeared from view. Even the role of labor is either not visible or appears to be present only as an empirical particular. As far as capitalists are concerned, Marx says, social wealth comes from the accumulation and investment of capital, and they do that themselves (1986b, vol. III: 167–8). One of the products of developed capitalist social relations is their appearance as segmented, positivistic empirics, or, more collectively, phenomena, which appear to have their origins primarily in themselves and seem otherwise inexplicable in their historical development. Social relations in this way seem reducible to language, individual volition, and consensual agreement—a continual making and remaking of social contracts via communicative and personal value-based processes. Such social appearances are commodity fetishism “writ large” and indicate a profound separation from our own humanity and from our human essence not only as this relates to honoring our own activities and their performance, but the transformation of our deepest creative, individual, and social instincts and practices into no more than their verbal expression as they exist in our communication about their latest forms and appearances. Like the capitalists arrived at the stage of financial capital, we feel we are no more than wherever we find ourselves, and we understand our own creations through our interpretations of only our most recent acts. Marx’s statement in the 1844 Manuscripts that private property is human beings lost to themselves echoes here (Marx 1976b: 283–322).

SOCIAL PRODUCTIVITY However that may be, capitalist production does not exist independently of the requirements for the coordination and development of social space. This contrasts with neo-classical economists’ interpretations which see the firm as a particular, one-sided basis for investment and economic development, in perfecting and universalizing the market. This interpretation contrasts also with those of Marxists who understand capital as a regime whose forms of spatial development are only extensions of itself. Capitalism is the universalization of urban space as a particular area for social development and for social and individual reproduction. Capital defines urban space as a universal relation to employment and consumption and, then, has its own forms of production and consumption determined increasingly by the social requirements of that space which it has posited for development. Absolute surplus value involves the extension of wage labor to a mass of the population. The mass extension of wage labor makes the commodities which workers

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consume, especially apparel, the objects for production. Workers’ needs for commodities in these forms and their wages make them subjects for, as well as objects of, production (Marx 1986b, vol. I: 296–304). The role of workers and other consumers as subjects for the production of commodities also makes distribution an object of social spatial development. Consumers’ choices redefine the products produced and the locations for and forms of their distribution (DuBoff 1989:16–18). Relative surplus value arises, in part, from reduced labor costs as a result of cheaper commodities for workers’ consumption. It is also the intensification of the labor process in response to the limits of the expansion of absolute surplus value. These are the limits to human capacities within the working day and to the extension of wage labor to a mass of the population. Relative surplus value therefore, is simultaneously the concentration and centralization of production. The intensification of the labor process is achieved, first, by combining workers’ activities through cooperation, and subsequently through the social objectification of those activities into machinery (Marx 1986b, vol. I: 305–93). This concentration and centralization further separates production from residence and makes urban residential and business space (i.e. for services and the circulation of commodities and capital) objects for production. With the concentration of production and the refinement of employment and distribution, transportation completes the universalization of urban development in its early industrial form. Transportation, primarily the railroad, makes itself a particular within that space for the movements of people and commodities and for interregional development beyond that space in the search for new consumers and workers (Marx 1986b, vol. I: 424–5; DuBoff 1989:18–23). As Marx discusses in the first volume of Capital, this interregional expansion is also disinvestment from areas of previous development. This is the evolution of capital as a particular in opposition to social requirements which it had posited for development. Of course, capital’s own previous limits to the expansion of mass employment in the creation of a mass of absolute surplus value represented a similar undermining of social requirements (1986b, vol. I: 582–600). Marx demonstrates throughout Capital that the process of disinvestment, which accompanies concentration and centralization, creates surplus population. These are not simply members of the industrial reserve army, but those who are socially displaced and of whom capital has no further need. The concentration of production and the increasing application of machinery create urban social space as a universal relation for production, distribution, exchange, and consumption for their development within that space. Economic investment and development are not random as in the neo-classical interpretation. Development within urban space was, rather, “brought about by autonomous investment by profit-seeking capitalists for reasons sometimes dictated by relative price changes but far more often by expectations of new marketplace advantages or by a drive to reduce labor requirements” (DuBoff 1989:31). Spatial requirements are not simply extensions of capitalist production, but are equally social requirements for the greater unification of production, distribution, exchange, and consumption. Marx demonstrates in the second volume of Capital that greater efficiencies in the circulation of capital within social space create expanded capital accumulation. Increased savings are among the effects of this capital accumulation. As Richard DuBoff states: “In the course of investment-propelled growth, the pool of savings is expanded through the

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familiar Keynesian multiplier effect” (1989:31). Closely related to savings as a basis for expanded investment are embodiment effects of investment in the latest and best technologies and those spatial requirements most complementary to expanded accumulation. Urban development consists of what Marx sometimes calls a series of “begats”: its requirements for individual and social reproduction are posited for development by capitalist production; this attracts investment; they expand capital accumulation and savings; this encourages reinvestment and their reproduction and the standardization of their particular forms. These forms together are embodied within a built environment which becomes not only the bases for capital accumulation, but also the universal bases for social existence in this form. That investment is not random, but is a product of social determinations, is indicated by the repeated movement of investment into those particular forms necessary to the creation of urban social space. Railroads accounted for 15 per cent of gross private investment in the 1850s and this expanded to an average of 18 per cent in the 1870s and 1880s. From 1850 to 1900, residential construction represented 50 per cent of the gross private investment. The other main source of investment demand was urban infrastructure: including factories, warehouses, office buildings, stores, ports, public utility systems. Between 1870 and 1900, the US population grew from 40 million to 76 million, and its urbanized component grew from 26 to 40 per cent. During this same period, residential building became the main consumer of capital and the number of urban dwelling units more than tripled (DuBoff 1989:32). Urban spatial forms, as they became universal and standard as particular forms, made themselves and their requirements objects for production. All of the major forms of production in the late nineteenth century presupposed their place and purpose within a human-made environment, increasingly independent of natural resources and their requirements. Those places and purposes were defined by their particular uses within that universal human environment. Each form of production was a particular form of a universal urban requirement for social and individual reproduction within that space and itself became the basis for the further universalization of urban forms. Each became, simultaneously, the basis for further particularization within each of these urban social requirements: steel for infrastructure and for general, and increasingly particular, forms of transportation (e.g. bicycles and automobiles); electricity as a universal form of energy for workplace and residential requirements; universal machine processes for the expansion of industrial forms of social reproduction; and chemicals for household and industrial applications. Metallurgical innovations enabled the mass production of steel during the latter half of the nineteeth century. But its particular uses enabled it to become a universal form for urban requirements, replacing wood, stone, iron, and clay. Mass-produced steel found direct application in transportation (rails, rail cars, ships); factory and office machinery (stoves, cans, wire, nails); and personal urban transportation (bicycles, later streetcars and automobiles). In this way, steel made each of these previously existing urban requirements more universal and particular. Similarly, electricity represented a common power source whose applications presupposed its uses within universal social space (DuBoff 1989:36). Electricity triumphed over steam because it allowed a flexibility in both workplace and residence as determined by social uses rather than mechanical requirements.3

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Producer durables and the continued social objectification of labor into machine processes, likewise, reflected universal social applicability, as this was presupposed in the reproduction of social space. The working and reworking of mechanical processes created machine tools: tools which were themselves particular machines and produced independently. Quantitative output of these tripled and quadrupled, during the late 1800s, in new centers like Cincinnati and Rhode Island. Qualitatively, this developed the machine tool industry into a nerve center for transmitting new skills and techniques to all machine-using sectors of the economy. Finally, applied chemistry, the fourth major innovation of the late nineteenth century, became an integral part of the “second industrial revolution” because of the wide applicability of its products within industrial processes and households (DuBoff 1989:37–8). In discussing the development of capitalism and its social relations, I have defined three phases of social reproduction. The first involves the establishment of capitalist production and the universalization of its social and spatial requirements, culminating in its development of regional and interregional transportation and economic development. The second phase involves the positing for development of social forms within that space and their impact both in enabling the circulation of capital and generating bases for expanding investment. The third phase concerns expanded industrial production and the development of processes and products which have universal applications within that developed social space. Each of these three phases represents a new and higher level unity of production, distribution, exchange, and consumption. The first phase is characterized by “arm’s length” transactions and the increasing refinement of commodity relations into an interactive system of social production and consumption. Distribution, exchange, and consumption become increasingly subjects for themselves in their capitalist forms in the second phase. It is these activities which Marx discusses, in the second volume of Capital, as the circulation of capital. The third phase represents, among the three, the highest unity in the mutual creation of production, distribution, exchange, and consumption. The products and processes which I describe above are all presupposed and posited directly for their production and use within developed requirements of common social space. Machine tools are especially significant in this regard because they represent the socialization of knowledge and tools necessary to the reproduction of industrial and urban requirements. All of these phases are also the continual refinement of production through distribution, exchange, and consumption and, therefore, make production the object for the others as subjects, as they are created as subjects within urban space in the processes of human individual and social reproduction within this form of existence. This is the redefinition of production through economies of scale, scope, and transaction costs. Scale and scope involve the lowering of unit costs and expanded production (long production runs) within a single facility (the concentration of production into new large firms) because of the increasingly direct consumption of products produced. This direct consumption results from their definite place for use within urban space. This is also, then, social productivity because it is the direct social determination (as subject for production as object) which makes possible economies of scale, scope, and transaction costs within production, and efficiencies in distribution, exchange, and consumption.

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The increasingly direct, mutually creative relationships of this third phase produce economies of scale, scope, and transaction costs that new large firms require to establish their economic dominance and financial security (DuBoff 1989:51–7). Demand and supply, production, distribution, exchange, and consumption always express definite social relationships among people as their social activities make them subjects for social reproduction within a particular mode of life. Scale, scope, and transaction cost economies are products of the ways in which individual and social reproduction under capitalism require the objects of production for their development within urban social space. These economies become increasingly possible because of the definite and repeated places and purposes which the objects of production occupy within human social reproduction. The production of those objects in large volume is made possible by the ability to supply those objects for social reproduction. For example, once the requirements for the reproduction of urban neighborhoods are evident and materials necessary to that reproduction are available, housing development becomes the development and extension of whole neighborhoods, from their most basic infrastructure to multiple dwellings of the same or similar forms. Moreover, the subjective activities which inhere in social reproduction in its various forms generate a “multiplier effect” as they generate both incomes and savings which extend demand for their own reproduction and for the renewal and extension of the objects of production. The expansion of demand inheres, therefore, not only in individual incomes and savings, but in the collective demand generated by the places and purposes which the embodiments of the built environment occupy in social space and time. It is in these ways that capitalism as private appropriation makes social reproduction possible. But it does so chiefly through its monetary expressions and according to all the social limits which inhere in incomes and savings. Social relationships within development under capitalism, in other words, express themselves in the primary ways open to them, as relations to money.

SOCIAL SPACE AND TIME Capital is, in all the ways that I discuss here, a spatial-temporal relation in its processes of social development. Capital extends commodity exchange as the basis for production and consumption within a given social space. It creates that production as a relation to socially necessary labor time. Capital extends wage labor as the condition for employment of most of the population and wages as the access to money for access to consumption. The extension of wage labor to a mass of the population creates mass surplus value as the basis for accumulation of capital. Spatial development in this form arises from the limit to absolute surplus value as the extension of the working day. The standardization of the working day according to its human limits leads to an intensification of production and the reduction in socially necessary labor time. The creation of relative surplus value through this intensification of labor is also the concentration and centralization of capital and the occasion for the disinvestment and reinvestment of capital into new forms of production and new areas for production and consumption. As I have indicated, it is chiefly the railroad which enables this spatial reconfigura-tion of capitalist production and consumption.

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Concentration of production, with the development of relative surplus value, is also the extension of capitalist circulation in the development of urban space. Urban infrastructure and other forms of development required for the circulation of capital, as I discuss above, not only speed the circulation of commodities and capital, but have their own reverse effect in creating incomes and further bases for urban spatial development. However, the creation of urban space on the basis of the circulation and accumulation of capital means that the time of circulation aids in averaging the profits flowing from all of these investments. Social time for the continuation of development in these forms is limited to the accumulation of capital. Capital moves away from those investments within social space whose profits have become socially average or below. Concentration and centralization of production, as a result of the social economies of scale, scope, and transaction costs that I describe, are also the occasion for corporate concentration and the further centralization and concentration of finance. It is in this way that finance becomes a mechanism for the management of social investment as a whole. This means also disinvestment from earlier forms of production and circulation. It is at this point that capital accumulation appears to be subject and object for its own development, a consequence of all forms of investment, and not a result of social labor or even, necessarily, production or human social reproduction. The same is true of all the social connections and premises which are the bases for capitalist development and accumulation. Capitalist concentration and centraliza-tion into its financial form is always the occasion, also, for the compression of social space and social time in relation to capital’s most socially developed forms of production, distribution, exchange, and consumption. The movement away from investments posited previously for development is also the basis for the creation of surplus population. The more the conditions of social existence become universal in their forms, the more their removal creates conditions of absolute social deprivation and exclusion. Social productivity is the consequence of capital’s interaction as a particular within the general social conditions of production and consumption which it posits for development. Capital unifies production as a social system through the social commonalities which it creates and makes these relations socially interactive. Production, distribution, exchange, and consumption all come to be carried on as relations of reproduction, for capital and for life within the urban whole. Capital profits from urban social reproduction because its relations are organized to produce the accumulation of capital. Capitalist concentration and centralization of production and wealth come about because the position of individual firms within these social interactions create the bases for their private appropriation and continually reproduce their particular structure of production and financial control. “Thus everything appears reversed in competition” (Marx 1986b, vol. III: 209; his emphasis). Because capital is the particular around which social reproduction and development are organized and because capital continually modifies these relations to expand accumulation as the end goal of their processes, capital appears as the particular which creates the general relation of social reproduction, as itself the alpha and omega, as the creator of the social and its result. In fact, the concentration and centralization of capital are equally products of requirements for human social and individual reproduction. Capitalism is essentially a system of social reproduction and development where social productivity, which is the result of the social activities, interactions, and

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interconnections among people in the reproduction of their own lives, struggles against its control by private appropriation and its reduction to a monetary relationship. Capital can be understood as its own development is given form and content within relations of social reproduction. Capital is also, therefore, an ever more particular form within mutually creative human relationships and requirements which extend well beyond capital. The development of accumulation as a social process of appropriation means, as Marx tells us at the beginning of volume two of Capital, that capital stands in constant relation to society and its processes as a relation to money (1986b:25–64). That is, money capital is itself as money for exchange, accumulation, and use; and it expresses the coordination of increasingly and explicitly social processes. Capitalists, as the coordinators of the labor process, social production, and circulation see both the need for and effects of their returns on money capital. Concentration as the result of accumulation has the effect of centralizing money capital and its availability for financial transactions. The development of the circulation of capital, so that it is mutually creative with the processes of production that define it, defines production as the turnover of capital, reduces both production and circulation costs, and releases capital for accumulation and investment. The growing social centralization of capital as finance is increasingly the availability of money capital for credit. As Marx says, credit first appears within these processes as the “humble servant” of production and circulation, but increasingly occupies a central administrative and controlling role with regard to them (Marx 1986b, vol. III: 435–41). Financial centralization and coordination are equally the products of the social coordination of production and circulation, and their social coordination which averages social rates of profit within and among industries and all commodified social relations. Both the existence of socially average rates of profit and the centralization of finance make capital appear as the product of its own investment activities. Within these objectified social processes, social labor activity as the subjective side of social development disappears from view. What appears is that the coordination of all social processes of production and circulation, with labor as only one factor within production, is necessary to maximize return on investment. Thus capital has a tendency, Marx states, to develop the productive forces to their own limits and to expand production continually to meet social requirements in their existing forms. Capital carries out this expansion, and the expansion of its own accumulation within it, through the increase of labor productivity which is also the further expansion of social productivity. But capital does this through the reduction of wage labor within production. Consequently, capital in this way increases the intensity of labor exploitation and the production of surplus value by increasing those elements of production which do not create new values. This is, in general, the definition of the falling tendency of the rate of profit (Marx 1986b, vol. III: 211–31). Capital continually defines and reproduces itself as a social particular within an overall relationship of social reproduction. Capital always expresses itself as a relation to its own processes of accumulation and within the context of its own concentration and centralization. Capital makes itself an ever wider relation to social activity but it carries on these social relations only as commodity relations. More and more commodities, Marx shows, mean more and more instability: the necessity for reconciling the relation of those commodities to one another and to the processes of concentration and centralized

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accumulation. The more capital unifies production and circulation of commodities and capital, the more the coordination of these processes averages levels of wages, surplus value, and costs. The unification of these through capital implies its concentration and centralization and its investment within production and circulation at the highest rates of profit. This implies further a depreciation of capital which does not represent the highest developed rates of profit and corresponding limits to economic expansion, as well as surplus population. Therefore, capital creates a socially average rate of profit as a relation to its own processes of accumulation and this is defined against previous and existing forms of development. Capital, Marx says, is not the means “for a constant expansion of the living process of the society of producers” (his emphasis). Production is for capital and not vice versa: The means—unconditional development of the productive forces of society—comes continually into conflict with the limited purpose, the self-expansion of existing capital. The capitalist mode of production is, for this reason, a historical means of developing the material forces of production and creating an appropriate world market and is, at the same time, a continual conflict between this its historical task and its own corresponding relations of social production. (Marx 1986b, vol. III: 250) Capitalism’s history is discernible not only through its movements of money capital and its evolution and renewal through crises. Capital is also a relation within social space as capital defines social space and time as relations to its own production and exchange and as capital reproduces its control of production as a relation of social class. It was these same social relationships which Lenin recognized as constituting imperialism. Greater efficiencies of scale, scope, and transaction costs during the late nineteenth century and after were achieved, in part, by the concentration and centralization of production. The horizontal and vertical integration of companies was also the concentration of ownership and capital. The organization of corporate integration was accompanied by the centralization of finance capital and the management through investment of the major portions of industrial production. These developments enabled capital to achieve greater stability by controlling the anarchy of competing commodities. Lenin cites the fact that raw materials’ prices failed to fall as fast as other commodity prices, as leaving companies especially vulnerable in crises (Lenin 1984:25–8). Of course, a primary purpose of monopoly corporations was to be able to appropriate to themselves emerging processes and products and to control prices and markets. Monopoly corporations then limited changes in prices, technology, products, and market entry in order to avoid competition. Corporations could introduce changes in these areas only in ways and to the extent that they were compatible with maintenance of monopoly control. Concentration and centralization of production and capital in these forms inherently limited the expansion of investment. At the very time when urban forms of social existence were making themselves universal objects for production and requirements of social life, corporations were restricting the conditions for their creation. Centralized and concentrated production made itself the condition for industrial employment and large

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numbers of people moved toward urban areas. But the expansion of employment and the ability to satisfy social needs within the urban environment were limited to corporate and capital requirements. Principally, the ability to reproduce oneself in an increasingly commodified existence depends upon the ability to pay. Corporations and capital extended the requirements for social reproduction primarily to those groups with the greatest abilities to consume. Given the increasingly social character of reproduction within urban life in all its forms, urban development became more politicized and became the basis for invidious competition among groups. Monopoly capital in the early twentieth century represented, at once, a system of more efficient social production, expanded capital accumulation, and centralized control of social reproduction. Lenin recognizes in Imperialism that the export of capital arose both because of capital’s necessity for maintaining monopoly conditions and the inability of monopoly production and finance to develop fully the social relations which they had posited for development (Lenin 1984:62–3). Social reproduction in its more expansive forms was limited to those groups which were strategically placed in relation to capital’s own requirements for reproduction. The aristocracy among organized labor, for example, represented the ability of some workers to advance socially because they were distanced themselves from other workers by their skills and their forms of trade unionism (ibid.: 105–8). In identifying the export of capital from corporations and finance as the essence of imperialism, and in stating that “imperialism is capitalism” in its monopoly corporate form, Lenin was recognizing that capitalism had become a system of social reproduction which was inherently limited and antagonistic in fulfilling its requirements (ibid.: 89; my emphasis). Moreover, as Lenin demonstrates, monopoly corporations had many other connections which centered them around their own development rather than that of national and social life. Monopoly corporations were international and were connected with the division and control of markets in international competition. Monopoly corporations in each of the major capitalist countries dominated economic life and government and were central to aggressive international rivalries. Monopoly corporations relied both on administered systems of international trade and foreign investments, including colonies. This resulted in a division of the world among the most powerful capitalist nations so that, by the time of the First World War, all parts of the world had been divided among them. Taken together, these constitute what Lenin identified as the five essences of imperialism: the export of capital, monopoly corporations, the dominance of finance capital, the division of the world among the monopoly corporations, and the division of the world among the imperialist nations. Imperialism was also a means of providing for corporations’ social and economic development of their home nations since they could offset some of the limits to the expansion of production and investment by exporting capital and then repatriating some of their profits. The labor aristocracy was among the beneficiaries of this system. Above all, the development of imperialism reflected the profound opposition between private appropriation and socialization—the inability of capital to face and fulfill social requirements directly and straightforwardly.

3 THE PREMISES FOR POST-SECOND WORLD WAR IMPERIALIST EXPANSION The reproduction of human existence is a social, collective, enterprise, and not the product of isolated individuals. Thus, production is always the reproduction of a mode of social existence. Capital became a universal form of production by making its forms of work, and commodity distribution, exchange, and consumption the conditions for human social and individual reproduction. Capital, in the United States by the late 1800s, unified those conditions, regionally and interregionally, through a national transportation system. But, as capital universalized itself as a national relation of private appropriation, it simultaneously and increasingly created itself as a particular within its own system of social reproduction. Any economic system, whether slavery, feudalism, capitalism, or socialism, ultimately represents a social unity of production, distribution, exchange, and consumption. However, as Marx states: “Hunger is hunger; but hunger that is satisfied by cooked meat eaten with a knife and fork differs from hunger that devours raw meat with the help of hands, nails, and teeth” (1986a:29). In other words, human needs have a universal existence; what matters is the developed forms for their satisfaction and the ways in which those developed forms are presupposed and posited by common relationships within human social activities. Capitalism is the most socially developed form of existence prior to socialism because it creates the premises of human social reproduction on the basis of shared urban social space which is itself a product of human social production, human-made space. The production of human social existence becomes, in its particular forms, what, in its deepest essence, it has always been, a process of collective social reproduction. Capitalism develops as a social economy because the conditions which it creates for production, distribution, exchange, and consumption assume common particular forms which become universal conditions for social existence as well as for corporate development. As these forms evolve into a common urban environment, they create the bases for further economic and social reproduction. Urban space becomes universal and particular in its forms because it represents, in part, an effective system of production, distribution, exchange, and consumption. The standardization of this space is a product of the corporations through their centralization and concentration of capital in the control of production and distribution, their organization of these activities for this social space. But it is equally true that the corporations are a product of this social space. Corporate concentration and centralization are made possible by the economies of scale, scope, and transaction costs which are achieved through the ways in which urban space exists according to its own requirements of human social and individual reproduction within that space.

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Understood as human needs for social reproduction, urban space becomes a basis for socialism. The neighborhood represents the basic unit necessary to social planning and development because it is built upon all previous and present requirements for urban development and it is the basis for positing new production requirements, just as it developed from a physical infrastructure through housing to household products and various services. The neighborhood provides the essential requirements for human individual and social reproduction as urban space develops under capitalism. The path of urban development was that once capital had created it as a common social space, urban social requirements became particular as they built upon one another. Housing becomes subdivided into neighborhoods; neighborhoods are themselves increasingly mass produced as units; and housing and neighborhoods are further particularized as household products and general requirements for education, health, recreation, and leisure provide the bases for social activities within and beyond the household. Neighborhoods become a basis for political activities, especially as these are connected to the production and reproduction of themselves as social space and the unities that they form within social production, distribution, exchange, and consumption. Because capitalism develops universal social technologies, it becomes increasingly possible to unify production and residence within urban space by decentralizing many of the activities which capital concentrates and centralizes. But it is exactly because production under capitalism is for exchange and capital accumulation, that the commonalities within urban social existence are not seen according to need. As Marx expresses it, capital is not for production—production is for capital (1986b, vol. III: 250). The corporation, therefore, represents a resolution, within the capitalist form, of the contradiction between ever more universal/particular forms of social existence and their creation in and through private appropriation. Imperialism becomes the social and institutional form of capitalist inequalities because production through the corporation and its own connections, especially the export of capital, limits economic and social expansion on the basis of urban needs. Consequently, imperialism reproduces inequalities of class, race, and gender in their socially developed urban capitalist forms through the ways in which capital marginalizes the bases for human subjects’ social reproduction. Simultaneously, the corporation is a social resolution of its contradictions. That is, the corporation must also resolve its relationships to the social connections, of which it is very much a product, by developing and extending social forms which are most compatible with its own requirements for social development. It is on this basis, and for this reason, that capitalist society took on new forms of institutional development beginning especially in the early twentieth century, which are defined as corporatist. As Charles Maier states: In the liberal polity, decisions demanded periodic ratification by a supposedly atomized electorate. The new corporatism, however, sought consensus less through the occasional approval of a mass public than through continued bargaining among organized interests. Consequently, policy depended less upon the aggregation of individual preferences than upon averting or overcoming the vetoes that interest groups could impose at the center. Consensus became hostage to the cooperation of each major

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interest. If industry, agriculture, labor, or in some cases the military, resisted government policy, they could make its costs unacceptable. (Maier 1975:9–10) Corporatism organized itself around those major sections of the society and economy upon which it was most dependent. The working class, during the first three decades of the twentieth century, represented not only the potential for industrial and urban unrest and revolution, but also a large bloc which had to be organized for workplace and consumption. Similarly, agriculture was economically unstable and frequently depressed and presented the need for policies which could organize food production into the context of a predominantly urban/ industrial society. Government intervention into social development became compelling for corporations, especially with regard to research and development, regulation of product standards and of the relations of monopoly industries to one another, and foreign policies which would assist international trade and investment. Social tensions, in the first three decades of the twentieth century, centered especially around the working class (Clarke 1988:133–54). Expanding unionization, strikes, revolutions, including that of the Bolsheviks in 1917, pressed corporations to develop ways to meld the working class into the emerging corporatism. In urban areas, the middle class found themselves caught between the expanding powers of workers and corporations, and desired to expand their own positions through reform of urban and national governments and by dividing urban space in ways that would extend their own control and economic security. Social relationships among people within the urban whole posited themselves as essentially political relations because they were, and are, essentially relationships within common, shared urban space, involving primarily the reproduction of those urban requirements and themselves. By 1927, urban planners recognized the neighborhood as the essential social unit necessary to urban development. But, just as urban politics were defined, in part, by the distribution of incomes and wealth, so the urban planning and reproduction of neighborhoods turned increasingly upon struggles by urban groups for the control of the local and national conditions of their development. All of these contradictions drove corporatism as their resolution within capitalism, and challenged liberalism in government, which emphasized laissez-faire. Whether governments during the early twentieth century embraced fascism as their political and social philosophies or whether they remained within a more traditional liberal framework, all governments were driven to play expansive roles in both foreign policy and domestic development. In this chapter, I will first consider developments in and among the imperialist countries, emphasizing urban and corporate developments within the United States and the expanding roles of government monetary and fiscal policies, and then examine the resolution of these tensions in the United States and the imperialist nations following the Second World War, which set the patterns for postwar national and international development. Imperialism, as it developed in the late nineteeth and early twentieth centuries, expressed decisively, and often violently, capital’s existence as a particular within its system of social production. Capital could develop that system of social production only to the extent of its own requirements for accumulation and investment, consistent with

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monopoly control. This limited social reproduction to commodity consumption and the development of the latest forms of products and technologies, at the expense of earlier ones. Moreover, monopoly control necessitated the export of capital in a search for profitable investments which could avoid the barriers of overaccumulation and provide export to those international connections which monopoly corporations had already formed internationally, among themselves and other nations.1 As monopolies and imperialism developed, social relationships among people within urban space posited themselves as political relations because they were relationships among people within common, shared urban space and because their social activities involved primarily the reproduction of those urban requirements and themselves. Abilities for social and individual reproduction within this shared space turned upon capitalist requirements for and definitions of incomes, wealth, and the ability to consume commodities. But, just as urban politics were defined, in part, by the distribution of incomes and wealth, so the urban planning and the reproduction of neighborhoods turned increasingly upon struggles by urban groups for control of the local and national conditions for their own development.

IMPERIALIST SOCIAL DEVELOPMENT Imperialism defined the politics of social reproduction both nationally and internationally. Those politics are the focus of this chapter. National development was determined by corporations in their control of their national economies and their extensions of themselves internationally through other corporations and countries. This determined social reproduction within the nation as a relation of social groups to corporate international development. This national-international political dimension took two principal forms: fascism, as domestic repression and territorial conquest; and liberal corporate capitalism, as international appropriation through exchange and domestic social reproduction as a relation to money and government-defined access to social requirements. I will examine each of these connections in turn before proceeding to a consideration of the forms of resolution of these contradictions following the Second World War. Imperialism is in essence the export of capital because it is the extensive development of capitalism outside of its country of origin, as opposed to its intensive development within the home country. The export of capital realizes this international economic development in what Lenin calls the search for profitable investment (1984:62–3).2 It was this extensive economic development which was typified by the race for colonies and it was this form of colonial expansion which defined the export of capital at the onset of modern imperialism. But, by the early twentieth century, the imperialist nations had divided all parts of the world among themselves. Once this limit was reached, extensive economic development turned increasingly upon the relations of the imperialist nations to one another. With the exhaustion of the possibilities for colonial expansion, the division of the world among the imperial powers became the essence of imperialism because it was through this relation that they determined the conditions for their national development. The First World War was both result and premise of this relation of the imperialist countries to one another. The international redivision of colonies and wealth

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among these countries which resulted from the war was intensified by the war reparations and loan repayments which followed. The United States was the primary beneficiary of this redivision because of the loans it was owed by its allies and their pressure upon the German economy for payment of reparations. This restricted the economic development within all of the Western European nations, in favor of the United States. Indeed, it was the attempt by the United States to turn this balance to its absolute advantage, in reaping the benefits of this international exchange while setting severe restrictions upon its imperialist trading partners, which was a major cause of the international economic breakdown in the 1930s. The international connections of the imperial powers in the interwar years were also a product of the expansion of monopolies and their reallocations of international markets among themselves. Again, this favored, especially, the United States corporations at the expense of the Germans. It also represented increased administration of international economic relations by monopoly corporations (Nussbaum 1988:131–45; Schröter 1988:160–71). Extensive economic development as capital and development were reallocated among the imperialist countries meant that social relations within these nations became increasingly differentiated. As capitalism developed into the form of national monopolies, it established its own unities of production, distribution, exchange, and consumption as conditions of social existence for most people within the nation. Consequently, people’s relations to one another within the nation were differentiated by their relative positions of access to these social requirements. Monopoly capitalist employment and consumption defined and reproduced social relations of ethnicity, race, gender, and class relations to monopoly capital’s own conditions for social existence. The export of capital made the conditions for social development within the imperialist nations more precarious and competitive. Since imperialism relied upon repatriation of wealth created abroad for its own national development, this encouraged social groups within the home nation to identify their country’s foreign operations as conditions for their own existence, while they denied and suppressed social claims and competition from those groups most disadvantaged by imperialist terms for national development. The development of the imperialist states at the expense of one another intensified this social competition and polarization. This social differentiation was expressed most dramatically in Germany. German expansion during the late 1930s and early 1940s was at least the beginnings of the fulfillment of the idea of lebensraum which had been prominent in their imperial politics since the late nineteenth century. I want to call attention to two aspects of this policy because of its implications for and consistency within imperialism generally, including in its post-Second World War form. Lebensraum always expressed, in particular, the general imperialist requirement that the continued development and prosperity of the nation could only be had by development outside of itself. Nazis expressed this as a relation to territorial possession, while capitalists in liberal corporatist states, like the United States, achieved it primarily through reallocations within international exchange. Additionally, the concept of lebensraum expressed a relationship of the imperial nations’ domestic groups to each other. It is one way of saying that within the domestic capitalist imperialist economy, a number of groups were surplus in their limited abilities to have a share in employment and consumption. With some groups, such as Jews, their economic displacement was said

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to be a reflection of their own inherent inferiority (Leon 1970:257–66). With other groups, such as industrial workers, for whose political allegiance rightists had to compete against socialists and communists, their social claims were often taken as justified, but unrealizable within the domestic economy (Smith, W. 1986:83–112). Only the control of foreign wealth or the availability of land outside the nation would provide sufficient return to the nation either to permit improved domestic conditions or allow people to settle abroad as colonists. In both of these ways, then, German imperialism, like imperialism generally, stated a privileged ranking among people within the nation and sought the resolution to its own social problems outside of itself. I am suggesting, further, that imperialist ideologies of classism, anti-semitism, racism, and patriarchy were derived from actual configurations of a nation’s corporations and empire. These ideologies expressed invidious social relations and their possible resolutions as these relations and possibilities were created within imperialism and its export of capital. For German imperialists and fascists, empire increasingly came to mean possession of their less-developed European neighbors and, of course, after the Munich Agreement of 1938 and the beginning of the war the next year, the possession and subordination of other imperialist states. In the ways that I have just cited, then, the principle of imperialist development as accomplished through one nation’s dominance and control within and among other imperialist states, was well established before the war. Fascists sought to accomplish this through outright territorial possession. The liberal corporatist states, and, given its international position, especially the United States, sought to accomplish it by international exchange. The latter method had its embryonic form in the exchange relations within the sterling area of the British Empire (Block 1977:14–31). The Second World War was decisive in establishing the liberal capitalist approach to international dominance and to domestic development, the predominantly “money” rather than “military” solutions to corporate and national control and development. Yet I am also suggesting, following Lenin, that both of these approaches rest upon the same premises of imperialist configurations of capitalism.

THE POLITICIZATION OF URBAN SPACE Any discussion of imperialism threatens to slip one-sidedly into a discussion of international relations or the international movement of capital. But imperialism was international because it was first of all national, a relation among people within capitalist nations. My central concern in discussing urban social development prior to the Second World War is to show how common social requirements posited other forms of social activity with regard to products for consumption and for economic and political organization. I will also show how monopoly capital shared a mutually determining relation to those common requirements through setting restrictions for their development with regard to its limits to consumption, including, especially, its dominance over monetary and fiscal policies. The mutual determination of monopoly capital and common social requirements came to include, also, the ways in which capital had to adapt itself as a political relation to these requirements.

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With monopoly capitalist concentration, urban areas expanded as magnets for individual employment and residence for industrial workers. By the turn of the century, it was possible to reproduce whole industrial towns such as Pullman, Gary, or Flint as units which included all elements of developed urban infrastructure. In Gary, the city was actually planned as an industrial social hierarchy (Greer 1979:51–71). These industrial communities, as well as workplaces, became sites of industrial struggles from the late 1800s. The steel strike of 1919 involved community organization which, in many ways, was the prototype of more successful community struggles in the 1930s, including citywide strikes in Toledo, Minneapolis, and San Francisco and the Flint sit-down strike in 1937. Union and community organization became increasingly combined with political organization, especially through the Democratic Party. Congress of Industrial Organization (CIO) unions in urban areas often used the shop steward as the central connection in both workplace and community political organization. This reflected the high degree of integration within urban social space as a center of work and residence. By the middle and late 1800s, the development of housing for wage workers had become increasingly important in urban areas. Existing housing was no longer adequate to the developing social space, especially since fires in existing working-class dwellings threatened to spread to those of the rich as well. The requirement for housing modified finance, which made possible lower interest loans for the extension of working-class housing (Stone 1986:48–50). Increasingly, housing was built in neighborhood blocks. Renovation of urban housing progressed to the rebuilding of whole sections of cities, both as real estate ventures and because of limits and decline within available housing stock. By the early twentieth century, whole sections of cities could be taken over by economic groups. Harlem, for example, was built for settlement en masse by wealthy persons, but when this venture failed, the housing became the object both of real estate speculation and mass migration within the city by blacks (Osofsky 1965:81–104). By 1927, urbanologists recognized the neighborhood as a definite social unit, which included, as requirements for existence within developed social space, everything from the wires and pipes under the ground to the paving stones on streets and sidewalks, to housing, consumer durables, and city services. The compression of a neighborhood as a unit for the social reproduction of mass housing and as a “cell” for social planning represented a unification of common social requirements and the particularization and differentiation, as well as the universalization, of neighborhoods as basic units of social existence (Angotti 1992:19–20). Of course, it was middle-class, and especially upper middle-class, neighborhoods of expanding professionals and managers which represented the most developed mass forms of neighborhood existence. Control of social reproduction of the neighborhood as a common social form posited itself as a political relation within shared urban space. Urban social development as a relation among social groups of marked economic differentiation set off struggles by the middle and upper middle classes for control of zoning and urban government in ways that diminished access by the poor and working classes (Angotti 1992:192–6). Control of social space and government at both the local and national levels was the priority of urban middle-class “progressive” movements during the early twentieth century. The “progressive” presidents most reflective of these movements, Theodore Roosevelt and Woodrow Wilson, were also champions of United States imperialism in international relations.

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The development of social space as a common requirement for social reproduction made it increasingly an object for production as well as for consumption. The development of power generation involved common social requirements. The evolution, refinement, and application of electricity was a consequence of the social productivity which sprang from the interactions of all elements within this social space (DuBoff 1989:82–8). The development of the automobile as a personalized form of mass urban transportation originated, in part, from the individualization of residence and neighborhood within social space (Angotti 1992:55–60). Monopoly corporations were further reinforced as consequences of growing social productivity as they struggled to control product development (especially automobiles and electrical products, at the expense of older industries, such as railroads), and as the use of mass production industries to supply common spatial requirements (DuBoff 1989:66–81). Among these requirements was the employment of the urban mass of wage labor which was both subject and object for production and consumer products. Throughout the 1920s, the need for consumer durables to meet needs within individual housing units and neighborhoods expanded against the limits of consumption imposed by wage labor employment and underconsumption, especially in agriculture. The inability of corporations to develop this social space consistent with the profit requirements and consumption limits that they imposed was a major reason for the depression of the late 1920s and the 1930s. Government monetary and, primarily, fiscal policies had to be adjusted to avoid social collapse. It is necessary to discuss the place of these policies within capitalism before exploring the Second World War as the resolution of the depression.

MONETARY AND FISCAL POLICIES IN NATIONAL AND INTERNATIONAL DEVELOPMENT The development of United States government control of monetary policy through the Federal Reserve in 1912 presupposed the existence of a national system of production and exchange and the existence of similar relations of commodities and money in all parts of the country. But the national monetary policy did not only express similar and national needs for money and exchange. The national system of production took the particular and essential form of the monopoly corporation. The coordination of money and exchange relations was primarily through highly centralized banking and finance. A social system of accounting, as Lenin calls it, carried on as a system of private appropriation (Lenin 1984:47). The money supply was and is managed as a relation to private appropriation. The availability of money expresses capital’s creation and determination of value through its system and not social needs or use values, i.e. the need of people for money as a condition of their social reproduction. Nevertheless, the money supply constantly threatens to slip beyond this limit. This is the case, for example, when wages and prices are driven upward in capitalist expansion through the business cycle. It is also the case with any social use value or development which requires commitment, expansion, or renewal that is at odds with the reproduction of exchange value within new and developing forms of its creation and management.

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Deflation of the money supply is a way in which capital preserves value and control of wealth. Capital increases the value of its holdings by making money more scarce. At the same time, deflation forces people to work harder and faster for a smaller quantity of money which stretches less far. This is one reason why monetarists argue that control of the money supply is the only form of social management in which government need engage. However, the money supply does not exist in the abstract, but is dependent upon ever more mechanisms of government, corporations, and social relations (see Zelizer 1994). Unless capital can dissolve existing values and renew them in new forms through its use of money, it cannot control economic and social relations. This necessity is part of the secret of the institutional and social forms which capital adopts. The revolutionizing of production and social relations is the dissolution and renewal of value through the control of money and its social uses. But this requires capital to centralize and concentrate itself (which is part of the flow and preservation of money in the business cycle and of deflation) into institutional forms which manage (and consequently depend upon) ever wider social relations, even while control and management of capital becomes ever more remote from those relations. Once the management of money becomes national and, within certain limits, governmental, so does the importance of government within capitalism. The expanding role of the federal government in the early 1900s focused upon attempts to remove various excesses such as speculation, which also reduce value, and to coordinate monopoly activities and relations. But increasingly, it took the form of the use of fiscal management, government taxing and spending. Like all other forms of capital’s use of government, these are limited to extensions of capitalist production and consumption. Nevertheless, the social and political character of government always threatens to allow these relations, also, to move beyond capital’s control and to make social commitments inconsistent with the preservation and renewal of the value relation. This becomes highly important with regard to the reproduction of developed social relations which involve government policies (Clarke 1988:221–43). The forms and uses of fiscal policy are often called “Keynesian,” and they are, insofar as this acknowledges Keynes’s genius in understanding employment and consumption in their developed social forms. But fiscal policies grew out of capital and its own social necessities. Moreover, the “Keynesian” designation confuses us with the notion that fiscal stimulus is the principal need for capital’s social adjustment and that capital is, or can now be, essentially national in its development. Keynes’s own willingness to see private appropriation carried on in the usual ways meant that his proposals for national capitalist development were ultimately inconsistent with the system of appropriation.3 Keynes’s own failure, along with that of many Marxists, to take full account of imperialism doomed these proposals from their conception. The limits to the forms and uses of fiscal policy are limits within capital’s own specific forms of development. These limits are not simply general, such as the need to restrict consumption so as not to push wages above a certain level. The class limits within fiscal policies, in their then particular forms, can be illustrated in the context of the development of international monetary policy during and after the Second World War. At the Bretton Woods conference on international monetary policy and economic development in 1945, Keynes proposed an international clearing union, to even-handedly

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manage currency exchanges among nations, and the creation of international agencies for trade and national development. These proposals grew out of Keynes’s goals for nationally-oriented capitalist economic development which conformed to his prescriptions for the maintenance of prosperity and humane social priorities. But it was exactly because the class limits to capitalist development necessitated its international expansion that national capitalist development was not possible. New Dealers in charge of developing international monetary policies in the United States, during and after the war, favored organized labor and supported fiscal policies which expanded domestic social rights and spending. But, for business, the extent of this domestic social spending was in question. They preferred an export-oriented economic development which would leave capital free for international expansion and would repatriate private capital to the United States to maintain its economic and social expansion. Labor and New Dealers, therefore, had to acknowledge at least some measure of export-oriented growth in their proposals which would permit a degree of freedom of movement for US capital internationally. What was never in question was the idea that government would or could control the reconversion process after the war in ways that would fulfill all of its potential for the expansion of social production and consumption. Labor and New Dealers, instead, supported export-oriented economic growth to satisfy business and as a curb on social spending. Export-oriented growth was in this way a means to curb unemployment as a consequence of reconversion. Restraint of capital’s layoff of large numbers of workers in the reconversion process would be achieved in exchange for capital’s ability to sell more of its products as commodities abroad and to expand its international investments (Block 1977:30–45). The restraints on fiscal policy are thus a consequence of capital always making its priorities politically dominant and ahead of any other political and social considerations, as those priorities reflect capital’s own limits within its specific and historical form of development. In the example I have just given, the class limits to social expansion through social spending necessitated export-oriented growth in order to reduce the consequences of those same class limits for social and economic development. It was, again, the class limits within social development within the nation, as these were created by capital, which were in turn pushing capital beyond itself, beyond its then specific form. For this reason, there could be no essentially national capitalism following the Second World War because of capital’s own class limits to social development within each of the imperialist nations. Moreover, it was only when US capital had sufficient control of international monetary relations that it could move international investment freely (and thus preserve control of money and its value relation as an opposition to its social uses) that capital moved economic expansion forward. This meant US control of monetary relations and economic development at Bretton Woods expanded into an even greater US control of exchange and reliance upon export-led growth after 1945. The social priorities of labor and the New Dealers during the war, as I have described them, were essentially dead within two years after its end. Consequently, international development in the ways Keynes and others proposed it—or sufficiently international agencies for international exchange and economic development—never materialized. The centering of international power and responsibility in the United States has had severe consequences for the US economy, as well as for all other countries, ever since.

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THE POSTWAR BASES OF IMPERIALIST EXPANSION The Second World War brought the fiscal powers of the capitalist governments into their fullest force. Only the mobilization of productive relations through the state could respond to the challenge of war. And this intensive development during the war threatened to push capitalist development beyond its limits in terms of employment, consumption, and production. I will examine each of these relations in turn and their importance in positing fiscal policy within the United States and other countries as a primary essence of postwar capitalist economic and social relations. For now, it is important to understand the contradictions which wartime development posed for capital and its immediate postwar struggles. The massive expansion of employment in the United States during the Second World War expressed the extensive social relations which had developed through monopoly capitalism, especially as this involved the participation of black and women workers. The total number of all workers employed in durable goods production rose from 3.9 million in 1939 to 7.5 million by 1945. The total number of women workers expanded by nearly 7 million, rising from 12 million in 1941 to nearly 19 million by 1944. Total black employment rose from 3 million men and 1.5 million women in 1941 to almost 4 million men and over 2 million women in 1944 (Moody 1988:21). For all social groups employed during the war, their social existences were posited as relations to the national character of production and dependence upon these national forms of production for access to the means of life. It was exactly because of the national similarities within productive technologies and relations that most people potentially could move easily among various forms of industrial production and, in fact, did so during wartime conditions. For women, this meant not only getting out of the home and social relations of patriarchy in that form, but also moving out of their entrapment within low wage industries. For blacks, this represented the consequences of the mechanization of Southern agriculture, as well as their need to escape its peonage. These were social relations which could be developed within capitalism only as commodified employment relations. But full employment was achieved only during the war and as a result of government policies and the organization of production. The labor movement was, likewise, a social relation which grew from the shopfloor and community struggles of the 1930s and early 1940s and, during the war, came to depend heavily upon government for its continued expansion. What was decisive, then, for the development of all of these groups, in terms of their social needs and relations to one another, was the expansion of unions and government social policies. The increasing number of blacks within the industrial working class was a product of declining employment within Southern US agriculture and the expansion of industries during wartime. These forces made de jure segregation obviously regional and increasingly untenable, even by the early 1940s, as Roosevelt’s willingness to support federal anti-lynching legislation by 1937 testified. Black employment in war industries was won by the threat of a national march on Washington. This came at the end of a decade of expanding popular demands for civil rights and equality (Marable 1985:74– 87). Racial equality was a class question, in part, because the access to industrial employment was a condition of social life. As such, the questions of equality and

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employment were central ones for the trade union movement. The fight for racial equality was in the material interests of all workers. As Manning Marable demonstrates, trade union movements that accepted the legitimacy of racial segregation were ultimately to be unsuccessful or achieved only marginal gains from capital (1985:78). Women’s employment during the war also reflected highly socialized and politicized relations. Alice Kessler-Harris concludes that the war reflected women’s desire to seek wage work when normative pressures to stay home are removed. The availability of child care and food services, even though still inadequate; the absence of men; attractive wages and job opportunities; and the temporary suspension of social animosity enabled this expansion of women wage workers. She states that 75 to 85 per cent of women surveyed during the war indicated their desire to maintain their jobs in peacetime (Kessler-Harris 1982:277). Lucy Greenbaum observed during the war that women’s situation in the postwar years would depend upon the extent to which the nation developed a full employment economy (Kessler-Harris 1982:298). The federal government’s control of employment and conditions of work during the war and its enforcement of the right to unionization, likewise extended the government’s potential for expanding postwar employment and equality. These controls placed unions in a pivotal position for expanding recognition of the employment relation as a class relation. Unions had arisen and expanded in the 1930s from the conditions on shopfloors and in communities which had been created by monopoly capitalist employment and urbanization. In the US context, therefore, the future of class relations and of the trade union movement depended, in large measure, on the role that full employment was to play following the war and the extent to which the trade union movement fought for the rights of all workers. During the war, the trade unions made only modest efforts to secure the rights of women and people of color, where they did not play an outright exclusionary role (Foner 1974:26–63;1982:394). Nevertheless, it was the struggles in the immediate postwar years in the United States and the other imperialist countries that were to decide the course of development in the late 1940s and beyond. The war produced an intensive development of all the productive forces within each of the imperialist countries. Wartime destruction was limited principally to transportation and this created barriers to the movement of goods rather than to their production (Armstrong et al. 1991:10–11). The conditions which characterized the class struggles following the war involved not so much rebuilding production in the various countries but the terms under which these productive forces would be socially developed. There were three primary barriers to the resumption of production. One of these was monopoly control of industry. In the United States, for example, following the war, the production of consumer durable goods was at first restricted by those businesses who wanted the opportunity to resume peacetime production ahead of any competitors. This also involved the maintenance and extension of the military-industrial complex which had arisen during the war (Cook 1960:65–78). Second, once resumed, peacetime production, including that in the United States, moved forward only sluggishly because of the dependence of monopoly producers upon foreign markets. During the war, US plans for economic recovery were conditioned on the expansion of foreign markets. As a State Department memorandum defined the problem in 1943, a great expansion of world trade would be essential to attaining full and effective employment in the United States and elsewhere (Armstrong et al. 1991:27). The

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United States, like the other capitalist nations, did not define expansion of its production and consumption as a relation to its own nation and its social development, but as an expansion of capitalist development in and through the other imperialist states. As Armstrong et al. conclude, markets for US goods would have stagnated unless the Western European countries and Japan recovered as markets. This meant that these nations had to be available, also, for US capital investment and expansion. Until this economic and political complement could be achieved, investment and production would stagnate and, especially in Western Europe and Japan, popular demands for socialism would grow (ibid.: 27–8). Third, relations within the capitalist countries, therefore, presented themselves in the postwar period as increasingly political and, especially, as relations to government fiscal policies. On the one hand, there was the necessity to restore social production and provide full employment within the various societies. Not only were anti-capitalist political movements very strong in Western Europe and Japan following the war, but they owed their popularity in part to their contribution to the anti-fascist struggles and the winning of the war. Moreover, capitalist governments themselves contributed mightily to the political character of these struggles because of the extensive connections to production, employment, and consumption which they had developed of necessity during the war and, by implication and possibility, at least, had extended well beyond the limits for capitalist development. The question was no longer whether government might be extended in the regulation and development of the economy, but who would capture political control of the government and the economic and social relations which it expressed.

FISCAL AND MONETARY POLICIES On the other hand, the means of production were still under capitalist control. Investment could expand in the short term by using assets developed during the war, especially those that had accrued to capitalists as a consequence of their development by government. This allowed a certain level of production without a general expansion of employment. Production could be maintained along with labor discipline through widespread dismissals and speed-ups. Social restraint of workers through their employment in these ways was supplemented by making them pay more than their share of taxes for rebuilding the infrastructure. A pattern began to emerge among the Western European countries of a combination of fiscal and monetary policies which encouraged the economic development of the middle and peasant classes at the expense of workers. The middle classes were worried about the value of their money which they had hoarded during the war. Farmers were looking for high agricultural prices even beyond those created by postwar food shortages (Armstrong et al 1991:38–67). The similarities among the fiscal and monetary policies in Western Europe, Japan, and the United States, following the war, reflected capitalists’ responses to the political problems created by the similarities among the classes within those countries and the relationships of those classes, capital, and government as posited by the war. These responses centered upon the ability to use government controls over social income in

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ways that pitted classes against one another. The outcomes of these fiscal and monetary policies made the middle classes, generally, pay a price through monetary reforms, but kept their purchasing power high. Farmers were allowed to keep farm prices very high and thus they too enjoyed high profits and high purchasing power. Meanwhile, the restraints upon workers, low industrial output, and the lack of full expansion of capital investment was complemented by continued inflation, black markets, and the stockpiling of goods (Armstrong et al. 1991:38–41). But these policies only posited government fiscal and monetary powers as a relation to class struggle. In all the imperialist countries during the first two years following the war, class struggles intensified as unions and workers’ political parties contested these policies and the failure of production to expand and the economies to revive. These struggles were intensified by the nationalization of some industries and the expansion of social services in various countries. In some cases, the response to the struggles was primarily military. This was especially so in West Germany and Japan, where US occupation forces held the struggles at bay, while imposing their version of the US model of labor relations through legislation. Moreover, through the Truman Doctrine, the United States was able by 1947 to extend its military obligations to the crushing of political unrest in countries, such as Greece, where the struggles were most likely to produce anti-capitalist governments.

TRADE UNIONS The US trade union movement proved itself increasingly cooperative with capital in the imposition of a US model on Western European and Japanese workers. But this was, likewise, a product of class struggles within the United States, where fiscal and monetary policies also posited themselves as relations to class and, most specifically, trade union struggles. It was in the United States arena that the model of trade unionism, which proved so essential to capital and its development during the postwar period up to the 1970s, and even beyond, developed and matured as an essence of postwar imperialist development. It is the evolution of that trade union essence through the class struggles in the United States in the two years after the war that I will now examine. Wartime government policies held wages to a 15 per cent overall increase while permitting prices to rise a total of 150 per cent and profits to increase 250 per cent. At the same time, the government enforced, and unions helped maintain, a no-strike pledge throughout the course of the war. This posited United States trade unionism, even in its most politically conservative forms, as a struggle for “catch-up” with regard to workers’ incomes. Much depended, therefore, upon the unity (or lack of it) with which these struggles were conducted. The struggle for full employment legislation most directly posed the challenge of whether the trade union movement would attempt to move the working class forward in controlling its own social reproduction. Given the general neglect, or even reversals, by the trade unions during the war of the struggles for civil rights and working women’s equality, and the paltry outcome of the full employment issue, it may seem arbitrary even to pose this question. But the lasting effect of these struggles was the extent to which the

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working class in the United States would be able to guide its national economic development. The conclusion of the struggles of the US trade unions during the two years following the war tell us much about the political and historical propensities of those organizations and the likelihood of their outcome. But while those things are important in their own way, what was most important was the relationship which the trade union movement was forming with the working class as a whole and to its social conditions for existence. As with all the fiscal and monetary policies favored by the imperialist classes in the two years after the war, the extent to which capital could reduce its class relationships to relationships of money, was the extent to which it could maintain its own mobility. This substituted monetary relations among groups within society for the full development of social relationships. To the extent that trade unions joined capital in creating this essentially monetary relation of people to one another, the unions identified themselves as consumers rather than as producers. That is, they represented primarily the incomes of their own members rather than the conditions of their members’ social existence and development and those of society as a whole. Even such economists as the conservative Henry Simons, of the Chicago School of Economics, and Friedrich Hayek, whose works have guided right-wing economic thought from the postwar to the present, stated clearly in the mid-1940s that trade unions only sought, in this way, to protect their own consumption, while presenting an obstacle to the free movement of capital (Simons 1946:282–94; Hayek 1991:153–4). In the immediate postwar period, organized labor in the United States placed its hopes and the focus of its political struggles on full employment legislation. But they voided any real possibilities for its effectiveness by their neglect of full racial equality and by agreeing to support legislation which excluded from any coverage those with full-time housekeeping responsibilities (Foner 1982:394). As Philip Foner states, the final form of the Full Employment Act of 1946 did not promise full employment to anyone and, therefore, the exclusion of housewives was unnecessary. Similarly, the strikes of 1946, having commenced as a united front of the leading industrial unions, ended with the split of the United Auto Workers into a separate settlement and, basically, the end of this movement’s progress toward national bargaining. Unions continued to support Truman even after he used federal powers to break a national rail strike in 1946 and his acquiescence in the Taft-Hartley Act which effectively reversed trade union-enabling legislation of the 1930s. The acceptance of Taft-Hartley effectively confined the trade union movement to the gains and to the form that it had developed during and after the Second World War. Taft-Hartley was also a result of the effectiveness of business in organizing a middle-class, and increasingly anti-union, political constituency. Increasingly, the limitations of organized labor’s social vision were not compelling even for its own members (Derber 1957:13–29).

MIDDLE-CLASS CONSUMERISM What was most significant about the trade union struggles I have just described was not their intensity or suspense, but their consequences. What was posited in each of the imperialist countries as a relation of government to social and economic development

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through its fiscal policies, as they had developed during the war, became (most decisively in the United States) a trade union struggle which increasingly posited itself as a relation to consumerism rather than fuller social reproduction. This meant that the trade union movement created itself, and its relationship to society as a whole, as a relationship to the wages of its members. And, by doing so, it increasingly lacked the means to expand its membership. Moreover, this meant that in creating itself as a relation to private consumption, the trade union movement was simultaneously reducing class, and social relationships generally, to consumerism. It was only through organized social and political power that the working class could have access to controlling the terms and conditions of its own development. And the working class now lacked the ability to do this even in terms of the obligation of government to maintain employment or to maintain the political rights of union organization beyond the most elemental requirements. Consequently, the social development of the working class was posited as a relation to the abilities of members of that class to consume. This not only reduced groups’ social reproduction to their respective access to incomes, it made income the primary basis for social development. The expansion of production could, in this way expand only in terms of the abilities of workers to consume, and those abilities were limited by the workers’ respective positions with regard to the requirements of capital and its development. The absence of full employment, therefore, meant the exclusion of women and people of color from the workforce or their reduction to lower levels of employment and income. The number of women in the workforce actually continued to expand following the war, but only in the lowest wage industries (Moody 1988:21–2). This meant, also, the maintenance within the working class of unemployment at levels responsive to capitalist expansion or contraction. Consumption was further limited by the increased power that capital had to limit wages and raise prices. Finally, the ability of employers and government to limit the expansion of unions also meant that union incomes would not be extended very far to support production. A major result of capital’s ability to limit the social power of unions and the obligations of government to the working class was that consumerism limited the bases for expansion of production rather than sustaining it. The same was true of the fiscal policies pursued by capitalists in Western Europe and Japan. The lack of economic expansion outside the United States, therefore, threatened to intensify further the class struggles in these countries. The limits to consumption and the insecurities of politics served to hold back the expansion of investment and thus further retarded economic expansion. The limits to each nation’s capitalist expansion made each of them, in turn, dependent upon its ability to sell its products within the other nations. But those same limits were also limits on their ability to absorb imports from the others. On the one side, then, the trade union struggles within the United States posited themselves increasingly as relations to consumerism. The trade union movement was, simultaneously, both separate from and joined with a broader relation of social consumption. In certain ways, the trade unions created the conditions for the latter. But the relation of consumption included many more working-class people than the trade union movement included or was likely, in its present form, to include. The trade union movement, in this way, represented a relatively privileged income relation within the working class and it used its organized power to expand this position.

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Potentially, by the late 1940s, the trade union membership represented a supplement to the middle class, a social expansion of the middle-income consumption relation. The consumer relationship thus became an essence of capitalist postwar development in its own right. But, on the other hand, this consumer relation remained primarily potential during the 1940s because of the limits of social consumption and development which that relation itself represented. Consequently, the consumption relation posited itself as a relation to export-led growth. This meant the ability of each of the imperialist states to provide, within its own class limits, its national development through production for and exports to others. This was not simply a relation of exports in general, but a specific form of economic development created within the context and the limits of imperialist national development, as these evolved prior to, during, and after the Second World War.

EXPORT-LED GROWTH As reliance upon exports, within and among the imperialist countries, developed in the late 1940s, export-led growth posited itself increasingly as a relation to the United States and the dollar. The United States was, during this time, responsible for 60 per cent of the world’s industrial production. Western European countries were buying 90 per cent more from the United States than they had prior to the war. But the Western Europeans lacked dollars for trade. In 1946, US imports were no more than a quarter of its exports. The Western European trade deficit with the world rose from $5.8 billion in 1946 to $7.5 billion in 1947. Meanwhile, Western European gold reserves between 1946 and 1948 fell by one-third (Armstrong et al. 1991:69–70). Consequently, there was the danger that the success of the United States in export-led growth could deepen the economic and political crises in Western Europe and force these countries out of the United States economic orbit. Since that form of national economic development most probably meant socialist governments, this was politically, as well as economically, quite worrisome to the United States, and made its relation to its own development through export-led growth increasingly a question of class alliance with the capitalists of the Western European countries. Armstrong et al. conclude that the European capitalist class was in far too precarious a position, both economically and politically, to pursue an independent path of development (1991:70). But US dependence upon export-led growth, and the limits to its own expansion within this relation, were likewise growing. The severe trade imbalance meant that US credits and its importers’ reserves of gold and dollars were rapidly depleting. The more the United States and the European countries converted to peacetime production, the more they would become dependent upon exports outside of their own class consumption limitations. This dependence would thus be rising as the capacities to absorb one another’s products would be diminishing. In the United States, even with a decrease of women in the workforce of 2.25 million, and more people enrolled in higher education, unemployment still rose from 0.8 million in 1945 to 2.7 million in 1946. Despite an overall increase in employment, hours of work declined. And exports represented 20 per cent of the total rise in non-government spending in 1946. Right-wing US trade unionists were increasingly won to an export-led growth strategy as consistent with their consumerist orientation. But the recognition of this rising dependence on exports

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occurred in the context of the limitations of US policies of trade and exchange, as they had developed since the beginning of the war (Armstrong et al. 1991:74–5). United States policies toward international exchange and economic development, during and after the Second World War, reflected a determination to assert US dominance through export-led growth and a concern with the problems growing out of that determination. At the Bretton Woods conference in 1945, as I indicated, the United States opposed proposals by John Maynard Keynes which would have created international exchange, banking, and aid mechanisms adequate for the development of national capitalist economies (Block 1977:31). The United States wanted, instead, a reliance upon export-led economic development so that each country was forced to earn its way against the production and trading power of the United States. As a result, the United States won recognition of the dollar as an international basis of exchange equivalent to gold. The US agreed to the establishment of the International Monetary Fund and the World Bank as international agencies for development, but the US dominated that development, in part through the underfunding of these agencies. US dominance in these ways insured a reliance upon export-led growth which was highly favorable to capital. Trade advantages would enable the United States to maintain a favorable balance of exports over imports. The US trade surplus would provide a privately-funded stimulus to its domestic economic development. Capital mobility would be assured along with a domestic economic stimulus which was not tied to governmentdirected development or spending for social services. US dominance in international exchange through the dollar facilitated its alliance with capitalists in the other imperial countries. The scarcity of dollars for international exchange created deflationary conditions within countries and encouraged multilateral rather than national orientations toward economic development. But the dominance of the United States and the lack of dollars for exchange, as these existed in the two years following the war, created inadequate bases for multilateral export-led economic development and strengthened demands by the left in Western Europe for nationally- and popularly-oriented economic development. The United States foresaw in early 1947 that the Europeans would not be able to sustain US export levels beyond another 12 to 18 months. The lack of available international credit, the taperingoff of US aid, and the depletion of Western European foreign currency reserves all indicated the potential for a political as well as an economic crisis (Block 1977:82). A Brookings Institution study concluded that there was every prospect that without further large-scale US aid an economic crisis would accentuate economic nationalism, produce social uprisings, and strengthen extreme political movements. Such a crisis would then undoubtedly bring stricter national controls over trade and foreign exchange (ibid.: 240). The expansion, or even continuation, of export-led growth was, thus, posited by 1947 as a relation to the availability of the dollar for international exchange. Unless export-led growth could be expanded, the relation of capitalists to their own societies, which necessitated this orientation in the first place, would be threatened. The United States model of trade unionism which had evolved in the context of these class politics would no longer seem a viable alternative to socialist movements. And the fiscal policies of government within each country would then be challenged to provide an economic and social development which capitalism had failed to develop. Imperialism as a whole, and especially US dominance, would then be undermined. It was in order to maintain and

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extend all these essential connections that the United States provided the Marshall Plan. I will examine the plan and the capitalist economic and social expansion built upon it in the next chapter.

4 FROM THE MARSHALL PLAN TO INTERNATIONAL PRODUCTION To summarize my discussion in the previous chapter, by the Second World War, imperialist development meant primarily the ability of monopoly corporations from a given nation to develop through, and at the expense of, other imperialist nations. The war decided that the liberal capitalist approach to appropriation through international exchange, rather than military conquest, was the primary means for corporate expansion. But following the war, the monopoly corporations in the leading capitalist nations lacked the political and profit incentives necessary for them to extend their investments nationally and internationally. In large part, political obstacles to capitalist investment came from the strong needs of people within these nations to expand their economic and social development as the potential for that expansion had been realized already through government-sustained employment during wartime. Capitalists, in the United States and Western Europe especially, were able to blunt the potential expansion of government fiscal and monetary powers by limiting their use to policies which favored middle-class consumerism at the expense of full employment. The development of fiscal and monetary policies, in this form, became the first essence of postwar imperialism because it created the potential for monopoly corporate expansion along that line. The development of a form of trade unionism, especially in the United States, which was not wedded to policies of full employment, working-class solidarity, and government-based social expansion, became the second essence necessary to postwar imperialist expansion. Together, these two essences created and extended a third: a middle-income stratum among farming, small business, and working people which was both politically aligned with capital in its government policies and complementary to a consumerist form of trade unionism. But the class limits to consumption and social development within nations, which these first three essential relations represented, in turn necessitated the fourth essence of postwar imperialism. This was the development of an international relation of export-led growth. Only if means existed for making export-led growth a truly interactive and developmental relation among the leading capitalist nations could the contradictions inherent in all of these essential relations be continued and extended. It was the limits to export-led growth as it had developed by 1947 which the Marshall Plan sought to overcome. The developments which have just been summarized, along with the Marshall Plan and international wage-productivity relationship which I discuss below, became essences of capitalist development and expansion because they each formed essential connections to the processes of social reproduction. Within the dialectical materialist method, essence refers to essential connection (see Appendix). It is one of the particular forms within a developed relationship among other particular forms which connects and determines the

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others, makes them possible as a relationship to one another. Urban space develops as the basis for human and social reproduction under capitalism. It develops as a system of social reproduction through its essential connections to the processes of production. Urban social space furnishes the objects for production as those objects are developed in relation to requirements for individual and social reproduction as these exist within this developed social formation. As I have shown previously, for example, working-class requirements form capital as a system of social and industrial production, urban space as the basis for private production and private exchange makes itself object for the production of housing. The development of housing into neighborhoods makes households the object of production and then makes neighborhoods themselves objects for production as the social extension of a developed form of existence. Each of these developments within urban space becomes an essence of that form because each builds upon and combines the others within itself. Early industrial workers’ needs make that space the object for social consumption and social production. The consumption of housing reorganizes residential space into neighborhoods and the production of neighborhoods extends them as the basic unit for social existence. By the early twentieth century neighborhoods had become the basic unit for social existence within urban space because they combined within themselves all of the previously developed requirements for individual and social reproduction within urban space. The neighborhood becomes the essence of urban development under capitalism because it combines within itself the primary forms of social consumption, and becomes the basis upon which social consumption makes itself the object for social production. It includes all the essential elements for individual and social reproduction as these evolve logically and historically within capitalist urban space, as that space makes itself the condition for individual and collective reproduction. The neighborhood combines housing, physical infrastructure, and household consumption, and is the basis for socialization beyond the household, as education, health care, recreation, and leisure requirements develop and become available as urban social requirements. Capitalism came to reproduce the neighborhood as itself an object of production, the production of whole neighborhoods as units for the development of urban space, because the neighborhood became the basic unit for individual and social reproduction within urban space. The neighborhood, by the early twentieth century, was urban social space “for itself” because that space can be extended and developed through the extension of the neighborhood as the unit for individual and social reproduction and development and for the further development of social production. This extension of urban space was posssible because the neighborhood combines within itself all the essential elements of that space as they had developed. But the neighborhood under capitalism cannot be the essence of urban space in its own right, as it exists as a universal basis for individual and social reproduction within urban space. The bases for human subjective activities in the processes of their own individual and social reproduction can only be organized under capitalism with the reproduction of capital as their object. At the same time, capital must reflect these conditions for social reproduction as part of its own developed forms of organization, its own forms and contents. This was the case, for example, with the organization of monopoly corporations which had the production of urban social space as their content and it was the case with the extension of government fiscal policies in the promotion of consumption in the

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context of liberal corporatist forms of social development into blocs of business, government, labor, and agriculture. After 1945, capital could create the conditions for social reproduction only on the basis of the further extension of the neighborhood form of existence and it could extend these only as relations to money and commodities. But, as the experiences of social democratic regimes have shown, it is possible, even under capitalism, to create social requirements in ways which increase their recognition as social rights. The forms of the essences which evolved as the bases for postwar capitalist expansion in the United States, and elsewhere, were not preordained. But, beginning with the collapse of labor movement solidarity and goals of full employment shortly after the war, the development of social relations as essential bases for capitalist expansion represented successive surrenders to commodified and privatized forms of existence. Even the trade union movement came to emphasize “members only” forms of benefits and social goals, aside from minimal commitments to social legislation. It should not have been entirely a surprise, therefore, when all these essential forms for social development during the “Golden Age” became ultimately no more than bases for further capitalist and corporate development, as I discuss in the next chapter. In this chapter, I examine the bases for international capitalist and social development as they continued to evolve through the late 1940s and 1950s.

THE MARSHALL PLAN AND THE INTERNATIONAL DOLLAR The US system of economic aid and development for Western Europe, known as the Marshall Plan, became the institutional resolution of the contradictory relations which dominated imperialist development in the years following the Second World War. The Marshall Plan was the product of all the postwar essences of imperialist development, presupposed them in its activities, and reproduced and defined all of them. The Marshall Plan, the fifth essence of postwar expansion, was the use of government monetary and fiscal policies within the United States and the Western European countries to create conditions for social and economic development consistent with the class limits existing in those countries. The Marshall Plan made possible export-led growth, as this form of economic development was necessary to sustain fiscal and monetary policies in the various countries. It encouraged a middle-class consumerism, supported and extended by right-wing trade unionism. The Marshall Plan created the conditions for export-led growth not only as the export of goods, but especially as the export of capital. Competition among the monopoly corporations of these nations developed increasingly as competition for international investment and production. It was, above all, the domestic social limits to monopoly corporate investment which were in question in the ability of capital to develop its national economies and sustain their expansion in the immediate postwar period. The Marshall Plan both created and extended the economic, political, and class relations which were necessary for capital to expand as a relation of international investment, and therefore created social development in its own image. What I will establish in this chapter is the international, social, and administrative character of the Marshall Plan and its development as an international sphere of investment for US capital. This meant, principally, the development of an international

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sphere of wages and productivity which became the condition for national development in the United States and the Western European countries. The Marshall Plan thus realized the US dollar as an international monetary relation, itself an essence of postwar US imperialism, and made possible international investment. This investment developed into the international relation of wages and productivity, which also summarized all the essences of postwar US imperialism.

THE INTERNATIONAL WAGE-PRODUCTIVITY RELATION It was the international relation of wages and productivity, the sixth essence of economic expansion, which made possible the recovery and expansion of capitalism and created the basis for economic development throughout the “Golden Age” of the 1950s and early 1960s. Export-led growth then became increasingly a competition for production rather than trade. The form and expansion of consumerism corresponded increasingly to the expansion and contraction of this international sphere of investment and production and to their orientation toward where, within this sphere, goods could be consumed at a given time. Trade unions developed further this wage-productivity relation as relations to wages and benefits, which reinforced their emphases upon incomes and consumerism. The fiscal relation of government was both premise and result of all these other essences as a relation to social development, but with that development always assuming the essential character of private investment and consumption. The most important achievement of the Marshall Plan, from the viewpoint of US capital, was to create a sphere of international investment which became the primary focus of US capital export. It was in and through this sphere of investment that US capital “built its body,” first, as a system of corporate international production and then as transnational, and increasingly stateless, corporations. This process of development over two decades, and its continued growth since then, had its roots in the common relation of wages and productivity which the Marshall Plan made possible (Armstrong et al 1991:68–113). The US dollars which the Marshall Plan made available for exchange were necessary for the export-led growth and were a consequence of the unwillingness of capital to fully extend investment for social development within its own countries. Capitalist control of investment was strengthened by deflations in a number of Western European countries during 1947. These deflations increased the value of private wealth and forced workers into more stringent conditions of employment and consumption. But, above all, deflation strengthened capitalist control of governments by making funds unavailable for expanded public spending and consumption. The lack of public funds for development forced workers into a further dependence on capital (Armstrong et al. 1991:38–67). The Marshall Plan made available the funds for domestic economic expansion on the basis of exports. But the conditions for this export-led growth were established by capital, and especially US capital. The Marshall Plan allowed the dollar to work directly in exchange against the weaker Western European currencies and to force further devaluations and deflations. The availability of dollars strengthened capitalists within the various countries by making economic development possible, even in conditions of domestic deflation and restricted public spending. The administrative system established

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by the Marshall Plan allowed economic planning which regulated domestic monetary and fiscal policies. Equally important, the Marshall Plan permitted economic planning which maintained the value relation within this sphere of investment. Part of the lack of investment incentive for capital after the Second World War was the lack of profitable investment, even within industries like coal and steel which had previously been core monopoly industries. This loss of value within these industries reflected their relative lack of profitability in comparison with developed rates of profit outside them. This was among the reasons why British capital was willing to accept their nationalization (Overbeek 1990:114–19). Moreover, the production of coal and iron in Western Europe could only be achieved on an international basis which would allow these industries to restore their profitability by highly efficient production. The Marshall Plan created economic development among the Western European states as an international “pooling” of resources and planning among capitalists, in ways that would develop industries and national economies on the most highly profitable bases. This established the pattern for Western European economic development as international development and for the planning and restoration of industries to their most highly profitable and competitive forms. This proved very important in Western European competition with the United States in the 1960s. The restrictions on domestic public spending, deflation, the dependence of workers on private employment and consumption, the consequent restrictions on trade unions and the left to develop their economies, and the restoration and maintenance of the highest levels of profitability made Western Europe attractive for US investment. All of these relations together created an international sphere of wages and productivity which facilitated the export of US capital.

THE INTERNATIONALIZATION OF US CORPORATIONS AND BANKS The United States, like other capitalist countries, had restricted its investments during the late 1940s. The limits on the profitability of investment in its national monopoly forms was clear in the emergence of the conglomerate corporation in the United States during the late 1940s. This was the search for higher rates of profit by the common ownership and management of previously unrelated industries. The conglomerate movement represented the “over-ripeness” of monopoly capitalist development in its national forms, because it was the movement of capital investments intersectorally, i.e. among several different industrial sectors. This movement of capital outside of previous monopoly divisions and the melding of that control under one corporation created, therefore, this intersectoral capital movement as an intrasectoral control over capital. This unified several different forms of investment and production into a single flow of profits under the control of a single firm. This permitted reliance upon the highest rates of profit from any of these industries and allowed the offsetting of bad times or decline in any of them. By the mid-1950s, this kind of investment made profit-by-firm the most common means of managing and measuring profitability (Penrose 1959:98–9; Szabo 1982:261–9).

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Profit-by-firm meant profit regardless of source, and this represented a greater flexibility of investment and management and a more intense focus on profitability for its own sake. This emphasis on profit from a variety of forms of production also meant further distancing of management from the control and development of production, except in the ways that it maximized profits. This, likewise, reduced the national focus of profit-making. Profit-by-firm was both developed and reinforced throughout the years from the late 1940s to the 1980s, primarily in the form of corporate conglomeration. And conglomeration extended the tendency toward corporate internationalism. Diversified companies were far more likely to locate abroad. Of the 162 leading corporations up to the 1970s with foreign investments, only 26 were not conglomerates. Conglomerate companies were a major source of the creation of diversified products within international production (Astapovich 1978:59). Product diversification accompanied the growing importance of research and development within international corporate operations (Maisonrouge 1985:101–6). Conglomerate ownership, both nationally and internationally, was a major solution to the problem of capital overaccumulation, just as was international investment by those companies which stayed within their original lines of production. But because international production, in whatever forms, involved the management of diverse forms and circumstances, conglomerate management was an important source of experience in the management and development of international production. This made management tasks more concretely general with regard to advantages derived from diversities within corporate ownership. Prior to the Marshall Plan, US investment hovered over Western Europe from England. The United States restored convertibility of the pound sterling in return for access to the Commonwealth markets and the revival of the City of London as an international financial district. This was, again, a negotiated and administered relationship with the United States, in which, Keynes, as the chief British negotiator, backed by the British financial community, now pushed a multilateralist approach to economic development upon the Labour Government (Block 1977:60–9). Once the Marshall Plan was in effect and sufficient political conditions had been established, US investment began to flow toward the continent. This refocused US investment away from Latin America, its traditional preserve. By 1953, 71 per cent of all US foreign investment was located in Western Europe (Astapovich 1978:19–22). The reliance upon interimperialist development among these states, which was again a product of political conditions, was also a consequence of the increasingly political, and often unacceptable, conditions for investment within the newly independent nations and the socialist countries (Itoh 1991:28–9). The area of the Marshall Plan thus represented the chief area of US foreign investment and competition. As such, it also represented a sphere of economic development of these Western European states through one another, a common sphere of interimperialist capitalist economic and political development. The dependence upon private investment and private employment meant that wages and productivity levels were highly competitive. Economic development within each of the Western European states relied upon government investment in industry and control over wage levels. Part of the price of the Marshall Plan was that Western European labor and social democratic movements gave up their plans for further nationalization of industries and expanded social welfare programs. Instead, social welfare programs supported consumption and supplemented

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dependence upon wage employment. But as Wolfram Hanreider has said: “The Marshall Plan decided that the economic development of the Western European states would be essentially international” (Hanreider 1989:236). Consequently, the revival of the economies of the Western European states and their establishment of convertibility by 1957 was also a collective achievement which resulted in the creation of the European Economic Community. This was, likewise, the renewal and intensification of this area as a sphere of interimperialist competition. After the Marshall Plan came to an end in 1951, the expansion of the availability of dollars was achieved through US military spending. The expansion of this spending encouraged the development of US bank branches abroad. From the initial beachheads which they had established in London in the 1940s, US banks spread throughout the continent where at first they served chiefly as depositories for US Marshall Plan and military funds and for short term deposits from US corporations. The multiplication of short term US deposits in these ways developed as a qualitative relation to the expansion of US investment. The more US corporate international investment multiplied, so did the holding of short term deposits, so that these became, in effect, long term deposits. US international bank branches could then make these deposits available as loans for further expanding US corporate investments in Western Europe (Holland 1987b:17–18). International banking, as it developed in Europe during the 1950s, was highly attractive to US banks because it placed them outside US controls over banking which had been established in the 1930s. In this way they controlled and multiplied the international supply of dollars, since every loan, in effect, represented an issuance of dollars. This was also conditioned by the fact that in these international investments they were not controlled by the depository requirements of the US Federal Reserve. By 1957, US international banks had developed the Eurodollar, meaning dollars whose circulation, use, and origins (in the case of the expansion of the dollar supply through loans) were essentially outside the US. Furthermore, Eurodollars were not usually repatriated to the US (Block 1977:162–3). The Eurodollar represented the US corporate international sphere of investment fully returned to itself. An international sphere of banking now existed which made it possible to finance US corporate investment abroad without regard to the United States or its national regulations. US corporations were able to intensify competition with their Western European counterparts in this way so that by the late 1950s, the US corporations had consolidated their positions within the national markets of several European nations and held the rank of number one or two producers (Berberoglu 1987:30–3;43–9). Part of the Western European defense against the economic power of the US and its corporations was the maintenance of tariff barriers within and among the various nations. Although the US claimed that it wanted a common area of free trade for itself and the Western Europeans, this was contrary to the desire of US corporations to maintain the United States as a protected monopoly market. Consequently, the United States never reduced its own tariffs very much during the 1950s and provided few grounds for reciprocity by the Western Europeans. US corporate investment, therefore, took the form of locating production inside the Western European states and behind their tariff barriers. Often these production sites were located near international borders to ease access to markets in neighboring countries (Block 1977:122–9).

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US corporations, therefore, increasingly developed trade competition as production competition. This internationalization of production supplied the means for the export of capital and increasingly redefined the orientation of US corporations toward their own profitability and investment. As their production came to be based upon production in several international locations under varying wage, productivity, and market conditions, the profitability of the firm as a whole from the variety of its operations came to be focused on the profitability of its particular divisions in comparison to one another. This meant that corporate investment and capital exports moved the firm’s development increasingly toward the most profitable and productive of its operations. The advantages of wage and productivity levels in Western Europe and the protected character of the US market encouraged US corporate expansion in the direction of its international divisions. By the late 1950s and early 1960s, US firms looked on themselves as focused upon a world market and this was their corresponding orientation toward consumption and its development. This outlook toward a world market, and production within and for it, encouraged the expansion of US capital abroad and a movement toward the most favorable wage and productivity levels. During the 1950s, the lower wages and higher productivity within Western Europe gave these states a relative advantage over the US in attracting the investments of US corporations. By the mid-1960s, the highest levels of productivity for US corporations were within their Western European production sites, and this tended to become an absolute advantage in the orientation of US investments at the expense of US domestic investment (Glyn et al. 1991:59–60). European trade barriers and the coordination of economic development through a common market were themselves products of the necessity to compete against US corporate investments on an international scale. The restoration of the convertibility of European currencies was an indication of their success in that competition. But with the establishment of the Eurodollar, US corporate internationalism was “in and for itself” as a relation of its own international production to all the postwar premises of economic development. Consequently, the Eurodollar as an independent basis of US international corporate finance was followed in the late 1950s and early 1960s by mergers and acquisitions of the US corporations’ less successful European competitors. The mergers and acquisitions by US corporations in their European markets during this time were products of an emerging system of international corporate production. The system of finance through US banks’ international operations which made possible those consolidations was also available to finance the expansion of sales within other markets and the manufacture abroad of increasingly diverse lines of products. The success of US firms in this European competition strengthened their abilities in the management of diverse operations and thus extended their orientation toward profit-by-firm. This form of corporate organization was also extended and reinforced by the rapid expansion of conglomeration within the US during the 1960s. By that time, Wall Street was measuring and rewarding companies according to the extent of their diversification and valuing their stocks in part on the basis of their potential for further acquisitions (Bluestone and Harrison 1982:149–60). The flows of capital within a company were an important means of self-financing. Even by the early 1960s, the extent of US corporate investments internationally had already outstripped the ability of the banks of any one nation to supply the necessary funds (Astapovich 1978:95).

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The intensifying production competition within the European markets tightened the competition for wages and productivity. The expansion of that production had already created an international division of labor within these corporations (Dicken 1988:190–3). European investment and wage competition during the late 1950s and early 1960s encouraged US corporations to pursue the subcontracting and outsourcing of production through corporate affiliates in Third World countries, especially in East Asia. These US investments were made by companies already practiced in offshore production and were quickly countered by investments of Western European and Japanese companies. These developments both reinforced and extended a division of international production and labor among countries internationally along North-South lines. But, simultaneously, this was an increasingly intrafirm division of international labor. From the perspective of US companies, this meant that the availability of their own international sources of finance, the ability to consolidate their sales and production within European markets and, now, their ability to attempt to supply world markets through Third World affiliates, had extended them considerably as a relation of international production. This further reinforced the orientation toward profit-by-firm and conglomeration and the measurement of each segment of the corporation anywhere in the world according to its revenue prospects (Astapovich 1978:24). What had been established as a relation of imperialist national development through international appropriation by the US following the Second World War became increasingly a relation of international appropriation by the US corporations themselves. Appropriation on the basis of exchange relations, which the US had achieved at Bretton Woods and which were consistent with the liberal national approaches of imperialism during most of the twentieth century, became, under the impact of US corporations, an international and interimperialist corporate sphere of investment, production, and appropriation. The international character and outlook of production for most major US corporations by the early 1960s represented a reorientation of their outlook toward economic development which increasingly limited social and economic expansion within the US, and even defined itself against US economic development. The international corporation and the social relations associated with it were mutually dependent and supportive. US corporate international investments expanded into, and then through, similarities in the wages and productivity levels existing in the United States and Western Europe and increasingly made these into a common relation for international corporate expansion and development. This was possible because of the existence of forms of trade unionism, primarily in the United States, but increasingly throughout the Western European countries, which, as we have seen, were focused upon private employment and the wages and benefits available through them. Unionism in this form was increasingly willing to tie improvements in wages and benefits to improvements in workers’ productivity. The development of wage and productivityoriented trade unionism helped expand the United States and Western Europe as an increasingly common area of consumption and also as a common area of production. The ability to develop middle-income consumption among these countries was complemented by the ability to expand production by making the necessary workforce and technological adjustments. This enabled the expanded production of the consumer durables consumed by these same middle classes and introduced new forms of production and products. Export-led growth increasingly took the form of international production, in part because

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of the relative similarities in the products consumed in this international sphere of development and also because of the ability to seek wage, productivity, trade, and marketing advantages among these countries. International production and investment, as well as trade, were aided by the availability of dollars throughout all these countries. For US banks and corporations, this international availability of the dollar represented a form of economic expansion in its own right, since banks and corporations could form their operations on an international basis and increasingly look to investment and production which were oriented toward world markets. The competition among banks, corporations, and countries involved in these international activities further developed and reinforced the existence of relatively common wage and productivity levels among these countries and made trade union and social democratic movements hard pressed to push wage and benefit levels beyond demonstrated improvements in productivity. The sphere of private appropriation during the period from 1945–60 became increasingly international in character—emphasized by the fact that competition was carried on increasingly by the monopoly corporations themselves through international production and exchange. This contrasted with international competition prior to the Second World War, where monopoly corporations, focused primarily upon national production, sought to improve their position through international exchange and agreements with other imperialist states and corporations (Teichova 1988:362–73). Now this economic expansion could be carried on through direct productive investment within other imperialist states and the interlinking of each corporation’s operations within an international relation of investment and production. The monopoly corporation, in this way, became more explicitly and distinctly the essence of imperialist appropriation. All the operations of imperialism were, in this form, increasingly carried on by the corporations themselves in their management of capital export, investment, and international production. The imperialist nations not only became more manifestly secondary and supportive of the international corporations, but themselves became merely geographic areas for division and development among these corporations. Consequently, by the late 1950s and early 1960s, there existed a sphere of international corporate investment and production which contained within it all of the principal elements or “sides” which subsequently developed into the international corporate complex known as the transnational corporation. These principal “sides” were, as I have shown, the six relations essential to postwar imperialism. It was these, individually and together, which formed not only the bases for the development of the international corporation, but the content of its primary activities: in relation to wages, productivity, consumption, international exchange and investment, and the ability to manage all of these relations in tandem with complementary governmental fiscal and monetary policies. But it is my argument that the transnational corporation matured and developed as it did because of the social limits which each of these “sides” of international corporate investment and production represented for the development of private appropriation. Each of the six essences of postwar imperialism represented not only a condition for private appropriation but a form of social reproduction in its own right. That is, each was a relationship of people to their needs posited for development by the requirements of private appropriation. And, as each of these developed to meet popular needs and to expand according to its own implications, each in turn was constricted by and restrained the expansion of private appropriation as it had developed

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during the period after 1945. While these limits were to become evident primarily during the late 1960s, as I will show in the next chapter, the oppositional character of these relations was implicit from their inception and during their expansion in the “Golden Age” of the 1950s and early 1960s. The Second World War not only resolved competition among imperialist nations, by placing competition through international exchange above military conquest, it made the United States the dominant nation within interimperialist competition. The US ability to carry on international exchange and investment to the benefit of its own national development was always contingent upon the ability of its national development to keep pace with that of other imperialist states. The power of the dollar in international exchange, and as a limit to international inflation, was based upon the productive power of the United States as this was sustained by domestic investment and expansion. The more that exchange relationships and investment initiatives became the responsibility of US banks and corporations, rather than of the nation, the more the US domestic expansion and the stability of the dollar became relative to its own international corporate development. In making the Eurodollar into an international currency for exchange and investment, therefore, US corporations were increasingly moving the dollar and the direction of investments beyond the limits inherent in their own nation’s development. Moreover, these corporations were creating the dollar as an essential element of international corporate management, in the context of the revival of European convertibility and, therefore, the revival of competition to US industrial power. The US national economic power and development which sustained the dollar were thus, even by the late 1950s, becoming increasingly relative to its own corporations. It was this opposition and limit to international economic expansion as expressed in the increasing instability of the US dollar which began to be played out in the early 1960s and which, as I discuss in the next chapter, was the first indication that the imperialist rivalry among nations was passing into a contest among companies at the expense of nations.

THE PREMISES FOR US DOMESTIC EXPANSION, AND THEIR LIMITS All the essences of US imperialism in the post-Second World War period were limited not only by the national-international corporate opposition, but by the fact that each of them was posited for development as a relation to the actions of government. That is, government fiscal and monetary policies posited themselves not only as a relation to international corporate expansion, but as a relation to the social and economic development of all groups within the nation. This meant that, overall, the international expansion of the corporation posited the government as responsible for national development within the terms of the six essences of postwar imperialism. In facilitating corporate international expansion as the basis of national economic development, the federal government made each of the six essences more explicitly political and social relationships. In limiting the power of trade unions through such measures as the TaftHartley Act, the government also made unions and their development increasingly the subject of national regulation. This meant that the terms and conditions of union organization and collective bargaining became institutionalized within administrative

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bodies and the courts. Trade unions could only press their social claims in these ways, as well as through the use of their political influence in government, but in their day-to-day relations with management, unions developed an extensive body of contractual rights for their members. Trade unions took an important part in furthering the middle incomes which were so conducive to corporate expansion. But with the expansion of this middle class, their social requirements for housing, education, health care, public services, and other essentially government-under-written or supplied social needs also expanded. The preservation of private consumerism, which was a principal basis for corporate expansion, had to contend with a social expansion, the satisfactions of which were increasingly posited as political relations, as relations of citizens to their government and its actions. Continued political and social expansion of middle-class consumption contended increasingly against corporate responses to wage levels and social costs. At the same time, politically conservative and corporate attempts to curb domestic social expansion limited consumption and, therefore, made the search for consumers among the interimperialist markets more competitive. Moreover, the similarities of lifestyles and product development within this international sphere intensified competition for exportled growth as productive competition. But the shifts of productive investment internationally threatened to undermine the productive bases for social expansion within the United States itself. International corporate production not only furthered the internationalization of the dollar and threatened its stability, but likewise threatened to make US wage and productivity levels less desirable than those which corporations could find elsewhere. The very movement of international corporate investment itself during the 1950s and 1960s was, in part, a search for improvements in wages and productivity beyond those available in the United States. The directions of these developments made corporations ever more internationally referenced and made the course of economic development appear to them as primarily a relation to their own corporate possibilities rather than those of the United States or any particular nation. International capitalist expansion, as it developed in its postwar forms, made possible a certain identity within the United States and elsewhere, between social consumption and social production. These forms extended urban space, especially in its suburban forms, as the unification of production, distribution, exchange, and consumption as subject and object for one another. As I discussed in previous chapters, urban development represented the reproduction of a particular form of social space as the basis for social reproduction. By the early twentieth century, popular relationships to social requirements within shared urban space increasingly politicized questions of access to those common requirements. The middle and upper middle classes took leading roles in attempting to define access to social requirements in their favor. During the 1930s, the working class became active in these struggles in their efforts to secure employment and trade unions. As urban space developed on the basis of increasingly common forms during the early twentieth century, social needs posited additional items for production. This was especially the case with consumer durables, electrical products, and automobiles. But their development was limited in relation to incomes, and this resulted in a crisis of underconsumption and overproduction, the Great Depression, which was equally a crisis of social development, i.e. of the reproduction of social spatial requirements over and

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against capital’s requirements for accumulation. The Second World War expanded the potential for renewed depression by its massive expansion of the forces of production. But depression was avoided by a national and international political coalition, centered in the middle class and compliant trade unionism, which reduced economic and social development primarily to incomes, as sustained by government fiscal policies, and created an international sphere for capitalist investment and appropriation, built upon urban middle-class forms of consumption. Despite the reduction of these social and political relations to a common dependence upon incomes, private investment and government fiscal policies extended the social and political bases of social reproduction in three important ways. First, corporate investment and government fiscal policies further universalized urban social space, and neighborhoods within it, as essential units for social reproduction. Capital investment and government spending did not occur randomly, for the most part, but resulted in consumption which was simultaneously the reproduction and expansion of a particular form of social existence. The expansion of neighborhoods, especially in their suburban forms, was accomplished through the direct reproduction of this previously established form of social existence. Government fiscal policies also universalized the forms of urban existence. In some ways, such as with automobiles, these forms were closely confined to corporate interests. Government fiscal policies became increasingly important in the preparation and maintenance of social space requirements. For example, the creation of highways during the 1950s meant spending tens of billions of dollars and assisted companies in taking 40 per cent of all disposable income through automobile purchases (DuBoff 1989:103–4). Nevertheless, this greatly expanded the development of urban/suburban social forms. In other cases, such as in the development of housing, education, or health care facilities, government fiscal policies were engaged primarily in helping to extend developed social requirements to a larger percentage of the population. In the early 1950s, US families were moving into new houses at the rate of 4,000 per day. Housing purchases were made possible through government-subsidized loans (Reich 1991:45). With regard to expanding social and political bases of reproduction, economic and social development rested, in part, with urban and suburban political coalitions who were, in their more popular forms, essentially the same middle classes and trade unions I discussed above. Within urban/suburban space, they formed the bases for the expansion of the urban neighborhood as a social form. Growth coalitions, as these political unities were correctly called, were certainly not anti-corporate or anti-capitalist, but they also had their own space and economic interests as their objectives. Moreover, development depended upon government, especially as this involved highways and negotiation between suburbs and downtown concerning development and government-coordinated processes of urban renewal (Frieden and Sagalyn 1989:15–37). Second, socialization meant that the neighborhood as a basic unit of social existence, comprising everything from infrastructure to households, consumer durables, and personal items, increasingly posited the development of social relations beyond the household. Socialization expanded through employment (with both members of the household working; the number of women employed rose 71 per cent during 1950–70); economizing on production within the home, e.g. appliances and prepared foods; recreational and leisure activities outside the home; and education, health care, and other

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services, both public and private, which provided additional premises redefining and extending social individualism (Mandel 1978:181). Corporate production meant, concretely, the production of objects for use within urban households and neighborhoods. Expanded consumption reflected an increased social production for common needs within this developed social space. Householders consumed dishwashers, clothes dryers, electric skillets, air conditioners, washing machines, baby carriages, refrigerators, television sets, electric toasters, frozen foods, canned baby foods, home permanent-wave lotions, and group hospitalization (Reich 1991:45). Automobile ownership expanded from 10 million in 1949 to 24 million in 1957. Production represented a highly concentrated particular within these social relations. This concentration reflected a direct identity between production and consumption— more concentrated production supporting ever wider social relations. About 500 corporations in the 1950s produced half of US industrial output, held about three-quarters of the nation’s industrial assets and accounted for 40 per cent of the nation’s corporate profits. These corporations employed one out of eight of the US non-agricultural workforce. The top 28 of these corporations accounted for about 10 per cent of all manufacturing employment. General Motors produced 3 per cent of the US gross national product, which was equivalent to the entire GNP of Italy. Standard Oil of New Jersey and AT&T each had revenues greater than those of Denmark (Reich 1991:46). Reich adds: This set of core corporations was in turn divided, by twos or threes, into thirty major American industries, for which the core corporations set industry norms on prices, wages, and methods of high-volume production. The steel industry was dominated by three behemoths: US Steel, Republic, and Bethlehem; the electrical equipment and appliance industry, by two—General Electric and Westinghouse; in basic chemicals it was DuPont, Union Carbide, and Allied Chemical; in food processing, General Foods, Quaker Oats, and General Mills; tobacco, R.J. Reynolds, Liggett & Myers, and American Tobacco; jet engines, General Electric and Pratt & Whitney; automobiles, General Motors, Ford, and Chrysler; and so forth, across the great expanse of American industry. (Reich 1991:46–7) Third, as Philip Mattera discusses, concepts of social requirements came to include basic elements of the “good” life and life expectations—home ownership, decent health care, college education, adequate leisure time (Mattera 1991:9). The multiplier effect of the interactions of incomes within all these socialized forms represented not only the circulation and multiplication of money through generalized consumption. Rather, the multiplier effect of incomes was simultaneously the reproduction of definite social forms as these were presupposed and posited, within neighborhoods and associated regions, for the reproduction of social existence. In the 1950s and 1960s, incomes derived from private and public employment and underwritten by government fiscal policies, became the device for the reproduction of increasingly universal and specific forms of social existence. Money was itself universalized as a means of social communication, capitalism’s way of making possible the reproduction of social embodiments and social

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individuals as these were presupposed and posited within social space and as that social space embodied standards for personal existence, behavior, and life. Therefore, government fiscal policies, and their expansion or contraction, came to have a general effect upon the economy and its development because of the specific and concrete forms in which money was now embodied within material social existence. These social embodiments and the social activities which surrounded them became, increasingly and explicitly, political relations to government fiscal policies at the local, state, and national levels. Growth coalitions for local development were one example of this, but so were neighborhood organizations, Democratic Party coalitions at all levels, and popular demands that the government “get the economy moving,” as well as government administrations’ taking the health of the economy as their object and responsibility. But from the perspective of the corporation, this was not a process of social reproduction, but one of corporate reproduction and capital accumulation. Incomes, labor, skills and education, products for development, were only markets corresponding or failing to correspond to corporate needs. Therefore, there could be an identity between production and consumption and the social relations which under-pinned them in their postwar forms only so long as they were directly reproductive of corporate requirements. And, as I show in this chapter and the next, that was becoming less and less the case. The universality of the wage-productivity relation created a variety of choices for corporations among income levels, wages, skills, productivity, and forms of social reproduction of labor (e.g. through education and health care). Corporations tended to favor Western Europe for these during the 1950s. Moreover, conglomeration and profitby-firm made the corporation essentially a specific and diverse collection of activities which measured profit and accumulation against many sources. The internationalization of finance and production, even by the late 1950s, meant that corporations were positioning themselves toward a global market. In this form, the continued social expansion, even in the middle-class and trade union forms developed after the Second World War, would increasingly exceed and become contradictory to corporate requirements.

5 THE POSTWAR SYSTEM AGAINST ITSELF During the first half of the twentieth century, monopoly corporations created themselves as the condition for national production. But their maintenance of themselves as monopolies, and their management of the finance capital which arose from their activities, created stagnant conditions for investment within themselves, and the requirement that they search for profits beyond their national limits. By the end of the Second World War, these monopoly corporations represented both the primary sources of national investment and employment, and the unwillingness to supply either sufficiently without political and social relations which would enable them to move capital and compete within an interimperialist sphere of investment. Fiscal relations of government which were limited to the reproduction of capitalist employment and consumption satisfied these requirements. So, too, did the emergence of a cooperative model of trade unionism, private income-based consumption, reliance upon exports as the source of expansion, and the dominance of the dollar as the standard of international exchange; and the melding of all of these into an international relation of wages and productivity which supplied both the socio-political conditions compatible with capitalist investment and employment, and the ability to develop production at any location within this sphere. But even as all these conditions were realized, they were in the process of moving toward their opposites. All together they created an international relation of capitalist production primarily through the US corporations which increasingly defined themselves against the conditions of national social and economic development. As early as 1947, Robert Triffin summarized the opposition inherent in international exchange on this basis in his famous paradox. Triffin observed that the position of the US as the most powerful nation could only be preserved among its trading partners if it supplied dollars in sufficient amounts to enable them to continue to trade. But this meant paradoxically that the US position as the most powerful nation would simultaneously be undermined because the maintenance of a sufficient supply of dollars in international circulation would cause continuing balance-of-payments problems. By the late 1950s and early 1960s, the US balance-of-payments deficit was a growing problem and a threat to the continuation of the dollar as equivalent to gold in exchange. This was especially true with the recovery and competitive vigor of the Western European economies (Strange 1987:6– 7). Yet, as I showed in the previous chapter, the US expansion of dollars in international circulation did not arise primarily out of the exchange of goods or other essentially national forms of international transactions. To a degree, there was the military spending of the US which was an essential condition for its hegemony and which became more decisive during the Vietnam War in undercutting the dollar’s value as the basis for

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international exchange. More importantly, however, the dollar, in the form of the Eurodollar, was increasingly an international currency tied to the US banks and corporations themselves. The fiscal, trade union, consumption, and export relations which had created the national conditions necessary for the free movement of capital during the late 1940s resulted in an institutionalization of that international movement of capital which defined itself against the conditions of its origins.

CONTRADICTIONS IN CORPORATE DEVELOPMENT The contradictions between international corporate and national development were a product of the incompatibility of capitalism with its own forms for social reproduction, in its own developed requirements for human individual and social reproduction. These contradictions became increasingly determinative of economic and social development in the United States, as in the other imperialist countries, in the late 1960s and early 1970s, and have dominated economic and social life since then. In this chapter, I will first summarize these contradictions and then examine their development as they emerged from 1960 to the mid-1970s. Each of these contradictions evolved as an ever more definite social and spatial form of social reproduction which became an antagonistic opposition to the conditions for general social reproduction which it implied. In other words, capital could not fulfill the premises for social reproduction which evolved after 1945 as the conditions for capital’s own expansion. Even these premises promised more general bases for social and individual reproduction than capital could provide. The international corporation, as I indicated in Chapter 4, involved the management of increasingly diverse operations. This was not only because flows of capitalist investment moved in different directions ranging from international investment to conglomeration. Even by the late 1950s, US international corporations found themselves confronting an international sphere of value creation involving different kinds and levels of skills, wages, and productivity. The creation of surplus value, by the early 1960s, paralleled the creation of mass surplus value in and among Third World nations, with the mass of surplus value, accumulated at lower rates of profit, in and among the imperialist nations themselves (Astapovich 1978:16–17). This international sphere of value creation was intensified as a definite geographic spatial relation by competition among the international corporations of the United States, Western Europe, and Japan. And because this was competition for the highest values in production and along a fairly narrow range of products, especially automobiles and items for personal consumption such as electronics, production developed on an intra-industry basis. This meant not only intensive geographic and product development, but technologies which corresponded to this value creation. Individual firms, as I will demonstrate in this chapter, came to reflect the management of all these diverse operations on a firm-specific basis, i.e. successful competition by developing ownership advantages specific to that firm, the ability to internalize global advantages, and location-specific advantages which belonged to that firm as a consequence of its international operations. The emergence of the international sphere of value and intra-industry production meant that the firm developed as the appropriation of advantages to itself from among many global connections. This concentration and centralization of corporations

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internationally set definite limits to the extension of wages, productivity, trade unionism, and consumption within the United States. On the one hand, the development of corporate internationalism as an internalization of its own advantages meant that capital moved away from being responsive to the requirements for social reproduction in all the ways that they were posited for developing US society as a whole. The international corporation, therefore, sought increasingly to reproduce only those social relations which were posited as reflections of its own international development. On the other hand, the abilities of people themselves to develop all the requirements of social existence for their own reproduction were contradicted by international corporate development. Attempts to expand social reproduction through commodity exchange were limited by the concentration of corporate product development, finance, and restrictions on monetary and fiscal expansion. Popular attempts to expand the conditions for social existence politically met these same restrictions and the growing political opposition of the corporations and their allies. All of these limits began to manifest themselves in the mid1960s and, a decade later, they were all fully present and reflected in intensifying political and social struggles. The more value creation was confined to international investment, the less government fiscal and monetary policies were available for local and national development. I will examine the premises for social development in the postwar years as they reached their limits in the capitalism of the 1960s and then consider the evolution of the corporations during that time. These social limits especially affected the middle class and the social and spatial relations which their existence required for their social and individual reproduction. These limits were even more restrictive as middle-class forms for social reproduction evolved as models for a more general social reproduction.

CONTRADICTIONS IN TRADE UNION DEVELOPMENT Trade unions provided a major social and organizational mechanism for the creation and extension of the middle class. The ability of trade unions to bargain for wages and benefits enabled ordinary working people to have a part in the determination of their incomes and working conditions. This provided the basis which enabled many skilled and semi-skilled workers, especially those in the great monopoly industries, to became part of the middle class. The ability to control incomes in this way was a major force for the retention of those incomes for personal consumption, which was simultaneously their use in the extension of social productivity. As Philip Mattera demonstrates, trade unions became major social organs for emulation by other groups. The wages and benefits that they were able to gain became social goals for more disenfranchised groups and social organizing and bargaining for power became the basic model of social struggle which characterized the popular movements of civil rights, urban and welfare rights, student and anti-war, women, and gays and lesbians (Mattera 1991:26–44). All of these groups represented, in varying degrees, members of a social and political coalition seeking to extend economic and social democracy. But the predominant form of trade union which emerged throughout the postwar period was one compatible with corporate capitalism. This compatibility provided a basis for trade unionism to be increasingly undermined, as well as limiting its embrace of

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social struggles. The struggles of the US unions maintained their income- and consumerorientation, which had developed in the 1940s, and which complemented capital and its international expansion. This form of trade unionism was also institutionalized in Western Europe and was another administered form of development extended by the Marshall Plan. The growing universality of this consumerist form of trade unionism and its existence as a condition for capitalist employment and expansion worked to define US trade unionism ever more in this direction. By the early 1950s, US trade unions were making the essence of the wage-productivity relation an explicit mechanism of their expression of social demands and collective bargaining agreements. When Charles Wilson, President of General Motors, first proposed in 1947 that wages be based upon the productivity of the workers over the life of the previous contract, it was immediately rejected by the United Auto Workers. But by the early 1950s, it had become a part of UAW agreements as well as those of other unions. The tying of workers’ wages directly to an expenditure of their effort, which was itself ultimately calculated by corporate and government officials hostile to workers, was a social pledge to management that collective bargaining was predicated upon the production of ever greater value and profits in return for employment. Once this step was taken, it followed logically that the displacement of workers by technology would be accepted by trade unions, too. Consequently, from the mid-1950s to the present time, trade union agreements have been characterized by negotiating the best wages and benefits available for those remaining employed. The improvement of income for some was, in this way, increasingly purchased at the expense of the many, as more and more workers were displaced throughout this period (Green 1976:52–102). Left-wing, or previously leftwing, trade unions, such as the West Coast longshore workers, had adopted this pattern as well by the early 1960s. In some industries, such as printing, management was able to make use of technologies, some of which had been around for most of the twentieth century, to replace a whole unionized industry. The wage-productivity agreement, as it developed in the United States even during the early 1950s, already represented a limit to the form and extent not only of trade unionism, but of US national economic and social development. It expressed, however tacitly, that management was making decisions concerning investment with regard to the most profitable and productive forms and, given that management was in the process of developing new production abroad, as well as maximizing profit-by-firm as opposed to particular forms of production, the contradictions to social development were already evident. But more immediately, the development of collective bargaining as an administered relation of wages and productivity set the development of trade unionism further against itself. Not only was the trade union tying wages to effort, facilitating technological change, and negotiating for those remaining employed, it was increasingly unable to resist expanding demands for management rights and was incapable of addressing the most immediate shopfloor concerns of workers upon which unionism in the 1930s had been built. Speed and other conditions of work, safety and health, discipline and discharge, and other daily concerns of workers were either unreachable through this formula for collective bargaining or relied upon administrative and quasijudicial procedures which were themselves premised upon the rights of management. Unions contributed to social struggles and the expansion of democracy, but their exclusivity was also an obstacle to the collective recognition of social needs and the

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development of social solidarity. The privatization of wages and benefits within the collective bargaining agreement continually separated trade unions from most of the working class because it reduced unions’ incentives for social protection and benefit, while making explicit the connection between wages and prices in the cost of living. Unions, from the 1950s on, found themselves increasingly at a distance from most other working people, as well as from many of their own members. The very effectiveness of unions in wage bargaining during the 1960s continually pushed labor costs in the United States beyond those available elsewhere within the emerging international corporate economy. Even where unions were most effective in representing their members, therefore, their contradictory existence within the wage-productivity relation made their success ever more inconsistent with their survival.

CONTRADICTIONS IN SOCIAL DEVELOPMENT It was consumption by the middle class during the 1950s and early 1960s which sustained the economic boom and justified corporate investment (Armstrong et al. 1991:123–4). Thus during these years the corporations were synonymous with middle-class employment and consumption. The creation of the middle-income relation, in part by government fiscal policies, posited their relation to social reproduction also as a political relation. The national and social measure of this was in the increasing federalization in the meeting of social needs. This was most obvious in housing, transportation, and education during the 1950s. But the continued expansion of the middle class, and the forms of social existence which it represented, and their support by fiscal policy, was inconsistent with the evolution of international corporatism in two major ways. First, as a relation of private consumption and commodity exchange, there were limits to middle-class expansion which came both from their capacity to consume and from the organization of production by the international corporations. There proved to be limits— especially by the late 1960s—to the ability of the middle class to absorb consumer durables. This was not only a consequence of limits to disposable income, it was also due to the inability to consume personally all the products which were produced. As Makoto Itoh states, there was a limit to the number of automobiles, couches, refrigerators and so on that those who could afford them could use (Itoh 1991:46–7). This indicates also that the consumer products provided by corporations represented a fairly narrow range of production. Corporations in international competition developed variations upon these products and extensive research and development capacities to come up with other products which might be related to their production processes. This further concentrated corporate production on an intra-industry basis with a few very large companies in each industry producing essentially the same or similar products for a world market. Consequently, corporations were limited in their flexibility to respond to possibilities for production as they were posited for development within social space. They chose instead to develop new personal use products, such as those for entertainment, which assumed, in effect, that their customers had available all the necessities for social existence. This assumption was reflected in corporate targeting of certain customers and rising limits to mass markets based on volume production. Selecting among social markets was reinforced by the fact that intra-industry production was both global and highly intensive.

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As a result, corporations were moving away from the production and service bases which had characterized both employment and consumption in the postwar period. Second, the expansion of public spending reflected the existence of needs within developed social space. As such, the expansion of education, health care, transportation, housing, and recreation and leisure facilities all represented ways of creating and distributing incomes for further social development within neighborhoods and regions. This development was both created by, and formed the basis for, expanded social productivity. But this was also an expansion of these social forms in their own right, as premises for more fully social development. As long as these forms corresponded, more or less, to expanded middle-class abilities to consume corporate products, social spending complemented corporate profitability. Any prospect of the extension or equalization of social services throughout the society as a whole, however, ran contrary to corporate development. It threatened both to increase the roles and costs of government in economic and social development and to enfranchise, socially and politically, groups that the corporations were to find increasingly inconsistent with their own goals during the 1960s and after (Barnet and Müller 1974:213–53). The middle class expanded as it did after the Second World War because it represented the social formation which had within it most of the essential elements of private residential development which were required to make itself subject and object for production. In general, social production and consumption meant the ability of areas of residential consumption to posit themselves as objects for production in all their essential elements, ranging from neighborhood infrastructure to housing, consumer durables, and other socially produced items for household and personal use. In addition, as I indicated above, social space required within itself common forms of education, health care, recreation and leisure facilities which depended upon social, and especially governmental, funding and administration. The middle class was a politically privileged social strata with regard to these elements exactly because of the inability of capital to extend them to the whole society. Each of these social forms of production and consumption as they existed within and for middle-class neighborhoods represented elements of social reproduction because they generated employment, incomes, and consumption in ways that allowed the middle class to maintain a share of social wealth. This level of social development enabled them also to increase the forms of social consumption within their own communities, including those supplied by small businesses, because they had available to them the incomes necessary to create and sustain that social space. From one side, these neighborhoods were a relation of incomes, savings, and commodity consumption. This relation fits the classic Keynesian multiplier and the usual interpretations of postwar economic expansion as the product of Keynesian fiscal policy (Van der Wee 1987:32–6). But, from the other side, middle-class development meant the universalization of the urban/suburban neighborhood, in all its elements, as these were required for social reproduction. The expansion of this form involved its own greater particularization within itself: in its ability to make itself and its requirements objects for production and, especially, in its ability to retain and reproduce incomes necessary to its own social reproduction. This particularization involved both expanding economic and political power and the ability to demand expanded services, such as education and health care, and to place demands upon government fiscal policies and their directions.

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The more urban/suburban neighborhoods became universal and particular, the more this form represented a self-sustaining economic and social unit with the capacity for its own reproduction. This was a social as well as a private and commodity relation because the generation and use of incomes within that space depended upon standardized forms of social existence and upon the maintenance and reproduction of that built environment. Moreover, the reproduction and development of that built environment posited itself as a relationship to government fiscal policy and, thus, extended beyond incomes and commodities to political relations.

CONTRADICTIONS IN POLITICAL DEVELOPMENT It is mistaken, therefore, to think of “Keynesian” government fiscal policies as remaining essentially unchanged after the Second World War, or to see them as defining consumption only as the supply of jobs and money generally available. Armstrong et al. show that those fiscal policies bearing Keynes’s name were primarily specific social and historical developments which defined and were defined by middle-class social consumption (Armstrong et al. 1991:126–7). Moreover, they demonstrate that only in the early 1960s was it possible for a national government to use fiscal policies to affect the overall direction of the national economy, and, in this way, respond to growing popular demands that they do so (ibid.: 138–41; 150). Fiscal stimuli, such as those practiced during the Kennedy and Johnson administrations, had their effect because they contributed to the further universalization and particularization of urban/suburban neighborhoods. These policies, and the political relationships which they reflected, indicated the ways in which fiscal policy was becoming “for itself” with regard to its ability to sustain and expand the built environment and the interactive elements of social production and consumption. Seen from this direction, fiscal policies had their effect because money increasingly represented a social aggregate which had particular places and purposes among the interactive elements of social space which together represented the conditions for developed social existence. But, from another direction, this expanded social spending, especially when combined with military spending, represented a “false boom” because it sustained continued economic expansion in the late 1960s when corporate investment in the United States was actually declining (Marglin 1991:20–2). The politicization of fiscal policy during the 1950s and 1960s involved all segments of society. There was a danger to capital that as fiscal policy became “for itself,” it would move society toward its evolution on new bases for social reproduction. Fiscal policy developed in this way simply because it was the chief means by which necessities for social production, consumption, and existence could be carried through. Even in the fetishized forms available, this development demonstrates the determination of human beings to develop the conditions of their own lives and the inherently social basis of human circumstances. Political formations of various kinds which aimed at shaping government fiscal policies were necessary because of the incapacity of capital ultimately to develop other than its own social bases, consistent with the evolution of its own concentration and centralization.

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It was exactly the lack of social control over investment which created the conditions for government support of social development. In the 1950s, government support for social development involved principally the middle class and local business. Urban growth coalitions of business people and civic groups arose in connection with interstate highway development and urban renewal and were welcomed and supported for public funding by Republicans. This politicized social development created conditions for similar demands by other urban constituencies. From the perspective of the Democratic Party, this included urban political machines, trade unions, and, increasingly, civil rights groups. Federal grants to cities at various times and for various purposes had decisive effects upon the political machines, often those of the Democratic Party. Urban machine politicians obviously coveted these monies for many reasons going beyond urban development, and not the least of these was as a source of building loyalties among political constituents. The effect on these constituents, however, was that they found even more needs to be fulfilled, especially with regard to neighborhood development, and consequently there developed a highly mutually creative, and even streamlining, effect between the federal funds for neighborhood development, their promotion by city administrators, and the creation of citizen bodies as a means of feeding into and defining these processes. In New York City during the late 1950s and through the 1960s, the evolution of politics from Mayors Wagner through Lindsey moved from city administration of federal grants to an increasingly sophisticated and interactive system of neighborhood representation (Savich 1990:242–67). The continued expansion of such governmentconstituent relations and of public services was increasingly contradicted by capital’s own necessary forms of development and their willingness to finance the whole. The political constituencies created by government activities grew and by the mid-1960s, under the Johnson Administration, confronted capital with ever-expanding demands for social development. The civil rights movement posed the greatest social challenge to US capitalism during the 1960s. This was not because the civil rights movement was anticapitalist. Nor was its form that of a class movement, even though most black people were working class and disproportionately unemployed. Rather, the civil rights movement posed a massive social challenge to US capitalism because it was a movement of virtually a whole people who were socially excluded, historically and massively. Civil rights meant not only social acceptance through legal protections, but access to standards of life as they existed for most of the population at the time. The universality of middle-class forms of existence meant that the social conditions for the production of that life were the primary requirements for the social life of all. Capitalism was and is, in general and ultimately, opposed to its own developed social relations because it must treat them as relations of money and not as social relationships among people. And because the social forms of life were premises for capital’s development, as it evolved after the Second World War, they were simultaneously premises for its movement of money and the establishment of the rate of profit into structures beyond those forms. The promise of middle-class life as it developed was never more, in its deepest essence, than the ability of capitalists to retain and move money among themselves internationally without commitments to full social development. As with the development of urban areas generally, the forms of federal response to the demands of the civil rights movement disclosed the limits of capitalist employment and

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consumption as means of access to social life. The myriad of federal programs which were created aimed at various kinds of preparation for education or employment which were themselves soon to be available only in decreasing supply. These made people dependent upon federal subsidies while leaving communities and local production and consumption underdeveloped. Once the limits to employment and consumption were reached within the system as a whole, the cutbacks in these programs, and their transformation—often into even more socially degrading forms of payment and distribution—placed poor people, and especially people of color, even further from the social relations of the dominant society. These changes only further institutionalized this social exclusion, and the social limits of capitalist development assumed ever more extensive and visible spatial forms. People on public assistance were at the low end of those receiving forms of compensation which were dependent upon the state. Private consumption as a whole, which stood at 76.9 per cent of the GNP in 1929, actually declined steadily after the Second World War and was 62.9 per cent of the GNP from 1961–69. By the early 1970s, one-sixth of the labor force was employed by the state and, if state-dependent military production is included, then one-third of the entire labor force was dependent upon the state (Castells 1980:99; 130). State dependence also included employment in education and health care and other forms of public payments which were extended by the expansion of social institutions during the 1950s and 1960s. Public and private pensions also represented forms of social subsidy. By the end of the 1960s, therefore, there were expanding portions of the population who were dependent upon various forms of social employment and consumption which often had their sources in government. But within capitalism these were not matters of social right or social development, but only income as a means of access to consumption. These monetary payments and public expenditures, therefore, increasingly reproduced the consumption relation as a dependence upon public spending and access by social groups to government fiscal and monetary policies. As with wage employment, which also expanded greatly during the 1960s, all these forms were increasingly social in character and dependent upon social investment and the dollar and its value. As the corporate system of international production expanded during the 1960s, investment and the capitalist value relation came to be relocated away from much of the US economy. All this social development as middle-income development increasingly found its limits in the 1960s. These limits expressed themselves initially in the growing vulnerability of the US dollar and its relation to US national production and the reorientation of US corporate investment away from the United States. But the extent of social development which had taken place and the lack of popular democratic control over its essentials and processes meant that it continued to expand as social dependence upon capital and its processes. The price of social reproduction was, therefore, a relation to the price of the national currency, as this was determined increasingly by the corporations. This meant, by the early 1970s, the devaluation of those forms of production and social relations upon which capital had depended since the Second World War. The essence of the problems facing the United States by the early 1960s had already become a crisis of social investment, being treated as a problem of attracting private capital and as a crisis of private consumption. This was because the United States had, through its political and governmental decisions since 1945, posited these private

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relations as the bases for its national and social development. But now the conditions for the realization of private appropriation in these forms were beginning to create social and national development as their opposites. This was the case even though, and precisely because, the social and economic relations summarized in the wage-productivity relation, which provided the conditions for the international expansion of capital, were always essentially social mechanisms for private appropriation. By the time that the Kennedy Administration took office in 1961, in the wake of the most prolonged economic recession since the end of the war and with the promise to “get America moving again,” the country suffered not only problems of an inflated international dollar and a growing deficit in its international balance of payments: it was suffering relative to Europe in attracting its own investment capital. Through “Operation Twist,” Kennedy established a system of dual interest rates, allowing higher interest to be paid on capital held in US banks for domestic investment rather than for capital export. He also imposed a ban on the export of capital for new international investments. The first of these policies had a negligible effect, which necessitated the second. The second remained in force until 1974, but was unsuccessful because of the increasing ability of international corporations to rely upon their own international financing. In fact, these capital controls probably only stimulated the expansion of the international system of dollar investments which operated outside the United States and its authority (Calleo 1982:20–2). While the occasion for these capital control policies was the US balance-of-payments deficit, and a rather superficial attempt by the Kennedy Administration to demonstrate to its trading partners that it was attempting to put its economic house in order, the need for them indicated deeper problems beginning to undermine US investment and production. The attractiveness of foreign investment and the creation of an international system of production was too strong for private capital. Moreover, with European competitiveness returning and based upon newer technologies and plant and equipment in many cases, either the United States had to redirect its investment and development nationally to restore its competitiveness or it had to rely upon its companies operating abroad to supply the necessary responses for the expansion of productivity.

CORPORATE INTERNATIONALIZATION AND THE END OF THE “GOLDEN YEARS” What brought the economic and social expansion of the postwar period to an end and reversed its essential processes, was the development of international corporatism into the form of the transnational corporation. International corporate development represented the movement of each of the essential forms of national development into its opposite. Each of the postwar essences represented the premises or bases for national and social development as conditions for corporate international expansion. Social development within the United States and other leading capitalist nations could be had if government fiscal policies confined themselves to maintaining income levels for private production and consumption, and trade unions cooperated in this regard. The limits to national consumption inherent in this relationship could be overcome through export-led growth. Exports would provide the basis for foreign earnings and would allow corporations to

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compete internationally and to export capital toward that end. Trade within this system would be kept afloat by US dollars which, after the Marshall Plan, would come increasingly from US military spending abroad and the activities of US corporations and banks in international production. But the development of the Eurodollar in the late 1950s, essentially as a US international corporate currency, reflected international corporatism fully returned to itself as a system of international finance and production. On this basis, corporations could finance the development of fully international corporate production, which they did, beginning most especially in the early 1960s. The international system of corporate production and finance turned the postwar essences of social and national development into their opposites. These essences then became the premises or bases for international corporate development as conditions for social and national development. The internationalization of the corporation and the development of its conglomerate form represented the management of diverse operations and the management of profits from several different sources within a single firm. Internationally, profit-by-firm meant maximizing competitive advantages by internalizing those advantages within the corporation. These were firm-specific advantages, i.e. those specific to that firm in global competition as a consequence of its own history, positioning, and available investment capital. In general, also, the essences of postwar social and national development became internal to the international corporations. The Eurodollar reflected an international financial system and, consequently, both expanded and put pressure upon the supply of US dollars within international exchange. Export-led growth developed consistently throughout the 1950s and 1960s as international production by corporations. International production intensified as intra-industry competition, especially from the mid-1960s, as Western European nations and Japan directed major counterattacks against US international corporations. Above all, corporate internationalization meant the ability to internalize wage and productivity, as well as technological, advantages. The internalization of wage and productivity advantages within the transnational corporation set limits for national development, on this basis, through either trade unionism or the expansion of the middle class. Simultaneously, these limits were also limits to the productive and social expansion of the national economy and, therefore, limits upon the value of the national currency and upon taxing and spending in the carrying out of fiscal policies. All these developments both marginalized trade unions and permitted international corporations to appropriate not only those areas with the best wage and productivity advantages, but also the most socially developed areas of middle-class consumption as markets for their products. In the remainder of this chapter, I will examine this corporate internationalization and internalization, which were also capital’s processes of concentration and centralization. Corporate concentration, when considered in comparison to national economies, was already at a very high level by the early 1950s and has only increased since that time. The general context of concentration from the 1950s to the present is that half of the world’s largest economic units are corporations and half are nation-states. True globalization, even in the 1990s, is characteristic only of a few corporations. Only 4–5 per cent are truly global and 70 per cent of US transnational corporate activity is carried on by 250–300 firms. In 1950, only three of 315 transnational corporations (TNCs) had subsidiaries in

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more than 20 countries, but by 1975, 44 TNCs were so located. In 1950, 138 of 180 TNCs had subsidiaries in fewer than six countries; by 1975 these same companies were located in no fewer than nine countries (Dicken 1988:55). Concentration by technology and industry among US TNCs reflects three main categories: technologically advanced industries, large volume medium technological consumer goods, and mass production branded consumer goods. Sixty per cent of US TNCs are in just four industries: chemical and allied products, mechanical and instrument engineering, electronics and electronic engineering, and transportation equipment (ibid.: 66). These concentrations reflect three primary historical connections which are part of the TNCs’ development both in their linear progression and their increasing internalization, their building of themselves upon themselves. First, these are the same industries—or largely the same ones—in which the United States moved into leadership in Western European markets during the 1950s (Berberoglu 1987:43–53). It was through these industries that the TNCs increasingly positioned themselves as international producers for a world market. Second, concentrations in advanced technologies are a consequence of the TNCs’ need to internalize the latest production techniques. It is this internalization, above all, which has defined the forms and contents of their production within the leading capitalist countries. But as high technologies have become general, especially under the impact of the newly industrialized countries (NICs), control of technologies has meant cooperation and contractual partnerships rather than ownership. This has added to the ever more diffuse character of transnational corporate control. Third, TNC concentrations in more generally available technologies and mass consumer goods have required the internalization of wage and productivity advantages, strategic marketing, and, increasingly, emphases upon products high in value and quality. These internalizations occur on an international basis, and often involve Third World countries. Initially, and until the 1970s, most firms were involved in international production because of host market production (Dicken 1988:204). Only gradually, but increasingly, has ownership advantage come to mean integrated international production. Therefore, like IBM, most companies in the early 1960s were poised within host countries and positing their development toward a world market (Maisonrouge 1985:101–3). From the perspective of the firm, John Dunning has established three conditions for international production (Dicken 1988:133). These conditions are: ownership-specific advantages, internalization, and location-specific advantages. Each of these is the firm’s response to “market imperfections.” The United Nations Centre on Transnational Corporations has expressed well the continual process of adaptation and internalization of advantages which the TNC represents in its control and use of capital. They define transnationalization as essentially the internalization of international market transactions into an individual decision-making unit, the transnational corporation itself. The TNC carries out this internalization whenever markets are non-existent or are imperfectly functioning or wherever the risks of market transactions are otherwise too great (UNCTNC 1988:16). The TNC, then, creates or becomes the market, defines the market through its internal processes. This is another way of saying that the TNC substitutes market-commodity relations where none exist or where the alternatives within existing markets are not acceptable to it. The TNC organizes the market in this way within the context of highly developed relations of

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social reproduction. For example, consider the costs and complexities of the delivery of health care on the private and “managed care” bases desired by these corporations. The TNC is an institution for substituting its forms of commodity relations for previously developed social relations of production, distribution, exchange, and consumption. It is for this reason that the TNC’s structure becomes more complex and diffuse because it is continually structuring and restructuring itself as it internalizes social multiformities. Corporate internalization as the international sourcing of products and subcontracting was a gradual process of development which has centered corporate activities increasingly around the management of world operations through internalized processes. International sourcing and subcontracting were virtually unknown before the early 1960s (Dicken 1988:205). The internalization of these connections represented an important step beyond production centered within host country markets. In this development, the TNC was driven by external forces, and it was these which created and made possible, as well as necessary, the internalization of sourcing and subcontracting advantages. A major force in the expansion of sourcing and subcontracting was East Asian industrialization. Key to the expansion of Asian industrialization were the Japanese zaibatsu and Sears, Penney’s, and Montgomery-Ward from the United States. During the early 1960s, these US retailers were searching for labor costs below those of their US-based suppliers. East Asian industrialization in these forms intensified competition. US production firms established offshore production units and international subcontracting, beginning in the early 1960s, and were followed by Japanese and Western European firms. The growth of such international production networks was extremely rapid during the late 1960s and throughout the 1970s. If anything, the world recession seemed to intensify the search by TNCs for low-cost production in order to remain competitive and maintain profitability. (Dicken 1988:205) By 1973, the most common products produced in the developing countries were: electronics (semi-conductors, valves, tuners, components) in Hong Kong, Singapore, South Korea, Taiwan, and Mexico; garments and leather for US and Japanese firms in the West Indies, Southeast Asia, and Mexico; automobile parts for US, UK, and Japanese firms in Taiwan, South Korea, Thailand, and Mexico. Other products produced internationally by the early 1970s included: televisions and radios, sewing machines, calculators and office equipment, electronic machinery, power tools, motorcycles, bicycles, typewriters, cameras, optical equipment, musical instruments, telecommunications equipment, chemical and synthetic fibers. Production in “developing” nations fell into two main categories: those in the mature stage of product life cycle with technology standardized and utilizing long production runs and semiskilled labor; and certain parts of production processes in newer industries which used semi- and unskilled labor, even though the industry as a whole was highly capital and technology intensive. A third group of environmentally noxious industries exported to “developing” nations might involve either of these first two groups (Dicken 1988:205–6). TNCs evolved from horizontal structures tied to host country markets, to international production as sourcing and subcontracting, beginning in the early 1960s, and then to a

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search for the lowest-cost international production networks which intensified with the crisis of the early 1970s. As Peter Dicken concludes: production units are spread globally, often as part of a strategy of dual or multiple sourcing of components or products. This is one way of avoiding the risk of overreliance on a single source whose operations may be disrupted for a whole variety of reasons. (Dicken 1988:208–9; his emphasis) All of these relations were accompanied in their evolution by an expanding relation of international finance which, by the early 1970s, was in a position to oversee the entire process (Astapovich 1978:95–103). Consequently, by the early 1970s, the TNC was the internalized global corporate management of all of these historical moments taken together. Corporate internalization conformed to a spatial relation which involved geographic connections to differing forms and levels of production throughout the world. As with their other connections, TNC relations to locations were historical and political. In addition to the expansion of high technology production within developing countries, locational relationships of TNCs, beginning in the early 1960s, were shaped by increasing state involvement in economies, the continuing concentration of research and development within and among the developed nations, and shifts internationally within production and markets. State ownership of industries was an important economic force within development outside of the United States. State ownership, especially prior to many privatizations in the 1980s, was most important in post, telecommunications, and railways, and somewhat less so in electricity, gas, airlines, coal, steel, and shipbuilding. In 1982, 66 of the largest 500 enterprises outside of the United States were state-owned (Dicken 1988:140). States tended to be the largest single customer within any given economy. State sponsorship, including nationalization, became an important counter to US competition within the European Community during the 1960s. Government, working with business, used its powers and monies to revive faltering industries as a counter to US corporate challenges in European markets. These industries were later reprivatized (Dicken 1988:151–7; also see Heller and Willatt 1975). States have been essential to capital formation within Third World nations and were primarily responsible for the formation of export industries in the newly industrialized countries (NICs). The concentration of research and development within the advanced capitalist countries reflected, in part, the large amount of government expenditure in support of corporations. By the 1960s, 95 per cent of all research and development within the United States was paid for by the federal government. Moreover, the concentration of research and development facilities within the advanced capitalist countries and the continual building of development upon that infrastructure, meant that 90 per cent of all US corporate research and development remained within the country, despite the internationalization of production. Of that US corporate research and development located abroad, 70 per cent was located in only four countries: Germany, France, the UK, and Canada (Dicken 1988:199). Only Brazil and Mexico among the Third World nations had US corporate research and development facilities. The advanced capitalist countries,

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in this way, remained the focus for investment in research and development and the highest technological production built upon it. “Developing” nations have tended to be hosts, as I indicated above, of segments of high technology production, semi-skilled mass production industries, and environmentally noxious industries. TNCs have also been shaped since the 1960s by limits and shifts within international industrial production. Within most Third World countries, import-substitution strategies gradually gave way to an export-orientation because of the inability to develop capital goods industries within those countries. This was the effect of the failure of import substitutes, within the unevenness of Third World economies, to generate a sufficient multiplier effect to aid in the formation of an expanding capital goods sector. The limits to this capital development had the effect of internationalizing much of the capital formed through these states (Dicken 1988:168–9). Several forms of production are general within the world economy and, therefore, TNC involvement within these means attempting to hold onto certain materials or technologies or divesting from production in these lines. For example, textiles and clothing are general throughout the world economy. In the 1960s and 1970s, there were great expansions of textile production in the NICs, China, and the USSR. Corporate concentration in textiles, therefore, involves controlling certain fibers or processes, especially chemical ones, within what amounts to global overcapacity. Concentration in clothing means holding onto certain markets and having capital available to adapt to changing technologies and locations in manufacture (Dicken 1988:242–5). TNCs represent not a simple or single pattern of organization, but a constant state of flux with some parts of the corporation growing and others stagnating or declining. “Contrary to much popular opinion,” Peter Dicken states, “there is no simple pattern of location dispersion. There is far more diversity among production units than between the administrative or research and development units” (ibid.: 211; 218). Ownership advantages must continually respond to changes in products, markets, technologies, and economic development. Location advantages shift with developments in production which take processes and technology ever further beyond direct corporate control and depend upon government policies and infrastructural creation. Internalization, therefore, becomes an increasingly intrafirm process of trying to find and hold onto corporate advantages within changing national, global, and corporate economies. By 1977, of the 329 largest TNCs, one-third of all parent company exports consisted of intrafirm sales with shares varying from at least 45 per cent for US firms, to 30 per cent for those of the EEC, to 17 per cent for Japanese corporations. Manufactured goods for US corporations involved 53.6 per cent of them as related-party trade and 37.6 per cent for semimanufactured goods (Dicken 1988:190). The TNC is the most concentrated and highly institutionalized form of corporate control of capital and has the ability to mobilize and move capital internationally in response to rates of profit. As Dicken states, the major advantage of the TNCs, in their more regular operations, is in their ability to make changes in situ without engaging in locational shifts (ibid.: 211). The TNC, in this way, has centralized administrative control over globally decentralized operations. It can achieve economies of scale by increasing the capacity of an existing plant. It can shed surplus capacity with a partial disinvestment. It can introduce new technologies or subcontract. In all these ways, it changes its intrafirm division of labor.

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The disinvestment which occurred among corporations beginning in the early 1970s meant that growth would decelerate and that TNCs’ future strategies would involve relocation from one country to another as part of major structural regrouping and reorganizations. Therefore, major clusters of TNC investment at one period have been followed by similar clusters of disinvestment at another, perhaps 15 to 20 years later. For example, during the 1950s and 1960s, many US branch plants opened in Scotland. Between 1976 and 1981, 61 foreign branch plants closed there, 35 of them from the US, with 44,000 jobs lost and only 3,000 new ones created by inward investment (Dicken 1988:214). Relocation as insulation from the business cycle in one international configuration becomes the premise for a relation to a new business cycle and thus requires further relocation (Yudanov 1989:71–8). New levels of value creation in competing processes and locations require continual adjustment on a global scale. TNCs thus develop as organizational models toward global “scanners” or “galaxies”: continual monitoring and evaluation for possible disinvestment and relocation (Dicken 1988:214; UNCTNC 1988:54–71). The TNC in its corporate “galaxy” form makes itself ever more explicitly an institution which manages and reflects changing rates of profit. This gives an increasing importance to the role of finance in international corporate activity and feeds the velocity of capital movements and increases capital’s speculative side. The TNCs ownership-specific advantages, internalization, and location-specific advantages represent an historical evolution which embodies the leading activities of national and international capital within a firm-specific organization. Capitalism becomes what its firms do: tautological expressions of their own evolution against institutionalized rates of profit. The TNC, in these ways, is primarily an historical product of the circumstances of its postwar evolution. The TNC was and is an evolution through the wage-productivity relation, established in the 1950s; a continual reorganization and redefinition through the TNC’s own spiraling development: a relation to markets, to sources of labor, to nation-states, products and technology, and to social infrastructural resources (education, research and development, and its other requirements within the built environment). Certain spaces within global development, therefore, conform increasingly to socialization as created through the TNC. TNCs reflect not only their own developed requirements, but, equally, the ways in which social relations are themselves posited for development. Because they develop common social requirements for some at the expense of others, TNCs stand in relation to the creation of surplus population within whole societies, as a single capitalist firm once did with regard to a single factory. The concentration and centralization of capital always shrinks developed social requirements away from a given population, even as it makes those social requirements more universal. The TNC engages in firm-specific private appropriation, within and among nations, of products, production, technologies, wages, distribution and consumption requirements, and social infrastructure, as these were made general through post-Second World War imperialism. The TNC’s control of each of these represents the historical adaptation of its forms of appropriation to insure centralized control over diverse sources of profit. The TNC organizes its production and finance as an international sphere of value creation which increasingly sets itself against the development, as a whole, of populations within each of the nation-states that create it. As primarily a relation to their own private appropriation, and sphere of value creation, TNCs form a specific limit and opposition to each of the postwar essences of capitalist development. But because this international

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sphere of value creation is equally a product of, and dependent upon, the social requirements which compose it, these requirements also reflect their own social development and potentialities. It is the evolution of this opposition from the late 1960s to the present time that I explore in the next chapter.

6 DRAWING THE LINES Economic internationalization and social polarization For nearly 30 years, a generation in human life, capitalism has waited for an economic expansion that has not come. This is because capitalism exists presently as an ever more profound contradiction between private appropriation and socialization. Capitalism has created urban social space as a series of universal requirements for human social and individual reproduction within that space. But capital can reproduce itself as a system of private appropriation only by creating itself within that space, as certain social forms of that space. This divides urban development against itself and produces social life for all those outside of capital’s sphere of social development as the increasing denial of developed requirements for social and individual reproduction, as social deprivation and decline. But because the requirements for social reproduction are so developed and extensive, the struggle for those requirements, to be effective, must increasingly take the form of a struggle for socialism. This is because capitalist urban space is increasingly reproduced as a relation of direct production for direct consumption, but only for those within its own forms of social development. The problem is that these forms coordinate relationships of private appropriation which are too narrow for the reproduction of everyone dependent upon the social requirements within this mode of existence. Direct consumption exists for direct production when the objects for production are well established as a consequence of their repeated production and consumption and new requirements arise as extensions of previously developed forms. With capitalism, the direct identities of production and consumption have existed from the beginning of the twentieth century. Capitalist urban space developed as a series of requirements for individual and social reproduction which arose as a series of logically and historically developed requirements, as urban capitalist space built itself upon itself. Once it was possible to produce neighborhoods as units for urban development, capitalist urban space was then “for itself” as a form of social and individual reproduction because neighborhoods contained all of the previously developed necessary requirements for life in this form. The neighborhood was then not simply the basis for the reproduction of urban space, but urban space could be extended simply through the extension of the neighborhood form. Production was then the reproduction of that form and the production of requirements which arose from within that form and variations upon previous products. This has meant primarily automobiles, electronics, consumer durables for the house, and items of personal consumption. The forms of these products, of course, have been determined by capitalist corporations. Automobiles have maintained their place as transportation, for example, only because capital has minimized or destroyed other forms of urban transportation.

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Capitalism develops urban social space as ever deeper unities of production, distribution, exchange, and consumption for the processes of human individual and social reproduction. But capital posits these not only as requirements for reproduction, but also as relations to money. One of the stories of capitalist development during the twentieth century has been its expansion of highly institutionalized and governmental forms of finance, as private finance and as fiscal and monetary policies. It was these institutions which permitted capital to extend urban space as the basis for middle-class development during the “Golden Age.” But the internationalization of private finance increasingly contradicted government monetary and fiscal policies. Governments lost control of their money supplies when international corporations were able to hold currencies and to create money at will through their own international extensions of loans. Governments found their fiscal policies restricted to the capacities for economic growth as measured by their nation’s ability to create exports, which was also the restriction of government investment to international corporate spheres for development. Nevertheless, the urban capitalist whole rests upon socially reproductive unities of production, distribution, exchange, and consumption which capital must acknowledge in its own forms of development. Capital today builds upon technologies which are themselves products of repeated production and social interactions which have placed emphasis upon social knowledge and social coordination of those processes and interactions, and de-emphasized mechanical and linear forms of production, distribution, exchange, and consumption. Computer-based technologies realize economies of scale, scope, and transaction costs simultaneously because the scale or volume of production can be determined by the customer’s order or purchase. The scope or variety can be determined also by consumer choice from among various forms which can be produced within a single production run at a desired volume and both volumes and varieties can be altered to correspond to consumer information. These interactions are the transactions. Costs of transactions are reduced by the ways in which computer-based technologies create exchange relations as direct and communicative interactions between production, distribution, and consumption. Capital, in these forms, creates individual and social reproduction as direct consumption for direct production. Personal consumption becomes the basis of every industry and service from steel to clothing (Quinn 1992:3–30). This is a consequence of increasingly customer-driven production, which also corresponds to mass market limitations, and of the social coordination and integration of services and production which characterize high technology processes. The highest levels of personal consumption become markets for capital because they represent both high levels of personal income and intricately-defined consumption requirements which are consequences of the further refinements of material social embodiments. Computer technology as high-end production of these products integrates production process and product (e.g. autos, computers, watches) because both are produced by and contain microelectronic technologies. Production itself is, then, a more profoundly social and community-based process relying, increasingly, upon the activities of single individuals and small groups as these are coordinated through information-based corporate structures and technologies (e.g. consultants engaged in the production of software or services). Production becomes the coordination of diverse activities over wide geographic areas, even globally. Yet, on

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average, more than 60 per cent of an individual TNC’s internal communication takes place within a radius of 500 miles. Production relies upon information technologies to coordinate all of its parts and the services associated with them (Kochan and Useem 1992:209–99; Quinn 1992:213–40). Scale and scope of production within the TNC are, in part, social responses to capacity adjustments in production which respond both to the social intricacies of personal consumption requirements and the limitations upon mass production. These are a consequence of economic and social development limitations, which TNCs seek to correct through underproduction. Production and service become increasingly integrated, both through global management of common production processes and through corporations’ own extension of service activities, especially with regard to finance and underutilized capital. This includes the identification of corporate “core competencies” of finance, management, and information, for such purposes as providing business services or corporate credit cards (Quinn 1992:31–70). Computer-based production technologies are increasingly integrated within urban space, or can be, because they are highly concentrated, centralized, and flexible forms of production for that space. Residential space becomes, or potentially is, part of the production process because production relies upon the coordinated activities of people and locations within that space. Neighborhoods, and the requirements for individual and social reproduction which exist within them, become part of the “distribution of the agents of production” (Marx 1986a:36). Urban social space and its reproductive requirements, in these ways, make themselves subject for production as their object. Capital, as I discuss in this chapter, includes the individual and social reproductive requirements within its “value chain” because its production and consumption relies upon the activities of human subjects within that space, who are engaged in the processes of their own reproduction according to the developed requirements for existence within urban social space. Neighborhoods are forms of social distribution because their infrastructure, housing, education, health care, recreation, and leisure are the requirements for individual and social reproduction. The availability of these requirements makes a neighborhood a potential location for investment in production. The existence of these requirements forms a basis for exchange. To the extent that these requirements are available at affordable levels they increase the potential for savings and disposable incomes. And exchange depends upon investments which allow a community and its requirements to reproduce and develop. It is because capital develops as a relation to money and exchange that it forms an identity with the best developed communities. Neighborhoods become sites for corporate investments because they have the best developed social requirements as these have evolved within urban forms since 1945. Often, these areas are closely related to military uses of social space. But these communities have considerable self-reproductive capacities which arise from their possession of developed social requirements. Their potential for exchange and consumption encourages investment and adds to their development possibilities. Capital is international and export-oriented in its forms of production and service and seeks to make social development and reproduction complement these forms. This regionalizes economic development within nations and limits monetary and fiscal policies to international exchange relations. Consequently, capital defines individual and

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social reproduction only according to its own reproduction. Capital becomes the direct appropriation of human social reproduction and seeks to produce those relations only according to its own money and exchange relations. It is this opposition to general social development which I examine in this chapter. Capital’s inabilities to produce economic expansion beyond its own social forms during the 1970s and 1980s has encouraged investment which concentrates production, distribution, exchange, and consumption into social and geographic forms which only further define urban space against itself. But, as I show in the next chapter, the fact that those developments can only take place within and build upon universal requirements for human individual and social reproduction also discloses social possibilities as well as necessities for development beyond capitalism.

THE SEARCH FOR PROFITABLE INVESTMENT The international corporation emerged into the 1970s and posited itself as a relation of finance for the development of wage and productivity levels, especially: new technologies; consumption through global export markets; the regulation of currencies according to its self-referenced determination of value; opposition to trade unions; and the limitation of government spending to complementary value-creating and sustaining activities. These relationships were summarized, theoretically, and made consistent with national economic and social development, in the image of the global factory. This concept held that the processes of economic development then underway were essentially a globalization of industrial production in which corporations’ own national markets would be served from a variety of international production sites. The locations of production would be established according to the most efficient wage and productivity levels available. Capital would flow to those locations which had the fewest barriers to investment, efficiency, and profits and national development would be attained by insuring that national policies and practices were aligned with global market forces. Ideologically, the global factory and the accommodation of market forces still obtain as explanations of the operations of the international capital markets and corporations. But, in fact, from the 1970s, the promises of the global factory failed to be realized as the corporations encountered barriers to their development of economic and social relationships both nationally and internationally. The emphasis of TNC affiliates upon production in and for particular regions suggests that the concept of regional factory is more appropriate than global factory (UNCTNC 1988:95–6). By the early 1970s, with the international corporation having developed a highly institutionalized relationship of global finance to national development and looking at a crisis of capital overaccumulation, the expansion of wages and productivity appeared to mean the national extension of those corporate and technological forms developed internationally. This was heralded in the United States by international corporate leaders’ complaints of falling profits, high wages, and low productivity. Throughout the 1970s, this opposition expressed itself in continuing crises of the dollar and “stagflation.” But the most striking characteristic of wages in the United States during the 1970s, and since then, has been their inelasticity, along with that of other forms of social payment. Although the reductions in employment and real wages undermined the conditions of workers and the middle class, and forced rising levels of poverty, wages never fell

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enough nor did productivity rise enough to permit the expansion of international corporations. This was primarily because of the developed social character of wages, even in the context of responses to overaccumulation bent upon their destruction. The development of international capital markets since the early 1970s has been characterized by their continual growth and expansion. This led not only to the “big bangs” of the mid-1980s, through which governments essentially released this market from national controls, but beyond that, to these markets’ burgeoning growth to levels where they now cycle approximately $3 trillion dollars a day through their processes. Capital markets include speculation in various forms, such as primary commodities and national currencies, and the funding of national and local government bond issues, especially through the London market (Costello, Michie, and Milne 1989:115–18). The growth of international capital markets represents a search for profitable investments as against the social restraints upon productive investments and the use of financial mechanisms to withhold, and therefore determine, the terms and conditions for profitable investment. The expansion of international finance capital has been complemented by the growth of the financial sides of banks and corporations. Banks, at least since the early 1980s, have had as much as two-thirds of their deposits in transactions which extend their investments for no more than 24 hours to six months. Very often, this simply involves switching investments among various currencies, as their values rise and fall in response to these same transactions. International corporations make as much as 40 to 60 per cent of their profits through financial transactions. This includes acting as banks for themselves and other corporations. In the United States, during the 1980s, corporate banking became tied up with the recycling of federal tax credits as an additional means of making profits. The convergence of international finance with banking and corporations exerted a powerful force which pulled almost all financial institutions effectively into the same competition (Kolko 1988:57–94; 100–24). But the international financial markets are, again, a search for profitable investment, where the conditions for productive investment and expansion, even of those corporations at the forefront of technologies, are shifting and uncertain. The power of the financial markets themselves add to the velocity of capital movements because they continually drive upward acceptable profit margins, as committed productive investment must compete with rises in speculative profits. The growth of the international capital markets within banks and corporations are a product of the essential opposition of these institutions to all their limitations within the social relationships of the global political economy.

THE LIMITS TO PRODUCTIVE INVESTMENT The limitations upon productive investment restrain and determine the form and content of those productive investments which do take place. Restrictions upon the expansion of production create, also, restrictions upon the conditions for consumption. The limits to consumption, in turn, determine that production will be carried on increasingly as underproduction. Underproduction and underconsumption are created in a wide variety of forms throughout the global political economy. These include underproduction in raw

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materials, food, and energy (Yakovlev et al. 1988:39–40). Industrial production, generally, is characterized by these same relationships. Automobile companies, by the end of the 1980s, were able to profit on 24 per cent fewer sales than at the beginning of the decade. Du Pont could profit using less than 60 per cent of productive capacity. General Electric restructured and reduced employment and products so that its earnings rose 50 per cent during the 1980s, while sales increased only 12 per cent (Kolko 1988:59). Apple Corporation, which was one of the success stories of capitalism during the 1970s and 1980s, retreated increasingly from a global production network existing in Singapore, Malaysia, Texas, and California into a single production plant. After 1985, Apple could produce within this California plant as many as 1.5 million units per year which were 95 per cent free of defects. But the prospects of international economic development extending from a global factory, which Apple’s initial expanse promised, was undercut by this development. Moreover, employment and consumption are limited by this form of high technology production. Apple’s single plant employs only 200 people, 70 of whom are engineers (UNCTNC 1988:49). By the early 1990s, Apple was dependent upon most of its consumption coming from government purchases, and the limits within popular consumption created for Apple a choice between retreating entirely into its government market or even merging with IBM. The limits to productive investment and the restrained and concentrated forms of production arising within this economy have meant the development of a system of production and investment which is increasingly defined by the markets of consumers available internationally. Underconsumption, in this way, redefines production as international underproduction and makes production and marketing still more highly competitive. This competition is intensified by the number of production facilities available worldwide within the various industries and increases the advantages of contracting-out production, rather than owning and developing plant and equipment. The international expansion involved in production and marketing on these bases encourages the development of business services, such as accounting and software, which can connect relations among production locations and customers and, above all, aid in the international search for consumers (Kolko 1988:97–9). All the relationships that I have discussed in this chapter, beginning with the interpenetration and mutual creation of the international corporation and finance capital, encouraged, by the mid-1980s, the prevalence of the “hollow” corporation (Business Week 1986:59; Quinn 1992:225–40; Harrison 1994:125–49). This corporate form of organization was both the connecting of information technologies of investment and production and the movement of these among a variety of international production configurations and market orientations. The “hollow” corporation was the extension through information technology of the essence of corporate production and marketing as an international shifting among different locations, a means of insulating against the effects of recession in any one place. These movements during the 1970s and 1980s created an emphasis within the international corporation’s structure upon its capacity for placing investment and production among several sites and correlating these with various expectations for the development of international consumption.1

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CONCENTRATION, CENTRALIZATION, AND ECONOMIC REGIONALIZATION The competitive conditions which were created through all these developments reinforced the structure of the corporation as a creation of possibilities for profit-by-firm, regardless of their sources. This made the corporate headquarters a generator of profitable investments through ever more loosely attached or even, in the case of contracting-out, detached divisions. This form of corporate organization, which had previously been notable especially in the Mitsubishi Corporation, by the early 1990s characterized firms such as IBM and AT&T. The expansion of the corporate structure in these ways as international management of investment, production, and marketing reinforced the tendency toward statelessness in the corporations’ orientation toward economic development (Business Week 1990:98–106). This stateless orientation includes their continued dependence upon their nation of origin for planning and development which complements their international operations. The forms of corporate private appropriation created corporate and financial structures as yet more information networks for the management of flows of capital. Even international economic reconfigurations, such as the North American Free Trade Agreement, were an integration of previously existing corporate production among countries, combined with circumstances arising out of the international search for skills and labor which would provide high quality production at the highest levels of surplus value. General Motors, for example, reported that it was only in the Mexican workforce that they found low wage workers with the ability to use new technologies to achieve the highest values in production. General Motors’ operations in the Americas represented, from one perspective, the shifting of production toward the highest values in opposition to existing social development. According to a Big Three auto executive, these companies would locate many more plants in Mexico if it were not for the United Auto Workers (Business Week 1992:100). And, from a second point of view, GM’s corporate structure remained a hodgepodge of various, and often loosely-connected, corporate affiliates. Both these and the overall future directions and investments of the company were quite doubtful (Keller 1989:159–80). Adding to these uncertainties, or at least multidirections, was the fact that much of GM’s annual profits have been accounted for not from manufacturing and selling cars, but from finance, including investment tax credits and foreign exchange gains (ibid.: 177). The United Nations Centre on Transnational Corporations said that TNCs are perhaps the most significant economic actors in the global economy (UNCTNC 1988:16). TNC sales exceed the aggregate output of most countries. The foreign content of output, assets, and employment in many TNCs ranges from 50 to over 90 per cent. The largest 600 industrial TNCs account for between one-quarter and one-fifth of value-added in production in the leading capitalist countries. TNCs account for 80 to 90 per cent of all the exports of the United States and 60 per cent or more of US imports, with at least 50 per cent of TNC transactions being internal, buying from and selling to themselves. Approximately 50 per cent of the US trade deficit is accounted for by the internal transactions of TNCs. TNCs, both financial and non-financial, control the bulk of international lending, have liquid assets in several currencies, and are important participants in world financial markets. The largest 56 TNCs have sales ranging between

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$10 billion and $100 billion. The expansion of the international economy through the TNCs has tended to involve more and more smaller companies, especially in the area of services (UNCTNC 1988:16). In 1990, slightly less than half the 35,000 TNCs were from four countries: the United States, Japan, Germany, and Switzerland, with the UK ranking seventh as the most popular home of TNCs. Of the Fortune top 500 industrial TNCs, 167 are headquartered in the US, 111 in Japan, 43 in the UK, 32 in Germany, and 29 in France. The combined wealth of the top 500 manufacturing and top 500 banking and insurance companies amounts to $10 trillion, twice the US gross domestic product (GDP) (Lang and Hines 1993:34).

THE “VALUE CHAIN” AND ITS LINKS International capital has sought to develop production as “high value” production. This means creating and extending those portions of production which can attain the highest rates of value and surplus value within the developed forms of private appropriation and by seeking out those consumers with the best abilities to pay, so that their social positions are simultaneously reinforced and rewarded. High value production, therefore, means seeking out niches within production which can be developed at the highest levels of profitability. High value production takes two principal forms: differentiation and lower cost production (Porter 1990:37–40). The first of these is production based upon differentiation within a particular product market. This involves connecting production to a market which is itself already premised upon underproduction and underconsumption. For example, Airbus has been successful because it provided the plane needed to carry passengers on secondary air routes created by airline deregulation and consolidation (ibid.: 88). Similarly, diverse fields like shipbuilding or footwear are organized to produce for particular markets, such as expensive or low cost footwear, which target particular levels of consumption within export markets (ibid.: 86–107). In short, differentiation refers to maximizing profits through specialty rather than mass production. The second major way of maximizing profit from productive investment is low cost production which is based upon a particular design, production, or marketing strategy which provides the highest revenues with the fewest inputs. These goals are often achieved by “spinning out” various activities which were previously part of the mass production corporations and finding that form of production or service anywhere in the global economy where the highest value and lowest cost can be achieved. Both of these methods of attaining high value, as opposed to high volume, production are aspects not only of competition among corporations, but of their increasing centralization and concentration of capital. The niches which they find for production are ways in which they can lower costs relative to their competitors or use their corporate capital and expertise to move into areas where they may be able to become dominant within a market. This search for new markets has itself taken large corporations ever more deeply into services and away from mass production emphases. Part of this is due to the increasing attention paid to customers and the multiplication of their wants as well as trying to maximize their satisfaction with high-priced purchases. In all these ways, therefore, the activities of transnational corporations are increasingly self-referenced

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because they involve finding forms of production and consumption which are made most highly profitable by the relative lack of mass productive and consumptive development. The withdrawal of mass production employment and consumption undermines all the bases of national development necessary to expand or even sustain most markets and their diminution creates a further downward spiral for investment. The fact that capitalism always calls into existence more dependence upon its employment and consumption than it can fulfill is now played out on an international scale; just as is the consolidation of capitalist ownership, which itself accompanies the control of technologies and markets, and creates lost bases for employment and consumption. Low cost and differentiated production both presuppose the existence of mass production because they are the result of finding niches within its activities. But mass production is not only reduced through disinvestment and plant closures, its products themselves become the specialties of a few producers, somewhere in the global economy, as a consequence of the differentiation of production and the location of particular markets. What is lost is the orientation of mass production toward national economic expansion and its corresponding dependence upon mass social development. “Mass” consumption within differentiated production becomes only a way of targeting a lowpriced product toward particular groups within the global market who have the ability to consume in that place, at that time. Moreover, international capitalist production and investment become a way of managing mass national production in opposition to a mass social market. Beginning in the 1970s, the only way that private appropriators could significantly reduce wages and social consumption was to downsize whole industries in ways which created masses of surplus population. The shifting advantages within production and services with regard to high value activities—changing costs, ever more differentiated markets, new uses for universal technologies, and new skill requirements, all favor the “hollow” form of corporate organization. This corporate form, in turn, reflects increasing tentativeness toward products and volumes of production. This furthers the corporation as an international relation to many different forms of labor, production, and service, and itself requires increasing circumspection as to investment possibilities for further reduced costs or greater differentiation of product markets. The fact that these activities involve considerable exchanges of information over wide distances, research and development, and a variety of kinds of skills means that they also presuppose developed social infrastructures through which they can evolve and operate. Taken together, all the forms of production (including mass, low cost, and differentiated), research and development facilities (including tie-ins to universities as well as expertise involved with extensive technological and materials requirements which depend primarily upon socially-created, rather than natural, resources), skilled labor (especially engineers and computer specialists and an educated workforce appropriate to the industry), infrastructure (which includes production and communication facilities, education, housing, leisure, and personal services), and government and other forms of social coordination capable of creating all of the “factors” necessary to these, constitute a “value chain” (Porter 1990:40–100). The “value chain” is thus that productive and social relationship which defines the connections necessary for current forms of production and marketing and itself becomes the object for investment as a means of further refining its uses or for developing potential markets for production, service, or consumption within

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it. The “value chain” is a product of national and social production and consumption requirements and its existence represents a primary condition for future forms of social and individual reproduction. But its control and determination by the corporations and finance capital mean that it develops in ways consistent with private appropriation. As a result, the forms that are developed within it, including those of social infrastructure, create unemployment and underemployment, underconsumption, and declining opportunities for social development and fulfillment, and these in turn further define and drive the corporate and governmental forms of organization. In contradistinction to David Harvey and those of the “Fordist” interpretation, international capital is not essentially a process of “flexible accumulation” (Harvey 1989:147–97). It is essentially inflexible and oppositional because of the profound contradictions between private appropriation and socialization in their present forms, and development. The overaccumulation crisis, which began in the early 1970s, has continued into the 1990s because of the inability of the TNCs and other institutions of capital to extend themselves through all the social relations posited for their development, nationally and internationally. This inflexibility expresses itself as underproduction and underconsumption and in financial speculation as well as the high concentration of international investment in a relatively few nations. But this opposition can be seen, as well, in the dependent and precarious forms of development through which capital does extend. The “value chain” itself summarizes the necessity for the coordination of highly socialized relations in order to make their further development compatible with capital. The “value chain” is a self-relation to capital which, in its present form, creates the bases, within developed capitalist countries, for the international sphere of private appropriation. Capital controls and maintains private appropriation by denying relations outside of itself as having value. Capital deprives these social relations of the elements necessary for their own social productivity and spontaneity, i.e. as developed social space presupposes and posits those elements which make up the “value chain” for general social development. This is strikingly evident in the polarization of urban development which I discuss below. Capital maintains value in forms compatible with itself by maintaining the commodity form. Internationally, TNCs accomplish the maintenance of commodity relations, in part, through “transfer pricing,” which is the movement of goods, services, and money internally, within the corporation, against national restrictions upon the maximization of corporate profits.2 Within nations, control of value means the maintenance of development as commodity exchange versus governmental and social definitions of development. Specifically, this limits the multiplier effect and the creation of social wealth to capital’s own accumulation requirements, while communities not so favored are starved for investment and development. Maintenance of value means the ability to control social development in directions compatible with international trade, exchange, and investment.

RESTRICTED MONETARY AND FISCAL POLICIES The concentration and centralization of capital internationally limit national monetary and fiscal policies to capital’s own expansions and contractions. This maintains social

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development as a relation to exchange by limiting social development to those who have money rather than developing objective social-spatial requirements. Social planning, therefore, centers around that exchange relation and its limits. This orientation emphasizes the military as central to research and development and government planning; centralizes retail distribution into shopping malls; maintains urban development through privatized grants; and reinforces private financial control over the social development of the elements of the “value chain” (Castells 1989:33–125; Frieden and Sagalyn 1989:133–70). The “value chain” is, in this way, defined as a relation to money and commodities rather than to people and their social development. Ultimately, this social development is administered privately by bondholders. Socially, this opposes those who create value for capital to those who do not. International corporatism became “for itself,” in the late 1960s and early 1970s, as the essence of US national development when it had created an international system of production and finance which enabled it to reproduce the six essences of postwar development as itself. Wages, consumption, labor, exports, productivity then became mirrors of the TNC’s own activities. Corporate choices among technologies, wages, and complaints of falling rates of profit, and of capital shortages arising from too much government spending, all reflected potentialities for national and TNC expansion. As defined by international corporatism, the social economy was then measured according to its potential for private expansion. International finance judged nations’ potentials for private investment and decided the exchange values of their national currencies. It was, ultimately, international corporate and banking speculation against the dollar which proved decisive in US devaluation of the dollar in 1971, the voiding of the Bretton Woods agreement, and the abandonment of the gold standard. The US response in the form of devaluation meant that US-produced or dollar-priced goods now competed in international markets at prices below those of competing nations. This was, in effect, underpricing national production rather than improving national productivity. The control of the money supply as a defense of the dollar also necessitated control over social spending and consumption. The role of monetary policy was limited in its usefulness because of the contradictory political pressures arising from social needs. During his 1972 re-election campaign, Nixon obtained an expansion of the money supply in order to expand social consumption. Monetary policy could only become effective, therefore, if it was accompanied by powerful restraints on fiscal policy, and this could only be achieved through the lowering of social consumption. This was especially true because of difficulties in establishing the parameters of the money supply, given the powers which corporations and banks had independently to extend the availability of dollars. International corporate dominance of production meant that wage and productivity relations were now essentially internalized within the corporation itself. International corporate valuations of the US dollar expressed their determination of the productivity of the United States as a relation to international corporate investments and prospects for expansion in that country. But this, simultaneously, valued national production as a relation to international corporate production and, thus, devalued those forms of national production and social existence which did not conform to developed or emerging corporate international standards. This meant the discouragement of expanded social spending which did not complement the international corporation.

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In this circumstance, the value of the dollar, and fiscal and monetary policies, became restricted to the international sphere of value creation. International competition and restricted economic development, in turn, hollowed out the US economy and this decline reinforced the loss of value.3 Reduced government spending forced reliance upon private incomes and exchange values, i.e. commodity relations. Insofar as people have the ability to consume (which depended upon their existence within developed social-spatial relations with their own capacities for reproduction, i.e. as personal consumption and further socialization were posited for development within that space), they have the ability to exchange (i.e. through the reduction of these social relations to money), and they are, therefore, targets for distribution, and even, in various forms, sites for production and service investments. This rewards those locations which have the most developed elements of social productivity, because that is the basis for national distribution and exchange. The corporation relies upon these and is an element within them. Through its restrictions upon and determinations within national development, international corporatism became the direct social reproduction of capital. Social productivity as defined by and coordinated through capital and its allies in government became a more definite relation in space and time and socially reproduced the class relation and its social control. The “value chain” summarizes these essentially social relationships. But this is the social coordination of value creation and class reproduction which can only be carried out as a social relation among many activities. These involve the social coordination of production by serving its needs for research and development and locations for corporate complexes. Distribution is organized according to those areas which are most developed in their spatial requirements and thus have the greatest capacities for consumption. But the reproduction of social and spatial requirements depends upon governmental planning and support and, therefore, requires political alliances for their accomplish-ment. The coordination of exchange depends, above all, on the ability of communities to posit personal and social needs beyond the household, as is achieved in gentrified areas. Coordination of exchange and consumption involves direct social identification of needs and wants and communication and service technologies which can interconnect these with production. The coordination of social space in these ways also involves its destruction: through deindustrialization and as government expands as an instrument of the deprivation of political power and monies necessary to social reproduction. Throughout the 1970s, capitalist control over fiscal policies of government expressed class limits to social and individual reproduction which circumscribed all of those forms of reproduction which were not consistent with capital’s own developed and increasingly institutionalized international system of private appropriation. The potential for Keynesian stimulus to purchasing power, therefore, existed within this class limit. The need to maintain the dollar, control wages, and circumscribe government spending within the limits established by private finance all meant that government expansion could only permit those forms which were consistent with the international value relation. During most of the 1970s, this meant curbing expenditures and resisting increases in income for much of the population. Meanwhile, monopolies struggled to maintain their profits by boosting prices within the restraints of government incomes policies.

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“Stagflation,” as the combination of restricted spending and private investment and declining real wages and currency values came to be called, was thus essentially a class relation which expressed the opposition of the international corporations to investment in national expansion for its own sake. Stagflation represented, also, their increasing opposition to their own existing corporate forms and the eroding purchasing power and restricted incomes and social development which that lack of investment and expansion created. All the forms of production and social reproduction were national, whether in manufacturing, services, housing, education, health care, or other social services, but the conditions for their utilization were increasingly determined by the conditions for the reproduction of capitalist corporations internationally and by the expressed positions of politicians who increasingly echoed these new corporate needs. At the same time, this made all the conditions for economic and social development political because of corporate reliance upon government mechanisms to provide conditions for their national expansion, and because all social groups were posited for reproduction as a relation to government. Among the most dramatic examples of the clash of private appropriation and public spending for social reproduction was the New York City fiscal crisis of the mid-1970s. One part of this was the expanding needs of the city for urban development, based on the evolved system of neighborhood programs which had emerged during the 1960s. In 1971, Mayor John Lindsay told Congress that the city would require $50 billion over the next decade to continue its present plans for development (Savich 1990:251). Proposals like this met increasingly cold reactions because of the increased shift of the tax burden to the ordinary taxpayer and because of the increasing international competition for private funding and the willingness of finance capital to challenge the proprieties of public spending. The use of bonds for public funding in New York had been increasingly combined since the 1950s with the use of the public authority, a mechanism which created private financial control over public funding and space. The imposition of a public authority to control finance in New York City gave finance capital effective control over all forms of social development in the city. This control expanded continuously over the next two decades as more and more social and political activities within the city were placed under public authorities and the city’s taxes were shifted in larger amounts away from the city toward development in other parts of the state and nation (Walsh 1990:188–219). In similar ways, the ability of international finance capital to control public expenditure through their willingness to buy bond issues became a major way of limiting social development and insuring the hegemony of capitalist private appropriation. The development of social infrastructure had been an important part of the politics of consumption since the 1950s. The expansion of urban centers came to depend increasingly upon relations to government subsidies and programs, and during the 1960s these forms of providing employment and community development had become major political programs. Even the limitations imposed upon urban development in the New York City fiscal crisis of the mid-1970s posited further reproduction as a social and political relationship. The necessity of continued development of the city required the development of some groups at the expense of others within the limitations established by finance capital. That is, because the city was a social and political relation, dependent primarily upon government funding, finance capital could only posit itself as a social and

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political relation in its attempt to control that reproduction. Bondholding was a way of financing the city, as well as other forms of government, which redistributed tax monies to the wealthy. But this was, simultaneously, only bondholders’ control over the forms of urban development that bonds could be used for, as well as how tax monies would be used and for whom. Consequently, finance capital’s control over government funding and expenditures was a directly political relation on both sides. Once finance capital had posited its relationships in this way, it was then necessary to evolve other political and social mechanisms of control which involved finance capital in the administration and development of political subdivisions, and that rewarded certain groups within those processes. The public authority represented one of those mechanisms because it represented the bonded funding of spatial development under the control of a stateauthorized private board. Plans for the development of urban and other space could then be planned and funded without popular involvement, except for the willingness to pick up the tax bill. Moreover, state and public authority control of revenues and development allowed revenues to be shifted to suburban areas and used for infrastructural development needed by the international corporations, as the developing sector of the economy (Walsh 1990:209–13). At the federal government level, the award of development grants to quasi-private local boards and professional developers allowed the creation of shopping malls, office buildings, and whole suburban-based complexes. All of these were most useful to those population groups associated with the international corporations and their infrastructural development. Although these were presented as beneficial to the whole community and its social and economic development, the very location and specificity of the social development of some communities, and not others, increasingly demarcated what spatial development was taking place, and for whom.

SOCIAL DUALISM IN DEVELOPMENT AND POLITICS Yet all this development, and the controls and directions of its funding, disclosed its common political bases. Because of the extent of the development of social and individual reproductive relations, on the one hand, and the ability of private capital to develop them only through control of their investment and in certain limited spatial forms, on the other, both of these were premised as relations to government and its control and use. Any city or state, even the whole nation, in this context, has a common basis for development, and that rests with the government and the potential use of government funds. Thus rich, poor, or middle-income areas all share common bases for their reproduction and it is they, as taxpayers and citizens, who underwrite development in any of its forms, even that of the international corporations themselves. The reproduction of the social space is, in all these ways, collective, but the political control of these governmental processes permits only certain forms of infrastructural development. This has, for example, dictated the development of “Edge City” complexes for international corporations with favorable tax policies, which complement their operations within the inner city itself; but it has meant, also, the decline of manufacturing and other forms of urban development and employment.

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Spatial reproduction is all underwritten in some form. Some people get physical developments, others get income maintenance; but it is all spatial development and governmental support of some kind. These government policies, given the social content of the relations which they are producing, make the reproduction of class relations ever more explicitly governmental. All spatial reproduction depends upon federal, state, and local policies which determine that development will be for some and not for others. International corporations are in a very powerful position because of their capital holdings and control of investment and technology, but they are simultaneously dependent on the creation of “Edge Cities” for the developing of “smart” buildings in locales where they can best dovetail with their preferred workforces and political constituencies, and their ability to simultaneously create areas throughout urban space which correspond to their production, service, and leisure desires. In these ways, the international corporations develop urban space, populations, and politics as the mirror image of their activities and to the degradation or abandonment of other portions of urban and suburban space. Nowhere are the spatial configurations of the opposition of private appropriation and social and individual reproduc-tive relations more clearly displayed than in urban areas as these have developed from the beginning of the 1970s. Bridgewater Township, New Jersey, is an example of one such community and is a good case study which summarizes many of the developments which I discuss in this chapter. In part, the development of this community, at the convergence of Interstates 78 and 287, is, as Joel Garreau subtitles his book Edge City, “life on the new frontier.” As a prosperous suburb in the late 1960s, Bridgewater Township was able to parlay its possession of well-developed urban social requirements (the bases for its generation and retention of incomes within that area and for positing additional development) into political activism which could attract favorable political and investment decisions. The primary symbol of Bridgewater Township as an attractive area for development was the location there of a highly sophisticated shopping mall (Garreau 1991:42–7). Bridgewater Township’s development also centered upon the creation of office space, including the world headquarters of AT&T. But AT&T found this area attractive not only because of its proximity to New York City and its ability to interface with its back office and other corporate operations. AT&T also had numerous connections to Bell Laboratories throughout New Jersey. And Bell Labs connections within that area, which dated from the early twentieth century, were further reinforced by access to universities and other research and development facilities (Garreau 1991:26–32). Much of these latter kinds of developments were extended and reinforced during the 1970s and 1980s by federal spending, especially for technology and research complexes, which were funded, largely, through the military budget (Castells 1989:259–306). Bridgewater Township is thus possessed of all the elements of the “value chain,” which I discussed earlier in this chapter, but which is, in essence, the adaptation of high technology production and service within developed social space. The reproduction of that social space, as I have just indicated, is a product of government as well as private planning and coordination. From one side, as Manuel Castells demonstrates with regard to the United States, “Edge Cities” are part of a corporate-governmental polarization of social existence within urban areas. These “informational cities,” as Castells terms them, appear as the economic and social future of the country, with the remainder of urban social space either complementary to this development or abandoned to the past, its

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inhabitants essentially surplus population. It is the developing areas which gain the political attention, the favorable government policies for incomes and development, and increasingly define the political parties, to the exclusion of others. But, from the other side, as I discuss in Chapter 7, “Edge Cities” represent, primarily, rearrangements within urban social space. “Edge City” and “Inner City” possess the same universal characteristics and requirements of urban social existence. They differ, in part, because the first is possessed of well-developed housing and neighborhoods and integrated social services and cannot only reproduce its own essentials, but can generate the bases for other forms of development. International corporatism’s integration within such social spaces is also a recognition of the universality of that form of social reproduction and is a dependence upon its qualities for present-day production and service. This, again, is also capital’s own existence as a particular for coordination and appropriation in and for that space. By the 1980s, consumption had become a highly politicized relationship because of the dependence of all segments of the population upon government policies and revenues in the creation of the conditions for social and individual reproduction. Of course, in terms of business and the wealthy, this meant the ability to create the conditions for private appropriation through these social relations. This meant the capacity to establish favorable tax depreciation schedules for writing off plant and equipment which had defined production during most of the postwar years. But, as I discussed above, the limits which existed to the expansion of productive investment meant that the ability of the wealthy to recreate and expand their incomes and their bases for social and individual reproduction was also increasingly dependent upon tax revenues. It was for this reason, in part, that the Reagan years saw the greatest redistribution of wealth through the tax system in US history. These tax reforms further depleted the social standing of the middle class, workers, and the poor (see Edsall 1984; Phillips 1990). These changes at once reduced income levels for most people in a direction more favorable to private appropriation, limited consumption in ways that forced reliance upon cheaper imported goods, and made all constituencies, including capital, more dependent upon government policies and revenues. The absence of productive investment along with massive destruction of plant and equipment fed the speculative side of capital and expanded still further the international financial markets (Kolko 1988:78–9; Adams and Brock 1989:114–23). Consequently, international finance came to exert still more pressure upon more national and local capital markets and on the availability of finance in all its forms. It was this convergence which brought about the deregulation of financial institutions and the “big bangs” in the leading capitalist countries in the mid-1980s, which were the removal of most investment and exchange controls within the various countries. This was also necessary because of the need for governments, like that of the United States, to rely upon international finance. Government revenues diminished in the face of the lack of productive investment and expanding government spending for social reproduction and statefinanced industrial development, such as the military. In the case of housing in the United States, the convergence of international capital markets brought a deregulation of the savings and loan industry and the movement of these funds away from the previously dedicated uses for private housing. Combined with favorable tax policies for office structures, the availability of savings and loan monies

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created a building boom, especially in the Southwestern United States. This resulted in an extensive overbuilding of office space throughout the country and the creation of a new stratum of millionaires who arose as a result of these policies (see Pilzer and Dietz 1989). The point, for my purposes here, is that all of these developments, even the “free movement” of capital itself, were created substantively by government policies of regulation, as well as control of revenues, and it was these, rather than random movements of capital privately and among businesses, which created the capitalist bases for the uses of capital. Government policies were in all these ways the premises for the reproduction of social individuals at all levels of society. Upper- and upper middle-income groups in “Edge Cities” had their social and political positions reinforced and developed through these federal policies, as did the corporations. There developed, as part of the politics of the 1980s, within the Democratic as well as the Republican party, a redefinition of political constituencies in order to weed out of the parties and the political processes everyone who did not correspond to those groups mirroring the processes of private appropriation by the international corporations. This was especially true of the politically expressed attitudes toward blacks and industrial workers as well as generally toward trade unions and inner city development (see Dionne 1991; Edsall and Edsall 1991; Greenberg 1995). The institutionalization within the parties and campaigns during the 1980s and early 1990s reached the point of completely ignoring and excluding these participants, and did so as part of a new politics of “realism” which both fed upon racist assertions about the essential character of black people and reinforced social divisions based upon race, income, and geographic location. These ideologies regarding different social groups corresponded directly to social conditions of reproduction necessary for the international corporations while denying the common and governmental bases of spatial development. Private funding of government and restrictions upon the use of fiscal policies has restricted education, health care, housing, and transportation and their development into private, or quasi-private, and vastly expensive, bureaucracies. This deprives many not only of necessary social services but of elements necessary to the economic and social reproduction of neighborhoods and regions. Deprivation of social requirements and employment reduces those in this condition to surplus population with respect to the developing economy and society. They must then rely upon the extension of government payments to sustain them in their social dependency. They are, in turn, as I have indicated, stigmatized socially and politically as drains upon the national treasury, when what they are most deprived of, in fact, are those elements essential to personal and social reproduction and social productivity. Because geographic areas, ranging from neighborhoods to nations, are deprived of elements necessary to their economic and social expansion, social development becomes intraregional. This expressed itself globally in the concentration, during the late 1980s, of 90 per cent of all available international investment capital in only 14 nations (UNCTNC 1988:16–26). The restrictions upon global investment appear, also, from an international corporate perspective, as a problem of world “overcapacity” in a number of industries. This further defines industrial production as a problem of managing overproduction and underconsumption (Kolko 1988:180–1). Within and among nations, intraregional development takes the form of the decline of regions in their relative development. For example, a 1990 study by the European Union found that the nations within the EU and

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regions within those nations were at greater distances from one another in development than they were in 1973 (Armstrong and Taylor 1993:280–5). I have discussed above the development of the United States along the lines of “Edge Cities” and urban polarization. In short, the development of the key elements of social reproduction, within and among nations, as a relationship to the corporate “value chain” creates dependence upon international corporations and finance, bifurcations of social space, and political polarization, as opposed to common relations to government and social reproductive needs. But this divided development represents recombinations within common space and requirements, as I will demonstrate in Chapter 7. For private urban developers, as well, the idea of critical mass is a synergy among parts of the built environment. This synergy is social and political as well as economic and is the reproduction of the commodity form on the basis of social participation and the centering around income and money to reward some people and not others. But the built environment represents the same conditions of social and individual reproduction, and the fiscal relation assumes a common relation to government and central responsibility for economic and social development. The maintenance of the fiscal relation as a money relation to those in need ensures their subordination by denying that other material elements and their interaction are necessary to social existence. Reproduction of the commodity form, in this way, is a social privileging of social reproduction because of the elements within developed social space which must be rearranged to achieve it. This is why these social relations, beginning in the early 1970s, need the commodity and privatization and are anti-state because they must be able to reduce these social and individual reproductive relations to commodity relations and money in order to dissolve and rearrange them in all of their complexities. But this is a political process because of the developed political connections to government as these existed by the early 1970s. That is why, in the context of low economic growth, there develops a political coalition which uses the government to rearrange these relations and redistribute income to themselves. But they can only do this with federal monies, deregulation, and privatization.

7 SOCIAL AND ECONOMIC CONSTRAINTS/SOCIAL NECESSITIES AND POSSIBILITIES Capital develops urban space as the basis for individual and social reproduction. It is within urban social space that humans are subjects for themselves in their ability to reproduce their lives according to developed social requirements. Capital forms production, distribution, exchange, and consumption as ever closer unities with one another. These unities mean that urban social space is itself a more universal form of human-made existence and the products and technologies involved in production, distribution, exchange, and consumption build upon and evolve through one another in the creation of their forms. These unities, then, create the bases for relations of direct production and direct consumption. Capital itself develops as an ever closer relationship to social reproduction and its requirements. Capital becomes initially and most clearly a form of social organization with the creation of the working class. But capital continued to develop as a social formation. Its monopoly stage involved a reorganization of society so that capital appropriated into its corporate and financial system the products, technologies, and economies which had developed within urban social reproduction up to that time. Capital then created cities as an organization of mass production industries and corresponding forms of industrial labor and extended the basis for urban development through the production of neighborhoods as the basic unit for social existence and reproduction. Following the Second World War, capital became still more decisively socially reproductive in its forms as it used government powers and policies to further extend urban space and neighborhoods as the primary basis for human individual and social reproduction and multiplied the products for use within that space. Capital could develop social space, especially after 1945, only as an international extension of its international productive investments. Only in this way could capital overcome the limits to consumption based upon private exchange and develop and introduce new technologies outside the limits of its maintenance of control over production processes and prices within its home market. This not only reproduced capital as an international form of production and appropriation, it decided also that capital’s development within its home nations could only take forms consistent with that international production. Still more importantly, for my purposes here, capital was also, as a social formation, ever more a product of its development in and through social space. As a result of, as well as a premise for, its development within that social space, capital built itself upon developed requirements for human individual and social reproduction within urban social space. But capital is not for production, production is for capital (Marx 1986b, vol. III:

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250). Social reproduction interests capital only as a basis for its own appropriation. Throughout its history, capital has, in the interests of its own reproduction and development, marginalized the existence of groups within the urban environment. This is the meaning of the surplus populations that Marx discusses in the third volume of Capital. Surplus populations are composed of people who are not a “reserve army of the unemployed,” but for whom capital has no further use, has no interest in or need of them as consumers and whose individual and social reproduction interests capital not at all. The more capital develops urban social space as the basis for individual and social reproduction, the more capital itself, its forms and organizations, become the products of that space. But the more extensively that space exists according to common requirements for social reproduction, the less capital can reproduce that space as a whole. And the more numerous and developed the requirements, the more people depend upon them for their own reproduction, the more their existence tends toward absolute deprivation when these requirements are lacking. The limits to capital’s development and expansion, which I explored in Chapter 6, are also the forms in which capital can develop urban social space in its present forms and requirements. It is the consequences of those limits to the forms of capital’s development and for human individual and social reproduction that I explore here. The task of this chapter is to establish, first, that urban social space represents universal forms for social reproduction and development. Development and diversity within this space, as I will show, arise only in and through reorganizations among its common elements. These reorganizations, as well as possibilities for more common and socially equal forms of development, exist because of common relations to government fiscal and monetary policies, to the roles of government in inter- and intraregional development, and to production, exchange, and finance. Limits to the present forms of development, as I will demonstrate, exist in relation to transnational corporations and their international sphere of value creation. Second, the universal forms of urban social existence are themselves composed of particular forms of social reproduction which together form the bases of economic activity and development within neighborhoods and regions. As Thomas Angotti states, these forms of reproduction are not always provided on a neighborhood basis. But experience, as well as consequences for economic and social development, have shown that they should be (Angotti 1992:209–13). I will examine the effects of employment and incomes, housing, education, and health care as these exist as social necessities and as bases for economic and social development. The limits with regard to social reproduction, as I have indicated above, tend toward absolute deprivation and reflect growing polarization and the reproduction of socially subordinated surplus populations.

URBAN SOCIAL SPACE AND ECONOMIC DEVELOPMENT The social requirements of urban space within capitalism are universalized, historically and logically, through the division between private production and private exchange, the consequent separation of production from residence, and the ways in which urban residential space increasingly makes itself the object of production by forming itself as a social unity of distribution, exchange, and consumption. This universality represents a

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measurement, both qualitatively and quantitatively, of the extent to which the urban space and the neighborhoods within it make themselves premises for the production and reproduction of human existence. That extent, which I will establish here, and which is obvious enough, makes clear the common environment that people share within the United States, and, increasingly, within other countries. The form and content of this common environment are made clear in the United States by the extent of urban/suburban social space. Doug Henwood demonstrates that threequarters of the US population is urban, although he notes that what Americans call cities probably seem like suburbs to foreign eyes (Henwood 1994:23). Central cities house almost one-third of the population on 0.8 per cent of the land. In at least half the states, 50 per cent or more of the population lives in urban/ suburban space, with many East Coast states at or approaching 100 per cent (ibid.: 22–3). Social space is composed, therefore, of the similarities of built forms within the regional diversities among them. Further diversity and development presupposes reorganization within that common space. For example, “Edge Cities” are economically and structurally different from the suburbs that surround them and, at the same time, they are themselves suburban forms which both presuppose and geographically overlay the surrounding suburbs. Similarly, as Thomas Angotti points out, the diversity of political authorities within and among urban/suburban metropolitan areas reflects not only differentiations of power within shared social space, but makes inevitable the essentially unmanageable and wasted forms of development within that space (Angotti 1992:42–6). Since the mid-1970s, development has been privatized by the federal government so that urban and suburban developers can, in effect, organize their own political coalitions to make rearrangements within the organization and use of common space. This is the case, for example, with urban and suburban shopping malls. In the first instance, developers organize political coalitions, which even include representatives of the black community, to cooperate in the location of shopping malls far away from poorer neighborhoods (Frieden and Sagalyn 1989:71–5). This allows a reorganization of exchange and consumption against the limits of underdeveloped neighborhoods, while providing forms of urban economic development within the context of limited economic growth. Developers locate suburban malls according to a “critical mass” of consumers which they identify and isolate according to the ways that middle and upper incomes converge within and among a sea of densely populated and extensively developed suburbs (Garreau 1991:30–1). Present integration of production, information, and service operations divide urban space. Urban spaces unified around TNC operations are made possible by information technologies. These technologies link TNC operations on a global basis as they centralize their operations among connected locations throughout an urban area. But this means that those who populate these centers are reliant upon developed spatial requirements of work and residence which they selectively reorganize according to their own operations. These operations connect them to other cities, other parts of the nation, other places on the globe. But this fragments the urban area and undermines the productive bases for areas outside of these corporate networks (Castells and Mollenkopf 1991:415–16). Despite the diversity of local political authorities among them, urban/ suburban areas share common connections to national fiscal and monetary policies. Fiscal expansion following the Second World War created the present built environment as a relationship

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of similar built forms and lifestyles based upon common requirements for individual and social reproduction. And the social politics of fiscal and monetary policies today, as I discuss below, sustain the forms of reproduction and the social divisions within them. Neighborhood and region, in terms of status for present or prospective development, are identified as the presence or absence of success of those social and individual reproductive interactions within them. Those areas whose interactions provide sufficient incomes provide bases for retail investment. Home stores, for example, supply modularized components for home improvement and repair and represent expressions of direct identities between production and consumption. It is this identity between production and consumption within the built environment which allows scale and scope advantages to be concentrated in retailing. Similarly, high technology production allows manufacturing facilities to be placed directly in neighborhoods and regions to customproduce for tastes particular to that area. This is the case with the celebrated example of manufacturing in Northern Italy. Northern Italy is composed of industrial districts which are paradigms for flexible production and spatial decentralization. In the typical industrial district, conforming to this ideal, small firms specialize in just one, or a few, phases of a total production process. Their roles and specialties may change because they are customer-driven. Different orders are received from regional middle-level distributors, who bring local buyers and small firms together, organize specific production projects to meet the specific demands of buyers, who travel Europe in search of customers. Small firms usually cooperate with one another on specific projects and share tools, information, and skilled personnel, but also compete for shares of new contracts or markets. Some firms reduce their economic vulnerability by being involved in several production networks at the same time. The general use of fairly small-scale, stand-alone computerized automation, including computer numerically-controlled machine tools and personal computer-based computer-assisted design (CAD) systems makes these industries into networks of flexible specialization, capable of meeting wide varieties of demands and changing circumstances. Tools can be reset rapidly and at low costs to achieve economies of scale, scope, and transaction costs simultaneously. The Italian government, prior to the 1990s recession, supported these districts with the development of a variety of infrastructural and business services (Harrison 1994:78–9). Italian government policies also promoted the availability of local capital for investment. As in the case of “Edge Cities” in the United States, the availability of an educated workforce, university interconnections for research and development, and high levels of sophisticated consumer demand in Northern Italy promoted the location and expansion of industry. Flexible production is joined directly to demand through the ability to produce directly for consumption tastes as they are defined within that region. This has the additional benefit of permitting further differentiation of products and processes and a further clustering of related industries which have that area as a primary market (Porter 1990:421–53). But most regions and neighborhoods are not so advantaged because they are effectively denied opportunities for similar development. This is because capital develops urban space as a relationship to money rather than as a relationship to requirements for social reproduction. The economic limits to the expansion of neighborhoods as they were developing after 1945 showed themselves in the neighborhood-based politics of the

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1960s. The similarities of neighborhood and community organization within metropolitan areas reflected both the universality of this form of social existence and their common economic and political needs and connections. But the centralization of finance, on an international scale, and the restraints on national production within global competition restricted federal fiscal expansion and then monetary expansion. This permitted the expansion of neighborhoods and regions to develop primarily as relations to the incomes which they contained within the restraints of the “stop-go” fiscal and monetary policies which central government pursued during the 1970s. The centrality of this control at once created a more common determination among all neighborhoods and regions in relation to their economic and social development. But the limits of this common determination as a relation to international exchange meant that it was the more secure middle- and upper-income groups which enjoyed the greatest opportunity both for economic expansion and for political access to government policies. The internationalization of production and the increased role of central governments in the management of domestic economic and social relations had decisive impacts upon inter- and intraregional development within and among nations. The “Edge City,” as the suburban form of an economic dualism within metropolitan areas, which decides the development of infrastructure, employment, and incomes against inner cities, is a product of government-corporate planning, favorable corporate tax policies, and fiscal and monetary policies which reinforce upper middle- and upper-income expansion. “Edge Cities” in the United States are similar to the corporate-centered research and development and high technology complexes such as those in London-East Anglia and elsewhere, which create intraregional development in ways that are intertwined with global capital. The development of these areas has a decisive effect on interregional development. A 1990 study by the European Union, for example, discovered that regions within and among the EU countries were economically further distant from one another at that time than they had been in the early 1970s. Attempts by governments, such as that of the United Kingdom, to provide further bases for intraregional development by making small business investment possible throughout the country have had the effect only of further expanding intraregional development within already prosperous regions (Armstrong and Taylor 1993:280–5). Despite the common forms of urban space throughout these countries, deindustrialization and other forms of economic decline have deprived some regions of the ability to be fully a part of national economic development within present politics and policies. Consequently, these declining regions are the most likely to suffer further decline as further internationalization, such as through the GATT, “hollows out” domestic economies to conform to global capitalist development (Lang and Hines 1993:46–57). Declining regions today most generally lack industrial employment, as a consequence of deindustrialization. But this should not disguise other elements of developed social existence in their generation and retention of incomes. Developed areas can lack industrial employment, but generate development within that space through welldeveloped services. Daniel Bell pointed out in the early 1970s that with new technologies, and the corresponding decline of previous mass production industries, there would be major unemployment unless economic priorities came to center on housing, education, health care, recreation, and leisure (Bell 1991:240).

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A Nottingham University study illustrates the ways in which social space can sustain itself as an area of distribution. Infrastructural, housing, and other social requirements are provided by the state, allowing students to retain a large portion of discretionary incomes which generate and sustain service investment. Objections to this study have centered on the fact that this community is largely and specifically not a product of market determinations (Armstrong and Taylor 1993:14–15). Rather, what we see here is an emphasis on maintenance of the built advantages of embodiments in social space and relations. This is rare under capitalism primarily because “market” forces direct the development of transportation, land prices, and the continual commodification of built space which leads away from the built advantages of already developed space (Fishman 1987:3–17). Potential development of social distribution is also offset by the expense of other necessary particulars such as housing, education, and health care, especially as these take larger and larger proportions of income. The universal urban forms of existence share universal connections to production, exchange, and finance. The ownership of production is concentrated and global. Common technologies within this production also contain the potential for localization of production and personalization of product development. The example of Northern Italy is again an instance where the identity of production within developed space has yielded to the possibilities for social production within that space. Product development and distribution are also highly centralized but disclose careful planning in the identification of product markets and the abilities of those within them to pay (Quinn 1992:181–7). New technologies of both production and information open enormous possibilities for direct identities between production and consumption. Mrs Field’s Cookies, for example, can change their displays every 15 minutes to correspond to information from their various locations about what kinds of products are moving best and according to what strategies. The Limited, a women’s clothing chain, communicates sales directly to corporate headquarters for reorder so that any item can be manufactured and restocked in the store within seven days after the initial customer’s purchase (Quinn 1992:223;320–1). The growth in the service industry has been, in large part, because of the consultation, planning, and coordination involved in making direct connections between production and consumption. Urban forms for social reproduction also share universal relations to finance. The bonds of most governments in the world are sold in the London market. Finance capital in this way exercises direct international control over the spending priorities of government and has an easy veto over those which are not in conformity with capital’s own development requirements. Corporate investments since the early 1970s have increasingly interconnected various locations to common forms of development, but the mobility of capital in this process has meant that areas for investment are often abandoned rather quickly. This leaves expanded urban development requirements in the wake of corporate movement, but this mobility only increases the velocity of capital while limiting the ability to raise required funds of areas no longer favored. For example, the movement of capital into the Sunbelt during the 1970s expanded population and urban requirements throughout that area. Capital, then, frequently moved beyond these areas to new, often international, locations. Consequently, the need of these Sunbelt cities for urban requirements as basic as water or sewage treatment cannot be met because they

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no longer have the necessary tax base and their status as yesterday’s area for investment means that they cannot successfully float their bonds (Smith, M.P. 1991:102–17). On the one hand, urban/suburban space represents common forms and requirements for social and individual reproduction and common bases for social and economic interactions within them. The concentration of capital on a global scale is also the spreading of those common forms and requirements, while capital, in effect, centralizes its control over these relations by appropriating the most economically successful of them for its own purposes of production, distribution, exchange, and consumption. On the other hand, as I have just indicated, the expansion and development of these urban forms are limited to their development according to corporate requirements and the corporations’ international sphere of value creation. Capital’s control of national production and technologies means that investment and development implode as a product of intensive intraregional development. The internationalization of exchange through such devices as the NAFTA and the GATT represents attempts to cope with development problems by spreading investment capital and technology internationally, while sustaining growing dependence upon export-led growth. But the class limits which inhere in this form of economic and social expansion within all countries mean that the populations are polarized in their development and that this is further reinforced by the privatization of services. This form of national development rests upon very shaky circumstances, as the case of Mexico in the mid1990s demonstrates (Heredia 1993:265–88). Within nations this polarization is reflected in dualism within urban development as those areas which are developing correspond to specific locations of international development. Robert Reich terms these international corporate interconnections a “global web.” US states and cities during the 1980s became notorious for their bidding wars to make their specific location part of the “global web” of development. This is typical not only of the social competitiveness and divisiveness involved in present development, but also of the narrowness and specificity of the forms of development which it creates. Reich points to the insufficient availability of appropriate education to meet current production, service and social requirements and the lack of political consensus within the nation. The “global web” as a form of social development amounts to corporate undercutting of, and creating opposition among, what are really common bases for social development.

SOCIAL REQUIREMENTS AND THE PRESENT LIMITS TO THEIR DEVELOPMENT Any form of social reproduction is universal as a consequence of the particular forms which compose it and as these particular forms represent universal requirements for existence. The production and reproduction of urban/suburban social space has continually redefined its requirements into increasingly common particular forms. These include universal and particular forms of employment and income, housing, education, and health care. As I have indicated above, the presence of these within neighborhoods and regions is essential to an area’s social reproduction, development, and expansion. The universality of these particular forms means that they are equally conditions for the

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reproduction of social existence within the nation as a whole. I will examine each of these particulars before turning to a consideration of the ways in which this shared social space posits itself for social activity for its own further development as the basis of human social reproduction. The urban form of existence is presently characterized by common forms of employment and incomes. Robert Reich identifies three forms of employment: symbolic analysts’ work at problem-solving in the coordination of production, service, financial, and governmental arrangements; manufacturing workers employed in a sector characterized by a declining number of jobs and high technology forms of production; and service workers, whose expansion has characterized 80 per cent of the jobs created since 1980, employed in low wage, temporary, and often part-time work in retail, personnel, and business services. Each of these three forms of employment is the product of highly centralized production within a common environment created by common forms of urban spatialsocial and individual reproduction. Therefore, these are common forms of positing social activity within that common space. Symbolic analysts are engaged in coordination among common requirements in several connections. This includes coordination within highly centralized finance for information regarding economic and social development. This is also the coordination of production and service which is increasingly customer-driven and designed to provide for specific customized requirements. This coordination is increasingly organized through corporate “architectures of knowledge” which means information, production, and service coordination among common requirements (Henderson and Venkatraman 1992:118–36). For example, Arthur D.Little provides standardized accounting systems both to businesses and governments, and companies such as Conrail or Federal Express provide communication and transportation in coordination among common requirements (Quinn 1992:10, 22). The need for coordination and problem-solving with regard to government regulations in economic and social development has increased greatly the number of lawyers in the United States. Like symbolic analysis, service employment, although much lower paid and considerably less secure, reflects not simply incomes in general but social coordination. In this case, services often reflect the socialization of needs beyond the household, although the forms which that positing can take differ according to economic status. For example, both McDonald’s and an upscale neighborhood restaurant represent food preparation and consumption outside of the household. But each reflects a different form of where and under what circumstances that consumption can take place, just as they reflect also the extent that a neighborhood can posit its own needs in this way and the extent to which the money from that activity will be recirculated in community reproduction. The same is true of retailing superstores versus neighborhood boutiques, or recreation through mall arcades or cineplex theaters versus community orientations. Common forms of employment assume common social space. For example, in clerical work, the corporation provides common forms of employment, but the quality of that employment and of life conditions differs according to whether it is clerical work contracted out to an impoverished community or whether it takes place in an “Edge City” corporate headquarters. The quality of the employment, in other words, depends not only on the pay and the workplace conditions, but upon the extent to which those workers possess other essentials of urban social existence and the extent to which that

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employment can sustain and reproduce the embodiments which make that existence possible and fulfilling. Finally, as I have indicated, Reich identifies declining industrial work, but this is also community decline with the industry as an essential premise for development of that community as an industrial community, the basis upon which all other elements of that community were built historically. Loss of incomes is loss of community because both community and incomes depend upon the interaction of all the developed social requirements in their ability to reproduce these presuppositions and to posit development beyond them. As I discuss above, interregional development does not sustain small businesses where other elements essential to neighborhood and regional development are lacking. As studies of attempts by the British government to sustain and expand economic development within Northern Ireland have demonstrated, the same is true of government block grants, including the building of modern infrastructural facilities, such as an airport (Armstrong and Taylor 1993:309–16). As a consequence of lacking the essential elements for social and individual reproduction within urban existence, development cascades toward those areas which possess an abundance of those embodiments, both as physical facilities and necessary social services. London-East Anglia in the UK and “Edge Cities” in the US grow still more prosperous and socially exclusive for the simple reason that they possess most of the essentials of modern urban life and the ability to reproduce those as bases for their own further development. Therefore, the best developed areas are the bases for individuated development, which appears as gentrification, while those areas not possessing the necessary embodiments become the basis for further centralization through retail superstores or urban malls because of the need to draw upon a larger pool of consumers. However, development in these forms is result and premise for further underconsumption as the intensifying competition between franchises such as McDonald’s, Pizza Hut, or GNC and stores owned by their own corporations indicates. Government income maintenance becomes a way of substituting for the lack of common spatial requirements for the reproduction of incomes and life. But this is, by definition, not value creation, and becomes the basis for further diminution and implosion, for underproduction and underconsumption. And this reflects further centralization and diminution of particular forms of universal requirements upon which development and social reproduction depend. Like employment and incomes, housing has assumed increasingly common forms, as is reflected in the extent of urban/suburban social existence. The centralized production of common forms of housing, especially since the end of the Second World War, and especially in modularized forms, has created housing in an ever more particular form and as an ever more definite particular with social production and reproduction. Mass production of housing has led also to mass production of particular parts, such as those supplied through home stores, for the maintenance, repair, or renovation of housing. Government subsidies and the maintenance of mortgages as a separate sphere of finance through savings and loan banks made possible the mass social expansion of housing after the Second World War. But this remained a form of commodity production and was closely tied to private finance. Consequently, as financial markets tightened by the early 1970s, finance of housing became one of those forms which competed with expanding corporate financial demands as part of their self-defined “capital shortage.”

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This competition for finance capital at first drove up interest rates for the purchase of homes and thus restricted their availability, and then increasingly pushed housing finance into competition with other financial markets. The deregulation of savings and loans in 1982 was an attempt both to recognize this convergence of financial markets and to make savings and loans “players” in the deregulating international financial markets. The resulting folly of this approach was compounded by tax regulations which favored the construction of office buildings so that savings and loan finance moved primarily to another form of built space, which quickly became overbuilt, while losing in its competition with other financial institutions. Housing remains tied to private finance. Racial segregation and exclusivity keeps housing prices artificially high by reserving neighborhoods for particular groups. Restrictions on available, affordable housing are reinforced by zoning practices. Cutbacks to government housing subsidies under the Reagan-Bush administrations also contributed to a rise in housing costs as a percentage of incomes. Housing costs as a proportion of incomes have created the phenomenon of “shelter poverty.” Shelter poverty is a particular social phenomenon that arises from the universal of forms of housing production and consumption as bases for life within urban/suburban existence (Stone 1986:42–8). Further impoverishment of incomes becomes the basis for further underproduction and underconsumption of housing, as well as of other commodities. Shelter poverty diminishes further the bases for expanded value creation, i.e. attractive communities for specialized production and for universal social services. Homelessness, which is at one end of a socially extensive spectrum of shelter poverty, represents the absolute deprivation of a growing number of common forms of social existence. While once homelessness was a relative term applied to life within a poor quality housing area, like the Bowery, it means now the loss of whole areas of housing, like the South Bronx (Stone 1986:41–65). But the spectrum of shelter poverty includes the rising percentage of non-owner households, especially among young people, and the interest rates and home prices which take larger percentages of incomes. The same is true of rising rents which eat their way further into disposable incomes. By the late 1980s, at least 33.7 per cent of households were shelter poor: “In other words, just over a third of American households could not buy enough food, clothing, and other necessities after paying for housing” (Mishel and Frankel 1991:230–1). Shelter poverty characterized 49 per cent of African-American households and 50 per cent of Latino households (Stone 1993:50). The absolute social deprivation which homelessness represents is approached in education in what Jonathan Kozol has called the “savage inequalities” which exist in the differences in schools between rich and poor neighborhoods. Education was one of those areas which expanded greatly during the period from 1945 to the early 1970s. This was true in all of the major capitalist countries. In the United States, the struggle against racial segregation meant the expansion of greater educational opportunity at all levels. Higher education became a major growth industry and, for a time, was represented as the promise of lifelong mass education. As with housing, the financing of education was one of those areas which was brought up short by the concentration and centralization of finance and, increasingly, the shift to private funding of education. Beginning, especially, with the Reagan Administration, families were forced to pay larger shares of higher education costs. Like shelter poverty,

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the percentage of education costs has increasingly eaten into the incomes of middle- and working-class families. By the end of the 1980s, public four-year college costs absorbed 11.1 per cent of parents’ median income, while private four-year colleges represented 31.3 per cent of parents’ median income. Meanwhile, federal financial aid to students not only failed to keep pace with college fees, but actually declined (Mishel and Bernstein 1995:373–9). Education is a major consideration for the location of investment, especially as this involves the integration of corporate research and development and communication facilities with institutions of higher education. The quality of local education is also important to investment involving workers with high levels of skills, since corporate abilities to attract and hold these employees depends upon the quality of education available for their children in local communities. Education at all levels is thus a major component of neighborhoods in “Edge Cities” and the contrast with inner city education is the primary basis for Kozol’s contrasts between these “savage inequalities.” A 1988 study by the US Departments of Education, Labor, and Commerce stated: “The basic skills gap between what business needs, and the qualifications of the entrylevel workers available to business is wide. This gap is particularly acute in the technical fields, which rely heavily on math and science skills” (Cuomo Commission 1992:138–9). This gap reflects present economic and social development not simply as an employment problem, but as a relationship between new and expanding technologies of production, distribution, and service, and the social character of the knowledge and skills needed in the workplace and in personal life. Computer-based information technologies require new knowledge and skills in communication, social interaction and planning, and adaptability to a great variety of workplace and job changes. All of these skills are premised upon new levels of conceptual and critical thinking abilities. The social mobility involved in frequent changes in employment requirements also represents new possibilities and expectations for personal and social advancement. Consequently, only by gaining the necessary kinds and levels of education can individuals have the opportunity for fulfillment in the workplace and society, and possess the expanded abilities needed for life activities. Reich warns of a virtual caste system as large percentages of the population are unable to get education to qualify them for better jobs (Reich 1991:247). Education is not quite the sweeping social solution that Reich sees, but it is important to the development of neighborhoods. This is the case not only because education is important to incomes, employment, and social fulfillment within neighborhood and broader social life. It is also important for the ways in which it centers social and personal life within communities and the way in which it allows life to focus upon its own processes for development. Probably in no other area is the incompatibility of capitalism with its own social requirements more glaring than in the case of education. Education is important to life fulfillment, but access to health care is essential to the preservation of life. Health care is another service which is essential to the production and reproduction of social life within the urban/suburban environment. But in this area as well, there is rising deprivation which reflects both increasing social polarization and the private control of access and delivery of medical care. Access to health care depends upon its local availability, preferably within neighborhoods. As with education, its availability is a major consideration in the location of corporate investment. It is another

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essential element within the corporate “value chain.” But health care is a major national, largely private, industry; the concentration and centralization of capital has moved it ever further away from a popular orientation and centered its present development in expensive private hospitals, modeled on hotel construction and management, which emphasize expensive and highly specialized and technological forms of care (Lindorff 1992:30–88). Attempts to bridge the gap between popular social need and the existence of health care as a private, capital-intensive industry have thus far primarily meant massive government funding for an expanding private bureaucracy. In the end, this has meant uncontrolled costs and less available care. Since 1960, costs for hospital care and physician services have risen approximately 350 per cent (Mishel and Bernstein 1993:393–409). Health care, whether by individual physicians or private or public hospitals, is increasingly organized around patient ability to pay and government guidelines as to what forms of care the government will recognize and pay for. Meanwhile, the continual expansion of costs has led employers and insurance companies to limit coverage through “managed care” and to find ways to shift cost burdens to employees or the insured themselves. Most major trade union strikes during the 1980s and early 1990s had deprivation of health care coverage as a primary issue. Meanwhile, fewer and fewer people are effectively covered by government or private insurance for health care. This is also closely associated with the deprivation of benefits through the expansion of temporary employment, both full-time and part-time, which provides employees with no benefits. It is estimated that in the mid-1990s approximately 43 per cent of people either have no health care coverage, or only very limited cover. Insufficient health care puts pressure on emergency facilities. Another consequence is that the poor are prone to needing catastrophic care (Mishel and Bernstein 1993:393– 409). With health care we thus see once again the tendency of capital toward absolute social deprivation.

8 THE SOCIAL ECONOMY, ECONOMIC DEVELOPMENT, AND SOCIALISM Marx shows in the Grundrisse and Capital that production, distribution, exchange, and consumption form relations to one another as they evolve in and through the processes of human social and individual reproduction within a certain mode of existence. “The result at which we arrive, is not that production, distribution, exchange, and consumption are identical, but that they are all elements of a totality, differences within a unity” (Marx 1986a: 36). This unity is not easily discernible because of the fetishism of commodities. Marx says of that fetishism that what are actually social relationships among people for their own reproduction appear to them in the fantastic form of a relation among things (1986b, vol. I: 77). And, of course, capitalism creates its own reproduction, makes itself object for human subjective activities, as a relation among things. Capitalism uses money as its form of accumulation of social wealth and as its device for the dissolving of previous relationships within social development and their reorganization for its own private appropriation. But capital can only reproduce itself as object for social relations by building upon developed forms of social reproduction. Consequently, capital creates the political economy as a social economy, as a form of social reproduction which relies ever more directly upon social relationships among people. The point at which we arrive at the end of the twentieth century is that urban social space is a form for human reproduction which is much broader than capital. I have shown in this book that urban space evolves as the universal basis for human individual and social reproduction within capitalism because of the ways in which capital reorganizes social space. The neighborhood becomes the essential form for human reproduction, which evolves as an identity containing all of the elements of urban social and individual reproduction and then becomes the essence which defines the urban whole. The neighborhood develops within capitalism because in creating urban space as a division between private exchange and private production, this effectively separated production from residence and created residence as a definite social space within the urban whole. Residential development then became an object for capitalist production. Development of that residential space, according to all its requirements from infrastructure to housing to household products, made residential space into definite social units of neighborhood. By the beginning of the twentieth century, the neighborhood itself became an object of production and, even prior to the depression of the 1930s, the neighborhood was recognized as the most essential element for urban planning and the extension of urban social space. As a unit for social reproduction within urban space, neighborhoods increasingly created requirements for social life beyond the household for education, health care, recreation, and leisure activities. The extension of neighborhoods as the basic units for

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social reproduction within urban space had to await the end of the depression and the war. After 1945, government fiscal policies became the mechanism for expanding this mode of existence and production became ever more refined in producing for that space. The expansion of urban social space on this basis during the “Golden Age” of capitalism represented the further universalization of urban space as a basis for individual and social reproduction. The neighborhood became, on this basis, the essence of the urban whole in the determination of that whole as a social unity of production, distribution, exchange, and consumption. In other words, the neighborhood evolved in the postwar period from being an essential element for the extension and development of urban space to being that element which could determine all else within it as a relation to itself. Of course, the neighborhood, as the basis for individual and social reproduction and for the determination of urban space and its development, cannot be fully “for itself” and its own development under capitalism. Capital must be the object for its reproduction. But, conversely, capital in its present forms shows that it can only reproduce itself in and through those urban neighborhoods. Thus capital itself demonstrates the objective unity of production, distribution, exchange, and consumption which neighborhoods represent in the processes of human individual and social reproduction. In Chapters 4 and 5, I show the quantitative and qualitative extension of neighborhoods and of products for them. Government fiscal policies made possible not only housing, but also vast expansions of education, health care, and other neighborhood requirements. This development happened on very contradictory bases because fiscal policies and the social relations which they supported were all ultimately tied to commodity forms and, therefore, the corporate mobility and expansion which they enabled was also the limit to their development in those forms. The transnational corporation was the resolution of these forms of development both as a relation to the internationalization of capital and as the basis for the further development of production, distribution, exchange, and consumption on their capitalist bases. But the transnational corporation, it turns out, as I demonstrate in Chapters 6 and 7, is a highly limited and constricted form of social development. Transnational corporations can only resolve their relationship to the development of urban social space by forming themselves as part of that space. This is because urban social space represents a universal form for individual and social reproduction which is broader than capitalism and represents in its essential elements, therefore, the emergence of new forms for social reproduction, for socialism. Just as capitalism evolved its objective forms for social reproduction out of feudalism, so socialism in various ways now develops out of capitalism. But capitalism, as itself a form of social reproduction and coordinated social activities, does all in its power to kill those emerging forms, just as feudal classes resisted the bourgeoisie. It is therefore necessary to understand how and why the neighborhood is the essential element determining and defining the urban whole and what that means for economic development, democracy, and socialism. Toward those ends, I will consider here how the neighborhood forms urban space as a unity of production, distribution, exchange, and consumption for human individual and social reproduction. I will then summarize the limits to capital in its present forms of development within that space. Finally, I will consider the implications of these discussions for the development of socialism and, more immediately, for economic development which could take us beyond the limits of capitalism in its present forms.

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Human production is always social production, the production of human existence in some form. It is on this basis that humans form their relationships to one another and, through those interactions, their identities as individuals. The social production of human existence is, of course, initially mediated by nature in ways that make human social forms highly dependent and contingent. Slavery created agriculture as the basis for a social division of labor which could make a human society the object of its production and maintain social relationships which separated mental and manual labor. Feudalism organized agriculture through political relationships and personal authority. And capitalism mediated social relationships through commodities and money. But commodities were always individual human-made products for exchange to other humans. Capitalism evolved as an ever more socially produced environment. I have detailed the evolution of capital as it reproduced neighborhoods within urban space. But the neighborhood, as I have also indicated, was ever more the object for production. By the early twentieth century, the neighborhood was so definitely the object of production, and products for it, including the production of whole neighborhoods, were so practiced as processes of production, that this created the basis for a social reorganization of production. Monopoly corporations had urban social space and, especially neighborhoods, for their content. The products which these corporations produced and the spaces within which they distributed for exchange and consumption were urban. Scale, scope, and transaction cost economies existed within monopoly corporate systems of production, distribution, exchange, and consumption, and reached through and defined one another as new forms and relations to one another, because they were parts of a social totality which was ever more mutually creative and socially unified. The monopoly corporation represented a new form for the mediation of social reproduction. Monopolies were characterized not by “arm’s length” transactions, but by directly communicative and planning relationships. This was true of the ways that finance capital organized these companies, true of the ways that they thought about their labor relations and searched for some kind of order in the way that labor was organized in production, and true of the ways that they increasingly understood mass social consumption as a problem to be addressed through government policies. Monopoly corporations made society appear as a direct extension of production. An acceptance of that appearance has been the basis for many of the mistakes and discouragements of Marxists and socialists during the twentieth century. But monopoly corporations existed because they were themselves parts of an evolving unity of production, distribution, exchange, and consumption as the basis for individual and social reproduction. Monopoly corporations owed their products and technologies to the developing unities within that social space. And their communications and planning were about developments within that social space. Electrification created the basis not only for more flexible forms of production but also forms of communication and bases for the organization of personal and social activities within urban social forms. Production in the form of the monopoly corporate factory itself became an ever more definite unit. The ability to reproduce plants as themselves products of production expanded throughout the twentieth century and made possible the export of plant and equipment for productive competition in the post-Second World War period. As capitalism evolves as a unity of production, distribution, exchange, and consumption in the processes of human individual and social reproduction, its

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technologies and products become ever more particular forms of the social relationships for which it produces. As capitalist urban space develops as a unity of social reproduction, its forms of production become increasingly integrated with its processes of distribution. Exchange becomes a collective social relation through government monetary and fiscal policies because consumption is mass consumption. But mass consumption happens on the basis of neighborhoods as the basic units for social reproduction within the urban whole. Neighborhoods are, in turn, increasingly interconnected with and determinative of production as they furnish products and sites for production. In other words, as urban space develops as a unity for social reproduction, the parts of that space themselves become forms of production, distribution, exchange, and consumption. Capital creates its relationships of reproduction as ever more directly and mutually determinative social relationships. Commodities continue to insinuate themselves into these relationships as the means for private appropriation but they are, in fact, ever more dependent upon these social relationships. This becomes especially the case as capitalist relations of social reproduction evolve to the point that they create themselves as direct production for direct consumption. Just as monopoly corporatism, in its own time, was itself a product of and reflected that unity among the forms of social reproduction, so the extension of neighborhoods as units for individual and social reproduction within an expanding urban whole after 1945 increasingly redetermined the forms of production into still more concentrated forms. The existence of neighborhoods as the objects of production and production for them on the basis of international corporate competition created more refined, concentrated, and computer-based technologies. In part, these technologies corresponded to the corporations’ own development. Corporations in the last half of the twentieth century have become more organizationally diffuse as they combine within themselves ever more social multiformities. Even in the late 1940s, the corporate form of organization was beginning to become less definite as industrial corporations strained at their limits to capital accumulation and moved toward conglomerate forms based upon profit-by-firm. Distributors such as Sears, Penney’s, and Montgomery Ward encouraged the expansion of new technologies as they contracted out in attempts to reduce the costs of products they purchased from manufacturers. Corporations, including the “hollow” corporate forms which evolved after the mid-1970s, have become more combined within their own forms and concentrated in their technologies. This is because of their inability to produce in and for the development of their own nations, and their reliance upon internationalized production, on the one hand, and, on the other, their need to move from one form of technology to another in their attempts to keep at the leading edges of technologies which are increasingly universal within the world economy. Neighborhoods as universal forms of urban social reproduction increasingly find themselves the sites for highly concentrated international corporate forms of production and service operations. This encourages a reintegration of production with residence as the more prosperous urban neighborhoods and surrounding regions make themselves object for the products of corporations located in their midst. And these neighborhoods are part of the production process itself as production and service activities are carried on from a variety of locations, including the home, tied together through computer technologies. They are also essential elements in the corporate “value chain” since

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housing, education, health care, and other social services are essential to the existence of production carried on within that social space. Neighborhoods provide these links within the “value chain” of production because they are universal forms for social distribution. Facilities and communications within them, as just indicated, represent distribution of the “agents of production,” as Marx called them (Marx 1986a:36). But neighborhoods are also the social form for the distribution of the means for individual and social reproduction because that is what their housing, education, health care, recreation, and leisure provide. The absence of these requirements, as they are undercut by the present forms of capitalist development, increasingly means the absence of the means of life itself. Distribution of these social requirements creates the basis for exchange and, consequently, for consumption. Social requirements as they exist in neighborhoods are forms of social wealth and bases for the expansion of social wealth. They are objects for investment and economic expansion because the ability to consume them creates the corresponding employment which produces them and sustains continued investment. To the extent that these social requirements must be purchased as commodities, disposable income levels are reduced. The abilities of large portions of the population to consume are then reduced to attempts to supply their basic necessities. As I show in Chapter 7, the deprivation of social requirements is a growing problem within capitalist economies. Conversely, once these social requirements are universally available within neighborhoods, these neighborhoods and surrounding regions are able to circulate incomes for their own reproduction, produce savings, and provide bases for further investment as they continue to socialize their forms of development beyond the household. These forms of development presently exist in prosperous neighborhoods and regions, especially as these are tied to the global economy. But other areas are faced with continuing decline as the growing differences among regions within the EU and the United States, which I discuss in Chapter 7, demonstrate. Present technologies practice direct production for direct consumption where customer-driven choices determine the forms of products, and products can be made directly available to customers through processes which link production, distribution, exchange, and consumption within a single chain formed by computer technologies. But this reduced turnover time benefits corporate accumulation as they are carried on as commodity transactions. Social investment to make these linkages available, the establishment of a shopping mall, for example, depends upon the consumption abilities of people within that particular area. The narrow focus of investment within urban space creates a downward spiral within urban social development. Capital is international and does not favor a general social expansion within any nation except as such expansion corresponds to global economic requirements. This imposes limits upon private investment and government fiscal and monetary policies. The lack of investment undermines social capabilities for reproduction because social requirements, which are universal and distributed on the basis of neighborhoods, become decreasingly available. The inability to sustain or expand social requirements through government spending undermines neighborhoods. These declining neighborhoods then become still less likely to attract private investment and find little political support for government assistance. Declining economic positions reinforce declining political positions. Government policies and forms of economic development

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which are available only further divide urban social space against itself. Political alliances between corporations, government, and more prosperous areas served by present forms of development become still more explicit. In this way, imperialism, which always arose from capitalists’ inabilities to reproduce socially their home nations, now assumes directly social forms for the underdevelopment for ever larger portions of the population. Present proposals for privatization and for social reproduction as a vast expanse of commodity relations are only the latest versions of the neo-classical supply-side economic dreamscape that it is capital and its accumulation that creates the economy. It is the continuation of capitalists’ persistent inability to acknowledge that the economy is a process of human individual and social reproduction. Calls from demand-side economists for corporations, government, and, in some proposals, trade unions, to work together in making corporations still more internationally competitive miss the socially reproductive character of the economy, and ignore the ways in which corporations and government already work together in this regard and toward what ends. This fails to recognize that export-led economic growth was itself an international expression of the inability of capitalists to provide domestic economic development and that international appropriation by the “most efficient producer” is part of the downward spiral which reorganizes our economies and societies around transnational corporations and their limits. Supply-side economics is mistaken because it treats investment as entrepreneurial, market-driven, and random and fails to recognize that investment depends upon consumption. Without consumption, there is no basis for investment because there is no basis for the creation of the products and employment necessary for that consumption. The notion that savings are a unilateral relation to private wealth does not recognize that if there is no consumption, then those savings are falsely derived. That is, they are savings at the expense of consumption and consequently those jobs not created as a consequence of that underconsumption mean that those not employed have no basis for savings. The savings derived from the private accumulation of wealth are, in this way, only the basis for undercutting the economy as a whole and create no basis for sustained and effective investment. The economy is better understood as an interrelation of its parts and their mutual creation through one another. The economy is essentially a process of human individual and social reproduction. We evolve the social relationships necessary to that reproduction as these relationships respond to and create social requirements within a particular mode of existence. The neighborhood evolves into the essence of the urban whole because it contains within itself the requirements for existence which define that urban whole as a universal form of social reproduction. Capital’s dependence upon those requirements and its development of them on commodity bases provides only further social deprivation and division. Ultimately, these social inequalities and the underconsumption and underproduction that they include undermine the effectiveness of capitalists’ own investments. In the present economy, reduced government support, increasing prices for social requirements, declining benefits, and security, force dependence upon wages and salaries and create productivity only by employing large numbers at low wages. Marx argued that the greater mistakes of political economists stemmed from failing to deduce all of the presuppositions necessary to a particular mode of social existence. If

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those presuppositions are understood as our own subjective activities in the processes of our individual and social reproduction as its requirements are derived from their evolution within that mode of existence, then we have the basis for understanding the economy as our own creation, through our own social practical activities. Urban space exists as a universal basis for individual and social reproduction because present forms of production and technologies evolved in response to its requirements. They are its products. Production using current technologies exists for reintegration within its space and the creation of new unities between production and residence. Urban neighborhoods are formed as bases not only for the distribution of the agents of production, but as they are themselves the forms of the distribution of universal social requirements. Social distribution of objective social requirements forms the basis for social exchange. Exchange does not exist in a social vacuum, disconnected from other social processes. Exchange depends upon one’s ability to consume as decided by the level of that person’s social existence. The ability to exchange depends upon distribution and how one participates in the distribution of social necessities. One of the reasons for the present economic and social downward spiral is that the transnational corporations’ own concentration and centralization, their vast accumulations of capital, and their social and governmental connections encourage them to see themselves as the economy. Just as the capitalists who arrived at the stage of finance saw economic creations as products of their own money capital investments, so the world of the TNCs appears as the extension of themselves and their own activities. They do not understand their own form of organization as itself a product of a crisis within capitalist social reproduction. TNCs’ own international competition drove them into the “hole” of further concentration and centralization. In their attempt to shed their previous forms of production and to further globalize their investments, they pulled government monetary and fiscal policies, and much of human society, into that hole after them. TNCs insisted upon their own organization of production as the only proper form of value creation. The determination of value through international competitiveness and exchange and the destruction of many previous forms of productive organization placed TNCs and their nations of origin in the position of constraining further bases for social development to their own value forms. But the underconsumption and underproduction which their organization of production and exchange has created has made the TNCs themselves ever more tentative and uncertain in their own plans and movements. I cite numerous examples of this in Chapter 6, where I also suggest that this sense of crisis and uncertain future has also encouraged the creation of the “hollow” corporation. TNCs’ enormous concentrations of investment capital become highly speculative in their global search for profitable investments. Stock markets reward corporate mergers, reorganizations, and downsizings which are products of and feed further the bases for underconsumption and underproduction. Part of the difficulty of creating a general expansion of consumption is that consumption depends upon highly developed social requirements. It is these requirements which are the elements of neighborhood which is also the form for their social distribution. Transfer payments from government, substitutes for the failure to produce social requirements, provide people with money to buy products. But transfer payments are a zero-sum solution because they do not create any productive employment for those

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receiving the payments and therefore do not provide them with any way to participate in an expansion of the economy. Welfare has been a capitalist alternative to full employment and commitments to the extension of developed social requirements. In this way, the lack of economic expansion, underconsumption and underproduction, are part of the price capital has been willing to pay for the retention of class control. But it is nevertheless true that individual and social reproduction is dependent upon urban social space and neighborhoods. Expanded consumption and social productivity can only be had through the expansion to all of developed social requirements. Struggles for housing, education, health care, recreation, leisure, and the development of neighborhoods on bases which allow ever greater socialization beyond the household all permit neighborhoods and urban space to play their roles in economic development by realizing themselves as processes for individual and social reproduction. Struggles for employment and development and against class, race, and gender discrimination are also struggles for economic expansion because they mean that the past and present forms of repression are less available for use in the organization of social space and its relations. The struggle for human social equality is closely connected to the struggle against capitalist claims that developed social requirements for individual and social reproduction are not creative of social wealth. The struggle for our own social reproduction means also the recognition of those requirements as derived from a universal human condition within this mode of existence. Employment at living wages, and the development of neighborhoods and social requirements within them, are the ways to create the expansion of social wealth by shifting capital away from its concentrated, centralized, and speculative forms. These developments help stabilize social relations by committing capital to human individual and social reproduction. They make all neighborhoods able to sustain and renew social reproduction as the basis for economic development. Neighborhoods’ economic expansion happens when they have satisfied their necessities for social requirements and can make themselves subject for development beyond those forms, especially in the further socialization of life beyond the household. These involve the multiplication of opportunities for recreation and leisure and for various personal needs. Once it is acknowledged that investment and savings do not arise unilaterally from capital accumulation, but are dependent upon consumption then it is necessary to inquire into the forms of consumption. I have argued in this book that the forms of consumption within capitalism arise through the processes of socialization as social requirements develop within urban space through the processes of human individual and social reproduction. This evolution is mutually creative of production, distribution, exchange, and consumption relations and develops these as ever deeper unities within the urban social totality. The social requirements of urban social space evolved during the twentieth century primarily in and through the development of neighborhoods as the basic units for individual and social reproduction. But capital cannot now reproduce neighborhoods, social requirements, and urban space as a totality exactly because these are social requirements for human social reproduction. It can reproduce neighborhoods and urban space only as a relation to its own private appropriation. This is the present outcome of the profound contradiction between private appropriation and socialization which Marx identified in Capital.

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But taken as objects for human individual and social reproduction, social requirements, neighborhoods, and urban space represent the bases for a democratic and socialist construction of society. The forms of consumption involved here, the creation of neighborhoods and their requirements as bases for reproduction, indicate the path for investment. The integration of production, distribution, exchange, and consumption on the basis of direct production for direct consumption would require the further integration of production, service, and residence. This already happens under capitalism, but only in truncated forms which have capital as their object. Scale, scope, and transaction cost economies, which are themselves always social economies, would permit socialist production, distribution, exchange, and consumption to generate savings and sustain investment and economic development. Democratic government to insure social justice and the directions of economic development, and neighborhoods as forms of political as well as economic organization, would permit both participation and diversity within social and economic development. The struggle for social rights and control of social space means a struggle for the increasing integration of production within that space in its developed forms and in ways consistent with the human environment. Just as the struggle for the distribution of social requirements and their delivery on the basis of neighborhood can expand consumption and exchange relations along with employment, so the struggle for the integration of production and service operations consistent with residence and overall urban development means a shift away from the capitalist organization of society. Struggle for the control of production is a struggle over the directions of investment and over the control and uses of technologies. Struggles for social development, in all of the ways that I have described here and, especially, the ability to gain access to technologies, are the ways to shift all nations from their dependence upon international exchange and imperialist relations and toward the more harmonious development of their own economies through international cooperation. The notion that economic development, change, and innovation happen as a result of competition for profit ignores the fact that the economy is a unity of production, distribution, exchange, and consumption formed in individual and social reproduction. Economic development is a consequence of our own subjective activities, and innovations arise in response to our needs within a certain mode of existence. Savings arise as scale, scope, and transaction costs are developed through ever greater unities of production, distribution, exchange, and consumption. As these unities develop, they are, even within capitalism, less dependent upon commodity, price, and monetary interactions and more and more dependent upon directly communicative relationships. Capitalists understand the necessity of social organization around “information technologies” and communicative forms of development and problem-solving, but it can be done only in capitalism’s own highly concentrated and centralized forms. I have argued in this book that the unities of production, distribution, exchange, and consumption are mutually determining as they arise and develop in relation to our individual and social reproduction. I have suggested, further, that these are increasingly social forms and relations in their content and that the bases for individual and social reproduction and for socialism are embodied in the present forms of urban social space with the neighborhood as the essential basis of that whole. I am proposing, then, that urban space is the product of our own social activities. It is the socialization which capital

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creates within itself and which is ever more irreconcilable with private appropriation. Our economic, political, and social problems, then, center around private appropriation in its concentrated and centralized forms. The problem is not primarily with our social space or its relations as bases for human social and individual reproduction, but with the ways in which transnational capital presently destroys and rearranges that space and marginalizes existence on the bases of class, race, and gender. Capitalism insists upon money and commodities and the substitution of these for more directly social relations in order to insure its dominance and appropriation. But commodities and money are also useful in the development of more decentralized and local forms, such as for small businesses necessary to neighborhood development. Most immediately, it is only on the basis of money and commodities that we can begin to expand the economy beyond present TNC limits to production and consumption. But this requires economic expansion according to social and political principles that can begin to take us beyond the limits of present capitalist forms. We need consumption based upon neighborhoods and developed social requirements to permit disposable incomes, and a more general and social productivity, and to decentralize investment capital in order to create a more general basis for consumption and productive investment. This requires understanding our social development as processes of our own activities in our individual and social reproduction. And these developments require political power because it is only government that can make possible these redirections of investment and development. Present economic development is centrally controlled through corporations and government. Corporate-based development takes place in the context of social planning. As I have shown in Chapters 6 and 7, this includes everything from the organization of shopping malls to elaborate and interconnected urban industrial and military complexes which form the bases for further social development centered around corporate activities. Commodities and exchange for present-day capitalist organizations are the means for keeping social control of production and money and for denying social access to capital’s highly concentrated and centralized forms of development. I have suggested in this book that a major problem for Marxists in the twentieth century has been to see developed forms for social and individual reproduction as other than commodity relations, as other than simply the extension of an ever more degrading and encompassing capitalist control. That control is real enough. But so are our own subjective activities in our own individual and social reproduction. Our alienation from these is our alienation from our own activities, our own lives. The identification of alternatives to capitalism as existing only in certain historical forms of working-class existence and organization, particular historical forms of production, or in socialism as it exists in nations very different from the leading capitalist societies, has taken us further away from, not closer to, our own needs, activities, and priorities. This has also taken our focus away from capitalist development and its forms of social crisis. Some have looked for the return to a crisis like that of the 1930s. But the crisis is here: it is now of long standing and is deepening. Social development, employment, and security are ever more the casualties of that crisis. Marx argued that human existence is not anthropological, but ontological (Marx 1976b:322). We know human beings not through the study of our particular characteristics, but from the ways that we create ourselves in the social production of our

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existence. We create our being through our own social practical activities in individual and social reproduction, as these evolve historically and logically within a certain mode of existence. The world we face at the dawn of the twenty-first century is the world we produced. It is a world of enormous social possibilities as a result of our own achievements. It is also a world of great dangers, which are also our own creations. The struggles which we face, I argue here, are for the recognition of urban social space and its requirements as the products of our individual and social reproduction and the basis for our existence and development. The struggle for that space means a struggle against present capitalist forms of organization of that space and for the creation of that space as a basis for more general economic renewal and development. I know the needs and rights for myself and my fellow humans because those needs and rights are social creations. They are conditions for me because they are conditions for all. They are the bases upon which we recognize one another as human, according to the requirements for individual and social reproduction which we have produced and developed. Socialism as a goal will be achieved the more we understand our own socially subjective and objective activities. That understanding must begin with the terms and conditions of the production and reproduction of our own social existence. This means, for the left, taking a social and people’s perspective toward development that avoids the elitism toward popular consumption and development which, too often, has simultaneously isolated and privileged leftists (see Cross 1993). We must come to understand democracy, not in the abstract alone, but as a control over our own activity in all its forms, facets, and sides as these relate to the ways in which we are subject and object for ourselves and one another. Our common social environment faces socialists, and all of us, with the challenge conveyed in one of Marx’s favorite expressions: Hic Rhodus, hic salta! Here is Rhodes, dance here!

APPENDIX The logic of dialectical materialism This book is in many ways more about logic than it is about political economy. Or, more accurately, it is an attempt to develop the logic of political economic relations in the United States since the Second World War. I have devoted this Appendix to an examination of the logic of dialectical materialism because I want to understand that philosophy as a method of inquiry and exposition for the historical developments that I discuss throughout the book. I first consider some of the logical problems which dialectical materialism addresses. I then discuss the assumptions and logical-historical method of dialectical materialism. Lenin records in his Philosophical Notebooks, where he examines and critiques Hegel’s philosophy: “It is impossible completely to understand Marx’s Capital, and especially its first chapter, without having thoroughly studied and understood the whole of Hegel’s Logic. Consequently, half a century later none of the Marxists understood Marx” (Lenin 1981:180; his emphasis). He states also: “Dialectics is the theory of [Hegel and] Marxism. This is the ‘aspect’ of the matter (it is not ‘an aspect’ but the essence of the matter) to which Plekhanov, not to speak of other Marxists, paid no attention” (ibid.: 360; his emphasis). My study is one long argument to support this view by understanding identities through contradiction, the unity of opposites, as they are expressed in practice, in human social activity.1 If it is true, as Lenin states in his conclusions about dialectics, that dialectical materialism allows us to understand the logical and historical development of “any and all particulars” (ibid.: 359), then Marxism means taking any and all social phenomena in their own development and change and understanding the relationships which they presuppose and posit. Rather than viewing Marxism as a collection of “sacred texts” from which present developments can be deduced, the use of inductive, as well as deductive, analytical and synthetic methods must be combined to understand any and all particulars of social development in their own right, as products of their own interconnections and evolution. This means always testing and retesting any and all conclusions of the founders of Marxism against the method which Marx establishes in his earliest works for understanding capital. Dialectical materialism is a philosophy which allows us to understand relationships within human practice and, therefore, relations of our activities to the choices that we have made and can make. Exploring this proposition means understanding practice and consciousness as mutually creative unities and the place of language within this relation. It means also understanding ourselves and our fellow human beings as creators of practice. In this way, dialectical materialism unifies our understanding of the personal, social, and political as mutually creative relationships of the essential unity between the general and the particular, the abstract and the concrete, within human activity. These philosophical questions are of considerable social and political importance today for a number of reasons. First, the so-called “triumph” of capitalism in the world

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has been accompanied by the notion that economics now operates according to the “market” as an autonomous and automatic mechanism. The presumed neutrality of the market rests, in turn, on the assumption that individuals and nations exist as relatively equal or potentially equal economic actors. If the price of goods and the price of labor are competitive within world conditions, then employment and consumption become immediately available. The chief job of governments, in this view, is the removal of “market imperfections” which stand in the way of these transactions. The kind of logic that I have just illustrated, which has been characteristic of bourgeois economics since its inception, imagines the general and particular as existing apart from one another. The market is a general relation consisting only of those individuals whose actions create and perfect it. Individual differences are considered not only as separate, but inappropriate. For example, the concrete circumstances of unemployed women or people of color or of a “developing” nation are irrelevant except as to what they must do to bring themselves into conformity with the needs of the market. Second, it is exactly because of the imposing and indifferent character of this abstraction, that many women and people of color have insisted on the primacy of the concrete and particular over the abstract and general (Fanon 1967:17–40; Nicholson 1990:1–16). This logic states that a general relation is valid only to the extent that the individuals within it share its common characteristics. Recognition of the concrete and particular is a necessary response to abstract and one-sided universal definitions such as the human as male-normed, or civilization as Western and white. Moreover, the development of the logic of the particular responds to Marxism as developed in Stalin’s time and to attempts to correct those misapplications since then. Rather than explore the different and opposed assumptions involved in the logic of the abstract in general and that of the particular, I want to examine certain similarities which they share. My purpose is primarily to consider their reliance upon formal logic. This will allow me then to consider how dialectical materialist logic overcomes these limitations and, I believe, strengthens the case for a logic of the particular and concrete. Both of these logical approaches treat the general and particular as essentially apart from one another. Because both approaches acknowledge that any and all individual anythings are concretely different, they understand the general as made through thought and language. That is, we know the general because we create it in our thinking and discourse by identifying in thought and language what we deem to be the characteristics of sameness among a group of individuals which are each themselves concretely different. This forces both approaches, as a matter of logic, to declare as outside of a general relation any individual which cannot be shown to share the common element said to exist among all of the others. Where they differ is that the first approach declares those different individuals to be inappropriate and demands their conformity while the second demands respect for difference or separateness among a wide variety of particular relations. But each is required similarly to limit their claims regarding the validity of any relationship, to the elements of sameness which they can establish among the individuals within it. Consequently, either approach is obligated by formal logic to separate the general and the particular when it cannot demonstrate what elements of sameness a particular and general relation share. For example, in speaking of transnational corporations as operating according to competitive practices, “free market” advocates are required to disregard from that generalization all of the monopolistic practices of those

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same corporations. Similarly, patriarchy or racism and capitalism may be shown to have social connections to one another by relations which they share within various social phenomena but the classifications of formal logic resist any understanding of their mutual determination through one another for the simple reason that, by formal definition, all of these are ultimately separate phenomena. Consequently, opponents of patriarchy or racism must attempt to refute these practices on political or other discursive bases. Even to say that these practices are “material” is only to make a claim in language that they are social phenomena which have an existence outside of thought. This falls back from Marx’s attempt to show how such relations are actually created through one another in social practice.

FORMAL LOGIC Formal logic understands universality as abstract and formed in thought. It understands the particular as concrete and always more diversely existent than any universal. The universal is formed in thought from among the common elements of particulars. The market, for example, includes cost advantages and profitability and, therefore, is a universal which isolates characteristics common to small commodity producers and transnational corporations in their “arm’s length” transactions, when exchange among competing producers is decisive. In this way, formal logic understands the universal as an abstract, general relation formed in thought as it identifies common elements among concrete particulars existing outside of thought. This establishes thought and objectivity as a dualistic, “two-world” relation. From this formal perspective, the test is always, as Kant says, how well thought corresponds to its object.2 Thought and language, consciousness, and their object are assumed in this way to be essentially separate and apart from one another. The particular is concrete, diverse, manifold. Thought and language form ideas about the concrete abstractly, by the isolation of certain common elements according to the rules of formal logic, especially the principle of identity. A thing is identified according to the samenesses or similarities of its common elements which establish its identity. A thing so identified is itself and cannot be said to have other than those elements, A=A. The rules of formal identity are, therefore, rules of logic and language and exist inherently apart from the concrete objects of that thought and language. But while formal logic understands the universal as abstract, it must see it also as particular. Abstract universality cannot express itself except with regard to the particulars that compose it. Therefore, there is always a particular, the characteristics of which most closely correspond to the universal. This is exactly the objection of those who state that the human as abstract universality is usually and historically male. This is a call for more closely defined abstract universals. But this greater particularity is formed according to the same principles of formal logic as the universal to which it objects. The logic of the particular still views thought and object as separate and as having a formal, “two-world” relation. The universal is always, then, even within formal logic, ultimately a particular because the universal is always formed on the basis of the particular as concrete. The particular as the actual basis of the abstract universal becomes especially important when the universal

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is considered historically. Obviously, for example, small commodity producers of the early 1800s, monopoly corporations of the early twentieth century, and transnational corporations are not the same, although they share certain common elements. The historical examination of a universal relation, therefore, always comes to rest upon a concrete particular which, in a given historical period, is dominant in manifesting, and also producing, those characteristics. For example, one can talk today about the market in a wide variety of ways, in terms of small and large producers or service operations. But most basically and practically, the market means the transnational corporations. It is their investments, their systems of production and services, their search for market perfections which are most basic to economic development and, more to the point here, what we mean by a market: a market for whom and for what.3 Therefore, the market today is abstracted and discussed in terms of the transnational corporation, and its characteristics are inevitably projected backwards in making historical comparisons because universality must always have reference to and basis in concrete particulars. “Arm’s length” transactions are key to the market because they suppose free competition with buyers and sellers independent of one another. Therefore, in discussing this, comparisons are drawn between capitalism at previous stages and transnational corporations, the latter of which have very few “arm’s length” transactions. Consequently, it is here that the universal runs aground on the particular. Just as in the case of the human as male, the more closely and concretely we consider the transnational corporation, the less its activities seem to correspond to market activities as the universal has defined them. The formation of the universal on the basis of what is essentially an individual particular has been equally a problem for the political left. Since working-class people are visibly and immediately represented in trade unions, especially in the United States, and since trade unions represent an active form of class struggle, it has been usual to identify trade union struggles as the most universal form of class struggle in the United States. But this universal must have reference to a particular form of union, usually industrial unionism, and to particular forms of struggle, usually contractual struggles. This creates the logical problem of what E.V.Ilyenkov terms the “falsely concrete” (1982:106–10). That is, trade unionism, which appears as both a concrete particular and universal form of working-class activity becomes instead an unmanageable and ahistorical abstraction. The isolation and absolutizing of industrial unionism as the form of unionism of which we are actually thinking, in effect, obscures our focus upon other forms of unionism (e.g. public employee unions) and other forms of struggle around urban life, in which working people are engaged. Trade unionism becomes an ahistorical abstraction because the particular form is imposed upon other relations in space and time without regard to differences in historical evolution which keep both unionism and all other forms of class struggle in constant change and motion. The problem with both the abstract universal and the concrete particular in all the above cases, as Ilyenkov again recognizes, is how they may be considered in the same relationship at one and the same time and mutually creative of one another (Ilyenkov 1982:70–100). In the examples I have given here, the abstract universal appears as separate and apart from particulars (e.g. the “market” or “humanity”) so that it excludes concrete differences (e.g. monopoly corporations or women) or the universal is itself ultimately only a particular (e.g. transnational corporations as the market or industrial

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unions as class struggle) which dominates and obliterates from our view all other connections. Formal logic cannot, in any of these cases, see the universal as a social product of the logical and historical relations of diverse particulars. From the one side, formal logic sees abstract general samenesses, a formal universal formed in thought according to commonalities among diverse particulars and, therefore, existing outside of and apart from that concrete diversity. From the other side, formal logic does not see that any universal is itself and inevitably also a particular which has its present form and identity as a result of the interactions among diverse and opposing particulars in their logical and historical development through one another. So, for example, from the first side, housing is obviously a general social requirement of human shelter and, abstractly, housing is simply a mental summary of all forms of human shelter. But, in formulating an idea of housing today, it seems reasonable to take housing in a highly developed form (e.g. gentrified urban areas or upscale suburbia) as a particular for generalizing about housing. This particular is taken as concretely separate from other, different forms, such as ghetto housing. Better quality housing for the poor exists as a separate category, such as public housing, or it exists ideally and abstractly as some hypothetical way in which the poor might attain housing in a better developed form. Yet what is not recognized is that housing is not simply a mental summary of forms of shelter or only one of its more developed forms. Housing is also, and concretely, itself a particular. Housing is all of the requirements which the reproduction of housing in a given form of society presupposes. Housing is not only individual units but infrastructural requirements, such as water and electricity, facilities for consumption, recreation, and leisure, and laws and regulations, as well as all of the physical and scientific requirements involved in the construction of social space. One can pose the solution for the poor in the ability to respond to the housing market with money and the ability to relocate. But, even within capitalism, money and mobility are only two elements in the development and use of social space. Given all of the concrete characteristics which create housing in contemporary urban space, it is evident that the space occupied by the poor and those better off share the same requirements. Housing in urban space does not exist apart from these requirements. The problem is not where the poor live so much as the ways in which their social requirements are reproduced. Ghetto and suburban housing share the same material presuppositions, but life within those areas is socially reproduced in very different qualities. The question is not how do we make it possible for the poor to move, it is rather why do the common requirements for the creation of housing produce housing which varies so widely? The limitations of formal logic make it impossible to understand the mutual determinations of the universal and the particular. The first angle of vision regards the particulars as separate from the universal, which is formed in thought (e.g. housing is the idea of housing). The second angle of vision insists on the concrete separateness of all the particulars, while simultaneously selecting out one of them as the ideal particular which is abstracted as the basis for all the others (e.g. suburban housing as the goal of economic social mobility). But this means, first, that even this universal must recognize common elements within diversities and that universality can only be established on the basis of particulars.4

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Dialectical materialist logic establishes the relation of the universal and particulars not abstractly or arbitrarily, but through their logical and historical relations to one another. In the above example, housing is a concrete particular because it has a form given to it by the universal conditions for the creation of housing developed under capitalism. As I have outlined in Chapter 1, capital creates common, universal, forms of social production, distribution, exchange, and consumption. These are the forms upon which capital organizes common, universal, requirements for existence within social space. Capital as a particular relates to social space as general and that social space is a particular which has capital, in all of its forms, as a general, universal, condition for its reproduction. Capital always imagines itself as a particular apart from that social space, a relation to the “market” as a reflection of its own activities, because capital is, in fact, a particular as a relation to its own accumulation of wealth. Capital extends its social forms of production and consumption only as it is compelled to and as it can extend itself through monetary relations. For example, capital made housing more available in urban areas only after it was self-evident that this closely shared social space posed similar threats of fire and disease for the rich as it did for the poor. But capital made new housing available only through the lowering of mortgage rates (Stone 1986:48–53). Capitalist production, distribution, exchange, and consumption are also the bases for social development, for social reproduction. Capital’s limitations of each of these particular forms as a relation to its own particular needs, and ultimately to its abilities to accumulate, are also the limitations of each of these forms for social reproduction. Capital, therefore, makes social reproduction possible as people are subject and object for their own and for capital’s development within common social space. Capital reproduces earlier relations of social subordination of class, race, and gender. But it does so in its own forms, as a relation to itself and its activities within the processes of social existence. Capital reproduces these forms of oppression because of its own inability to extend employment, distribution, exchange, and consumption beyond its own interests and requirements. Consequently, social relations of class, race, and gender which preceded capitalism are extended and made more universal; most obviously in their respective forms of unequal access to those requirements which capital makes the conditions for social existence and development. Simultaneously, the divisiveness of this competition for social access posits relations between and among people for their own personal and social reproduction of these enmities. The more universal capital makes its requirements for social existence, the more those requirements become conditions for individual and social reproduction, and therefore the more those forms express, both universally and particularly, social divisions of unequal access and oppression. Housing is a concrete particular: its reproduction within capitalism increasingly presupposes common forms and common social space, and, simultaneously, housing is, in these ways, the reproduction of the social standing of people in their relation to capital, i.e. in their access to developed social requirements. It is for this reason, as well, that the working class is a universal relation not only to employment but to all the particular social requirements which reproduce class as a form of social subordination at any particular time.

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DIALECTICAL MATERIALIST LOGIC AND SOCIAL PRACTICE Dialectical materialist logic examines any and all particulars as they are created as universal relations to themselves and through one another in their logical and historical evolution. These particulars, together, create a universal relation which has one of them as their essence (e.g. as capital is the particular which makes housing universal in all of its particular forms). Each develops as itself, but only in its extension through others (i.e. they remain concretely particular; capital and housing each exist in their particular forms, which is why capital must limit the extent of housing as a relation to capital’s own requirements). We express universals in thought and language, consciousness, as these are posited for our consciousness by the interactions of particular social activities. It is through social activities that we observe social universals or norms. Patriarchy is a norm of capitalism, for example, because of all the social forms in which capital reproduces male authority. Housing and employment become social universals under capitalism because of the ways in which capital extends itself as a universal relation to all the particular forms in which housing and employment are created. Sexism, racism, and housing all come to have concrete particular forms and functions within capitalism as a consequence of their historical and logical relations to one another: their necessity for one another, as they are repeated, reproduced through one another. If the social is always the universal and the universal is always the product of the particulars that compose it in their interaction, then any social activity must be identified as both particular and universal. To say, for example, as Marx and Engels do in The German Ideology, that human beings distinguish themselves by their ability to produce their existence, is not to isolate production as a particular. Production is both particular and universal because production is always social. The fact that human beings produce in society means that any particular form of production is always also the reproduction of that society. That is, production is a particular in the universalization of social relations. And those social relations and their reproduction are necessarily the subjects which universalize production by making it their object.5 As E.V.Ilyenkov states, Marx understood contradiction as the solution to the problem of the concrete in thought (Ilyenkov 1982:233). Contradiction means the ability to understand the universal as a product of the interactions of concrete particulars through one another. Abstract universality is, therefore, the product of many determinations. Consequently, abstract universality is equally concrete and particular. The more multiple determinations, the more we recognize the individuality of a thing or phenomenon and its most essential features. Abstraction, universality, the general in appearance and in objective development are products of concretion. And that concretion, the multiple determinations which create a thing or phenomenon, is equally a product of universality and abstraction, i.e. the universalization of particulars through one another. Global capitalism today, for example, is universal because it reproduces itself through a wide variety of social forms and is, simultaneously and most decisively, its predominant and particular corporate form. Like Hegel, Marx understood the problem of knowledge as first of all a logical problem: the relation of the universal and particular, as identified in thought, in their

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logical and historical development through one another outside of thought.6 Marx’s greatest achievement in this connection was to recognize the objects of thought as the products of human social activity, of practice. Because of the centrality of practice within the Marxist philosophy and method, I will examine its basic principles as Marx established them in his “Theses on Feuerbach.” Marx’s concept of practice overcomes the “two-world” relation which understands thought as separate and apart from its object. The object, considered apart from practice, can be known only in contemplation according to the rules of formal logic and language. Marx states: The chief defect of all materialism up to now (including Feuerbach’s) is, that the object, reality, what we apprehend through our senses, is understood only in the form of the object or contemplation, but not as sensuous activity, as practice; not subjectively. (Marx and Engels 1968:197; Marx’s emphasis) The active side of this “two-world” relation (i.e. object or contemplation), Marx says, was developed by idealism. But idealism, as he says, “does not know real sensuous activity as such.” Idealism, in whatever form, knows ideas about human practical activity in contemplation and, therefore, in formal logic and language, with the thinking human as the center of activity. Idealism can recognize objective existence outside of thought and language, but it still expresses this as ideas about these objects, rather than as those objects and ideas about them are formed as relations within human activity, in practice. Thought and language are, in this way, imagined as both contemplation and practice. In this formulation, human social relations are constituted through the interactions of thinking individuals in their contemplations and communications. Idealism, or any materialism which understands society as constituted communicatively, cannot escape positing a relation between subject and object which is centered in contemplation. “Feuerbach wants sensuous objects, really distinguished from its objects of thought: but he does not understand human activity itself as objective activity” (1968:197; Marx’s emphasis). Objects exist for contemplation as products of human activity and cannot be understood as isolated objects apart from the sensuous human subjective activity which determines and posits them in their present forms, contents, and relationships for subjective contemplation. Even nature in any of its forms cannot be conceived apart from its existence in and through its relations with active human subjects (Ilyenkov 1977:146–57). Things and phenomena, objects, are thus, object for human activities as subject because they are products of the interactions of human subjects, i.e. human subjective activity. And, these objects are subject for human activity as object because they represent, in their present developed form, the conditions for the contemplation and the reproduction of human activities, i.e. for thought and activity which has these human activities as their object. This means that any particular is a universal relation of all the diverse particulars which give it its form and content as a relation among human subjective activities, that is, as these subjective activities make it object in that form, as object for their own reproduction as subjects. And, simultaneously, any universal relation

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is a particular as that particular makes itself subject for the reproduction of that universal relation as its object, for its reproduction of itself as object. As I argue throughout this book, capital as a particular represents an ever wider universal relation among diverse particulars which are posited as requirements for social development. Capital, in its developed corporate form, therefore, has all of these particulars as subjects for its own development as object. The corporation is, in this way, modified in its form and content to conform to developed requirements for social production and consumption. The development of mass housing, for example, presupposes the development of common infrastructural space, financing, laws, and regulations necessary to the reproduction of that social space. The corporation is reproduced as object as a consequence of its own determination through diverse human subjective activities which are increasingly presupposed in its form and content. Simultaneously, the corporation is equally subjective activity. It is also a particular which has as its object its own reproduction in a particular form and content through these subjective activities. Consequently, corporate capital can make mass housing available in certain forms and also reproduce the infrastructural requirements which that housing presupposes. But the corporation’s own reproduction as object means that at a certain point mass housing must take other forms, such as public housing or ghetto housing, because the full extension of mass housing in its most developed forms is inconsistent with accumulation and other capital requirements. In these same ways, the reproduction of each of us as a human being is increasingly a universal relation to all those particular subjective activities which together form the bases of postmodern social life. It is because we live increasingly in social space which has common socially developed bases that we recognize social interaction as interpersonal and intersocial and as displacing, in certain ways, previous historical categorizations of class, race, and gender. Social development within common social space defines the postmodern as against the modern. And it is because the opportunities for the social reproduction of each of us are unevenly shared that the most developed forms of postmodern society are ever more decisively confined to a particular social strata. Individual human activity is, therefore, ever more interpersonal and political, also, in the reproduction of social separations of class, race, and gender. Classism, racism, and sexism rely more extensively within shared social space upon directly personal and political control for their reproduction. It is for this reason that these forms of social subordination increasingly involve personal violence, such as against people of color or women, and categorizations in social and political language, such as against the poor as socially undeserving or against single mothers as destroyers of “family values.” Things and phenomena have their meanings according to their place and purpose within human activities. And it is only through those activities that humans can conceptualize and act upon those things and phenomena. The human individual is always and in all circumstances a social individual whose premises for contemplation and activity are the social presuppositions of that individuality. Each of us exists in and through the social activities which posit the forms and contents of our existence and we can only reproduce the form and content of any activity through those same social connections and requirements. Marx, in Capital, quotes Goethe: “Im Anfang war die That.” “In the beginning was the deed” (Marx 1986b, vol. I: 90). Thought, language, and communication do not exist separately from the social practices which posit them and

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which are presupposed for their own activities.7 The separation between contemplation and its object can only be surmounted by understanding that the object is objective activity and is, therefore, made object in this form by human subjective activity, i.e. human activity as subject for itself in this objective form and, thus, simultaneously, object for itself as subject in this form. As I have already indicated, the logic of the particular does not overcome the barrier between contemplation and object. Emphasizing the particular is only a different way of unifying subject and object within contemplation. Contemplation requires formalism: thought and language can only express themselves in terms of samenesses. In making human practice, social activity, the subject, rather than the contemplative and communicative individual, we understand how universality is created through diversity. Human language is itself inherently social. Language for the single individual is inconceivable (Marx and Engels 1968:14–15). Human activity is always subject and object for itself in some form.8 “Base,” as productive activity, and “superstructure,” as the social relations which are created through their relationships to that base, have been, since Marx’s time, most usually conceived in ways which only repeat the dichotomy between subject and object. Either the base is seen as material and the superstructure as contemplative and communicative, as is the case with Stalinism, where the superstructure is only a reflection of the base; or language is taken as the primary material relation constituting base and superstructure.9 In this latter approach, consciousness replaces practice as the fundamental social unity.10 But this, by definition, takes social relations as essentially a collection of ideas about those social relations. Both of these approaches fall back from Marx’s concept of practice because they do not take social activities as the premise for inquiry and investigate the ways in which base and superstructure are mutually creative.

THE LOGIC OF CAPITAL’S EVOLUTION I want now to explore dialectical materialist identity and its relation to Marx’s method of investigation. From his earliest works through Capital, Marx understood any identity as the product of the social interaction of different empirical particulars through one another. The commodity, which I will use as an example, following Marx’s discussion in the first volume of Capital, is an identity created from several sources and not as an individual property of any of them. We know things as a result of our interactions with them in social practice. Dialectical materialist identity is diverse and concrete on all of its sides. It is at once universal and particular: a commodity exists as a particular article of exchange because it is the result of the general exchange against one another of many different kinds of products. Their social interaction creates the equation of these particulars through one another. The commodity as an article of exchange originates in an opposition to the limits of use value, the need to exchange one use value for another which is more immediately and directly useful. The exchange of many articles beyond their immediate usefulness requires their equation on a still more general social basis. This equation is established through exchange based on labor time as an element common to the production of all of them. But this common element summarizes many different kinds and qualities of labor. Exchange on the basis of labor time redefines production as production for exchange,

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valued according to socially necessary labor time. The expansion of exchange through the production of commodities necessitates the development of money as a universal commodity which permits extended exchange relations. And the socially general production and exchange of commodities increasingly involves the sale of labor power as access to money and commodity conditions of social existence. Wage labor is both a workforce for commodity production and a market for the sale of commodities. With the development of wage labor, the commodity is subject and object for itself as the basis of social production and consumption. The commodity, like any other identity, evolves as a process of spiral development through practical social activity. Each of the identities, from the commodity in its initial form through wage labor, is both particular and universal because of their development through one another. Each of them develops from a relation of opposition. The commodity, for example, has its origin in the opposition between use value and exchange. It is the limit of use value as a relation to its own realization in exchange which necessitates its redefinition and development as exchange value. Similarly, each of these other successive levels of development involves its overcoming the previous relation. Each level represents an extension of the commodity through other phenomena into a broader and more socially universal relation. And each of these elements upon which the commodity is built similarly extends itself as a socially universal relation through the commodity. Socially necessary labor time, money, and wage labor all represent forms of the coordination of ever wider relations of production and social existence as all of these are extended through their relation to the commodity. Each of them presupposes the others in its own development and, therefore, its universality through the others is also its development of its own particularity; an individuality composed of the diverse concrete elements upon which its existence depends. Imagined as a spiral relation, wage labor, in this example, represents the latest and outer ring of the spiral which resolves the opposition of the role of labor in a society where production and consumption are based upon commodities. But wage labor also presupposes use values based upon exchange and thus reproduces use value as the oldest and most inner ring of the spiral, just as it also reproduces all the others. Wage labor, then, becomes the essence which is created by and reproduces all of the others in relation to itself. It makes the commodity relation “for itself” with regard to all of these elements as a relation of social production and consumption. And each of these elements is itself an essence of the relation as a distinct element, and each of them, in turn, defines the others as part of its form and content. Essence is understood as the mutual and contingent reproduction of a thing or phenomenon in and through other essentials. It is not one-sided, isolated, or unilinear in its development. In these ways, each of these essences meets Marx’s criteria for dialectical contradiction. First, they are mutually identical; each is the other, its opposite. For example, the commodity is each of these essentials and each of them in its own form creates the commodity as a socially general relation. Second, they are mutually dependent. None of them exists in its present form without the others and each presupposes the others in its present development. Third, they are mutually creative; each of them creates itself as an individual and universal relation through the others (Marx 1986a:28–9).

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IDENTITY AND APPEARANCE But Marx tells us in Capital, as elsewhere, that identity appears not as a relation of the particulars that are presupposed in its creation, but as a singular, universal, formal identity which summarizes samenesses among these many elements and actually appears as prior to the particulars which are the bases of this identity. In certain ways, this appearance is reality. Formal identity has an objective existence which is the product of many kinds of interaction, i.e. as identity summarizes objective samenesses created through opposing interactions. The commodity in its initial form is an article of exchange and is, in this simplest form of its existence, historically prior to the extensive dependencies which later make it a condition for social production and consumption. And all of the essentials upon which the commodity comes to depend reproduce the commodity in its initial form and make it more socially general and particular. But each of these other elements becomes essential to the commodity because of the limits to its own development in its initial and subsequent forms. The commodity does not exist as a socially general relation except through all the diverse particulars upon which it depends. Therefore, while formal identity has an objective existence, its appearance as being independent of the particulars that it summarizes is illusory. It is an illusion created by thought reflecting upon itself, as imagining that thought and its language and categories are themselves creators of the social reality that they express rather than particulars within that reality. The several reasons why this is the case also form a basis for Marx’s methods of investigation and exposition which I will outline below. Identities summarize in language and thought their social creation through diverse activities in practice and appear to us “post festum,” after the fact, as a result of that creation (Marx 1986b, vol. I: 80). We cannot know an identity before it develops; until it is posited by practice for recognition in language and thought. Marx provides the example of Aristotle and his inability to imagine the value of beds being expressed by a house because of the lack of a socially developed concept of value (ibid.: 65). Similarly, Marx points out that Adam Smith was able to recognize and establish the labor theory of value because social production and exchange of commodities created labor as a summary of many diverse forms of labor activity (Marx 1986a:41). Identity as socially developed universal appearance posits itself in language and thought as an inversion of the processes of its own creation. It appears as a premise for language and thought, as the beginning of conception of this phenomenon. In fact, it is premise in this way because it is the result of its development through other and diverse phenomena. Identity, therefore, invites us to imagine it as primarily a product of thought and to imagine language and thought as at the center of human activity. Consequently, these associations encourage us further to associate the origins of this identity with common elements which link it to its previous forms of existence and to understand its history as a unilinear development. For example, Marx points out that the appearance of the individual in bourgeois society is used by bourgeois political economists as the basis for understanding all previous human individuality as having the same essential bases and characteristics, thus obscuring different historical circumstances (Marx 1986a:17–18). This process of the inversion of identity in thought and language is the camera obscura that Marx and Engels refer to in The German Ideology (1968:14). It is also part of the basis of the fetishism of commodities which I discuss in Chapter 2.

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But, as Marx and Engels discuss in The Holy Family, these inversions are equally the product of the conditions of language and thought operating according to their own rules: the reliance upon words and categories created according to samenesses and formal identities as conditions for themselves in formal logical consistency (Marx and Engels 1975:68–72). Marx’s method, as outlined in the Grundrisse, speaks to using the dialectics of language and practice: socially developed universals in their general appearance in opposition to the particulars which created them; mutually creative relations within a social totality, their place and purpose within diverse social identities and their interactions.

THE DIALECTICAL METHOD OF INVESTIGATION Marx’s method of political economy investigates the dialectical development of things and phenomena through one another. This means that any and all particulars within a relation are induced and analyzed according to their interconnections and then deduced according to their universal determinations through one another as deeper and deeper levels of essentialness. Marx describes his method of investigation as twin “journeys.” The first of these begins with abstract appearances and identities which represent a “chaotic conception of the whole, and through closer definition one [arrives] analytically at increasingly simple concepts; from the imagined concrete, one [moves] to more and more tenuous abstractions until one [arrives] at the simplest determinations” (1986a: 37). For example, on first appearance capital, at any stage of its development, is a chaotic whole of diverse and, apparently, relatively unrelated particulars. Commodities, wage labor, production, money, and so on appear to have their relationships primarily according to their usefulness for socially isolated individuals in their interactions, constituting social relations among themselves. Yet upon further consideration, it is evident that the commodity is the most universal of these and that it is connected as an element to all of them. Moreover, the commodity is universal because it requires the interactions of all these particulars and, therefore, assumes them, however diverse their forms, as presuppositions of its universality. Simultaneously, this means that the commodity is a condition for each of them and this suggests that it is historically and logically prior to the development of each of them in their present forms. At this point, we have completed what Marx describes as the first journey. We have understood the commodity as a universal relation which is created as object by each and all of these particulars, these “simple determinations,” in their subjective activities. Consequently, we also understand the commodity as a particular whose own interactions as subject for itself make it the essence of all of them. Once a conception of the whole is realized in this way, as levels of essence in their mutual determination, it is necessary to understand how these create a synthesis of the whole. Through this “return journey,” the concrete is understood as concrete “because it is a synthesis of many determinations, thus a unity of the diverse” (Marx 1986a:38). In thinking, therefore, it

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appears as a process of summing up, as a result and not a starting point, although it is the real starting point, thus also the starting point of perception and conception. The first procedure attenuates the comprehensive visualization to abstract determinations, the second leads from abstract determinations by way of thinking to the reproduction of the concrete. (ibid.: 38) The second journey, then, requires an investigation and demonstration of the mutual creation of these particulars through one another in the historical and logical process of their development. This means understanding the limits of each in its previous form of development in relation to the whole and how and why each of them became necessary in their evolution through one another. We can then understand that universal relation as the product of the concrete particulars that compose it and understand also the present form and content of those particulars as it is derived from their interactions with one another within that universal relation. Marx understood practice as premise for perception and conception. The dialectical development of social relations is also their existence as bases for social consciousness. Marx used the economic category of exchange value as an example in order to distinguish his method from other forms of mental assimilation. Exchange value exists in and through social relations and “presupposes population, population which produces under definite conditions as well as a distinct type of family, or community, or State, etc. Exchange value cannot exist except as an abstract, one-sided relation of an already existing concrete living whole”: But as a category exchange value leads an antediluvian existence. Hence to the kind of consciousness—and philosophical consciousness is precisely of this kind—which regards the comprehending mind as the real [hu]man, and only the comprehended world as the real world—to this kind of consciousness, therefore, the movement of categories appears as the real act of production—which unfortunately receives a push from the outside—whose res It is the world; and this (which is however again a tautology) is true in so far as the concrete totality regarded as a conceptual totality, as a mental concretum, is IN FACT [sic] a product of thinking and comprehension; yet it is by no means a product of the self-evolving concept whose thinking proceeds outside and above perception and conception, but of the assimilation and transformation of perceptions and images into concepts. The totality as a conceptual totality seen by the mind is a product of the thinking, which assimilates the world in the only way open to it, a way which differs from the artistic-, religious- and practical-intellectual assimilation of this world. The real subject remains outside of the mind and independent of it—that is to say, so long as the mind adopts a purely speculative, purely theoretical attitude. Hence the subject, society, must always be envisaged as the premiss of conception even when the theoretical method is employed. (Marx 1986a:38–9)

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This is still and inevitably, as Marx recognizes, an understanding within thought and language. But it makes society the premise by understanding universality and particularity as reflecting relations within human practical activity. Moreover, it establishes mutually defining and developmental relations within a totality. Mutual determination is, therefore, the establishment of identity according to its place and purpose within a relation. This makes any theory of these relations relative, as Lenin says, but it is-relative to its place within a totality and to that demonstration (Lenin 1981:358). This demonstrated relation among things and phenomena is also its scientific aspect and goal. Any identity or universal is simultaneously general and particular through all of the elements which create it. Properly understood, Lenin states, dialectical materialism defies the absolutizing of abstraction, the authority of a single perspective (Lenin 1981:361). This is because dialectical materialism seeks to understand relationships, within social totalities whose parts are historically developed and contingent. This makes dialectical understanding not only consistent with, but essential to, the achievement of fully human social development and democracy. We use this method to reflect upon the conditions of developed social practice and to understand the places and purposes of any and all human activities within it as well as the conditions for human social reproduction.

NOTES 1 A THEORY OF THE SOCIAL ECONOMY 1 Terry Eagleton discusses the pessimism which Perry Anderson has called an abiding feature of Western Marxism (1991:46). My argument in this book is that this pessimism is inherent in conceptions which understand consciousness and human practical activity as constituted through thought and language rather than conceiving practical social activities themselves as prior to and constitutive of thought, language, and consciousness about those social activities. The former approach at once makes socialism a problem of consciousness and separates that consciousness from the practical conditions of its own creation. Consequently, such conceptions of socialism turn upon themselves as problems in thought and language rather than as problems in practice. I examine this problem further in the Appendix. The pessimism of Western Marxists often is expressed in theories of capitalist development which owe as much to the influence of Martin Heidegger as they do to Marx. Heideggerian Marxism characterizes, especially, the work of the Frankfurt School. In this approach, as exemplified in Herbert Marcuse’s From Luther to Popper, the essence of humanity is taken as something other than human social practical activity in the production and reproduction of human existence. Marx’s concept of “species-being,” for Marcuse, in effect, replaces Heidegger’s concept of “Being,” and the victory of the proletariat is equated with the realization of the human essence. Because, in this interpretation, the human essence is not realized within the processes of capitalism, and other oppressive forms of development, the further extension of capitalism can bring only intensified oppression. As Mark Gottdeiner discusses, this concept characterizes present-day “Fordist” social theories which observe “the penetration of capitalist social relations into virtually every sphere of daily life, aided by the state and involving commodification of such previously traditional cultural forms of community as the family, health care, education, and so on” (Gottdeiner 1985:209). In these, and many other theories of Marxism, the working class creates its object only through its own class consciousness and its political unity. As Charles Bettleheim, for example, states: “what is decisive—from the point of view of socialism—is not the mode of ‘regulation’ of the economy, but rather the nature of the class in power. In still other terms, the fundamental question is not whether the ‘market’ or ‘plan’ (therefore also the ‘state’) controls the economy but the nature of the class which holds power” (Sweezy and Bettleheim 1968:44; Bettleheim’s emphasis). But, as I have indicated, these approaches have the result of dividing social practical activity from consciousness and discourse. Moreover, social class and other theoretical categories become absolutized over and against the very activities that provide their form, content, and evolution. Socialism can only be achieved, within these theories, if the proletariat can somehow be brought to consciousness and political unity and then rid itself of a system alien to its own essential character. This concept and task becomes all the more fantastic as capitalism becomes, in these interpretations, more and more defining of every aspect of life and, thus, increasingly disempowers the proletariat in their everyday practical activities. It is to counter these theoretical limitations, and because I believe that these theories misconstrue Marx’s conceptions, including those in his earliest writings, that I argue from very different perspectives in this book. 2 The model of urban development which I develop in this book is inferred from Marx’s Capital and from Thomas Angotti’s discussion of urban development in Metropolis 2000 which complements Richard DuBoff’s (1989) examination of economic development in Accumulation

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and Power. I have also relied upon Smith and Tardanico (1991) in “Urban Theory Reconsidered: Production, Reproduction, and Collective Action.” 3 Marx and Engels equate division of labor with possession and they state in The German Ideology that the division of labor “was originally nothing but the division of labor in the sexual act, then that division of labor develops spontaneously or ‘naturally’ by virtue of natural predisposition (e.g. physical strength), needs, accidents, etc., etc.” (1968:20). This perspective provides premises within Marxism for understanding sexual possession as the basis of patriarchy, as Gerda Lerner argues that it is (1986:23). Lerner criticizes Engels’ approach in his The Origin of the Family, Private Property, and the State where he identifies the “world historical defeat of the female sex” with the rise of private property and the state (Engels 1969:120–1). While Lerner is correct in seeing the origins of patriarchy in sexual possession, it is also necessary to examine its evolution in relation to other forms of possession and property and as part of the social division of labor. This means that while Engels’ emphases upon private property and the state may obscure the importance of sexual possession, it is also true that private property and the state are founded in and evolve through relations of sexual possession. Both private property and the state are divisions of labor and patriarchal control based on the separation of household from other social relations of production and the grant of authority to men in the control over women within those relations, which is most basically and ultimately sexual control. 4 Keynes establishes the multiplier as a possibility which arises from the need for expanded incomes as a consequence of unemployment and underconsumption within the capitalist business cycle. The multiplier represents a basis for the development beyond the previous limits of that business cycle and, simultaneously, the basis for a new social equilibrium within capitalist development (1964:13–31).

2 CAPITAL AND IMPERIALISM 1 Michel Aglietta, whose A Theory of Capitalist Regulation centers Marxist political economy on twentieth-century “Fordism,” dismisses Lenin’s Imperialism as a collection of observations on certain, then current, phenomena, of no scholarly interest, and unconvincing in its assertion that imperialism plays a substantive role in capitalist development (Aglietta 1979:29–33). It is partly because Marxist theories based upon “Fordism” disregard imperialism that they neglect the social identities of production, distribution, exchange, and consumption. They concentrate upon the analysis of production with the industrial working class as simply its mirror image. Aglietta and other “Fordists” do not observe, therefore, how capitalist production becomes increasingly at odds with other socially developed requirements. Consequently, they miss the continual social opposition which imperialism expresses in its own development, both nationally and internationally. “Fordist” theory in this way reduces itself to summarizing the secular development of capitalist production and its interruptions by its own crises of accumulation. “Fordism” is a theory of capitalist production which, because of this inherent limitation, falls short of understanding capitalist social development. 2 David Harvey and Manuel Castells’ nterpretations, like that of Mark Gottdeiner, all express, from opposing perspectives, their common relations to the same problem. All of them consider capitalist production as essentially a secular relation which remains essentially unchanged in its content, except in those ways and epochs in which it changes its relations to its own processes of accumulation. Because Harvey sees capitalist production as essentially unchanged, he is unable to distinguish postmodernism as a socially, as well as ideologically, differentiated form of capitalist development. He states that postmodernism indicates nothing more than the logical extension of the market over the whole range of production (Harvey 1989:62). In David Harvey’s interpretation, postmodernism reflects changes primarily in the ways in which capital explains itself and its adoption of “flexible” methods of accumulation. Production,

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distribution, exchange, and consumption all share mutual identities, therefore, only in that the last three are extensions of production. But this approach effectively denies the mutually creative character of these social relations and focuses our understanding of social development only on capitalist production. Everything else becomes, essentially, superstructural phenomena which are reflective of the base. Changes in cultural forms and a new round of time-space compression in the organization of capitalism, Harvey says, when considered in relation to the processes of capital accumulation, are in appearances rather than the emergence of some postcapitalist or postindustrial society (ibid.: vii). Manuel Castells examines the dynamics of consumption struggles, partly because of their activity and, often, intensity, within urban social development. But Castells also treats these struggles as separated from production and, therefore, in his own way, treats production as isolated and as over and apart from the social processes of distribution, exchange, and consumption. The mutual creation of production and consumption relations is lost in this interpretation just as it is in Harvey’s. Mark Gottdeiner understands social space as a product of social production, but, in his concern to treat social phenomena in their own right, he separates them from their determination in and through the development of that social production and its capitalist premises. Consequently, he states: “Most important, it is quite simply wrong to suppose that the link between capitalist social development and spatial form is clearly demonstrable. There are no, nor have there ever been, ‘industrial capitalist cities,’ ‘monopoly capitalist cities,’ or ‘global capitalist cities.’ There are only spatial forms and modes of production linked by a contingent process and existing in various phases of development and change” (Gottdeiner 1985:199–200). 3 Richard DuBoff states that there was nothing inevitable in any of these forms of technology (1989:56). This is true in the sense that no particular form was preordained. Steam power had universal applications, as Watt himself recognized when he patented the steam engine as a universal machine. The question with electricity is not in its development (its existence in nature was long recognized); nor is it a question of technological determinism (electricity was already one among the several other power sources which it ultimately replaced). It is rather a question of its use: the universality of its forms of application are both why it was adapted from nature and why its applications overcame other forms. Electricity was thus used within socially determined processes. Its flexibility and manipulability made it useful for application within a large number of human social interactions. The applications of electricity were in the ways that it formed linkages within these social interactions. Computer technology then became a further particularization of electricity within human social interactions in still more directly communicative and logical forms. The computer made electricity a medium of organization for personal and social activity. Technology is, therefore, understood through a series of logical relationships: first, in terms of the logical relationships which inhere in the particular form of technology itself, as itself an expression of a particular human logic; then, through the universals within social relations which posit the development of that technology for use in that way; and, finally, in the ways in which those social relations themselves are redefined and extended through that technology. It is because the computer is both immediately and directly a socialized form of human logical expression which interacts with humans in their own immediate personal and social thought and action, that its relations to use are, at once, liberating, mysterious, and maddening. Joseph Weisenbaum (1980) explores these dimensions skillfully and imaginatively in Computer Power and Human Reason.

3 THE PREMISES FOR POST-SECOND WORLD WAR IMPERIALIST EXPANSION 1 At the same time, it is important to emphasize that these are elements within a search for private investment and do not always represent or realize the highest profits. It is for this reason that

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unprofitable colonies, like other wasteful investments, are sometimes a price to be paid for avoiding the commitment of capital to developed social requirements. 2 Capitalism is not, as Michael Storper and Richard Walker state, a process of investment which is of competitive speculation on an unknown future (Storper and Walker 1989:42). Nor is the process of capitalist development so undefined as they suggest, with falling rates of profit being answered simply by movements of investment to new products, sectors, and labor processes (ibid.: 67). Rather, as Marx demonstrates throughout Capital, understanding capitalist investment and development means understanding how capital as a social process continually defines itself against itself. Capital in any of its existing or evolving forms is always a social limit to all of its parts in their relations with one another. Capital’s inability to fully extend employment, for example, is also its continual relation to underconsumption and overproduction and its attempt to move beyond these relations. Overaccumulation within a given social formation is likewise the product of capital’s inability to develop that relation intensively and socially. But capital’s investments which take it beyond these connections are themselves products of its own previous movements in its attempts to extend and preserve its bases for private appropriation. Colonies create imperialism as well as vice versa. That is, colonies as a previous form and development of capital are available for reinvestment for precisely that reason. They become an alternative course because they lack the social limits to profitable investment which inhered within the developed imperialist nation. But colonies are also directly connected to government and are an alternative investment, in part, because of the growing collaboration between monopolies and government. The same is true of the administered trading relations among countries which Lenin describes in Imperialism. In other words, capital becomes an ever more administered national and international system of appropriation and this is not because its investments and product development alternatives have become more anonymous and mysterious, but that they have become less so. At the same time, it is important to emphasize that these are elements within a search for private investment and do not always represent or realize the highest profits. It is for this reason that unprofitable colonies, like other wasteful investments, are sometimes a price to be paid for avoiding the commitment of capital to developed social requirements. 3 Regarding private appropriation, Keynes stated in the General Theory that it was not important for the state to assume ownership of the means of production. The state needed only determine the aggregate amount to be invested in expanding the productive instruments and the basic reward to those who owned them (Keynes 1964:378).

6 DRAWING THE LINES: ECONOMIC INTERNATIONALIZATION AND SOCIAL POLARIZATION 1 Andrei Yudanov discusses how the ways in which TNCs sense and respond to asynchrony in the world business cycle, itself a unity of national cycles, especially through investment and disinvestment, lead to TNC structures which are well-insulated against the effects of national recessions (Yudanov 1989:71–8). Henk Overbeek demonstrates the high degree of insularity of British TNCs historically by focusing on the evolution of those corporations from the late 1940s. He shows that their degree of detachment from their national economy was the basis for what came to be called the “British disease,” where a nation continually fares less well economically than its corporations (Overbeek 1990:84–111). 2 Transfer pricing is the very essence of transnational corporate internalization and internationalization because it means the ability to move money and wealth against national regulations and boundaries. Its administration becomes the determination of an ever deeper international sphere of private appropriation which reconfigures geography and economic and social development in the image of transnational capital. Transfer pricing originated, in part, in

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the desire of corporations to escape national taxation and tariffs and was practiced by corporations among Latin American countries in trade in primary commodities during most of the twentieth century (Helleiner 1981:40–5). It then became an increasingly extended and intricate system of corporate administration, control, and development with the development of international production following the Second World War (Barnet and Müller 1974:157–60). 3 Bennett Harrison describes the results of the narrowness and specialization of the industrial base as consequences of slow growth and high real long-term interest rates. Since the early 1970s, the annual growth rate of industrial capacity has fallen steadily in the United States. It was 3.5 per cent in the 1980s but only 1.5 per cent in 1992. Even some Wall Street analysts acknowledge that companies may have gone too far in hollowing out the nation’s industrial base. This creates a vicious cycle for economic expansion since slowly growing industrial capacity soon pushes up rates of capacity utilization and triggers higher interest rates from the Federal Reserve which fears inflation. This slows the economy and encourages companies to rely upon low wage, temporary workers (Harrison 1994:215).

APPENDIX 1 Dialectical materialism is Marxism because it understands any identity as created through mutual determinations in practice and, therefore, requires us to establish that identity in practice as a relation of its own logical and historical development. This moves us beyond the limitations of language and formal logic whose own rules must prevail if we investigate identity and development in any other way This latter approach means essentially summaries as to samenesses and similarities among phenomena. Contradiction, the unity and development of opposites, holds us to a standard of reference to practical activities in two ways. First, identities and their development must be shown to be fully mutually identical, dependent, and creative and must be shown to have this development through their emergence as particular and general forms within social practice. Second, dialectical materialism begins from identity as the empirical appearance of any and all phenomena as they exist in their own development. This means that dialectics always examines particulars as themselves and, as Lenin said, “not examples, not divergences, but the Thing-initself” (Lenin 1981:220). This requirement holds dialectical materialism to the investigation of a phenomenon according to its own logic and history. Divergence from this breaks the chain of investigation and places us back into associations which then must turn upon formal logical requirements. For this reason, for example, Althusser’s proposal that we look upon phenomena as “overdetermined” does not involve a dialectical investigation (Althusser 1969:89–127). Rather, it looks for formal associations of multicausality. It is not a requirement that phenomena be studied according to their strict mutual determination and development through one another in social practice. Similarly, Gramsci’s concept of ideological hegemony is a formal association of ideas which are said to be dominant with reference to a particular regime of production. But it does not show us how base and superstructure arise and develop through one another and how both are in constant motion and change. Consequently, the summary of the dominant ideas itself obscures our vision and leaves possibilities for change outside our consciousness. 2 I use the term “object” throughout this chapter even though I am aware that one of Ludwig Wittgenstein’s contributions was to establish that “facts” capture better the manifoldness and multiplicity which exist for expression in language and thought. I use the term “object” because, although the concept of “facts” improves upon the Kantian theory of knowledge, it does not reach beyond language to the concept of practice which Marx established. I believe that Marx’s concept of practice, which is at the heart of dialectical materialism, takes us to the essential unity of subject and object within human activity. In other words, the problems upon which I focus are not “object” or “facts,” or those of language theory generally, but those of the theoretical understanding of practical activity.

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Wittgenstein’s work is a major example of how language has been the central problem of philosophy in the twentieth century. Much of language philosophy builds upon the work of Ferdinand de Saussure who identifies the phoneme as the “logical atom” of human speech. As Newton Garver and Seung-Chong Lee establish, Saussure identifies the phoneme as an element in all languages primarily through its contrast with other phonemes. Saussure denies that the phoneme has any empirical basis. It has only, he says, a dialectical relation to language’s own development within itself: “n’a pas une réalité positive, mats oppositive” This creates, as Garver and Lee demonstrate, a closed system in which language is taken as self-determining and can be understood only according to its own elements. That language is not, in fact, such a closed system is shown by the problem of metaphor. A metaphor is only explicable in terms of multiple relationships within human activity. The problem of metaphor makes it clear that language involves a dimension of thought and communication which goes beyond language to mental and social activity. For example, we often use metaphor to contribute perspective or to be provocative, to contribute understanding rather than meaning. Metaphor makes the use of language into a situational-practical determination which has more to do with activity than meanings within a closed system of language. As Garver and Lee state, current attempts to create language as a closed system are “reminiscent of logical positivism in the 1930s, which attempted to purge language so that it would be used only to describe tautologies or facts in the world” (Garver and Lee 1994:46). Language takes place in the context of social relations and has meaning only through them. Phonemes do not exist independently of human speech. The logical contradiction for Saussure, and Jacques Derrida following him, is that phonemes cannot be said to exist without reference to a positive reality outside of them. Phonemes and texts presuppose their creation outside of themselves. Derrida, who says there is nothing outside the text, seeks, like Saussure, to confine social relations to language. They present the notion that all language may be deduced from the phoneme. But the phoneme is itself one element within language. This presents the phoneme as seemingly having an independent existence, while actually explaining language in terms of itself. The phoneme is taken as having an independence as a universal and neutral element when it is itself only a form of speech. This circularity is possible because language is defined both as itself and the social relations through which it is created. The problem of metaphor arises exactly because language is defined as a closed system which at once denies and is said to include social practice. To respond, as does Derrida, that all language is metaphorical, undermines his closed system of the text because he refuses to distinguish metaphor as a form of action (Derrida 1991:32; Garver and Lee 1994:52). Such a response discloses the arbitrary authority which underpins the whole enterprise. The political and power relations of language and practice are of decisive importance to questions of mutual recognition and democracy. This is expressed in what might appear as an extreme form by Paul de Mann, who says of historical truth: [I]t is always possible to face up to any experience (to excuse any guilt) because the experience always exists simultaneously as fictional discourse and as empirical event and it is never possible to decide which one of the two possibilities is the right one. The indecision makes it possible to excuse the bleakest of crimes because, as a fiction, it escapes from the constraints of guilt and innocence.

(quoted in Rockmore 1992:9) If language is the realm through which practice is both constituted and interpreted, then we are left with the reality given us by the teller of the tale. Martin Heidegger’s

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work is an example of this. On the one side, he dismisses empirical “presence at hand” as an object for consideration—unworthy of consideration and certainly an unreliable source of knowledge. In doing so, he creates in “Being” a very large abstract universal which is said to stand for the essence of human existence. On the other side, this abstract universal must correspond to some concrete and empirical particulars. In making his “turn” toward these, in establishing the concrete within the human essence, Heidegger settles upon “das Volk” which are concretely social relationships of German nationalism and imperialism, as well as the prism of his own personal upbringing and background (Ferry and Renaut 1990:31–43). This abstraction becomes imposed and uncritical precisely because it is seen as separate from the empirical relations which it must ultimately confront. Richard Rorty accords much of the same province and power to language as does Heidegger, upon whom he very much relies. In calling truth a “sheer contingency” because we cannot formulate any truth apart from language, Rorty relies upon pragmatism and solidarity as combined means of perceived self-interest and good will for bridging this gap between language and empirics (Rorty 1989:3–32;189–98). 3 Alan Rugman in his Inside the Multinationals: The Economics of Internal Markets uses the Canadian economy as an example of how policies for national economic development should be adapted to the market requirements of the transnational corporations. 4 It is on this basis that Lenin states in his Philosophical Notebooks: “Here already we have dialectics (as Hegel’s genius recognized): the individual is the universal.” And Lenin then quotes Aristotle, who says in his Metaphysics: “for, of course, one cannot hold the opinion that there can be a house (in general) apart from visible houses.” Lenin continues: Consequently, the opposites (the individual is opposed to the universal) are identical: the individual exists only in connection that leads to the universal. The universal exists only in the individual and through the individual. Every individual is (in one way or another) a universal. Every universal is (a fragment, or aspect, or the essence of) an individual. Every universal only approximately embraces all of the individual objects. Every individual enters incompletely into the universal, etc. etc. Here already we have the elements, the germs of the concept of necessity, of objective connection in nature, etc. Here already we have the contingent and the necessary, the phenomenon and the essence; for when we say: John is a man, Fido is a dog, this is a leaf of a tree, etc., we disregard a number of attributes as contingent; we separate the essence from the appearance and counterpose the one to the other.

(1981:359; his emphases) Seyla Benhabib is among those who define production as a particular, which it can be only 5 from a Kantian perspective. She, therefore, disagrees that production should be considered both in its particular social forms and as the reproduction of human existence. For her, production as a universal becomes blurred and inexpressive of creativity: there is nothing self-expressive about machine production and the conveyor belt (1986:64). Identity in this form places us back at the problem from Kant which Hegel initially confronted. But we are left with only Kant’s solution. Consequently, Benhabib prefers Kant over Hegel on the question of ethical identity (1986:70–101). She makes this objection on grounds which include the necessity for reflection within thought and individual tentativeness as opposed to understanding what thought reflects upon as logically and historically developed. In other words, she loses the relation of ethical identity to social activity for which Hegel strives and which Marx realizes in his concept of practice: “All social life is essentially practical. All the

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mysteries which urge theory into mysticism find their rational solution in human practice and in the comprehension of this practice” (Marx and Engels, 1968:199; Marx’s emphasis). Benhabib’s objections to Hegel and Marx deprive her of the ability to see the universal as a relation of identity based upon difference within human practice. Thus, Benhabib objects to Habermas’s finding the highest moral and ethical identities as those established by Kohlberg (1986:322). But she has insufficient grounds for so doing, since Habermas satisfies the conditions for ethical identity which she demands: his definition is both abstractly universal and reflective in ways that place it over and above the social activities which it seeks to measure and judge. Her objection, that it excludes reasoning based on women’s social positionality, lacks grounds since it can be responded simply that women’s reasoning is a different and separate relation. In fact, concepts based on women’s social positionality take us much closer to human practice. Reasoning from social positionality needs the philosophical basis of dialectical and historical identity. Unless social positionality can be understood as simultaneously particular and universal, it risks being considered only as a particular and dismissed as a basis for universality and theoretical construction. It is this disregard that has so long plagued us in developing theories of class, race, and gender. In this same way, Habermas’s insistence on Kohlberg’s universals ignores the concrete and historically derived character of those universals. Nicholson and others in Feminism/ Postmodernism demonstrate many of the logical problems presently involved for theoretical construction based on social positionality. 6 Hegel recognizes that the problem of epistemology, of how and in what ways we can know anything reliably, is first of all a problem of logic. Kant poses the problem to which Hegel responds. If, Kant says, we know formal identity, that a thing is itself, that A=A, is a product of thought, then we cannot establish the existence of anything outside of our own thought. We must, in other words, always rely upon thought and the rules of formal logic and language to establish the existence of anything outside of them so that we can never really know that anything exists outside of thought and language (Hegel 1990:86–8). Hegel responds that the very statement of formal identity itself assumes the objective existence and development of that identity. Unless we arbitrarily and rigidly insist upon a single formal identity as we have identified it, then we must acknowledge that any identity presupposes its historical development and its interconnections to other identities outside of itself. In other words, if we postulate an identity, we have simultaneously postulated its existence beyond that identity. To deny its development is equally to deny the validity of the formal identity because we are then, in effect, demanding that it has only the name and form that we have given it; and to acknowledge its development necessitates also our investigation of its origins and that development (1990:68–108). It is on the bases that I have outlined that Hegel establishes the identity of opposites. If we acknowledge the development of an identity, then we must understand it as a relation of differences in development. We are, therefore, always inquiring into how its present form and existence is presupposed by its previous form and existence. In this way, we are always measuring it against itself in its own development. And, if we acknowledge the existence and development of something, then we must acknowledge also its previous non-existence. This non-existence means that we also know this identity only as a relation to other things as it evolved in its interconnections with them. Moreover, if we acknowledge this non-existence of any one thing, then we must similarly posit the previous non-existence of everything that now exists. Any existent, any form of being must logically be assumed to have come from nothing. But nothing is meaningful as a concept only in relation to being. On this basis, therefore, all things must be said to be somehow interconnected in their origins and development. Understanding how and in what ways is, again, the task of logic. Hegel was an objective idealist. He understood human existence as a reflection and development of ideas, of spirit, through themselves. And as ideas developed, their ideal forms

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were increasingly synthesized within human minds and institutions. On the one hand, he saw ideas and their development as an extension of God. On the other, as an expression of the logical requirements for the understanding of the objective development of ideas through one another, his philosophy had no need of God. If ideas could be understood as reflecting instead human activity and its own development, then Hegel’s logic anticipated Marx’s development of the concept of practice. Lenin commented in his Philosophical Notebooks on this dichotomy within Hegel’s work (1981:170–91). It was left to Marx to create the concept of practice and the philosophy of dialectical materialism exactly because the Hegelian dialectic was not oriented toward an understanding of human activity in its own right. Because Hegel looked upon the existence of universal forms as the objective creation of ideas perfecting themselves in the world, he always looked upon particular forms and relations within human existence as being created one-sidedly by universal determinations. This subordinated human particularities and activities to their determination through abstract general relation and gave Hegel’s universal the same abstract, imposed, and metanarrative character of the formal universals that I have described in this chapter. Marx made clear his opposition to this approach in 1843 in his critique of Hegel’s Philosophy of Right, as well as in his subsequent works. It is part of my argument here that Marx’s recognition of the particular and universal as mutually creative means that Marxism is not a metanarrative philosophy. Marx’s challenge to Hegel’s Philosophy of Right was that Hegel’s concept of the state was not fully dialectical because it did not understand that the universal and the particular are both equally concretely existent and created through one another. Marx begins his critique by paraphrasing Hegel’s definition of “concrete freedom.” “Hegel tells us that concrete freedom consists in the identity (as an ought, a dual identity) of the system of particular interest (the family and civil society) with the system of general interest (the state)” (Marx 1976a:5). Hegel poses concrete freedom as an individual identity in which the rights of families and civil society are derived from the quality of the state. It is the extension of civil law by the state that determines the character of their freedom (1976a:5–6). This represents, Marx says, a determination of the family and civil society by the state, but it completely ignores the determination of the state by families and civil society. Hegel fails to consider how the state and law are themselves created as universal and particular relations by the struggles of people for their own rights and freedom and the ways in which the forms of the state and law express these struggles. Hegel’s concept of the state not only ignores the “empirical clashes,” as Marx calls them, which surround its development. Families and civil society are the actual premises of the state and are its “genuinely active elements…but in speculative philosophy things are inverted. When the idea is made the subject, however, the real subjects; namely civil society, family, ‘circumstances, and caprice, etc.’ become unreal objective elements of the idea with a charged significance” (1976a:8; Marx’s emphasis). 7 Marx and Engels state in The German Ideology: The whole trick of proving the hegemony of the spirit in history (hierarchy Stirner calls it) is thus confined to the following three tricks.

1 One must separate the ideas of those ruling for empirical reasons, under empirical 2 One must bring an order into this rule of ideas, prove a successive connection

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made by thought). 3 To remove the mystical appearance of this “self-determining concept” it is changed into a person—“self-consciousness”—or, to appear thoroughly materialistic, into a series of persons, who represent the “concept” in history, into the “thinkers,” the “philosophers,” the ideologists, who again are understood as the manufacturers of history, as “the council of guardians,” as the rulers. Thus the whole body of materialistic elements has been removed from history and now full rein can be given to the speculative steed. Whilst in ordinary life every shopkeeper is very well able to distinguish between what somebody professes to be and what he really is, our historians have not yet won even this trivial insight. They take every epoch at its word and believe that everything it says and imagines about itself is true. (Marx and Engels1968:42–3) Efforts to understand the Marxist method and human society from phenomenological 8 approaches are unsatisfactory because they do not take us fully to Marx’s concept of practice. Phenomenology understands a phenomenon as socially constituted and, therefore, subject and object for the human individual. Within Marxism, this certainly represents an advance over the rigidities of Stalinist categories or those of structuralism. But the primary contribution which Marx’s concept of practice makes is that it allows us to understand any object as a relation within subjective activities which constitute it as object and as the basis for our own subjective activities. This requires an exploration of all of the activities which are presupposed and posited within the development of that object. This means investigating the full extent of its universalities as it is made universal through all of the particulars which make it universal and are defined as particulars through that universal relation. Among phenomenology’s contributions is to return us to a focus upon the social individual. I argue throughout this book, as well, that social individuality was central to Marx’s inquiries. But phenomenology tends to confine itself to the individual without exploring fully the social presuppositions of that existence. Consequently, Rosalyn Bologh, in Dialectical Phenomenolgy: Marx’s Method, for example, understands the individual as subject and object for her or his activities as they are constituted and constitute their social existence as a relation to language and signs. This reduces social activity back to language with all of the inherent problems that I discuss throughout this chapter. Carol Gould, in Marx’s Social Ontology, advances beyond this to social practice but in understanding social objectification one-dimensionally, she does not establish a practical critique which shows the socially and individually liberatory potentials within practice. For instance, in using the example of the automobile, Gould establishes the primary ways in which it is subject and object for the social individual, including personal mobility, traffic congestion, and pollution. But this does not disclose that the automobile itself is socially constituted by the need for common forms of transportation within universal urban space. It is exactly because the automobile is a personal form of transportation which has been used overextensively as a social form of transportation that we suffer all of the contradictions which Gould correctly cites. Nevertheless, this does not take us to the needs for common forms of transportation required of shared urban social space which are the bases for overcoming these contradictions. The limitations of the automobile as a particular for the reproduction of transportation requirements within the urban social universal is, moreover, attributable directly to capitalist dominance and its own limitations for social development. 9 Stalinist versions of Marxism recreate this gap between language and practice in their insistence upon the abstraction of concrete particulars and Marxist categories into a separate

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and primarily deductive system. The Stalinist interpretation of the commodity is an example of this. The commodity is understood as a category within Marxism, but not as representing an empirical and developing universal/particular relation under both capitalism and socialism. The commodity is, in this way, reduced, and restored from a dialectical to a formally logical category. On the one hand, capitalist commodities are interpreted as a formal universal sameness regardless of historical circumstance. On the other, commodities are perceived as different under monopoly capital, following Lenin. But it is not seen how commodities and monopolies exist, simultaneously and dialectically, as individual particulars and together and through one another as mutually defining and developing essences of capital. The categorical denial of the existence of commodities under socialism, on the basis of Marx’s “Critique of the Gotha Program,” meant that the Soviets were without necessary tools of logic to understand how they had in fact developed commodity relations in their own society. In all of these ways, the establishment of a unity of human thought and practice which socialism promised, and a sense of holism and control, eluded the Soviet system and undermined its existence (see Aganbegyan 1988; Bolotin et al. 1988). It is this ability to understand unities of theory and practice and the place and purpose of things within human experience, ourselves as the creators of the totality of our own social relations to nature and to one another, that is at the heart of dialectics and Marxism. These unities are essential to mutual social recognition, to political participation, and to human survival and development. 10 In attempting to restore consciousness, language, and other superstructural forms to positions of mutual determination within material activity, Terry Eagleton and Raymond Williams ultimately reduce practice back to language and consciousness. Eagleton states that the human animal is distinguished by the fact that it moves in a world of meaning and that these meanings are the bases for constituting its activities and are not secondary to them (Eagleton 1991:73). He says also that Marx and Engels verge on naive sensuous empiricism which fails to observe that there is no “real life process,” as they phrase it, without interpretation (ibid.: 75) Eagleton recognizes objective existence outside of language and he is correct when he says that consciousness is present on both sides of the expression of any material relation (ibid.: 73). That is, any expression in language and consciousness is both itself and a more general relation to the social presuppositions that make it possible. But understanding practical social activity requires understanding how language, meaning, and consciousness are posited by and for development within that activity, not vice versa. Language, meaning, and consciousness are “moments” or particulars within human practices that occur both inside and outside of them. This does not mean that they are less important than other material practices, but that they must be understood, like any other particular, according to their existence and mutual determination, within the totality of relations which make them possible in that way, in that form, and at that time. Williams is, therefore, correct when he says that consciousness and its products are always parts of the material social process itself (1976:60). But he is mistaken when, immediately prior to this, he corrects Marx and Engels in their view that there is first material social life and then, at some temporal or spatial distance, consciousness and its products (ibid.: 60). Capital accumulation, from its inception, is just such a process. It is a culmination of practical activities going on above, beyond, and behind the participants in ways that redefine their activities, and the meanings and interpretations that they give to them. The accumulation and management of money capital makes itself subject, as a particular empirical relation, for the guidance of other particular human activities as its object. And accumulation is simultaneously an object created through the diverse, opposing, and particular activities and consciousnesses of the many social subjects who form it, even as they are formed by it. The goal is to deduce and analyze all of these as relations within practical social activities rather than as expressions in language and consciousness. Language and consciousness per se, as Marx states in the Grundrisse, only more or less capture these activities (Marx 1986a:38–9). As he also says there, it is only when

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we imagine society, rather than individual or collective consciousness, as the subject and object of practical activity that we escape the cul-de-sac that makes language and consciousness the beginning and end of our investigations.

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INDEX abstraction 158–9, 165, 174, 182n Aglietta, Michel 176–7n agriculture 7, 44, 55, 58, 145 Airbus 114 Althusser, Louis 180n Anderson, Perry 175n Angotti, Thomas 130–1, 176n appearance, and identity 170–2 Apple Corporation 111 Aristotle 171, 182n Armstrong, Philip 57, 62, 91–2 Arthur D.Little 137 Asia: East 75, 99; Southeast 100 AT&T 81, 112, 123 balance of payments 85, 95 banks: international 73, 110; internationalization of US 70–8 Baran, Paul 3 base, and superstructure 168, 180n Bell, Daniel 134 Bell Laboratories 123 Benhabib, Seyla 182–3n Bettleheim, Charles 175n blacks: exclusion from workforce 61; wartime workers 54–5 Bologh, Rosalyn 186n Bolsheviks 44 bond issues 120–1, 135 bourgeois society 25, 171 Brazil 101 Bretton Woods Agreement (1945) 53–4, 63, 75, 118 Bridgewater Township, New Jersey123 British Commonwealth 71 Brookings Institution 64 business services 107, 112 Canada 101 capital 2, 26, 53–4, 167; assets 22;

Index

162

circulation of 24, 32–4; internationalization of 144–5, 154; logic of its evolution 169–70; and unity of production, distribution, exchange and consumption 128, 163–4; and the “value chain” 114–17 capital markets, international 110–11 capitalism: as basis for socialism 1–2, 42–4; and imperialism 24–41; incompatibility with own forms for social reproduction 1–23, 85, 93–4, 105–6; as the unity of production, distribution, exchange and consumption 11–12, 106 Castells, Manuel 26, 123–4, 177n centralization 36–8, 43, 112–14 China 102 cities 49, 128, 130 civil rights movement 59, 87, 93–4 civil society 185n class 26–30, 55; control 152, 167, 175n; limits 53–4, 65–6, 119–20; relations and spatial reproduction 122–5; struggles, US 58–9 collective bargaining 87–9 commodity 25, 186n; fetishism 3, 29–30, 143, 172; relations 67, 117–19, 144–5, 149–50, 154–5, 169–70, 172–3 (and social reproduction 126–7) community, loss of 138 computer-based technologies 14, 106–7, 141, 147, 178n concentration 36–8, 43, 97–8, 103, 112–14 conglomeration 70–4, 83, 85, 96–7 Congress of Industrial Organization (CIO) unions 49 consciousness, practice and 16, 158, 168, 175n, 187n consumerism, middle class 60–2, 65–6, 68, 69, 76, 79, 89–91 consumption, mass 146–7 consumption, politicization of 124–7 contracting-out 111–12 corporate development, contradictions in 85–7 corporate internationalization 70–4, 89–90, 96–104 corporations 29, 43–4, 167; core 81–2; “hollow” 112, 115, 147, 151; internationalization of US 70–8; self-financing 74–5 credit 38 deindustrialization 119, 133–4 demand management 149 democracy 153, 156, 174, 181n Democratic Party, US 93, 125 dependence, state 94, 126

Index

163

depression (1920s and 30s) 51, 80 deprivation, absolute 129, 130, 139–40, 142 deregulation 110, 124, 127, 139 Derrida, Jacques 181n development, social dualism in 122–7 dialectical materialism 23, 66, 157–74, 180n; and logic and social practice 164–8 dialectics 157, 172–4, 180n, 182n Dicken, Peter 99–100, 102 distribution 10; see also production dollar 62, 63, 109; international 63, 68, 73, 76, 77–8, 79; supply 84–5; vulnerability of 95, 118 downsizing 115, 151 Du Pont 111 DuBoff, Richard 32, 176n, 178n Dunning, John 98 Eagleton, Terry 175n, 187n East Anglia 133, 138 economic constraints 128–42 economic development: social economy and socialism 143–56; and the unity of production, distribution, exchange and consumption 153–4; and urban social space 130–6 economic internationalization, and social polarization 105–27 economic nationalism 64 economic planning 70 “Edge Cities” 122–5, 130–1, 132, 133, 138, 140 education 89, 140–1 employment: during WWII 54–6; Reich’s forms of 136–8 Engels, Friedrich, The German Ideology 6–7, 16, 165, 172, 176n, 185n environmentally noxious industries 100 equality 60, 152 essence 66, 170, 175n Eurodollar 73, 74, 78, 85, 96, 97 Europe, Western 57–8, 61, 62, 64 Europe, Western, trade barriers 73, 74 Europe, Western, US system of economic aid and development see Marshall Plan European Economic Community 72, 74, 101 European Union 126, 133 exchange 3, 10–11, 146–7, 150–1, 169; see also production; internationalization of 133–4, 135–6; relations 75, 108, 117; value 173–4 existence, social production of 6–8, 17, 91

Index

164

export of capital 40, 41, 45, 46, 47, 95 export-led growth 53, 62–4, 65–6, 68, 69, 76, 84, 97, 149 family 7, 185n fascism 45, 46, 48 Federal Reserve, US 51, 73 feudalism 145 Feuerbach, Ludwig 165–6 finance capital 38, 41, 146; international and public expenditure 120–1 finance markets, international 124–5 fiscal policy 13, 51–4, 57–8, 80, 82, 144; limits to 53–4, 117–22; and middle-income relation 89–92 “flexible accumulation” 116, 177n flexible specialization 132 Foner, Philip 60 Fordism 116, 175n, 176n formal logic 160–4 France 101, 113 Frankfurt School 175n freedom, Hegel’s “concrete” 184–5n full employment 59–60, 65; wartime 55–7 Full Employment Act, US (1946) 60 Garreau, Joel 123 General Agreement on Tariffs and Trade (GATT) 134, 135 General Electric 111 General Motors 81, 88, 113 Germany 47–8, 58, 101, 113 globalization 14, 83, 97, 109, 136–7, 148 Goethe, Johann Wolfgang von 168 gold reserves 62 gold standard, abandonment of the 118 “Golden Age” (1950s and early 60s) 67, 69, 77, 96–104, 106, 144 Gottdeiner, Mark 175n, 177n Gould, Carol 186n government: block grants 138; importance within capitalism 52; regulation of unions 78–9 Gramsci, Antonio 180n Greece 58 Greenbaum, Lucy 56 growth coalitions 81–2, 92–3 Habermas, Jürgen 183n Hanreider, Wolfram 72 Harlem 50 Harrison, Bennett 180n

Index

165

Harvey, David 26, 116, 177n Hayek, Frederick 59 health care, privatization of 141–2 Hegel, G.W.F. 157, 165, 183–5n Heidegger, Martin 175n, 182n Henwood, Doug 130 high technology complexes 133 highways 80, 81 home stores 131–2 homelessness 139–40 Hong Kong 99 housing 43, 49–50, 66, 80, 89, 90, 125, 138–40, 162–3 IBM 98, 111, 112 idealism 166 identity 157, 160, 169, 174, 180n, 183–5n; and appearance 170–2; ethical 183n Ilyenkov, E.V. 161–2, 165, 166 imperialism 39, 40–1, 42–64, 149, 176–7n, 179n; and capitalism 24–41, 43–4, 45, 77; postwar 42–64, 65, 68–70 import-substitution 101 income-based consumption 61, 84, 87, 94 incomes: government maintenance 138; “multiplier effect” 82, 176n individual, the 6, 171, 186n inequalities 43–4 information technology 107, 112, 141, 154 “Inner City” 122, 124 interest rates, dual 95 international cooperation 153 international corporations 75–6, 77–8, 85–6, 96–104, 106, 109 international corporations, and the “value chain” 117–22 International Monetary Fund (IMF) 63 international production 65–83; conditions for 98, 103–4 intervention 44 investment: corporate 135; crisis of social 92–3, 95; dependence on consumption 21–2, 149–50, 152; international 54, 68, 69–70, 85–7, 95–6; limits to productive 111–12; search for profitable 109–11, 178n, 179n; in urban social space 32–3 Ireland, Northern 138 Italy, manufacturing in Northern 132, 134 Itoh, Makoto 89

Index

166

Japan 57, 58, 61, 75, 113 Japan, zaibatsu 99 Johnson administration 92, 93 Kant, Immanuel 160, 183n Kennedy, John F. 92, 95–6 Kessler-Harris, Alice 55–6 Keynes, John Maynard 16, 21–2, 52–3, 54, 63, 71, 176n, 179n Keynesianism 52, 91–2, 119 Korea, South 99, 100 Kozol, Jonathan 140 labor: division of 7, 176n; international division of 75 labor costs, US 89 Labor Party, US 53 labor time 26, 169–70 Labour Government, UK (1950s) 71–2 language 158, 159, 166, 168, 175n, 181n, 186–7n Lebensraum 47–8 Lee, Seung-Chong 181n Lenin 26, 46, 49, 51, 157, 174, 180n, 182n, 184n, 186n Lenin, Imperialism 24, 25, 39, 40–1, 176n, 179n Lerner, Gerda 176n liberalism 45, 46, 48 Lindsay, Mayor John 93, 120 London: City of 71, 72; stock exchange 110, 135 London-East Anglia 133, 138 Maier, Charles 44 management: conglomerate 71; rights 88 Mann, Paul de 181–2n manufacturing workers 136–7 Marable, Manning 55 Marcuse, Herbert 175n market 158, 160, 161 Marshall Plan 64, 65–83, 87, 96 Marx, Karl 1, 3, 6, 10–11, 21, 24–5, 26, 28–9, 30, 38, 42, 143, 148, 166; Capital 157, 168, 170; The German Ideology 6–7, 16, 165, 172, 176n, 185n; ontology 155–6; political economy 8–9, 150, 172–1; production for capital 39, 43, 129; surplus value 27–8 Marxism, Western 175n materialism 166

Index

167

Mattera, Philip 82, 87 mergers 74, 151 metaphor 181n Mexico 99, 100, 101, 113, 136 middle class 14, 44–5, 50, 58, 79, 87; consumerism 60–2, 65, 68, 76, 79, 89–91 military: and R&D 117; spending, US 72, 85, 92, 96 military-industrial complex 56, 155 Mitsubishi Corporation 112 monetary policies 51–4, 57–8; restricted 117–22 money 21, 26–7, 37–8, 67, 82, 92–4, 106, 108, 143, 145, 154, 169–70; supply 51–2, 118 monopoly: capitalism 14, 40, 49, 56–7; corporations 39–41, 45, 47, 50–1, 65–7, 76–7, 84, 146–7 Montgomery Ward 99, 147 mortgages 139 Munich Agreement (1938) 48 national development 115 nationalized industries 58, 70, 100–1 neighborhood organizations 81–2 neighborhoods 3, 13, 15–16, 18, 43, 45, 66–7, 105–6, 108, 130, 131; development of 93, 143–4; middle-class 50, 90–1; and the unity of production, distribution, exchange and consumption 20–1, 23, 145–54 New Deal 53 New York City 93, 120–1 newly industrialized countries (NICs) 98, 101–2 niche production 114–15 Nicholson, L. 183n Nixon, Richard 118 North American Free Trade Agreement (NAFTA) 113, 135 North-South divide 75 offshore production 75, 99 “Operation Twist” 95 outsourcing 75 overaccumulation crisis 116, 178–9n Overbeek, Henk 179n partnerships 98 patriarchy 7, 48, 159, 164, 176n peacetime production 56–7, 62–3 peasant class 58 Penney’s 99, 147 phenomenology 185–6n phoneme 181n

Index

168

Plekhanov, G.V. 157 political constituencies, redefinition of 125 political development, contradictions in 91–6 political economy 8–9, 150, 172–4 politics: neighborhood-based (1960s) 133; social dualism in 122–7 postmodernism 167, 177n postwar expansion 42–64 postwar system against itself 84–104 practice 16, 158, 173, 175n, 187n; Marx’s concept of 165–6, 180–1n, 183n private appropriation 115–17; clash with public spending 120–1; international 76–7; and socialization 24–5, 41, 105–6, 153; TNCs as firm-specific 103–4 private finance, internationalization of 106 private funding of government 125–7 private property 30, 176n privatization 127, 149 production 3, 9, 10; for capital 39, 43, 129; distribution, exchange and consumption, unity of 9–16, 19–21, 79–82, 128, 145–54, 163–4; identity with consumption 79, 81, 132; integration with service 107; internationalization of 73–4, 147; mass 115; relations of 170 products: customer-driven choices 148–9; diversification 71, 114; international development 79; international sourcing 99–100 profit 38, 73–4, 93 profit-by-firm 71, 74, 83, 88, 97, 112, 147 “progressive” movements 50 public authorities 120–1 R&D 101, 140 racism 48, 55, 125, 139, 140, 159, 167 Reagan, Ronald 124, 140 Reagan-Bush administration 139 regionalization, and centralization 112–14 regions 108–9, 126, 131, 133–4, 138, 148 Reich, Robert 81–2, 136–8, 141 Republicans, US 92, 125 residential space 107–8, 130, 143–4, 147–8 rights, urban and welfare 67, 87, 153 Roosevelt, Theodore 50, 55 Rorty, Richard 182n

Index

169

Rugman, Alan 182n Saussure, Ferdinand de 181n savings 150, 152, 154 scale economies 4, 5, 34–5, 102 scope economies 4, 5, 34–5 Scotland 103 Sears 99, 147 services 107, 113–15, 134, 135–8 “shelter poverty” 139–40 shop stewards 49 shopping malls 117, 131, 155 Simons, Henry 59 Singapore 99 skills gap 141 slavery 7, 145 small businesses 91, 132, 133–4, 154 Smith, Adam 171 Smith, M.P. 176n social class see class social development: contradictions in 89–91, 128–42; and economic development 2, 126; imperialist 46–9 social economics, the premises of 16–23 social economy: economic development and socialism 143–56; and international corporatism 118; a theory of the 1–23 social exclusion 93–4 social polarization, and economic internationalization 105–27 social practice, and the logic of dialectical materialism 164–8 social productivity 31–5 social relations 164, 168, 173–4 social reproduction 2, 17, 18–20, 37, 66, 149; and commodity relations 55–6, 126–7; phases of 34 social requirements 42, 128–42, 148, 152–3; and limits to their development 136–42 social space 26, 36–41, 177n social system, and social class 26–30 social tensions 44–5 social time 27, 36–41 socialism 64, 105, 145, 153, 154, 156; and capitalism 42–4; economic development and social economy 143–56; origins of 1–2 socialization 3, 66–7, 81, 152, 154; of needs 137; and private appropriation 24–5, 41, 103, 105–6, 153 speculation 52, 110, 116, 118, 124, 151

Index

170

“stagflation” 109, 120 Stalinism 158, 168, 186n Standard Oil 81 state 176n, 179n, 185n sterling, 71 stock markets 151 Storper, Michael 178n strikes, US: (1930s) 49; (1946) 60; (1980s and 90s) 142 subcontracting 75, 99, 102 subjective activities 17–18, 35, 166, 186n suburban areas 79, 121 Sunbelt 135 superstructure, and base 168, 180n supply-side economics 149–50 surplus populations 129, 130 surplus value 27–8, 36, 86; absolute and relative 31 Sweezy, Paul 3 Switzerland 113 symbolic analysts 136, 137 Taft-Hartley Act 60, 78 Taiwan 99, 100 tangible assets 22 Tardanico, R. 176n tax system 110, 124 Thailand 100 Third World countries 75, 86, 98, 100, 101 thought, and object 159, 160, 165–6, 171–2, 175n transaction costs 4–5, 34–5 transfer payments 151 “transfer pricing” 117, 179n transnational corporations 69, 77, 96–104, 144–5, 149–50, 179n; countries of origin 112, 113–14; organizational models 103; relations to locations 100–2, 131; services and 113, 114–15 transnationalization, definition 98 transportation 31–2, 42, 50, 89, 106 Triffin, Robert 84 Truman, Harry S. 58, 60 underconsumption 111, 116, 138, 150, 151 underproduction 111, 116, 150, 151 unemployment 116; rate in US (1945–46) 63 unions 40, 55, 58–60, 65, 67–8, 80, 87–9, 161; cooperative model 84;

Index

171

middle-class membership 62; power limited 78–9, 97; and wage-productivity links 76; wartime 55, 56 United Auto Workers 60, 88, 113 United Kingdom 101, 113, 179n United Nations Centre on Transnational Corporations 98, 113 universal relations 160–4 urban politics 45–6 urban space 2, 3–4, 12–13, 14–15, 32–5, 43, 66, 105–6, 143–4, 150, 153, 154; and economic development 130–6; the politicization of 49–51; and unity of production, distribution, exchange and consumption 19–20, 79–82 US 42, 46–7, 113; national development and international development 51–4, 77–8, 117–22; postwar monetary and fiscal policies 51–4; premises for domestic expansion and limits 78–83 use value 169–70 USSR 102, 186–7n value: international sphere of creation 85–7, 103–4, 151; labor theory of 171 “value chain” 108, 114–24, 148 Vietnam War 85 violence 167 wage labor 36, 169–70 wage-productivity: agreements 87–9; relation 76, 83, 95 (international 69–70, 84; TNCs and 98, 103, 118) wages, inelasticity 109–110 wages, Marx on 28–9 Wagner, Mayor 93 Walker, Richard 178n Wall Street 74 war loans 46–7 Weisenbaum, Joseph 178n welfare 72, 151–2 West Coast longshore workers 88 West Indies 100 Williams, Raymond 187n Wilson, Charles 88 Wilson, Woodrow 50 Wittgenstein, Ludwig 180–1n women: equality for workers 59; exclusion from workforce 61; social positionality 183n;

Index

wartime workers 54–6 working class 12, 44, 59, 60–1, 79, 89, 175n working day, standardization of the 36 World Bank 63 World War I 46 World War II 48–9, 54, 80 Yudanov, Andrei 179n

172