[Marxism] Dueling Powers and Capitalist Property in the United States by Matt Russo

[Anthony Boynton]

*Dueling Powers and Capitalist Property in the United States*

by Matt Russo



(Please note that this is a reply to a document that I wrote called,  "Who
Gets to be a member of the ruling class?"    The key idea of that essay can
be grapsed in this excerpt,



"I think houses that are bought and sold in markets like any other commodity
are clearly a form of capital. The fact that the melt-down in the housing
and mortgage markets was the catalyst for the current plunge into economic
deep water ought to be a clue for anyone thinking about the topic (how's
that for mixing metaphors?)

"Home equity constitutes the most important form of capital owned by the
petty bourgeois strata of the working class, and is an important part of the
capital owned by the petty bourgeoisie per se.

"If you look at it this way, the current economic crisis can be seen in part
as a gigantic liquidation of the capital accumulated by the labor
aristocracy and the entire petty bourgeoisie.

"Is a house capital?
Are homeowners capitalists?
Who gets to be a member of the capitalist class?"



The whole document can be found at,
http://marxredux.blogspot.com/2008/11/who-gets-to-be-member-of-ruling-class.html



It can also be found in the November marxmail archives.)



* *

Is worker-owner occupied housing a form of capital? This to be precise,
since second or third houses are obviously in almost all cases a form of
capital. And if so, does this make the worker-owner a member of the "ruling
class"? The answer to the first can be yes if it can be shown that owner
occupied housing circulates in the the form of commercial or merchant's
capital. The worker who is paid enough to afford a mortgage can act as a
merchant upon sale of the house, carrying out an arbitrage not over space,
as with the classical merchant, but over time sufficient to realize a cash
equity upon that sale. What is put forward here is that this has been the
case with the United States throughout its history, and - outside the
smaller Anglo settler states of Canada and Australia/New Zealand - was
uniquely the case with the U.S. until quite recently, when "home ownership"
as a speculative commodity spread to selected parts of Western Europe and
East Asia, and even more recently beyond the core of key imperialist states
in to the Mediterranean zone, Eastern Europe and major Russian cities, as
well as parts of China, India and the Middle East, giving for the first time
in history a global scope and force to the present mortgage bubble bust and
subsequent financial collapse. In many of these latter countries it is not
at all clear that owner occupied housing has been the speculative plaything
of privileged proletarians, but there can be no doubt of this in the case of
the archetype, the United States. The focus, then, will be limited to this
state. It should be a timely focus, as the present financial and economic
crisis has precisely as its central question the viability of this hybrid
form of capitalist property - a.k.a. "The American Middle Class".



That the well paid worker has to carry out this mercantile arbitrage over
time speaks to the fact that this particular (indeed peculiar) form of
capitalist property is the result of not one but multiple determinations,
which are not simply that of the superstructure of imperialism which permit
capitalists to pay "surplus wages" to workers of imperialist countries, but
historically in the case of the U.S. also took the form of the small
freeholder state (first fully realized under Andrew Jackson), fed by a
surplus that was the result of a classic act of primitive accumulation in
the form of the expropriation of an entire continent from its original user
inhabitants, and was generally not the the fruit of an imperialist hegemony
or domination exercised over other states, feudal, modern or otherwise by
the U.S.. The post-agrarian successor form at the end of the 19th century
was as a component part of variable capital, coinciding with the rise of
American state power in the world system, enabling a surplus to be
redistributed by means of successful interimperialist competition to workers
wages in the U.S.. It is critical to grasp here that the very recent legacy
- a legacy still living all the way up to World War 2 - of the agrarian
freeholder state acted as a powerful lever to force the redistribution of a
portion of the surplus into worker's wages sufficient to enable home
ownership. This potential merchant's capital is at the same time, and in the
meantime, a component of consumption necessary for the reproduction of labor
power. To realize this potential required that a portion of that variable
capital be transformed into homeowner property by means of the mortgage.



It is for this very reason that a third determination must enter, that of
money capital in the form of residential mortgages, for even the highly paid
worker must still, as a worker, reproduce their capacity to labor on a daily
basis, and cannot suspend this process in regards to shelter for their
family for the 20 - 30 years required to accumulate the sum to purchase the
residence outright. The worker is, so to speak, in the reverse position of
the banker, lending their labor power short - for as Marx pointed out labor
power is always expended in advance of its payment in wages - while
borrowing long for ownership of housing as mercantile speculation over time.
In other words this particular form of variable capital is a near perfect
market complement to banking capital, and in sum this particular form of
capitalist property assumes the form of variable capital (for the employing
productive capital), commercial capital (for the worker-owner) and money
capital (for the banker-creditor). It therefore traverses all three main
spheres of capitalist production as a whole: commodity production,
circulation, and realization of capital as a commodity. This can give it a
profound weight in capitalist society as a whole should this form of capital
attain sufficient economic weight. However an entire historical transition
had to be navigated before a substantial layer of the U.S. working class
could replace the former settler agrarians as the mass foundation of the
freeholder state. This substitution, preserving the old 19th century basis
of the state, was truly a social innovation of U.S. capitalism. At the same
time it also involved maintenance of the 19th century structure of "dual"
balance of power in the state that acted as a constraint upon the capitalist
class. Understanding this transition and its structure will go a long way to
explain why a "socialist consciousness" has not yet developed in the
American working class.



As to the second question: "Who is a member of the ruling class". Here first
of all there is some potential for confusion in the manner of phrasing the
question. The "ruling class" is neither identical to the capitalist class
nor the capitalist class plus the mass of the petit bourgeoisie. For the
word "ruling" to have any meaning here, it must be distinguished from the
concept of a socially dominant class. The capitalist class per se, as owners
of the majority of capital, is the socially dominant class, but it is far
too tiny a percentage of the population to actually rule society directly.
For that it has always required an extended layer of petit bourgeois
intellectual functionaries in all spheres of social life - constituting a
sort of "ideological apparatus", as Althusser might have put it (though not
necessarily "of the state", where I think Althusser errs, as this apparatus
is not necessarily coterminous with the state). It is this layer that
permits the capitalist class to reproduce itself as the dominant class while
this layer is also the favored route of the petit bourgeois into potentially
entering the capitalist class, although the vast majority remain in this
nevertheless most privileged sector of the petit bourgeoisie. In the
definition here, the sum of these constitutes the "ruling class". The early
modern bourgeoisie ruled exclusively in this manner up until the French and
American Revolutions.



Between the American, French and Jacksonian political revolutions we have
the emergence of a "democratic" petit bourgeoisie forming a sphere of "civil
society" beyond the state as both a mass social support for, and constraint
upon, capitalism. With this a second determination enters in the definition
of "ruling class" in the form of a distinction between "ruling" and
exercising a limited and partial power in the state. The ruling class in
this case rules "hegemonically" in conjunction with some form of small
capitalist property. This also led to a distinction between political
regimes in the 19th century and persisting well into the 20th. At one pole
were the "Britains", including post 1871 Germany, Italy, Japan and so forth
, relatively narrow capitalist oligarchies ruling still in the 18th century
manner where land ownership was monopolized by a post-feudal
pseudo-aristocracy and therefore had a weak mass petit-bourgeoisie excluded
from the exercise of power in the state. This is generally the situation of
"ground rent" as Marx analyzed in Vol. 3 of Capital. At best in this case,
as in Britain, there was a layer of small "shopkeepers" consisting of a form
of capitalist property divorced, though, from ownership of land. These
shopkeepers could therefore just as easily bloc with the emerging
propertyless London proletariat as with the political regime, as they did
until the Napoleonic Wars, or with the Chartist movement at the latest.
France, as a result of the Revolution, was an intermediate case, with a
politically active rural and urban mass petit bourgeoisie in an unstable
balance with the capitalist class that oscillated between Bonapartist and
parliamentary regimes at least until 1871, when this pattern came to an end
with the suppression of the Paris Commune. Its Bonapartist phases reflected
a rise in the influence of the petit bourgeoisie in the state, but the sharp
difference in forms of capitalist property between the petit bourgeoisie of
the city and country prevented a stable and enduring representation in the
state based on a homogeneous form of property - instead the rural petit
bourgeoisie, following the Napoleonic tradition, tended to favor the Army as
representative institution.



The origin of the small freeholder form of capitalist property in the United
States as a foundation of the state, and its transformation into the form of
the worker homeowner as a continuation of that foundation, will be covered
in the next installment.