On Credit
Reflections on administered credit & the global supply chain
Reflections on administered capital & the global supply chain
1. The Illusion of Working Class Diminution
For contemporary Marxists in the west, the decades-long process of de-skilling, compartmentalisation, complexification, and financialisation of the labour process has, by most accounts, produced profound diminutive effects upon labour power. Such a seismic transformation as has been experienced over the last fifty-or-so years has cultivated two major threads of assumption when analysing the working class in this state: that the worker has become an unviable political category, or that they remain viable only beyond the horizon of local relations of production; in the first instance something we can broadly lump in with the partisans of critical theory and allied disciplines, in the second the catch-all conception of ‘Third Worldism’.
In either case, the class relation appears suspended. In such dire circumstances for the labour movement, the capitalist class would have provably won out. Marxism must now be definitively repudiated as a relevant form of analysis or activity, subordinated to one among many theoretical postures, a formal abstract relation in a horizontal critical-analytical schema.
There remain some oppositional Marxists who hold to ‘traditional’ presumptions, engaging in a so-called ‘class reductionism’ which privileges the contemporary persistence of an impoverished wage-earning strata (over and above other abstract forms) as evidence of the validity of the ‘classical’ conception of Marxism. This classical Marxism, however, covertly concedes to their enemy, analysing the proletariat only in terms of a superficial relationship, that being their wage labour plus their impoverishment. Needless to say, wage labour + impoverishment alone does not suffice as the essential reality of the proletariat, at least by the criteria established by Marx. These characteristics hold no essential bearing on the quality of the work performed by the wage-earner, nor the quality of the wage, as in the actual content of pay packet, for example. A significant transformation in this content is vital to understanding what our modern working class actually is, divorced from both the relativism of the academics and the reductionism of the traditionalists. In the contemporary world, the wage is not merely conditioned by the relations of production, but the credit relation; the wage flows immediately into debt servicing, rent, and financialised consumption in a way that is qualitatively different to the earlier ‘classical’ form, wherein the wage accounted for the exploited share of a worker’s productive value. Even if the contemporary sum of the wage is proportional, or even identical, to that of the ‘classical’ wage (with regard to purchasing power, etc.), that holds no bearing on the qualitative distinction at the essential level between today’s and yesterday’s wage-form. The wage comes pre-spent by a financial machinery to which the worker is not only subservient, but intractably enmeshed.
In order to reinvest Marxism with some vitality for our present situation, the actual site of production must be located against the presumption that it has simply disappeared or been relocated abroad. Understanding where to locate the working class today requires the location of where productivity is.
2. Credit
For Marx, discrete formal objects and empirical relations only afford a partial view of the actual nature of production, necessitating a process of abstraction, that the common-sensical (positivist) schema of the abstract being a property of the concrete is a faulty, inverse orientation: ‘the sensibly-concrete counts only as the form of appearance of the abstractly general and not, on the contrary, the abstractly general as property of the concrete.’ (Capital Vol. I, Value-Form Appendix). If the point of abstraction in Marxism is, broadly speaking, to arrive at the general features which give rise to capital, labour, etc., and also accepting that there has been some fundamental alteration in the underlying reality of the wage-form, then we are compelled to call into question the inherited, formal conceptions of capitalism’s essential-reality as purported by classical Marxism. From this initial suspicion, to then locate and understand what abstract form gives rise to relations of production in our period.
As we have discussed with regard to the modern wage form, the continued assumption of profit as the key driver of production has become fundamentally suspect. Rather, credit, which is the measure of anticipated return on investment, circulating through central banks and ‘universal owner’ firms (Metacartel) have taken a determinate position in the driving force of production. We see, for instance, how BlackRock and Vanguard, determinate owners in the system of production, have shifted from metrics of actual quarterly profit to ‘Sustainability’ and ‘ESG’ scores in order to determine creditworthiness, rather than profitability. As Marx abstracted from the apparent diversity of commodity exchange to arrive at abstract labour, the same procedure applied to contemporary capital arrives at the structural primacy of administered credit, with profit reduced to one input or signal among many in the assessment of creditworthiness.
3. The Temporal Restructuring of Capital
The essential movement of capital as outlined by Marx is M – C – M’ (where M = Money; C = Commodity; M’ = More Money), wherein the increment (surplus value) determines the circuit. Profit, being the phenomenal form of surplus value, formally signals that the circuit has been completed, that living labour has been set to work, value produced, and the surplus extracted in the process of commodity exchange.
From this assessment, outlined in Capital, classical Marxism presupposes that for the last century or more nothing has essentially deviated in this schema, that profit remains the tangible driver of capital, with credit functioning as a formally subordinate but materially necessary lubricant for accumulation at scale. In spite of this assumption, no attention is paid to the possibility that the temporal structure of the M – C – M’ circuit may be fundamentally extended, and that by such a radical extension would necessarily undergo a qualitatively reconstitution.
Credit in its classical type functions simply to anticipate surplus value, to allow production to proceed before the actual process of valorisation (the transition from C to M’) is complete. In prior periods this anticipation was relatively short, typically seasonal and tied to the physical process of production, with the bill of exchange generally referring to actual commodity shipments. (Capital Vol. III, Chapter 25).
What is decisive in our period is that this process of anticipation has become so radically extended that the connection between any given credit instrument and surplus value production has become, from the standpoint of the capitalist, functionally indeterminate. Derivatives, collateralised debt obligations, credit default swaps, etc., today function as distributions of compounding, nesting chains of claims on claims of future surplus value or the volatility of those claims (risk) rather than proximate claims on actual surplus value. Credit ratings, yield spreads, and the cost of borrowing have assumed an allocative signal function. Capital flows not determinately to where profit is being made but to where ‘creditworthiness’ is identified; in other words, a given firm can remain unprofitable for years, and yet attract enormous capital inflows if its credit conditions are deemed favourable.
Conditions of favourability are themselves not by necessity determined by profitability or tangible prospects of future valorisation but instead to broader social determinations beyond classical assumptions of creditworthiness. For instance, as in the National Security and Investment Act 2021, a given firm’s importance to national security objectives in regards to supply chain maintenance holds immense determination over basic creditworthiness in profitability-terms: commitments to national security, alongside aforementioned ‘Sustainability’ targets and so forth, demonstrate that the reproduction of society itself takes precedence over and above the apparent foundations of said society in regards to its self-conception as being properly ‘capitalist’.
As the joint-stock company was for Marx ‘the abolition of the capitalist mode of production within the capitalist mode of production itself’, the socially-determined credit system is the abolition of the market allocation of capital within the market form. Credit, circulating through nominally market institutions wherein its allocation has been determined by explicitly social criteria, administered by state institutions on the basis of societal reproduction rather than profitability, is itself ‘a self-dissolving contradiction’, still incubating as a ‘mere phase of transition’ wherein a mode of production qualitatively distinct from capitalism takes form. See the bailout culture that has emerged since 2008, such that we are rife with firms that are too big to fail dictated not by the whims of the market, but by the requirements of the state.
In much the same way that the British state is still a monarchy while feudalism no longer serves as its undergirding economic ground, ‘capitalism’ – as understood both by its advocates and by classical Marxists – is no longer a useful or realistic descriptor for the contemporary mode of production. For classical Marxism, it’s considered a scandal to entertain the proposition that profit has been dethroned in the logic of capital, subordinate to the lesser position of an abstract signal for the sake of credit issuance. Despite its scandal, a realistic inquiry cannot help but deliver the critic to such a conclusion.
4. The Redistribution of Labour Power
Marxists (all variants) agree that abstract, undifferentiated labour must necessarily still exist, but that the various concrete forms of abstract labour, their determinate import, have changed. In accepting Marx’s treatment of abstract labour while keeping in focus the numerous compounding revolutions in the forces and relations of production since the writing of Capital, the fundamental contradiction between our tremendously increased technological potential for productivity and our actual output per worker arises as a (perhaps the) fundamental tension at the heart of the contemporary order.
The mechanism of this stagnation is the credit system itself. By sustaining non-value-generating firms and sectors, administered credit has given rise to a vast labour force whose wage is underwritten by the financial apparatus rather than by any tangible productive output. Human energy, value-generating labour, has concentrated near-totally into the shrinking but irreducible core of supply chain logistics, a concentration coterminal to the ballooning of socially unnecessary labour time. While our technological capacity should allow for a radical reduction in the working day, the credit superstructure requires constant consumption-driving output. It prioritises the survival of the debt-loop over the physical investments – such as, for instance, reducing energy costs – that might serve to increase overall productivity in real terms.
By this, the class struggle in Britain cannot be said to have actually diminished in actuality, that it qualitatively rages as it always has done since the inception of industrial modernity, since the first tools were downed. The success of class struggle in any period can’t be reduced to the quantity of workers or the quantity of strikes; socialists can only locate the ground of political development, the criteria and veracity of their work, through interrogating the quality of labour and therefore the quality of a strike, from there tracing by way of concrete-abstraction the real movement for the realisation of socialism. Notions of anti-imperialism, internationalism, and anti-fascism – all iterative developments upon the core insights of Marx, suspended as they are in formal traditionalism – take on a concrete and decisive character today if drawn from the direct operative experience of organised labour embedded in organising, operating, and maintaining the global supply chain.
5. The Generalised Supply Chain Strike
Whereas one might expect otherwise, given the generally atrophied level of Communist and Marxist organisation in Britain, the National Union of Rail, Maritime and Transport Workers (RMT) likely has the highest density of Marxists within the commanding heights of their organisation, and a relatively high (and growing) density of Marxist rank-and-file. Italian logistics workers also claim relatively high militancy and Marxist density through the CGIL, as do their French and Spanish counterparts (see the development of logistic union blockades in Italy, the French CGT-Transports and SUD-PTT vanguard of the interprofessional strikes of 2019 & 2023, and the Spanish Platform trucker strikes of 2022, of course on top of the 2022 and 2023 RMT strikes in the UK). The form of labour and the formal ‘industrial unionist’ aspirations of these unions (the RMT in particular) afford a degree of militancy which is otherwise intangible or inopportune for organised labour in other key industries. Communist consciousness is still determined in a profound way by a direct, tactile relationship to value generation.
At present, Marxism typically serves the function within these unions as a formal cultural traditionalism, permitting workers in the here-and-now to interface with and identify in past struggles, with the wider socialist/communist project, and so on. There is then the potential for a rectification of this tradition into operative method, realising the concrete identity between Marxism and organised labour over the ephemeral, abstract, and mythic association which presently renders organised supply chain labour at the same time culturally enriched while also formally tied to the vestiges of something qualitatively overturned, and therefore useless to them. If we accept that the (productive) working class is now situated almost exclusively within logistics, then the notion of the general strike, one of the premier formal inheritances of the labour movement, becomes a questionable proposition. As the Iranians have demonstrated this last month-or-so in the Strait of Hormuz, the constraining of global supply choke points has assumed a determinate position in the logic of global economic affairs. Reflection on recent events then leads to a possibility beyond the narrow scope of the general strike, supplanted by a generalised supply chain strike.
Necessarily such a strike would entail global coordination and would be led by organised labour in the logistics sector; other unions or other workers might demonstrate solidarity in some form or another, and may be capable of intensifying pressure, but will not be the initial determinants in this struggle. Demands can then be levelled not just towards the various firms, private or public, which claim control of various aspects of the supply chain, but also to the central banks which underwrite the global supply chain in its interrelation with the administered credit system.
A generalised supply chain strike affords a realistic, concrete, and determinate method by which autonomous working class power can be achieved; the globalisation of labour struggle, and therefore the globalisation of the concessions made from capital to labour. At the level of the credit system, a logistics strike that threatens supply chain continuity threatens the creditworthiness assessments of every firm dependent on it, which in the contemporary arrangement threatens the systemic stability that the present order exists to maintain. The strike therefore forces the credit system to reveal its dependence on physical production, making visible the contradiction between the credit superstructure and its productive basis that administered capital permanently works to conceal.
Here then arises the greatest potential leverage that the labour movement has for the exposure of the contradictions of the present system, and toward the formal instantiation of a socialised mode of production in which the relations between people and things are not mystified and occluded by nostalgia and dogma – the cult of profit – but revealed in their fullness for the rational re-organisation of capital to the benefit of mankind. In turn, the labour movement must rid itself of the idols and fetishes of prior analytical frames, take hold of this leverage, and administer the pressure needed to engender the next phase of the socialist transition.