Chapter 32. Militarism in the Sphere of Capital Accumulation

Militarism carries out a very determinate function in the history of capital. It accompanies the progress of accumulation in each of its historical phases. In the period of so-called “original accumulation,” i.e. at the origins of European capital, militarism plays the decisive role in the conquest of the New World and the Asian spice-producing countries; later, it plays the same role in the subjugation of the modern colonies, the destruction of the social forms of organization of primitive societies, and the appropriation of their means of production, the imposition of commodity exchange in countries whose social structures constitute an obstacle to the commodity economy, the forcible proletarianization of the indigenous inhabitants, and the imposition of wage labor in the colonies. Similarly, it plays the decisive role in the formation and extension of the spheres of interest of European capital in non-European regions, in the extraction of concessions for the construction of railways in backward countries, and in enforcing the claims of European capital as an international creditor. Finally, militarism plays the decisive role as a means of competitive struggle between capitalist countries over areas of noncapitalist civilization.

These are supplemented by another important function of militarism. From a purely economic standpoint, militarism constitutes a preeminent means for the realization of surplus value—i.e. as a sphere of accumulation. In examining the question as to the identity of the potential purchasers of the mass of products containing capitalized surplus value, any suggestion that the state and its organs might provide consumers in this capacity has been consistently rejected in this study. As the representatives of derivative sources of revenue, state officials were ranged under the same category as the beneficiaries of surplus value (or to a lesser degree, they were included under the category of recipients of the wage), alongside the representatives of the liberal professions, and sundry hangers-on of contemporary society (“king, priest, professor, prostitute, mercenary, etc.”).³⁶¹ However, to dismiss this solution in this way is only valid under two presuppositions: first, it must be assumed, in accordance with Marx’s schema of reproduction, that the state disposes of no other sources of taxation than capitalist surplus value and capitalist wages;³⁶² second, the state and its organs must be considered only as consumers. If, following this second assumption, the personal consumption of state officials (and thus of the “soldier”) is taken into account, this is counted as a partial transfer of consumption from the working class (insofar as this consumption derives from taxes paid by workers).

It can be temporarily assumed that the whole amount of indirect taxes squeezed out of workers, which represents a deduction from their consumption, is used to pay the salaries of state officials and to provision the regular army. In this case, there will be no change as far as the reproduction of total social capital is concerned. Both the department producing means of consumption and, consequently, the department producing means of production remain unaltered, since the total requirements of society have not undergone any qualitative or quantitative change. The only shift that has occurred is merely that the relation in value-terms between variable capital (which represents the commodity of labor-power) and the products of Department II, i.e. means of consumption. The same variable capital—the same monetary expression of labor-power—is now exchanged against a lesser quantity of means of consumption. What happens to the resulting remainder of products from Department II? It is transferred to state officials and to the armed forces. The decrease in workers’ consumption is compensated by new consumption by the organs of the capitalist state. Thus, if all the conditions of reproduction remain unaltered, a change in the distribution of the total social product has occurred: of the products of Department II previously allocated to the consumption of the working class (equivalent in value-terms to the variable capital), a portion is now allotted to the consumption of the strata appended to the capitalist class. From the standpoint of social reproduction, this displacement effectively gives the same result as if the relative surplus value generated had been increased by the same quantum of value, with this increase being allocated to the part of surplus value earmarked for the consumption of the capitalist class and its appended strata.

As such, the squeezing of the working class through the mechanism of indirect taxation in order to maintain the structures of the capitalist state apparatus amounts to a mere increase in surplus value, and, more precisely, an increase in the part of surplus value that is consumed; the only difference is that this is a further division between surplus value and variable capital post festum—i.e., one that occurs after the exchange between capital and labor-power has taken place. This consumption by the organs of the capitalist state has no bearing on the realization of capitalized surplus value, because the increase in surplus value consumed occurs ex post, even if it happens at the expense of the working class. To put it the other way round: if the working class did not bear the bulk of the costs of maintaining the state officials and members of the armed forces, they would have to be met in full by the capitalists themselves. The latter would have to allocate a corresponding portion of surplus value directly to the maintenance of these organs of their class rule, either by forgoing an equivalent portion of their own consumption, or—the more likely scenario—by deducting it from the portion of surplus value earmarked for capitalization. In the latter case, they would only be able to capitalize a smaller amount of surplus value, because they would have to use a part of it for the direct maintenance of their own class. The displacement of the bulk of the costs of maintaining the strata appended to the capitalist class onto the working class (and onto those engaged in simple commodity production: peasants, artisans, etc.) allows the capitalists to set free a larger portion of surplus value for capitalization. This does not as yet generate the possibility of this capitalization—i.e., this does not as yet generate any new markets in which to realize the new commodities that would now actually be produced with the surplus value that has been set free. It is a different matter if the revenue from taxation is used by the state for the production of means of warfare.

Through indirect taxation and high protective tariffs, the costs of militarism are mainly paid for by the working class and the peasantry. These two forms of taxation are to be considered separately. As far as the working class is concerned, the transaction comes down to the following in economic terms: presupposing that wages do not rise in line with rising food prices, which is currently the case for vast masses of the working class, and also largely corresponds to the situation of the unionized minority as a result of the pressure applied by cartels and employers’ organizations,³⁶³ indirect taxation implies the transfer of a part of the purchasing power of the working class to the state. As a determinate quantity of money capital, variable capital serves in all cases to set the corresponding amount of living labor in motion, so that the corresponding constant capital is used for the purposes of production and a corresponding quantity of surplus value is produced. After this circulation of capital has been completed, a distribution between the working class and the state occurs: a part of the quantity of money received by the working class as wages in exchange for its labor-power is handed over to the state. Whereas the former variable capital is entirely appropriated by capital in its material form as labor-power, only a portion of the money-form of variable capital is retained by the working class, with the remaining portion being transferred to the state. This transaction occurs—behind the back of capital, so to speak—each time after the circulation of capital between capital and labor has been completed; it has no immediate bearing on this fundamental dimension of the circulation of capital and the production of surplus value, nor does it concern it in the first instance. Yet it certainly affects the conditions of the reproduction of total social capital. The transfer of a part of the purchasing power of the working class to the state signifies that the share of the working class in the consumption of means of subsistence has decreased by the same amount. For the total social capital, this implies that, for the same quantity of variable capital (as money-capital and as labor-power) and the same amount of surplus value appropriated, it must now produce a decreased quantity of means of subsistence for the maintenance of the working class; in actual fact it now assigns a decreased share of the total social product to the working class. It follows that, in relation to the value-magnitude of variable capital, a reduced quantity of means of subsistence will now be produced in the reproduction of the total social capital, since the ratio in value terms between variable capital and the quantity of means of subsistence in which it is realized has itself been altered: the amount of indirect taxation manifests itself in price increases for means of subsistence, whereas, under the assumption made here, the monetary expression of labor-power remains constant, or at least does not rise in line with price increases for means of subsistence.

What kind of displacement will occur in the material relations of reproduction as a result? Through the relative reduction in the quantity of means of subsistence required for the reproduction of labor-power, a corresponding amount of constant capital and living labor is set free. This constant capital and this living labor can be used for other kinds of production insofar as new requirements backed by the ability to pay are generated in society, or new effective demand. This new demand is now generated by the state with the portion of the purchasing power it has appropriated from the working class by means of tax legislation. In this case, however, the state does not generate demand for means of subsistence (disregarded here are the means of subsistence that are required for the maintenance of state officials and paid for out of tax revenues, for the reasons alluded to previously in the consideration of “third parties”), but rather for a specific type of product: the means of waging war on land and sea required by militarism.

In order to examine more closely the resulting adjustments in social reproduction, the example of the second Marxian schema of reproduction will be recalled:

I. 5,000c + 1,000v + 1,000s = 7,000 means of production

II. 1,430c + 285v + 285s = 2,000 means of consumption

Let it be assumed that real wages—i.e. the consumption of the working class—are in total reduced in value terms by 100 through indirect taxation and the resulting price rises in means of subsistence. The workers still receive 1,000v + 285v = 1,285v in money, but in reality they only obtain means of subsistence to the value of 1,185. The sum of money of 100 corresponding to price rises in the means of subsistence is transferred to the state in the form of taxes. Let it be assumed that the state also receives tax revenues of 150 from peasants, etc., making a total of 250 to spend on means of warfare. This amount of 250 constitutes new demand, in this case for means of warfare. For the time being it is only the sum of 100 deriving from wages that concerns the analysis here. In order to satisfy this demand for means of warfare to the value of 100, a corresponding branch of production emerges, requiring a constant capital of 71.5 and a variable capital of 14.25 (assuming an equal—i.e. average—organic composition):

71.5c + 14.25v + 14.25s = 100 (means of warfare)

This branch of production further requires the production of means of production to the value of 71.5 and means of consumption to the value of approximately 13 (corresponding to the reduction in real wages of approximately , that now also applies to these workers).

Here the objection might immediately be raised that it merely appears superficially that a profit arises for capital from this new market expansion, since the reduction in actual consumption by the working class will inevitably result in a corresponding reduction in the production of means of consumption. This reduction will be expressed in the following proportion:

71.5c + 14.25v + 14.25s = 100

Furthermore, the department producing means of production will also have to contract accordingly, such that the value-product of the two departments will now be as follows as a result of the reduction in working class consumption:

I. 4,949c + 989.75v + 989.75s = 6,928.5

II. 1,358.5c + 270.75v + 270.75s = 1,900

If, through the mediation of the state, the same value of 100 now elicits production of means of warfare to the same value, and provides a corresponding further stimulus to the production of means of production, this appears at first sight to be a merely superficial adjustment in the material form of social production: a given quantity of means of warfare is now produced instead of a given quantity of means of consumption. On this argument, capital has gained with one hand what it has lost with the other. The point could be made as follows: for the contraction in the market affecting the large number of capitalists producing means of subsistence for workers, there has been a corresponding expansion in the market for means of warfare to the benefit of the small group of large-scale industrialists in this branch of production.

However, the matter only presents itself in this way from the standpoint of individual capitals. From this standpoint, it certainly makes no odds whether production turns to one sphere or another. As far as the individual capital is concerned, there are no departments of total social production such as those distinguished by the schema: there are merely commodities and purchasers, and in itself it is a matter of complete indifference to it whether it produces means of subsistence or means of destruction, canned meat or armored plating.

This point of view is often adduced by the opponents of militarism to argue that, on an economic level, capital invested in means of warfare only benefits one set of capitalists at the expense of another.³⁶⁴ On the other hand, capital and its apologists seek to impose this point of view on the working class by giving them the line that indirect taxation and demand generated by the state constitute a mere adjustment in the material form of reproduction; instead of other commodities, cruisers and guns are produced, but such production equally provides employment and a livelihood for workers, and might even improve the situation in this regard—so the argument runs.

A cursory look at the schema shows how much truth there is in this argument as far as the workers are concerned. Assuming, for the sake of comparison, that as many workers are employed in the production of means of warfare as were formerly employed in the production of means of consumption for wage-laborers, they will now receive means of subsistence to the value of 1,185 in performing labor corresponding to wages to the value of 1,285v.

Things are different from the standpoint of total social capital. For the latter, the state revenue of 100, which represents a demand for means of warfare, presents itself as a new market sphere. This sum of money was previously variable capital. It has fulfilled its function as such, having exchanged itself against living labor, which in turn has produced surplus value. It now interrupts, and separates itself off from, the circulation of variable capital, in order to present itself as new purchasing power in the form of state revenue. It has been created out of nothing, as it were, and functions exactly like a sphere of the market that has been newly opened up. It is true in the first instance that capital will find that the market for workers’ means of subsistence has contracted by a value of 100. For the individual capitalist, it makes no odds whether the consumer and the purchaser of commodities is the worker, the state, the peasant, or “another country,” etc. It should not be forgotten, however, that the sustenance of the working class is merely a necessary evil for total social capital, a mere deviation on the path toward the actual goal of production: the generation and realization of surplus value. If it can find a way to extract the same quantity of surplus value while providing labor-power with a reduced amount of means of subsistence, so much the better for the bottom line. In the first instance, it is essentially as if capital had managed to reduce wages (without any price rises in means of subsistence) by a corresponding amount without decreasing the labor performed by the workers. However, a continual reduction in wages would ultimately entail a contraction in the production of means of subsistence. Capital is untroubled by the fact that it will have to produce fewer means of subsistence for workers when it carries out daylight robbery on their wages, and in fact it pursues any opportunity to do so with heart and soul; capital as a whole is equally sanguine about the fact that there will be a reduction in working class demand for means of consumption as a result of indirect taxation that is not compensated by wage increases. Indeed, when there are direct reductions in the wage, the capitalists pocket the difference in variable capital; such wage reductions increase relative surplus value, assuming commodity prices remain constant, whereas with indirect taxation, the deduction from the wage is transferred to the state treasury. On the other hand, it is a fact that generalized and continuous wage reductions are seldom feasible in any period, let alone if trade union organization is highly developed. Here, the pious wish of capital comes up against rigid constraints of a social and political nature. By contrast, reductions in real wages through indirect taxation are imposed promptly, smoothly, and universally, and resistance to them is usually expressed only after a certain interval, and is restricted to the political arena, without achieving any immediate economic results. If there is a subsequent contraction in the production of means of subsistence, this transaction does not present itself as a loss in markets from the standpoint of capital, but rather as a saving in outlays for the production of surplus value. The production of means of subsistence for workers is a condition sine qua non of the production of surplus value, namely the reproduction of living labor-power; however, it is never a means for the realization of surplus value.

Returning to the example given previously:

I. 5,000c + 1,000v + 1,000s = 7,000 means of production

II. 1,430c + 285v + 285s = 2,000 means of consumption

At first glance, it appears in this case, too, that Department II generates and realizes surplus value in the production of means of subsistence for workers, and likewise Department I in the production of means of production that are required for production in Department II. However, this semblance is dispelled if the total social product is considered. The latter is expressed as follows:

6,430c + 1,285v + 1,285s = 9,000

Now, if consumption by workers is reduced by a value of 100, the adjustment in reproduction as a consequence of the contraction in both departments will be expressed as follows:

I. 4,949c + 989.75v + 989.75s = 6,928.5

II. 1,358.5c + 270.75v + 270.75s = 1,900

This now gives the following expression for the total social product:

6,307.5c + 1,260.5v + 1,260.5s = 8,828.5

The first thing that is noticed is a general decline in the scale of production and also in the surplus value produced. This is only true insofar as the abstract quantities of value in the composition of the total social product are taken into consideration, rather than its material composition. On closer examination, it emerges that the entire deficit only affects the costs of maintaining labor-power, and nothing else. A reduced quantity of means of subsistence and means of production are now produced, but this served exclusively to maintain workers. The capital employed has now decreased, as has the resulting product. Yet the aim of capitalist production is not simply to employ as large a capital as possible, but to obtain as much surplus value as possible. The deficit in capital has only arisen in this case, however, because the maintenance of workers requires a reduced capital. Whereas previously a sum of 1,285 was the value-expression of the total maintenance costs for all workers in employment in society, the deficit that has arisen in the total social product, 9,000 = 8,825.5 = 171.5, must be deducted in full from these maintenance costs, in which case the altered composition of the total social product is given as follows:

6,430c + 1,113.5v + 1,285s = 8,828.5

Constant capital and surplus value remain unchanged, and only the total variable capital—i.e. paid labor—has decreased. Alternatively, since an unchanged magnitude of constant capital might seem unrealistic, a reduction in constant capital can be assumed corresponding to the reduction in workers’ means of subsistence, which is exactly what would actually occur. This would give the following composition of the total social product:

6,307.5c + 1,236v + 1,285s = 8,828.5

Surplus value remains unchanged in both cases, despite the decrease in the total social product, since the maintenance costs of the workers, and these alone, have been reduced.

The question can also be presented in the following way: the total social product can be divided up in terms of value into three proportional parts, exclusively representing the total constant capital, the total variable capital, and the total surplus value in society respectively. More precisely, such a division implies that not a single atom of additional labor enters into the first portion of products, while the second and third do not contain a single atom of means of production. Since this mass of products is, as such (i.e. in terms of its material form), exclusively the result of the given period of production, the total number of workers employed can also be divided into three categories (even though as a magnitude of value, constant capital is the result of previous periods of production, and its value is transferred to new products). These three categories are: (1) workers exclusively producing the total constant capital of society; (2) workers exclusively producing means of subsistence for all workers; (3) workers exclusively creating the entire surplus value of the capitalist class.

If there is a reduction in workers’ consumption, a corresponding number of workers will be dismissed from the second category alone. Yet a priori these workers do not create any surplus value for capital, and their dismissal is thus, from the standpoint of capital, no loss—indeed it represents a gain, because it reduces the costs of surplus value production.

On the other side beckons the simultaneously arising market that is generated by the state with all the allure of a new sphere for the realization of surplus value. A portion of the sum of money that is locked into the circulation of variable capital escapes this trajectory to represent new demand on the part of the state. The fact that, in terms of the technicalities of the system of taxation, the process is different—indirect taxes are advanced to the state by capital, with the capitalists only being reimbursed subsequently by consumers purchasing commodities whose price includes a component corresponding to the value of these taxes—has no bearing on the economic dimension of the process. What is decisive in economic terms is that the sum of money functioning as variable capital first mediates the exchange between capital and labor-power, and is subsequently transferred in part by the worker to the state as taxes during the exchange between the worker as consumer and the capitalist as seller of commodities. The sum of money thrown into circulation by the capitalist thus first fulfills its function in the exchange with labor-power, only then to embark upon a new trajectory as the fiscal means of the state, i.e., as a purchasing power that is extrinsic to both capital and workers, and that is oriented toward new products, toward a particular branch serving to maintain neither the capitalist class nor the working class. As such, this new branch of production presents capital with a new opportunity for both the generation and realization of surplus value. Previously, in considering the use of the indirect taxes squeezed out of workers to pay the salaries of state officials and to provision the armed forces, it emerged that, in economic terms, the “saving” in working class consumption in effect means that capitalists are able to defer the costs of the personal consumption of the strata appended to the capitalist class and those of the instruments of its class rule onto workers—i.e. these costs are transferred from surplus value to variable capital, thus setting the corresponding quantity of surplus value free for the purposes of capitalization. It can now be appreciated how the use of the taxes extracted from workers for the production of means of warfare offers capital a new opportunity for accumulation.

In practice, militarism works in both directions on the basis of indirect taxation by securing the maintenance of the standing army—the organ of the rule of capital—and by establishing an unparalleled sphere of accumulation; it fulfills both of these functions at the expense of the regular living conditions of the working class.³⁶⁵

The analysis can now turn to the second source of the state’s purchasing power, which in the above example corresponds to the sum of 150 from the total sum of 250 invested in means of warfare. This sum of 150 is essentially different to the sum of 100 considered thus far. It does not derive from workers, but from the petty-bourgeoisie—i.e. from artisans and peasants; disregarded here is the relatively small proportion of taxation deriving from the capitalist class itself.

The sum of money paid to the state in the form of taxes by the peasant masses, who may serve here as representatives of the mass of non-proletarian consumers, is not originally advanced by capital, nor does it separate itself off from the circulation of capital. In the hands of the peasant masses, this sum of money is the equivalent of realized commodities, it is a precipitation of value from simple commodity production. Here, a part of the purchasing power of noncapitalist consumers is transferred to the state; from the outset, this purchasing power serves capital by realizing surplus value for the purposes of accumulation. The question is now whether this transfer of the purchasing power of these strata to the state for militaristic purposes results in economic changes for capital, and if so, which kind. At first glance, this also entails alterations in the material form of reproduction. Instead of producing a given quantity of means of production and consumption for peasant consumers, capital now produces means of warfare to the same value for the state. In fact, the changes run deeper. Most importantly, when the purchasing power of noncapitalist consumers is rendered liquid by the state through the mechanism of taxation, it becomes much greater in quantitative terms than if it is actually used for the purposes of these consumers’ own consumption.

To a large extent, it is in fact the modern system of taxation itself that first imposes the commodity economy on the peasants. The burden of taxation compels peasants to continually transform a progressively greater portion of their product into commodities, at the same time as it increasingly converts them into buyers; it pushes the product of the peasant economy into circulation and forces the peasants to become purchasers of the products of capital for the first time. In addition, the system of taxation elicits a greater purchasing power from the peasant economy than the latter would otherwise exert.

The means that would otherwise constitute peasants’ savings stored up in savings banks and other financial institutions, thus increasing the capital that is seeking investment, now becomes the opposite as the fiscal means of the state—it now represents demand and an investment opportunity for capital. Furthermore, the large number of minor and fragmented instances in the peasant economy where there is a demand for commodities—instances that do not coincide temporally, and in which demand could just as easily be satisfied by simple commodity production, in which case it would play no part in the accumulation of capital—are now replaced by demand on the part of the state, i.e. by demand that is integrated into a homogeneous, compact, and powerful force. The satisfaction of this kind of demand presupposes large-scale industry of the highest order, i.e., favorable conditions for the production of surplus value and for accumulation.

The purchasing power of the mass of consumers is thus concentrated to an enormous degree and takes the form of orders for military hardware placed by the state. Freed from the vicissitudes and subjective fluctuations of personal consumption, it attains an almost automatic regularity and a capacity for rhythmic growth. The levers regulating this automatic and rhythmic movement of militaristic capitalist production are ultimately in the hands of capital itself through the executive and legislative apparatus of the state, and through the press, whose function is the production of so-called public opinion. This specific sphere of capital accumulation initially seems capable of indefinite expansion. Whereas the expansion of markets into other spheres as a basis on which capital can operate depends to a large extent on historical, social, and political factors beyond the control of capital, militaristic production constitutes a sphere whose regular surges of expansion appear to be determined in the first instance by the volition of capital itself.

The historical exigencies of capital’s intensified competition on a world scale for the conditions of its accumulation are thus transformed into a sphere of accumulation of the highest order for capital itself. The more forcefully capital uses militarism in order to assimilate the means of production and labor-power of noncapitalist countries and societies through foreign and colonial policy, the more powerfully the same militarism works progressively to wrest purchasing power at home, in the capitalist countries themselves, from the noncapitalist strata—i.e. from those engaged in simple commodity production, and from the working class. It does this by robbing the former of their forces of production on an increasing scale, and by reducing the standard of living of the latter, in order to increase the rate of the accumulation of capital enormously at the expense of both. From both sides, however, once a certain level has been reached, the conditions for the accumulation of capital turn into conditions for its demise.

The more violently capital uses militarism to exterminate noncapitalist strata both at home and abroad, and to worsen living standards for all strata of workers, the more the day-to-day history of capital accumulation on the world stage is transformed into a continuous series of political and social catastrophes and convulsions, which, together with the periodic economic cataclysms in the form of crises, will make it impossible for accumulation to continue, and will turn the rebellion of the international working class against the rule of capital into a necessity, even before the latter has come up against its natural, self-created economic constraints.

Capitalism is the first form of economy with propagandistic power; it is a form that tends to extend itself over the globe and to eradicate all other forms of economy—it tolerates no other alongside itself. However, it is also the first that is unable to exist alone, without other forms of economy as its milieu and its medium. Thus, as the same time as it tends to become the universal form, it is smashed to smithereens by its intrinsic inability to be a universal form of production. In itself, it is a living, historical contradiction; the movement of its accumulation is the expression, the continual solution, and simultaneously the exacerbation of this contradiction. At a certain level of its development, this contradiction cannot be solved by any means other than the application of the fundaments of socialism—i.e. of the very form of economy that is inherently a universal one and simultaneously a harmonious system in itself, since it is oriented not to accumulation, but to the satisfaction of the vital needs of laboring humanity itself through the development of all of the world’s productive powers.