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1979 11: 60Review of Radical Political EconomicsJim O'Connor

Some Reflective Criticisms on Mosley's "Critical Reflections on The Fiscal Crisis of the State"  

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COMMENTSome Reflective Criticisms on Mosley’s"Critical Reflections on The Fiscal Crisis of the State"Jim O’Connor*

1. Introduction

Mosley’s first claim is &dquo;O’Connor’s state theory isdeveloped within the tradition of American neo-Marx-ism, of which Baran and Sweezy’s Monopoly Capital isthe representative work.&dquo; First, I don’t develop a

&dquo;state theory&dquo; in FCS; merely a method for graspingon the basis of class analysis the relationship betweencapital accumulation, social struggles, and the statebudget. Second, FCS is also developed within &dquo;fiscalsociology,&dquo; the theory of accumulation, power struc-ture analysis, and other traditions. More, in MonopolyCapital the &dquo;problem&dquo; as everyone knows is &dquo;surplusabsorption&dquo; or realization. The production of surplusvalue or profits is taken for granted in that work. Thefocus in FCS is production and realization, especiallythe problem of expanding profits by socializing capitalcosts. Finally, in Monopoly Capital, state expendituresare not treated as socialized costs but rather as &dquo;reve-

nues.&dquo;

Mosley states that the &dquo;concepts of Marx’s value-theoretic analysis of capital are conspicuously absent.There is a heavy reliance on concepts of bourgeois eco-nomic thought .... &dquo; If he means that I don’t workwithin the orthodox tradition of the &dquo;falling tendencyof the rate of profit,&dquo; he is right. If he thinks that theuse of such categories as wages, prices, costs, profits,etc. signifies &dquo;reliance on bourgeois thought&dquo; then he isdead wrong since the concept of value is impossible

*Since Hugh Mosley has chosen to publish in RRPE many of thesame criticisms of Fiscal Crisis of the State which appeared in his re-view of the book in Monthly Review (May, 1978) the reader hopefullywill understand why at times I use some similar answers in my reply(Monthly Review, November, 1978). Yet this is a different occasion inthat Mosley’s RRPE review is more detailed and exemplifies morestrikingly the limits of Marxist functionalism. Given that I am writingthis under sharp time constraints, the best way of communicating mydisagreements with &dquo;capital logic&dquo; Marxism is point by point. Thisapproach doesn’t make the most exciting reading in the world but ithas the advantage that the reader may refer to Mosley’s points and myresponses with maximum convenience.

without prices. The measure of value is socially neces-sary labor time, which no one can ever &dquo;know&dquo; until

prices are formed and the market clears. Since FCS wasnot a Marxist economic textbook, I believed that suchmatters could be safely ignored.

Mosley states that I reify the concept of the &dquo;giantcorporation&dquo; and &dquo;identify it with an actual sector ofthe economy, the monopoly sector, to which definiteinterests and a political will, vis-a-vis state activity, asascribed.&dquo; As Domhoff and many others haveshown, there is a fraction of capital which can for con-venience be called &dquo;big capital&dquo; which constitutes themost important sector or fraction of capital; which isorganized politically in many ways; which gets higherprofit rates because capital units are huge in absoluteterms; which enjoys special standing in the stock andmoney markets; which have common internationaleconomic relations, roughly similar labor process andrelations with workers; etc. Of course this major cap-ital fraction has regional sub-branches; it is subdividedin various ways between big merchant and big indus-trial capital, etc. But through organizations such as

CED and Business Advisory Council, through its fin-ance-capitalist mouthpieces who speak for big capitalas a whole, etc., big capital very much exists as suchand functions as such politically. Big capital as such,not any particular industry or regional grouping, is re-sponsible for American imperialism, to take an obvi-ous example. In sum, the concept of monopoly sectormeans many things, among which &dquo;big capital as awhole.&dquo; Competitive sector means among other thingssmall capital as a whole. I admit that this is an over-

simplification but also I think it is a necessary one giv-en the task I set myself to study, i.e., the ways that stateprocesses and accumulation relate to one another. Not

being a functionalist in the &dquo;Berlin school&dquo; I thoughtten years ago and still think that it is question beggingto simply deduce state functions from the requirementsof accumulation based on Marx’s theory of the condi-tions of capital accumulation.

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Mosley then claims that I don’t base my analysison &dquo;the level of social capital in general.&dquo; True, I don’trehash Capital. I did try to look at social capital in gen-eral grasping that social capital is made up by (amongother things) big and small capitals and state economicactivities. These make up the totality of the process ofaccumulation. Of course they aren’t the only compon-ents of the totality; but they seemed to me at the time tobe the most important given the problem I set for my-self. And it still seems that big capital is decisive for ac-cumulation in the system as a whole. Not any particul-ar branch of big capital; but the whole of large-scaleproduction, transport, communications (includingmedia), finance, etc.

2. O’Connor’s Sectoral Categories and Their Poor Em-pirical Fit

Mosley in effect claims that the distinctionbetween monopoly and competitive sectors is useless.As I wrote in Monthly Review, &dquo;my argument wouldhave been clearer had the concepts ’small capital’ and’big capital’ been used consistently.&dquo; Reflecting somebourgeois theoretical baggage, I didn’t sufficiently dis-tinguish between firm, industry, capital unit. How-ever, if &dquo;competitive sector&dquo; is changed to &dquo;small capi-tals&dquo; and &dquo;monopoly sector&dquo; to &dquo;big capitals&dquo; the ar-gument remains essentially the same. Besides, there is agood correlation between absolute size of capitals andtheir relative size in particular industries. Big capitalunits have more leverage in capital markets, moneymarkets, product markets, and (internationally) labormarkets. It’s interesting that Mosley’s &dquo;Marxist cri-

tique&dquo; of FCS doesn’t distinguish between monopoliesin capital markets and monopolies in trade.

Mosley admits that there are many industriesdominated by large-scale capitals with characteristicsmost economists including myself ascribe to them. Hesays however that there is a spectrum of varyingdegrees of market control rather than a dichotomousdivision between big and small capitals. This is true ofall social phenomena, including good and bad socialtheory. The world is an imperfect place and so are alltheoretical categories. Of course some big firms are

more monopolistic in product markets than others. Butthe fact is that rates of profit are related to the absolutesize of the accumulating unit. Of course elasticity ofdemand varies; capital intensity, degree of technology,and-strength of labor unions vary. The point howeveris that there is less variation within the fraction of bigcapital than between big and small capital fractions.Again, of course whether a firm is national or inter-national helps decide &dquo;political activity.&dquo; But nearlyevery big capital is international today. Utilities are ofcourse regulated; precisely to cheapen the costs of

the elements of constant and variable capital. Utilitiesare capitalism’s service stations.

As for my failure to distinguish &dquo;old and new

capitals&dquo; especially regional cleavages, this reflects

simply the limited scope of my work and its intentions.The geographical manifestations of capital are a

separate problem. In terms of the FCS thesis, state so-cializing of costs in the new accumulation centers (e.g.,strip-mining in the mountain states) will create theneed for new &dquo;social expenses&dquo; of production. Imaginewhat poverty, social disruption, unemployment,damage to small farming, etc. will occur, and how mu,.hthe state will have to pay for all of this, if and when itactually underwrites energy accumulation to the tuneof $100 billion or more! Meanwhile, back east, socialexpenses are out of hand (i.e., current attack on thewelfare state). Clearly there occurs combined and un-even regional development hence combined anduneven social struggles; budgetary processes; etc. Tenvolumes would be required to deal with this question ina satisfactory way in relation to regional differences inthe USA.

Mosley then claims that the category &dquo;competitivesector&dquo; is &dquo;residual.&dquo; Because there are ten million orso small capitals in the USA they are much more div-erse than the big capitals. But the central point in thisregard is that big capitals can compete with small

capitals but small capitals cannot compete with bigones. Thus, the overcrowding, high turnover, inabilityto afford union wages, low profits, etc. so characteristicof American small capitals, although not all of them.

It is true that politically, small capitals are less wellarticulated. They are organized typically along indus-try lines. My response to this is, so what? It’s a bigcountry and it is very difficult for small capitals as suchto form a political fraction; instead they form fractions(e.g., lobbies) which wheel and deal in Washington and.state capitols. Mosley then claims that Sears, A&P, J.P.Steven’s, and other companies belong to the competi-tive sector. In one sense, all big capitals do because theyare conglomerates and operate in some industries inwhich there is considerable competition in productmarkets. But Sears is a big capital; it plans; it takes intoaccount regional differences in labor discipline in thecourse of locating warehousing and other facilities; it is

international; it has a string of small capital supplierswhich it can exploit; it is a giant warehouse in whichpractically everything is sold. Hence even in &dquo;productmarkets&dquo; it has something that few other capitals have:convenience, centrality, monopoly of huge amounts ofspace, diversity of goods. In most American cities thereare three, or more of these giant warehouses. No smallretailer can carry the diversity of goods offered bySears and company; nor offer the same terms of sale;multiple-need shopping convenience; etc. The same istrue of A&P. As for Levi Strauss, it made a fortune

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manufacturing jeans, the Polaroid of clothing as it

were. Temporarily, although not of great size, it exer-

cized a lot of trade monopoly.I own up to ignoring the difference between mer-

chant capital, bank capital, etc. except insofar as the lat-ter has an important relationship with the state debt.The reason is simply that these cleavages when theyexist simply do not have much significance for my gen-eral theses. If they do, it is curious that Mosley didn’texplain how and why they do. In sum, Mosley mis-takenly believes that I set out to write a treatise onindustrial organization. I didn’t, but merely wanted toemploy theoretically the distinction between big andsmall capitals, and their relationship to one another,during one period in US history.

3. Monopoly Capital and Competitive Capital:The Analysis of State Social Capital Expenditures

Mosley argues that my view that state social

capital outlays are intimately related to the growth ofbig capital is highly dubious. He says that it is difficultto tell who benefits from state transportation invest-ments and that I am inconsistent to speak of socialcapital outlays as underwriting growth of big capitalmeanwhile pointing to the resulting contradictions forthe system as whole. First, whoever &dquo;benefits&dquo; fromtransportation, education, etc. outlays (and admittedlysmall and big capitals both benefit), accumulation in thesystem as a whole depends on big capital benefiting.Without highways, bridges, tunnels, there can be nobig capitals in automobiles, tires, contract construction,and of course, no small capitals in &dquo;real estate develop-ment&dquo; either. The point is that the former capitals arethe engines of growth; the mere fact that they are them-selves large-scale is proof. Second, of course, there arecontradictions; duplication, overinvestment, etc. Thisis a central theme of my book; contradictions betweenthe systemic interests of capital as a whole, includingbig capital as a whole, and individual big capitals. Butthese contradictions appear only in a certain conjunc-ture. The fact is that big capital as a whole, organizedpolitically in many ways, determined the direction ofthe U.S. transportation system: the result was a mess,which big capital spokesmen today are the first to

admit.

Mosley then claims that monopoly capital is notthe &dquo;particular beneficiary of education expendi-tures,&dquo; especially given &dquo;de-skilling&dquo; in mass produc-tion industries. First, as I tried to show in the book, oneimportance of education expenditures was (and is) thatthey generate a pool of socialized, &dquo;educated&dquo; labor-power from which big capital can pick and choose. Socan small capital. But again, the system’s health

depends on big capital accumulation; hence theeconomic significance of the education system

(independent of the particular struggles, compromises,legitimations, etc. involved in establishing and expand-ing the system). Second, in big capital, alongside thedevelopment of &dquo;mass worker&dquo; is the new salariat, aneducated work force which plays an indispensible rolein managing big capital, developing new products,processes, ways of organizing work, marketing, etc.

Third, as I tried to take pains to show, education isn’tsimply &dquo;social investment&dquo;; it is also a form of

legitimation. All state expenditures are loaded withmeanings, some contradictory, some not. Education inparticular cannot be understood out of the context ofclass struggle, as well as &dquo;functional accumulationneeds.&dquo; But of course in the &dquo;capital logic&dquo; theory ofcapitalism, the word &dquo;legitimation&dquo; has no status.

Finally, R and D expenditures are closely tied intomilitary contracts. But the point is that without state Rand D, new processes ranging from nuclear power tonumerical control machinery would not be available, orat least very much delayed historically. New productssuch as the whole range of consumer plastics, compu-ters, etc. would not be available for marketing, or

would be historically delayed. It seems obvious to methat big capital depends on new process and new prod-ucts ; that these require vast outlays on R and D; andthat state-organized-or-subsidized R and D has beencentral to American capitalist development since

World War II. As I wrote in Monthly Review&dquo;Accumulation of means of production would come toa complete halt without state transportation expendi-tures, R and D expenditures, outlays on educated laborpower, etc., not merely because state spending expandsaggregate demand but mainly because the costs to

individual capitals (however large-scale) of providingtheir own trained labor force, their onw transportationsystems, maintaining the health of their own workers,etc., are simply too great.&dquo;

4. Shortcomings in the Political Analysis Based onO’Connor’s Sectoral Categories

Mosley writes, my &dquo;two general state functions -accumulation and legitimation - are not specific to thecapitalist state but could be applied to any state institu-tions : capitalist, socialist, fascist, etc.&dquo; This makes littlesense to me. In a capitalist state, systemic accumulationneeds are one thing; working class needs are another.The state must try to promote systemic needs; the statealso must pretend that it is promoting human needsand/or actually promote human needs. As for thesocialist state, since it itself is the functioning &dquo;capital-ist,&dquo; accumulation and legitimation are indistinguish-able. It is impermissible for capitalist state activitiesto make profits (if they do, private capital wants theseactivities for itself). By contrast, it is impermissible forsocialist state activities not to make profits, excluding

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of course socialized activities, e.g., education. As forthe fascist state, i.e., capitalist state without bourgeoisdemocracy, there are problems - big problems - oflegitimation. Naturally they are different than those

facing a capitalist democracy.Mosley next states that &dquo;implicit in O’Connor’s

analysis is the view that the capitalist character of thestate lies merely in its political subordination to capital-ist interests.&dquo; False. I have at least implicitly (and I

regret that it wasn’t more explicit) a &dquo;class struggle&dquo;theory of the state, as readers who peruse the sectionsconcerning social consumption and social expenses willsee for themselves. Mosley then states that politicalanalysis based on my sectoral analysis is &dquo;speculativeand crude.&dquo; His only proof is a) his statement that I

believe that &dquo;the executive is controlled by monopolycapital and the competitive sector dominates in Con-gress.&dquo; But I refer (p.70) to &dquo;interest-group economicneeds, to which the legislative branch and many execu-tive agencies are highly responsive.&dquo; My introductorypages to the whole section of politics and the budget(e.g., p.65) will demonstrate to readers how wrong

Mosley is. And b) that I wrote in the book that &dquo;large-scale monopoly sector ... has relatively little influenceor power in the House or Senate.&dquo; (p.224) What Imeant was that big capital has little power relative to itspower in the Treasury, which is not surprising in acapitalist democracy.

Mosley continues &dquo;The institutional structure ofthe American Congress and the presidency leads to apredominance of special interests in Congress versus agreater responsiveness to the interests of capital in gen-eral at the executive.&dquo; This statement is meant as a crit-icism of my analysis of economics, politics, and thebudget. In effect, however, it is one of my positions.Small capitals must form interest groups (usually in-dustry or regional/subregional groups) to be politicallyeffective, whereas big capital as a whole has significantnegative powers of noncooperation, capital strike, etc.which it uses to get its way in the executive. But I stressthat within the executive there are agencies functioningin many contradictory ways for individual small andbig capital fractions; professional associations; laborassociations; etc. And within the Congress there areclass-conscious politicians beholden to no particularcapital fraction or working class fraction who try tolook out for the &dquo;system as a whole.&dquo;

Finally, Mosley claims that I treat the structural

incapacity of state institutions to develop rational pol-icy as an &dquo;ad hoc factor&dquo; and not integral to the moderncapitalist state. He offers no evidence to support thischarge. This certainly is not my view. Nor was it myintention to make the argument he claims I do. He andthe members of the orthodox Marxist group in Berlinwho helped him make his review should know frompersonal experience that in the late 1960s and early

1970s I was deeply affected by Claus Offe and com-pany’s view of the structural incapacities of the mod-ern state. There was no point in duplicating Offe andhis coworkers’ work (assuming my own capacities weresufficient to do so) in FSC. The fact is that in the lastpassages of FCS I state bluntly that the deep problemof modern capitalism is individualism, and in theabsence of a system of social production based on socialneed the fiscal (social) crisis will not go away no matterwhat the state does. If this doesn’t exemplify the viewthat the state’s capacity for solving problems is struc-turally limited in capitalist democracies I don’t knc .what does.

5. O’Connor’s Sectoral Analysis Abandons Marx’sSystemic Levels of Analysis

Mosley claims that &dquo;the basic structure of’O’Connor’s analysis is constituted by his three pos-tulated societal sectors: the state, the monopoly, andthe competitive sector. O’Connor disregards thedistinction between capital in general and individualcapitals ...&dquo; Incorrect. My basic structure is individualsmall capitals and small capital as a whole and indi-vidual big capitals and big capital as a whole and ofcourse fractions of both big and small capital as a wholeorganized along industry, regional, etc. lines. More-over, I do have a concept of capital as a whole, which isthe relation between big and small capitals (as well aswithin these fractions). Mosley claims that I deal onlywith the transactions between distinct sectors and thatthe &dquo;fiscal crisis is merely a deficit in the transactionsbetween state and private economy.&dquo; False. The fiscalcrisis is a social crisis, as I state in the book. He statesthat I don’t deal with the main question, &dquo;the social

surplus and surplus-value creation in the economy as awhole ...&dquo; False again. The truth is that Mosleydoesn’t like the way I deal with this problem. Hecorrectly states that I think that socializing costs raisesthe rate of profit. But he argues that socializing costsdoesn’t &dquo;necessarily increase profit rates on capital as awhole.&dquo; True, but I also think that sosial investmentand consumption lowers reproduction costs of labor-power in various indirect ways (i.e., social capital indir-ectly increases productivity as a whole), hence in theabsence of compensating class struggle which results inhigher wages or shorter hours, social capital indirectlyexpands surplus-value as a whole. Of course particularexpenditures are &dquo;beneficial for the profitability andproductivity of some individual capitals&dquo; as Mosleyhimself admits. This is true of any change which raisesrelative surplus value in the economy by raisingproductivity.

Mosley also complains that I &dquo;don’t analyze stateexpenditures and social capital in a systemic context,i.e., in terms of state revenue sources and alternative

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state and nonstate means for providing the same goodsand services.&dquo; The example he uses is social insuranceprograms which he claims may redistribute income tothe working class at the expense of profits. But I was atpains to point out that taxes don’t fall on profits; andthat social insurance raises profits via its effects on

security and stability hence discipline of the workforce. He adds that socializing costs of medical care forthe aged doesn’t raise profits but represents a &dquo;shift ofthe performance of certain services from the family tothe exchange economy and/or an increase in the costsof the social reproduction of labor.&dquo; Here Mosleyconfuses social consumption (social variable capital)with social expenses. An &dquo;increase in expectations(provision of comprehensive medical care for the

aged)&dquo; (NB the liberalism in this formulation; the factis that social struggles not &dquo;increased expectations&dquo;generate the demand for more medical care) representsan increase in social expenses.

6. &dquo;Social Capital&dquo; in O’Connor’s Usage is

Unsatisfactory

In this section, Mosley complains that &dquo;socialconstant and social variable capital are not attributes ofstate expenditures as social capital. There is rather a

socialization of the costs of constant and variable

capital.&dquo; The latter formulation Mosley appears to

accept; which is all to the good since it is a central partof the FCS thesis. But the former statement is also trueto the degree that state organizes labor processes (e.g.,schools) rather than merely financially underwriting alabor process organized by private capital. In this case,&dquo;social capital&dquo; isn’t a bad expression because it

expresses 1) a relationship of domination and struggle;2) a relationship in which money (.e.g, school budgets)brings together workers and means of work andpermits some people to organize the living labor ofother people; 3) a relationship which is not the same asthe social relationship called &dquo;private capital&dquo; in that ithas a social (i.e., socially legitimate aspect) which pri-vate capital relationships do not have (the basic

legitimation here is profit-making).Mosley continues &dquo;the key element in systemic

terms is not whether the given state activity oT expendi-tures provides inputs in the form of goods and servicesfor economic production and thus socializes someproduction costs... but whether such state expendi-tures are efficient in the sense of rationalizing surplus-value production in the economy as a whole.&dquo; Heclaims I don’t deal with this issue. I claim the wholediscussion of the social-industrial complex dealsdirectly with this issue. Anyway, I can’t imagine stateexpenditures being efficient in the abstract sense thatMosely means. The effects of state expenditures mustwork their way through individual capitals, capital

fractions, etc. All state activities, even something asgeneral as wage controls, have differential effects ondifferent capital units; their effects on surplus value asa whole are mediated by their effects on capital unitsand fractions. Finally, to write that &dquo;there is not onlythe question of the distribution of surplus-value ...but the prior question of the magnitude of surplus-value and profits in the economy as a whole&dquo; misses thewhole point that in modern capitalism the latter is

totally inexplicable without an analysis of state budgetsand interventionism generally. It simply isn’t true thatthe economy has certain production, realization,reproduction, conditions which give a certain rate ofexploitation and profit subsequently increased or

decreased by state activity. State activity is so imbeddedin the &dquo;private economy&dquo; that Mosley’s old-fashionedway of looking at things simply won’t do.

7. Social Expenses vs Social Capital: O’Connor’s TwoState Functions are Merely Postulated But Not

Conceptually Clarified

Mosley’s first complaint is that the concepts of&dquo;accumulation&dquo; and &dquo;legitimation&dquo; provide no &dquo;realcontrast.&dquo; He actually believes that successfulaccumulation is &dquo;the principal condition for social

harmony in capitalism.&dquo; This is hard to take seriouslygiven that &dquo;successful accumulation&dquo; (following a hostof Marxist and even bourgeois economists) is alwaysuneven, unbalanced, filled with contradictions,creating poles of wealth and poverty, regionalunderdevelopment, decline of small business, environ-mental costs, etc. In the mountain states today there isalready a debate over the extent of social damage andsocial costs to farmers, old people, the natural environ-ment, etc. which will result from massive &dquo;successful&dquo;accumulation by energy capital. Mosley continues hisargument by saying that social harmony creates theconditions for profitable accumulation. Maybe, maybenot. But to confuse the concepts of &dquo;capital&dquo;(&dquo;accumulation&dquo;) and &dquo;working class&dquo; (&dquo;legitima-tion&dquo;) seems to me to be absurd. For example, socialharmony in the late 1960s was precariously won onlythrough massive social expense outlays which wereinflationary, undermined labor disciplines, and createda new unproductive state bureaucracy, none of whichany reasonable person, much less a Marxist, could call&dquo;successful conditions for accumulation.&dquo;

8. Social-Industrial Complex

Mosley’s whole critique of my analysis of the soc-ial-industrial complex (&dquo;reprivatization&dquo; is a popularword today) is based on the anti-Marxist view thatcommercialized service production is a &dquo;drain on pro-ductive resources,&dquo; i.e., unproductive. Marx rejected

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this out of hand. So do I. Mosley apparently believesthat surplus value is produced only in direct materialproduction.

9. Is There a Fiscal Crisis of the State?

Mosley concludes his &dquo;critique&dquo; by claiming thatthe &dquo;fiscal crisis&dquo; is a &dquo;manifestation of the economiccrisis affecting all Western capitalist nations.&dquo; Sincethis economic crisis has occurred relatively recently(on his own account), it follows that there was no fiscalcrisis in the 1950s and 1960s. But this was the periodthat I was primarily interested in understanding. It

seems to me to be the worst kind of reductionism to layat the door of &dquo;general crisis&dquo; all other crisis trends andtendencies. Of course the &dquo;general crisis&dquo; is related tothe state budget in many ways. But I still maintain thatthe fiscal (social) crisis retains its own specificity andhas its own independent relationship to the &dquo;generalcrisis.&dquo; The fact is that nowhere does Mosley deal withthe basic argument in the book, namely, that the statebudget grows because it grows, i.e., social capital fin-ally requires more social expenses.

10. Conclusion

The curious thing about Mosley’s &dquo;critique&dquo; is

that it is not a critique in the Marxist sense at all, i.e., inhis own words &dquo;no alternative analysis is developed.&dquo;The reason of course is that he doesn’t have an alterna-tive analysis; nor does orthodoxy generally, exceptingthe extreme functionalism of writers like Altvater andthe dogma in works like Paul Mattick’s Marx and

Keynes. Like bourgeois economists, orthodox Marxistssimply haven’t done very well when it comes to the

theory of the modern capitalist state, capital, accumu-lation, class struggle, etc. I wrote FCS with the aim of

helping to develop a real discussion of the subject. Myhopes have been more than realized, as many people inmany countries have found the book useful; so haveorganizers and agitators in state employments, &dquo;clientassociations,&dquo; etc. If Mosley is right, all of these peoplehave been deluded, and have deluded themselves. A

depressing thought. But to get back to the point, thereason that Mosley offers no real critique, i.e., sub-

sumption and surpassing of the text, is that he sees

FCS as bad &dquo;capital theory.&dquo; In fact, he’s right. That isexactly the book’s strength; the absence of the kind offunctionalism or Marxist structuralism which has be-come so tedious theoretically and useless in practicalstruggles. Mosley accuses me in effect of not beingfunctionalist enough (one passage he states &dquo;beginspromisingly as a functional analysis&dquo;). For me this is acompliment, however unintended. That’s precisely thebook’s strength. The book’s weakness is that it is bad

(I’m being deliberately hard on myself) &dquo;class struggle

theory.&dquo; I didn’t and couldn’t at the time make my class

struggle perspective explicit enough. Yet throughoutthe work the class struggle (not capital logic alone) is atwork; determining wages; forcing capital to socializecertain variable capital costs; forcing the state to pro-vide more income based on need; etc. In short, Mosleyoffers no real critique because the only critique pos-sible is from a class struggle point of view, one whichwould expose the limits of FCS from the standpoint ofadvancing the class struggle. But in Mosley’s review,class struggle is conspicuous by its absence. Insteadthere is a rather sad wish for &dquo;certainty,&dquo; i.e., nice cleanconcepts, as if the capitalist world wasn’t a not-nice,dirty, and confusing place.

I would like to pass on to Mosley and other socialtheorists, who may be persuaded that &dquo;capital logic&dquo; isthe key to answering any and all problems of politicaleconomic theory, something I’ve learned in the pastdecade, although not well enough when FCS appearedto be clear in my own head about it. Namely that thereis a world of difference between the theory of the con-ditions of capital accumulation and the theory of capit-alist development, historically understood. The formertheory can be deduced from a few premises. Marx didthis work. The latter theory must grasp reality not as&dquo;capital domination&dquo; but as a contradiction between

capital and working class struggle. Orthodoxy claimsthat Marx did this latter work too. It is true that hestarted and laid down some simple precepts for thetheory of capitalism as it existed and exists. But hewrote before the modern period of the development ofthe mass working class, mass surplus population, etc.,i.e., before the development of a whole regime of&dquo;modern industry.&dquo; Until there is a &dquo;Marxian workingclass&dquo; there can by no &dquo;Marxist class struggle.&dquo; Thishas come only in the twentieth century and we are inthe middle of it now.

This is why Mosley and company cannot askthemselves hard questions about the contradictorymeanings of state expenditures and taxes; the blurredand dual meanings of words like &dquo;education,&dquo; &dquo;social

consumption,&dquo; etc. This is why I failed to understand(until Dale Tomich explained it to me) why the cate-gory &dquo;social expense&dquo; is a functionalist Marxist cate-gory and why from a working class point of view theissue is to abolish the difference between &dquo;social ex-

pense&dquo; and &dquo;social consumption&dquo; or &dquo;socialized vari-able capital.&dquo; This is the kind of critique that makessense from the standpoint of working class struggleand socialism. In short, the ambiguity of the categoriescomes from the ambiguity of the social relations.

Jim O’ConnorCollege EightUniversity of CaliforniaSanta Cruz, CA 95064

at UNIV OF TENNESSEE on September 12, 2014rrp.sagepub.comDownloaded from