Half of every capitalist, “entrepreneur,” bourgeois is a….shopkeeper; that half made more than half-mad over threats, real and imagined, to his or her property, his or her shop. The other half of every capitalist, “entrepreneur,” bourgeois is a landlord, a “developer,” a block-buster, a red-liner, willing to burn down the buildings occupied by others, eager to sift through the ashes for the insurance money.
The halves make the whole and the whole is the irrationality of capitalism, spending billions to deny others pennies, dismembering partnerships, alliances, networks in order to preserve values that have no viability outside those very networks.
Welcome to the US of A, home of the Fox News president, that coalition candidate of Koch-ers, Birch-ers, Murdoch-ers, and arsonists; the most perfect proof that two halves make a zero, a hole; where irrationality has a reason, serves a purpose, and takes the cake. The Fox News president has imposed tariffs on specific commodities, aluminum and steel; and on a specific country, China, with more to come for other once-upon-a-time partners. He has also placed sanctions on Russia, which probably means that getting a backstage pass to the Miss Universe contest isn’t in the cards for either him or his Russian counterpart this year. Or next.
The FN president has identified the US balance of trade deficit as a drain on the “wealth” of US capitalism. Since the US last ran a balance of trade surplus in 1975, you might expect the US bourgeoisie to be broke, busted, tapped out, except of course they aren’t as the trillions of dollars stashed in accounts all over the world still does indicate, but only on the rational fringe, and to that disappearing rational fringe, of capitalism and capitalists.
Not so long ago, “competition” was the “go-to” explanation and rationale for everything capitalist, including but not limited to capital flight, lay-offs, shutdowns, givebacks, asset-stripping. “Free trade,” being but “competition” on the international scale was the second commandment on capital’s tablets.
That was then. This is now.
And here’s the now on the US trade deficit: It doesn’t exist. At least it doesn’t exist in the manner, and size, and with the meaning the Fox News president and his trade team of Lighthizer and Navarro think it does.
Like most things, when we look at trade balances, the devil is in the details. And the devilish detail here is called related party transactions, or related party trading. According to the US Department of Commerce a related party trade is “trade by US companies with their subsidiaries abroad as well as trade by US subsidiaries of foreign companies with their parent companies” (Statistical Abstract of the United States, 2015). When IBM in New York State imports a magnetic drive from IBM Malaysia, that’s an import on the balance of trade records, and a related party trade for the adjusted balance of trade.
In 2013, the US recorded $2.24 trillion in goods imports and $1.58 trillion in goods exports, with a deficit of $660 billion. Unadjusted. Correcting the numbers for related party trading, the value of the imported goods falls more than 50 percent to $1.12 trillion while the exports decline by 25 percent to $1.19 trillion (Statistical Abstract of the United States 2015, p.833). The deficit vanishes, or rather, it exists only in account books.
In 2016, related party transaction adjusted exports were valued at $939 billion, and the adjusted imports were valued at $1.08 trillion, for a real deficit of $69 billion, about 1/10 of the reported gross deficit.
Related party transactions account for 66 percent of the imports from Mexico; 50 percent of imports from Canada; 20 percent of imports from China; and 70 percent of imports from both Japan and Germany. Related party trading accounts for 42 percent of total US imports and exports.
So what’s up with the trade war? Is this just inter-capitalist competition writ large by the short-fingered, small handed shopkeeper-landlord in DC? The answer is yes and more than “yes.” Competition is the field where the determinations of capital, its intrinsic dynamics are expressed by capitals in the encounter with other capitals. It’s not so much about nations or nationalism, but it is about the general condition of capital that is manifested by the nationalism, in the competition.
And that general condition of capitalism, within and beyond national boundaries is the condition of generalized overproduction. The condition is the continued overproduction of steel, aluminum, automobiles, SUVs, coal, oil, gas, iron ore that accumulates beyond the capacity for realization. Despite, or even because of the recovery of US capitalism from the near recession of 2016, the growth in international trade remains depressed. With the growth in international trade depressed, “national markets”– if such relations can even be said to exist– cannot provide the necessary realization of the capital values pumped into the system. It is not consumption that falters, and in its faltering determines the path of capitalism. Capitalism does not produce for consumption; it does not produce for consumers. Capital produces for accumulation, for expanded reproduction, for other capitals. Competition is the expression of the dependency of capital on other capitals, and the reaction to that dependency when accumulation is impaired.
The “success” in the reproduction of capital, the production of capital, for other capitals, is made manifest in the growth of fixed assets, amplifying the productive power of human labor power. Between 2010 and 2016, the value of fixed assets accumulated in the mining, utility, construction, manufacturing, transportation, warehousing, and information sectors of the US economy increased 21.8 percent, compared to a 46 percent expansion for the 2002-2008 period, compared to a 34.7 percent growth for the 1994-2000 years. Now it might just be that the cost of adding fixed assets declined during the 2010-2016 years, while the value output from their usage actually increased. Maybe, but a) if that were the case the economy as a whole would have experienced more rapid growth than it did, and b) such divergence would have been an anomaly in the general processes and laws of accumulation, where the expansion of capital is indeed indexed by the increased valuation of the expanded means of production. Capital exists to accumulate the means of production as values, as value-extracting, value-commanding. Slowing accumulation in the valuation of the means of production is, literally, the impairment of the valorization process.
So…accumulation is impaired. Trade growth slows. Industrial recoveries are interrupted. Profit is threatened. The previous accumulation of the means of production as capital, as values, impedes the further accumulation of value. “Irrationality,” in trade wars, in attacks upon the networks, alliances, partnerships, of the past is the “new normal.” The “nation”– the national mythology– is paraded forth as the once and always struggle of “us”– “our capital”– against “them”– “their capital,” when there never was, is, or can be “our capital;” there is only capital, their capital, belonging to the bourgeoisie, against all of us, those of, by, and for the working class.
April 10, 2018