The multinational corporation - concentration, fiction or rent?

Andy Higginbottom

• PREAMBLE• INTRODUCTION• MARX’S THOUGHTS ON THE JOINT STOCK COMPANY

• FICTITIOUS CAPITAL FROM MARX TO HILFERDING

• SUPER PROFIT AND SURPLUS PROFIT • OTHER ASPECTS • CONCLUSION

PROBLEM• Rapid incursion of open cast mining sweeping across Colombia, Andean region and Latin America, as in other parts of the world – decade long boom in commodity prices, now come to an end.

• Four of the top seven mining multinationals are located or co-located in London. Other international centres are Canada, US, Australia, Switzerland and the rise of BRICS. In particular the end of apartheid and capital flight from SA has seen a reconfiguration which leaves mncs headquartered in London as a central financial hub directing production projects all over the world, a global apartheid system of extraction.

• With some activist campaigning but (up to now) little initiative coming from the Marxist left. The Fossil Fuels divestment campaign is challenging BHP Billiton one of the El Cerrejon consortium which is now a corporate partner of UCL. (Guardian 23 October 2014)

DEBATES

• “Lonmin’s office in London is nothing more than a fax machine and a secretary” Rehad Desai, film maker Miners Shot Down (Marxism, July 2013)

• “Where does the Communist Manifesto say no to mining? What socialist theory said no to mining?” Rafael Correa, president Ecuador May 2012 (Gudynas, 2013)

• Issues of neo-colonialism and extractivism, ecological debt, workers and communities, new workers internationalism.

Argument so far…• Inception of modern mining in South Africa (first diamonds then gold ) under British direction. I argue that the super-exploitation of the African mineworkers was the basis of a colonial capitalist relation

• Marx’s categories of rent need to be revised to meet the new variant of social relations, with effective ownership of the land, the monopoly of the mining corporations included both differential and absolute rent in addition to average industrial profit.

• Acquisition of extra surplus value due to especially racial and oppressive conditions of labour exploitation in South Africa allows for the transfer of value, in this case physically as gold shipments, and the crystallisation of a corporate apparatus of finance capital in London, fuelled by super-profits.  

• The framing of the argument is a change within the capitalist mode of production in its expansion rather than an external articulation with other modes of production, there occurs an internalisation and conversion of oppressive exploitation as variants of capitalist social relations, (articulation of modes of exploitation within capitalism); what one might term a neo-Leninist rather than a neo-Luxemburgist mode of analysis.

• The corollary is when considered in relation to the concept of surplus value as Marx bequeathed it, extraction by super-exploitation cannot be satisfactorily contained within the categories of absolute and relative surplus value, but requires a further development or dimension to surplus value.

How does capitalism survive?

• Capitalism survives as imperialism, ‘a Babylon system sucking the blood of the sufferers continually’. Capital survives in the form of the multinational corporation.

• The multinational corporation is the contemporary representative of capital as such, the ‘concrete universal’ of units of imperialist capital accumulation in its current form.

• The hypothesis that I advance is the connection between Surplus Profit (Marx), Super-Profit (Lenin and other theorists) and accumulation by mncs.

• Surplus Profit <– >Super-Profit <–> Multinational Corporation• Largely unchallenged

MARX’S THOUGHTS ON THE JOINT STOCK COMPANY

• “Capital in general (this is the subject-matter of the first part).

• Competition, or the action of the many capitals upon one another.

• Credit, here capital as the general principle confronts the indi vidual capitals.

• Share capital as the most highly developed form (turning into communism) together with all its contradictions” Letter to Engels, 2 April 1858 cited in Foley 2014

Role of Credit in Capitalist Production

• ‘necessary development to effect the equalisation of the rate of profit, or the movements of this equalisation, upon which the entire capitalist production rests

• Reduction of the costs of circulation … acceleration of the process of reproduction in general.

• Formation of stock companies’. (Marx 1974, 435-436)

Joint Stock Companies facilitate:

1)An enormous expansion of the scale of production and of enterprises, that was impossible for individual capitals…

2)The capital, which in itself rests on a social mode of production and presupposes a social concentration of means of production and labour-power, is here directly endowed with the form of social capital (capital of directly associated individuals) as distinct from private capital, and its undertakings assume the form of social undertakings as distinct from private undertakings. It is the abolition of capital as private property within the framework of capitalist production itself.

3)Transformation of the actually functioning capitalist into a mere manager, administrator of other people's capital, and of the owner of capital into a mere owner, a mere money-capitalist. ..” (Marx 1974, 436)

The two characteristics immanent in the credit system are

• ‘on the one hand, to develop the incentive of capitalist production, enrichment through exploitation of the labour of others, to the purest and most colossal form of gambling and swindling, and to reduce more and more the number of the few who exploit the social wealth;

• on the other hand, to constitute the form of transition to a new mode of production. It is this ambiguous nature, which endows the principal spokesmen of credit from Law to Isaac Péreire with the pleasant character mixture of swindler and prophet.” (441)

Fictitious Capital • The industrial corporation, our first object of inquiry, involves above all a change in the function of the industrial capitalist. For it converts what had been an occasional, accidental occurrence in the individual enterprise into a fundamental principle; namely, the liberation of the industrial capitalist from his function as industrial entrepreneur. As a result of this change the capital invested in a corporation becomes pure money capital so far as the capitalist is concerned. (Hilferding 1910, 107)

SUPER PROFIT AND SURPLUS PROFIT

• If profits come from surplus value, do super profits come from super surplus value?

• My answer is yes, except the terminology is awkward and it is better to revert to the term used in standard English translations of Marx which is extra surplus value, or mehrwert in the original German.

SURPLUS PROFIT• Marx, the first major illustration of surplus profit in the analysis of ground rent, Part VI of Volume 3

• Differential rent is the form of appearance of extra surplus value brought about by enhanced labour productivity.

• Is there a general category of surplus profit as the forms of appearance of extra surplus value?

CONCLUSIONS• The joint stock corporation has not been the vehicle for transition to socialism, it has been the vehicle for transition to imperialism and social democracy.

• The association of producers cannot inhabit the existing form of the corporation, it has to find its own more adequate forms of existence.

• Directly engaging in a fight to destroy corporations is an essential part of the fight for socialism. Fighting multinational corporations is an essential part of international solidarity.