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The system of free competition and what it is about

[Translated from Gegenstandpunkt: Politische Vierteljahreszeitschrift 3-17, Gegenstandpunkt Verlag, Munich]

“Competition is quite generally the way capital establishes its mode of production."
(Karl Marx)

1.

It is well known that in this world “competition prevails”; it is ubiquitous as the principle of the way people deal with each other and as an imperative, anonymous law shaping the behavior of modern individuals.

Politicians show their respect for this fact when providing their citizens with equal opportunities, whether in education or in the economic world, where an antitrust law and an antitrust office make sure that the power of money is competed for properly. But they also do so when they decree reforms to the nation they govern and justify them as a service to their business location, which is facing the challenge presented by other business locations. And they do so especially in all their decisions aimed at security — i.e., in the questions that states and their leadership are so intent on because they face a trial of strength that must be won with the will and ability to use force.

In the economy, which sees to the production and distribution of wealth — not only within nationally delimited societies but, in the age of globalization, all over the world — there is nothing at all that the people in charge do without regard for competition. Setting prices and wages, calculating costs and surpluses, creating and eliminating jobs, introducing new production methods — in short, all aspects of investing are both reactions to the course of competition and actions aimed at succeeding in the contest of businessmen and business spheres. Businessmen or managers are always concerned with their company’s competitiveness; the lack of it is what’s to blame for any failure, unless government obstacles or other adverse business conditions have made it utterly impossible to be competitive. A competitor’s success is of course often evidence that it has violated the principle of genuine, free competition. Putting the comparison of products and prices, productivity figures and returns into practice is the reason for and the purpose of the decisions that management makes in banks and companies large and small; and the current market-economy theorists also regard any real or supposed limitation of this business practice as a harmful restriction of freedom.

This freedom is by no means reserved for the top ten thousand. Quite ordinary people without any far-reaching decision-making power have their hands full all day every day outdoing others. A halfway satisfactory working life can only be had if one’s school certificates are better than one’s classmates’. Whether one can find or keep a job, a problem that individuals and whole staffs have in times of high unemployment, depends on the higher qualification one can demonstrate in comparison with others, whereby one’s superiority can also consist in such peculiar skills as wage sacrifice and other unsportsmanlike deprivations. Even one’s legally protected private life, whether one is a teenager or a seasoned family man or a mature woman, is filled with efforts to recoup oneself in place of competitors and at their expense. So much so that psychotherapists and lawmakers have to try and stop people from overdoing it. It cannot be overlooked, however, that excesses such as bullying and youth violence, family dramas and discrimination, etc., are the unwanted consequences of a life that is a struggle — to land one of the few better places in a world of hierarchies…

2.

Anyone who likes to contemplate the world thus has plenty of material for discovering that competition, and behavior of the same name, reveal human nature. This appraisal also has the advantage that one can do without the additional luxury of elaborately praising competition, but also of complaining about its unrelenting prevalence. There is plenty of that already, the contradictions being of no matter:

— Hardly has it been agreed that competition is “good for business” and guarantees efficiency, which would otherwise fall by the wayside due to human laziness, when unrestrained competition calls for all kinds of precautions, restrictions, and corrections, above all social ones.

— The need for competition, for the essence of freedom, presents itself — historically, and time after time — as a demand to be met by those in political power; and scarcely has the state blazed the way for freedom by getting a market economy & democracy going, when there are those who see competition — the harsh one prevailing — as one big set of constraints.

— In the realm of politics, there is therefore a lively competition over how to organize competition powerfully, in the state’s domestic life as well as its external one. Releasing human nature against monopolies and bureaucratic regulation mania, freeing it from prohibition and patronage, requires a considerable measure of rebuke backed by force, also internationally. It is equivalent to building up a system in which particularly those who complain about the constraints are quite at home and want to keep up their activities. A good example: businessmen who unfortunately have to announce another mass layoff because of the merciless competition. This turnaround — from complaining to being all the more determined to exercise one’s trade, although the constraints supposedly make it practically impossible to make a free decision any more — is not a privilege exclusive to capitalists, however. The art of utilizing one’s individual freedom to choose to adapt to the bemoaned constraints is one that everyone masters. The differences there are arise from the particular social mis­sion one has ended up with.

3.

How astonishingly farsighted Marx was. He not only stated that “competition doesn’t explain anything,” he also noticed that it is not “the individual” that is freed in competition, the school for self-assured character masks of given conditions. He thought the things competed for in the modern, money-earning society, the means for such competition, and the success criteria that apply, show the “inner nature of capital … realized as the reciprocal interaction of many capitals with each other,” and it was clear to him that “the competition among workers is only another form of the competition among capitals.”

Marx proved this in his main work by explaining the thing that is competed for in this society because it is the general means for life: he analyzed money and set forth the objective necessities it entails, the expansion of capital, and its consequences. The sources of income that the free citizens of modern society handle as the means of their livelihood — primarily, capital as the source of interest income, remuneration for labor, rent from landed property — come about as the forms in which the “inner nature” of capital “appears”: necessary products of an economy that fully develops what the private power of money already contains. This result includes a critique of the instrumental way in which free individuals treat their respective source of revenue. What they each consider a means for themselves that works — more or less — according to their purposes is, in terms of its economic nature, an element of the movement of capital; it is a part of and a means for the accumulation of money according to its own laws, which competitors subject themselves to when trying to make the best of them for themselves. When people intent on acquiring money make use of the means and abilities available to them for that purpose, what they are actually serving with their needs and all their efforts are the necessities of capital.

Marx on occasion characterized the reversal of purpose and means in bourgeois, money-earning life by the generalizing formula that “social existence,” i.e., the objectively given private power of money, “determines consciousness,” i.e., compels people to use, and thus acknowledge, this power as the universal means of life. His thanks has been persistent, enthusiastic misunderstanding on the part of epistemologists of various stripes, bourgeois sociologists of knowledge, and socialist ideologues propagating the notion that thinking is conditioned by class.

4.

Competitors with such reliably ‘false,’ i.e., wrong consciousness need a forceful authority to make them get along with each other. For there is anything but harmony between the sources of revenue that follow necessarily from the “inner nature of capital.” As much as they need each other, the participants have opposing interests when it comes to making a living. The fact that they are all competing for the same thing, for their share in the result of the capital expansion they are contributing to in accordance with the prevailing necessities, means they cannot terminate their contradictory position toward each other, but makes it necessary for a sovereign force-wielding authority to decree and enforce rules for reconciling irreconcilable interests. And this necessity is not only an objective one, but is basically also plausible to everyone; even — indeed, above all — to the majority who, with their work for money, reproduce their own position serving capital as its exploited component, thereby increasing the systematic benefit of a small number of owners to their own detriment. Once they are nailed down to their precarious source of income, simply due to the lack of viable alternatives, they see the law and its guardian not as what is guaranteeing their miserable position in the system, but as the only available protector of their efforts to make something out of their position for themselves against its “logic” and against their peers. That is why with its historical revolutions, bourgeois society, even though it now likes to call itself a “civil society,” never brought matters to a point where the use of sovereign force was overcome, but rather precisely to the point that its rulers were committed to enforcing the “factual constraints” that capital needs for functioning and making its progress in the “interaction of the many capitals on each other,” including the “competition of the workers among themselves” and the conflict with landed property.

So it was on Marx’s to-do list to continue his explanation of the capitalist mode of production by deriving the bourgeois state, the competition of nations, and the creation of the world market. He didn’t live long enough to do it. Too bad. He did criticize the great mistake that communist and socialist parties were already making, of seeing state power and its legal sovereignty as a patron whose true calling and historical mission is to give “the labor factor” its due and provide proletarians with their full civil right to compete freely. The workers’ movement made this mistake nevertheless; and its theorizing representatives developed, for its wrong praxis, wrong theories about the state and international relations, leaving absolutely nothing worth considering after a decades-long dispute over the alternative “reform or revolution,” and after a temporarily successful “real socialism” gave itself up. After a century’s delay, this knowledge gap was filled.[1] However, that only made a small theoretical correction to the leftist, Marx-reading zeitgeist coming up in Western Europe, didn’t alter the decay of the old workers’ movement, and has so far not found any publicly perceptible echo.

5.

This much is clear: explaining the capitalist mode of production not only makes it quite easy to distinguish those it benefits from those it harms, it objectively contests the willingness of those it harms to so actively submit to the laws of this mode of production, and radically criticizes the consciousness with which they do so.

After all, no one, whether a shareholder, a teacher, or a temp worker, runs around seeing himself as being directly or indirectly a servant of the private power of money and its capitalist accumulation. Everyone considers the economic constraints of earning money that they have to live up to, together with the state’s protection of these constraints, as so many premises, conditions, and possibilities for earning money, and as an opportunity, indeed as the guarantee of their freedom, to make the best of it for themselves.

For instance, the thing that dominates the working and living process of bourgeois society — capital — is considered not only by the owners and beneficiaries of this wealth, but also by the agencies of the common good and by wage-dependent employees, including “precarious” unskilled workers, as an indispensable means of subsistence, for the individual as well as for the community as a whole. And this is simply because work and life in the modern world depend entirely on it; they follow the pitiful logic that total dependency without any alternative is the best reason for supporting its functioning. The damage that this regime wreaks on the biographies of average people — damage that is coped with under the public authority’s organization — is not blamed on what has caused it, but is interpreted, from the standpoint that “growth” is indispensable, as the consequence of insufficient or inadequate investment of capital. To the class of capital owners and their leading functionaries, their rule over the employment and remuneration of the mass of society, and the taxes on their profits with which the state finances the corresponding order — in short, the power of their money and the expenses resulting from their business — are a service to the common good, which entitles them to consider their business interests to be the source of all well-being. The service these people really do, namely, to the requirements of profit-making, which none of them has invented but each one takes for granted as factual constraints on his wealth, is perceived by them, conversely, as their own personal achievement and as proof of their business acumen, which qualifies them for their highly responsible job of getting richer and richer. The employees exploited with so much business sense are every bit as self-assured as their bosses. They may be constantly confronted with the fact that the dependency of their livelihood on successful capital expansion is to their detriment. But because they have no other means of earning a living, they aim their material interests primarily and crucially at their job, which combines a given performance with a fixed remuneration in a business-serving way. And because submitting to the requirements and applying their working capacity to meet them is their own, voluntary act, accompanied by all kinds of self-serving calculations, they figure their service to capital is their personal vocation. They also feel entitled to make demands on the state, expecting above all that it acknowledge their work that is of little benefit to them, and that it take care of them a bit. The fact that the state and the economy make use of their services gives them class pride in their own importance rather than making them realize that they are the dependent variable of capital… And so on.

So the result of Marx’s derivation of capital and its circuits is that the purposes the various economic characters of this mode of production self-assuredly pursue are not the reasons why they act as they do, and that their motives do not determine the purposes they are actually working toward. This is a contradiction that is advantageous for few, and destroys the benefit of many. So the scientific explanation of the sources of revenue that people accept as the basis for their elementary material interests calls for a continuation: that the critique of the prevailing interests and the wrong ideas that go with them be carried through; that the ‘false’ consciousness the useful victims of capital have of themselves be pointed back to what it really is about, their economic dependence, which they both embrace and deny in their efforts to earn money, in their taking part in competition, and in the couple of different ways they see themselves and the world. It is necessary from a practical point of view to implement this objection to the way the mass of self-assuredly acting competitors come to terms with the system of capitalist exploitation of labor every day.

Marx intended to do that, too — systematically explain the world of competition in which “the inner nature of capital” appears upside down — but never did. He criticized forcefully enough the fundamentally affirmative position that trade unions and workers’ parties had on life as a wage worker, the development of a proletarian interest in fair appreciation of wage labor, ​being proud in their state-supporting significance, as the representatives of the workers’ movement outright taught their followers to be — but this criticism had no historical effect. Social-democratic reformers furnished practical proof that this kind of emancipation program is quite compatible with submitting to the necessities of capital expansion, can be had perfectly well within the capitalist state, and is even very beneficial to the productivity of capital. Leftist revolutionaries seized state power and succeeded in replacing the capitalist class and the constraints and customs of free competition by a planning system that converted wage labor into a relationship serving and remunerated by the state, which didn’t actually benefit the proud working people. Marx’s theoretical heirs were no less wrong in dealing with the opposition between the scientific explanation of capital and the system-compliant misinterpretation of the competitors’ world of experience in their own way. Some took the analysis of money and the derivation of capital and its forms to be a teleological interpretation of history, as if Marx hadn’t criticized the inherent movement of the expansion process but rather glorified it as “the system” overcoming itself. For critical minds intent on avoiding any conflict with the persistent reality of capitalism but still hanging on to Marx as the authority when it comes to radical critique, his criticism of the political economy has no objective explanatory value whatsoever, being instead a method of thinking that allows, enables, requires, or whatever, the economic world to be interpreted as something that has come about historically and is therefore capable of change. Some Marxologists have subsumed the explanation of the capitalist mode of production under the kind of sociological theory construction familiar to them, regarding it as an edifice of hypotheses whose dubious realness first needs to be verified by empirical studies and long-range statistics on profit rates and capital growth. A great many fans of Marx’s theoretical lifework have been interested in it only from the point of view of where did it come from and what did it lead to: the sources used and precursors followed by Marx, and the aftermath of his “thinking.” But practically no one has tried to complete his criticism, to carry on his scientific program as planned. Hardly anyone has taken the general result of the explanation of capital seriously, i.e., that the interests of the agents of this mode of production, their expedient actions, as well as the relevant ideologies in circulation reflect the “inner nature of capital” upside down, so that what is behind “market-economy” activities must be found and made clear to the people affected. There has been even less effort to systematically set forth how the owners and functionaries of society’s wealth — capitalists and politicians — together with their wage-dependent rank and file, all out of self-interest and in faithful fulfillment of what their respective jobs require, actually do everything that Marx deduced from the concept of money and the necessities of its accumulation.

6.

So there is still quite a bit of theoretical work to be done — not to mention the whole practical business.

When it comes to theory, one thing is an ongoing task: to show how exactly what is happening in the world economically and politically is neither a matter of chance nor some machination, but rather the way capitalism takes its course. How does this system that Marx explained work: the exploitation of man and nature, the subordination of labor and wealth to the laws by which money is accumulated? How does the sovereign state power make the profitable working of this system its business, and co-opt its people to that end? How do modern states empower capital to compete globally, and how do they compete against each other for control over, and benefit from, that global competition? The world of business and force that operates this way is full of interest-driven interpretations of what it is accomplishing: competing interpretations from the standpoint of competing, if not hostile, interests. In order to stay out of this competition of interpretations, i.e., to stop going along with the existing competition of prevailing interests and to challenge the prevailing received wisdom, one constantly needs correct arguments. Since 1992, the quarterly magazine GegenStandpunkt has been trying to provide them — it should at least be possible to read why world affairs merit no partisanship, especially not from the standpoint of those intended to play the part of indispensable useful idiots in these affairs.

It is for the sake of theoretical certainty in this long-term effort, which is aimed at practical relevance, that we are following up the derivation of capital, the bourgeois state, modern imperialism, as well as the achievements of the financial sector and the world market, by systematically setting forth which necessities the actors put into effect in a world where “competition prevails,” and what inherent logic they follow in doing so. We will begin with the actions of the capitalists, the agents of those interests that govern modern economies, nowadays on a global scale. It will be explained how those having capital as the source of their income — being either owners or managers of it — produce, point by point, while pursuing their interests, the constraints that are inherent in their economic means; how the public power stands by them as a supervisor and enforcer; how this turns them into character masks of their own regime over labor, nature, and created wealth around the globe, and as such into the ‘ruling’ social class. The globally dominant mode of production will be derived from the profession of self-serving capitalist enrichment, this being divided into five chapters of six sections each in accordance with the accompanying outline, the details of which are not yet complete. The first topic will be the principles of how private owners have the goods required by society produced for profitable sale. These principles receive scarcely any attention from the public so avidly interested in the latest achievements of “globalized” capitalism and the hottest maneuvers of its prime movers, even though they are the principles of the whole mode of production. This will be Chapter I, forthcoming. The succeeding chapters will then lead further, following the praxis of businessmen and the politicians in charge, to that contradictory symbiosis of capital growth, world financial markets, and imperialist force that determines both national and international affairs.

The fate of those who, under these conditions, do the work necessary for production and for the capitalist way of producing is included in the requirements and objectified constraints of the capitalist regime over work and wealth — how could it be otherwise in a regime prevailing so absolutely. Those dependent on wages, the masses throughout the world who have either been made useful for capital growth or are being neglected as useless surplus, will therefore definitely find their place in the derivation of the profession of capitalist enrichment with its fatal consequences — the place assigned to them by their employers’ income-earning acumen that has consolidated into a system, and by the order maintained by the state. As free, full-fledged citizens with their own acknowledged interest in earning an income and their own means of doing so — the state-protected disposal over themselves and their capacity to work — the members of this vast majority are not, however, merely the dependent variable, the politico-economic product of the capitalist regime. They — “we all” — struggle, without any alternative and therefore also with fatal consequences, to make a living from work that serves capital or the conditions of its growth. This majority also demand and receive consideration from the capitalists and assistance from the state. With will and consciousness, they reproduce themselves — as dependent human material for the ‘ruling’ class and state rule. They don’t merely get their politico-economic identity as a special social class slapped on them, they make it their own. At the same time, every determination of this identity, every advance in the logic of earning a living by enriching others, always includes further determined reasons for terminating this relationship — as well as the additional efforts required of those concerned to cope with their precarious existence, and required of the public power to make the impossible real and keep this mode of existence going.

This, too, is not only one of the topics our journal deals with constantly, but will be the object of a systematic explanation in the form of a derivation, parallel — in keeping with the nature of the matter — to the competition of the ‘ruling’ class for the growth of its wealth. This will mean theoretically reconstructing the necessities that the dependent class in capitalism is subjected to so inescapably and adapts to with such difficulty; i.e., criticizing the systematic mistake that the victims of the system make. It is on this mistake that the continuance of the prevailing mode of production together with its political rule depends. So overcoming this mistake opens up the only alternative that doesn’t end up maintaining “all the shit” (as Marx puts it) in a constantly “revolutionized” way.

Note

1 See The Democratic State: Critique of Bourgeois Sovereignty, and Imperialismus (I), Munich 1979, untranslated, reissued by Gegenstandpunkt Verlag.