MIA: Encyclopedia of Marxism: Glossary of Terms
Those who break the security of a computer system.
"Cracker" was coined by hackers to describe theives and vandals that the capitalist press claim are the model for all "hackers". Crackers are often times relative neophites, gathering in small tightly knit groups, usually detached from the computer community, as opposed to hackers, many of who participate in large communities such as the GNU project, etc.
Some organised groups exist who use cracking as their economic sustenence. Such loosely knit organisations sell their labour power to essentially make systems more secure (acting as ‘electronic locksmiths’). Some of these groups have ethical codes (Samurai) while others who sell their labour to the highest bidder are referred to as Sneakers, or in military use, Tiger Teams.
Credit is the separation between purchase of a commodity and payment for it.
Credit is essential for the development of production and distribution, but credit is also debt. Historically, credit gives rise to various forms of fictitious capital, and to paper money and credit-cards in place of “hard cash” (i.e., gold or silver coin whose value is intrinsic, not relying on the “guarantee” of the bank or government, because it is the product of a certain quantity of labour.)
In his 1843 Comments on James Mill, Marx showed how credit (in its normal day-to-day manifestation) serves to accentuate the class character of bourgeois society:
“Within the credit system, its nature, estranged from man, under the appearance of an extreme economic appreciation of man, operates in a double way:
“1) The antithesis between capitalist and worker, between big and small capitalists, becomes still greater since credit is given only to him who already has, and is a new opportunity of accumulation for the rich man, or since the poor man finds that the arbitrary discretion of the rich man and the latter’s judgment over him confirm or deny his entire existence and that his existence is wholly dependent on this contingency.
“2) Mutual dissimulation, hypocrisy and sanctimoniousness are carried to extreme lengths, so that on the man without credit is pronounced not only the simple judgment that he is poor, but in addition a pejorative moral judgment that he possesses no trust, no recognition, and therefore is a social pariah, a bad man, and in addition to his privation, the poor man undergoes this humiliation and the humiliating necessity of having to ask the rich man for credit.
“3) Since, owing to this completely nominal existence of money, counterfeiting cannot be undertaken by man in any other material than his own person, he has to make himself into counterfeit coin, obtain credit by stealth, by lying, etc., and this credit relationship -- both on the part of the man who trusts and of the man who needs trust -- becomes an object of commerce, an object of mutual deception and misuse. Here it is also glaringly evident that distrust is the basis of economic trust; distrustful calculation whether credit ought to be given or not; spying into the secrets of the private life, etc., of the one seeking credit; the disclosure of temporary straits in order to overthrow a rival by a sudden shattering of his credit, etc. The whole system of bankruptcy, spurious enterprises, etc.... As regards government loans, the state occupies exactly the same place as the man does in the earlier example.... In the game with government securities it is seen how the state has become the plaything of businessmen, etc.
“4) The credit system finally has its completion in the banking system. The creation of bankers, the political domination of the bank, the concentration of wealth in these hands, this economic Areopagus of the nation, is the worthy completion of the money system.
“Owing to the fact that in the credit system the moral recognition of a man, as also trust in the state, etc., take the form of credit, the secret contained in the lie of moral recognition, the immoral vileness of this morality, as also the sanctimoniousness and egoism of that trust in the state, become evident and show themselves for what they really are.” [Comment on James Mill]
In the nineteenth century, when Marx was writing, credit was something that really existed only for the middle and upper classes; for the poor there was only usury, the ruthless exploitation of poverty by various kinds of money-lender. Especially from the 1950s onwards, a multiplicity of forms of consumer credit have penetrated the daily lives of the masses, all of them new forms of usury, driving people into debt and skimming a share of the surplus out of workers’ wages through interest payments. For the wealthy, the credit system invents new and newer forms every year. Since the 1970s, forms of credit operating in the world of finance – future, commodity speculation, the purchase and sale of debt itself, and so on – have far outstripped paper money and constitutes a huge burden of fictitious capital on the backs of the working class and an enromously unstable ocean of value that can sweep whole economies away in its ebbb and flow.
See Volume III of Capital, especially chapters 21 to 27 for a more detailed analysis of credit.
Crisis of Capitalism
The word “crisis”, used in reference to the economic system, may be in connection with (i) a conjunctural crisis, (ii) the cyclical crisis or “business cycle”, or (iii) the historic crisis of capitalism.
A conjunctural crisis can only be discussed in connection with the specific conditions involved in the given case, and generalisation is impossible. For example, such crises can be caused by defeat in war, or by being overtaken economically by a rival power, or as a result of a weak or incompetent government, or as a result of the loss of the natural conditions for production, such as where the environment has been destroyed by industry.
It is, however, particularly the cyclical and historical crises of capitalism which have absorbed the attention of Marx and other revolutionaries over a long period of time, and have been the subject of important theoretical debate down the years.
In the opening chapters of Capital Marx explains why cyclical crises are characteristic of capitalism:
“If the interval in time between the two complementary phases of the complete metamorphosis of a commodity become too great, if the split between the sale and the purchase become too pronounced, the intimate connection between them, their oneness, asserts itself by producing - a crisis. The antithesis, use-value and value; the contradictions that private labour is bound to manifest itself as direct social labour, that a particularised concrete kind of labour has to pass for abstract human labour; the contradiction between the personification of objects and the representation of persons by things; all these antitheses and contradictions, which are immanent in commodities, assert themselves, and develop their modes of motion, in the antithetical phases of the metamorphosis of a commodity. These modes therefore imply the possibility, and no more than the possibility, of crises. The conversion of this mere possibility into a reality is the result of a long series of relations ..” [Capital, Volume I, Chapter 3]
and in one of the last fragments of Volume III:
“... production relations are converted into entities and rendered independent in relation to the agents of production, ... the interrelations, due to the world-market, its conjunctures, movements of market-prices, periods of credit, industrial and commercial cycles, alternations of prosperity and crisis, appear to them as overwhelming natural laws that irresistibly enforce their will over them, and confront them as blind necessity. ...” [Capital, Volume III, Chapter 48]
It is also said that capitalism is in permanent crisis, as capitalism is constantly transforming the labour process and revolutionising the relations of production, driven by the unresolvable contradiction between capital and labour. Or, to put it another way, capitalism is unsustainable development by its very nature.
crisis of capitalism, cyclical
The cyclical crisis of capitalism, or “business cycle” is the oscillation between boom and slump, between inflation and recession, which runs through the capitalist economy roughly every ten years.
The business cycle arises from the “distance” that opens up between the production and the consumption of a commodity, bridged by debt, and the huge mass of fictitious capital which builds up on the basis of the credit system. As this mass of paper value and speculative capital grows, the system becomes more and more unstable, the recession more devastating. Tweeking the interest rates and money supply to stave of this crisis is like driving a Formula One racing car; the central bankers of the capitalist powers are very skilled at the art, but the task of avoiding a crash gets harder and harder and fictitious capital circulates around the world in greater and greater masses.
crisis of capitalism, historic
The historic crisis of capitalism is the tendency, played out over decades and centuries, for life under capitalism to become more and more untenable, and for the social forces opposing capitalism to gradually build up.
One of the central concerns of Marx, in his study of the capitalist mode of production, was to identify and understand its inner contradictions, the source of the historic crisis which would eventually create conditions for its overthrow and replacement by a more humane and rational system of production. Marx did not come to a definitive answer on this question, and nor could he, for the answer to this question must be the work of all of humanity, not one person. Nevertheless, the search for the essential contradictions within the capitalist mode of production is a theme underlying all of Marx’s work, and he identified a number of contradictions and distinct visions of the historic crisis of capitalism.
These include: (i) the tendency of the rate of profit to fall, (ii) the concentration of capital, (iii) the growth of the proletariat; given the falling rate of profit, an historic crisis may be manifested as (iv) a crisis of realisation (underconsumption); Lenin added to these (v) war and revolution (imperialism), and in the post World War Two period, by extension of Marx’s analysis of the cyclical crisis of capitalism, we should add (vi) a catastrophic collapse of credit.
(i) the tendency of the rate of profit to fall
The tendency of the rate of profit to fall is a theory put forward by Marx to the effect that the rate of profit enjoyed by capitalists will get smaller and smaller over time. This is because capitalists use more and more developed materials and machinery in their production as the labour process becomes more and more socialised over time, and use smaller and smaller amounts of wage-labour per unit output. Thus, the “value added” is necessarily smaller in each stage of the process of production, since it is only labour-power which adds value, not machinery or materials.
(ii) the concentration of capital (or elimination of small capital)
The concentration of capital is the historical tendency for capital to be gravitate into fewer and fewer hands, or as the saying goes – “the rich get richer and the poor get poorer”.
Left to itself, this process would bring about a situation where a handful of immensely rich capitalists would find themselves contronted by a vast mass of proletarians with nothing in between. Consequently, capitalists governments have long had “anti-trust” laws to protect capitalism from itself. Likewise, the US, Japan and Europe use tariffs and subsidies to protect small farmers even though cheaper food could be imported from overseas.
(iii) the growth of the proletariat
As capitalism grows, not only are there more and more workers, but the workers are increasingly involved in organising and managing every aspect of social life; increasingly, the capitalists and their hangers-on are redundant, and there is nothing to stop the workers taking over.
After the Roman Empire collapsed, it took centuries for the feudal system to establish itself in Europe and regain what had been lost in the collapse of the Roman Empire, because slave society did not generate any class capable of overthrowing the old system and rebuilding society anew. Capitalism however, not only creates the proletariat, but organises and educates the proletariat for the task of destroying capitalism itself.
This conception of the crisis of capitalism is most clearly expressed in the Communist Manifesto:
“We see then: the means of production and of exchange, on whose foundation the bourgeoisie built itself up, were generated in feudal society. At a certain stage in the development of these means of production and of exchange, the conditions under which feudal society produced and exchanged, the feudal organisation of agriculture and manufacturing industry, in one word, the feudal relations of property became no longer compatible with the already developed productive forces; they became so many fetters. They had to be burst asunder; they were burst asunder.
“Into their place stepped free competition, accompanied by a social and political constitution adapted in it, and the economic and political sway of the bourgeois class.
“A similar movement is going on before our own eyes. Modern bourgeois society, with its relations of production, of exchange and of property, a society that has conjured up such gigantic means of production and of exchange, is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells. For many a decade past, the history of industry and commerce is but the history of the revolt of modern productive forces against modern conditions of production, against the property relations that are the conditions for the existence of the bourgeois and of its rule. It is enough to mention the commercial crises that, by their periodical return, put the existence of the entire bourgeois society on its trial, each time more threateningly. In these crises, a great part not only of the existing products, but also of the previously created productive forces, are periodically destroyed. In these crises, there breaks out an epidemic that, in all earlier epochs, would have seemed an absurdity - the epidemic of over-production. Society suddenly finds itself put back into a state of momentary barbarism; it appears as if a famine, a universal war of devastation, had cut off the supply of every means of subsistence; industry and commerce seem to be destroyed. And why? Because there is too much civilisation, too much means of subsistence, too much industry, too much commerce. The productive forces at the disposal of society no longer tend to further the development of the conditions of bourgeois property; on the contrary, they have become too powerful for these conditions, by which they are fettered, and so soon as they overcome these fetters, they bring disorder into the whole of bourgeois society, endanger the existence of bourgeois property. The conditions of bourgeois society are too narrow to comprise the wealth created by them. And how does the bourgeoisie get over these crises? On the one hand, by enforced destruction of a mass of productive forces; on the other, by the conquest of new markets, and by the more thorough exploitation of the old ones. That is to say, by paving the way for more extensive and more destructive crises, and by diminishing the means whereby crises are prevented.
“The weapons with which the bourgeoisie felled feudalism to the ground are now turned against the bourgeoisie itself.
“But not only has the bourgeoisie forged the weapons that bring death to itself; it has also called into existence the men who are to wield those weapons - the modern working class - the proletarians.
“In proportion as the bourgeoisie, i.e., capital, is developed, in the same proportion is the proletariat, the modern working class, developed - a class of labourers, who live only so long as they find work, and who find work only so long as their labour increases capital. These labourers, who must sell themselves piecemeal, are a commodity, like every other article of commerce, and are consequently exposed to all the vicissitudes of competition, to all the fluctuations of the market.” [Communist Manifesto, Chapter 1]
and Marx and Engels conclude:
“The essential conditions for the existence and for the sway of the bourgeois class is the formation and augmentation of capital; the condition for capital is wage labour. Wage labour rests exclusively on competition between the labourers. The advance of industry, whose involuntary promoter is the bourgeoisie, replaces the isolation of the labourers, due to competition, by the revolutionary combination, due to association. The development of Modern Industry, therefore, cuts from under its feet the very foundation on which the bourgeoisie produces and appropriates products. What the bourgeoisie therefore produces, above all, are its own grave-diggers. Its fall and the victory of the proletariat are equally inevitable.” [Communist Manifesto, Chapter 1]
As a result of the conditions of postmodern capitalism, every worker today is as much as organiser of production as a producer as such. Never has capital been as unnecessary as it is today.
The Marxist perspective should be contrasted with conception of capitalism as a system which necessarily leads simply to universal immiseration and pauperism, with growing unemployment as a result of mechanisation and automation. As most clearly expressed in the Communist Manifesto, Marx saw capitalism as a system which would revolutionise the world, and foremost among its achievements was the creation of the proletariat: “its own grave-diggers”.
“The slave frees himself when, of all the relations of private property, he abolishes only the relation of slavery and thereby becomes a proletarian; the proletarian can free himself only by abolishing private property in general.” [Engels, Principles of Communism]
(iv) crisis of realisation “stagflation”
“Contradiction in the capitalist mode of production: the labourers as buyers of commodities are important for the market. But as sellers of their own commodity – labour-power – capitalist society tends to keep them down to the minimum price.
“Further contradiction: the periods in which capitalist production exerts all its forces regularly turn out to be periods of over-production, because production potentials can never be utilised to such an extent that more value may not only be produced but also realised; but the sale of commodities, the realisation of commodity-capital and thus of surplus-value, is limited, not by the consumer requirements of society in general, but by the consumer requirements of a society in which the vast majority are always poor and must always remain poor.” [Capital, Volume II, Chapter 16]
(v) imperialism – epoch of wars and revolution
Imperialism is the specific stage in the development of capitalism beginning roughly from the beginning of the 20th century, characterised by the dominance of finance capital over industrial capital and by inter-imperialist wars over markets, sources of raw materials and cheap labour.
In Marx’s day, capitalism was still in its phase of expansion, spreading from Europe to the rest of the world, conquering new markets and finding new sources of raw materials and cheap labour. Although large cartels had grown up and banks grown to significant proportions, industry was still the dominant sector of capital.
By the turn of the century, there was no more room for expansion for any capitalist in search of new markets or resources, except at the expense of competing colonial powers. In those days, colonialists jealously guarded their exclusive right to exploitation of their own colonies, and the exhaustion of new opportunities meant war between the imperialist powers and every time the balance of power changed for one or another reason, a new war would have to be launched for a redivision of the markets.
The new epoch which opened up under these conditions is called Imperialism. See Lenin’s Imperialism – the latest stage of development of capitalism for the first comprehensive analysis of the nature of imperialism. As an epoch of wars and revolution, imperialism now expresses a new form of the crisis of capitalism:– “Mutually Assured Destruction”.
Many people argue that sometime in the last few decades a new phase in the development of capitalism – beyond Imperialism – has begun; the fact that there is only one dominant imperialist power, the collapse of the USSR, the rise of communications and information technology, the services sector and “knowledge work” are cited as the basis for such theories.
(vi) catastrophic collapse of credit
A catastrophic collapse of credit is an event, like the Wall Street Crash of 1929, when a tidal wave of bankruptcies sweeps across the world, throwing millions out of work and paralysing production.
The post-War boom from 1945 – 1968 was the longest boom in history, and was based on the accumulation of vast amounts of fictitious capital. This accumulation of fictitious capital now continues on a greater scale than ever before with 98% of financial transactions on the world market not including any actual good or service.
Many people believe that the kind of analysis Marx makes of the cyclic crisis of capitalism, just as it led to the Great Depression of 1929-39, could lead to another catastrophic collapse, and that such a crisis would be of such a scope that it would take on the character of an historic crisis and stimulate not just a New Deal, but provide the social impetus for the overthrow of capitalism and reconstruction on the basis of new social relations of production.
Critique is the practice of exposing the social basis underlying an argument. Marxist critique is generally immanent critique, that is, critique springing from inside.
Critique differs from simply countering an argument with a different one or proving it to be wrong, in fact, critique implicitly recognises that the argument it opposes is right, but right in the context of a specific form of social practice which may not be declared.
Immanent critique accepts the terms of a theory and pursues it thoroughly and consistently until it arrives at contradiction with itself, as must any consistent theory which pretends to be complete. This disclosure of the immanent self-contradiction implicit in a system of ideas opens the way to disclosure of its social basis and interest.
Critique has its origin with Kant, whose Critique of Pure Reason can be said to mark the beginning of modern philosophy. For Kant, Criticism was a “third way” between dogmatism and scepticism. See his Impossibility of a Sceptical Satisfaction of Pure Reason in its Internal Conflicts. Instead of simply considering whether a given statement was true or false, Kant subjected to scrutiny the ‘categories’, the concepts themselves, through which the question was posed. Kant proved that Hume, the proponent of scepticism, was in fact dogmatic, since he denied absolutely, but without proof, the possibility of knowing the cause of things.
Hegel was the first to develop criticism systematically. Hegel’s critique was based on the understanding that every thought was just one stage in the unfolding of the Absolute Idea; he developed the art of uncovering the internal contradictions within an argument which would lead it, by its own logic, to an opposite position. Hegel saw human history as expressing successive stages in the development of the Idea. Every truth is for Hegel, then, a relative truth, since it expresses one stage in the unfolding of history.
“In the history of philosophy the different stages of the logical idea assume the shape of successive systems, each based on a particular definition of the Absolute. As the logical Idea is seen to unfold itself in a process from the abstract to the concrete, so in the history of philosophy the earliest systems are the most abstract, and thus at the same time the poorest. The relation too of the earlier to the later systems of philosophy is much like the relation of the corresponding stages of the logical Idea: in other words, the earlier are preserved in the later: but subordinated and submerged. This is the true meaning of a much misunderstood phenomenon in the history of philosophy - the refutation of one system by another, of an earlier by a later. Most commonly the refutation is taken in a purely negative sense to mean that the system refuted has ceased to count for anything, has been set aside and done for. Were it so, the history of philosophy would be, of all studies, most saddening, displaying, as it does, the refutation of every system which time has brought forth. Now although it may be admitted that every philosophy has been refuted, it must be in an equal degree maintained that no philosophy has been refuted. And that in two ways. For first, every philosophy that deserves the name always embodies the Idea: and secondly, every system represents one particular factor or particular stage in the evolution of the Idea. The refutation of a philosophy, therefore, only means that its barriers are crossed, and its special principle reduced to a factor in the completer principle that follows.
“Thus the history of philosophy, in its true meaning, deals not with a past, but with an eternal and veritable present: and, in its results, resembles not a museum of the aberrations of the human intellect, but a Pantheon of godlike figures. These figures of gods are the various stages of the Idea, as they come forward one after another in dialectical development. [Shorter Logic, Hegel]
The Young Hegelians called themselves “Critics”, and Marx ridiculed their criticism in The Holy Family, or Critique of Critical Criticism.
One of the Young Hegelians, Ludwig Feuerbach developed a new approach to criticism which he turned against Hegel. Feuerbach took statements of Hegel and interchanged the subject and object, showing that the sentence made more sense this way. For example, whereas Christianity asserted that the family was an image of the Holy Family, Feuerbach asserted that the Holy Family was an imaginary image of the Earthly family. (See Essence of Christianity.) In his early work, such as Critique of Hegel’s Philosophy of Right, Marx uses Feuerbach’s method:
“Had Hegel started with the real subjects as the bases of the state it would not have been necessary for him to let the state become subjectified in a mystical way. ‘However, the truth of subjectivity’, says Hegel, ‘is attained only in a subject, and the truth of personality only in a person.’ This too is a mystification. Subjectivity is a characteristic of subjects and personality a characteristic of the person. Instead of considering them to be predicates of their subjects’ Hegel makes the predicates independent and then lets them be subsequently and mysteriously converted into their subjects.”
But Marx soon discovered the limitations of Feuerbach’s criticism as a one-sided contemplative materialism.
“Feuerbach, consequently, does not see that the “religious sentiment” is itself a social product, and that the abstract individual whom he analyses belongs to a particular form of society.” [Theses on Feuerbach, VII]
Thus, Marx restored a valuable element of Hegel’s critique, in Hegel’s conception of ideas and theories expressing interests in “a particular form of society”. Social relations underlie ideology and provide the key to understanding ideology, but at the same time, ideology provide the clearest possible window into social relations.
Thus, Marx entitled his magnum opus, Capital: Critique of Political Economy, and in Capital Marx’s aim is to understand the nature of bourgeois society by critique of its expression in the theoretical formulations of the political economists.
“Political Economy has indeed analysed, however incompletely, value and its magnitude, and has discovered what lies beneath these forms. But it has never once asked the question why labour is represented by the value of its product and labour-time by the magnitude of that value. These formulae, which bear it stamped upon them in unmistakable letters that they belong to a state of society, in which the process of production has the mastery over man, instead of being controlled by him, such formulae appear to the bourgeois intellect to be as much a self-evident necessity imposed by Nature as productive labour itself. “ [Capital, Chapter 1]
Marx’s critique differs from, for example, Derrida’s critique: Derrida’s method is called deconstruction, and in deconstruction, the method is to disclose within an argument a hidden or implied binary, and to challenge the validity of this binary. Every argument can be shown to have such an unspoken “binary”, so deconstruction is an operation that can be carried out without any reference to the material world outside the text. For Marx on the other hand, the argument and the social conditions spoken of, expressed by and revealed in the text are inseparable.
Another tradition in critique begins with Nietzsche and Freud up to Lacan and Zizek, in which concepts of psychology and psycholanalysis are used to disclose personal interest disclosed in an argument. There is also a linguistic or semiotic current in criticism which shares with Derrida the exclusion of anything outside the text and focuses on disclosing hidden meanings in the linguistic structure of the argument.
The Women’s Liberation Movement introduced a new and powerful method of critique with the concept of sexist language:
“One of our fundamental rules for making sense of our male-dominated world is – predictably – that the male represents the positive while the female, necessarily then, represents the negative. On this foundation stone we have erected many of the structures which make male dominance seem reasonable and even ‘natural’ for our feedback is determined largely by what we feed in. It is this rule which must be changed if we are to construct a view of the world in which both sexes are accorded equal value. When we begin to select, pattern and interpret according to the rule that the sexes are equal, we will construct a very different reality, we will make very different ideas ‘come true’. The claim for male superiority will no longer seem reasonable and the male monopoly in power will be seen as problematic.
“Each day we construct the world we live in according to these man made rules. We select, pattern and interpret the flux of events in the attempt to make life meaningful and few of us suspect how deeply entrenched, and arbitrary, these rules are. We impose them on the world so that what we see conforms to what we have been led to see. And one of the crucial factors in our construction of this reality is language”. [Man Made Language]
Marxism is concerned particularly to uncover class interests underlying an argument. However should not be equated with crude slander like “Engels owned a factory therefore his ideas were bourgeois”, or “Althusser killed his wife, therefore his ideas must be sexist”. Trotsky expressed it very well:
“We have said above that every important and lasting grouping in the party, to say nothing of every organised faction, has the tendency to become the spokesman of some social interests. Every incorrect deviation may, in the course of its development, become the expression of the interests of a class hostile or half hostile to the proletariat. But first of all this applies to bureaucratism. It is necessary to begin right there. That bureaucratism is an incorrect deviation, and an unhealthy deviation, will not, let us hope, be contested. This being the case, it threatens to lead the party off the right road, the class road. That is precisely where its danger lies. But here is a fact that is instructive in the highest degree and at the same time most alarming: those comrades who assert most flatly, with the greatest insistence and sometimes most brutally, that every difference of opinion, every grouping of opinion, however temporary, is an expression of the interests of classes opposed to the proletariat, do not want to apply this criterion to bureaucratism. ...
“Nevertheless, there should be no oversimplification and vulgarisation in the understanding of the thought that party differences, and this holds all the more for groupings, are nothing but a struggle for influence of antagonistic classes.” [The New Course, Trotsky 1923]