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6/17/2019 "The Black Economy 50 Years After The March On Washington"

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Establishing The United States Of Africa: Toward A New Concept Of Capital And Development (Part 3)

Here we look at what Marx had to say:

"The circulation of commodities is the starting point of capital. The production of commodities and their circulation in its developed form, namely trade, form the historic presuppositions under which capital arises. World trade and the world market date from the sixteenth century, and from then on the modern history of capital starts to unfold.

If we disregard the material content of the circulation of commodities, i.e. the exchange of the circulation of commodities,...and consider only the economic forms brought into being by this process, we find that the ultimate product is money. The ultimate product of commodity circulation is the first form of appearance of capital.

Historically speaking, capital invariably first confronts landed property in the form of money; in the form of monetary wealth, merchants' capital and usurers' capital. However, we do not need to look back at the history of capital's origins in order to recognize that money is its first form of appearance. Every day the same story is played out before our eyes. Even up to the present day, all new capital, in the first instance, steps onto the stage - i.e. the market, whether it is the commodity-market, the labour-market, or the money-market - in the shape of money, money which has to be transformed into capital by definite processes.

The first distinction between money as money and money as capital is nothing more than a difference in their form of circulation. The direct form of the circulation of commodities is C-M-C, the transformation of commodities into money and the re-conversion of money into commodities: selling in order to buy. But alongside this form we find another form, which is quite distinct from the first: M-C-M, the transformation of the money into commodities, and free the re-conversion of commodities into money: buying in order to sell. Money which describes the latter course in its movement is transformed into capital, becomes capital, and, from the point of view of its function, already is capital.

As the conscious bearer of this movement, the possessor of money becomes a capitalist. His person, or rather his pocket, is the point from which the money starts, and to which it returns. The objective content of the circulation we have been discussing - the valorization of value - is his subjective purpose, and it is only in so far as the appropriation of ever more wealth in the abstract is the sole driving force behind his operations that he functions as a capitalist, i.e. as capital personified and endowed with consciousness and a will. Use-values must therefore never be treated as the immediate aim of the capitalist; nor must the profit on any single transaction. His aim is rather the unceasing movement of profit-making. This boundless drive for enrichment, this passionate chase after value, is common to the capitalist gone mad, the capitalist and the miser; but while the miser is merely a capitalist gone mad, the capitalist is a rational miser. The ceaseless augmentation of the value, which the miser seeks to attain by saving his money from circulation, is achieved by the more acute capitalist by means of throwing his money again and again into circulation.

The independent form, i.e. the monetary form, which the value of commodities assumes in simple circulation, does nothing but mediate the exchange of commodities, and it vanishes in the final result of the movement. On the other hand, in the circulation M-C-M both the money and the commodity function only as different modes of existence of the value itself, the money as its general mode of existence, the commodity as its particular or, so to speak, disguised mode. It is constantly changing from one form into the other, without becoming lost in this movement; it thus becomes transformed into an automatic subject. If we pin down the specific forms of appearance assumed in turn by self-valorizing value in the course of its life, we reach the following elucidation: capital is money, capital is commodities."

Both Marx and Smith defined money as capital and the most dominant or "ultimate" form of capital at that - the form of capital that other forms depended upon for their cultivation and development. However, Smith saw the ultimate aim of money, as capital, to be consumption obtained as a result of stored labour, while Marx saw the ultimate aim of capital as profit-making and the incessant accumulation of capital. As Marx stated, 'Use-values must therefore never be treated as the immediate aim of the capitalist; nor must the profit on any single transaction.' For Marx, the motive of the individual who buys in order to sell is different than he or she who sells in order to buy. The latter is engaged in legitimate economic activity while the former is involved in an activity that, at its base, in Marx' view, is neither economic or proper. Smith, on the other hand, saw both activities as serving the same end - consumption or the eventual purchase of goods and services. Smith saw the accumulation of capital in either circulating or fixed forms as ultimately aimed at consumption - their use aimed at the satisfaction of needs and wants; enjoyment and leisure.

These two views of capital have dominated economics and the minds of policy makers in the West and economically developing world for much of the last two hundred years. They both presuppose the role of capital as first and foremost a means to an end that is judged, measured and evaluated in terms of the motivation of the individual who possess it. To Smith a capitalist is one who uses surplus revenue (an amount more than what he needs to live) to provide for whatever portion of his wants or perceived needs that he desires. For Mark, a capitalist is one who desires to continually accumulate money, of course, well beyond any use that it may serve in satisfying physical needs and wants. Smith saw revenue derived from an existing stock as a means to lessen the load carried by labour in the maintenance of the human being. He saw poverty as indicated by the degree to which the stock produced by a person's labour is sufficient to provide for their maintenance. To the degree to which a person had no excess stock - they were not wealthy. Therefore, those who wished to be wealthy would somehow have reached the point where their labour generates a level of stock that is sufficient to not only maintain that individual but also produce a surplus that produces revenue of its own - independent of the labour process that produced it.

For Marx, the only acceptable process by which this state of surplus stock can be achieved is when the human being produces and receives revenue from such production and then again, engages in production. The moment that a person derives revenue and stock in excess of that which is needed to maintain them, they have begun to engage in capitalist activity. They begin in the C-M-C (commodity-for money-for commodity) cycle and end in the M-C-M (money for commodity-for money) cycle.

For both men the circulation of money is the center of "capital". The manner in which money moves and for what purpose determines the lines of demarcation for labor and capital and even, in the case of Marx, good and bad.

Africa has been forced to operate under both of these worldviews and varying levels of understanding of both, in the minds of their leaders over the last 200 years. First, the continent, under colonial rule carried the weight of European nations who devalued the lives of Africans and valued the "fixed capital" under the ground more than the human capital of the human beings who lived above it. These colonizers were, directly or indirectly, operating out of the worldview of Smith, moving through and out of the mercantalist vision and influence that Smith wrote against. However, the application of the Smith model was not for Africans as principals. Rather, they were relegated to a supporting role that only allowed them to vicariously observe the capitalist activities of their European ruler, never from the top, always from the bottom.

When the European nations were thrown out of Africa and their yoke removed from the African, one independence movement after another, on the continent, threw off what they interpreted to be the vestiges of capitalism in favor of socialism, and or, an interpretation of Marxist ideology. To varying degrees, independent African nations rejected capitalism in favor of an economic model closer to Marx and communism.

The result, on both accounts, before and after colonial rule was not a clean match with what Smith nor Marx envisioned.

While both economic models have failed in Africa, partially because of the degree to which African policy makers have violated the tenets of capitalist and communist orthodoxy, both models were destined to fail in Africa and everywhere else in the world due to their chief fundamental shortcoming, which both systems share in common.

Both Marx and Smith placed an excessive an inappropriate amount of emphasis on money. Both men make money as capital the premier form of capital. Marx does this by focusing on the manner in which the accumulation of money, in his estimation, is the end all of those who are able to generate profit. Smith does this by making the presupposition that all of those engaged in the economic process are using capital in order to obtain revenue or profit in order to purchase, from this additional revenue, what they previously relied exclusively upon their labor to provide. Both men are essentially saying the same thing - that all human beings, if not interfered with, desire a state of being where money, as capital, generates increased amounts of money and at a faster rate and in greater quantity than could be produced by an individual's human labor.

The bottom line, in both worlds, is that the human being labors for money in order that their holding of money derived from labor, now known as capital, will independently or with only a slight assist from its owner, produce additional money, additional capital. In both worlds, the optimum state sought by the individual and in the mind of the individual, is that whereby capital subsumes labor; where labor is put in the service of capital. And by capital, ultimately what is meant is money. As a result, in their worldview, financial capital is superior to human capital.

The premium placed upon financial capital in both models comes at the expense of human capital. And this is largely because under Marx and Smith, the development and cultivation of the human being is not viewed as the primary responsibility or activity of the marketplace. The development of the human being, even though he or she is the originator of economic or capitalist activity, under both models, is the responsibility of a non-economic entity. And even under the Marxist model where the education of human beings upon certain vocational lines may take place - the potential of the human being is not explored or seen as an element that must be evolved for the economic process to take place at the highest level of operation. And with Smith, human beings essentially come as they are and participate in the economic marketplace in whatever condition in which they arrive. Although Smith does recognize the importance of education and even nominally connects its impact on the sum total of talents available in the marketplace; he yet does not demonstrate that he sees the education and cultivation of the human being as an economic undertaking, first and foremost. It is important to remember that Smith only saw the cumulative acquired and useful abilities of human beings in a society as constituting only one fourth of that society's fixed capital. In addition, partly because of the timeframe in which he lived, Smith viewed the improvement of talent as having no greater impact on the economy than that of a new machine. He was not able to think clearly into the totality of human capital, focusing almost exclusively on the physical portion as opposed to the intellectual elements.

As a result of the marginalization of human capital by both Marx and Smith, those who have attempted to build economies primarily under the influence of their economic models have found that what they produce and devise is inefficient in its ability to develop, account, and arrange all of the forms of capital in a society. Therefore its economies have never been successful in achieving their stated objectives and goals.

It is within the human being and not the produce of lands, fisheries and mines (as Smith thought) where the greatest sources of capital lie. And it is not in money, as Marx thought, where the great volume of capital resides. It is in the physical body of the human being - body and mind - where the boundless universe of capital lies. And the economy that can best develop, cultivate, and bring to market and exchange the most human capital will prosper in this century. And it will be that economy that will provide the best answer to date, in solving the problem of economic income growth vs. economic income distribution.

Another view of human capital superior to that which Smith and Marx demonstrated must guide the world's economies and the African Union, in particular, if it is to rise to a level of economic activity well beyond what individual African nations were to accomplish under the influence of Marx and greater than that which Africa and its European colonizers were able to achieve under the influence of Smith.

That view must begin with a recognition that a human nature does in fact exist. And that recognition must be superior to that demonstrated by either of the world's economic patriarchs, Smith and Marx. That view has to include, at its most basic levels, an understanding that human beings are born as tangible economic factors - barring debilitating defects and illnesses - in the physical and intellectual senses. This view also must include a realization that the greatest bulk of human resources, beyond manual labor, are buried deep in the human being and are unmanifested and "invisible" to the naked eye. The process by which the most valuable forms of human capital are brought out requires a keen spiritual eye that can search the human being and bring out or draw out what is within. By the word spiritual we certainly do not have in mind what most imagine in relation to that term. Rather, we speak of the ability to see unseen realities with faith in a process - a phenomenon that is demonstrated everyday by school teachers around the world. The teachers, particularly those in the early years of elementary school cannot see what lies within their students, yet and still they exhibit confidence or faith in a process that has proven to develop human beings in a manner that eventually manifests the invisible - those talents and abilities that society one day will be able to account for as part of its collective capital "stock".

If that, which today, is largely considered the work of the educator and spiritual leader, were considered "economic" in nature, society and even nations would be better able to identify, account, develop and arrange human capital as never before.

Thursday, August 1, 2002

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