Profit and growth

The postwar expansion of the welfare state and of social guarantees — including access to higher education — can no more be ascribed to the era’s high level of taxation than it can to the state’s unilateral beneficence. Such an attribution completely erases the centrality of productive relations and makes political economy operate solely within the moment of (re)distribution. Taxation is the realm of the state, and even though tax regimes do of course rebound on the economy and productive relations, they do not determine them; a particular taxation regime can exist with any kind of productive system. Attributing the increase of social advantages and opportunities to taxation both is apolitical and ignores the importance of productive relations. Specifically, in the postwar era, it was the productivity bargain that enabled the expansion.

Attributing the expansion to high rates of profit in an attempt to point to the symmetry of possibilities in the past and present is an improvement, but just barely. Profit is not the same thing as growth. Profitability can be high due to a range of factors, most of them limited and temporary, that have nothing to do with increased productivity: lowered tax obligations, the extraction of absolute surplus-value (which under neoliberalism has been made possible by the postwar era’s shorter working hours), and the like. Profitability — which measures profits of publicly traded corporations — is today sometimes as high as it was during the Golden Age, but that’s not the same thing as saying that growth is what it is then. Because it hasn’t been: growth post-’73 has been much slower than what it was from ’48-’73. The distinction is important, because the former measures the performance of individual firms, while the latter charts the change in the nation’s productivity. But the relevance doesn’t arise solely because growth presents a truer picture of the “whole” of production but because growth presents it at the level of its realization: the nation. Individual firms (“profits”) don’t act as apparatuses of capture or express productive relations. Nations (“growth”) do.

And so the contraction of social opportunities, the “crisis” in social reproduction as some would have it, is a reflection not of the insufficiency of taxation but of the relative paucity of growth. This results from capital’s decreased ability to direct command over labor. To quote myself:

Neoliberal capitalism has, on the one hand, been forced to subtract some axioms, particularly those relating to labor productivity, because workers, the traditional instigator of new axioms, have become less massified and have ceased making demands of the state. The consequence of this is that capitalism is not pushing beyond its limits with as much regularity and with as great a force as it used to. It has become internally impoverished and ascetic, which manifests itself in growth rates in the “core” capitalist economies that are much slower than during the Keynesian era, the time of maximum axioms. On the other hand, neoliberalism has increased certain of its axioms, particularly in the regulation of life, channeling more and more of nonwork existence toward productive activity. This has manifested itself in nearly unprecedented levels of income and wealth disparity and rates of profitability, not to mention neoliberal subjects’ seemingly endless capacity to accumulate debt.


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