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Marx wrote that it is capitalism that imagines that the only input to its production is labor. “In reality, natural is the mother and labor is the father of production”. The vast productivity of today’s capital is predicated on the exploitation and degradation of what it views as natural resources or raw materials.
The importance of raw material has had interesting twists. From pre-capitalist times, the control of raw materials has been a powerful force in the expansion of the surplus-extracting complex. Mining and other activities pre-date Roman.
The expansion of the European empires’ access to raw materials through Spain and others’ original “conquest of the new world” gave one of the original impulses to European capitalist development. At the same, the bourgeois as a class came to understand overtime that production based on extraction tended to create backwardness since it did not allow the total development of capitalist relations in an area – it does not lead to capital-intensive industry and all its fall-out; a skilled workforce, technological development, etc. The gold and resources extracted by Spain ultimately left the empire backwards.
Now, the model of American development began with extractive industries – but the ultimate value of raw materials here has come from using reduced raw-material prices to stimulate development.
A third phase involves the value of raw materials and extractive industries within the field of capitalist speculation. It is important to realize that investor speculation and the creation of money are fundamentally linked phenomenon. The successful creation of greater speculative opportunities within the economy increases demand through the “wealth effect” – it effectively creates money in same way that the bank “money multiplier” effectively creates money. Effective money is anything that is perceived as automatically convertible into something of value and can thus be exchanged. And total existence of effective money is thus a juggling act.
è Consider an earlier time, when US dollars are legally convertible into some quantity gold. When confidence was high, the average investor didn’t bother to actually do the conversion, they simply held the dollars. To continue the situation, what needed to be maintained wasn’t the dollars at Fort Knox but the confidence. Maintaining the dollars at Fort Knox might be one powerful step in gaining that confidence but other methods might wind-up being cheaper and more effective.
Our investors, altogether, wish to hold a certain amount of speculative investment and a certain amount of money. They use their money to buy speculate and gain money from their speculations (if they are successful). So what society as a whole considers money becomes the key to how much initial, nominal capital speculators have to work with.
And the present phase of capitalist development actually requires that this nominal capital expand indefinitely.
If decreasing the price of raw materials is one method that always been attempted for counter-acting the declining rate of profit, then increasing demand through external or artificial means is another continuously method.
There has been two sides of this process. When capital was relatively young, the wealth of less-developed areas was a vast field ready to be exploited. As capitalist production grew over-all, the relative size and wealth of pre-capitalist and less-developed areas has shrunk. And by this token the interest of capitalist in using the least developed areas, the bottom of the third world, as immediate outlets for markets has decreased.
At the same time, the speculative interest in access to developing markets has been a powerful force in routing investment to developing areas. In areas like East Asia, India or Russia, Western nations aim to create a consumer-capitalist infrastructure so-as to exploit these potential markets. Unlike the “grab for Africa,” this approach does not aim to give an outlet for the over-production of Western factories. Rather, it aims to install both factory and mall and export profits (and without the factory-workers, the malls can now hardly expect much business).
This “forward-looking investment,” especially of the sort pouring into China, has similarities to
This cycle of capitalist “externalities” has, in the last twenty years, taken America back to a position somewhat analogous to Spain after Columbus. Through the vast power of the American dollar and American military might, America disproportionately consumes both industrial and raw materials output of the world. What industrial capacity America maintains is dependent on the disproportionately low energy prices which American military might maintains. The collapse of American hegemony would be catastrophic to this.
And it seems relatively likely