Taking Stock
Congress may soon limit or ban stock trading. But there's a deeper conflict.
By Associated Press - https://www.pennlive.com/business/2019/10/stock-market-crash-of-1929-left-people-hysterical-with-fear.html, Public Domain
On Wednesday morning, House Speaker Nancy Pelosi took initial steps that could result in an eventual ban on Members of Congress being able to trade individual stocks. Left-wing Democrats and activists have been calling for such a ban for months, at least, with little progress to show. Pelosi, worth an estimated $114.6 million as of 2018, had previously opposed such a measure, arguing, “we’re a free market economy.”
Pelosi appeared to reverse that position, announcing that she’d “tasked the House Administration Committee to review the options Members are putting forth.” Punchbowl News’ Jake Sherman had the scoop, and his thread raises some interesting questions about implementation and scope of any future ban.
Beyond the nuts and bolts of this measure, it’s worth taking a minute to understand what the need for this ban tells us in the first place.
Most of the debate around trading stock focuses, understandably, on conflicts of interest. Members of Congress are not only privy to all sorts of non-public information, but also are themselves actors whose decisions, both individually and collectively, can move markets and affect stock prices.
But there’s something more profound here than just a collection of individual conflicts of interest. Or, a better way of saying that, is that there is a more profound conflict of interest at play here, it just happens to be between the class interests of Members of Congress and the overwhelming majority of people in the United States.
We’re generally very bad at talking about class in the United States, despite Occupy and Bernie’s best efforts to the contrary. To the extent that we talk about it at all, it’s usually reduced to a vibes-based evaluation of someone’s personal finances on any given day. Pollsters often use college education as a proxy for class, which has the aggregate effect of perpetuating a bunch of myths about meritocracy, income, and personal advancement at the expense of talking about family wealth.
Marxists have a different way of talking about class. They’re always talking about “relations” — social relations, economic relations — and it can be a bit confusing if you’re not used to the jargon. The reason that talking about relations is important, especially when it comes to class, is that where a person’s wealth comes from is by definition inextricable from where that person fits into society. If you’re a landlord, or the child of a landlord, simply knowing how much money you have in the bank doesn’t tell me very much about your particular class interests. But, if I know that your money comes from your relationship to the tenants that you extract wealth from, I know a lot more about the kinds of tax breaks, zoning laws, police policies, and politicians you’re likely to support. Same if you are a titan of finance capital or industry.
To Marxists, the key class distinction isn’t between say, landlords and finance, although those factions may sometimes be at odds with one another. The distinction is between owners of capital and workers. One of Marx’s most basic and crucial insights is that money functions differently for each of these groups. The capitalist starts with money, uses that money to purchase a commodity, and then sells that commodity for more money (M-C-M’). For the worker, who has nothing to sell but their ability to work, the operation is reversed. They begin with the only commodity they have, their labor power, which they sell for money, which they then use to buy commodities like food and shelter (C-M-C). At it’s most basic, it’s the relationship between these two actors that determines someone’s class position.
And class isn’t an identity marker. Again, it’s where you fall in relation to the production and sale of commodities. One helpful example is if you think about a very wealth professional athlete. Regardless of how rich that athlete is, if they go on strike — if they withhold their labor so their boss can’t turn a profit — they are acting as a worker, regardless of the number in their bank account. But, if that same athlete opens a chain of restaurants, they’re now acting as a capitalist.
This can all get very confusing — deliberately mystified, even — when you bring in the stock market, which brings us back to Pelosi. Owning shares of stock just means having partial ownership in a company, and the more you own the more you fall on the capitalist side of the capital-labor relation. What Sherman’s questions help to illustrate is the degree to which the US government is an inextricable part of the ownership class. It’s not simply that the government is controlled by capitalists. It’s that the relationship of the state (as it exists) to capital is symbiotic. Even a small reform like banning stock trading is a massive lift because the vast majority of Congress and their families are owners of capital. Requiring Members to place their holdings in a blind trust might address some of the narrow conflict of interest issues, but it clearly does nothing to address the broader class antagonisms.
For socialists, saying that the bourgeoisie control the state right now is obvious. Where Marxists differ from anarchists is in their analysis that they believe worker control of the state is possible following a worker’s revolution (see, for example, Lenin’s The State and Revolution), whereas anarchists see the state itself as an inherently repressive institution. A working class revolution isn’t exactly on the menu in the United States at the moment, but clarifying the class control of the state is still worthwhile. For one, there is extreme clarity going the other direction. Capitalists know that they are in power and that to keep that power they must exercise control over labor. Most of the discussion about labor shortages is really rising worker power due to low unemployment and pent-up demand. Capital knows that labor must be disciplined through police force and manufactured employment precarity.
For another, the kinds of policies on tap are difficult to understand without a clear class analysis. The last two years have seen an explosion of interest in Modern Monetary Theory, which, crudely, argues that government spending in the form of deficits doesn’t create inflation. Rather, inflation is the result of real constraints on the economy. (Standard Keynesianism argues this as well.) There’s a long-running debate on liberal-left Twitter about the merits of MMT. Neoliberal economists like Larry Summers are MMT skeptics because they favor austerity policies, either explicitly or implicitly. Some Marxists don’t like MMT because they think it allows the left to ignore class struggle — that is, they say MMT argues that government spending can fund a welfare state without necessarily raising taxes on the wealthy. MMT-ers often feel like orthodox Marxists set up strawman arguments against them and can be resistant to any theory that deviates significantly from Marx’s analysis in Capital.
For my money, I think there is a lot of overlap to be found between MMT and Marx, which I think is probably true of a lot of people in both camps. I think what a Marxist analysis can add that can get lost when discussing MMT is that the kind of spending the government engages in, especially in a crisis, is necessarily determined by the class composition of that government. Malcolm Harris recently made this point on Twitter, eliciting some consternation from MMT-er Nathan Tuckus.
The US government spent an unprecedented amount of money to combat what could have been another recession caused by COVID. It is true that workers are in relatively stronger position than they’ve been in decades, but that’s primarily a by-product of the spending. It wasn’t the goal. The real winners were, as always, the owners of capital. One recent study found “the combined wealth of all U.S. billionaires increased by $2.071 trillion (70.3 percent) between March 18, 2020 and October 15, 2021, from approximately $2.947 trillion to $5.019 trillion.” Those figures are astronomical. For as much as MMT helps describe the way federal spending actually functions, I think an additional Marxist analysis is required to understand why labor is still coming up so short, even when it is in a strong position relative to the last few decades.
I’ve had a few recent pieces go up over at Truthout, if you’re interested.
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