Saturday, 28 February 2009

The AWL and Workers Control

Sean Matgamna has posted this short piece by TRotsky on the qustion of Workers Control, which is worth reading

TRotsky on Workers Control .

In particular, the following is worth reading.

"Thus the regime of workers’ control, a provisional transitional regime by its very essence, can correspond only to the period of the convulsing of the bourgeois state, the proletarian offensive, and the failing back of the bourgeoisie, that is, to the period of the proletarian revolution in the fullest sense of the word."

Now, if I am not mistaken this state of society does not correspond to the current state of society and the class struggle in Britain today. Which means that when the AWL put forward the slogan of "Nationalisation under Workers Control" of the Banks at the moment we can see how far both from reality and from TRotsky they now are.

What would the demand for Workers Control amount to according to TRotsky in condiiotns like those which apply today?

"If the participation of the workers in the management of production is to be lasting, stable, “normal,” it must rest upon class collaboration, and not upon class struggle. Such a class collaboration can be realized only through the upper strata of the trade unions and the capitalist associations. There have been not a few such experiments: in Germany (“economic democracy”), in Britain (“Mondism”), etc. Yet, in all these instances, it was not a case of workers’ control over capital, but of the subserviency of the labor bureaucracy to capital. Such subserviency, as experience shows, can last for a long time: depending on the patience of the proletariat."

In other words it is a demand for class collaboration at best. The reality is that it is a totally meaningless demand, because not only is there no militant class conscious working class at the moment capable of implementing such a demand or forcing it upon the Government, but not even those TRade Union leaders referred to by TRotsky have any intention of fulfilling that role of permanent class collaborators sitting on the Boards of the Banks.

Wednesday, 18 February 2009

Ravenscliffe By Election and a Socialist Programme

On 5th March there is a by-election in the Ravenscliffe Ward of Kidsgrove, which is part of Newcastle Borough Council in North Staffordshire. The election is caused by the sitting Tory Councillor standing down. The important thing, though, is that both the BNP and UKIP are standing candidates in the election. Neither have any chance of winning.

Labour

The ward, which was only created a few years ago as the existing wards became too large, is one of the more affluent areas of the Borough. Labour held the seat when it was first contested by existing Borough Councillors, but the Local Labour Party has gone downhill significantly since that time. It might have been expected that with the BNP, in particular, standing in this election, that the Labour Party would have made some attempt to counter the fascist ideas that they are now spreading, but no, the Labour Party leaflet sunk to an all-time low. It didn’t mention the BNP at all, in fact it didn’t mention anything political at all. The whole of the front page of the leaflet was taken up by a large headline and a few words condemning the previous Tory Councillor for not attending meetings, and now going off to Spain. That was an own goal to begin with because the Liberals in their leaflet were able to point to the fact that a Kidsgrove Councillor, and former Labour Group Deputy Leader, had disappeared to Spain a few years ago along with a Computer etc. The back of the leaflet did contain a very small story about the fact that a LP member through his own activity had managed to get trains from Kidsgrove station to Manchester increased, and a train from there to London for the first time. But, the rest of the leaflet was taken up by a half page asking for people to tell the LP what issues concerned them. In other words the message of the leaflet was we have absolutely nothing to say, we have no policies to put in front of you, and not only do we not have any solutions to your problems, but we have no idea what your problems are!!!!

At least the Liberals did mention the BNP in their leaflet with a bit of a jibe at them, and they did put an equal opportunities statement on the leaflet.

The BNP

The BNP have managed to put out two leaflets compared with just one so far from the main parties. They have concentrated on trying to jump on the bandwagon of “British Jobs for British Workers”, without of course, saying anything about the fact that where they tried to intervene in the refinery strikes on that basis they were cleared off in no uncertain terms by the strikers. It shows just why the “ignore them they’ll go away”, or “expose them as Nazis” tactics, though are no longer sufficient. Unlike the Labour Party, the BNP do recognise the fears of local workers, and unlike the Labour Party, they have something to offer those workers in terms of a solution. It is a thoroughly reactionary solution, it is a solution, which would, in fact, create even greater problems for British workers, let alone the foreign workers on to whose shoulders they want to place the blame, but, in the land of the blind, the one eyed man is King.

Having listed all of the local industries that have gone to the wall over the last 25 years the BNP offer a series of nationalistic solutions – though, in fact not much different in some ways from the nationalistic demands the Communist Party and its hangers on advanced in the Alternative Economic Strategy, mixed in with references to all the eastern European and other migrant workers coming into Britain.

Policies

So mirroring the nationalistic politics of the AES they call for:

· Protect our core/strategic economic interests by the selective exclusion of certain foreign manufactured goods from the British Market

· We will ensure that wherever possible our manufactured goods will be produced in British factories, employing British workers. This will bring unemployment to an end , and give well-paid employment to many.

Other parts of the demands are if anything slightly more progressive than was the AES. For example,

· We will unite the ingenuity of the British People with their hard work. We envisage a manufacturing base of factories producing super high-tech products that will be traded around the world.

And in an area once largely based on coal mining they also say,

· We will instantly power up the British economy by opening up dozens of deep coal mines across our nation. There is 300 years worth of coal beneath our feet, an independent source of energy for our people.

But other parts are a bit zany.

· We see a strong, healthy agricultural sector as vital to the country. Britain’s farms will produce a much greater part of the nation’s food needs.

All this is combined with the normal attacks on Eastern Europeans coming into the country, and the spreading of the familiar fears about many more from Turkey coming in etc.

Attacking The BNP Not Enough

But, its clear given this approach that simply telling people not to vote BNP, because they are Nazis simply isn’t good enough. After all, that is open to some people responding “well if that’s what the Nazis were about, perhaps they weren’t so bad.” It requires not only a clear response to those politics, but even more it requires an alternative set of politics to be put forward that really can begin to offer workers a solution to their problems. Last week I tried to put forward a leaflet that began to do that, but it looks as though the local anti-fascist group will go with the same old attacks on the BNP, and possibly even some nationalism itself by attacking the BNP for using pictures of Spitfires during the Battle of Britain – partly because R.J. Mitchell the Spitfire designer was born only just outside the ward.

Cognisant of the fact that the ward was held by the Tories the BNP’s second leaflet in addition to being a bio of the candidate – who as a Vicar’s daughter surely trumps the usual comments from your friendly neighbourhood purveyor of opium to the people so much loved by many in the anti-fascist movement – goes with an attack on the Euro! Surely, a bit dicy as it didn’t work to well for William Hague, and given that the pound is collapsing against the Euro at a time when people are thinking about this year’s foreign holidays, not an obvious winner!.

The political response to the BNP’s nationalistic solutions should be clear,a nd have in part at least been rehearsed as a result of the refinery strikes.

If you exclude foreign manufactures from Britain then you will a) put the price of those imported goods up significantly for British workers, thereby making British workers pay for the inefficiency of British Capitalists, and b) other countries will respond in like manner. As a trading country dependent on selling into foreign markets in order to obtain those things that Britain cannot possibly produce itself at a reasonable cost, if at all, such a policy would be disastrous for British workers who would find themselves thrown on to the dole in droves just as such protectionism led to in the 1930’s.

They do not explain HOW they will ensure that “wherever possible our manufactured goods will be produced in British factories, employing British workers”. How will they force British Capitalists to produce here rather than abroad. Those Capitalists located production abroad precisely because they could make bigger profits by doing so. It would only be possible to attract those Capitalists to invest and produce here rather than in China or elsewhere if they could make the same kind of profits, and that would mean reducing British workers wages down to the level of Chinese and other Asian workers. Hardly a thing British workers should relish you would think.

And similarly, if that were adopted then logically workers elsewhere would look to their Governments to adopt a similar position. Here in Kidsgrove, many if not the majority of people actually work for foreign owned companies like Bentley at Crewe. If all those foreign owned companies upped sticks to go back to their own country it would mean tens of thousands of jobs lost just in this area alone.

And although, socialists would have no objection to Britain developing an economy based on the production of high-tech, high value products, which could sustain much higher wage rates than traditional low skilled employment, how on Earth would such production be sold “around the world”, under conditions where Britain was excluding similar goods from the British market? And how does this “unite the ingenuity of the British People with their hard work”? It doesn’t. It means bigger profits for British bosses. The only way the ingenuity of British workers could be united with their hard work would be if those workers owned the means of production themselves, if they developed Co-operative industries based on such production and technology.

Although, many environmentalists would probably oppose the opening of deep coal mines, there is no real socialist objection to such a project, but those mines were closed during the 1980’s because they were uneconomic in Capitalist terms. It was more rational in Capitalist terms to import cheaper coal from abroad in return for higher value British exports. Moreover, the jobs in those deep coal mines were dirty and dangerous, destroying the lives of the miners who worked there. A socialist programme for utilising that coal would require the introduction of sufficient health and safety measures, the large scale automation of production to remove workers from the dirty and dangerous conditions, and would have to be linked to a programme of developing high tech, clean fuel technologies for the use of that coal in power stations. But, in reality that then would not create many mining jobs. It would create some high-tech jobs in developing the new technologies, but that is not the solution being touted by the BNP.
As for the idea of getting British agriculture to produce a much larger part of Britain’s food this is pie in the sky. Britain lost the ability to feed itself more than 150 years ago. A socialist agricultural programme that broke up all of the huge landownings still in the hands of a tiny minority of aristocrats like the Prince of Wales, which established large Co-operative farms – in fact the Co-op is already the biggest farmer in Britain so extending its remit would not be difficult – and turning agriculture over to an even greater scientific and industrial form of farming could increase production, but eve then not only would it be unlikely to meet all of Britain’s needs, but it is even debatable whether this would be an efficient use of resources, compared to importing food from other countries in Europe where they can produce more cheaply and efficiently. Partly, this demand seems to be an attempt to get votes for the BNP in the countryside where they infiltrated the Countryside Alliance, and where they have been winning seats on Parish Councils due to low turnouts.

The BNP have no chance of winning the seat. They are likely to be annihilated. But, the ward adjoins Stoke where in recent years the BNP have become a sizeable presence. As a by-election the context has already given them invaluable publicity, which will be their main reason for standing.

UKIP

What is perhaps surprising is that the BNP’s fellow nationalists the BNP ‘Light’, UKIP are standing against each other. UKIP’s politics set out in their leaflet are even more off the wall despite their candidate being a former lecturer, and having studied political philosophy.

They begin by warning Borough residents of the danger that the Borough Council might be abolished as have neighbouring Borough Council’s in Congleton, Crewe, and Macclesfield. Oddly, they try to blame this on Europe – well perhaps not so oddly as they blame Europe for everything – whereas the real reason is the inefficient and uneconomic nature of Borough Council’s. When I looked at the figures a few years ago, for instance, Newcastle Borough Council spent nearly 70% of its budget on “Finance and Management”, which meant paying the over-inflated salaries of its Chief Executive, and Chief Officers along with their numerous assistants and deputies, and on collecting the Council Tax, and the Computer Systems for doing this, along with all of the necessary Accountants and solicitors. In other words what Borough Council taxpayers were really paying for was not services, but for a machinery to do little more than collect their Council Tax.

UKIP even point to the fact that the Borough Council lost £2.5 million pounds as a result of the collapse of an Icelandic Bank they had put money into. Another good example. That money was part of the £55 million the Council got from selling off its Housing Stock to an ALMO – the Chief Executive of which was the former Director of Housing who in the process saw his salary double to around £70,000 – and the proceeds of which could have gone to refurbish the ancient and rundown facilities in the Borough, or to build new ones. Instead it was put to sit in the Bank, to cover the costs of new computer systems and other pet projects of the top bosses.

Again, in giving us this information UKIP seem oblivious to the fact that this has nothing to do with the EU, and in fact Iceland has been desperate to fast track EU membership as a means of protecting its tiny economy in the whirlwind its banking collapses have created. And without realising the irony the BNP 'light' UKIP say in their leaflet " But please think carefully about how you vote. The poor performance of existing Councillors can increase the likelihood of frustrated voters turning to extremists"! Yes, like UKIP.

Workers Solutions

Workers do need solutions to the very real problems they are facing in respect of jobs, housing conditions and so on. The nationalistic politics of the BNP and UKIP offer no real solution, but in the absence of socialists bringing practical solutions before those workers, they are likely to take what is on offer. Its clear that Brown’s Labour party cannot do that, and the forces of the left are too tiny, and divided more than ever into warring sects. It will be up to individual and small groups of Marxists to work through the LP and other channels of the Labour Movement to bring such solutions forward, turning LP, Trade Union and Co-operative organisations outwards into the communities with immediate initiatives that workers themselves can take up and implement.

· We need to build workplace organisation, breaking down sectionalism and the divisions that exist often between different trade unions in the same workplace. We need the development of at first even small groups of rank and file workers in each department across skills, across unions, and even including non-union members.

· We need to bring such groups together as Factory Committees able to organise immediate direct workers action within the workplace as a response to problems and attacks by the bosses rather than going down the road of full-time officialdom. The direct action and wildcat strikes of the last weeks should be the inspiration.

· We need to build on the basis of the involvement of real workers in such Factory Committees Industry wide combines of Shop Stewards as part of a European wide Shop Stewards Movement linked using all the facilities of the Internet to co-ordinate action.

· Socialists must join their local Labour Party Branch. The refinery strikes showed the lesson. If Marxists shun the workers because they do not yet come up to their expectations, then the workers will correctly shun the Marxists. Whatever, Marxists might dream for of establishing some new Workers Party, there is no demand for such a Party from the class. The LP IS the Workers Party for now, and as those strikes showed its necessary for Marxists to intervene in it, do as Marx and Engels advised, take the workers as they find them, and through patient work raise them up.

· The focus has to be on the LP Branches not the CLP’s, which the Left has focussed on in the past. It is the Branches that have the real contact with their local working class communities. It is the Branches that can organise campaigns in their ward, can help create and develop Tenants and residents Associations, Credit Unions and other such Co-operative organisations that workers can develop themselves control themselves, and thereby empower themselves with.

· The real work of fighting the fascists should be organised through the Labour Parties as the mass organisation of the working class. If others outside the LP wish to attach themselves to its activities fine, but the working class and its Party cannot allow tiny sects, or alien class forces to dictate to it, how it will proceed, they are in no position to do so.

· In providing answers to the workers Marxists should argue for and demonstrate how such solutions must be based on mobilising the direct action of the working class itself, on building its self-reliance, confidence, pride, and economic and social power. That cannot be done by appeals to the bourgeois state at the central or local level, but only by building Co-operative forms, the traditional form of workers ownership and control, the form as described by Marx as the transitional form between Capitalism and Socialism. Marxists do not put forward such solutions to workers in their Party, and their other organisations in a sectarian take it or leave it manner, but patiently explain why such solutions are needed, accepting decisions when they go against such an approach, but then calmly and patiently explaining why – as they must – those other solutions failed.

· The emphasis for such activity is not in the electoral sphere, not in Parliament or in the Council Chamber, but amongst the working class itself, in the workplaces and in the communities. By developing such rank and file organisation, and by developing Co-operative forms, workers will of necessity need to create a new form of democracy, a direct participatory democracy arising out of these new forms. But, for as long as Capitalism remains political power will continue to reside within the channels of bourgeois democracy. It will be necessary once those bastions of working class power have developed sufficiently for them to exert political pressure on the Workers Party, in the selection of its leading personnel, of its representatives and so on and to utilise its power to control such representatives in the carrying out of their functions. In this way, the necessary political struggle within the confines of bourgeois democracy can be undertaken from a position of strength.

· But, Britain is a small country in decline. Not only is socialism inconceivable within the confines of Britain alone, but the solutions to workers problems here and now also require a much wider perspective.

· The creation of a Europe Wide Shop Stewards network is only a start. It is necessary to create EU wide Trade Unions, preferably as industrial unions, and to create a European Workers Party.

· Britain already lags behind a number of EU Countries in respect of the Working Time Directive, or Pensions or retirement age and so on. An EU wide Trade Union Movement needs to fight for common Benefits and conditions throughout Europe alongside common Trade Union Rates of pay.

· But, a level playing field, and avoidance of opt-outs such as that of Britain on the Working Time Directive can only be achieved by a single state. It is not the job of Marxists to advocate such a solution to the bourgeoisie – our goal is rather a Socialist United States of Europe – but if the bosses do create such a state, we should not oppose it, rather we should demand a proper EU Wide Constituent Assembly to determine its basis, its Constitution and so on, and demand the right of workers assemblies throughout Europe to fully discuss it, and frame it.

This is an outline of the kind of programme that can really address workers problems and needs not just here and now, but in the future.

Workers of the World Unite.

Thursday, 12 February 2009

Is It Me?

The news has been occupied, this week, by the tragic loss of life of people in the raging fires in Australia. Like every one else - other than perhaps, those who appear to have deliberately caused some of the fires - I have the deepest sympathy for those who have lost friends, and family in this tragedy. However, I am bound to ask why weren't precautions taken to avoid such a situation arising.

It isn't as though bush fires in Australia, or, the similar fires recently in California, are something new. So, why not clear large areas to provide a firebreak between the trees and human communities? No doubt cost is one reason, but what is the cost now? But, its not just that. Last year, and the year before, the news was full of similar, sad stories about people in this country whose homes had been ruined by floods. But, again, apart from in a few instances, its not as though such floods were something new. Some were in coastal areas, some were in flood plains between two large rivers, for God's sake. If you are going to build houses on a flood plain - and shouldn't the very name give you some clue as to what is likely to happen there - then aren't you, in fact, inviting disaster? Yet, the Government says, they will not prevent further building on flood plains, and when the insurance companies say - and whatever I might think about insurance companies I find it hard to disagree with their logic here - that they either won't insure houses in flood plains, or else the premiums will be sky high, there is uproar.

With the fires in Australia, you can understand the situation of families who have grown up in a particular home or area over a long time, but not all the houses or families were like that, so what are people thinking when they buy a house in the middle of a tinderbox? Similarly, in Britain some of the houses that were flooded were old houses - though many of the people living in them bought them knowing what they were buying - but probably the majority were not. Again, what were the people thinking when they bought a house next to a river. Don't they ever watch the news to know that fairly frequently rivers cause floods?

But, the same thing is actually true about the current financial crisis. What was the cause of that crisis. Well, its roots can be found in the creation of huge amounts of credit by the US and British governments in particular. That meant that there was a large amount of money available for people to borrow at ridiculously low interest rates. In turn, that encouraged banks and financial institutions to make risky loans to people who had a good chance of not repaying them, and also led them into developing financial derivatives that falsely showed huge profits in the accounts of those institutions, and on which were paid huge salaries and bonuses to the bankers that claimed those profits were down to them.

But, its the same thing. No one forced those bankers to take the risk of lending to people who probably wouldn't pay back the loan. No one forced them to take the risk of buying Credit Default Swaps and other derivatives that they didn't properly understand, whose real value they couldn't determine and so on. Similarly, no one forced people who couldn't really afford to buy a house to do so, or who couldn't afford the interest payments, even at ridiculously low rates, to borrow the money. No one forced people to take out mortgages at 5, 6 and more times their earnings, whereas, historically, you wouldn't have been able to get a mortgage of more than twice your annual earnings. Certainly, no one forced people to rack up debts, running into tens of thousands of pounds, on credit cards, to buy things they really didn't need. People knew what they were doing, but simply seem to have failed to have taken any account of any downside of their actions. Why?

It seems to me we have developed a culture, in which, that is the way people's behaviour is shaped. I think the rise of anti-social behaviour is another example of it. Some kids think that they can do anything they like without any downside. If they are picked up on their behaviour they act as though they are the offended party. And kids that grew up like that are now adults behaving in exactly the same way, and passing that on to their kids.

When I grew up my parents had gone through the Depression. They had learned valuable lessons. It was not always going to be the case that you had a job, or that when you didn't the State would look after you. They had known what it was like not to be able to have things. So I grew up, like many other people at the time, learning not to spend every penny I had, not to get into debt and so on. In other words to understand about risk. That's why from the day I got married, and, despite both us being very young, and on low wages, we lived on one person's wages and saved the other, just as many Chinese workers do today.

But, welfarism has changed that. It has created a dependency culture, which at the same time has created a culture of irresponsibility. Go ahead, buy a house in the middle of a tinderbox, or a flood plain, don't worry, someone else will pick up the bill when things go wrong. Go ahead, lend money to people who can't pay you back, in order to make big short term profits, and boost your bonus, when your bank goes bankrupt the State will bail you out. Go ahead, borrow money you can't pay back for things you don't really need, or can't afford, when you go bust the Government will bail you out, and wipe away your debts through inflation, and by reducing interest rates, for the pensioners, and others, who've saved rather than spent, to zero to help bail you out.

The reason modern capitalism does this is clear. On the one hand, it develops the kind of self-centred individualist culture that bourgeois society needs. Anti-social behaviour is a direct result of it, it is individuals saying I'm going to do what I please, and I don't give a fuck for anyone else. Secondly, monopoly capitalism is built on a fusion of the state and big business. The State has to be able to intervene to bail it out, and to support it for the whole system to work. But, it also then has to be seen to be bailing out everyone else, and in doing so it helps to diminish some of the social tensions that would otherwise arise, tensions that would more clearly pose themselves in terms of a clash between Capital and Labour. Without, social security benefits workers would be far more likely to fight to defend jobs, and to rely on their collective strength.

Worse, this kind of culture demeans workers, taking away their pride, that should come from taking responsibility for their lives and the decisions they make, it helps to keep them in a servile condition. It says, don't think about things too much, everything will be alright, someone else will pick up the tab. No wonder the most common phrases heard are "Someone (alternatively the anonymous 'they') should do something", rather like the question asked by Trigger on Only Fools and Horses when Rodney was explaining about the Sun eventually swallowing up the Earth. No wonder we have such a booming business for Accident lawyers and other such forms for people wanting to shift the blame for everything that happens to them on to somebody else.

Only, a change from that kind of reliance on the bourgeois state and its associated organs, can save the working class from a continuing decay of its basic character. I am not at all suggesting some kind of Thatcherite individual responsibility culture, though there is certainly room for workers as individuals to take more responsibility for their lives too, but a return to the ideas on which socialism was first developed,a nd from which it has increasingly departed, a reliance on itself as a class, and on co-operative, and solidaristic actions.

Tuesday, 10 February 2009

More Greenshoots?

Further reports in recent days show that the credit crunch appears to be coming to an end. Rates have been falling, and a number of Corporate Bond issues have been well taken up. The latest inflation data out of China shows a significant decrease, giving the Central Bank further room for easing monetary policy. In fact, it already looks like the Chinese slowdown bottomed at the end of last year even before recent monetary and fiscal measures together with some centrally directed measures take effect.

Last month, for the first time ever car sales in China exceeded those in the US. It was thought that the Chinese car market would not exceed that in the US until around 2014. Although, this month's figures are likely to be a one-off - they still represented a slow down sales in the US fell by more than 30%, whereas in China by only 8% - it now looks likely that the speed of advance of the Chinese economy is faster than first thought, and with it, the advance of Chinese consumers, who account for a large part of Chinese production.

And although, its often thought that China now represents the workshop of the world, recent figures show that Germany remains the world's leading exporter.

Meanwhile, it was just reported on CNBC that Intel is planning to invest $7 billion over the next two years in research and development to produce the next generation of smaller, more powerful and more energy efficient chips. The investment will largely be in areas that will employ more high value, high wage workers.

See: Intel To Spend $7 billion

A couple of weeks ago I wrote about the fact that there had been rumours about British Banks being nationalised, rumours that coincided with the reintroduction of short selling for Bank shares. At the time it led to big falls in bank shares as shareholders got out. At the time with RBS shares falling to 10p, I forecast that some of the smart money, indeed perhaps some of those spreading the nationalisation rumours, would make big bucks if those shares rose to their former highs or even, as I argued if RBS rose to just £1, which is only a 6th its former high. In fact, in the couple of weeks since then those Bank shares have already risen sharply. Within a week RBS had doubled to 20p. It now stands at around 26p. That's a 160% increase in about two weeks, which makes my original suggestion of 1,000% in a year look like an underestimation. Compare that with the 1% a year or less savers are getting on their hard earned money.

As I said then the Banks remain one of the biggest cash generative businesses in the country. Although they have all these toxic assets on their books which hav led to the Credit Crunch, they also have millions of debtors, 90% plus of whom are day in day out filling the banks' coffers with their loan repayments, mortgage repayments and even more lucratively their credit card repayments. While, the cost of money to the banks from the Central Bank has now fallen to almost zero, those banks are still receiving up to 6% on mortgage repayments, 6% plus on loan repayemnts, and over 20% on credit card repayments. No wonder that Barclays last week announced that amid all the gloom and doom it had still made more than £7 billion profits, and ws to icnrease its dividends by 10%.

See: Barclays .

Despite all the hysteria all the signs are that despite the sevrity of the financial crisis, this downturn is just a normal cyclical recession like those of 2001-3, and 2005-6. Workers should take the lesson from the refinery wildcat strikes and not be cowed into accepting pay cuts or other measures that allow the bosses to take advantage of the current situation. Indeed, as I wrote recently when the economy begins to expand again towards the end of this year, the massive injection of money tokens into the economy will lead to huge inflation - Dr. Marc Faber has even suggested inflation in the US could reach 200%, though I think that is overdoing it somewhat -

See: Marc Faber Video

Towards the end of the 19th century the German Government was bailing out with subsidies German industry. In a letter to August Bebel, Engels said thatthey were doing this with worekrs money paid in taxes. He went on that he and Marx had always seen Co-operatives playing a central role in the transition between Capitalism and Communism. The Communists he argued should advocate the establishment of such Co-ops where Capitalist industries went bust, in agriculture in place of the large estates of the landlords and should ask for the same kind of subsidies for those Co-operatives that the bosses were giving to private Capitalists. At a time when the bosses state is again handing out workers money to the bosses in the bank and other bail-outs Engels suggestion is one which Marxists should take up. We need workers to establish Co-operatives, which enable them to have control of the means of production and over their own labour process - which they can never have under the meaningless demand for workers control under Capitalist or State Capitalist enterprise - and for them to call for the same kind of support from the State that that State is giving to the bank bosses that caused the current crisis.

See:See: Second Letter .

Sunday, 8 February 2009

Trouble At Th'Mill

Taking a breather from writing a multi-part blog on the question of Co-ops, I was scanning the left sites, when I spotted this by Robin Sivalapan of the AWL. Robin was the comrade, from the AWL, who put the call out for a picket of the UNITE offices to demand the refinery strikes be called off.

"I just want to sum up my little journey - I'll try and be brief. I'm going to leave out things that incriminate my own organisation, because apparently that's what we do, apart from when it concerns me (and that's the least of the group's political problems)."

His post was very long, meandering, and I was left at the end of it wondering what the point of it was. See: here . How he thinks the Transitional Programme might have helped in this situation I really don't know. He needs to read a piece Sean Matgamna wrote 20 years ago that picked up on Trotsky's suggestions to his followers entitled "Learn to Think", not look in the textbooks for ready made demands to pull out. How he thinks the AWL's demand of "Work or Full Pay", provides any answer for workers here too is hard to fathom. Who is going to force the bosses, or their state, to provide it? The strikes this week were great; to see workers once again get off their feet - though the AWL and others at first didn't seem to think so, as, concerned about their periphery, they were keener to attack the reactionary nature of the strikes than support workers in struggle. But, those strikes are a far, far cry from the level of class struggle that would be needed to get the bosses or their state to concede the AWL's utopian suggestion. As usual they combine sectarianism towards the actual struggle, with maximialist demands that offer the real working class nothing.

But,the interesting point about his post was those couple of sentences, and in particular the phrase, "I'm going to leave out things that incriminate my own organisation, because apparently that's what we do, apart from when it concerns me" Do we take it that,as the AWL rowed backwards, faster than Pincent and Redgrave (Steve not Vanessa)in reverse, as their initial position was seen to be so palpably wrong, that Comrade Robin, feels that he was hung out to dry by his own organisation, as it sought to shift responsibility from itself on to a single comrade? Old Uncle Joe was a past master at that tactic. Yet another indication of the rapid degeneration of what was once a decent organisation. Something Comrade Robin seems to be coming to an understanding of when he admits "(and that's the least of the group's political problems)."

Tuesday, 3 February 2009

Sanity and Sectarianism

As I suggested last week in my blog on the current wildcat strikes - Oil on Troubled Waters when the various Left organisations did get round to offering the workers involved some kind of solution to their problems, those solutions would probably consist of a series of slogans, which either consisted of call for “more militancy”, or else amounted to calls to denounce the Government. In fact, what passes for Marxism in Britain today has deteriorated so far that such inadequate responses, actually, were the better end of the spectrum. At the other end of the spectrum was the response of the sectarians such as the SWP, Workers Power and the AWL, who focussed their attention not on supporting workers in struggle, but on attacking those workers, effectively siding with their bosses, with the bosses government and state, and even calling for a picket of the offices of the Unite union bureaucracy demanding it call off the strikes!!!!!

See: Trotskyist Snowmen Melt Away

Three groups have stood out in having a correctish response. The Socialist Party, who are the only ones to actually have workers involved in the strike, have managed to intervene in the way I suggested last week to turn their support for the workers into the lever that allows the strike to be moved away from the reactionary demand of “British Jobs for British Workers”, on to more progressive demands, which I will come to later. One of the first groups to come out with a statement online, which approached the strike from the correct angle, was The Commune, a small group of one or two people that formed the small healthy part of the AWL. Finally, Permanent Revolution, the healthier part of the split from Workers Power, came out with a statement that was pretty much in line with the kind of response Marxists should have to such a situation. See: Refinery Strike Divides the Left . To be fair. The Socialist Party has to be recognised as adopting pretty much the right response from the beginning, as they were employing it actually on the ground. The Commune had pretty much the right response early on before the Strike Committee adopted the new demands, which have begun to change the nature of the strike, whilst Permanent Revolution only came out with their statement after that. The fact that their has been success in bringing forward these demands has even caused some significant rowing back of the original sectarian position of the AWL. But, the working class cannot afford groups that only get things right after the event, after things have moved on. This tailism is typical of the AWL’s politics of recent years.

How explain the responses of the different groups. As some have commented at the Commune website - Here - part of the explanation seems to be that various groups like the AWL with very little implantation in the real working class, and with a mostly student and petit-bourgeois membership, simply jumped in with both feet and mouth wide open, without taking the trouble to find out what the strikes were actually all about. But, that is only part of the problem here. The reality is that groups like the AWL, and this applies to the SWP too, although they talk about – “independent working-class action”, forming the basis of their politics, have actually lost faith in the real working class. The imaginary working class that they have in their head is still fine, they just find the real, living working class, to difficult to stomach. Rather like the workers states that didn’t live up their dreams of perfection, these petit-bourgeois turn away in revulsion, cocooning themselves away from the infection. Instead, and intent on building their own sectarian little groups they look instead to some other milieu in which to swim, the student movement, the environmental movement, ant-racist movements, anti-imperialist movements and so on, where they can find like-minded people, and potential recruits. Hence the SWP, destroyed the closest thing to Left Unity in decades that could have, perhaps, though its unlikely, have been able to form the basis of a pole of attraction for workers dissatisfied with New Labour. They broke up the Socialist Alliance in favour of the Communalist “Respect”. Why, because they felt that they had more chance of building their organisation by relating to a milieu of angry Muslims, and assorted petit-bourgeois Leftists who were so frustrated at the working class’s failure to fight Capitalism that they would throw in their lot with anyone, however reactionary, that was engaging in such a fight. Of course, Marxists DO have a duty to relate to the struggles of such oppressed people, but the irony here is that the SWP related to it by abandoning their own sort of socialist politics, and simply accommodating to the reactionary politics of those they sought to recruit.

The AWL, too has engaged in similar activity in recent years. Its petit-bouregois, moralistic politics shines through its front organisations such as “No Sweat”, or Migrants Rights campaigns, and the many other areas of similar activity that appeal to its largely studentist membership and periphery. When your main goal is “building the organisation”, when these types of milieu are the main focus of your activity to achieve that goal then adopting any position, which might piss off your possible recruits in those milieu is to be avoided like the plague. Needing to say something about these strikes that was clearly the guiding principle for these organisations – “Don’t piss off the potential recruits” – even if that meant standing on the wrong side of the class lines. It is the classic attitude of the sectarian.

The position of the Socialist Party is also not too difficult to explain. Unlike most of the rest of the Left, the exception being the IS/SWP during the 1960’s and 70’s, the Socialist Party and its predecessor The Militant, have always had a higher proportion of working class members, and of members fairly well implanted in the ordinary working class. In part, that stems from its long term tactic of implantation in the Labour Party, and its adoption of a largely Left Reformist programme. Its politics were just as sectarian as the other Left groups, but manifested in different ways. Its main emphasis was on “building the Party”, but did that in that working class milieu of the LP, and the Trade Unions, often ignoring activity in other forums such as anti-racist groups, CND and so on. And, because of its focus on “building the party” on that basis from recruiting ordinary workers in the LP and Trade Unions – which also gave it the advantage of gaining votes for its candidates in LP and TU elections – it had a tendency to workerism, and to tailism. The most classic example, was its attitude to Ireland, where in response to widespread hostility to IRA bombings it toned down its politics in respect of opposition to British Imperialism, and tried to give he impression that the problem could be resolved by little more than normal Trade Union solidarity, thereby avoiding raising the thorny questions about Civil Rights, let alone National Rights. With workers employed in the industry, and most of those workers on strike it is not surprising that the Socialist Party supported a strike by its potential recruits. But, that should not take away from the fact, that having done so they have intervened correctly, and positively in that strike to lead it away from the original reactionary slogans about “British Jobs for British Workers”, and on to more positive territory, even if territory that is still inadequate, and to some extent dangerous. After all, other groups such as the Stalinist CPB have simply tailed the workers giving uncritical support. But what would you expect from a group with such a national socialist tradition.

The fact, that the Commune got this right is encouraging, but again understandable. They have been forged in a faction fight against the petit-bourgeois politics of the AWL, a politics, which has turned inevitably, and increasingly towards a reliance on alien class forces that it sees as having a more progressive outlook than does the working class itself, in which it has lost faith. Here it lines up with the bosses, and the bosses state against reactionary workers. In Iraq it lined up with the bourgeois state against workers and proletarians who in their confusion and desperation had been led into support for various reactionary, clerical groups. And in its answers for workers problems despites its avowed politics it repeatedly turns to the bourgeois state to provide the solution. It is in the faction fight against those reactionary politics of the AWL, that the Commune group has begun to move towards a more adequate, Marxist politics.

I will reserve judgement on Permanent Revolution. It would have been better had we been able to see what position they would have come out with prior to the new demands being adopted by the strikers.

The New Demands

Yesterday a mass meeting of the strikers adopted a position that had been put forward by Socialist Party members involved in the strike. It dropped the “British Jobs for British Workers” demand in favour of:

* No victimisation of workers taking solidarity action.

* All workers in UK to be covered by NAECI Agreement.

* Union controlled registering of unemployed and locally skilled union members, with nominating rights as work becomes available.

* Government and employer investment in proper training / apprenticeships for new generation of construction workers - fight for a future for young people.

* All Immigrant labour to be unionised.

* Trade Union assistance for immigrant workers - including interpreters - and access to Trade Union advice - to promote active integrated Trade Union Members.

* Build links with construction trade unions on the continent.


The mass meeting overwhelmingly voted for the demands put to them by the strike committee

The strike committee accepted the main demands of Keith Gibson and John McKewan put to the mass meeting yesterday. Keith is a Socialist Party member on the strike committee, and John is an SP supporter and victimised worker from the refinery. The strike committee added an extra demand, calling for John to be reinstated into his job.

Problems and Weaknesses


To be honest I’m not that ready yet to be jubilant. Its good that the strikers have officially dropped the reactionary demands. Its really good that the BNP were driven away from the strike in no uncertain terms. But, I’ve been a Trade Union militant for a long time, I’m long in the tooth to know that often a mass crowd can be won over to vote for what the platform puts to them if that platform has their confidence, which the leaders of these strikes clearly have. That doesn’t mean that in the dark recesses of the mind of that mass those reactionary demands don’t still exist. Indeed, I would be amazed if they didn’t.

Showing the extent to which the petit-bourgeois Left is divorced from the real working class, this comment by a contributor to the AWL website amazed me.

“On local radio (BBC Radio Northampton) this morning, unemployed workers from Corby were asked 'who is to blame for the economic crisis?'. Without exception the answer given was 'foreign workers'. Just a couple of weeks ago, surely that response would have been unthinkable, and the response would have included 'fat cats', 'bank bosses' and such like.”

See: Pat Markey .

I have to ask what planet are you living on??? I could have taken you to innumerable working class communities around here, where if you had asked that question not only would you have got that response, but a lot worse besides. Why on Earth do you think the BNP have been making such rapid progress in recent years??? Every day I speak to ordinary working class people, not the petit-bourgeois, the former students who’ve got jobs as workers because of their revolutionary responsibilities, or even the politicos that stuff the various forums of the Labour Movement – talk to those people and you are bound to get a warped idea of where the real working class is at – I talk to ex-Miners, potters, production line workers at the nearby munitions factory, workers from Bentley and other manufacturing companies. Some of them are or have been active Trade Unionists. Almost without exception you would over the last few years, and probably long before that, have got the same response. Last week, the overwhelming response was support for the strikers, and the sentiment “we have to look after our own country first”. Even when I was able, to explain the logic of the demands, and that logic was accepted for a while, particularly when one worker from Bentley explained what it would mean for him, after a while that rationality was still overtaken by that much easier solution deep seated in the psyche of workers brought up in the atmosphere of a colonialist power, “we should look after ourselves first.”

That is what worries me about the limits of the current demands.

* No victimisation of workers taking solidarity action.

* All workers in UK to be covered by NAECI Agreement.

* Union controlled registering of unemployed and locally skilled union members, with nominating rights as work becomes available.

* All Immigrant labour to be unionised.

* Trade Union assistance for immigrant workers - including interpreters - and access to Trade Union advice - to promote active integrated Trade Union Members.

* Build links with construction trade unions on the continent.


Are all perfectly commendable demands that should be supported. But, they do not address the immediate problem here of workers without a job, especially those particular workers who think they should have had THESE jobs. Unless, some demands are raised that can address THAT problem, those deep seated ideas about, “British Jobs For British Workers”, will be bound soon to resurface, and when they do, and if the current leadership fail to provide a solution to those immediate problems then that mass will lose confidence in that leadership. It will look to some alternative leadership that will at least appear to offer it a solution to those problems here and now. Remember that in 1917, the Russian workers and Peasants gave their overwhelming support to the Mensheviks and SR’s, not the Bolsheviks. They only gave their support to the Bolsheviks when the former parties failed to provide the immediate answers to their need for Peace, Bread and land. Unfortunately, we all know who will chime into the need for a quick easy solution here. It’s the BNP.

Although, supportable some of the above demands are inadequate in themselves. Its okay, registering unemployed union members, but if no work comes available then those members are likely to ask what was the point. The Trade Unions need to be producing workers plans for useful employment – God knows if you go round most working class communities there is plenty that needs doing – and we need proper plans for how that work could be done, with committees of workers and tenants and so on. But, it is no good demanding that the bosses government establish programmes for this work. That only fools workers into believing that Brown’s government and the bosses state are in some way neutral between classes, that they can be persuaded to act in workers interests. By all means strike to demand that Brown’s Government hands over money to workers, better still strike to demand that the oil companies and other big companies making billions hand over money to workers. But, the last thing we need is yet another Government initiative, another state capitalist enterprise that will exploit and oppress workers. Having been a County Councillor for 8 years, and having worked for a local Council for 14 years I know what these state capitalist initiatives mean. They mean lucrative jobs for the big bureaucrats, lavish expenditure on offices and facilities, and very little going to employ workers to do something useful, and even less benefit for the communities they are supposed to be designed for.

Anyone who works for Local or Central Government knows this to be true. Anyone who remembers the experience of nationalised industries knows that its true, and the last people workers should be looking to for a solution is the Capitalist State. We need the Unions, and the Labour movement in general, instead to be mobilising resources both from within the movement, by obtaining credit from the Co-op Bank and Unity Trust, by demanding money from the government and the bosses to establish Co-operative enterprises under real democratic workers control that can begin to address workers needs both as workers and as consumers.

The Demand

* Government and employer investment in proper training / apprenticeships for new generation of construction workers - fight for a future for young people.

Is inadequate from that perspective. The Labour Movement should be providing such training for young workers, including the training for being a part of that Labour Movement, training to stand up for workers rights, to stand up to the bosses, training to demonstrate that workers don’t need bosses, training of how to create and run a workers enterprise. The bosses state if it provides anything will be yet another quango simply providing a good living for state bureaucrats. We should not fool workers into believing anything different.

The demand:

“All Immigrant labour to be unionised”, could be deemed discriminatory. After all, we do not demand that all native workers be unionised. We seek to unionise them, to convince them of the need to join a trade union, but there is no closed shop.

The demand, “Build links with construction trade unions on the continent.” Is supportable, but inadequate. We need to start from such links at a rank and file level, but we need to build up to them to the establishment of European wide Trade Unions, better still a single European Trade Union, and those Trade Unions need to form the basis of a European Workers Party. But, there is no point in having European Trades Unions and Workers Parties if Europe itself remains divided in outdated nation states. The necessary demands for common Trade Union rates of pay across Europe, for common working hours, benefits, pensions, and other conditions are only meaningful if there is some single European State that can legislate them across the whole of Europe with no opt outs for individual states. In reality such things would only ever be meaningfully implemented by a European Workers Government. Ultimately, our goal is a United Socialist States of Europe, but that is not currently on the agenda. As Trotsky said in the 1920’s and early thirties, even a United States of Europe would be a step forward.

But, those are the demands which in the words of the Communist manifesto represent the interests of the movement tomorrow in the movement today. Unless we can begin to address workers immediate concerns all that is pie in the sky utopian scheme mongering. Here and now, we need solutions that can be accomplished with our own resources without recourse to the bourgeois state, or to the bosses. We need to mobilise our own resources to establish workers co-operative to provide useful work. By all means as argued above use class struggle methods to demand money from the bosses and the bosses state to help capitalise them – provided that its understood that such money gives no right to have a say in these co-ops – but the Labour Movement does have resources to set this going – huge union bureaucracies with expensive building for one thing – there is money in the Co-op Bank and CIS, in Unity Trust, in the various Mutual Societies tied in some ways to the Labour movement such as Britannia, ultimately, though it would take longer to obtain control over it, there are huge sums in workers pension funds, under the control of and being used for those same fat cat bankers that caused the current financial crisis.

Workers have begun to rise from their knees after a long period of depression. That arousal of self-confidence needs to be developed in a programme of workers self-activity, not diverted on to the old statist solutions of blaming the Government, and then demanding it act in workers interests.

Sunday, 1 February 2009

Reactionary Little Shit

Over the last decade, some right-wing Labourites, such as Roy Hattersley, have appeared relatively less right-wing as New Labour moved even further to the Right, and these old Labourites struck up a critical position that was marginally to the left of Blair and Brown. The same cannot be said for Frank Field. He was a reactionary little shit back then, and he appears no different today. He accomplishes the, not very easy task, of being a critic, of Brown's right-wing politics, not from the left, but from the even further right.

Today, on the BBC News, he was spewing forth another particularly vile load of reactionary, nationalist bilge in response to the strike at oil refineries and other facilities around the country. See Oil on Troubled Waters . In part, couching his argument in pseudo radicalism, he argued that the strikes being undertaken now, and the arguments being used, by the strikers, would be echoed in most other European countries. Even were that true, it would not make the arguments being employed any less reactionary. If it is true, then the logic of Field's argument is that we should expect to see, getting on for more than a quarter of a million, British workers abroad in Europe being told to pack their bags and head back to sign on the dole in Britain!!!!

But, Field went on when asked about Brown's notoriously jingoistic comments about "British Jobs for British Workers", to argue that he hoped that that was precisely what Brown meant, whereas Brown and his coterie have been trying to say that all it meant was training British workers to be able to take up an increasing number of skilled jobs that he hoped would become available. He might have meant that, that might be the context of those words, but in an atmosphere of rising nationalism, racism, and hostility to foreign workers, reflected in the growing support of the BNP, Brown must have known, that by using such words, and using them so ambiguously, they would be understood in precisely the way they are being used now.

And, typical of the duplicity of those like Field, who raise these arguments but, who shy away from accepting responsibility for the logical response to them, he tried to say that this should not at all mean any hostility to all those immigrants who have settled in this country. But, how else can anyone take the slogan, "British Jobs for British Workers"? It is bound to be understood by ordinary workers in precisely the way it is being put forward now, and the way that the BNP and other Nazi groups will use it, that is to mean if you weren't born here, you are taking our jobs, so piss off!

This dispute does pose difficult questions. Socialists do not support bosses using cheap labour to undercut Trade Union rates. In so far as any strikes are based on trying to ensure that this company pays Trade Union rates then it is progressive. At the moment, that is not the focus of the strike. Even that argument is one that requires some discussion. As I said in my previous blog on this, if these workers were working at Trade Union rates in Italy producing say shoes, we would not call for boycotts of shops selling those shoes even though Italian union rates might be less than British union rates! That would just be a form of protectionism that led us to line up with our own bosses against foreign workers,and which would make it more difficult for those foreign workers to apply the pressure to raise their wages. In a global labour market the best, the fastest means by which workers in low wage economies can bargain for higher wages is if the demand for that labour rises quickly.

The real answer here is the establishment of European wide Trade Unions, and for the establishment of Europe wide Trade Union rates of pay for different jobs, and for co-ordinated action by unions across Europe for their implementation as well as for common rates and conditions for pensions, and benefits. It requires a closer unity of workers across Europe, and that will mean a closer political unity of Europe itself, because common benefits etc. will require common European fiscal and monetary policies. We need a United States of Europe.

In the short term, the real problem for the workers on strike is not that they need these particular jobs, but that they need jobs in general. I gave some solutions to that in the last blog, but there is another obvious solution, which links to those solutions. Last week Shell announced its profits for last year. Record profits equal to $31 billion. See for example here . Not just Shell, but all the big oil companies, like Total, have made similar huge profits. Although those profits declined at the end of the year, as oil prices fell, they are still massive, and as oil prices rise again they will become even more massive. Out of all those billions providing a few million pounds to enable workers in depressed areas, to provide work for those protesting, who need jobs, would not be missed. Instead of focusing their attention on "British Jobs for British Workers", which necessarily attack our fellow workers from abroad, the strikes should focus on these oil companies and their profits, should demand they hand over some of that profit created by the workers of the world, back to some of those workers in order that they can establish co-operatives producing useful work and products for their local communities.

Workers of the World Unite

Water and Diamonds

Bourgeois economists often attack the Labour Theory of Value - which they always describe as Marx's Labour Theory of Value, forgetting to mention that it was actually developed by the two greatest bourgeois economists, Adam Smith and David Ricardo - in ways that show either that they have not read and understood the theory, or else that they are dishonest.

Often, they fail to take account, of the fact, that the theory says that the Exchange Value of Commodities is determined by average, socially necessary, simple labour-time, and simply trot out, if the value of commodities is determined by the Labour-time expended on them, then producers will have an incentive to spend as much time producing them to raise their prices, and so on. They confuse Exchange-Values with prices and other such nonsense that means that often in any such discussions it is necessary to spend a long time dispelling all the fallacies before any serious discussion of the theory can be undertaken.

Another common criticism arises in reply to what has come to be known as the diamond-water paradox. The division between Marxist economics and bourgeois economics comes down essentially to this. Marxist economists basing themselves on the Labour Theory of Value argue that the Exchange Value of a commodity is an objectively determinable quantum equal to the average, socially necessary, simple labour-time required to produce it. In other words, in any economy at any specific time if we take all the producers of a commodity, all in competition with each other, this competition will force all of them to use the most efficient means of producing this commodity. Some will be more efficient, some less, and taking all together an average efficiency will be calculable. Ultimately, this efficiency can be measured by the amount of Labour-time required for this production. That labour-time is divided between the Labour-time required to produce the machines used in the production process (or at least that part of the machine, the wear and tear in the production process), that required for the production of the raw materials and ancillary materials used, and finally that living labour used in turning these materials into the finished product.

This Labour-time is not the Labour-time of the specific workers. All workers are different, have different skills etc., and so the Labour-time of a bricklayer might count as twice or three times the Labour-time of the brickies' labourer. The measure of Labour-time, simple labour, is this basic unskilled labour. If the actual Labour used is skilled then it is considered to be complex labour, and the calculation simply requires that a multiple of that simple labour-time be applied. Finally, in previous societies where commodities were made solely to be exchanged with a known buyer there was no question of commodities being produced that were not wanted. Where commodities are produced to be sold on a market this is no longer the case. Now commodities may be produced for whom there is no buyer, or at least no buyer at that Exchange Value. In other words more labour has been expended than was socially necessary. Only that which is socially necessary can count in calculating the Exchange Value.

The alternative theory of Value, that on which bourgeois economics is based, seems in many ways simpler to comprehend. It argues that Value is not objective, but subjective. Each person determines the value of any commodity based on how much they are prepared to pay for it, or how much they are prepared to sell it for. Haggling between the two settles the price, except that this haggling takes place between millions of buyers and sellers. In the end this comes down to a psychological argument. The Value any individual places on a commodity is determined by what they think it is worth to them at that particular moment in time compared to other commodities, and that comes down to what is the utility they can derive from this commodity compared to others, including the money they have to hand over to buy it.

This conflict between the two theories goes back to the first discussions on this matter both taking place at the same time in different places, in Ancient China, and in Ancient Greece at the time of Plato and Aristotle. For a long time, basically, the Labour Theory of Value won out in this battle. Smith, Ricardo and other economists of the time simply picked up the thread of a long line of Islamic and Christian scholars who over the centuries had worked their way to developing the idea of the value of commodities being determined by the Labour-time required for their production.

But, the theory was dangerous to the bourgoisie. The complete formulation of the theory by Marx showed how Capitalism was based upon the exploitation of Labour just as much as Feudalism was based on the exploitation of the serf and peasant, and slave society on the exploitation of the slave. It was the labour of the worker that created new value, and a portion of that value was simply appropriated by the Capitalist just as the Landlord appropriated part of the production of the peasant, or the slave owner appropriated the surplus product of the slave, over and above what was required for the slave's subsistence.

W.S Jevons was one of the first proponents
of the theory of utility.
So bourgeois science developed a new theory going back to the idea that the value of commodities was based not on the objective quantum of the labour-time requried for production, but on the idea that it was due to some innate quality of the commodity - its utility. But, Marxist economists were quick to point out the flaw in this argument. If we take two commodities, diamonds and water, the Value of diamonds is very high, but water has a very low Value, sometimes zero. Yet, it is clear that, in terms of utility, water is far more precious than diamonds, we can live without diamonds, but not without water. The bourgeois economists came back with the argument that it was not the total utility that counted, but the marginal utility, the utility of the last unit of a commodity to be consumed that determined its value. So, if there is plenty of water, I am able to consume lots of it, and I will get to a point where I don't want any more, so I will not be prepared to pay much, if anything, for it. But, there are very few diamonds about, I can consume few of them, so the price I am prepared to pay, for the next one I might be able to get my hands on, will be high.

In order to show the force of this argument, they often give an example similar to the following. They say, suppose someone has a diamond and has been lost in the desert for many days. They are dying of thirst, and come across another person with a glass of water. At this point they argue, the utility of the glass of water is greater to them than the diamond, and so they will be prepared to exchange the diamond for the water.

That seems a reasonable argument, but could the Labour Theory of Value also explain the basis of this exchange? It appears to contradict it, diamonds require a lot of labour to produce water very little, yet the diamond is exchanged for the water. But, in fact like many of the arguments used by bourgeois economists there is a sleight of hand here. What actually is the commodity being exchanged? Is it simply a glass of water? Or is it a specific glass of water available at a particular point in space and time?

Moroccan Water Sellers
Let's look at the facts. Someone is lost, say in the Sahara desert. In order for them to exchange their diamond, with the glass of water, there also has to be someone there, with a glass of water, at that specific place and time, for them to exchange it with! Unless we are dealing here with just isolated examples of pure fate, which can tell us nothing about Capitalist, or any other kind, of commodity production, this supplier of glasses of water, would have to have undertaken a number of decisions and actions. They would have had to, first, acquire the glass of water. At this stage, true, the glass of water has very little value; it has required very little labour-time for its production. But, if this producer of glasses of water wants to exchange this glass of water, for something else, they have to find someone with whom they can exchange it. Most frequently, such suppliers will go to where there are the most numerous potential buyers. They will quickly be able to exchange their water there, and, in consequence, because there will be other suppliers of water, the value they will get, in exchange, will be low. If our supplier wants to exchange his water for a diamond, he will have to go to where there is much less competition, but the place where there is much less competition, is also the place where there are far fewer buyers.

Our water seller decides to set up shop in the middle of the Sahara desert. Sure enough he faces no competition. But, where potential buyers, of his water, pass in hundreds through the market, in the town, few potential buyers are to be found in the middle of the Sahara. Many of those who come by, knowing that they will not easily find water have brought sufficient supplies with them and so are not customers either. Unless, our water seller is very lucky, in which case he could have simply bought a lottery ticket, he is likely to spend many unpleasant years sitting in the desert waiting to find a potential customer with a diamond to exchange for his water. During all that time, not only is he expending his labour-time, to provide this specific commodity - water at a specific time and place - but he will have to expend further labour-time, making sure that his glass of water does not evaporate, in the blazing sun. All in all, he could probably have expended less labour-time finding the diamond, and digging it out of the ground, which he hopes to exchange for his water. That is why you do not find many Capitalists engaged in such an activity. It is in fact, far better explained by the Labour Theory of Value than it is by the Marginalist Theory.

After all, the Marginalist theory is rather circular on this point. It explains the low prices of some commodities by their low price. It is not the large supply of water that allows me to buy water at a low price, but the fact that the suppliers of water have to expend little labour, in its production, that causes its price to be low, that then allows me to purchase lots of it! If a certain supplier of water had a monopoly of supply, the fact that there was lots of water would not cause its price to be low necessarily. The supplier would charge a monopoly price by restricting its supply, and I would pay a higher price. The monopolist would then make a monopoly profit, because the labour-time he expends would remain the same.

You can see something like the water-diamond situation above in practice. I drive quite a bit in Europe. Increasingly, you are seeing, particularly in the big countries, like France and Spain, the emergence of fully automated filling stations. This follows from the argument above. In Britain, with filling stations, largely, in, or close to, towns and cities, they get a high volume of traffic, and sell millions of gallons of fuel, plus increasingly selling other things in the shop. Over all these millions of gallons sold, the wages of the attendants form a tiny proportion of the cost. But, in a big country, where its necessary to have filling stations miles from any large connurbation, the volume of traffic, the number of gallons sold can be much smaller. If an attendant was employed, then, like our water seller, they could be sitting their for long periods without any customers. Capitalists do not pay workers to sit doing nothing. Instead, then they automate the pumps, making everyone pay for their fuel with credit cards. Food and drink dispensing machines also remove the need for someone to be in attendance in the shop.

Occasionally, problems might arise, which would, otherwise, have been dealt with by an attendant, but, with CCTV, and online error reporting, a number of such facilities can be linked together, and a technician dispatched to deal with problems when they arise.