Thursday, 23 February 2017

Brenda Procter - A Fighter For Her Class

I was saddened to learn yesterday of the death of my old friend and comrade Brenda Procter, who for more than thirty years had been a prominent member of the Miners' Wives Group, and a series of other mining communities related activities.  She was a real working-class fighter for her class.  I first met Bren in 1981, long before the 1984 strike.  I met Bren as a result of my contact with her next door neighbour Paul Barnett, who later joined the Stoke Socialist organiser group, for a short time.

The Stoke Socialist Organiser group arose in 1979, as a result of the creation of the Socialist Campaign for a Labour Victory.  The SCLV was the project of Workers Action, of which I had been a member since 1974.  It also drew in supporters of Socialist Charter, and won the affiliation of a number of CLP's, branches and PPC's across the country, including one Jeremy Corbyn.  There was one Socialist Charter member in Stoke, at the time, Jim Barrow, a journalist who like me had gone to University after having worked for several years beforehand.  Both of us continued to maintain close contact with the world of work, and with the trades union movement, we had spent much of our time in over the previous years.

In the early days of the Stoke Socialist Organiser group it had rapid success starting off with around 15 members.  But, apart from myself, Jim, and Neil Dawson, all the other members were students, and as Trotsky pointed out, in relation to students, they can be more trouble than they are worth, unless they are part of a large proletarian organisation that can keep them under control.  Their essentially petit-bourgeois, dilettantist approach means that they tend to flit in and out of political activity, and sure enough within about three weeks, 90% of the students flounced out of the group.

I paint this picture, not just to give an impression of the times, but also to make the contrast between this studentist politics and the working-class politics of Bren.  Over the next year, another couple of students came into the group, whilst Jim Barrow also left, as Socialist Charter nationally engaged in work on London Labour Briefing.  The only workers left in the local group were then myself and Neil Dawson.  In the meantime, the group suffered an infiltration by a member of the Sparts, which led to Martin Thomas coming up from London to carry out his expulsion.

Again indicative of this dilletantism, it was after this event that two of the student members told me that they had known that the person concerned was a Spart, because he sold copies of their paper around the Poly, sometimes to them, after Socialist organiser meetings, and after I had left.  Yet neither of these students thought it fitting to have provided this information beforehand!  Over this period, I found myself increasingly frustrated at this kind of behaviour, which left me spending endless amounts of time driving from one end of the city to another for meetings, only to find that these students, including the former Branch organiser, never turned up.  In the end, I had to ask Martin Thomas about the situation, and we agreed to expel the former Branch Organiser.

So, by 1981, the Socialist Organiser Branch was down to just two members, myself and Neil Dawson.  Yet, things were actually turning up in many ways.  It was liberating not to be wasting so much time in pointless journeys, for one thing.  But, also by 1981, the long hard work of the last seven years, in the Labour Party and local Trades Council, had begun to pay off.  Both had turned left, and in the Labour Party branches, the moribund organisations had begun to flower once more.

In 1981, I was elected as Assistant Secretary of Stoke District Labour Party and on to its Executive Committee with a vote that was twice as large as the next highest EC member.  At the time, I was also leading a number of community actions, via the Labour Party Branch, as well as being involved in trying to set up local Rank and File Mobilising Committee Groups and so on, which kept the media full of stories, and kep John Golding busy threatening to have me expelled from the party.

After the meeting, I was approached by the late John McCready, a pottery union militant, who I also subsequently supported (unsuccessfully) for the nomination for the Stoke North PPC (won by Joan Walley).  I'd first met John, back in 1974, when I sat on an ASTMS negotiating team to hammer out a Spheres of Influence Agreement with CATU, the pottery union.  John was on their EC, as was another comrade I already knew, Geoff Bagnall, who had been a member of the IMG with Jason Hill. John had numerous questions, for me, such as "Is it true you support Troops Out of Ireland?"  It was, and in fact, the Labour Committee on Ireland, was only one of a long series of such campaigns that I was involved in at the time.

John was a member of Stoke South CLP, and with him was another Stoke South member Paul Barnett, who lived in The Broadway at Meir.  From that point on, I would visit Paul and his wife Lynn and their four kids every week to talk over the latest paper, and local political events.  I was not alone, I would often run into Steve Martin or John Pickett from the Militant, who were also trying to draw Paul into their orbit.  Paul eventually joined SO, and wrote a few articles covering his area of interest in theatre, particularly reviews of the then current "Boys From The Blackstuff".  As an added bonus for me, Paul also used to service my car.

It was in this context that I first met Bren who would come round from next door.  At the time, Bren was married to Ken.  If I remember correctly, Ken was a biker, or at least 36 years on, I have an image in my mind of him wearing a leather motorbike jacket.  Ken worked at Florence Colliery in Fenton, though his parents owned the local Procter's Coach company.

So, when the 1984 Miners' Strike broke out, I was not at all surprised to see Bren taking a leading role in it, organising the local Miners Wives group, and from the start being regularly on the picket line to turn back anyone even thinking of crossing, and standing four square against the police that tried to keep the pickets down to the then maximum six.

I can't remember if Bren came with me and a number of local miners to Merseyside to collect money after I'd organised a tour there with Lol Duffy, and other comrades in the area, but on almost every occasion when something was going on, Bren was involved in it.  At the end of 1984, I took over was Secretary of the North Staffs Miners Support Committee, set up by the North Staffs Trades Council.  Every week, in that capacity, as well as my capacity as organiser of my Branch LP Miners Levy, I met with Joe Wills, up at the NUM offices in Burslem, and shortly after taking over as Secretary of the Support Committee, I organised with the NUM, a mass picket of Wolstanton Colliery, where Joe had previously worked, and where my comrade the late John Locket was a prominent figure.

One again, Bren was there, bringing a large number of Miners Wives with her, and the picket, which drew in around 300-400 people, also brought in local MP Mark Fisher, from Stoke Central.  In the following weeks, we also organised a number of such mass pickets at the Meaford power station.

Even after the defeat of the strike, working-class morale and organisation did not dissipate quickly.  In 1985, I took over as President of the North Staffs Trades Council, and for the two years I held that position, there were still attendances each month of around 80 delegates.  And, during that time, we drew in a number of speakers from disputes that were going on around the country, notably the Silentnight dispute, where all the workers had been sacked.

We organised a leafleting outside the Co-op furniture store in Hanley, in the not unreasonable belief that the Co-op might itself be amenable to such activity.  Unfortunately, it turned out that the manager of the store was more concerned with the stores sales of Silentnight beds than he was the rights of Silentnight workers.  Bren and a group of Miners Wives turned up to take part in the activity,a nd we split ourselves between the two store entrances.  Myself, and another Trades Council activist, Andy Day, who also worked in the Hanley Peace Centre, took the front doors, and Bren and the others were on the side doors.  Shortly after we had started leafleting, a police van pulled up, and a sergeant got out to tell all of us that if we did not go, by the time he returned, we would be arrested.

After a short discussion, we agreed there was no point all of us risking getting arrested, so just me and Andy remained on the front doors.  Sure enough, when the sergeant returned we got nicked for "Behaviour likely to result in a breach of the peace."  When questioned as to exactly what that behaviour was, we were told that it was handing out leaflets that someone might take offence too, and thereby respond violently!  Not surprisingly, the charges were later dropped.

Bren later entered a relationship with Phil Pender who along with his brother Chris, was a member of my Labour party Branch in Tunstall.  Both Phil and Chris for a brief period joined the Stoke North SO group, which met in the Hole In the Wall pub in the back streets of Tunstall, off America Street, and just up from the Torch.  Both Phil and Brenda, joined Scargill's SLP.

I last saw Bren, I think back in 2011, when I had gone to a meeting of the NSTC, Chaired by Jason, to oppose the new round of austerity that the Tories were inflicting.  I commented in my speech to that meeting that it reminded me in many ways of how things were back in 1974, when I first got involved in political activity.

Brenda Procter was one of those working class heroes whose mettle was forged in the fire of that time.

Theories of Surplus Value, Part I, Chapter 3 - Part 43

Marx then turns to the position from the standpoint of the machinery producer. They produce machines for the weaver, spinner and yarn producer, as well as producing machines for their own use in producing other machines. Measured in terms of linen, this comes to two metres for the loom, one metre for the spinning machine, one metre for agricultural machines, or four metres of linen in total, which is the equivalent of a value of twelve hours labour or £12.

But, again, of this total value of machinery supplied to these other producers, it is only the revenue component – the component equal to the value newly added by labour, and equal to wages and profit – that can be consumed by the machine maker. The other component of the value of the machine, the constant capital, must be reproduced. The machine maker must use linen to buy these commodities – wood, iron, leather and so on – from the suppliers of these commodities, or as with the flax grower, who reproduces their seed from their own output, the machine maker must reproduce their own machines out of their own output.

Looking at the machine maker's production, the value of a machine is comprised two-thirds constant capital, and one-third new value added by labour. Consequently, only one third of the linen they obtain represents revenue, which can be consumed.

In total, they can consume 0.66 metres of linen from loom production, 0.33 metres from spinning machine production, and 0.33 metres from agricultural machine making, which makes 1.33 metres altogether. The remainder of the 2.66 metres of linen they have obtained represents the value of the constant capital contained in those machines. Out of this, they must pay their own suppliers for that constant capital.

Marx assumes that of the value of this constant capital (2.66 metres = eight hours labour = £8) raw material used in their production constitutes two-thirds, whilst the other third is comprised of the wear and tear of their own machinery, used in the production. As described above, the position of this machine is the same as for the flax grower, who has to replace their own seed, but Marx analyses it further later on.

The amount of linen equivalent for wood, iron, etc. comes down to 1.78 metres. But, its necessary to refer back to the machinery producer again at this point, because the wood producer and iron maker also use machines in their own production, and they must therefore hand some linen back to the machine producer equal to the value of machinery used in their output.

The situation is, however, more straightforward in respect of those extraction industries, because they do not use any raw materials for processing, so the value of their output divides into the value of wear and tear of the machines used in production, plus the value of the new labour added.

The point being here that there are innumerable exchanges that could continue to mushroom out of the total production. Just as was the case in trying to find sufficient demand from revenue, by introducing revenue from additional capitals only compounded the problem, because the total value of output necessarily grew faster than revenue, so its impossible to resolve the problem on the back of exchange itself.

“And so we might go on calculating to infinity, with ever smaller fractions, but never able to divide the 12 yards of linen without a remainder.” (p 133)

The linen here represents the consumption fund, and consequently is equal to, and can only be consumed by revenue – the value added by labour, or v + s. But, in examining the production of the linen, in ever more detail, we find that the total value of production is greater than the value of this final output, i.e. the linen, because it necessarily involves the production of constant capital used not in the production of the final output, but also in the production of constant capital itself.

In other words, the value of the consumption fund, of final output, is equal to v + s, but the value of total output is equal to c + v + s, so that it is impossible for the value of total output to be resolved into incomes – wages, profit, interest and rent – as Smith and his inheritors claim. National Income/Expenditure does not equal national output, but only the value of the consumption fund, the new value added by labour during the year.

Wednesday, 22 February 2017

Vote Labour In Stoke and Copeland

Vote Labour


23rd. February

In the by-elections tomorrow in Stoke central and Copeland, workers should vote Labour.  They should do so for all the reasons Marxists always advise workers to support the workers' party. 

“As the experiences of the Russian Revolution teach us – remember this in England and America! – the most important thing of all is to stay in the midst of the masses of workers. You will often go wrong with them, but never leave the mass organisations of the working class, however reactionary they may be at any given moment”.

(Zinoviev’s closing speech at the 15th Session of the Second Congress of the Comintern) 

Particularly, at the current moment, the Labour Party following the election of Corbyn, as Leader, in 2015, is moving Left, and so all of the old excuses of the left sects ring even more hollow today, as they ossify in their self-imposed isolation from the working-class, and its main political organisation.  No Marxist would suggest that Corbyn's Labour Party is perfect, though it is an improvement on what has existed over the last thirty years, but perfection only springs into existence ready formed, in the minds of fantasists and deists.  In reality, anything even approaching perfection has to be forged through hard work, over long periods.  The best conditions for workers identifying what is good or bad, and what needs to be improved in the existing Labour Party, therefore, arise when it is tested in that real fire of class struggle.  We need Labour MP's and a Labour government to test that mettle, and to forge ever harder tools and weapons.

Of course, for an ordinary worker in Stoke the recent events may weigh heavily on their hand as they hold the pencil in their hand ready to make their mark in the polling booth.  If they were a Leave voter, they may on the one hand, be concerned that Labour were opposed to Brexit, and that the Labour candidate Gareth Snell correctly stated in one tweet that "Brexit is a load of shit".  They may, on that basis consider voting for the parties that honestly support Brexit, rather than are committing themselves to it, only after the referendum, and so as not to risk losing the support of Labour voters in Leave areas.  So, they may consider voting for the Tories or more rationally UKIP.

But, even as a Leave voter, they would be wrong to do so.  In all polls going back years, prior to the referendum, the majority of voters, including in areas like Stoke, rated the EU and Immigration, as coming low down on their lists of concerns, behind jobs, wages, the NHS and so on.  That is why, these areas continued over the years to vote Labour, who the workers in these areas saw as being the party committed to policies they needed on those issues.  Workers in Stoke, and similar areas did not suddenly become hostile to the EU, or concerned about immigration only last June!  All of those who live in these areas, and talk to ordinary workers as a matter of our daily lives, know that these sentiments have been there for decades.  Yet, none of those concerns stopped workers in those areas, year after year voting labour, and in some cases being active members of the Labour Party itself.  Nor will that situation have changed on June 24th 2015 either.

Whatever Labour Leave voters might feel, their overriding concern for the issues of jobs, wages, the NHS and so on, means that they should still vote Labour, because they must know that the Tories are the enemies of workers on all these issues.  It is the Tories who want and where they can, have cut workers wages.  It is the Tories that are decimating the NHS just as they did under Thatcher and Major in the 1980's and 90's.  It is the Tories who want to use Brexit so as to have a bonfire of workers rights and turn Britain into a 21st century equivalent of Batista's Cuba, with low wage, low status jobs for the the majority, and low taxes and vast speculative wealth for a small minority.  

Moreover, Nuttall's Nutters in UKIP are even worse.  Nuttall himself is a former hard-right, Thatcherite Tory, who stood in elections under that banner in the past, and openly advocated privatising the NHS.  However, workers in Stoke feel about the EU or immigration, which the Tories and UKIP and the gutter press over decades have led them to believe are the causes of their problems, in order to distract them from the real cause in the inadequacies of capitalism, and the austerity policies carried out by conservative politicians, they should vote Labour, because only Labour comes close to offering them the kind of policies required for dealing with their main concerns over jobs, wages, the NHS.

The Tories and UKIP offer the opposite kinds of policies on all those issues.  They offer only further attacks on workers jobs, conditions, wages, the NHS and public services.  As far as the Liberals are concerned, its tempting to ask, "Are the still here?"  We all saw where the priorities of Liberal politicians lie in 2010.  The whiff of ministerial leather caused them to jump into bed with Cameron's Tories, and to stand shoulder to shoulder with them in carrying through their right-wing policies of austerity, supporting things such as the Bedroom Tax.  Had they won more than their paltry 8 seats at the 2015 General Election, they would have had no qualms about getting back into bed with the Tories.

Moreover, a look at the actual practice of parties like the Liberals and the Greens, in Local Government, shows a similar pattern, whereby they talk left, but act right, alongside the Tories to implement policies of austerity etc.

On the other hand, a Remain Labour voter in Stoke might be revulsed at the haste with which Corbyn and the Labour Party have themselves jumped into bed with Theresa May to push through Brexit.  They might think that, in response they will register their vote by voting for the Liberals or Greens, who have maintained a principled position of opposing Brexit.  Again they would be wrong.  The Liberals are partly responsible for this mess, because they facilitated Cameron's government, and his hubris in calling the referendum.  The Liberals long advocated such a referendum, yet it was clear that any such referendum undertaken under a Tory government, would not be an adequate test of public opinion on the matter.  The referendum descended into nothing but a Reality TV show, of coverage of the personal bickering of Tory politicians, with everyone else effectively blacked out along with any other perspective other than inside or outside the existing capitalist framework of the EU.  There was no discussion of the possibility of reforming the EU in the interests of EU workers, for example, as opposed to introducing further reforms, such as those proposed by Cameron which would have further undermined workers rights.

The Liberals had their chance and blew it, along with the rest of the Blair-right, Third Way political centre, whose conservative policies over the last thirty years blew up speculative asset price bubbles, which undermined real productive investment, caused the financial crisis of 2008, and threatens an even bigger financial crisis any minute.  The political death of that political centre, be it the Liberals, Blair-rights, Pasok, Clinton, the PSOE, Hollande etc. is no accident.  It created its own gallows, and there is no future for workers in trying to resuscitate that corpse, however much the media keep trying to forge a new Frankenstein's Monster out of the bits of separate corpses, the latest example of which was the attempt on Newsnight by Evan Davies to invite Tory Ed Vaizey and Progress Member Alison McGovern to join together, having had former SDP member Polly Toynbee sing the praises of the French Blair-right candidate Emmanuel Macron.

Even just practically, nationally, neither the Liberals nor the Greens could form a realistic opposition.  If the LIberals even trebled their number of MP's, they would have a measly 27, whilst Caroline Lucas would have her solitary confinement broken only by the addition of an additional two Green MP's.  The only real effect, would be to split the anti-Tory vote, as happened in 2010, and thereby help the Tories back into government.

All of those arguments apply equally to the by-election in Copeland, but there is an additional factor there, which is the issue of nuclear power.  Everyone knows that Jeremy Corbyn opposes nuclear power.  However, Jeremy Corbyn is not the candidate standing in Copeland.  Moreover, the Labour Party is a democratic not a dictatorial party.  Jeremy Corbyn as leader has an important voice, but still only one voice.  The policy of the Labour Party is not to oppose nuclear power, as it is for the Greens and Liberals.

My personal view, as it has been for forty years, is that socialists should not cut off the potential of a power source that could be the most important one we have for the energy demands of our future. The question should not be whether we are in favour of nuclear power or against it, but as with any question of technology, how it is used, for what purposes, and under whose control.  No one opposes the use of nuclear material in medicine, for example, where it is used for X-Rays, C-T Scans, as well as for radiation treatment of cancers.

Our first concern with the nuclear industry should be that it is not used for purposes that damage workers interests, by threatening their lives, health and communities.  We have to be concerned for the workers who live in the communities surrounding such plants, as well as for all those generations of workers to come.  If only such concern had been shown for all of those workers, communities and families who were allowed to work for decades with deadly asbestos, that continues to blight people's lives decades later.  Everyone can be wise long after the event, and bemoan the fact that they were too concerned about short term economic considerations to have heeded the warnings that were given to them.

Labour's policy should be to demand that nuclear plants, and the nuclear industry in general is placed under workers control, with day to day workers supervision undertaken by committees of specialists drawn from the workers' movement, and local communities.  Activity should only be undertaken where it can guarantee very high levels of safety and security for workers and local communities, and just as the government provides huge subsidies to the private nuclear power companies, they should provide sufficient subsidies to ensure that workers can run such plants to these high levels of safety and security.

Moreover, we should demand as a priority, that the government provides large scale funding along with other EU governments for intensive research and development of nuclear technology so as to improve safety and security, and particularly, for the rapid development of nuclear fusion technology, which can provide limitless supplies, of safe and cheap nuclear power into the future.

But, all of that requires that we remove the Tories and their UKIP and Liberal allies, and their faith in capitalism and the free market.  It requires that we build the Labour party, and the Labour Movement, so as to be able to take on these challenges of the future.

Theories of Surplus Value, Part I, Chapter 3 - Part 42

Suppose the flax grower produces 300 kg of flax. Its value comprises 1 hour/£1 value of seed, and £2 value of labour added. Of the output, 100 kg is set aside just for the reproduction of the seed, so that only the remaining 200 kg are actually sold to the spinner. In that case, although the value of output is equal to £3, only £2 actually goes into circulation, and comprises a part of the constant capital of the spinner. When the spinner then uses this flax in the production of the yarn, only this £2 of value is incorporated in the value of their output, and when the yarn is sold to the weaver, the weaver only has to give them £2 of linen in exchange for it. (The weaver, of course, gives an additional quantity of linen equal to the value added to the constant capital by the spinner's labour).

“It is clear in the first place that the producers of the elements of the linen, of the constant capital of the linen, could not consume their own product, since these products are produced for production and do not enter into immediate consumption. They must therefore spend their wages and profits on linen—on the product which finally enters into individual consumption. What they do not consume in linen, they must consume in some other consumable product exchanged for linen. As much (in value) linen is therefore consumed by others as they consume in other consumable products instead of linen, It is the same as if they had themselves consumed it in linen, since as much as they consume in another product is consumed in linen by the producers of other products.” (p 128)

Looking at how the linen is then allocated Marx summarises the situation thus.

The linen has a value of £36 made up £12 newly added labour, £24 loom and yarn. The machine maker and yarn producer receive eight metres of linen with a value of £24. Marx assumes that the machine maker and yarn producer have added a third of the value by their added labour. That is the £24 value of machines and yarn £8, is the value of added labour, and £16 is the value of wood, iron and flax that comprise the constant capital of the machine maker and yarn producer.

In terms of linen, eight metres were paid out by the weaver, and of these 2.66 metres make up the consumption of the machine maker and yarn producer, leaving 5.33 metres left over, and which are the equivalent of the value of the constant capital of the machine maker and yarn producer, i.e. the equivalent of £16 or 16 hours of value.

If we take the flax grower then, Marx says, (and assuming no wear and tear of his fixed capital) all of the linen they receive from the yarn producer can go to consumption, because they replace their constant capital – the flax seed – out of their own output, and so do not have to buy it with linen.

Marx makes an error here. He previously said that the value of the constant capital of the machine maker and yarn producer combined was equal to 5.33 metres of linen, or £16. He begins by then setting the value of the constant capital of the yarn producer as equal to this 5.33 metres. Afterwards, he corrects it, and assumes that the yarn producers constant capital only has a value equal to four metres of linen.

We then have a situation where the constant capital of the weaver is equal to eight metres of linen (£24) divided into six metres of yarn, and two metres loom. For the spinner, Marx assumes that the value of their output comprises the four metres of linen (constant capital) and two metres of linen (new value added by labour).

The machine maker's output in linen equivalent comprises 1.33 metres of linen (constant capital) and 0.66 metres of linen (new value added by labour).

Of the four metres of linen that are the equivalent of the constant capital of the spinner, these are exchanged with the flax grower and machine maker. Marx assumes that three metres goes to the flax grower and one metre to the machine maker.

“A considerable part of the constant capital in the flax, used in its production, has not however to be replaced; for the flax-grower has already returned it to the land in the form of seed, manure, fodder, cattle, etc. Therefore in the part of his product that he sells, only the wear and tear of his instruments of labour, etc., has to be included as constant capital. Here we must rate the labour added at two-thirds at least and the constant capital to be replaced at one-third at the most.” (p 130) 

The total value of output of the flax grower is then equal to three metres of linen. Of this, two metres goes as revenue, and is equal to the new value added, whilst one metre is equal to the value of constant capital. This leaves a number of things still not accounted for. There is the equivalent of one metre of linen, which is equal to the flax grower's constant capital, 1.33 metres equal to the constant capital for the loom, and one metre, which is equal to the value of the spinning machine.

The spinning machine has a value equal to one metre of linen. It is comprised of 0.66 metres for constant capital, and 0.33 metres for added labour.

There is also the one metre of linen equivalent of the flax grower's machinery, which is divided 0.66 metres constant capital, and 0.33 metres new value added.

Tuesday, 21 February 2017

Business Rates

There has been a lot of discussion, over the last week, about Business Rates. The Tories have once more got themselves into a bit of a pickle, because they are in danger of alienating some of their small business supporters in the better off parts of the country, particularly London and the South-East. The basic issue is this. Business Rates are calculated on commercial property values, and in the better-off parts of the country, particularly London, commercial property values along with other property values have soared into an unsustainable bubble over the last decade. That means that Business Rates in these areas should rise. On the other hand, in other parts of the country, property values have stagnated or fallen, and so Business Rates in these areas are scheduled to fall. Overall, the Tories claim that the falls in Business Rates, will be larger than the rises, but it is those facing the rises, and specifically the largest rises that are complaining, and putting pressure on their Tory representatives.

Of course, the fact is that, commercial property has not been revalued for seven years. The revaluation should have been done, and the effects implemented ahead of the 2015 election, but the Tories, fearing the kind of hostility they are now encountering, deferred it to boost their election hopes. The reality is, therefore, that for the last seven years, when property values in London have soared, businesses there and elsewhere, that experienced these property bubbles have benefited compared to other parts of the country, who likewise, therefore, continued to pay too much in Business Rates. In other words, as with many more things, for example, the cost of commuter rail travel to London, the rest of the country has been subsidising already buoyant businesses in the capital.

The owners of these businesses in London, are complaining about the size of the rises they now face, of as much as 300%. But, the fact is that they know how Business Rates work, and they know that in the last seven years, at least, property values in London have been in an unsustainable bubble. They have had seven years, during which time their Business Rates were lower than they should have been, to have set aside some of their profits to cover this rise when it came, or else to have used that time to relocate their business to other parts of the country, where property values have not soared, if the question of such rates are a significant impediment to their business.

After all, that is how the capitalist market is supposed to operate. If costs rise in London to a level where firms make lower profits than in say Stoke, those businesses should relocate to Stoke, where their costs will be lower, and their profits higher. That would provide work for the people of Stoke who over the last seven years and more, have suffered from the policies of fiscal austerity that in part have been driven by the government's attempts to keep interest rates low, and to keep the property bubbles in places like London inflated. The increase in the demand for labour-power in Stoke would then increase workers wages in the area, and increase the demand for property, bringing about a rebalancing, whilst the fall in employment in London, and fall in the demand for property, would decrease London wages, burst the London property bubble, and thereby bring about an equalisation. This is the basis for the formation of a general rate of profit that drives the allocation of capital in a capitalist economy.

As this reallocation of capital, to places like Stoke, then occurs it not only raises living standards in the area, which have been decimated, as a result of the conservative policies implemented over the last thirty years, but on the back of those higher revenues for workers and businesses, it would also raise local taxes to finance the decayed infrastructure and so on that has been destroyed over that period, and which has led to the rise of reactionary forces such as UKIP and Brexit. There is then no economic rationale for the Tories collapsing, over the demands of business owners in London and other areas, where property values have soared. But, as with the situation before the 2015 election, and other issues relating to property bubbles, the reason the Tories are likely to buckle is purely political.

It isn't big businesses that are complaining about the rise in business rates. For these businesses, such taxes represent only a small part of their profits. It is the small businesses that are complaining, because the tax forms a larger part of their profits. But, that is the problem the Tories face, because they represent the interests of these small private businesses, as well as the interests of money-lending capitalists, and landlords. It is these small private capitalists that make up the core of the Tory party membership, and of its electoral base. Yet, if the Tories concede to those interests in London, it will relatively disadvantage the same social layers in the rest of the country.

Looking at the small businesses in London, either they own or rent those properties. The business owners who own the property, of course, have not complained about the huge speculative capital gains they have made in the prices of those properties over the last seven years and beyond, which have absolutely nothing to do with any effort on their part. Their is a good economic argument for encouraging such beneficiaries of these speculative capital gains to realise them by selling their properties and moving their business to some other lower cost part of the country, as described above. There is no economic argument for facilitating further such speculative gains, and allowing those business owners to benefit from them, by effectively subsidising their current Business Rate liability.

After all, the basis of the rise in those rates is not a rise in the actual tax rate itself, but is the fault of that very rise in property values. If small businesses in London want to see lower Business Rates, they should place the blame where it lies, on hugely inflated property values, and seek to burst that property bubble.

For those businesses in London that rent their premises a different set of questions arises. Firstly, high commercial property prices are a reflection of high commercial rents, because property prices are capitalised rent. But, as Ricardo and Marx described long ago, the reason there are higher differential rents in one area as opposed to another, is because the difference between commodity values and the price of production is greater in some areas than others, so that surplus profits are obtained, and landlords thereby levy a differential rent on this surplus profit. In other words, the economic conditions in London, facilitate surplus profits for businesses there, which enables landlords to levy higher differential rents, which thereby inflates property prices. There is little economic basis, let alone social justice basis, therefore, for the less well off, economically depressed parts of Britain, to subsidise London business, and London landlords, by subsidising the business rates of small businesses in the capital.

The same small businesses that are complaining about the rise in Business Rates, do not seem to have complained in the same way about the higher commercial rents they have had to pay over the last seven years, and yet one might assume that these rents are a more significant portion of their profit than is Business Rates. Higher Business rates, required to finance local services and so on, in London, would reduce the amount available to be paid out as rents to landlords, which would in turn assist in lowering London property values. There is no reason that anyone should be subsidising London landlords, who have made a killing from simply being parasites leaching off the economic activity of others.

The Tories, of course, are likely for purely political reasons to subsidise both the small businesses and landlords in London and the South-East, which again effectively means helping to keep those property bubbles inflated, and paying for it by draining surplus value from productive investment, and from the more deprived areas of the country. It is the same conservative political agenda, which over the last thirty years left large swathes of the country in a state of decay and decline, with similar conservative policies in the US and EU having the same effect that then leads to the rise of reactionary separatist and nationalist agendas and parties.

When house prices entered an unsustainable bubble, it led to the 2007-9 financial crisis. The bubble in house prices should have meant that demand for them, itself largely artificially stoked, for speculative purposes, by the Tory government in the 1980's and after, collapsed, causing a collapse in those prices. In fact, that is what happened. In parts of the US, property prices fell by around 60%, the same was true in Ireland. In Britain, house prices fell by 20% in short order – demonstrating that the high prices had nothing to do with some structural shortage of supply – and were on their way to exceeding the 40% drop they suffered in similar conditions in 1990. But, instead of allowing that collapse to proceed in order to restore some semblance of rationality to the property market, first the Labour government of Gordon Brown, slashed banks borrowing costs so that they could subsidise mortgages, and then as those money drugs wore off, after 2010, the new Tory-Liberal government, artificially boosted demand yet again with the Help To Buy scams, and so on, so as to prevent the bubble from bursting. The Tories are addicted to these property and financial bubbles, because the illusion of wealth they create is central to the fictitious wealth of those sections of the population on which they rely for their support. But, the cost of keeping those bubbles inflated is to damage actual economic growth and productive investment. Moreover, the cost of doing that has grown more and more over the years, so that it is now unsustainable.

Rents are at massively inflated levels, and yet rental yields are at record lows; dividend and bond yields are at near zero levels, and yet the amounts paid out in dividends and interest are at high levels; mortgage rates have been reduced to record low levels, and yet mortgage payments have soared, and an increasing number cannot afford to buy a house, because house prices themselves have ballooned to ridiculously high levels. In the meantime, dragged down with all of this debt, increasing numbers of people cannot get through the month without resort to high cost credit on their credit cards, or to payday lenders charging up to 4000% p.a. interest rates. This is not just unsustainable, it is way beyond unsustainable. The lesson that should have been learned over the last thirty years is that economies cannot be built upon such fictitious wealth and debt, and when this bubble inevitably bursts, the consequences will be much greater than in 2008, when that reality first broke through.

Of course, Business Rates are themselves a bad tax, just as domestic rates had been, and as Council Tax is now. They are all regressive forms of taxation, which is why, in relation to Business Rates, it is the small businesses that are complaining, not the big businesses. It would be far better to replace both Business Rates and Council Tax with a local income tax. Modern computer technology makes that quite easy to achieve.

In fact, asI wrote previously, I would also scrap Corporation Tax, and replace it with much higher taxes on dividend income, so as to encourage firms to reinvest their profits into the business rather than pay it out as dividends. I would accompany that with changes in the laws on corporate governance, so as to remove the rights of shareholders to elect company boards, and instead give that right to the workers and managers within the company. That would also deal with the question of corporate raiders simply buying up the shares of a company, and then using their control to shift production elsewhere.

And, as I also wrote some time ago, if companies are to be taxed, they should, like workers, be taxed on their sales not their profits. If workers paid income tax only on the profits they made from selling their labour-power, as companies do in paying corporation tax on their profits, then workers would pay no income tax, because they make no profit on selling their labour-power. The cost of producing their labour-power is equal to the price they obtain for it, in the form of their wages – if they are lucky!

The problem with local income taxes is that in those areas of the country where economic activity is already depressed, and where more is required to cover things such as social care, health care and so on, the tax base is also lower. That means that either the services provided in those areas are of lower quality, reducing the use value of labour in that area, and also acting as a deterrent for other inward investment, or else the rates of tax levied in such areas have to be higher, again acting as a deterrent for inward investment, and encouraging the better paid workers to also move out to lower tax areas. That was witnessed in New York, during the 1970's, for instance.

In order for such local income taxes to work properly, therefore, they have to be accompanied by forms of fiscal transfers from a central state authority, so as to create a more level playing field within the overall economy, and in order to prevent a race to the bottom in relation to taxes, and services. In fact, that is one reason that not only is Socialism In One Country a reactionary and utopian concept, but in the modern globalised world, with a world economy, and capital taking the form of huge multinational companies, even the idea of social-democracy in one country is a reactionary and utopian concept. It is why the foundation of the Eurozone was always flawed, and why the EU will have to bring about greater fiscal and monetary integration, and introduce greater fiscal transfers across the member states, so as to promote growth in economies such as Greece, Portugal, Italy and Spain.

It is also why Brexit is a thoroughly reactionary concept that will damage the interests of workers, particularly in Britain, for decades to come, if it is ever pushed through.

Theories of Surplus Value, Part I, Chapter 3 - Part 41

[(b) Impossibility of Replacing the Whole Constant Capital of society by Means of Exchange between the Producers of Articles of Consumption and the Producers of Means of Production]

Marx continues to measure value in terms of hours, and to present this value in money form, for the basis of calculation, but he assumes that the linen basically acts as means of payment. In that way, the weaver pays the spinner for the yarn they receive with an equivalent value of linen, the loom producer with linen to the value of the loom, and so on. Likewise, the spinner uses some of the linen they receive to pay the machine maker for the spinning machine, and the flax grower for the flax they receive, whilst the machine maker uses some of the linen they receive as payment to pay the wood producer and iron-maker, who provide them with wood and iron to produce machines.

The principle here is that it is linen that represents society's consumption fund. It is assumed that all of the linen is for final consumption, and not an input into any other commodity. All of the other commodities are merely inputs, intermediate goods, which go into the production of this final product, the linen.

Marx is trying to show again that whilst all the linen can be accounted for in consumption, as an equivalent of revenue, i.e. of all the new labour undertaken in the economy, it cannot be equal to all of the value produced in the economy, because that production also includes the value of constant capital, which was produced in previous years, and whose value and use value must again be reproduced within current production, whilst taking no part in exchange against revenue.

In his examples, Marx uses yards as the standard of length. I have used metres.

In the example, a linen factory produces twelve metres of linen in a twelve hour day. The linen has a value equal to thirty-six hours, made up of twelve hours of new labour and twenty-four hours of constant capital. This thirty-six hours of value is the equivalent of an exchange value of £36.

The twelve hours of new value is divided between wages and profit. Assuming that the level of social productivity remains the same, so that the value of looms and yarn is unchanged, the eight metres of linen, which is the equivalent of the value of the constant capital (one metre = £3, constant capital = £24 = eight metres) can now be exchanged for looms and yarn, to replace that consumed in its production.

“But if the weaver’s constant capital is equal to 2 working-days (his daily consumed constant capital), then for one working-day of the weaver there are two working-days of spinner and machine maker—2 working-days which may themselves be divided in very different proportions into labour added and constant capital. But the total daily product of spinner and machine maker together (assuming that the machine maker makes only looms)—constant capital and added labour together— cannot amount to more than 2 days’ labour while that of the weaver, because of the 12 hours’ labour newly added by him, amounts to 3 working-days.” (p 126)

This law was established in Capital II. If we assume a closed system, in which the producers of looms and yarn here only supply the linen producer, then if the linen producer only has a demand for £24 of constant capital (twenty-four hours or two days of value), then the value of output of the loom maker and yarn producer cannot be more than the £24, because otherwise they would have overproduced and would be unable to sell all their output at its value.

Consequently, the combined value of the output of the machine maker and yarn producer can never be the same as that of the linen producer, who takes their output and adds new value to it. Its possible that the loom producer and yarn producer may themselves add twelve hours of new value, just as does the linen producer, but, in that case, their products must contain less constant capital, i.e. only twelve hours worth, as opposed to the twenty-four hours of value of constant capital used by the linen producer.

The £24 of constant capital of the linen producer thus reproduces all of the capital (constant capital plus variable capital) of the machine maker and yarn producer. 

Out of the £24 (eight metres of linen) that the linen producer exchanges with the machine maker and yarn producer, a part, therefore, is consumed by them, equivalent to their wages and profit (revenue), which is equal to the new value created by the machine maker and yarn producer, and the remaining portion of the linen they receive as payment goes to the producers of their own constant capital – the wood producer, iron maker and flax grower.

But, on the same basis here, the value of the machine maker's output must be greater than the value of the output of the wood producer and iron maker, who provide him with the constant capital (wood and iron) he requires to produce machines. That is because, in addition to the value of their output, which comprises his constant capital, he also adds to it new value, as a consequence of the additional labour he expends. The same is true of the yarn producer, who takes the value of the flax produced by the flax grower, and adds additional value to it, as a consequence of his own labour, in spinning it into yarn.

Consequently, in reproducing the £24 of constant capital, (loom and yarn) used in his own production, the linen weaver also, thereby reproduces the value of the constant capital of the machine maker and yarn producer, because a portion of the linen produced not only is paid as revenue (wages and profit) to the machine maker and yarn producer, but another portion is used by them to buy their own constant capital.

But, the value of the wood and iron that comprise the constant capital of the machine maker is comprised not only of the constant capital of the wood producer and the iron maker. It also comprises the new value added by the wood producer and iron maker by their own labour. When the machine maker hands over the portion of the linen they receive from the weaver, which is the equivalent of their own constant capital, this linen also thereby covers not just the value of the wood producer's and iron maker's constant capital, but also the value of the new value added by their labour.

It too, comprises the value of the constant capital they use, as well as the value added by their labour. The one metre of linen they receive does not, therefore, just cover their revenue, i.e. the value of their added labour, but also the value of their own constant capital. The same thing would be true if the situation of the flax grower was examined.

In fact, as Marx sets out, if we examine the position of the spinner, who produces the yarn, their constant capital does not just comprise the flax, bought from the flax grower. It also comprises spinning machines and spindles bought from the machine maker. It also comprises coal to power the steam engine to run the machines and so on.

But, if we take the grower, then although a part of their constant capital may be in the form of commodities bought from other producers, a part such as the seed, will not be bought from elsewhere, but will simply be taken from their own output, and used to reproduce their constant capital in that regard. This portion of their own output, will, therefore, never be sold, and will, therefore, never obtain any linen in exchange for it.

“Here we find a part of the constant capital which replaces itself and is never sold, and therefore also is never paid for, and is never consumed, never enters into individual consumption. Seed, etc., are the equivalent of so much labour-time. The value of the seed, etc., enters into the value of the total product; but the same value, because it is the same amount of products (on the assumption that the productivity of labour has remained the same), is also deducted again from the total product and returned to production, not entering into circulation.” (p 127)

Monday, 20 February 2017

Rise Up, Reject Nuttall's Nutters. Resist Brexit

If Paul Nuttall fails to win, on Thursday, in Stoke Central, it spells the end of UKIP. It will represent a part of the process of social-democracy, across the globe, beginning to fight back against the wave of reactionary nationalism that has developed in the last decade, and the conservatism that dominated the last thirty years. Tony Blair was right, last week, to call for an uprising to resist Brexit, of which Nuttall and UKIP are the standard bearers, but such an uprising requires, also, a rejection of the nationalism inherent in the current Labour position, and of the conservatism that was inherent in the politics of Blair and Brown.

There ought to be no problem in Labour winning in Stoke. For the last century, from the time the TUC conference met in Hanley, in 1905, and took the decisions that set up the Labour Party, Stoke has had Labour MP's. For as long as I could remember, Labour held 57 of the 60 council seats, with the Tories being holed up in the Trentham Ward, where the small and medium sized business owners, the higher paid professionals and the like were concentrated, until the 1960's, when the construction of new estates, opened the door to sections of better-off workers.

The right-wing Tory policies of Paul Nuttall, and UKIP should then have no appeal for the workers of Stoke. Nuttall had one advantage. He is, as he has repeatedly stated at his press conferences, and on hustings, a national figure; he is, to be fair, a competent speaker and media performer. Moreover, given the near 70% vote for “Leave” in Stoke, he had a simple message to convey. He only had to keep hammering UKIP's only real political message, which is “It's all the fault of foreigners and immigrants.”

That is the message that won a majority for Brexit; it is the message that won a majority for Trump; it is the message that has built up support for Le Pen, Wilders etc. But, Nuttall seems to have thrown away that advantage. There was no reason for him to have stated his address to have been in Stoke, and the consequence of him doing so was to distract from his message for a week or so. Nor was there any reason for what now appears to be a series of Walter Mitty like claims about himself that he has made, which not only distracted from his campaign, but now seems to have led to him going into hiding. But, we shouldn't place too much store in that having an effect. After all, the same could be said about Trump, and it didn't stop him winning.

Labour should be winning in Stoke Central by a huge margin. At the last election, Labour secured nearly double the vote share of UKIP, who came second, with the Tories slightly behind them in third. But, a marked feature of the poll was the turnout of barely 50%. It reflected the fact that Stoke, as an industrial area, based on three dominant industries – ceramics, coal and steel – had been hollowed out during the 1980's, 90's and 2000's, by the conservative policies of Thatcher and Major that were essentially continued by Blair and Brown. The only other major employers were the NHS and Local Government, both of which suffered from policies of austerity. Tristram Hunt was a personification of those those politics, and its no wonder that voters were not enthused by them. But, since 2015, a dramatic change has happened in the Labour Party. Jeremy Corbyn became Leader, and the party membership soared to over half a million.

Corbyn proposed building a social movement, as opposed to being limited to purely electoral politics. That is precisely what an area like Stoke needed, if Labour was to rebuild all of those communal structures required to activate large numbers of people, to give them hope, and a way out of their immediate situation, and on the back of it, to transform Labour's electoral standing.

I set out, when I first started writing this blog, how such activity was able to succeed in conditions far less favourable than today, back in the 1980's. Back in the early 1980's, the period of sharp conjunctural crisis, typical of that Autumn phase of the long wave (1974-87) was drawing to an end. In the earlier part of that phase, workers had won considerable victories with the 1972 and 1974 Miners' Strikes, with the victories of women workers over equal pay at Ford's Dagenham and so on. Even at small workplaces like Grunwicks, huge mobilisations of the working-class took place. But, by the early 1980's, conditions had changed. The steelworkers had been defeated, and previously strong groups of workers such as those in the print industry went down to defeats, as new forms of technology undermined their industrial position. Eventually even the miners were defeated in 1984-5, having battled valiantly for over a year.

And the Labour Party reflected that change. From a position of being a hollowed out shell during most of the 1970's, and moribund in most of its branches, it began to take on new life by the late 1970's, and into the 1980's. A series of wins for the Left had begun to transform it, but the right-wing continued to control its upper reaches. Having lost the elections of 1979, and then 1983, the right-wing targeted the hard left as a scapegoat for its failures, and it was accommodated by a soft left that tailed behind a rapidly right moving Kinnock, who paved the way for Blair, having failed to dislodge Thatcher after having gutted the party, and shifted it ever rightwards for more than a decade.

From 1980 onwards, barely a week went by that I was not the subject of some local media article about left wing groups in the Labour Party, often accompanied by threats from nearby MP John Golding (Hammer of the Left) about imminent expulsion, and at its height that was more like every day. That experience was shared by thousands of left-wing activists in the Labour Party across the country, during that period.

For me, it reached a peak in the weeks preceding the 1983 Stoke City Council elections, when myself and Jason Hill were the Labour candidates for the Burslem Central Ward (formerly Ward 2). Given what happened to Labour nationally in the 1983 General Election, given the level of opposition from the local media, especially as I had ousted the long-standing former Labour Councillor, Stan Dutton, who stood against me as a “Labour Moderate”, the victory that Jason and myself achieved is all the more testament to the importance of standing on a clear, consistent and principled programme, and of having built up local support networks.

The turnout in Burslem Central that year was 40%, compared to an average of around 25% for previous elections, and was higher than in any other ward. Both Jason and me won over 49% of the vote, whilst our Labour Moderate opposition secured barely half that amount, despite large numbers of the old right - whilst still in the party – lending him their support.

Our platform in the election was “No Cuts, No Rent or Rate Rises”. Both Jason and myself were founder members of the local anti-fascist group back in 1974, and both of us were prominent members of CND, at a time when nuclear disarmament was a prominent issue, and coming shortly after the Falklands War. Our victory showed that the way for Labour to win is not to pander to backwardness, or to opportunistically tail public opinion, but to stand firm on your principles, and to consistently build up your support, year after year, on the basis of them, within the community.

With Corbyn as Labour leader, with Momentum standing behind him, with thousands of supporters, even allowing for the distractions of the leadership contests, foisted on us by the right, this should have been a golden opportunity, over the last year, to have built such a social movement, and organising resistance to Brexit, and the wider nationalist assault should have been part of it. Unlike the 1980's, when a period of economic stagnation was setting in, the world today is in a period of long wave expansion, much like the 1960's, with the global working-class expanding at a rapid pace. It is a period when rank and file labour movement organisation and restructuring should be taking place.

Instead, what we have had is a collapse into the old electoralist politics. And, when it came down to it, instead of a principled position, and a mobilisation of the labour movement to fight for it, the Labour leadership rolled over, and fell in behind Theresa May's reactionary nationalist agenda, whilst trying to justify it with a series of weasel words that necessarily results in a confused and unconvincing message, when it comes to by-elections like that in Stoke.

So, despite the advantages that Labour has had historically in Stoke, despite the fact that Corbyn as leader, and the half million, mostly Corbyn supporting members, should have been a beacon for Stoke's hard pressed communities, despite the disarray of the UKIP campaign, it is still not clear who is going to win. If the Tories all vote for Nuttall then Labour will lose. One hope seems to be that with Nuttall's apparent self-destruction, the Tories have sensed a glimmer of hope, and sent May to the constituency. If the Tory vote holds up, or takes votes from UKIP, then Labour will win.

But, in a constituency like Stoke Central, whose Labour Party members backed Corbyn by a 10:1 majority, winning should not be a matter of hoping that UKIP self-destruct, or that the Tories might come to Labour's rescue by splitting the opposition vote. Labour should already be miles ahead on its own merits.

In the US, Trump's election has already generated a large oppositional movement drawing in many of those who were part of the movement behind Bernie Sanders, and before that the Occupy Movement. Every week, large numbers are turning out to Town Hall meetings held by Republican politicians, heckling them and demanding they answer questions about the promises they made in the elections, as well as demanding that Democrat politicians fight back against Trump. We need workers in Britain to also rise up, and challenge the Tories, and demand that Corbyn and the Labour Party fight back against May and Brexit, rather than acting as her support act.

In Austria, the challenge of the nationalist right was pushed back in the Presidential elections. In France, Le Pen is not likely to win, despite all of the attention she and other right-wing nationalists are being given by the British media. In fact, it is the Left in the shape of Hamon who are more markedly on the rise, as the challenge of Fillon fades. If the rest of the Left falls in behind Hamon, the second round might even be fought out between him and the Blairite Macron.

In the Netherlands, the latest polls show Wilders and his party have peaked, and their support is slipping, partly as a result of the effect of people seeing what having a right-wing populist like Trump in charge actually means. Wilders also has no chance of winning. In Germany, the SPD is seeing increased support at the expense of Merkel. Moreover, across the EU there seems to be a growing recognition that the reason that the nationalist right has been able to grow and to challenge the existence of the EU itself, cannot be separated from the policies that conservative politicians, occupying the political centre, have pursued. The policies of malign neglect that led to the de-industrialisation and decay in the US rust belt, that fed support for Trump, are the same policies that led to the decay of places like Stoke, that led to Brexit, and that led to Le Pen in France, Wilders in the Netherlands, and Golden Dawn in Greece.

If the EU is to survive, then in place of the conservative politics of the last thirty years, that focussed on blowing up financial and property bubbles, that created a delusion of fictitious wealth for a minority, and the reality of poverty, debt and austerity for the majority, it instead will need to adopt the same kind of social-democratic policies that have been promoted by Syriza, Podemos, Corbyn, Sanders, the Left Bloc and so on.

But, for even these social-democratic policies to work, it will require more not less Europe. It will require a much greater, and more rapid integration of European institutions, the extension of the Eurozone, the introduction of a single fiscal policy and so on. In today's world there can be no policy even of social-democracy in one country.