Saturday, 10 December 2016

Capital III, Chapter 51 - Part 13

In a similar manner, the further development of capitalism reduces the private capitalist to the role of coupon clipper, rather than manager and controller of production, as this role is taken on by the salaried professional managers.

The individual capitalists who become mere money-capitalists take on the role of managing and controlling production only in a superficial sense, in that some of their number take on the role of sitting on boards of directors, or as CEO's and Chairmen of companies.

“But with this accumulation the number of rentiers, people who were fed up with the regular tension in business and therefore wanted merely to amuse themselves or to follow a mild pursuit as directors or governors of companies, also rose.” (Engels Supplement, The Stock Exchange, p 909)

In reality, as Marx set out earlier, these directors are there only to represent the interests of money-capital, as against the interests of industrial capital, represented by the professional managers.

“The so-called distribution relations, then, correspond to and arise from historically determined specific social forms of the process of production and mutual relations entered into by men in the reproduction process of human life. The historical character of these distribution relations is the historical character of production relations, of which they express merely one aspect. Capitalist distribution differs from those forms of distribution which arise from other modes of production, and every form of distribution disappears with the specific form of production from which it is descended and to which it corresponds.” (p 883)

The confusion that results in a belief that those distribution relations can be changed independently of the production relations, Marx says, stems from an ahistoric view of the labour process itself. If the labour process, in every society, is the same, whereby labour simply relates to Nature, so as to manipulate what it provides, and thereby produce all those things that society requires, then there would be no reason why society could not then distribute those products on whatever basis it so desired.

This is what lay behind the false view of J.S. Mill, as well as those of Eugene Duhring and others, as well as the Fabians. On this basis, the form of distribution ultimately comes down to a question of force. Society's wealth, on this understanding, is distributed in particular proportions, solely because some groups are able to mobilise force – including here in the purely political sense of exercising power and control in society – to bring it about.

In that case, all that is required is to redress the balance of political power, and thereby bring about a different distribution of wealth. This is the classic view of the reformist, who believes this can be done via parliament, redistributive taxation and a welfare state.

But, as Marx has demonstrated, here and throughout Capital, and as Engels demonstrated in “Anti-Duhring” such reformist dreams are utopian, and based on subjectivism. The distribution of society's wealth is not subjectively determined, as a consequence of respective power relations in society, and the application of force in some sense or other.

In fact, quite the opposite is the case. The power relations in society themselves flow from the social relations, which in turn rest upon the productive relations, and it is the objective laws, which govern production, which determine how society's wealth is not only produced, but how it is distributed.

The example of the landlord, alluded to earlier, is a good example of that. The social function, and consequent power in society, of the landlord did not disappear because the feudal lord stopped exercising political power and force in society. It ceased because agriculture itself became capitalist agriculture, organised and managed by capitalist farmers.

It was, in fact, this change in production that brought about a change in the distribution between profit and rent, and which created new political and power relations in society.

A similar transition arises as the productive relations expand to such a degree that they are no longer compatible with the existing distribution relations, represented by private capital. The individual private capitalist can only accumulate capital in line with the profit they obtain from distribution.

For each individual capitalist, a significant portion of that capital must be consumed as revenue, to meet the consumption needs of the capitalist and their family. The amount of value that the individual capitalist can devote to accumulation, therefore, becomes increasingly inadequate for the needs of accumulation, that must take place on an increasingly massive scale.

“Since the crisis of 1866 accumulation has proceeded with ever-increasing rapidity, so that in no industrial country, least of all in England, could the expansion of production keep up with that of accumulation, or the accumulation of the individual capitalist be completely utilised in the enlargement of his own business; English cotton industry as early as 1845; the railway swindles. But with this accumulation the number of rentiers, people who were fed up with the regular tension in business and therefore wanted merely to amuse themselves or to follow a mild pursuit as directors or governors of companies, also rose. And third, in order to facilitate the investment of this mass floating around as money-capital, new legal forms of limited liability companies were established wherever that had not yet been done, and the liability of the shareholder, formerly unlimited, was also reduced ± [more or less] (joint-stock companies in Germany, 1890. Subscription 40 per cent!).” (Engels Supplement, p 908-9)

This transformation of production, therefore, brings about a change of social relations, as private capital is increasingly expropriated by this new socialised form of capital, in the shape, on the one hand, of the joint stock companies, limited liability companies, trusts and corporations, and on the other by the worker owned co-operatives. But, this too brings with it changes in distribution, and in social relations.

On the one hand, the social function of the private capitalist disappears, and it is taken on by the professional manager, on the other the individual capitalist becomes transformed into a rentier, whose revenue now derives from their ownership of fictitious capital, and their power becomes centralised in the Stock Exchange and financial institutions.


Friday, 9 December 2016

French Elections

All of the media coverage, of the upcoming French Presidential Elections, is based on the assumption of a run-off between François Fillon of the Republican Party and Marine Le Pen of the neo-fascist Front National. The assumption, and the media coverage, is then geared to the notion that all right-thinking people will rally to the banner of the Republicans, as a lesser-evil to a win by Le Pen. Socialists, in France, should not be swayed by such short-term electoral concerns.

In fact, the reason that this situation, presenting such unpalatable options, exists is that voters got fed up of centre-ground politicians, who based themselves on short-term electoral considerations, triangulating themselves into clones of each, presenting only marginal differences, and increasingly basing their appeal, therefore, not on advocacy of any set of ideologically defined principles, but merely on personality politics, spin and presentation, as though they were nothing more than a packet of soap powder to be sold to consumers. .

That has long been the case in US politics, exacerbated by its Presidential system, its use of open primaries, which reduce the role of party members to mere foot-soldiers, cannon-fodder in the electoral process, and why no potential candidate has a chance of winning without billions of dollars behind them to fund their advertising campaign.

It became increasingly the case, in Britain, in the 1980's, starting with Kinnock, who set his goal as being the destruction of the Labour Party, in order to substitute the Parliamentary Labour Party for it, and to turn the PLP into a pale imitation of the Tories purely to achieve electoral success. It turned the notion of a political career into its logical culmination – the notion that a party exists for no other reason than to allow a handful of career politicians, all from the same elite, to obtain lucrative life-time careers.

That assumed its most developed form under Blair and Brown, but a good illustration of it is now being witnessed. The Tories under Theresa May are stealing one policy after another from Ed Miliband, and from Labour's 2015 Manifesto. Those same policies were described by the Tories, and the Tory media as “anti-business”, and often nothing short of Marxism, when presented by Miliband in 2015. Across the ocean, Mitt Romney who only a few weeks ago was describing Trump as a phony, is now actively considering taking up the job of US Secretary of State, in a Trump government. And they wonder why people have no time for politicians?

They were able to get away with it by playing the man not the ball. Political culture has become so debased and corroded by this commoditisation of politics, over the last thirty years, that large numbers of voters are unable to think critically about any of these issues, because during all that time there has been nothing to assess critically, in the offerings of the parties, other than how well they can dress up the candidates and their manifestos. Moreover, many of the traditional means of undertaking such critical assessments via discussion have broken down.

In the past, in a factory, it was still possible for workers to talk to each other, as they sat at their bench, or stood in the assembly lines. In an engineering workshop, like that my father worked in, the craftsmen would be able to set up their milling machine, lathe etc., and then allow it to do its work, giving them a few minutes to talk so that the discussion of politics mingled with the discussion of all other aspects of everyday life.

Those discussiona would continue in large communal works' canteens, over dinner breaks; for the more active, they would continue at union branch meetings, and similar discussions would take place, at night, in the pub or club, over the wall in the backyards of terraced houses, and so on. By these means political ideas were developed and fed down, and put into the kind of language that ordinary workers could relate to. But, much of that has gone. Some of it is due to the changed nature of the labour process, some to the reduction in trades union activity and organisation, some to the changed nature of communities, and some to the fact that parties became nothing more than electoral machines, to be rolled out every few years, and whose representative in the community was reduced to a disembodied voice at the end of a phone line, cold-calling them to vote for their candidate, in the same way that they are bothered by someone calling about PPI mis-selling.

Voters are thereby turned into passive consumers, only able to choose from a range of cloned alternatives that fit into the same Overton window, for the same reasons that Game Theory indicates leads to car makers all making near identical cars, for each range. Voters, as mere passive consumers play no effective role in determining the polity within which those choices are framed. That role has become the prerogative of that elite of career politicians, and the mass media for whom it is nothing more than entertainment, to which they seek audiences, via sensationalism and gossip.

But, after 2008, it became increasingly clear that the centre-ground had no solutions for the problems that the majority of society faced. It was not that the centre-ground had solutions prior to 2008 either, but that the fact they had no solutions did not matter so long as the majority in society perceived their position to be improving, more or less, year on year.

After 2008, it became clear that was not going to be the case, as centre-ground politicians could only offer the majority endless austerity and freezes of their wages.

The last time such a situation arose was the late 1970's and early 1980's. It led to a series of large scale social conflicts, across the globe. And that is significant, because the French Republican candidate, Fillon, is being described as a French Maggie Thatcher. Conservative politicians and pundits see that as a good thing, because they see the problems of France deriving from the fact that it did not undergo the same kind of deregulation and diminution of workers' rights that Thatcher pushed through in Britain. French workers are being presented with a choice between Fillon and Le Pen, which effectively is no choice at all, in terms of the attack on their basic rights. It would be like being asked to choose between death by hanging or death by poison, and French workers should refuse to accept such a choice.

Firstly, Thatcher's 'revolution' in Britain clearly did not resolve the problems of British capitalism. Rather, it created their specific manifestation. So, the policy of de-industrialisation, of the creation of a low-wage, credit driven economy, created the conditions that existed in 2008, which caused it to be particularly hard hit by a credit crunch and financial crisis. The same was true of the US, as a consequence of the similar policies adopted by Reagan in the 1980's.

It was not that Thatcher and Reagan had solutions to the problems of the 1980's, but that the policies they pursued simply disguised the problem. They did not provide a basis for significantly raising social wealth, as the foundation for sustainably raising living standards. On the contrary, they, in large part, destroyed the basis of raising social wealth, which is why wages in both countries, for large portions of the population, remained stagnant, whilst, for other significant portions of the population, in those decaying urban areas, left derelict as a result of de-industrialisation, wages actually fell.

Thatcher and Reagan did not provide a solution to this problem of falling living standards, they merely disguised it, by freeing up credit. In a sense its fitting. The Tory Party is the party of the old landed aristocracy, and of the financial oligarchy, and the Republican Party is its US equivalent. The old landed aristocracy, in its decline, was renowned for such an approach. They continued to finance their consumption, not by raising their income, but by borrowing against their assets, i.e. their landed estates.

The Tories and Republicans have done the same. Marx in Capital also describes the way, the bankers, and the Tory politicians influenced by them, see interest-bearing capital as generating revenue, interest, almost magically, in the same way that a pear tree naturally produces pears. They became entranced by the power of compound interest, without asking where the surplus came from that enabled such interest to be paid. One of the first things that Thatcher was accused of was “selling the family silver”, as they privatised state assets to cover their debts. Instead of modernising the economy, investing in the country's infrastructure, and creating a modern, well-educated working-class, Thatcher did the opposite.

With almost unbounded revenues from North Sea Oil and Gas, which would have allowed Thatcher to fix Britain's roof whilst the sun was shining, by rebuilding its decaying roads, rail, schools and hospitals. Instead, she used the revenues to finance attacks on the Trades Unions in line with the Ridley Plan, and to finance mass unemployment, so as to break workers' resistance, and push down wages.

But, 2008, was the signal that this option had now run out. In the years after 2008, central banks did what they could to extend it, and thereby protect the fictitious wealth of the private money-capitalists, but now even the central banks are admitting they have run out of ammunition.

Across the globe, economic reality is asserting itself. Real wealth comes from increasing the mass of use values produced, capitalist wealth comes from increasing the mass of capital, and that requires an expansion of the mass of surplus value, which in turn arises only either by expanding the amount of labour-power employed, or by raising the level of productivity, which requires significant investment in new technologies.

“Given the necessary means of production, i.e. , a sufficient accumulation of capital, the creation of surplus-value is only limited by the labouring population if the rate of surplus-value, i.e. , the intensity of exploitation, is given; and no other limit but the intensity of exploitation if the labouring population is given.” (Capital III, Chapter 15) 

Even in terms of a short-term electoral success, therefore, Fillon offers no real alternative to Le Pen. The reason that large numbers of people in Britain's left behind communities voted for Brexit is because the policies of Thatcher, in the 1980's, continued by Major and Blair in the 1990's and early 2000's, created the conditions in which they lived, seeing some sections of the population enjoying rapidly rising paper wealth, whilst their own future looked dismal, especially as the Tories, after 2010, imposed austerity and pay cuts, whilst a timid Labour Party, under Miliband, had offered only austerity lite.

The same factors in the US led to the election of Trump. The same factors have opened the door for Le Pen.

But, all these “solutions”, be it Trump or Brexit, or Le Pen, are no solutions at all. And, that is not just because economic and political realities will neuter them. Trump has already rowed back on many of his election pledges, covered by yet more inane statements, and the appointment of hard-right politicians to his Cabinet. Brexit is already postponed for at least two years, and may yet not happen. But, even were Trump to implement his election rhetoric, it would fail.

The coal and steel industry jobs in the US are not going to return, no matter what import controls the US applies. For one thing, other countries will respond by imposing controls on US imports. But, aside from that, for US companies to be competitive, they need cheap materials and energy. The biggest threat to US coal jobs comes not from foreign coal mines, and foreign coal miners, but from US produced shale oil and gas, and from the growing green energy production in the US. US coal producers seeking to be competitive will threaten US coal jobs via the introduction of new mining technologies that increasingly reduces the requirement for mining labour to near zero.

Only a few years ago, the US imposed import controls on EU steel, and the result was that US car makers, and other US producers that relied on steel, had to buy the now more expensive US produced steel. They then found themselves increasingly uncompetitive in the global markets. A handful of coal and steel jobs, in the US, were temporarily saved, at the expense of putting many more US industrial jobs at risk.

Britain will find similar problems with Brexit. In some ways, this is a repetition of what happened in Greece. An alternation of centre ground governments, PASOK followed by New Democracy, came and went, offering no real solutions, and were both swept aside by Syriza. The same is happening in Spain. But, differently to Trump, or Brexit, Syriza actually did offer policies, still within the limits of capitalism, that could have worked. They were not socialist policies, but merely old style, post-war social democratic policies, the kind of policies upon which the EU was founded, and which are fundamental to the operation of modern socialised capital. But, over the last thirty years, conservative politicians have achieved dominance reflecting the interests not of real capital, but of purely fictitious capital, of paper wealth as against real productive wealth. Those politicians, that have been responsible for printing money to keep paper assets inflated, whilst implementing austerity to destroy real wealth, and productive potential have acted to prevent the introduction of social democratic measures to save capitalism from itself, and in the process they have created the conditions for the rise of the far right, and right-wing populism that threatens to blow apart the post-war developments, to reintroduce national antagonisms, and the threat of war.

In a variation of the process in Greece and Spain, the centre-ground politicians in the Labour Party were swept aside by Corbynism, whilst its purest representation, the Liberals, were destroyed as a political party. The movement behind Bernie Sanders, in the US, represents the same process. There are also indications of similar movements across Europe, such as with the Left Bloc in Portugal.

France has been different, in this case. Hollande did the usual thing of centre-ground politicians who talk left, and then act right. That is why the Presidential Election has been turned into a two-horse race between Fillon and Le Pen. Part of the reason may be that there has always been a sizeable left outside the Socialist Party. Indeed, for a long-time, the French Stalinist Party was the main representative of French workers. The various left sects, such as Lutte Ouvriere, and the Ligue Communiste Revolutionaire were also able to put up a better showing in France's two-stage, proportional representation system, over the years, than their British counterparts could ever hope.

It may be that election defeat for the socialists may act as a spur for a realignment of the left, as happened in Greece, and Spain. Or it may lead to the emergence of a new left within the Socialist Party itself, as happened with Corbynism within Labour, and with Bernie Sanders in the US Democrats.

What the left should not do is to accommodate to all of those reactionary sentiments within the more backward sections of the working-class, which have provided the electoral base of Trump, of Farage, and the Brexiteers, and for a range of right-wing populists, such as the Five Star Movement in Italy, and nationalist and neo-fascist parties like the FN in France.

Such a tendency towards accommodation can be seen by some Labour MP's, who want to restrict immigration, but that kind of nationalist accommodation has also characterised Stalinists and their fellow-travellers, in the past. That applies also to the French Stalinists around Melonchon.

Although the left sects, in France, are larger and have fared better than their English counterparts, they remain political sects. Marxists always have to deal with reality. Our main focus is the unity of the working-class, as a global class. But, within each country, we aim at maintaining and extending that unity. As Engels put it to the US socialists.

“….It is far more important that the movement should spread, proceed harmoniously, take root and embrace as much as possible the whole American proletariat, than that it should start and proceed from the beginning on theoretically perfectly correct lines. There is no better road to theoretical clearness of comprehension than "durch Schaden klug tererden" [to learn by one's own mistakes]. And for a whole large class, there is no other road, especially for a nation so eminently practical as the Americans. The great thing is to get the working class to move as a class; that once obtained, they will soon find the right direction, and all who resist, H.G. or Powderly, will be left out in the cold with small sects of their own.” 

When the Bolsheviks and other revolutionaries split the workers movement, after 1914, they did so under specific conditions. Firstly, a World War was underway, and the leaders of the workers movement had failed to resist the tide of national chauvinism that engulfed the working-class of every nation. At the same time, a large number of socialists were breaking away from that leadership, and, after 1917, it looked as though revolutions were about to sweep the globe, which would require a decisive leadership, to be successful.

In some countries, nearly the whole of the old socialist party transformed itself into a communist party affiliated to the Third International, a fact that itself was a weakness in the way the International itself came into existence. As Lenin puts it, the truth is always concrete, and in these conditions, of a large scale movement of workers from the old workers' parties to some new formation, the truth resides in the pace and scale of this movement.

The same was true of the break of the British workers from the Liberal Party, in order to establish the Labour Party. The Fabians opposed that move, and initially, the Labour Party could offer no immediate alternative to the Liberals, as a means of obtaining legislative reforms. Yet, it was clear from the scale and speed of movement of workers to the Labour Party, that to continue to oppose such a move was to be constrained by formalism rather than to view reality dialectically, in terms of process and dynamic.

Engels had advised his followers to shun the sects, such as the ILP and the SDF, and to relate directly to workers within the Liberal Clubs, and that has a direct parallel today. There is a world of difference between the sects that perennially declare the formation of a new Workers Party, and who, just as often fail to attract the workers to their banner, which is what Engels was warning against, and a situation where the working-class itself breaks dramatically from the old organisations and the old ideas. The difference is being illustrated again with the way the sects who represent nothing and no one, today use their sharp elbows to take over a more or less spontaneous movement like Momentum, to pursue their own sectarian interests, and, as always, thereby, act to destroy such organisations.

Even after the Communist Parties had been established, the revolutionaries had to try to speed up the process of the transfer of workers from the old reformist parties to the communist parties, and that was why they formulated the tactic of the United Front. Yet, the difference between then and now is stark. Look at what Trotsky said in discussing the United Front tactic.

It was, he said, only relevant where the Communist Party already had around 30-40% of the working-class marching behind its banner. If they had less support than that there would be no reason for the reformists to negotiate with them. If the CP had a majority of workers already supporting them, and the direction of travel was in their favour, there was no reason to do deals with the reformists.

Yet, today, nowhere do the sects have anything like such support, and their existence, separated from the real workers parties, is a sectarian extravagance driven often by the egos of the leaders of those sects. That does not mean that Marxists have to mechanically demand that socialists stick with the traditional workers parties, however. It would be ridiculous to demand continued adherence to PASOK in Greece, for example! The truth is always concrete.

But, there seems no equivalent, yet, in France, of Syriza or Podemos. The main left alternative, around Melonchon, suffers from the old influences of nationalism, at a time when socialists need, more than ever, to resist the lure of nationalist solutions, and instead to be promoting the idea of EU wide workers solutions, and internationalism, as part of a fight to forge a different kind of Europe.

For now, therefore, Marxists should advise work in the French Socialist Party, throughout the coming months. As I suggested some months ago, in relation to the US Presidential Election, such activity should not be understood in simple electoral terms, as being about a desire for a socialist electoral victory, still less a victory based upon lesser-evilism. The basis of the work should be about building the kind of workers unity described above, a unity based upon an honest reckoning of the weaknesses of the policies pursued in the last four years, and the weaknesses still represented by the programme of the Socialist Party. Our task is to use the elections to gain the ear of the widest number of workers, and in the first instance, the most advanced workers, for such a discussion of those deficiencies, and how to overcome them.

We say, vote Socialist despite Hollande's record, and begin the process of building the alternative to it. Marxists should propose a vote for the Socialist Party, in the first round, and, if the choice is between Fillon and Le Pen, in the final round, we should advise an active abstention. It is not our job to advise a vote for one reactionary candidate as against the other. If it were, we would end up advising a vote for Le Pen, if she were the lesser-evil compared to some even more reactionary alternative! 

The reality is, and Hollande's Presidency over the last four years shows it, whoever wins, our message to the French workers is the same, organise to defend yourselves. Over the last four years, Hollande has followed the line of other conservative politicians across the EU, like Merkel, of imposing austerity, when, even in the interests of European productive-capital, what were required was measures of fiscal expansion, of investment in modernising and productivity raising infrastructure, in increasing education and training etc. Such measures would have saved economies like Greece, Spain and Portugal and so on from the devastating destruction of capital, which austerity imposed on them. It would also have prevented the rise of right-wing populists like Le Pen that have rode the wave of popular anger that the austerity and decay has brought about.

Hollande has stood aside, knowing he had no chance of winning, but it currently looks likely that the Socialist Party will choose some other Blairite as their candidate. Such clones have no chance of winning support from the French workers, any more than a search for a mythical centre-ground has proved fruitful for the British Labour Party, for Pasok, the British Liberals, or Clinton in the US. For now, workers have to rely not on some elected saviour coming to their rescue, but on their own strength to resist, and to push forward their interests wherever the conditions allow. In future, having rebuilt our organisations, on that basis, we will be in a better position to push forward better political representatives to help us in that endeavour.

Capital III, Chapter 51 - Part 12

“And now let us consider profit. This specific form of surplus-value is the precondition for the fact that the new creation of means of production takes place in the form of capitalist production; thus, a relation dominating reproduction, although it seems to the individual capitalist as if he could in reality consume his entire profit as revenue.” (p 882)

But, again, its clear that this is not true because of further objective laws. Firstly, the capitalist at an individual or social level, could not simply consume all of their surplus as revenue, because they must set aside certain funds for insurance. If a business suffers a fire, flood or other such accident, a portion of its fixed or circulating capital, may thereby be destroyed, and the firm cannot recover this value. It would then mean that it could not operate on the same level, which may mean it could not function at all.

The firm must then set aside a portion of its profit as an insurance fund to cover such eventualities. It doesn't matter whether this takes the form of a sum of money, kept in an account, by the firm to cover such eventualities, or whether the firm hands over a sum of money to an insurance company to cover such eventualities. Either way, a portion of the profit, even were there to be simple reproduction, could not be consumed.

But, competition also means that the individual capitalist cannot consume all of the profit, because unless a portion is given over to accumulation, the firm will become uncompetitive, lose market share and eventually be destroyed.

“The entire process of capitalist production is furthermore regulated by the prices of the products. But the regulating prices of production are themselves in turn regulated by the equalisation of the rate of profit and its corresponding distribution of capital among the various social spheres of production. Profit, then, appears here as the main factor, not of the distribution of products, but of their production itself, as a factor in the distribution of capitals and labour itself among the various spheres of production.” (p 882)

Not only is the amount of surplus value determined by these objective laws, operating in the realm of production, which flow from the requirement to physically reproduce the consumed means of production and consumption, but also the manifestation of this surplus value as profit is constrained by those same objective laws operating within the realm of production.

At an individual level, it may be the case that the capitalist decides to take a larger or smaller proportion of their profit as revenue, rather than accumulating it as capital, but firstly, even at an individual level, this can only occur within certain constraints, but secondly, at an aggregate level, competition ensures that a certain proportion must be accumulated, though this proportion will vary according to other objectively determined conditions, i.e. the ability to accumulate additional capital as capital.

That is in addition to the other objective laws previously established, which limit the proportion of surplus value that can be realised as profit, as opposed to that which must form interest and rent.

“The division of profit into profit of enterprise and interest appears as the distribution of the same revenue. But it arises, to begin with, from the development of capital as a self-expanding value, a creator of surplus-value, i.e., from this specific social form of the prevailing process of production. It evolves credit and credit institutions out of itself, and thereby the form of production. As interest, etc., the ostensible distribution forms enter into the price as determining production factors.” (p 882-3)

The same is true in relation to rent. Capitalist rent is not the same as rent under other modes of production. Capitalist rent itself derives from the objective laws immanent within capitalist production itself, in particular, the existence of surplus profits. Capitalist rent, therefore, is not the same as arbitrary revenue obtained by the landlord, which they can force out of tenants, as for example, feudal landlords could do. The landlord is constrained by the fact that capitalist rent is equal to the amount of surplus profit. The landlord under capitalism is also reduced to the role of merely a receiver of rents, rather than the manager and controller of production, as they were under previous modes of production, and this too is a direct consequence of capitalist production, and the social relations it creates.

Thursday, 8 December 2016

Capital III, Chapter 51 - Part 11

The revenues, wages and profits, imply the existence of wage labour and capital and so definite historically determined forms of property and social relations. The distribution relations themselves, therefore, are determined by these productive relations.

It does no good, as the reformists believe, to think, therefore, that these distribution relations – which allocate portions of the total social output according to objective economic laws – can be changed without changing the productive relations on which they are based.

It is not possible to increase the share of total output that goes to workers, to reproduce their labour-power, beyond that point, under capitalism, for example, by increasing taxes on the more affluent. All that does is to create distortion in the distribution relations, as well as draining value to cover the unnecessary labour employed by the state bureaucracy to operate the taxation and redistribution mechanism. Moreover, because such tinkering inevitably results in money being taken from one group of workers, in order to give to some other group of workers, they are a material basis of creating division amongst workers themselves. It is just a modern equivalent of the problems caused by Parish Relief that Marx describes in Capital I.

At times, as Marx describes, when there is rapid capital accumulation on an extensive basis, the demand for labour-power rises, and may do so to such an extent as to lift wages above the value of labour-power. But, this very fact, as Marx sets out in Chapter 15, because it eventually reaches a point whereby no additional labour can be profitably employed, leads to its own negation.

As soon as no more labour can be profitably employed, the crises of overproduction that break out lead to workers being laid off, to capital being destroyed, and a slow down in the formation of new capitals, which reduces the demand for labour and causes wages to fall.

In addition, at such times, capital seeks out new labour saving techniques. A new Innovation Cycle is undertaken and the new machines that are introduced are then generally cheaper and more productive than the old machines. As capital accumulation proceeds, in the following period, it occurs on an intensive rather than extensive basis, i.e. a few new machines replace many older machines, rather than the number of existing machines simply being expanded.

The rise or fall in wages that occurs due to these economic laws, cannot be changed simply by trying to redistribute revenue from capital to labour via the tax system.

Where real wages rise, i.e. workers living standards rise, this is usually due not to a reallocation of revenue away from capital to labour, but due to a sharp rise in social productivity that increases the mass of use values produced. In fact, such a rise in real wages is often required by capital to ensure that produced surplus value is realised, but it also goes hand in hand with a fall in the share of wages in national income relative to capital.

If total new output is 1000 units, and is divided 800 units to labour and 200 units to capital, when total new output rises to 2000 units, labour may obtain 1500 units, and capital 500 units. Workers wages will have risen 87.5%, but their share of national income will have fallen from 80% to 75%, whilst the share of capital will have risen from 20% to 25%.

Wednesday, 7 December 2016

The Hypocrisy of The Tory Government and The Brexiteers

Not just for months, but for years, ahead of the EU Referendum, UKIP and the Tory Right argued that the reason they were calling for a vote on EU membership was that in 1975, the British people had voted only to join a Common Market, and not a political union.  That claim was itself bogus. When Britain voted overwhelmingly by 2:1 to join the EEC, in 1975, it was on the basis of Parliament already having passed legislation that recognised and committed Britain to being a part of a European Union by 1982.  However, the more important point is that now, those same Ukippers, and Tory Brexiteers, along with Tory Ministers who supposedly supported Remain, are now claiming that the EU Referendum committed Britain not just to leaving the EU, but also to leaving the Common Market, i.e. leaving the Customs Union, and the Single Market.

For years the Eurosceptics claimed that they wanted to be a part of a Common Market, as they argued had been agreed by the 1975 Referendum.  Nowhere on the EU Referendum Ballot Paper did it ask people if they wanted to leave the Customs Union, or the Single Market, or any of the other institutions and arrangements that are part of, but separable from the EU itself.  No one knows exactly what people voted for in that Referendum, because some no doubt voted to Leave everything, some to only leave the political arrangements, whilst remaining in the common market, i.e. the customs union and single market, and as the recent Italian Referendum demonstrated, many no doubt voted simply to kick Cameron's government, or to express their hostility to immigration or foreigners in general.

To base Britain's future on such uncertain and shaky foundations, especially given that a large part of the effected portion of the population, i.e. 16 and 17 year olds, were denied a vote, and given that the vote to leave only marginally exceeded, the millions of people who voted to remain, and given the obvious lies that were told by proponents of leave, such as the idea that £350 million a week would go to the NHS, would be light-minded in the extreme.  Only 37% of the gerrymandered electorate voted to Leave.

Yet, today when question during PMQ's, by Emily Thornberry, and having said that they would provide a plan to parliament setting out exactly what the government does mean by Brexit, David Liddington refused even to commit to saying whether the government will seek to remain in the Customs Union.

The Tories and the Brexiteers, clearly did not expect to win the EU Referendum, they have no idea what Leave means, they are divided amongst themselves as to what it means, which is why they have delayed for months before even proposing to trigger Article 50.  It is once more an example of how incompetent the Tories are, as seen over the last six years.  That incompetence has destroyed the UK economy via austerity, and now threatens to inflict irreversible damage via a Brexit geared only to resolve internal divisions within the Tory Party itself.  And, of course, had the Liberals not acted as the facilitators of the Tories in joining them in a reactionary coalition government ibn 2010, we would not be in this position today.  A plague on both their houses.

Capital III, Chapter 51 - Part 10

In previous modes of production, the surplus value extracted from the producers, whether this surplus value took the form of a surplus product, produced by a slave or the serf, of direct labour service, again provided by the slave or the serf, or of a money rent, provided by the independent peasant producer, this surplus value was effectively a means of the exploiting class increasing their revenue, including its expression in conspicuous consumption.

But, this meant that the direct producers were able, within limits, to increase their own means of production. Although a portion of surplus production, as always, was appropriated by the exploiters, another part is accumulated by the producers themselves.

However, this is impossible under capitalist production. The total social production, including the additional means of production, are produced by workers, but immediately owned by capital. The capitalist obtains their share of the surplus value, in the form of profits, but these profits are able to accumulate means of production, precisely because the addition to their stock is automatically in the ownership of capital.

“But only because this surplus-value thus appears as his profit do the additional means of production, which are intended for the expansion of reproduction, and which constitute a part of this profit, present themselves as new additional capital, and the expansion of the process of reproduction in general as a process of capitalist accumulation.” (p 881)

In other words, the surplus product produced by a slave or serf, or an independent peasant, is quite visibly a surplus product, produced by them, even if at least a part of it, if not all of it, is appropriated by someone else. But, that is not the case with the surplus product produced by the wage worker. The surplus product, and consequent surplus value appear to be directly the consequence of capital and thereby the property of the owner of that capital.

In a clear refutation of the belief of some Marxists that value is specific to commodity production, or even more specifically to capitalism, Marx states, once more, that this is not the case.

“Although the form of labour as wage-labour is decisive for the form of the entire process and the specific mode of production itself, it is not wage-labour which determines value. In the determination of value, it is a question of social labour-time in general, the quantity of labour which society generally has at its disposal, and whose relative absorption by the various products determines, as it were, their respective social importance. The definite form in which the social labour-time prevails as decisive in the determination of the value of commodities is of course connected with the form of labour as wage-labour and with the corresponding form of the means of production as capital, in so far as solely on this basis does commodity-production become the general form of production.” (p 882)

This is a restatement of the explanation of The Law of Value that Marx gave in his letter to Kugelmann, where he states that value exists in all modes of production, because value is labour. Wherever, labour is undertaken purposefully to produce use values, it is value creating. As Marx states, the law of value operates as a law of nature, in all of these instances, but only thereby assumes a different form.

“Every child knows that any nation that stopped working, not for a year, but let us say, just for a few weeks, would perish. And every child knows, too, that the amounts of products corresponding to the differing amounts of needs demand differing and quantitatively determined amounts of society’s aggregate labour. It is self-evident that this necessity of the distribution of social labour in specific proportions is certainly not abolished by the specific form of social production; it can only change its form of manifestation. Natural laws cannot be abolished at all. The only thing that can change, under historically differing conditions, is the form in which those laws assert themselves. And the form in which this proportional distribution of labour asserts itself in a state of society in which the interconnection of social labour expresses itself as the private exchange of the individual products of labour, is precisely the exchange value of these products.” 

(Letter to Kugelmann)

Tuesday, 6 December 2016

The Sleaford By-Election

After last week's Brexit influenced by-election in Richmond Park, we now have, on Thursday, the potential of another Brexit influenced by-election in Sleaford in Lincolnshire.  In many ways, they are mirror images.  Richmond Park, an urban metropolitan area that voted 70% in favour of Remain, Sleaford a rural backwater that voted 60% for Leave.  Yet, both had Tory MP's that stood down to cause the by-elections.  In the case of Sleaford, it is because the sitting Tory MP, who supported Leave, could not support the dictatorial stance of Theresa May, and her government, that is trying to deny Parliament the right to debate and vote on the terms under which Article 50 is triggered, and Brexit negotiated.  Its fitting that whilst May's legal representative is in Court, arguing for her right to utilise the dictatorial powers of medieval Monarchs, via the Royal Prerogative, that May herself, is visiting her friends the brutal feudal monarchs of Bahrain, Saudi Arabia and other Gulf States, to which she supplies weapons of mass destruction.

If Labour had any sense, they would have fought the Sleaford by-election on the basis of a vigorous pro-Remain campaign, but a campaign which stressed the need to defend workers rights interests whether Britain ended up, in or out of the EU.  The reality is that 35% o the electorate in Sleaford, voted to Remain in the EU, and as across the rest of Britain, the reality is beginning to sink in of just how bad for the interests of workers, Brexit will be.  On the other hand, whatever the supporters of Brexit might want to argue, and what the Brexit vote might seem to imply, the issue of the EU, and even immigration, ranked only around sixth or seventh in people's concerns, in all opinion polls.  Voters are far more concerned with the issues of jobs, wages, the health service and so on than they are with the EU or immigration.  And in fact, Both Brexit and a curtailment of immigration will be bad for all those other issues.

Brexit will cut off Britain from its main market in the EU, and the Tories will utilise withdrawal to push through the rest of their reactionary agenda to demolish workers rights.  A look at UK GDP, which the Brexiteers trumpet again shows that what growth has occurred is almost entirely due to immigration.  UK GDP per capita has risen by only around £2,000 since 2010, or about 5% over six years.  If it were not for the immigration of skilled workers that has taken place, large parts of UK business would not have been possible, leading to those businesses locating overseas, and without immigration services like the NHS would have collapsed.

Labour should have fought the Sleaford By-Election on this basis, arguing that it continued to be in workers interests to be in Europe, but a different kind of Europe forged by workers to meet their interests.  By presenting a strong pro-Remain argument, Labour could directly address itself to that 35% of the population in Sleaford that voted Remain, and which the Richmond by-election showed is now recognising the importance of standing up to fight its corner, because of just how historically disastrous for workers Brexit will be.  Unless Labour presents that case, the danger is that in other such by-elections, the Liberals, as they did in Richmond Park, will hoover up that vote.

Sleaford is not Richmond Park, however.  In Richmond, it had been a Liberal seat between 1997 and 2010.  The Liberals, despite being destroyed as a party in the 2015 General Election, were still the obvious party in Richmond to take advantage of the unpopularity of the Tory Brexit.  That is not the case in Sleaford, where Labour came second in 2015, with 17% of the vote, whilst the Liberals came a distant fourth behind UKIP, with just 5.7% of the vote.  Indeed, if the Liberals were serious about their bleating overtures for some kind of alliance to defeat the Tories and their Brexit plans, they would have stood down their candidate in Sleaford, in order to give Labour a clear run, as they and their supporters inside the Labour Party had done in calling for Labour to not stand in Richmond Park.

There is a possibility that Labour taking a vigorous pro-Remain stance in Sleaford, could increase its vote share, picking up that 35% of the electorate that supports Remain.  They could further enhance that position by adopting a far more radical, Corbynite position of opposition to austerity and wage cuts than voters in Sleaford have previously been offered by the Blair-right Labour Party of old.  After all, what has been seen this week is that whilst some people were prepared to express their bigotry in the EU Referendum, which was supposed to be on just the one issue of EU membership, but which, like all plebiscites, involved people voting to express resentment in a whole host of different and often unrelated issues, when it comes to a more general, parliamentary vote that bigotry gets dissipated, as other more pressing concerns predominate.

Farage, for example, promised 100,000 on the streets to object to the Supreme Court curtailing the dictatorial ambitions of May and her government.  Instead, it was pro-EU campaigners that were out on the streets.  It is time for Labour to be bold, to stick by its internationalist principles, and to defend workers interests across the EU, and resist the siren calls of reactionary nationalism.