Friday, 26 May 2017

Friday Night Disco - Keep Falling In and Out of Love - Supremes

Corbyn Speech On Terrorism and Security

Jeremy Corbyn in his speech today on terrorism and security quite clearly and quite correctly stated that the abhorrent attack by Islamist terrorists against civilians including children in Manchester can in now way be excused by any reference to the behaviour of the British state itself.  Yet, the Tories have attacked Corbyn as though he had said something completely different and in opposition to what he actually said.  In fact, ever since Monday, the Tories and their storm troopers in the gutter press have done all they could to link the outrageous attack in Manchester with Corbyn's supposed support for terrorism.  That they blatantly lie about his speech now is simply par for the course of how they engage in barre faced lies, in their arrogant belief that they can get away with it.  And, of course if left to the Tory media, and even some sections of the right of the Labour Party they would.

Having shown Corbyn's speech in its entirety once during the day when most people are at work, the media can be relied on not to show it in full again at peak times, whilst they will allow the Tories and Labour right to lie about its contents and to spread their narrative ad nauseum, in every subsequent news and current affairs broadcast.  Increasingly, social media, and the use of the Internet is undermining the ability of the Tory media to get away with the lies they have perpetrated in the past.

Perhaps it is because increasingly the public are getting to see a truth that stands in stark contrast to the narrative that the Tories, the Tory media, and the Labour Right have been purveying that has resulted in the surge of support for Corbyn's Labour.  A huge swing to a large Labour majority in the polls in Wales has already occurred, and in the UK as a whole, the Tory lead that we were told once stood at 24%, has now been slashed to just 5%, with the momentum hugely in favour of Corbyn's Labour.

Share the video below, and show just how much is the case that either the Tories simply do not understand basic concepts that conflict with their world view, or else have become so used to lying that they do not recognise the truth when it stares them in the face.

Theories of Surplus Value, Part I, Chapter 4 - Part 81

If A represents the producers of all consumable products, then as described, it does not matter if each of these individual producers consume only their own product out of their revenue, or they consume their revenue part from their own product, and part from that of the producer of some other consumable product. For A producers in total, their revenue will be totally consumed in their own products.

“So the part of the consumable product which represents the revenue of the producers of consumable products is consumed by them either directly, or indirectly, through exchanging among themselves the products to be consumed by them; in regard to this part, therefore, where revenue is exchanged for revenue—here it is the same as if A represented the producers of all consumable products. He himself consumes one-third of this aggregate amount, the aliquot part which represents his revenue. This part, however, represents exactly the quantity of labour which during the year category A has added to its constant capital, and this quantity is equal to the total sum of wages and profits produced by category A during the year.” (p 238)

In our example above, the baker represents the producers of all consumable products and consumes his revenue (10) in his own product. But, likewise, if we take all the producers of means of production (B), then as demonstrated above, it is only that part of their own production which represents revenue, which can be exchanged for consumable products. For B, the total revenue is 20, made up of 10 hours of new value created by the farmer, and 10 hours by the miller.

(B), therefore exchanges this 20 hours of value, as intermediate production with (A), obtaining 20 hours of value in consumable goods in return. The miller and farmer, therefore, also consume this part of the value of their output, equal to revenues, out of (A)'s production of consumable goods.

But, (B)'s total output value is not just equal to 20, i.e. the value of its revenue, or the value of intermediate goods. It is equal to 25, made up of 5 constant capital, and 20 new value created. This remaining 5 hours of value is simply exchanged with itself, an exchange of capital with capital, as the constant capital is physically reproduced out of current production.

Marx traces the relations in reverse from the value of the end consumable product of A, back through the intermediate production, which comprises its inputs to the original production of means of production. He makes linen the proxy for this total consumable product.

It can be set out like this. The value of linen is equal to 12 days. Two-thirds of this value is constant capital in the shape of machinery and yarn. The weaver, therefore, adds 4 days value to this constant capital. It constitutes his revenue, and it is only this value he can consume in his product. Likewise, the machinery maker and the spinner together create 4 days of new value, which is added to the 4 days of value incorporated in their own constant capital comprising flax etc. for the spinner, and iron etc. for the machine maker. Of the 8 days value of their product, they can, therefore, only consume 4 days of value equal to the new value they have created. The other 4 days of value they must use to pay the flax grower, and iron producer for the constant capital.

If its assumed the iron producer and flax grower use no constant capital then the 4 days of value they obtain is equal to the new value created by their labour, and likewise can be consumed as revenue.

“The revenue, although it is assumed to be of the same size— equal to 4 days—in all three cases, is of different proportions in the products of the three classes of producers who participate in producing product A. For the linen weaver, it is one-third of his product, equal to one-third of 12; for the spinner and for the machinery manufacturer it is equal to one-half of his product, equal to one-half of 8; for the flax-grower it is equal to his product, 4. In relation to the total product it is however exactly the same, equal to one-third of 12, that is, 4.” (p 241)

As set out earlier, for the weaver, his inputs appear as constant capital, past labour, not new labour. Similarly, for the spinner and machine maker, their inputs appear as constant capital, not new labour.

“For the spinner and machinery manufacturer, the total product represents the labour newly added by themselves and by the flax-grower, the labour-time of the flax-grower appearing as constant capital. For the flax-grower, this phenomenon of constant capital has ceased to exist.” (p 241-2)

Thursday, 25 May 2017

Theories of Surplus Value, Part I, Chapter 4 - Part 80

If we consider the total product, as divided into those two departments A and B, with A producing consumption goods and B producing means of production, all of A's output has been accounted for. Part of A's output is used solely to meet the consumption needs of producers in A. As previously set out, it doesn't matter that the producer of food takes part of their consumption in linen, and vice versa.

In total, revenue has just exchanged with revenue. But, another part of A's output was required to exchange with B to obtain the means of production (intermediate goods) that A required. By completing this exchange, all of A's output is accounted for, and in the process, part of B's output is simultaneously accounted for.

In the example used, in fact, all of B's output is accounted for, because it was assumed that all of its constant capital was produced by current labour. In other words that it began with no constant capital. The constant capital of the miller was produced solely by the current labour of the farmer, and the constant capital of the baker by the current labour of the farmer plus the miller. But, as set out above, this is not possible, because all production requires constant capital, as well as current labour, and as capital accumulation proceeds, the quantity of this constant capital, particularly raw materials, gets progressively and proportionally larger. So, we now have this further portion of the value of B's output that must be accounted for.

It is quite clear that this portion of output cannot be exchanged with revenue because, all of A's output has already been accounted for. For the same reason the the national accounts always omit this element of national output, and so progressively understate the value of national output, because following Adam Smith, they equate national output with national income (revenue) and expenditure, i.e. as Marx describes solely with the value of value added, and so only with the consumption fund.

This portion of B's output can, therefore, only be accounted for by an exchange of capital with capital. In other words, all of that portion of B's output that is not equal to the value of revenue/new value produced in B is exchanged with itself. The farmer who uses 5 hours value of seed in the production of grain with a value of 15 hours (10 hours added by their current labour) thereby takes 5 hours of value in seed out of their current production, simply to replace their constant capital. They are thereby left with two-thirds of their output to exchange. Its value, equal to 10 hours, is equal to their revenue. They can thereby exchange this value with the baker, obtaining bread with a value of 10 hours for their consumption. We would then have the following situation.


c 5 + (v + s) 10 = 15.

Of this, 5 is used as seed, and 10 sold to the miller.


c 10 + (v + s) 10 = 20.

All of this is sold to the baker, but of the 20 hours value of bread they receive they can only consume half, the other half being used to once more buy grain form the farmer.


c 20 + (v + s) 10 = 30.

They consume a third of their product themselves as revenue, and exchange the other two-thirds with the miller, thereby reproducing their constant capital.

If we considered the situation in respect of the economy as a whole, it would be

c 5 + (v +s) 30 = 35.

But, only 30 is resolvable into revenue (v + s), or wages, profit, interest and rent. The other 5 hours of value forms revenue for no one. It forms a part of the total output value, but must be reproduced in kind out of the current production.

Wednesday, 24 May 2017

Theories of Surplus Value, Part I, Chapter 4 - Part 79

In the example given, the total value of output was equal to 30 hours, and this was also equal to the value of the consumable product. All of the total product was thereby reducible to revenue. That was so even though two-thirds of the value of the consumable product comprised constant capital, and only one-third new value added by the baker. The constant capital here is the equivalent of what in the GDP figures constitutes “intermediate production”. That is it is the value of all those inputs which are used in the production of the final consumable product.

Wikipedia describes it like this.

“Conceptually, the aggregate "intermediate consumption" is equal to the amount of the difference between Gross Output (roughly, the total sales value) and Net output (gross value added or GDP)...

Thus, intermediate consumption is an accounting flow which consists of the total monetary value of goods and services consumed or used up as inputs in production by enterprises, including raw materials, services and various other operating expenses.”

But, the only reason we arrived at this conclusion that all of this value of final production was entirely resolvable into the new value added, was because we began by assuming that the only constant capital consumed was that which was created in the current year by the expenditure of labour. So, we assumed that the farmer did not use any constant capital, for example. In fact, of course, this is impossible. In order to produce grain, the farmer must himself consume constant capital. Seed is required for any grain to be produced; tools are required for planting, cultivation and harvesting; barns are required; fertiliser is required and so on.

All of this production must be reproduced out of the value of his production, and is, therefore, unavailable for consumption as revenue. Moreover, it is not just the farmer in this position. The farmer is provided with tools from the machine maker, who likewise has constant capital that must be reproduced out of their own production, and whose value is thereby not available as revenue. The machine maker is similarly provided with steel from the steel producer, wood from the timber producer and so on, all of whom have constant capital that must be reproduced out of their production.

Tuesday, 23 May 2017

Theories of Surplus Value, Part I, Chapter 4 - Part 78

The miller sells flour to the baker with a value of 20 hours, made up of 10 hours of grain (c) and 10 hours of new value added by their labour. Let us assume that instead of money payments we have an actual exchange of commodities. In that case, the baker gives bread to the miller with a value of 20 hours. But, now, the miller cannot consume all of this bread, any more than the baker could previously. The miller can consume half of the bread they have received with a value of 10 hours, but they must set aside the other half of the bread because they must exchange it with the farmer for the grain they require. In other words, the value of the flour that the miller exchanged with the baker comprised two parts, a part equal to the value of the constant capital (grain) and a part equal to the value of the labour added (revenue).

It is only this latter part that can be consumed. The miller exchanges bread with a value of 10 hours with the farmer for grain with a value of 10 hours. 

Because we have assumed the farmer uses no constant capital, the value of his product is wholly attributable to the new value created by his labour. It all constitutes revenue, and so he can consume all of the bread received. For the baker, the two-thirds of his product he exchanges constitutes his commodity-capital. In exchanging it with the miller for flour, it is for him an exchange of capital for capital. Commodity-capital is exchanged for productive-capital. The portion of his product that he exchanges, two-thirds, is equal to the value of constant capital consumed in his production.

For the farmer, and the miller, however, it is an exchange of capital with revenue. The miller provides the baker with means of production, with a value of 20 hours, but this value is comprised of 10 hours of new value created by the miller, and 10 hours of new value created by the farmer. When the miller exchanges with the baker, therefore, he exchanges both these revenues, for revenue in another form, i.e. in the form of bread. Half of the bread he consumes as revenue, the other half being exchanged with the farmer, who consumes it as revenue.

If we consider the farmer and miller as one producer of means of production one one side (B) and the baker on the other side as producer of consumption goods (A), then,

“If we look at the relation from both sides there, A exchanges his constant capital for B’s revenue, and B exchanges his revenue for A’s constant capital. B’s revenue replaces A’s constant capital, and A’s constant capital replaces B’s revenue.” (p 237) 

As Marx describes in Capital II, what is sold or exchanged is not capital but only commodities. For the farmer, his grain constitutes his commodity-capital, but he does not sell it as capital, i.e. as self expanding value. He sells it only as grain, as a commodity whose value is determined by the labour-time required for its production. The miller who buys the grain also does not buy it as capital, but only as a commodity – grain. The use value they purchase is not that of capital, as self-expanding value, but only the use value of grain, which can be turned into flour. Once purchased, it does become a part of their productive-capital, but it is neither bought nor sold as capital.

The flour represents the commodity-capital of the miller, but likewise it is not sold to the baker as capital, but only as a commodity. It is bought for its use value as flour, of being capable of being turned into bread. As Marx sets out in Capital III, in describing the development of interest-bearing capital, in all of these exchanges, it is not capital that is bought and sold, but only commodities. It is only the use value of capital as capital, as self-expanding value, that can be sold as a commodity, and whose market price is the rate of interest. But, this use value has no value, because it is not the product of labour. Its market price, the rate of interest, is determined solely on the basis of the demand and supply for money-capital.

“In the exchange itself only commodities confront each other—and a simple exchange of commodities takes place—the relation between which is merely that of commodities, the designations of revenue and capital having no significance here. Only the different use-value of these commodities shows that one lot can only serve for industrial consumption, and the other only for individual consumption, can only enter into this consumption. The various practical uses of the various use-values of various commodities, however, concern their consumption and do not affect the process of their exchange as commodities.” (p 237-8)