The Handicraft Census In Perm Gubernia, Article III, Section VI - Part 2 of 10

What Lenin's analysis shows is that the buyers-up, in Russia, were not simply merchants operating in the sphere of distribution, but were large-scale capitalist producers, operating via the Putting Out System, to employ large amounts of wage labour. In other words, the same process described by Marx and Engels, in Capital, was occurring in Russia too. Merchants, who provided materials to independent commodity producers, began to put work out to those producers, supplying them with material, and buying up the finished product at prices that essentially represented only a wage for the added labour. They, thereby, appropriated not only their previous commercial profit, but now, also the surplus value created in production by he producer's labour. Some of the buyer-up also became, or already were, large-scale producers themselves, operating factories alongside the putting out of work to these domestic producers. The people's production that the Narodniks presented as being the basis of some alternative path of development, avoiding the inevitability of capitalism, was itself already dominated by capital.

The data in the census facilitated the analysis, because it separated out, into the third sub-group, these handicraft producers who worked for buyers-up.

“But this advantage is outweighed by the great number of omissions and uninvestigated factors, which rather seriously complicates our inquiry. No data are available on the number of buyers-up, on large buyers-up and small, on their ties with the well-to-do handicraftsmen (ties of origin, ties between the commercial operations of the buyer-up and production in his workshop, etc.), on the business of the buyer-up. The Narodnik prejudice of treating the buyer-up as extraneous prevented most investigators of handicraft industry from examining business done by buyers-up, although this is obviously a prime and principal question for the economist.” (p 422-3)

Lenin sets out that, for a detailed study, there are a number of requirements, such as investigation of how the buyers-up' capital is formed, how it operates in buying material and selling the finished product, what social relations exist, what expenses are involved, and how these differ from those of purely merchant capital, the volume of trade, the conditions in which processing is done partly in the workshop partly domestically.

“A comparison should be made between the cost of production of an article turned out by a small handicraftsman, by a large producer in a workshop where several wage-workers are employed, and by a buyer-up who gives out material to be worked up by domestic workers. The unit of investigation should be each enterprise, that is, each separate buyer-up, and it is necessary to determine the amount of his turnover, the number of persons working for him in his workshop or workshops, or in their own homes, the number of workers he employs to acquire raw materials, to store them and the finished product, and to sell the latter. A comparison should be made between the technique of production (number and quality of implements and fixtures, division of labour, etc.) used by the small master, the workshop owner who employs wage-workers, and by the buyer-up. Only such an economic investigation can give an exact scientific answer to the questions: what is a buyer-up, what is his significance in the economic process and in the historical development of the forms of industry under commodity production.” (p 423)

But, the Narodniks failure to undertake such data collection and analysis, in the house to house census, was a serious omission. Instead, the Narodniks focused on the exploitation of the producers by “kulaks” purely on the basis of commercial exploitation, i.e. from the perspective of unequal exchange relations. The same is seen, today, in the arguments of the petty-bourgeois “anti-imperialists” who focus on the unequal exchange relations between centre and periphery, thereby, avoiding analysis of the actual basis of exploitation by capital of wage labour, within each country – centre or periphery. Instead of the relation being the exploitation of labour by capital, it becomes the exploitation of periphery country A (thereby lumping together the workers and capitalists within it) by imperialist country B.

The Narodniks presented this as,

““the source of the exploitation of labour . . . lies in the function of exchange, and not in the function of production” (101); or what we often meet with in the handicraft industries is not the “capitalisation of production,” but the “capitalisation of the process of exchange” (265).” (p 424)

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Northern Soul Classics - You Don't Mean Me No Good - Jellybeans

 

Friday Night Disco - Lady Marmalade - Patti Labelle

 

Australia Abandons Rule of Law

One of the fundamental principles of a bourgeois democracy is its adherence to The Rule of Law.  Basically, it means that everyone is equal before the law, so that no one is subject to arbitrary action being taken against them, even by the state itself.  Australia has just  abandoned that fundamental principle.  Its just the latest example of how increasingly authoritarian governments, have utilised Covid paranoia, to systematically remove basic bourgeois rights and freedoms from individuals, via a process of salami slicing.

The Australian government has decided to abandon The Rule of Law, and to ignore the legal decision of a properly constituted court of law, and to arbitrarily impose a sanction on Serbian tennis player Novak Jokovic.  Despite the court, having considered the relevant facts, and laws, deciding that Jokovic had a valid visa, enabling him to compete in the Australian Open Tennis Tournament, the Australian government has overridden the court, and withdrawn his visa.  Its necessary to sort out what is relevant and not relevant, here.

Jokovic has spoken out several times against vaccination.  It appears that he is in the camp of the had core anti-vaxxers.  Let me be clear, I have no time for the anti-vaxxers.  However, when it comes to the question of Jokovic's visa, what I, Jokovic, or the Australian government think about them is irrelevant.  Only what the law says, and whether Jokovic complied with it is relevant.  The court decided that Jokovic had complied,, because, although he had not been vaccinated, he had a valid exemption, based upon having been infected with Covid in December.  The Australian government has abandoned The Rule of law, because, although Jokovic has, thereby, abided by it, confirmed by an Australian court, the Australian government is acting as though he had not, which is an arbitrary act by the government.  It means that, in future, no one can now be sure how the Australian government might act, because its actions have become arbitrary and no longer consistent with the Rule of Law.

Now, Jokovic may feel, as many more people do, who are not hardline anti-vaxxers, that, because he is young, fit and healthy, Covid poses no threat to them.  On that I would agree with them, because we know that Covid is a virus that almost exclusively affects the elderly or with compromised immune systems.  They may think that its safer for them, whatever the small risk, not to be vaccinated, also, in the process making available vaccines for them who actually do need them.  Again, whatever I, Jokovic, or anyone else might think on that matter is irrelevant.  All that matters is what the law currently says, and the law currently requires anyone entering Australia to have been vaccinated unless they have an exemption.  But, again, Jokovic did have such an exemption, and so was in compliance with the law.  There was no reason for the visa not to be valid, therefore, and so the government's action is arbitrary and an abandonment of the Rule of Law.

I think that the law requiring such vaccination is itself idiotic, and illiberal.  Why should people who are fit, and healthy, and at no real risk from Covid have to be vaccinated?  What the law should do is ensure that those actually at risk can be protected, by ensuring that there are plenty of vaccines available to them, that health and social workers have proper PPE, and adequate contact protocols are in place to prevent spread of the virus to the vulnerable etc.  But, again, what my opinion or anyone else's opinion might be is irrelevant, because it is the current law, however, irrational that has to be complied with.  However, Jokovic did comply with that law, it is the Australian government that is not complying with its own laws, that has set aside the decisions of a properly constituted court, and which is acting arbitrarily, and outside the Rule of Law.

It has been suggested that part of the reason for the governments actions is in retaliation for Serbia pulling out of a deal with Australian based mining company Rio Tinto.  Possibly, but more likely seems to be that the Australian Prime Minister had gone out on a limb to proclaim that Jokovic would be sent back home, even before he knew the facts, and before the court had ruled in Jokovic's favour.  In other words this is simply a matter of a Prime Minister who lost face having jumped feet first into his own wide open mouth.  But, this is also a prime Minister, who like many across the globe has got used to simply making pronouncements without having to justify them with facts, or according to the law, as a result of a growing Bonapartism made possible under cover of Covid paranoia.

Rather like Boris Johnson in Britain, this is a Prime Minister who would rather abandon the Rule of law, in order to save his own face than to admit he was wrong.

Adam Smith's Absurd Dogma - Part 41 of 52

Speaking of that portion of the output that constitutes revenues, whether of the producers of means of production or consumption, Marx says,

“In this exchange it is a matter of complete indifference to them whether the sellers of the consumable articles exchange capital or revenue for the coal; that is to say, whether for example the cloth manufacturer exchanges his cloth for coal in order to heat his private dwelling (in this case the coal itself in turn is an article of consumption for him, and he pays for it with revenue, with a quantity of cloth that represents profit); or whether James, the cloth manufacturer’s footman, exchanges the cloth he has received as wages for the coal (in this case the latter is once more an article of consumption and exchanged for the revenue of the cloth manufacturer, who in turn however has exchanged his revenue for the unproductive labour of the footman); or whether the cloth manufacturer exchanges cloth for coal in order to replace the coal required in his factory that has been used up. (In the latter case the cloth that the cloth manufacturer exchanges represents for him constant capital, the value of one of his means of production; and the coal represents for him not only the value but his means of production in kind, But for the coal producer the cloth is an article of consumption, and both cloth and coal represent for him revenue; the coal, revenue in its non-realised form; the cloth, revenue in its realised form.)” (p 189-90)

But, in respect of the portion of value that represents the constant capital, it must – assuming production on the same scale, and no change in productivity – always go to the reproduction of that constant capital.

“He could, it is true, exchange also this one-third for articles of consumption (or, what is the same thing, for the money of the producers of these articles), but in fact only on the condition that he exchanges these consumption articles in turn for iron, timber, machinery—that they enter neither into his own consumption nor into the outlay of his revenue, but into the consumption and revenue outlays of the producers of timber, iron and machinery; all of whom, however, in turn find themselves in the position of not being able to expend one-third of their product on articles for individual consumption.” (p 190)

In relation to the situation described above, whereby Department I producers mutually replace each others constant capital, in kind, but where this may not be to the extent of 100%, in each case, Marx notes,

“In so far as these products of theirs enter [into their] mutual [constant capital] to the same amount of value, they replace themselves in kind, and one has to pay the other only the balance for the surplus that he has bought from him in excess of what he has sold to him. In fact, in such a transaction money appears in practice (through the medium of bills of exchange, etc.) only as means of payment, not as coin, means of circulation; and only the balance is paid in money.” (p 190)

This mutual exchange of constant capital, in Department I, therefore, has nothing to do with the exchange of revenue for constant capital, or of revenues for revenues.

“It plays exactly the same role as seed in agriculture or the capital stock of cattle in cattle-rearing. It is a part of the yearly product of labour, but it is not a part of the product of the year’s [newly- added] labour (on the contrary it is a part of the product of the year’s labour plus the pre-existing labour), which (conditions of production remaining the same) replaces itself annually as means of production, as constant capital, without entering into any circulation other than that between dealers and dealers and without affecting the value of the part of the product which enters into the circulation between dealers and consumers.” (p 191)

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The Handicraft Census In Perm Gubernia, Article III, Section VI - Part 1 of 10

Article 3

Section VI – What Is A Buyer-up?

Lenin examines the nature of the buyers-up. The significance of this analysis is that the Narodniks sought to deny that the buyers-up had any role in production, being only involved in the process of exchange and distribution. The reason they were keen to make such an argument was that they wanted to deny the extent to which capitalist production was already dominant within Russia. They wanted to emphasise the role of “people's production”, based upon small, independent, handicraft producers, linked to agricultural production in the village commune, and, thereby, to demonstrate that there existed another, non-capitalist, path of development for Russia.

This is typical of the petty-bourgeois, moralist approach. It is idealist and subjectivist, essentially starting from the proposition that nothing in history is inevitable, and that, whatever can be conceived in the human mind, can be translated into reality. Of course, as Lenin demonstrated, previously, in response to Struve's positivism, its true that, taken in the abstract, nothing is absolutely inevitable, but, for a materialist, nor does history simply unfold as nothing more than the realisation of ideas conceived in the human mind. There are constraints. Firstly, the ideas in human mind are themselves a reflection of material conditions, and conflicting interests. Secondly, whatever ideas arise in the human mind, at any one time, they are not necessarily achievable, in reality, given existing material conditions. The starting point, for the materialist, is these material conditions, and, given them, certain realities do, indeed, become inevitable. The truth is always concrete.

For the Narodniks, as petty-bourgeois moralists, the idea of capitalist development was unpalatable. As representatives of the interests and outlook of the petty bourgeois producer, they sought to present the idea of a path of development based upon such production as a viable and preferable alternative. To that end, they continually tried to deny or minimise the extent to which capitalist production was not only inevitable in Russia, but already established, and, instead, to overstate the significance of the independent producer. The same thing is seen today amongst the petty bourgeois moralists, and moral socialists for whom “imperialist” capital is anathema, and who seek to promote some alternative path of development for newly industrialising economies. But, it is also to be seen in their mirror image, amongst the petty bourgeois moralists who see imperialism as the saviour of the world, in the form of liberal interventionism. Although, time and again, their hopes for such salvation are dashed, as imperialism acts in ways that, from others, would cause them to fly into fits of moral outrage, they repeatedly rely on it as the means of opposing such atrocities.

Like the Narodniks, they believe that, whatever the concrete reality, determined by material conditions, nothing is inevitable. So, as with Einstein's definition of stupidity, they keep repeating the same experiment, each time expecting a different outcome. The latest example was their horror that imperialism had pulled out of Afghanistan, leaving the door open for a return of the Taliban, as though imperialist troops could ever be an alternative to the 40 million Afghans themselves, when it comes to the question of creating a viable state, and as though imperialism would do any other than act in its own material interests, and not as the policeman of some Kantian categorical moral imperative!  Any question of the material conditions in Afghanistan, required for even a functioning bourgeois democracy, such as that it have a significantly developed capitalist economy, is totally ignored by these moralists. They seem to think that a bourgeois democracy can be built in a society whose economy is not only pre-capitalist, but even barely feudal! This is typical of the petty-bourgeois idealist and subjectivist, as against the materialist.

Back To Article II, Section V

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Adam Smith's Absurd Dogma - Part 40 of 52

Going back to the previous analysis, it is only the £250 of value newly created by labour that represents revenue, and that can be spent on items of consumption. Likewise, its obvious that the sellers of these items of consumption cannot then replace the £750 of constant capital with the £250 they receive. If we assume that the coal producers constant capital consists of only iron, we can view it from the other direction.

The iron producer buys £1,000 of coal from the coal producer, and we will assume that, likewise, this constitutes all of their constant capital. With the same organic composition of capital, they produce iron with a value of £1300, made up of £1,000 constant capital and £300 labour. They now sell £750 of iron to the coal producer, replacing their constant capital. The constant capital of both the coal producer and iron producer have now been replaced, but neither was done so out of revenues. The iron producer has £550 of iron, which they sell to producers of consumption goods, which replaces their consumed constant capital.

Having sold £1,000 of coal to the iron producer, replacing the iron producer's constant capital, and having replaced their own constant capital by buying £750 of iron, the coal producer has £250 in money, equal to their revenues/new value created. The iron producer, having reproduced their constant capital, by buying £1,000 of coal, covered part of that by selling £750 of iron to the coal producer. In effect, the coal producer replaced all of their constant capital by this mutual exchange, whereas the steel producer replaced 75% of their constant capital, by mutual exchange. But, the steel producer sells £550 of iron to the producers of consumption goods. Of this, £250 is money spent by the coal producer, representing their revenues in excess of what was required to replace their constant capital (iron). In other words, all of the constant capital of the iron producer is also replaced as a result of their mutual production, although this remaining £250 is done so indirectly. The other £300 of constant capital, bought by the producers of consumption goods, is merely the equivalent of the £300 of revenues of the iron producer over and above the £1,000 they pay to replace their constant capital – coal.

Another way of seeing this is if both produce £1,000 of output, and both consume £750 of constant capital. The coal producer sells £750 to the iron producer, who exchanges £750 of iron for it. Both mutually replace the other's constant capital, as though they were a single coal and iron producer. Both, now also sell £250 of coal and iron to the producers of consumption goods, equal to the new value added/revenues. The producers of consumption goods now sell £250 of consumption goods each to the coal and iron producers. Their constant capital has been replaced entirely on the basis of an exchange of capital with revenue.

In other words, assuming that for consumption goods we have, say, £500, constant capital, and £150 of new value created by labour in that sector, that is output of £650. The first £500 is not new value/revenue created in consumption goods production, but is the equivalent of the £500 of new value created/revenue in the production of constant capital. As the producers of constant capital cannot consume that £500 of revenue in their own production, they can only consume it in the form of consumption goods, equal to this component of the value of those consumption goods. So, this component of the value of consumption goods is attributable not to its production but that of the producers of its constant capital, and it is those producers of constant capital, who subsequently provide the demand for that £500 component of value, from their revenues. The rest of the £650 value of consumption goods is equal to the new value created by labour in that sector, and is equal to the revenues of that sector. Those revenues provide the demand for this £150 component of the value of consumption goods.

In other words, total output value is £2,650, whilst total revenues/GDP is only £650. The constant capital of coal and iron producers is entirely replaced out of an exchange of capital with capital between the producers of coal and iron, whilst the constant capital of the consumer goods producers is replaced by an exchange of capital with revenue, and so the new value created by labour in the coal and iron sector. Its only this component that constitutes the category of “intermediate production”, in GDP data, and consists entirely of revenue, and no value component of constant capital.

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