Tuesday, 18 December 2018

Theories of Surplus Value, Part III, Chapter 19 - Part 44

Cazenove writes, in relation to the identity of supply and demand, as put forward by James Mill (Say's Law), 

““The supply of each man depends upon the quantity which he brings to market: his demand for other things depends upon the value of his supply. The former is certain; it depends upon himself: the latter is uncertain; it depends upon others. The former may remain the same, whilst the latter may vary. A hundred quarters of corn, which a man brings to market, may at one time be worth thirty shillings, and at another time sixty shillings, the quarter. The quantity or supply is in both instances the same; but the man’s demand or power of purchasing other things is twice as great in the latter as in the former case” (op. cit., pp. 111-12).” (p 65) 

This argument was taken up by Marx in Theories of Surplus Value, Chapter 17. Cazenove is quite right here that A may take a quantity of corn to market that embodies a certain quantity of labour-time, but the actual value of this corn, can never be determined until it's sold, because only then, when the amount of demand for it is seen, can the amount of socially necessary labour expended on its production be determined. This is not meant in the sense of the temporary fluctuations of demand that over a period average out, but where this average level of demand, is above or below the level of supply at the market value. In other words, where there is some more permanent underlying shift in consumer preferences. 

As Marx sets out, in Capital III, if 1,000 metres of linen are produced, using the most efficient means possible, and the labour-time expended is equal to 100 hours, say an exchange-value of £100, or £0.10 per metre, then, if demand at this price only amounts to 800 metres, 20% of the labour-time expended was not socially necessary. It is as though the 1,000 metres only has a value of 80 hours, or an exchange value of £80. 

As Cazenove says, and Marx makes the same point, in Chapter 17, and again later in this book, the seller has control over the quantity of commodities they take to market, but not over the demand for them. But, in the same way, Cazenove points to the fact that, at one time, the seller of the corn may obtain sixty pounds, and only thirty pounds at another, as the basis for the fact that, in turn, this seller may provide twice as much demand, at one time, compared to another. Yet, the fact that the seller has sixty pounds to spend, rather than thirty pounds, is no reason that they will form twice the demand. As Marx sets out later, for the buyer, they require a certain quantity of the commodity, which is why the seller cannot determine the demand. If, as a buyer, I want to buy 1 metre of linen, the fact that I have £60 rather than £30, in my pocket, is no reason that I will buy 2 metres of linen, rather than the 1 metre I require. As Marx put it in Chapter 17, it is possible that the demand for the general commodity, money, may be higher than the demand for all other commodities, or in this case, my demand for the other £30, in my pocket, is greater than my demand for an additional metre of linen. 

Monday, 17 December 2018

Labour Must Vote Down May's Deal Despite Her Threats

Whenever May brings her Brexit deal to parliament, Labour MP's must vote it down. May's tactic appears to be to run events out to the last minute so that MP's will feel they have to vote for her disastrous deal in order to avoid a No Deal Brexit going through automatically on March 29th 2019. Labour MP's must make it clear now that they will not be blackmailed by such an empty threat. May knows she could not actually allow a No Deal Brexit to go through. To do so, would cause catastrophe. It would then mean that she, and the Tory Party bore responsibility for that catastrophe, and would mean the Tory party would be destroyed, and at least unelectable for a generation or more. She will not do that no matter how vociferous she makes blood curdling threats to the contrary to try to bludgeon MP's into voting for her terrible deal. Indeed, the dominant sections of the ruling-class would never allow her to do that. Long before any such collapse into No Deal occurred, there would be a run on the Pound, a sharp rise in UK borrowing costs, and so UK market rates of interest, and a crash in the prices of UK shares, bonds and property. 

If May and the Tories were to continue on that course, there would be civil unrest at the consequences, far in excess of anything the Brextremists are ridiculously claiming Leave voters may undertake if they lost another referendum. In fact, despite all their claims the proponents of Leave Means Leave, have never been able to garner any significant active mobilisations, and are now left relying on a few BNP/EDL activists backing Tommy Robinson, as they take over the rapidly collapsing and completely irrelevant rump of UKIP. And, that is not surprising, because the social forces that backed Leave, are not the kind of social forces that are at all cohesive, are noted for being unable to engage in such organised and structured mobilisations. Indeed, the majority of support for Brexit came from a large number of elderly, middle-class Tory voters. They are not the kind of force likely to take to the streets with their zimmer frames to bring about some revolutionary change, nor are they likely to back the kind of radical socialist politics required to end austerity, and mobilise workers behind any kind of real solution to their problems. 

Under those conditions, of chaos that destroyed the Tories, the door would be wide open for Labour to take the reins. But, it could not be a Labour Party that continues on its current path, and with its current lack of a principled leadership. It would mean that the vast majority of the party, of the 90% that oppose Brexit, would have to sweep the current leadership aside. It would mean drawing in a large army of new more radical, more internationalist members, and on that basis to sweep away also large numbers of current MP's, and to build a new, fighting, socialist leadership. The Tories most certainly would not want to see that either. 

So, the reality is that May will not push through a No Deal Brexit, and Labour MP's should discount it from their calculations. They should vote down her deal come what may, and should make clear that they will do that, whenever she allows them to vote on it. Any Labour MP, wavering, and suggesting that they might back May's deal should be warned now by their party members that they would be removed forthwith. That is the best means of ensuring that May stops deluding herself that she might be able to get through her terrible deal if only she waits long enough. 

Polls show that if Labour were to back another referendum, its support would surge. Some polls suggest that if Labour came out to back stopping Brexit, it could have a 20 points lead in the polls. As things stand, however, the Labour leaderships lack of principled leadership, its failure to push the policy passed at Labour Party conference, its constant vacillations, and the suggestion that it secretly backs Leave has seen Labour's standing in the polls continue to slide, even against May's totally dysfunctional and discredited government. If as Labour's Andrew Gwynne suggested on the Marr show at the weekend, Labour would go into a General Election or another referendum as a Pro-Brexit party, then it would be destroyed. All of those new radical, progressive, internationalist members and voters that swung behind the party in 2017, would rapidly disappear. It would mean that the party leadership was actively driving them away towards the Greens, SNP, Liberals, and opening up the potential for the Blair-rights to forge them together in the kind of new party that until now, has been seen as simply impossible. 

Who could blame them, because the reality would be that, as with Melonchon in France, such a Stalinoid party as Labour would have become, fixated upon the reactionary, nationalist dream of Britain leaving the EU, so as to pursue some policy of economic nationalism, would indeed be reactionary even compared with an internationalist minded, Blair-right workers party, just as the Stalinist party of building “Socialism in One Country”, in the USSR, turned into a hellish nightmare for workers, and set back the cause of socialism for a century, at least. It would not only repeat that nightmare, but that of more recent times in Venezuela, for example, that has driven the workers there into destitution, and provided the right with yet another easy target to point to as to why “socialism” cannot work. 

Had Labour been arguing forcefully against Brexit over the last three years, organising regular demonstrations, building the kind of social movement it committed to, building a real fighting organisation across the EU, drawing in the other radical social-democratic and socialist forces across the Continent, to fight against austerity, and to put forward an EU wide programme for reconstruction and renewal, then Labour would today be in an unassailable position, and they would have strengthened the forces of the left in Europe too. The fact that they have failed to do so is criminal, and stems from the Stalinist influences on the Corbyn leadership. It is not necessary for Labour to present itself as “Pro-EU”. It is quite right to be critical of the EU's current conservative politicians, and their domination of the parliament, the Council of Ministers, as well as the Commission, and other bodies of the state, such as the ECB. The answer to that, however, is not to be “Pro-Brexit”, in other words to be Pro all of those very same conservative forces just so long as they are “British”

It is only necessary that Labour is “anti-Brexit”, in order to simply expose the fact that the problem with the EU is not that it is comprised of foreigners, unlike the British state which is comprised of “our own people”, but that it is dominated by conservative politicians, and conservative politics. The more substantial problem is that the EU, like Britain, is a capitalist state. But, that is precisely the point it is not the fact that the EU is a foreign capitalist state, as opposed to Britain being a British capitalist state; it is not that the EU is dominated by foreign conservative politics as oppose to Britain being dominated by British conservative politics that is the problem. To view things in that light is to allow your politics to be based upon nationality not class, it is what makes such an outlook a reactionary nationalist outlook, not a progressive, international socialist outlook. 

The answer to the problems of British workers cannot be found via Brexit. It can only be found by standing alongside our EU brothers and sisters, in a struggle against conservative politics, and for progressive social-democratic, and socialist politics, against capitalism whether it comes draped in the Union Flag or the EU Flag, for a struggle to build a Workers Europe. Indeed, the problems of British workers can only be increased by Brexit, as it undermines the UK economy, and thereby undermines the demand for labour-power in the UK, thereby pressing down on wages, at the same time that a falling Pound, and rising import costs, raise the cost of living for British workers. 

Against Brexit. Against Reactionary Stalinist Economic Nationalism. Build an EU Wide Workers Movement. For a Workers Europe, on the Road to A Socialist United States of Europe. 

Theories of Surplus Value, Part III, Chapter 19 - Part 43

15. Malthus’s Principles Expounded in the Anonymous “Outlines of Political Economy” 

Marx quotes from the Malthusian, John Cazenove's work, Outlines of Political Economy; being a Plain and Short View of the Laws relating to the Production, Distribution, and Consumption of Wealth etc., London, 1832, on why they were so opposed to the Smithian/Ricardian labour theory of value. 

““That labour is the sole source of wealth seems to be a doctrine as dangerous as it is false, as it unhappily affords a handle to those who would represent all property as belonging to the working classes, and the share which is received by others as a robbery or fraud upon them” ([John Cazenove, Outlines of Political Economy, London, 1832, ] p. 22, note).” (p 63) 

Cazenove confuses the value of commodities with the utilisation of commodities, and money and capital, but, in doing so, in the following he correctly identifies the origin of surplus value

““The value of capital, the quantity of labour which it is worth or will command, is […] always greater than that which it has cost, and the difference constitutes the profit or remuneration to its owner” (op. cit., p. 32).” (p 64) 

In other words, commodities or money of a certain value can only ever exchange for other commodities of the same value. It is the fact that these commodities or money are used as capital that enables it to produce surplus value, because it exchanges for the commodity labour-power, at this value, but the seller of the labour-power must then undertake labour that produces a greater value, a surplus value

“The following, too, which is taken from Malthus, is correct as an explanation of why profit is to be reckoned as part of the production costs of capitalist production: 

“… profit upon the capital employed” [“unless this profit were obtained, there would be no adequate motive to produce the commodity”] “is an essential condition of the supply, and, as such, constitutes a component part of the costs of production” (loc. cit., p. 33).” (p 64) 

And, as Marx demonstrated, in Capital, for society, the profit, or surplus value is a cost of production, because the labour it entails had to be performed by someone. It is only that it is not a cost born by the capitalist. Cazenove combined the notion that surplus value arises as a result of the relation between capital and wage labour with the idea that having produced the surplus value, it is only realised in circulation. 

““… a man’s profit does not depend upon his command of the produce of other men’s labour, but upon his command of Labour itself.” (Here the correct distinction is made between the exchange of one commodity for another and the exchange of the commodity as capital for labour.) “If”(when the value of money falls) “he can sell his goods at a higher price, while his workmen’s wages remain unaltered, he is clearly benefited by the rise, whether other goods rise or not. A smaller proportion of what he produces is sufficient to put that labour into motion, and a larger proportion consequently remains for himself “ (op. cit, , pp. 49-50).” (p 64) 

The same thing applies, Marx says, where new machinery is introduced by one firm, which reduces the individual value of its output, but where the firm can still sell at the old market value, thereby obtaining a surplus profit. 

“It is true that when this happens, the worker does not directly work a shorter period for himself and a longer one for the capitalist, but in the reproduction process, “a smaller proportion of what he produces is sufficient to put that labour into motion”. In actual fact, the worker therefore exchanges a greater part of his immediate labour than previously for his own realised labour. For example, he continues to receive what he received previously, £10. But this £10, although it represents the same amount of labour to society, is no longer the product of the same amount of labour-time as previously, but may represent one hour less. So that, in fact, the worker works longer for the capitalist and a shorter period for himself. It is as if he received only £8, which, however, represented the same mass of use-values as a result of the increased productivity of his labour.” (p 64) 

Sunday, 16 December 2018

Andrew Gwynne, Labour and Brexit

On Andrew Marr, this morning, Labour's election coordinator, Andrew Gwynne, said that, in the event of a General Election, or another referendum, Labour would enter those contests as a pro-Brexit party. If that is the case, then, for the first time in my life, I would not be voting Labour in the General Election, and I would be opposing Labour's position in the referendum, in order to support stopping Brexit, and remaining in the EU. I suspect millions of other Labour voters would respond in the same way.

I could not, in all conscience, as an international socialist vote for something that was going to so obviously damage the interests of the working-class; not just the working-class in Britain, but the working-class as a global class, and, particularly, across Europe. It would be voting for a policy that acts to deliberately divide workers in Britain from their comrades across Europe, solely, in order to pursue a policy of Stalinoid economic nationalism, that would inflict major damage on workers living standards, and would result in a considerable damage to the socialist cause in the longer-term, by creating disillusionment amongst workers, and driving them towards the arms of the far-right, who would use such disillusionment to double down on their nationalism, hostility to free movement, and hatred of foreigners that has already been fuelled by Brexit. Even less could I vote for a Labour Party whose leadership pursued such a policy in spite of the fact that 90% of Labour Party members, and around 75% of Labour voters oppose such a stance, and favour remaining in the EU! That expression was clearly behind the composite motion passed at Labour Conference, which the Labour leadership have been trying to avoid implementing ever since, and which Gwynne's statement now shows they intend to totally disregard. They are prepared it seems to “respect” the will of the “people” when it comes to a reactionary policy of Brexit, but not to respect the will of the vast majority of party members. This will end very badly. The Labour leadership appear determined to destroy the party, or at least to create a massive split in it that will make it unelectable for a very long time.

In 2017, Labour's Manifesto said that it would “respect” the 2016 referendum result, but that Labour would attempt to negotiate a soft Brexit, based upon Jobs First, and the meeting of its six tests. Had it been me, I would have made no such commitment. I would have said openly that the Brexit decision was a reactionary decision, pushed through by the 70% of mostly elderly, middle-class Tory voters, and to the disadvantage of the 70% or so, of Labour voters that voted Remain. I would have argued for stopping Brexit, in 2017. But, it was possible to continue to support Labour in 2017, because, in fact, this Manifesto commitment could not really be taken seriously. There could be no Jobs First Brexit, nor was it credible that Labour could negotiate a Brexit that would meet its six tests. The reality was that Labour was seen as the only credible party that could stop the Tories hard Brexit, and that is why millions of people, including many Liberals, even some Tories, and many young people angry at the Brexit decision, swung behind the party, some of them actually becoming members.

The dynamic in 2017, was towards a continual hardening of Labour's position against Brexit, as it confronted the reality of the Tories Brexit negotiations, and as it became impossible that the delusions of the Brextremists, but also the delusion that the six tests could be met, were exposed. And, indeed, so it has been. The reality of the chaos of the Tories Brexit negotiations, the fact they had to abandon their red lines, and still could not get a deal across the line, and the fact that it also became obvious that Labour's six tests could not be met, either by a Tory government, or a Labour government, led inexorably to the conclusion that Brexit had to be stopped, either by a General Election, or by another referendum. That is the dynamic that led to the composite resolution at Labour Conference, with the clear implication that Labour would campaign, in either of those situations, for remaining inside the EU. That is the position of the vast majority of the party, and its voters.

It is insane for Gwynne and the Labour Leadership to now be saying, therefore, that they would go into a General Election or another referendum, as a pro-Brexit party. It puts them completely at odds with party members, and Labour voters. It means they are as deluded and detached as is Theresa May. With everything that has happened since 2016, we now know that it's impossible to negotiate a Jobs First Brexit, or a Brexit that meets the six tests. The momentum since that time has been overwhelmingly in the direction of first opposing a hard Brexit, and then of demanding another say on the issue, with the clear implication of stopping Brexit. To go into an election, or into another referendum arguing a pro-Brexit position is unfathomable, other than if you are an ideologically committed Stalinist hack, for whom the promotion of economic nationalism, and the idea of “Socialism In One Country”, overrides every other consideration.

It now becomes clear why the Corbynites did not push through their advantage to ensure the extension of democracy in the party, and the introduction of mandatory reselection. It was to ensure that they were not themselves held to account by the party membership, as they rode roughshod over them. It is also apparent why Labour has engaged in such political cowardice in confronting the Tories over Brexit in parliament, including the refusal to put down a No Confidence motion in them. It is because the Stalinised leadership itself seeks to introduce Brexit, under cover of the Tories.

Trotsky wrote that the position of communists in relation to the labour movement should be “With the workers always. With the workers leaders sometimes.” In 1979, socialists sought to call on workers to vote Labour, but could not do so on the basis of Labour's official programme, or its record in government over the previous five years. We, therefore, established the Socialist Campaign for a Labour Victory, which set out its own socialist manifesto for those elections, under which Labour candidates and constituencies stood, rather than the official Labour Manifesto. I have called for a similar stance in recent years, for the 2010 election, for example, and in relation to a call for a Socialist Campaign for Europe, in the 2016 referendum. If the Labour Leadership goes into a General Election or another referendum, on a policy of Brexit, that is the only basis that I could vote Labour, i.e. by voting for a Labour candidate standing on an international socialist platform of stopping Brexit. Given that 90% of the party back that position it should not be difficult to mobilise such a campaign that would overwhelm the reactionary nationalist stance upon which the leadership seem currently set.

But, it also reinforces why we need to press forward with deselections of existing MP's, and for further democratisation of the party to introduce mandatory reselection.  Stop the leadership's betrayal of the party, and of basic international socialist principles.  Stop the Stalinist coup.

Theories of Surplus Value, Part III, Chapter 19 - Part 42

UK Household Debt
One aspect of Malthus argument was valid, and also applies to more recent times. In addition to rent, the old landed aristocracy maintained their conspicuous consumption, by borrowing against their estates. This borrowing created no new value, it simply represented a conversion of wealth (dead labour) into revenue, and thereby a transfer of wealth out of one set of hands into those of another. It is one way in which the wealth of the old landed aristocracy was diminished, as they were supplanted by the bourgeoisie. In the period between 1950 to 1980, some workers were able to convert some of their revenue, as wages, into wealth, by being able to buy houses, accumulate savings in the form of pension funds, or ISA's and so on. In the 1980's and after, some of that wealth was liquidated, as workers, facing stagnant wages, converted this wealth into revenues, including by borrowing against these assets as collateral. By these means, by encouraging a sharp rise in household debt, capital was able to go some way to addressing the contradiction it faced between the need to raise the rate of surplus value, by depressing wages, and the need to realise that surplus value, as profit, by maintaining levels of household consumption, which was under attack from falling wages.

I discussed this process in my book, Marx and Engels Theories of Crisis.

Marx quotes Rousseau's statement that,

““The more monopoly spreads, the heavier do the chains become for the exploited.” (p 63)

Malthus has other ideas, he writes,

““We might even venture,” says Malthus, “to indulge a hope that at some future period the processes for abridging human labour, the progress of which has of late years been so rapid, might ultimately supply all the wants of the most wealthy society with less personal effort than at present; and if they did not diminish the severity of individual exertion” (he must go on risking just as much as before, and relatively more and more for others and less and less for himself), “might, at least, diminish the number of those employed in severe toil” ([Malthus, Principles of Population, p. 304,] Prévost, p. 113).” (p 63) 

On this basis, the middle class grows, whilst the working class, although growing absolutely in numbers, becomes a smaller proportion of the total population. Marx notes, 

“This in fact is the course taken by bourgeois society.” (p 63) 


In Capital III, Marx notes that the number of commercial workers, professional managers, technicians, administrators and so on necessarily rises, as the scale of socialised production and cooperative labour increases. And, this goes along with the growing technological nature of production, which also requires an extension of public education and so on. At the time Marx was writing, many of these professions were seen as middle-class, but today, we would class teachers, clerks, and other such people as workers. The day to day professional managers, or functioning capitalists are themselves drawn from the working-class and continue to live amongst other workers. As Marx himself says, in Capital III, Chapter 17, 


“The commercial worker, in the strict sense of the term, belongs to the better-paid class of wage-workers — to those whose labour is classed as skilled and stands above average labour. Yet the wage tends to fall, even in relation to average labour, with the advance of the capitalist mode of production. This is due partly to the division of labour in the office, implying a one-sided development of the labour capacity, the cost of which does not fall entirely on the capitalist, since the labourer's skill develops by itself through the exercise of his function, and all the more rapidly as division of labour makes it more one-sided. Secondly, because the necessary training, knowledge of commercial practices, languages, etc., is more and more rapidly, easily, universally and cheaply reproduced with the progress of science and public education the more the capitalist mode of production directs teaching methods, etc., towards practical purposes. The universality of public education enables capitalists to recruit such labourers from classes that formerly had no access to such trades and were accustomed to a lower standard of living. Moreover, this increases supply, and hence competition. With few exceptions, the labour-power of these people is therefore devaluated with the progress of capitalist production. Their wage falls, while their labour capacity increases.”

Back To Part 41

Forward To Part 43

Saturday, 15 December 2018

Theories of Surplus Value, Part III, Chapter 19 - Part 41

14. The Reactionary Role of Malthus’s Writings and Their Plagiaristic Character. Malthus’s Apologia for the Existence of “Upper” and “Lower” Classes 


Malthus’s book On Population was a lampoon directed against the French Revolution and the contemporary ideas of reform in England (Godwin, etc.). It was an apologia for the poverty of the working classes. The theory was plagiarised from Townsend and others. 

His Essay on Rent was a piece of polemic writing in support of the landlords against industrial capital. Its theory was taken from Anderson. 

His Principles of Political Economy was a polemic work written in the interests of the capitalists against the workers and in the interests of the aristocracy, Church, tax-eaters, toadies, etc., against the capitalists. Its theory was taken from Adam Smith. Where he inserts his own inventions, it is pitiable. It is on Sismondi that he bases himself in further elaborating the theory.” (p 61-2) 

Marx sets out Malthus' arguments as to why society must be divided into upper and lower classes. He provides the following quote from Malthus “An Essay on the Principles of Population”. 

““it has been observed that those cottagers, who keep cows, are more industrious and more regular in their conduct, than those who do not… Most of those who keep cows at present have purchased them with the fruits of their own industry. It is therefore more just to say that their industry has given them a cow, than that a cow has given them their industry” [Malthus, An Essay on the Principles of Population, fifth ed., Vol. 2, London, 1817, pp. 296-97].” (p 62) 

Marx draws similar conclusions in Capital about the speculative losses made by some capitalists, and the way it benefits more dynamic elements of that class. He says, 

“And it is therefore correct that diligence in labour (together with the exploitation of other people’s labour) has given cows to the parvenus amongst the bourgeoisie, while the cows give their sons the taste for idleness.” (p 62) 

In fact, Malthus' argument, as set out, is a good reason to oppose the right to inherit wealth. Yet, the classes that Malthus sought to defend are the epitome of inherited wealth and status. Malthus also says in the same work, 

““But it is evident that all cannot be in the middle. Superior and inferior parts are in the nature of things absolutely necessary; and […] “ (naturally there can be no mean without extremes) “strikingly beneficial. If no man could hope to rise, or fear to fall in society; if industry did not bring with it its reward, and indolence its punishment; we could not expect to see that animated activity in bettering our condition, which now forms the master-spring of public prosperity” ([Malthus, Principles of Population, p. 303,] Prévost, p. 112).” (p 62) 

Yet, its precisely the indolence of the landed aristocracy, the clergy and state bureaucracy that Malthus seeks to glorify as playing a fundamental role in ensuring the progress of society, as a result of these parasitic layers engaging that passion for consumption without themselves contributing to production. 

“Thus there must be lower classes in order that the upper ones may fear to fall and there must be upper classes in order that the lower ones may hope to rise. In order that indolence may carry its own punishments the worker must be poor and the rentier and the landlord, so beloved of Malthus, must be rich.” (p 62) 

It comes down to the idea that workers must be given the illusion that one day they can exploit other workers and become rich themselves. In more recent decades, when that illusion has become ever more apparently a delusion, and when self-employment has become synonymous with overwork, precarity and poverty for workers unable to obtain permanent employment, the illusion has instead been transferred into the prospect of becoming rich via the lottery, becoming a celebrity, by house price inflation, or even by compensation claims! 

Northern Soul Classics - Anyway You Want It - Fred Smith Orchestra