Sunday, 30 September 2012

Labour Should Not Wait For An Election To Provide Workers With Answers

The Labour Part at its Conference this week is likely to be taken up – apart from all of the back slapping – with a lot of talk about what they will do if they win the next election, like Ed Miliband's announcement on breaking up the banks. Even in this regard, however, its clear that on the things that really matter to ordinary workers – like whether the Liberal-Tory pay freeze, and cuts will continue – Labour has indicated it will say very little. Their argument is that they do not know what conditions they will face after two more years of the Liberal-Tories destruction of the economy. But, in relation to what they will do to try to prevent that on going destruction, here and now, beyond simply appearing on TV shows to declaim it, we are likely to hear nothing from Labour's leaders, and probably little if anything more from the Trade Union leaders either. It will be a big mistake.

The recorded history of the 1980's shows Michael Foot as being one of Labour's least successful leaders. Unfavourable comparisons of other leaders like Gordon Brown are often set against the yardstick of Foot's leadership. In fact, it is a case of history always being written by the victors. In 1981, when Thatcher had just begun the plan of attack, set out in the Ridley Plan, to provoke confrontations with the weakest unions, and had also begun to set in place the Hayeckian Plan for constricting the money supply to force employers to also confront the unions, Michael Foot, as leader of the Labour Party took his place at the head of several huge marches in Britain's major cities to oppose the Tory attacks. It put him miles to the Left of “Red Ed”. He also gave his support to the “People's March For Jobs”, as 1980's unemployment surged to 3 million, just as it is once again doing today under another Tory Government.

What was the effect? Foot's standing in the opinion polls rose, and in 1981, Labour stood at 51% in the opinion polls, way ahead of Thatcher, and in fact, 9% ahead of the 42% that Labour stands at today. Had a general Election been held during 1981, or indeed any time up to the outbreak of the Falklands War, Labour would have secured a landslide under Foot's leadership.

The mistake that Foot made is the same mistake that Labour is making today. The Falklands War gave Thatcher and the Tories an unforeseen boost. Labour responded by seeking to moderate its stance, and focus on winning the next election, rather than defeating the Tories in the present. That meant clamping down on those in the party, who did want to fight the Tories in the here and now. In turn that meant that rather than focussing its attention on fighting the Tories and providing workers who were suffering under them with immediate solutions, Labour focussed on an internal feud, and on merely an electoral strategy geared towards an election in 1983 or 1984. The consequence was that with only individual groups of workers, like the steel workers, and the miners, and a number of Local Councils, fighting an uncoordinated struggle against the Tories, sometimes even in the face of hostility from Labour leaders, the Tories continued to increase in strength as they increasingly appeared to be winners.

The situation was not helped by the nature of the left within the Labour Party itself. It was seriously divided. On the one hand there was the essentially Stalinist Left, fellow travellers of the CP, around Tribune. It was part of a larger “soft-left” of essentially left reformists, whose focus itself was on electoralism. Then there was the “hard left” made up of assorted trotskyist groups, and the left reformists of the Militant Tendency. Yet, at a time when workers were under increasing attack, it was only the hard left that put up any kind of continued resistance, whilst this Left as a whole united around, and put considerable resources into issues that were of more concern to the middle class radicals than they were to ordinary workers.

For example, in 1983, I was a Stoke City Councillor. I had been elected on a platform of “No Cuts, No Rent or Rate Rises”; a policy I stuck to to the end, when I resigned over the issue, having been previously expelled from the Labour Group for doing so. The Council had 57 labour Councillors, and 3 Tories. It could vote through anything it wanted. I well remember a meeting in 1983, where the Council, having told the people of Stoke for months before that it did not have the money to repair the roads, or their Council houses, proposed to spend several thousand pounds erecting “Nuclear Free Zones” signs. It was not that I objected to the signs, I was an activist in CND and Labour CND. But, I did point out that as an ordinary worker I would find it hard to understand how a Council that could not find the money to do the necessary repairs to my house, and was doing nothing to fight the Tory policies that brought that about, could find the money to erect such signs, just as it had recently found the money to refurbish the leather benches in the Council Chamber and Committee Rooms!

But, the Left could unite around such tokenistic policies, whilst providing no answers, no leadership for the mass of workers on the very issues that most serious affected them. Labour went into the 1983 General Election on a similar basis. The leadership had pulled back from its enthusiastic support for workers struggles of 1981. On the other hand the Manifesto was proposing Unilateral Nuclear Disarmament, and so on, which seemed a million miles away from the real concerns of millions of workers. Rather than do the necessary work of providing leadership, and more importantly providing practical answers for workers immediate problems, Labour sank back into electoralism. But even to win elections, you first have to convince voters that you mean what you say, and that you have answers to their problems, that you are prepared to fight and so on. Unless, of course, that is you are prepared to wait 18 years until the other lot become so despised that anyone could win against them.

The same is true today. If labour thinks that it can sit back and count on the current unpopularity of the Liberal-Tories carrying them through, if they think they can just get away with talking vaguely about things they might do if they win the next election, and so on, they will lose. Unless, the European and US politicians really screw up – which is possible – and create a serious economic crisis, the current cyclical slow down is likely to end next year, which will ease pressure on the Eurozone debt crisis etc. The UK economy, given the incompetence of the current Government, and given its continued commitment to austerity, is not likely to be booming, but by 2015, it could at least again be growing, and that has a significant impact on voters attitudes. But, even if that is not the case, it is not in Labour's interest to allow current Government policies to further damage the economy, because that will make their own job worse in 2015.

Labour recently announced its policy with the unfortunate name “pre-distribution”. But, if they are serious about it – the idea being that rather than being reliant on the State for income support, workers should be paid a Living Wage, we should encourage the development of high value industries that pay high wages, we should ensure that workers are able to obtain the necessary skill and education to fill such high value jobs – then why not do something about it here and now. Why can't Labour openly join with the Trades Unions in an activist campaign for a Living Wage, including where necessary taking industrial action to achieve it. In Germany and in the US, there has been a history of Trades Unions picking a company in a particular industry, and then targetting it for a campaign to win pay rises, and better conditions, which when won, can then be fought for in other firms in the industry. In the 19th century, the Potters Union did the same thing, paying the wages of workers from the particular firm for as long as was necessary to win the struggle.

The TUC could organise such a co-ordinated campaign today, and labour's leaders if they are serious about “pre-distribution” should support it. But, as Marx pointed out, such “pre-distribution”, no more than “redistribution” cannot work as a solution for long under Capitalism, because capital will always have the whip hand. Only if workers own the means of production themselves can they prevent that. Labour and the TUC should organise a campaign along with the various Co-operative organisations to bring together all forms of Co-operative into a single Federation, with an active goal of spreading workers ownership and control throughout the economy. That would be the best response to the Tories proposals for privatising the NHS and other services. Such a powerful single Co-operative organisation could ensure that where hospitals or other services are to be privatised, including under the Tories dishonest proposals to turn them into Co-ops, the workers could take them over themselves, and the necessary support could be provided to them, building up a sizeable bulwark of workers ownership and control within the economy that could be used to fight the Liberal-Tories attacks, and to provide workers in general with a practical, efficient and immediate solution to their problems.

The same is true within the communities. In November, the first elections for Police Commissioners will take place. Labour will focus on trying to attack the Liberal-Tories for their cuts to police budgets and numbers. But, the experience of all the demonstrations against the cuts, against Tuition Fees, our experience from Grunwicks, from the Miners Strike and a myriad other struggles shows that the Police as an organisation of the State, is no friend of the working class. Its main function is to protect the property of Capital, and of the rich. It is a million miles away from what needs to be done to protect the lives and property of ordinary workers on estates up and down the country. Labour should commit itself not only to ensuring that police budgets are diverted to those tasks, but to a far more thorough democratisation of policing than the periodic election of Commissioners entails.

For example, they should campaign for Community Police to be employed by, and under the immediate democratic control of the local community they serve. Labour should campaign from the branches upwards for the merging of Tenants and Residents Associations with Neighbourhood Watch Committees, that would be capable of carrying out this function. Indeed, just as Jury Service is seen as a civic duty, and as military service is seen as such in time of war, so policing should be seen as a civic duty of every able bodied adult. Labour should campaign for the setting up of local policing units, as an extension of the current system of Special Constables, to which everyone should have to give time, paid for by their employer, in order that their local community can be policed by, and in the interests of the local community.

Ordinary LP members can engage in these activities as individuals or on a more organised basis through the LP and TU branches, Trades Councils, CLP's and so on. But, such a campaign would be massively advanced if the Labour and Trade Union leaders themselves committed themselves to it. Doing so, and building a grass roots opposition to the Liberal-Tories here and now, is the most effective way in which Labour can build the support it needs to defeat the Tories at the next election.

Saturday, 29 September 2012

Northern Soul Classics - You've Got To Pay The Price - Al Kent Orchestra

This is imprinted on my mind as having to follow on from last week's classic from J.J. Barnes.  A favourite of countless mid week discos, from the early Torch days.  One week I'll also feature the vocal.

Friday, 28 September 2012

Capital 1, Chapter 12 - Part 2

Marx then describes the process by which this raising of productivity occurs, and why capitalist competition drives this process. He does so by looking at the way each capitalist has a motivation for raising their own productivity in order to make higher than average profits. This is because of the difference between Value and Exchange Value.

Suppose 1 hour's labour = £10.

In a working day of 12 hours, £120 of new value is created. If, in this 12 hours, 120 items are produced, each will have £1 of new value added to it. Suppose the constant capital used up, in each article, is also £1. Then the price of each article is £2.

If a capitalist can raise his productivity, compared to his competitors, he can make extra profits.

Suppose a capitalist raises his productivity so that, in 12 hours, he can produce 240 rather than 120 items. The constant capital in each will still be £1, but the labour in each will now be only 50p. So, the individual value of his products is just £1.50.

However, it is not the individual value of these commodities which determine their market price, but their social value, the average socially necessary labour-time required for their production. If this capitalist is only one of a large number producing these commodities, his lower cost of production will not change the average SNLT.

So, the market price will remain £2, whereas his individual value is £1.50, giving him an extra 50p per unit profit over his rivals. But, in practice, in order to get rid of the additional supply, he may have to cut his prices below this, say to £1.75, making just an extra 25p profit, but will in the process increase his market share.

This augmentation of surplus-value is pocketed by him, whether his commodities belong or not to the class of necessary means of subsistence that participate in determining the general value of labour-power. Hence, independently of this latter circumstance, there is a motive for each individual capitalist to cheapen his commodities, by increasing the productiveness of labour.” (p 301)

Even in the case described, however, the additional surplus value arises because the amount of necessary labour-time is reduced.

Suppose out of the 12 hour day, 10 hours were required for necessary labour. In that case, wages amount to £100, and Surplus Value is £20. But, now, the capitalist produces 240 items not 120. He sells each at £1.75 bringing in £420. Of this £240 represents Constant Capital, and £100 represents wages (Variable Capital) leaving a profit now of £80.

Previously, the ratio of surplus value to necessary value = surplus labour to necessary labour was 20:100 = 1:5, now it is 80:100 = 4:5.

The other way of looking at this, says Marx, is to view the labour employed in this firm as intensified labour, like complex labour, so that in every hour, it creates more value than 1 hour of abstract, simple labour. Unlike with complex labour, however, which would involve the capitalist paying for it at its higher value, this capitalist continues to pay for it at its original value. We do see this in practice in a slightly different form. If we look at the same type of labour employed at different size of firms, for example, we see workers employed at very large firms, which enjoy the economies of scale, being paid higher wages, and receiving better conditions, than the same workers employed by small firms. In the same way, workers in advanced economies, where productivity is high, generally have higher wages than workers in less developed economies where it is low.

Hence, the capitalist who applies the improved method of production, appropriates to surplus-labour a greater portion of the working day, than the other capitalists in the same trade. He does individually, what the whole body of capitalists engaged in producing relative surplus-value, do collectively. On the other hand, however, this extra surplus-value vanishes, so soon as the new method of production has become general, and has consequently caused the difference between the individual value of the cheapened commodity and its social value to vanish. The law of the determination of value by labour-time, a law which brings under its sway the individual capitalist who applies the new method of production, by compelling him to sell his goods under their social value, this same law, acting as a coercive law of competition, forces his competitors to adopt the new method. The general rate of surplus-value is, therefore, ultimately affected by the whole process, only when the increase in the productiveness of labour, has seized upon those branches of production that are connected with, and has cheapened those commodities that form part of, the necessary means of subsistence, and are therefore elements of the value of labour-power.” (p 302-3)

The value of commodities is in inverse ratio to the productiveness of labour. And so, too, is the value of labour-power, because it depends on the values of commodities. Relative surplus-value is, on the contrary, directly proportional to that productiveness. It rises with rising and falls with falling productiveness. The value of money being assumed to be constant, an average social working day of 12 hours always produces the same new value, six shillings, no matter how this sum may be apportioned between surplus-value and wages. But if, in consequence of increased productiveness, the value of the necessaries of life fall, and the value of a day’s labour-power be thereby reduced from five shillings to three, the surplus-value increases from one shilling to three.” (p 303)

Hence there is immanent in capital an inclination and constant tendency, to heighten the productiveness of labour, in order to cheapen commodities, and by such cheapening to cheapen the labourer himself.” (p 303)

The capitalist is only interested in the surplus value of the commodities they produce, not their Exchange Value. In realising the surplus value, they also recover the value of the constant and variable capital advanced in the production. This solves the question then of why capital seeks to reduce the Exchange Value of commodities, because Relative Surplus Value increases with the productivity of labour, whilst that same process reduces the Exchange Value of commodities.

The shortening of the working day is, therefore, by no means what is aimed at, in capitalist production, when labour is economised by increasing its productiveness. It is only the shortening of the labour-time, necessary for the production of a definite quantity of commodities, that is aimed at. The fact that the workman, when the productiveness of his labour has been increased, produces, say 10 times as many commodities as before, and thus spends one-tenth as much labour-time on each, by no means prevents him from continuing to work 12 hours as before, nor from producing in those 12 hours 1,200 articles instead of 120. Nay, more, his working day may be prolonged at the same time, so as to make him produce, say 1,400 articles in 14 hours. In the treatises, therefore, of economists of the stamp of MacCulloch, Ure, Senior, and tutti quanti [the like], we may read upon one page, that the labourer owes a debt of gratitude to capital for developing his productiveness, because the necessary labour-time is thereby shortened, and on the next page, that he must prove his gratitude by working in future for 15 hours instead of 10. The object of all development of the productiveness of labour, within the limits of capitalist production, is to shorten that part of the working day, during which the workman must labour for his own benefit, and by that very shortening, to lengthen the other part of the day, during which he is at liberty to work gratis for the capitalist.” (p 304)

Once again, we see the same thing today, in relation to the raising of the retirement age. It is now 170 years since the working day was reduced to 10 hours. Yet, today, many workers still work an 8 hour day, and the Liberal-Tories, like the Blairites before them, object to the modest proposal of the EU to introduce a maximum 48 hour week!!! But, in that 170 years, the productivity of labour has risen by astronomical amounts. Each worker, today, produces, in each hour, many hundreds, if not thousands, times as many use values as they did in 1850. yet, despite that, and despite the fact, on that basis, that workers should be able to benefit by working fewer hours per day, fewer days per week, fewer weeks per year, and fewer years in their life, capital insists on making workers work both longer hours, and more years out of their life, to provide itself with more profits.

Thursday, 27 September 2012

Old But Not That Old!

I was watching the TV the other day and saw a BUPA advert for its Care Homes.  It features an old chap who tells us about all the things he has seen and done in his life, including "even won a medal in the War".  He goes on to tell us that he's now 83.  But, hold on a minute, just rewind there.  If he's 83, that means he was born in 1929, which means that when the War broke out in 1939, he was 10, and would only have been 16 when it ended in 1945.  So, how did he manage to win a medal?  Surely, he wouldn't even have been old enough even to have been in the War!

I've noticed this with quite a few things.  In fact, the Second World War is now so long ago, that although there are quite a few people still alive who can remember it from when they were kids, there are very few people relatively speaking alive who are old enough to have actually taken much of a part in it.  It ended 67 years ago, so unless you are in your late 80's, its unlikely you lived through much of it as an adult.  But, its not just in relation to the War.

A while ago, I was watching a documentary about the 1950's, and how people lived.  I grew up in the 1950's and 60's, an so can remember what it was like quite clearly.  I remember in the 1950's my mum doing the washing with a dolly peg, and dolly tub, and we had a scrubbing board, which like many other kids at the time I also used to use as a musical instrument, like the skiffle groups at the time used to do.  I remember having a bath every Sunday night in an old zinc bath in front of the fire in the living room.  I remember, by the 1960's, my mum upgrading to a gas washing machine, that still required a lot of manual effort both to agitate the washing in it, and to wring it through the attached mangle.  I also remember us upgrading from the zinc bath to a cast iron, roll top bath (that would be very classy today), that my dad rescued from the nearby farm that specialised in reclaiming stuff from demolition.  It was fitted into the back kitchen, but still had to be manually filled with hot water from a large gas boiler, because even by the time I left home in 1974, we still never had running hot water in the house.

I was watching this documentary where there were a number of people being interviewed, some of them minor celebrities from today, some of them not, most of them no older than me, many of them not as old, and yet they were talking about how THEY did the washing in these kinds of ways, and how great it was when they upgraded to an electric washer, obtained a fridge, a vaccum cleaner and so on.  But again, its different that I can remember all these things from that time, and what my mum had to do to do the washing and so on, and to confuse that with me doing it!

The same thing even happens with more recent times.  I've lost count of the number of programmes about the 1970's, I've watched that have been commented on, by various talking heads who either would not have been born at that time, or else were in short pants, but who talk about the pop music etc. of the time, as though they lived through it.

I suppose, it reflects as much as anything the fact that many of the people making the programmes, are themselves only young, and so, as I once thought when I was 16, everyone over 18 is old, and you gradually increase that evaluation, as you get older yourself.  My wife said the other day, she'd visited her mother, who is nearly 90, who had described the people who've just moved in across from her, as middle aged.  My wife reckons they are in their 70's!  So, I suppose, a 20 something film producer can be forgiven for thinking that anyone over 60 must have experienced every historical event of the twentieth century.

Wednesday, 26 September 2012

Capital I, Chapter 12 - Part 1

Production Of Relative Surplus Value

1) The Concept of Relative Surplus Value

Up to now, the analysis has assumed that the amount of Necessary Labour-time, required to reproduce Labour-power, was constant. The analysis began with an historical analysis of the length of the working day, which showed that its length was variable. The determination ultimately turns on the relative strength of Labour and Capital, which in turn depends on the demand for and supply of labour-power. Surplus labour-time is then the difference between the actual working day, and the amount of necessary labour-time.

When capital has developed to the stage whereby a normal working day is established, according to the objective laws Marx described in Chapter 10, it appears that the only way to expand the mass of surplus value is to increase the number of workers – or to increase the proportion of complex to simple labour – employed.

Cobden & Bright led the political struggle of the
industrialists against the landowners for the Repeal
of the Corn Laws, which kept food prices high, and
 thereby kept the Value of Labour-power high.
However, there is another means of increasing both the mass and rate of surplus value, that, in fact, is more effective than lengthening the working day. That is by reducing the proportion of the working day required as necessary labour-time. To be clear, this is not a question of simply cutting wages. Marx continues to insist that Labour-power, like every other commodity, is sold at its value. That value, as we have seen, is determined by the amount of socially necessary labour-time required for its reproduction. In the case of labour-power, that is the SNLT required to produce all of the food, shelter, clothing, education, entertainment and so on required to reproduce workers in the quantity, and to the standard that capital requires at the particular time. So, if the cost of producing these things can be reduced – whilst maintaining their quality – the value of labour-power falls. The proportion of the working day required as necessary labour-time falls, leaving a bigger proportion of the day as surplus labour-time.

Suppose the working day is 12 hours long. 10 hours are required as necessary labour-time, leaving 2 hours as surplus labour-time. Now, if the cost of producing the wage goods needed by the worker can be reduced by 10%, so that only 9 hours of the day are required as necessary labour-time, this will leave 3 hours as surplus labour-time, an increase of 50%! The rate of exploitation has gone from 2/10 = 20%, to 3/9 = 33.3%. Yet the worker is, in absolute terms, no worse off. They continue to consume the quantity and quality of commodities, that they did before. But, these commodities are now 10% cheaper, allowing capital to reduce nominal wages by 10%, whilst real wages stay constant. Of course, the worker is relatively worse off, because they are now handing over 3 hours of their labour-power to the capitalist for free, whereas before they were only handing over 2.

In fact, as Marx demonstrates, on this basis, real wages can and do rise, whilst the rate and amount of profit rises simultaneously. It was on this basis that Marx opposed the idea of immiseration of workers contained in Lassalle's “Iron Law of Wages”, and against which Marx commented, in the Critique Of The Gotha Programme Chapter 2,

It was made clear that the wage worker has permission to work for his own subsistence—that is, to live, only insofar as he works for a certain time gratis for the capitalist (and hence also for the latter's co-consumers of surplus value); that the whole capitalist system of production turns on the increase of this gratis labor by extending the working day, or by developing the productivity—that is, increasing the intensity or labor power, etc.; that, consequently, the system of wage labor is a system of slavery, and indeed of a slavery which becomes more severe in proportion as the social productive forces of labor develop, whether the worker receives better or worse payment. And after this understanding has gained more and more ground in our party, some return to Lassalle's dogma although they must have known that Lassalle did not know what wages were, but, following in the wake of the bourgeois economists, took the appearance for the essence of the matter.

It is as if, among slaves who have at last got behind the secret of slavery and broken out in rebellion, a slave still in thrall to obsolete notions were to inscribe on the program of the rebellion: Slavery must be abolished because the feeding of slaves in the system of slavery cannot exceed a certain low maximum!”

Marx calls the extraction of surplus value, by lengthening the working day, Absolute Surplus Value, and by reducing the value of labour power, Relative Surplus Value.

As stated above, this cannot be achieved simply by cutting wages.

This result, however, would be obtained only by lowering the wages of the labourer below the value of his labour-power. With the four shillings and sixpence which he produces in nine hours, he commands one-tenth less of the necessaries of life than before, and consequently the proper reproduction of his labour-power is crippled. The surplus-labour would in this case be prolonged only by an overstepping of its normal limits; its domain would be extended only by a usurpation of part of the domain of necessary labour-time. Despite the important part which this method plays in actual practice, we are excluded from considering it in this place, by our assumption, that all commodities, including labour-power, are bought and sold at their full value. Granted this, it follows that the labour-time necessary for the production of labour-power, or for the reproduction of its value, cannot be lessened by a fall in the labourer’s wages below the value of his labour-power, but only by a fall in this value itself.” (p 297-8)

This reduction in value requires an increase in the productivity of labour.

For example, suppose a shoe-maker, with given tools, makes in one working day of twelve hours, one pair of boots. If he must make two pairs in the same time, the productiveness of his labour must be doubled; and this cannot be done, except by an alteration in his tools or in his mode of working, or in both. Hence, the conditions of production, i.e., his mode of production, and the labour-process itself, must be revolutionised. By increase in the productiveness of labour, we mean, generally, an alteration in the labour-process, of such a kind as to shorten the labour-time socially necessary for the production of a commodity, and to endow a given quantity of labour with the power of producing a greater quantity of use-value. Hitherto in treating of surplus-value, arising from a simple prolongation of the working day, we have assumed the mode of production to be given and invariable. But when surplus-value has to be produced by the conversion of necessary labour into surplus-labour, it by no means suffices for capital to take over the labour-process in the form under which it has been historically handed down, and then simply to prolong the duration of that process. The technical and social conditions of the process, and consequently the very mode of production must be revolutionised, before the productiveness of labour can be increased. By that means alone can the value of labour-power be made to sink, and the portion of the working day necessary for the reproduction of that value, be shortened.” (p 298-9)

In order for this improvement in productivity to reduce the value of labour power it must reduce the value of wage goods. But, that does not mean just a rise in productivity in these industries will have this effect. For example, productivity in shoe making might remain constant, but if productivity in leather production rises, the cost of the leather in shoes will fall, bringing about a fall in the value of shoes themselves.

Marx says,

But the value of a commodity is determined, not only by the quantity of labour which the labourer directly bestows upon that commodity, but also by the labour contained in the means of production. For instance, the value of a pair of boots depends not only on the cobbler’s labour, but also on the value of the leather, wax, thread, &c. Hence, a fall in the value of labour-power is also brought about by an increase in the productiveness of labour, and by a corresponding cheapening of commodities in those industries which supply the instruments of labour and the raw material, that form the material elements of the constant capital required for producing the necessaries of life. But an increase in the productiveness of labour in those branches of industry which supply neither the necessaries of life, nor the means of production for such necessaries, leaves the value of labour-power undisturbed.” (p 299)

If the value of one commodity, that forms part of the workers' consumption, falls, then this can only reduce the value of labour power in proportion to the significance of that commodity in relation to the workers' total consumption. For example, suppose the necessary labour-time amounts to 10 hours. Of that 1 hour is required to cover the purchase of clothing. If productivity in clothing production doubles, so that only 1/2 hour is now required, this only reduces necessary labour-time from 10 hours to 9.5 hours, a fall of 5%. However, if 5 hours are required to cover food, and the cost of food is halved, then only 2.5 hours are required, which brings about a 25% reduction in the value of labour-power.

This reduction in the value of labour-power does not reduce the value of other commodities. The labour-time required for their production remains the same. It is only the labour-time required to reproduce labour-power -the necessary labour-time – that falls, and it is this consequence that, thereby, increases the amount and rate of surplus value.

This general result is treated, here, as if it were the immediate result directly aimed at in each individual case. Whenever an individual capitalist cheapens shirts, for instance, by increasing the productiveness of labour he by no means necessarily aims at reducing the value of labour-power and shortening, pro tanto the necessary labour-time. But it is only in so far as he ultimately contributes to this result, that he assists in raising the general rate of surplus-value. The general and necessary tendencies of capital must be distinguished from their forms of manifestation.” (p 299-300)

Marx makes an important point in relation to where his completed work would have taken him, in analysing competition, and how this was manifest in the subjective decisions of capitalists. Of course, he did not live to complete that work. He writes,

It is not our intention to consider, here, the way in which the laws, immanent in capitalist production, manifest themselves in the movements of individual masses of capital, where they assert themselves as coercive laws of competition, and are brought home to the mind and consciousness of the individual capitalist as the directing motives of his operations. But this much is clear; a scientific analysis of competition is not possible, before we have a conception of the inner nature of capital, just as the apparent motions of the heavenly bodies are not intelligible to any but him, who is acquainted with their real motions, motions which are not directly perceptible by the senses.” (p 300)

Tuesday, 25 September 2012

Liberal Death Rattle

The noises, out of the Liberal Conference, this week, sound like its death rattle. The Party is, to all intents and purposes, already dead, maintained only by the life support system, provided to it by the Tories, and by a compliant press and media that continues to treat the Liberals as though they were a separate party from the Tories, to allow them representatives alongside Tories and Labour in interviews etc. But, in reality the Liberals and Tories are now one party. Liberal spokesmen this week have even proclaimed that it has been Liberal manifesto commitments that have been implemented by the Liberal-Tory Government, more than Tory commitments. So, it is clear who is to blame then for all of the austerity and misery, and incompetence of the last two years – it is the Liberals to a greater degree than the Tories!

Two years ago, when the Liberals entered the coalition with the Tories, I said that it was like them committing Hari Kiri. So it has been. I said it was long overdue, and would benefit Labour. So it has been. Very quickly, the facade of Liberal opportunism, which allowed them to face both ways, at the same time, in order to pick up votes, was exposed. The true nature of the Liberals was exposed along with it, as they scrambled for ministerial posts and limousines. Their opposition to austerity, held to even into the coalition negotiations, was quickly dropped, and the Orange Book Liberals, like David Laws, were distinguished from their Tory partners only by their even more overt free market positions. What few principles the Liberals might have had were quickly dropped, as was their almost sworn in blood pledge to vote against any increase in Tuition Fees. They have conceded position after position on everything that mattered to the Tories, whilst acting as loyal foot soldiers for the Tories on everything that did matter.

Not surprisingly, as I predicted, all those middle class radical votes, they had picked up on the back of their social liberal faced politics, disappeared, either to Labour, or to abstention. The opportunist politics of the Liberals had led them to adopt the persona of a radical alternative to Labour, where Labour was strong. On the back of that, they not only picked up votes from middle -class radicals, but a lot of their members came from this milieu too, not infrequently from ex-members of far left organisations. Those members disappeared just as quickly. Labour picked up many of these activists.

Liberals return To Benthamite
So, the dichotomy within the Liberals, which was the material foundation of that opportunism, the division between traditional Free Market Liberalism, and Social Democratic, Social Liberalism, was resolved in the only way it could be in a coalition with the Tories; in favour of the former. The dichotomy only now exists in a shadow form, largely for the purposes of trying to provide some kind of distinction from the Tories for the sake of appearances. So, for example, Liberal spokesmen like Vince Cable, and even Clegg have come out over the weekend with calls for increased taxes on the rich. In fact, there is nothing particularly radical about such proposals. As Marx pointed out, arguing against the Lassalleans in his, Critique Of The Gotha Programme,

Taxes are the economic basis of the government machinery and of nothing else. In the state of the future, existing in Switzerland, this demand has been pretty well fulfilled. Income tax presupposes various sources of income of the various social classes, and hence capitalist society. It is, therefore, nothing remarkable that the Liverpool financial reformers — bourgeois headed by Gladstone's brother — are putting forward the same demand as the program.”

Its not radical for the reason Marx was alluding to here. The distribution of income and wealth is a function of the mode of production, and so long as the means of production are in the hands of a tiny few, the majority of income and wealth will continue to flow to them, whatever measures are taken in regards to tax. As Marx put it in the above,

Any distribution whatever of the means of consumption is only a consequence of the distribution of the conditions of production themselves. The latter distribution, however, is a feature of the mode of production itself. The capitalist mode of production, for example, rests on the fact that the material conditions of production are in the hands of nonworkers in the form of property in capital and land, while the masses are only owners of the personal condition of production, of labor power. If the elements of production are so distributed, then the present-day distribution of the means of consumption results automatically. If the material conditions of production are the co-operative property of the workers themselves, then there likewise results a distribution of the means of consumption different from the present one. Vulgar socialism (and from it in turn a section of the democrats) has taken over from the bourgeois economists the consideration and treatment of distribution as independent of the mode of production and hence the presentation of socialism as turning principally on distribution.”

Whether it is by tax avoidance, or other means any attempt to redistribute wealth via the tax system under capitalism is doomed, which is why in more than a century of trying to do it, the gap between rich and poor, affluent and deprived in Britain has widened rather than shrunk. But, Clegg and Cable know that the chance of getting this Cabinet of millionaires and Public School toffs, who see the rest of society merely as a bunch of plebs, to introduce any measures that seriously tax their kind are none existent. On the contrary, it is the Tories who persuaded the Liberals to vote through the cut in the top rate of tax, and at the same time to impose a massive increase in the tax burden on the rest of society via the more than 10% increase in VAT!

And, when questioned, the Liberal-Tories like Laws, have admitted that what they are really saying is not that they want the tax on the rich to be increased rather than further attacks on the welfare benefits of the poorest in society, but that they want some increased taxes on the rich as a condition for voting for even more cuts on welfare benefits! In other words, what they are after is not some relief for the poorest in society, but some relief for their electoral fortunes, by being able to claim that they won some minor concession from the Tories!

But, this just shows what a hopeless position the Liberals are now in. They have lost the votes of the radical middle class won by virtue of their duplicitous behaviour over the years in pretending that they were some kind of radical alternative to Labour. Those votes, and most of those members are not coming back. So, logically, the Liberals should then concentrate on securing the votes of the real Liberal supporters, the traditional free market Liberals, and Libertarians. But, they cannot do that, because the Tories have already shot that fox. The only way the Liberals can differentiate themselves from the Tories is by harking back to the social Liberalism, which they abandoned in going into coalition with the Tories in the first place! That is the meaning of Cable and Clegg's calls for taxes on the rich. It is meaningless chatter.

Moreover, the fact that it is meaningless chatter was exposed in the Conference itself. The extent to which the party has been denuded of its radical, social Liberal base was illustrated in the debate and vote over the motion attacking the Government's economic policy and calling for a Plan B. The party leaders opposed it, and the vote against it was crushing. The Orange Book, Free Market Liberals whose traditions hark back to all the worst aspects of the 19th Century, are clearly in the ascendancy in the Liberal Party, and necessarily so. It could have been no other way, once they went into coalition with the Tories, and sent themselves on an inevitable course either to oblivion, or else to simply being absorbed into the Tories themselves. Either way, it means the Liberals are dead as an independent party.

But, as I also pointed out in my post Time For Labour To Euthenise The Liberals the last thing that Labour should be doing is to provide the Liberals with any kind of lifeline. The establishment of the SDP in the 1980's, and their alliance with the Liberals tore the Labour Party in two. It did so because it split the Labour vote, and provided the right inside the LP with an opportunity to argue the need for moving to the centre so as not to lose votes. If the Liberals are destroyed, the potential for that happening again is destroyed with it. Instead, today it is the Tories that have that problem. On the one hand, for now, they need to keep the Liberal leaders as part of the coalition, because if it breaks, they will lose an election. On the other, any sign that they are making concessions to the Liberals angers the Tory Right, some of whom are already dallying with UKIP, who have moved above the Liberals in the opinion polls.

In fact, rather than holding out any olive branch to the Liberals, Labour should tack to the Left in order to heighten the problems for the Tories. If Labour makes a tactical shift slightly to the Left, it will put pressure on the Liberals to do likewise for their own opportunist, electoral reasons. That will put further strain on Cameron, and his relations with the Tory Right. If Labour are lucky it might even cause a split from the Tories towards UKIP, which would seriously split the right of centre vote, and provide Labour with a shoe in at the next election. Labour are already way ahead in the polls, so there is no reason for them to provide any kind of concessions to the Liberals, just to pick up a few MP's support. In any case, the Liberals are now so toxic in politics, that were Labour to in any way associate with them, they would poison themselves.

The Liberals chatter this week, from Cable about British voters only voting for Coalitions in future is nonsense. On present standings Labour should win an outright majority. Cable's pronouncements are merely a last gasp hope, and an attempt to suggest that he would be prepared to form a coalition with Labour after the next election, were he Liberal leader. Just as Boris Johnson is the Crapulinski in the wings of the Tory Party, waiting for the demise of Cameron, so Cable is waiting in the wings for the demise of Clegg. Such is the nature of bourgeois electoral politics, which revolves around the personal interests and fortunes of a few elected politicians rather than the fate of the millions of others of us plebs.

Monday, 24 September 2012

Capital I, Chapter 11 - Part 2

Capital is divided into Constant and Variable Capital as analysed in previous chapters. The proportions between them vary in different types of production. For example, modern car production uses a lot of Constant Capital in the form of buildings, robots, assembly areas, materials and so on, and relatively little in the way of Variable Capital. Apple and other high tech producers use relatively little in the way of Constant Capital, but use relatively large amounts of Variable Capital – lots of developers, analysts, programmers, designers etc – and because these types of labour are highly complex, each hour of their labour-time is equivalent to many hours of simple labour. Put another way, each average worker employed by Apple and other such high tech, high value company is equivalent to many simple labourers.

In addition, even in the same branch of production, the proportion between Constant and Variable Capital varies because technical change occurs, which means that what were once labour intensive types of production become capital intensive instead. At one time, economies employed around 80% of people in agriculture. In Britain today, just 0.7% of the population is employed in Agriculture. Yet, agricultural production is much higher in Britain today than it was prior to the Industrial Revolution. Similarly, in the 19th Century, most of these agricultural workers moved to become employed in manufacturing. That was a process, which the Malthusians argued must end in disaster. Of course, it did not, because agricultural production increased astronomically, in part because of the introduction of capital equipment, and chemicals produced by manufacturing industry. But again, in manufacturing Capital replaced Labour, so that now in Britain only 21.4% of the population is employed in manufacturing, but again the value of manufacturing output is higher than it was! Today, 78% of the population are employed in Services, and once again, Capital is replacing Labour in all of these areas too.

But in whatever proportion a given capital breaks up into a constant and a variable part, whether the latter is to the former as 1:2 or 1:10 or 1:x, the law just laid down is not affected by this. For, according to our previous analysis, the value of the constant capital reappears in the value of the product, but does not enter into the newly produced value, the newly created value product. To employ 1,000 spinners, more raw material, spindles, &c., are, of course, required, than to employ 100. The value of these additional means of production however may rise, fall, remain unaltered, be large or small; it has no influence on the process of creation of surplus value by means of the labour-powers that put them in motion. The law demonstrated above now, therefore, takes this form: the masses of value and of surplus value produced by different capitals — the value of labour-power being given and its degree of exploitation being equal — vary directly as the amounts of the variable constituents of these capitals, i.e., as their constituents transformed into living labour-power.” (p 290)

This appears to contradict all experience.

Everyone knows that a cotton spinner, who, reckoning the percentage on the whole of his applied capital, employs much constant and little variable capital, does not, on account of this, pocket less profit or surplus value than a baker, who relatively sets in motion much variable and little constant capital. For the solution of this apparent contradiction, many intermediate terms are as yet wanted, as from the standpoint of elementary algebra many intermediate terms are wanted to understand that 0/0 may represent an actual magnitude.” (p 290)

What Marx is referring to here is that Capitals of equal magnitude tend to obtain the same rate, and consequently amount of profit, irrespective of how much Variable Capital they employ. The resolution of this apparent paradox is provided in Volume III of Capital, where Marx demonstrates that competition acts to share out the total amount of Surplus Value between these different Capitals, and in the process establishes “Prices of Production” separate from Exchange Values, which then take the place of the latter, as the pivot around which market prices fluctuate. This is the so called “Transformation Problem.”

If we take the total number of workers in a country and a given length of working day, then these workers can be considered as a single collective worker, and their labour as a single collective work day. So, if there are 1 million workers, and a 10 hour day we have a collective 10 million hour day. If we assume that all labour is simple labour, then this limit is set by the growth of population, and the amount of surplus value, by this and the possible lengthening of the working day. As Marx says in examining Relative Surplus Value, it will be seen that this is not exactly true.

I would again point out here that this also only applies in relation to simple labour. As I demonstrated in my Reply To Dr. Paul Cockshott the population could be falling, but if via education, training etc. and consequent changes in the nature of production and consumption, simple labour is replaced by complex labour, then the collective working day and collective surplus value can rise, and possibly rise substantially. For example,

1 million simple labours working 10 hours = A collective working day of 10 million hours.

10,000 David Beckham's working 10 hours = A collective working day of 100 million hours, if each Beckham hour = 1000 hours of simple labour.

Not all money or value can be turned into Capital. If a worker needs to work 8 hours to reproduce the value of their labour power, and also works 4 hours producing surplus value, the capitalist, to live only as well as the worker, off this surplus value, would have to employ 2 workers i.e. 2 x 4 hours surplus value = 8 hours necessary labour time, to buy those necessities. But, capital needs to expand not just feed the capitalist.

So, to live twice as well as a worker, and convert half the surplus value into capital, the capitalist would have to increase the minimum amount of capital employed 8 times. That is not just the amount required to employ 8 workers, but also to provide them with the necessary amount of constant capital. The capitalist could, and they did work themselves.

..but he is then only a hybrid between capitalist and labourer, a “small master.” A certain stage of capitalist production necessitates that the capitalist be able to devote the whole of the time during which he functions as a capitalist, i.e., as personified capital, to the appropriation and therefore control of the labour of others, and to the selling of the products of this labour.The guilds of the middle ages therefore tried to prevent by force the transformation of the master of a trade into a capitalist, by limiting the number of labourers that could be employed by one master within a very small maximum. The possessor of money or commodities actually turns into a capitalist in such cases only where the minimum sum advanced for production greatly exceeds the maximum of the middle ages. Here, as in natural science, is shown the correctness of the law discovered by Hegel (in his “Logic”), that merely quantitative differences beyond a certain point pass into qualitative changes." (p 292)

Marx elaborates a principle that applies today.

The minimum of the sum of value that the individual possessor of money or commodities must command, in order to metamorphose himself into a capitalist, changes with the different stages of development of capitalist production, and is at given stages different in different spheres of production, according to their special and technical conditions. Certain spheres of production demand, even at the very outset of capitalist production, a minimum of capital that is not as yet found in the hands of single individuals. This gives rise partly to state subsidies to private persons, as in France in the time of Clobber, and as in many German states up to our own epoch, partly to the formation of societies with legal monopoly for the exploitation of certain branches of industry and commerce, the forerunners of our modern joint stock companies." (p 293)

This is relevant today in a number of aspects. For example, we see in many established industries high barriers to entry due to the minimum amount of capital required. Its impossible to enter mass car production without hundreds of millions of pounds of capital for instance. On the other hand, Microsoft began in Bill Gates' parents garage. Similarly, many areas of production would not start without state support, or the state taking them on. For example, there would have been no space industry without the US and Soviet states engaging in that activity.

Capital further developed into a coercive relation, which compels the working class to do more work than the narrow round of its own life-wants prescribes. As a producer of the activity of others, as a pumper-out of surplus labour and exploiter of labour-power, it surpasses in energy, disregard of bounds, recklessness and efficiency, all earlier systems of production based on directly compulsory labour.

At first, capital subordinates labour on the basis of the technical conditions in which it historically finds it. It does not, therefore, change immediately the mode of production. The production of surplus value — in the form hitherto considered by us — by means of simple extension of the working day, proved, therefore, to be independent of any change in the mode of production itself. It was not less active in the old-fashioned bakeries than in the modern cotton factories.” (p 293)

Capitalist production and the production of surplus value changes the relation of the worker to the means of production. Outside Capitalism, the worker utilises the means of production to achieve his goal, the creation of some new Use value. He does not relate to them as Capital, but merely as a means to an end, means of production.

But, under Capitalism, the worker relates to them as capital. Now, the means of production are the means of absorbing the workers' labour, in order to create value and surplus value. Instead of the worker employing the means of production to achieve his end, of creating a new Use Value, the means of production (Capital) employs the worker to achieve its end of creating Exchange Value, and Surplus Value.

It is now no longer the labourer that employs the means of production, but the means of production that employ the labourer. Instead of being consumed by him as material elements of his productive activity, they consume him as the ferment necessary to their own life-process, and the life-process of capital consists only in its movement as value constantly expanding, constantly multiplying itself. Furnaces and workshops that stand idle by night, and absorb no living labour, are “a mere loss” to the capitalist. Hence, furnaces and workshops constitute lawful claims upon the night-labour of the work-people. The simple transformation of money into the material factors of the process of production, into means of production, transforms the latter into a title and a right to the labour and surplus labour of others.” (p 293-4)

Sunday, 23 September 2012

Liberals Plan To Pauperise Parents and Grandparents

On Sunday's, Andrew Marr programme, Nick Clegg set out his plans for pauperising parents and grandparents. Faced with massively inflated house prices, the bubble in which must burst at some time, Clegg, rather than proposing to deal with Britain's housing problem, by announcing plans for massive house building, for measures against speculation and so on, instead proposed to boost debt levels even further, and to get parents and grandparents to assume responsibility for that debt, by placing their Pension Funds and other savings at risk, by using them as collateral for their children's mortgages on massively overvalued property!

This is from a Liberal-Tory Government, which continually says that its draconian austerity measures are necessary because you cannot solve a debt problem through more debt! But, in fact, Governments can solve debt problems through more debt, because they can legally print money, and provided they use the additional debt to invest in improving productive capacity, and competitiveness, the additional income will repay the debt. Moreover, Government Debt is only around £1 Trillion – not high by previous standards when it rose to 250% of GDP – whereas, Private Debt already stands at £2 Trillion.

But, in fact, despite its mantra this is a Government whose solution for most things seems to be additional debt. They complain, for example, that Banks are not lending enough to individuals, and small firms. They have put thousands of students in the position of starting life in massive debt, because of the increase in Tuition Fees, and the need to pay for them, and other living expenses by taking on massive amounts of Student Debt. Now, they want to pauperise those workers who have managed to build up a modicum of savings over their lifetime, by getting them to underwrite mortgages on properties whose values must before too long fall way below those mortgages.

In the period of the post war Long Wave Boom, the relative shortage of labour allowed some workers to save enough money to buy a house. Many were able to build up small company pensions – though the value of those was already hit badly due to the Stock Market Crash that followed on the credit fuelled stock market bubble created by Thatcher and Reagan. Some were able to build up an amount of savings. Already, the policies of the Liberal-Tory Government have begun to eat into that buffer. The Stock Market Crash of 2000, was followed by the Financial Meltdown of 2008. That has undermined many Pension valuations, and money that people might have saved in PEP's and ISA's. Where people played it safe, as they thought, and put their money into a simple Bank Deposit account, they find that as a result of the policies pursued by the Government and Bank of England, they are receiving next to no interest on their money, whilst inflation has way outstripped it, for the last 5 years. For the same reason, had they put their money into Bonds, the yield they are able to obtain on them, is negligible. At the same time, and for the same reason, anyone who has built up a Pension pot, finds that with current Annuity Rates, their pension will be a fraction of what they anticipated.

But, not satisfied with screwing people in that way, now the Liberals want to get their hands on what is left of older people's savings and assets. The reason the Liberals are putting forward this proposal is clear. Along with the Tory wing of the Liberal-Tory Party, they have sought to screw more Absolute Surplus Value out of people by extending the Working Life, increasing the State Retirement Age. But, some people who have managed to build up savings of one sort or another may still be able to retire at their expected age, because with the erosion of the State Pension, what they lose might be small compared to their company pension. The Liberal-Tories need to erode any independent means of support that workers might have. They need to do that for a further reason in respect of housing.
In the US, when house prices fell by around 75%, many people who had recently taken out mortgages, simply walked away from the property, and the debt, leaving it with the banks who had recklessly lent money. That is the last thing the Liberal-Tories want to see happen. On any metric, UK house prices are in a massive bubble. To get back to any of the historic averages, they need to fall by 50%, and whenever such a correction occurs, they always overshoot. UK house prices should, and at some point will fall by around 75%-80%. The Liberal-Tories along with the Bank of England, are pulling out all the stops to prevent that, but all they can do is delay it, and make it worse when it does happen.

They are trying to prevent it, not because of any concern for house buyers – if they had a concern for house buyers then as I pointed out in my post An Answer To James Bevan's Question they would be doing everything they could to reduce house prices – but out of concern for the banks who will go bust when all of that private debt goes bad. If the Liberal-Tories really wanted to help house buyers, and others seeking shelter, they would announce a massive Council House building programme; they would scrap the Green Belt, which protects the large landowners, and keeps land prices artificially high; they would introduce punitive taxation on empty homes; and they would stop the money printing designed to prop up the banks.

But, by getting parents and grandparents to underwrite the unaffordable mortgages on over priced property of their children, the Liberal-Tories provide another line of defence for the Banks. If house prices crash by 80%, the majority of home owners, and home buyers will not be adversely affected, as I set out in the blog above. In fact, many, looking to move to a better house, would benefit considerably from lower prices. Only those who have taken out mortgages in the last 10-15 years are likely to be adversely affected, the worst affected being those that took out mortgages in the last 5-10 years. But, for this minority, as happened in the US, the best thing to do would be to simply walk away from the property, and hand the keys back to the bank along with the debt. The Liberal-Tories want to avoid that.

What the Liberal proposal, put forward this morning by Clegg amounts to is that they want parents and grandparents to keep the bloated property prices inflated for a while longer. Then, when the crash comes, the fact that parents and grandparents have sunk their own savings into these properties means that the banks losses are reduced. The banks unable to get their money back from the children, who took out the unaffordable mortgages on the inflated property, will instead take it off their parents and grandparents! That will put pressure on the kids not to default, not to walk away from the property, and thereby to turn themselves and their parents and grandparents into debt slaves.

That is exactly the condition that Capital needs them to be in so that it can exploit them as wage slaves to the maximum, including forcing them to work well into old age. Workers should not trust Clegg and the Liberal-Tories in this as in anything else. Simply saying you are sorry after the event is not enough.