Saturday, 29 November 2014

Black Friday

A 24 hour news media needs to have crazes and events as stories to justify its existence.  Yesterday's was "Black Friday".  In fact, like other artificially created crazes such as "Trick or Treating", it has been imported from the US.  But, even in the US, "Black Friday" always meant something different, to what the media currently present.

The origin of Black Friday is that it was the point in the year where retailers accumulated income exceeded their costs.  In other words, it was the point where their profit and loss account went into the black - hence Black Friday.  Of course, even that is a bit false, and reminiscent of the claims of capitalists and their apologists in the 19th century in respect of what Marx termed "Senior's Last Hour".

The economist, Nassau Senior, presented the argument on behalf of industrialists against the introduction of the ten hour day.   As set out in the link above, the basic argument was that during most of the day production was only creating sufficient potential revenue to cover costs, so that it was only during the last hour of the day that workers were creating additional value, that enabled the capitalist to make profits.  Reduce the working day, the argument went, and the capitalist would be able to make no profits.  The argument was, of course, nonsense, as Marx demonstrates, and as Marx himself says, to be fair to Senior, he later rejected the argument as false.

In reality, each commodity unit produced and sold comprises its own fraction of surplus value, created by the workers.  However, there is an element of truth in the argument if the difference between fixed and variable costs are taken into account.  Every business has some fixed costs to cover things such as the purchase or rent of a building, the cost of heating and lighting and so on, which it has to pay no matter how much it is producing or selling.  That is in contrast to its variable costs which increase as the amount it produces or sells rise.  A firm that produces commodities will pay more for materials and labour-power, if it produces more commodities.  A retailer will pay more for the stock it buys, and possibly for the wages it has to pay, the more commodities it sells.

As a result, in order to cover these fixed costs, there is a minimum quantity of commodities that must be sold, before a firm starts to make profits.  The break-even point.  After that point, assuming the firm's revenue is greater than its variable costs, all of the revenue above the variable costs adds to its profits.  That was the origin of Black Friday, and nothing to do with give away sales.  The give away sales essentially arose, because Black Friday comes the day after the big US Thanksgiving Holiday, which is the start of the Christmas Holiday season.

It is perhaps no surprise then that, the UK has also started marking Thanksgiving, even though the history of that festival is purely specific to the US.

But, perhaps there is another reason to denote yesterday as Black Friday.  According to news reports, a number of people in the UK were injured in scrambles to obtain "Black Friday" sale bargains.  Such occurrences are not unusual in the US.  Perhaps we should denote it as Black Friday also because it denotes the willingness of people to scramble over other human beings in order to gamble on being able to make some minor financial gain for themselves.  All that was missing to complete the picture was that all those who had clawed their way over the mangled bodies of their fellow human beings, in order to get to the ephemera, should carry off their prizes in white vans festooned in the flag of St. George!

It affirms Chomsky's point about neo-liberalism.

"Instead of citizens, it produces consumers. Instead of communities, it produces shopping malls. The net result is an atomized society of disengaged individuals who feel demoralized and socially powerless." 

(Profit Over People: Neoliberalism & Global Order - Noam Chomsky)

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