Sunday, 30 April 2017

Social-Democracy, Bonapartism and Permanent Revolution Chapter 11 – Results and Prospects (3)

Chapter 11 – Results and Prospects

Part 3

In the 17th century, in England, feudal production was dominant. Around 80% of the population was still employed in agricultural peasant production. But, a merchant class, in the towns and cities, was growing rapidly, and becoming economically and socially powerful; in terms of foreign ventures, the existing ruling class looked to it as a partner in developing colonial empires, and to finance its activities; and capitalist production was taking hold in agriculture itself. The bourgeois ideas that flowed from this, and the ability of this rising bourgeois class to mobilise the peasantry behind them is what determined the dominant economic and social power that challenged for state power in the English Civil War.

And, despite the fact that capitalist production still was not dominant, by the end of the 17th century, this bourgeois economic and social power was, by that time, dominant enough to provide the ruling ideas of society that flowed through its institutions, such as the universities, which then determined the consciousness of all those functionaries of the state itself. Its supremacy, and control of the state is signified by Locke's Second Treatise on Government, and practically by the Glorious Revolution. Yet, despite the bourgeoisie being the controlling economic and social power, and state power being in their hands, they were still not the controlling governmental power. The parliament, and thereby the government was still firmly in the grip of the old landed aristocracy.

Even at the start of the 19th century, only 2% of the population, in Britain, had the vote, and that is why, at events such as the Peterloo Massacre, the crowds comprised not just urban workers, but also the urban bourgeoisie. Only in 1832, with the Second Reform Act, does the bourgeoisie, as a whole, exert its influence, and only after 1848, does the industrial bourgeoisie, with the backing of the urban proletariat, exert its specific political power.

The Reform Bill of 1831 had been the victory of the whole capitalist class over the landed aristocracy. The repeal of the Corn Laws was the victory of the manufacturing capitalist not only over the landed aristocracy, but over those sections of capitalists, too, whose interests were more or less bound up with the landed interest-bankers, stockjobbers, fundholders, etc....

Chartism was dying out. The revival of commercial prosperity, natural after the revulsion of 1847 had spent itself, was put down altogether to the credit of Free Trade. Both these circumstances had turned the English working class, politically, into the tail of the ‘great Liberal Party’, the party led by the manufacturers. This advantage, once gained, had to be perpetuated. And the manufacturing capitalists, from the Chartist opposition, not to Free Trade, but to the transformation of Free Trade into the one vital national question, had learnt, and were learning more and more, that the middle class can never obtain full social and political power over the nation except by the help of the working class.”


The state power flows from the economic and social power, which is its base. The state power is objectively driven to defend and extend the dominant economic and social relations, because it is on them that the existence of the state itself depends. And, it is that objective reality, which conditions the ideology of the state. Yet, a process of combined and uneven development is also at play here.

In his Preface to Capital I, Marx discusses the development of ideas, in this context, and in particular, the development of political economy in Germany. Even whilst capitalist production was in its infancy, in Germany, German political economy was able to skip over the stages of development, on the back of the development of political economy in France and England, where capitalist production was more advanced.

Intrinsically, it is not a question of the higher or lower degree of development of the social antagonisms that result from the natural laws of capitalist production. It is a question of these laws themselves, of these tendencies working with iron necessity towards inevitable results. The country that is more developed industrially only shows, to the less developed, the image of its own future.

But apart from this. Where capitalist production is fully naturalised among the Germans (for instance, in the factories proper) the condition of things is much worse than in England, because the counterpoise of the Factory Acts is wanting. In all other spheres, we, like all the rest of Continental Western Europe, suffer not only from the development of capitalist production, but also from the incompleteness of that development. Alongside the modern evils, a whole series of inherited evils oppress us, arising from the passive survival of antiquated modes of production, with their inevitable train of social and political anachronisms. We suffer not only from the living, but from the dead. Le mort saisit le vif! [The dead holds the living in his grasp. – formula of French common law]

It is also in this vein that such societies find that they must catch up, and as Marx says they then suffer the iniquities of capitalism, and from its inadequate development. Lenin makes the same point about the development of capitalism in Russia that they were suffering not just from capitalism but also from not enough capitalism.

And from these principles it follows that the idea of seeking salvation for the working class in anything save the further development of capitalism is reactionary. In countries like Russia, the working class suffers not so much from capitalism as from the insufficient development of capitalism. The working class is therefore decidedly interested in the broadest, freest and most rapid development of capitalism. The removal of all the remnants of the old order which are hampering the broad, free and rapid development of capitalism is of decided advantage to the working class.”


When the economic and social power in society is balanced or generally weak, this creates the conditions in which the state power itself can rise up, above society, and exert its influence. It is why conditions of dual power cannot last for long without one side or the other taking control. In such conditions, the state power becomes fused with the governmental power, usually via some kind of coup – Cromwell's dissolution of parliament, Bonaparte's coup, Lenin's dissolution of the Constituent Assembly and so on.  All were the result of premature political revolutions, which arose before the revolutionary class, and the economic and social relations upon which it is based, were sufficiently developed, i.e. prior to the completion of the social revolution.

The economic and social power may be balanced because a new revolutionary class has become strong and exerted its influence – as with the bourgeoisie under Mercantilism, leading to the English Civil War. It may be weak for a variety of reasons. The society may be riven with a variety of other cleavages. As with the situation in 1917, in Russia, a weak bourgeoisie, dependent on the peasantry, may itself be overthrown, by a tiny and weak proletariat, itself relying on a Peasant War, to achieve its goals. The working-class in such a situation, being entirely feeble, becomes the ruling economic and social class effectively by default, as the material foundations of the other classes – landlords and bourgeoisie - are torn up, along with the economic and social relations that flow from them.


Theories of Surplus Value, Part I, Chapter 4 - Part 55

Marx says, if 10 workers work a 12 hour day with 10 hours required as necessary labour, and 2 hours surplus labour, the value produced is 120 and the capitalist obtains 20, or a sixth. If 5 workers work a 12 hour day, of which 6 hours is necessary labour, they will produce a total value equal to 60, of which 30, or half goes to surplus value.

“The total surplus-value too would have risen, namely from 20 to 30, by 1/3. When I appropriate one-half of 60 days, this is one-third more than when I appropriate one-sixth of 120 days.” (p 216)

There is again a minor error here, as 30 is 50% more than 20, not a third larger, as Marx states. Of course, this depends upon the conditions described above. For any one industry, this rise in productivity would simply reduce the value of the output, so that a greater quantity of it would have to be sold to replace the workers wages. Marx assumes that only the same quantity of output need be produced to reproduce the labour, without taking into consideration the inevitable fall in the value of the output.

He is right that,

“Moreover, the one-half of the total product that the capitalist gets is also greater in quantity than before. For 6 hours now produce as much product as 10 did before; 1 [hour] as much as ten-sixths of an hour [before], or 1 as much as 1 4/6=1 2/3, So the 30 surplus hours contain as much product as did previously 30 (1+2/3) = 30 + 60/3 = 50. 6 hours produce as much product as 10 did previously, that is, 30—or 5×6—produce as much as 5×10 did before.” (p 216)

provided we assume that this rise in productivity causes a proportional drop in the value of labour-power. But, if the rise in productivity is restricted to this one industry, with no effect on the value of labour-power, although the capitalist will obtain a larger surplus product, this will not translate into greater surplus value.

The fall in value of the commodity will simply mean that a greater quantity of output will have to be sold to reproduce the value of wages and surplus value.

“The surplus-value can even rise without the quantity of the total product being increased.” (p 216)

I've shown above that this can be the case for any individual industry anyway, but Marx has in mind the situation in respect of production as a whole. The basis of this rise in surplus value is an increase in relative surplus value. So, a rise in productivity in the production of wage goods means that the physical products required to reproduce the workers labour-power can be produced in less time, so the amount of surplus labour-time rises.

But, its hard to see under what conditions this would occur without the total product rising in quantity. Suppose 1000 commodity units are required to reproduce labour-power, and these are currently produced in 5 hours of a working day, with another 1000 surplus units being produced in the other 5 hours of the working day. If productivity rises by 20%, the 1000 units required for workers consumption will be produced in 4 hours, equal to 250 units per hour. But, with a 10 hour day, that means that 2500 units will be produced – an increase of 25%. Total output would only remain constant at 2000 units, if the number of workers employed fell.

But, in that case, the actual amount required as variable capital would fall further because less physical product would also be required to reproduce the employed labour-power. If previously 100 workers were employed, now only 75 will be required. Previously, each worker consumed 10 units, making 1000 units in total, and now only 750 units are required to meet the workers needs.

If 100 workers produce 250 units per hour, 75 workers produce 187.5 units per hour. The 750 units they require being produced in 4 hours, and a further 1250 surplus units being produced in the remaining 6 hours of the day. But, there are various reasons why this does not usually happen. Firstly, businesses usually are interested in increasing output, not simply producing the same output with fewer workers. It is expansion of output that facilitates other economies of scale, as well as being the means by which firms grab larger market share.

They usually introduce new, more efficient equipment as additional investment in fixed capital alongside existing equipment, not in place of it. To the extent it replaces existing equipment, during periods of intensive accumulation, it often replaces worn out equipment, so that one old machine is replaced by a new machine that is more productive. During periods of extensive accumulation, although the new equipment is relatively labour replacing, i.e. a new machine does the work of two older machines, and 2 workers, it is absolutely labour adding, because as an additional machine it still requires an additional worker. It is only as older machines wear out, and are replaced by new machines that they actually replace labour, but the extent of this will depend upon the ratio of machine replacement to machine accumulation, i.e. whether it is a period of intensive or extensive accumulation.

If a firm replaces 1 machine per year, but also accumulates 1 machine per year, and each new machine is twice as productive as the machines being replaced, there may be no reduction in employment, whilst the level of output will continually rise.

Marx explains this in Capital I.

It is only where firms are at a more mature stage of the product cycle, where a large portion of the demand for the product is satisfied, the price elasticity of demand is high, and where supply is more or less just replacing existing consumption, rather than expanding markets, that any technological innovations result in an absolute reduction in employment.

But, also for these same reasons of only potential for a slow growth of demand – usually accompanied by tight profit margins – capital accumulation in these industries tends to be slow, the need to expand the workforce is reduced, and so the need to introduce labour-saving technology is reduced, leading to investment in innovation being concentrated in areas where labour shortages do exist.

Saturday, 29 April 2017

Theories of Surplus Value, Part I, Chapter 4 - Part 54

Marx's actual example proceeds as follows. Wages are £1 per worker. £300 is advanced as wages. £310 is advanced for materials. He assumes that the number of workers is halved, so wages fall to £150, but because the same quantity of output is produced, the same quantity of material is required, so this component of c remains £310.

He says, 

“If the value of the machinery was four times as much as the rest of the capital, it would now be £1,600.” (p 214)

Again, this is not quite correct as it would be £1,840. This is not significant and would only complicate the calculations. On the basis that the fixed capital loses 10% p.a. in wear and tear, £160, and previously amounted to only £40, Marx derives the following table.



Machinery
Raw Material
Wages
Total
Surplus-value
Rate of Profit
Total Product
Old capital
40
310
300
650
150 or 50%
23 1/13%
800
New Capital
160
310
150
620
150 or 100%
24 6/31%
770

As shown, the result here is that the rate of profit rises, because the mass of surplus value has remained constant whilst the advanced capital has declined. More capital is advanced as fixed capital, but a much bigger reduction results from the fall in wages.

On the assumptions made, there is a £30 release of capital, which can, therefore, be used for additional accumulation. But, as described earlier, the foundation of Marx's argument here is false. So, he writes,

“If a labourer without machinery needs 10 hours to produce his own means of subsistence, and if with machinery he only needs 6, then (with 12 hours’ labour) in the first case he works 10 for himself and 2 for the capitalist, and the capitalist gets one-sixth of the total product of the 12 hours.” (p 215)

But, for any particular industry this additional productivity – other than for individual firms, initially and temporarily – does not result in a higher rate of surplus value, for the reasons set out above, and set out by Marx in Capital I. The higher productivity simply results in a lower value of each unit of output, as the same quantity of labour is spread amongst a much greater quantity of use values. If weavers produce 1000 metres of cloth per day, instead of 500 metres, the value of each metre halves, so that twice as much cloth as before must be produced and sold to reproduce the labour-power.

It is only if all labour, or at least all labour employed in producing wage goods, enjoys this rise in productivity that it raises the rate of surplus value, by reducing the value of labour-power.

Northern Soul Classics - S.T.O.P. - The Lorelei

Friday, 28 April 2017

Friday Night Disco - Day Tripper

Bojo To Trump - "How High Shall We Jump?"

Boris Johnson was one of the leading proponents of Brexit.  It was sold to millions of British people on the flaky foundation of a return of sovereignty.  In fact, Britain has not yet even Brexited, but it has already become apparent that rather than regaining sovereignty, it has given up whatever sovereignty it had.  Bojo's latest antics indicate the extent to which a rapidly declining Britain is merely a vassal state of the US, so that Bojo's latest outburst tells us that when Trump shouts "Jump", Britain's only response is "Yes sir.  How high sir?"

No sooner had May triggered Article 50, than she scuttled off to the US, to supplicate herself, fawningly before Emperor Trump.  She tried to cover her selling of UK plc to the dealmaker by claiming that she had obtained significant promises from him.  Well anyone watching Trump's first 100 days, knows just how much those promises are worth.  It was only a matter of a few weeks before Trump announced that he would be putting the EU ahead of Britain in any trade negotiations, and when it came to his strike on Syria, Britain came behind Russia in being even notified about it.

Now, Bojo, wanting to seem like he and Britain still has a role to play, has offered again to play second fiddle to the US in any foreign wars it wants to start, so as to hope to curry favour.  Its like the new boy at Eton, who offers to fag for the school bully in order to try to gain some credibility and protection from other bullies.  For most of us, that's only something we learn about from reading Tom Brown's Schooldays, but for Boris and the other Tory members of the establishment its part of their actual upbringing.  No wonder they are such an arrogant bunch of snobs, who think they have a god given right to rule and lead the rest of us free from any criticism or opposition; no wonder they hate anti-establishment figures like Corbyn with a venality they could never show for people like Blair.

The Brexiters like Bojo sold the idea largely to that group of older voters who grew up when the world was a very different place, but who have not come to terms with the fact that times have changed.  They grew up at a time when their school books showed large areas of the world coloured pink, where the British Empire still ruled.  On a Sunday morning, they got up to listen to "Two-Way Family Favourites" on the radio that broadcast messages and music from families in Britain to their spouses, and children serving in the armed forces, in these far flung outposts of the Empire, even if by then it was called the Commonwealth.  And many, like many of the Tories themselves are still under the delusion that Britain still has that importance, when, in fact, it is merely a second rate power on the global stage, whose importance is decreasing by the day.

Even before Britain has Brexited, not only did May scuttle off to try to curry favours from Trump, but having embarrassed  herself there, she scuttled off to visit the medieval butchers of Saudi Arabia and other Gulf monarchies, pleading with them to buy more British weapons to use on their peoples, so as to prop up the British economy for a while longer.  Then she went to visit the dictator in Turkey, Erdogan, perhaps to learn some lessons on how to prevent criticism and opposition, and also to try to sell him more weapons.  Then in the last week we have had International Trade Minister, Liam Fox, going off to visit the butcherous dictator, Duterte, in the Phillippines, and  speaking of their shared values!

Even before Brexit has happened, it has been turned into a vassal state of the US, and a creature of any rogue or dictator across the globe who might be the source of a few silver coins.  And, its no wonder, therefore, that May and the Tory government are trying to prevent any criticism or opposition at home, and why Bojo is now even talking about sending British troops to fight US wars, without parliamentary approval.  The only approval that counts now for British Tory politicians is the approval of Trump.

As members of the EU, Britain at least had Ministers who sat on the Council of Ministers, Commissioners appointed to the EU Commission, and MEP's directly elected to the  European Parliament.  Now British voters will have no votes in the decisions taken by the US president and Congress, but Britain will be automatically signed up to those decisions by May and Bojo.  That is why they are trying to establish May as a dictatorial strong leader now, in the fashion of Erdogan.

And who can wonder that they attempt that.  If Britons are to have no say in their future, having signed away any hope of sovereignty they may have exercised through the EU, by voting for Brexit, the Tories will only be able to press ahead with being the servants of Trump, if they can ride roughshod over any criticism or opposition in Parliament, or by the British electorate.  And, after all that is what the Tory media continually tell us the British public want.  In vox pop after vox pop, newspaper editorial after newspaper editorial, press preview after press preview what we are told is that the British public want a strong leader, an Il Duce, a Mussolini in a skirt.

They should be careful what they wish for.

UK GDP Data Shows The Economy Is Starting to Stagflate

The GDP data for the first quarter, for the UK, has come in at just 0.3%, as against forecasts, which themselves anticipated a sharp slow down, to just 0.4%.  The figure represents a drop of more than 50%, on the quarterly growth figure of 0.7% at the end of last year.  At the same time, the fall in the pound, resulting from Brexit, has caused imported inflation to start to surge, at a time when stronger economic growth in the EU, and globally is causing global inflation itself to rise, putting additional cost pressures in a fragile UK economy.  Nearly all of the growth in the UK economy over the last year or so has been down to credit financed consumer spending, whilst UK household debt levels are back to those last seen ahead of the 2008 financial meltdown.  As I wrote, last year Britain is headed for stagflation.

We might see inflation tick down slightly for the next month, because following the announcement of the General Election, the Pound has strengthened against the dollar by around 5%.  But, at $1.29, it is still considerably down from its rate prior to the Brexit vote, and down even more from its rate in 2015, when it stood at around $1.70, and rising.  The stronger pound seems to be a delusion in markets that the announcement of the election will be a means of May, orchestrating a soft Brexit, by having more room to face down her backbenches.  It won't.  Tories at a local level are likely to select even more hard right, Brexiteers as candidates.  Moreover, May has already said she doesn't even want to be in the Customs Union or Single Market, so what negotiations are there to have?  Merkel has quite rightly reinforced what Juncker said some time ago.  there is a chance between hard Brexit and no Brexit.  Far from the election being about room to negotiate a soft Brexit, it is about May knowing that today's GDP data is just the start of the bad news; it is about May preparing to just pull out of negotiations in a couple of months time, and announce that they are going to just repeal the 1972 European Communities Act, taking Britain out of Europe at a stroke.

Inflation is already above 2.3%, and rising.  As the Pound continues to drop, and as global prices for things like materials, energy, and food prices, all of which Britain imports in large quantities, that inflation rate is likely to rise sharply.  At the same time, wages in the UK are falling causing a squeeze on real wages, which is feeding through to consumer spending figures.  Given that the UK GDP figure has been reliant on consumer spending, with investment at low levels, that spells further problems for the UK economy, in the near future.

UK households have maxed out their credit cards to finance their spending, and only that spending has kept the UK economy going.  As wages fall, and consumers are unable to finance further spending by yet more debt, and as inflation rises, spending will get increasingly squeezed, also squeezing UK profits.  The hit to consumers has already been seen in the drop in house prices for a second consecutive month by Nationwide.  That is just for asking prices, which as readers of this blog for some years will know are pretty meaningless, especially as aggregate figures.  As I pointed out several years ago these house price figures are largely a fiction.  Anyone who has been looking for a house in a specific area, as I have, for the last few years, will have seen how actual houses they have viewed or identified, have continued to fall in price, and actual selling prices, as opposed to asking prices are often 20% below the initial asking price.

That is despite the fact that government policy for the last 10 years, at least, has been geared to keeping both property prices and stock and bond prices high by what ever means, including giving government money away to the shareholders and bond holders in banks, and to house buyers in the various Help To Buy and Buy To Let Scams, and via hundreds of billions in money printing.  All that has been done to keep those asset prices inflated, even at the cost of the real economy, as it helped to such further resources into such speculation, and away from investment in real productive capital.  It caused the hyperinflation of asset prices to be protected at the cost of a deflation of consumer prices, and stagnation of the real economy.

Moreover, the rise in rents in recent years to record levels, which is a consequence of house prices being driven to ridiculously, and unsustainably high levels, and the pricing out of increasing numbers of people from the housing market, has only been sustained by yet more subsidies to landlords, in the form of a ballooning bill for Housing Benefit.  And, where does the money for that Housing Benefit come from?  It comes from taxes, which means out of profits, which means less money available for real investment in productive-capacity, fewer jobs, and less real wealth as the cost of protecting fictitious wealth.  Adam Smith and David Ricardo understood these principles more than 200 years ago, but the Tories in order to keep these paper prices inflated are prepared to destroy all real wealth and ignore those basic economic laws.  It is also why Theresa may wants to set herself up as an authoritarian strongman, knowing that as the economic reality bites, the only way they can continue to try to defy the laws of economics is by imposing increasing pain on the ordinary citizen.

They know that they had tied themselves in over tax in the previous Tory Manifesto, and that their commitments on pensions were not going to be sustainable after Brexit, as the economy stagnates.  So, they have gone for an election now, so as to be able to inflict all that pain on ordinary families over the next five years, slashing real wages further, raising taxes and national insurance, scrapping the triple lock on pensions, willing to see unemployment rise "as a price worth paying", as they put it in Thatcher's time, and seeing increasing numbers of people put on zero hours contracts, and other forms of unstable working conditions.

We need to get rid of the Tories before its too late, and the only party that can offer an alternative government is Labour.

Theories of Surplus Value, Part I, Chapter 4 - Part 53

Marx's error here flows from his failure to take into account the fact that the surplus labour-time only accounts for a portion of the whole working day. So, a doubling of surplus labour labour-time, in either case, does not result in a doubling of the working-day. If the working day itself does not double, but the number of workers is halved, then the length of the social working-day (working day x number of workers) must fall. Consequently, in either case, the total product must be reduced, and less material is processed, so the value of constant capital must fall.

In the first case, where surplus labour-time is increased by a lengthening of the working day, this gives a much more extended working-day, because the rate of surplus value was already taken as high. A much lower rate of surplus value would have given a different result. For example,

v 8 + s 2 x 10 workers = 80 v + 20 s = 100 hours.

To double s,

v 8 + s 4 x 5 workers = 40 v + 20 s = 60 hours.

The total social working day falls much more here, because the working day only needs to be extended by a small amount, to double the surplus labour, and compensate for the reduced workforce.

So, Marx is wrong on several counts. He is wrong that the total quantity of products would remain unchanged, if the total surplus value remains the same. He is wrong that the total expended on wages falls in half, if surplus value rises, because of a rise in relative surplus value. Wages may fall much more than that, i.e. by 80%, in the example above (Part 52). He is also wrong that the quantity of raw material processed remains the same, because in both cases, the length of the social working day is reduced, so that less is produced and less material is thereby needed.

In order to obtain this final conclusion, Marx assumes that the length of working day remains constant, but half the workers produce the same level of output as before, as a result of the introduction of additional fixed capital. On this basis, total output remains constant, and workers are paid the same wage, but with half the workers, this amounts to half the total wage bill. But, unless we take it that this is just one firm taking advantage of introducing this fixed capital, its not at all clear that this would result in the additional surplus value per worker that Marx seeks, for the reasons he has set out elsewhere. Moreover, the additional fixed capital employed so as to obtain this result, itself requires an increase in the value of constant capital.

The fact that 5 workers working a 10 hour day now produce the same 1000 units of output that previously 10 workers, working a 10 hour day, produced, previously, means that the previous value of these 1000 units (100 hours) has fallen to 50 hours, as a result of the rise in productivity. Suppose that the workers are producing linen. They work a 10 hour day, of which 4 hours is necessary labour and six hours surplus labour. Say the product of an hour's labour is equal to £1, so the workers are paid £4 in wages and produce £6 of surplus value. If there are 10 workers that is a total product value of £100, which we will say is represented by 1000 metres of linen.

In that case, 400 metres of linen are required to cover wages and 600 metres constitute surplus value. If then the number of workers falls to 5, but they continue to produce the same quantity of linen, its value must fall, because it now represents only 50 hours of labour, whereas previously it represented 100 hours of labour. Each worker still requires £4 as wages, but with only 5 workers to pay rather than 10, wages fall to £20. But, £20 now represents more linen.

Previously, 1000 metres of linen represented 100 hours, equals £100, but now represents only £50. To cover the £20 of wages, for the 5 workers, now requires 400 metres of linen to be sold, leaving a surplus product of 600 metres, with a value of £30. In fact, therefore, the rate of surplus value here remains unchanged at 150%, because s' remains constant, whilst v is halved, therefore, s falls from £60 to £30. Marx seems to have fallen into the trap he had initially criticised, of confusing the value of labour-power with the value of the product of that labour-power.

Marx's conclusion from his example, that the rate of profit would rise, is also false, because his assumption that the surplus value remains constant is itself false. In fact, because the surplus value would halve, in line with v, the rate of profit would fall, because c would remain constant so s/c+v would fall.

Thursday, 27 April 2017

Social-Democracy, Bonapartism and Permanent Revolution, Chapter 11 – Results and Prospects (2)

Chapter 11 – Results and Prospects 

Part 2

Industrial capital, via its natural process of concentration and centralisation, becomes socialised capital, which, as Marx describes, is the transitional form of property, and upon which the material basis for social-democratic ideas are developed, which bear within them the roots of socialist consciousness.

The value of these great social experiments cannot be overrated. By deed instead of by argument, they have shown that production on a large scale, and in accord with the behests of modern science, may be carried on without the existence of a class of masters employing a class of hands; that to bear fruit, the means of labour need not be monopolized as a means of dominion over, and of extortion against, the labouring man himself; and that, like slave labour, like serf labour, hired labour is but a transitory and inferior form, destined to disappear before associated labour plying its toil with a willing hand, a ready mind, and a joyous heart. In England, the seeds of the co-operative system were sown by Robert Owen; the workingmen’s experiments tried on the Continent were, in fact, the practical upshot of the theories, not invented, but loudly proclaimed, in 1848.”

Marx – Inaugural Address to the First International

In the 1970's, social-democracy pulled back from confronting and overthrowing the power of the owners of fictitious capital, because, as was the case with the liberal bourgeoisie, in 1848, they required the mass of the working-class behind them to accomplish their aims, and took fright. The consequence was a conservative reaction, most notably in the shape of Thatcher and Reagan, in the UK and US, Both rested upon that social base of millions of small business owners; both sought to undermine the social base of social-democracy within the organised working-class. Neither could escape the objective reality that modern capitalism is dominated by socialised capital, and that the interest and rents paid to rentier capitalists, and the taxes paid to the state, depend on the profits produced by that socialised capital.

Nor could they escape the fact, as Marx described in Capital III, Chapter 15, that the extraction of surplus value, is only the first part of the story in the production of profits, and that the second part depends upon the realisation of those profits, via the sale of the finished products.

But this production of surplus-value completes but the first act of the capitalist process of production — the direct production process. Capital has absorbed so and so much unpaid labour. With the development of the process, which expresses itself in a drop in the rate of profit, the mass of surplus-value thus produced swells to immense dimensions. Now comes the second act of the process. The entire mass of commodities, i.e. , the total product, including the portion which replaces the constant and variable capital, and that representing surplus-value, must be sold. If this is not done, or done only in part, or only at prices below the prices of production, the labourer has been indeed exploited, but his exploitation is not realised as such for the capitalist, and this can be bound up with a total or partial failure to realise the surplus-value pressed out of him, indeed even with the partial or total loss of the capital. The conditions of direct exploitation, and those of realising it, are not identical. They diverge not only in place and time, but also logically. The first are only limited by the productive power of society, the latter by the proportional relation of the various branches of production and the consumer power of society. But this last-named is not determined either by the absolute productive power, or by the absolute consumer power, but by the consumer power based on antagonistic conditions of distribution, which reduce the consumption of the bulk of society to a minimum varying within more or less narrow limits. It is furthermore restricted by the tendency to accumulate, the drive to expand capital and produce surplus-value on an extended scale. This is law for capitalist production, imposed by incessant revolutions in the methods of production themselves, by the depreciation of existing capital always bound up with them, by the general competitive struggle and the need to improve production and expand its scale merely as a means of self-preservation and under penalty of ruin. The market must, therefore, be continually extended, so that its interrelations and the conditions regulating them assume more and more the form of a natural law working independently of the producer, and become ever more uncontrollable. This internal contradiction seeks to resolve itself through expansion of the outlying field of production. But the more productiveness develops, the more it finds itself at variance with the narrow basis on which the conditions of consumption rest.”

Capital III, Chapter 15

A necessary contradiction arises from attempting to raise the rate of profit by depressing wages, and so raising the rate of surplus value, and the ability then to realise that produced surplus value, as profits, when the workers whose wages have been cut, comprise a large component of aggregate demand.

As I described in my book, Marx and Engels Theories of Crisis, the answer that was found to this dilemma was debt. What workers could no longer consume from their stagnant or reduced wages, they were encouraged to buy instead on credit, as credit controls and other financial regulations were abolished in the 1980's. Many thereby mortgaged their future labour-power, to finance their current consumption, turning themselves into debt slaves, as well as wage slaves. Private debt soared into the period prior to the 2008 crash, and has soared again now to similar levels.

Households covered their consumption via this debt, whilst countries covered the import of the commodities consumed by those households, by borrowing from foreigners, particularly from Asia, as the trade deficit grew ever wider. But, as described in Chapter 9, consumption that is not financed from revenue can only be financed by a consumption of, and thereby destruction of, capital. As Joan Robinson said, a long time ago, there is a big difference between borrowing to invest in productive capacity, which increases wealth, and borrowing simply to finance consumption, which destroys wealth.

In examining the situation in any society, as I wrote recently, Marxists do not simply undertake a superficial, journalistic snapshot of the constitutional arrangements, and governmental powers, but examine the social relations upon which the different parties rest. The truth is always concrete.

A fundamental understanding, in this regard, as I have set out in the past, requires a recognition of the existence of three different powers – the economic and social power, the state power, and the governmental power or political regime.

The economic and social power can be thought of as civil society, As Marx says, in The Critique of the Gotha Programme, it is upon this civil society that the state itself ultimately rests. The civil society is never static, but is constantly developing in the direction of the new economic and social relations, under the pressure of the development of the productive forces. The bourgeoisie developed capitalist property within the pores of feudal society, and they developed their own forms of self-government alongside it, as alternative forms to those of the existing ruling class. And, the working-class develops co-operatives, trades unions, and other forms of collective organisation, such as Friendly Societies, and its own political party as an alternative power to that of the bourgeoisie.

The economic and social power itself derives from the dominant social relations arising from the dominant economic relations. Moreover, this has to be analysed concretely and dynamically, not superficially and statically.


Theories of Surplus Value, Part I, Chapter 4 - Part 52

[9. Ganilh and Ricardo on Net Revenue. Ganilh as Advocate of a Diminution of the Productive Population; Ricardo as Advocate of the Accumulation of Capital and the Growth of Productive Forces]


Marx then turns to the concept put forward by Ganilh and Ricardo that wealth depends on net product, i.e. surplus value rather than gross product, i.e. total value produced. Ganilh claimed that Ricardo had copied this idea from him.

There are some minor errors in Marx's formulations here that I will highlight along the way.

“Surplus-value presents itself (has its real existence) in a surplus-produce in excess of the quantity of products which only replace its original elements, that is, which enter into its production costs and—taking constant and variable capital together—are equal to the total capital advanced to production.” (p 213)

In other words, out of society's total output a physical portion must be set aside to replace those physical products, which constituted the means of production, and a further portion to replace those physical products, which constituted the workers means of consumption. Only what is left over, after these products have been physically replaced constitutes the surplus product, and surplus value.

This surplus value is equal to the rate of surplus value, s' or s/v, multiplied by the number of days labour, or the number of workers. So, if there is a 10 hour day, and the worker performs 4 hours of necessary labour, and 6 hours of surplus labour, s' = 6/4 = 150%. If there are 10 workers then the total surplus value = s' x v x n = 1.5 x 4 x 10 = 60 hours.

The surplus value can then be increased in two ways. Either the rate of surplus value can increase, or the amount of labour exploited might increase. If instead of 10 workers employed, 20 workers are employed, surplus value would rise to 1.5 x 4 x 20 = 120 hours. If the rate of surplus value rose to 200%, but only 10 workers are employed, then 2 x 4 x 10 = 80 hours. This would require that the working day rose from 10 hours to 12 hours.

“With a given length of labour-time, this surplus-value can only be increased by an increase of productivity, or at a given level of productivity, by a lengthening of the labour-time.” (p 214)

If the number of workers is halved, but each performs twice as much surplus labour as before, then the same amount of surplus value is produced. Marx says,

“On this assumption, therefore, two things would remain the same: first, the total quantity of products produced; secondly, the total quantity of surplus-produce or net product. But the following would have changed: first, the variable capital, or the part of the circulating capital expended in wages, would have fallen by half. The part of the constant capital which consists of raw materials would also remain unchanged, as the same quantity of raw material as before would be worked up, although this would be done by half the labourers employed before.” (p 214)

But, in fact, this is wrong. Suppose there is a 10 hour day being worked by 10 workers. Four hours comprises necessary labour and six hours surplus labour. Ten units of output are produced per hour. So, 1,000 units are produced in total. If the number of workers is reduced to 5, then to produce the same 60 hours of surplus value, the surplus value per worker must rise to 12 per day. That means the working day must rise to 16 hours.

Previously, to produce 60 hours of surplus value, 10 workers worked a 10 hour day, which is 100 hours in total, with 100 units of output being produced. Now, 5 workers work a 16 hour day, which is only 80 hours being worked in total, and only 800 units of output being produced. That means that less constant capital, as material, would be consumed, so the value of constant capital would fall.

The only other way that the rate of surplus value could rise would be if relative surplus value increased. If we take a 10 hour day once more, and assume that 6 hours comprises necessary labour and 4 hours surplus labour, then for surplus labour to double to 8 hours, necessary labour would have to fall to just 2 hours.

So, if we had:-

v 6 (60) + s 4 (40), with 10 workers, we would have total wages equal to 60, and total surplus value equal to 40, with total output equal to 1000 units. If the number of workers falls to 5, to retain the same mass of surplus value requires:-

v 2 (10) + s 8 (40) x 5, so that wages fall to a sixth their previous level at 2 x 5 = 10, leaving surplus value constant at 8 x 5 = 40, whilst the total amount of value is halved from 100 to 50, and total output from 1000 units to 500 units.

Wednesday, 26 April 2017

Are The Tories Going To Reintroduce Capital Punishment?

The Tories, like Michael Fallon, have attacked Jeremy Corbyn for not saying that he would back a drone strike against the leader of ISIS.  What Corbyn actually said was that many drone strikes have failed to hit their intended target, or have killed innocent civilians on a large scale in the process.  Others have argued that had Andrew Marr asked about those leaders being taken out by special forces, that objection does not apply.  So, let's be clear, what the Tories like Fallon are saying is that they are in favour of the execution of individuals, on foreign soil, where British troops have no right or need to be, by those very same British troops.  Moreover, they appear to be arguing for the execution of those individuals, without them being granted due legal process through the legal system.  That is actually not called execution or capital punishment, its called murder pure and simple.  The logical conclusion of the Tories statements is that the next Tory government will reintroduce the death penalty!

If British troops are involved in a legally declared war, and enemy combatants are killed as a result of fighting that is a normal process of war.  However, as seen recently, if individuals, such as captured, or injured enemy combatants are killed in cold blood, by British troops, that is murder,a nd those troops can be charged for such crimes.  British troops asked to murder ISIS leaders, not in combat, but simply in cold blood as, individuals, by targeted assassination, should know clearly whether the people who are telling them to commit such murders will be the ones who find themselves in court for having given those orders, or whether as is always the case, it is those troops who have to do the politicians dirty work for them, who will not only be the ones getting killed and injured, but will also be the ones ending up in court, whilst the politicians go scot free, and take whatever credit they can.

What Tories like Michael Fallon are telling us, is that they are sending British troops to fight in an undeclared war, in a country that is not at war with Britain, and has made no attacks on Britain, and that those same troops are also being asked to murder people in cold blood in that country.  In this case its Syria, but, as seen in recent years, it could be almost any country around the globe where Britain chooses to send troops, often as junior partner to the United States.  Let's remember that its not Syria that is sending its troops, or even Syrian terrorists to fight in Britain.  Quite the contrary, Jihadi John, and thousands of the other ISIS and Al Qaeda/Al Nusra and other fighters went to Syria from Britain.

If Britain really wanted to fight terrorism, it would stop sending Islamic terrorists, like Jihadi John, to fight in Syria, just as it would stop sending weapons to the Gulf Monarchies, who provide the weapons and financial backing for those same terrorists.

But, if Tories, like Michael Fallon, ar now in favour of murdering in cold blood individuals in foreign countries that have not declared war and have no beef with Britain, how is that different from what Vladimir Putin does, who sends his forces, and special agents to murder his opponents in Britain and other foreign countries?  Once again we see the way that the Tory government under May, Fallon and others is prepared to silence any opposition, by whatever means they see necessary, just as does Putin, or Erdogan and other dictators.

Moreover, what the Tories are proposing is murdering people in cold blood without those individuals being arrested, charged and given due process in the courts.  So, what is stopping the Tories equally executing its opponents in Britain in exactly the same way.  After all, we know that a Tory government used the SAS and other special forces to assassinate members of the IRA in the 1980's, in that way?  Of course, murdering their opponents in Britain, might cause a bit of a stir, so they could at least cover it up by at least going through some process of superficial justice for its opponents.

If the Tories are in favour of cold blooded murder of their opponents in foreign lands, why do they not openly now execute after due legal process Islamic terrorists held in Britain.  How can they ask British troops to act as executioners in Syria, and elsewhere, on people who have not been tried or convicted, and yet they will not act as executioners themselves, of convicted terrorists in Britain?  As usual, the Tories want others to do their dirty work for them, away from the public gaze, but will not get their hands dirty at home.

At the moment, they cannot introduce capital punishment in Britain, because its not permitted for EU members states, but once Britain is outside the EU, the Tories will be free to reintroduce capital punishment again, in line with their traditional hang 'em and flog 'em mentality.  After all May's Tory government is basically the same as a UKIP government, as May has stolen all of UKIP's clothes.  And UKIP leader (at least at the time of writing, but that could have changed again at tome of posting), Paul Nuttall, has already said that he would introduce a referendum to bring back capital punishment.

Theories of Surplus Value, Part I, Chapter 4 - Part 51

Returning to Ganilh, Marx gives a quote from him that also pre-empts the view of marginal theory, whereby each factor contributes to the formation of value, and thereby obtains revenue equal to this contribution. Ganilh writes,

“It is forgotten that all production only becomes wealth concurrently with its consumption, and that exchange determines up to what point it contributes to the formation of wealth. If it is remembered that all labours contribute directly or indirectly to the total production of each country, that exchange, in fixing the value of each labour, determines the part that it has had in this production, that consumption of the production realises the value that exchange has given it...” (p 212) 

But, Marx points out the contradiction in Ganilh's argument. In the above quote, Ganilh continues, “... the surplus or deficit of production over consumption determines the state of wealth or poverty of peoples, it will be realised how inconsistent it is to isolate each labour, to fix its fertility and its fruitfulness by its contribution to material production and without any regard to its consumption, which alone gives it a value, a value without which wealth cannot exist” (l.c., pp. 294-95).” (p 212) 

As Marx points out, therefore,

“On the one hand the fellow makes wealth depend on the excess of production over consumption, on the other hand he says that only consumption gives value. And a servant who consumes 1,000 francs consequently contributes twice as much to the giving of value as a peasant who consumes 500 francs.” (p 212)

Ganilh ends up facing both ways at the same time, admitting that the unproductive labour does not contribute to the creation of material wealth, and at the same time, trying to prove that it does, not by producing but by consuming.

“All those who polemicise against Adam Smith on the one hand assume a superior attitude to material production, and on the other hand they attempt to justify immaterial production—or even no production, like that of lackeys—as material production. It makes absolutely no difference whether the owner of the net revenue consumes this revenue in lackeys, mistresses or pasties.” (p 212)

Malthus, as the apologist of the landlord class made a similar argument that the landlords fulfilled a useful function by their consumption, but, as Marx points out, it is ludicrous to suggest that it is only these unproductive classes such as the landed aristocracy, or those retainers and flunkies paid out of their revenue, including all the state officials, that could fulfil the role of consuming this production. The productive classes themselves could quite easily fulfil that role, and raise their rather miserable living standards by doing so!

Tuesday, 25 April 2017

Social-Democracy, Bonapartism and Permanent Revolution, Chapter 11 – Results and Prospects (1)

Chapter 11 – Results and Prospects


Part 1


In 1848, the revolutionary bourgeoisie, across Europe, which had pulled along a developing working-class with it, in opposition to the old feudal ruling class, took fright at the thought that this working-class might turn the bourgeois revolution into a permanent revolution, going beyond the aims of overthrowing feudal private property, and its limitations, to overthrowing all private property and its limitations.

The result was a vicious counter-revolution and the coming to power of Bonapartist regimes. Objectively, what those Bonapartist regimes did, whether it was Louis Bonaparte in France, or Bismark in Germany, was to protect the political power of the old ruling class, whilst simultaneously developing the productive forces and relations of capitalism. They achieved, across Europe, what effectively the period of liberal bourgeois democracy had achieved in Britain.

As Marx, says in relation to this role of the state,

All revolutions perfected this machine instead of breaking it. The parties, which alternately contended for domination, regarded the possession of this huge state structure as the chief spoils of the victor.

But under the absolute monarchy, during the first Revolution, and under Napoleon, the bureaucracy was only the means of preparing the class rule of the bourgeoisie. Under the Restoration, under Louis Philippe, under the parliamentary republic, it was the instrument of the ruling class, however much it strove for power of its own.”

Lenin, in his writings on Economic Romanticism, from the 1890's and early 1900's, makes a similar point, in relation to the Tsarist state, and the development of capitalism in Russia.

And, nor could it have been different. Once capitalist production has been established, in Britain, and led to its global dominance, it forced all other nations to follow suit.

The bourgeoisie, by the rapid improvement of all instruments of production, by the immensely facilitated means of communication, draws all, even the most barbarian, nations into civilisation. The cheap prices of commodities are the heavy artillery with which it batters down all Chinese walls, with which it forces the barbarians’ intensely obstinate hatred of foreigners to capitulate. It compels all nations, on pain of extinction, to adopt the bourgeois mode of production; it compels them to introduce what it calls civilisation into their midst, i.e., to become bourgeois themselves. In one word, it creates a world after its own image.”

Marx – The Communist Manifesto

Society had to pass through an historical phase of Mercantilism, before it could transition from feudalism to capitalism. Even in societies such as Russia, China, and India, as well as Egypt, where development took a different historical route, via the Asiatic Mode of Production, rather than feudalism, this was true, in the sense that these societies were first opened up to merchant capital from outside, including via colonialism, which laid the basis for a transition to capitalist production.

When asked by Vera Zaulich whether Russia could skip over the phase of capitalism, and convert its existing system of village communes and communal production into socialism, Marx responds,  diplomatically, that this is theoretically possible, in the same way that Russia skipped the earlier period of development of machines to be able to introduce the latest machinery.

...the rural commune, still established on a national scale, can gradually extricate itself from its primitive characteristics and develop directly as an element of collective production on a national scale. It is only thanks to the contemporaneity of capitalist production that it can appropriate from it all its positive acquisitions without passing through its hideous vicissitudes. Russia does not live isolated from the modern world; neither is it the prey of a foreign conqueror, like the East Indies.
If the Russian admirers of the capitalist system deny the theoretical possibility of such an evolution, I would put to them the question: In order to exploit machinery, steamships, railroads, etc., was Russia forced, like the West, to pass through a long period of incubation of machine industry? Let them further explain to me how they managed to introduce in their midst, in the twinkling of an eye, the whole mechanism of exchange (banks, credit societies, etc.), whose elaboration cost the West centuries?

Letter to Zasulich

But, as Marx also points out in his reply, the Russian village commune did not exist in a vacuum, and these external forces of capitalism operating on a global scale were not standing still, waiting for such a revolution to occur in Russia. Those very same forces were operating inside Russia, and already acting to dissolve the village commune, in the same way they had done via colonialism, more brutally, elsewhere. In the end, what Marx is saying here is that Russia could move directly from the village commune to socialism, only on condition that socialism had been established elsewhere already, and was able to facilitate that development, in the same way that the establishment of capitalism in Britain and France had facilitated the development of capitalism in India, and in the colonies via colonialism.  It is a process of combined and uneven development.

In my opinion the colonies proper, i.e. the countries occupied by a European population – Canada, the Cape, Australia – will all become independent; on the other hand, the countries inhabited by a native population, which are simply subjugated – India, Algeria, the Dutch, Portuguese and Spanish possessions – must be taken over for the time being by the proletariat and led as rapidly as possible towards independence. How this process will develop is difficult to say. India will perhaps, indeed very probably, make a revolution, and as a proletariat in process of self-emancipation cannot conduct any colonial wars, it would have to be allowed to run its course; it would not pass off without all sorts of destruction, of course, but that: sort of thing is inseparable from all revolutions. The same might also take place elsewhere, e.g. in Algeria and Egypt, and would certainly be the best thing for us. We shall have enough to do at home. Once Europe is reorganised, and North America, that will furnish such colossal power and such an example that the half-civilised countries will of themselves follow in their wake; economic needs, if anything, will see to that. But as to what social and political phases these countries will then have to pass through before they likewise arrive at socialist organisation, I think we today can advance only rather idle hypotheses. One thing alone is certain: the victorious proletariat can force no blessings of any kind upon any foreign nation without undermining its own victory by so doing. Which of course by no means excludes defensive wars of various kinds.”

Engels letter to Kautsky (1882)


Similarly, it seems likely that society will need to pass through a phase of social-democracy before it can transition to socialism. Marx notes that philosophy had its origins in theology, and became its negation. Bourgeois ideology has its origins in Mercantilism, and similarly by the development of industrial capitalism, becomes the negation of Mercantilism, and thereby of feudalism, the negation of the negation. Socialised capital, and the social-democracy that arises from it, is the negation of private capital, and the liberal bourgeoisie democracy that arises from it, whilst socialism is the negation of the socialised capital, and the social-democracy.


Theories of Surplus Value, Part I, Chapter 4 - Part 50

A similar argument to that put forward by Ganilh has been used more recently. Its been argued, for example, that Britain has to encourage billionaires into London, because, by spending their money there, they then provide income for people working in hotels, restaurants and providing other services. But, as Marx demonstrates, this consumption of value is not at all the same as the creation of value. Unlike the servant or prostitute, in Marx's example, who at least create value by their labour, which is then exchanged against revenue, the billionaires create no new value. They merely consume the use values produced by others, and thereby destroy the value contained in those use values. That means they consume use values that could have been consumed by others who actually do produce value. Moreover, to the extent that the revenue they use to buy these use values is derived from dividends or bond interest, which itself is a deduction from the surplus value produced by workers in Britain, they consume use values produced by workers in Britain, using revenue that itself derives from an appropriation of the surplus value produced by workers in Britain! In other words, workers in Britain, may as well have simply handed these goods and services over to these billionaires free of charge!!

The Tories, of course, looking after the interests of their own class, want to provide these parasites with tax concessions so as to encourage them further in such practices. Worse still, in using their vast wealth to push up property prices, they also act to increase the cost of shelter, and so the value of labour-power. The ultimate consequence of that is to reduce surplus value, and to reduce the potential accumulation of productive-capital, and so acting to actively reduce rather than increase real wealth.

Marx also sets out what is wrong with this argument even in respect of the servant or prostitute, who do create value by their labour. But, in the process, he also explains why, even for the productive labourer, there is no relation between the value of labour-power and the value created by that labour-power. Unlike constant capital, the capital-value of variable capital is not transferred to the end product.

“But even assuming that the value (the costs of production) of a servant is twice as great as that of a productive labourer, it must be observed that the productivity of a labourer (like that of a machine) and his value are entirely different things, which are even in inverse proportion to each other. The value that a machine costs is always a minus in relation to its productivity.” (p 211)

This is so for several reasons. Firstly, surplus value itself directly depends upon the fact that there is no relation between the value of labour-power, and the value created by that labour-power. Surplus value is only possible because the latter is greater than the former, and the larger the difference between the two, the greater the mass of surplus value produced.

On the one hand, there is a limit, as Marx describes, to absolute surplus value, which is dependent upon the value of labour-power, which is why, he says, that even absolute surplus value is based upon relative surplus value. If workers can only physically work for 12 hours per day, but require the product of 12 hours labour just to reproduce their labour-power, then although they produce 12 hours of positive new value, during this time, all of that value is required simply to reproduce their labour-power, and so no surplus value is produced.

If, for example, there is a crop failure, so that the physical product of this 12 hours of labour is seriously reduced, this does not change the fact they have produced 12 hours of positive new value, by the expenditure of this labour. It simply means that this new value is contained in a much smaller number of use values, so that the value of each use value rises substantially. But, precisely because the labour-power requires as many of these use values to reproduce itself as it did previously, and precisely because there is no relation between the value of labour-power, and the value produced by that labour-power, the value of labour-power must rise substantially.

Suppose 12 hours of labour produces 120 units of wage goods. In order for this 12 hours of labour to be reproduced, the worker must consume 60 units of wage goods, and so a surplus of 60 units of wage goods, equal to 6 hours is produced. If, however, there is a crop failure, or some other sudden fall in social productivity the workers still work for 12 hours and thereby still creates 12 hours of positive new value as before. However, if this 12 hours of labour only produces 40 units of wage goods, the value of each unit will have risen from 0.10 hours of labour to 0.30 hours of labour.

Previously, the value of labour-power was equal to 6 hours of labour, which produced 6 hours of surplus value. But, the worker must still consume 60 units of wage goods to reproduce their labour-power, so the value of labour power rises to 18 hours of labour! The worker has created 12 hours of positive new value, as before, but now to reproduce this labour-power requires 18 hours of labour. Instead of the worker producing a surplus value of 6 hours, they now produce a loss of 6 hours. In order for the capitalist to reproduce their capital on the same scale, they would have to add 6 hours of value, of additional capital, to provide the wage goods required to reproduce the labour-power consumed.

Consequently, the existence of surplus value depends on the productivity of labour. Secondly, therefore, assuming that productivity is at such a minimum required level, the fact that the value of labour-power is equal to say 4 hours labour has no bearing on the fact that this same labour-power may work for 6,8,10,12 or so hours in the day, and thereby produce corresponding amounts of new value.

Thirdly, if productivity rises, so that only 3 hours of labour are required for the reproduction of labour-power, this has no bearing upon the fact that this labour may continue to work for 6,8,10,12 or so hours per day, and continue thereby to produce the corresponding amounts of new value.

Finally, the value of labour-power has no direct relation to the value of the product of that labour, which is itself determined post facto in the market, as Marx describes. A particular concrete labour may be highly skilled, and its value be high, because of the cost of educating and training that labour. This same level of skill may itself cause the product of this labour to be high, because the labour constitutes complex labour. But, there is no necessity for that to be the case.  Skilled labour-power may have a higher value, because it requires more labour-time for its reproduction, but that does not necessarily mean that the labour is complex rather than simple labour.  The determination of complex labour, Marx says is only determinable post facto, in the market, by what consumers are prepared to pay for the product of that labour (separate from what they pay for the constant capital etc. that comprises the final product).  It may require less labour-time to produce the labour-power of a footballer than a nurse, yet that has no bearing upon what consumers are prepared to pay for the product of 1 hour's footballing labour as opposed to 1 hour's nursing labour.

Marx describes, for example, the situation with professional and commercial workers. Their labour is skilled and complex, so that the value of its product is greater than that of simple labour. But, Marx goes on, the extension of public education, so that members of the working class could take on such jobs, reduced the value of this type of labour-power, even below that of unskilled workers.

“His wage, therefore, is not necessarily proportionate to the mass of profit which he helps the capitalist to realise. What he costs the capitalist and what he brings in for him, are two different things... 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.”

(Capital III, Chapter 17)

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