Friday, 31 March 2017

Friday Night Disco - Nowhere To Run - Funk Brothers

Groove on.


Social-Democracy, Bonapartism and Permanent Revolution, Chapter 1 – Brexit

Chapter 1 - Brexit




As I wrote recently,

“The Tory government is more and more appearing as an elected dictatorship, whilst Labour seems intent on committing political suicide. The Tories attempt to deny the Scottish people the democratic right of self-determination, and Labour's alignment with the Tories over the issue, is the latest example.”

A few years ago, I described the dynamic underway with Cameron's government, and the similarity with the dynamic that led to the coup of Louis Bonaparte, in France, described by Marx in “The Eighteenth Brumaire of Louis Bonaparte”. Instead of Boris Johnson pushing aside Cameron, however, it has been Theresa May that took on that role, though we may not have seen this farce reach its last act. Moreover, it was Bojo, Gove et al who did effectively push Cameron aside by coming out for Brexit, paving the way for May.

Rather like the dynamic described by Marx, in The Eighteenth Brumaire, whereby Louis Napoleon was able to carry out his coup, resting on and representing that large, but amorphous, mass of backward layers of society, running from sections of the middle class, Bohemians, and through to all the atomised plebeian layers, so too that characterises the forces that lie behind the Tory Brexiters and their UKIP outliers, that have captured the Tory government. But, as I discussed recently, its not alone. That same dynamic can be seen with Trump, with Le Pen, with Wilders, with Erdogan, and with Netanyahu.

Trump does not represent the interests of US capital, let alone global capital, and nor does he represent the interests of US workers. He is, in many ways, the typical Bonaparte, whose rise to power is attributable to neither of the two main class camps in society, but to the ability of that large amorphous mass, between those class camps, to throw up its own authoritarian figurehead, and whose confused and contradictory ideas are themselves a reflection of the diffuse and conflicting interests of that mass, and which can only be given some rationality by the imposition of authority and order from above. It is no surprise that Trump has stuffed his government with generals alongside billionaires.

And much the same can be said of May's Tory government. The Tories, like the US Republicans, are historically the party of the financial and landed oligarchy, of the large owners of landed property, and of all those large money-lending capitalists whose wealth is held in the form of fictitious capital, paper wealth in the shape of shares, bonds, mortgages and other financial assets. But, their membership, and their electoral base is comprised mostly of the millions of small business owners, without whom the Tories could never get elected.

Yet, the thing that has characterised the Tories has been Brexit, and as with Trump, its clear that their obsession with carrying out that policy is done so directly in the face of the interests both of capital and labour. From various survey data, even the medium sized business owners appear split over their attitude to Brexit, as, in the modern globalised world, many of these too are dependent on EU membership.

The large-scale money-lending capitalists benefit, in the short term, from the existence of a large number of weak, fragmented states, compared to larger state structures. It means that they have opportunities for commercial profits and capital gains from arbitraging competing currency and tax regimes, and their paper wealth can be converted from Dollars to Pounds, to Deutschmarks, to Francs or Yen, to effect such speculation, at the press of a computer key.

Yet, in the longer term, even these large-scale money lending capitalists begin to realise that the basis of the interest they obtain from their holdings of bonds and mortgages, dividends on shares, as well as the capital gains they obtain on these financial assets, rests on the ability of large scale socialised capital to produce ever larger masses of profits, and the requirement for that is a social-democratic state that facilitates long-term planning and regulation, so as to maximise capital accumulation. The existence of large structures, like the EU, is fundamental to that, whereas Brexit is antithetical to it.

However much the Stalinists and other proponents of national socialism might promote the notion of building socialism in one country, it is also clear that Brexit is not in workers' interests either. Brexit is the agenda only of an economically and socially insignificant section of society. As Marx describes in his analysis of the peasantry and what constitutes the difference between a class in itself as opposed to for itself, this diffuse and amorphous mass mass may be numerically large, but its very nature means that it always requires some charismatic leader, some strongman to lead it by the nose, and to impose order from above. It is characterised by being able to mobilise around what it is against, but no ability to agree on what it is for.


Theories of Surplus Value, Part I, Chapter 4 - Part 25

Suppose, Marx says, we take a coal mine, iron works, timber producer and machine builder. The constant capital of each is equal to a third, so that it relates to the new value produced by labour as 1:2.

“Then all these industries produce each a daily product of x, x', x'', x'''.” (p 188)

Let us say these quantities are 120,150,180,210 of whatever unit may be appropriate, such as tons of coal, iron and timber and number of machines. This is the quantity produced by labour in a day, in each case, but this product is not just the product of labour. The coal producer, to achieve their output, will have used some of their own coal to power steam engines, which themselves will have been bought from the machine maker, and they will have used wood and iron for pit props and so on.

In other words, a third of the value of their output is due to the value of this constant capital used in its production. Put in terms of the use values produced, of the 120 tons of coal produced, 40 tons is simply due to to the constant capital used in its production, and 80 tons are due to the day's labour employed in its production. If we think about it in terms of that used at the beginning, where the coal producer provides coal to the steel producer, and the steel producer provides steel to the coal producer of equal value, it is as though, here the coal producer gives an amount of coal to the steel producer, wood producer and machine maker, and obtains an equal value of steel, wood and machines in return, and thereby reproduces the constant capital consumed in the day's coal production.

It is as though the coal producer took 40 tons of coal directly out of their production and used it themselves as constant capital, leaving just 80 tons available for sale. The only difference here is that instead of taking out 40 tons of coal and using it as constant capital, to replace the coal they have consumed fuelling their steam engines, they instead obtained the constant capital in another physical form – steel, wood, machines.

But, each of the other producers did exactly the same thing. A third of the steel producer's output is equally attributable to their constant capital – 50 tons – so that only 100 tons are actually available for sale. Rather like a farmer takes a proportion of their wheat, simply to obtain the seed required to replace that used to grow this year's crop, so here, it is as though the coal producer and steel producer take a proportion of their output simply to replace their own constant capital, thereby removing it from what is available for sale.

The steel producer may require some of their output simply to replace steel they have used themselves, just as the coal miner used some of their output to replace coal used to power their steam engines. But, whether this is the case or not, is irrelevant, because the fact remains that each of these producers sets aside a third of their output simply to replace the constant capital consumed in its production, whether it takes the form of their own output or that of some other producer.

Thursday, 30 March 2017

A Disastrous Day For Workers

Yesterday, the day that the Tories instigated Article 50, will go down in history as a disastrous day for workers.

Already, after the referendum result last June, there was a spike upwards in racist attacks on workers in Britain.  The bigotry that provided the core support for the Brexit vote, but which, until then, had largely been subdued was invigorated, and emboldened to come out in the open.  The Tories have disgracefully turned EU citizens living in Britain into bargaining chips, a human shield for their reactionary policies, and its no wonder that those EU citizens, along with other immigrants, and even other members of ethnic minorities that were born and bred here, now feel like aliens under perpetual threat.  It acts to divide workers living in Britain, and makes building workers unity against the real enemy, the capitalists, and immediately the Tories, that much harder.

And the same applies to workers in Europe.  It is inevitable that the resentment that foreign workers in Britain will now feel, as a result of this ill-treatment and bigotry, will be transmitted to their family and friends.  Brits in Europe already have a bad reputation, largely arising from the activity of right-wing football hooligans, but also resulting from the loutish behaviour of many other Brits on holiday on the Continent, whose boorishness and bigotry, resulting from the mindset created by centuries of its colonial past, contributed to the deluded fantasies let loose in the Brexit debate.  That antagonism is likely to be reversed, and poisoned, as the reality begins to bite that Britain is no longer a significant global power, but is a rapidly declining, second rate power, whose bargaining power vis a vis an EU that is ten times its size, in terms of population, and economy, is negligible.  Those in Britain that cling to that delusion of grandeur are likely to react like every other dying organism, by lashing out wildly, and indeed Brexit itself represents such a death spasm.

Such reactions create further sharp divisions within society that detract from workers focussing their attention on the real enemy.  And Britain has experience of such divisions over a long period.  For decades the division in Ireland, led to serious communal violence, and a prevention of normal class politics.  The entry of both Ireland and Britain into the EU, and the opening up of borders, as a result of it, was a precondition for the Good Friday Agreements, and the political arrangements of the last 20 years.  The Tories and other Brexiteers openly lied when they were questioned about the problem that Britain leaving the EU would cause in relation to the Irish border.  It is clear that they have no idea how to resolve what is an irreconcilable problem.

They claim to want a frictionless border between the North and South of Ireland, but that is impossible given that that border will be the only land border of Britain with the EU, and thousands of people move across the border on a daily basis.  In effect, the problem of the unification of Ireland was resolved in practice over the last 20 years, as a result of the EU.  Now that resolution is being removed, and the problems that were highlighted during the EU debate, and which the Brexiteers, including the Northern ireland Secretary denied, will break out.

Last week, the 24 hour news channels had wall to wall coverage for nearly 48 hours of a fairly limited attack by a disturbed individual, who ran over a group of people on Westminster Bridge, and was misguided enough to take a knife to a gun-fight.  It looks like this individual had no association with any Islamist terror group, but even where such groups have undertaken attacks they have shown themselves to be very amateurish compared to the attacks of the Provisional IRA during the 1970's, 80'2, and early 90's.  Brexit poses a severe risk that such violent attacks may return, as the peace of the last 20 years breaks down, with the restoration of the border, the ending of the period of gradual coming together of both parts of the island, and a growth once more of an assertion of the old colonialist mentality, that bred Loyalist supremacism.

The obvious solution to that problem, given that a sizeable majority of people in Northern Ireland voted to remain in the EU, would be for Ireland to be reunited, but although the Unionists have lost the majority in Stormont, its likely that the old supremacism will assert itself to oppose the reunification of Ireland, and the struggle over which would make the Scottish Independence referendum look like a Sunday School, discussion.  A restoration of these divisions, and a descent of Britain into vicious and violent communalism, not seen for perhaps a century, or more, when most major cities, across the whole of Britain, still had regular conflicts between Catholics and Protestants, would be added to by the further communal violence that the unleashing of bigotry against all ethnic minorities is added to the mix, will make Britain a very unpleasant place to live.  Many British workers will crave free movement, in order to escape.

And, for those stuck in Britain, its rapidly declining economy, and rising cost of living will be another reason for those workers who can escape to do so.  Those who propose to end free movement of labour, of course do not propose to end free movement of capital.  The fruit and vegetable pickers, unable to obtain labour to be competitive, can easily shift their capital to Romania, or Bulgaria where there is plenty of land, if the workers from those countries are no longer able to come here to work.  Britain will then lose all of the spending of those workers, adding to its aggregate demand, and providing additional work for British workers, as well as losing all of the tax revenue those foreign workers provide to pay for the NHS etc.  Even more easily, the food processors, unable to bring in those foreign workers will easily be able to shift that processing work to Ireland, or to an independent Scotland within the the EU, or across the Channel, and the consequence will then also be a further deterioration in Britain's trade balance, as these activities currently undertaken here, will be undertaken inside the EU, and the resultant production then imported.

Brexit and the intransigence and supremacism of English Toryism has already provoked a restoration of calls for Scottish independence.  That once again means immediate divisions between workers in Scotland, and between Scottish workers and workers in England.  Its important that English workers mobilise, and make clear from the start that we will have no truck with the Tories attempts to prevent Scotland exercising its democratic right to self-determination if they so choose.  The Tories are quick to assert that right for Kosovo, for Crimea and elsewhere, but always reluctant to implement that right when it comes to Ireland or Scotland.

Socialists could not advocate an independent Scotland, whilst Britain was in the EU, but a situation of Scotland inside the EU, with England outside the EU changes the calculus.  For the reasons described above, an independent Scotland, desperate for immigrants to boost its population and economy, for example, would be an obvious place for many English businesses to relocate to, when they could not obtain EU labour, and when they were outside the EU single market and customs union.  The large Scottish coastline, for example, would provide the basis for a renewal of the Scottish fishing, and fish processing industries, especially with EU regional support for such investment and development; it would take very little for the financial services industry, which is already heavily located in Scotland, in places like Edinburgh, to relocate from London; Scotland has always been a leader in education and technological developments, and there is considerable scope to develop Silicon Glen.

But, as the Tories comments about developing a bargain basement economy demonstrate, the English workers would be the ones to pay the price for that, as the Tories sought to attract capital to stay, by offering them low taxes, and cheap labour, along with poor working conditions, the undermining of environmental safeguards, and a further removal of workers rights even beyond the Tories existing attacks via the Trades Union Act.

As Marx describes in Capital III, large scale capital favours higher wages, because it provides an advantage compared to small-scale capital.  But, that is only true within the context of a closed system, where the average rate of profit operates.  It is one of the reasons that we should be in favour of the removal of borders, and a regularisation of taxes etc, so that the average rate of profit applies on a wider basis, so as to allocate capital accordingly.  But, the existence of borders, and imposition of restrictions, prevents that operation, it means that capital operating on one side of a border, may obtain advantages over capital operating on the other side of the border, as a result of lower taxes, weaker regulations and so on.  It thereby drives competition to reduce conditions to the lowest common denominator, at the expense of workers, or else it drives to an intensification of protectionism, which leads initially to higher living costs for workers, reduced levels of capital accumulation, and so of employment, and ultimately leads to trade wars turning into shooting wars.  In all events, the losers from such situations are workers, who pay through their pockets, if not with their lives.  

Theories of Surplus Value, Part 1, Chapter 4 - Part 24

(b) Replacement of the Constant Capital by Means of the Exchange of capital against Capital


Marx here once more explains the absurdity of Smith's position, adopted by orthodox economics ever since, that the value of commodities, and so of national output, can be divided into factor incomes – wages, profit, interest and rent. As Marx has described in Capital II, III, and earlier in this volume, it cannot, for the simple reason that a portion of the value of the commodity is not the result of new value created, this year, by labour, but is the result of the transfer of value of constant capital, of the dead labour of previous years. Nor can this be resolved, as Smith and other economists since have proposed, by claiming that the value of this constant capital itself resolves into those other factor incomes. It cannot, because the value of the commodities that comprise the constant capital, itself also comprises a portion that represents the value of constant capital, used in its own production.

A portion of total output, therefore, never is circulated and exchanged against revenue, but is always itself only exchanged with capital, i.e. a portion of total output, equal to the value of constant capital, is always set aside solely to replace the consumed constant capital.

“When a coal-mine supplies coal to an ironworks and gets from the latter iron which enters into the operations of the coal-mine as means of production, the coal is in this way exchanged for capital to the amount of the value of this iron, and reciprocally the iron, to the amount of its own value, is exchanged as capital for coal. Both (considered as use-values) are products of new labour, although this labour was produced with means of labour that were already in existence. But the value of the product of the year's labour is not the product of the labour [newly added] in the year. It also replaces the value of the past labour which was materialised in the means of production. Therefore the part of the total product which is equal to this value is not a part of the product of the year’s labour, but the reproduction of past labour.” (p 187-8)

As Marx set out in Capital III, this is where his insistence on calculating the value of the consumed capital, on the basis of its current reproduction cost, rather than on the basis of historic prices, is vital. As Marx set out in Capital III, it is the physical components of the capital that must be reproduced on a like for like basis, for social reproduction to continue, on at least the same scale. If social productivity rises, less social labour-time is required to reproduce these use values. A smaller proportion of total output, of total social labour-time is required to effect that reproduction. This is reflected in the fact that the value transferred to current production, by the constant capital, is also likewise reduced. Whatever was paid for those commodities is irrelevant. Their value is determined by their current reproduction cost.

Back To Part 23

Forward To Part 25

Wednesday, 29 March 2017

Social-Democracy, Bonapartism and Permanent Revolution - Synopsis

  • Modern capitalism is dominated by socialised capital.
  • Social-Democracy arises on the back of socialised capital, and represents a period of transition between capitalism and socialism, in much the same way that Mercantilism represented a period of transition between feudalism and capitalism.
  • The Middle Class managers, supervisors, technicians and administrators, i.e. the “functioning capitalists”, are the personification of the socialised capital, and their equivalents within the state are the embodiments of the ruling ideas of society, determined by the objective needs of this socialised capital. They stand in a similar position, as did the Middle Class merchants under Mercantilism.
  • The old ruling class fraction, the owners of private-capital, are now divided into the owners of small-scale private capital, i.e. small business owners, and the very large private owners of fictitious capital, i.e. the owners of shares, bonds, and other financial assets.
  • This class fraction is conservative, and provides the basis for conservative parties and conservative ideas that continue to exert considerable political sway, just as did the landed aristocracy under Mercantilism, and even into the period of capitalism proper. Even by the last half of the 19th century, the landed aristocracy retained a majority in the British Parliament, illustrating the difference between holding state power, and holding governmental power, or office.
  • At times, this conservative class fraction can utilise this governmental power to further its own ends, even at the expense of real capital, just as Marx discusses the way the landed aristocracy used its governmental office to attack industrial capital, by passing factory legislation etc.
  • Ultimately, this class fraction is, subordinated to socialised capital, because it is socialised capital that dominates the economy, and it is on its fortunes that the fortunes of the state itself depend, and upon which the rents and interest payments of the owners of fictitious capital depends.
  • The last thirty years has been one such period. In the same way that the Theory of Permanent Revolution explains that the bourgeoisie would baulk at confronting the landed aristocracy, or colonial overlords, for fear of the working-class standing behind it, so the social-democrats baulked at confronting the owners of fictitious capital, for fear of unleashing the working-class standing behind it.
  • The workers deserted the social-democratic parties, letting in conservative parties, and a period of conservative reaction – Reagan, Thatcher.
  • As electoralist parties, the social-democratic parties, in order to get elected, triangulated and adopted conservative policies themselves. Those policies continued the policies that favoured fictitious capital, and led to the blowing up of asset price bubbles at the expense of real capital, and thereby sowed the seeds of their own destruction, as objective economic reality asserted itself with the financial crash of 2008.
  • Again rather than confront the owners of fictitious capital to deal with that crisis, the social-democrats bailed them out, and imposed austerity, thereby destroying real capital to an even greater degree, and forcing the inevitable contradiction to an even sharper resolution, and bigger financial crash to come. Greece has merely showed the future to every other economy.
  • The conservative political centre-ground has, therefore, collapsed. In places like Greece, that opened the door to the more traditional social-democratic policies of Syriza, and similar trends have been seen with Podemos in Spain, with Corbyn in Britain, Hamon in France, the Left Bloc in Portugal. But, it has also been reflected in a growing support for right-wing populist forces, like Trump, for Brexit, for Le Pen, Wilders etc.
  • These right-wing populists are based upon what is actually an economically and socially insignificant section of the population, on an amorphous block of declassed elements within the context of a mass society.
  • These social forces are traditionally those associated with Bonapartist regimes, and their diffuse and contradictory nature leads to the requirement for such a regime to give them order and rationality.
  • Certain elements of that Bonapartism can be glimpsed in the increasing authoritarianism of the regimes of Trump and May.
  • The regimes of Trump and May are not, however, Bonapartist. Bonapartism requires that the ruling class is itself weak, and unable to rule in its own name, allowing the state to rise above society, and to exercise governmental as well as state power. On the contrary, the power of socialised capital is if anything stronger than ever, and to the extent that the regimes of Trump and May threaten it, the social-democratic state apparatus has confronted them, via the judiciary and other levers.
  • The right-wing populists, be it Trump, May, Le Pen, Wilders or others of that ilk across Europe are anomalies. They represent neither the interests of socialised capital, nor fictitious capital, nor, despite their claims, the workers. They do not even represent the interests of most medium sized private capitals. The programmes they pursue are, correspondingly inchoate, backward looking and doomed to failure.
  • They have provoked a reaction from social-democracy, witnessed by the growth of grass roots activism in the US, out of the Sanders campaign, by the election of Hamon as Presidential candidate for the French Socialists, by the defeat of Wilders and his party in the Netherlands, and growth of the pro-EU/pro-immigration D66, and Green Left and so on.
  • The contradiction between fictitious capital and real capital has been pushed even beyond its limits, and must result in a new even bigger financial crash, and massive destruction of fictitious capital, via a collapse in financial asset and property prices. The potential to resolve that, by further money printing, and austerity no longer exists, in the way it did in 2008.
  • Social-democracy will be forced either to resolve that crisis at the expense of fictitious capital, by allowing that destruction to occur, as the means of restoring the flow of money-capital into real productive activity, and accumulation of real capital, and by pressing forward with a strengthening of social-democracy, by introducing real measures of industrial democracy, greater economic planning and regulation, and a strengthening and integration of the EU, and other such bodies, or else it will open the door to a period of real reaction, and the establishment of Bonapartist and fascistic regimes. Again Greece shows the future for every other economy in this regard.
  • As Marx says in Capital III socialised capital is a transitional form of property.
    “The capitalist stock companies, as much as the co-operative factories, should be considered as transitional forms from the capitalist mode of production to the associated one, with the only distinction that the antagonism is resolved negatively in the one and positively in the other.” (Chapter 27)
    Social-democracy resting upon these economic and social relations represents a similarly transitional phase. As Marx says, in respect of social-democracy,
    “The peculiar character of social-democracy is epitomized in the fact that democratic-republican institutions are demanded as a means, not of doing away with two extremes, capital and wage labour, but of weakening their antagonism and transforming it into harmony.”
    The working-class must push social-democracy to live up to its own ideology. Within that ideology, in concepts such as the role of industrial democracy, of the role of planning and regulation, and of internationalism also lie the seeds of socialist consciousness, as workers, through their own experience, recognise that bosses are no longer needed, the money-lending capitalists act as the same kind of parasitic drain on real capital accumulation as are the landlords, and that not only does capitalism itself require planning and regulation as fundamental to its own efficient operation, but that same planning and regulation can be utilised by workers themselves to run the economy to meet their needs, and not the blind needs of capital.
  • To the extent that social-democracy lives up to its own ideology, socialists should critically support it, but we should remember the lessons of 1848. Our agenda is not simply for an accommodation with capital, so as to mitigate its effects, but to replace it with socialism, with the self activity, self-determination and self-government of the working-class through the creation of the co-operative commonwealth.

Social Democracy, Bonapartism and Permanent Revolution - Table of Contents

Table of Contents











Chapter 10 - Bonapartism

Part 1
Part 2

Chapter 11 - Results and Prospects

Part 1
Part 2
Part 3
Part 4
Part 5
Part 6

Theories of Surplus Value, Part I, Chapter 4 - Part 23

Garnier raises another objection to Smith's attack on state functionaries.

“Why, he says, call productive 

“the labour of an inspector or director of a private enterprise in trade or manufacture, and non-productive, the labour of the government official who, watching over the upkeep of public highways, of navigable canals and ports, of monies and other important instruments destined to enliven commercial activity, watching over the security of transport and communications, the carrying out of conventions, etc., can with justice be regarded as the inspector of the great social manufacture? It is labour of absolutely the same nature, though on a vaster scale” (pp. 172-73).” (p 184)

But, its not the fact that the inspectors here are employed by the state that makes their labour unproductive.

“In so far as such a lad takes part in the production (or conservation and reproduction) of material things which could be sold were they not in the hands of the State, Smith might call his labour “productive”.” (p 184-5)

In other words, it would be the fact that the labour was not involved in material production that would make it unproductive for Smith, not the fact that it was labour employed by the state.

The third argument put forward by Garnier amounts to nothing more than moralising, Marx says. Garnier says, why should the labour of a perfumier, whose product “flatters my sense of smell” be productive whilst that of the musician who “enchants my ear” be unproductive.

“Smith would reply: because the former supplies a material product and the latter does not. Morals and the “merits” of the two lads have nothing to do with the distinction.” (p 185)

Again, that is not to say that Smith was right, but only that Garnier's attack was ill-founded. In fact, on the basis of Smith's first correct definition, the labour of both could be productive. The musician, employed by a theatre, for example, who produces a surplus value for the theatre owner, is just as productive as the chemist employed by a perfumier, whose labour creates surplus value for them.

Garnier's fourth objection is in a similar vein. He says, if a violin maker or maker of other instruments is a productive labourer, then why not the musician who uses those instruments, because, after all, the point of producing the instruments was only that they are played. But, Marx points out that the act of playing the instrument is only its consumption. It is no different than someone consuming the food that a farmer has grown. Just because the labour of growing the food was productive, that does not make the act of eating it productive, just because the point of growing it was that it be eaten!

Again, Garnier's critique is ill-founded, because it is based upon the second, incorrect definition used by Smith.

Garnier eventually gets to this point. He writes,

““The only general difference that can, it seems, be observed between […] the two classes assumed by Smith, is that in the class which he calls productive, there is or may always be some intermediary person between the maker of the object and the person who consumes it; whereas in the labour that he calls non-productive, there cannot be any intermediary, and the relation between the labourer and the consumer is necessarily direct and immediate.” (p 186)

Moreover, the unproductive labour, which exchanges with revenue, cannot be for the most part subordinated to capitalist production, whilst nearly all material production of commodities occurs within the remit of capitalist production. On this basis, the revenue received by unproductive labourers, “whether those of a prostitute or of the Pope) can only be paid for either out of the wages of the productive labourers, or out of the profits of their employers (and the partners in those profits), quite apart from the circumstances that those productive labourers produce the material basis of the subsistence, and consequently, the existence, of the unproductive labourers.” (p 186)

In other words, its not the fact that these productive labourers or their employers are engaged in the production of material commodities that is the basis of them paying the wages of the unproductive labourers, but the fact that they are engaged in capitalist production. Ultimately, all production and consumption rests upon the production of agricultural products, as the Physiocrats argued. Without the surplus production from the land, it would not be possible for labour and capital to be employed in other activities.

But, not all consumption is of agricultural products. Consumption involves consumption of manufactured goods as much as agricultural goods, and in the same way, consumption consists as much of non-material goods and services as of material goods.

“It is however characteristic of this shallow French cur that he, who wants to be an expert in political economy and so an explorer of capitalist production, considers inessential the feature which makes this production capitalist—the exchange of capital for wage-labour instead of the direct exchange of revenue for wage-labour or the revenue which the labourer directly pays to himself. By so doing Garnier makes capitalist production itself an inessential form instead of a necessary—though only historically, that is, transiently necessary —form for the development of the social productive powers of labour and the transformation of labour into social labour.” (p 187)

Garnier says,

“... “… it would also always be necessary to deduct from his productive class all labourers whose labour consists purely of cleaning, conserving or repairing finished articles, and consequently does not put any new product into circulation” (p. 175).” (p 187)

But, Marx points out that nowhere does Smith say that productive labour is only that which produces commodities that form the circulating capital. It can just as well be labour that maintains and repairs the fixed capital. In that case, the value they produce, like the value of the fixed capital itself, enters the value of the end product bit by bit, and is reproduced in the value of the commodity.

The distinction would be where such maintenance and repairs were undertaken not by wage labour, exchanging with capital, but by servants exchanging their labour with revenue. For example, the labour of an electrician who repairs a machine in a factory is productive, but the labour of an electrician who repairs a machine in the home of the capitalist is unproductive.

Garnier, having noted the distinction between the labour that exchanges with capital, and that which exchanges with revenue, then says,

“But this capital is always in the end replaced by the revenue of a consumer, otherwise it would not circulate and therefore would not yield any profit to its possessor.” (p 187)

In fact, Garnier is wrong. A part of the capital is replaced by capital, not by revenue, i.e. of c + v + s, c is replaced by capital.

Tuesday, 28 March 2017

Theories of Surplus Value, Part I, Chapter 4 - Part 22

[7.] Germain Garnier [Vulgarisation of the Theories Put Forward by Smith and the Physiocrats]


Marx then turns to some of the critiques of Smith. In discussing these critiques, Marx was not suggesting that Smith was right. He was simply showing that they were attacking Smith for the wrong reasons.

(a) Confusion of Labour which Is Exchanged Against Capital with Labour Exchanged against Revenue. The False Conception that the Total Capital Is Replaced through the Revenue of the Consumers


Garnier picks up on the weakness in Smith's argument, both in relation to his insistence that it is only labour embodied in physical commodities that is productive, and that any labour that produces value rather than surplus value is productive. Garnier says,

“ “All labour is productive in the sense in which the author uses this word productive, The labour of the one as of the other of these two classes is equally productive of some enjoyment, commodity or utility for the person who pays for it, otherwise this labour would not find wages.”” (p 183)

But, in developing this argument, Garnier goes on to cite examples of where “unproductive” labour, in Smith's view, performs the same labour, or creates the same kind of use value as “productive labour”. These examples are similar to the ones Marx gave earlier about the people who come to your house to provide various services, although Marx points out that some of the “productive” labourers that Garnier contrasts them with are not considered “productive” by Smith either.

Garnier is correct in highlighting this contradiction, but he does not criticise Smith for the real weakness, which is that this contradiction exists, because he has slipped into the second, false, definition of productive, as merely productive of value.

Garnier also introduces another false idea here, in relation to that labour, which performs various kinds of maintenance. But, Marx points out that nowhere does Smith deny that productive labour can take the form of labour materialised in the form of such repairs rather than in new construction. The real critique of Smith here should be the insistence on productive labour being materialised in some physical commodity.

A further false concept follows on from this. It is that any labour undertaken to save time for some other productive labour thereby becomes productive itself by virtue of enabling the productive labour to function. So, for example, a menial servant may perform the functions of cooking, cleaning and so on, which thereby frees up the time of a productive worker to engage in productive activity. 

“But Adam Smith does not deny this “division of labour”. If everyone had to perform productive and unproductive labour, and through the dividing up of these kinds of labour between two persons both were better performed, according to Adam Smith this would in no way alter the circumstance that one of these labours is productive and the other unproductive.)” (p 184)

If we take the situation of a commodity producer, the time they require to take their goods to market and sell them is not productive; it adds no value to their commodities. This is why initially the markets were held on a Sunday, when they would not have been working anyway. It dos not change this situation when, instead of taking their commodities to market themselves, they turn this function over to merchants.

What was an unproductive activity for the commodity producer does not suddenly become productive because they hand this function over to a specialist merchant. All that occurs here is that the expense of taking goods to market, of selling, is reduced.

Monday, 27 March 2017

Bonapartism and Presidential Systems

In recent posts I have compared the regimes of Trump and May to the regimes of Putin, Erdogan, Netanyahu, and with the right-wing populism of parties in Europe such as the Front National of marine Le Pen, and the Dutch Freedom Party of Geert Wilders.  Comparison, obviously does not mean equation.  None of these regimes are the same as or interchangeable for another.  What all share is a similar appeal to a mass society, and to its amorphous and atomised elements.  They are right-wing parties that claim to be "workers-parties" on the basis of an appeal to this amorphous mass, and their claim to defend its interests against some alien "other" - usually foreigners in general and often in particular, but also the so called "metropolitan elite", which is suitably left vague and undefined.
The appeal to this amorphous mass, and claim to be a "Workers Party" is backed up by national socialist rhetoric, and policies.  For example, Le Pen and Melanchon both put forward policies for large scale fiscal expansion via public works, and infrastructure investment.  Trump having been knocked back by the Tea Party elements in the Republican Party, now looks set to try to win support from Democrats for his own programme of fiscal expansion and infrastructure spending.  May's government has rowed back, but initially reduced its commitment to further austerity, as well as throwing in talk about putting workers on company boards,
What each of them also share is an increasing tendency towards authoritarianism.  Trump has clearly been taken aback by the fact that he cannot operate as President in the same way that he did as head of a company.  He has been knocked back by the courts over his Muslim Travel ban, and by his own House Republicans over the repeal of Obamacare and introduction of Trumpcare.  His response has been to use extra-parliamentary resources, via social media, and friendly mass media outlets to attack and undermine his opponents in these other arms of government.
May's government sought to cut out Parliament from having any say over the Brexit Bill, and when the courts struck down that attempt, a similar attack on the judiciary was undertaken by the governments supporters in the right-wing media.  The government kept discussion of the Bill to a minimum, and now proposes to insert so called Henry VIII clauses into the Great Repeal Bill, that will again remove parliamentary control over the government, and grant it dictatorial powers in implementing its policies in relation to withdrawal from the EU.
It is also the case that Britain's parliamentary democracy has increasingly taken on some of the features of a Presidential system in recent decades, which led former Tory Lord Chancellor Quentin Hogg, to describe it as an elected dictatorship.  Talk about Theresa May or Gordon Brown not being "elected", meaning elected via the electorate via a General Election, reinforce those trends, by suggesting that a General Election is about electing a Prime Minister, rather than about electing a Parliament.  The introduction of Presidential style Leaders Debates at election time is another facet of that development.
In this post, therefore, I examine the relation between Bonapartism and Presidential systems.
The Brisbane Workers Liberty leaflet here: Support the Workers Not Chavez makes the case that Chavez is a Bonapartist dictator. Part of the argument is that he has been backed by business leaders. If that was the primary condition for being a Bonapartist then almost every political leader in the West would be similarly described. Another part is that he has concentrated power in his hands. I will examine that below.
The leaflet states:
Chávez has won eight elections. But he’s concentrated power in his own hands. He appoints his own vice-president and has no prime minister. He has sole power over military promotions and a big say in the appointment of judges. He can dissolve the
National Assembly and declare a state of emergency”
But this seems to reflect a lack of understanding of basic comparative politics, the difference between the kind of Parliamentary system that exists in Britain with the presidential systems that exist in other parts of the world, most notably France and the US.
France
DeGaulle came to power in a coup in 1958. He maintained a close relationship with the military thereafter. At the outset of the Fifth Republic there was supposed to be a bicephalous allocation of responsibility between the President and the rest of the Executive responsible to the Prime Minister. The transition from the Fourth to the Fifth Republic was legalised by Coty. De Gaulle made it clear he did not accept the idea of a limited presidential sector. At his press Conference of 31st January 1964 he asserted that “the individible authority of the state is completely delegated to the president by the people who elected him”. This claim to supreme and uncircumscribed power was defended by the Prime Minister Pompidou.
Pompidou, and subsequent Presidents have also assumed this supreme power of the President. Within the French presidential system the President has eight traditional presidential powers which have been transformed from formal into real powers, and seven prerogative powers, which do not require Ministerial countersignature.
The prerogative powers are.
1) The appointment and dismissal of the prime Minister. This power has been used several times by Presidents including recently to dismiss Prime Ministers that had not been defeated in Parliament.
2) The right to send messages to parliament, for example, announcing referenda
3) The right to call referenda on non-constitutional modifications to government organisation
4) The right to dissolve the Assembly
5) The right to nominate one third of the Constitutional Council
6) The right to assume Emergency Powers under Article 16 of the Constitution, giving him the power to take whatever measures are required for as long as he requires.
7) On the basis of Article 15 and under a decree of 1964, giving the President as head of the Armed Forces sole right to use the nuclear force.
The traditional powers are:
1) The appointment and dismissal of Ministers.
2) He is Chairman of Council of Ministers, effectively the Cabinet
3) He is Commander in Chief of the Armed Forces and presides over the national defence committee.
4) He promulgates statutes
5) Under Article 52 he is empowered to negotiate treaties, controlling foreign policy
6) The President appoints to a wide range of senior judicial, administrative and military posts including Councillors of State and judges, ambassadors and senior officers, prefects and rectors, the divisional heads of ministries, and heads of certain nationalised industries.
7) The president is “protector of the independence of the judicial authority”, he appoints and presides over the higher Council of the judiciary and exercises the right of reprieve.
8) The President can initiate an amendment to the Constitution at the request and with the countersignature of the Prime Minister – who of course is appointed by and can be sacked by the President.
But such Presidential powers are not peculiar to France. They do not reflect its Bonapartist past, or the consequences of the Fifth Republic being the child of DeGaulle’s coup.
The US
The US Presidency enjoys if anything even greater power and autonomy as the war in Iraq and other wars launched by the President without Congressional approval display. Like Chavez the US President also appoints his Vice President as running mate, and if the Vice President resigns, the President simply appoints a replacement.
As with the French President, one of the President’s most important powers is the power of appointment. In the US the top level bureaucrats are appointed by the President rather than being permanent civil servants as in Britain. Although, the Senate can challenge the President’s appointments, this hardly ever happens with the topmost appointments. The President also appoints to the Supreme Court which under the US Constitution can overrule the Congress, and even the President if their actions, or legislation is deemed ultra vires, i.e. that it is inconsistent with the basic rights and freedoms enshrined within the Constitution.
The President can remove Executive officials.
The formal body for co-ordinating policy is the Cabinet, but since 1939 Presidents have pulled control even closer to themselves through the Executive Office of the President. It contains the White House Office, The Bureau of the Budget, the Council of Economic Advisers, and the National Security Council.
The President also controls the annual budget which is done through the Office of Management and Budget. Congress can also block budgets put forward by the President which has happened several times leading to a stalemate, but Congress usually gives in after some horse trading, because they do not want to be seen as bringing the country to a halt.
The President also controls foreign and defence policy through the National Security Council set up in 1947. The President is Commander in Chief of the Armed Forces, and has tremendous power emanating from that role. As Galbraith demonstrated long ago the US political system is characterised by a powerful military-industrial complex. Defence contractors always have a large number of ex-Generals and Admirals on their Boards, and Defence Secretaries are themselves often connected with the military as with Colin Powell. The work associated with military contracts is also significant in economic terms, and as a means of bringing Congress men and women into line in order to obtain lucrative contracts for defence companies in their states, part of the so called pork-barrel politics.
Unlike France the President does not have the power to dissolve Congress, with elections occurring at fixed four year intervals. But that is unnecessary. Unlike France, which retains some elements of Parliamentarism, the US is not at all a Parliamentary, but a purely Presidential system. There is no Prime Minster, because the President is himself both President and Prime Minister rolled into one. The Ministers are not Ministers of a parliament, but members of the Presidents Cabinet, that he can sack and appoint at will. All of the functions that would in Britain be seen as the function of Parliament, and now of Government acting through parliament, are in the US, functions carried out by the President. If anyone’s time is to be cut short it is then that of the President, which can only be done if the President is first impeached. That rarely happens, and even in the case of Nixon he was not actually removed after impeachment, but resigned.
Yet, the US and France are countries where the bourgeois democratic revolution has been more completed than Britain, whilst in these countries power is placed in the hands of the President, which when claimed by others, like Chavez, is described as Bonapartism.  Clearly, a definition of Bonapartism requires something other than purely a description of these executive powers, or else we would describe every Presidential system in the world, as well as parliamentary systems like that in the UK that have similar executive powers, as Bonapartist.
One of the requirements set out by Marx, and by other writers, Trotsky in particular in describing Bonapartism, is not the extent to which these Presidential powers are imbued in the office, but the extent to which the State itself has been able to rise up above society, and exert an independent power largely free from the control and influence of the dominant social class within the society. That was the condition Marx set out in relation to both the first and second Bonapartes in France. In the case of the first arising from the weakness of the bourgeoisie, its reliance on the peasantry, and the continued strength, particularly in alliance with foreign monarchies of the ancient regime. In the case of the second, the continued weakness of the bourgeoisie and continuing reliance on the peasantry and petit-bourgeoisie, as against the rising power of the proletariat.
Such situations are quite rare in history reflecting periods of fairly intense social crisis. In order to describe a regime as Bonapartist it is then necessary not just to point to Presidential powers which are, in fact common to most Presidential systems, but to demonstrate that these powers are exercised on behalf of a state which has raised itself up above society, and freed itself from the control of the dominant social class. It is necessary in doing so to describe the social conditions in which that dominant social class has found itself unable to exercise its class dictatorship, and that invariably means showing that some other class has become strong enough to effectively challenge that class dictatorship.

Theories of Surplus Value, Part I, Chapter 4 - Part 21

William Petty also has this conception of foreign trade, which brings in money, being the basis of what is productive wealth, but Petty includes in his definition of who is involved in this productive activity soldiers. This presumably reflects their role, for example, within the East India Company, of securing these colonial markets from which treasure was returned from such trade.

““Husbandmen, Seamen, Soldiers, Artizans and Merchants, are the very Pillars of any Common-Wealth: all the other great Professions, do rise out of the infirmities and miscarriages of these; now the Seaman is three of these four” (navigator, merchant, soldier) ([William Petty,] Political Arithmetick, etc. [in Several Essays in Political Arithmetick], London, 1699, p. 177). “… the Labour of Seamen, and Freight of Ships, is always of the nature of an Exported Commodity, the overplus whereof, above what is Imported, brings home Money, etc.” (p. 179).” (p 180)

Petty also indicates that with a certain level of trade, a nation can also benefit from the division of labour, so that it can build different types of ships to carry different types of cargo, and to operate in different types of sea conditions, and thereby reduce the cost of construction and the cost of freight.

Petty also adopts a position similar to Smith in respect of a definition of productive being determined by whether what is produced is a material commodity.

“If taxes are taken from industrialists, etc., in order to give [money] to those who in general are occupied in ways “which produce no material thing, or things of real use and value in the Commonwealth: In this case, the Wealth of the Publick will be diminished: Otherwise than as such Exercises, are Recreations and Refreshments of the mind; and which being moderately used, do qualify and dispose Men to what in it self is more considerable” (l.c., p. 198).” (p 180)

Petty anticipates the analysis of surplus value, but only in the form of rent. He defines value in terms of labour-time – although, as with Benjamin Franklin, he doesn't distinguish between concrete and abstract labour. So, he says that if it takes the same time to bring an ounce of silver from the ground in Peru, to London, as it takes to produce a bushel of corn, then “one is the natural price of the other.”

On this basis, he argues that as other industries arise, labour will leave agriculture, and wages rise. But, as wages rise, the rent must fall. In other words, the surplus value is reduced. The value produced by the agricultural worker (husbandman) remains the same, and this is reflected in the price of a bushel of wheat remaining constant so that, if wages rise, they form a greater portion of this price, leaving a smaller portion for rent. The price of the wheat cannot rise, because of competition, as wheat would be imported.

Marx quotes a further passage from Petty's A Treatise of Taxes, and Contributions…, London, 1662, where he sets out this view of surplus value even clearer. In this passage, Petty says that after a husbandman planted, cultivated and harvested a certain area of land by hand, then after they had deducted from their output what was required to replace their seed, what was required to cover their own consumption, and what had been given to others in exchange for the clothes and other commodities they require, then “..the Remainder of Corn is the natural and true Rent of the Land for that year; and the medium of seven years, or rather of so many years as makes up the Cycle, within which Dearths and Plenties make their revolution, doth give the ordinary Rent of the Land in Corn.” (p 182)

He goes on to ask what the corn and the rent would be in money, and again repeats the argument made previously.

“Let another man go travel into a Countrey where is Silver, there Dig it, Refine it, bring it to the same place where the other man planted his Corn; Coyne it, etc. the same person, all the while of his working for Silver, gathering also food for his necessary livelihood, and procuring himself covering, etc. I say, the Silver of the one must he esteemed of equal value with the Corn of the other” (p 182)

(c) John Stuart Mill, an Adherent of Smith’s Second View of Productive Labour


J.S. Mill added nothing to Smith's second, incorrect, definition of productive labour, other than to suggest that labour used to produce labour-power was itself productive. In other words, the labour involved in educating and training labour-power is itself productive.

Sunday, 26 March 2017

Defend Scots Democratic Rights - Part 6 of 6

To claim, as the Tories do, that Scots could only hold a referendum when the full details of the Brexit settlement is known is nonsense. The Tories have just carried through an EU referendum with the British people, as a whole, having no idea what the settlement will be, and largely based on a whole series of lies told by the Brexiters, such as the promise of £350 million a week for the NHS. The Scots had demanded continued membership of the single market and customs union, and continued right of free movement. Whatever happens with the Brexit negotiations, it is already known that these demands will form no part of it, because the Tories have already ruled out even asking for them.

With the Tories not wanting to be a member of the single market or customs union, and their driving principle being to end the free movement of labour, it is not as if the EU is going to voluntarily offer membership of the single union or customs union, or impose it on Britain, as part of such a settlement. The Scots already know that their demand for membership of the single market and customs union, and for free movement will not be part of any settlement because the Tories have already ruled out even seeking it.

As things stand, I am still inclined to believe that socialists should place the unity of Scots, Welsh and English workers, in a unitary British state, above the importance of seeking the unity of Scots workers with other EU workers within what is still only a loose, confederate, proto-state. For one thing, its not clear that Brexit will ultimately occur, and a decisive campaign by British workers, could prevent it. Even if it does occur, the consequences are likely to be such that Britain will again have to supplicate itself in applying for readmission, and that will be driven by the needs of capital.

But, a Britain driven by an increasingly authoritarian and reactionary English nationalism, responding to right-wing populism, and with a Labour Party apparently being carried along on its coat-tails, may change that calculation. At the same time, the demise of the Dutch Labour Party, which adopted a popular frontist strategy similar to that of the British Labour Party, whilst the pro-EU, pro-immigration parties, such as D66, and the Green Left, made significant advances, indicates again that England and Europe are moving in different directions.

In England, the Tories are embracing bigotry, whilst Labour is accommodating to it. In Europe, new social forces and parties are responding, by fighting it, and promoting a positive and progressive alternative future for Europe.

Socialists should be on the side of those whose sights are on that progressive future, not those whose misty eyes are locked on their memories of the past.

Theories of Surplus Value, Part I, Chapter 4 - Part 20

(b) Early Attempts to Distinguish between Productive and Unproductive Labour (D’Avenant, Petty)


D'Avenant (An Essay upon the Probable Methods of Making a People Gainers in the Ballance of Trade, London, 1699, p. 50) put forward a Mercantilist view of productive and unproductive labour. For the Mercantilists, it was activity that created a surplus of trade which was productive. This trade surplus, thereby provided the gold and silver as a surplus value, which could then be used to finance the employment of labour in all other activities. 

In this regard, D'Avenant quotes the work of Gregory King (Scheme of the Income and Expense of the Several Families of England, calculated for the year 1688) who divided the nation into two classes, the first who were productive of wealth and the second who were destructive of wealth, and dependent on the first.

In the first class, King places “Lords, Baronets, Knights, Esquires, Gentlemen, Persons in Office and Places, merchants in oversea trade, Persons in the Law, Clergymen, freeholders, farmers, persons in liberal arts and sciences, shopkeepers and tradesmen, artisans and handicrafts, Naval Officers, Military Officers. As against these, the “unproductive” class consists of: common seamen, labouring people and out servants (these are agricultural labourers and day wage-labourers in manufacture), cottagers (who in D’Avenant’s time were still a fifth of the total English population), common soldiers, paupers, gipsies, thieves, beggars and vagrants generally.” (p 178)

D'Avenant's justification for this position was that those in the first class not only obtained an income sufficient for their consumption, but also obtained a surplus, which could be used to employ others. By such employment, D'Avenant suggested they were consumptive of the wealth created by the first class.

In fact, what was paid out as wages, and thereby added to domestic consumption was directly seen as destructive of wealth by D'Avenant and other Mercantilists, because what was consumed at home was not exported, and thereby reduced the trade surplus, which reduced the flow of gold into the country.

However, Marx says,

“Incidentally, it must not be thought that these Mercantilists were as stupid as they were made out to be by the later Vulgar-Freetraders.” (p 179)

Marx quotes D'Avenant (Discourses on the Publick Revenues, and on the Trade of England, etc., London, 1698) where he indicates that he clearly understood that the real wealth consisted not simply in the store of precious metal, but in the productive capacity of the economy.

““Gold and Silver are indeed the Measure of Trade, but the Spring and Original of it, in all Nations, is the Natural, or Artificial Product of the Country, that is to say, what their Land, or what their labour and Industry produces. And this is so true, that a Nation may be suppos’d, by some Accident, quite without the Species of Money, and yet, if the People are numerous, industrious, vers’d in Traffick, skill’d in Sea-Affairs, and if they have good Ports, and a Soil fertile in variety of Commodities, such a people will have Trade, […] and, they shall quickly get among ‘em, a plenty of Gold and Silver so that the real and effective Riches of a Country, is its Native Product” (p.45)” (p 179)

Saturday, 25 March 2017

The Fart and the Deal

According to the so called billionaire business genius, Donald Trump, he is the master of deal making, and even wrote a book on it called "The Art of the Deal".  No doubt, Trump believes it is the best book ever folks, all other books are failing and terrible.  But, of course, as with everything Trump it is simply foul-smelling hot air, as his record already as president demonstrates.

Since becoming President, he put forward a disastrous decree to prevent people from seven Muslim majority countries from travelling to the US, which was struck down almost immediately by US Courts; he has pissed off his own state security services, by publicly attacking them, and comparing them to the Nazis, as well as pissing off the British state by trying to draw them in as collateral damage to cover his ridiculous claims that Obama has been phone tapping Trump Tower (which he can, of course feel free to do, as Britain embarking on Brexit, has to tug its forelock to every large power in the globe); and now even his flagship Health Insurance Programme cannot even win the backing of his own Republican Party in Congress, let alone any wider backing!

The fact is that Trump is full of shit, but he has been able to get away with it, in the same way that others of his ilk can get away with all sorts of rubbish and incompetence, because he was born with loads and loads of money, though by some accounts he has lost even a lot of that.  The fact is that Trump has actually been lucky that his fellow republicans have been fighting like rats in a sack over his Healthcare Bill, because had it passed, it would have caused chaos, and led to massive rises in health insurance costs for millions of those who actually voted for him, and the withdrawal of health insurance for millions more.  Hard reality, would soon have led those supporters to sober up, smell the coffee and ditch the Donald.

In places where people have had experience of him in the past, some of those illusions have already been shattered.  In Atlantic City, for example, Trump made big promises, like those he has made to the people of the US as a whole.  He took over a number of big Casinos, but instead of the area flourishing, it went backwards, whilst Trump stripped money out of the Casinos, before disappearing.

Its the same kind of asset stripping that was seen with BHS in Britain under Phillip Green.  Now it seems that Trump has his sights on a bigger asset to strip - the US itself no less.  He has already appointed members of his own family into this new empire.  We can only hope for the American people that having asset stripped the country, and left yet another venture in bankruptcy, Trump does not follow the example of Phillip Green who sold on the BHS for a pound, and sell on the US to Putin for a dollar.

Theories of Surplus Value, Part I, Chapter 4 - Part 19

6. Advocates of Smith’s Views on Productive Labour. On the History of the Subject


(a) Advocates of the First View: Ricardo, Sismondi


Both Sismondi and Ricardo accepted Smith's first correct definition of productive labour as that which exchanges with capital. Sismondi writes,

““The one always exchanges its labour against the capital of a nation; the other always exchanges it against a part of the national revenue.”” (p 177)

Ricardo also argues that it is better for workers if capitalists and landlords spend their revenue on hiring “unproductive labourers” than that they spend it on the purchase of luxury commodities. If they buy the latter then, once these commodities have been consumed “and there would be an end of them”, no more labour would be employed. However, Ricardo continues, if the revenue were spent on hiring menial servants, this would increase the demand for labour. 

“As the labourers, then, are interested in the demand for labour, they must naturally desire that as much of the revenue as possible should be diverted from expenditure on luxuries, to be expended in the support of menial servants” ([David ] Ricardo, [On the] Principles [of Political Economy, and Taxation,] third edition, [London,] 1821, pp. 475-76).” (p 177)

Marx does not challenge this view here, but its not at all clear that Ricardo is correct in this argument, for the reasons Marx has set out previously. If revenue is spent simply on hiring a cook, to prepare a meal for me then once I have spent that money it is gone. It is not reproduced. Unless I have some more revenue I have no means of employing the cook to produce further meals. The commodity they supply, the service of cooking a meal, has gone just as much as is any other commodity I buy, such as some luxury clothes. Ricardo does not seem to take into consideration that in buying say an expensive suit, this too created a demand for labour as with hiring a cook.

The tailor is added labour here, as is the labour of the weaver, who produces the cloth, the spinner who produces the yarn, the farmer who produces the cotton or wool, the machine maker who produces the loom, and the spinning machines and so on.

All of this additional labour is demanded because the revenue is expended upon buying a suit, which increases the demand for all these other commodities, and the labour required for their production. In hiring the menial servant, the revenue merely enables that worker to reproduce their labour-power, but adds nothing to capital accumulation. However, in buying a luxury suit, the revenue enables the surplus value of the tailor to be realised, so that his capital can be expanded. This expansion of capital thereby creates the condition not only for the existing labour to be reproduced, but for a demand for additional labour to be created.