Thursday, 31 August 2017

Labour's Brexit Shift Is A Step Forward

The decision of Labour's leadership to shift its position on Brexit, so as to support staying in the Single Market and Customs Union, for a provisional period, after 2019, is a step forward. The previous position was untenable. Every time a Labour spokesperson appeared before the media, it made them look either incompetent, uncertain,or dissembling, because it meant arguing two irreconcilably opposed positions, based upon the the Government's ludicrous approach of seeking to have cake and eat it. Moreover, try as Labour might to deny it, it was clear that Labour's position, in practice, was no different to that of the soft-Brexit Tories, which itself is untenable. However, all that the shift in position has done is to highlight how untenable the previous position was. It merely avoids the awkward questions that position raised in the immediate situation, only to defer them to a few years down the road.

Arguing for remaining in the Single Market and Customs Union, for now, avoids the contradictions that arise over the Irish border, citizens rights, free movement and so on, and the disastrous effects on the economy that a cliff edge split with the EU will bring with it. But, all of those questions still exist, if Labour continues to argue for withdrawal from the Single Market and Customs Union at some future point. Yes, theoretically, if Labour were to argue for becoming a member of the EEA or EFTA, some of those contradictions could be removed, but that ignores the fact that whilst such solutions might be workable for small countries like Norway or Switzerland, in practice, they are not solutions for Britain's larger economy.

Even politicians in Norway argue that its relation to the EU is not desirable. It means they are bound by EU obligations, decisions and laws, but with no input into forming those rules and obligations. But, for small countries like Norway and Switzerland, that may be a small price to pay for being able to obtain the benefits of membership of the single market or customs union. For Britain, it's clear that whilst it is a small fish compared to the whole EU, or to economies like the US, or China, it is big enough not to be prepared to play such a back seat role as a Norway or Switzerland. The current UK-EU negotiations have made that clear, as Barnier talked about Britain's stance reflecting a kind of nostalgia, of wanting to enjoy all the rights of EU membership, in framing rules and regulations, but without being a member of the club. In other words, it is an expression of the arrogant British stance of seeking to have cake and eat it. There is no way the EU will accept such a stance, and those Brexiters who continue to think otherwise are simply deluded, and are misleading the British people, as they did during the referendum campaign itself.

Labour's change of stance has already had an effect on the Tories. It is probably why May has come out to more firmly announce her intention of staying and fighting the next election, and why the hard Brexiters have rallied around her. The fact is that now, the Tory Remainers, and soft Brexiters have a flag to rally around. Its only a pity that Labour had not provided it during the parliamentary debates over Article 50. The other consequence of that, however, is that it looks like the hard right in the Tory Party are angling to create an excuse to break off talks with the EU, as UKIP had been advocating.  That will require a determined struggle in Parliament, and probably the need for another General Election.  The shift of stance is also welcome because had Labour continued to appear merely as a pale reflection of the Tories on Brexit, the chance was that many of those younger voters who flocked to Labour as the only hope of resisting hard Brexit, would begin to splinter away.

The shift in stance means that the support of those younger voters and all those that went further and joined the party, can be consolidated, and the chance of fake left parties such as the Greens, Liberals, Plaid and SNP acting as a pole of attraction is cut off. But, that only applies for so long, and the current shift in stance is only a stop-gap, in that respect. Moreover, Labour's stance is back to front. It argues that it will accept free movement, as a part of remaining in the single market, but the starting point ought to be arguing positively for free movement. It is free movement that is the basic element of promoting workers rights, whilst it is the elements of the free market ideology of the Single Market, that undermines workers rights and interests that Labour should be seeking to change along with socialists and social-democrats across the EU.

And a recent poll suggested that even amongst Leave voters, the principle of free movement has majority support, as a recent Left Foot Forward post illustrated.

Labour's stance has so far continued to be framed in those old Blair-right terms of what is good for business as being the basis of what is then good for workers. Yet, even in those terms, what the free market policies that underpinned the EU really represented was not the interests of capital per se, of large-scale socialised capital, but only the interests of the owners of fictitious capital, of share and bondholders. Its foundations framed by people like Thatcher, and other European conservatives in the 1980's, reflected the interests of that fictitious capital, in contrast to the original foundations of the Common Market, based upon extending social-democratic principles of planning and regulation, as the basis of the accumulation of real productive-capital.

What Labour, merely as a progressive social-democratic party needs to get back to is the advocacy of those same principles of longer-term planning and regulation, as the basis for creating the stable conditions under which capital accumulation can proceed across the EU. It needs to get back to the ideas that underpinned the EU's Draft Fifth Directive on Company Law, that proposed establishing the same kind of co-determination of companies by having 50% of company boards made up of elected worker representatives, as already exists in Germany. And that requires also not a breaking up of the EU, but its further integration, and the harmonising of taxes, benefits, minimum wages and so on within its borders. It requires a more rapid development of a Federal United States of Europe, as the minimum basis upon which the struggle for a Workers' Europe can be undertaken.

And that same approach also needs to be taken inside Britain itself. Blair pushed forward the devolution agenda for typically Blair-right reasons. Blair's politics was based entirely upon electoralism, as a form of populism, and the tailing of public opinion. It saw a party's politics as being merely a commodity to be sold to voters, like washing powder, simply packaged up in a fashion that its market research told it would be most effective. Every policy, if such it could be called was merely a consequence of a process of triangulation to maximise votes from different segments of the electorate, in the same way that advertisers seek to maximise sales by stratified marketing.

The various focus groups told the Blair-rights that Scots voters wanted something different to what English voters wanted, particularly those English voters in the South-East that Blair was desperate to win away from the Tories. A single Labour message across the whole of Britain thereby threatened to retain Labour's core vote, whilst alienating some of the English “middle ground”. Devolution meant that a different Labour message could be sent out in Scotland to England, and that, it was intended, would be the way of undermining the SNP, and maximising the Scottish Labour vote. In fact, it inevitably had the opposite effect. It meant the nationalists could continue to blame Westminster for all the ills of Scotland, whilst taking credit themselves for any success. It meant that politics in Scotland was increasingly fragmented along nationalist and loyalist lines rather than class lines, not yet as clear-cut as in Northern Ireland, but moving in that same direction.

Indeed, the logical extension of that has been seen more recently, where that trend has infected the Labour Movement, and Labour Party itself with increasing calls for the Scottish Labour Party to separate itself from the Labour Party in the rest of Britain, much as the SDLP in Northern Ireland exists as an independent party, and the logical extension of that is for the Scottish TUC and Scottish trades unions to separate themselves from their English brothers and sisters, much as is the case with the Northern Irish trades unions. Wherever, these vertical cleavages in society are allowed to become more decisive, or where they are by the history and nature of the society, already more decisive (for example, in Northern Ireland, but the same kind of cleavages exist in a more exaggerated form in places like Iraq, Syria Egypt etc.) they undermine the organisation of politics on class lines. They encourage the formation of cross-class alliances that always weaken the position of workers, and subordinate their interests to those of the respective national bourgeoisie.

Indeed, the same thing could be seen over Brexit itself. Much as Corbyn and others sought to fight the referendum on the basis of the shared interests of workers across Europe, the media were only interested in framing the discussion around a binary choice of the interests of Britain v the interests of the EU. And, when it came to the Scottish referendum that same binary choice was what was on offer. Labour's disastrous Scottish referendum stance was to become good English Nationalists, arguing the case for the union, as it stood, as a capitalist union.

With Kezia Dugdale standing down as Labour Leader in Scotland, the opportunity opens up for a different approach. The approach throughout the UK should be the same as our approach to Europe. We start from the position of what is in the interests of the global working-class. That is why we support the right of free movement, irrespective of whether Britain is in or out of the EU; we start from the position that the minimum practical unit in which to pursue even progressive social-democratic policies is that of the EU. The reason to advocate staying in the EU is not because it would be good for Britain, or good for British business, but because it is the best basis upon which to forge workers unity and class solidarity across the continent, and thereby to undertake the political struggle for workers' interests.

And, the same is true in relation to Scotland, as socialists we argue against Scottish independence not because we are English nationalists, or because such union is good for British business, but because nationalism is a diversionary dead-end, and distracts from the need to build ever closer unity in action of workers throughout Britain, and beyond to ever closer unity in action with workers across Europe.

Theories of Surplus Value, Part II, Chapter 8 - Part 3

Marx repeats a point made in his discussion of rent in Capital III, which may be historically accurate, but which I'm not sure is theoretically valid. He writes,

“Quite apart from the variation in rent according to the fertility of the land, the very existence of rent—i.e., the modern form of landed property—is feasible because the average wage of the agricultural labourer is below that of the industrial worker. Since, to start with, by tradition (as the farmer turns capitalist before capitalists turn farmers) the capitalist passed on part of his gain to the landlord, he compensated himself by forcing wages down below their level. With the labourers’ desertion of the land, wages had to rise and they did rise. But hardly has this pressure become evident, when machinery etc. is introduced and the land once more boasts a (relative) surplus population. (Vide England.)” (p 17)

There is no doubt that capitalist farmers sought to compensate for the payment of rent by reducing wages below the value of labour-power, but the same can be said about the less efficient capitalist producers in general, who seek to compensate for their lower profits, arising from that inefficiency, by paying lower wages, and imposing poorer conditions.

Marx also describes the response to that in agriculture, with the movement off the land into the towns, and consequent rise in agricultural wages. Again, yes, historically, the response over time was to introduce labour-saving machines, which recreated a relative surplus population on the land, but its not clear how this is different to the position labour faces in general, when such new technology is introduced to remedy a relative shortage of labour. Marx's argument, related to this, in Capital III, was that it reflects the fact that productivity in agriculture is always lower than in industry, but it is not clear that this must always be the case or that the basis of rent would disappear if it were not the case.

The basis of Marx's argument is that the difference between agriculture and industry is that increased surplus value in industry arises from cheaper production, whereas in agriculture it arises from more expensive production. Marx sets out the situation in industry. But, his argument is rather lax.

He takes the price of production of yarn, and then examines the situation of a producer that produces with a lower individual value, due to the use of fixed capital, which allows more efficient production, on a larger scale. So, if the price of production of 1 kg. of yarn is £2, this producer may be able to produce it at £1, including the average profit. Because this lower cost is the result of producing on a larger scale, say 10,000 kg. rather than 8,000 kg., this represents increased supply of 2,000 kg., a place for which must be found on the market.

Marx makes a slight error, because he says that the lower cost is only achieved because the fixed capital cost is spread over this larger output, so that if only 8,000 kg. were sold, the price would be 20% higher. In fact, of course, the fixed capital raises productivity so that also the cost of wages in each kg. of output falls.

In order to sell this 10,000 kg., therefore, the producer reduces the selling price, so as to create additional demand. However, in reality, it depends on the relative proportion of total output which this producer accounts for. If the total production of yarn is say 1 million kg., the additional 2,000 kg., of this producer, will not be significant. They would, in reality, continue to sell their output at the existing price of production of £2 per kg., making £1 per kg. of surplus profit.

But, Marx assumes that this 10,000 kg. is sufficient to require the producer to reduce their price so as to sell it. If they reduce their price to £1.50 to do so, this will be below the previous market price and price of production, but above the individual value/price of production for this 10,000 kg. thereby still providing a surplus profit of £0.50 per kg.

Marx does not pursue the ramifications of the argument, however, For example, if this 10,000 kg. represents a significantly large proportion of total output as to require a fall in the market price of yarn, to create the demand to absorb the additional supply, it must also be large enough to also affect the market value/price of production of yarn itself. It is not just this producer alone who then must sell at £1.50 per kilo, but all other producers of yarn. But, other yarn producers may produce with a price of production equal to the previous level of £2 per kg. which means that they now make profit below the average, to the extent of £0.50 per kg. Others may produce at prices of production even above the old level who now see their profit disappear, leading them to withdraw their capital.

Turning to the situation in agriculture, Marx argues that the supplier would sell, not at £1.50 per kg., but at £2 per kg, because “... if I had sufficient fertile land, the less fertile would not be cultivated.” (p 18)

But, if we assume no change in demand, in both cases, that is what would happen. In the case of industry, some of those businesses that produced at costs of production above the new price of production, of £1.50 per kg., would cease production, reducing supply. If the supply of corn rises by 2,000 kg., because some new technique raises productivity, this additional 2,000 kg. of supply can only be absorbed by the market if demand rises, and assuming no change in the demand conditions for corn, that can only happen if the market price of corn falls accordingly.

Wednesday, 30 August 2017

Theories of Surplus Value, Part II, Chapter 8 - Part 2

This difference in productivity, therefore, can only be compensated by absolute surplus value, i.e. by increases in the length or intensity of the working-day, within fairly narrow limits. If the labour-time required for the reproduction of labour-power is six hours, then the rate of surplus value, of 100%, with a twelve hour working day, can be increased to 200% with an eighteen hour working day, but its unlikely to be able to extend it beyond that.

If there are one million workers, so that the necessary social working day is six million hours, then, with this eighteen hour day, eighteen million hours of value is produced, giving twelve million hours of surplus value. If the number of workers doubles, the total amount of surplus value also doubles to twenty-four million hours, but the rate of surplus value is not changed. But, this is not the case with relative surplus value. If social productivity rises, then its possible that the needs of this working population of two million may still be met by the expenditure of six million hours of labour, but in an eighteen hour day, these two million workers produce thirty-six million hours of value, so that surplus value is now thirty million hours, giving a rate of surplus value of five hundred percent, with a consequent increase in the rate of profit.

Its possible that instead of a reduction in the value of labour-power arising from rising social productivity, a similar effect may be achieved by reducing wages below the value of labour-power, but, over the longer term, this will reduce the supply of labour-power, for a variety of reasons. Workers may leave the country, have smaller families, or be incapable of working for the same length and intensity. They will not develop the same level of skill, education and so on, so that even if the same quantity of concrete labour is undertaken, it will represent a smaller quantity of abstract labour.

Marx repeats the point made in Capital I, in response to Carey.

“In any case because in a given country the value of labour is falling relatively to its productivity, it must not be imagined that wages in different countries are inversely proportional to the productivity of labour. In fact exactly the opposite is the case. The more productive one country is relative to another in the world market, the higher will be its wages as compared with the other. In England, not only nominal wages but [also] real wages are higher than on the continent. The worker eats more meat; he satisfies more needs.” (p 16-17)

Yet, as was indicated earlier, these higher wages go along also with higher profits, and a higher rate of profit, because although these wages are higher than wages in other countries, they are not higher as a proportion of the total value of production.

“But in proportion to the productivity of the English workers their wages are not higher (than the wages paid in other countries].” (p 17)

Tuesday, 29 August 2017

Theories of Surplus Value, Part II, Index

Capital ICapital IICapital III,

Theories of Surplus Value Part I, Part II, Part III

Chapter 8 - Herr Rodbertus. New Theory of Rent. (Digression)

Part 1, Part 2, Part 3, Part 4, Part 5, Part 6, Part 7, Part 8, Part 9, Part 10, Part 11, Part 12, Part 13, Part 14, Part 15, Part 16, Part 17, Part 18, Part 19, Part 20, Part 21, Part , Part 23, Part 24, Part 25, Part 26, Part 27, Part 28, Part 29, Part 30, Part 31, Part 32, Part 33, Part 34, Part 35, Part 36, Part 37, Part 38, Part 39, Part 40, Part 41, Part 42, Part 43, Part 44, Part 45, Part 46, Part 47, Part 48, Part 49, Part 50, Part 51, Part 52, Part 53, Part 54, Part 55, Part 56, Part 57, Part 58, Part 59, Part 60, Part 61, Part 62, Part 63

Chapter 9 - Notes on the History of the Discovery of the So-Called Ricardian Law of Rent.[Supplementary Notes on Rodbertus] (Digression)

Part 1, Part 2, Part 3, Part 4, Part 5, Part 6, Part 7, Part 8, Part 9, Part 10, Part 11, Part 12, Part 13, Part 14, Part 15, Part 16

Chapter 10 - Ricardo’s and Adam Smith’s Theory of Cost-price (Refutation)
Part 1, Part 2, Part 3, Part 4, Part 5, Part 6, Part 7, Part 8, Part 9, Part 10, Part 11, Part 12, Part 13, Part 14, Part 15, Part 16, Part 17, Part 18, Part 19, Part 20, Part 21, Part 22, Part 23, Part 24, Part 25, Part 26, Part 27, Part 28, Part 29, Part 30, Part 31, Part 32, Part 33, Part 34, Part 35, Part 36, Part 37, Part 38,

Chapter 11 - Ricardo’s Theory of Rent.

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

Chapter 12 - Tables of Differential Rent and Comment

Part 1, Part 2, Part 3, Part 4, Part 5, Part 6, Part 7, Part 8, Part 9, Part 10, Part 11, Part 12, Part 13, Part 14, Part 15, Part 16, Part 17, Part 18, Part 19, Part 20, Part 21, Part 22, Part 23, Part 24, Part 25, Part 26, Part 27, Part 28, Part 29, Part 30, Part 31, Part 32, Part 33, Part 34, Part 35, Part 36, Part 37

Chapter 13 - Ricardo’s Theory of Rent (Conclusion)

Part 1, Part 2, Part 3, Part 4, Part 5, Part 6, Part 7, Part 8, Part 9, Part 10, Part 11, Part 12, Part 13, Part 14, Part 15, Part 16, Part 17, Part 18, Part 19, Part 20, Part 21, Part 22, Part 23, Part 24, Part 25, Part 26, Part 27

Chapter 14 - Adam Smith’s Theory of Rent

Part 1, Part 2, Part 3, Part 4, Part 5, Part 6, Part 7, Part 8, Part 9, Part 10, Part 11, Part 12, Part 13, Part 14, Part 15, Part 16, Part 17, Part 18, Part 19, Part 20, Part 21, Part 22, Part 23, Part 24

Chapter 15 - Ricardo’s Theory of Surplus-Value

Part 1, Part 2, Part 3, Part 4, Part 5, Part 6, Part 7, Part 8, Part 9, Part 10, Part 11, Part 12, Part 13, Part 14, Part 15, Part 16, Part 17, Part 18, Part 19, Part 20, Part 21, Part 22, Part 23, Part 24, Part 25, Part 26, Part 27, Part 28, Part 29, Part 30, Part 31, Part 32, Part 33, Part 34, Part 35, Part 36, Part 37, Part 38, Part 39, Part 40, Part 41, Part 42, Part 43, Part 44, Part 45, Part 46, Part 47, Part 48, Part 49, Part 50, Part 51, Part 52, Part 53, Part 54, Part 55, Part 56

Chapter 16 - Ricardo's Theory of Profit

Part 1, Part 2, Part 3, Part 4, Part 5, Part 6, Part 7, Part 8, Part 9, Part 10, Part 11, Part 12, Part 13, Part 14, Part 15, Part 16, Part 17, Part 18, Part 19, Part 20, Part 21, Part 22, Part 23, Part 24, Part 25, Part 26, Part 27, Part 28, Part 29, Part 30, Part 31, Part 32, Part 33, Part 34, Part 35

Chapter 17 - Ricardo’s Theory of Accumulation and a Critique of it. (The Very Nature of Capital Leads to Crises)

Part 1, Part 2, Part 3, Part 4, Part 5, Part 6, Part 7, Part 8, Part 9, Part 10, Part 11, Part 12, Part 13, Part 14, Part 15, Part 16, Part 17, Part 18, Part 19, Part 20, Part 21, Part 22, Part 23, Part 24, Part 25, Part 26, Part 27, Part 28, Part 29, Part 30, Part 31, Part 32, Part 33, Part 34, Part 35, Part 36, Part 37, Part 38, Part 39, Part 40, Part 41, Part 42, Part 43, Part 44, Part 45, Part 46, Part 47, Part 48, Part 49, Part 50, Part 51, Part 52, Part 53, Part 54, Part 55, Part 56, Part 57, Part 58, Part 59, Part 60, Part 61, Part 62, Part 63, Part 64, Part 65, Part 66, Part 67, Part 68, Part 69, Part 70, Part 71, Part 72, Part 73, Part 74, Part 75, Part 76, Part 77, Part 78, Part 79, Part 80, Part 81, Part 82, Part 83, Part 84, Part 85, Part 86, Part 87, Part 88, Part 89, Part 90

Chapter 18Ricardo’s Miscellanea. John Barton

Part 1, Part 2, Part 3, Part 4, Part 5, Part 6, Part 7, Part 8, Part 9, Part 10, Part 11, Part 12, Part 13, Part 14, Part 15, Part 16, Part 17, Part 18, Part 19, Part 20, Part 21, Part 22, Part 23, Part 24, Part 25, Part 26, Part 27, Part 28, Part 29, Part 30, Part 31, Part 32, Part 33, Part 34, Part 35, Part 36, Part 37


Theories of Surplus Value, Part II, Chapter 8 - Part 1

[CHAPTER VIII] Herr Rodbertus. New Theory of Rent. (Digression)

[1. Excess Surplus-Value in Agriculture. Agriculture Develops Slower Than Industry under Conditions of Capitalism]

In this chapter, Marx examines the theory of rent presented by Rodbertus. He begins with a short restatement of the basis of surplus value. A producer requires the expenditure of a certain amount of labour-time to produce the products required for the reproduction of their labour-power. That is the value of their labour-power. But, the value of the product of their labour is equal to the total amount of labour-time they expend. The difference between this total labour-time expended and the value of their labour-power is the amount of surplus value produced.

Where the producer is producing commodities rather than just products for their own consumption, this situation continues, but appears in a different form. The necessary labour undertaken by the producer now appears as a quantity of commodities which they exchange for the commodities required for their own consumption, or for an amount of money, the general commodity, which can be used to buy these commodities.

Under these conditions, it is then not just the productivity of the individual producer, which determines how much labour-time constitutes necessary labour, and how much surplus labour, but social productivity. If general social productivity rises, so that less labour-time is required to produce the commodities required to reproduce labour-power, the producer will have to exchange fewer of their own commodities to obtain them, leaving a greater proportion of their labour-time available as surplus labour-time and surplus value.

“Herr Rodbertus first investigates the situation in a country where there is no separation between land ownership and owner-ship of capital. And here he comes to the important conclusion that rent (by which he means the entire surplus-value) is simply equal to the unpaid labour or the quantity of products which it represents.” (p 15-16) 

Rodbertus only takes account of the growth of this relative surplus-value, as rising social productivity reduces the value of labour-power. Marx makes the point also made previously in Capital III, that all surplus value is relative, in the sense that it requires social productivity to have risen to a level where the worker does not need to spend all their time simply reproducing their labour-power.

Higher rates of profit, therefore, generally go along with higher levels of social productivity, which reduce the value of labour-power, and raise relative surplus value. Higher rates of profit usually only accompany lower levels of productivity under specific and unusual conditions.

“The relative productivity of labour necessary before a profit-monger, a parasite, can come, into being is very small. If we find a high rate of profit though labour is as yet very unproductive, and machinery, division of labour etc., are not used, then this is the case only under the following circumstances; either as in India, partly because the requirements of the worker are extremely small and he is depressed even below his modest needs, but partly also because low productivity of labour is identical with a relatively small fixed capital in proportion to the share of capital which is spent on wages or, and this comes to the same thing, with a relatively high proportion of capital laid out in wages in relation to the total capital; or finally, because labour-time is excessively long.” (p 16)

Even here, this higher rate of profit is only possible in so far as the prices of commodities remain locally, rather than globally determined. Alongside the small fixed capital goes the low level of productivity, which gives rise to the large quantity of labour, and high proportion of wages. Where this relates, for example, to textile production, in India, by small handicraft producers, and the market value is determined only in India, then a high rate of profit may result, especially as the high level of nominal wages, as a proportion of the total cost, may still represent a low level of real wages. But, as soon as these Indian textiles have to compete in the market against mass produced textiles from Britain, produced by very productive workers, using large amounts of fixed capital, the value of the Indian textiles itself collapses, and along with it the surplus value and rate of profit.

“The latter is the case in countries (such as Austria etc.) where the capitalist mode of production is already in existence but which have to compete with far more developed countries. Wages can be low here partly because the requirements of the worker are less developed, partly because agricultural products are cheaper or—this amounts to the same thing as far as the capitalist is concerned—because they have less value in terms of money. Hence the quantity of the product of, say, 10 hours’ labour, which must go to the worker as necessary wages, is small. If, however, he works 17 hours instead of 12 then this can make up (for the low productivity of labour].” (p 16)

In Capital I, Marx makes precisely this point that wages in Austria, Belgium and other parts of Europe were 50% below those in Britain, and working conditions were similarly poorer, Yet, these countries still could not compete with British industrial production, due to its higher level of productivity.

Monday, 28 August 2017

Theories of Surplus Value, Part I, Chapter 7 - Part 30

[(I) The Problem of Productive Labour from the Standpoint of the Total Process of Material Production]

“With the development of the specifically capitalist mode of production, in which many labourers work together in the production of the same commodity, the direct relation which their labour bears to the object produced naturally varies greatly. For example the unskilled labourers in a factory referred to earlier have nothing directly to do with the working up of the raw material. The workmen who function as overseers of those directly engaged in working up the raw material are one step further away; the works engineer has yet another relation and in the main works only with his brain, and so on. But the totality of these labourers, who possess labour-power of different value (although all the employed maintain much the same level) produce the result, which, considered as the result of the labour-process pure and simple, is expressed in a commodity or material product; and all together, as a workshop, they are the living production machine of these products—just as, taking the production process as a whole, they exchange their labour for capital and reproduce the capitalists’ money as capital, that is to say, as value producing surplus-value, as self-expanding value.” (p 411)

As stated earlier, this is most apparent in the case of socialised capital, and particularly in respect of the worker owned co-operative. The division of labour not only divides various tasks into their component parts, but it also divides mental from manual labour.

“This however does not prevent the material product from being the common product of these persons, or their common product embodied in material wealth; any more than on the other hand it prevents or in any way alters the relation of each one of these persons to capital being that of wage-labourer and in this pre-eminent sense being that of a productive labourer. All these persons are not only directly engaged in the production of material wealth, but they exchange their labour directly for money as capital, and consequently directly reproduce, in addition to their wages, a surplus-value for the capitalist, Their labour consists of paid labour plus unpaid surplus-labour.” (p 412)

[(J) The Transport Industry as a Branch of Material Production. Productive Labour in the Transport Industry]

Marx finally examines transport. Transport is like a service in that the production and consumption cannot be separated, whether it is goods or people who are to be transported. The service is consumed simultaneously with it being produced.

This has no bearing upon whether the labour employed is productive or unproductive, which again depends upon whether it exchanges with capital or revenue. It is an issue that arises with Uber, i.e. are the drivers owners of their own means of production, and so neither productive nor unproductive labourers, or else wage workers employed by capital, and so productive labourers.

As I have set out in relation to Marx’s discussion of transport, in Capital II, I believe Marx's argument is wrong. He argues that by changing the geographical location of a commodity, transport changes its use value, and thereby adds to its value.

“When the commodity has reached its destination, this change which has taken place in its use-value has vanished, and is now only expressed in its higher exchange-value, in the enhanced price of the commodity. And although in this case the real labour has left no trace behind it in the use-value, it is nevertheless realised in the exchange-value of this material product; and so it is true also of this industry as of other spheres of material production that the labour incorporates itself in the commodity, even though it has left no visible trace in the use-value of the commodity.” (p 413)

I think this is wrong. I think that the consumer buys two commodities – the commodity itself and its transportation. This is highlighted by the fact that the sellers of commodities themselves often present the matter in that way, listing the price of the commodity, applicable wherever the buyer might be, plus a separate charge for delivery.

If I go to watch a football match at Wembley, I pay the same price to buy that commodity, wherever I live. The fact that I pay a train fare, if I live in Stoke, in order to consume this commodity, does not change, in any way, the use value of the football match, or its value. I have simply consumed another commodity – rail travel, in addition to the football match.

Sunday, 27 August 2017

Theories of Surplus Value, Part I, Chapter 7 - Part 29

[(G) Supplementary Definition of Productive Labour as Labour which is Realised in Material Wealth]

“In considering the essential relations of capitalist production it can therefore be assumed that the entire world of commodities, all spheres of material production—the production of material wealth—are (formally or really) subordinated to the capitalist mode of production - for this is what is happening more and more completely; [since it] is the principal goal, and only if it is realised will the productive powers of labour be developed to their highest point. On this premise—which expresses the limit [of the process] and which is therefore constantly coming closer to an exact presentation of reality—all labourers engaged in the production of commodities are wage-labourers, and the means of production in all these spheres confront them as capital. It can then be said to be a characteristic of productive labourers, that is, labourers producing capital, that their labour realises itself in commodities, in material wealth. And so productive labour, along with its determining characteristic—which takes no account whatever of the content of labour and is entirely independent of that content—would be given a second, different and subsidiary definition.” (p 409-10)

But, as discussed earlier, capitalist production has moved on considerably in the 150 years since Marx wrote that. Marx refers to the capitalist production of services in his time being an exception, but today service industries account for more than 80% of output in all developed economies.

“Non-material production, even when it is carried on purely for exchange, that is, when it produces commodities, may be of two kinds:” (p 410)

Firstly, it can result in an actual commodity, such as a book, painting and so on. Marx comments,

“Here capitalist production is applicable only to a very restricted extent: as for example when a writer of a joint work—say an encyclopaedia—exploits a number of others as hacks. In this sphere for the most part a transitional form to capitalist production remains in existence, in which the various scientific or artistic producers, handicraftsmen or experts work for the collective trading capital of the book-trade—a relation that has nothing to do with the capitalist mode of production proper and even formally has not yet been brought under its sway. The fact that the exploitation of labour is at its highest precisely in these transitional forms in no way alters the case.” (p 410)

But, again, today that is not the case. The modern equivalents of the examples that Marx gives, are the film, TV, and video production industries, computer games production and so on, and these are vast and very profitable industries, in which a lot of the labour employed is highly complex and highly paid.

The second is where the commodity is a service the consumption of which cannot be separated from its production. The examples Marx gives here are the performances of a singer or actor, or the work of a teacher. Again Marx notes,

“Here too the capitalist mode of production is met with only to a small extent, and from the nature of the case can only be applied in a few spheres. For example, teachers in educational establishments may be mere wage-labourers for the entrepreneur of the establishment; many such educational factories exist in England. Although in relation to the pupils these teachers are not productive labourers, they are productive labourers in relation to their employer. He exchanges his capital for their labour-power, and enriches himself through this process. It is the same with enterprises such as theatres, places of entertainment, etc. In such cases the actor’s relation to the public is that of an artist, but in relation to his employer he is a productive labourer. All these manifestations of capitalist production in this sphere are so insignificant compared with the totality of production that they can be left entirely out of account.” (p 411)

But they certainly cannot be left out of account today. Besides the fact that many of the commodities of this second kind can now be transformed into those of the first kind, because a performance, a lecture, or a football match etc. can be recorded, as well as instantaneously transmitted across the globe, even the live performance of these activities has been transformed into mammoth industries.

Live performances of singers, actors, sports people and so on are now multi-billion dollar events. The “educational factories” that Marx describes in his day appear as mere workshops compared to the mammoth Fordist education factories that capital has established as part of the welfare state, and the same is true of the health and social care factories. The same is true with the provision of environmental health services and so on, all produced by a huge army of wage labourers, exchanging their labour with capital.

Back To Part 28

Forward To Part 30

Saturday, 26 August 2017

Theories of Surplus Value, Part I, Chapter 7 - Part 28

In the case of a joint stock company, the money-capital is loaned by shareholders, who likewise are entitled to interest on their loan, in the form of dividends. But, in both cases, the productive-capital is collectively owned by the firm, i.e. the associated producers, not the shareholders, and the profit is likewise the property of the associated producers, not the shareholders. The dividends paid to the shareholders represent a deduction of interest from those profits.

“The determinate social character of the means of production in capitalist production—expressing a particular production relation —has so grown together with, and in the mode of thought of bourgeois society is so inseparable from, the material existence of these means of production as means of production, that the same determinateness (categorical determinateness) is assumed even where the relation is in direct contradiction to it. The means of production become capital only in so far as they have become separated from labourer and confront labour as an independent power. But in the case referred to the producer—the labourer— is the possessor, the owner, of his means of production. They are therefore not capital, any more than in relation to them he is a wage-labourer. Nevertheless they are looked on as capital, and he himself is split in two, so that he, as capitalist, employs himself as wage-labourer.” (p 408)

That is not only clear in relation to the peasant producer, or the self-employed, but is also clearly the case in relation to the worker-owned co-operative, as Marx sets out in Capital III, Chapter 27.

“The co-operative factories of the labourers themselves represent within the old form the first sprouts of the new, although they naturally reproduce, and must reproduce, everywhere in their actual organisation all the shortcomings of the prevailing system. But the antithesis between capital and labour is overcome within them, if at first only by way of making the associated labourers into their own capitalist, i.e., by enabling them to use the means of production for the employment of their own labour.”

Marx points out that this way of presenting the matter, of the owner of the means of production owning their own capital is “irrational”, and yet, “... is nevertheless so far correct, that in this case the producer in fact creates his own surplus-value commodity at its value>, in other words, only his own labour is materialised in the whole product. But that he is able to appropriate for himself the whole product of his own labour, and that the excess of the value of his product over the average price for instance of his day’s labour is not appropriated by a third person, a master, he owes not to his labour —which does not distinguish him from other labourers —but to his ownership of the means of production. It is therefore only through his ownership of these that he takes possession of his own surplus-labour, and thus bears to himself as wage-labourer the relation of being his own capitalist.” (p 409)

This is true also in relation to the socialised capital of the joint stock company. The surplus value belongs to its associated producers collectively, not to the shareholders. The shareholders are entitled only to the average rate of interest on their loaned money-capital. That the power of these shareholders, and their representatives on company boards, obtain returns in excess of this, at some times, does not invalidate the underlying economic relation.

It is why there are increasing demands to limit the undue influence of these shareholders, for example, to legislate for elected worker directors on company boards, as in Germany, and as proposed in the EU's Draft Fifth Company Law Directive. It was also reflected in the comments, in July 2015, by Bank of England economist, Andy Haldane, complaining about “capitalism eating itself”, as well as in comments, at the same time, by Hillary Clinton, complaining about the problems caused by “Quarterly Capitalism”. Both reflected the concerns of this socialised productive capital against the interests of fictitious capital, which resulted in excessive amounts of profits going as revenue to shareholders rather than being used for productive investment.

Separation appears as the normal relation in this society. Where therefore it does not in fact apply, it is presumed and, as has just been shown, so far correctly; for (as distinct for example from conditions in Ancient Rome or Norway or in the north-west of the United States) in this society unity appears as accidental, separation as normal; and consequently separation is maintained as the relation even when one person unites the separate functions.” (p 409)

And Marx could also have said when one corporate person, as in the case of a co-operative or joint stock company unites the functions.

“Here emerges in a very striking way the fact that the capitalist as such is only a function of capital, the labourer a function of labour-power.” (p 409)

The individual peasant or handicraft producer was bound either to turn themselves into capitalist producers, or else to be turned into wage labourers themselves. But, similarly, as Marx sets out in Capital I, Chapter 25, and in Capital III, Chapter 27, even the largest private capitalists were to represent a fetter on further capitalist development, and were themselves to be expropriated by socialised capital in the form of the co-operatives and joint stock companies.