Monday, 16 July 2018

Theories of Surplus Value, Part II, Chapter 17 - Part 18

But, its not just in the realm of restaurants that such a transformation occurs. The growth of leisure and entertainment to become a major component of household spending means that capital employed in a range of such ventures, from cinemas to football clubs, from gyms to pop concerts, enjoy a similar high rate of turnover of capital, and annual rate of profit. But, that change in the nature of production and consumption impacts the rate of turnover as a result of the role of the Internet in other ways. For example, one aspect of the change in consumption patterns, is the growth of expenditure on things such as music, film, computer games and so on. Initially, a lot of this was conveyed electronically by use of CD's and DVD's, which then still had to be physically shipped. The media required for that purpose was continually improved, but the revolutionary shift arises with the Internet, which means that a piece of music, film, video game, can be transferred instantaneously from one side of the globe to the other, and at the same time, payment for that commodity can be transferred simultaneously into the bank account of the seller. Given the extent to which these new industries, and types of commodities play an increasing role, this revolution in production and distribution is even more significant. These are already low organic composition/high profit industries to begin with. By massively increasing the rate of turnover of the advanced capital employed within them, not only is the mass of capital hugely increased, but so is the annual rate of profit. 

Its no wonder that the capital employed in these industries, can afford to pay high wages to workers for the complex labour they supply, and yet these capitals still make huge masses and rates of profit. As Marx points out, it is the fact of these new high profit areas, which act to raise the average rate of profit, which explains why the rate of profit itself, never falls by more than the rate at which the mass of capital expands. To, the extent that these capitals are themselves industrial capitals that take on some of the functions of merchant capital – a restaurant has to sell as well as produce its meals, a football club must sell seats at its matches and so on – or else has to rely on specialised merchant capitalists for this function – for example, even computer software suppliers often transfer the function of providing downloads to third party merchants – Marx's analysis of the role of the rate of turnover in circulation, as it affects merchants capital, the rate of profit, and prices is significant. 

“We disregard here the case in which more capital is accumulated than can be invested in production, and for example lies fallow in the form of money at the bank. This results in loans abroad, etc., in short speculative investments. Nor do we consider the case in which it is impossible to sell the mass of commodities produced, crises etc. This belongs into the section on competition. Here we examine only the forms of capital in the various phases of its process, assuming throughout, that the commodities are sold at their value.” (p 484) 

Marx refers here to the point addressed in Capital III, where he discusses the difference between the accumulation of loanable money-capital, and of real productive-capital. They are two different things, he shows. During a period of rapid growth, realised profits may rise sharply, and, although a large part of this may go into productive investment, there are physical limitations on how quickly such investment can occur, as suggested above. For example, a factory cannot be built overnight, and even if it could, the factory is no good without the required machines, circulating capital and so on in the required technical proportions, and accumulated profits must be sufficient to put all this in place together. The consequence is that, during such periods, large amounts of money-capital may accumulate and push down on interest rates. Often this encourages speculative activity. It does so, because lower interest rates lead to higher capitalised values for revenue producing assets, so that speculators attempt to obtain capital gains, leading to the blowing up of financial and property market bubbles. 

Marx and Engels describe the way this happened in 1847, with the speculation in railway shares that led to the Railwaymania, and subsequent bursting of that bubble. Similar situations arose in the 1990's with the blowing up and then bursting of the property market bubble, and the bubble and subsequent bust in Japan, followed by the blowing up and bursting of the tech bubble in 2000, followed by the blowing up of the stock market and property bubble, and its subsequent bust in 2008, and the blowing up of even bigger stock market and property bubbles in the period after 2009, which are themselves now primed to explode. 

Sunday, 15 July 2018

Paul Mason's Postcapitalism - A Detailed Critique - Chapter 3 (6)

Innovation and Accumulation


The crux is highlighted by Paul, explaining the low level of investment, since the 1970's, when he says, 

“... in the neoliberal system, firms use profits to pay dividends rather than to reinvest.” (p 71) 

But, this is only partially correct. In the stagnation phase of the long wave, such as 1873-90, 1927-39, 1987-99, its typical for investment to appear low; that's a large part of what leads to growth being low, during such periods. But, the other factor that contributes to that, and which starts at the latter part of the crisis phase, is the fact that the investment is characterised as intensive rather than extensive accumulation. In other words, a new machine is introduced, but it is a machine that replaces previous machines, not a machine additional to them. It does not add to output, it simply enables the existing output to be produced more cheaply, i.e. it is more productive, and requires less labour

In addition, during this period, low levels of demand mean that raw material prices fall, and new technologies introduce new materials, and more efficient ways of using existing materials and energy etc. So, not only is the value of fixed capital slashed, and the existing fixed capital stock depreciated, but the value of circulating constant capital is slashed too. This is the other driver of the rise in the rate of profit, along with the rise in the rate of surplus value. So, on the one hand, actual physical growth of capital is restrained, for the reasons described, but the unit value of the accumulated capital is also reduced, so this gives the appearance of an even greater lack of investment. Yet, the actual reality is indicated by the explosion in the volume, and range of use values produced, particularly from the mid 1990's on. In the stagnation phase, its typical that the gross product/gross value grows by a smaller proportion than the net product/surplus value, which is the basis for the rise in the rate of profit. 

But, as I've indicated, the fact of the rise in the proportion of profits going to dividends, having risen from 10% in the 1970's to around 70% today, is an important feature. I will deal with it in relation to Chapter 4, rather than here. I would, however, say that Paul's comment about share buybacks etc., 

“They are minimising their exposure to being financially exploited, and maximising their own ability to play in the financial markets”, 

is uncharacteristically naïve. The problem these companies face, as socialised capitals, is that control over their capital is exercised by non-owners of that capital. The executives that exercise that control are there to represent the interests of shareholders, of whom they are frequently themselves a component, if not initially then subsequently, as a result of entitlement to share options etc. In other words, they are there to ensure that the firm is financially exploited, in the short-term interests of the owners of fictitious capital, even where that undermines the long-term interests of the company and thereby the owners of fictitious capital too. As Haldane puts it, it is an example of capital eating itself. 

And, so whilst Paul is right that the 2008 crisis is an indication of something bigger and more structural than merely the usual fall in the rate of profit that would be expected around that stage of the long wave cycle, I don't think he has grasped exactly what that is. What it is is a manifestation, in a different form, of the problem that manifested itself in the 1970's. It is the division of interest between socialised capital, as productive-capital, and of fictitious capital as interest bearing capital, which leeches off the former. It is the fact that, economically, the latter is dependent on the former, and subordinated to it, and yet, because the latter is owned by, and, and represents the concentrated political and social power of the dominant section of the capitalist class, in the form of company shares, they exercise control over property they do not own, on the basis of their personal short-term financial interests, and not the longer-term interests of capital. But, they can only do so for so long, until the laws of economics impose themselves, and a financial crash results. 

Paul, like many others, does not seem to realise that 2008 was a financial crisis, not an economic crisis, and that is why he is also led to awkwardly, and unconvincingly, extend the 4th wave from the late 1940's to 2008, with the downtrend starting in 1973, so that it would last for 35 years, and yet within which Paul has a new wave commencing in the 1990's. Moreover, in describing the conditions of what Paul describes as a disruption of the wave that leads to this extension, he seems to forget that the period after 1973 is actually the downtrend of the wave, whilst he describes conditions such as the opening up of the Eastern Bloc, etc., which would facilitate a prolongation of an upswing! 

Theories of Surplus Value, Part II, Chapter 17 - Part 17

The Internet speeds up circulation in other ways too. In order for the circuit to be completed, the produced commodities must be sold, which means consumers having to go to stores to buy them. But, the Internet, via online shopping, speeds up that part of the circulation process too. The consumer may never see any money paid to them as wages, dividends, interest or rent, as it gets transferred electronically into their account. They may even have a standardised weekly shopping list that gets filled by the supermarket, and delivered to them, and nor will they see the money paid for those commodities, as its electronically, and immediately transferred from their own account to that of the store. Not only does this hugely speed up the process of circulation, by increasing the velocity of commodity transactions, as well as money transactions, but it also hugely reduces the quantity of money that must be thrown into actual circulation, which represents a significant reduction in the costs of circulation for capital

The role of the Internet in massively increasing the speed of circulation is manifest in another way too. That is related to the shift in the patterns of production and consumption. Not only is it the case that 80% of the economy of developed nations is today comprised of the production of service industries, but this shift in production is symptomatic of a corresponding shift in consumption. Although, the bubble in property prices in the UK, blown up over the last 30-40 years, has massively increased the proportion of household budgets that must be devoted to shelter – particularly for those in rented accommodation – the massive reduction in commodity values that the aforementioned rise in social productivity has brought, alongside the shift of production of many manufactured goods to low wage economies, such as China, means that the proportion of the budget spent on such consumer goods has continually fallen in real terms, and often even in absolute terms – for example the price of computers etc.   The ONS provided this breakdown of UK family spending in 2012, the figures for spending on services, is likely to be greater now.

Transport 
65.70
Recreation and culture
63.90
Housing (net)1, fuel and power
63.30
Food and non-alcoholic drinks
54.80
Restaurants and hotels
39.70
Miscellaneous goods and services
38.60
Household goods and services
27.30
Clothing and footwear
21.70
Communication
13.30
Alcoholic drinks, tobacco and narcotics
12.00
Education
7.00
Health
6.60


Total COICOP expenditure 
413.90


Other expenditure items
69.70


Total expenditure 
483.60

Similar improvements in productivity, and the increase in global agricultural land under cultivation, notably now also in Africa, means that food prices have also continually fallen in real terms, apart from short term price spikes caused by temporary failures to meet sharply rising demand. In fact, in Britain, food has become so cheap, that the average family is calculated to throw away a third of the food it buys. A significant proportion of the average family spending on food, is actually made up of what is really leisure activity, or entertainment, i.e. eating out at restaurants, rather than the actual purchase of food. This shift also has a significant effect on the rate of turnover, both in terms of the time of production and of circulation. Take some manufacturing business. It buys labour-power, and materials, and sets them to work with machines to produce motor cars. Even allowing for modern production techniques, the cars do not go from the initial arrival of engines, body panels, gearboxes and so on through to assembly, finishing, and transport to showrooms in less than several days. Selling the cars to final consumers could take several days more. But even assuming the average turnover period for such industrial capital, is just a week, this compares badly with the situation for these new forms of capital. 

Take a fast food restaurant. It daily advances productive-capital in the form of means of production (burgers, onions, salads, buns etc.) and labour-power. It is even likely to obtain the return of this capital, plus surplus value before this advanced capital has even been paid for! Even if a certain amount of means of production are bought one day and used the next, this does not change anything, because this capital held as a productive-supply only counts as advanced when it enters the production process; what has been bought yesterday, does not have to be bought again today, if it has not been used. The produced output, as commodity-capital is also sold daily to customers, who pay by cash or card, thereby completing the circuit of the capital within the same day. 

In other words, instead of this new more prevalent form of capital turning over once a week, or 50 times a year, it turns over once a day, or 365 times a year! The increase in the rate of turnover, and consequent rise in the annual rate of profit arise not just because of a shortened production period, but a much curtailed circulation period. As Marx points out, if two capitals of the same size are employed one in this sphere, and the other in the old form of manufacturing industry, then, although they have the same rate of surplus value, the annual rate of surplus value for the former will be more than seven times that of the latter, and, all other things being equal, the annual rate of profit will be seven times higher too. 

Saturday, 14 July 2018

Theories of Surplus Value, Part II, Chapter 17 - Part 16

The point made by Engels about the effect of faster circulation times to the US and India reducing the explosive potential for crises is multiplied in the speed up of circulation, which these systems imply, and these are just part of a much larger planning framework to ensure that outputs are geared closely to match changing consumer requirements, and that inputs are geared to match the needs of those changing outputs. So, Marx says,

"The fact that consumption lives from hand to mouth, changes its linen and its coat as rapidly as it does its opinions and does not wear the same coat ten years running, etc. is connected with the speed of reproduction, or is another expression of it. To an increasing extent consumption—even of articles where this is not demanded by the nature of their use-value—takes place almost simultaneously with production and becomes therefore more and more dependent on the present, coexisting labour (since it is, in fact, exchange of coexisting labour). This takes place in the same degree in which past labour becomes an ever more important factor of production, even though this past itself is after all a very recent and only relative one."

(Theories of Surplus Value, Chapter 21)

As Marx puts it, in agreement with Hodgskin, nearly all consumption, whether personal or productive, is actually the consumption of the products of coexistent labour, so that what is consumed is simultaneously what is being produced by coexistent labour.

" The majority of the commodities consumed by the worker in the final form in which they confront him as commodities, are in fact products of simultaneous labour (they are therefore by no means stored up by the capitalist)."


The system runs from the modern EPOS systems used by retailers, which link immediately to their huge warehouse systems, which in turn are increasingly connected to the computer systems of their suppliers, to automatically generate new orders for re-supply. The huge evolution in ICT systems, and in the Internet means that this has moved on significantly even from when Simon Clarke wrote in 1990, 

“Indeed it would be fair to say that the sphere of planning in capitalism is much more extensive than it is in the command economies of the soviet bloc. The scope and scale of planning in giant corporations like Ford, Toyota, GEC or ICI dwarfs that of most, if not all, of the Soviet Ministries. The extent of co-ordination through cartels, trade associations, national governments and international organisations makes Gosplan look like an amateur in the planning game. The scale of the information flows which underpin the stock control and ordering of a single Western retail chain are probably greater than those which support the entire Soviet planning system.” 

(Capital and Class, Winter 1990) 

But, it is probably in the realm of the Internet, where the effect on speeding up the circulation time is greatest, in this respect. An article in The American Banker bemoaned the slowness of electronic payments in the US, pointing out, 

“In the United Kingdom, you can send money to someone else's bank account within a couple of hours. In Mexico, the process takes no more than a minute or two. In Sweden, it happens even faster, via mobile phones. 

Here in the United States, electronic payments move at a snail's pace by comparison. Times vary by bank, but it's common for three, four or five days to elapse before the cash arrives in the recipient's account.” 

In fact, compared to the slowness of payments discussed by Marx, even the US seems extremely rapid. The Internet has made possible not only such almost instantaneous payments direct from your bank account, or credit card account, it has established other money-dealing capitalists, such as Paypal, as means of transmitting money from one place to another more securely and quickly. It has also, of course, speeded up circulation by making credit instantly available over mobile phones, even if the circulation may later be sharply curtailed, as the consequent debts turn bad. 

Northern Soul Classics - Some Things Are Better Left Unsaid - Ketty Lester

Friday, 13 July 2018

Friday Night Disco - Funky Nassau - The Beginning of the End

Theories of Surplus Value, Part II, Chapter 17 - Part 15

As the means of transport and communication are improved and speeded up, the more stocks can be reduced. This was seen in Capital II. If transport between the location of suppliers and producers are prone to being severed, producers will want to hold larger stocks, in case their supplies do not get through, in time, which would disrupt their production. They may go for less frequent, but larger deliveries. If the speed of communication is slow, that is likely also to be the case, whereas with fast, secure communication it means that orders can be sent out closer to when supplies are required, smaller, more frequent batches may be used, as with Just In Time production and stock control systems. 

Engels, in Capital III, described the way the speeding up of sea transport, as a result of steamships, and the building of the Suez Canal, had slashed circulation times for capital, which had a corresponding effect on raising the rate of turnover, and consequently, the annual rate of profit. But, also, because it reduced the need to hold such large stocks, it also removed one of the main causes of crises, because production did not continue to run ahead of the market so easily. 

“The chief means of reducing the time of circulation is improved communications. The last fifty years have brought about a revolution in this field, comparable only with the industrial revolution of the latter half of the 18th century. On land the macadamised road has been displaced by the railway, on sea the slow and irregular sailing vessel has been pushed into the background by the rapid and dependable steamboat line, and the entire globe is being girdled by telegraph wires. The Suez Canal has fully opened East Asia and Australia to steamer traffic. The time of circulation of a shipment of commodities to East Asia, at least twelve months in 1847 (cf. Buch II, S. 235 [English edition: Karl Marx, Capital, Vol. II, pp. 251-52. — Ed.]), has now been reduced to almost as many weeks. The two large centres of the crises of 1825-57, America and India, have been brought from 70 to 90 per cent nearer to the European industrial countries by this revolution in transport, and have thereby lost a good deal of their explosive nature. The period of turnover of the total world commerce has been reduced to the same extent, and the efficacy of the capital involved in it has been more than doubled or trebled. It goes without saying that this has not been without effect on the rate of profit.” 

(Engels, Capital III, Chapter 4) 

In my book “Marx and Engels' Theories of Crisis”, I have pointed to a similar situation as a result of the introduction of containerisation, and a similar feature has been created by the Internet, both in terms of the circulation time for the delivery of services and digital goods (software, music video, games etc.), and in terms of the speeding up of payments via electronic payments systems. 

In the last few decades, there has been continual changes in both areas, as well as revolutionary changes in both. Take for example, in the transport of commodities. A major shift was the introduction of containerisation. Like many such innovations, containerisation was not new. It goes back, at least, to late 18th century coal mines in Britain. But, like the take up of any such innovation, it really only takes off when other economic factors come together to make it a suitable solution to resolve the existing problems. Containerisation slashed the cost of transport, and at the same time massively increased the speed of shipments. 

According to this World Bank Report, using data from the McKinsey Report, the productivity in 1965 of dock labour (prior to containerisation) was 1.7 tons per hour. Post containerisation, in 1970, that had risen to 30 tons per hour. The average ship size went from 8.4 GRT to 19.4 GRT, insurance costs fell from £0.24 to £0.04, and capital tied up in transit halved from £2 per ton to £1 per ton. Today, 90% of goods are transported by container, in an integrated road, rail and sea system. As the report suggests, the reduction in cost, and increase in speed, has also had a significant effect in stimulating the circulation of commodity-capital in the process. 

This is perhaps one of the most notable increases in transport productivity, but it should not be missed that alongside it many more such improvements continually occur, for example, in increasing the size of carriers, improvements in speeds of carriers, development of additional road and other transport networks and so on. Moreover, alongside these physical improvements in transport speed, through technological development come others. For example, the development of common markets, like the EU, across the globe, has speeded up the movement of goods and services by the removal of various legal barriers - an advantage which Britain will lose as a result of Brexit. The introduction of the Schengen Agreement in Europe, means that time spent at border crossings has been slashed. Even, things such as the introduction of satellite navigation systems, has acted to speed up deliveries. 

But, changes in production have also acted to speed up circulation. The introduction of flexible specialisation systems, alongside the introduction of Just In Time, means that the suppliers of the large companies operating such systems, have themselves to introduce similar systems, in order to be able to provide the guarantees to customers that they will be able to provide the inputs of the right type, quality, and in the necessary quantity, at short notice, to be delivered precisely when required. This means that the quantity of commodity-capital at any one time lying fallow is reduced. 

Thursday, 12 July 2018

Paul Mason's Postcapitalism - A Detailed Critique - Chapter 3 (5)

The Rate of Profit


Paul hits a nail on the head, when he says, 

“The real insight posed by Luxemburg's insight is not what happens when the whole world is industrialised, but what happens if capitalism runs out of ways to interact with an outside world? On top of that, what happens if it can't create new markets within the existing economy?” (p 63) 

It is important, because, in addition to the other objective material factors I have outlined that determine the periodicity of the long wave, this is another. In Capital III, Chapter 15, Marx says that, in addition to the previously described problems of producing surplus value, at points where capital accumulated faster than labour supply, and where wages rise, squeezing profits, there is the further issue of being able to realise the surplus value as profit, when it has been produced. The problem is made more complex, because of the heterogeneous nature of consumers. 

At a point where employment and wages are high, stimulating demand for wage goods, capital is incentivised by competition to meet the demand by additional investment in wage goods production. With wages rising, and the rate of surplus value falling, capital is led to throw a larger proportion of those squeezed profits into accumulation than personal luxury consumption. With rising interest rates, asset prices fall, discouraging the use of profits for speculation. But, with employment and wages high, workers consumption has already risen. As Marx points out, demand is determined by use value, not exchange-value. If the price of knives falls, Marx says, it doesn't mean I have to buy six knives when I only need one. And, the same is true where wages rise, i.e. its a matter of income elasticity of demand, as opposed to price elasticity. At some point, I have bought enough food, clothes and so on. To get me to buy more, rather than save the money for the next period of uncertainty, the prices of those things have to fall by a lot. As Marx describes in Capital II, workers begin in those periods to buy some of the luxury products formerly the preserve of the rich, thereby compensating for some of the drop in the demand, from the rich, for these goods and services. But, even with higher wages, workers still cannot afford to buy many of these luxury items. 

When Ford began mass production of the Model T, at prices much below what cars previously sold for, they still had to introduce the novel idea of consumer credit, even for middle-class consumers, to be able to buy them. It is a fact that a limit to the growth of the market for these existing commodities is reached that means that whole new markets, in the shape of brand new types of goods and services, can be sold at high prices producing large profits. 

In my book, Marx and Engels' Theories of Crisis, I have given the figures for UK car ownership, for example, in the postwar period. 

“In Britain, in 1950, there were just 1.9 million cars on Britain's roads, by 1971 that had risen to 19 million. In 1951, nearly 90% of households had no car. By 1971 that had fallen to around 40%. By 1971, around 5% of households had two cars, and for the first time the number of households, even with 3 cars begins to appear in the statistics.” 

Paul notes Lenin and Bukharin's linking of Hilferding's ideas to the notion of Imperialism, as nation states, standing behind monopolies, seek to carve up the world into colonial empires, which drives them to war. He fails to point out that the notion was both historically and factually inaccurate, and basically nonsense, although polemically useful, in the conditions it was developed. Colonial empires had been constructed in the heyday of Mercantilism, long before the dominance of industrial capitalism, let alone the transformation of that industrial capital into large monopolies. The main drive to war in Europe was not competition over colonies, but a drive to create a unified European state, in the same way that Prussia had united Germany, and the US Civil War had created a centralised state there. In 1918 and 1939, it was a question of whether Germany or France could dominate such a state, and whether, as it had done in previous centuries, Britain could prevent such unification altogether. 

Paul also highlights the problem of the top-down approach, which I have previously discussed. As he describes, in Russia, the Bolsheviks were led to abolish workers control, and, across Europe, wherever workers did take control, it was shown they were simply not equipped to do so. 

As Paul rightly says, the concept of catastrophe and collapse, promoted by Stalinism, had a debilitating effect on the working-class, and Varga's Law of progressive immiseration was spread by Stalinist parties across the globe. Even in the post-war period, when it was more than apparent that workers' living standards, in the West, were rising sharply, the Stalinists performed ridiculous acrobatics to try to show that it wasn't real. The various Trotskyist sects, also, in this period, clung to the thought that capitalism was in its Death Agony, until they eventually had to accept that it was alive and well, at which point they did an about face, and adopted various Keynesian arguments to justify its renewed stability. Most of them have not gone beyond that, and the extent of their radicalism, as with the Left reformists nowadays goes no further than calling on the capitalist state to nationalise this or that failed enterprise, with the demand for workers' control, tagged on to save face. 

Paul notes the work of Husson and Shaikh, and says they 

“... demonstrated how neoliberalism restored profit rates from the late 1980's onward. But these show a sharp fall in the final years before the 2008 financial crisis. Husson argues, correctly, that neoliberalism 'solves' the problem of profitability – for both individual firms (by suppressing labour costs) and for the system as a whole (by massively expanding financial profits). But, alongside higher profits, the overall rate of investment after the 1970's is low.” (p 71) 

But, the real factor at play here was Marx’s law of the falling rate of profit, which in the 1970's and 1980's introduced new labour saving technologies that undermined labour, drove down wages, and drove up the rate of surplus value. It decimated the value of the existing fixed capital stock, and drove up the rate of turnover of capital, thereby creating a surge in the annual rate of profit, from the mid to late 1980's onwards. It creates a huge excess supply of loanable money-capital, which progressively drives down the rate of interest, and drives up asset prices. In the way Marx describes in Theories of Surplus Value, the cheapening of constant capital also releases it, converting capital into revenue, giving an illusion of profit, as he describes in Theories of Surplus Value, Chapter 22

The fall in the rate of profit prior to 2008 has nothing to do with the law of a falling rate of profit, and everything to do with the fact that a) after 1999, raw material prices soared, and b) wages began to rise, at a point where productivity gains were starting to fade, which thereby began to reduce the rate of surplus value. 

The rise in financial profits is an illusion. Financial profits, as stated earlier, are based upon either the difference between banks' borrowing costs and lending rates, or else, they are based upon their speculative activities, via their investment banking arms. The former is merely an indication that the rate of profit of industrial capital has increased massively, since the 1980's, because interest is a deduction from that profit, and the latter is pure illusion, or more appropriately delusion, because it is actually an indication not of profit, but simply of speculative – and in the case of QE induced, hyper-inflated asset prices not so speculative - capital gains on fictitious capital. That is why, as soon as interest rates began to rise in 2007, the whole edifice collapsed.

Theories of Surplus Value, Part II, Chapter 17 - Part 14

If the flax grower had expanded their production, but the spinner, weaver and machine maker had not, then the flax grower would be left with excess output that could not be sold. Marx is setting out here the various points in the circuit of capital where a breakdown can occur, resulting in overproduction and crisis. He details these far more, later in the chapter. What we see here are breakdowns in the circuit as a result of disproportions arising within different interlinked spheres of production. 

“If these relations exist, then in the first place the producers constitute a market for the capitals which they must replace for one another. The newly employed, or more fully employed workers constitute a market for some of the means of subsistence; and since the surplus-value increases in the following year, the capitalists can consume an increasing part of their revenue, to a certain extent therefore they also constitute a market for one another. Even so, a large part of the annual product may still remain unsaleable.” (p 482-3) 

As Marx puts it, if the weaver is taken as representing capital in general, all of which seeks to accumulate, 

“... what are the conditions of this general accumulation, what does it amount to? Or, since the linen weaver may be taken to represent the capitalist in general, what are the conditions in which he can uninterruptedly reconvert the £5,000 surplus-value into capital and steadily continue the process of accumulation year in, year out? The accumulation of the £5,000 means nothing but the transformation of this money, this amount of value, into capital. The conditions for the accumulation of capital are thus the very same as those for its original production or for reproduction in general.” (p 483) 

And the condition for this is that all of these commodities are produced, and become available on the market, in the correct proportions. Some commodities can only be consumed whereas others can only be used as means of production, whilst others may fulfil both roles. The producers of consumption goods require means of production, but, because the producers of means of production cannot consume their own product, they require the producers of consumption goods to produce a sufficient surplus of them to meet the consumption needs of the producers of means of production. And similarly, the producers of means of production must produce means of production in the proportions required to meet the needs of producers of consumption goods, as well as producing enough to meet their own needs, so as to replace the means of production used in their own production. 

In analysing the development of capital, it was seen that all of these commodities were available in the market precisely because capital does not come into existence from nothing. Thousands of years of production of products for direct consumption, and then of commodities that are produced and exchanged by petty commodity producers takes place, before capital comes into existence. Consequently, a capitalist baker is able to buy flour, eggs, milk and butter from a peasant farmer, because the peasant farmer has surplus of these commodities that they take to market to sell, in order to obtain other commodities, or money, in order to be able to buy other commodities. As capitalist production spreads, these commodities become available on the basis of that production, and the division of labour. 

“... as a result of the division of labour carried out in capitalist production on a social scale (distribution of labour and capital between the different spheres of production); as a result of parallel production and reproduction which takes place simultaneously over the whole field. This was the condition of the market, of the production and the reproduction of capital. The greater the capital, the more developed the productivity of labour and the scale of capitalist production in general, the greater is also the volume of commodities found on the market, in circulation, in transition between production and consumption (individual and industrial), and the greater the certainty that each particular capital will find its conditions for reproduction readily available on the market. This is all the more the case, since it is in the nature of capitalist production that: 1. each particular capital operates on a scale which is not determined by individual demand (orders etc., private needs), but by the endeavour to realise as much labour and therefore as much surplus-labour as possible and to produce the largest possible quantity of commodities with a given capital; 2. each individual capital strives to capture the largest possible share of the market and to supplant its competitors and exclude them from the market—competition of capitals.” (p 483-4) 

Wednesday, 11 July 2018

Theories of Surplus Value, Part II, Chapter 17 - Part 13

Returning to the weaver with the £1,000 of surplus value that is converted into variable capital, this may either employ more workers or the existing workers may be paid overtime, so that the working-day is extended. In either case, more yarn will be required. If more workers are employed, more machines may be needed, or, alternatively, the existing machines may be utilised more extensively by the introduction of additional shifts. 

If either the working-day is extended, or additional workers are employed to work additional shifts, the existing machines will wear out more quickly, as a result of their more extensive use. They will give up the use value and value more quickly via wear and tear, but this will also be spread over a larger mass of output. The fact that the weaver buys these additional commodities, yarn, auxiliary materials for the machine, coal for the steam engine, is essentially no different than had the weaver used their surplus value to buy consumption goods. It only requires that resources elsewhere in the economy go to the production of these additional means of production rather than means of consumption. In essence, there is no difference here, as far as this accumulation is concerned than any other instance of where commodities are used as capital rather than as revenue, i.e. for the purpose of productive rather than personal consumption. 

If the commodities that the weaver requires are not available, they will have to place orders for them, and wait for their delivery. In that case, the suppliers of these commodities will have to engage in their own process of accumulation, and obtain all of the additional productive-capital required. 

“If the raw material (flax) were only produced to order [as, for instance, indigo, jute etc. are produced by the Indian Ryots to orders and with advances from English merchants], then the linen weaver could not accumulate in his own business during that year. On the other hand, assuming, that the spinner converts the £5,000 into capital and that the weaver does not accumulate, then the spun yarn— although all the conditions for its production were in supply on the market—will be unsaleable and the £5,000 have in fact been transformed into yarn but not into capital.” (p 482) 

In each sphere, and indeed within individual firms, within each sphere, capital is accumulated for numerous reasons. The accumulation of an amortisation fund has already been referred to, but funds of surplus value accumulate, because realised profits can only be reinvested when they have grown to a minimum size, determined by the technical composition of capital, to enable expansion. Other funds exist to cover variations in both the firm's cash flow and the cash flow of the capitalist himself, required for personal consumption. All of these funds of money-capital become available for use as bank credit. The owners of this money-capital, who cannot use it immediately, as productive-capital, themselves do not want it to sit doing nothing for them, and so make it available as loanable money-capital, which returns interest to them. But, in addition to these owners of money-capital all of that class of rentiers, and of landlords, who receive large revenues as interest and rent, thereby also amass large reserves of loanable money-capital, which then becomes available for productive-capital to borrow to finance capital accumulation. 

“Every capitalist will however prefer to invest his accumulation as far as possible in his own sphere of production. If he invests it in another, then he becomes a moneyed capitalist and instead of profit he draws only interest— unless he goes in for speculative transactions. We are, however, concerned with average accumulation here and only [assume] for the sake of illustration that it is invested in a particular sphere.” (p 482) 

Tuesday, 10 July 2018

Paul Mason's Postcapitalism - A Detailed Critique - Chapter 3 (4)

The Role of the State


Paul elaborates the growth at the end of the 19th century/start of the 20th century of the huge corporations and cartels across the globe, and their desire to effectively banish the free market. In effect, the leaders of the big productive-capitals had become social-democrats. Company welfare schemes had already started in the US, towards the end of the 19th century, but the best example was that of Ford, in the 20th century. It went along with a drive for standardisation in all areas of the economy, to facilitate production on an even more massive scale, and it went along with the creation of central banks, like the Federal Reserve, to control money supply, with the goal of preventing falls in the nominal price level, and generating the modest annual inflation that Fordism needed so as to disguise the falls in nominal wages behind the reality of rising real wages. These were the kinds of development that Liberals like Mises and Hayek despised. It is what leads their followers today to describe the US as socialist. 

And, as Paul describes, the growth during this long wave uptrend was exceptional. The US, as Kondratiev described, was somewhat out of synch with Europe, by about 10 years. So, where Europe saw the uptrend finish between 1914-20, and went into a crisis period that ran until around 1933, the US, in the 1920's, experienced The Roaring Twenties. On the back of the new mass production, it continued to export around the globe, sucking in gold and forcing the US to inflate its money supply, which pushed down interest rates, and led to a flood of speculation in its financial markets that burst in dramatic fashion with the 1929 Wall Street Crash. 

Paul highlights the relevance of Hilferding's “Finance Capital”, noting that many of the features that Hilferding cited as stabilising features of 20th century capitalism were identical to the countervailing tendencies to the tendency for the rate of profit to fall. But, both Marx and Engels had already noted that back in the previous century. Engels, for example, in his Critique of the Erfurt Programme, basing himself on Marx's analysis of the development of socialised capital, and its development into the large corporations had already said, 

“I am familiar with capitalist production as a social form, or an economic phase; capitalist private production being a phenomenon which in one form or another is encountered in that phase. What is capitalist private production? Production by separate entrepreneurs, which is increasingly becoming an exception. Capitalist production by joint-stock companies is no longer private production but production on behalf of many associated people. And when we pass on from joint-stock companies to trusts, which dominate and monopolise whole branches of industry, this puts an end not only to private production but also to planlessness.” 

Its also important to point out a distinction here. Marx's most important law for capital, the tendency for the rate of profit to fall, where the organic composition of capital rises, remains the most important law in terms of how capital is allocated. Where the organic composition is lower than the average, and/or the rate of turnover is higher than the average, the annual rate of profit is higher than average, and this encourages additional capital into those areas. It may be that existing firms reinvest their profits, that other firms enter that market, or that money-capital is raised by bank loans or the issue of bonds or shares. But, the driving force for this additional capital to be invested in these spheres, rather than elsewhere remains the fact that they produce a higher annual rate of profit. 

Now, given that, as a result of the mammoth scale of these capitals, this reallocation of actual capital does not happen overnight, the consequence is that the shares of Company A, which produces 10% profit, will tend to rise relative to the shares of Company B, which produces only 5% profit. The reason is that if both companies pay out the same proportion of profits as dividends, say 10%, then Company A will pay twice as much in dividends as Company B. The yield on A shares might be 5%, whereas on B shares only 2.5%. In the stock market, therefore, shareholders will sell B shares, and buy A shares. The price of B shares will fall, and A shares rise until such time as the dividend yield on both is equated at around 3.75%. 

But, none of this flow of speculative money out of B shares and into A shares has anything to do with a reallocation of actual capital. It involves merely a speculation on the prices of fictitious capital. No matter how much money flows out of B shares and into A shares, as a result of this process, not one penny of real productive-capital is moved from B to A, not one single Whitworth nut or bolt is added to A's productive-capital, as a consequence of it. 

And, it is precisely because all of the big private capitalists withdraw from their social function in production, and become simply money-lending capitalists, prepared to live off their interest on bonds and shares, rather than take on the risk of actual productive activity, so as to obtain profits, that this situation arises. Now, in search of the highest yield on their money-capital, rather than the highest rate of profit on their productive-capital, they buy and sell bonds, shares property and other financial assets. It is only in engaging in this function themselves, as financial speculators and gamblers, that the banks and financial institutions, through their investment banking arms, stand in relation to the private money-lending capitalists. It has nothing to do with the allocation of real productive-capital. Only in so far as the private money-lending capitalists, along with the banks, buy newly issued shares and bonds for the purpose of funding real capital accumulation, is that the case, but that represents a small fraction of the total volume of activity on the stock and bond markets. Understanding this vital difference is crucial to understanding what led up to 2008, and what has happened after it. 

Paul is right to argue that the perspective put forward by Hilferding and embodied in the ideas of Fabian reformists and Leninist revolutionaries alike, of state capitalism as a stage towards socialism, which only requires a top down control by the state, is a dead end. But, it's wrong to say that the view that capitalism itself only persists because of the role of the state died after 1989. It remains a fact that capitalism cannot exist without a large interventionist state regulating the economy by the use of automatic stabilisers, and more active use of monetary and fiscal levers, as well as assisting capital via scientific and technological development through the Universities – not to mention its role in socialising the working-class via the education system – and regulating the supply of labour-power via the welfare state. Even in the most neoliberal of neoliberal regimes, in the US, the state accounts for around 50% of all economic activity. 

Paul is also right to highlight the debilitating effect of the Left's need for catastrophism as a route to Socialism. I have a theory to explain that. It is that a lot of the intellectuals who drive the ideas of the Left are, by their nature petty-bourgeois. That most petty bourgeois of all, the peasant, was renowned for seeing revolution in terms of violent acts – often individualist terrorist acts of violence - such as burning down the landlord's barns, house and so on, but with little vision of what positive to put in its place. For the petty bourgeois intellectual, especially for the young students that the revolutionary sects are dependent upon, and which today they are almost entirely composed of, it is the romantic idea of political revolution that attracts them. And as Simon Clarke puts it, this mentality is necessarily elitist, and managerialist. 

“The social base of state socialism lies in the stratum of intellectual workers, including such groups as managers, administrators, scientists, technicians, engineers, social workers and teachers as well as the intelligentsia more narrowly defined.” These groups believe that the key to a more just society lies “in their mobilisation of their technical, administrative and intellectual expertise... The ability of this stratum to achieve its rationalist ambitions depends on its having access to positions of social and political power.” 

“For the working-class the Party is a means of mobilising and generalising its opposition to Capital and its State, and of building autonomous forms of collective organisation, while for the intellectual stratum it is a means of achieving power over capital and the state... As soon as the party has secured state power, by whatever means, it has fulfilled its positive role as far as the intellectual stratum is concerned. The latter's task is now to consolidate and exploit its position of power to secure the implementation of the Party's programme in the interests of the 'working class'. Once the Party has seized power, any opposition it encounters from the working class is immediately identified as sectional or factional opposition to the interests of the working class as a whole, the latter being identified with the Party as its self-conscious representative.” 

(“Crisis of Socialism Or Crisis Of the State?”, in Capital & Class 42, Winter 1990) 

By contrast, the worker, be it the industrial worker, commercial worker, or clerical worker is used to a daily routine, and boring incrementalism. Each day, they do more or less the same tasks as the day before, bit by bit, shaping the material in front of them. And these workers, it turns out, actually do feel they have more to lose than their chains, in throwing themselves into rash, ill conceived adventures.

Theories of Surplus Value, Part II, Chapter 17 - Part 12

[4. The Connection Between Different Branches of Production in the Process of Accumulation. The Direct Transformation of a Part of Surplus-Value into Constant Capital—a Characteristic Peculiar to Accumulation in Agriculture and the Machine-building Industry] 


Marx's argument at the start of this section does not seem logically consistent. He says, 

“Even if the total capital employed in machine-building were only large enough to replace the annual wear and tear of machinery, it would produce much more machinery each year than required, since in part the wear and tear merely exists nominally, and in reality it only has to be replaced in kind after a certain number of years. The capital thus employed, therefore yields annually a mass of machinery which is available for new capital investments and anticipates these new capital investments.” (p 480-1) 

But, this makes no sense. If we assume that, in this economy, there are 12 machines bought at different times, and each with a 12 year average lifespan, it remains the case that, on average, only 1 machine per year needs to be replaced. It may be the case that in one year no machines are replaced, and in the second, two are replaced, and so on average it is one machine per year. So, a machine producing industry would gear its output to producing one machine a year, to meet this replacement demand. It will, when it sees signs of economic strength and potentially increased demand, increase this output accordingly, but, as the Accelerator Theory indicates, even if this results in it producing one extra machine that would represent a 100% increase in its output from one to two machines a year. 

So, when Marx says, 

“He supplies £12,000 worth of machinery during the year. If he were merely to replace the machinery produced by him, he would only have to produce machinery worth £1,000 in each of the eleven following years and even this annual production would not be annually consumed. An even smaller part of his production would be used, if he invested the whole of his capital. A continuous expansion of production in the branches of industry which use these machines is required in order to keep his capital employed and merely to reproduce it annually. (An even greater expansion is required if he himself accumulates.)” (p 481) 

this shows the effect of the accelerator though in a rather exaggerated fashion. Marx's example, here, assumes that all of the machines in the economy are acquired at the same time, in Year 1, as the machine maker produces and supplies these 12 machines. On average, then, it would be 12 years before those machines were due for replacement, at which point they would again all come up for replacement at the same time. Logically, here, the machine maker, not having this demand for 12 machines, would drastically reduce their capital, so as to produce only 1 machine a year, so that after 12 years, they had in stock the machines required to meet the needs of the replacement cycle. Given this 12 year turnover period, for their capital, they would need to adjust their prices accordingly, so as to make the average annual profit

The other alternative set out by Marx would be just as extreme. In his example, the machine maker is geared to produce 12 machines a year, whereas the replacement demand is only for 1. An economy would have to be running at an astronomical rate of growth if every firm was adding 11 new machines to its fixed capital for every one it replaced as being worn out! 

In practice, neither of these extremes are realistic. Synchronisation of replacement cycles does mean that the investment required for such replacement becomes bunched, rather than smoothed. But, one reason that a machine maker would not produce one machine a year over a 12 year period, besides the fact of its physical deterioration/depreciation, in storage, over the period, is that it would have suffered a moral depreciation, as newer technologies, in the intervening period, would have made it redundant. 

In Capital I, Marx discusses periods in the industrial revolution when machines had to be destroyed, even before they were completed, because, in just the time of their manufacture, new machines had been developed that made them redundant. For some items of fixed capital, with very long production times, that can continue to be the case. 

“Thus even the mere reproduction of the capital invested in this sphere requires continuous accumulation in the remaining spheres of production. But because of this, one of the elements of continuous accumulation is always available on the market. Here, in one sphere of production—even if only the existing capital is reproduced in this sphere—exists a continuous supply of commodities for accumulation, for new, additional industrial consumption in other spheres.” (p 481) 

But, here, as Marx also showed in Capital II, and as the theory of the Accelerator Effect shows, a further potential source of crises exists. If this machine building industry is geared to producing an average one machine a year, as a replacement for the one machine out of twelve that, on average, is worn out, if it has to produce an additional machine, as a result of growth and accumulation, that means its output doubles, even though the machine consuming industries may only have seen an 8.5% increase in their own demand. 

The machine producers must then double their employment of labour-power and materials etc. But, similarly, if the machine consuming industries see only a similarly small reduction in demand, they may not even replace the worn out machines, so the demand for machines disappears altogether, and the machine makers output represents an overproduction of capital. They have to lay off workers, and so on. 

Monday, 9 July 2018

Labour Should Demand a General Election to Stop Brexit

As I wrote on Saturday, the events at Chequers, on Friday, were a charade. The aim of the Brextremists is just say and do anything that results in Brexit Day, on 29th March next year, coming and going, so that Britain is officially out of the EU. Then they will have a free hand; every agreement made, promise given will be torn up, as they push through a hard Brexit, and begin to implement their hard right plans for ripping up workers, consumers and environmental rights and protections. The drive, over the last two years, towards a more authoritarian government, as with the Tory right's alignment with the world's dictators such as Duterte, Erdogan and Bonapartist politicians like Trump and Netanyahu will be put in its historical context, as they require such “strong and stable leaders” to inflict their measures on society, as society wakes up to what is happening and begins to resist. 

The resignation of David Davis is just the sacrifice of a pawn in this strategy. Already Davis has been replaced by the even more Brextreme Dominic Raab, and it looks likely that Steve Baker will be replaced by the uber Brextreme Suella Braverman. Over the weekend, the strategy of the Brextremists, I outlined on Saturday, continued to unfold, as one after another they appeared on TV to present the Chequers deal as the softest Brexit possible, which, if the EU rejected, would mean that it left Britain only with the option of walking away immediately on the basis of no deal. Already, the RINOS (Rebels in Name only) like Anna Soubry appear to have caved in to accept the duplicitous form of words that May has come up with once more, in the Chequers deal. That in itself indicates the folly of those who would ally themselves with these people to prevent Brexit, in the People's Vote campaign. 

It illustrates the folly of those engaging in the People's Vote popular frontist campaign for a second referendum. We do need to stop Brexit, but to do so, we need Labour to demand a General Election on that basis. In stopping Brexit, we need to do so not on the basis that the Tory Remainers, Liberals and Blairites propose, of simply accepting the conservative social-democratic principles that currently underpin the EU, but on the basis of a struggle in combination with the working-class and labour movement, across the EU, for an overturning of those principles, and, at least, for a return to the progressive social-democratic principles that were the basis of the EEC up to the 1980's, and better still, for a struggle for a Workers Europe, and the creation of a United Socialist States of Europe. 

Those who argue that Labour cannot campaign in a General Election on the basis of stopping Brexit are wrong. Brexit damages the interests of the working-class; not just the interest of the working-class in Britain, but the interests of the working-class across Europe. A principled social-democratic party, let alone a socialist party, should always stand on the basis of defending workers interests, whatever the short term electoral impact. But, the fact is that those who argue that standing on a programme of stopping Brexit would lose the support of Labour voters in the North and Midlands are simply wrong. All of the evidence shows that Labour voters in those areas voted overwhelmingly AGAINST Brexit. They did so in only slightly lower proportions than they did elsewhere in the country. Those analyses were done by John Curtice and the BES on the basis of those who voted Labour in 2015. Measured against those who voted Labour in 2017, which included a large number of younger voters (under 50), as well as former Liberal and Green voters, the proportion opposing Brexit is even larger. 

Those who make the argument that opposing Brexit would cause Labour to lose votes in the North, make the mistake of confusing Labour voters with the sections of the precariat and other atomised layers of society, who have never been core Labour voters. Their social position has always meant that their individualistic outlook actually makes them often hostile to the organised Labour movement and the principles it represents. Its those social layers that, as Marx sets out in The Eighteenth Brumaire of Louis Bonaparte, are always the ones attracted to “strong leaders”, who offer simple solutions based upon reactionary principles, and the blaming of “the other”. If those within these social layers have ever voted Labour, it has always been on the basis of an unthinking, tribalist support, not any kind of proletarian class consciousness. Its that, which, in the past, enabled such layers to offer up such similar unthinking tribalist support to the Nazis in Germany, or to the BNP in Britain. But, most of the time, it simply results in such layers wallowing in apathy, and seething, but ineffectual resentment. Its plebiscites of the kind of the EU referenda that allow such reactionary nationalism to take centre stage, and the same is true of the Scottish Independence Referendum and the Catalan Independence Referendum, no matter how much national socialists might try to dress them up as outbursts of progressive proletarian outrage. 

Just look at what happened after the Scottish Independence Referendum. Those naïve lefts who claimed that it was some kind of proletarian uprising, on the coat-tails of which the Left would rise to prominence – just like it has sought to do in one single issue after another – should have been quickly disabused of that delusion. The Scottish far left has sunk into total oblivion; the nature of the nationalist vote, as essentially a disaffected Tory vote, has again been revealed, as a large chunk of the SNP vote has returned home to the Scottish Tories. The proponents of Lexit, or of an abstention in the Brexit referendum were even more deluded. The former openly aided and abetted the reactionaries, though fortunately not in any practical sense, because no one was even aware of their existence, whilst those proposing an abstention aided and abetted the reactionaries by omission, but whose existence was even more removed from the awareness of any of the voting public.  The consequences of both were immediately felt by the upsurge in racism and xenophobia, and its longer term effect is being felt by workers now, in the carnival of reaction that is Brexit.

The Brextremists, like Rees-Mogg, are wrong when they claim that a Brexit that leaves Britain in the Customs Union and Single Market is not Brexit. For years, UKIP and the Tory Brextremists argued against the fact that Britain had voted 2:1 in 1975 to join the EU, by claiming that all they had voted for was to join the EEC. Firstly that's wrong, because by 1975, the legislation had already been passed for the setting up of the EU by 1982. But, secondly, the Customs Union is the EEC. So, they should be supporting remaining in the Customs Union, on the basis of the arguments they put forward for the last 40 years. In the referendum, no one was asked whether they wanted to remain in the Customs Union, Single Market, Euratom, or any of the other 40 EU bodies that are vital to the UK economy. That is why plebiscites are a useless vehicle for democracy, and much loved by dictators. 

But, Rees-Mogg and the Brextremists are right that a Brexit that leaves Britain inside a Customs Union and Single Market, but without any vote to determine the rules and regulations produced by those bodies is senseless. Some years ago, I described such a situation as making Britain a vassal state, in which it had to pay dues, and accept the rules of a larger state, but without any voting rights. That description was also used last year by Labour's Barry Gardiner, and more recently by Rees-Mogg. Its why Labour's position, as I have argued all along, is senseless. It represents the same kind of have cake and eat it that Bojo and the Brextremists originally argued, whereby somehow Britain could be outside all of the EU bodies and the requirements that go with that, and yet still have all the advantages of still being a member of those bodies. Its like someone who wants to be outside a Trades Union, avoid having to pay the subs, attend meetings, go on strike etc., but who wants to have every advantage that union members themselves enjoy! Any union that agreed to that would quickly disappear. 

That is why, as I have said all along, the advice of the EU itself from the beginning, is the only real set of alternatives. That is, it is hard Brexit or no Brexit. 

Labour should demand a General Election to stop Brexit. The real problems facing workers in Britain cannot be resolved by Brexit. Not only is it a diversion from the real solutions to those problems, but it will make providing solutions much harder. It will immediately and significantly worsen workers living standards and rights. But, more importantly, the solutions to British workers problems can only be addressed at an EU wide level. Its on that basis that Labour should wage its election campaign. Labour should demand a General Election to stop Brexit, and it should do so on the basis of a programme for progressive social-democracy across the EU. It should unashamedly link up with progressive social-democrats across Europe, with Syriza in Greece, Podemos in Spain, the Left Bloc in Portugal and with the left-wing elements of the Socialist Parties in France, Germany, Italy etc. 

The problems that face workers in Britain are the same as those that face workers in Ireland, Germany, France, Italy etc. Those problems have been created over the last 30 years by the policies of conservative social-democrats, be it Thatcher or Blair in Britain, Chirac or Hollande in France, Schroder or Merkel in Germany. Its those politicians that implemented policies to favour the owners of fictitious capital, at the expense of real capital. Its they who have blown up astronomical asset price bubbles that create instability, whilst draining potential investment from real capital. It's their policies that drove the EU into the insanity of austerity, at the same time as printing trillions of Euros to inflate asset prices. They are the same forces joined together now in the People's Vote popular front. The workers across the EU should have nothing to do with them. 

A People's Vote would have all of the same undemocratic limitations as the first vote. It would mean a vote to stay in the EU, was effectively a vote to continue with all of those conservative social-democratic policies that created the problems that exist today. No to a People's Vote, Yes to a General Election to Stop Brexit and move forward to a Workers Europe