Carillion, Outsourcing and Conservative Protectionism (4), Who Pays?

Who Pays? 

Even if we assume that say workers, in Britain, immediately bear the cost, as a result of their falling wages leading to a diminution of their living standards, this still ultimately falls on capital. It can be seen in the relative differences in labour productivity. It takes a British worker 5 days to produce what a French worker produces in just 4 days. Surplus value is the difference between the value of labour-power, and the new value created by that labour-power. If the value of labour-power falls, as workers are pushed into a lower standard of living, or if wages fall below the value of labour-power for a sustained period, the consequence may well be a fall rather than a rise in the rate and mass of surplus value, because the new value created by this diminished labour-power might fall be a greater amount than the fall in wages. Marx, in Capital I, quotes Adam Smith, who had already recognised that wherever wages are low, the price of labour is high, by which he recognised that low wages encourage low levels of productivity. In a globalised economy, where the productivity of labour is measured on a global basis, that becomes ever more apparent. And, the productivity of labour on a national basis is not simply a question of its ability to produce greater quantities of commodities, but is also a function of its skill, its ability to use new technologies effectively, its ability to undertake skilled work in new industries and so on. The more wages are driven below the value of labour-power, the more a solution is sought in short term cuts in wages and living standards, including cuts in the provision of education and training etc., the lower the productivity of the labour, and the corresponding effect on the reduction in the rate of surplus value. 

There is then no reason why capital in general would simply acquiesce in PFI schemes that were overall inefficient, and thereby undermined the production of surplus value, and maximisation of the average annual rate of profit. Of course, that doesn't mean that such a situation might not still happen. In the US, the inefficiencies of state spending on armaments has been well documented, and its continuance has been attributed to the power of the military-industrial complex, whereby senior generals, admirals and politicians rotate seamlessly into top jobs, in the big armaments firms, and vice versa. In Britain, many of the top military personnel recognise that spending on nuclear submarines like Trident is a waste of money, and deflects from spending on conventional forces, and yet the lobbying power of those involved in the nuclear arms industry, including the trades unions whose members work in those industries, ensures its continuance, and the waste of billions of pounds.

Incidentally, the idiocy of free market apologists who argue that state functionaries cannot make the kind of business decisions that private sector executives do, is exposed by this reality.  Those executives, like Michael Edwards at British Leyland, or Iain McGregor, at the NCB, were the very same executives who before and after undertook the same function within private sector companies!  

If we want to take up the issue, then, it is on this basis of corruption, and incompetence that we should focus, not the question of whether the capitalist state should have financed itself by one method rather than another. But, to do so, it would also mean that the labour movement would have to take on the question of its limitations within the bounds of an economistic trades union consciousness. For example, it would have to take aim at the narrow immediate concern with the protection of jobs in the armaments industry, and that applies also to protectionism in terms of jobs in the public sector as opposed to private sector.  As Marxists, our focus should not be on one form of capital as opposed to another, other than being opposed to the turning back of socialised capital into private capital, but on what develops the means of production most effectively, and thereby creates the objective conditions required for the construction of socialism. 

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