Monday, 30 April 2018

Marr Gives The Game Away

Yesterday, Andrew Marr gave the game away. Opening the Marr Show, on BBC, in a week when the disgrace over Windrush, and the revelations of the institutional racism that runs, like a yellow thread, through the Tory Party has been the dominant issue, he raised the side issue of the meeting between Corbyn and the British Board of Jewish Deputies and the Jewish Leadership Council, and let slip what the real reason for all the attacks on Corbyn, over anti-Semitism, are really all about. Those who want to protest over anti-Semitism, he concluded, would have the opportunity to express their concern in this week's local government elections.

Of course, most Labour Party members already know the real purpose of the attacks on Corbyn, and know why the attacks have come now, just ahead of those elections, just as they have come before every other set of elections, in the last two years. Len McCluskey got it quite right. The attacks are scurrilously taking a real issue, anti-Semitism, and using it, unscrupulously, as a means of undermining Corbyn, and the Labour Party, in the hope of undermining Labour's chances in the elections. The Right are doing that, because they know they have lost the battle of democracy, in the party, and because their whole argument and philosophy has depended upon the idea that Corbyn's progressive social democracy is not popular, and only their own brand of conservative social democracy, and pandering to popular prejudices – as with their advocacy of racist policies on immigration, and support for the same kind of policies of creating a “hostile environment” by the Tories – were capable of winning elections. 

Every time Labour does well in elections, under Corbyn, a Blair-right fairy dies. Each time, their vain hope that somehow, some way, fate will sweep them back into power takes another battering. Unlike the Left who have always made up the vast majority of the activists in the party, and who have thereby been used to having to make their own history, through hard work, the Blair-rights and soft Lefts relied on a desire of party members to win elections, and so put up with policies they disagreed with, and they have relied on the Tory media acting to provide them with a platform, as well as their control over the party apparatus to bureaucratically minimise the role of the rank and file, and to promote the right-wing careerists into their positions. They are not emotionally prepared to have to actually wage an intellectual and political battle for their ideas, which is why they now lash out at the party, in a similar way to how minority opposition groups around the globe, try to overcome the limitations of their tiny forces, by getting larger imperialist military powers to come to their assistance, in the name of humanitarian assistance. But, no one is coming to the rescue of the Blair-rights. 

The Tories have thrown them a bone, because the Tories, especially after the last election fear Corbyn more than the Blair-rights, but they could not help saving themselves, in relation to Windrush, by pointing out that it was Blair-right Home Secretaries that had first introduced policies of hostility towards immigrants, in the hope of currying favour with sections of voters, rather than tackling the issue of anti-immigrant bigotry head on. They couldn't help pointing out that the same Blair-right and soft left MP's who had helped them out over Windrush, by providing the diversion of the attacks on Corbyn over Syria, and over anti-Semitism, were the same MP's who had supported the 2014 measures that led to the current debacle. In the process, they succeeded, unconsciously, in illustrating that it was only Corbyn, and a handful of others, who voted against those measures, just as it is they who have been, consistently, the ones who have opposed all forms of racism and bigotry. 

And, the Tory media, whilst coming to their assistance, has done so in a rather half hearted manner. The Sunday Times front page article suggesting Russian intervention in last year's election was farcical. It is an amateur version of the notorious Zinoviev Letter. There is no reason why a right-wing nationalist like Putin would support a left-wing internationalist like Corbyn. There is every reason why Putin supports right-wing nationalists like Trump, Le Pen, Wilders, Farage and their ilk within the Brexit wing of the Tory Party. And, everyone also knows that Putin is building an alliance with the right-wing strongman Erdogan in Turkey, as well as having daily discussions with Netanyahu in Israel. These are all right-wing nationalists and populists, presenting themselves as “strong and stable” leaders, just as May attempted to do in last years' election. The choice of slogan was not accident. It is the mantra of the Bonapartist. 

Its not Corbyn that the Kremlin has been supporting, but the Tories, and their Brexit wing in particular. It's the Tories who have received hundreds of thousands of pounds from Kremlin cronies living in luxury in London; its Kremlin cronies who have paid tens of thousands of Pounds to play tennis with Boris Johnson, and similar amounts for access to other Tories. According the The Sunday Times, 5,000 Russian bot accounts were established during the last election. But, even if that is true, it would be insignificant. With 600,000 members, many of them young, there are hundreds of thousands of genuine social media accounts that rallied to Corbyn over the last two years. The thousands who turned up to open air events, certainly were not somehow, fictitious! 

The Blair-rights, and their supporters in the Tory media are becoming more frantic by the day. They have no tools to understand what is happening to them, no emotional, psychological or political capacity, no moral fibre to be able to deal with the situation they find themselves in, and so they lash out with all of the venomous tools they can lay their hands on. Len McCluskey is right, we should call them to account.


Liberals are already bleating about the merger between Sainsbury's and ASDA.  It will be bad for consumers they whine, but will be allowed to go ahead because the competition authorities had failed in the past to prevent TESCO getting too big.  All of this moaning from Liberals is reactionary nonsense.  The concentration and centralisation of capital is a normal feature of the way capital accumulates, and the way capitalism works.  Indeed, far from it being something we should oppose, it is something, as Marx set out more than a century ago, we should welcome, because that development is part of the process, by which capitalism itself creates the forms, and material conditions required for society to move beyond the limitations of capitalist production and distribution towards socialism.

The Liberals complain that the development of large oligopolies - rarely do actual monopolies exist - leads to a lack of competition, and so higher prices, for consumers.  Actually, as Marxist economists described during the 1980's, that is not true.  Marx himself, in "The Poverty of Philosophy", set out the way monopoly led to competition, which led to monopoly, which led to competition at a higher level.  Oligopolistic competition, between huge companies does not proceed on the basis of the penny-pinching competition that characterised early 19th century, free market competition, between a plethora of tiny capitals.  The competition between large companies proceeds rather on the basis of trying to avoid reducing prices, but to obtain instead higher profits by reducing costs, via higher levels of efficiency, more effective investment, and economies of scale.  The competition is driven by a desire to retain and win market share on the basis of improvements in the quality of the goods and services provided, which often goes along with the technological improvements that these large companies - and often it is only very large capitals that can fund such technological research and development - bring about so as to reduce their own costs, and increase their profits.  But, as Marx sets out in Capital III, and in Theories of Surplus Value, these very same technological improvements, that these very large companies bring about, which reduce the cost of production, themselves, thereby, reduce the market value of those goods and services, and consequently reduce their price of production.

The consequence is that rather than prices rising, they fall in real terms over a period.  The large companies avoid destructive price wars in terms of reductions in nominal prices, where possible, but that is precisely why social-democratic, capitalist states introduced central banks at the start of the last century, which were able to manipulate the supply of money tokens and credit, so as to enable real prices and wages to fall, whilst nominal price levels rose.  The large companies are usually able to obtain a higher than average rate of profit, and these surplus profits then provide rents.  Some of that rent goes to the workers employed by the large companies, which can afford, as one of the economies of scale, to pay higher than average wages, especially where the size of the firm facilitates workers organising into effective unions; it means they can afford to provide better working conditions, training and so on.  Indeed, it is one of the reasons that Liberals have always opposed such large companies, because it facilitates other forms of collective organisation, such as trades unions, whose members are thereby enabled to obtain advantages over the atomised, individual workers who are the building blocks of the bourgeois liberal ideology.

The lesson that socialists draw from the natural development of capital, into larger, more effective units is not that such units should be broken apart, or prevented from forming, by some kind of reactionary, anti-monopoly legislation, but that it should be welcomed as a harbinger of the future, more rationally organised, more efficient future.  What the development of huge socialised capitals like Sainsbury-ASDA shows, is not that such such companies should be broken up into smaller, less efficient units - which history shows, as with the introduction of similar anti-monopoly policies at the end of the 19th century, will only result in those separate units themselves once again forming into huge companies - but that we need workers control over these companies.  Alongside social-democracy in society, that provided millions of workers the right to vote, on issues relating to life outside their workplace, what we need is also social-democracy, industrial democracy in the workplace.  As Marx set out in Capital III, Chapter 27, in the worker-owned co-operatives, that industrial democracy automatically exists.  But, in joint stock companies, in economic terms, there is no difference to a co-operative.  The capital in a joint stock company, as with a co-operative, is socialised capital, not privately owned capital.  The capital belongs to the firm itself, not to any individual or group of individuals.

The only difference is how the different types of socialised capital raise money-capital to be able to acquire the productive-capital of the company.  A worker-owned co-operative raises money from the workers it employs, each having a share in the company, as well as the co-operative borrowing money-capital on the money market.  A consumer co-operative issues shares to its members, on which they get divi, in proportion to how much they spend, again as well as borrowing money-capital in the money market.  A joint stock company borrows money, by issuing shares, bonds and debentures, as well as borrowing money-capital in the money market.  But, in each of these cases, those who lend money to the companies, are thereby only creditors of the company, entitled to receive interest on the money they lend, and nothing more.  Yet, the political power of the shareholding class, has enabled them to exercise control over capital they do not own, capital they gave up possession of in return for being paid interest.

What the Sainsbury-ASDA merger shows is not the need to prevent such progressive developments of capitalism, but the need to bring the social relations of society into alignment with these new productive relations that capitalism has established.  It means it is time for social-democracy to extend democratic control from society into an effective industrial democracy in the workplace.  Rather than committing to a reactionary breaking up of these large companies, or a pointless, and expensive programme of nationalisation, what a progressive social-democratic government should propose is to simply end the undemocratic and unjustified control over social capital, that a tiny group of money lenders - shareholders, not even other forms of money lender - currently exercises.  Progressive social-democratic parties, such as Corbyn's Labour, should commit to a reform of the laws on Corporate Governance.  They should build upon the move in that direction that Germany took decades ago with its co-determination laws, that the EU put forward in the Fifth Draft Company Law Directive, and that the Bullock Report proposed in Britain in the 1970's, before the conservative reaction put a halt to such social-democratic development.

The unjustified ability that shareholders have to vote and control capital they do not own, to elect Boards of Directors to further the interests of shareholders, as against the interests of the company, is an anachronism.  Not even other forms of money lender to companies have that right, and the idea that control over property should be exercised by those that do not own it, is fundamentally contradictory to bourgeois property laws themselves.  Yet, that is exactly the right that shareholders currently exercise.  Progressive social-democratic parties should commit themselves, and this is something they could co-ordinate and propose across Europe, quite easily, to removing that right from shareholders, and requiring that company boards be elected entirely by and from the workforce within the company.

On that basis, the progressive nature of these large capitals, and the ability to move beyond them to a more rational, co-operative coordination of their investment and business planning with other such large capitals could be extended across the global economy, and thereby begin to organise production and distribution of goods and services to meet workers and consumers needs, not simply to meet the demands for creating profits.

Theories of Surplus Value, Part II, Chapter 15 - Part 33

The actual wage paid will vary, as a market price, which will result in the period of unpaid labour being greater or smaller, as a consequence of changes in the demand and supply of labour-power. If profits are high, capital will demand more labour-power, and, as the reserves of labour-power are used up, and shortages of labour-power begin to emerge, the wages will rise, even above the value of labour-power. Workers may then marry earlier, and have more children, more of those children will survive, increasing the supply of labour-power. But, as wages rise, and profits are squeezed, capital will expand less rapidly, reducing the increased demand for labour-power. And, to deal with labour shortages, and the resultant high wages, capital will introduce new labour-saving technologies, that create a relative surplus population, so that wages once more fall, and profits rise.

And here can be seen part of the basis of the long wave cycle too. Profits rise, the demand for labour-power rises, wages rise; workers marry earlier, and have more children more of whom survive, increasing the supply of labour-power, a dozen or so years hence, as these children enter the workforce; the higher wages start to squeeze profits, but the higher wages, and increased number of workers creates an increased demand for wage goods, which drives capital to expand further to meet that demand; this increasing demand, driving increasing extensive capital accumulation, with increasingly squeezed profits, as wages rise, causes interest rates to rise, as productive-capital must demand more money-capital from the money-market; it also leads to an overproduction of capital, where it has expanded so far, in relation to the available workers, on the basis of the existing technology, that no additional labour can be employed in conditions where it would produce additional surplus value. The length and intensity of the working day have already been pushed to their limit, women workers, and immigrants have been recruited to the workforce, but the demand for labour-power continues to outstrip the supply, so that wages rise to a level whereby no additional workers can be employed profitably. A crisis of overproduction, therefore, breaks out as each capital, still driven by rising demand, is forced by competition to try to maximise its market share.

Each capital seeks to introduce labour-saving technologies, to reduce the cost of wages, and obtain competitive advantage; some capitals go bust. The accumulation of capital slows down, rather than extensive accumulation, it becomes intensive accumulation, with new technologies introduced to produce the same level of output with fewer machines and workers, rather than to increase output, and the demand for labour-power is reduced, both as a result of the slower pace of capital accumulation, and the introduction of labour-saving technologies, at just the point where the additional labour supplies, from the new generation of workers enters the workforce, creating a relative surplus population, pushing wages down, and raising the rate of surplus value, creating the conditions for a rising mass and rate of profit, in the next upswing of the cycle.

In short, contrary to Smith's belief, capital will always be in a position to demand a period of unpaid labour, because the capital will only act as capital, where it makes a profit. If no profit can be made, from the advance of additional capital there is no point in advancing it. When those conditions cease to exist, a crisis of overproduction arises. Initially, this leads to a spike in interest rates, as firms seek money simply as currency to pay bills and stay afloat, and will pay almost any rate of interest to do so.  But, in the aftermath of the crisis, the demand for money-capital collapses, and interest rates drop to their lowest level.  The owners of money-capital simply use it for additional consumption, or for speculation, which is why asset prices rise in speculative bubbles during such periods. Those in receipt of profits, instead of investing it productively turn it into loanable money-capital, or simply into money to fund additional consumption and speculation. Where they do use it productively, it is to introduce new labour-saving technologies, to overcome the squeeze on profits caused by the rise in wages, induced by the shortage of labour, caused by the previous overproduction of capital.

But, workers do not have the luxury of these options. They must work or die, and so they are always thereby forced by necessity to provide capital with a period of unpaid labour. And, as was demonstrated earlier, the more the value of labour-power is reduced, by constantly rising social productivity, the greater the portion of the working-day that represents unpaid labour becomes. That is true even if workers real wages rise. If a worker works for 10 hours, and produces £10 of new value, say they require a kilo of grain to reproduce their labour-power, and the kilo of grain has a value of £5, or 5 hours labour, in that case they produce 5 hours, or £5 of surplus value. If productivity rises, so that it only requires 2 hours to produce the grain, so that it has a value of £2, the worker may be paid 2 kilos of grain as wages, equal to wages of £4. But, although the workers' real wage has doubled, the amount of paid labour they provide has fallen by 20%, and the amount of unpaid labour has risen by 20%. They now provide 6 hours of unpaid labour, compared to only 5 before.

Marx notes a further inconsistency in Ricardo's argument, in respect of the treatment of materialised and immediate or living labour. Ricardo says,

““Not only the labour applied immediately to commodities affects their value, but the labour also which is bestowed on the implements, tools, and buildings, with which such labour is assisted” (David Ricardo, On the Principles of Political Economy, and Taxation, London, 1821, p. 16).” (p 399)

In other words, in determining the value of commodities, Ricardo correctly notes that the quantity of labour required consists not just of the living labour required, in the immediate labour process, but also of the materialised labour contained in the materials etc. processed by the living labourer, in that process. But, Marx says, in that case, if both of these forms of labour, materialised and living, are treated without distinction, in determining the quantity of labour that forms the value of commodities, how can it be justified to determine the value of these different forms of labour differently, when it comes to their exchange one with the other in the form of the exchange of wage labour and capital?

“Why should it, in this case, invalidate the law of value, since the difference in itself, as shown in the case of commodities, has no effect on the determination of value? Ricardo does not answer this question, he does not even raise it.” (p 399)

Back To Part 32

Forward To Part 34

Sunday, 29 April 2018


The bourgeois media pundits have been eulogising over the apparent rapprochement, between the two Koreas, and the US.  The only difference between the reactionary bourgeois media pundits and the liberal media pundits is that the former have been euphoric in praising the role of Trump, in bringing it about, whilst the liberal media pundits have grudgingly conceded credit to Trump.  Both are wrong.  Trump has something to do with the current situation, but it's not what these pundits believe it to be.

The reality of the talks that are proposed between Kim and Trump, if they do eventually take place, is that Kim will ask Trump to remove the nuclear shield from South Korea.  He will ask Trump for some major financial aid, and will seek to increase trade with the South, as part of Trump agreeing to lift the current sanctions on the North.  In return Kim will agree to reduce the size of the North's massive conventional army, but Kim will not agree to get rid of the nuclear weapons, and missiles they have only just painstakingly acquired.

Trump has brought about the current situation, in that his policy ensured that the North was able to proceed to develop its nuclear weapons, and its intercontinental missiles largely unchecked.  Trump has boxed himself in.  By threatening essentially to launch a pre-emptive nuclear strike on the North, if it didn't stop that development, Trump had to either carry out his threat, or impotently sit by, doing nothing.  Given that everyone, including Kim, knew that Trump was not going to launch a pre-emptive nuclear strike on the North, that meant that Trump was seen to be just hot air.  So, Kim ignored Trump's empty threats, and ridiculous school yard tweets, and built the nuclear weapons and the missiles he needs to defend Korea against the potential of a US attack.  Trump's ridiculous threats brought about the current situation, not because they scared Kim into coming to the negotiating table, but for the opposite reason, that Trump's hyperbole and ultimatism was seen as obviously an empty threat that allowed Kim to carry on unchecked, until he had reached a stage of development of his arsenal, where he could pause, and see what else he might get out of the incompetent Trump.  Kim is not stupid.  He has seen what happened to others who believed the West's assurances.  Kim has no desire to go the way of Saddam or of Gaddafi.

North Korea was led to build up an oversized army, because of the ever present danger of a highly effective US military, stationed in South Korea, and the Pacific Ocean, launching a conventional war against it, as had happened in other parts of South-East Asia.  Totalitarian regimes do not like having too big a military than they can get away with, because the military, as a significant social force, always has the potential for removing the dictator.  Moreover, for a country like N. Korea, the cost of a huge conventional army is debilitating.  It drains potential capital away from economic growth - a problem that brought down the USSR, along with its requirement to sustain a huge welfare state.

North Korea, unlike the USSR has no need of a massive nuclear arsenal.  It has no intention of being involved in a global strategic struggle with the US.  All N. Korea needs to do, is to be able to deter the US waging a military campaign against it, for fear of one or two US cities, as well as Japan, and South Korea getting nuked.  Now that Kim has got the nukes and missiles he needs to achieve that aim, he can afford to voluntarily forego any further tests.  The nukes mean that Kim can now focus on bargaining for economic benefits from the US and South Korea, in exchange for reducing its conventional forces, conventional forces that Kim now has an incentive to reduce so as to divert those resources into the economic development of the North.

The bourgeois media pundits are prevented by their own ideology from realising that, because their ideology is only capable of describing the world, not understanding the way it works.  That is why bourgeois reportage, and supposed analysis of world events is nothing more than a presentation of superficialities, and hence their infatuation with the role of individuals such as Kim, or Trump, and with celebrity.

Theories of Surplus Value, Part II, Chapter 15 - Part 32

The answer, of course, is, as Marx demonstrated in Capital I, that Ricardo like Smith, fails to distinguish between labour as the essence of value and whose measure is labour-time, and labour-power, which is a use value possessed by the labourer, i.e. the use value of being able to undertake labour, which, in the form of wage labour, becomes the commodity that workers sell. The commodity that workers sell is the ability to perform labour, the activity of creating new value. The value of this commodity is determined, as with all other commodities, by the quantity of labour-time required for its reproduction. But, labour, the value creating substance, the essence of value, has no value itself, any more than length has a length. Labour is value, and it makes no more sense to ask what is the value of value, i.e. what is the value of labour, than it does to ask how long is length? It was Marx’s great achievement to make this distinction, and the failure to make this distinction was the fatal flaw in the Ricardian School.

“This weakness in Ricardo’s discourse, as we shall see later, has contributed to the disintegration of his school, and led to the proposition of absurd hypotheses. 

Wakefield is right when he says: 

“Treating labour as a commodity, and capital, the produce of labour, as another, then, if the value of these two commodities were regulated by equal quantities of labour, a given amount of labour would, under all circumstances, exchange for that quantity of capital which had been produced by the same amount of labour, antecedent labour […] would always exchange for the same amount of present labour […] It follows, that the value of labour in relation to other commodities, in so far, at least, as wages depend upon share, is determined, not by equal quantities of labour, but by the proportion between supply and demand.” (E. G. Wakefield, Note on p. 230 of Vol. I of his edition of Adam Smith’s Wealth of Nations, London, 1835.)” (p 398-9)

In other words, if all we are dealing with is an exchange of commodities, it follows that a variable-capital of £100, representing 100 hours of labour, would purchase 100 hours of labour, or 100 hours of materialised labour, whether in the form of the general commodity, money, or in the form of actual wage goods, would purchase 100 hours of labour. This would be no different than where a blacksmith provides 100 hours of labour in shoeing a peasant's horse, and in return the peasant labours for 100 hours on the blacksmith's land. But, it is precisely because the social relation between capital and wage labour is not the same as that between two independent commodity owners and producers that this exchange relation does not exist. The capitalist owns the means of production that the labourer needs, in order to be able to produce at all, just as the landlord owns the land, which the labourer needs, in order to produce. In just the same way that landed property will not allow a labourer, or a capitalist farmer, to use the land, without paying them a rent, so capital will not allow wage labour to use the means of production without providing them with a quantity of unpaid labour.

The capitalist also owns the means of subsistence that the labourer needs in order to live, because, without being able to produce, the labourer cannot even provide for their own subsistence. So, capital does not buy the commodities that labour produces, in the same way that independent commodity producers exchange finished products, but instead buys labour-power itself from the labourer, and thereby obtains the ability to appropriate the product, not just of the labour they have paid for, in wages, equal to the value of that labour-power, but also the product of a period of unpaid labour, which thereby creates a surplus product and surplus value.

Saturday, 28 April 2018

Theories of Surplus Value, Part II, Chapter 15 - Part 31

Capital is self-expanding value, and the extent to which the surplus value has risen from £1 to £4 here indicates the extent to which the corn in the hands of the capitalist, to pay as wages, acted as capital to this greater extent, i.e. expanded its value to a greater extent.

Ricardo not only does not deal with the contradiction facing Smith, he does not even recognise it exists. Instead, Ricardo satisfies himself with demonstrating that rising wages do not cause higher commodity values/prices.

Ricardo is happy to simply state that,

““They are not equal”, that is “the quantity of labour bestowed on a commodity, and the quantity of labour which that commodity would purchase” (l.c., p.5).” (p 397)

But, Ricardo does not answer the question of how this commodity labour is different from every other commodity, other than saying that one is materialised labour and the other is living labour. In that case, Marx says, this is just two different forms of the same commodity, in which case, its still necessary to explain why the law of value applies to one of those forms and not the other.

“Ricardo does not answer—he does not even raise this question.” (p 398)

Nor is Ricardo's argument helped by the introduction of the role of supply and demand. In fact, as will be seen shortly, introducing supply and demand here opens up a weakness that is exploited by the proponents of theories of subjective value, such as Samuel Bailey.

Ricardo says,

““Is not the value of labour … variable; being not only affected, as all other things” (should read commodities) “are, by the proportion between the supply and demand, which uniformly varies with every change in the condition of the community, but also by the varying price of food and other necessaries, on which the wages of labour are expended?” (l.c., p. 7).” (p 398)

He understands that supply and demand does not affect the value of a commodity, whether that commodity is labour or linen, because he argues that market prices rotate around the value of commodities. Unless commodities have a value, there is nothing for their prices to rotate around, as supply and demand interact. But, this still leaves Ricardo having to explain why the value of labour is determined differently to other commodities.

Wages, which are the price of labour(power), rotate around the value of labour(power), in response to changes in the demand and supply for labour(power), just as the market prices of other commodities rotate around their exchange-value. But, this takes Ricardo no further forward in explaining why the value of labour should be determined differently than the value of linen, or any other commodity. Ricardo can't argue that its because the value of wage goods fluctuate, because these wage goods are only commodities, (inputs) required for the reproduction of labour (power), just as cotton is a commodity required as an input for producing yarn. The values and prices of cotton and other commodities can vary due to changes in demand and supply just the same as for wage goods.

“That the wages of labour are spent upon food and necessaries, means after all only that the value of labour is exchanged against food and necessaries. The question is just why labour and the commodities against which it is exchanged, do not exchange according to the law of value, i.e., according to the relative quantities of labour. 

Posed in this way, presupposing the law of value, the question is intrinsically insoluble, because labour as such is counterposed to commodity, a definite quantity of immediate labour as such is counterposed to a definite quantity of materialised labour.” (p 398)

Northern Soul Classics - Not A Chance In A Million - Jock Mitchell

Deep soul, and watch for the change of tempo.

Friday, 27 April 2018

Friday Night Disco - Love Train - The O'Jays

Looking forward to the monthly Moorville tonight!

Marc Wadsworth's Expulsion Is A Disgrace

The decision of Labour's National Constitutional Committee, to expel Labour activist and long-time anti-racist campaigner, Marc Wadsworth, is a disgrace.  Wadsworth was originally charged with anti-Semitism, the hook on which Labour right-and soft left opponents of Jeremy Corbyn have hung their latest attempts to undermine the Labour Leader, and his massive support in the party rank and file.  But, the charge of anti-Semitism, against Wadsworth, which was clearly unfounded, was dropped, and instead he was charged with bringing the party into disrepute.  That follows the dropping of similar charges of anti-Semitism against others such as Moshe Machover, and Tony Greenstein, and replacement with the vacuous charge of bringing the party into disrepute.  In the case of Machover, the party was eventually forced to have to reverse its decision, and in the case of Greenstein, the charge eventually came down to a charge against him that he had been "rude".

In fact, it is rather ironic that many of those who have been expelled by the Labour Party's bureaucracy, initially on charges of "anti-Semitism", have, like Machover and Greenstein, and as with Jackie Walker, themselves been Jews!  The problem of anti-Semitism, in the Labour Party, seems to come from the top, but not the political top, rather from the bureaucratic top, from within its bureaucracy.  Their anti-Semitism seems to be manifest in a desperation to expel the "wrong type of Jews" from the party, i.e. those Jews who support Corbyn, who oppose the Blair-rights, and who oppose the Tories who head up various Jewish organisations such as the Board of Deputies and the Jewish Leadership Council.  Their anti-Semitism seems to be manifested in their rush to expel all Jews from the party who make a distinction between being anti-Zionist, and being anti-Semitic, along with anyone else in the party who supports them in making that distinction.  Perhaps the members of the NCC should pull themselves up on charges for such anti-Semitism, and all expel themselves from the party!

And, if "bringing the party into disrepute" is the issue, then rather than expelling Wadsworth and others, whose crime seems only to have been to criticise right-wing MP's, for their links to right-wing Tory newspapers, in a prolonged process whereby that alliance has been used to undermine Corbyn, then shouldn't the NCC first start by bringing before it all those right-wing MP's who have, and continue to attack and undermine Corbyn, and party policy?  What about the charges made by John Mann and others that "Marxists", or members of Momentum, or Corbyn supporters sent his wife a dead bird in the post, when, according to Daily Mirror Associate Editor, Kevin McGuire, on Twitter, that incident happened in 2012, long before Corbyn was Leader, long before Momentum ever existed!  And, McGuire points out, Mann has form in making such unsubstantiated claims in the past.

Unsubstantiated claims against Labour Party members, accusing them of online abuse, are everyday occurrences from right-wing MP's, including those made in the parliamentary debate on anti-Semitism last week.  All these MP's should be expelled for "bringing the party into disrepute", especially for having allied with the Tories and Tory media in the run up to the local elections, in order to use those smears to do the maximum amount of damage to Labour's chances in those elections.  If calling out, in calm tones, as Wadsworth did, the alliance of right-wing Labour MP's with elements of the right-wing Tory press, is bringing the party into disrepute, then any rational debate within the party, any holding to account of its representatives becomes impossible.

And, if bringing the party into disrepute is the issue, then the last week's debates over the Windrush Generation, and immigration policy should be ample reason to expel large numbers of Blair-right MP's, and their supporters, because whilst the last week has exposed the utter hypocrisy of the Tories claims to be humanitarians - for example, in their bombing of Syria, again without first providing any evidence or proof of their allegations - it also exposed the hypocrisy of the Blair-rights, who also supported them in that bombing, but who have also been shown to have been the actual instigators of the policy of creating a "hostile environment" for immigrants that led to the Windrush debacle.

Not only was Theresa May able to express a vote of thanks across the Commons Chamber to the Blair-rights for providing her with a diversion from Windrush, with their stunt to attack Corbyn over anti-Semitism, but she was able to point out that it was Alan Johnson who had first used the phrase "hostile environment", when he was at the Home Office, but she was also able to point to a string of equivalent phrases from Yvette Cooper, and other Blair-rights, who had been falling over themselves as Ministers, and Shadow Ministers to pander to racism and bigotry, and to blame immigration and immigrants for all ills, so as to win votes.  The hostile environment for immigrants goes back to the times of Charles Clark, and of John Reed as Labour Ministers at the Home Office, and as late as 2014, Blair-right MP's were lining up with the Tories to push through the racist, anti-immigrant policies that ultimately resulted in the Windrush scandal.  It was only Corbyn, McDonnell, Abbott and a handful of others who, as so often in the past, voted against the Tories disgraceful, racist agenda.

The hypocrisy of the racist, anti-immigrant policies of the Tories and supported by the Blair-rights, and soft lefts is illustrated by their attempts to claim that they were only hostile to "illegal immigrants"!  What Windrush shows, and what was seen after the Brexit vote, is that for large numbers of people no such distinction exists.  Once you blame immigrants, legal or illegal for society's ills, anyone who looks like an immigrant, anyone with different skin colour, different culture, clothing, or who speaks differently, is identifiable as an immigrant, and therefore, potentially is an "illegal immigrant", and thereby  fair game to be made unwelcome, as part of the creation of a hostile environment.  That is precisely the conditions that the Blair-rights and the Tories created, which has led to the Windrush disgrace, and which will be seen to be the tip of the iceberg in terms of lots of other immigrants who will have suffered a similar fate, just as the disgraceful bigoted campaigns against benefits claimants run by those same Tories/Blair-rights and the gutter press put large sections of the population in the firing line, as potential scroungers etc.

So, if bringing the party into disrepute is the issue, let's have shut of all these Blair-right and soft left MP's who have brought the party into disrepute with their constant unsubstantiated attacks on Corbyn, their support for racist, anti-immigrant policies, and willingness to pander to racism and bigotry in search of votes.

What we have with the anti-Semitism trope, is the equivalent of what was seen a few years ago with grooming of girls by Pakistani men in Rotherham.  All attempts by anti-fascists in the area to raise the issue were objected to by the SWP, who were eager to avoid charges of Islamophobia, which might damage their attempts to win support in Muslim communities, via their ill-fated Respect venture.  It meant that all rational debate was shut down, with cries of racism or Islamophobia.  The result in Rotherham is now well known.  But, what we have now is an equivalent situation.  No matter what the circumstance, any criticism of anyone who might be Jewish, whether the person raising the criticism knows the target of the criticism is Jewish or not, whether the criticism has anything to do with them being Jewish or not, stands the risk of being accused of anti-Semitism, simply for raising a criticism of someone who just happens to be Jewish!

Down this road leads nihilism and disaster.  CLP's should flood the NEC with emergency motions demanding the reinstatement of Wadsworth, and we need motions to party conference to bring these show trials to an end.  If people are guilty of anti-Semitism, they should be kicked out forthwith, the sooner the better, and the same for any other kind of bigotry.  But, those bringing such charges against them should have real evidence not simply tittle tattle, innuendo and assertions.  We should remove the catch-all charge of bringing the party into disrepute, as a means of witchhunting those against whom actual charges cannot be substantiated.  Those making any such accusations should proceed by the normal labour movement ethic of sorting such disputes out within the party, and not running to the Tory media at the first opportunity, in the hope of cheap publicity and the chance of sticking the knife into Corbyn and the party.  Indeed, those running to the media such be themselves brought up for disciplinary proceedings for having done so.

Theories of Surplus Value, Part II, Chapter 15 - Part 30

The value of 1 metre of linen is not measured by gold, but by abstract labour, whose proxy is now gold producing labour. The value of linen is measured by whether the quantity of this abstract labour increases or decreases, which is a function of productivity in linen production. Only the exchange value of linen is measured by gold, i.e. the relation between the value of linen as against the value of gold. 

As Marx puts it slightly later, talking about Smith, 

“Moreover here he confuses—as Ricardo also often does—labour, the intrinsic measure of value, with money, the external measure, which presupposes that value is already determined;” (p 403) 

Suppose that the 20 hours of gold producing, (abstract) labour now produces 20 grams of gold. The value of gold thereby falls. But, this fall in the value of gold does not at all affect the value of linen, which continues to require 20 hours of abstract labour for the production of 1 metre of linen. Now, 1 metre of linen exchanges for 20 grams of gold, the linen producing labour continues to produce twice as much value per hour as gold producing (abstract) labour.   Ten hours of linen producing labour creates as much value as 20 hours of gold producing (abstract) labour, but now this means that 1 metre of linen exchanges for 20 grams of gold, rather than 10 grams of gold, because the value of 1 metre of linen still has a value of 20 hours of abstract labour, whereas the value of gold has fallen, because 20 hours of abstract labour now produces 20 grams, whereas previously it only produced 10 grams.

But, this determination of the value of the linen has thereby nothing to do with the value of the linen producing labour (power) itself, i.e. what portion of it is paid labour as opposed to unpaid labour, as Smith contends, but only by the total labour, paid and unpaid, required for production. If the paid labour declines, because changes in social productivity reduce the value of wage goods, and thereby the value of labour-power, this in no way changes the value created by the linen producing labour; it simply changes the proportion in which that value is then distributed, in providing for the reproduction of the labour-power, and that going to surplus value

“Ricardo’s reply to Adam Smith is correct—that the relative quantity of labour which is contained in two commodities is in no way affected by how much of this quantity of labour falls to the workers themselves and by the way this labour is remunerated; if the relative quantity of labour was the measure of value of commodities before the supervention of wages (wages that differ from the value of the products themselves), there is therefore no reason at all, why it should not continue to be so after wages have come into being. He argues correctly, that Adam Smith could use both expressions so long as they were equivalent, but that this is no reason for using the wrong expression instead of the right one when they have ceased to be equivalent.” (p 396) 

Both expressions were equivalent when it was only a question of materialised labour exchanging for materialised labour

“They cease to be equivalents as soon as materialised labour is exchanged for living labour.” (p 397) 

In other words, there is a change not just in the exchange relations here, but in the social relations that underpin those exchange relations. In a society of petty commodity producers, each producer creates a commodity, and they exchange this commodity for some other commodity, or set of commodities that have the same value, i.e. represent the same quantity of abstract labour. 

“Two commodities exchange in proportion to the labour materialised in them. Equal quantities of materialised labour are exchanged for one another. Labour-time is their standard measure, but precisely for this reason they are “more or less valuable, in proportion as they will exchange for more or less of this standard measure” [l.c., p. 5].” (p 397) 

In other words, if commodity A represents 10 hours of abstract labour, and commodity B represents 5 hours of abstract labour, A is relatively more valuable than B. 1A will exchange for 2B, “since this exchange relationship expresses, is identical with, the relative quantity of labour which it itself contains.” (p 397) 

But, herein lies the contradiction, and the problem facing Smith, which Ricardo, by his approach, has failed to resolve. Wage labour is itself a commodity, and the basis upon which capitalist production is founded. But, on the basis of the argument that Smith has put forward, the law of value, by which the value of commodities is determined by the labour-time required for their production, cannot apply to this commodity, labour (power). If it did, then the value of this wage labour would be equal to the value it created, and so no surplus value could exist, and thereby capitalism itself could not exist. 

Nor can the value of this wage labour be defined in terms of Smith's second definition, derived from the value of labour, rather than the quantity, because that would lead to a tautological statement that the value of labour is equal to the value of labour. Smith is then led to a conclusion that capitalist production is not governed by the law of value. 

“This is the first of Adam Smith’s problems. The second—which we shall find further amplified by Malthus—lies in the fact that the utilisation of a commodity (as capital) is proportional not to the amount of labour it contains, but to the ‘extent to which it commands the labour of others, gives power over more labour of others than it itself contains. This is in fact a second latent reason for asserting that since the beginning of capitalist production, the value of commodities is determined not by the labour they contain but by the living labour which they command, in other words, by the value of labour.” (p 397) 

In other words, if we take a commodity, such as corn, as a proxy for wages, a worker requires a certain quantity of this corn for the reproduction of their labour-power. But, in the hands of the capitalist, the value of this corn resides in how much living labour it will buy, and consequently, how much surplus value they can extract. If a worker requires 1 kilo of corn per day, as wages, they exchange say 10 hours of their labour for this kilo of corn. Say a kilo of corn sells for £2, and the capitalist buys this corn, and pays it as wages to the worker. The worker then undertakes 10 hours of labour, and creates £3 of new value. Now, the capitalist takes this £3 of new value and can again buy a kilo of grain, so as to pay the wages to the worker again the following day, whilst keeping £1 of surplus value for themselves. But, if the price of a kilo of corn falls to £1, the capitalist can now buy 2 kilos, and thereby employ 2 workers, who now produce £6 of new value, so that the capitalist can extract £4 of surplus value. 

Thursday, 26 April 2018

Theories of Surplus Value, Part II, Chapter 15 - Part 29

Another version of this is the fetishisation of gold as money, which thereby fills the same role as Smith here assigns to corn. The confusion arises because of equating value with exchange-value. Money acts as a measure of exchange-value; it is exchange-value incarnate, in the shape of a money-commodity, here gold, although the money-commodity can be any universally accepted equivalent form of value. The money-commodity provides a measure of exchange value in the form of money prices. Moreover, as gold becomes the general commodity, the commodity representing all other commodities, so the labour used in producing gold also, thereby, becomes a proxy for labour in general, for abstract labour. But, the value of commodities, as opposed to their exchange value, continues to be measured in terms of labour, not gold, i.e. by the abstract labour it represents. In other words, if we take a commodity such as linen, a metre of this linen may have an exchange-value equal to 10 grams of gold, so that 1 metre of linen exchanges for 10 grams of gold. If tomorrow this exchange relation changes, so that 1 metre of linen exchanges for 20 grams of gold, it is impossible to know whether that is because linen has become more valuable, or because gold has become less valuable. In other words, has the change arisen because more abstract labour is required to produce a metre of linen, or because less abstract labour is required to produce 10 grams of gold. Only by measuring the actual value of each commodity, i.e. the labour required for its production is it possible to make that determination. 

It may be that 1 metre of linen requires 10 hours of labour, as spinning and weaving labour, to produce, if we discount the value of constant capital. If gold is the general commodity, and gold producing labour thereby becomes the proxy for abstract labour, and 10 grams of gold require 20 hours to produce, we can conclude that the linen producing labour is complex labour. 

1 metre of linen = 10 hours of linen producing labour. 

10 grams of gold = 20 hours of gold producing/abstract labour. 

1 metre of linen exchanges for 10 grams of gold, therefore, 10 hours of linen producing labour exchanges for 20 hours of abstract labour. The linen producing labour is, therefore, complex labour, which produces twice as much value as abstract labour per hour. 

Wednesday, 25 April 2018

Theories Of Surplus Value, Part II, Chapter 15 - Part 28

Ricardo on the Problem of Surplus-Value 

1. Quantity of Labour and Value of Labour. [As Presented by Ricardo the Problem of the Exchange of Labour for Capital Cannot Be Solved] 

As seen earlier, in Part I of Theories of Surplus Value, Adam Smith, at one time, advocates a labour theory of value, whereby the value of commodities is determined by the labour-time required for their production, and at other times has a cost of production theory of value. The former determines the value of commodities in terms of the quantity of labour used in their production, the other in terms of the value of the labour (actually labour-power) used in their production. On the basis of this latter determination, Smith also uses corn (as a proxy for food prices, and so wages) as a measure of value. But, from the start, and throughout his work, Ricardo rejects this second approach of Smith, and determines the value of commodities only on the basis of quantity of labour rather than the value of labour (labour-power). And this, he argues, is not at all incompatible with wages as the price of labour. 

Ricardo says, opening Chapter I of “The Principles”

““The value of a commodity, or the quantity of any other commodity for which it will exchange, depends on the relative quantity of labour which is necessary for its production, and not on the greater or less compensation which is paid for that labour” (l.c., p. 1).” (p 395) 

Marx affirms this approach and writes, 

“It is clear that the proportional quantity of labour contained in two commodities A and B, is absolutely unaffected by whether the workers who produce A and B receive much or little of the product of their labour. The value of A and B is determined by the quantity of labour which their production costs, and not by the costs of labour to the owners of A and B. Quantity of labour and value of labour are two different things. The quantity of labour which is contained in A and B respectively, has nothing to do with how much of the labour contained in A and B the owners of A and B, have paid or even performed themselves. A and B are exchanged not in proportion to the paid labour contained in them, but in proportion to the total quantity of labour they contain, paid and unpaid.” (p 395-6) 

Ricardo highlights the fact that Smith has these two theories of value, and that things become more or less valuable “in proportion as they will exchange for more or less of this standard measure”. This standard measure here being corn, acting as a proxy for wages. Ricardo criticises Smith for arguing as if “these were two equivalent expressions”. But, Marx says, 

“Adam Smith nowhere asserts that “these were two equivalent expressions”. On the contrary, he says: Because in capitalist production, the wage of the worker is no longer equal to his product, therefore, the quantity of labour which a commodity costs and the quantity of commodities that the worker can purchase with this labour are two different things—for this very reason the relative quantity of labour contained in commodities ceases to determine their value, which is now determined rather by the value of labour, by the quantity of labour that I can purchase, or command with a given amount of commodities. Thus the value of labour, instead of the relative quantity of labour becomes the measure of value.” (p 396)

Tuesday, 24 April 2018

Theories of Surplus Value, Part II, Chapter 15 - Part 27

Marx quotes Ricardo's comment, in Chapter XVII of The Principles

““Raw produce is not at a monopoly price, because the market price of barley and wheat is as much regulated by their cost of production, as the market price of cloth and linen. The only difference is this, that one portion of the capital employed in agriculture regulates the price of corn, namely, that portion which pays no rent; whereas, in the production of manufactured commodities, every portion of capital is employed with the same results; and as no portion pays rent, every portion is equally a regulator of price” (l.c., pp. 290-91).” (p 394-5) 

This assertion “that every portion of capital is employed with the same results and that none pays rent (which is, however, called excess profit here) is not only wrong, but has been refuted by Ricardo himself as we have seen previously.” (p 395) 

In other words, Ricardo himself has previously stated that the market value of industrial commodities is determined ““by the most unfavourable circumstances, the most unfavourable under which the quantity of produce required , renders it necessary to carry on the production” {l.c., pp. 60-61}” (p 203) 

In which case, its clear that those producers, in each industry, who produce under more favourable conditions, will obtain surplus profits. In fact, as Marx sets out, in Capital III, it is only where supply fails to meet demand that, in industry, the market value is determined by the least efficient producer. Generally, the market value will be determined by the average producer. If competition drives towards an average rate of profit for one industry as compared to another, then it follows that within any single industry, where different capitals operate at different levels of efficiency, and therefore, different rates of profit, the rate of profit obtaining in this industry – also the general annual rate of profit – cannot sustainably be determined by the least efficient capital. 

Suppose the general annual rate of profit for the economy is 10%. So, the rate of profit obtaining in industry A must be 10%. However, if market values in industry A are determined by its least efficient producer A1, who sells at the price of production, including a 10% profit, A2 will also sell at this market-value, but their lower cost of production will provide them with a profit of 10% + x. Producer A3 will obtain a profit of 10% + x`, and so on. In which case, it is obvious that the average rate of profit in industry A could not be 10%, i.e. the general rate of profit. All firms other than A1 would enjoy surplus profits, and the industry, as a whole, would enjoy surplus profits, causing an influx of capital, a rise in supply of commodity A, and a fall in its price. 

The same would be true in reverse, if it was the most efficient producers in any industry that determined the market value. In that case, only they would make the average profit, and all other firms would make less than 10%, so the rate of profit for the industry would be below 10%. Capital would flow out to other industries, the supply of commodity A would fall, and its price would rise. Only if the mean average producer determines the market value, does it result in them obtaining the average profit of 10%, with as much capital in the industry operating at higher levels of efficiency, and making above average profits, as there is capital producing at lower levels of efficiency and making below average profits, so that capital overall, in the industry, makes the general annual rate of profit of 10%.

Monday, 23 April 2018

Theories of Surplus Value, Part II, Chapter 15 - Part 26

Marx quotes the following statement by Ricardo to show that he does consider value and price of production to be the same thing. 

““Mr. Malthus appears to think that it is a part of my doctrine, that the cost and value of a thing should be the same;—it is, if he means by cost, ‘cost of production’ including profits” (l.c., p. 46, note).” (Note * p 393) 

Ricardo admits that, in practice, there may be no portion of land that pays no rent, but argues that some of the capital employed on the land pays no rent. The basis of this is that if a farmer rents an area of land from a landlord this may hide the fact that actually only three-quarters of the area produces a rent. So, although say 4 hectares are rented, at a rental of £75 per year, this hides the fact that the rent is £25 per hectare on 3 hectares, with the fourth being rent free. But, this does not help Ricardo's argument, Marx says. 

“The one fact is as irrelevant to the theory as the other. The real question is this: Do the products of these lands or of this capital regulate the market-value? Or must they not rather sell their products below their value, because their additional supply is only saleable at, not above, this market-value which is regulated without them.” (p 393) 

In other words, the market value is determined by production on other lands. All producers have to sell their output at this market value, which is below the individual value of the product of these lands that produce no rent. So, they must sell this output below its individual value. 

“So far as the portion of capital is concerned, the matter is simple, because for the farmer who invests an additional amount of capital landed property does not exist and as a capitalist he is only concerned with the cost-price; if he possesses the additional capital, it is more advantageous for him to invest it on his farm, even below the average profit, than to lend it out and to receive only interest and no profit. So far as the land is concerned, those portions of land which do not pay a rent form component parts of estates that pay rent and are not separable from the estates with which they are let; they cannot however be let in isolation from the rest to a capitalist farmer (but perhaps to a cottager or to a small capitalist).” (p 394) 

A farmer that is already renting out an area of land, is not confronting landed property, in relation to any additional capital they seek to invest, because their rent is already set for the duration of their lease. So, as Marx described earlier, in opposition to Ricardo, a farmer who seeks to invest an additional £1,000 of capital is led to do so, even if it produces a lower rate of profit than they currently enjoy, or below the average rate of profit. They do so because they cannot easily invest it in a separate farm, or other line of business, and even a lower rate of profit is likely to bring them a higher rate of return than were they to simply lend the capital as money-capital in return for interest. 

As set out earlier, some small pieces of land that cannot sustain rent can be let out to capitalist farmers as part of a larger area of land. The advantage to a landlord may not be only that it acts as an inducement to the farmer to take on the larger rented area, but the farmer may subsequently undertake improvements of that land, so that, in future, it sustains a rent. Some smallholders may be allowed to take on such areas rent free, or be given rent free periods, in return for undertaking such improvements of the land, so that it becomes cultivable, rent producing land in future. Some councils who rent out allotments do this. They will often make a charge for clearing a piece of land, before a new allotment holder takes it on, or they will give the allotment holder a year's free rent, if they undertake the initial clearance work. 

In addition to these options, a small peasant producer may sell their output at the market value, but below the individual value, whilst also paying a rent. The rent then eats into the profit, and often even into the wages of the producer. Small producers can continue on this basis, where they are also the landowner, particularly as they are reluctant to give up that ownership, and the independence that comes with it, in order to turn themselves into wage workers. As Marx pointed out, in relation to workers moving to the U.S., whenever they could, they proceeded in the opposite direction, saving their wages, so as to buy a piece of land and become a peasant producer. 

“The situation would be different in a country in which the composition of the agricultural capital was equal to the average composition of the non-agricultural capital, which presupposes a high level of development in agriculture or a low level of development in industry. In this case the value of the agricultural produce would be equal to its cost-price. Only differential rent could be paid then. The land which yields no differential rent but only an agricultural rent, could then pay no rent. For if the farmer sells the agricultural produce at its value, it only covers its cost-price. He therefore pays no rent. The landowner must then cultivate the land himself, or the so-called rent collected by him is a part of his tenant’s profit or even of his wages.” (p 394) 

Marx also refers to conditions where industry is at a low level of development, and consequently capitalist production in industry is poorly developed. In these cases, the categories of capitalist rent, of absolute and differential rent, do not exist, and other economic and social relations, for example of corvee, or share-cropping, and so on may exist. 

Sunday, 22 April 2018

Theories of Surplus Value, Part II, Chapter 15 - Part 25

Suppose, as a result of improvements, Marx says, the composition rises from 60:40 to 66.6:33.3. In other words, more machinery is introduced to replace labour. This might be induced by a rise in agricultural wages due to “emigration, war, discovery of new markets, prosperity in the non-agricultural industry”, which Marx also cites in “Value, Price and Profit”, between 1849-59. Or, it could be, he says, that competition from imported grain forces domestic producers to seek to raise productivity. However, these are different circumstances that Marx does not distinguish. So, he says, 

“... the same circumstances could continue to operate after the introduction of the improvement and wages therefore might not fall despite the improvement).” (p 393) 

If its import competition that provokes the introduction of machines, wages would not have risen to begin with. On the other hand, if agricultural wages rise, for the reasons described, then it would be expected that industrial wages would also have risen, so the rate of surplus value, and rate of profit would have fallen. 

Marx assumes that the value of the agricultural product falls, as a result of the reduction in the variable capital, and no change in the rate of surplus value. In other words, c rises by 6.66, whilst v falls by 6.66, and s falls by 3.33, so that the total value falls by 3.33. At the same time, he assumes that the general annual rate of profit remains 10%, so that, on £100 of capital, the price of production remains £110. On £100 of capital, the value of output is now £116.66, so that the rent falls from £10 to £6.66. However, if wages in general rise, that would have meant that the general annual rate of profit would fall, with a consequent effect on the price of production of agricultural output. But, also, as Marx and Engels describe, in Capital III, capitalists only introduce machinery where its value is less than the value of the paid labour it replaces, so as to increase profits. That is one of the inducements, not only to develop machines that are ever more efficient, but also to produce those machines themselves more efficiently, and thereby reduce their value. 

“The absolute rent may rise because the general rate of profit falls, owing to new advances in industry. The rate of profit may fall due to a rise in rent, because of an increase in the value of agricultural produce which is accompanied by an increase in the difference between its value and its cost-price. (At the same time, the rate of profit falls because wages rise.)” (p 393) 

So, advances in industry may raise social productivity so that a given mass of labour processes a larger mass of material, which causes the organic composition of capital to rise, and the rate of profit to fall. But, this assumes that this does not reduce the value of constant capital – both of the processed material, and a moral depreciation of the fixed capital stock – or raise the rate of surplus value, thereby causing the general rate of profit to rise. And, it assumes that the rise in productivity does not raise the rate of turnover of capital, and thereby the general annual rate of profit. 

A rise in the value of agricultural products may raise the value of labour-power, because of higher food prices, which thereby reduces the rate of surplus value, and rate of profit. An increased value of agricultural output, at the same time as a lower rate of profit, and so lower prices of production, increases the difference between the price of production and value of agricultural output, and so causes rent to rise. 

“The absolute rent can fall, because the value of agricultural produce falls and the general rate of profit rises. It can fall, because the value of the agricultural produce falls as a result of a fundamental change in the organic composition of capital, without the rate of profit rising. It can disappear completely, as soon as the value of the agricultural produce becomes equal to the cost-price, in other words when the agricultural capital has the same composition as the non-agricultural, average capital.” (p 393) 

But, as I've discussed elsewhere, there is no reason why landowners would lease their land for free, and nor would all of them wish to farm or mine it themselves. Land would, therefore, tend to be simply withheld. Prices of agricultural and mineral products would then rise as a consequence of inadequate supply, so that prices rose above exchange-values, and prices of production, to a level where rents acceptable to landlords could be paid. What would constitute “acceptable” would depend on what yields could be obtained on alternative revenue producing assets, such as bonds or shares. 

Landowners may sell land where higher yields are available elsewhere, so reducing land prices, until available rents provided equivalent yields. However, as seen recently, landowners, as well as owners of financial assets may hold on to them, even at zero or even negative yields, if they believe that potential gains from rises in the price of those assets, underpinned by central banks, and state activity, more than offset the lack of revenue. 

The absolute rent, in this case, arises because landed property is able to prevent capital being employed. The surplus profit arises not because the value of output exceeds its price of production, but because the output is sold at a monopoly price above the value. This represents a draining of surplus value from industry, as a consequence of these monopoly prices. It is then not technically rent, but a portion of profit, in the economic sense. 

“Ricardo’s proposition would only be correct if expressed like this : When the value of agricultural produce equals its cost-price, then there is no absolute rent. But he is wrong because he says: There is no absolute rent because value and cost-price are altogether identical, both in industry and in agriculture. On the contrary, agriculture would belong to an exceptional class of industry, if its value and cost-price were identical.” (p 393) 

Saturday, 21 April 2018

Theories of Surplus Value, Part II, Chapter 15 - Part 24

Ricardo says, 

““I hope I have made it sufficiently clear, that until a country is cultivated in every part, and up to the highest degree, there is always a portion of capital employed on the land which yields no rent, and” (!) “that it is this portion of capital, the result of which, as in manufactures, is divided between profits and wages that regulates the price of corn. The price of corn, then, which does not afford a rent, being influenced by the expenses of its production, those expenses cannot be paid out of rent. The consequence therefore of those expenses increasing, is a higher price, and not a lower rent” (l.c., p. 293).” (p 392) 

But, Marx points out that absolute rent is equal to the excess of the exchange-value of the agricultural product over its price of production. So, whatever reduces the total quantity of labour (dead labour and living labour) required for corn production, reduces the rent, because it reduces the value. The price of production consists of the cost of production, k, (c + v) plus average profit. Marx comments, 

“In so far as the price of production consists of expenses, its fall is identical and goes hand in hand with the fall in value.” (p 392) 

This is only where less labour is required. If v falls because wages fall that is not the case. If the value of c falls, then the value of c + v falls, and consequently c + v + p falls. However, if the value of the variable capital falls, because the value of labour-power (wages) falls, (c +v), k, + p, i.e. the price of production falls, but c + v + s, the value, does not, because s rises by the same amount as the fall in v. 

“But in so far as the price of production (or the expenses) is equal to the capital advanced plus the average profit, the very reverse is the case. The market-value of the product falls, but that part of it, which is equal to the price of production, rises, if the general rate of profit rises as a result of the fall in the market-value of corn. The rent, therefore, falls, because the expenses in this sense rise—and this is how Ricardo takes expenses elsewhere, when he speaks of cost of production.” (p 392) 

However, as shown earlier, this is only the case if the rise in p is greater than the fall in k. 

“Improvements in agriculture, which bring about an increase in constant capital as compared with variable, would reduce rent considerably, even if the total quantity of labour employed fell only slightly, or so slightly that it did not influence wages (surplus-value, directly) at all.” (p 392) 

But, given that agriculture and mineral extraction forms a significant element in the input costs of wage goods, it's hard to see how an improvement in efficiency in the production does not reduce the value of wage goods, and thereby in the value of labour-power, thereby, so raising the rate of surplus value. Moreover, in both agriculture and mineral extraction, a large part of the organic composition is determined by the introduction of fixed capital, as neither involve the processing of raw material, in the way that occurs in manufacturing. In mineral extraction, as Marx already pointed out, there is only a minimal amount of circulating constant capital, in the form of auxiliary materials. The organic composition is affected by the introduction of machines to replace labour, but, as described in Capital III, new machines are only introduced where their value, i.e. the labour they represent, is less than the paid labour they replace. In the case of agriculture that also applies, but in addition a large element of the circulating constant capital in corn production is seeds. But, if a rise in efficiency reduces the value of corn, it thereby also reduces the value of the seeds, which are themselves replaced in kind from the production.