Saturday, 21 September 2019

Respect Yourself

A couple of days ago, Channel 4 News, had a story about a growing number of children entering school, who lacked basic skills such as not being toilet trained, some still using dummies, unable to talk in sentences (a problem not confined to disadvantaged children as I described recently in relation to some politicians), others who had never seen a book, and, when they did, tried to swipe left and right on it, as though it was a tablet. Of course, the people they had on to talk about these problems, explained it in terms of increased poverty, parents who worked long hours and so on. No; its child neglect pure and simple. 

One middle class woman, on the programme, even tried to blame the technology companies that produce the tablets and other devices that, in fact, are a means of making life easier, of saving time, and so on, for the fact that parents misuse them, by neglecting their own parenting responsibilities, by handing over the technology to their kids to keep them occupied, or because they are too busy themselves swiping left and right, or looking at the latest Instagram pictures of someone's dinner to be spending time with their own kids. Yes, technology companies producing various bits of social media software use sophisticated psychological techniques that work like drugs in promoting addiction, to keep people glued to their screen, but, at the end of the day, its your mind, take responsibility for it, just as its your body, and you should take responsibility for it, and not blame someone else because you eat too much, are too lazy to cook cheaper, healthier food, and instead live off expensive takeaways, and just as they are your kids; take responsibility for them. If you can't even exert some control over your use of your devices, at the expense of your kids lives, then its time to get rid of those devices, just as if you are addicted to drugs or alcohol, its not a good idea to keep them around the house. Don't expect someone else to do it for you, or look to blame someone else for your own failure to do so. In the words of the Staple Singers in yesterdays Friday Night Disco – Respect Yourself. 

The blame culture that was presented by the various contributors to the Channel 4 News item, is what you get as a result of years of middle-class, liberal welfarism, that sucks any sense of dignity, and self-respect from the working-class, reducing it to a state of abject dependency. It is the very opposite of the approach of Marx and Engels, and of other earlier socialists who sought to promote not the dependency of the working-class on philanthropy, either from rich individuals or the capitalist state, but who sought to have the working-class develop its own respect in itself, its own self-reliance, self-activity, and self- government. Marx and Engels recognised that, in the middle of the 19th century, many workers themselves still had not reached a level of education and culture that would lead them to ensure that their kids were properly educated, which is why, although they opposed the state getting involved in education, they saw a role for state school inspectors, just as there were state factory inspectors, whose job was to police minimum standards. But, Marx and Engels certainly did not see the lack of education and culture of some workers in that respect as something that was to be accommodated to or excused, or the responsibility for which was to be thrown on to others. They saw it as something that the workers, as a class should themselves address, as soon as possible by raising up their own level of education and culture. 

“If the middle and higher classes neglect their duties toward their offspring, it is their own fault. Sharing the privileges of these classes, the child is condemned to suffer from their prejudices. 

The case of the working class stands quite different. The working man is no free agent. In too many cases, he is even too ignorant to understand the true interest of his child, or the normal conditions of human development. However, the more enlightened part of the working class fully understands that the future of its class, and, therefore, of mankind, altogether depends upon the formation of the rising working generation. They know that, before everything else, the children and juvenile workers must be saved from the crushing effects of the present system. This can only be effected by converting social reason into social force, and, under given circumstances, there exists no other method of doing so, than through general laws, enforced by the power of the state. In enforcing such laws, the working class do not fortify governmental power. On the contrary, they transform that power, now used against them, into their own agency. They effect by a general act what they would vainly attempt by a multitude of isolated individual efforts... 

The combination of paid productive labour, mental education bodily exercise and polytechnic training, will raise the working class far above the level of the higher and middle classes.” 

(Marx – Instructions For Delegates to the Provisional General Council of the First International) 

The consequence of the last decade of austerity, not to mention the effect of the last thirty years during which time wages have been stagnant or falling has undoubtedly resulted in a rise in relative poverty. But, things like spending time with your kids, so that they are toilet trained, don't still depend on dummies, at least know what a book is, and have at least the minimum of verbal interaction with you that they understand basic words, and sentences, are not a function of relative poverty. It requires even pretty high degrees of absolute poverty for those things to be justified. But, the reality is that, although relative poverty has risen as a result of the effects of conservative social-democracy, over the last thirty years, and particularly of austerity over the last decade, real living standards today are much higher than they were thirty years, let alone fifty years ago, or a hundred years ago, when these problems did not exist at this kind of level. 

The average deficit to GDP ratio under the last Labour Government
was half what it had been under Thatcher/Major, up to the financial
meltdown.  Even taking that into consideration it was still much lower
on average, and for four years at the end of the 90's and start of the
 2000's, Labour actually ran a budget surplus.  The Liberal-Tory claims are
simply lies. 
The middle class woman on C4 News, who wanted to blame the technology companies, stated that she had told her teenage sons to spend less time on their devices, but then admitted that, whilst she was conveying this message to them, she was herself engrossed in her own device! What this reflects is a lack of self-respect, and self-control, and a willingness to fail to take responsibility for your own actions, on the basis that you can always lay the blame on someone else. That is the culture that liberal welfarism has engendered in people. And, of course, why wouldn't you take that easy option. After all, when greedy speculators, having created huge bubbles in asset prices, saw their paper wealth shredded in 2008, and other occasions, when the prices of property, shares and bonds crashed, they were bailed out too by the state, in Britain, to the tune of £2 trillion. And, of course, the Tories and Liberals instead of putting the blame for that where it lay, instead lied and blamed the Labour government for supposedly overspending, when, in fact, the deficit to GDP ratio under Blair and Brown had been only half what it had been under Thatcher and Major

The responsibility for child neglect cannot be placed at the door of technology companies, whose devices actually are part of the general improvement in living standards, and act to free up time that could be used for people to spend with their kids, if they chose to do so, rather than wasting their lives, swiping left and right. Nor can it be placed at the door of increased poverty. When I was a child, I suffered from chronic bronchial asthma, and was seriously ill for long periods of time, during which my parents had to take it in shifts caring for me. When I almost died from pneumonia, at the age of 12, my father, having worked from 7 in the morning until 5 in the evening in a heavy engineering job, used to come home, and literally carry me on his back, around the house, jogging up and down, to try to enable me to breathe, and that went on for about a fortnight. 

In my father's family, he was the youngest of four sons and two daughters. My grandmother started work on a potbank when she was 10 years old. My grandfather was a miner, working in three foot seams, on his back, digging out coal, manually, with a drill, pick and shovel, at a time when 10 hour days, six days a week were the norm. In a two bedroom terraced cottage, the kids had no choice but to share not only bedrooms but, beds, sleeping head to toe. The cottages had a shared outside toilet. But, neither my father nor any of his siblings failed to get toilet trained, or continued to use dummies, or failed to be able to read when they started school, and so on. 

So, save me the liberal blame culture bullshit that tries to excuse child neglect by trying to lay the blame on someone else. If you can buy a tablet, that your kid is palmed off with, so that they try to swipe books, rather than read them, you can afford to buy a book instead, or you can borrow a book, go to the library and so on, none of which costs any money, unlike a tablet, or iPhone. I see young women every day, pushing around pushchairs, too busy swiping their smart phones as they walk, to be paying any attention to their own children, and that is not a result of poverty, or of being too busy. 

Respect yourself, because if you can't how do you expect anyone else to. 

Northern Soul Classics - Come Back Part 2 - The Fantastic Puzzles

Continuation of the gem that was Part 1.

Friday, 20 September 2019

Friday Night Disco - Respect Yourself - The Staple Singers

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

But, Marx’s own analysis, in relation to the rise in the value of fixed capital and materials is also deficient. Marx identifies that, whilst the value of machinery rises absolutely, it falls relatively

“If one worker is in charge of 1,800 spindles instead of driving a spinning-wheel, it would be quite ridiculous to ask why these 1,800 spindles are not as cheap as the single spinning-wheel.” (p 365) 

But, if a spinning machine with 10 spindles is developed, its quite possible that, if it goes along with a fall in the value of wood and metal, and a rise in productivity in machine making, it might have a lower value than did the spinning-wheel previously. And, once developed, expanding this 10 spindle machine to a 20 or 50 spindle machine may involve virtually no additional materials, which may themselves have become cheaper, and further improvements in productivity can reduce the labour required to produce this 50 spindle machine below that required to produce the 10 spindle machine. And, the same kind of process can result in quick succession to a 500, 1,000 and 1,800 spindle machine being developed that has no greater value than did a spinning wheel, when production methods were more primitive. The main obstacle to such development was not in the machine technology, but in the need to develop steam power to provide the motive force to drive the machine. 

Moreover, as Marx says, 

“Instead of a simple and cheap instrument a collection of such instruments (even though they are modified) is used, and to that collection has to be added the whole part of the machinery which consists of the moving and transmitting parts; and also the materials used (like coal, etc.) to produce the motive power (such as steam).” (p 365) 

Its not just that the materials used in the construction of machines and fixed capital become cheaper. Greater economy in the use of those materials also occurs, and new types of materials are used in the construction. For example, changes in the process of producing steel (the Bessemer process) enabled it to be produced much more cheaply. But, this cheaper steel then also replaces iron for the construction of rails etc., and is far more durable. To put it in a modern context, a smartphone has as much processing power, and greater functionality, than a 1970's mainframe computer. It is less than a 10,000th of the price of the former, and contains only a fraction of the materials. 

Moreover, as Marx says, the machinery also comprises the motive power and transmission mechanism. The move from water-power to steam-power was made possible by the development of the steam engine, but once developed, the steam engine was continually developed so as to be both cheaper to produce, and cheaper to run. The use of multiple condensers involved little additional material in construction, more than offset by the fall in the value of materials, and increased productivity in machine production. But, it meant that a given amount of coal produced a much greater quantity of power capable of powering a much larger number of spinning machines etc. 

As engineering improved, the possibility of producing more efficient boilers, able to operate at higher pressures, further raised the power to coal ratio. And, subsequently, steam power itself gives way to cheaper more efficient power from oil, gas and electric. 

“There can be no doubt that machinery becomes cheaper, and this for two reasons: [1] The application of machinery to the production of raw materials from which the machinery is made. [2] The application of machinery in the transformation of these materials into machinery. In saying this, we already say two things. Firstly, that in both these branches, compared with the instruments required in the manufacturing industry, the value of the capital laid out in machinery also grows as compared with that laid out in wages. Secondly, what becomes cheaper is the individual machine and its component parts, but a system of machinery develops; the tool is not simply replaced by a single machine, but by a whole system, and the tools which perhaps played the major part previously, the needle for example (in the case of a stocking-loom or a similar machine), are now assembled in thousands. Each individual machine confronting the worker is in itself a colossal assembly of instruments which he formerly used singly, e.g. 1,800 spindles instead of one. But in addition, the machine contains elements which the old instrument did not have. Despite the cheapening of individual elements, the price of the whole aggregate increases enormously and the [increase in] productivity consists in the continuous expansion of the machinery.” (p 366) 

So, it is, in fact, quite possible that an 1800 spindle machine might have a lower value than previously did a spinning wheel, and yet, that the total value of such machinery is greater than was previously the total value of spinning wheels. This simply reflects the gigantic expansion of production that occurs under industrial capitalism, compared to handicraft production. Again to put this in a modern context, the value a modern PC, with more power and functionality than a 1970's mainframe costs around £500, whereas the 1970's mainframe cost around £2 million. But, the total installed base of PC's today amounts to tens of millions of machines, compared to at most a few hundred mainframe computers in the 1970's. The total value of PC's in use today, thereby, exceeds the total value of mainframe computers in use in the 1970's. 

Thursday, 19 September 2019

Theories of Surplus Value, Part III, Chapter 23 - Part 3

[2. On the Progressive Decline in the Number of Workers in Relation to the Amount of Constant Capital] 

Marx then turns to the question of whether this rise in the proportion of total output going to the reproduction of constant capital, relative to variable-capital, explains the tendency for the rate of profit to fall. 

“For us, however, the main thing is: does this fact explain the decline in the rate of profit? (A decline, incidentally, which is far smaller than it is said to be.) Here it is not simply a question of the quantitative ratio but of the value ratio.” (p 364-5) 

If productivity, in all spheres, increased in the same proportion, Marx says, then, on the basis of this value ratio, there could be no effect on the rate of profit. Suppose a worker uses one spindle and produces 100 kilos of cotton. If, now, the worker uses a machine, with 10 spindles, they process 1,000 kilos of cotton. But, if the machine, with 10 spindles, now has the same value as the spindle had previously, and if, now, 1,000 kilos of cotton can be produced for the same value as 100 kilos previously, there is no change in the value relations between labour, machine and cotton, so that there is no change in the rate of profit. Indeed, to the extent that the rise in productivity reduces the value of labour-power, the rate of surplus value, and so rate of profit would rise! 

Marx sets this out in an example where a single worker, using a 100 spindle machine, replaces 100 workers using a single spindle. 

“As far as the machinery is concerned, its cost is not as great as that of the labour it displaces, although the spinning-machine is much more expensive than the spindle. The individual capitalist who owns a spinning-machine must possess a greater amount of capital than the individual spinner who buys a spinning-wheel. But the spinning-machine is cheaper than the spinning-wheel in relation to the number of workers it employs. Otherwise it would not have displaced the spinning-wheel.” (p 365) 

But, this is at odds with his initial assumption, in the previous paragraph, where he says, 

“... and one worker produces a spinning-machine whereas previously he produced only a spindle, then the ratio of value remains the same...” (p 365) 

The later statement is only valid on the basis that the value of spinning wheels also fall. 

Illustrating the point made earlier, however, that even as the proportion of output going to replace machinery relative to labour rises, the proportion going to replace machinery itself falls, Marx says, 

“But the spinning-machine is cheaper than the spinning-wheel in relation to the number of workers it employs. Otherwise it would not have displaced the spinning-wheel. The place of the spinner is taken by a capitalist. But the capital which the former laid out on the spinning-wheel was larger relative to the size of the product, than that which the capitalist lays out on the spinning-machine.” (p 365) 

Marx, here, sets out both the countervailing forces to the tendency for the rate of profit to fall, and the limits of those countervailing forces. His statement, above, that the fall in the rate of profit is much less than it is said to be, is reinforced in his later comment that, 

“ The cheapening of raw materials, and of auxiliary materials; etc., checks but does not cancel the growth in the value of this part of capital. It checks it to the degree that it brings about a fall in profit.” (P 369) 

This reinforces Marx's comment that the fall in the rate of profit is only small, and only perceptible over long periods of time. It puts into perspective those theories that attempt to explain crises on the basis of this fall in the rate of profit that according to Marx is “much smaller than it is said to be”, only perceptible over very long periods, and which, in any case, is checked by the fall in the value of raw and auxiliary materials. 

Wednesday, 18 September 2019

Anyone Who Thinks Brexit Would Be The End of The Matter Is Badly Mistaken

Tory politicians continually claim that people are fed up with Brexit, and just want it all to end, and equate this with meaning that they just want to Brexit. It doesn't mean that at all. Those that want Brexit certainly want that, but the majority who now oppose Brexit, equally want it to end by Brexit simply being cancelled, either by another referendum, to validate that decision, or, increasingly, simply by Article 50 being revoked, as the Liberal Democrats have now committed to. Given that around 70% of the Brexit vote came from elderly, well to do, Tory voters, its not surprising that the majority of people Tory MP's speak to interpret being fed up with Brexit as meaning simply leaving, of course. Its what provides the basis for their support for Boris Johnson's parliamentary coup, in shutting down parliament so as to try to silence it in scrutinising and challenging his rush towards a No Deal Brexit. But, the truth is that anyone who thinks that, if Brexit happens, it will be the end of the matter, is badly mistaken. 

After all, it was not the end of the matter when Ted Heath's government took Britain into the EEC in 1973. Opposition from nationalists continued in the period after, leading to the 1975 Common Market referendum. In that referendum, the majority for staying in was 2:1, but it did not stop nationalists continuing to argue that Britain should leave. Indeed, the reactionary economic nationalist wing of the Labour Party around Benn, Foot, Shore, Castle et al, continued to advocate leaving the Common Market long after, and Labour Party policy itself continued to be to leave the EEC, right up until 1987. Even after Labour policy was changed to support being in the EU, as it then was, the economic nationalists, like Benn, in the Labour Party, continued to argue for leaving the EU, and for a Little Englander, nationalist approach instead. And, of course, the far right nationalists of the National Front, British National Party, and later UKIP, along with the far right inside the Tory Party, never stopped campaigning for Britain to leave the EEC/EU during all that time, despite the overwhelming majority for staying in the EEC/EU given by voters in 1975. So any idea, that the majority of the electorate that now wants to overturn the narrow victory for Leave in 2016, are going to simply play dead, if Boris Johnson takes Britain out of the EU, is simply delusional. 

For one thing, after 1975, Britain's entry into the EEC, and then EU, was fundamental to the improvement in the British economy that occurred in the 1980's. The removal of trade barriers and frictions massively reduced costs of production and circulation, which raised the rate of profit, creating a release of capital, and rise in the rate of profit, which was then available for accumulation and economic growth. The removal of frictions meant that the rate of turnover of capital was significantly increased, both because borders and trade barriers were removed, allowing goods to move more quickly, but also because that development facilitated the development of Just In Time production and stock control systems, alongside the introduction of flexible specialisation in production, and other forms of post-Fordist, production systems, that raised productivity levels, by as much as 100%, with a consequent rise in profitability, and potential capital accumulation. 

Alongside the economic gains that EU membership brought with it, there also went the economic and social gains for workers, as a result of the development of a Social Europe, and the proposals from Jacques Delors for restrictions via the Working Time Directive, and so on. But, of course one worker's gain is another small capitalist's loss. So, it is no surprise that Thatcher, the main architect of the Single Market, and a strong protagonist for it, and for Europe, as a means of raising profits, became less enamoured with it, when that same Single Market's requirements for common standards not just for goods and services, was deemed to apply also to the rights of labour. Its at that point that Thatcher's “No, no, no”, means that the British Tories' right-wing, needing to protect the interests of its small capitalist, petit-bourgeois base becomes increasingly Eurosceptic. If that minority that felt its interests threatened simply by workers getting increased portions from an expanding pie, could mobilise a growing opposition to Europe, at a time when Europe was providing economic benefits to Britain, imagine how much more opposition there will be, to what will be seen as an enforced Brexit, which results in a worsening economic condition, and even more demands by that minority of small capitalists, for workers to be squeezed even further. 

If Johnson takes Britain out of the EU, either via No Deal, or following a Tory General Election win, on the basis of some kind of Managed No Deal, and Canada Plus style Free Trade Agreement, that is only the start of things. The Raving Right might fantasise about Britain doing a trade deal and aligning with Trump's US, with Netanyahu's Israel (or whichever Zionist Bonapartist takes over from him), with feudal Saudi Arabia, and other such regimes, but the simple economic and geostrategic reality is that Britain cannot cut itself away from the EU. Britain will have to negotiate new terms of doing business with the EU, immediately following Brexit. Whether that is some Canada style FTA, or whether it is some other form of trading arrangement, or whether it is arrangements in relation to security and other cooperation. Those negotiations will be prolonged, lasting probably between 7-10 years. 

The Brexiters have always claimed that negotiating Britain's withdrawal from the EU, and negotiating a subsequent trade deal would be the easiest thing in the word. As with everything else, they lied. A withdrawal agreement, more than three years after the referendum still has not been negotiated, and talks on a trade deal, therefore, have not even begun. The Brexiters have claimed that, because Britain is already part of a single market and customs union with the EU, it will be much easier than where such deals are struck between third parties. The opposite is the truth. Normally, when two parties come together to negotiate a trade deal, it is mutually beneficial to them. Both can make some concessions to the other, because both will gain from the increase in trade that results, and the lower costs, and increased growth that brings with it. That is particularly true where the two parties are of equal size and bargaining power. 

But, in the case of the UK leaving the EU, this is a case where, rather than both parties mutually benefiting from the process, both will suffer. Any trade deal will be for the purpose, not of improving the condition of both parties, but of trying to minimise the damage. Moreover, this will not be a negotiation between two equal parties. The EU economy is seven times the size of the UK economy. When it comes to minimising damage, the EU will be in a much better negotiating position to ensure that the bulk of the economic damage falls on the UK, and not on the EU. That is particularly the case given that the EU knows that, for all its bluster, the UK is not going to make up for any loss in its trade with the EU by increasing its trade with the US, China, India or elsewhere. On the contrary, the EU knows that, because the UK is a minnow, compared to the US or China, and increasingly compared to India, it will not be in a strong position to negotiate beneficial deals with those countries either. There is no reason for the EU to give the UK a good deal, when it knows it can't get a better deal elsewhere, and where, simply on the basis of geography, the bulk of UK trade will continue to be with the EU, more or less irrespective of what onerous terms the EU imposes on it. 

And, because the world economy is dividing into economic blocs, and so the nation state as an economic unit is increasingly irrelevant, the oft repeated fact that the UK is the fifth largest national economy, is pretty meaningless. Britain will find itself negotiating trade deals not with other nation states, but with these large economic blocs, themselves formed as replicas of the EU, such as Mercosur in Latin America, or ASEAN, or the new African Economic Community, comprising 1.3 billion people. ( See also)  Of the world's 10 fastest growing economies, six are in Africa, and part of this bloc, and they have been the fastest growing economies for more than a decade. Britain is cutting itself off from this development, by trying to walk backwards through history. It will fail. 

And, that failure will become ever more apparent, as economic conditions, in Britain, deteriorate alongside it negotiating, over coming years, its trading relation to the EU. It is inevitable that, as those negotiations proceed, all those currently angered by the headlong rush towards Brexit, will make their opposition to it felt, and will do so in an increasingly vociferous manner. The small majority for Leave obtained in 2016, was quickly reversed, according to opinion polls. In the immediate aftermath of the referendum, there were a significant number of Remain voters, however, who resigned themselves to the fact of Brexit happening. But, in the following period, that has changed. The Remain and Leave identities have hardened, and become far more important than the identification with political parties although more than 70% of Labour voters back Remain and 70% of Tory voters back Leave. Initially, the hardening of the Remain vote, which was more pronounced than the hardening of the Leave vote, was manifest in the demand for another referendum, but it has increasingly become identified with the demand simply to revoke Article 50, a fact that the decision of the Liberals to adopt that position reflects. On Sky News' Politics Live, this morning, it was reported that a YouGov poll shows that 30% of Tory Remain voters, and 60% of Labour voters, support the Liberal position of calling straight out for Article 50 to be revoked. 

If the Tories implement a No Deal crash out of the EU, which Johnson is trying to avoid, by getting Corbyn to have to ask for the extension of Article 50, prior to a General Election being called, the consequences would be immediately disastrous, resulting in immediate calls for re-entry into the EU, and the question being dead forever. If, after a GE, Johnson pushes through a Managed No Deal, and Canada Style FTA, negotiations on that will be prolonged. During all that time, the current majority opposing Brexit will only get larger and more powerful. The only reason that Johnson could win a General Election currently, is that a core vote strategy that secures for the Tories 30-35% of the vote would be enough, if the anti-Tory vote is equally divided between a resurgent Liberals, promoting a clear anti-Brexit stance, and a confused and dithering Labour Party appearing to have no credible position, but appearing to still favour some form of Brexit. 

Marxists oppose referenda, because they are not truly democratic, despite the superficial appearance. They are the favoured tool of despots and Bonapartists. The answer to the first referendum producing the Brexit result could never be to demand another referendum. Often, if such votes are imposed upon us, depending on the circumstances, we have to participate, as was the case in 2016, but we should always point out the undemocratic nature of such plebiscites, and never call for them ourselves. We should commit to revoking Article 50, and Labour should commit to taking Britain back into the EU, if the Tories take us out. 

The fact is that there is now a majority against Brexit. It is not a sufficient majority that could be guaranteed to result in a Remain vote in a referendum organised by a Johnson government, with all of the levers at its disposal to influence the result. The 12-15 million voters, made up of the owners of small businesses and their families, which are the core of the Tory membership and its voters, are also the core of the 17 million votes that went to Leave. But, the fact is that, whilst this minority that forms this core maybe relatively stable, as it seeks to defend its interests, it is nevertheless a minority. Amongst the majority of society, who are wage labourers, whether they be white collar or blue collar workers, the majority support Remain. Most would like to back Labour, if it too reflected their interests, by having a clear Remain position, such as that now adopted by the Liberals, of calling for Article 50 to be revoked. But, here and now, the defining issue is Brexit, and most of them will vote for the party that provides the clearest anti-Brexit position.  At the moment, that is not Labour.  Of the 2016, electorate, only 80% now exists, as part of the current electorate. Two million voters from 2016, have died, and the majority of them were Leave voters. Two million new voters have joined the electorate, and 80% of them back Remain. With every year that passes the elderly Tory voters that backed Leave are dying out, whilst more young voters who overwhelmingly back Remain are joining the electorate. The majority for Remain can only continue to grow. 

With the majority for Remain growing each year, with the damaging effects of Brexit being increasingly manifest, as the negotiations with the EU drag on, it is inevitable that the demand to simply cancel Brexit, if it is during the transition period, or to reverse if it is after it, will only grow louder. Within the next 2-3 years, the majority for being in the EU will be undeniable. It will be impossible for any party to be able to win a General Election without responding to it. Labour should recognise that reality now, and quickly adopt its own position of revoking Article 50. Our differentiation from the Liberals should not be on a continued offering of a reactionary Brexit alternative, but should be on our commitment to work with other socialists across the EU, to transform it into a Workers Europe, on the way to the creation of a Socialist United States of Europe. 

Theories of Surplus Value, Part III, Chapter 23 - Part 2

Marx sets out the implications in a form that I have also utilised, in the past, which demonstrates why there is no limit imposed on the rate of profit by the rate of surplus value. If we consider the working-day as the individual working-day of individual workers, then its true that such a limitation exists, at least in theory. The usual way of viewing this is that a worker can only work say 15 hours in a day, and if even 14 hours of these hours are surplus value, this is less than if 15 workers each produced just 1 hour of surplus value. But, of course, the working-day does not exist as simply a sum of these individual working-days, but as a single social working-day

“The total product, like the total labour of the workers, falls into two parts. One part the workers produce for themselves; the other part, they produce for the capitalist. Just as the [labour-] time of the individual worker can be divided into two parts, so can the [labour-] time of the whole working class. If the surplus labour is equal to half a day, it is the same as if half the working class produces means of subsistence for the working class and the other half produces raw materials, machinery and finished products for the capitalists, partly as producers and partly as consumers.” (p 363) 

The working-day of any individual worker is physically restricted to the number of hours they can work, and so the amount of surplus value they can produce is likewise physically restricted. But that is not the case with the social working-day. It increases with the mass of simultaneously exploited labour, and so no restriction on the rate or mass of surplus value exists. 

As Marx puts it,

"Given the necessary means of production, i.e. , a sufficient accumulation of capital, the creation of surplus-value is only limited by the labouring population if the rate of surplus-value, i.e. , the intensity of exploitation, is given; and no other limit but the intensity of exploitation if the labouring population is given."

(Capital III, Chapter 15)

To produce more surplus value, given the rate of surplus value, it only requires more labour to be exploited. And, if more labour is exploited, whilst only the same amount of social labour is required to produce the wage goods for this increased mass of labour, not only does the mass of surplus value rise, but the rate of surplus value itself also rises. 

The important aspect of the work of Ramsay and Cherbuliez is the fact that they both effectively distinguish between constant and variable-capital. They should also distinguish between the circulating constant capital – materials – and the fixed constant capital – machines, buildings etc. 

“The important thing in variations in the constituent elements of capital is not that relatively more workers are occupied in the production of raw materials and machinery than in that of direct means of subsistence—this concerns only the division of labour— but the proportion of the product which has to be used to replace past labour (i.e., to replace constant capital) to that which has to be used to pay living labour.” (p 364) 

As social productivity increases, a given mass of labour processes a greater quantity of material – circulating constant capital. Consequently, not only does this material constitute a growing proportion of the value of output, but a growing proportion of current production must be set aside to replace this consumed material, on a like for like basis. The means by which the rise in social productivity is effected is via the introduction of machines that enhance the productivity of labour. So, to the extent that machines replace labour the proportion of output that must be set aside to replace these machines must also rise, relative to that set aside to reproduce labour-power. But, as Marx sets out in Capital III, Chapter 6, this does not mean that the proportion set aside to replace these machines rises relative to the total output value. The value of machinery, as well as labour, in total output, both fall proportionately, as the value of materials rises proportionally. 

A new machine that replaces two older machines, makes one worker redundant, but it also makes one machine redundant. The value of material processed by the remaining worker and machine remains the same, whilst the value of output falls, as a result of less current labour required in its production, and less value of machinery used in its production. Although the proportion of total output accounted for by labour falls, and of variable-capital falls, this value represents a rising quantity of use value, as the rising social productivity reduces the value of commodities. £100 of wages now represents a greater quantity of wage goods than did £100 previously, and the same is true of the £100 profit that formed the other part of the new value created by labour. However, whilst, by this process, of rising social productivity, workers living standards rise, they do so by less than the rise in that productivity, so that the rate of surplus value rises. 

“The part of the product which belongs to production becomes larger, and the part which represents living, newly added labour becomes relatively smaller. Although, this part grows in terms of commodities—use-values—the development described is synonymous with increased productivity of labour. But the portion of this part which the worker receives falls relatively all the more. And the same process gives rise to a continuous relative redundancy of the working population.” (p 364) 

Tuesday, 17 September 2019

Political Chaff

When military aircraft are under attack, they throw out chaff, in the form of aluminium strips and flares, to confuse and distract the radar guided and heated seeking munitions being fired at them. Boris Johnson's government is throwing out lots of political chaff, and the media and opposition politicians are chasing after it. 

We have, in the courts, today, an example of that. Johnson's parliamentary coup had the effect, for him, not only that it meant that he has given himself an extra five weeks of election campaigning time, during which he can use all of the facilities of government for propaganda, using the publicity platform it provides, whilst being free of any parliamentary scrutiny, but it has meant that opposition politicians, consumed by parliamentary cretinism, have spent large amounts of time trying to find constitutional objections to his actions, including dangerously bringing the ruling class's unelected judges into the political arena, to pronounce upon the legality of the government's actions. Ironically, although all the focus in that litigation is upon the advice that the government, via the Privy Council gave to the Monarch, the actual decision to prorogue is that of the Monarch herself. It is the Queen that prorogues parliament not the government. So, if the courts decide that the prorogation was unlawful, they will actually be saying that the Monarch acted illegally. Under the British constitution that is impossible because the Queen is above the law, which is why she doesn't have to pay tax, have a number plate and so on. Rather like Judge Dredd, Lizzy can say “I am the law!” 

But, the fanfare over the Supreme Court hearing, into the legality of the suspension of parliament, is only one piece of chaff. Yesterday, we had all of the noise over Johnson failing to take part in the press conference in Luxembourg. Had Johnson had to take part, it would simply have exposed, for anyone who doesn't already realise it, that he has no alternative proposals to put to the EU, to deal with the Irish Backstop etc. Failing to be at the podium has simply meant that all of the media today has discussed that rather than the fact that Johnson has no alternative proposals. The noise simply dissolves into Remainer media outlets decrying Johnson's failure to participate, whilst the Brexiter media outlets focus on the rudeness of the EU, and its conspiracy to set up Johnson  etc. 

And, of course, continuing alongside all of that is the endless pointless discussions over what Johnson will do to get around the Benn Act, which requires him to send a letter to the EU requesting an extension, if no deal has been agreed by 19th October. Of course, the Tory media love all of that, because it means they can engage in their favourite pastime of bringing in lots of supposed experts and talking heads to mull over all the possible scenarios and gambits that might be used to get around the situation. Its just another example of them chasing after the chaff rather than focusing on the substantive issue. The same thing happens when they break off occasional useful studio discussions on various topics, to go over to some live event, where, often as not, all we get is an empty screen waiting for something to happen, and where, when something does happen, its pretty much a non-event anyway. 

The fact remains that none of the various scenarios of what Johnson might do, so as to get around the Benn Act are realistic, because the fact remains that he does not have a majority in parliament. Whatever clever ruse he might come up with would come up against that basic fact. He can't currently push a No Deal through, because he does not have the votes. He would undoubtedly like a deal with the EU, but that deal amounts to the EU simply dropping the Backstop. All of the parliamentary shenanigans are essentially to that end, in the belief – which Johnson has always had – that the EU needs a deal with Britain, and so, faced with No Deal, will, at the last minute, drop the backstop. The failure to present any alternative proposals to Europe is simply part of that strategy of conveying to the EU that he is serious about leaving without a deal. 

All of the stuff about a deal that cuts out Northern Ireland is also just chaff. Johnson might ditch the DUP down the road if, after a General Election, he has a working majority without them, but, for now, he has no majority for any deal that does not deal with the Irish Backstop. The parliamentary maths have not changed, and they will not change without an election. Johnson hopes that with this mad man negotiating strategy, taken from the Trump play book, the EU might think he will actually just crash out, and so will drop the backstop to get a deal, which is the strategy that Johnson has had from before the 2016 referendum. But, again, the reality has not changed. The EU is not going to agree to anything that undermines the Single Market, which Johnson's requirements would. Moreover, the EU knows, whatever Johnson's theatrics, that Britain cannot go for a crash-out No Deal any more now than it could under Theresa May. The EU knows what cards are in the UK's hand. 

The only scenario in which Johnson could flout the will of parliament, and push through a No Deal, with all of the chaos that entails, is if he is prepared to go full Bonaparte, to defy the law, and, as the chaos ensues, to employ the Contingency Powers Act, so as to install martial law. That is not going to happen, at this stage, because Johnson has not prepared the ground for it, yet. It would require shutting down parliament, and putting troops on the streets to enforce government diktat. But, with the courts themselves not in Johnson's camp, even if not yet necessarily acting to all-out frustrate him, they would certainly come more into play in such circumstances. Moreover, although Bonapartism rests upon the petit-bourgeoisie, including the representatives of that class in the military, in the officer ranks – military coups are always the work of colonels, and similar ranks, not Generals - and Brexit and the Tory Party also rests upon that same petit-bourgeoisie – in the British Army, as a professional Army, the Generals have a powerful position, reinforced by discipline. The Generals represent the dominant section of the ruling-class, and the dominant section of the ruling class does not support Brexit; it certainly does not support a Brexit that depends upon the government tearing up the constitution, and ripping away the facade of bourgeois democracy

Johnson and Cummings know that. It is why they and all their representatives have emphasised that, of course, Johnson will not break the law. But, in that case, they could not have been clearer about what their actual course of action will be. If Johnson will not send the letter to Brussels, and he will not break the law, the only option is that, come 19th October, he will simply resign, and invite the Queen to call on Corbyn to become Prime Minister. The opposition don't want to confront that reality, because they placed a considerable amount of faith in all of their parliamentary games to try to pin Johnson down, and force him to ask for an extension, so as to undermine his credibility, and ensure that his votes leach away to Farage. They don't want to accept that all of their games simply played into Johnson's hands. He can now claim the mantle of saviour of the Brexit nation, of standing firm on his principles against a parliament that wants to surrender, and wanted him to surrender; he can force Corbyn to have to seek the extension, thereby encouraging Labour Leave voters to come over to the Tories; he can force the Liberals, Chukas and others to have to eat humble pie, and back Corbyn so as to be able to get the extension of Article 50 passed, or else expose the incompetent nature of the rabble alliance, as they fall apart, unable to do that. 

And, having succeeded in extending Article 50, Corbyn would then have to call the General Election that Johnson needs, in order to change the maths in parliament. It means that Johnson will have crushed the Brexit Party, as he consolidates the Brexiteers behind his Tories, whilst the rabble alliance, fighting like rats in a sack, and with Labour still dithering in no man's land, loses shed loads of votes to the Liberals, and SNP, allows Johnson to win a clear parliamentary majority. 

That is the target that the opposition politicians should be focusing on, and not simply chasing after all of the political chaff that Johnson and Cummings are throwing out to distract them

Theories of Surplus Value, Part III, Chapter 23 - Part 1


[1. Distinction Between Two Parts of Capital—the Part Consisting of Machinery and Raw Materials and the Part Consisting of “Means of Subsistence” for the Workers] 

Most of Cherbuliez' work is based on the writing of Sismondi. He correctly distinguishes between constant capital, comprising machinery and materials, and variable-capital comprising means of subsistence for workers, though he does not use these terms. Like all bourgeois economists, he reduces these elements of capital down to their physical existence as things – means of production, means of subsistence – rather than recognising that what makes them capital is their historically specific social relation to wage labour. For Cherbuliez, the only thing that defines a commodity as capital is the fact that it is used in production rather than for consumption, without distinguishing what mode of production it is. 

And, as Marx points out, in relation to the means of subsistence that comprise the variable-capital, this definition is not accurate, anyway. As Ramsay points out, the means of subsistence do not, themselves, take part in the production process. 

“... though means of subsistence are indeed a condition for the producer, a prerequisite enabling him to exist during production, they themselves do not enter into the labour process, into which nothing enters but the object of labour, the means of production and labour itself. Thus the objective factors of the labour process—which are common to all forms of production—are here called capital, although the means of subsistence (in which wages are already included) tacitly implies the capitalist form of these conditions of production.” (p 362) 

Both Cherbuliez and Ramsay assume that the means of subsistence (variable-capital) diminishes relative to the total capital, i.e. they assume a constantly rising organic composition of capital

“But both he and Ramsay appear to think that there is an inevitable reduction in the amount of means of subsistence, of necessaries, which can be employed as productive capital. But this is by no means the case.” (p 363) 

Marx points out that people frequently confuse the surplus product with that component of the gross product that simply replaces, on a like for like basis, the consumed constant capital. That was the case, as seen in Capital I, in relation to Senior's Last Hour, where the confusion arose from the idea that workers not only had to replace the value of their labour-power, out of the new value they created, each day, but also the value of the constant capital they process. 

The process whereby the organic composition of capital rises, only requires that a greater proportion of the gross output consists of constant capital, and that, therefore, a greater proportion of current output is set aside to replace that consumed constant capital. That follows from a rise in social productivity. 

“The means of subsistence decrease because a large portion of capital, that is, the part of the gross product employed as capital, is reproduced as constant capital instead of as variable capital. A larger portion of the surplus product, consisting of means of subsistence, is consumed by unproductive workers or idlers or exchanged for luxuries. That’s all.” (p 363) 

In other words, the wages that once were paid to any new released labourers, can be consumed as revenue by capitalists, landlords or the state. They can be used to pay wages to unproductive labourers, such as additional domestic servants, mistresses etc., taken on by the exploiters, or they can be exported in exchange for imported luxuries to be consumed by the capitalists.

Monday, 16 September 2019

Theories of Surplus Value, Part III, Chapter 22 - Part 28

Marx repeats the point made in Capital III, that, whilst a contradiction exists between the worker and industrial capital, and a contradiction exists also between industrial capital and rentiers, there is no relation between the rentiers and the workers. It is not the workers that the rentiers exploit, but the industrial capitalists. However, contrary to Ramsay's lumping together of all the recipients of revenue from the industrial capitalist, into one class camp, there is no shared interest between the workers and the exploiters of the rentier classes. On the contrary, with the development of socialised capital, as the effective property of the associated producers, a direct contradiction between the interests of these associated producers, i.e. the workers and managers, as against the rentiers is established. Its for that reason that the rentier capitalists – shareholders – demand the right to exercise control over property they do not own, and to appoint their own Boards of Directors, and executives, to promote their interests as against the interests of the industrial capital. 

“The whole contradiction between industrial profit and interest only has meaning as a contradiction between the rentier and the industrial capitalist, but it has not the slightest bearing on the relationship of the worker to capital, the nature of capital, or the origin of the profit capital yields.” (p 359) 

We have seen that Ramsay correctly identifies constant and variable-capital, though he wrongly calls them fixed and circulating capital, respectively. 

““Revenue,” says Ramsay in the final chapter, “differs from the annual gross produce, simply by the absence of all those objects which go to keep up fixed capital” (by which he means constant capital, raw materials in all stages of production, auxiliary materials and machinery, etc.) (op. cit., p. 471).” (p 359) 

We have also seen that he correctly argues that variable-capital does not take part in the production process. As Marx describes in The Grundrisse, the commodities that comprise the variable-capital act rather to reproduce labour-power outside the production process. But, Ramsay goes further, and claims, therefore, that the variable-capital is superfluous, required only because of the poverty of the labourers who cannot provide their own means of subsistence during the production process. 

““circulating capital”—that is his term for capital laid out in wages—is superfluous, it is “… not an immediate agent in production, nor even essential to it at all…” (loc. cit., p. 468). (p 359) 

As set out earlier, this is quite clearly wrong. It arises because of Ramsay's failure to understand the historically specific nature of capital and wage labour. If the workers could provide their own means of subsistence, they would not be wage labourers. As wage labourers it follows that, in order to labour, they must consume, and the means for that consumption is the wage. The wage is the money form of the variable-capital. So, the existence of wage labour itself determines the necessity of variable-capital, not as part of the production process itself, but as part of the production of the labour-power that engages in that production process. 

“But he does not draw the obvious conclusion that by denying that wage-labour and capital laid out in wages are essential, the necessity for capitalist production in general is denied and the conditions of labour consequently cease to confront the workers as “capital” or, to use Ramsay’s term, as “fixed capital”. One part of the conditions of labour appears as fixed capital only because the other part appears as circulating capital. But once capitalist production is presupposed as a fact, Ramsay declares that wages and gross profits of capital (industrial profit or, as he calls it, profit of enterprise included) are necessary forms of revenue (loc. cit., pp. 478, 475).” (p 359) 

In fact, it is these two forms of revenue – wages and profit of enterprise – that characterise the capitalist mode of production, and the two main classes – proletariat and bourgeoisie – on which it is based. Ramsay also says that rent is also superfluous, but fails to recognise that capitalist rent arises as a consequence of the capitalist mode of production, which turns land into a commodity, and enables landed property to appropriate surplus profits. 

Ramsay makes a similar comment in relation to interest. 

“[In case of a sharp reduction in gross profits] it would only be necessary for the rentiers to become industrial capitalists. As regards national wealth this makes no difference… The gross profit need certainly not be so high as to afford separate incomes to the owner and the employer (pp. 476-77).” (p 360) 

But, as Marx notes, Ramsay has himself commented that, with the development of society comes a growing number of rentiers prepared to live off the interest on their capital. As Marx describes in Capital III, only if interest rates fell to such a level that rentiers could no longer sustain their lifestyle from the interest they received would they be led to turn their money-capital directly into productive-capital, and themselves from rentiers into industrial capitalists. 

“Thus, the conclusion at which Ramsay arrives is, on the one hand, that the capitalist mode of production based on wage-labour is not really a necessary, i.e., not an absolute form of social production (which Ramsay himself expresses only in a rather limited form by stating that “circulating capital” and “wages” [would be] superfluous if the mass of the people were not so poor that they had to receive their share of the product in advance, before it was completed). On the other hand, he concludes that interest (in contrast to industrial profit) and rent (that is the form of landed property created by capitalist production itself) are superfetations which are not essential to capitalist production and of which it can rid itself. If this bourgeois ideal were actually realisable, the only result would be that the whole of the surplus-value would go to the industrial capitalist directly, and society would be reduced (economically) to the simple contradiction between capital and wage-labour, a simplification which would indeed accelerate the dissolution of this mode of production.” (p 360) 

In fact, as Marx sets out in Capital III, Chapter 27, this fundamental contradiction between wage labour and capital reaches maturity, and is negated, as the monopoly of private capital is replaced by socialised capital, in the form of cooperatives and corporations. These are the transitional forms of property between capitalism and socialism. As set out earlier, the antagonism of the rentier capitalists is not with labour but with industrial capital. However, with the development of socialised capital, the fundamental contradiction between capital and labour is dissolved. Socialised capital is the property of the associated producers. The workers, therefore, are the owners of the industrial capital, even though, other than in the worker-owned cooperative, they do not exercise control over it. 

Once socialised capital becomes the dominant form of capital, therefore, the major contradiction in society becomes that between the associated producers – not as workers but as owners of the industrial capital – and money-lending capital, primarily in the shape of the shareholders. 

In the Communist Manifesto, Marx and Engels set out that the class struggle, is manifest in the raising of the property question. Once socialised capital becomes dominant, the class struggle is exemplified precisely in the raising of the property question. Specifically, the property question is who has control over the socialised capital, the associated producers who are the owners of that capital, or the shareholders, the owners of fictitious capital? The class struggle takes the form of an extension of the struggle for democracy in society to a struggle for industrial democracy. The two main forms of property that confront each other are then socialised capital and fictitious capital. 

Sunday, 15 September 2019

The Brexit Election Maths In A Nutshell

Lyndon Johnson is quoted as saying the first rule of politics is learn to count. That is certainly vital in relation to the forthcoming General Election. For the last three years, the defining issue in British politics has been Brexit. In 2017, the Tories, although they lost their majority, increased their vote and vote share. The reason was that they were seen as being prepared to implement Brexit, as May emphasised that “No Deal, is Better than a Bad Deal”, even though it later became apparent she didn't believe that for a minute. It meant the Tories collapsed the UKIP vote, and consolidated their own core vote. Similarly, Labour increased its vote and vote share significantly, because it pulled in millions of Liberal, Green, Plaid, and even some Tory Remain voters, on the basis that only Labour had any credible chance of preventing the Tory hard Brexit deal that May now appeared to be offering. The truth of that can be seen by the way that Labour has lost those votes, in subsequent elections, back to the Liberals, Greens, Plaid and SNP, as it became clear that Labour's “constructive ambiguity”, on the issue, was being used simply as a cover, by Corbyn, to continue with his own pro-Brexit agenda. Today the large majority of people identify themselves by whether they are a Remain or Leave voter, whereas only a small minority identify themselves by whether they are a Labour or Tory voter, and those identifiers have been getting stronger, particularly amongst Remain voters. Anyone who thinks that the next General Election is going to be about anything other than Brexit is simply deluding themselves. 

If the position of the parties on Brexit stays as it is currently, the basic maths of the election amount to this. In Scotland, in SNP/Tory or Tory/SNP marginals, the SNP will win, as the majority of Remain voters (and Remain voters form a significant majority in Scotland) swing behind the SNP. In Tory/Liberal or Liberal/Tory marginals the Liberals will win for the same reason. In SNP/Labour or Labour/SNP marginals, the SNP will win, because Remain voters will see Labour as a Brexit supporting also ran, and so swing behind the SNP. In Liberal/Labour or Labour/Liberal marginals, the Liberals will win for the same reason. In Tory/Labour or Labour/Tory marginals, and some where Labour holds the seat by a larger majority, the Tories will win, because a significant number of Remain supporting Labour voters will switch to the SNP or Liberals, splitting the Labour vote, and letting in the Tories, whose core vote will consolidate. 

In short, in Scotland, Labour is likely to lose its existing seats, the Tories will lose most of theirs, and the main beneficiaries will be the SNP. 

In England, in Tory/Liberal or Liberal/Tory marginals the Liberals will win, as Labour, Green and some Remain supporting Tories switch to them. That can be seen in many constituencies in the South-East, and places like St. Albans, where there was a large Remain vote in the referendum. We might expect to see something similar in the South-West, where the Liberals were traditionally strong, but that might be complicated by the fact that there was a large Leave vote in that areas, probably to do with the fishing industry. The Liberals may be facilitated in this shift from the Tories if they continue to pick up defections of rebel Tory MP's in the run up to the election. We can expect that a large proportion of the 21 expelled Tory MP's may defect to the Liberals, in a drip feed designed for maximum effect, and there will be quite a few more Tory MP's who are facing the possibility of deselection, who might jump ship in the process. 

In Liberal/Labour and Labour/Liberal marginals, the Liberals will win, as Labour Remain voters vote Liberal, along with Green voters, and Tory voters, keen to keep Labour out. In Tory/Labour and Labour/Tory marginals, the Tories will win, because Labour Remain voters will defect to the Liberals, or Greens, thereby splitting the Labour vote, and letting the Tories in. 

The overall effect is that the Tories will lose seats to the Liberals, Labour will lose seats to the Liberals, but Labour will also lose seats to the Tories, as the Tory vote consolidates around its hard Brexit position, whilst Labour's vote is split, losing not just the Liberal and Green votes that were lent to it in 2017, but also many young Labour voters, for whom Remain is the primary issue. 

In Wales, this same dynamic will play out as in Scotland, with Plaid picking up seats where it is in second place, the Tories losing seats to either Plaid or the Liberals, Labour losing seats to Plaid and the Liberals, but also to the Tories, where the anti-Tory vote is split between Labour, Liberals, Plaid. This will be the case whether the Liberals, Green and Plaid form any formal pact or not, as voters themselves simply vote tactically based upon which Remain candidate has the best chance in each particular seat. 

Overall, as things stand, the Tories will lose some seats in Scotland, Wales, the South-East, and some seats in the South-West. The SNP, Plaid and Liberals will gain, with the Liberals being the largest gainers amongst these. Labour will lose seats in Scotland, Wales, the South-East and South-West to the SNP, Plaid and Liberals, but will also lose seats to the Tories elsewhere in the country as the Remain vote is split. The Liberals, Plaid, SNP will gain at the expense of Labour and Tories, but not by as much as the Tories will gain from the splitting of the Labour vote. The result will be, therefore, that the Tories will get a majority, that I expect will be between 50-100 seats. And, this will be a majority for a hard right, hard Brexit Tory party, thereby given a mandate to implement its policies for the next five years. 

The only hope that that might not happen is, as I wrote yesterday, if Labour dramatically shifts position, as a result of Labour conference. It will require that Labour commits not only to revoking Article 50, but also commits to a Labour government seeking to revoke Article 50 retrospectively if necessary, and to taking Britain back into the EU if the Tories take us out. Only on that basis can Labour stop its vote draining away to the other Remain supporting parties, and the consequent loss of seats.

Theories of Surplus Value, Part III, Chapter 22 - Part 27

Marx quotes Ramsay's statement that, 

““The profits of enterprise may … be considered as made up of 3 parts: one… the salary of … the master; another an insurance for risk; the remainder … his surplus gains” (op. cit., p. 226).” (p 357) 

Point 2 is irrelevant Marx says, because the insurance against risks distributes any losses uniformly as a reduction in the average rate of profit

“The profits of the insurance companies—that is, of the capitals which are employed in the business of insurance, and take over this distribution—must be deducted from these uniformly distributed losses.” (p 357) 

The profits obtained by the insurance companies are like those of the merchant capitalists. In other words, whilst they do not produce any additional surplus value they do enable a greater quantity of profit to be realised, by reducing circulation costs. They are able to obtain their profits on the basis of this reduction.  They enable a release of capital because it is only necessary to insure based upon actuarially determined averaged risks, rather than worst case risks.

“At most one could say that, even apart from capitalist production, the producers themselves might have certain expenses, that is, they would have to spend a part of their labour, or of the products of their labour in order to insure their products, their wealth, or the elements of their wealth, against accidents, etc. Instead of each capitalist insuring himself, it is safer as well as cheaper for him if one section of capital is entrusted with this job. Insurance is paid out of a portion of surplus-value, its protection and distribution between the capitalists has nothing to do with its origin and magnitude.” (p 357-8) 

This is, in fact, why all developed capitalist economies create welfare states, based on some kind of general social insurance. It reduces overhead costs, reducing the value of labour-power, and thereby increasing the rate of surplus value, and rate of profit

That leaves the wages of superintendence, and the profit left over, after the payment of interest and rent. The amount of this surplus profit, or profit of enterprise, if rent, as a return to landed property is discounted, is then determined by the ratio of interest to industrial profit. So, it becomes clear that the interest of industrial capital is not just antagonistic to landed property, but also to money-lending capital. 

“As far as 1), the salary, is concerned, it is first of all self-evident that in capitalist production, the function of capital as lord over labour falls to the capitalist, or a clerk or a representative paid by him. Even this function would disappear together with the capitalist mode of production, insofar as it does not arise from the nature of co-operative labour but from the domination of the conditions of labour over labour itself.” (p 358) 

Ramsay essentially dismisses, or at least minimises, the wages of superintendence, on the basis of the economies of scale arising from the continued expansion of the scale of production. He says, 

“The salary [of the employer], like the work [of superintendence], remains roughly the same, be the concern large or small (loc. cit., pp. 227-29). A worker will never be able to say that he can do the same amount of work as two, three or more of his workmates. But one industrial capitalist or farmer can take the place of ten or more (p. 255).” (p 358) 

In fact, as the scale of production expands massively, the labour of superintendence does not remain at the same level, but it does not rise proportionately to the rise in production. Moreover, as this labour of superintendence passes from the hands of the actual capitalist to that of the functioning capitalist, the wages for this labour diminish. The functioning capitalists, or day to day managers, administrators, technicians, sales and purchasing managers, accountants and so on, are increasingly drawn from an educated working-class, and, as the welfare state churns out more and more of these educated workers, from its Fordist education factories, so the wages of this kind of labour-power falls significantly. 

As far as the profit of enterprise, or surplus profit, as Ramsay calls it, Marx paraphrases Ramsay's analysis. 

““These surplus gains,” Ramsay writes, “do truly represent […] the revenue derived from the power of commanding the use of capital” (in other words from the power of commanding other people’s labour) “whether belonging to the person himself or borrowed from others… these net profits” (interest) “vary exactly as the amount of capital […] on the contrary […] the larger the capital, the greater the proportion they bear to the stock employed” (loc. cit., p. 230).” (p 358) 

In other words, as said above, as the scale of production rises, the mass of profit rises in line with the mass of advanced capital, but the wages of superintendence do not rise proportionally. 

“... the salaries of masters stand in inverse ratio to the size of the capital. The larger the scale on which the capital operates, the more capitalist the mode of production, the more negligible is the element of industrial profit which is reducible to salary, and the more clearly appears the real character of industrial profit, namely, that it is a part of the surplus gains, i.e., of surplus-value, i.e., of unpaid surplus labour.” (p 359) 

Saturday, 14 September 2019

Theories of Surplus Value, Part III, Chapter 22 - Part 26

Financial analysts today talk about the risk free rate of return, as the basis upon which risk premiums on other financial assets rest, as the means of valuing assets. Ramsay gives an early variant of that. 

Interest is only a measure of net profits where the level of civilisation is such that the “want of certainty” of repayment is not a factor which enters into the calculation. “In England, for instance, at the present day, we cannot, I think, consider compensation for risk as at all entering into the interest received from funds lent on what would be cabled good security” (op. cit., p. 199, note).” (p 355) 

Ramsay calls the industrial capitalist the master capitalist. As with the bankers, like Overstone, who believed that only money-capital was capital, and only the owners of money-capital capitalists, Ramsay calls the owners of money-capital capitalists. He correctly notes that it is the master capitalist who acts as the general distributor of revenueswages, interest, rent – but, on this basis, lumps all of the recipients of these revenues into one class camp, leaving the master capitalists in an opposing class camp. 

““He is the general distributor of the national revenue; the person who undertakes to pay […] to the labourers, the wages, […]—to the capitalist, the interest […]—to the proprietor, the rent [… ] On the one hand are masters, on the other, labourers, capitalists and landlords […] The interests of these two grand classes are diametrically opposed to each other. It is the master who hires labour, capital, and land, and of course tries to get the use of them on as low terms as possible; while the owners of these sources of wealth do their best to let them as high as they can” (op. cit., pp. 218-19).” (p 355) 

Marx notes, 

“What Ramsay writes about industrial profit (and especially, about the labour of superintendence) is on the whole the most reasonable part of his book, although part of his demonstration is borrowed from Storch.” (p 355) 

A lot of this is also argued by Marx in Capital III, in his own exposition of the labour of superintendence. As Marx sets out there, the labour of superintendence breaks down into two components. On the one hand, under any mode of production, there is a requirement for the labour process to be organised and coordinated. As Marx describes it, in Capital III, it is like the role of a conductor in an orchestra. The conductor does not play an instrument, and thereby contribute to the music, but, without them, the other musicians performance would be diminished. The larger the scale of production, and the greater the extent of cooperative labour, the more this role of superintendence grows. But, there is a second type of labour of superintendence, and that arises solely due to the antagonism between the producer and the owner of means of production. The slave owner must employ the slave master, the capitalist the foreman etc. 

The costs of both types of labour of superintendence represent a necessary cost of production, but it is only the first type that is necessary where the antagonism between labour and capital has disappeared. The wages paid for this labour of superintendence are a part of the variable-capital, and, therefore, already deducted from the general rate of profit. Marx repeats the point made in Capital III that the clearest example of this is shown in the worker owned cooperatives set up in Lancashire textile mills. 

“... for these, despite the higher rate of interest they have to pay, yield profits higher than average, although the wages of the general manager, which are naturally determined by the market price for this kind of labour, are deducted. The industrial capitalists who are their own general managers save one item of the production costs, pay wages to themselves, and consequently receive a rate of profit above the average. If this assertion of the apologists [that profit of enterprise constitutes wages for the labour of superintendence] were taken literally tomorrow, and the profit of the industrial capitalist limited to the wages of management and direction, then capitalist production, the appropriation of the surplus labour of others and its transformation into capital would come to an end the day after tomorrow.” (p 356) 

In other words, what is actually profit is labelled as wages for labour of superintendence. The larger the capital the larger the profit and the smaller, proportionally, the wages for superintendence. The vast remuneration of members of Boards of Directors and executives, in reality, are simply a portion of the profit. These individuals are involved only minimally, if at all, in any labour of superintendence. They are there only to represent the interests of shareholders as against the interest of the socialised capital, and the associated producers. Conversely, in a very small capital, the profit may be very small, or non-existent. Then, what appears as profit is really only wages for labour of superintendence. 

“... this portion of the profit stands in inverse ratio to the size of the capital, it is infinitesimally small in the case of large capital and enormously large where the capital is small, i.e., where the capitalist production is purely nominal. Whereas the small capitalist, who does almost all the work himself, seems to obtain a very high rate of profit in proportion to his capital, what happens in fact is that, if he does not employ a few workers whose surplus labour he appropriates, he actually makes no profit at all and his enterprise is only nominally a capitalist one. (whether he is engaged in industry or in commerce). What distinguishes him from the wage-worker is that, because of his nominal capital he is indeed the master and owner of his own conditions of labour and consequently has no master over him; and hence he appropriates his whole labour-time himself instead of it being appropriated by someone else. What appears to be profit here, is merely the excess [of his income] over ordinary wages, an excess which results from the fact that he appropriates his own surplus labour.” (p 356-7)