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The Latest Willsman Tape

I haven't heard all of the latest tape leaked to the press, for obvious political purposes, by enemies of the Labour Party, but from what I've heard from it, on the news, there is nothing that is anti-Semitic or warrants Pete Willsman's suspension let alone immediate expulsion.

The accusation that what Willsman says on the tape is overtly anti-Semitic comes down to his speculation that the Israeli Embassy was probably behind the campaign against Corbyn, and his supporters by creating a moral panic about rampant anti-Semitism in the Labour Party, which had become institutionally anti-Semitic under Corbyn.  Its claimed that this is overtly anti-Semitic, because it falls into established anti-Semitic tropes about Jews controlling important institutions.

So, let's examine that.  What is the "important institution" that Willsman is suggesting is controlled by Jews here?  It is the Israeli Embassy!  Is the Israeli Embassy controlled by Israeli Jews?  Of course it is.  Who else would you expect to control the Israeli Embassy, Outer Mongolians?

The other "anti-Semitic trope" associated with this is that this Jewish controlled Israeli Embassy, is accused of acting in a manner to further the interests of the Israeli state, by seeking to undertake actions in concert with others, in Britain.  Shock horror, states attempt to further their own interests, by all sorts of means including covert and conspiratorial means, and the Israeli state itself acts in that manner.  One element of actual anti-Semitism, particularly "Left anti-Semitism", is holding the Israeli state to a different set of standards and requirements than any other bourgeois state.  That swings both ways.  It is not "anti-Semitic" to claim that the Israeli state, and its Embassy acts to further the interests of Israel by all sorts of means, including covert and conspiratorial means, it is to claim that it acts in exactly the same way as every other state in doing so.  It is, in fact, anti-Semitic to expect that the Israeli state would somehow act differently to every other state in that regard.

And, of course, not only would we expect the Israeli Embassy, like the Embassy of any other state, to act in whatever way it saw fit, to further the interests of Israel, including trying to undermine the position of anyone it saw as an opponent of that state, but we know that the Israeli State, and its agents, working out of its Embassies, has a long record of doing that, including assassinating its opponents across the globe, kidnapping Israeli citizens that spoke out about the nuclear programme of the Israeli state, and of course, yes, the Al Jazeera video that the British media have been far less forthcoming about than the Willsman tape, showing a representative of the Israeli state offering £1 million to British politicians to undermine other British politicians it saw as hostile to Israel, and its policy in respect of the Palestinians.

So, what is anti-Semitic about pointing out well known facts, and drawing conclusions from them.  When the Skripals were poisoned, everything we knew about the vile regime of Putin in Russia pointed the figure immediately in that direction.  There was, at the beginning, no evidence to back it up, and in the days and weeks that followed, the actions of the British state itself gave rise for questioning whether the obvious conclusion that Russia was responsible was valid.  Yet, the facts meant that it was always going to be the case that speculation pointed the finger in Putin's direction, and quite rightly.  So, given that the job of the Israeli Embassy is to promote the interests of the Israeli state, given that the Israeli state, like other states, has a long track record of intervening across the globe to assassinate, and undermine its political opponents, given that there was video footage of the Israeli state offering a £1 million slush fund to undermine British politicians that are critical of Israel, why wouldn't it be quite rational to speculate that the Israeli state, via the Israeli Embassy, and its contacts with sympathisers in Britain, would try to further its interests by undermining its opponents, one of whose most visible is Corbyn, by such means.

Here is the problem with the extension of the definition of anti-Semitism, in that it means that its no longer possible even to accuse the Israeli state of acting in the same normal methods of any other state, without being accused of anti-Semitism, purely on the basis that it is the Israeli state that is being criticised.

The other element of the accusation of anti-Semitism is the suggestion that Willsman in his comments was denying the existence of anti-Semitism, in the Labour Party.  But, Willsman has done no such thing.  He has merely argued that claims of anti-Semitism in the Labour Party have been grossly exaggerated, and have been so for overtly political reasons so as to undermine Corbyn and his supporters.  He may be right or wrong in believing that to be the case, but it is certainly not prima facie anti-Semitic to speculate that it may well be the case given the other evidence to support such a belief.  Considering the facts, Willsman's speculation seems at least to have the potential for being correct.

After all, claims of the Labour Party being institutionally anti-Semitic, of anti-Semitism being rife across the Labour Party has itself become a trope repeated ad nauseum by the Tory media, and by Corbyn's opponents at home and abroad.  Yet, on the basis of the actual cases brought before the NEC, they constitute only 0.1% of Labour Party members.  The instances of anti-Semitism in the Tory Party, not to mention the instances of Islamaphobia, even highlighted by Baroness Warsi, are much greater than is the case with the Labour Party, and the same would probably be true of any large organisation in Britain.  Yet, it is only the Labour Party that has been singled out as having this problem, which obviously raises the question why, and who it is that is pushing that agenda, Cui Bono?

If we look at the charges of anti-Semitism brought to the NEC, by some leading Labour MP's, it turned out, even at the first hurdle, that 80% of those listed in those allegations were not even Labour Party members!!  Of the rest, it was found that another 200 had no case to answer.  When such a large number of charges are brought that even prima facie should never have been brought forward, other than for reasons that those bringing them forward were seeking to create the impression that a much larger problem exists than actually does, it begs the question of what the real motivation of those bringing these spurious charges actually is.  The fact that, in every case, those bringing the charges are MP's that from the beginning have been hostile to Corbyn, and those that support him, is at least strong circumstantial evidence as to what those real motives are.  After all, the suspensions and witchunting of activists, has resulted in a proportionally large number of Jewish Labour Party members actually being the ones that have been expelled for "anti-Semitism"!

It may, of course, be merely coincidence that many of those MP's that have brought these charges, 80% of which were found to have no substance, are opponents of Corbyn, members of The Labour Friends of Israel, or have connections with BICOM, which itself on its website, shows that a number of its senior personnel are former members of the Israeli state, but if it were Corbyn and his supporters who were shown to be hobnobbing with say representatives of the Russian state, members of lobby groups in parliament and in the Labour Party supporting Russia, and if it was found that the Russian Embassy was offering large amounts of Russian gold to anyone who assisted in undermining its opponents in parliament, I wonder how far we would find any justified criticism, and suspicion of those links described as merely circumstantial, and nothing more than long-held, anti-Russian tropes.

The other element in the release of this tape is its timing.  The tape is reportedly several months old, and yet has only just been released, suggesting it has been held back for use at the most advantageous time.  It has, of course, allowed Corbyn's opponents to launch another attack on him, via their prince across the water, Tom Watson.  The reason for the release of the tape now is obvious.  The Corbyn/Stalinist Brexit agenda has led to catastrophe.  Surveys show that 60% of Labour Party members, let alone voters, voted for other parties than Labour in the European parliament elections.  Corbyn's disastrous policy of economic nationalism, and social democracy in One Country is destroying the party, which now stands in joint fourth place in the polls alongside the Tories, and only just above the Greens, with the Liberals have been resurrected by Corbyn, having a clear lead over all the other parties.

At the same time, the party kicked out Campbell for having voted Liberal.  On that basis it would have to expel more than half its members who did the same.  That, of course, is what Corbyn's Morning Star advisers are recommending!  Corbyn has undermined himself and the Left of the Party that until now has supported him, by poking his supporter base in the eye over Brexit.  He has isolated himself locked off behind his tiny cabal of Stalinist advisers.  Over the last three years he, and his leadership have continually buckled and backtracked when faced with opposition from the right.  he has stood by whilst the witchunting campaign has proceeded.  Now the forces of the right, as they always do are pressing forward further, as they see his obvious weakness following the Brexit disaster.  Corbyn will almost certainly buckle over Willsman too.

At the same time we see the same Stalinist trolls, and fake news sites coming out with infantile attacks on anyone like Paul Mason who even points out the disaster the Left in the Party,a nd the Party itself is being led into.  I don't do Twitter, and having read some of the tweets sent to Paul Mason, which read like the tantrums of petulant, spoiled young children, I can safely say I have no intention of ever wasting my life ever bothering with it.  As Corbyn's disastrous strategy weakens his position and that of the Left, allowing the right to reassemble and reorganise, as seen by the rsurgent Liberals, instead of recognising the errors they have made, the Stalinists advising Corbyn instead double down on the rejection of reality, and turn their attack on those that lift the curtain on it.

Fortunately, this is not the Stalinist Russia of the 1930's when that same phenomenon resulted in show trials, executions and assassinations.  The worst they can do is idiotic tweets.  It is time for the grown ups in the room to take control. 

Theories of Surplus Value, Part III, Chapter 21 - Part 8

But, the author of the pamphlet also fails to recognise two other factors, when they limit the options for the use of this surplus value to those described above. I have set them out previously, and Marx discusses them in Capital III. 

“As a result of the introduction of machinery, a mass of workers is constantly being thrown out of employment, a section of the population is thus made redundant; the surplus product therefore finds fresh labour for which it can be exchanged without any increase in population and without any need to extend the absolute working-time.” (p 242) 

This is a point that Marx makes in the Grundrisse, and in Capital III, Chapter 14. It is, in fact, the same argument that Marx discusses in relation to the Physiocrats' correct recognition that the basis of all accumulation is the surplus product, created in agriculture. As Marx says, the Physiocrats were quite right to argue that it is impossible to engage in any other additional types of production unless the labour employed in agriculture can produce a surplus product, i.e. a worker on the land must be able to produce more than is physically required for their own reproduction. Only then can they either devote some of their own time to producing other products, or can individual producers devote all of their time to producing other products that can be exchanged for the surplus food produced by workers on the land. 

The creation of a surplus product, i.e. overproduction, is then simultaneously the creation of a surplus population, and this surplus population is able to utilise the surplus product, so as to extend the range of products available to society. Overproduction is thus a fundamental requirement for accumulation in all modes of production.  By raising productivity, machinery, and other forms of technology, increases the size of the surplus product, but the capitalists do not have to then use the surplus product either to pay higher real wages (because to sell it back to workers the prices of the commodities would have to fall) or to buy fixed capital, or to exchange for imported luxuries. At the same time that an increased surplus product is created, a surplus population is created. Fewer workers are now required to produce all of the previous set of commodities for consumption. The released workers can now produce a range of additional commodities for consumption, as well as all of the commodities required for that production. 

These new commodities can then be exchanged for that surplus production of all the old commodities, in the same way that when surplus food production became possible, former agricultural workers could produce, say, pottery, which could then be exchanged for some of the surplus food. In this way, as Marx describes in The Grundrisse, this new production also becomes the demand for the surplus old production, and thereby enables the realisation of its value. 

““On the other side, the production of relative surplus value, i.e. production of surplus value based on the increase and development of the productive forces, requires the production of new consumption; requires that the consuming circle within circulation expands as did the productive circle previously. Firstly quantitative expansion of existing consumption; secondly: creation of new needs by propagating existing ones in a wide circle; thirdly: production of new needs and discovery and creation of new use values. In other words, so that the surplus labour gained does not remain a merely quantitative surplus, but rather constantly increases the circle of qualitative differences within labour (hence of surplus labour), makes it more diverse, more internally differentiated. For example, if, through a doubling of productive force, a capital of 50 can now do what a capital of 100 did before, so that a capital of 50 and the necessary labour corresponding to it become free, then, for the capital and labour which have been set free, a new, qualitatively different branch of production must be created, which satisfies and brings forth a new need. The value of the old industry is preserved by the creation of the fund for a new one in which the relation of capital and labour posits itself in a new form” 

(Grundrisse, Chapter 8) 

“Let us assume that 500 workers were employed previously, whereas now there are 300 workers, who perform relatively more surplus labour. The other 200 can be employed by the surplus product as soon as it has increased sufficiently. One portion of the old [variable] capital is converted into fixed capital, the other gives employment to fewer workers but extracts from them more surplus-value in relation to their number and in particular also more surplus product. The remaining 200 are material created for the purpose of capitalising additional surplus product.” (p 242-3) 

Back To Part 7

Forward To Part 9

McCluskey Talks Bollocks On Brexit

Len McCluskey, on “Peston”, on Wednesday, talked total bollocks on Brexit, and Labour's strategy. There was one valid comment, in all of the confused jumble of delusions and fallacies he came out with, which was that the country is sharply divided over the question of Brexit. No shit Sherlock. The country certainly is divided. It is divided between reactionary nationalists backing Brexit, and progressive internationalists opposing Brexit. In such a sharp, political division, it becomes imperative for socialists and social-democrats to choose the side of the latter, and to pursue the struggle against the former with all their might. The trouble is that McCluskey has put himself on the wrong side of this life or death class struggle. 

McCluskey having come to the startling discovery that the country is bitterly divided over the question of Brexit, wants the solution to be that the bitter division simply goes away. Superficially, he wants it to go away by Labour promising to resolve the conflict via a compromise between these two mutually exclusive positions, but, in reality, that compromise involves the progressive internationalists lying down and playing dead, whilst Brexit is imposed upon them! McCluskey insists that any solution must be based upon Brexit being implemented. All of the stuff about bringing workers together by emphasising Labour's economic and social agenda is so much pie in the sky. The same kind of delusion was presented this morning on “All Out Politics”, by the CWU's Dave Ward. 

What we have here is repetition of the same kind of Economism that characterised the politics of the Militant Tendency, in respect to Northern Ireland and the border, in the 1970's and 1980's. The Militant responded to the growing divisions between Protestant and Catholic workers in Northern Ireland, by a similar tin eared demand that the workers should simply forget about the differences between them, which resulted from the denial of national and civic rights to Catholics, and should instead focus on a joint struggle for bread and butter issues, of raising wages and so on, that they should pursue by workers, from both communities, building their trades unions, and that they should respond to the growing violence, carried out by the paramilitaries, on both sides of the communal divide, by building joint workers defence squads, made up of workers from both communities. It was total nonsense then, and McCluskey and Ward's version of it is total nonsense today. 

It means seeking a resolution of a political problem by simply wishing it away, on the basis that you find it troublesome that the problem exists and is getting in the way of you talking about the economic issues you would much prefer to be discussing. It means wishing the world was the way you want it to be, rather than dealing with the world as it actually exists. For Northern Ireland Catholics, in the 1960's, 70's, 80's, and 90's, their main immediate concern was not economic, but political, and to the extent their problems were economic they were inextricably linked to, and determined by their political concerns. There was no point telling Catholic workers to forget about the issue of the border, and the fact that they were denied basic political and civil rights, and simply to focus on their economic concerns, because their economic concerns about high levels of Catholic unemployment, discrimination over housing, jobs and so on, were themselves largely determined by the fact that they were an oppressed minority in Northern Ireland. There was no more point telling Northern Ireland Catholics to forget about their political concerns, and to forge an alliance over economic issues with Protestant workers than there was in telling black South African workers to forget about apartheid, and form such an alliance with the white working-class in South Africa, whose privileged position was based upon the oppression of the black workers! 

A parallel can be drawn with Israel today. What point is there telling Palestinian workers to forget about the denial of rights to them by the Israeli state, and instead to focus simply on an economic, trades union struggle with Jewish Israeli workers? A unity of workers in each of these cases is necessary, but it cannot be achieved by simply wishing away the political reality that divides them. First and foremost that unity has to be built on the basis of a political programme that addresses the denial of basic political and civil rights, which creates the fundamental basis of the division of the working-class in the first place. There was no point telling women workers, or black workers in Britain to forget about the discrimination they faced in society, including in the labour movement, and in which white male workers were also complicit, because what was first required was action such as that of the women workers at Ford's for equal pay, and that also involved a struggle of women and black workers inside the labour movement itself for equal rights. 

Similarly, there is no point telling the majority of British workers who oppose Brexit, and who see it as the reactionary policy it is, to simply forget about it, and play dead. Its no wonder that a large majority in Northern Ireland voted for Remain in the EU Referendum, because it was a large part of the answer to the political problem that the people of the province faced. On the one hand, the EU, with its human rights requirements, placed Northern Ireland Catholics, in most ways, on an equal footing with Northern Ireland Protestants. On the basis of the EU, and the position of Ireland, Northern Ireland and Britain within it, it made possible the Good Friday Agreement, and the more or less wiping away of the border. As international firms invested in Ireland both sides of the border, the old Protestant Ascendancy lost much of its industrial power as these international businesses were only interested in getting the best workers from which they could get most profits, not what religion those workers were. And, as the EU, by similar means, meant that the old Catholic Confessional state in the Republic was dissolved, and a new modern secular state rose in its place, the old fears of the Northern Ireland Protestants about being dragged into a “Papist” state in the South were also removed. Of course, all those advantages brought by EU membership are now in danger of being reversed as a result of Brexit, which is more than an issue simply over whether a hard border is reimposed. 

Both McCluskey and Ward promoted the idea that Labour should ignore the wishes of the vast majority of Labour members and voters to oppose Brexit, and instead to push ahead with it, at the same time promoting the delusional idea that Labour could negotiate some kind of impossible “Jobs First Brexit”. But, no such solution is possible. The closest to it, would be that Britain remained inside both the Customs Union and Single Market, but that would mean continuing to pay to be in those institutions, and all of the other institutions attached to them, including acceptance of jurisdiction of the ECJ, and continued acceptance of free movement. But, its precisely those things that the small minority of Labour Leave voters want to see scrapped! You will not win over those voters, let alone those working-class, non-Labour voters that support the reactionary nationalist agenda, on the basis of such a solution. In the meantime, because such a half-way house is the worst of all worlds, because it means accepting all the rules and regulations, paying all of the subs, but without any political input into the formulation of the rules, it will be quite rightly rejected by anyone with a brain, especially by Labour's large majority of Remain supporters. 

McCluskey and Ward's position seems based on simply refusing to accept reality. They seem to have swallowed the line put out by the Stalinists of the Morning Star, and others, behind Corbyn that the 75% of Labour voters that oppose Brexit are somehow not working-class, not really true Labour voters at all. It implies a belief that out there somewhere are a reservoir of real, industrial working-class voters just itching for a Stalinist Labour Party to offer them the promised land of Socialism in One Country, along the lines of such previous utopia as existed in Russia, and Eastern Europe, Cuba, and Venezuela. Indeed, whilst the same elements have revelled in expelling Alistair Campbell, the Morning Star itself, proposed a boycott of voting Labour, because it considered it too soft on Brexit, only refraining from joining its fellow travellers like George Galloway, in promoting a vote for Farage's Red-Brown Brexit coalition for internal party management reasons. 

Both McCluskey and Ward promoted the idea that Labour should hold its nerve, and continue to argue for this reactionary Brexit agenda, whilst promoting its radical economic and social agenda. They fail to accept that that is exactly what Labour has been doing, and in the EU parliament elections, it got inevitably destroyed as a result. They sound like the Monty Python 's black knight, who having had his arms and legs chopped off in the fight, insists that “'tis but a scratch”. In Scotland, where Labour most notably pursued that course, in the Euro elections it was most visibly destroyed. Labour picked up just 9% of the vote, coming fifth, just one point ahead of the Greens! In Edinburgh it came sixth, with 7% of the vote, and in the Scottish Borders it came sixth, with less than 3% of the vote, less than one percentage point ahead of Change UK. The situation in Wales, was not much better. 

And, as Paul Mason has seen, those like him that have pointed out this reality have been targeted by a well oiled Stalinist apparatus that is trying to shut down debate and recognition of the facts, as reality shows that the Stalinist strategy pursued by Corbyn and his advisors has been catastrophic. It is the same kind of approach that Stalinists have always adopted whenever the reality of their failed ideas is demonstrated in practice. Now the Morning Star, which called for a boycott of Labour itself, wants Corbyn to launch into a mass purge, presumably they are not calling for the same kind of show trials, executions and assassinations the Stalinists pursued in the 1930's, to rid the party of anyone that criticises the strategy. Having destroyed their own sect over the years, they now seek to destroy the Labour Party too, and reduce it to the same kind of status as an irrelevant sect. 

Rather, what is required is a clear out of all the unelected Stalinist advisors standing behind Corbyn, and for a democratisation of the Labour party and trades unions. What is required is a clear change of position of the party and of the party leadership to oppose Brexit, by all means. Then it is possible to address the economic and social questions on an honest basis that recognises that the problems facing British workers are not caused by the EU, and will not be solved but only made more intractable by leaving it. 

Dave Ward, pointed to the fact of the fall in wage share of British workers over the last 40 years. But, its not just British workers that have seen such a fall in the wage share. That drop is common to workers across most of the globe. Even in those places where globalisation has brought most benefits, in China, Asia, Latin America, and Africa, and where workers living standards have risen most sharply, that rise in living standards has happened alongside a fall in the wage share, as the growth of these economies saw profits grow even faster than wages. Ward does not seem to recognise that the fall in the wage share is nothing to do with being inside the EU, and being outside the EU would not reverse it. Far from it. The fall in the wage share over that period was down to a simple fact. 

In the 1970's, the wage share had risen. It had been rising from the early 1960's. It was that rise in the wage share, as capital expanded, and employed greater quantities of labour, which caused a squeeze on profits, which resulted in the period of crisis that erupted in 1974. In response, capital, as it always has, in such conditions, began to innovate, and to introduce large amounts of labour-saving technologies. It created a relative surplus population, which prevented and then reversed the rise in the wage share that had been occurring from the early 1960's. It meant that, with the use of these new labour saving technologies, in the late 1980's, and after, the growth in capital and profits was always greater than the growth in the demand for labour, so that wages were under constant downward pressure during that period. Living standards continued to rise, because sharply rising productivity reduced the value of wage goods, but workers never got the full benefit of that rising productivity, as the main benefits of it were appropriated by capital in higher profits, which in turn were paid out in higher dividends/interest, as well as higher rents, and executive salaries. 

The key to higher wages and wage share, if that is as far as your ambitions for workers goes, lies, as Marx described in Wage Labour and Capital, in a more rapid growth of capital leading to a more rapid growth in demand for labour-power. But, Brexit will create the very opposite of that. For British workers in particular, it will lead to a much weaker economy, and a reduced demand for British labour-power as firms relocate to the EU, and unemployment rises. For workers in general, as with Trump's global trade war, the increase in trade frictions will slow economic growth, it will increase production costs, thereby slowing down capital accumulation and the demand for labour-power. It will undermine the very conditions required for improving the workers immediate condition. 

LP members and trades union activists need to defend those like Paul Mason that have pointed out the idiocy of the strategy being pursued by Corbyn under direction from the Stalinists in pursuit of their reactionary nationalist agenda. We should flood the party and unions with motions demanding a recall conference to decisively shift party policy to opposition to Brexit, and a call for revoking Article 50. We should push forward with a democratisation of the party, starting with booting out Corbyn's unelected Stalinist advisors that have led us into this catastrophic position. 

Theories of Surplus Value, Part III, Chapter 21 - Part 7

As I have set out elsewhere, the objective driver for accumulation is competition. When the monopoly of private capital gives way to socialised capital, this objective driver of accumulation remains. But, the private capitalist, now reduced to the role of money lender, of shareholder or bondholder, is thereby relieved of that objective driver for accumulation. They can now let rip with their desire to engage in conspicuous consumption, so long as it does not result in a diminution of their assets below a level required to sustain their revenues, sufficient to cover their lavish lifestyle. And, this applies also to those executives they appoint to Boards of Directors to represent their interests, and whose income is derived from the surplus value, rather than from variable-capital.  In fact, in the 18th and 19th centuries, landlords, consumed above these levels, borrowing against the value of their estates to do so.  In the last two decades of the 20th century, and first two decades of the 21st century, the owners of fictitious capital did a similar thing.  They borrowed recklessly against massively inflated asset prices, so as to consume unproductively.  The same was done by pension funds, and the state.

It is why, as described earlier, we have seen an increasing proportion of profits paid out as dividends/interest, and other forms of capital transfers, which convert capital into revenue. But, this ultimately undermines itself, both as a result of causing falling yields on these assets, and as a result of diverting capital away from productive investment. In so far as these revenues have simply gone back into speculation, in these revenue producing assets, the process has actually been more destructive than previous forms of using up surplus value in unproductive consumption. The money may as well have been used to gamble at the race track or at the casino. In fact, it would have had fewer negative consequences had it been used in that manner. 

The problem is that if the surplus product exists in the form of a vast quantity of necessaries, the capitalists cannot consume them personally. They have the option then of selling them to workers, but this is essentially to increase the size of the variable-capital, to raise wages, and equally diminish profits. Instead, the surplus production can be exported, in exchange for luxuries, and the capitalists then simply consume these luxuries. 

“Here is the real secret of the necessity for increasing consumption by “the rich”, advocated by Malthus, in order that the part of the product which is exchanged for labour and converted into capital, should have great value, yield large profits, absorb a large amount of surplus labour. He does not however propose that the industrial capitalists themselves should increase their consumption, but [allots] this function to landlords, sinecurists, etc., because the urge for accumulation and the urge for expenditure, if united in the same person, would play tricks on each other.” (p 242) 

It is also, as described elsewhere, the basis of the Keynesian solution, with the state occupying this function of buyer of last resort. 

The author of the pamphlet does, here, however, expose the fallacy of the argument of Ricardo and Barton, and others, in regard to wages. The level of wages is not determined by quantity of means of consumption that are available as variable-capital but by the quantity that are actually transformed into variable-capital. Capitalists can use these additional means of consumption to employ unproductive labour as retainers, domestic servants and so on, or they can export this surplus of necessaries in exchange for luxuries. The level of wages is set as a minimum by what is required for the reproduction of labour-power. If wages rise above this level, it is not because higher productivity has created a surplus of necessaries – as for example Carey had argued – but because the demand for labour-power itself, relative to the supply, rises, and so competition drives wages higher. In short, it is the demand for labour-power, driven by accumulation, that causes wages to rise. 

Back To Part 6

Forward To Part 8

Theories of Surplus Value, Part III, Chapter 21 - Part 6

And, the author of the pamphlet also addresses the point made earlier in relation to the contradiction in the Ricardian theory, 

““Why set out by telling us that no accumulation of capital will lower profits, because nothing will lower profits but increased wages, when it appears that if population does not increase with capital, wages would increase from the disproportion between capital and labour; and if population does increase, wages would increase from the difficulty of producing food” (loc. cit., p. 23, note).” (p 240) 

In other words, Ricardo objects to the Smithian notion that capital accumulation causes profits to fall, because, as capital accumulates faster than the supply of labour, competition causes wages to rise. Instead, Ricardo argues that the capital accumulation results in the growth of the workforce, but this causes the demand for food to rise, which causes higher food prices, so that, although wages rise, workers living standards fall. 

The author of the pamphlet recognises the problem referred to earlier that, as capital accumulates, and productivity rises, the size of the surplus product rises, and, in order to realise it as profit, this surplus product must be sold back to the workers. They put forward two alternatives to that, both of which have their reflection in more modern economic theories. Instead of selling the surplus product back to the workers, they suggest that it could a) be used to accumulate additional fixed capital, or b) it could be exported, in exchange for imported luxury goods, so that the capitalists, thereby, consume this portion of the surplus product themselves, in alternative form, i.e. they do not consume the surplus product in the form of necessaries, for which their demand is sated, but, instead, in the form of a smaller quantity of luxury products. 

Marx sets out the fallacy of these two solutions, as already described elsewhere in Capital. Firstly, as Marx says, in relation to the accumulation of fixed capital, 

“It should be noted that the first method—which is only effective for a time and then neutralises its own effect (at least as regards the fixed capital consisting of machinery, etc., which itself is used in the production of necessaries)—implies the transformation of surplus product into capital...” (p 242) 

In other words, although the surplus product can be used for the accumulation of fixed capital, either directly, or via the exchange of the surplus product for fixed capital, the only purpose, ultimately, for accumulating any additional capital is that the output resulting from it can be sold. For a time, a cotton grower might accumulate additional machines, and produce more cotton, if by the same token, they are able to sell more cotton to a spinner, who likewise overproduces yarn, so long as the weaver buys it, and so on. But, ultimately, if no one buys all of the additional cloth, clothing and so on, for final consumption, there is no point in producing additional means of production. Moreover, where the fixed capital takes the form of machines that raise productivity, this ultimately exacerbates the overproduction, because it entails higher levels of productivity, so that the surplus product increases even more. 

“... whereas the second method implies consumption of an ever-increasing portion of the surplus product by the capitalists—increasing consumption on the part of the capitalists and not the reconversion of surplus product into capital.” (p 242) 

This is also the point that Marx deals with in Capital III, Chapter 15. It misunderstands the nature of capitalist production, as based upon capital accumulation, as opposed to merely the personal enrichment and consumption of capitalists. As Marx points out in Capital II, at the heart of expanded reproduction resides simple reproduction, the requirement to devote a portion of the surplus product to the capitalist class themselves. As capitalism develops, and the size of the surplus product expands, the individual capitalists are torn between the personal desire to engage in the same kind of conspicuous consumption as previous ruling classes, and the fundamental drive of capital to accumulate. 

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Forward To Part 7

A Second Referendum Is Not The Issue, Opposition To Brexit Is

At a glacial pace, Labour's leadership is edging towards calling for another referendum. As the Euro elections showed, its too little, much too late. But, the real point is that backing another referendum is not the real issue, opposing Brexit is. If the Labour leadership does change its position to backing a second referendum, the first question, as would be the case in the event of a General Election, is what line would Corbyn and the Labour leadership take in it? Would they back Remain, Leave, an impossible Labour Brexit option, Remain and Reform, in which case, what kind of reforms etc. The second question is, if the referendum came down in favour of a No Deal Brexit, what then? Would Labour, and all those that have been calling for another referendum, put themselves in the invidious position of having to support that outcome and carrying it out? What happened to the idea that socialists first concern should be to stand on their principles, to argue for them, and continue to fight for them, whether they win a majority for them or not? What happened to the idea that the first responsibility of socialists is to tell the truth to the workers, no matter how unpalatable, and that their principles should be based on what is objectively in the interests of the working-class. 

Suppose there were a party that was doing well mobilising support for the idea that women's place is in the home, looking after the kids, the sick and the elderly, rather than taking away the jobs of married men, who needed the money to support their families, and that women, prepared to work for pin money, undermined men's wages. It may seem a ridiculous proposition today, but that kind of idea was rampant amongst working-class communities in the 1960's, and even into the 1970's. Its the corollary of the idea that the reason British workers wages are low, is because “foreigners” are taking those jobs, and are prepared to work for peanuts. The false argument is the same, only the scapegoat chosen is different. Moreover, on the back of the kind of reactionary agenda that the Brexiters have promoted, their fellow travellers in Europe, and elsewhere, have already moved on to that logical next step. People like Orban in Hungary, are already promoting this kind of Kinder, Küche, Kirche agenda. 

Would the Labour Party then decide to triangulate towards this section of voters that was attracted to these reactionary ideas? I wish I could say the answer is obviously not, but on the basis of what has been seen over Brexit, and the willingness, not just of the Labour Leadership and right-wing Labour MP's, but also of whole swathes of what is supposed to constitute “The Left” to abandon principle, in search of cheap populism, and votes, I have no great confidence that that would be the case. It would not be the first time the Left has capitulated to reaction in response to a populist upsurge. 

Listening to Tony Blair on Sky News, this morning, I have to say that his analysis of Brexit is absolutely right. His conclusion that Labour must come off the fence and adopt a clear position is also quite right. His further conclusion that that should be to argue for another referendum, is completely wrong, for the reasons set out above. There is no reason for calling another referendum unless you are absolutely clear what position you are going to be fighting for in that referendum, and so far Labour's Leadership has no such clarity. But, also there is no point arguing for a referendum, unless you are absolutely committed to implementing its outcome. There is absolutely no principled basis for Labour to implement a referendum decision in favour of Brexit, any more than it should implement a referendum decision to force women back into the home, precisely because it is reactionary, and against the interests of the working-class. 

Blair is quite right that there are only two real alternatives – No Deal Brexit, or No Brexit. A soft Brexit, based on being in the Customs Union and Single Market, is theoretically possible, but practically impossible. The Tories are not going to pursue it, as they head towards electing a No Deal Brexit leader. Labour would need to win an election to pursue it, but their Utopian idea of have cake and eat it, by being outside the EU, but having all the benefits of being inside, is not going to happen. They could settle for vassal state conditions, whereby they accept all the rules, but have no part in making them, but who would go along with that for long, and what would be the benefit? 

But, Blair is also right that the truth is, as I said at the weekend, and have said for the last few years, that no Prime Minister will actually implement a crash out No Deal Brexit. It would be disastrous for Britain, leading to chaos, of a scale that would lead to demands for an emergency re-admittance on whatever terms could be achieved; and long before it even got to that stage, the Pound and the financial markets would crash, interest rates would soar, and the government would be forced to capitulate. The most a Tory Prime Minister could do, would be to push for a “Managed No Deal” Brexit with the aim of moving towards a Canada style free trade agreement in a few year's time, but there is no guarantee the EU would facilitate that, and it has a series of other problems attached to it. The only real option is to revoke Article 50. That is what Labour should argue for vociferously, rather than messing around with demands for another referendum that might, in any case, commit it to a course of action that socialists should be completely hostile to supporting. 

The problem with the 2016 referendum was this. For years there had been nationalist parties advocating British withdrawal from the EU, and the EEC before it. None of those parties managed to get any MP's elected. Indeed, they all got less than derisory votes in General Elections. The reason was that the question of the EU was not a major concern for the vast majority of the electorate. Some grumbled, and soaked up all the nonsense about the EU demanding that bananas be straightened, just as they soaked up all the nonsense about immigrants and other “benefit scroungers” being given free luxury houses, cars, not needing to pass their driving test and so on, pumped out by the gutter press alongside other such ridiculous stories such as “Freddie Starr Ate My Hamster”. Some of them who swallowed this garbage were even Labour voters, who voted that way out of tribal loyalty, and others because things like Labour's commitment to the NHS and so on, compared to the Tories, far outweighed their grumbles about the EU, scroungers, and immigrants. The truth is though, they were always only a minority of Labour voters. 

Those like Lisa Nandy, Caroline Flint, Gareth Snell, John Mann, Ruth Smeeth and so on, who want to go after these minority of Labour voters, in a strange coalition with sections of the far left that push this notion of a mythical mass of “left behind” Labour voters, by appeasing bigotry, are on a fool's errand. The Labour voters who held and hold these bigoted views, are a minority, even in those areas that voted heavily in favour of Leave. Even in those areas, they constitute at most around 35-40% of Labour voters, and going after them means losing a large chunk of the 75% majority of Labour voters, who now see they can vote Liberal or Green in England, and SNP or Plaid as well in Scotland and Wales. 

But Andrew Adonis, also speaking on Sky News this morning was also right, as against John McTernan, in arguing that the answer for the Lisa Nandys is that what will win those seats for Labour is not appeasing the bigotry, but telling the truth to the workers there about Brexit, and how it will actually damage their interests, alongside promoting Labour's clear and more radical economic and social policies. Indeed, it makes no sense to try to argue for the latter, whilst the national debate continues to be dominated by Brexit, and it makes no sense to talk about Labour's more radical economic and social agenda, whilst equivocating over Brexit, because if Brexit happens, Labour's radical economic and social agenda becomes impossible to pursue. The task then will be to simply try to deal with the weakened position that workers will find themselves in, as jobs disappear fast, and a victorious and rampant Tory hard right begins to implement its policies of Libertarian Minarchism, and red in tooth and claw free market competition. 

Thatcher was only a halfhearted supporter of Hayek and Von Mises, compared to the ideologically devoted libertarians and contrarians such as Farage, Claire Fox (Foster), Rees-Mogg et al. If people in Wigan thought they were badly done by as a result of Thatcher's Austrian School, and libertarian policies of the 1980's that inflicted deindustrialisation and devastation on them, they have seen nothing compared to what her modern day equivalents in Farage's Brexit company, and the Tory Right have planned for them! 

Blair is also wrong to think that the Tories would be mad to call a General Election. Having got shut of May, the Tories are now on course to elect a Brextremist Prime Minister. All of those Tory voters that gave them a kicking by voting for Farage's Brexit company, will come flooding back to a hard Brexit Tory Party led by Bojo, Raab, Gove, or Baker. At a stroke, the Tories would steal Farage's main asset, a clear message that the Tory vote can mobilise around, and, at least in Bojo, a charismatic leader, able to rouse the mob. On its own, its not enough to win them a General Election. May tried to push the hard Brexit line in 2017, and failed miserably. But, in 2017, it was possible to rally the enthusiasm behind the Corbyn surge on the hope that Labour would provide opposition to Brexit. No more. If Labour continues to equivocate, even in the slightest, and fails to come out to openly commit to scrapping Brexit, it will continue to lose votes to others who do offer that prospect. There is no real choice between a Tory hard Brexit, and a Labour impossible Brexit. They are both Brexit, and those for whom the issue has now become an acid test, and whose views on the matter have become entrenched will not vote for a Labour lesser evil Brexit, as against a Tory hard Brexit. 

Farage and his Brexit company are demanding a seat at the Brexit negotiating table. They should be given one. Indeed, the ideal situation in 2016 would have been that having proposed Leave and undertaken the Leave campaign, Bojo and the other Leavers should have been invited to form a government, on the basis that “You broke it, you bought it.” Theresa May, in a way, went part of the way. She appointed the hard Brexiteers to all the top posts in the Brexit talks. Bojo was Foreign Secretary, Fox International Trade Secretary, Davis Brexit Secretary, with uber Brextremists like Raab, Baker and Braverman in other posts in the Department. It would have been complete, if at that stage, Farage himself had been given a job in those talks. That way, when he too failed to implement Brexit, the blowhard would have been exposed for all to see. 

The truth is, as I said at the weekend, if No Deal Brexiters actually were in control of the government, they would quickly have to face the reality that a No Deal Brexit is practically impossible. They would quickly have to abandon that project, and shut up. The fact is that, there has never been a British National Party that could mobilise enough support behind it to get elected sufficient Nationalist MP's to form a government to push through a No Deal Brexit, and no such party exists today either. 

Blair is wrong that politics is suffering from the fact that the centre-ground is not represented by the two main parties. The centre ground no longer exists. That is why the Liberals failed in 2017, and why the Blair-rights and the Chukas have failed miserably. After 2008, the conservative social-democratic (neoliberal if you prefer that nomenclature) model based upon continually inflating asset prices ended, although central banks and conservative governments have tried to sustain it on life-support ever since via austerity, and QE, and the only two options for resolving the situation imply a shift to the extremes. One option is a reactionary option, based on attacking socialised capital, and thereby social-democracy itself. It is represent by the Libertarian/Austrian School dreams about a return to the days of classical Liberal democracy, and the dominance of millions of small capitalist producers, each fighting it out in a Darwinian struggle of survival of the fittest. It is, in reality a fantasy that can never be achieved, but which can cause great devastation as a result of its adherents pursuing it. The other option is that the interests of socialised capital are pursued, and the interests of fictitious-capital/interest-bearing capital subordinated to it. That is the progressive solution. 

Ideally, it results from progressive social-democrats, given critical support from socialists, pursing a programme of a struggle for greater industrial democracy, and a reduction or ending of the influence of shareholders in determining company policies. It involves an extension of planning and regulation of the macro-economic environment, so that the inevitable flux in the capitalist economy, as capital is reallocated from one sphere to another – and as Marx sets out, in Capital II, such flux is inevitable in a communist economy too – is increasingly smoothed and managed, and the democratically controlled industrial capital can be increasingly integrated and coordinated, as part of this process of exerting control and planning of the economy. 

This is the underlying objective economic reality that determines the political options now available. A progressive, social-democratic solution implies a commitment to this struggle for industrial democracy, which itself requires a struggle against the owners of fictitious-capital, in whose interests economies have been run for the last 40 years, i.e. of the top 0.01%, the dominant section of the ruling class, whose wealth is now almost entirely held in the shape of this fictitious capital. There is no longer any centre-ground as existed on the mirage that was pursued for the last 40 years. It requires a return precisely to some of those social-democratic ideas that developed in the post-war period. It requires, as the Bretton Woods conference established, global para state bodies to implement Keynesian style policies to regulate the supply of money-capital at an international level, to smooth financial frictions; it requires the development of larger states, such as the EU, as the nation state has long past its sell-by date; it requires the introduction of industrial democracy, and the final subordination of the interests of landed property, and interest-bearing capital, to the interests of industrial capital, by making all company boards elected by the workers and managers (the associated producers as Marx calls them) of the company. Already, in the 1970's, prior to the rise of the conservatives, such ideas were taking shape via the Bullock Report in Britain, the EU's Draft Fifth Company Law Directive and so on. 

Unfortunately, as in the 1930's, there is another way in which the interests of this large scale socialised capital can be furthered. It takes the shape of National Socialism either of the variant attempted by Stalin in the USSR, or that attempted by Hitler in Germany. It adopts all of the same kinds of state capitalist type polices of Keynesianism, it introduces its own bureaucratic form of planning and control of the economy, but it does so, from the perspective of remaining inside the framework of the nation state. To the extent it looks outwards, it does so only within the context of this nation state, and thereby of subordination of other states to its interests, initially by nationalistic methods aimed at obtaining competitive advantage via trade policies, import controls, tariffs, and so on, but inevitably, ultimately, by other methods including war, and military conquest. 

There is a clear difference between reactionaries of the Faragist, or Rees-Mogg type who are reactionary in the true sense of the term, in that they actually want to turn the clock back, to return capitalism to some previous less mature stage of development, based upon the free market, and liberal democracy, and the National Socialists. The latter should be seen, not as reactionary, but as conservative.  They don't want to turn the clock backwards, they want to preserve the dominant form of capital, large-scale, socialised industrial capital, upon which the fate of the state itself depends, but to do so, by thoroughly bureaucratic, statist methods, and within the confines of the existing nation state. As I have previously characterised this National Socialism, be it of the Stalinist or Hitlerist variety, it is social-democracy without the democracy. 

The problem we face today, is that whilst the mass of the Labour Party is truly characterised by being comprised of progressive social-democrats that looks outwards to the future, to internationalism, the Labour Leadership is infused with the ideas of National Socialism. Its agenda, as with the agenda of the Stalinists and Hitlerites is not only bound to fail, but in the process of failing, and its supporters being pushed into ever greater atrocities to try to defend it, it will be devastating to the working-class, and the long-term prospects of socialism itself. But, in a similar way, the ideas of the Faragists, Libertarians and Miseans is even more bound to fail. And, again, in the process of failing, its supporters too will find themselves agreeing with the sentiments of Hayek, and Lord Acton that they do not fetishise democracy over freedom, and will come to rely upon the endeavours of some “benevolent despot” to that attend, as they sink ever faster into Bonapartism, as the state attempts to quell the inevitable anger of the mob that turns against them. 

These are more dangerous times than have been seen in a century. Its time to choose which side you are on.

Theories of Surplus Value, Part III, Chapter 21 - Part 5

The author of the pamphlet describes surplus value as interest. They illustrate, here, why this continual increase in the amount of this “interest” could not keep expanding, proportionate to the capital, because it would mean that wages would disappear. But, their belief that the capitalists would attempt to do so is what leads them into the belief that wages would be progressively reduced to the bare subsistence level, with cheaper foods, such as potatoes, replacing bread and so on. 

Over the last thirty years, the idea contained here can be seen to have some validity, in the policy adopted, certainly, in the US and UK, of conservative social democracy. The belief took hold that wealth, in the form of fictitious capital, of financial and property assets, could simply inflate, and this inflation would somehow magically produce additional value. But, instead, and necessarily, as asset prices inflated, yields fell, and, as attempts were made to compensate for falling yields, by raising dividends and rents, so this simply succeeded in draining even more potential money-capital away from productive investment, and, thereby, undermined the actual basis of raising the production of surplus value, from which these higher dividends and rents could be paid. 

As Andy Haldane pointed out, where, in the 1970's, only about 10% of corporate profits went to dividends, today that figure is around 70%. And yet share prices have risen so much that, even on the basis of this massive rise in dividends as a share of profit, dividend yields have continued to fall. The same story applies to rental yields, and bond yields. And, in pension funds, revenues from dividend yields and bond interest eventually fell to levels whereby those funds, also under the delusion that asset price inflation represented real value creation, thought they could simply cover liabilities by selling some of these rapidly inflating assets, which, of course, had the consequence then, of undermining the capital base of the fund, and its future revenue producing capacity. Which then left those funds with multi-billion Pound black holes. As Marx points out, 

“Because surplus-value and surplus labour are identical, a qualitative limit is set to the accumulation of capital, [it is determined by] the total working-day (the period in the 24 hours during which labour-power can be active), the given stage of development of the productive forces and the population, which limits the total number of working-days that can be utilised simultaneously at a given time. If, on the contrary, surplus yield is understood in the abstract form of interest, that is, as the proportion in which capital increases itself by means of a mythical “sleight of hand”, then the limit is purely quantitative and it is absolutely impossible to see why capital does not daily add to itself interest as capital every morning, thus creating interest on interest in infinite progression.” (Note * p 241) 

As the author of the pamphlet puts it, 

““Suppose … there is no surplus labour, consequently, nothing that can be allowed to accumulate as capital” (op. cit., p. 4). 

“… the possessors of the surplus produce, or capital…” (loc. cit., p. 4). 

“… the natural and necessary consequence of an increased capital, [is] its decreasing value…” (op. cit., pp. 21-22).” (p 240) 

Or as, again, Marx puts it, 

“If the value of capital, that is, the interest of capital, i.e., the surplus labour which it commands, which it appropriates, did not decrease when the amount of capital increases, the [accumulation of] interest from interest would follow in geometrical progression, and just as, calculated in money (see Price), this presupposes an impossible accumulation (rate of accumulation), so, reduced to its real element—labour, it would swallow up not only the surplus labour, but also the necessary labour as “being due” to capital.” (p 240) 

Back To Part 4

Forward To Part 6

Bad Night For Brextremists. Revoke Is Now The Only Option

Listen to the Tory media, or to Nigel Farage, or Steve Baker, and you would think that last night was a tremendous victory for the Brextremists. But, of course, it wasn't. It was a very bad night for the Brextremists. Once again, they showed they cannot get beyond support from around 30% of the population, leaving 70% of the population opposed to them. The Brextremists cannot get beyond the same 30% of the population that we have known, for a long time, are bigots, not necessarily hard line racists or fascists, but, generally speaking, people of the much older generation, who grew up at a time when socially conservative ideas were indoctrinated into people from childhood, and when notions of Britain's natural superiority, and right to Empire were commonplace. They are generally people who are less well educated, or educated at a time when learning was based upon rote, and an acceptance of truisms, rather than critical reasoning, of people whose ideas are formed as much on the basis of faith as on logic. 

Farage's Brexit company topped the poll, in England, though not in Scotland or Northern Ireland, but only because it embodied nearly the whole pro-Brexit vote. Getting around 32%, in what amounts to a proxy for an EU referendum, is then pretty bad for the Brextremists. Add in the remaining 3.3% for UKIP, and the total Brextremist vote comes to only 36%. Total up the vote shares for the clearly anti-Brexit parties, Liberals, Greens, SNP, Plaid, Chukas and the total is 40.4%, showing a clear majority for the anti-Brexit forces. But, the real situation is even more dire than that for the Brextremists. 

The Tories vote share collapsed to just 9.1%. Even on a generous reading for the Brextremists, this is a vote for some kind of Brexit deal, based on Theresa May's failed Withdrawal Agreement, rather than any kind of No Deal Brexit. But, in truth, all of the Tory Leave vote has gone to Farage's Brexit company. At least the large majority of that 9.1% vote for the Tories has to be counted as Tory Remainers, who cannot bring themselves to vote for any other party. As the Brextremsts never tire of telling us, after all, Theresa May, was a closet Remainer, in their view. 

And, those same Brextremists have spoken out of both sides of their mouth when it comes to Labour too. On the one hand, they use Labour's disastrous decision to fight the 2017 General Election on the basis of a decision to “respect” the referendum result, as evidence that Labour voters in 2017 were all Brexit supporters, even though its quite clearly the case that that isn't true, and that 75% of Labour voters in 2017, wanted Brexit stopped. On the other hand, the Brextremists have tried to claim that Labour was an anti-Brexit party, trying to frustrate their goal of pushing through a No Deal Brexit. The truth is, of course, that Labour, as a party, is massively anti-Brexit. When it comes to Labour members, 90% want to stop Brexit, and 75% of its voters feel the same way. But, Labour's leadership is pro-Brexit, and, so far, has done everything it can to facilitate it. That is why so many Labour Party members, joined Labour voters in rejecting the party in these elections, and lent their vote instead to the Liberals, Greens, SNP, or Plaid. 

It was always going to be the case that the Brextremists then tried to claim that the Labour vote was a vote for Brexit, even though its clear that, in fact, as with the Tories it mostly represents Labour voters that back Remain, but who could not, out of tribal loyalty, bring themselves, even on this one occasion, to vote for some other more openly anti-Brexit party. Even if we take half of the Tory vote, and give it to the Brextremists, we have to give the other half to the anti-Brexit vote. But, in line with the voting surveys, we would have to say that at least 75% of the Labour vote was from Remainers. That would mean that the total Leave vote comes to just over 40%, whereas the total anti-Brexit vote comes to around 60%. 

That is in line with what polls have been showing of a clear shift to reversing Brexit. The dynamic is entirely in the direction of stopping Brexit, and that can only continue in the weeks ahead, especially given that so much of the Brexit vote is based on very old people, who are dying off by the day. Had Labour been actively arguing to stop Brexit for the last three years, the majority against Brexit, today, would be even higher. It would have enabled the Labour Party to advance a progressive social-democratic agenda for Europe, and Labour itself would have a commanding lead in the polls ahead of any forthcoming General Election. The results announced last night, show that Corbyn must either dramatically and convincingly shift his position to oppose Brexit, or he will have to be shifted himself, and make way for a Leader capable of leading that fight. 

Labour's strategy, based upon a reactionary nationalist agenda, has been disastrous. In 2015, the Liberals were all but destroyed, following their coalition with the Tories. In 2017, that process was continued. At a time when Corbyn's Labour should have been stamping down the ground solidly over the Liberals graves, it has instead bent down and given them a hand to be resurrected, and not just resurrected, but given new life to even overtake Labour itself. It has had the same effect in respect of the Greens, of the SNP, and of Plaid in Wales. And, without holding all of the ground that it has thereby given up, Labour has no chance of winning a General Election. For Labour to come third in Wales is a disaster, only surpassed by its performance in Scotland. 

But, for the Left inside Labour, the strategy has been even worse. For the last three years, Corbyn has assuaged the forces of the right, the Blair-rights and soft lefts, on a range of issues, whenever he has come under pressure. He has essentially stood back, whilst left-wing members have been witch-hunted, he has abandoned positions of principle whenever challenged by the Tory media. You might have thought, therefore, that, as the right and Blair-rights seek out their next chance to overthrow him, he would be keen to retain the support of the vast majority of rank and file members that got him elected. Instead, he has poked his finger in their eye, with his reactionary policy on Brexit, and his support for an end to free movement. In so doing, he has massively strengthened the position of the right-wing opposition to him in the PLP, and elsewhere. 

The good thing is that the Chukas disgraced themselves. Their one reason for existence was to oppose Brexit, but they are too incompetent even for that. Set aside all of the failures on practical organising, which, of course, in the past, they could leave to all of the minions, whose only function they see as being to get them elected to cushy positions, and what the Chuka's managed to do was to split the anti-brexit vote. Their 3.4% got them no MEP's, so it was votes wasted. Had those votes gone to Liberal or Green, or SNP or Plaid candidates, it would have increased the number of anti-Brexit MEP's elected. In fact, the same can be said for all of the anti-Brexit parties, whose failure to put up a joint slate, or make proper tactical arrangements ahead of the vote, led to fewer anti-Brexit MEP's being elected than would otherwise have been the case, given the actual anti-Brexit vote share. 

Labour is now talking more about coming round to supporting another referendum. It is too little too late. The reality is that the only option left now is to commit to revoking Article 50. The Tories in the next few weeks will replace May with a hard line Brexiteer. The best option, as I wrote yesterday, would be for them to elect Steve Baker, but its more likely to be Bojo or Raab. The reason Baker would be better, is that he is the hardest Brexiteer they have. When he has to capitulate, rather than pushing through a No Deal Brexit, the gig will be up. The Brextremists, including Baker himself, in his announcement that he might stand, have set up their betrayal narrative, that Bojo, Raab etc. buckled and supported May's MV3. 

The truth is that May was probably a Leaver all the time. She appointed hard line Brexiteers to all the top positions responsible for Brexit. She appointed Bojo Foreign Secretary, Fox as International Trade Secretary, and Davis as Brexit Secretary. Inside the Brexit Department, Davis was supported by uber Brextremists like Baker himself, as well as Raab, and Suella Braverman. Yet, over three years, they failed to bring in a hard Brexit deal. They claim, consistent with the betrayal narrative, that they were undermined by May and her officials, but, in that case, why did they not all resign, en bloc, as soon as that became apparent, and call May out? Why did Raab simply replace Davis, with Baker and Braverman moving up within the department? No, the truth was that reality imposed itself, and the hard Brexiteers put in charge of bringing in Brexit found it impossible to do. They used May and her officials as a useful scapegoat, when they found that all the lies they had told about Brexit being the easiest thing to achieve were rebounding on them. 

The best scenario would be for Baker to be elected Tory leader, and then start negotiating for his No Deal Brexit. The impossibility of that would then quickly be established. Probably, as soon as his election as Leader was announced, the Pound would collapse, the UK Stock Market would go into free fall, UK Gilts would crater, and interest rates be sent soaring. He would quickly announce an abandonment of Brexit, and a General Election. But, the election of Bojo or Raab, only strings out that process a little longer. It does not change the underlying reality. 

A Tory Brextremist will not be able to negotiate the great deal they promised, because it is not possible. A No Deal Brexit is also impossible for the reasons set out yesterday. The UK will not get a new Prime Minister until the late Summer, and the EU Commission, with whom it must negotiate, will not be in place until after the October 31st. deadline date for Brexit. Whoever is the Prime Minister will be faced with the reality that they cannot negotiate a Brexit deal, and a No Deal Brexit is economically and politically impossible. The only option now possible is to revoke Article 50. Labour should be honest about that, and begin to mobilise for that outcome. 

Theories of Surplus Value, Part III, Chapter 21 - Part 4

The pamphlet continues, 

““… if capital does not decrease in value as it increases in amount, the capitalists will exact from the labourers the produce of every hour’s labour beyond what it is possible for the labourer to subsist on: and however horrid and disgusting it may seem, the capitalist may eventually speculate on the food that requires the least labour to produce it, and eventually say to the labourers, ‘You sha’n’t eat bread, because barley meal is cheaper; you sha’n’t eat meat, because it is possible to subsist on beetroot and potatoes’. And to this point have we come!” (loc. cit., pp. 23-24). 

“… if the labourer can be brought to feed on potatoes instead of bread, it is indisputably true that more can be exacted from his labour; that is to say, if when he fed on bread he was obliged to retain for the maintenance of himself and family the labour of Monday and Tuesday, he will, on potatoes, require only the half of Monday; and the remaining half of Monday and the whole of Tuesday are available either for the service of the state or the capitalist” (loc. cit., p. 26).” (p 239) 

The lack of a clear understanding of wages is manifest in this quote, however, which follows through into a belief that wages must be continually driven down to this bare subsistence level. It is the foundation of the Lassallean Iron Law of Wages, which itself has echoes in the writing of Daniel De Leon. Where the author of the pamphlet does advance, however, is in the recognition that all surplus value, whether it takes the form of profit, interest, rent or taxes, is merely derived from this surplus labour undertaken by the worker. By making that distinction, and thereby illustrating that surplus value – and so profit, interest, rent and taxes – are not some arbitrary amounts, the author also is in advance of today's conservative social-democrats, and their ideologists, who, over the last thirty years, have proceeded on the basis that capital produces interest, in the same way that a pear tree produces pears. They have, thereby, come to believe that as capital, in the form of assets (bonds, shares, land/property) rises in price, the yield (interest, rent) produced by this capital simply increases in proportion with it. And, as this interest accrues each year, so it results in a further accumulation of capital and rise in those asset prices, in a magical process of accumulation via compound interest. The consequence is actually the serial asset price bubbles that central banks, for the last ten years, have been frantically trying to keep inflated. 

The underlying delusion is the same as that put forward by Dr. Price, and swallowed by Pitt, analysed by Marx in Capital III. The author of the pamphlet, by recognising the nature and source of surplus value, is able to expose that nonsense by writing, 

““… if it were possible to continue to increase capital and keep up the value of capital, which is proved by the interest of money continuing the same, the interest to be paid for capital would soon exceed the whole produce of labour… capital tends in more than arithmetical progression to increase capital. It is admitted that the interest paid to the capitalists, whether in the nature of rents, interests of money, or profits of trade, is paid out of the labour of others. If then capital go on accumulating […] the labour to be given for the use of capital must go on increasing, interest paid for capital continuing the same, till all the labour of all the labourers of the society is engrossed by the capitalist. […] that it is […] impossible to happen; for whatever may be due to the capitalist, he can only receive the surplus labour of the labourer; for the labourer must live…” (loc. cit., p. 23).” (p 240-1) 

Back To Part 3

Forward To Part 5

Bojo and Brexit

If Boris Johnson is in the last two candidates selected by Tory MP's, for the run-off as Tory Leader, he will win an overwhelming majority from Tory members, who given their average age is over 70, can hardly be described as “activists”. Those “activists” back a No Deal Brexit by a margin of around 80% to 20%, pretty much identical to the almost equally aged Tory voter base. If Tory MP's do not select Bojo, or some other hard line Brextremist like Dominic Raab, as one of the last two, whose names are put to party members, they will face a backlash from the Tory Associations, and a further flood of members out of that party towards Farage, and his Brexit company. 

All of the pundits have been consoling themselves with the idea that the favourites in Tory election contests rarely become Leader. But, it is not an inviolable law. Johnson is not liked by many Tory MP's. Some see him as not a Tory at all, just like Republicans did not see Trump as a Republican. It didn't stop Trump becoming the Republican candidate for President, nor then Trump increasingly turning the Republican Party into a Trumpist Party. In order to get into the last two, Bojo will have to get around 120 votes. With the ERG having around eighty votes, and some other Tories outside the ERG, saying they will back him, it seems unlikely that he will not muster that number. He may face competition for the ERG votes in the early rounds. Dominic Raab, seems likely to pick up a lot of hard Brexiteer votes, but probably not enough to beat Bojo for support from that wing of the party. The die-hard Brextremists are already setting up their betrayal narrative, by backing Steve Baker, on the basis that, unlike Bojo, Raab, or David Davies, he did not buckle and vote for May's Meaningful Vote 3. 

Baker probably has no chance of getting into the last two, which, for reasons I will come to, is probably a pity. The run-off is likely to be between a centre-ground Tory, still trying to get a version of May's Withdrawal Agreement past parliament, and a No Deal Brexiteer promising to just crash out in October. All of them will be pulled to the right, to assuage the party rank and file, especially as the Tories are likely to have been crushed by Farage's Brexit company in the European Parliament elections. Whether the Brextremist candidate is Bojo or Raab, they will get the vote of the party members, and become the next PM. 

There are then two main options. Bojo had always argued, prior to the referendum, that a vote to Leave, or even just a large minority vote in that direction, would give the basis for the Prime Minister to go back to negotiate for more concessions from Europe, along the lines of the concessions previously given to Thatcher. That will undoubtedly be the first ploy. They have established the narrative that its only because May took No Deal off the table that the EU did not offer further concessions, including scrapping the Irish Backstop. It is nonsense. There are two reasons the EU did not make further concessions. Firstly, they know that no sensible PM is going to push through a No Deal Brexit, because whilst it would be an inconvenience to the EU – though less so now that it has had the last year or so to prepare for it – it would be catastrophic for Britain, leading to a level of chaos and breakdown that would not be tolerated, and would quickly lead to Britain having to make an emergency appeal for re-admittance to the EU, on whatever terms it could get. It is now, as it has always been an empty threat. Secondly, the EU cannot scrap the Irish Backstop, because to do so would mean allowing the Irish border to be an open breach of the EU Single Market and Customs Union, the former being the most significant. It would be undermining the whole basis of the EU itself, which it is not going to do. 

A British Prime Minister has then a number of further options, if they want to reach such a deal. They could agree with the EU that Northern Ireland be treated differently, and essentially remain inside the Single Market and Customs Union, which is what May initially proposed. But, the DUP will not stomach that, and so to pursue that course, the Prime Minister would have to call a General Election, and win a large enough majority that they could push through such a course of action without the support of the DUP, or hard line Tory Unionists. Alternatively, they could decide that Northern Ireland is an encumbrance, and open the door to a Border Poll leading to a United Ireland. That would face the same opposition from the DUP and Unionist Tories, but it could also not guarantee such a border poll would vote for a United Ireland. Finally, they could push ahead with a No Deal Brexit, and dare the EU to respond. The problem then is that that implies the UK breaking an international treaty obligation, in the form of the Good Friday Agreement. It would sour relations between the UK and the EU, at a time when the UK would be desperate to try to negotiate some post-Brexit trading and other arrangements with its much larger neighbour. Moreover, having reneged on an international treaty, it would not put Britain in a good position to be negotiating treaties with other countries. And, the reality is that, whatever either may currently say, if such a situation arose, the EU would have to erect a hard border in Ireland, to protect the Single Market, and Britain would erect a hard border too, because it would want to prevent large-scale migration across the border, as a back door into Britain, as well as preventing large-scale smuggling into Britain. 

The truth is that no British Prime Minister, be it May, Bojo, Raab or Baker, could actually implement a crash-out No Deal Brexit, because of the catastrophe it would cause. A bunch of very elderly Brexit voters, who still imagine that Britain rules the waves, can turn up as many times on Sky News and other vox pops, to invoke the Dunkirk Spirit to proclaim that they would “get through it”, as Brexit crashed the economy, but for those already retired, about to retire, or who have, in any case, been in long-term unemployment, its easy to be blasé about the loss of jobs that would result. But, they fail to think about who, under those conditions, would be paying their pensions and benefits! They fail to remember that Dunkirk was a massive defeat, and that by 1940, Britain, as a whole, was defeated, and was only rescued by the valiant efforts of the USSR, and its Red Army, and by the industrial might of the US. Those who see May's deal as tantamount to a surrender, like that of a nation defeated in war, as one Brextremist from Middlesbrough put it on Sky News, should get used to it, because that is the position that Britain is now in. 

The other main option for such a Prime Minister, therefore, is to go to the EU, and propose a “Managed No Deal” solution. That is what some of the ERG have also argued. A number of temporary agreements have already been reached with the EU, to prevent some of the chaos that would ensue from a crash out Brexit. As a result, they depend on a measure of good will remaining from the EU, which could otherwise not be forthcoming if the UK tried to push a hard line. It would mean that the Prime Minister would have to go to the EU, and ask for another extension of Article 50, beyond October, so that these current temporary arrangements could be extended, and established as a series of bilateral arrangements. The EU might agree to that, because it too does not want the disruption that a crash out would cause if it can be avoided. 

At the start of the year, I argued that May would be mad not to call a snap election in February, on this kind of agenda. With Labour haemorrhaging votes, due to trying to pursue its insane pro-Brexit stance, it would have meant that the the Tories could have won a clear majority. I would expect a new Tory Prime Minister, now to pursue that course, before Labour is itself forced, by its members, to adopt a clear anti-Brexit stance that is the only way it can win a General Election. 

But, this does not get the Tories out of the hole they are in. All the cards are in the hands of the EU. Unless the EU does agree to a further extension of Article 50, Britain will crash out at the end of October. For all the reasons previously set out, no British Prime Minister is going to allow that to happen, whatever they might say at the moment. That is why it would be preferable for the most ardent Brextremist, like Steve Baker, to be Prime Minister, because they too would have to back down, under such conditions. As it is, now, if Bojo or Raab become Prime Minister, the Tory Brextremists, channelling Farage have their betrayal narrative in place, already, that these are the same people who buckled to support May's Meaningful Vote 3. 

The reality, is, as was the case prior to it becoming apparent that May and parliament was not going to allow Britain to crash out at the end of March, if it even began to look like a Prime Minister was contemplating such a course of action, the Pound would crater, the UK Stock market would go into freefall, UK Gilts would crash in price, sending interest rates soaring, and the government would be forced to change course. And, the fact is that the UK economy is already in a parlous state. Productivity is appallingly low, encouraged by a low wage environment that gives no incentive for capital to introduce labour-saving technologies. The economy, in the last quarter, grew at a miserable 0.5%, and even that was largely driven by hoarding by businesses and consumers ahead of a potential crash-out in March. Retailers are dropping like flies, whilst foreign car companies are pulling out of Britain ahead of any potential Brexit, whilst British Steel collapses, causing around 25,000 job losses. According to liquidation specialists Begbees-Traynor, around half a million businesses are suffering severe stress, and could go bust, whilst another 160,000 are zombie companies, barely able even to pay the interest on the loans they have taken out. On top of that, the Pound is already sliding again, and inflation is rising. 

The fact is that, when Bojo, Raab or whoever else goes back to negotiate with the EU, they will find themselves faced with the same options. Either scrap Brexit, or agree to membership of the Single Market and Customs Union, but without a vote. Those are the same options that Britain faced as the only means of escaping the Irish Backstop, and they remain the same today. And, so even if the EU gave the UK some leeway with an extension of Article 50, to negotiate some additions to achieve a Managed No Deal those options would still apply. After a managed No Deal, there is still the question of Northern Ireland, and of Britain's trading relationship to the EU. 

The Brextremists frequently tout, in this regard, the so called Canada style Free Trade Agreement option that the EU had offered, but they fail to mention that it does not deal with the question of the Irish border, and would require that Northern Ireland remain inside the single market and customs union, to resolve that issue. But, if then Northern Ireland remained inside the Single Market and Customs Union, Scotland would demand the same right, and so too, possibly would Wales, as well as Gibraltar, which voted by over 90% to remain in the EU. It would mean Britain being effectively dismembered, with England being left as an increasingly shrivelled husk within it. 

The likelihood is that, in these conditions, a Bojo or Raab, would, like May before them, have to come back with something like her Withdrawal Agreement, or probably worse. But, the truth is that as Britain has wasted several months since it was given the last extension, and will waste several more over the Summer, as the Tories engage in internecine warfare, the EU will simply sit back, and offer no such extension. Its being touted that the election of a Bojo will make a No Deal Brexit more likely. On the contrary, it makes it almost inevitable that parliament will have to Revoke Article 50 to prevent such an event. Labour should get ahead of the field, and begin to argue for revocation now.