Monday, 30 September 2019

The Rule of Unelected Ruling Class Judges - Part 4 - Reaction v Conservative Social-Democracy (4)

Reaction v Conservative Social-Democracy (4) 


Every moment in time comprises a past, present and future. That is fundamental to understanding any process of change, because every such process has a potential not only of moving forwards but of moving backwards. Capitalism, in its infancy, not only bore within itself forces driving it forward, but it also had to contend with forces trying to hold it back, and to revert back to feudalism. The present condition of capitalism, as social-democracy, not only has progressive forces acting upon it driving it forwards towards a more progressive social-democracy, and socialism, but it also has conservative forces, trying to hold back further progress in that direction, as well as reactionary forces trying to drive it backwards, to overthrow the current social-democratic status quo, and to revert capitalism to a more primitive form, based upon unrestricted free market competition between millions of small private capitals, on a laissez-faire removal of the state from any involvement in the market, or other aspects of life, other than to ensure that these free market rules are allowed to play out, unfettered by the existence of monopolies, and, most importantly, monopolies of workers in the supply of their labour-power, via trades unions. It is a return to small private capital, the small state, and thereby also to the nation state. It is the programme of the Austrian School Libertarians like Rees-Mogg. 

Viewed in the long-term, backward movements are not sustainable, because the laws of nature drives the arrow of time, and history forwards. The same is true in relation to capitalism. The natural laws identified by Marx that drive forwards social development, in the same way that natural laws drive forward the evolution of species, mean that this natural process continues behind Men's backs. If all of the existing monopolies were broken up, in Britain, then British capital would find itself grotesquely uncompetitive with large-scale, socialised industrial capital overseas. Unless Britain wished to turn itself into some kind of autarkic, free market equivalent of North Korea, Libertarianism In One Country, the reality is that British capital must operate in a global economy, and global market. The consequent lack of competitiveness would mean that the British economy would sink inexorably, the Pound would drop relentlessly, and UK living standards would plunge. The very operation of the laws of capital that led to small private capitals becoming big private capitals, which then had to become even bigger socialised capitals would reassert itself, and we would end up back where we are now, having simply endured a long painful excursus. 

But, that is the condition we find ourselves in. We have reactionary forces behind Brexit, trying to turn the clock backwards; we have conservative social-democratic forces opposing Brexit, but trying to prevent any forward movement towards progressive social-democracy, based upon an extension of industrial democracy and greater planning and regulation; we have progressive social-democratic forces, pushing forward in that direction, along with socialist forces that seek to move even beyond that, beyond the bounds of socialised capital, as a transitional form of property, and towards the re-conversion of capital into merely means of production, utilised to meet human needs not to produce profit

But, these latter forces are weak. For more than a century, the forces of socialism have, in fact, been nothing more than forces of progressive social-democracy. Even this progressive social democracy was confused and contradictory. It was Lassallean and Fabian in nature, and so from the beginning statist, and thereby nationalist, the most obvious manifestation of which is its crowning demand for nationalisation. Demanding that the capitalist state simply undertakes the function that is the historic function of the working-class, via such nationalisation, is the corollary of the idea that the capitalist state, via its courts, should take on the historic function of the working-class in fighting its own class and political battles. A further extension of it is the bastardised interpretation of internationalism as meaning that this capitalist (imperialist) state should take on the historic function of the working-class in fighting for the liberation of our class on a global scale, in supposed wars of intervention (See: Trotsky against the interventionists)

Nationalised capital is also socialised capital, like that of the cooperative, or the joint stock company. But, all that this nationalised capital does is to replace the role of the money-lending capitalist (shareholders/bondholders) in lending money to the company, with the capitalist state, as money lender, though, in reality, this simply inserts an intermediary, because the capitalist state itself borrows this money-capital from the big money-capitalists, in the bond markets. Similarly, it replaces the “nominal directors” appointed by shareholders to look after their interests, with literally the same “nominal directors” now appointed by the capitalist state to look after its interests as money lender! So, we have people like Michael Edwardes moving seamlessly from a job as a CEO of a large corporation to being CEO of British Leyland, and we have Ian MacGregor moving from being CEO of a large corporation to being CEO of the NCB, and in both cases, there is no difference in their actions, and in both cases, the effect is devastating for the workers. 

As Kautsky put it, in the Erfurt Programme

“If the modern state nationalises certain industries, it does not do so for the purpose of restricting capitalist exploitation, but for the purpose of protecting the capitalist system and establishing it upon a firmer basis, or for the purpose of itself taking a hand in the exploitation of labour, increasing its own revenues, and thereby reducing the contributions for its own support which it would otherwise have to impose upon the capitalist class. As an exploiter of labour, the state is superior to any private capitalist. Besides the economic power of the capitalists, it can also bring to bear upon the exploited classes the political power which it already wields.

The state has never carried on the nationalising of industries further than the interests of the ruling classes demanded, nor will it ever go further than that. So long as the property-holding classes are the ruling ones, the nationalisation of industries and capitalist functions will never be carried so far as to injure the capitalists and landlords or to restrict their opportunities for exploiting the proletariat.” 

The fact that progressive social-democracy, along with the majority of those that call themselves socialists, Marxists, or revolutionary socialists, in fact, rises no higher than this Lassallean/Fabian level of understanding, and thereby places its faith in the capitalist state to bring about socialist transformation from above, is the measure of how far the labour movement is from the ideas set out by Marx and Engels 150 years ago, or even Kautsky a century ago. The so called Marxists and revolutionary socialists attempt to cover their statism and reformism with calls that, having nationalised companies, this capitalist state should then simply hand over control of this capital to the workers, an absurdity that Kautsky describes above, and that Pannakoek as well as Trotsky describes. 

As Marx says in The Critique of the Gotha Programme

“From the remnants of a sense of shame, "state aid" has been put -- under the democratic control of the "toiling people". 

In the first place, the majority of the "toiling people" in Germany consists of peasants, not proletarians. 

Second, "democratic" means in German "Volksherrschaftlich" [by the rule of the people]. But what does "control by the rule of the people of the toiling people" mean? And particularly in the case of a toiling people which, through these demands that it puts to the state, expresses its full consciousness that it neither rules nor is ripe for ruling! (Part III) 

“The German Workers' party — at least if it adopts the program — shows that its socialist ideas are not even skin-deep; in that, instead of treating existing society (and this holds good for any future one) as the basis of the existing state (or of the future state in the case of future society), it treats the state rather as an independent entity that possesses its own intellectual, ethical, and libertarian bases... 

But the whole program, for all its democratic clang, is tainted through and through by the Lassallean sect's servile belief in the state, or, what is no better, by a democratic belief in miracles; or rather it is a compromise between these two kinds of belief in miracles, both equally remote from socialism.” (Part IV) 

Of course, the capitalist state is not going to concede democratic control over nationalised industries, unless the working-class forces it upon it, and that is only possible in a revolutionary situation, in which case we would not be talking about the nationalisation of this or that capital, but workers demanding control of all capital, a measure that does not require nationalisation, but which only requires that a Workers Government change company law to prevent shareholders exercising control, and instead makes boards of directors fully elected by workers. 

This latter demand is not, of itself, a socialist demand, but merely a progressive social-democratic demand. It does not demand that capital cease being capital, only that this capital, as socialised capital, the capital of the associated producers, be controlled by those associated producers, and not by shareholders. It is merely the application of consistent democracy, and bourgeois property law, within the context of progressive social-democracy. Of course, to achieve it, a political revolution is itself required, because it will require a Workers Government to legislate accordingly, legislation that will be fought tooth and claw by the owners of fictitious capital, who will not give up their control willingly. Their first line of defence will indeed, be their courts and their judges, who will attempt to strike down any such legislation, as ultra vires, in the same way that the Supreme Court has just struck down the action of Johnson's government in proroguing parliament. It will be a first test of whether, those courts truly do believe that parliament is sovereign after all. 

It will require that such a government be prepared to take on the power of the ruling class judges, a first step to which means that we require a continuation of the bourgeois revolution itself, by having all judges elected, so that we can begin to have judges in place that come from, and represent the interests of workers and not the ruling class. But, to the extent to which the ruling class find they cannot frustrate the will of the working-class, by utilising their courts, they will use all of the other powers of their state against us, which is why such a Workers Government could only function if it was supplemented by a mass extra-parliamentary movement of the working-class, which was already, via its own self-organisation, self-activity and self-government, moving to take over and exert direct democratic control over the means of production, and creating its own forms of direct democracy, and organs of a workers state, standing in direct opposition to the capitalist state. As Marx also says, in The Critique of the Gotha Programme, in the Lassallean view, 

“Instead of arising from the revolutionary process of transformation of society, the "socialist organization of the total labour" "arises" from the "state aid" that the state gives to the producers' co-operative societies and which the state, not the workers, "calls into being".” 

Whereas, 

“That the workers desire to establish the conditions for co-operative production on a social scale, and first of all on a national scale, in their own country, only means that they are working to revolutionize the present conditions of production, and it has nothing in common with the foundation of co-operative societies with state aid. But as far as the present co-operative societies are concerned, they are of value only insofar as they are the independent creations of the workers and not protégés either of the governments or of the bourgeois.” 

For all these reasons, the forces of progressive social-democracy, and of socialism are weak and confused. It enables the forces of conservative social-democracy to take the lead in opposing the forces of reaction, a fact that is seen by the fact that it is these conservative forces that were the ones behind the People's Vote campaign. But, these forces themselves will fail to defeat the forces of reaction within constitutional limits. Boris Johnson is uniting the forces of reaction behind him, whilst the forces of social-democracy are divided against each other, representing conflicting class interests. Unless the working-class steps up to the plate to undertake its historic role, we are likely to see this undeclared civil war unfold as a conflict between two Bonapartisms, a reactionary Bonapartism and a conservative Bonapartism, much as occurred in Egypt. The dominant section of the ruling class will not allow its interests to be undermined by the forces of reaction.


Theories of Surplus Value, Part III, Chapter 23 - Part 14

Marx cites Cherbuliez' comment, 

““Productive capital […] is composed of a consumable part […] and a non-consumable part […] The more wealth and population increase, the more the consumable part tends to increase, because the extractive industries demand an ever greater supply of labour. On the other hand, this same progress […] causes the amount of capital invested to increase at a much faster rate than the amount of capital consumed. Thus although the total mass of capital consumed tends to increase […] the effect is neutralised, because the mass of products grows in more rapid progression and the total amount of profit must be considered as growing at a rate at least as high as that at which the total amount of capital invested grows” (loc. cit., p. 71). 

“The amount of profit grows, not the rate, which is the ratio of this amount to the capital invested, r=P–c/C. It is clear that P–c or the profit, since P–c=π can grow although r declines, if C grows more rapidly than P–c” (p. 71, note).” (p 375) 

He comes close to identifying the cause of the tendency for the rate of profit to fall, here, but the lack of clarity in his formulation simply leads him into confusion and contradiction. His distinction of consumed and unconsumed capital is essentially a distinction between fixed capital and materials. He recognises that, as fixed capital increases, productivity rises, and so the quantity of materials consumed rises. So, he sees that, alongside this rise in output, arises a rise in total value and rise in profit. His definition of profit, π, is P (the value of output) – c (the value of consumed capital). So, as P rises, with the rise in output, c also rises, because more material is consumed. However, he sees P rising more than c, so that π rises. 

However, he defines the rate of profit as the ratio of π to the total employed capital, i.e. including the unconsumed fixed capital. Because he sees this total employed capital rising at a faster rate than output, the result is then a fall in the rate of profit. But, as Marx points out, his argument is based on assumptions that he does not justify, and other statements that are just outright contradictions. 

“First the amount of capital consumed grows but the amount of products grows even more rapidly (i.e., the excess of the value of the products over their cost-price in this case), for it grows in proportion to the capital invested and this grows more rapidly than the capital consumed. Why the fixed capital grows more rapidly than the mass of raw materials, for example, is not explained anywhere. But never mind, the amount of profit grows in proportion to the capital invested, to the total capital, but the rate of profit is nevertheless supposed to fall, because the total capital grows more rapidly than the mass of products or rather than the amount of profit.” (p 375) 

In fact,as Marx describes, in Capital III, Chapter 6, although the mass of fixed capital rises absolutely, it declines relative to output (both physically and in value terms) because it results in rising social productivity, so that, at least in economies based upon the production of physical commodities, it is the quantity of materials that increases proportionally, whilst labour and fixed capital declines. Moreover, Marx argues, because fixed capital is the product of manufacturing processes, where the rise in social productivity is more pronounced, the value of the commodities that comprise this fixed capital are more likely to fall relative to the value of raw materials, whose value is also dependent on organic processes, land fertility and so on. 

Sunday, 29 September 2019

Theories of Surplus Value, Part III, Chapter 23 - Part 13

Cherbuliez could not provide an adequate definition of profit, because he has provided no analysis of surplus value

“Now the rate of profit ought to be explained. But once again nothing emerges except the vulgar definition.” (p 374) 

So, just as Cherbuliez defines profit as the excess of value over the cost of production, so he defines the rate of profit as this profit as a proportion of the advanced capital

“The distorted conception and bungling application of the approximately correct distinction between the elements of capital, and the vague idea that profit and rate of profit are directly connected with the ratio of these elements to one another, only lead to a repetition of the generally known phrases in a rather doctrinaire fashion, in fact merely to a statement that profit and rate of profit exist without, however, anything being said about their nature.” (p 374) 

Marx sets out Cherbuliez' algebraic formula for these relations. 

““Let P be the aggregate product of a given period of time, C the capital invested, π the profit, r the ratio of profit to capital (rate), c the capital used up, then P–c=π, r=π/C therefore Cr=π. Therefore P–c=Cr; therefore r=P–c/C” (loc. cit., p. 70, Note 1).” (p 374) 

This only sets out algebraically what has been stated verbally that profit is the excess of value over cost of production, and rate of profit is profit as a proportion of advanced capital. In fact, profit, under capitalism, is not the excess of value over cost of production, because commodities do not sell at their values, but at their price of production. The price of production is the cost of production plus the average profit, calculated on the advanced capital. 

When Cherbuliez talks about the difference between consumed and unconsumed capital, he is really talking about the fixed capital, as opposed to the circulating capital. Surplus value is created in production, but is realised, as profit, in circulation. Whatever happens in circulation cannot change the reality of what happened in the production that precedes it. The average profit that attaches to the output of different capitals, according to the size of the advanced capital, is a consequence of what happens in the sphere of circulation. In other words, it is competition between capitals, competition that exists in the sphere of circulation, to obtain the highest annual rate of profit, which results in capital migrating towards the most profitable spheres, and thereby leads to the development of the average rate of profit. But, that does not change the fact that the total mass of surplus value available to be distributed in this way was produced in the production process. 

“Surplus-value is antecedent to circulation and no matter how much the differences arising out of circulation affect the rate of profit, they have nothing to do with the origin of profit.” (p 375) 

Saturday, 28 September 2019

Theories of Surplus Value, Part III, Chapter 23 - Part 12

Cherbuliez frames his argument in terms of use-values, of physical outputs, relative to inputs. But, as set out earlier, an increase in physical output does not imply an increase in output value. An increase in physical outputs, relative to physical inputs, signifies an increase in surplus product, but not necessarily an increase in surplus value. Indeed, it can indicate a fall in surplus value, both relatively and absolutely. 

Cherbuliez is misled by correlation into believing he has identified causation. In other words, he sees the correlation between capitals with large amounts of advanced fixed capital, and their correspondingly larger outputs. But, he also sees the prices of the commodities that comprise this output, and so the total price of production, of that output. Because he makes no distinction between exchange-value and price of production, he equates this higher price of production with higher value. But, the higher price of production of this output, the reason it rises proportionally to the advanced capital, is precisely because of the average profit that is attached to the advanced capital, and thereby forms part of the price of production. 

The fixed capital increases the volume of output, because it increases productivity. But, this advanced fixed capital does not add anything to the value of the output. It is only the used up portion of the fixed capital that adds any value to the output, as a result of wear and tear. However, in raising productivity, as Marx describes in Capital III, Chapter 6, even this value of wear and tear, as a proportion of output value, is reduced, because the machines value is spread over a much larger mass of output. 

“But, by itself, this unconsumed part of constant capital does not bring about a growth in the amount of products. It helps to produce a greater output in a given labour-time. Therefore, if only the same amount of labour-time were expended as is contained in the means of subsistence, the same amount of products would be produced.” (p 373) 

In other words, if the higher productivity reduces the time required to produce the means of subsistence, and the amount of labour-time expended was reduced accordingly, the same volume of products would be produced, but, in less time. The increase in the surplus product can only arise because a rise in productivity means that more raw material is processed, as a result of the use of machinery etc. The exception to that is in agriculture/primary production, where an increase in output may be the result of greater fertility of the land or mine, or as a result of the weather etc. 

Cherbuliez might as well say, 

“The growth in the total amount of products” (at least in manufacturing industry) “is proportionate to the growth of the part of capital consisting of raw materials which is used up.” (p 373) 

That is so for the reason described earlier that, setting aside any technological changes that might reduce waste etc., the physical output of, say, yarn, depends upon the physical input of cotton, flax, wool etc. In fact, as I've set out previously, these technological changes are significant. Not only can they reduce waste, but they can raise efficiency in energy use, they can introduce new, more durable materials, as inputs, they introduce new end products, which themselves require fewer physical inputs. For example, a motor tractor required less inputs than a steam tractor, a mobile phone less material inputs than an old land-line telephone, a personal computer less than a 1970's mainframe computer and so on. 

“For the increase of products is physically identical with the growth of this part of capital. In agriculture on the other hand (and likewise in the extractive industries), where only a small proportion of the capital invested is not [annually] used up (i.e., constant capital) and a relatively large proportion of capital is used up (as wages for example), the amount of products, provided the land is fairly fertile, can be much larger than in the advanced countries where the ratio of capital invested to capital used up is infinitely greater.” (p 373-4) 

In addition, as I've set out elsewhere, this relation of the quantity of material inputs to the quantity of output is decisive in economies where the majority of production is of physical commodities. That was true at the time Marx was writing, but it has not bee true, now, for more than thirty years. In developed economies, 80% of value added comes from service industries, and the same is increasingly true of developing economies like China. By the nature of such service production, rises in productivity result in greater outputs without any significant change in material inputs (with materials taking the form of auxiliary rather than raw materials), indeed with relative if not absolute reductions in such inputs. 

“The second proposition thus amounts to an attempt to bring in surreptitiously surplus-value (the indispensable basis of profit).” (p 374) 

Northern Soul Classics - Personally - Bobby Paris

Friday, 27 September 2019

Friday Night Disco - Rock Steady - Aretha Franklin

Namby-Pamby Bleeding Heart Liberals

What most of the bleating about violent language in politics comes down to is that politics has been reduced to only what goes on in parliament, and what goes on in parliament has been reduced to merely a cushy, white collar career opportunity for privileged middle-class people, who share a similar set of middle-class opinions, and culture.  They have no real political principles around which they can form any passionate attachment or commitment - just look at the way the Chukas have easily moved from one party to another.  Like Groucho Marx they say, "These are my principles, and if you don't like them, I have others."   The furore over language is simply an expression of the fact that they have no political arguments to utilise, whether it is against Boris Johnson or Jeremy Corbyn, which is why this tactic of weaponising the English language has been utilised by the namby-pamby, bleeding heart liberals against both.  It is an alternative to robust political argument.  And, ironically, given its use by these liberals, it has the effect of strengthening those that would use it for illiberal purposes.  Its logical consequence is to enhance the argument of the censors, of those who would have us believe that violence is the consequence of things like films or computer games, and that we must be shielded from pornographic literature, such as Lady Chatterley's Lover, for fear that our sensibilities and our passions must be uncontrollably inflamed.  It is hogwash, and a return to all of those illiberal ideas we thought we had left behind in the 1960's.

The bleeding heart liberals are happy with politics conducted within the narrow confines of the Overton window that has existed for the last thirty years.  They are unhappy that reality has imposed itself upon it from the outside, as class contradictions have mounted.  The bleeding heart liberals, confronted with the raw politics of Johnson and Cummings, and the social forces that stand behind them, want to respond with appeals for compromise, for polite discussion, and for all to come together and sing kumbaya.  It is unreal.  Give me the honest politics of a John Prescott, who, plastered with an egg, responds with a carefully aimed punch to the offenders jaw, any day of the week.

In parliament itself, the opposing benches are separated by a distance equal to two swords lengths, which reflects the history of parliamentary debate and its antagonistic nature.  Here is the difference between the working-class, Marxists, and the bleeding heart liberal representatives of the middle-class.  We recognise that politics is class politics, it is the outward reflection of class struggle, which must and does manifest itself in class war.  The bleeding heart liberals would have us believe that there is no such thing as class struggle, because there is no such things as fundamentally contradictory class interests.  Indeed, one of the problems that this strand of liberalism, and social-democracy has in confronting the reactionary nationalists, is that their own ideology is implicitly nationalistic itself.  If there is no fundamental contradiction dividing the classes, then, as they believe, we can all get along swimmingly, as part of one nation.  That is why these liberals can frequently also be heard talking about subordinating the party interest to the national interest and other such meaningless guff.

Thousands of communards died in the orgy of
violence unleashed by our class enemies once
the Paris Commune had been crushed.
But, Marxists know scientifically from our analysis of society that what drives history itself are these fundamentally contradictory class interests.  The working-class knows it instinctively from the experience of its daily life.  We know that our class enemies will not simply negotiate away their position as ruling class, on the basis of some supposed shared common interest and a spirit of compromise.  They will use every trick in the book, every lever of power, and ultimately the most vicious use of violence against us to cling to their privileges.  No decent representative of the working-class should seek to deceive the workers by pretending that there is some shared long-term interest between workers and the ruling class that provides a basis for such compromise.  At best, we might have some shared common interest with one set of exploiters against another set of exploiters that we might be able to utilise, tactically, to our advantage, as now with our shared interest with the owners of fictitious capital in defeating the forces of reaction backing Brexit, or as when in the 19th century, workers joined with the industrial bourgeoisie against the old landed aristocracy and the financial oligarchy to secure the repeal of the Corn Laws.

In the Spanish Civil War, the workers
fought valiantly, but they were poorly
prepared and misled.  The Stalinists and
social-democrats asked them to join a
Popular Front with the bourgeoisie, a
bourgeoisie that had already gone over to
Franco, just as in 1848, they had gone over
to the Junkers. 
War is politics by other means, and likewise politics is war by other means.  We know that ultimately, the ruling class will engage in a violent civil war to prevent the working-class from taking power.  How violent that war is depends upon the degree to which the working-class is prepared for it.  We will not prepare the working-class for that by pretending that our differences with our class enemies can be all resolved by amicable debate.  We should expect that our class enemies will not only use violent language, but violence itself against us, and we should prepare the working-class to meet that violence head on with even greater, more organised and effective violence, not with pacifistic calls for every one to be nice to each other!

Boris Johnson and co. knows exactly what they are doing in using the language they use.  It is to ensure that all of those reactionary elements that back Brexit, and who currently have thrown their weight behind the Brexit Party come back to the Tories.  Current polls show that if he can get back even half of the Brexit Party vote the Tories will win 360 seats, giving them a comfortable majority, and the reason he will be able to do that is that Labour's disastrous Brexit stance will mean that the anti-Tory vote is split down the middle.  But, this language about the "Surrender Act", and "Traitors" cannot reasonably be used to explain the actions of violent thugs and fascists, who existed long before Boris Johnson's use of this language, and before Brexit itself.  Suggesting that it can is not just a cop-out, but actually plays into the hands of all those who would close down political debate and exercise a stifling control over society that most of us thought we had overcome in the 1960's.

It means that all those like today's Mary Whitehouses who blame TV for violence, for immoral behaviour, and so on, will be massively strengthened.  Our objection to such measures such as state bans has always been that we know that such actions always rebound badly on the working-class and socialists, against whom these measures are used more effectively.  Are socialists and trades unionists, for example, to be censured for calling strike breakers scabs, or Labour politicians who side with the Tories, class traitors, because such language must lead to some individuals being provoked, uncontrollably, by our words, into physically attacking them?

Such politics is the politics of the kindergarten.  It is not real class politics.  Our answer to the threat of violence from our class enemies is not the namby-pamby, bleeding heart, liberal calls for sweetness and light, for compromise and for all to come together to sing kumbaya, but is to build workers defence squads, to meet violence by superior violence.

The Russian Social Democratic Labour Party could not be held responsible for the terrorist acts of Narodniks and Anarchists, who serially attempted to assassinate the Tsar, because the Russian socialists attacked the Tsarist regime in the most strident terms.  And, as Lenin put it, in decrying the individualistic, terroristic actions of the Narodniks and Anarchists, herein lay the difference between them.  In response to the violence of the Tsarist state the Narodniks and Anarchists, Lenin said, went in for violence retail, "whilst we Bolsheviks go in for it wholesale." 

The job of Marxists, in the current conditions, of an undeclared civil war over Brexit, is not to mislead the working-class by lining them up for slaughter behind a bunch of bleeding heart liberals, bleating and pleading for everyone to be nice to each other, but is to prepare them to meet the violence of their class enemies head on, by mobilising the organised working-class for its own self-defence.

The Rule of Unelected Ruling Class Judges - Part 3 - Reaction v Conservative Social-Democracy (3)

Reaction v Conservative Social-Democracy (3)


The current situation is one in which an undeclared civil war is taking place, with Brexit being the manifestation, in the same way that religion was the manifestation of the English Civil War in the 17th century. This civil war is between reactionary forces based upon the plethora of small private capital that seeks to bring about a political counter-revolution that overthrows the social-democratic state that has existed for just over a century, and social-democratic forces, based upon the dominant socialised capital, upon which that social-democratic state rests. The social-democratic forces are divided, because social-democracy is a transitional form between capitalism and socialism, just as socialised capital is the transitional form of property. As such a transitional stage it represents a heightened degree of contradiction.  It is a similar situation that existed under Mercantilism, as a transitional form between feudalism resting upon landed property and capitalism resting upon industrial capital.  Under Mercantilism, sections of the landed aristocracy aligned with the rising merchant class, based in the towns, along with the growing class of independent capitalist farmers (yeomanry) like Cromwell, against the power of the King.  The clear manifestation of this alignment was their symbiotic relation in creating colonial empires across the globe based upon the extraction of rent, commercial profit and interest.

Social-democracy is itself divided between conservative social-democracy, which rests upon the owners of fictitious capital who draw their revenues from it, in the form of dividends and interest on the shares and bonds they own, which is dependent upon the profits of this socialised capital, and progressive social-democracy, which rests upon the working-class and middle class whose employment and wages depend upon the growth of this socialised capital. The middle class managers of this socialised capital are its personification, and as such, they represent its drive to maximise the profit of enterprise, both by driving up the rate of profit, and also by driving down the appropriation of profits as by payments of interest and dividends.  In terms of class struggle it is the struggle between these two form of property socialised, industrial capital and fictitious capital, which characterises this stage of capitalism. It is this which demonstrates the reactionary nature of the forces behind Brexit, because they want to turn the clock back from the current stage of development of capitalism. It is why the owners of fictitious capital, and the working-and middle class are objectively aligned by their interests in opposition to the forces backing Brexit – and a similar situation exists in relation to Trump in the US, and other reactionary nationalists, like Orban in Hungary etc. 

The forces of progressive social democracy are weak, and it is they which can mobile large-scale social movements, based upon the power of the organised working-class. That is why the resistance to Brexit has fallen to the forces of conservative social-democracy, which undertakes that struggle using its own methods, primarily utilising its control over the social-democratic state, and its institutions such as the civil service,.the courts etc. 

To understand, this its necessary to understand the objective basis of social-democracy as resting upon socialised capital, in the form of the cooperative and joint stock company/corporation. 

In the worker owned cooperative, the workers find that they are still wage labourers as before, and they are still confronted by capital as before, even though it is now socialised capital over which they exercise control. But, because it is capital, and still continues to operate as capital within the context of a capitalist system, it must continue to function as capital. The workers who now elect their own managers to take on the role of functioning capitalist, to organise production as efficiently and profitably as possible, find themselves constrained by the same objective economic laws that confront every other capitalist. They find that they cannot simply raise their wages above the market price for labour-power, because if they do so, they will reduce the profitability of the cooperative. If the profitability is reduced it will have less capital to reinvest. If it reinvests less capital, it will become less competitive as against other cooperatives and other capitals, so that eventually it will lose market share and go bust. (This should not be taken to apply mechanically, but only as a general law. Obviously, if workers in a cooperative produce more efficiently than the average firm, and Marx sets out that this is the case, and current data supports it, they can pay themselves higher wages whilst still producing the average profit. It simply means they cannot escape the general laws of capital). 

As Marx puts it, 

“The co-operative factories of the labourers themselves represent within the old form the first sprouts of the new, although they naturally reproduce, and must reproduce, everywhere in their actual organisation all the shortcomings of the prevailing system. But the antithesis between capital and labour is overcome within them, if at first only by way of making the associated labourers into their own capitalist, i.e., by enabling them to use the means of production for the employment of their own labour.” (Capital III, Chapter 27) 

But, in the joint stock companies, the associated producers never exercise this control. The capitalists, as ruling class, ensure that, even as they withdraw from their active role in production, they use their political power to pass legislation that determines company law, to give them control, as shareholders, over capital which they do not own, just as the landed aristocracy, after it withdrew from an active role in agricultural production, to live off rent, ensured they used their political power, to ensure their continued control. As Marx puts it, 

“It reproduces a new financial aristocracy, a new variety of parasites in the shape of promoters, speculators and simply nominal directors; a whole system of swindling and cheating by means of corporation promotion, stock issuance, and stock speculation. It is private production without the control of private property.” (ibid) 

In other words, the ruling class uses its political power to give shareholders a right to exercise control over capital it does not own. The shareholders live off interest, in the same way that the landlords live off rent, and both live off capital gains from speculation in these assets, which results in the inflation of share, bond and property bubbles, totally independent of what is happening in the real economy, and separated from real capital accumulation, which thereby introduces a whole new sphere in which financial crises can erupt, and thereby affect what happens in the real economy.

The shareholders, having removed themselves from any active role in production, assign the management of their interests, to maximise these revenues, from interest and dividends, to “nominal directors”, the Boards of Directors of companies, and a series of executives who contribute nothing in terms of added value, whilst receiving huge remuneration, paid out of company profits. Their role is to exercise control over the actual functioning capitalists, minimising the extent to which they can maximise profit of enterprise for reinvestment, and thereby maximising the amount paid in interest and dividends, and other forms of capital transfers to shareholders. It is what has resulted over the last thirty years in dividends going from 10% of profits to 70% of profits, with huge amounts of profits also going into share buybacks to pump up share prices, to inflate capital gains, and so on.

All of this represents the main class division that exists within modern capitalism in this transitional phase of social-democracy between capitalism and socialism, in which this socialised capital is dominant. That division is between two forms of property socialised industrial capital on the one hand, that is the real capital employed in production and distribution of goods and services, and fictitious capital on the other hand, that is all of those financial assets such as shares and bonds, as well as landed property, and the various derivatives created from these assets, such as mortgages, mutual funds, pension funds, mortgage backed securities and all of the 57 variety of Special Investment Vehicles (SPIV's). 



Theories of Surplus Value, Part III, Chapter 23 - Part 11

Variable capital regarded as means of subsistence is, therefore, just as “passive” an element as both the other parts of capital which Cherbuliez describes as “passive”. (p 371) 

In other words, Cherbuliez describes fixed and circulating constant capital as passive. They create no new value. And, that is true of the means of subsistence. It is not the means of subsistence that creates new value, or surplus value, but only the labour bought with them. 

“The same distortion of views prevents him from elaborating the rate of profit out of the relationship of this active element to the passive element, and from showing that it declines as society advances. Cherbuliez in fact reaches no other conclusion but that the means of subsistence decline as a consequence of the development of productivity while the working population grows, that is, as a result of the redundant population, wages are consequently pushed down below their value.” (371) 

Cherbuliez nowhere bases his analysis on the exchange of equal values, and so he arrives at an explanation of profit as essentially a deduction from wages, though he nowhere spells that out. As Marx says, it may be the case that, in practice, in some instances, wages may fall below the value of labour-power, and individual capitalists may obtain profits from a deduction from wages, just as, sometimes, rents are a deduction from normal profits, or wages, rather than from surplus profits, 

“but it can never serve as the foundation for the elaboration of the category of profit.” (p 371) 

Marx reformulates Cherbuliez' propositions, so as to analyse his argument. 

““The value of the total amount of products, less the value of the total amount of capital used up in its production, provides us with the total amount of profit gained during a definite period of time.” 

This is the primary (usual) form in which profit appears and it is likewise the form in which it appears in the consciousness of capitalists. In other words, [profit is] the excess of the value of the product gained during a definite period of time over the value of the capital expended. Or the excess of the value of the product over the cost-price of the product.” (p 371-2) 

The concept of “definite period of time”, here, is important for the reason, set out earlier, of distinguishing the rate of profit from the annual rate of profit. But, Cherbuliez does not deal with the circulation process of capital, so that the rate of turnover does not arise in his theory. So, his first proposition is merely the normal definition of profit, and hence rate of profit as profit margin. Yet, Cherbuliez does recognise that there is a difference between the capital advanced and the capital laid-out, or “used up”

“The second proposition: 

“The growth in the total amount of products is proportionate to the capital employed and not to the capital used up.” 

Paraphrased again, it would read thus: 

“the growth in the value of the total amount of products is proportionate to the capital advanced” (whether used up or not).” (p 372) 

As Marx points out, even when reformulated, this statement that the total value of products is proportionate to the capital advanced, is only correct if its first assumed that the average rate of profit exists, and that commodities sell at prices of production, rather than exchange values. If commodities sell at exchange values, then the total value of products is proportionate to the variable-capital not the total capital, because it is the size of the variable-capital that determines the mass of surplus value produced, and embodied in the value of the commodity. 

“The only purpose of this is the surreptitious introduction of the completely unproven and, in the way it is formulated, quite false proposition (for it already presupposes equalisation to the general rate of profit) that the amount of profit depends on the amount of capital employed. But an apparent causal nexus is to be introduced because “the growth in the total amount of products is proportionate to the capital employed and not to the capital used up”.” (p 372) 

In other words, Cherbuliez appears to recognise that the price of commodities comprise the cost of production plus the average profit, and that this average profit is calculated on the basis of the advanced rather than laid-out capital, i.e. it is the annual rate of profit, not the rate of profit/profit margin that is determinant. However, he nowhere sets out an explanation for the formation of an average rate of profit, so as to justify this conclusion. Marx reformulates Cherbuliez' statement as follows: 

““The growth in the value of the total amount of products is proportionate to the capital employed and not to the capital used up.”” (p 372) 

The term “employed” here means advanced. In other words, a machine with a value of £1,000 represents capital employed, but only the wear and tear of the machine, say £100, is capital that is used up. The £100 enters the value of the output, as part of its cost of production, but the £1,000 does not. However, in terms of calculating the average profit to be included in the price of production of the output, it is the £1,000 that is its basis, not the £100. Marx illustrates the importance of this later, in relation to the effect on the rate of profit itself, as fixed capital becomes devalued, as a result of such wear and tear, in addition to the separate issue of depreciation

But, Cherbuliez is confused about how this distinction between the advanced capital, and the used up capital results in a higher value of the output. 

“Here, evidently, surplus-value is to be evolved on the basis of the fact that the excess of the capital employed over that used up creates the excess value of the products. But the capital which is not used up (machinery, etc.) retains its value (for the fact that it is not used up means precisely that its value has not been used up); it retains the same value after the conclusion of the production process as it had before this process started. If any change in value has taken place, it can only have happened in that part of the capital which has been used up, and which therefore entered into the process of the formation of value.” (p 372) 

In other words, the greater value of the advanced capital cannot explain a greater value of output, because it is only the value of the used up capital that is transferred to the value of output. The greater value of advanced capital does not change the value of output, but only the price of production of output, and it does so only on the basis of affecting the amount of average profit to be added to the cost of production of each sphere of production. On the basis of exchange-value rather than price of production, its more likely that it is where the advanced capital is smaller, and the used up capital greater, that the value is higher. Where the advanced capital is higher that will tend to reflect a greater quantity of machinery, with higher productivity, a lower proportion of labour, and so a smaller proportion also of surplus value. Where the used up capital is higher, in proportion to the advanced capital, the opposite would be the case. 

“In point of fact it is also wrong to say that, for example, a capital of which a third is not used up and two-thirds are used up in production, would inevitably yield a higher profit than one in which two-thirds are not used up and one-third is used up, provided the rate of exploitation is the same (and disregarding the equalisation of the rate of profit). For obviously, the second capital contains more machinery, etc., and other elements of constant capital, while the first capital contains less of these elements and sets more living labour in motion, and therefore produces more surplus labour as well.” (p 372-3) 

Thursday, 26 September 2019

Death Threats and Humbug

Yesterday, in parliament, the Attorney General, sundered the ranks of Labour MP's, and Boris Johnson, followed behind to bayonet the walking wounded that were left. Johnson was attacked by Labour MP's on the basis of what amounted to him being “a very naughty boy”. Johnson replied defiantly, and as expected, by demanding then that they punish him by passing a motion of no confidence, or agreeing to a General Election. He was confident in making such a challenge, because he knows that the opposition are way too weak to be able to follow through with such a challenge, because, in any election, the opposition forces are divided, and fighting like rats in a sack, which will enable Johnson to win a handsome majority. The reality is that the forces of conservative social-democracy (neo-liberalism), ranged against Johnson's reactionary vandal hoards, are politically and morally bankrupt. They have no viable political arguments, or solutions, which is why the political centre they represent has collapsed. In place of political argument, they are reduced to petit-bourgeois moralism. When Johnson accuses them of “Humbug”, he is absolutely right. 

The conservative social-democrats have no effective political arguments to utilise. In reality they had none for the last thirty years, but were able to disguise it with the politics of tweedle-dee tweedle-dum, of politics reduced to the level of the celebrity contest, and vague, heavily spun inanities. But, now they are faced with real politics, and they have no response. The fact is, of course, that the first manifestation of that fact came, not in relation to the current Brexit debate, but in the complete shock to their system that arose with the election of Corbyn as Labour Leader. When Corbyn won that context they went into a state of shock, and, when they began to come out of it, they thought that they would be able to deal with the situation in the way they have done for the last thirty years. They thought that all they needed to do, was to huddle within the Westminster bubble, and put Corbyn under daily moral pressure, culminating in them passing a vote of no confidence in him, and that he would then crumble and walk away. He didn't, and that very fact alone destabilised them. 

But, what happened in the run-up to that vote of no confidence was itself interesting. The Blair-right wing of this conservative social democracy can envisage no world outside that they have viewed as eternal over the last thirty years, and in which elections cannot be won other than from the centre. They always believed that they had history on their side, and that as soon as it was seen that Corbyn was electoral poison for Labour, its members would turn on him, and they would have a way back. At this point a number of even female Labour MP's could be heard saying that if Labour did badly they would not stick the knife in Corbyn's back, but would do it from the front. Indeed, when the local elections came in 2016, they thought they had their chance, and it was the late Jo Cox, who on the first announcements of the results had commented that she had just been on TV to put the knife into Corbyn's chest. In fact, of course, the election results were not particularly bad, the leadership challenge failed miserably, and in 2017, Corbyn showed that the claim that elections can only be won from the centre is a fabrication. 

But, what is interesting, here, is that, at this point, the challenge to Corbyn was still sort of political. The political challenge failed completely, precisely because the conservative social-democratic forces had no real political answers or arguments, and their world view was collapsing around their ears. Everything they thought they knew to be true was turning out to be false, and that was clearly manifest when they failed miserably with their own chicken coup. Its then that the strategy changed. With no political arguments to utilise, they instead began to attack Corbyn on other grounds, and firstly, not to attack Corbyn himself, but those that had made him Leader. Everyone who uses social media knows that 90% of the traffic on it is the work of trolls who have no particular political convictions, but for whom it is merely a form of free entertainment. Hidden behind the cloak of anonymity they can spew out all kinds of aggressive nonsense, using multiple identitities, making one outlandish statement one minute using one persona, and a completely opposing outlandish statement the next using a different identity. Where these trolls have made threats that break the law, and they have been apprehended, in 90% of cases, they are found to be social inadequates whose bark way exceeds their capacity to bite. 

But, the conservative social democrats were more than happy to utilise the large number of outlandish and aggressive comments by such trolls to paint the picture that there were large numbers of actual Corbyn supporters that were the ones making these comments. We then had the breaking of Angela Eagle's constituency office window, linked to these threatening social media comments, as though, naturally, we could assume that it was some rabid Corbynite that was responsible, despite absolutely no evidence to support it. We had the allegations of John Mann about a dead bird being sent to his home, a story he thought was so good he used it twice. 

But, the real culmination of this tactic came with the attacks on Corbyn's supporters, and then on Corbyn himself, for supposed anti-Semitism. What all of these attacks amount to is the same strategy. First some sacred cow is identified, which might be opposition to violence, or anti-Semitism, etc., then the English language itself is weaponised, so that any statement that, in any way, can be stretched, so as to suggest that the person who makes it is really trying to slaughter that sacred cow, is then hurled against them, as an alternative to engaging in real political argument. That is why the conservative social democrats were so insistent on having their precise definition of anti-Semitism, with all of their examples included in Labour's disciplinary code, for example. 

As I wrote a couple of weeks ago, Kirsty Wark, on Newsnight, complained about Boris Johnson using the phrase “Die in a ditch”, to describe his determination not to ask for an extension of Article 50. Wark ridiculously tried to describe this common phrase, as somehow being inappropriately violent. Common or garden political phrases about “the knives being out”, which refers back to Shakespeare's Julius Caesar, have been condemned in similar terms, when Theresa May was under attack by her backbenchers. Last night on Newsnight, Emily Maitliss after spending some considerable time covering all of the outrage at the violent language and imagery in parliament, and the need to be careful about the use of language, in questioning Liberal Layla Moran, talked about the Liberals "pulling the trigger" on calling a vote of no confidence.  I was not at all surprised that Douglas Murray had also noted this rather glaring piece of hypocrisy, and called Maitliss out for it.  The truth is that there is nothing wrong with using a metaphor about "pulling the trigger", because every intelligent person knows that it does not in any way mean pulling ana ctual trigger, or firing some actual gun.  But, that is true about all of the other metaphors that are used in political discourse, but which the conservative social democrats seek to utilise in feigning outrage.

No one with an ounce of intelligence or honesty, believed, for example, that when Geofrey Cox, used the well worn analogy to describe a question from the opposition as being a "When did you stop beating your wife", trick question, that he was in any sense diminishing the problem of domestic violence!  The fact that outrage immediately spread across social media, is itself an indication that this confected outrage is merely a device used by people who have no real political arguments to use.

In the absence of real political arguments, the conservative social democrats have weaponised the English language as a means of trying to close down debate, and to attack their opponents, not for their ideas, but for their language, when, in fact, that language has been consistent with normal parlance for centuries. It is indeed, confected outrage for political effect, in a media age. It represents the political bankruptcy of a section of politicians that are reduced to petit-bourgeois moralism

Johnson is, therefore, absolutely correct to say that this confected outrage and attempts to weaponise the English language amounts to “Humbug”

MP's undoubtedly do face threat of violence, and some of those threats even are real, as the murder of Jo Cox demonstrated. But, MP's are not the only ones to face such threats. Every political activist faces such threats. If you are from an ethnic minority, if you are gay, disabled or in some other way stand out, you face the possibility of attack from bigots every day of the week, but without any of the advantages that an MP has. And, the reality is that, currently, we are in an undeclared civil war, and in civil wars people get killed. This is real politics, not the toy town, game playing that MP's engage in in parliament. 

The truth is that it is the weakness of the labour movement, of progressive social democracy and socialism that has led to the forces of conservative social democracy taking the lead in opposing the forces of reaction represented by Johnson, Farage et al. The forces of progressive social democracy and socialism know how to deal with such threats. It is by our collective action to defeat it. When Moseley's fascists attempted to march down Cable Street, the forces of progressive social democracy and Socialism simply turned out thousands of people to stand to defeat them, whilst the forces of conservative social-democracy, represented, at the time, by Clement Attlee, called on them not to do so, and to stand aside to leave it to the police. 

And, today, we see the same thing. When Johnson launched his coup, Corbyn and the forces of progressive social-democracy proved too weak, too confused to do what they should have done, to call for a General Strike to defeat it. It was left to the forces of conservative social democracy to respond, and they did so, not by mobilising the working-class, but by utilising their traditional tools, the institutions and organs of their capitalist state. They brought in the courts, and relied upon the unelected ruling class judges. 

But, of course, workers cannot rely on the bosses' courts, or the bosses' police force for our defence. Just ask the miners who were confronted by those forces at Orgreave, and its aftermath! In the 1970's, I remember going out leafletting in local elections, at a time when the NF were increasing their presence. One female comrade was assaulted by NF thugs, while we were simply handing out LP election material. The police were called, and in the police car on the way to the police station, the police openly admitted their sympathy with the NF. On another occasion, I recall an antifascist leafletter being assaulted by an NF thug outside his home. The NF thugs neighbour called the police having witnessed the assault, but when the police arrived they instead arrested the comrade from the SWP who had been assaulted! 

Our response to such conditions as we face now was established long ago. We cannot rely on the bosses' state for impartiality, or to act in our defence, and nor should we if we could. We fight for our liberation with our own hands not those of the bourgeoisie and its state. The whole basis of the socialism we seek to create is based upon our self-activity, self-organisation and self-government. We rely on our collective strength to defeat our class enemies. Of course, the forces of conservative social democracy can have no such outlook, because, in truth, they base themselves not on the working-class, but on our class enemies, on the owners of fictitious capital, and their interests. In our present conditions we march in the same direction, in opposing the forces of reaction, but, in doing so, we have no illusions in the fact that we aim at a different destination, and that history shows us that we cannot rely on them, because they will indeed knife us in the back, the front or anywhere else, if they feel that the interests of the class they serve are seriously threatened by us. 

Our answer to violence and death threats is collective action; our answer is to build workers defence squads to protect our meetings and so on. In order to protect ourselves from a more organised violent threat either by reactionary paramilitaries or the forces of the capitalist state, we propose the creation of a democratically controlled workers militia. What we do not do is bleat pathetically, and issue petit-bourgeois moral sermons about the need to compromise or to moderate our language and response to the threats of our class enemies. 

Of course, for the conservative social democrats any idea that the state is not neutral, or that we should rely on our own class organisation is anathema. Fair enough, let them protect themselves. Maybe, with their undying faith in the power of market forces, they would instead prefer to rely on the market for their protection, and use their money to buy in their body guards and security companies. 

The Rule of Unelected Ruling Class Judges - Part 2 - Reaction v Conservative Social-Democracy (2)

Reaction v Conservative Social-Democracy (2)


Paul Mason and others have described what is going on in traditional Arendtian terms as an alliance of the super rich with the mob. That is a similar analysis as provided by Trotsky in relation to the rise of fascism in Germany. That description is wrong, for what is currently going on. In Germany, what we had was a conservative Bonapartism, in the shape of Hitler, whose function was to act in the interest of the dominant section of the ruling class – the super rich, comprised of the owners of fictitious capital – against a rising and revolutionary proletariat that threatened to remove control, and their dominant position from them. Today, what we have is a very weak, disorganised and poorly led proletariat that poses no such threat, but where the threat to the dominant section of the ruling class comes rather from the forces of reaction, who want to overturn the current polity, and, via a political counter-revolution, take capitalism back to a less mature form, based upon the dominance of the plethora of small capital, rampant free market competition, and a minarchist state. Unlike the 1930's, today the super rich are in the same class camp as the working-class and the middle class managers of socialised capital. Its not the super rich that are backing Brexit, or Trump, other than for a few mavericks like the Kochs, or the mafia capitalists that comprise Putin's oligarchy. The super rich, the multi-billionaires, like Bill Gates or Warren Buffett, or George Soros are, generally, in the camp of conservative social-democracy (what others call neo-liberalism), in opposition to the camp of reaction. People like Aaron Banks cannot be counted as part of the super rich, they are really just jumped up barrow boys and chancers, and ideally, therefore, reflect precisely that ideology, culture and mindset of the small capitalist.

What we have, then, is this division between reaction representing that class of small private capitalists, and the ideology that flows from it, as against conservative social-democracy, based upon large-scale, socialised industrial capital.  In these socialised capitals, the function of capitalist in production is now undertaken by workers drawn from the working-class and paid wages.  They form a middle-class because of their contradictory role in production, which flows from the contradictory nature of socialised capital as a transitional form of property.  As the personification of this form of capital, they are at one and the same time labourers, and at the same time the representative of capital, and its objective requirement to accumulate, and so to maximise profit. In confronting the owners of fictitious capital they are workers, in confronting workers they are capitalists.  As Marx continues, 

“In stock companies the function is divorced from capital ownership, hence also labour is entirely divorced from ownership of means of production and surplus-labour. This result of the ultimate development of capitalist production is a necessary transitional phase towards the reconversion of capital into the property of producers, although no longer as the private property of the individual producers, but rather as the property of associated producers, as outright social property. On the other hand, the stock company is a transition toward the conversion of all functions in the reproduction process which still remain linked with capitalist property, into mere functions of associated producers, into social functions.” 

(Capital III, Chapter 27) 

In other words, the capital here is not owned by anyone. It is owned by the firm itself, as an independent legal entity in its own right. The function that was previously undertaken by the private capitalist is now undertaken, in the firm, by dozens or even hundreds of professional managers, technicians, administrators, accountants and so on, and these are now drawn from the working class, and paid workers' wages. In a worker owned cooperative, as Marx says, this is particularly apparent. It is the workers and managers within the cooperative that exercise control over the capital. No individual worker or manager owns this capital. If any of them leave they do not take a proportionate share of the capital with them. It is the associated producers, employed by the firm, at any one time, that exercise this control of the socialised capital of the firm. Objectively, this should also be the case with the other form of socialised capital, the joint stock company. Neither a cooperative nor a joint stock company, for example, gives control or any say to a bank from which it borrows money-capital, nor does it give any control or say to bondholders from which it borrows money-capital, nor to landowners from which it borrows the use of land, in return for rent. As Kay and Silberston set out, thirty years ago, nor, therefore, is there any reason why they should give such control to shareholders, from whom the firm likewise borrows money-capital. Marx continues, 

“This is the abolition of the capitalist mode of production within the capitalist mode of production itself, and hence a self-dissolving contradiction, which prima facie represents a mere phase of transition to a new form of production... 

It is the point of departure for the capitalist mode of production; its accomplishment is the goal of this production. In the last instance, it aims at the expropriation of the means of production from all individuals. With the development of social production the means of production cease to be means of private production and products of private production, and can thereafter be only means of production in the hands of associated producers, i.e., the latter's social property, much as they are their social products... 

They show how a new mode of production naturally grows out of an old one, when the development of the material forces of production and of the corresponding forms of social production have reached a particular stage... The capitalist stock companies, as much as the co-operative factories, should be considered as transitional forms from the capitalist mode of production to the associated one, with the only distinction that the antagonism is resolved negatively in the one and positively in the other.” 

The reason it is resolved positively in the cooperatives, but negatively in the joint stock company, is that, in the worker owned cooperative, the associated producers themselves immediately exercise democratic control over this socialised capital. But, in the joint stock company, that is not the case.

Back To Part 1

Forward To Part 3

Theories of Surplus Value, Part III, Chapter 23 - Part 10

Surplus value always takes the form of a surplus product, but a surplus product does not always constitute surplus value, as I have set out elsewhere. For example, a slave produces no new value, but they produce use values greater than the use values required for their own reproduction. They thereby produce a surplus product. But, this surplus product does not constitute surplus value. The same applies in relation to the physical production of a pack animal, or a machine. If we take a society such as that envisaged by Marx in The Fragment on Machines, where production was fully automated, no new value, and so no surplus value, is produced. But, such an incredibly productive society would produce a huge surplus product. 

A peasant who spends 10 hours per day producing use values may only need to spend 8 hours producing the use values required for their own reproduction. The other 2 hours is thereby surplus labour, which results in the production of a surplus product. But, it does not constitute surplus value in the capitalist sense, because the peasant has also expended this additional 2 hours of labour-time. They have not obtained something for nothing, in the way the capitalist does by appropriating unpaid labour. In other words, they do not obtain 10 hours of value having only advanced 8 hours of value in exchange for it, as is the case with the capitalist who advances 8 hours of labour in the form of wages, and obtains in return 10 hours of labour, and so appropriates 2 hours of surplus labour, as unpaid labour. 

Marx's example, here, I don't think is correct. He says, 

“A product may contain no surplus-value, as, for example, in the case of a peasant who owns his own implements as well as his own land and only works exactly the same amount of time as any wage-worker does to reproduce his own wages, say six hours. In a good year, he might produce twice as much [as usual]. But the value would remain the same. There would be no surplus-value, although there would be surplus product.” (p 370) 

But, this is wrong. The surplus value is equal to the new value created less the value of labour-power. Originally, the peasant works for six hours, and creates six hours new value. But, they must work for six hours to reproduce their labour-power. It has a value of six hours, so surplus value is zero. If their output doubles they now reproduce the value of their labour-power in 3 hours (say 10 kilos of corn), whilst they continue to produce 6 hours of new value (20 kilos of corn). So, they, thereby produce not only a surplus product of 10 kilos of corn, but also a surplus value of 3 hours. It arises due to the production of relative surplus value, as the value of their labour-power falls. Its only that this surplus value is still labour they have undertaken not something that comes to them gratis. 

Variable-capital, as Marx sets out, in Capital II, consists of the means of subsistence, wage goods, in the hands of the capitalist class. But, 

“In itself it was already a mistake on the part of Cherbuliez to represent variable capital in the “passive” and purely material form of means of subsistence, that is, as use-value, a form which it obtains in the hands of the workers. If, on the other hand, he had considered it in the form in which it actually appears, namely, as money (as the form in which exchange-value, i.e., a certain amount of social labour-time as such, exists), then [he would have seen that] for the capitalist it represents the labour which he exchanges for it (and, as a result of this exchange of materialised labour for living labour, the variable capital would be set in motion and would grow); variable capital in the shape of labour—but not if it is regarded as means of subsistence—becomes an element of productive capital.” (p 371) 

In other words, as Ramsay correctly observed, the means of subsistence do not themselves take part in the productive process. The value of these means of subsistence do not somehow expand into a greater value during that process. The means of subsistence merely result in the reproduction of labour-power. The labour-power is bought in exchange for those means of subsistence. But, that purchase first takes the form of the payment of money wages, of a certain amount of exchange value equal to a given amount of labour-time

As Marx says, once viewed in these value terms, rather than in use value terms, it becomes clear that a certain quantity of labour-time buys labour-power of an equal value, but, in doing so, it gains command over a greater quantity of labour, because this labour-power can produce a greater quantity of new value than required for its own reproduction. Its not the means of subsistence that enter the productive process, as productive-capital, but the labour that is bought with those means of subsistence/wages.