Tuesday, 30 June 2020

What The Friends of the People Are, Part III - Part 6

“It is therefore obvious that the stock argument of there being no capitalism in our country since “the people own land” is quite meaningless, because the capitalism of simple co-operation and manufacture has never been connected anywhere with the worker’s complete separation from the land, and yet, needless to say, it has not on that account ceased to be capitalism.” (p 209-10) 

But, large-scale, capitalist machine production does not tolerate this continued connection to the land by the worker. It necessarily arises on the basis of the process of concentration and centralisation of capital, described by Marx, whereby first the small capitalists are expropriated by the bigger capitalists, and then these big capitalists are themselves expropriated by the even larger socialised capitals. In the West, even the ability of some workers to become homeowners, in the postwar period, and to accumulate small amounts of savings, was problematic for capital, because it meant that they could utilise this wealth as a supplement to income, so as to hold out longer against attempts by capital to force them to accept lower wages. Capital, however, having defeated workers and their trades unions, turned this potential threat into an advantage, by increasingly forcing workers to rely on that wealth as an alternative to wages, by encouraging them to use it as debt collateral. By that means, it was able to maintain high levels of consumption, despite stagnant or falling wages, whilst surreptitiously, over the last few decades, again depriving workers of those accumulated assets, in the same way that they had previously expropriated the landed aristocracy which similarly mortgaged its estates to finance its consumption. In Britain, for example, although we are told that, as a result of astronomically high house prices, the proportion of homeowners has fallen, what is never pointed out is that, the majority even of these homeowners, in reality, are also no such thing, because they are mortgagees, with vast amounts of debt undertaken to buy the house. Usually, the debt is significantly more than the actual value of the house, as opposed to its market price, which is demonstrated every time the property bubble bursts, as in 1990, 2008, and 2010. About 30% of homes, in Britain, are owned outright by their occupants, and a further 40% are owner-occupied on a mortgage. The rest are rented. 

Lenin notes that this fact that large-scale capital cannot live with a continued attachment of the worker to his land, was identified by Dementyev, in Russia, independently of Marx. That analysis showed that the connection of the Russian worker to the land was so tenuous, whilst the power of the capitalist, be they a money-lender, merchant or factory owner, was so great that any further technical advance would convert them into wage labourers pure and simple. 

Lenin makes the point, here, that Marx also makes, in his Preface to Capital I, that the characteristic of these earlier and smaller forms of capitalist production is more oppressive in relation to the worker than is large-scale capitalist machine production. In his “The Development of Capitalism In Russia”, Lenin makes this point at greater length, setting out that workers in handicraft production had the worst wages and conditions, those employed in manufactories had better wages and conditions, but the much better wages and conditions were enjoyed by the workers in the large capitalist factories. 

“The domestic system of large-scale production is not only a capitalist system, but the worst kind of capitalist system, one under which the most intense exploitation of the working people is combined with the minimum opportunity for the workers to wage a struggle for their emancipation.” (Note *, p 210) 

Again, this highlights the reactionary nature of the Stalinists' and Third Worldists' hostility to this large-scale capital, and monopoly, which amounts to the same kind of Sismondism as that purveyed by the Narodniks that Lenin polemicises against here. Lenin provides another cannonade against it later in his Two Tactics of Social Democracy, where he says, 

“And from these principles it follows that the idea of seeking salvation for the working class in anything save the further development of capitalism is reactionary. In countries like Russia, the working class suffers not so much from capitalism as from the insufficient development of capitalism. The working class is therefore decidedly interested in the broadest, freest and most rapid development of capitalism. The removal of all the remnants of the old order which are hampering the broad, free and rapid development of capitalism is of decided advantage to the working class.”

Monday, 29 June 2020

How The Left Should Have Responded To Covid19 - Part 3 of 3

So, what would a rational socialist government have done, and what should the labour movement have been arguing. Firstly, a socialist government would not have imposed austerity on the health and social care system over the last ten years. Hospitals and care homes, under the direct democratic control of the workers employed in them, would have ensured that their own health and safety was protected, by having adequate supplies of PPE, not just in preparation for Covid19, but also for the long predicted flu epidemic, or other epidemics that might arise. Those workers would have established their own sets of safety and isolation protocols to protect them against infection or further spread of infection. 

Bourgeois governments, of course, would never concede to such a thing, because, despite all of their talk about it being “our” NHS, it is no such thing. It is “their” NHS, the NHS of the capitalist state, which acts on behalf of capital, not of workers. But, that is no reason why the labour movement should not have emphasised that fact. The labour movement itself should have demanded that Health Service unions be allowed to create Committees of Workers Inspection, for every hospital, and care home, overseeing the provision of activities and provision of adequate PPE etc. 

Of course, there is no point having such Committees of Workers' Inspection unless their findings and proposals can be implemented. Under socialism, the workers themselves exercise democratic control over production, directly, but, under capitalism, a political struggle, a class struggle, is required to obtain such control. The labour movement should have engaged in such a class struggle to demand that hospital workers and care workers do have such democratic control. The government claims it is “our” NHS, so they should be asked to prove it by handing over control to the workers. 

But, the labour movement, including the Left, could not do that, because it had both demobilised and immobilised itself. You can't wage a class struggle if you are sat at home, and have conceded that you can't congregate with your fellow workers! And, even in terms of the provision of PPE, ventilators and other equipment that was in short supply, remedying that situation required workers control of production existed on a wider scale. A socialist government would have immediately diverted resources to the production of face masks, PPE, and ventilators, but, under capitalism, it is only workers that can guarantee that with their own direct action. Workers control of production would have seen every workplace with the capacity to produce such equipment turned over to its production, with the workers liaising with the Committees of Workers Inspection to establish appropriate specifications. They would have ignored patent laws, and so on, so as not to have to reinvent the wheel, as some of those firms that did switch to such production have done. 

The model could have been the Lucas Plan where workers at Lucas Aerospace drew up detailed plans of how the company could have been converted from production of weapons to socially useful production. And, as happened in France, in 1968, local committees of workers, which, here, could have been based on Trades Councils, came together to ensure that socially useful production continued, amidst the General Strike. They ensured that supplies went to hospitals, fuel etc. to workers houses and so on. But, again, all this requires that workers continued to work, continued to congregate in their workplaces, the basic organising unit of the working-class. The petty-bourgeois Left might think they can fight the class struggle sitting at home tapping away on Twitter, but they can't. 

A socialist government would have ensured an adequately resourced healthcare system could have undertaken the required testing and tracing on an even more efficient scale than S. Korea and Germany, so as to prevent the spread of the virus in the first place, but, in the event it did spread, a properly resourced healthcare system would have had appropriate isolation facilities so that it was not necessary to stop people with other serious medical conditions coming in to hospital. If not through dedicated isolation hospitals then at least through isolation wings, the spread of the virus throughout hospitals and care homes could have been prevented. And, of course, it has been in the hospitals and care homes, where vulnerable populations were locked down, that the concentration of deaths have occurred. 

But, a socialist government would focus its attention on preventing people becoming ill in the first place. Capitalist healthcare, as provided by the NHS, is focused only on treating people after they have been made ill. Its on that basis that NHS bureaucrats build their own empires, that pharmaceutical companies and medical supplies companies make their large profits. A socialist government would, therefore, have put resources into the development of vaccines against coronavirus and other viruses, as well as into other antiviral treatments. The drug companies will only develop such products where it is profitable, and that requires a large market. Unless large numbers of people are likely to be affected by a disease, and unless it is serious enough to warrant treatment, the drug companies have no reason to produce such a treatment. 

But, even if it were the case that COVID19 had spread, this prophylactic approach would still be the one that a socialist government would take, i.e. to prevent people becoming ill to begin with. The already known facts about coronaviruses, in general, and about Covid19, in particular, from what had occurred in China, actually made that easy to undertake. Coronaviruses, in general, such as those responsible for the common cold, are highly contagious, but for the majority of the population more or less benign. It is only for the minority whose immune system is weak, such as the elderly or those suffering a range of illnesses to whom it poses a serious risk. For 80% of the population not in those categories, Covid19 poses no more, and possibly even less risk than does the common cold. There was little point in engaging in drastic action, therefore, to prevent this 80% of the population contracting the virus, because most of them would not know they had had it, and the rest would think it was just a cold. What is more, having had it they would have developed antibodies against it, making them immune to it, what scientists call herd immunity or natural vaccination. 

A socialist government, operating on a precautionary principle of prophylactic medicine, would, therefore, have ensured that everyone in that 20% of the population actually at risk from it, was removed from the potential of contact with the virus. The majority of those at risk are those over the age of 80 (about 53% of deaths) but with a significant proportion (about 39% of deaths) being those between 60 and 80. A socialist government, on the basis of a more rational organisation of the economy, would reduce the retirement age to 60, if not 55, so straight away this large segment of the 20% is removed from the risk of infection in the workplace. The rest of the 20%, i.e. people under 60, but with underlying medical conditions, or who have someone in their household in the 20%, would have been put on sick leave with full pay. On that basis, all of the 20% could have been effectively isolated. Their shopping and other requirements would be delivered to them, as a socialist society created a much more comprehensive and free broadband network, enabling everyone to shop online. 

For those in the 20% who required home social care – though its hard to know why that would remain given the provision of high quality communal care – the adequate levels of PPE, and contact protocols, for care workers, who would no longer be precarious workers on zero hours contracts, with inadequate contact time, would ensure that neither was at risk of contracting or passing on the virus. On this basis, the majority of the population would have quickly developed immunity, so that, without hosts to infect, the virus would simply die out. 

But, that is also what the labour movement should have demanded the government do now. If all of the 20% were enabled to effectively self-isolate, then the virus would have died out, as the 80% became immune to it. That was the rational scientific approach to have adopted, along with the other demands set out above. In all workplaces, the approach should have been similar to that which should be adopted with nuclear power, and other such hazardous production. We demand workers control, and committees of workers' inspection, so that production only occurs when the workers themselves are satisfied that it is safe. 

Instead, the labour movement, and the Left, abandoned any independent working-class perspective; it forgot all about the principle of workers' self activity and self-government, and related demands for workers' control, as part of an overall programme of class struggle, and instead collapsed into rank opportunism, placing a plus sign wherever the populists placed a minus sign. The whole fiasco shows that the ordinary members of these microsects have become mindless drones, unable to think for themselves, as the microsects have become more like religious cults. In the words of Trotsky, they need, once more, to Learn To Think

Sunday, 28 June 2020

What The Friends of the People Are, Part III - Part 5

As Marx points out in Theories of Surplus Value, this period of primitive capital accumulation is not at all characterised by the employment or accumulation of additional means of production, but by the process of concentration and centralisation of existing means of production in a few hands, in a few locations. This very process, also, itself facilitates cooperation in production, which reduces costs, and brings competitive advantage to the capitalist producers, putting further stress on the artisan producers, more of whom, thereby, go under, accelerating the process. The more of these producers who go under, and become wage workers, the more they must rely on the market to obtain the commodities required for their own reproduction. An artisan producing leather goods, for example, may have worked for four hours of the day, on their own plot of land, growing food required for their family's consumption. Now, turned into a wage worker, they must work 8, 10 or 12 hours a day solely on leather goods production, so that they must now buy their food also in the market. As Lenin described earlier, this is also the process by which a large market for agricultural commodities is developed, which opens the door for capital to begin to operate in agriculture, as well as industry. 

“It goes without saying that the domestic system of large-scale production is a capitalist form of industry: here we have all its features—commodity economy already at a high level of development, the concentration of the means of production in the hands of individuals, and the expropriation of the mass of the workers, who have no means of production of their own and therefore apply their labour to those of others, working not for themselves but for the capitalist. Obviously, in its organisation, handicraft industry is pure capitalism, it differs from large-scale machine industry in being technically backward (chiefly because of the preposterously low wages) and in the fact that the workers retain diminutive farms. This latter circumstance particularly confuses the “friends of the people,” who, as befits true metaphysicians, are accustomed to think in naked and direct contrasts: “Yea, yea—nay, nay, and whatsoever is more than these comes from the evil one.”” (p 209) 

In short, the Narodniks position was that if the workers have no land there is capitalism, and if they have land there is no capitalism. But, as Lenin illustrated previously, in relation to the silk industry, the fact that workers retain a small piece of land does not mean they have time to utilise it, to meet their needs. Moreover, as the previous analysis indicated, for even most of the middle peasants, let alone the poor peasants, the size of the plot they had was inadequate to meet basic consumption requirements. It is this which leads these poorer peasants to rent out or sell the land they can now no longer farm to their richer neighbours, as Lenin described in “On The So Called Market Question”. It is by this process that capital and capitalist production extends from the towns and industry into agriculture, as the richer peasants produce an increasing proportion for the market, and employ wage labour to do so. 

“They do not know, it seems, that capitalism—while still at a comparatively low level of development—was nowhere able to completely separate the worker from the land. For Western Europe, Marx established the law that only large-scale machine industry expropriates the worker once and for all.” (p 209) 

In other words, as stated earlier, Marx distinguishes between the formal subordination of labour and the real subordination of labour. The handicraft worker who loses their means of production always has the theoretical possibility of regaining them. A wheelwright who produces wheels can always theoretically regain their means of production, and return to independently producing wheels for customers rather than selling their labour-power to a master. Even as a detail worker, within an extended division of labour, they may be able to do that. For example, if their job in the workshop is producing spokes, they may still retain the overall skill as a wheelwright, and be able to return to such production, or they may become an independent producer of spokes, who sells them as components to other wheelwrights. 

However, once production of wheels becomes something undertaken by the use of large-scale machinery, this possibility ceases. Firstly, the labourer exists not as an artisan, for example a wheelwright, or even as a detail worker, producing components by hand, but only as a machine operator. And, that machine production takes place in factories. Apart from some initial training, a machine operator in one trade is pretty much the same as a machine operator in another. For example, a lathe operator employed in turning spokes for wheels performs the same function as the lathe operator who turns legs, and other parts of chairs in the furniture factory. 

The labour itself becomes homogeneous factory labour, and as such can only ever be employed as such. Moreover, because the production of both wheels and furniture now requires this large-scale machinery, and a factory in which to operate it, the individual labourer is no longer able to amass these means of production, in the way they could when it only required a number of hand tools plus raw materials. Labour is, at this point, really subordinated to capital.

Saturday, 27 June 2020

Post Covid Prices and Revenues - Lockdown


The lock down of social activity has caused an economic slowdown far greater than was provoked by the 2008 financial meltdown. It is the biggest slow down for 300 years, according to the Bank of England, and others. The immediate effect, as it appeared that all production would stop, was to see stock markets sell off massively. Falls of up to 10% a day started to become common. Then central banks pumped even more liquidity into circulation to reflate asset prices. The state intervened to say it would become employer of last resort, taking responsibility for wages off companies. Although the smallest companies were abandoned, the state made clear it would stand behind all of the biggest companies, once again demonstrating that the future of the state continues to depend on that big capital, and that the state will protect it, whatever the conservative representatives of small capital might hope. 

Indeed, it soon became clear that the lock down was a lock down of social activity not economic activity. The latter only got hit as a consequence of the former. The Dow Jones which had been over 27,000 before the sell off, dropped to below 20,000 (still 50% more than where it had been prior to the 2008 crash), but, as the reality that production for many big companies continued, with the state bankrolling others, and with central banks again destroying currencies to buy financial assets, the Dow Jones has risen to over 27,000 once more, and other stock indices have followed suit. This shows how much speculators believe the state has their back. They believe that central banks will continue to print money tokens and buy up assets. Its even been proposed that the Federal Reserve might buy shares as well as bonds, to that end. In addition, they believe that the state will bail out all of the big companies whose profits and markets have been hit, as well as spending trillions of Dollars to restore levels of demand. 

After 2008, the British state spent £2 trillion bailing out the banks. Bailing out all of the big companies will cost more like £20 trillion, especially as Brexit means Britain will be harder hit than elsewhere. Many big companies will simply decide to relocate to the EU, unless they are given big bribes to stay. Already, Britain has seen its borrowing, for the last month, rise to as much as for the whole of last year. What makes the situation today different to the last thirty years is this. In the last thirty years, money printing was used to buy financial assets and so inflate their prices, which squeezed yields. Austerity was used to suppress economic activity, reduce demand for capital and lower wages, so as to sustain profits and the supply of capital, so as to depress interest rates. All of that was designed to inflate asset prices. 

Now, states have printed money on an even vaster scale, whilst the artificially induced economic slowdown, created by the lockdown, has reduced the demand for capital, lowering interest rates, and boosting asset prices, but that cannot last. In the US, there is an ironic position in which many very low paid workers have seen their incomes rise as a result of the state taking over the payment of wages, sometimes by significant amounts. It has meant, combined with reduced spending, because many forms of consumption have been banned, that some household debts have been paid down, especially as mortgage repayments were suspended. In the latest US Jobs number, one interesting fact was that, alongside the 2.5 million jobs increase, as laid off workers were brought back, hourly incomes fell, because these workers were no longer getting the higher payments that were being paid out by the state! As the social lockdown ends, consumption of all those things currently shut down will rise. Firms whose profits and cash reserves have gone will have to borrow to take on staff, buy in materials and so on. Many households, even when they have had 80% of wages paid by the state, will have dipped into savings. They will also increase borrowing on credit cards and so on, as they return to normal consumption patterns. But, the biggest borrowing is that of the state; it has ballooned, and will continue to rise, as it introduces measures of fiscal stimulus. The US has introduced fiscal stimulus already amounting to around $4 trillion, more or less equal to the Federal Reserve's already inflated balance sheet; the EU is proposing €750 billion of fiscal stimulus as a start that will come out of a central fund, marking the start of the EU creating a fiscal union, alongside its monetary union, and single market, which is just one step away from the creation of a federal European state. 

All of this fiscal stimulus, combined with the increase of liquidity, in conditions of existing masses of liquidity, means that devalued currency will go into general circulation, causing commodity prices to rise at the same time that increased demand for money and money-capital is met by a reduced supply as profits disappear, and savings are ransacked, leading to rising interest rates. By the state printing money to hand to workers for them not to work, it inflates monetary demand at the same time as reducing the supply available to meet that demand, which must result in higher prices, much as happened in Weimar. In fact, as I reported recently, this paper, published by the IFS, shows that commodity price inflation is already rising sharply, having risen as much in a month as it would normally have risen in a year. States cannot respond to this in the way they have in the last thirty years by printing even more money tokens, as that simply causes inflation to rise as this liquidity is now being sucked into general circulation. That inflation then means that households, businesses, and government need to borrow even more to cover the higher prices of the commodities they now buy. 

Given the destruction of large spheres of production, what we have is situation similar to that of the Weimar republic in the 1920's.  Then, a smashed economy could not quickly increase production and supply. It had debts to cover and did so by deliberately printing money tokens so as to pay its creditors in devalued currency. But, the devalued currency also created inflation. The inflation increased the costs to households, who sought higher wages, and to businesses which sought higher prices, as well as the government, whose debts also thereby rose, leading it to print more money tokens, leading to hyperinflation. Today, many economies across the globe are in a similar situation, creating a global Weimar. As the lock down ends, this will become manifest. First will come higher interest rates, as demand for money-capital exceeds supply, causing asset prices to fall sharply. Then will come rising prices, causing borrowing to rise further, and interest rates to rise higher, causing asset prices to crash further, and giving an incentive for money to go into actual production, where at least money profits will be rising as a result of inflation, and then, as the state, using the weapons of the previous war, prints even more money, will come the hyperinflation.

Northern Soul Classics - Don't Be Afraid - Creative Source

Friday, 26 June 2020

Friday Night Disco - Sweet Talking Guy - The Chiffons

What The Friends of the People Are, Part III - Part 4

“In Nizhni-Novgorod Gubernia there are in all 2,552 handicraftsmen producing this sort of cutlery, of whom 48% (1,236) work for the market, 42% (1,058) work for a master, and 10% (258) are wage-workers. Consequently, here too the independent (?) handicraftsmen are in the minority. And those who work for the market are, of course, only apparently independent; actually they are no less enslaved to the capital of buyers-up.” (p 208) 

Taking the data for the Gorbato Uyezd, Nizhni_novgorod Gunernia, 84.5% of all those who worked worked in industry. Lenin notes, 

“Exceptionalist Russian economists, who measure Russian capitalism by the number of factory workers (sic!), unceremoniously classify these working people, and the multitudes like them, as part of the agricultural population, who do not suffer from the yoke of capital, but from pressure artificially exerted on the “people’s system” (???!!)” (Note**, p 208) 

Lenin sets out the exact data, which was available for 10,808 of the aforementioned 21,983 working in industry. In metal, leather goods, sadlery, felt and hemp spinning, 35.6% of the handicraft workers worked for the market, 46.7% for a master, an 17.7% were wage workers. 

“Thus, here too we see the predominance of the domestic system of large-scale production, the predominance of relations under which labour is enslaved to capital.” (p 208) 

Lenin affirms the point made earlier. 

“Another reason why the “friends of the people” so freely ignore facts of this kind is that their conception of capitalism has not advanced beyond the commonplace vulgar idea that a capitalist is a wealthy and educated employer who runs a large machine enterprise—and they refuse to consider the scientific content of the term. In the preceding chapter we saw that Mr. Yuzhakov dates the beginning of capitalism directly from machine industry, omitting simple co-operation and manufacture. This is a widespread error, which, incidentally, results in the capitalist organisation of our handicraft industries being ignored.” (p 208-9) 

The scientific analysis of capital, as provided by Marx, dates capitalist production back to the 15th century, which is long before large-scale machine production. This capitalist production is founded upon a number of necessary material conditions. Firstly, commodity production must have become sufficiently generalised that significant markets exist, at least for a number of specific commodities. These markets must also be concentrated in specific areas rather than being dissipated across a large area. In other words, it requires that towns of a reasonable size have grown, and, within these towns, artisans, performing a number of trades, operate and exchange their goods, as well as selling them to landowners and agricultural producers, in exchange for food and raw materials. Quesnay's Tableau Economique sets out these economic and social relations. As Marx describes, already in these transactions, the towns begin to exploit the countryside in the prices charged for their goods, which reflect high profit margins. 

Secondly, some of these artisans must lose their own means of production. The causes of this can be many fold, from sickness, poor business decisions and so on. It leads, initially, to a need to borrow from usurers. At this time, there are often prescriptions against lending by Christians, which leads to usury becoming the preserve of small numbers of Jews and Lombards. The supply of loanable funds is, therefore, very restricted, whilst borrowing is only resorted to in desperation, so that interest rates are very high. In Capital, and Theories of Surplus Value, Marx quotes from Martin Luther to give the picture of the extent of such interest rates. 

In previous times, when artisans fell into such circumstances, it resulted in them becoming slaves or serfs. Now, the existence of significant markets, for a range of industrial commodities, means that, instead, the artisan's means of production can be taken over by the usurer or merchant, to cover the debt, or else might be bought by a master craftsmen, who now operates them as capital. The former independent artisan is then employed as a wage labourer, paid a wage equal to the value of their labour-power. Their output continues to be sold as commodities on the market, at its exchange-value. But, now, the difference between this exchange-value, and what the capitalist has paid for the materials provided, and the wage paid to the labourer, i.e. the surplus value, is appropriated as profit by the capitalist.  Capital moves first into those industries where the annual rate of profit is highest, and as it continues to move into these industries, prices fall below the exchange value, until they reach the price of production.

Thursday, 25 June 2020

How The Left Should Have Responded To Covid19 - Part 2 of 3

So, we then have to ask the question why governments did initiate that course of action. The fact is, of course, that not all did. South Korea and Germany, for example, did not close down their economies. But, both of those economies, from the start, introduced large-scale testing and tracking. Before the virus could spread extensively, within their borders, they tested people coming in, or who showed symptoms, and, where they had the virus, they were isolated, and those they had come in contact with were traced, and similarly tested. By isolating those with the virus, who were a small minority, they prevented its spread, and, thereby, removed the need to close down their economies. But, as I've set out elsewhere, if you have allowed the virus to become widespread, this strategy cannot work, because it spreads faster than your ability to track it. Its why the introduction of track and trace in Britain is unlikely to work, now, because even with the higher levels of testing its not likely to keep pace with new infections, until a condition of herd immunity is achieved either naturally or by vaccination, so that the virus starts to die out anyway. 

The reason that the US and Britain did not introduce such a system, back in February or March, is not down to Trump or Johnson's Covid19 denial, but down to the inability to actually undertake such an operation. In the US its near impossible, given the length of its borders, and amount of traffic into and out of the country, but also because of its lack of socialised healthcare, meaning millions of people who are sick would not seek medical treatment until it was too late. The UK also lives by trade, and a constant flow of people across its borders, a fact that will become apparent were anyone stupid enough to attempt a hard Brexit. But, ten years of austerity means that Britain's NHS is also even less fit for purpose than it was anyway, and the introduction of charges for non-UK patients again means that many would not seek treatment when they are ill. More immediately, neither the US nor UK had the basic requirements of testing kits, facilities, staff or testing laboratories to have been able to carry out such large-scale testing in the way that Germany and South Korea had done. It requires that you had prepared for such an eventuality in advance. 

The NHS has suffered ten years of austerity, but, as a state capitalist health service, its purpose has never been to cater for the interests of workers rather than capital. The imposition of austerity has simply made that condition worse. Anyone who has waited for 24 hours in A&E, or waited weeks just to get a GP appointment knows that it was on the point of collapse anyway. Brexit will make that much worse, as all of the staff that the NHS, and social care, depends upon return to the EU. If no one had heard of COVID19, and all of the deaths were put down to “flu-like symptoms”, as they are in other years, then this would all have been put down to being the flu pandemic that has been warned about for years, and we would simply have been complaining that the government had failed to heed those warnings by providing the NHS with the resources to deal with it. In fact, in any year the number of people coming down with “flu-like symptoms” includes around 14% of people who are actually suffering with coronavirus. Had this just all been put down to the expected flu pandemic, its unlikely that there would have been such a moral panic, and demands that things be made even worse by adding a close down of the economy, creating the worst economic slowdown in 300 years, to everyone's problems. In fact, making the coronavirus outbreak into some kind of apocalyptic event that it isn't has helped Johnson get off the hook of not having properly resourced the NHS for the expected flu pandemic. It enables him to present it as something way out of the normal that could not have been anticipated, as an unexpected external enemy. Trump, of course, has milked that particular cow dry, claiming that Covid19, is the “Chinese Virus”, leaving it up to others to create conspiracy theories about it being unleashed from Chinese laboratories and so on. In short, all of the usual components of a moral panic. 

The NHS simply did not have the capacity to undertake the testing required, particularly alongside he Winter Flu Season. The US was in a worse position still in trying to achieve that. Trump and Johnson are only individuals, and if the US and UK could have done the testing and tracing then the pressure would have come from within the ruling class, and its representatives in the state, to have done so, but they couldn't. 

If an extensive programme of test and trace was not possible, as in Germany and South Korea, countries like Britain and the US were dependent on other measures to try to prevent the spread of the virus, by calling on people to engage in physical distancing. It still seems that the best way of killing the virus, apart from the development of herd immunity, is by simply soap and water, and regular hand washing. In fact, it appears that another means of slowing the spread of the virus would have been to advise the wearing of face masks, because although they are useless in preventing you contracting the virus, they are effective in preventing you spreading the virus to others. But, there was a lack of such masks, there was concern that people snapping them up would deprive health and social care workers even more of such protection, and the WHO was advising against them. The US and UK might have hoped to escape any serious consequences, because coronaviruses spread throughout the population every year. They account for between 8-14% of all “flu-like” illnesses. In addition, Sweden imposed no lockdown, and saw, and has seen, no large excess number of deaths from COVID19. On the contrary, its per capita mortality rate is lower than the UK, and the gap is widening. Over the last week, in Sweden, new COVID19 deaths have been down to single digits, or low teens, whereas, in Britain, new deaths continue to run into hundreds. 

But, the US and UK are not Sweden. Sweden did see a spike in COVID19 deaths, but it was due to the same reason that deaths rose sharply in Italy. In Italy, the virus got into its health and social care system, and so ran rampant amongst confined vulnerable populations. It should have been an obvious lesson for the governments elsewhere, because the data from Wuhan in China showed clearly that the virus posed a risk to that 20% of the population, the over 60's, and those with underlying medical conditions, i.e. those most likely to be already in hospitals and care homes! The obvious strategy, armed with that knowledge, and particularly the knowledge also out of Wuhan, that the virus posed no threat to the other 80%, was to isolate that 20% until immunity against the virus had been achieved, and it had been eradicated. 

Sweden has large care homes for the elderly, larger and more concentrated than those of its smaller Nordic neighbours, and it was in these that it saw a spike in COVID19 deaths, not amongst its general population, which continued to meet freely, and to go about its business normally, whilst simply taking sensible measures of social and physical hygiene. Contrary to all of the hysterical projections that seemed to crave a sharp rise in Swedish mortality to confirm the need for the lockdowns that were imposed elsewhere, in fact, as the data shows, its per capita mortality rates have been better than other countries that imposed lockdowns, and instead of it being only a question of timing, as some claimed, before the Swedish rates ticked up, the opposite was the case, with Sweden being one of the first to flatten its curve of new deaths, and to reduce them now close to zero. One reason for that is almost certainly that the early deaths were concentrated in the care homes, whilst its general population, dominated by the 80% not at risk, has been able to acquire a natural herd immunity to the virus without even having known it had contracted it. Only later when we get reliable antibody tests will that become apparent. 

But, London, New York and other major cities contain millions of people in close proximity. A sizeable number of those people are disadvantaged, elderly and suffer health conditions, making them vulnerable to serious consequences from infection. In fact, its not just the less dense population of Sweden and its Nordic neighbours that gives it an advantage in that respect, but also their more equitable societies, and higher levels of social provision. Both the US and UK have very large hospitals and care homes, which experience from Italy showed are the main centres around which the virus does most damage. So, absent any strategy to protect those vulnerable populations, it was inevitable that the virus would not only spread rapidly – which is not a problem in itself, as it does not affect 80% of the population – but that it would spread to these vulnerable populations and lead to a spike in deaths. 

Once that occurred, the moral panic that had been created on social media, and which had been picked up by the mass media, in search of cheap sensationalist stories, became an unstoppable force, leading populist governments to collapse into taking the most visible, the most drastic and draconian measures they could come up with. Having done so, that in itself simply fed the frenzy, because what other reason could there be for taking such measures unless, as in wartime, we all faced some real existential threat, even though, in reality, no such threat existed! 

Populist governments capitulated to popular demands, hyped up by a sensationalist mass media, and introduced lockdowns along with all the other authoritarian measures that go with it. A Left that had itself called for such action as an unthinking, knee-jerk reaction to the Populist Right's, pandemic denial, found itself wrong-footed, and driven down a dead-end in which it could now only counterpose itself to the Populist Right by itself becoming ever more authoritarian, ever more illiberal in its own demands. 

These demands for draconian measures, not even seen in wartime, and for a comparison to which its necessary to go back at least to the 18th century, and the Combination Acts, or more closely to the days of serfdom, were thoroughly reactionary, especially when they were addressed to right-wing populist regimes already travelling rapidly in the direction of Bonapartism. But, the reality was that these governments put forward the lockdown policy, largely as show. It was quite clear, and certainly should have been clear to Marxists, that the idea that you can simply close down production is a total nonsense. 

As Marx put it in his Letter to Kugelmann, 

“Every child knows a nation which ceased to work, I will not say for a year, but even for a few weeks, would perish.” 

And, with the rate of turnover of capital about thirty times faster than in Marx's time, that, today, is a matter of days, or even hours, not weeks. Large stores keep only 2-3 days of stock, and their shelves would soon empty unless their suppliers were constantly providing them with replacements. Indeed, that was the reason for shelves emptying at the start of the lockdown, rather than the “panic buying” that the media and the government were putting forward as the explanation. The capitalist economy, from its inception, has been based on a comprehensive social division of labour, with each industry being dependent on every other, and, today, that is a global social division of labour. Its why Brexit is such a reactionary and disastrous idea, and why the Theory of Socialism In One Country is a reactionary dangerous delusion. 

The lockdown message of the government to “Stay At Home”, and not go to work, was, from the beginning, therefore, a lie, and those, on the Left, promoting that message were themselves complicit in promoting this lie. Its okay if you are a teacher to think that you can stay at home for ever, so long as you don't question what effect that will have on the future of all those working-class kids deprived of their education, despite all the science showing that kids are unaffected by the virus, and so long as you don't have to think about who it is that is producing the electricity that you are using, the gas you are burning, the food you are eating. The campaign of teachers, where sections of the Left are strong, to close schools and keep them closed against everything that science tells us about the nature of the virus, seems far more about a crude, and simple minded political attack on the government than anything to do with even basic trades union health and safety, let alone socialist class politics and the overall interests of workers. Moreover, in trying to use teachers as such a battering ram, as Mike McNair has said, it is likely to lead to yet another devastating defeat for a group of workers, and for the Left that pushed them into that position

That Stalinist Lexiters and other such reactionary elements, and economic nationalists should promote this message is understandable, because it fits their own irrational, illiberal ideas, and opposition to free movement, but why on Earth were those on the Left that had recognised the reactionary nature of Lexit, and opposition to free movement, jumping on the same ridiculous bandwagon. It is because these tribal, boneheaded, dogmatic microsects have lost the ability to think critically. They need to learn to think! 

The government knew that the idea that everyone should “Stay Home” was nuts. For one thing, if doctors and nurses stayed home, who would treat the people in the hospitals? But, hospitals do not function just on the labour of doctors, nurses and ancillary staff; they require electricity, water, drugs, clinical supplies, bed linen, and a thousand and one other commodities that must be supplied more or less daily. If the workers producing these other commodities stayed home, where would hospitals get these supplies? And, the producers of these thousands of supplies themselves require inputs, in the form of paper, wood, cotton and other fabrics, plastic, steel, rubber, and thousands of other materials, many of which come from all over the world. So, unless the workers producing all of these primary products and manufactured materials ignored the demand to “Stay Home”, where would the producers of all these products required by the hospitals get their raw materials, so that they could produce the commodities required by the hospitals? And, of course, having produced all of these commodities, it requires that workers on ships, plains, trains and lorries continued to work, so that they could be delivered. And, in order that all these workers could get to work, it required that transport workers, on trains, the tube, buses and taxis continued to work. 

The idea that there ever could have been a lockdown, as far as work is concerned, was a non-starter. For one thing, had electricity workers stayed home, power would have been cut off within hours, bringing not just the economy, but life as we know it to a shuddering halt. Yet, the government, and the media, had to perpetuate this myth that there was a lockdown. In part, they did so, because otherwise they would have to admit that a fundamental plank of bourgeois ideology is a lie. They pretend that labour is dependent on capital. It is capital that creates wealth and employs labour, out of the goodness of its heart. Value is created in exchange not in production, and production itself is the product of capital. Had they had to face the reality that, if labour actually did stop, as workers stayed home, then the economy would collapse, it would have been a crippling blow to the lies and ideology upon which capitalism rests. 

Just using your eyes and common sense showed that talk of a lockdown was nonsense. The only workplaces that were actually closed down were those that involved people coming together as consumers. But, the data also proves it. GDP is a measure of new value created, i.e. of new labour performed. If all labour had stopped, GDP would fall to zero. It didn't. On average, GDP, at its low point, seems to have fallen by around 30%, meaning that 70% of labour has continued to be undertaken. Now, the 30% drop is undoubtedly significant, but it shows that the vast majority of labour continued to be undertaken, there was, and could be no real lockdown of production. What there was was a lockdown of social activity, which, because there was no lockdown of production was both farcical and dangerous. 

What it meant was that you could go to work, and indeed despite the lockdown lie, you were expected to go to work, and so be in contact with other workers, both at work and on public transport to work, but you could not meet those other workers outside work at say a trades union branch meeting or a LP meeting. You could be killed by a racist cop on your way to and from work, but you could not gather together with others to protest about racism, and the murder of your fellow workers! You could not even meet with your friends and fellow workers in the pub or other venue to discuss such atrocities or to organise against them. But, the Left not only went along with this lie, they acted as cheerleaders for it, only demanding that the government be even more draconian and illiberal. It inevitably found itself once again tailing the working class when it spontaneously erupted to protest the murder of George Floyd, and its manifestation of more widespread racism, in violation of all those reactionary laws designed to enforce the lockdown of social activity. 

It is this lockdown of social activity and the consumption that goes with it, that is the basis of the 30% drop in GDP. That has led to the biggest slowdown in 300 years, and those that inflicted it will pay a political price, down the road, as will those that encouraged it. Millions of workers who lost their jobs, or had their livelihoods destroyed in pursuit of a lie, will not look kindly on those who imposed such policy, especially as it will not take long for it to be seen that it was both unnecessary and ineffective. 

There is hope, however. In 1847, the UK economy suffered a 37% contraction, as a result of another artificially created economic crisis. Then, it was because a speculative bubble in railway shares burst, along with a credit crunch caused by the 1844 Bank Act. But, when the government was led to suspend the Bank Act, the economy quickly bounced back. The long wave economic boom that had started in 1843 then resumed, running through to 1865, with only the interruption of a similar financial crisis in 1857. 

There is every likelihood of the same thing happening this time. The last US jobs numbers showed 2.5 million workers quickly being reemployed, and there are signs of a wall of “revenge spending” set to be unleashed, as soon as consumers are allowed to enter the shops, pubs, restaurants and other venues they have been banned from for the last ten weeks. As I've written before, an argument could be made for governments having used the Covid19 moral panic to create an economic slowdown. In 2018, as the global economy resumed a path of higher growth, interest rates began to rise. The US financial markets crashed by 20% with corresponding drops elsewhere. By the end of 2018, Trump introduced his global trade war, which, along with Brexit, acted to slow global trade and growth. That took upward pressure off wages and interest rates, which, along with resumed money printing, reflated those crashed financial markets. But, in 2019, trade began to find new routes and channels, growth continued, and the potential for higher wages, as employment reached new heights, along with the potential for higher interest rates, again threatened to burst the massively inflated financial and property bubbles. The economic slowdown caused by the response to Covid, could be seen as a means of preventing that process unfolding and again boosting financial markets, which, though they dropped initially, are back to their astronomical highs. 

However, as I also wrote previously that is not likely the reason for governments pursuing the policies they have, which is more due to cock-up than conspiracy. For one thing, as I wrote recently, the fall in productivity and rise in costs, means that, combined with all of the injected liquidity, there is likely to be rising inflation, as soon as lockdown eases, and consumers rush back into all those places from which they have been banned. Although many displaced workers will suffer, other spheres will see rising demand and activity. Rising wages will squeeze profits, whilst the vast amount of borrowing already undertaken, plus that to come, will cause interest rates to rise, and so leading to a financial and property market crash. That is not what those governments, the state, nor the top 0.01% would want.

Wednesday, 24 June 2020

What The Friends of the People Are, Part III - Part 3

The Narodniks also tried to present the handicraft producers, in Russia, as not being capitalist. Marx, in his historical analysis of the development of capitalism indicates the way first individual handicraft producers are employed as wage labourers by capitalists. First, these producers go into debt for whatever reason. The merchant then provides them with material, and the labourer then converts it into cloth etc. The labourer is no longer independent, but has become a wage labourer, employed by the merchant, and the merchant becomes an industrial capitalist. Similarly, the merchant, or an existing master craftsman, in some trade, may establish a workshop in which a number of former independent producers, who have fallen on hard times, are brought together. At first, they continue their handicraft production on the existing basis, but now within the manufactory. They each independently negotiate with the factory owner the price they will be paid for their individual production, but this price now, essentially, represents a wage paid for their labour-power. They are now wage labourers, employed by capital

But, the Narodniks sought to present the continuation of this handicraft production – now on a capitalist basis – as simply a continuation of peasant production. 

“The author is evidently referring to data on the number of handicraftsmen, which is as many as 4 million, or, according to another estimate, 7 million. But who does not know that the form of economy predominating in our handicraft industries is the domestic system of large-scale production? that the bulk of the handicraftsmen occupy a position in production that is not independent at all, but completely dependent, subordinate, that they do not process their own material but that of the merchant, who merely pays the handicraftsman a wage?” (p 206) 

Lenin cites data from the statistician S. Kharizomenov, in the official publication Yurisdichesky-Vestnik. 

“Summarising the published data on our handicraft industries in the central gubernias, where they are most highly developed, S. Kharizomenov reached the conclusion that there is an absolute predominance of the domestic system of large-scale production, i.e., an unquestionably capitalist form of industry. “Defining the economic role of small-scale independent industry,” he says, “we arrive at the following conclusions: in Moscow Gubernia 86.5% of the annual turnover of handicraft industry is accounted for by the domestic system of large-scale production, and only 13.5% by small-scale independent industry. In the Alexandrov and Pokrov uyezds of Vladimir Gubernia, 96% of the annual turnover of handicraft industry falls to the share of the domestic system of large-scale production and manufacture, and only 4% is accounted for by small-scale independent industry.”” (p 206-7) 

The reason the Narodniks, and other liberals, ignored these facts was because they wanted to ignore the class contradictions in society. Insofar as they wanted to recognise the existence of capital and capitalism, they wanted to present it as only existing in the form of the very large machine industry, and as in some way a defect, in the same way that, today, liberals describe the existence of monopoly as some form of anomaly or defect as against the normal condition of free market competition. 

Lenin also refers to Krivenko's description of the Pavlovo cutlery trade as being “a trade of semi-artisan character”, and yet, Lenin points out, the cutlers produced exclusively for the market and not for order. 

“As a matter of fact, the making of cutlery has least of all (compared with other Pavlovo industries) preserved the small-scale handicraft form, with its (seeming) independence of the producers. “The production of table and industrial cutlery,” says N. F. Annensky, “is already largely approaching the factory, or, more correctly, the manufactory form.” Of the 396 handicraftsmen engaged in the making of table cutlery in Nizhni-Novgorod Gubernia, only 62 (16%) work for the market, 273 (69%) work for a master, and 61 (15%) are wage-workers. Hence, only one-sixth of them are not directly enslaved to an employer.” (p 207-8) 

Working for a master, here, means that they are provided with materials by a capitalist, who takes the finished product from them and sells it, i.e. either via the Putting Out System, or by the labourers being employed in a handicraft workshop or manufactory. In either case, it is capitalist production, and the fact that the labourer obtains a “price” for their output simply obscures the fact that they are only being paid a wage for the value of their labour-power.

Tuesday, 23 June 2020

Post Covid Prices and Revenues - The Reversal

The Reversal 

The economic crisis created by the lock down of social activity, imposed by some governments, has created a completely different situation. After 2008/10, governments imposed austerity. It had a specific purpose. That was to slow down the increase in economic activity that had been seen between 1999-2008. That increase in economic activity had already seen significant increases in wages in certain spheres. The greatest increases globally had come from those areas of the world that had seen the most rapid growth, and growth of a working-class, in Asia, Latin America, the former Stalinist States of Central and Eastern Europe, but now, it was in the developed economies, where wages had been stagnant for twenty years, that began to see large increases. UK tanker drivers, in 2007, won a 14% pay increase after just a two-day strike. It alarmed the pundits, who, even hours before it was conceded, were saying that obviously such a large rise was impossible, so used had they been, for twenty years, of workers simply rolling over. German engineering workers also won significant increases with little effort. This was like the recovery of labour in the 1950's, and that is not surprising, because the 1950's was the equivalent phase of the long wave uptrend, in the previous wave. 

Rising wages meant constriction on profits, although those profits themselves, at this stage were at their high point for the long wave cycle. The first response in such conditions is for the state to print more money tokens so that companies can raise prices, but that leads to inflation spiralling that spook markets and lead to preemptive rises in interest rates, unless productivity can be increased enough to prevent it. However, in 2008, 23 years had passed since the peak of the Innovation Cycle, and the new technologies that came out of it, and raised productivity were now the standard technologies, no longer capable of bringing their former large productivity gains. Its no surprise that the Chancellor, Alistair Darling, appeared on TV to tell workers not to press for wage rises to compensate for rising prices

The rising economic activity alongside wages, which albeit only marginally squeezed profits, meant the demand for money-capital, to finance expansion grew faster than the supply of money-capital that was, in any case, largely being drained into financial and property speculation. The result inevitably was rising interest rates. Rates did not rise that much in absolute terms, but were, at that time, at historically very low levels. Yields on assets were even lower, as a result of repeated injections of liquidity to inflate asset prices, which had risen much faster than the revenues of those assets. The consequence was again inevitable; a rise in interest rates could only manifest itself in a sharp fall in asset prices. To see that its only necessary to understand how capitalisation works. Rising interest rates meant bond prices would fall, but then money moves from shares and property to bonds, to get the higher yield, but then share prices and property prices fall. 

The banking system and financial markets had been based on continually rising asset prices. Mortgages were sold to to people who were likely to default, and mortgages were given for 125% of the market price of properties, because ever rising property prices meant the bank would be sure to get its money back when they foreclosed and sold the house. Mortgage backed securities could be sold on the same basis, and on the basis that the proportion of good mortgages would cover defaults on bad ones. But, now, suddenly, when interest rates rise, and asset prices fall, the house of cards collapses. Its no longer the case that lenders will get their money back, or that the proportion of good mortgages will cover defaults on bad ones. The majority of mortgages appear potentially bad ones, as market prices for properties fall way below mortgage advances. One lender stops lending to another, and as much of the borrowed money now came from such short-term interbank lending, money created by the banks themselves out of thin air, on the back of the astronomically inflated collateral on their balance sheets, rather than from money the banks had obtained from the injection of capital, or from deposits from savers, that meant that all lenders faced an immediate credit crunch. Overnight bank lending rates like LIBOR soared. 

A credit crunch enveloped the system, when depositors in banks like Northern Rock took fright, and asked for their money, they found their was none. It was like the kind of bank runs that caused numerous financial crises prior to the 19th century, and prior to the Bank of England becoming lender of last resort, and before bank legislation set in place capital asset ratios that were supposed to prevent such bank runs. The trouble, here, was that those capital asset ratios were based on a huge fiction. The huge assets they appeared to own in the shape of government bonds, corporate bonds, shares, and collateral on property, whose prices were massively inflated, were now seen as nearly worthless when valued at current market rather than book prices. The same thing had happened in Japan in the early 90's, when its bubble burst, and property prices fell by up to 90%. 

It should have been the end of irrational exuberance, and start of a return to rationality. But, the wealth and power of the top 0.01% is tied up in all of this fictitious capital. Moreover, conservative governments depended on a continuation of this financial delusion. They saw rising house and other asset prices and borrowing against them, as the means to pay for elderly care, as well as the means to sustain consumer spending, whilst they attempted to constrain wages. So, instead of a return of rationality, the 2008/10 financial crises, once the system had itself been stabilised, simply prompted even greater irrationality. Even more liquidity was injected, turning bond yields negative, whilst austerity was introduced to slow economic growth and, thereby, rises in wages and interest rates. It could never work, and didn't. 

The economic laws of capital, and of the long wave cycle, meant that, despite government attempts to slow economic growth, and divert money into financial speculation, the economy would continue to grow, more labour would be employed, so that the demand for wage goods would rise, creating further growth. Competition between companies forces them to expand to meet the rising demand, so as not to lose market share. The peak of the Innovation Cycle came in 1985, with its base technologies being rolled out in labour-saving devices over the following 15-20 years. But, by 2008-10, most of the productivity gains from that had been had, as it replaced older technologies. Now expansion meant proportionately more labour employed than in previous periods. And, given that now, 80% of new value was created in service industry, which is labour intensive, either because it uses lots of simple labour, or smaller amounts of highly complex labour, any expansion of capital meant an even greater expansion of labour as against a more or less constantly decreasing proportion of value accounted for by constant capital

When, after 2014, the large expansion of production of primary products resulted in a flood of cheaper supplies of raw materials, and food, this gave a boost to profit rates, and further expansion of industry. Despite austerity, global growth continued to rise, and again interest rates rose, sparking a 20% crash in US and other stock markets, in 2018. Trump's global trade war, along with Brexit, slowed global trade and growth, which provided some respite for interest rates, and the Federal Reserve, which had been reducing its balance sheet, resumed QE, reflating financial assets again. But, as 2019 progressed even all that was failing to prevent global growth continuing to rise.

Monday, 22 June 2020

What The Friends of The People Are, Part III - Part 2

“In another passage he contrasts “small-scale people’s industry” to “large-scale, capitalist industry.” If you were to ask what is the distinguishing feature of the former, you would only learn that it is “small” and that the instruments of labour are united with the producer (I borrow this latter definition from Mr. Mikhailovsky’s above-mentioned article). But this is certainly far from defining its economic organisation—and, moreover, is absolutely untrue.” (p 206) 

I have previously written about the small business myth. It is mostly promoted by conservatives who are the ideological and political representatives of such small private capital, but it is also purveyed by left populists. The underlying idea goes something like its small businesses that predominate in the economy, they account for the majority of output and employment. It is sometimes complemented by the idea that such small business represents the ideal organisation of the economy, based upon free competition, and that monopolies, therefore, are a distortion of the normal functioning of the economy. Of course, its nonsense. If we take Britain, its true that its 5 million small businesses constitute the majority, compared to the few hundred large businesses, as represented by, say, the FTSE 250. Its true, as an aggregated total, those 5 million account for the majority of output and employment, but, as with the Narodniks, this superficial aggregation leads to a complete distortion of reality. 

Dividing the output of the 5 million small businesses amongst them shows that, individually, they account for very little compared to the concentrated economic power of the large companies. Moreover, the 5 million figure itself hides a wide array of different sized companies, from those employing a few hundred workers down to those that comprise a self-employed individual and their family. Even amongst the larger small companies, they exist only on the basis of undertaking sub-contract work for a large company, which means that they are dependent upon, and subordinated to it. The smallest companies depend on the revenues of workers in their locality, for example the wages of the car worker, shipyard worker and so on, out of which they pay the window cleaner, or buy items from the corner shop. 

Again, its true that, in aggregate, the 5 million small businesses account for the majority of employment, but each business employs only a handful, compared to the thousands, or even tens of thousands employed by a large company. In China, for example, Foxconn employs 1 million workers. Moreover, the 5 million small businesses are not the same 5 million small businesses from one year to another. Large businesses tend to endure for decades, if not centuries, but 25% of new small businesses go bust within six months, 75% go bust within five years, with a consequent effect on the workers they employ. 

There is a tendency amongst populists, including left populists, to try to present these small private capitals as somehow being less objectionable than the large monopoly capitals, even though the former actually represents the less developed, more reactionary forms of capital, whereas the latter represents the mature form of capital, socialised capital as the transitional form of property, as Marx defines it. An example is found in relation to Brexit, and the last British General Election. 

Brexit was a reactionary, populist agenda, driven by the right-wing of the Tory Party, and its outriders in UKIP/BP. It reflected the views and interests of this class of small capitalists, of whom the Tory Party is the political representative. Yet, all of these small capitalists, symbolised by the ubiquitous white van man, were portrayed as being “working-class”, and in some way representative of the core working-class vote, along with those other peripheral layers amongst the retired and elderly, where support for this reactionary agenda was found. 

Insofar as left populists did not, themselves, line up on the side of reaction, in support of Brexit, after the referendum, many of them did collapse into the position that the referendum result had to be “respected”. Despite the fact that the EU and local elections, in 2019, showed that those voters most certainly did not represent Labour's core vote, the Stalinists and Left Populists continued to orientate towards them. The result, in the General Election, was inevitable. Those small capitalists that backed Brexit, and whose political representative is the Tory Party, voted solidly Tory, and drew the associated reactionary social layers along with them. Labour failed to give a clear, principled and progressive alternative, and so saw its vote shredded. 

A similar thing can be seen in France, where the Gilets Jaunes are a similar movement of the reactionary small capitalists, whose initial cause, around which they mobilised, was increases in fuel duties, which hit these small businesses profits, along with other increases in taxes

Sunday, 21 June 2020

How The Left Should Have Responded To Covid19 - Part 1 of 3

The response of the Left to the Covid19 pandemic has been abysmal. It has been a mixture of opportunism, Malthusian catastrophism, dogmatism and group think. The most level headed response I have seen has been that of socialists in New Zealand, and I say that not because of any general agreement with them. On the contrary, in relation to probably most things, and particularly imperialism, I would be in disagreement with them. I would describe them as being amongst that class of petty-bourgeois moral socialists/Sismondists criticised by Lenin, in the series on Economic Romanticism that I have been running recently. 

If the Labour Party, and its foreign equivalents, are considered, their response was necessarily bad. These are bourgeois parties that are never going to adopt a serious, independent, proletarian internationalist position. As parliamentarist parties, their position is always going to be opportunist, based on seeking short-term parliamentary political advantage. But, the response of the Left, outside these bourgeois parties has also been atrocious. 

The problem with the organised Left is that it is contained within ossified micro sects. Each micro sect exists on the basis of promoting its own particular dogma. They portray themselves as different, as they each seek to cultivate their own niche in the market, and to justify their separate existence, but, from a distance, they appear all to be the same heap of decalcifying bones from the same skeleton. It mitigates against any kind of critical thinking. The leadership of these micro sects have been in place for 40-50 years, longer than for most Stalinist rulers. These leaders hand down the party line, which the members are then expected to defend in tribal loyalty. Given that most of these members have then lost the capacity for critical thinking, as they simply parrot the appropriate meme, its no wonder that, as soon as they are confronted by an alternative position, which they are unable to dismiss, the discussion, particularly over the Internet, quickly descends into a barrage of abuse and expletives. Indeed, its often difficult to differentiate between the outright trolls, who have no beliefs, but simply engage in flame wars for entertainment, and the more brain dead members of the micro sects. 

In large part, the position of most of the Left, over Covid19, was just as opportunist as that of the LP. It amounted to putting a plus sign wherever your opponent puts a minus sign. Trump, Bolsanaro, Johnson/Cummings were pandemic deniers, and opposed imposing lockdowns, so the Left automatically put a plus sign where these right-wing populists put a minus sign. The first thing the Left should have done, therefore, in Trotsky's words, was to “Learn To Think”

“In ninety cases out of a hundred the workers actually place a minus sign where the bourgeoisie places a plus sign. In ten cases however they are forced to fix the same sign as the bourgeoisie but with their own seal, in which is expressed their mistrust of the bourgeoisie. The policy of the proletariat is not at all automatically derived from the policy of the bourgeoisie, bearing only the opposite sign – this would make every sectarian a master strategist; no, the revolutionary party must each time orient itself independently in the internal as well as the external situation, arriving at those decisions which correspond best to the interests of the proletariat... 

Those ultra-leftists who do not want to think as Marxists, that is, concretely, will be caught unawares by war. Their policy in time of war will be a fatal crowning of their policy in peace-time. The first artillery shots will either blow the ultra-leftists into political non-existence, or else drive them into the camp of social-patriotism, exactly like the Spanish anarchists, who, absolute “deniers” of the state, found themselves from the same causes bourgeois ministers when war came.” 

And, indeed, so the same comparison can be made with the outbreak of the Covid19 moral panic, which has itself been couched in wartime phraseology. It has been those that profess themselves to be supporters of workers' liberty, and in general opponents of Bonapartism, of authoritarianism, and so on that have been the greatest cheerleaders of such authoritarian and draconian measures by the state, and Bonapartist regimes, criticising them not for their authoritarianism, but for not being authoritarian enough! This is also a consequence of such micro sects having abandoned any concept of independent, working-class action and self government, and a collapse into craven reliance on the bourgeois state to provide answers to workers problems, of a pathetic collapse into Lassallean/Fabian statism, into petty-bourgeois social democracy.

So, for example, not only do we see calls for the capitalist state to enact these draconian measures to take away the right of free movement, and to withdraw the basic rights and freedoms of workers, taking them back to the conditions of serfdom, but we see ridiculous demands for care homes to be nationalised by the capitalist state, as a solution! This is the same capitalist state that already controls the NHS, which has proved itself totally unfit for purpose in protecting workers lives and health, including its own workers that were deprived basic PPE, and which has been systematically undermined by ten years of austerity. We are told that such state capitalism is “public ownership”, reinforcing the nonsense spouted by the Tories as well as social democrats, about it being “our” NHS, when it is no such thing. They seem to have forgotten the basic tenets of Marxism that there is no such thing as “the public” or “the people”, because society is comprised of classes, and those classes stand in antagonistic contradiction to each other. How can any of these things be under “public ownership”, when they are controlled by the capitalist state, a state there to protect the interests of the capitalist class, not the working class? 

Trump and the populist Right denied the existence of the pandemic, and so the Left not only had to assert its existence – which is undeniable – but to characterise it in apocalyptic terms, which it most certainly does not justify. A pandemic certainly exists, i.e. a virus that is highly infectious, and has spread across most countries of the world, but all of the claims about it causing 45 million deaths, globally, up to 500,000 deaths in the UK, and corresponding numbers in the US etc., clearly are not justified, and some analysis of this, and of the science and the facts would have shown, from the start, that it was not justified. But, the Left launched headlong into putting plus signs where the populists placed minus signs, and so, when the populists did impose lockdowns, the left could only respond by positioning themselves as even more authoritarian, even more illiberal. 

The AWL, even has it as part of its name, the Alliance for Workers Liberty, but, in the name of counterposing itself to Trump, Johnson et al, it quickly abandoned all demands for such liberty, including the right to free movement it had called for in response to Brexit. But, it was not alone. Most of the Left demanded that workers right to work, right to assemble and so on be scrapped, and that workers be confined to their quarters, required only to come out as drones to work in “essential” jobs, which really meant nearly all jobs, but that they should keep quiet about it. Even the right to free speech was challenged, as anyone challenging the received wisdom was branded a “Pandemic Denier”, an enemy of the state, or non-person, as were those who did not abide by the state and its media's requirement that everyone, each week, come out to clap the nation's health and care workers, even as the government itself denied them PPE! A more glaring example of 1984 style brain-washing and social conditioning, to see how far conformity could be induced, its hard to imagine, and was reminiscent of the kind of programming discussed by Milgram

The weekly clap was part of a propaganda campaign to convince us that we were “all in it together”, just as in wartime, and that the war was being waged by “our NHS” just as in wartime it is being fought by “our armies”. But, of course, they are not “our armies”, and nor is it “our NHS”, because both these things are merely aspects of the capitalist state, which itself is most certainly not ours, but is the state of the ruling capitalist class. The task of Marxists, as Trotsky sets out above is to be enemies of that state in peace and in war.  In fact, that NHS has treated its own workers appallingly, and failed not only to provide them with PPE, to provide adequate contact and isolation protocols, but even called back retired health workers, i.e. those amongst the 20% of the population actually at risk from infection by the virus! In addition it has failed to protect its patients, it has been in the confined, locked down spaces of hospitals and care homes that the greatest concentration of deaths from Covid19 came. They have been like killing fields for the virus, and yet all the attention has been on closing down wider society, where relatively very few deaths have occurred. It has engaged in large scale stunts like the creation of Nightingale Hospitals that remained effectively empty, and were then closed down, having diverted money, staff and resources from where they were actually needed. In fact, that kind of behaviour is typical of the top heavy, bureaucratic nature of the NHS as a whole. 

Its not the job of Marxists to advise the capitalist state on how it should arrange its affairs. We are not in a position to make such decisions or to make such demands upon it, and that state is not going to ask our advice in doing so. That was precisely Lenin's criticism of the Narodniks in their attempts to draw up such schemas. We can, however, examine what that state has done, why it did it, and to say, how instead a rational socialist state would have acted, and we can set out how, in the constraints of the existing state, workers can organise to defend their own interests. The Left, in fact, failed to do any of that, instead focusing on demanding that the state be even more authoritarian, even more illiberal, and destroy the economy and the basis of workers' livelihoods even more drastically. It is a measure of just how petty-bourgeois, both in composition and in outlook, that Left has become. 

Adopting a rational approach to Covid 19 was not difficult. Its true that its a new virus, but that is only true in the sense that its a new strain of an existing type of virus. Covid19 is simply a strain of coronavirus, and the coronavirus has been around for a long time. They were first discovered in animals in the 1930's, and in humans in the 1960's. It is coronavirus, along with rhinovirus and others, that is responsible for the common cold. We know that these viruses are very contagious, every year, millions of people across the globe catch colds; there is a pandemic every year in that respect. But, the vast majority of people who catch a cold, i.e. contract coronavirus, or rhinovirus, are not seriously ill as a result. Even fewer die from it. That is just a simple fact. But some people are seriously ill, and some do die from catching a cold. If you are old, or your immune system is compromised, even a cold can make you seriously ill, and, frequently, it is the fact that this prolonged illness, and your bodies response to it, that actually kills you, as you get pneumonia, or other complications.  The main means of dealing with the common cold is via the development of herd immunity, because the rapid mutation of the viruses that cause it makes developing appropriate vaccines difficult.

So, too with Covid19 as a coronavirus. For 80% of people, as with the common cold, it causes no symptoms or only mild cold like symptoms. The WHO now even says that people amongst this 80% who have the coronavirus, but who are asymptomatic, are also very unlikely to be contagious. That appears to be the case with children, which throws into question the whole farce of having closed down schools. Unlike the flu virus, which makes pretty much everyone ill it infects, including children, Covid 19 does not affect children, and has virtually no effect on 80% of the population. Even amongst the remaining 20%, it only severely affects a minority, and kills an even smaller number than that. If we take the 20%, in Britain, that is around 13 million people. The total number of deaths so far, which have been concentrated amongst the elderly in hospitals and care homes, and appears now to have reached a peak, having ravaged those confined populations, is just over 40,000. That only constitutes just 0.3% even of that 20%. It represents a tiny 0.07% of the total population. As a comparison, flu, for which we have vaccines, kills, in a bad year, in Britain, around 17,000 people, and has a mortality rate of 0.1%. So, we have a pandemic, yes, but the nature of that pandemic is by no means as apocalyptic as the media have portrayed it as being, and which the Left have themselves been complicit in suggesting. 

On average, 8,000 people die from flu each year, in Britain, despite having vaccines to provide herd immunity against it, and particularly to protect those most at risk from it. In 2018, 17,000 died, in Britain from flu, which is half the number that have died from Covid 19. But, even this is not a valid comparison. Flu affects everyone, whilst Covid 19 particularly affects the elderly. More than half those that have died are people over 80, and most of them are over 85. In terms of excess deaths its hard to say how many of the 40,000 can be absolutely attributed to Covid19, because many of those people, especially those suffering with other conditions would have died anyway. In other years, such deaths are often attributed to these other causes, or to flu, because, in previous years, no one has tested for Covid19. But, despite those 17,000 flu deaths in 2018, no one demanded that the economy be closed down, to prevent its spread. That is despite the fact that there have been warnings, for years, that a flu pandemic was likely. Each year, around 80,000 people die from smoking related illnesses, and a further 320,000 contract serious smoking related diseases. Yet, despite twice as many people dying from these smoking related diseases as from Covid19, we don't even get a ban on smoking or close down cigarette manufacturing, and so on. 

So, if we can have 17,000 people die from flu, if we can have 80,000 people die every year from smoking, without closing down the economy, what justifies closing down the economy in response to Covid19? The answer is that there is no justification.

Forward To Part 2