Friday Night Disco - Its So Hard Being A Loser - The Contours

The Civilising Mission of Capital - Part 3 of 4

As part of its civilising mission, therefore, capital is led to produce ever new types of use value, to develop science, to explore the world for new types of use value, new ways of using use values, and, thereby, to expand the market, as it continually revolutionises production, and produces commodities on an expanding scale, so that it repeatedly comes up against the limits of capitalist production, in the form of an overproduction of commodities, overproduction in the capitalist sense that, even though these commodities become ever cheaper, there comes a point where they cannot be sold at prices that produce profits. As it widens the scope of the market, the commodities sold to workers, also in order to develop the use value of their labour, expand out of the provision of purely material commodities into the provision of services, of education, art and culture. These provide the workers with the tools not only to raise their horizons, but also to begin to recognise their own specific class interests, to become a class not just in itself, but also for itself. It provides the working-class with the tools required to become the ruling-class. As Marx says, in the programme he produced for the First International. 

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

In its infant stage, capitalism, in seeking to win market share, on the basis of cheap prices, also seeks to cut corners, to use cheap tricks, such as adulteration of food and so on. And, in its dealings with workers, in the workplace, it sought to utilise similar methods to reduce costs, to cut wages, to minimise conditions. Such methods continue to be the hallmark of the small capitalist that can only survive against the competition of big capital by using such methods. Big capital too, in periods of more fierce competition, and when the supply of labour is plentiful, may also resort to such methods. But, as Engels describes, largely, by the second half of the 19th century, the larger capitals had found such methods to be both unnecessary and self-defeating. 

“Thus the truck system was suppressed, the Ten Hours’ Bill was enacted, and a number of other secondary reforms introduced — much against the spirit of Free Trade and unbridled competition, but quite as much in favour of the giant-capitalist in his competition with his less favoured brother. Moreover, the larger the concern, and with it the number of hands, the greater the loss and inconvenience caused by every conflict between master and men; and thus a new spirit came over the masters, especially the large ones, which taught them to avoid unnecessary squabbles, to acquiesce in the existence and power of Trades’ Unions, and finally even to discover in strikes — at opportune times — a powerful means to serve their own ends. The largest manufacturers, formerly the leaders of the war against the working-class, were now the foremost to preach peace and harmony. And for a very good reason. The fact is that all these concessions to justice and philanthropy were nothing else but means to accelerate the concentration of capital in the hands of the few, for whom the niggardly extra extortions of former years had lost all importance and had become actual nuisances; and to crush all the quicker and all the safer their smaller competitors, who could not make both ends meet without such perquisites.” 

(Engels – The Condition of The Working Class in England) 

And, the introduction of welfare states was simply the logical extension of this process, and of the civilising mission of capital, as, now, workers had no choice about having to spend a portion of their wages on education for their children, on healthcare and so on, because although the Truck System of the individual employers had been banned, now the capitalist state introduced the biggest truck system of all, in the form of welfare states, by which all workers had a part of their wages deducted in taxes and social insurance, to cover the provision of these services. Now a large part of the workers wages was paid in truck, in the shape of the social wage.  Now the workers had no control over the nature of the services provided to them, as part of the social wage, by the biggest monopolist of all, the capitalist state. Unlike when the workers provided for themselves, through their own cooperative schools, labour colleges, and trades union and friendly society provision of health and social care, and insurance for unemployment, sickness and old age, the capitalist state could, now, dictate how much they would pay by law, and could determine the quantity and quality and content of provision, to meet the needs of capital rather than labour. It was what Marx feared from such state provision when he said in relation to state involvement in education, 

“"Elementary education by the state" is altogether objectionable. Defining by a general law the expenditures on the elementary schools, the qualifications of the teaching staff, the branches of instruction, etc., and, as is done in the United States, supervising the fulfilment of these legal specifications by state inspectors, is a very different thing from appointing the state as the educator of the people! Government and church should rather be equally excluded from any influence on the school. Particularly, indeed, in the Prusso-German Empire (and one should not take refuge in the rotten subterfuge that one is speaking of a "state of the future"; we have seen how matters stand in this respect) the state has need, on the contrary, of a very stern education by the people.” 

(Critique of the Gotha Programme) 

Or as Engels set out opposing demands for a welfare state in Germany, 

“These points demand that the following should be taken over by the state: (1) the bar, (2) medical services, (3) pharmaceutics, dentistry, midwifery, nursing, etc., etc., and later the demand is advanced that workers’ insurance become a state concern. Can all this be entrusted to Mr. von Caprivi? And is it compatible with the rejection of all state socialism, as stated above?” 

(Critique of the Erfurt Programme)

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What The Friends of the People Are, Part III - Part 21

The Narodniks tried to argue that these elements were no longer peasants but only hucksters, thereby claiming that the “people's industry” remained intact. However, Lenin says, setting these hucksters and others of their ilk on one side, and, setting on the other all of those who were no longer peasants, because they had become wage labourers, what remained of this so called “people's industry”? In fact, what it showed was that this “people's industry” did not exist, because what it actually consisted of was the hucksters, the merchant capitalists, and small productive-capitalists, on the one hand, and proletarians on the other, whether those proletarians were in the form of actual wage labourers, or in the form of the labourer exploited via the Putting Out System, and system of domestic production, or the handicraft workshop. In fact, these latter forms were more exploited than the actual wage labourers, because their atomised condition meant they could not organise collectively, and what they were paid frequently fell even below the value of labour-power. The same applies to workers in similar conditions today, who must, thereby, rely on massive levels of in-work welfare payments to subsidise their wages. 

“This mass of small rural exploiters represents a terrible force, especially terrible because they oppress the isolated, single toiler, because they fetter him to themselves and deprive him of all hope of deliverance; terrible because this exploitation, in view of the barbarism of the countryside due to the low labour productivity characteristic of the system described and to the absence of communications, constitutes not only robbery of labour, but also the Asiatic abuse of human dignity that is constantly encountered in the countryside. Now, if you compare this real countryside with our capitalism you will understand why the Social-Democrats regard the work of our capitalism as progressive when it draws these small, scattered markets together into one nation-wide market, when, in place of the legion of small well-meaning blood suckers, it creates a handful of big “pillars of the fatherland,” when it socialises labour and raises its productivity, when it shatters the subordination of the working people to the local blood-suckers and subordinates them to large-scale capital.” (p 235-6) 

In the era of globalisation and multinational capital, the same argument applies to the development of superstates, like the EU, and economic blocs like MERCOSUR, ASEAN, ACFTA and so on. And, the opponents, today, of such developments, the proponents of Brexit, and attempts to constrain capital within the confines of the nation state, are today's equivalents of the Narodniks and Sismondists. The bringing together of nation states into these larger units, which prefigure large superstates, are not only a reflection of the material conditions and needs of capital, they are the means by which this further development of capital is facilitated. In so doing, it facilitates the transformation to Socialism, which itself is predicated on such large-scale, international, economic relations. Lenin, in 1918, polemicising against ultra-lefts described this in relation to the development of large scale industrial capital in Germany, as providing the basis both for imperialism, and for socialism. 

“To make things even clearer, let us first of all take the most concrete example of state capitalism. Everybody knows what this example is. It is Germany. Here we have “the last word” in modern large-scale capitalist engineering and planned organisation, subordinated to Junker-bourgeois imperialism. Cross out the words in italics, and in place of the militarist, Junker, bourgeois, imperialist state put also a state, but of a different social type, of a different class content—a Soviet state, that is, a proletarian state, and you will have the sum total of the conditions necessary for socialism. 

Socialism is inconceivable without large-scale capitalist engineering based on the latest discoveries of modern science. It is inconceivable without planned state organisation, which keeps tens of millions of people to the strictest observance of a unified standard in production and distribution. We Marxists have always spoken of this, and it is not worth while wasting two seconds talking to people who do not understand even this (anarchists and a good half of the Left Socialist-Revolutionaries)... 

And history (which nobody, except Menshevik blockheads of the first order, ever expected to bring about “complete” socialism smoothly, gently, easily and simply) has taken such a peculiar course that it has given birth in 1918 to two unconnected halves of socialism existing side by side like two future chickens in the single shell of international imperialism. In 1918 Germany and Russia have become the most striking embodiment of the material realisation of the economic, the productive and the socio-economic conditions for socialism, on the one hand, and the political conditions, on the other.” 

(Left-wing Childishness) 

And, to emphasise the point that this was not simply some argument that he had raised to fit the particular conditions they found themselves in, Lenin quotes from his article in September 1917  The Impending Catastrophe and How to Combat It . 

““. . . Try to substitute for the Junker-capitalist state, for the landowner-capitalist state, a revolutionary-democratic state, i.e., a state which in a revolutionary way abolishes all privileges and does not fear to introduce the fullest democracy in a revolutionary way. You will find that, given a really revolutionary-democratic state, state-monopoly capitalism inevitably and unavoidably implies a step, and more than one step, towards socialism! 

“. . . For socialism is merely the next step forward from state-capitalist monopoly. 

“. . . State-monopoly capitalism is a complete material preparation for socialism, the threshold of socialism, a rung on the ladder of history between which and the rung called socialism there are no intermediate rungs ” (pages 27 and 28)” 

(ibid) 

But, more than that, capital not only creates the material conditions for socialism, by developing the means of production, it also creates the social agent which brings about this social change, it creates the working-class, and the more capitalism develops, the larger, the more socially dominant this working-class becomes, and the more capitalism becomes a global system, the more this working-class too develops as a global class, for which national borders become an unnecessary fetter. If socialism is only possible on an international basis, which it is, then it can only be brought about by a working-class that is itself international, and internationalist in nature. It requires that this working-class, facing the same economic and social conditions, must exist not in the form of a national class, but at least as a continent wide class, organised in continent wide class organisations, in continent wide trades unions, cooperatives and workers parties. It must engage in continent wide class struggle for control and ownership of the means of production.

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The Civilising Mission of Capital - Part 2 of 4

Rising productivity, and the increasing mechanisation of production, and spread of technology has a contradictory effect. On the one hand, machine industry means that labour is really subordinated to capital. It exists, now, only as factory labour. As factory labour that acts only as machine minding labour, it is homogeneous. But, even this homogeneous factory labour has different requirements to peasant labour, and even to simple handicraft labour. The worker needs some basic educational skills, to be able to read and write, so as to understand instructions, for example. But, also alongside this homogeneous factory labour grows a range of other new types of concrete labour. Machine production requires engineers able to produce and maintain machines, for example. Train drivers, and other railway workers need to be able to read, to do simple maths, to write and so on. And, as industry expands, and the role of the private capitalist is eclipsed, whole armies of workers are recruited into the role of functioning capitalist, as managers, administrators, accountants, and so on. 

“The commercial worker, in the strict sense of the term, belongs to the better-paid class of wage-workers — to those whose labour is classed as skilled and stands above average labour. Yet the wage tends to fall, even in relation to average labour, with the advance of the capitalist mode of production. This is due partly to the division of labour in the office, implying a one-sided development of the labour capacity, the cost of which does not fall entirely on the capitalist, since the labourer's skill develops by itself through the exercise of his function, and all the more rapidly as division of labour makes it more one-sided. Secondly, because the necessary training, knowledge of commercial practices, languages, etc., is more and more rapidly, easily, universally and cheaply reproduced with the progress of science and public education the more the capitalist mode of production directs teaching methods, etc., towards practical purposes. The universality of public education enables capitalists to recruit such labourers from classes that formerly had no access to such trades and were accustomed to a lower standard of living. Moreover, this increases supply, and hence competition. With few exceptions, the labour-power of these people is therefore devaluated with the progress of capitalist production. Their wage falls, while their labour capacity increases. The capitalist increases the number of these labourers whenever he has more value and profits to realise. The increase of this labour is always a result, never a cause of more surplus-value.” 

(Capital III, Chapter 17, p 300-301) 

On the one hand, therefore, capital needs to sell new types of commodity to workers, including services such as education, and on the other, it also needs workers to consume such commodities as education, because its requirements, in terms of the concrete labour required for production, is changing. Indeed, these basic requirements, for the type of concrete labour needed, implies other changes for capital too. There is no point capital providing resources for workers education, if the worker themselves has a short lifespan, or is regularly too ill to work. That would mean having to expend resources on education for new generations of workers more frequently. Capital requires that workers, therefore, also consume commodities that encourage better health, that they be dissuaded from drinking alcohol, and so on. Hence the bourgeoisie introduces temperance campaigns, and so on. It is this, which leads capital not only to extend “free” public education, but also to establish welfare schemes, whether in the form of the company welfare schemes introduced in the US by large corporations, or in the form of state capitalist welfare schemes via national and other forms of social insurance. 

So, capital requires a different type of labour, with different use values, and, in order to achieve it, it must also get workers to consume different types of use value in order to produce that type of labour. At the same time, capital, as it expands the range of goods and services it produces, and must sell these in ever larger quantities, must also encourage the workers to consume these wider range of commodities and services. 

“...likewise the discovery, creation and satisfaction of new needs arising from society itself; the cultivation of all the qualities of the social human being, production of the same in a form as rich as possible in needs, because rich in qualities and relations -- production of this being as the most total and universal possible social product, for, in order to take gratification in a many-sided way, he must be capable of many pleasures [genussfähig], hence cultured to a high degree -- is likewise a condition of production founded on capital. This creation of new branches of production, i.e. of qualitatively new surplus time, is not merely the division of labour, but is rather the creation, separate from a given production, of labour with a new use value; the development of a constantly expanding and more comprehensive system of different kinds of labour, different kinds of production, to which a constantly expanding and constantly enriched system of needs corresponds.” 

(The Grundrisse, Chapter 8) 

This is the Civilising Mission of Capital. Productivity rises, the quantity of every type of existing commodity increases. At a certain point, even as the value of these commodities falls, as productivity rises, the demand for these commodities cannot be increased sufficiently. There is overproduction of these commodities. Their market prices fall sharply, and the rate of profit on them falls rapidly along with it, with some producers suffering losses. It is no longer possible to simply accumulate the released capital in these spheres, and so it must seek out new spheres of production, new spheres where consumption and the market can be expanded, and where profits can be made. And, the capital invested in these new spheres, also, thereby, creates a market for the capital invested in the old spheres, validating it, as exchange between these spheres is now possible. 

“The value of the old industry is preserved by the creation of the fund for a new one in which the relation of capital and labour posits itself in a new form. Hence exploration of all of nature in order to discover new, useful qualities in things; universal exchange of the products of all alien climates and lands; new (artificial) preparation of natural objects, by which they are given new use values. The exploration of the earth in all directions, to discover new things of use as well as new useful qualities of the old; such as new qualities of them as raw materials etc.; the development, hence, of the natural sciences to their highest point...” 

(The Grundrisse, Chapter 8) 

This is the Civilising Mission of Capital.

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What The Friends of the People Are, Part III - Part 20

In the same way that Marx, in Theories of Surplus Value, examines the material basis of the various strands of political economy, from the Mercantilists, through the Physiocrats, to Classical Economy and Critical Economy, to vulgar economy, so too Lenin says, the reason for him examining the data, provided by Zemstvo statisticians is to locate the material foundations of Narodnik ideology. 

“Illustrations and examples of the economy of our peasants and handicraftsmen show what this “peasant” is whose ideologists the “friends of the people” want to be. They demonstrate the bourgeois character of our rural economy and thus confirm the correctness of classifying the “friends of the people” as ideologists of the petty bourgeoisie. But this is not all; they show that there is the closest connection between the ideas and programmes of our radicals and the interests of the petty bourgeoisie. It is this connection, which will become even clearer after a detailed examination of their programme, that explains why these radical ideas are so widespread in our “society”; it also admirably explains the political servility of the “friends of the people” and their readiness for compromise.” (p 234) 

This analysis applies equally today to the “anti-imperialists” and “anti-capitalists”. Not only are these trends comprised almost exclusively of the middle class, but their programme and practice is based upon alliances with, or cheerleading of, petty-bourgeois nationalist movements and regimes, and the promotion of petty-bourgeois ideas and sentiments. In a comment today's “anti-capitalists” and “anti-imperialists” (who claim to be Marxists, and even Leninists) should take note of, especially those that claim that capitalism is no longer progressive, Lenin says, 

“A study and description of these economics was the simplest way to reply in substance to one of the most widespread objections to Social-Democracy current among people here. Proceeding from the usual idea that capitalism contradicts the “people’s system,” and observing that the Social-Democrats regard large-scale capitalism as progressive, that it is large-scale capitalism that they want to have as their basis in combating the present robber regime—our radicals, without more ado, accuse the Social-Democrats of ignoring the interests of the mass of the peasant population, of desiring “to put every muzhik through the factory melting pot,” etc. 

All these arguments are based on the amazingly illogical and strange procedure of judging capitalism by what it really is, but the countryside by what it “might be.” (p 234) 

As Lenin says, the basis of this criticism is the Narodnik insistence of dealing with capitalism – by which they only meant large-scale machine industry – by what it is, whilst judging “people's industry” by what it might be. The same is true, most clearly, of the “anti-imperialists”, who judge “imperialism”, i.e. large-scale multinational capital, on the basis of what it is – and often not even that, but a parody of it, and an equation of it with imperialist military intervention – but judge the petty-bourgeois nationalist regimes, and the domestic capital on which they rest, by what it might be, thereby reneging on their duty to analyse the nature of that capital, and the more onerous exploitation and oppression it inflicts. All aspects of that more onerous and grotesque exploitation, which flows from the less developed nature of that domestic capital, is instead blamed on “imperialism”, and “super exploitation”, the “development of underdevelopment” and other such tripe. 

The existence of child labour, in less developed economies, is no more the product of imperialism, for example, than was the existence of child labour in Britain, in the 19th century. Quite the contrary, it is the product of a less mature form of capital, wheres imperialism, in the shape of large scale industrial investment is the most rapid means by which that less developed form of capital can be superseded, that the working-class organises into trades unions to oppose such exploitation, and organises to demand factory laws, child labour laws, and so on. The same is true of the “anti-capitalists” who focus their ire on the large capitals, but are never to be seen protesting against the small capitalists whose exploitation of their workers is far more grotesque. 

“Naturally, there could be no better reply to this than to show them the real countryside and its real economics. ” (p 234) 

And, indeed, we are a long way today from the days, in the 1970's, when we mobilised thousands of pickets outside the small Grunwicks photo processing laboratory, in support of its grossly exploited and oppressed workers, and their demands for trades union rights, and simply to be treated in a civilised manner. We hear a lot about sweatshops in Asia, producing clothes and footwear for multinational sportswear and and clothing retailers, but little about the thousands of sweatshops operating in Britain, producing items sold on stalls, in local markets, and so on. Only when we hear of a tragedy such as that of the cockle collectors in Morecambe, do we get any light shone on the activities of these small capitalists and gang masters operating in Britain, and then attention usually soon disappears from sight after only a few days of headlines. 

“When you compare the descriptions of peasant economy given by our radicals with precise first hand data on rural economic life, you are astonished that there is no place in the criticised system of views for that mass of small hucksters who swarm in each of these markets, all these higglers and chafferers or whatever else the peasants call them in different localities, for all that mass of petty exploiters who dominate the markets and ruthlessly oppress the working people.” (p 235)

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The Civilising Mission of Capital - Part 1 of 4

Marx describes the concept of The Civilising Mission of Capital, in The Grundrisse. Capitals are driven to compete. Initially, this competition takes the form of price competition, as each firm seeks to undercut others in the industry, and, thereby, to grab market share. In order to obtain this advantage, each firm is led to innovate, to raise the level of productivity, so as to reduce its costs. As every other firm follows suit, and introduces new machines, new techniques and so on, to obtain this higher productivity, so the level of productivity, in the industry, and across the economy, is raised. Those firms that do not manage this, and go bust, then see their market share taken over by the more efficient firms so that, again, the average level of productivity rises. But, as productivity rises, for each industry, there comes a point where the capital and labour, thereby released, moves to some other new sphere of production, instead of being used to simply produce more of the given product. 

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

(Grundrisse, Chapter 8) 

So, as productivity rises, the value of commodities falls, which is manifest, also, in a fall in their price of production. Living standards rise, because, even though wages fall, i.e. the value of labour-power falls, and profits rise, these wages buy an increasing quantity of wage goods. However, there is a limit to how much of any particular wage good workers want to buy, no matter how cheap it might become. 

“The same value can be embodied in very different quantities [of commodities]. But the use-value—consumption—depends not on value, but on the quantity. It is quite unintelligible why I should buy six knives because I can get them for the same price that I previously paid for one." 

(TOSV 3 Chapter 20, p 119)

So, it is inevitable that all consumers, including workers, will only buy more of any type of commodity, as it becomes cheaper, up to a point. After that, they will prefer the general commodity, money, to any or all of these other commodities, and keep it in their pocket, meaning that all of these other commodities have been overproduced. 

“At a given moment, the supply of all commodities can be greater than the demand for all commodities, since the demand for the general commodity, money, exchange-value, is greater than the demand for all particular commodities, in other words the motive to turn the commodity into money, to realise its exchange-value, prevails over the motive to transform the commodity again into use-value.” 

(TOSV2, Chapter 17, p 505) 

At such a point, the rate of profit, on all of this production, would also drop suddenly. This is particularly the case, given that its often where the demand for labour-power has risen so much that wages are pushed up, so that workers, with these higher wages, are able to buy more of these commodities, and so reach a point where they do not demand more, that also means that these higher wages reduce relative surplus-value, thereby, creating an overproduction of capital as well as an overproduction of commodities. Producers, need to find new types of production to engage in, to attract consumers to buy their output, rather than hold on to money. These new types of production are also, usually, ones where the rate of profit is high, where the organic composition of capital is low. 

“...new lines of production are opened up, especially for the production of luxuries, and it is these that take as their basis this relative over-population, often set free in other lines of production through the increase of their constant capital. These new lines start out predominantly with living labour, and by degrees pass through the same evolution as the other lines of production. In either case the variable capital makes up a considerable portion of the total capital and wages are below the average, so that both the rate and mass of surplus-value in these lines of production are unusually high. Since the general rate of profit is formed by levelling the rates of profit in the individual branches of production, however, the same factor which brings about the tendency in the rate of profit to fall, again produces a counterbalance to this tendency and more or less paralyses its effects.” 

(Capital III, Chapter 14, p 237) 

Whilst, some of these new lines of production are luxury goods, only affordable to the capitalists and other exploiters, others are types of commodities that are affordable to workers, some are commodities that are affordable by the middle-class, and so on. Similarly, former luxury products only affordable by the exploiters, become cheaper, as productivity in these industries rises, and as demand for these products rises, more capital engages in those sectors, raising the level of supply, but, also, increasing competition, and stimulating more rapid innovation, so that prices of these commodities falls, making them, too, accessible to much larger layers of society. Motor cars were initially only accessible to the rich, but, by the early 20th century, the revolution in production brought about by Fordism reduced their value, and, with consumer credit, meant that they became affordable by members of the middle class.  Further revolutions in productivity meant that, by the 1960's, some workers could afford to buy cars, and by the 1970's, many working-class households had more than one car. 

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What The Friends of the People Are, Part III - Part 19

“I have dwelt once more in such detail on the differentiation of the peasants and handicraftsmen just because it was necessary to bring out clearly how the Social-Democrats picture the matter and how they explain it. It was necessary to show that the facts which to the subjective sociologist mean that the peasants have “grown poor,” while the “money chasers” and “blood-suckers” “derive profits for their own advantage,” to the materialist mean the bourgeois differentiation of the commodity producers necessitated by commodity production itself. It was necessary to show what facts serve as the basis for the thesis (quoted above in Part 1) [See p. 191 of this volume. –Ed.] that the struggle between the propertied and the propertyless is going on everywhere in Russia, not only in the mills and factories, but even in the most remote villages, and that everywhere this struggle is one between the bourgeoisie and the proletariat that emerge as a result of commodity economy.” (p 232-30) 

Lenin's analysis, like that of Marx, was not based on subjective sociological criteria, about rich or poor, affluent or not affluent, which also forms the basis of modern subjective sociological definitions of class, but on objective material conditions or property ownership, and specifically ownership of capital. The distinction was not between affluent large capitalists on the one hand, and not very affluent workers and small capitalists on the other, but between the owners of capital, big and small, on the one hand, and workers on the other. 

“This thesis may be called the central point of the theory of WORKING-CLASS SOCIALISM as against the old peasant socialism, which understood neither the conditions of commodity economy in which the petty producers live, nor their capitalist differentiation due to these conditions. And, therefore, whoever wanted to criticise Social-Democracy seriously should have concentrated his argument on this, and shown that from the angle of political economy Russia is not a system of commodity economy, that it is not this which causes the break-up of the peasantry, and that the expropriation of the mass of the population and the exploitation of the working people can be explained by something other than the bourgeois, capitalist organisation of our social (including peasant) economy. 

Well, just try it, gentlemen!” (p 233)

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The Civilising Mission of Capital - Summary

Summary

• The Civilising Mission of Capital should not be confused with the Historic Mission of Capital.

• The Civilising Mission of Capital is a concept set out by Marx in The Grundrisse. It says, essentially, that, because capitalism is forced, by competition, to continually revolutionise production, and so to raise the level of social productivity, it must also continually divert the released capital and labour, resulting from this rising productivity, into new spheres of production. It must continually produce new types of commodities, and continually stimulate new desires amongst consumers for those new commodities. It must also, thereby, develop new types of concrete labour that produces these new products.

• The labourers must, thereby, be trained and educated so as to have these new skills, and as the workers increasingly become the largest class, and so the largest body of consumers, so an increasing range of these products must be included in the normal consumption of workers, the basis of the value of labour-power. That includes not just the material commodities bought by workers, but increasingly the immaterial commodities, the services such as education, art and culture. Capital necessarily provides the working-class, therefore, with all of these “civilising” influences, as well as greater leisure-time, so that the workers themselves acquire the necessary skills to become the ruling class.

• The further development of capitalist production means that the initial means of reducing costs, of cheapening prices, and grabbing market share are superseded, as the extraction of relative surplus value, by the raising of social productivity dominates. The development of large-scale socialised capital, means that a change in social relations occurs, the state must become a social-democratic state, planning and regulating the economy, to create the conditions for long-term capital accumulation. The working-class must be drawn into this corporatist state, itself on the basis of it being “civilised” and socialised by absorbing bourgeois ideas and culture.

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Northern Soul Classics - Going, Going, Gone - Cody Black

Friday Night Disco - The Walk - Jimmy McCracklin

Economic Recovey?

UK retail sales rose by 13.9% in June compared to May, taking them back to near pre-lockdown levels.  In addition UK PMI data for Services rose to 56.6 for July, compared to 47.7 for June, and estimates of 51.5.  It was the fastest pace of expansion in the services sector since July 2015.  Is this evidence that the economic slowdown caused by the Tory lockdown was just a blip, and that the economy has already mostly recovered?  Short answer - no.

Firstly, what all this data indicates, as I forecast some weeks ago is simply that we have moved from a period of economic contraction to one of a reversal of that contraction.  To put it in the context of a car, if its travelling at 100 mph, and the driver slams on the brakes, the car will rapidly slow down, if s a result the car is travelling at 20 mph, and the driver takes their foot off the brake, it stops slowing down so quickly, and if the driver puts their foot on the accelerator, it will speed up, but it will be speeding up from 20 mph, and so will take some time, even to get back to the original speed of 100 mph.  All that has happened is that the Tory government has taken its foot off the brake, and as a result as consumers are free to resume spending, its the equivalent of a slight pressure on the accelerator.

For example, retail sales are back to pre-lockdown levels, but that means that all of the sales that were lost in the months of the Tory lockdown still have not been recovered, and are probably unlikely to be recovered.  The figure for retail sales is also only a partial picture for consumer spending.  In a service based economy, a lot of consumer spending goes on things that are not physical commodities bought from shops.  For example, spending in gyms, and so on.  As most of these things have continued to be closed by the Tory lockdown, no such resumption of spending in those areas has taken place.

The same is true of the PMI number, as I wrote some time ago.  If there had been a real lockdown of production then GDP would have fallen to zero, because GDP is a measure of value added, i.e. of the new value created by labour.  If no labour takes place, no new value is created, so GDP is zero.  But, correspondingly, any resumption of economic activity from such a state represents growth, so all PMI numbers would then show a huge rise above 50 (the point at which growth is represented), even though the actual level of economic activity might be a fraction of what it was previously.

What the economy has faced is a huge supply shock as the Tory lockdown forced businesses to shut their doors, and as this, in some cases, for example car sales, had an inevitable knock-on effect to producers.  At the same time, the government's furlough scheme meant that monetary demand was largely maintained, as the government became employer of last resort, nationalising the economy's variable-capital, and paying the nation's wages.  But, its basic economics to understand that if you maintain the level of monetary demand, whilst reducing supply, the consequence is inevitably inflation.  And that was what was seen as shown by the analysis published by the IFS.  

There has been other consequences.  For some, the maintenance of incomes whilst avenues of consumption were closed led to some debt being paid down.  That was assisted by the mortgage holidays that the government told banks to provide.  But, of course, that debt was not waived simply deferred, and now those that took advantage of the mortgage holiday are finding that it has affected their credit rating.  But, also much of the spending itself was simply deferred, and so the pay down of debt is likely to now see a running up of debt, as some of that deferred spending is made up.  As I noted a while ago, the higher costs now imposed by the requirements for coming out of lockdown, means that prices will rise, and as this spending also meets the consequence of the supply shock, prices will rise even more.  As I reported recently, there are already reports of hairdressers doubling their prices as they have been allowed to reopen.

The retail sales data also shows that a lot of the additional spending is being done on line rather than in the High Street.  That High Street continues its slow death, as more and more retailers close unable to compete with online offerings, and that is spreading to the huge shopping malls and out of town retail parks too, with a consequent cratering of rents and property values, and the bankruptcy of some of the large property companies involved in their provision.

Again, what is being seen is a shift in spending and in the type of labour demanded.  The lockdown has simply speeded up the process of the death of physical retailing, and growth of online shopping an spending.  It means that the type of labour that is going to be in demand is the more high value, skilled labour of the web designer, of the network developer and maintenance engineer, and so on.  But, the shopworker let go, is not going to be able to quickly fill those vacancies without large scale retraining and education.

There has been a similar rebound in the Eurozone PMI data.  So, the data shows that economies are no longer slowing, and beginning to recover.  It does not mean that they are at the levels that preceded government imposed lockdowns, or that they will get back to those levels quickly.  The data indicates combined and uneven development within economies, and shifts that were already beginning to occur in the type of production and employment have been accelerated.  Rapidly rising consumer demand, fuelled by the furlough payments and other money pumped out to consumers by governments at a time when economies are still suffering from a lock down induced supply shock, means that prices will rise, also induced by rising costs, and excesses of liquidity pumped in by central banks.  With even more stimulus to aggregate demand in the pipes as a result of huge fiscal stimulus packages introduced by nearly every government across the planet, expect demand to exceed supply by some margin, leading to rising inflation, in coming weeks and months.

But, that rising demand, and rising money profits resulting from rising inflation, means that businesses will also be rushing to pocket some of that largesse.  To do so, at a time when the profits and income has been decimated as a result of lockdowns and closure, means they will have to borrow on a huge scale, again at a time when governments and households are borrowing on unprecedented levels.  That means that nominal interest rates will rise sharply, but with inflation rising, in order for real interest rates to rise, nominal rates will have to rise by an even greater amount.

So, as set out in previous posts over the last few weeks, these rising rates mean that a huge asset price crash is an inevitability.  Some pundits are looking to gold to save them in this environment, but gold too is a speculative asset whose price has been inflated way beyond its current price of production.  It now stands at nearly $2000 an ounce, as against a price of production of around $1200 an ounce.  When the bubbles burst, so too will the price of gold.  The more these speculative assets crash, the more it will become obvious that the only safe investment is that in actual productive-capital, but in an age of socialised capital,  that is no longer effectively possible for the individual capitalist.  There will be some that will start small to medium sized private businesses, and the odd multi billionaire like Elon Musk, who might put large amounts into actual productive-capital in some new venture such as the hyperloop, but in the main, any such investment can only be undertaken by the socialised capitals, themselves, and to do so means issuing millions of new shares, and new bonds etc.  That huge increase in supply of fictitious capital, will again crater the prices of those assets, adding to the depth of a financial meltdown that will dwarf that of 2008, but will simply be a matter of appearances being brought back into alignment with reality, and the necessary basis for the resumption of real capital accumulation, and real economic growth to resume.

What The Friends of the People Are, Part III - Part 18

For the Narodniks there was none of this analysis. Instead, as Lenin says, the expropriation of the peasant is explained simply on the basis of the allotment size, and a characterisation of peasants as poor due to such allotments. 

“Here most likely he again had in mind the profound idea that if the labourer is separated from the land, which passes into the hands of the blood-sucker, this happens because the former is “poor” and the latter is “rich” in land.” (p 232) 

Today, we see a similar thing with the crude description of “the rich”. Often, the term "rich" is confused with "affluent". The former refers to the possession of a large stock of wealth, i.e. assets be they property, shares, bonds or productive capital. The latter refers to the size of income. As Marx sets out in the Grundrisse, its possible to be rich but not affluent, just as its possible to be affluent but not rich. A peasant farmer can be rich compared to a wage labourer, if the former owns their farm, whilst the wage labourer owns no assets. Yet, the wage labourer may be more affluent than the peasant farmer if their net income is greater. That was the case with the two peasant households referred to earlier by Lenin, who engaged wholly in wage labour, but whose net income was not only greater than that of the other poor peasants, but was also greater than the average for the middle peasants. 

The Narodniks failed to distinguish between those peasant households that were bourgeois and those that were proletarian, or becoming proletarian, instead lumping them all into the camp of “people's industry”, on the basis of average and aggregated data. The distinction between bourgeois and proletarian households had nothing to do with affluence, as the Narodniks presumed, but with the ownership, or non-ownership of capital. 

The same error and failure of distinction is seen today. In the category of “the rich”, a meaningless category compared to "bourgeois", are included millions of more affluent workers. Yet, not only is a more affluent worker not necessarily rich, on the basis of Marx's analysis and definition, they most certainly are not bourgeois, i.e. they do not own capital as the main source of their revenue. A worker who earns even £150,000 or £200,000 a year still only does so because they sell their labour-power, like any other worker. Indeed, as Marx points out, the more the worker becomes affluent, the more they are tied to capital, the more they must continue to sell their labour-power, and depend on capital employing them. The affluent worker adjusts their standard of living to their income, and should they lose that income, even for a short time, the more surely is that standard of living taken away from them. The large mortgage they have taken out becomes unpayable, and so on. 

None of that is true for the capitalist whose revenue does not at all depend on their employment, but depends only on the ability to continue to appropriate surplus value from others as profits, interest or rent. 

In this way, too, the main form of property of the more affluent worker, their own house, does not put them in the category of capitalist. Even if you own a £1 million house, it does not make you a capitalist or affluent. The house does not bring you revenue. On the contrary it consumes it in running costs, and the more expensive the house, the greater the running costs. But, someone who owns £1 million of shares, or bonds is a capitalist, because this fictitious capital will bring them between £20,000 - £60,000 in interest. Similarly, someone who owns £1 million of productive-capital is a capitalist, because it will bring them around £250,000 - £300,000 in profits per year, before payment of rents, interest and taxes. 

There is a qualitative difference between the affluent worker who earns £150,000 - £200,000 a year, only by the sale of their labour-power, and the small capitalist who makes only £20,000 a year, solely from interest on their fictitious capital. This is the basis of Marx's analysis of revenues and their sources, in Capital III, and in Theories of Surplus Value, Part III, Addenda. It is the foundation of his theory of class upon which his theory of historical materialism and social evolution is founded. 

The qualitative distinction is only made more stark in looking at the revenues of the big capitalists that comprise the top 0.01%. If we take the revenue of one of these billionaires, then, assuming only a 1% rate of interest, that provides them with an annual income of £10 million, and, for many in that group, who have wealth of £10 billion, it means an annual income of £100 million. On this basis, it can be seen how ludicrous are the reformist, redistributionist policies of those that want to concentrate their attention on those workers who earn more than £50,000 a year, rather than dealing with the real issue, which is the property question, the question of the ownership and control of capital.

Back To Part 17

Forward To Part 19

We Are Headed For Another British Brexit Capitulation

The UK-EU Brexit negotiations are going nowhere.  The deadline for agreeing an extension of the transition period passed in June, apparently leaving the only option as some kind of negotiated deal.  However, the deadline set for that is the end of July, and that clearly isn't going to happen.  Reports in recent days have shown what a disaster, for Britain, there would be if no deal is agreed.  Only a quarter of UK hauliers would be able to operate in Europe, meaning that in a matter of days, there would be shortages of food, medicines and other vital supplies.  That is just one area in which life would get seriously worse, even compared to the catastrophe that the Tory lockdown has inflicted on the economy.

The EU will lose economically from a no deal too, but far less than will the UK, and it will not represent any kind of threat to life and well being, as it will imply for UK citizens.  Moreover, as a consequence of the economic crisis caused by government lockdowns there could be distinct advantages for the EU in a no deal.  States across the globe will be having to spend trillions bailing out strategic industries that have been crushed by the effects of government imposed lockdowns.  The EU will pump tens of billions into Airbus, for example, but has no reason to want to see any of that money benefiting the UK arm of the company.  Quite the opposite, the EU will be keen to see, industries and jobs migrating from an isolated UK economy towards the EU, as it will assist its efforts at restarting its economy after the lockdowns.  And, a large movement of businesses from the UK to the EU will be an inevitable consequence of a no deal, as the EU imposes tariffs, and other restrictions on UK produced goods and services.

So, the fact remains, as it has always been that in these negotiations the EU retains all the cards, and the UK is trying to bluff, whilst everyone can see that it has an empty hand.  Boris Johnson rather like his US counterpart, Brexit Trump, will continue to bluff and bluster, and talk about what a wonderful position the UK is in, his henchmen will continue the inane mantra that the EU always only reach a deal at the last minute, and so its all a matter of waiting for them to give in, and so on.  However, the reality is here presented in a mirror.  Just like Trump's negotiations with Kim in North Korea, the bluff and bluster don't change the outcome, however, much spin they put on it.

The fact is that its not the EU that will capitulate at the last minute, but Britain, because the reality is that Britain cannot live with a no deal outcome.  Boris Johnson knows it, the ruling class knows it, the British state knows it, and the EU knows.  The EU negotiators have given some concessions to Britain, because they are smart enough to know that Johnson and co. would try to present things as being all down to EU intransigence.  The EU negotiators know that Johnson, and the UK negotiators are tied into a narrative framed by their own Brexit campaign, and appeal to reactionary sentiment, amongst a minority of the UK population that, as with Trump in the US, however, represents the core support for the Tory Party.  So, the EU knew they could give concessions on side issues, in the sure knowledge that the UK would obstruct any agreement on the core issues such as fishing and the level playing field.

But, all that does is to put time pressure on the UK.  Time is running out for the UK.  The deadline for an extension of the transition period has gone, and the possibility of a no deal that would crucify the UK is rapidly approaching like a freight train.  Johnson and the UK negotiators have no option but to continue to bluff and bluster and pretend that the EU will cave at the last minute, even though they must know that will not happen, and has never happened before.

They gave Cameron nothing in his pathetic attempts to mimic Thatcher's negotiations of various UK concessions; for all Theresa May's talk of "Brexit Meaning Brexit", and of a "Red, White and Blue Brexit", of "No Deal is Better Than A Bad Deal", she capitulated, and extended Article 50 twice, as well as capitulating in order to get a Withdrawal Agreement with the EU that she couldn't then get through parliament; for all Boris Johnson's promises to "Die In A Ditch", he didn't, and also extended Article 50, and then capitulated again in January, accepting a worse deal than that which May had accepted, a deal, which she had rejected earlier, because of opposition from not only the DUP, but also of Johnson himself!

So, as the year drags on, all of the theatrics will be meaningless.  The UK will have only two real options.  The third option of a NO Deal, is not a real option, because even without the economy having been cratered by the Tory lockdown, it would mean devastation for the UK economy, and a real threat to life and limb of UK citizens to a degree that no government could consider being held responsible for.  It would split the Tory parliamentary party, lead to mass protests and strikes, and almost inevitably the fall of the government in conditions worse than those that led to the fall of the Heath government in 1974.  Combined with the growing realisation of the unnecessary damage that the Tory lockdown has imposed, it would mean that the Tories would be destroyed as a political force for at least a generation.

The only two real options are that either, at the last minute, Johnson will have to ask for an extension of the Transition Period, or else, he will have to do what he did in January and capitulate accepting a deal on EU terms.  Theoretically, the first option isn't possible, but the EU has always found ways of getting round theoretically impossible hurdles, where it was to their advantage to do so.  To get to this position, Johnson would have to make an embarrassing climb down and U-turn once again.  But, he has already done lots of them.  he would have to repeal the legislation his government passed saying there would be no extension, and to do so he would probably have to rely on Labour votes.  In such conditions, the EU would be seen to be clearly in the driving seat.  It would undoubtedly only grant an extension if it was for a prolonged period, at least two years.

But, some EU countries, like France, have become somewhat tired of Brexit and of the destabilising role played by Britain.  They may not agree to an extension preferring to just lance the boil.  They may force the issue forcing Britain to choose between a No Deal that would destroy the UK, or else capitulating and accepting a deal that effectively leaves the UK inside the Single Market and Customs Union, subject to the ECJ, and so on, but with no political rights which are only available to members.  If the EU negotiators have gamed this scenario, that i the option they would choose, because it leaves the UK in a seriously weakened position, though not as weakened as a No Deal Brexit would leave it.  It leaves a UK government with only that one rational option to take.  It means that the UK would also not be able to do deals with the US that would be detrimental to the EU, and means that in a fairly short time period, the UK would almost certainly be seeking a fast-track re-entry into the EU, because why have all the obligations of membership without the rights that go with it?  But, as the EU presses on towards fiscal union, which means that actual political union is not far behind, it would mean that a future British reentry would also be on that basis.  It would mean that the things the UK has always been able to frustrate as a member of the EU, of membership of the Eurozone, and political union, it would no longer have any power to resist.

The Historic Mission of Capital - Part 7 of 7

So, does this mean that capitalism is naturally evolving into Socialism, and so all that is required is to sit back and allow it to unfold. That was what the revisionists like Bernstein believed. It is the basis of reformism. But, of course, alongside this development is also its opposite, the development of capital. The fact that private capital ceases to exist as the dominant form in production – large amounts of private capital, of course continues to exist in production, but only in the form of the plethora of small capital, which is subordinated to big capital – does not mean that capital itself ceases to exist. The socialised capital, even as the collective property of the workers is still capital. As Marx describes in relation to the worker owned cooperative. 

“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, more significantly the fact that private capital leaves the realm of production does not mean that it ceases to exist. Instead, it simply assumes its most perfect, most alienated form as loanable-money capital, capital which appears to self-expand without any connection to production whatsoever. The contradiction between capital and labour, therefore assumes a new form. It is a contradiction between socialised capital – collectively owned by the workers – and loanable money-capital/fictitious capital – owned by the private money-lending capitalists and channelled through the banks and financial institutions, stock exchanges and so on. This private capital also becomes ever larger, and more powerful, in conjunction with the increase in the size and power of socialised capital, and the working-class. It is via its ownership of this fictitious capital that the private capitalists now extract surplus value in the form of interest/dividends from the workers rather than directly via profits. 

“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... 

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. However, this expropriation appears within the capitalist system in a contradictory form, as appropriation of social property by a few; and credit lends the latter more and more the aspect of pure adventurers. Since property here exists in the form of stock, its movement and transfer become purely a result of gambling on the stock exchange, where the little fish are swallowed by the sharks and the lambs by the stock-exchange wolves. There is antagonism against the old form in the stock companies, in which social means of production appear as private property; but the conversion to the form of stock still remains ensnared in the trammels of capitalism; hence, instead of overcoming the antithesis between the character of wealth as social and as private wealth, the stock companies merely develop it in a new form.” 

(ibid) 

The class struggle, therefore, becomes a struggle between these two forms of property, socialised capital on the one hand and fictitious capital on the other, collectively owned productive capital v privately owned interest-bearing capital. And, so the idea that workers could simply sit back and wait for society to evolve to Socialism is not possible. A look at the way the ruling class, the top 0.01% who own all of this fictitious-capital have used their control over socialised capital to line their pockets, at the expense of the socialised capital illustrates that fact. They have taken company profits that should have been used for capital accumulation, and instead paid out ever expanding amounts of interest/dividends. According to Haldane, where dividends accounted for 10% of profits in the 1970's, today they account for 70%, and the executives, who represent the interests of these shareholders, have found other ways to hand money to them, in capital transfers, measures to boost share prices by selling bonds to raise money to pay dividends or buy back shares, and so on. 

Similarly, the representatives of that class within the state and central banks have been equally prepared to destroy the real economy in order to protect the wealth of the top 0.01%. They have destroyed currencies via QE so as to use the printed money tokens to buy bonds, so as to inflate their prices, which then feeds through into higher prices of shares and property, so as to inflate the capital gains of the owners of this fictitious capital. They have simultaneously inflicted measures of austerity to hold back economic growth so as to restrain wages and interest rates, so as again to inflate asset prices. The central issue of the class struggle, therefore, becomes the property question, the question of control over this socialised capital, and the ability of the owners of fictitious capital to still exercise control over property they do not own, thereby enabling them to line their pockets at the workers expense. 

Back To Part 6

What The Friends of the People Are, Part III - Part 17

The Narodniks attempted to base their argument on the concept of land poverty, of an inadequate allotment size. They attempted to prove this by comparing the position of the former state peasants with that of the former landlords peasants, the former having, on average, a larger allotment. But. This was nonsensical. The difference in average allotment size, between these two groups was relatively small, and the difference between peasant households within each group was far larger than the difference between the two groups themselves. 

Krivenko is forced to acknowledge that the poor peasants become dispossessed and the richer peasants are able to buy or rent additional land, so what difference does allotment size make? After all, the peasants were not given their allotment for free, but had to buy them, usually going into debt to do so. 

“It is high time to abandon this meaningless talk about land poverty, which explains nothing (because the peasants are not given allotments free but have to buy them); it only describes a process, and moreover describes it inaccurately, because one should not speak about the land alone, but about the means of production in general, and not say that the peasants have a “poor” supply of them, but that they are being freed from them, are being expropriated by growing capitalism.” (p 232) 

Krivenko says that they do not think that agriculture can or should be separated from manufacturing industry, yet, as Lenin points out, his previous recognition of the extent of money economy and exchange, implies such a separation, and Krivenko continues, 

“and that the separation of the labourer from the land and the instruments of production is being effected not by capitalism alone, but also by other factors that precede and promote it.” (p 232) 

But, there was nothing artificial or exogenous about this separation. Division of labour itself goes back to the primitive commune, pre-dating trade. But, commodity production and exchange, which requires the prior existence of a social division of labour, (or else there is no basis for trade to occur) then encourages a further increase in the social division of labour. As soon as direct producers begin to produce commodities, so as to obtain money, exchange-value incarnate, there is a logical necessity to increasingly produce those commodities which will provide the greatest amount of exchange-value for the least expenditure of labour. In other words, each producer has an incentive to produce those commodities in which they have some comparative advantage, i.e. where the individual value of their output is lower than the market value. 

It does not matter that a direct producer only produces potatoes as commodities in order to exchange them for the carrots, wine, linen and so on required for their own direct consumption, C-C, or, in a money economy C-M-C. The fact is that the direct producer will be encouraged to produce potatoes rather than carrots, parsnips or some other commodity, if and only if, they have some comparative advantage in doing so. 

If the market values of the above commodities are such that the prices are £1 per kg of potatoes, carrots, and £1 per litre of wine, and £1 per metre of linen, then, if a direct producer can produce potatoes at an individual exchange-value of £0.80, they will increasingly focus their labour on producing potatoes, because, on this basis, for every 48 mins they spend producing potatoes, they will be able to get, in exchange, the equivalent of 1 hour of labour embodied in these other commodities. The only reason they would focus on producing, say, carrots, instead of potatoes, is if they had an even greater comparative advantage in producing carrots compared to potatoes, so that for example 45 mins spent on carrot production enabled them to obtain 60 mins of labour embodied in wine, cloth and so on. This means that, even if commodity production forms only a small part of the production of the direct producer, a dynamic is necessarily established whereby they will specialise in the production of commodities for which they have a comparative advantage. The more the market expands, and the economy becomes a money economy, the more will they engage in this commodity production as the most effective means of meeting their own immediate needs for consumption. 

Commodity production and exchange necessarily leads to the development of money, and an expansion of the market and money economy. That, in turn, leads to an increasing social division of labour, and a dependence on the market to meet consumption requirements, which leads to a further development of the market and money economy. This expansion of the market and money economy means that some producers fail and others succeed. Those that fail lose their means of production and become wage labourers, now wholly dependent on the market. Those that succeed accumulate money, they buy up means of production from those that failed, and these means of production now confront their former owners as capital. Their former owners, now as wage labourers, can only use these means of production if they hand over to their new owners an amount of free labour, surplus value. The capitalist producer, now in search of further competitive advantage, extends the division of labour inside the workshop, dividing up the production of each commodity into a series of separate tasks, each performed by a different type of detail worker. Eventually, large-scale machine industry is introduced with the worker reduced to being a machine minder.

Back To Part 16

Sweden Has Essentially Eradicated COVID19 Deaths

For months, we were told that Sweden was a pariah that its refusal to join with other states in destroying its economy by imposing a lockdown would result in mass deaths and serious illness running into tens of thousands. Even at the end of April, Michael Roberts was saying that Sweden could suffer up to 65,000 deaths from COVID19 as a result of not locking down. But, it was all an hysterical fantasy. Sweden has made liars of them all.

According to the latest data available from Statista, for July 17th, the number of deaths in Sweden has not surged to 65,000 or any of the other ridiculous projection, but to just 5,609.  What is more, that is the same number of deaths as for the previous day, i.e. zero new deaths.  The day before that it was just 1, with similar figures in the days prior to that.  Its not the first time Sweden has had zero new deaths per day.  It has done so on several days over the last month, and, in fact, over that month and longer it had reduced the number of deaths to single figures or at least low double digits.  Essentially, Sweden has eradicated the threat of deaths from COVID19, whilst Tory lockdown Britain continues to see deaths in the hundreds. 

What is more, because Sweden never locked down, it does not have a problem of coming out of lockdown.  There is not going to be any surge or second wave of deaths in Sweden, as a result of any such easing, therefore.  By contrast, everywhere that imposed lockdown, or that attempted to stifle spread by extensive test, trace methods are seeing infections and deaths rise rapidly as soon as they come out of those conditions, and that is likely to be even more damaging as they try to reimpose them.

Sweden has made liars of all those catastrophists, and all those that claimed that the best or even only way of dealing with COVID19 was by imposing lockdowns.  In Britain the Tory lockdown has cratered the economy, causing the worst economic slowdown in 300 years, and causing debt levels to rise astronomically, way above anything seen in the 2008 Financial Meltdown.  Its catastrophic effects will be felt, and suffered by the most vulnerable for decades to come, impacting them far more than anything that needed to have been suffered from COVID19 had it been dealt with correctly.  Yet, the Tory lockdown crisis, having imposed this economic catastrophe did not even work in its own terms.  Britain has had one of the worst records for COVID deaths in the world, despite imposing one of the harshest and longest lockdowns!  The mortality rate for COVID, in Britain, is more or less double that in Sweden!  In Sweden, the 5,609 deaths represents just 0.056% of its population, again disproving all of those claims that the mortality rate form COVID was going to be around 1%.  In other words, those claims were out by a factor of 20, just as the claims that the total number of deaths globally of 45 million, have been out by a fact of around 100!

Of course, Sweden has suffered because other countries with which it trades followed the insane and illogical policy of a blanket lockdown that the Tories imposed in Britain, and that had the inevitable effect of destroying economic activity.  No country is an island economically, and so Sweden also suffered because its trading partners destroyed their own economies needlessly.

After 2008, the Tories supported by their Liberal puppets, attacked Labour for the global financial meltdown, even though it was clear that Labour had no real responsibility or control over that global crisis.  The most that could be said is that the roots of that crisis went back to the 1980's, and the deregulation polices introduced by Thatcher and Reagan that started the astronomical inflation of asset prices, and financial speculation that led to the bursting of the bubbles, and that after 1997, New Labour continued those same Thatcherite policies confusing rising asset prices with the increase in real wealth, and thinking that this delusion could continue for ever.  But, the real responsibility lies with the conservative ideology that was behind that, and with the Thatcher government that tied Britain into that economic model, just as it lies with the Reagan government that did the same in the US.  The idea that the crisis was down to Labour profligacy was just an outright lie, because Labour had budget deficits only half those of the Thatcher/Major period, until the financial meltdown gripped the world.  The borrowing was simply to bail out the banks and financial institutions that went bust.  

But, the economic crisis caused by the Tory lockdown is entirely the responsibility of the Tory government, and those that backed its policy of locking down the economy.  The lockdown did not stop deaths from COVID19, as a comparison with the performance of Sweden shows, and now, as attempts to lift that lockdown are made, the number of deaths rises again, because herd immunity has not been created amongst the wider population, whilst no measures have been taken in the intervening period to enable an effective isolation of the 20% of the population actually at serious risk from the virus.  In the meantime it will be another year before an effective vaccine is rolled out.

The Tory lockdown has caused the biggest economic catastrophe in 300 years, and that catastrophe is entirely of the Tories own making, unlike the situation in 2008, which the Tories opportunistically, but, from an electoral perspective,  highly successfully, blamed on Labour.  This catastrophe is much worse than 2008, it is entirely of the Tories own making.  Labour should not let them get away with it.  Labour should ensure that the Tory lockdown crisis is pinned fairly and squarely on them.  The Tories as a result of this catastrophe should never be trusted with running the economy or the country ever again.