Friday 24 July 2020

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.

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