Marxism, Zionism and the National Question - Constraints On The Creation of Nation States (5/5)

Marxism, Zionism and the National Question

Constraints On The Creation of Nation States (5/5)

This strategy was developed to deal with a situation where there were numerous actually oppressed nations, as part of the Tsarist Empire. It does not apply, therefore, to say Scotland, which is not oppressed by England, and has shared in the spoils of British imperialism. But, as with Norway and Sweden, Scotland is not equal to England. The experience of Brexit has shown that. Both English and Scottish Marxists must argue that Scottish independence would be a reactionary decision, by dividing Scottish and English workers, yet, here too, the onus rests with English workers and socialists to demand that it is up to the Sots to determine that, free from any restriction imposed on them by the British parliament.

A nation may never establish its own nation state, because a) it is just too small to have been able to create a large single national market, in which capitalism and a bourgeoisie can develop, b) it may be large, but occupies a large territory in which it is dispersed, so that no large local markets for industrial products arise in its towns, so that no basis for capitalist production arises, c) its technological development is at a low level, as with the Asiatic Mode of Production, or the indigenous peoples of North and South America, Australia, and Africa, d) it has been a colony of some other larger nation, or has been annexed by it.

In the case of a), these small nations may overcome this by joining together in a multinational state, or federation. Although, therefore, the nation state may be the ideal form, it is not necessarily the only form in which capitalist development, and the creation of the capitalist state may occur. Switzerland, was one example of such a multinational capitalist state. But, Lenin also sets out why some small nations may seek to remain attached to a larger nation in a multinational state.

“Not only was Austria for a long time a state in which the Germans preponderated, but the Austrian Germans laid claim to hegemony in the German nation as a whole. This “claim”, as Rosa Luxemburg (who is seemingly so averse to commonplaces, platitudes, abstractions...) will perhaps be kind enough to remember, was shattered in the war of 1866. The German nation predominating in Austria found itself outside the pale of the independent German state which finally took shape in 1871. On the other hand, the Hungarians’ attempt to create an independent national state collapsed under the blows of the Russian serf army as far back as 1849.

A very peculiar situation was thus created—a striving on the part of the Hungarians and then of the Czechs, not for separation from Austria, but, on the contrary, for the preservation of Austria’s integrity, precisely in order to preserve national independence, which might have been completely crushed by more rapacious and powerful neighbours! Owing to this peculiar situation, Austria assumed the form of a dual state, and she is now being transformed into a triple state (Germans, Hungarians, Slays).”

(The Right of Nations to Self-Determination) 

But, of course, this joining together into a multinational state was also a feature of the most successful capitalist state of the 19th century – Britain. On the one hand, the English feudal state had arisen after the various kingdoms of the Heptarchy had been unified, but also, as a result of the subordination of the Welsh and Cornish nations. Having formed this English state, however, England also joined together with the Scottish state, in the Act of Union of 1707, creating a multinational British state. This Act of Union, entered into voluntarily on both sides, was however, different to the 1801 Act of Union with Ireland, which amounted essentially to simply a formal annexation of Ireland, in the face of continued opposition by the Irish population.

If we take b), then, an example of how this is again overcome by federation is the creation of the United States, or Canada, or Australia, where sparse settler populations, create a national economy on the basis of bringing together states, which are of a size, which, in Europe, would have justified a single state. This process is facilitated, in all these cases, by the fact that, as settler colonies, the European settlers brought capitalist production, and the market with them. Capitalism, in these cases, does not have to wait for commodity production and exchange to develop sufficiently for capitalism to arise, and so for a bourgeoisie to develop as ruling class, and create a nation state on that basis. This is the same basis upon which Zionism, as also a colonialist ideology, establishes itself in Palestine, with Zionist colonists occupying the land, and directly transferring capitalist production and the capitalist state into it.

In the case of c), such nations inevitably find themselves annexed or colonised, as happened in North and South America, large parts of Asia, and Africa. Capitalism is introduced from outside, leading to a social revolution, which transforms the society. Some small indigenous peoples disappear, others are enslaved, driven on to reservations and so on. Large indigenous populations eventually, and largely on the back of this development, are themselves formed into national movements that seek, and are enabled to win, independence. Marx and Engels speak of true colonies being those where European settlers form the dominant population, such as North and South America, and Australia, as opposed to the situation, as in India, and other parts of Asia and Africa, where they are a minority, and simply subordinate the majority population.

Some have compared the position of Palestinians, in relation to Israel, as being like that of blacks in South Africa under apartheid, but a more accurate parallel is probably that of Native Americans in North America, who were put into reservations. Except, of course, that Native Americans have a right to move out of the reservations, and, also, its recognised that the reservations are under the remit of the US Federal State, even though they enjoy autonomy, and as such, the native Americans enjoy the same political rights of any other US citizen, to be able to vote and to become members of Congress and so on.

Back To Part 4

Forward To Do Marxists Have To Support The Demand For Self-Determination?

Back To Table of Contents

The Economic Content of Narodism, Chapter 3 - Part 5

Lenin quotes Struve's comments about certain “peculiarities”, relating to agriculture that Marx was supposed to have acknowledged, in this relation, but whose significance he disputed. However, Struve does not set out exactly what these peculiarities might be. Perhaps he is referring to Marx's comments about the fact that subsistence peasant farmers can cultivate land that capitalist farmers would not. If so, this is hardly an indication of the lack of superiority of the large-scale agricultural production. 

Lenin then gives a long quote from Struve, which, he says, makes clear what he meant by these comments. Struve sets out that the development of exchange economy leads to a growth of industrial production, and of the urban areas. The industrial population grows in relation to the rural population. The demand for agricultural commodities rises, and this can only be met by a more rational, capitalist organisation of agriculture. But, this shows the inadequacy of Struve's objectivist method, Lenin says. Struve had correctly set out what was wrong with the Narodnik argument, but it was incomplete, because he did not describe what new classes were created as part of this process, and the new class antagonisms that arises upon it. He fails to set out that, in agriculture, as in industry, the same two classes – bourgeois and proletariat – are created. The Narodniks, in agriculture, as in industry, refer to capitalist production only in terms of the expropriation of the small farms by the big ones, but Struve was quite right to point out that the domination of the economy by commodity production and exchange means that the nature of the production, in the small farms as much as the large, is capitalist production, just as the reality of the “people's industry” was that it was capitalist production. 

“The condition and interests of the independent proprietor isolate him from the mass of the producers, who live mainly on wages. While the latter raise the issue of a “fair reward,” which is necessarily the gateway to the fundamental issue of a different system of social economy, the former have a far more lively interest in quite different things, namely, credits, and particularly small “people’s” credits, improved and cheaper implements, “organisation of marketing,” “extension of land tenure,” etc.” (p 430) 

Something similar could be said, today, of the petty-bourgeois, in Britain, represented by “White Van Man”, or, in France, by the Gilets Jaunes, who some wish to portray as part of the industrial working-class, but who, actually, comprise this reactionary social strata. 

The argument put by Vorontsov that the decline of the nobles' farms and renting of land by peasants, after the Reform, just shows they do not understand what was happening, Lenin says. Under feudal agriculture, the peasants undertook cultivation. They produced their own necessary product, as well as the surplus product of the landlord. The reform broke apart these relations, but what it meant was that instead of peasants providing the landlord with a surplus product, they were employed as wage labourers, and now provided their employer with surplus value. But, also this went along with the expansion of the market, and of commodity production, so that, even for those peasants who did not become wage labourers, their production was now commodity production, geared to the market. So, as those peasant producers competed for market share, some prospered and became capitalist producers, whilst others failed and themselves became proletarians. It was on this basis that some peasants rented additional land, whilst others had to rent it out to them. 

“Now it is to this aspect of the matter, to the bourgeois organisation of the new, “rational” agriculture that attention should have been directed. The Narodniks should have been shown that by ignoring the process mentioned they change from ideologists of the peasantry into ideologists of the petty bourgeoisie. “The improvement of people’s production,” for which they thirst, can only mean, under such an organisation of peasant economy, the “improvement” of the petty bourgeoisie. On the other hand, those who point to the producer who lives under the most highly developed capitalist relations, correctly express the interests not only of this producer, but also of the vast mass of the “proletarian” peasantry.” (p 431)

Back To Part 4

Forward To Part 6

Northern Soul Classics - I'm Not Built That Way - The Hesitations

 

Friday Night Disco - Hard Rock - Herbie Hancock

 

Marxism, Zionism and the National Question - Constraints On The Creation of Nation States (4/5)

Marxism, Zionism and the National Question

Constraints On The Creation of Nation States (4/5)

So, the abstract right of nations to self-determination, and the creation of an independent nation state is not at all the same thing as the inevitable creation of any such nation state, nor of Marxists support for any such endeavour. The only thing that Marxists are committed to, as part of seeking to achieve the greatest unity of workers, is the assertion of this abstract right, on behalf of oppressed nations, and the right of any nation that does seek to assert that right to do so unhindered by any other state. In particular, in a situation where one nation is in the position of oppressor of some other nation, it is the responsibility of socialists in the oppressor nation to assert that right for the workers in the oppressed nation.

“The Social-Democrats will always combat every attempt to influence national self-determination from without by violence or by any injustice. However, our unreserved recognition of the struggle for freedom of self-determination does not in any way commit us to supporting every demand for national self-determination.”

(The National Question in Our Programme )

“People who have not gone into the question thoroughly think that it is “contradictory” for the Social-Democrats of oppressor nations to insist on the “freedom to secede”, while Social-Democrats of oppressed nations insist on the “freedom to integrate”. However, a little reflection will show that there is not, and cannot be, any other road to internationalism and the amalgamation of nations, any other road from the given situation to this goal.”

(The Discussion On Self-Determination Summed Up)

In fact, Lenin was so concerned that the demand for self-determination was being misunderstood, and misused by social chauvinists for whom it was code for “defence of the fatherland”, or of their existing borders, that, later, he proposed a different formulation that of “the right to free secession” which more accurately reflects its use as a demand aimed at the peoples of oppressed nations, by the socialists in oppressor nations.

“Instead of the word self-determination, which has given rise to numerous misinterpretations, I propose the perfectly precise concept: "the right to free secession"...

On the other hand, we do not at all favour secession. We want as vast a state, as close an alliance of the greatest possible number of nations who are neighbours of the Great Russians; we desire this in the interests of democracy and socialism, to attract into the struggle of the proletariat the greatest possible number of the working people of different nations. We desire proletarian revolutionary unity, unification, and not secession. We desire revolutionary unification...

But we want unification, and this must be stated; it is so important to state it in the programme of a party of a heterogeneous state that it is necessary to abandon custom and to incorporate a declaration. We want the republic of the Russian (I am even inclined to say Great-Russian, for this is more correct) people to attract other nations to it. But how? Not by violence, but solely by voluntary agreement. Otherwise the unity and the brotherly ties of the workers of all countries are broken. Unlike the bourgeois democrats, we call for the brotherhood of workers of all nationalities, and not the brotherhood of nations, for we do not trust the bourgeoisie of any country, we regard them as our enemies.”

(Lenin – The Revision of Our Programme)

Back To Part 3

Forward To Part 5

The Economic Content of Narodism, Chapter 3 - Part 4

Instead of seeing the expansion of this large-scale, monopoly capital, and its destruction of the old, small scale production, as progressive, the petty-bourgeois socialists, instead, seek to hold back, or even turn back the former, and, in the process, thereby, slowdown the process of the transition to Socialism. The only consequence of the “anti-monopoly” position they put forward is strengthening of the petty-bourgeoisie, and reactionary forms of capital. 

“... it is clear that only the producer employed in the “artificial,” “hothouse” conditions of factory industry can be the representative of the working handicraftsmen.” (p 428) 

And, Lenin adds, quoting Struve, 

““The entire process is expressed in the fact of petty production (handicraft) approximating to ’capitalism’ in some respects, and in others to wage-labour separated from the means of production” (p. 104).” (Note *, p 428) 

In other words, it is only the industrial worker, employed in the large enterprise, that can lead the way. That is because, only here is the condition between capital and labour expressed in its mature form. The small handicraft producer still sees themselves as in some way an independent producer, an owner of “capital”, even though they are in various stages of dependency on the buyers up etc. And, for these small producers, who themselves employ a few wage workers, this is all the more the case. They see any policies aimed at raising wages as directed directly at their heart, because, unlike the large producers, who have a higher organic composition of capital, wages form a larger proportion of their cost of production, and they are less able to afford these wages, or better conditions of employment that the big employers can provide. 

Lenin turns to Struve's argument in relation to agriculture. It shows again the limitations of objectivism as against materialism, and of Struve's failure to delve into the realities of the Russian economy. 

“Steam transport compels a transition to exchange economy, it makes agricultural production commodity production. And the commodity character of production unfailingly requires “its economic and technical rationality” (110).” (p 428) 

Again, this requires some explanation that Lenin does not provide. Its quite clear that its not steam power or steam transport that leads to an exchange/commodity economy. Commodity production and exchange goes back 10,000 years, and money itself goes back thousands of years, showing that extensive commodity production and exchange itself is not a modern phenomenon. Indeed, even the capitalist production and exchange of commodities goes back several centuries prior to the introduction of steam-power, let alone steam transport. Rather, it is the growth of markets alongside an extension of the division of labour that makes possible the profitable use of machines, and it is the continued expansion of markets, on the basis of this increased division of labour, and increased commodity production, that makes possible the profitable utilisation of steam-power, to drive a much greater volume of machinery. What steam transport does is to make large markets in towns and cities more readily accessible to agricultural producers, and this fact means that agricultural producers get a huge incentive to produce agricultural commodities to sell in those markets. That, in itself, encourages agricultural production on a larger, more rational, i.e. capitalist basis. 

This is the argument that Struve puts forward, on the basis of objectivism, as against the Narodniks who argued that the benefits of large-scale agriculture had not been proved. This same reactionary, petty-bourgeois argument against large-scale, capitalist agriculture can be found today. Its common amongst environmentalists, as well as amongst “anti-imperialists”, for whom it forms part of the argument against supposedly “unnatural” monoculture.

Back To Part 3

Forward To Part 5

Marxism, Zionism and the National Question - Constraints On The Creation of Nation States (3/5)

Marxism, Zionism and the National Question

Constraints On The Creation of Nation States (3/5)

In the national question, whilst each nation may have the right to self-determination, it is not just a question of whether they can objectively exercise such a right, but also, a question of whether Marxists would support it. Marxists acknowledge the abstract right of each nation to self-determination, but that does not mean that they automatically support the exercise of such a right in any particular case. On the contrary, the presumption is against the exercise of such rights, because, in the current era, such action inevitably divides the working-class of one nation from another, and the goal of Marxists is not the self-determination of nations, but the self-determination of the working-class within each nation. Our goal is the unity of workers across national borders, which means, where possible, tearing down those borders not erecting new ones. It is why Marxists oppose Brexit, or Scottish independence.

As Lenin put it,

“As the party of the proletariat, the Social-Democratic Party considers it to be its positive and principal task to further the self-determination of the proletariat in each nationality rather than that of peoples or nations. We must always and unreservedly work for the very closest unity of the proletariat of all nationalities, and it is only in isolated and exceptional cases that we can advance and actively support demands conducive to the establishment of a new class state or to the substitution of a looser federal unity, etc., for the complete political unity of a state.”

(Lenin – The National Question In Our Programme)

And, as Lenin also says,

“The working class supports the bourgeoisie only in order to secure national peace (which the bourgeoisie cannot bring about completely and which can be achieved only with complete democracy), in order to secure equal rights and to create the best conditions for the class struggle. Therefore, it is in opposition to the practicality of the bourgeoisie that the proletarians advance their principles in the national question; they always give the bourgeoisie only conditional support. What every bourgeoisie is out for in the national question is either privileges for its own nation, or exceptional advantages for it; this is called being “practical”. The proletariat is opposed to all privileges, to all exclusiveness.”

(Lenin - The Right of Nations to Self-Determination)

Again, this is in contrast with Zionism, which is inseparable from the demand for “exclusiveness” and for privileges for Jews not extended to others living within the Jewish state.

“The bourgeoisie always places its national demands in the forefront, and does so in categorical fashion. With the proletariat, however, these demands are subordinated to the interests of the class struggle. Theoretically, you cannot say in advance whether the bourgeois-democratic revolution will end in a given nation seceding from another nation, or in its equality with the latter; in either case, the important thing for the proletariat is to ensure the development of its class. For the bourgeoisie it is important to hamper this development by pushing the aims of its “own” nation before those of the proletariat. That is why the proletariat confines itself, so to speak, to the negative demand for recognition of the right to self-determination, without giving guarantees to any nation, and without undertaking to give anything at the expense of another nation.”

(ibid)

Back To Part 2

Forward To Part 4

The Economic Content of Narodism, Chapter 3 - Part 3

The existence of merchant capital, and the significance of the merchant on its own, therefore, does not at all prove beyond doubt that what existed was a capitalist organisation of production or that “commodity economy is money economy, is capitalist economy,” (p 427). What signifies that this is a capitalist organisation of the economy, as Marx describes, in Theories of Surplus Value, is this. In previous modes of production, when commodity producers are ruined, rather than the usurer or merchant, to whom they are indebted, taking over the means of production, and employing the producer as a wage worker, the producer is instead reduced to becoming a slave or serf. It plays a reactionary role, turning back the productive relations to a more primitive stage. The reason for this is two-fold. Firstly, markets are not large enough to justify commodity production on the scale required for capitalist production, and secondly, the forces of production are not themselves sufficiently developed so that a capitalist producer could introduce machines that would significantly undercut existing handicraft production. Moreover, in order to justify the introduction of machines, capitalist production must itself be large enough to warrant their use, and that requires that the market is large enough to absorb that output. When the market reaches a certain size, it justifies the merchant or money lender taking over the means of production of ruined producers, and employing them as wage labourers. Now, a simple division of labour results in the output having a lower individual value than that of other handicraft producers. The merchant capitalist is able to sell this increased output into an expanding market, and now in addition to the commercial profit, they make from buying commodities below their value, they also extract surplus value from the labour of the producer, to whom they now only pay the equivalent of wages for the labour they provide. It is this which characterises the condition as being capitalist organisation of production. 

“... the predominance of capitalist exploitation in our handicraft industries has long been known, but the Narodniks ignore it in the most shameless fashion.” (p 427) 

The reason for the low wages was that, because the producers continued to be individual producers, isolated in their own cottages, the conditions for them coming together, collectively, in a single workplace, where they could form a trades union, were also undermined. That continues to apply where it is only a small workplace, and where an employer can simply dismiss all or part of the workers, and replace them. The petty-bourgeois “anti-capitalists” of today often point to large employers like Amazon or Wal-Mart, and their anti-union practices, whilst, like the Narodniks, saying nothing about the millions of small capitalists whose anti-union policies are even worse, and whose treatment of workers is also much worse. The fact remains that it is only in the larger workplaces where effective trades union organisation is possible. The fact that in some of these workplaces, workers have not organised is a symptom of the degree to which the position of the working-class has weakened, from the mid 1980's onwards, and has still not recovered. 

“In almost every issue of their magazines and newspapers dealing with this subject, you come across complaints about the government “artificially” supporting large-scale capitalism [whose entire “artificiality” consists in being large-scale and not small, factory and not handicraft, mechanical and not hand-operated] and doing nothing for the “needs of people’s industry.” Here stands out in full relief the narrow-mindedness of the petty bourgeois, who fights for small against big capital and stubbornly closes his eyes to the categorically established fact that a similar opposition of interests is to be found in this “people’s” industry, and that consequently the way out does not lie in miserable credits, etc.” (p 427-8) 

That the Tories and their counterparts should promote such reactionary nonsense is understandable, because they are the political representatives of this small, private capitalist class, but the fact that similar ideas can be found emanating from the Labour Party, and its counterparts, along with elements to its Left, shows the extent to which the labour movement itself has become imbued with petty-bourgeois ideas, and is failing even to fulfil the function of progressive social-democracy, in representing the interests of large-scale socialised capital.

Back To Part 2

Forward To Part 4

Marxism, Zionism and the National Question - Constraints On The Creation of Nation States (2/5)

Marxism, Zionism and the National Question

Constraints On The Creation of Nation States (2/5)

The nation state, then, arises concurrent with the development of capitalism, and with the bourgeois-democratic revolution. But, from this, it can also be seen how little Zionism has in common with even this bourgeois-democratic argument for self-determination. In order for it to apply, then, Jews would already have had to be a nation occupying a given territory, in which capitalism had developed as the dominant mode of production, in which, therefore, there existed a single national market. The Jewish nation state, as with the British nation state, French nation state, and so on, would then have arisen as the natural consequence of that capitalist development, and bourgeois-democratic revolution. That was not the case. From the time of the diaspora, 2000 years ago, there was no Jewish nation, and Jews were spread across the globe in a large number of other nations and states. Kautsky described the position of Jews across Eastern Europe as being that of a caste.

So, the process described above by Marx, Engels and Lenin, of the formation of a nation state, out of this process of capitalist development, within such a given territory, could not apply to a Jewish nation state. The idea that first a Jewish state could be created, and then this process of capitalist development within it could take place is to put the cart before the horse. It is at odds with the process of historical development of every other nation state. The advocacy of such a process is consistent not with Marxism, or historical materialism, but of the kind of idealism, and subjectivism of schema-mongering typical of moralists, and petty-bourgeois socialists of the type of Sismondi, Proudhon, Duhring, or the Russian Narodniks. Moreover, such a Jewish state could only be created by itself supplanting the existing people residing in that territory, i.e. the Palestinians. Again that is completely at odds with the historical justification for the development of the nation state. Even the bourgeois-democratic right to self-determination does not posit it on the basis that one nation achieves it at the expense of some other nation. The Marxist, who seeks primarily the unity of workers of all nations, most certainly could not support a demand for self-determination on such a basis. As Lenin puts it,

“That is why the proletariat confines itself, so to speak, to the negative demand for recognition of the right to self-determination, without giving guarantees to any nation, and without undertaking to give anything at the expense of another nation.”

(The Right of Nations to Self-Determination)

Even if we describe Jews as a nation, rather than as a religious denomination, and, even if we were to ascribe to every nation the right to self-determination, i.e. to establish their own nation state, this is in no way the same thing as saying that any such nation could translate this right into actuality, or that, if it could, we, as Marxists, would advocate it. The example, given by Engels, of the Herzegovinians, or the example of The Falkland Islanders are illustrations of that. The constraints on any nation turning the abstract right of self-determination into actuality have already been discussed, in terms of whether any particular nation is large enough to be able to create the size of single market required for capitalism to develop. But, there are other historical constraints, such as the degree of social development in the particular nation.

In North and South America, social development remained at a very low level prior to European settlement that brought with it commodity production and exchange, and capitalist production. The indigenous nations never rose to the level of development to construct nation states, and that task fell to the European colonists. By the start of the 19th century, the North American colonies had become independent nation states. By the end of the 19th century, Bolivarian national revolutions had turned all of those former colonies, in South America, into independent nation states. In India, and other parts of Asia, the Asiatic Mode of Production had been a dead-end of social development, and, again, it is European colonialism that brings about the required social revolution, introduces capitalist production, and, thereby, creates the conditions for the creation of nation states. By the 1960's, these former colonies had become independent nation states, as had colonies in Africa.

In Britain, the Acts of Union of 1801, passed in the parliaments of both Great Britain and Ireland, amounted to a formal annexation of Ireland by Britain, with Ireland then sending MP's to the Westminster parliament. In parts of Europe, for example Russia, the late development of capitalism, means that some nations are simply annexed, forming part of the Russian Empire. All of these nations might have an abstract right to self-determination, but whether any of them achieve it is a different matter.

“Whether the Ukraine, for example, is destined to form an independent state is a matter that will be determined by a thousand unpredictable factors.”

(Lenin - The Right of Nations to Self-Determination)

In the case, of annexed or colonised nations, they may rise to a position in which a nation state, becomes objectively possible, but, the question then arises as to whether, in each particular case, Marxists would argue for it. In the case of colonies, the answer to this question is invariably yes. The colony exists, already, essentially, as a nation state, but one that is under the political domination of some other state. Its liberation from the political, if not economic domination, of this oppressor state, does not constitute the creation of some new class state, but merely the ability of this existing class state to exercise its own independence. Herein lies the difference between the national as against the colonial question.

Back To Part 1

Forward To Part 3

Lessons From Covid For Catastrophists

The Left has been plagued by catastrophism for much of its history. Its a form of spite combined with wishful thinking by the impotent and demoralised petty-bourgeois. Whether in the field of environmentalism or political economy, the same features can be distinguished within it.

For those like Michael Roberts, whose URL for his website “The Next Recession”, tells you all you need to know about where his hopes and aspirations lie, the last ten years have been one rolled over prediction after another that, there would be a recession in the following year, all, of course, as a result of The Law of The Tendency For The Rate of Profit To Fall, though, given that this law is one that operates continually over the long-term, why it should result in a recession this year rather than any other year is not apparent. Given the failure of any of these predicted recessions to occur during that period, the arrival of the government imposed lock-outs, as their response to the virus, came, no doubt, as a welcome relief to Michael, as he could, at least claim that his perennial prediction of recession had been proved right, at least once, even if the cause of it had nothing to do with The Law of the Tendency for the Rate of Profit to Fall as had been suggested.

Of course, there is absolutely no evidence that the government imposed lock-outs had any beneficial effect, as far as the virus was concerned. All statistical analysis of countries that have imposed them against performance, in relation to per capita mortality, shows no correlation whatsoever. The justification for them is impossible to identify. Not only did they fail to reduce mortality, but they also failed to stop infection, or hospital admissions. They did extend the period that the virus was at large, by slowing the development of herd immunity, and so also facilitated the development of new mutant strains of the virus that might yet pose greater threats in future. What, of course, they also did was to cause the greatest economic slowdown in 300 years, and send hundreds of millions of people, across the globe, into even greater poverty, malnutrition, ill-health and death.  About 500 million more people have been thrown into these conditions globally, compared to still only 2 million COVID deaths, itself just a sixth of those that died from flu in 1968, on a population adjusted basis, and a 75th of the population adjusted death toll from Spanish Flu in 1918.

In Britain alone, the latest figures show half a million more people thrown into destitution as a result of the government imposed lock-outs, and this is just the start. Of course, if you have found that, over the years, you have failed to convince any large numbers of people of your vision of socialism as better than that they have under capitalism, and so have concluded that the way forward is to pray that capitalism becomes really fucked up, so that all those people will see what a messiah you really were, after all, then all of that catastrophe coming their way, is grist to your mill. Trouble is, of course, that the people who usually benefit from those conditions of catastrophe are rarely, if ever, the Left, and invariably the Far Right.

So, last April, I wasn't surprised that when I challenged Michael Roberts' arguments in favour of government imposed lock-outs, his response was to block my comments. Incidentally, on checking the other day, I see he is still allowing the trolls like “Anti-Capital”, and his sock puppets such as “Socialism In One Bedroom”, who also posts on the “All That Is Solid” blog under a huge array of pseudonyms, to put forward their mindless pap. Back then, after I had pointed out that, contrary to Michael's argument, Sweden had imposed no lock out, and yet its per capita mortality rate was better than Britain, which had. Michael assured us that it was only a matter of time, claiming that, if it continued not to impose lock-outs, its deaths would rise to 61,000. What, in fact, has happened? In the Summer, its deaths went more or less to zero. Even now, a year later, its total deaths amount, not to 61,000, but to just 12,600, or just double what he claimed would be the case even with lock-outs, and its curve has again flattened.

Of course, Michael Roberts was not alone in making these hysterical claims about how high deaths were going to go. They accepted willingly as good coin the claims of the scientists at Imperial College, advising Boris Johnson, that deaths in Britain could go as high as half a million, and worldwide could go as high as 45 million, the same number the same people had predicted would be the global death toll from Swine Flu some years ago, but which turned out to be about 1% of that figure. There were those like David Ashcroft who proclaimed that deaths in the US were only a couple of weeks away from hitting 1 million. The truth, despite all of the idiocy of Trump, US deaths amount still to just 497 thousand, and as with the UK data, and most other data, this is the number of people dying with COVID, not necessarily from COVID.

In much the same way that Messianic bible-thumpers told us that AIDS was a plague sent down upon gays as punishment for their behaviour, we saw claims that COVID was somehow a plague sent down upon us as a consequence of capitalism. It is as though, such viruses are something that has only arisen since capitalism, as though all history of The Black Death never happened. Its as though all of the thousands of deaths from cholera, typhoid, smallpox and so on that capitalism has eradicated as a result of introducing clean drinking water and sanitation, and vaccines never happened.

And, of course, capitalism has done it again. The Medical-Industrial Complex, seeing great opportunities for profit making – even selling COVID vaccines at cost adds to big pharma profits as a result of a huge contribution to their fixed costs – stepped up to the plate, and produced, not just one, but a plethora of viable vaccines to stop the virus in its tracks in record time. Whilst the state capitalist NHS was not even able to protect its own staff or patients from being infected with the virus, and so became the biggest single superspreader of the virus, all of these corporations provided the solution effectively and efficiently. If ever there is an argument in favour of such large-scale socialised capital, as against the proponents of “anti-monopoly alliances”, then the performance of big pharma in producing the solution to COVID is it. What a pity the workers in those industries do not themselves have control over them, but how lucky we are, given the abysmal performance of the capitalist state, and its health service, that its not the state or Boris Johnson exercising that control.

And, of course, this has wider lessons for catastrophists. In an article recently, Paul Mason wrote,

“Because climate change demands the end of capitalism.” 

I almost fell of my seat when I read that. Talk about hyperbole. I know Paul has a book to sell, but still. He's made similar comments before, for example in Postcapitalism, but this seems the most stark to date. But, of course, climate change in no way demands the end of capitalism. Quite the contrary, responding to climate change opens up a a panorama of new investment opportunities for capital, whole new vistas of potential new profits. Many of them are in commodities that were already being developed, as, in any case, new, more efficient means of using materials and energy. Solar and wind power is already cheaper than fossil fuel energy, for instance, and these industries now provide far more jobs and profits in the US than does the old fossil fuel based energy production.

But, set all that aside. Assume that was not the case, then if climate change did really pose a threat to capitalism, isn't the obvious lesson from what we have just seen in the response of big capital and its mobilisation of technology, in producing a whole range of effective vaccines, in just a few months, that capitalism is more than capable of taking on that challenge? In Capital I, Marx describes the way some employers moaned when the Factory Acts imposed on them limitations on the working-day and so on. Earthenware producers, here in Stoke, said it would be the death of them, as their production processes could not adjust to the new requirements. What happened?

“In 1864, however, they were brought under the Act, and within sixteen months every “impossibility” had vanished.

'The improved method,” called forth by the Act, “of making slip by pressure instead of by evaporation, the newly-constructed stoves for drying the ware in its green state, &c., are each events of great importance in the pottery art, and mark an advance which the preceding century could not rival.... It has even considerably reduced the temperature of the stoves themselves with a considerable saving of fuel, and with a readier effect on the ware.'

In spite of every prophecy, the cost-price of earthenware did not rise, but the quantity produced did, and to such an extent that the export for the twelve months, ending December, 1865, exceeded in value by £138,628 the average of the preceding three years.”

(Capital I, Chapter 15 p 447)

Covid was trumpeted by the catastrophists, who gloried in the chaos and misery caused, not by COVID itself, but by the government imposed lock-outs introduced in response to it. However, the rapid, effective and efficient response to it, by the big pharma companies in producing a large number of viable vaccines, in record time, shows not only the extent to which capitalism remains a flexible, and revolutionising force, able to develop and apply technology at a very rapid pace, but that it remains more than capable of dealing with any potential catastrophe thrown at it. The job of socialists is not to be continually seeking the next catastrophe, in the hope that it might bring down this hugely progressive system, but should be to be asking why it is that the workers, the associated producers, who make this system work, do not have control over it, and how can we most readily obtain it.

The Economic Content of Narodism, Chapter 3 - Part 2

Lenin sets out Struve's description of the development of commodity economy,of the division of labour, and role of the “buyer-up”, i.e. the merchant capitalist, who appropriates surplus value from the producers via the Putting Out System. When commodities begin to be sold in more distant markets, this facilitates the role of the buyer-up, who buys them cheap and takes on the costs of selling in these more distant, but bigger markets. The expansion of the market encouraged and increased division of labour, but, at this stage, does not bring about a technical restructuring of the industry. Existing handicraft producers are concentrated in one particular type of commodity production, and often continue to produce domestically, their output bought by the buyer-up. This means that the merchant capitalist is the first section of the bourgeoisie to rise in social importance. 

Lenin quotes Struve's comment, 

“This is lost sight of by our ’true Marxists’ like Mr. V. V., who are blinded by the significance of purely technical progress”.” (p 427) 

Lenin says that this “proves beyond doubt” that “The entire process is expressed in the fact of petty production (handicraft) approximating to ’capitalism’ in some respects, and in others to wage-labour separated from the means of production” (Note * p 427) 

Of course, the significance of the merchants on its own does not prove that. From almost the dawn of commodity production and exchange, 10,000 years ago, there have been merchants, and they played a significant role. Tribes and primitive communes selected individuals from their midst to act as merchants representing them in exchanges with other tribes and communities. The merchants became specialists in their own right, being able to assess the value of commodities produced by different communities, and, as Marx describes, therefore, played a crucial role in the formation of market values of these commodities, which is the basis for the determination of exchange-values. As Marx describes, merchants and merchant capital, which along with interest-bearing capital, represents an antediluvian form of capital, has existed alongside all modes of production.

Back To Part 1

Forward To Part 3

The Invisible Shield

Last week, the government announced that it was adding 1.7 million to the list of people it was recommending should shield from COVID19.  But, that takes the total number it says should be shielding only to 4 million.  That is completely pointless.  It is essentially an invisible shield, unable to achieve anything useful.  We have known from the start that about 20% of the population are at serious risk from COVID19, so any effective shielding policy should have started from that basis.  Had the government done that it could have saved tens of thousands of lives.

The 20% of the population actually at serious risk of COVID amounts to around 13 million people, as against the 4 million that the government is only now suggesting should be shielding.  A large proportion of that 13 million people are elderly people many of whom are in care homes, in hospitals, or else who receive care in their own homes from health and social care workers.  Of course, these are precisely the people who needed shielding most, and for whom such shielding should have been most easy to achieve by a welfare state and NHS focussing on that requirement.  Yet, the opposite has been the case.

Rather than shielding all of these people, it has been precisely in NHS hospitals, and care homes that the large majority of COVID deaths have occurred.  One of the reasons this necessary shielding did not occur, is that instead of providing such focussed protection, the government implemented its blanket lock down strategy, putting huge amounts of effort into enforcing it, along with all of the resources that went into the totally useless, but vastly expensive test and trace programme.  If a fraction of that effort and resources, let alone just an application of simple common sense had been used to shield the elderly and vulnerable in NHS hospitals and acre homes, and receiving care in their homes, then tens of thousands of lives would have been saved, and the number of seriously ill people in hospitals would have been reduced to a fraction of what it has been.

The basis of who should be in the government's shielding category was unclear.  I was never told I was in it, despite being over 65, and being a lifelong asthmatic who has had pneumonia twice.  If that didn't qualify what did?  My decision to self-isolate/shield from last March was taken out of my own application of common sense, rather than any reliance on the government or its scientific advisors.  In fact, from the scientific advice I have seen offered over the last year, and on the basis of the idiotic positions that the government has adopted on the basis of it, I would say that anyone ha been better off relying on their own common sense, rather than listening to the government.

We know that more than 90% of those that have died or been seriously ill from COVID are people over 60.  If we add in others who are otherwise vulnerable that comes to around 95% of all deaths and serious illness.  So, if the government from the start had told all these people to shield then its clear that tens of thousands of lives would have been saved.  At least it would had the government itself put the resources into ensuring such shielding in its hospitals, and in care homes etc., which of course, it has singularly failed to do as instead it put all of its emphasis into a pointless and counter-productive lock down of the rest of society, where very few deaths and serious illness has occurred.

According to the government data around 120,000 people have died with COVID.  If we take that at face value, then had the government told the 20% of the population, actually at risk to shield, then we would expect that the 90% plus of people who have died, that came into that category, could have been saved.  That means that 108,000 people, aged over 60 would not have lost their lives.  Put another way, only 12,000 would have died.

But, of course, we know that the 120,000 deaths figure is totally bogus, because this is the number who have died with Covid, rather than from Covid.  A large proportion of those dying were not just over 60, but over 80!  The average age of these deaths is 82, older than the average life expectancy.  Many of the people that have died are people who have died from other illnesses, but who also at some point contracted COVID, many of them after they had gone into hospital.  If we say conservatively that only half those dying did so from COVID rather than with COVID, then the number of COVID deaths comes down to 60,000.  But, again, had the government introduced effective shielding of the 20% from the start, then, again, 90% of those deaths would have been avoided.  That would mean that total COVID deaths would have been reduced to just 6,000.

A death toll of just 6,000 is less than the average 8,000 deaths that happen each year in Britain from flu, and far less than the 20,000 that frequently occur in bad flue years.  The policy of lockdown was idiotic and counter-productive.  The real story of COVID has been the failure of the government to effectively shield the 20% of the population actually at serious risk from the virus, and its continuing to do so.

Marxism, Zionism and the National Question - Constraints On The Creation of Nation States (1/5)

Marxism, Zionism and the National Question

Constraints On The Creation of Nation States (1/5)

The first constraint on the right to self-determination, for any nation, is clear, from what has been stated. Not every nation is large enough to be able to create, within its own borders, a single market of sufficient size, for the development of capitalism, as a dominant mode of production. The minimum size of such markets continually increases, as the minimum size of production required for efficient use of capital increases. Without such development of capitalism, no domestic bourgeoisie arises capable of becoming the ruling-class. It languishes in a continuation of feudal, or pre-capitalist productive relations. Meanwhile, other larger nations around it, do develop capitalism, and the low prices of this capitalist production are “the heavy artillery with which it batters down all Chinese walls” and so these smaller nations that do not rise to the task of creating nation states, either become absorbed into this larger nation state, or else they are annexed, or otherwise subordinated to it. The most obvious variant of this is the establishment of colonies, the difference being that colonies are generally established in countries that are large enough to sustain a nation state, but where social development itself had been at a very low level, prior to colonisation.

It is these very same, objective, material conditions that prevent the development of a domestic bourgeois ruling class, and nation state, that makes these small nations reactionary, for the reasons that Engels describes that, in order to achieve this historic task, which they have proved incapable of doing themselves, they look to other outside forces, to larger states, to bring about this liberation for them. As Engels describes, here, that is inevitably reactionary. Trotsky made the same point in relation to the Balkan Wars, in which he opposed the kind of intervention by Tsarism, as an external liberator of the Slavs, from the Ottomans that Engels described in his letter to Kautsky.

“Petersburg's diplomacy has no business in the Balkans, and the Balkan peoples can expect nothing to their advantage from the diplomatic chancelleries of Petersburg. The peoples of the Near East must organise a democratic federation on their territory, on principles of independence from both Russia and Austria-Hungary.

This standpoint unites us closely both with you and with the fraternal parties in the Balkans, whose fight against local dynastic and militarist reaction will be the more rewarding and successful the more vigorously and uncompromisingly we wage our struggle against any and every interference by the Great powers in Balkan affairs.”

(Trotsky Writings On The Balkan Wars, p 319-20)

Generally speaking, Marxists oppose the establishment of federal states as opposed to a unified state, but, it is precisely where small nations may not be able to rise to the task of creating such a unified nation state that the argument for federalism arises. The Balkan peoples had failed the historic task of creating individual nation states, which is what made the establishment of a Balkan federation, a progressive alternative, especially in an era of imperialism, when the nation state itself had become an inadequate framework for the further development of capitalism. This was the position adopted by the European Marxists of the time, but, as with today, they were confronted by the liberal interventionists for whom this more complicated, arduous task of building for such a solution was trumped by the simpler demand of simply allowing other large powers to undertake these tasks of history on their behalf.

“And tangled knots exist in plenty in the Balkans...A customs union, federation, democracy, a united parliament for the whole peninsula – what were all these pitiful words beside the unanswerable argument of the bayonet. They had fought the Turks in order to 'liberate' the Christians, they had massacred peaceful Turks and Albanians in order to correct the ethnographical statistics of population, now they began to slaughter each other in order to 'finish the job'.”

(ibid, p 329)

Back To The Abstract Right of Nations To Self-Determination

Forward To Part 2

Back To Table of Contents

Northern Soul Classics - So Far Away - Hank Jacobs

 

Friday Night Disco - Bad Luck - Harold Melvin & The Blue Notes

 

The Economic Content of Narodism, Chapter 3 - Part 1

Chapter 3

Struve, moves next, in his book from a consideration of sociology to a consideration of economics. His analysis suffers from the same problems of its objectivism as opposed to materialism. So, Struve begins by saying that it is ““natural and legitimate” to start from “general propositions and historical references,” from “indisputable premises established by human experience,”” (p 424) This leads to the analysis being abstract, which is a particular problem, given that Struve aimed his book at the Narodniks and their specific analysis of Russian history, and the development of its economy. 

There is nothing wrong with setting out a broad framework, in which the specific analysis can be framed, but by remaining significantly at this level means that Struve cannot develop his arguments fully on the basis of the concrete analysis of Russian economic history and development. As Lenin was fond of saying, the truth is always concrete. It is precisely because the Narodniks argued that it was wrong to apply these general principles to Russia that Struve needed to do so by demonstrating their applicability in relation to the facts. Struve's objection instead leads to fatalism, and the idea that what is described in the general principles must play out in reality. 

“the Narodniks’ particular way of understanding Russian reality should have been compared with the Marxists’ other way of understanding that same reality. On the other hand, the abstract character of the author’s arguments leads to his propositions being stated incompletely, to a situation where, though he correctly indicates the existence of a process, he does not examine what classes arose while it was going on, what classes were the vehicles of the process, overshadowing other strata of the population subordinate to them; in a word, the author’s objectivism does not rise to the level of materialism—in the above-mentioned significance of these terms.” (p 425) 

To illustrate this relation between objectivism, Lenin quotes Marx from The Eighteenth Brumaire, in which he contrasts his materialist method with the objectivist method of Proudhon. 

““Proudhon, for his part, seeks to represent the coup d’état [of Dec. 21 as the result of an antecedent historical development. Unnoticeably, however, his historical construction of the coup d’état becomes a historical apologia for its hero. Thus he falls into the error of our so-called objective historians. I, on the contrary, demonstrate how the class struggle in France created circumstances and relationships that made it possible for a grotesque mediocrity to play a hero’s part”” (Note *, p 425) 

The Narodniks presented a romanticised version of Russian “people's history”, in which, under natural economy, the direct producers were owners of their means of production, but this rural idyll was a fantasy that only existed in their heads. Struve is quite right, Lenin says, to point to the fact that, throughout Russian history, “people's industry” had been inseparable from a dependency on the lords. 

“In the period of natural economy the peasant was enslaved to the landowner, he worked for the boyar, the monastery, the landlord, but not for himself...” (p 425) 

The Narodniks set out this fairytale about the peasant's ownership of the means of production, because, on this basis, instead of analysing the expropriation of the peasantry, in the context of the replacement of the appropriation of the peasant's surplus labour/product, via rent, with the extraction of surplus value by profit, the Narodniks could explain it solely in terms of the accidental development of capitalism, as the country diverged on to an unnatural path. 

“And they were not ashamed to tell these absurd stories about a country which had but recently seen the end of the feudal exploitation of the peasantry in the grossest, Asiatic forms, when not only did the means of production not belong to the producer but the producers themselves differed very little from “means of production.” Mr. Struve very pointedly sets against this “sugary optimism” Saltykov’s sharp rejoinder about the connection between “people’s production” and serfdom, and about how the “plenty” of the period of the “age-old basis” “fell only” [note that!] “to the lot of the descendants of the leibkampantsi and other retainers” (83).” (p 426)

Back To Chapter 2

Forward To Part 2

Back To Table of Contents

The Uber Decision Is Not A Real Victory

Uber drivers have secured a decision in their favour in the Supreme Court, which means that they are classified as workers rather than independent contractors.  As I have written many times, it was, of course the reality that Uber drivers sold their labour-power to Uber, rather than being independent commodity producers and sellers.  They are in the same position as the Scottish pebble collectors, described by Marx, who appeared as independent commodity owners selling pebbles to the stonemasons, but who, because they were so numerous, in reality only sold the pebbles at a price that reproduced the value of the labour-power of the pebble collectors, rather than the actual labour-time they expended, and which was represented by the value of the pebbles themselves.

The court ruling means that Uber must now treat the drivers as employees rather than contractors, and so pay them Minimum Wage, holiday pay and so on.  This will have wide consequences for other gig economy workers too.  In providing the workers with this level of protection, the court ruling is clearly a step forward in he workers' conditions.  However, in a deeper sense, it is not a victory at all, and that is precisely because it does define the drivers as workers rather than independent contractors and commodity sellers.

As workers, employed by Uber, it means that their condition as wage slaves is simply codified and legitimised.  It simply puts their exploitation on a legal footing, rather than creating the conditions under which that exploitation would cease.  One of the drivers who brought the case said on Sky News, this morning, that they regretted that they had had to bring the case, because, he said, the State should be there to prevent workers from being exploited.  That represents two huge fallacies.

Firstly, the state is a capitalist state, and so its function most certainly is not to prevent workers being exploited by capital.  On the contrary, its job, as a capitalist state, is to crate the best possible conditions under which capital can exploit workers, and so maximise its profits, and so accumulate additional capital.  But, even if the state were minded to end such exploitation it could not do it, because the whole basis of capitalism, and of the position of workers is that they are exploited, i.e. they produce surplus value, which is appropriated as profit by capital.  Unless capital is enabled to do that, there is no reason for capital to employ workers, and so it wouldn't!  By legalising the reality that these workers, are simply wage slaves employed by Uber, the decision, necessarily condemns them to be continually exploited by capital, in performing that function.

The real solution for the Uber drivers, as for all other workers in that position is not to settle for continuing to be merely wage slaves employed by capital, but to take the position that capital claims they are in, as independent commodity owners and sellers, and to turn it into reality.  There is a large number of Uber drivers - that is why, as atomised individual labourers Uber is able to only pay them the equivalent of wages - but that large number is also their strength, if instead of seeing themselves as individual labourers, they were to see themselves as a collective.  Forming a trades union does that to a limited degree, but in the process accepts the continued role of the labourer, as simply a wage labourer.

If all of the Uber drivers had formed themselves into a cooperative, they could have dictated the terms under which they would sell their services to Uber.  Indeed, the rational conclusion of that is that, the drivers would be able to set their prices on the basis of what they charged passengers, not what Uber agreed to pay them from what it receives from passengers from the service provided by those drivers.  In other words, the drivers would then charge passengers the fall value of the service they provide.  At best, Uber would be able to charge a rent for the use of its App.  But, the further logic is that a drivers co-op would simply use its own App, so that no such payments to Uber would occur.

The solution for workers does not reside in continuing to accept their position as wage slaves, and settling merely for an amelioration of the condition that places them in, via better wages and conditions, but in recognising their position as the collective owners of capital, over which they should exercise control, and thereby ending their exploitation by capital itself.

Marxism, Zionism and the National Question - The Abstract Right of Nations To Self-Determination (4/4)

Marxism, Zionism and the National Question

The Abstract Right of Nations To Self-Determination (4/4)

To summarise, then, for capital to develop, a large market, for at least some industrial commodities, must exist, so that it justifies production on a larger scale. Without this larger scale production, capitalist production cannot undercut independent handicraft production. Capitalism itself, as a mode of production, cannot become established, and become dominant, without the development of a large single market, for all commodities, in which there are common laws, currency, tariffs, taxes and so on, and this means the formation of a nation state, as the minimum size required for such development.

In Capital I, Marx, in discussing the development of the Factory Acts, even in the 19th century, makes this point that, in different localities, where local capitalists also comprised the magistrates, they would interpret the laws so as to benefit themselves. Eventually, the capitalists had to recognise that this situation could not continue, because it undermines the foundations of a single market with common rules.

“Some of the masters themselves murmured:

“On account of the contradictory decisions of the magistrates, a condition of things altogether abnormal and anarchical obtains. One law holds in Yorkshire, another in Lancashire, one law in one parish of Lancashire, another in its immediate neighbourhood. The manufacturer in large towns could evade the law, the manufacturer in country districts could not find the people necessary for the relay system, still less for the shifting of hands from one factory to another,” &c.

And the first birthright of capital is equal exploitation of labour-power by all capitalists.”

(Capital Vol I, Chapter 10)

Its also why petty-bourgeois policies such as the introduction of Enterprise Zones, or Free Ports always collapse. The basic requirement of the capitalists, Marx notes, and the same refrain is made today, in relation to the EU, is the existence of a level playing field. But, after 1860, the development of capital on a huge scale means that this level playing field, based upon minimum conditions for workers, enforced by the capitalist state, itself favours the interests of this large-scale capital, as against the small capitalists.

“However, the principle had triumphed with its victory in those great branches of industry which form the most characteristic creation of the modern mode of production. Their wonderful development from 1853 to 1860, hand-in-hand with the physical and moral regeneration of the factory workers, struck the most purblind. The masters from whom the legal limitation and regulation had been wrung step by step after a civil war of half a century, themselves referred ostentatiously to the contrast with the branches of exploitation still “free.” The Pharisees of “Political Economy” now proclaimed the discernment of the necessity of a legally fixed working-day as a characteristic new discovery of their “science.””

(ibid)

It became, another means of enhancing the concentration and centralisation of capital. As Engels put it,

“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.”

(Preface to the English Edition of “The Condition of the Working Class in England”)

The nation state, therefore, arises as a direct consequence of this requirement to organise capitalist production on a large scale, within a single market, in which these common rules and standards are applied. To say, therefore, that every nation has a right to create its own nation state, to exercise self-determination, is simply to express this right as nothing more than an abstract right, in pretty much the same way as we might express the abstract right to free speech, and so on, or other bourgeois rights and freedoms. We can say that these rights exist, even that they are consistent with the interests of the bourgeoisie – certainly in its struggle against feudal absolutism – but the declaration of the existence of these rights is, essentially, nothing more than Kantian moralism. They are rights that remain purely abstract in nature, unless they can be enforced. The truth is always concrete, and whether these abstract rights can be enforced, in any particular case, is constrained by material conditions.

Back To Part 3

Forward To Constraints On The Creation of Nation States

Back To Table of Contents

Inflation is Barrelling Towards Us

None of today's economic pundits, under 50, have seen inflation and interest rates at high levels. Those under 40 have not seen it at even moderate levels. For the last 40 years, rising productivity, caused by the technological revolution of the 1970's and 80's, led to falling commodity values and prices, and the sharp rise in the annual rate of profit it created, along with the massive release of capital it produced, led to continually falling interest rates. There is a tendency to take the conditions you have experienced, and are currently experiencing, and to see them as natural, and the way things will always be. But, its the mistake of the man who having fallen from a 30 story building thinks, as they fall past 29 floors, that they will never hit the ground.

In fact, the inflation seen over the last 12 years has been artificially low too, as have interest rates. When the new long wave upturn began in 1999, the prices of primary products like oil, copper, iron ore, steel, platinum and foodstuffs rose sharply, as demand increased much faster than supply. That happens with every new long wave uptrend. In the early 2000's this rise in primary product prices began to feed through into manufactured goods prices, particularly, as, over the previous ten years or so, central banks had been busy filling the global economy with liquidity as they tried to reflate asset prices that had crashed in 1987, 1994, 1997-8, and 2000. That liquidity now began to inflate all of these consumer goods prices. In parts of the world, where the sharp rise in global growth had created a large new working-class, it led to food riots, and strikes. In Britain, in 2007, oil tanker drivers won a 14% pay rise after just a two-day strike, and workers in Germany won big pay rises too.

The shadow of inflation began to emerge, and interest rates began to rise. With asset prices having been driven artificially high as a result of central bank money printing, even this slight rise in interest rates was enough to cause asset prices to crash leading to the crisis for lenders in 2007, and then the global financial meltdown of 2008. By 2010, having stabilised the global economy, states and central banks again began the job of restoring the paper wealth of the top 0.01% by reflating their asset prices, which involved printing even more money tokens, and buying up these worthless assets to raise their prices. Alongside it, they introduced measures of fiscal austerity to ensure that economies did not again grow faster, which would have simply caused inflation and interest rates to rise again, causing an even bigger asset price crash.

For the last ten years, they have continued to hold back economic growth, and to print money tokens and pump them into inflating asset prices. In so doing, they have also caused money-capital to be drained from the real economy, and into this speculation in assets. Share and bondholders have taken their revenues, and pumped it back into speculation in these assets. Companies have used their profits to buy back shares or speculate in other assets, rather than use those profits to accumulate real capital, which would have caused economic growth to rise, leading to rising interest rates and another crash of asset prices. Even ordinary citizens, seeing savings rates go to near zero, were, thereby, led to speculate in these assets, whether by becoming Buy-To-Let landlords, or just by stampeding into buying astronomically overpriced houses for themselves or their children, and so pushing those prices higher. They were encouraged to speculate in ever more risky assets, including, now, the fad for buying Bitcoin, or whatever some unknown person – probably a professional speculator employed by a big investment bank – suggests, in what amounts to a pure Pyramid Scheme, that will leave thousands having lost all their savings and more.

But, what all of that does, is to drain liquidity from general circulation, and drive it purely into monetary demand for speculative assets whose prices then rise, inflating that bubble. Inflation is a monetary phenomenon, and so, with liquidity drained out of general circulation, the market prices of commodities is constrained, whilst the prices of assets increases. That has been a deliberate policy of states and central banks. The slow down in global economic activity caused by government imposed lockdowns has been a godsend to them, as once again, after 2018, they began to see economic growth begin to rise significantly, and interest rates begin to rise with it, despite their best efforts. No wonder that, in the second half of 2020, and into 2021, stock and bond markets soared once more, the price of gold rose, and Bitcoin went from below $10,000 to now over $50,000. But, such inflation always precedes a crisis and a crash. Just look at Japan, where its stock markets and property markets soared, in the late 1980's, and then crashed by up to 90%. The Nikkei Index is only now getting back to the level it reached in 1990.

In the end, states and central banks cannot control the global capitalist economy. Even a socialist global economy cannot avoid the laws of economics, and particularly The Law of Value. Its hilarious that the biggest advocates of the free market have placed their faith in the ability of central planners, in central banks, to be able to do so, by controlling the most important price in the capitalist economy, the price of money-capital, or rate of interest. But, the fact remains that although the state and central banks are powerful institutions that can manipulate and corrupt the laws of capital for a time, they cannot abolish those laws, and eventually, those laws impose themselves, and come back to bite them the more they have been manipulated and corrupted.

The basic laws involved, here, are these. The main benefits of rising productivity from the technological revolution of the 1970's/80's, began to run out in the late 1990's, and early 2000's. Without those benefits of rising productivity, any significant increase in economic activity causes the demand for labour-power to rise, which leads to rising wage share. Even if unit wages themselves don't rise – which they tend to do beyond a certain point – wage share itself rises, simply because more labour is being employed, whilst the rate of surplus value falls, as a result of limits on the rise of absolute surplus value. As wage share rises, workers demand more wage goods. That was seen spectacularly after 1999, as the workforce expanded massively in China and the rest of Asia, as well as in the former Stalinist states.

When the demand for wage goods rises, capitalists, driven by competition for market share and profits, have to accumulate additional capital, at an increased pace. They must either use more of their profits for investment, putting less of it into capital markets, or they must go into the capital market to borrow additional capital. At the same time, as the rate of surplus value falls, they start to feel a squeeze on their own profits, if only slight. The rise in demand for primary products, especially at a time before any significant new investment in their production has occurred, means that the prices of these products rises, again as seen markedly after 1999. This increase in the value composition of capital causes their rate of profit to fall, but also causes a significant tie-up of capital. This is the opposite of the conditions seen after the mid-1980's.

Firms must then advance more capital for any given increase in the mass of profit. The demand for money-capital to finance this accumulation rises faster than the supply of new money-capital from realised profits, and so interest rates rise, and this causes asset prices to crash. Capital can only avoid this if the increase in economic activity, and consequent rise in aggregate demand is kept within limited bounds of a steady accumulation of additional capital, and the rise in supply made possible by annual increases in productivity. That is what capitalist states and central banks have tried to engineer in the last 13 years, so as to prevent a rise in interest rates, and new, even more massive collapse in asset prices, and global financial markets.

But, they inevitably fail. They fail because of the underlying characteristic of all generalised commodity production and exchange, the characteristic that itself drives all such economies to become capitalist in the first place, and which drives capitalist economies to become increasingly concentrated and centralised – competition. Whilst wages are relatively low, and not rising, there is no incentive for firms to spend heavily on innovation. To expand they make marginal changes in their technique, and improvements in their fixed capital, as and when it needs replacing. Generally, they expand by simply doing more of the same, and this is characteristic of a period of extensive accumulation. But, the consequence is that rises in productivity cease. If you replace old fixed capital with new more productive fixed capital, then your productivity will rise, but if you simply replace one machine with another of the same kind, it will not. Eventually, all your machines are the same. So, then, any rise in output can only be achieved with a relative increase in the amount of labour employed, compared to what was possible when increased output was achieved by introducing more efficient machines.

Extensive accumulation inevitably leads to a rise in the demand for labour-power. As the number of workers employed rises, so the demand for wage goods rises, and competition drives firms to accumulate to capture this increased market, as described above. Increases in population also drive such an increase in demand for wage goods, and from the late 1980's, as China and the rest of Asia industrialised more rapidly, large numbers of former peasants and direct producers came to rely on the market to meet their needs. Their wages, as industrial workers, far exceeded their ability to consume as subsistence peasants, and this drove a significant increase in the expansion of global markets.

For the last 13 years, capitalist states have tried to keep a cap on this expansion of demand, so as to prevent the inevitable rise in interest rates, and collapse of asset prices. But, now, it is breaking through once more. The freeze of economic activity due to lockdowns has simply delayed changes that were already apparent in 2018, and which again had only been modified by Trump's global trade war and Brexit, in 2019. Lockdowns have had an inevitably contradictory effect. On the one hand, they have immediately frozen economic activity. That caused the demand for labour-power to fall, and the demand for money-capital to fall. That immediately causes interest rates to fall back, and with huge new money printing and asset purchases, causes asset prices to zoom to even more surreal levels.

But, the state could not impose lockdowns without giving some financial support to those it had deliberately locked out of employment. So, now, the state is led to print even more money tokens simply to hand to those it has locked out, in order that they can live. This is qualitatively different money printing to that of the previous thirty years. That went to inflate asset prices, this now goes to inflate monetary demand for actual commodities. What is more, precisely because of locking out workers from production, the supply of those commodities is reduced at the same time that the monetary demand for them is increased, or at least maintained, as a result of these furlough and other payments. In fact, as a result of lock down, some of the main elements of consumer spending are prevented all together. The prices of these commodities and services drops, as demand is cut off, and this fall in prices severely distorts the general consumer prices indices. Meanwhile, the demand for other commodities and services, available online, increases substantially, and the prices of these rises sharply, though it is not reflected in the general consumer prices indices. So, the CPI and RPI data, already substantially understates the real level of inflation.

But, when economies come out of lockdown, this sharp rise in prices of those commodities that have been able to be bought will be replicated in all other commodities, and undoubtedly to an even greater degree, given that consumers have been denied access to them for so long. In fact, that was seen previously when lock downs were relaxed. People flocked to hairdressers, and their prices more than doubled; consumers flocked to car showrooms, especially as they feared using public transport, and with car stocks having been exhausted, demand exceeded supply and car prices rose.

As China resumed its economic activity last year, the same thing was seen. With US consumers also buying extensively online, Chinese suppliers quickly ramped up production to meet this increased demand. They filled container ships with goods headed for the US Pacific Coast ports, and the demand for shipping capacity drove up shipping rates massively. With China, and other Asian countries again increasing output, their demand for primary products is again rising rapidly. Oil prices that were around $40 in 2020 have risen by 50% to over $60 a barrel.

Copper, whose price was between $2 - $3 for much of 2020, has risen to nearly $4. Platinum, used in catalytic converters and other industrial uses, was below $800 for pretty much all of 2020, and as low as $600, has risen to $1300. Iron Ore, which was around $80-100 has risen to over $160, and so on.

In foodstuffs, wheat prices have risen from $500 to $650; Soybeans have risen from $800 to $1400; Beef has gone from $14 to $20, and so on.

What exists is completely different to the conditions that exist in a period of stagnation following a period of crises of overproduction. In the latter, the crisis is a consequence of the overproduction of capital relative to the available labour supply, i.e. the social working-day. It results in capital itself being destroyed. But, this economic slowdown is entirely artificial caused by government imposed lockdowns. There is no crisis of overproduction, capital has not been over accumulated, the annual rate of profit remains high, and apart from the effects of lockdown, the mass of profit continues to grow. There are innumerable spheres of capital investment available for businesses to enter, and currently, there is a lot of underemployed labour available for this capital to employ, and from which new masses of profit are available. In other words, as soon as the economy is released from lockdowns, there is a wall of monetary demand waiting to wash into circulation, creating a surge that, due to lockdowns, supply is not yet able to meet, which will cause prices to rise, leading to an inflationary spiral.

A look at the announcements on the energy price cap illustrates the point, with energy prices set to rise by nearly 9%. Nearly every economist now sees inflation rising in the period ahead. Most do not see it as a significant problem, given that the headline figures are currently below central bank targets of 2%. But, those headline figures do not take account of the distorting effects of lockdowns. However, look at how inflation rose quickly in the late 1960's and 70's. It went from around 2-3% in 1968 to 6% in 1969, and 10% in 1970, rising to 28% in 1975. Today, the amount of liquidity in circulation is much, much greater than it was at that time, and the potential for inflation to rise even more quickly is that much greater too.

The potential for this rise in inflation, and the effects of the increase in economic activity that it reflects, is also being reflected even in the heavily manipulated bond markets. The rise in economic activity causes interest rates to rise, and rising inflation also causes interest rates to rise as lenders demand protection against being paid back in greatly depreciated currency. US 10 Year Bond Yields have risen from around 0.5% back in August to 1.31%, thereby, almost trebling. The trend is strongly upwards, despite the attempts of the Federal Reserve to keep yields low via its bond buying programme. UK 10 Year Bond Yields have risen from 0.1% in August to 0.62%, thereby increasing six fold. Again the trend is strongly upwards. Even German 10 Year Bond Yields have become much less negative, having risen from -0.63% to -0.35%, or more or less doubling.

But, this represents only the picture in relation to these highly manipulated Bond Markets, where the central bank can massively affect the price of the bond, and so yield, via its own money printing and bond buying activities. The fact that bond prices are falling and yields rising despite those activities, shows the strength of what is going on in the subterranean channels of the global capitalist economy. It is a Leviathan that when it surfaces is going to consume all of the associated asset price bubbles that have been inflated on the back of this unprecedented increase in liquidity.