Friday, 31 December 2021

Friday Night Disco - Respect - Otis Redding


Adam Smith's Absurd Dogma - Part 35 of 52

Its clear, if these producers are the same capitalist. The coal producer uses some of their coal to replace the coal they burn running their steam engines, in the same way that a farmer uses a portion of their grain output as seed. This portion of output, thereby, never becomes a marketed commodity, and never produces any revenue. As a coal and iron producer, coal is also used as merely a product, rather than a commodity, as means of production, in iron production. The coal consumed in iron production is directly replaced, by the combined coal and iron producer, out of the coal they simultaneously produce in their mine. But, the coal and iron producer also simultaneously produces iron and steel used to replace the pit props and rails being worn out in the mine, in the production of coal.

None of this mutual replacement of constant capital enters into the consumable product as constant capital, none of it constitutes revenue, and also has no equivalent in the consumable product. It forms no part of GDP or National Income, and yet, as social productivity rises, and the organic composition of capital rises with it, this portion of total output becomes ever larger. Even where the economy is no longer dominated by the processing of materials, the continued growth of fixed capital means that the portion – if not the proportion – of output required to reproduce wear and tear expands.

Marx sets out the value relations involved, as against the appearance given by the use values, by giving an example of the machine maker.

“... the part of the machinery manufacturer’s constant capital which represents the wear and tear of his machine-building machines, instruments, etc.—and therefore consists neither of raw material ... nor of labour added, and so neither of wages or profit—this wear and tear is in fact made good by the machinery manufacturer appropriating for himself one or two of his own machines to serve as machine-building machines.” (p 146)

This is the same as the approach taken by Marx in Capital I, of dividing the output up into physical quantities, each representing c + v + s. So long as productivity remains constant, these physical quantities remain constant too. In the case of the machine maker, the element of c comprises both wear and tear of their own machines, which they replace, in kind, from their own production, and materials, which they cannot.

“The machinery of the machinery manufacturer himself is not sold. It is replaced in kind, deducted from the total product. Consequently the machines which he sells represent only raw material (which consists only of labour, if he has already been charged for the wear and tear of the raw material producer’s machinery) and labour added, and therefore are resolvable into linen for himself and for the raw material producer. As for what specially concerns the relations between the machinery manufacturer and the producer of raw materials, the latter has deducted, in respect of the part of his machinery that has been wasted, a quantity of iron equal to its value. He exchanges this with the machinery manufacturer, so that each of them pays the other in kind, and this process has nothing to do with the division of revenue between them.” (p 146-7)

In other words, in the same way that the farmer sells only a part of the grain they produce, retaining another part to replace their consumed seed, so the machine maker sells only part of the machines they produce, using the other portion of their production to replace, in kind, their own worn out machines. Of the grain the farmer does sell, not all of it constitutes revenue either, because, out of it, they must also cover the cost of wear and tear of their machines, and of other items of constant capital. Another way of viewing it would be if they handed grain to the machine maker for machines, and similarly to other suppliers of constant capital, who then exchanged grain for consumable products. Similarly, of the machines the machine maker sells, not all of that is revenue either, because a part must cover the cost of raw materials used in the construction of those machines. Only that portion equal to the new value created by labour (v + s) can constitute revenue, for them, and can be exchanged for consumption goods. It is only that component that passes into final production. Marx summarises it as follows.

“In reality, the constant capital is replaced by being constantly produced anew and in part by reproducing itself. The part of the constant capital which enters into the consumable product is however paid for out of the living labour which enters into the non-consumable products. Because the latter labour is not paid for in its own products, it can resolve the whole consumable product into income. A part of the constant capital, considered as part of the annual product, is only seemingly constant capital. Another part, although it enters into the total product, does not enter into the consumable product either as a component part of its value or as a use-value, but is replaced in kind, remaining always incorporated in production.” (p 147)

Review of Predictions For 2021 - Prediction 6 – Trump Indicted

Prediction 6 – Trump Indicted

Again the verdict must be  - not yet. All of the arguments set out last year remain valid. The net is tightening around Trump's associates in the US, and globally. Bannon has been indicted, Christopher Steele's dossier has been published, and so on.

One factor that has slowed progress is the incompetence and timidity of Biden, which is also resulting in weakness politically for the Democrats as they approach next year's midterm elections. Biden's incompetence is only outdone by the similar opportunist idiocy of Starmer in Britain, as conservative social-democracy continues to focus on the limited threat to its Left, as against the very real, clear and present danger on its Right. That also shows the disaster that would flow from the kind of Popular Frontist politics proposed by Paul Mason, last year, which called for the Left to politically disarm itself in search of a meaningless alliance with those forces of conservative social-democracy.

The Left will, of course, fight alongside the centre against any immediate threat from the Right, but we will do so under our own banner, not that of alien class forces, and any such fight first requires that the centre is itself prepared to fight those to its Right, and not to continually seek to appease them, as both Biden and Starmer have done, including by adopting large swathes of the ideological programme of reactionary nationalism.

Thursday, 30 December 2021

The Handicraft Census In Perm Gubernia, Article II, Section IV - Part 4 of 6

The wages of non-agricultural workers were also higher, though the difference was not so great as between the masters. For the non-agriculturist, the average wage was 57.8 roubles, as against 43 roubles for agricultural workers. Later, Lenin would also show that the wages and conditions of the workers in the more capitalistically developed enterprises were higher than for those in the less capitalistically developed. Despite that, the rate of exploitation in the more capitalistically developed enterprises was higher, again confirming the analysis provided by Marx in Capital.

“The difference between the size of the masters’ incomes and workers’ wages is incomparably larger in the case of the non-agriculturists than in that of the agriculturists: taking all three sub-groups, the income of a non-agriculturist master is almost double a worker’s wages (113 rubles and 57.8 rubles respectively), whereas among the agriculturists the income of the master is only slightly higher—4.1 rubles more (47.1 and 43.0)! If these figures are astonishing, even more so are those relating to the agriculturist artisans (I, 2), where the income of the master is less than a worker’s wages! But the reason for this will become quite clear later, when we cite data showing the tremendous difference between the size of incomes in large and small establishments. By increasing productivity of labour, the large establishments make it possible to pay wages exceeding the income of the poor, individual handicraftsmen working alone, whose “independence,” in view of their subjection to the market, is quite fictitious.” (p 394)

Again, these differences are most pronounced amongst the non-agricultural producers.

“The negligible difference between the income of the small master and the wages of the worker clearly shows that the income of the small agriculturist handicraftsman who employs no wage-workers is not higher, and often even lower than the wages of a hired worker. As a matter of fact, the net income of the master (47.1 rubles per family worker) is the average for all establishments, large and small, for both the owners of factories and of one-man workshops. Naturally, in the case of the big masters, the difference between their net income and the wages of their workers is not 4 rubles, but anything from ten to one hundred times as much, which means that the income of the small one-man workshop is considerably below 47 rubles; in other words, this income is not higher, but often even lower than the wages of a worker.” (p 395)

The handicraft census data fully confirmed that conclusion, Lenin says. Again, it demonstrated that, contrary to the Narodnik arguments, the tie to the land greatly reduced earnings.

Lenin then turns to an analysis of the data in relation to the different working seasons for industry and agriculture to show that this cannot explain the difference in incomes, and output. The census dealt with this by looking at the intensity of production at different times during the year, measured by the number of family members and wage workers employed. The data, however, was poorly analysed, Lenin says. Moreover, there were numerous errors in the data, presented in the table. All of that made it risky to use this data as the basis for any analysis.

“All that remains is to treat these data regardless of others, and to compare the maximum and the minimum numbers of workers engaged in each month. This is what is done in the Sketch, but the separate months are compared. We consider it more correct to compare winter and summer; for that will enable us to determine how far agriculture diverts workers from industry. We took the average number of workers engaged in winter (October to March) as the standard, and, applying this standard to the number of workers engaged in summer, we arrived at the number of summer working months. By adding up the number of winter and summer months we got the number of working months in the year. Let us illustrate this by an example. In the first sub-group of Group I there were 18,060 workers engaged in the six winter months, which gives us an average of (18,060 : 6 =) 3,010 workers in one month. In the summer, 12,345 workers were employed; in other words, the summer working season is equal to (12,345:3,010) 4.1 months. Hence, the working period in the first sub-group of Group I amounts to 10.1 months in the year.” (p 397)

As an example, Lenin says, in the first sub-group of Group I, there were 18,060 workers employed over the six Winter months, giving 3,060 workers in a month. Using that average monthly number of workers, Lenin then takes the figure of 12,345 workers employed over the Summer to derive a Summer working season of 4.1 months. That gives a total working season of 10.1 months.

“This method of analysing the data seemed to us both the most correct and the most convenient. It is the most correct, because it is based on a comparison of winter and summer months, and hence, on an exact determination of the extent to which agriculture diverts workers from industry. That the winter months have been correctly taken is confirmed by the fact that in the October-March period the number of workers in both groups is higher than the average for the year. There is the greatest increase in the number of workers from September to October, and the greatest decrease from March to April. Incidentally, the choice of other months would have had little effect on the conclusions. We consider the method chosen to be the most suitable because it gives an exact figure for the working period which allows us to compare the groups and sub-groups in this respect.” (p 398)

Review of Predictions For 2021 - Prediction 5 – Africa Outperforms

Prediction 5 – Africa Outperforms

African economies have been growing again in 2021, following the global recession caused by lockdowns in 2020, but the renewed lockdowns in 2021, have again limited growth in economies, on a continent where the production of primary products continues to be central, although they are increasingly moving away from primary products to service industries, as has been the case with developed economies.

The effects of lockdowns and lockouts on the global economy, necessarily impacted the poorest economies in the world, and the poorest in each society hardest. The calls for such lockdowns, irrespective of the damage they cause, came largely from middle classes, able to isolate themselves from those consequences. But, globally, the effects on the poorest economies has been to increase the numbers in absolute poverty by around 120 million, according to the World Bank, and according to Oxfam, around 150 million people are now suffering extreme hunger, as a result of the economic effects of lockdowns. As they point out, these consequences, which will last for years, are likely to cause many more deaths than will COVID.

In terms of COVID itself, Africa has done relatively well compared to elsewhere, despite being deprived access to vaccines on the scale of developed economies. That is partly due to the nature of its societies, being more sparse, and, in the cities, where that is not the case, the populations being generally much younger than in developed economies.

East Africa, where a lot of the more vibrant economic activity is focussed, has again suffered from war, as fighting broke out and extended in Ethiopia. Such conflicts are by no means peculiar to Africa, in these early stages of industrial development. European countries went through long periods of internal conflicts before nation states were constructed, followed by conflicts between nation states, as they too became too small for the needs of a rapidly growing capitalist production, and the US, went through its Civil War, on a similar basis.

Renewed global growth in 2022 is likely to see economic growth in Africa again rise sharply, as the demand for primary products rises abruptly, and rising primary product prices will feed through into revenues, and the potential for capital accumulation. At a time when developed economies in Europe, North America and Asia are facing demographic constraints due to ageing populations, and birth rates that are falling below the replacement rate, Africa faces no such problem, enabling it to find the labour it requires, and to act as a suitable venue for capital from across the globe in search of labour-power.

Wednesday, 29 December 2021

Adam Smith's Absurd Dogma - Part 34 of 52

It is on this basis that Adam Smith's absurd dogma rests, and upon which all modern orthodox economics rests, and which, thereby, equates GDP with total output, even though it only represents the value of the consumption fund. It completely misses out the much larger value of output, which consists of Department I production of means of production, which never enters the value of that consumption fund, but merely replaces “on a like for like basis”, the consumed means of production in Department I, i.e. the 4000 in Marx's reproduction schema, as against the 2000 exchanged with Department II. They never form a revenue for anyone, and so, just as the component of output appears nowhere in GDP, so there is no equivalent of it in revenues in the National Income data.

This issue should also not be confused with other suggestions of calculating national output such as Gross Output Value which simply double counts intermediate production. As already indicated, the value of constant capital at each of these previous stages itself comprises only the value of revenues from previous stages. Including that value of “constant capital” rather than just the value added, at each stage, rather than recognising the nature of the problem, as being that the constant capital value is itself nowhere accounted for, because it is replaced as an exchange of capital with capital, not with revenue.

In the case of the linen producer, in the previous example, which represents Department II, a part of the linen is consumed out of Department II, revenues. The rest goes to pay its suppliers of constant capital. But, these can only consume a part of this, because they must also use another part to cover their cost of constant capital.

The account, however, can only be settled if it is only revenue, newly-added labour, not constant capital, that has to be replaced by the last part of the linen, the consumable product. For on the assumption we have made the linen enters only into consumption and does not in turn form the constant capital of another phase of production. constant capital.

This has already been shown to be the case for a part of the product of agriculture.” (p 144)

In other words, a portion of total output never takes the form of commodities – and that is not including all of the value of output from domestic labour etc. - but takes the form only of products, used to directly replace the same products, as means of production. Such is the case of seed, or livestock for the farmer, the coal of the coal producer, and so on.

“In general, it is only products that enter as raw materials into the final product of which it can be said that they are consumed as products.” (p 144)

The term product is used precisely by Marx, here, in the context in which he analyses it in Capital I, being a use value produced by labour, and which, therefore, has value, but which is not put on the market for sale, and so does not have this value compared to other saleable products, i.e. it does not become a commodity, or have its value expressed in the form of exchange-value, or price.

But, in addition to this component of total output that consists of products, reproduced in kind, there is a larger portion that does take the form of commodities, but which also does not enter, as constant capital, into the consumable product. In other words, it reproduces the consumed means of production of Department I, on the basis of mutual exchange. The coal producer provides coal to the steel producer, and the steel producer provides steel to the coal producer. They, thereby, mutually replace each other's constant capital, without any of the value entering into the value of the commodities they sell to Department II, whose value consists entirely of revenues.

“... the raw material of machinery— apart from such agricultural products as leather belting, rope, etc. —is wood, iron and coal, while on the other hand machinery in its turn enters as a means of production into the constant capital of the producers of wood, iron, coal, etc. In fact, therefore, both replace each other a part of their constant capital in kind, Here there is exchange of constant capital for constant capital.” (p 145)

And, Marx shows that this is not merely a question of accounting.

“The producer of iron debits the machinery manufacturer for the wear and tear of the machinery used up in producing the iron and the machinery manufacturer debits [the producer of iron] for the wear and tear of his machinery in constructing the machines.” (p 145)

Review of Predictions For 2021 - Prediction 4 – Gold Heads Towards $3,000 An Ounce

Prediction 4 – Gold Heads Towards $3,000 An Ounce

Again, the prediction itself failed to materialise, but the arguments behind it remained valid. As I described last year, these “predictions” are not really predictions at all, in the conventional sense, but only a description of existing material conditions, and the processes unfolding from them. As with the other predictions, the fact that governments, everywhere, again imposed lockdowns, restricting economic activity, and at the same time, introduced additional liquidity, which flooded into asset prices, explains why the process described was again waylaid.

Yet, it has simply created the conditions, whereby, the process itself will simply be exacerbated. Part of the argument set out was that, rising inflation will cause the price of production of gold to rise. Across the globe, inflation is rising sharply, and as central banks have put themselves way behind the curve as they have tried to keep asset prices inflated, they run the risk of allowing inflation to run out of control. Sharply rising inflation, means that the prices of all inputs from materials and energy, used in gold production, themselves rise. The price of production is this cost of production, plus average profit, and as money profits will also rise along with inflation, that means the price of production of gold, as of other commodities will rise.

Those rises did not feed through last year, but look set to do so in the year ahead, and as the ability of governments to continue to hold back economic activity using COVID as an excuse shrinks further, unless they resort to more overt methods of Bonapartism to do so, and to hold down wages, as they allow prices and profits to rise sharply, then that will intensify in the year ahead.

We have seen central banks everywhere having to start to raise policy rates, and reduce QE, and even to talk about QT. That combined with rising inflation means that all of the arguments set out last year as to why speculators will seek to abandon paper assets, and worthless assets such as Bitcoin, and move to assets with real value such as gold, silver and so on will intensify.

Tuesday, 28 December 2021

The Handicraft Census In Perm Gubernia, Article II, Section IV - Part 3 of 6

Another interesting analysis would be a comparison of the incomes of agricultural handicraftsmen compared to those of the non-agriculturists, Lenin says. Although the data can be extracted from the various tables, there was no summary of this information provided. Lenin provides a table summarising the results.

The conclusions are not surprising, but, again, contradict the arguments of the Narodniks. The non-agricultural workers numbered only half that of the agricultural workers, and yet they accounted for nearly half the gross output. In terms of income, and so combining the net income of workers, plus wages of workers, they accounted for 51.4% of the total.

“Consequently, we find that, while they are a minority in numbers, the non-agricultural industrialists do not lag behind the agriculturists in volume of output. This fact is of great importance when we come to judge the traditional Narodnik theory that agriculture is the “main foundation” of so-called handicraft industry.” (p 391)

Lenin sets out a number of other conclusions that flow from this. The gross output of non-agriculturist workers is much higher than agriculturist workers, 192.2 as against 103.8 roubles. The difference cannot be explained by the longer working season of the former. The difference is smallest in the third group, i.e. those small producers who work for buyers up. Given that these are the least capitalistically developed, this is natural.

A similar thing applies to the net income of the non-agricultural masters, big or small. It is 113 as against 47.1 roubles. Again, the difference is biggest in the most capitalistically developed enterprises, which produced directly for the market.

“There can be no doubt that it is due to the fact that the tie with the land lowers the incomes of the industrialists; the market discounts the incomes derived by the handicraftsmen from agriculture, and the agriculturists have to content themselves with lower earnings. This is probably aggravated by the fact that the agriculturists suffer bigger losses on sales, spend more for materials and are more dependent on the merchants.” (p 393)

The importance of low earnings in agriculture was its role “preserving methods of production that are primitive and entail bondage, in retarding the use of machinery, and in lowering the workers’ standard of living.” (p 393) The Sketch again provided no details in this relation, but Lenin notes that other accounts had detailed the higher living standards of those involved in industry rather than agriculture. He notes the comments of Yegunov.

“The author points to the completely “urban” standard of living in some of the landless villages, to the endeavour of the non-agriculturist handicraftsman to dress and live “as decent people do” (European clothes, even to the starched shirt- samovar, larger consumption of tea, sugar, white bread, beef, etc.).” (Note *, p 393)

Review of Predictions For 2021 - Prediction 3 – Populism Is Put In Retreat

Prediction 3 – Populism Is Put In Retreat

The predictions in this post have been wholly borne out, along with the arguments set out as their basis. The day after the post, I reflected on the pathetic attempt at a coup, by Trump and his supporters. In the days and weeks that have followed, the various fascistic organisations involved have been subject to action by the US state that is breaking them apart. The state, through the civil courts, is pulling apart at Trump's property and financial empire, preparing the ground for legal actions against him, as well as combing through his tax affairs, and so on, which will provide the material for criminal charges against him. Investigation into all those around him, and their links to others, to Putin et al, continues to go on apace, and Congress, itself, is systematically investigating the January 6th coup attempt, to provide the basis of legal action, including charges of treason. Trump's long-time ideological mentor, and guiding light of global populism, Steve Bannon, has been indicted. In Britain, the threads of this web, are at an early stage of being unwound, but the release of papers by former MI6 operative, Christopher Steele, is indicative of the way that the state is beginning to move against the populists, and the petty-bourgeois interests they serve.

Populism is often described as being Left or Right, which is a fallacy, based upon idealism and subjectivism, wholly dependent upon the self-description of those involved. It comes down to the particular populists own verbiage, and the superficial targets of their ire, used to mobilise masses behind them. Left populists direct their ire at large-scale capital, the rich, and “imperialism”, whilst right-wing populists direct their ire at “foreigners”, organised labour and so on. Both replace class analysis with easy answers designed to unite a petty-bourgeois mass. The easy answers of both Left and Right Populists are both reactionary in nature, and the supporters of one can easily move to the other - the material basis of Red-Brown Fronts.

Lenin writing about the programme and ideology of the Russian Populists (Narodniks) described this reactionary nature, in relation to the Russian bourgeois-democrats (Narodnoye Pravo), let alone the Russian Marxists.  Lenin argues that a recognition by the group of its liberal-idealist nature and aims, in the process of breaking away from its heritage in Russian peasant socialism, was a step forward, because it brought a degree of honesty and clarity.  I have argued a similar thing in relation to the fact that the petty-bourgeois, liberal idealists of the AWL, appear also to be now on the verge of formally renouncing the Marxism within which they try to reconcile those actual politics, and which is the basis of their turmoil, and need to resort to dishonest, bureaucratic, and vulgar methods of responding to criticism both from within and from without.

Lenin discusses the unity drive launched by the bourgeois democrats of the Narodnoye Pravo group, to form an alliance to fight for political liberty against absolutism. But, this appeal had no foundation, because it ignored all the other questions, which defined the various organisations. Something similar can be seen in the way various petty-bourgeois groups have made similar appeals for the creation of organisations such as the Anti-Nazi League, Stop The War Coalition, and so on. These organisations are sometimes referred to as Popular Fronts, which is an inaccurate description, because a Popular Front actually exercises political power through government. These organisations are more properly defined as cross-class alliances, and as such they fall apart on contact with reality, when the question of political programme has to be addressed, or else to prevent that, the socialists have to subordinate their principles, so as to avoid the discussion of programme.

“But what is characteristic is that this “amalgamation” trend represents one of the last stages in the process of transformation of militant, revolutionary Narodism into politically radical democracy, a process which I have tried to outline above.”

(Lenin – What The Friends of The People Are, p 292)

The Marxists would welcome the development of a non-socialist, bourgeois-democratic party, Lenin says, but such a party would only be possible “when a durable programme of democratic demands has been drawn up that will put an end to the prejudices of the old Russian exceptionalism.” (p 292) This would, of course, facilitate the clarification of political lines, reflecting the division of society into two great class camps, because, whilst the bourgeoisie would form itself into such a democratic party, the workers would be organised under the banner of Marxism.

“The Social-Democrats, who consider essential the independent organisation of the workers into a separate workers’ party, could not, of course, “amalgamate” with such a party, but the workers would most strongly support any struggle waged by the democrats against reactionary institutions.” (p 293)

The Populists, however, were defenders of those reactionary institutions, which they saw as representing the traditional interests of “the people”, of the small producers, and barriers to capitalist development. Populists whether they describe themselves as Left or Right, seek to hold back the development of large-scale capital, in favour of small scale capital, because they are representatives of the interests of the petty-bourgeoisie.

Brexit was a classic example of that. Even when they claim to be representatives of workers, as was the case with the Sismondists and Narodniks, and today is seen with the Lexiters, the “anti-imperialists”, and “anti-capitalists”, in their ideology, they never get beyond the ideas of the petty-bourgeoisie. And, because the interests of the petty-bourgeoisie are themselves contradictory, reflecting the fact that it is a transitional class, continually in the process of differentiation, it is impossible to present a clear programme based upon class interest. It necessitates vagueness, and the prominent role of some charismatic leader, with the prime means of change coming from the top, from the state, with the masses brought on only as foot soldiers.

Populism thrives when the two main classes are weak, but as Marx describes in Wage Labour and Capital, and elsewhere, the condition for the working-class being strong is that capital is also strong, that capital is accumulating rapidly, and driving up the demand for labour-power. The populists, and the idealists and subjectivists see things standing on their head. They believe that workers condition improves as a result of workers becoming more organised in trades unions, etc., and becoming more militant. But, that requires that this change in consciousness comes about by some switch simply being turned on in their heads, unrelated to the material conditions surrounding them. Its this which leads them to the crude belief that any form of economic crisis, leads workers into such a response, whereas, the opposite is the case.

As Marx and Engels describe, it is the more rapid accumulation of capital that lessens the competition between the workers, enables their wages to rise, and so facilitates their own educational, cultural and political development, as well as facilitating their ability to combine to further their interests, which they now see more clearly. The same process, by contrast, increases the competition between different capitals. As Trotsky put it,

“It means a growing demand for goods, expanded production, shrinking unemployment, rising prices and the possibility of higher wages. And, in the given historical circumstances, the boom will not dampen but sharpen the revolutionary struggle of the working class. This flows from all of the foregoing. In all capitalist countries the working-class movement after the war reached its peak and then ended, as we have seen, in a more or less pronounced failure and retreat, and in disunity within the working class itself. With such political and psychological premises, a prolonged crisis, although it would doubtless act to heighten the embitterment of the working masses (especially the unemployed and semi-employed), would nevertheless simultaneously tend to weaken their activity because this activity is intimately bound up with the workers’ consciousness of their irreplaceable role in production.

Prolonged unemployment following an epoch of revolutionary political assaults and retreats does not at all work in favour of the Communist Party. On the contrary the longer the crisis lasts the more it threatens to nourish anarchist moods on one wing and reformist moods on the other. This fact found its expression in the split of the anarcho-syndicalist groupings from the Third International, in a certain consolidation of the Amsterdam International and the Two-and-a-Half International, in the temporary conglomeration of the Serrati-ites, the split of Levi’s group, and so on. In contrast, the industrial revival is bound, first of all, to raise the self-confidence of the working class, undermined by failures and by the disunity in its own ranks; it is bound to fuse the working class together in the factories and plants and heighten the desire for unanimity in militant actions.”

(Flood Tide)

In other words, workers higher living standards are not a consequence of their increased militancy and trades union organisation, but the increased organisation and militancy is itself the consequence of their higher living standards, which themselves result from the economic expansion, and demand for labour. The economic revival that got underway in 2021, was the material basis for such a change, and the further undermining of populism. But, the same limitations of that economic revival, resulting from the physical constraints on economies, brought about by lockouts and lockdowns, has necessarily limited that process also.

The main challenge for the ruling-class (the main owners of fictitious-capital) comes today not from the working-class, but from that reactionary petty-bourgeoisie whose economic and social weight has been significantly increased over the last 40 years, and whose political reflection is found in their control over traditional conservative parties such as the Tories in Britain, and Republicans in the US. Its in that sphere that the danger of fascism resides, but it is a fascism aimed directly at the ruling class, in the interests of the petty-bourgeoisie, not on behalf of the ruling class directed at workers.

But, here, too, the ruling class faces a dilemma, because, as set out in yesterday's post, the potential for the ruling class to avoid a cataclysmic crash in asset prices has run its course. The best it might hope for is that it minimises such a crash, by having central banks buy up even more worthless paper, and also having workers pension schemes buy up worthless assets, with large numbers of gullible retail speculators picking up other assets before their prices crash. The development of phone apps, and commission free platforms, and proliferation of meme stocks, cryptocurrency etc. is the front runner of that.

It would then focus on driving up the rate of profit, and capital accumulation, so as to finance its interest payments and rents, but could only do so as a result of a high level of inflation, whilst wages were held down, causing a sharp fall in living standards. For the reasons set out above, in conditions of a rapidly expanding economy that could only be achieved by the use of draconian measures by a Bonapartist National Government of the kind that is being de facto created by Johnson and Starmer.  Covid restrictions have been a good preparation for such an eventuality.

The comparison of the responses to COVID with the measures during war is apt. In 1939, when war broke out, my father was just 20, and working as an engineer at Rolls Royce in Crewe, making engines for Spitfires. In the next five years, he worked at nearly every other car factory in the Midlands, and the reason was that he was continually moved from one to another as a result of him acting to organise and represent the grievances of his fellow workers. In the end, he had his cards literally filled with black ink, so that he could not get another job, at which point he went into the army. In fact, during the war, all such opposition was made almost impossible, even without resort to the use of the bodies of armed men to prevent it.

The Stalinists, who had originally opposed the war, during the Hitler-Stalin Pact, came out to argue that it was now the class conscious worker who would strike-break in favour of the war effort. Labour, which had made Churchill Prime Minister, in the face of opposition from many on his own Tory benches, formed a National Government, with him, and so prevented any effective political challenge, via parliament. When elections did take place, it was National candidates that fought the election, thereby, removing any competition between Tory and Labour. Only the candidates from the Commonwealth Party of Tom Whittingham and J.B. Priestley offered workers a socialist alternative.

Today, we are seeing Covid used in a similar manner to create a National Government, backed by totalitarian methods of propaganda, by a 24 hour, war to wall, media that bombards homes directly sending the views of an elite, unchallengeable into the heads of the masses. Undoubtedly, this apparatus is going to be central to the requirements of the ruling class in rescuing itself from the inevitable financial crash to come.

Monday, 27 December 2021

Adam Smith's Absurd Dogma - Part 33 of 52

“The whole problem was partly solved by the fact that the part of the farmer’s constant capital, which does not itself consist of labour newly added or in machinery, does not circulate at all, but is already deducted, replaces itself in his own production, and therefore also—apart from the machinery—his whole circulating product consists of wages and profit and consequently can be consumed in linen. This was one part of the solution.” (p 140)

But, in fact, if we divide total production into the two departments, one producing means of production the other means of consumption, then the relation can be seen as characterising the entire process of social reproduction. What Department I sells to Department II is only a small part of its total output. In terms of use values, it comprises constant capital, but, in terms of value, it comprises only Department I revenues, i.e. equal to the new value created by labour in Department I. So, it has the appearance that what is constant capital for one is revenue for another.

If we take the use values sold by Department I to Department II, in Marx's reproduction schema, they have a value of 2000. If we assume they are machines, then, examining each machine, its value is made up of 1,333 constant capital, and 666 new value added. But, in reality, this is an illusion, when viewed in value terms, and from the perspective of Department I's total output. The total value of Department I output is 6000, not 2000. The 2000 is only the new value added by labour/revenue, and so available for consumption. In value terms, none of this 2000 comprises constant capital, even though in terms of use values that is the form it assumes. The whole of Department I's constant capital is reproduced not from an exchange with Department II, but entirely within Department I itself, from its own production. It is this component of total output that comprises the c in c + v + s, in relation to the total output, and it appears nowhere in the GDP or National Income data, precisely because it forms a revenue for no one. It is not new value added, but the value preserved and transferred to current output.

Again illustrating the error of Michael Roberts, who tried to deal with this issue by equating this c with the capital goods accumulated out of profit, Marx notes,

“Here we leave entirely out of account the part of the profit which is transformed into new capital (both circulating and fixed, variable and constant capital). It has nothing to do with our problem, for here new variable capital as well as the new constant capital are created and replaced by new labour (a part of the surplus-labour).” (p 141)

It has nothing to do with where the demand for the equivalent of the consumed means of production comes from, i.e. from what fund it is replaced.

“So putting this case on one side, the total of labour newly added, in a year for example, is equal to the total of profit and wages, i.e., equal to the total of the annual revenue spent on products which enter into individual consumption, such as food, clothing, heating, dwelling-house, furniture, etc.

The total of these products going into consumption is equal in value to the total labour added annually (to the total value of the revenue), This quantity of labour must be equal to the total labour contained in these products, both the added and the pre-existing labour. In these products not only the labour newly added, but also the constant capital they contain, must be paid for. Their value is therefore equal to the total of profit and wages.” (p 141)

In terms of Marx's reproduction schema, total wages and profit is 3000 (2000 in Department I, 1000 in Department II). This is also the value of Department II output/GDP. Total wages and profit form the demand for this output, not just the 1000 of new value added by Department II, but the also the 2000 of constant capital (intermediate production), used in its production. But, as described above, this constant capital for Department II, is only revenue for Department I. In value terms, considered from the standpoint of total social production, it comprises not one penny of constant capital, but only the new value created by Department I labour.

“Thus although the final product—the linen, which represents all consumable products—consists of newly-added labour and constant capital, and so the final producers of this consumable product can only consume that part of it which consists of the labour last added, of their total wages and profits, their revenue—nevertheless all the producers of constant capital consume or realise their newly-added labour only in the consumable product. Thus although this consists of labour added and constant capital, its purchase price consists—in addition to that part of the product which is equal to the quantity of labour last added—of the total quantity of all the labour added in the production of its constant capital. They realise all added labour in the consumable product instead of in their own product—so that in this respect it is the same as if the consumable product consisted entirely of wages and profit, of labour added.” (p 143)

Review of Predictions For 2021 - Prediction 2 – The World's Biggest Ever Financial Crisis Occurs

Prediction 2 – The World's Biggest Ever Financial Crisis Occurs

Well, again wrong, but looking at the arguments used as the basis of the prediction, it can be seen why. As I said last year, these predictions are not really predictions at all, but descriptions of existing material conditions, and the processes that flow from the development of them. The arguments themselves remain valid. As with Prediction 1, it is the fact that governments imposed further lockouts and lockdowns that modified the process. Towards the end of last year, when I was writing the predictions for this year, there had been a period when the initial lockdowns were being relaxed, replaced with tiers and so on. From July, economies, even with these restrictions, began to open up strongly, with labour shortages appearing, and inflation already starting to rise. Government bond yields also started to rise sharply.

Then, as that began to create the conditions, described in the prediction, in which that could lead to asset prices crashing, governments again were put under pressure to reintroduce lockdowns over Christmas. The basis of those demands, then, as now, was rising numbers of infections. At a time prior to vaccinations, there was at least some logic to such demands, though, the real logic should have been to introduce focused protection, not blanket lockdowns. The logic should have been to protect the elderly and otherwise vulnerable, not close down large sections of the economy once more. In doing so, of course, the process that was leading to higher wages and interest rates, which would cause asset prices to crash, was halted.

But, again, the potential for such restrictions to continue was limited. After a year of the virus being at large, even with its spread being restrained by the implementation of lockdowns, there had inevitably arisen a sizeable degree of natural herd immunity, due to large numbers of asymptomatic infections. That even before vaccinations began to be rolled out. Then, as now, the increase in COVID related deaths being shouted about by the media was, in reality, simply the normal increase in deaths of older and more vulnerable people that occurs every Winter. Once, that seasonal variation was over, it was inevitable that deaths would fall again, as, indeed, they did. With vaccines being rolled out that made it even harder to justify further restrictions, as not only deaths, but also hospitalisations, fell to a fraction of what they had been in the early days of the pandemic.

As demands for a continuation and intensification of restrictions continued, however, the new justification in the Summer and Autumn of 2021 became the spread of the Delta variant. In fact, Delta never took off as a justification for further restrictions in the way the first variants had. It tended to be concentrated in particular geographic areas, and, in Britain, where widespread vaccination now added to the effects of natural immunity, it became obvious that, not only had hospitalisation levels fallen massively, but also those being hospitalised, and those dying, were almost exclusively, now, those that had refused to get jabbed.

The logical basis for continued restrictions had been removed, because society was now essentially being held to ransom by a small minority of the population that refused to get jabbed, and so who became the only ones really at risk from the virus, a risk that was being used, again, as the excuse to impose restrictions on economic activity and workers' liberty. The potential to continue justifying those restrictions, was now becoming increasingly unsustainable, but it was enough to slow the rampant economic growth that leapt forward in the Summer as soon as restrictions were relaxed.

The anticipated crash did not occur, because, once again, the rampant economic growth of the economy was artificially constrained by lockdowns. But, just as the use of QE to devalue currencies, and inflate asset prices, created its own set of contradictions that would inevitably explode in a financial crisis, such as 2008, so the use of physical restraint on economies via lockdowns creates its own additional contradictions that are now added to those created by repeated liquidity injections and the repeated inflation of asset price bubbles. But, each time such methods are used to defer the inevitable crash, the more those contradictions are heightened further, and the narrower the base upon which the house of cards rests. The worst financial crash in history has not been averted, but merely deferred, again.

Once bitten, twice shy, and so, as approaching Christmas, with yet another variant now being used as justification for further physical constraint upon the economy with the wall of propaganda reaching screaming pitch from all sides of the state apparatus, and with an almost wartime level of Bonapartism being utilised to close down any dissenting voices to the creation of a Covid paranoia, it would be brave to make the same call again for the coming year. Almost any level of duplicity seems possible in the claims being made about the threat posed by the Omicron variant, even as the facts show, not only that it is a much milder strain than its predecessors, but that the level of hospitalisations and deaths from it, even amongst the unvaccinated, are very low.

Yet, the additional contradictions are already to be seen, as the levels of inflation across the globe begin to soar in a way that means they could easily spiral out of control. So, far, we are only at the start of that process, yet, inflation even on the basis of the fiddled official figures has gone from sub 1% to over 6%, in a matter of months, and continues to move higher as each month goes by, with much more in the pipeline for coming months, and that is before the second round effects from rising wages, and higher inputs costs begin to feed through. With or without the constraining effect on the economy of lockdowns, central banks have now had to start curtailing QE, and even raising their policy rates.

Governments are being pressed to tighten constraints on the economy even further, and even the depressing effect of the level of paranoia and moral panic will inevitably again restrict some aspects of consumer spending. But, increasingly, people can see that all of the catastrophic predictions of the last two years failed to materialise, and the current level of hysteria from the media is completely out of alignment with the reality that people witness with their own eyes. The media cannot focus on the relevant facts, because those facts, in terms of hospitalisations and deaths contradict their catastrophist narrative, which is another reason they focus on their tittle-tattle stories about Christmas parties and so on. The same was true in relation to their coverage of the loss of the Shropshire North election, and complete avoidance of the real political issues such as the effects of Brexit etc.

On a balance of probability, I would say that the chance of Omicron being capable of sustaining the argument for further restrictions is slight. Not only are hospitalisations from it very low, but the proportion of hospitalisations for all strains are already falling amongst the vulnerable, as vaccinations continue to be rolled out. Unfortunately, all of the scientists that jumped on the bandwagon of catastrophism, by design or fear of being separated from the crowd, will have discredited themselves, and, thereby, given fuel to all of the cranks that want to deny things like climate change, the anti-vaxxers and so on.

When all of the claims about impending doom from COVID vaporise in the new year, the underlying growth in the economy will assert itself even more vigorously. The Bank of England is likely to have to raise its policy rates in quick succession, in coming months, as well as engaging in quantitative tightening. The Fed is also likely to have to speed up QT, and its forecast three rate rises, will be brought forward. Unless, of course, some new excuse for physically restraining the growth of economies can be found.

Sunday, 26 December 2021

The Handicraft Census In Perm Gubernia, Article II, Section IV - Part 2 of 6

Lenin then examines the oil millers. That is those involved in growing flax and other such crops from which vegetable oils are extracted. The average wage of their agricultural labourers was 35.1 roubles. These producers had other benefits of larger scale capitalist production.

““The refuse, or oil-cake that remains after the milling process, serves as excellent cattle feed, thanks to which it is possible to manure the fields on a larger scale. Thus the household derives a triple advantage from the industry: the income from the industry itself, the income from livestock, and a higher yield from the fields” (164). “Agriculture is carried on by them” (the oil-millers) “on a wide scale, and many of them, not contenting themselves with the community allotments they get, also rent land from the poor households” (168). The data showing the distribution of flax and hemp growing by uyezds reveal “a certain connection between the area under flax and hemp and the distribution of the oil-milling industry among the uyezds of the gubernia” (170).” (p 389)

This kind of technical relation commonly results in industrial producers engaging in the primary production required for the provision of materials, not just in agriculture. For example, iron and steel producers were also often involved in coal mining.

“Hence, the commercial and industrial enterprises in this case are those known as technical agricultural industries, the development of which is always characteristic of the progress of commercial and capitalist agriculture.” (p 389)

Of the 421 flour millers, 385 were also involved in agriculture.

“Like the oil-milling industry, “flour-milling serves the millers as a means of marketing the produce of their own farms in the most profitable form”.” (p 389)

This was still not the kind of large-scale capitalist production that was seen in Western Europe and North America, but it was clearly small scale capitalist production that was rapidly developing towards the kind of concentration and centralisation of capital that was seen elsewhere.

“These examples, we think, should be quite sufficient to show how absurd it is to regard the term “handicraftsman agriculturist” as signifying something homogeneous and uniform. All the agriculturists we have cited are representatives of the agricultural petty bourgeoisie, and to combine these types with the rest of the peasantry, including even the ruined households, is to obscure the most characteristic features of reality.” (p 389)

The Narodniks argued that, although stratification in property ownership was not precluded, by the forms of communal production, it had never been a significant factor, and any such division tended to be obliterated rather than intensified. It was capitalist production that was the cause of stratification, they argued.

“To say that the claim that differentiation of the peasantry is growing and spreading is an “arbitrary” one, means to ignore well-known facts: peasants lose their horses and abandon the land on a mass scale and this is coupled with “technical progress in peasant farming” (cf. Progressive Trends in Peasant Farming by Mr. V. V.); the increase in the letting and mortgaging of allotments is coupled with increased land renting; the increase in the number of commercial and industrial establishments is coupled with an increase in the number of migratory industrialists, i.e., vagrant wage-workers; etc. etc.” (p 390)

Review of Predictions For 2021 Prediction 1 – Countries obtain herd immunity long before the widespread roll-out of vaccines.

Prediction 1 – Countries obtain herd immunity long before the widespread roll-out of vaccines.

Well, that was certainly wrong in relation to Britain. Its probably wrong in relation to much of Europe, Asia, and North America. With the supply of vaccines to millions in poorer countries, however, its not clear whether it will prove correct or not.

There are two main reasons that the prediction was wrong in relation to Britain and other developed economies. Firstly, most developed economies introduced measures of lock down, of one sort or another, and those continued from early in 2020, through to the present, in one form or another. That meant that the spread of infection was slowed considerably, and, given that the development of herd immunity depends upon the virus being spread rapidly amongst the population, it directly prevented the rapid development of natural herd immunity.

Had a policy of focused protection been implemented in early 2020, as advocated by the Great Barrington Declaration, then a large degree of natural herd immunity would have been developed, cost-free, and safely, long before vaccines were rolled out. But, that did not happen, and the consequence was at least three fold. Firstly, by not focusing protection on the 20% of the population actually at risk from the virus, i.e. the over 60's and those with defective immune systems, tens of thousands of such vulnerable people died or suffered serious illness, which should have been avoided. Around 95% of deaths of people with COVID have, therefore, been of people in this particular group.

Secondly, by not focusing protection on the vulnerable, herd immunity was not developed free and safely amongst the rest of the population, which meant that the threat from the virus persisted for much longer than would otherwise have been the case, and given that the chosen route for dealing with that threat was via lockdowns, it meant that society had to remain locked down for a much longer period than otherwise would have been required. That had an inevitable cost, in itself, in terms of lost production, and of damage to the health and well-being of millions of people, unable to leave their homes, to obtain required medical treatment, suffering deprivation and so on, the consequences of which will persist for many times longer than will the effects of COVID. That has been true even more for the least well off in society, and more so still for the poorest countries, and people in the world, where levels of poverty, and malnutrition have soared.

Thirdly, because herd immunity was not developed quickly, and so the virus was at large for a longer period of time, it had the opportunity to mutate, to a greater degree, meaning that new strains of virus could develop that might not be so susceptible to vaccines. By restricting the opportunities for the virus to spread, it favoured those mutations, which were more virulent, and so able to spread in spite of the restrictions placed in its path. Omicron is an inevitable consequence of the mutations that policies of lock down, and other restrictions on the spread of the virus favour, via the process of natural selection.

The other reason that the prediction was wrong, at least in respect of Britain and other developed economies, is that capitalism, again, proved itself to be an incredibly inventive, productive, and flexible mode of production, which continues to develop technology and the productive forces at a very rapid pace, and so to demonstrate its progressive nature. That is illustrated by the fact that not just one but a significant number of pharmaceutical companies were able to go from scratch to the development of functioning vaccines, and the large-scale production and distribution of those vaccines, within a matter of just a few months.

That contrasts starkly with the abysmal performance of the overly bureaucratic state apparatus, in relation to the pandemic, in almost every sphere in which it became involved, and in the degree of corruption that accompanied its involvement. Perhaps worst was the criminally negligent performance of the NHS, in Britain, which failed to implement even measures of basic common sense to protect either its own workers, or its patients. But, similar incompetence and idiocy was found in the education system, where millions of students, the vast majority of whom were at no risk whatsoever from the virus, were denied a large chunk of their educational entitlement, as schools were unnecessarily closed, whole schools and classes sent home, just on the pretext that one child had a sniffle, and so on. That is education which these students will now never recover, with a consequent impact on their future job and income prospects, not to mention the impact on the economy's future productive potential.

That sections of the Left, have, then, responded to the pandemic by demanding that the companies that responded so admirably to the tasks of developing vaccines, and that responsibility be placed in the hands of the capitalist state which has acted so bureaucratically and incompetently, speaks volumes about the Lassallean/Fabian nature of that Left, and the distance that exists between it, and the Marxism it purports to follow!

Friday, 24 December 2021

Friday Night Disco - Skin Tight - The Ohio Players


The Handicraft Census in Perm Gubernia, Article II, Section IV - Part 1 of 6

Article Two

Section IV. The Agriculture of “Handicraftsmen.”

Lenin now turns to an examination of the data in relation to the nature of the agriculture undertaken by the handicraft producers. In summary, what this, again, illustrates is the fact that capitalist production begins in industry, in the towns, and then, later, migrates to the countryside and agriculture. The phenomenon had also been seen in England where capitalists who had made their money in industry and commerce, in the towns, then used their wealth to become landowners, and applied the same capitalistic methods they had used in industry to agriculture.

As early as 1724, Daniel Defoe had noted that, on estates near London, families of local gentry were being displaced by families enriched in business; and Cobbett, the writer who admired Squire Coke of Holkham, felt very differently about the people from London whom he termed “the Squires of Change Alley”. Parliament passed a series of so called Enclosure Acts. A few such Acts had been obtained under Queen Anne and George I, and over two hundred during George II’s reign, but even at the accession of George III in 1760, the open field system still existed in half the counties of England mostly in the Eastern counties bounded by the East Riding in Yorkshire, Norfolk, and Wiltshire. During George III’s reign, however, some 3,200 Enclosure Acts were obtained including, in 1801, a General Enclosure Act, which simplified the procedure.

In other words, all of this change in agriculture comes long after the development of industrial capitalism in the towns, which began in the 15th century, and is, in fact, the necessary condition for the later transfer of capital into agricultural production.

Lenin provides the following table 

and notes,

“We thus see that the more prosperous the handicraftsmen are as industrialists, the more prosperous they are as agriculturists. The lower they rank in production, the lower they rank in agriculture.” (p 387)

The idea, perpetuated by the Narodniks, that there was some kind of separate form of communal production, combining small industrial production and peasant agriculture was completely false. The same socio-economic relations established in industrial production were being replicated in agriculture.

“The handicraft census data, therefore, fully confirm the opinion already expressed in literature, namely, that the differentiation of the handicraftsmen in industry goes hand in hand with their differentiation as peasants in agriculture (A. Volgin, The Substantiation of Narodism, etc., pp. 211, et. seq.). As the wage-workers employed by the handicraftsmen are on an even lower (or not higher) level than the handicraftsmen who work for buyers-up, we are entitled to conclude that the proportion of impoverished agriculturists among them is even higher.” (p 387-8)

The inadequacy of detailed information in relation to the agricultural activity of the one-man handicraft producers made analysis difficult, and so Lenin has to use the information for specific industries, and from other sources. Lenin examines the tanning industry, and the agricultural activity of its owners. Of the 131 establishments, they employed 124 agricultural labourers, had 4.6 horses per establishment, and cultivated 16.9 dessiatines each. These workers divided into 73 annual and 51 seasonal, and received an average 20.1 roubles each. The average wage of a worker in the tanning industry, however, was 52 roubles.

“Here too, therefore, we observe the phenomenon common to all capitalist countries—the status of the agricultural labourer is lower than that of the industrial labourer. The “handicraft” tanners obviously represent the purest type of peasant bourgeoisie, and the celebrated “combination of industry with agriculture” so highly praised by the Narodniks is nothing more than the prosperous owners of commercial and industrial establishments transferring capital from commerce and industry to agriculture, and paying their farm labourers incredibly low wages.” (p 388)

Thursday, 23 December 2021

Time To End The Pingdemic

It is isn't even Christmas yet, but its already clear that the dire predictions about the effects of the Omicron variant are proving false. The latest information we have suggests that Omicron is much milder than the Delta variant, which itself was milder that its predecessors. As a consequence, even just of that, the proportion of people infected who require hospital treatment, let alone those who die, is somewhere between a half and just a third that of those infected with previous variants. On top of that, we have the effects on reducing serious illness, hospitalisations and deaths arising from the additional factors of widespread natural immunity, and vaccination. Nearly all those being hospitalised or dying, now, are people who have refused to get vaccinated.

The latest ONS data shows that whilst infections are rising – the number of Omicron infections is rising at a far faster rate than for all Covid infections – the number of hospitalisations remained flatlined, and is even declining, and the same applies to deaths. Nearly all those hospitalised or dying are people who were not vaccinated, many not vaccinated at all, and continues to show that the vast majority of deaths are amongst the elderly.

Again, this data, it has to be remembered, is deaths of people WITH Covid19, not FROM Covid 19. In other words, it is simply a measure of the people who have died from all causes, including being hit by a bus, but who also, in the last 28 days, received a positive Covid test. The ONS data I have provided previously indicates that only about 10% of those dying WITH Covid, actually die FROM Covid, as opposed to dying from some other cause, such as Alzheimer's, dementia, stroke, heart disease and so on.

So, taking that into consideration, and the fact that the large majority of those being hospitalised or dying even WITH Covid, are people who have the previous variants of it, rather than Omicron, its no wonder that the numbers for hospitalisations and deaths are pretty much flatlining. Firstly, they have little to do with deaths FROM Covid, and everything to do with the normal increase in deaths from all these other causes that always happens during the Winter, and secondly, because Omicron is milder than these previous variants, as it becomes more dominant, its effect is going to be to reduce the number of hospitalisations and deaths, not increase them, especially when the growing number of people that have immunity increases.

The media and opportunist politicians continue to try to skew this data, and make it say what it clearly does not show. One example is the focus on the data for London. But, London is a special case, because, for a range of reasons, London has very low rates of vaccination. On some accounts, only about 30% of people in London are fully vaccinated, and again many of them not vaccinated at all. So, its no wonder that London has suffered higher rates of hospitalisation, serious illness and death than other parts of the country. This is not a measure of the increased danger from Omicron, but of the failure of the London Mayor and others to persuade Londoners to get vaccinated, probably because they have been too busy engaging in other irrelevant courses of action, and tittle tattle about Christmas parties and so on.

It must be quite clear by now, looking at the actual data, that all of the scare stories about the effects of Omicron, used to argue for further lock downs and so on, were baseless. But, there is one further consequence of them that does pose a real immediate danger. All of the calls for further restrictions play into the continuation of the measures requiring people who have been “pinged” to self isolate. Even setting aside the question of the millions of people wrongly pinged, the whole process of “pinging”, and requiring a period of self-isolation is completely pointless, and damaging. To my count, Starmer himself must have self-isolated about four or five times, not because of being ill, but simply because of being pinged. That was probably at least one benefit to the rest of us, but, in general, it indicates the lunacy of such an approach.

Having known carriers of the virus be isolated, in a period when it was not widespread, and before there was vaccination, had some point, though, across the world its been seen that it would not be contained in that way. But, when millions of people have already been infected, when there is now widespread natural immunity from previous infection, and when about 90% of the adult population have been vaccinated, it is not just pointless, but counter-productive.

The way to proceed is on the basis of ensuring that everyone is fully vaccinated, so that even if they come into contact with some other infected person it poses no risk to them. Its why things like masks and passports are a useless diversion. Moreover, why should the 90% of the population that has got itself vaccinated be further penalised just for the benefit of a small, irrational minority that refuses to get jabbed? In some places, those that refuse to get jabbed are being charged for the hospital care, if they contract Covid, and there is rationality in such an approach, as against authoritarian measures to force people to be vaccinated.

But, the obvious area in which the pingdemic is again having immediate serious consequences is in the NHS. The media, daily, says that tens of thousands of NHS staff are off sick with Covid, and that the number could reach 50,000-100,000. But, of course, the vast majority of these staff are not off sick with Covid at all. They are off work, because they have simply been pinged, after having come into contact with the infection – which you would think must happen on a daily basis to staff in the front line!  At worst, some of these workers will have been infected, but as the data shows, infection does not at all mean illness, let alone serious illness.

It is sheer madness to have tens of thousands of health workers forced to stay away from work – indeed for tens of thousands of others workers too – simply because of being pinged. The rational way to deal with the virus, now, is not by trying to isolate those that have it, or even just come in contact with it, but is by vaccinating everyone so that they are not made ill by it. The government has reduced the period of self-isolation from 10 days to 7 days, provided those pinged get two successive negative tests, but the rational response is to scrap the requirement altogether, along with the testing. The actual test of whether someone should be off work should be simply whether or not they are ill.

By forcing people to stay off work even when they are not ill, but simply because they have been pinged is to ensure that the normal Winter crisis that affects the dysfunctional NHS will be worse than normal. But, that has nothing to do with Covid. It has everything to do with the irrational measures that are being adopted in response to it, not to mention the fact that the NHS itself is not fit for purpose.

Adam Smith's Absurd Dogma - Part 32 of 52

So, it is clear that the consumers do not pay for the reproduction of the total consumed constant capital, and similarly, the currency required to circulate the commodities that comprise the exchange between Department I and II is not sufficient to circulate the total value of commodities, because the total value of output also includes the additional value of constant capital that circulates only within Department I. Consumers only pay for the constant capital consumed in Department II, not that in Department I, and that, because the constant capital consumed in Department II, is itself only equal to Department I revenues. It is Department I consumers who pay for Department II constant capital, from the revenues obtained from the sale of that constant capital to Department II. But, on that basis all revenues are accounted for, leaving none left for the purchase of Department I constant capital.

In the example given, here, only the question of the replacement of Department I constant capital, in kind, is considered, but, as Marx sets out, this also applies to the consumed Department I constant capital that is replaced via mutual exchange rather than in kind.

Here, then, the question of how the 8 metres of linen, £24, equal to the constant capital of the weaver is resolved. When we get back to the flax grower, the flax they sell to the spinner comprises only a part of their actual output, and the same applies to the machine-maker, who makes the spinning machines and looms. The machine maker also makes machines that replace their own worn out machines, just as the flax grower replaces their own seed etc., from their own output. So, neither the flax-grower nor the machine maker recovers this cost in the portion of their total output sold to the spinner. Its value consists entirely of revenues, and no element of constant capital. They both consume other constant capital, bought from other producers, such as wood and metal producers. Continuing back to these further primary producers, they also replace their constant capital directly from their own production, so that the portion of their total output actually sold comprises no value of constant capital, but only revenue, and all this revenue can then be consumed.

It is this fact that not all output of the producers of means of production is sold to Department II, but a portion is always retained and used to replace Department I means of production that explains how the total constant capital can be reproduced, as well as how revenues comprising only v + s can buy a consumable product comprising c + v + s. As Marx describes, it does not matter whether this retained portion, not exchanged with Department II, is replaced in kind or by mutual exchanges within Department I. The result is the same, it is replaced out of capital and not out of revenue. It is why revenues/GDP can never be equal to the value of total output, but only equals the new value created by labour during the year, v +s. Marx now addresses this in the next subsection, examining the exchange of capital for capital.