Friday, 30 June 2023
Paul Mason Backs Prigozhin
Paul Mason's campism has led him to its rational conclusion. Campism is based on the twin concepts of “My enemy's enemy is my friend”, and “lesser-evilism”. For Mason, the enemy is Putin and Russia, and so, whoever is the enemy of Putin and Russia, be it the corrupt, anti-working class regime of Zelensky in Ukraine, NATO imperialism, or now Prigozhin, is Mason's friend. If pushed, campists, like Mason, might admit that some of these new found friends are not that savoury, but are a lesser-evil. That's like choosing Satan over the devil!
In his latest missive, attacking Andrew Murray and the Stop The War Coalition - Britain’s tankies react to Prigozhin’s mutiny – Mason sides unreservedly with Prigozhin, and his farcical rebellion of last weekend, echoing Prigozhin's words, in defence of his actions, as though they were the gospel truth. The reason he does so is quite clear, its to try to shore up his narrative, but its the same logic that leads him to ignore all of the corrupt nature of Zelensky's regime, its connections to fascists and white nationalists, its anti-Semitsm and Holocaust denialism, and lauding of WWII Ukrainian Nazis, as well as its current attacks on Ukrainian workers and their organisations, at least for the duration, whilst it represents the “lesser-evil”, and “enemy of my enemy”.
Mason quotes all of Prigozhin's statements about the Russian invasion not being necessary, that there was no NATO aggression, that there was no mass opposition in Eastern Ukraine and so on. Well, for those of us who are not campists, and who opposed the Russian invasion, the first point loses its sting. Of course, being opposed to a Russian invasion is not the same thing as saying that it was unprovoked. Mason uses Prigozhin's statement to suggest that NATO is some kind of global philanthropic organisation with no evil intent whatsoever, and that its expansion up to Russian borders, as with its expansion in the Pacific and around China's borders, is nothing for those countries to be concerned about. That, of course, is nonsense.
When the USSR proposed stationing nuclear missiles on Cuba, in 1962, after the failed Bay of Pigs invasion of the island, and in response, also, to the US stationing nuclear missiles in Turkey, the US blockaded Cuba, and threatened to start WWIII. Speaking of the run up to WWI, Lenin also noted,
“Imperialism camouflages its own peculiar aims – seizure of colonies, markets, sources of raw material, spheres of influence – with such ideas as “safeguarding peace against the aggressors,” “defence of the fatherland,” “defence of democracy,” etc. These ideas are false through and through. It is the duty of every socialist not to support them but, on the contrary, to unmask them before the people. “The question of which group delivered the first military blow or first declare war,” wrote Lenin in March 1915, “has no importance whatever in determining the tactics of socialists. Phrases about the defence of the fatherland, repelling invasion by the enemy, conducting a defensive war, etc., are on both sides a complete deception of the people.” “For decades,” explained Lenin, “three bandits (the bourgeoisie and governments of England, Russia, and France) armed themselves to despoil Germany. Is it surprising that the two bandits (Germany and Austria-Hungary) launched an attack before the three bandits succeeded in obtaining the new knives they had ordered?””
That NATO did not actually engage in an armed conflict, itself, with Russia is besides the point and sophistry. It has been engaging in proxy wars against Russia for decades. Even Blairite, former NATO Secretary General, George Robertson has admitted that they goaded Russia into invading Ukraine! But, for Marxists that is not the issue. We are not concerned about who shot first, who goaded who, and other such moralistic questions, but only with what is in the interests of the working-class as a whole, and that most certainly is not served by a war between Russia and Ukraine, and less still a war that leads to a nuclear conflagration, and the destruction of mankind itself, and so of the working-class. As Lenin put it,
“The objective historical meaning of the war is of decisive importance for the proletariat: What class is conducting it? and for the sake of what? This is decisive, and not the subterfuges of diplomacy by means of which the enemy can always be successfully portrayed to the people as an aggressor. Just as false are the references by imperialists to the slogans of democracy and culture. “... The German bourgeoisie ... deceives the working class and the toiling masses by vowing that the war is being waged for the sake of ... freedom and culture, for the sake of freeing the peoples oppressed by czarism. The English and French bourgeoisies ... deceive the working class and the toiling masses by vowing that they are waging war ... against German militarism and despotism.” A political superstructure of one kind or another cannot change the reactionary economic foundation of imperialism. On the contrary, it is the foundation that subordinates the superstructure to itself. “In our day ... it is silly even to think of a progressive bourgeoisie, a progressive bourgeois movement. All bourgeois democracy ... has become reactionary.” This appraisal of imperialist “democracy” constitutes the cornerstone of the entire Leninist conception.”
(ibid)
And that is the reality of the war between Ukraine and Russia, two developed capitalist (imperialist) states, behind which stands NATO imperialism on one side, and Chinese imperialism on the other. As for there being no mass opposition to the Ukrainian regime in the Eastern Republics, the voting record of those republics, the polling done by various organisations, showing the majority opposition to the Maidan demonstrations, and so on say otherwise. If you want to equate mass opposition with only the existence of large armed groups, then you would rule out mass opposition in the vast majority of cases.
Nor is there any doubt about the fact that after 2014, the regime in Kyiv did pass laws that discriminated against ethnic Russians, and so on. Even the USC has admitted that, but respond only by saying they disagree with those policies that are being implemented by the regime which, they nonetheless continue to support, just as they cannot deny its anti-worker, anti trades union actions. Even Paul Mason has had to admit that the recent conference about rebuilding Ukraine, was really about how Zelensky's regime was going to facilitate US and EU companies going in to pillage the country on the back of a destroyed Ukrainian labour movement!
Mason is forced, like the rest of the western bourgeois media, to big-up Prigozhin's farcical rebellion, and make it into something it never was, in order to continue with the narrative about Russian failure, and Ukrainian success in the war, and the consequent fracturing of the Russian regime. Mason says,
“The Putin regime nearly collapsed because 25,000 mercenaries marched on Moscow and an unknown number of generals and their troops refused to stop them, because they are sick of the meat-grinder war they know they cannot win.
The famous Lenin/Clausewitz quote — “War is a continuation of politics by other means” — works both ways. The Putin regime is fragmenting because Russia is losing and sections of the oligarchy are looking for a way out.”
Even the bourgeois military pundits on Sky News admitted that Prighozin did not have 25,000 men to march on Moscow. Wagner may have had 25,000 mercenaries, but most of them were spread across the globe, mostly in Africa. Only about 10,000 were in Russia, and many of them had been killed. Half of what was left of that were available to “march on Moscow”, at best around 5,000. Compare that to the 4.5 million men that Russia has under arms, and the farcical nature of Mason's claim can be seen. Prigozhin's force was outnumbered 1000:1! Even just taking the Russian forces permanently defending Moscow they were outnumbered more than 100:1.
Prighozin's forces were no real threat, they were like a gnat bite, and would have been swatted like a gnat had they actually tried to fight. That is why there was no real fighting, and why they turned around within a few hours of setting off without Prigozhin getting a single one of his demands met, with it ending in him having to go into hiding in Belarus, with his top commanders facing prosecution for treason, at best, and the mercenaries having to either join the Russian army, or themselves go into exile. If it really was a matter of him having tacit support from Russian troops who know they cannot win - despite having already won in their objective in Eastern Ukraine - why didn't they continue and simply oust Putin? The notion is clearly absurd.
What seems to have happened is this. The Wagner Group was used like the Nazis used the stormtroopers in Germany. They were recruited from similar elements of society, criminals and lumpen elements. In Ukraine, they have fulfilled their function, as Russia has been able to consolidate its position, in the East, over the last nine months. Putin either voluntarily, or under pressure from his generals, decided it was time to move against Prigozhin, in the same way that Hitler moved against the Strasserites in The Night of The Long Knives. Prigozhin represented a smaller threat than the Brown shirts, and so he and his organisation were simply told that they must sign contracts and be absorbed into the Russian army.
As one expert put it, that was tantamount to saying to Prigozhin, mutiny or be destroyed. So, he organised the mutiny, but with absolutely no chance of it going anywhere, and hence its farcical nature. But, Mason, like the western bourgeois media in general needed to turn it into something it wasn't, to cover the fact that the Ukrainian counter-offensive they promised for months, when it eventually arrived, was a damp squib. Mason quotes Prigozhin again,
““As of today the Russian Army is retreating in the Kherson and Zaporizhzhia directions. The Armed Forces of Ukraine is pushing the Russian Army. We’re washing with blood. No one is giving the reserves. There is no control. Same hysteria… Thus what is being told to us is a complete lie”.”
But that is as baseless and self-serving as the rest of Prighozin's rant, designed to big-up his own role and importance. Even Zelensky, sounding ever more like a desperate fantasist has not claimed any significant advance by the Ukrainian forces. At best they have recaptured a few square miles of territory in strategically unimportant areas, and even that at great cost. Even in a limited offensive in the last couple of weeks they seem to have lost more than a thousand men, and more than a dozen of the much vaunted Leopard II tanks, and US Bradleys, some of which were also captured. As Irish Marxism has noted,
“While this offensive is not exhausted, and the Ukrainian armed forces (UAF) still have the majority of its prepared forces available, it is clear that they cannot be assembled in such a way as to achieve the necessary mass and force to make significant advances. Instead, it would appear that they have suffered many casualties with reports of some surrendering rather than take part in what they have called suicide missions, with prisoners condemning their commanding officers.”
And, although Mason talks about ecocide by Putin and his army, presumably referring obliquely to the blowing up of the Nova Khakovka dam, the only real evidence of anyone having attacked it is the evidence that Ukrainian forces attacked it with missiles in December last year, as the Washington Post reported.
That poses huge problems for NATO, and for those pro-imperialist supporters of NATO like Paul Mason and the USC that have bet the farm on massive NATO armaments to Ukraine being decisive, and Russia being defeated, leading to a break-up of Putin's regime. Of course, whatever Mason might say, the reality is that, it does indeed matter what happens were Putin's regime to fall, and what kind of regime might replace it. The reality, currently is, as with Lenin's quotes about the run up to WWI, and as Trotsky wrote about the run up to WWII, everything that NATO is doing, and that the NATO campists like Mason are doing, is firstly strengthening the position of Putin, but also of those to his nationalist Right!
“The democracies of the Versailles Entente helped the victory of Hitler by their vile oppression of defeated Germany. Now the lackeys of democratic imperialism of the Second and Third Internationals are helping with all their might the further strengthening of Hitler's regime. Really, what would a military bloc of imperialist democracies against Hitler mean? A new edition of the Versailles chains, even more heavy, bloody, and intolerable. Naturally, not a single German worker wants this. To throw off Hitler by revolution is one thing; to strangle Germany by an imperialist war is quite another. The howling of the "pacifist" jackals of democratic imperialism is therefore the best accompaniment to Hitler's speeches. "You see," he says to the German people, "even socialists and Communists of all enemy countries support their army and their diplomacy; if you will not rally around me, your leader, you are threatened with doom!" Stalin, the lackey of democratic imperialism, and all the lackeys of Stalin —Jouhaux, Toledano, and Company — are the best aides of Hitler in deceiving, lulling, and intimidating the German workers.”
So, whatever Paul Mason might say about his wish for Russian workers to rise up against Putin, the reality of his actions, in supporting NATO imperialism, and seeking the defeat of Russia, not by its workers, but by the forces of NATO imperialism, does exactly the opposite. But, then, that also flows from his failure to understand basic Marxist concepts, such as that of revolutionary defeatism, or else his willingness to completely bowdlerise their meaning in support of his narrative. Describing revolutionary defeatism he writes,
“the whole point of the Leninist “defeatism” tactic is to collapse your own regime under pressure of war, in order for a progressive government to replace them.”
Completely false. The principle of revolutionary defeatism is not to actively seek the defeat of your own state in war, but is to not demur from seeking the overthrow of that state, simply on the basis that doing so might result in its defeat during war. The goal is not to simply look to the conditions of war to undermine the state, which, on its own, could result in any number of reactionary consequences, but is to build the forces of proletarian revolution, and, thereby, enable a progressive alternative to the existing state, by arguing against the war conducted by the capitalists' state, pointing to its reactionary nature, and so on. As Lenin put it, as quoted by Trotsky, in the earlier article,
“With the outbreak of the war in August 1914 the first question which arose was this: Should the socialists of imperialist countries assume the “defence of the fatherland”? The issue was not whether or not individual socialists should fulfil the obligations of soldiers – there was no other alternative; desertion is not a revolutionary policy. The issue was: Should socialist parties support the war politically? vote for the war budget? renounce the struggle against the government and agitate for the “defence of the fatherland”? Lenin's answer was: No! the party must not do so, it has no right to do so, not because war is involved but because this is a reactionary war, because this is a dogfight between the slave owners for the redivision of the world.”
Paul Mason says, he believes,
“the Russian people, given the right circumstances, are fully capable of launching a mass democratic movement against oligarchic rule. Maybe not yet, and maybe with chaotic results, and maybe with no real feeling of solidarity towards Ukrainians but out of a desire for self-preservation…but surely that’s what the left should be working for?”
Yes, absolutely that is possible, but as Trotsky and Lenin point out above, those “right circumstances” do not include a situation in which they see NATO having expanded up to its borders, and with “socialists” in the West standing shoulder to shoulder with that NATO imperialism against them, just as the social-patriots did in WWI, and as they and the Stalinists did in WWII.
“If revolutionary and progressive movements beyond the boundaries of ones own country could be supported by supporting ones own imperialist bourgeoisie then the policy of social patriotism was in principle correct. There was no reason, then, for the founding of the Third International.”
(ibid)
Finally, the full reactionary conclusion of Mason's campism becomes manifest as he ends up in the camp of the neo-cons, and that old mantra of the 1980's, “Better Dead Than Red”. Back then, it meant that the neo-cons would rather see the world destroyed in a nuclear holocaust than it be taken over by communists. For Mason, not even the former catastrophe is required to justify turning the world into cinders, merely, that the defeat of Zelensky's corrupt, anti-working-class regime should be prevented. He says, opposing Murray's comment that a defeat for Putin could leave nukes in the hands of someone worse, and so we should oppose the war,
“To the contrary: the safest thing Ukraine can do to protect its people and uphold its territorial sovereignty, is to drive Russians out, before Putin commits even greater acts of ecocide and mass murder. And the best thing we in the West can do is send them more arms and more solidarity.”
Really? Safest for who? Safest for which Ukrainian people, the Ukrainian workers, the Ukrainian petty-bourgeoisie, or the Ukrainian oligarchs who are not doing the fighting, but, as in all wars, profiteering, whilst having Zelensky's government pass further anti-union measures? And what arms? For example, if Ukraine can't retake the Donbas, should it be given ever more sophisticated weapons, up to and including tactical nukes?
So, Mason wants Russian workers to overthrow Putin, at the same time as driving those workers into Putin's arms by supporting NATO imperialism, but he does not want Ukrainian workers to overthrow the Ukrainian oligarchs, who are indistinguishable from their Russian counterparts, by mobilising against Zelensky/NATO's war, and against Zelensky's corrupt, anti-working class regime, because, his primary objective is not the interests of workers, be they Russian, Ukrainian, or any other nationality, but only the military defeat of Putin at the hands of NATO!
He writes,
“Of course, every life lost between now and the war’s end is tragic. And nukes in the hands of fascist madmen are an existential danger to the world. But the only way we, the democratic peoples of the world, now have to mitigate those dangers and shorten the conflict is the defeat of Russia.”
And, so much, therefore, for his earlier pious words about believing in the power of progressive change from below. Instead, he simply falls foul of his own description of campism,
“Here we come to one of the most fundamental “tells” of 21st century campism: absolute despair at the possibility of progressive change from below.”
Which is precisely the position of Mason, which leads him into a policy based not upon the principles of international socialism of opposition to militarism and imperialism, but instead to the most craven abasement at the feet of the camp of NATO imperialism, and its war against Russia.
Thursday, 29 June 2023
3. The Method of Political Economy - Part 1 of 7
3. The Method of Political Economy
Marx describes the superficial nature of bourgeois political economy, which begins with a description of general abstractions such as nation, society, population, production and distribution. But, even an analysis that begins on this basis, to be scientific, must look into each of these categories, and determine their reality, and fundamental nature.
“Population is an abstraction if, for instance, one disregards the classes of which it is composed. These classes in turn remain empty terms if one does not know the factors on which they depend, e.g., wage-labour, capital, and so on. These presuppose exchange, division of labour, prices, etc. For example, capital is nothing without wage-labour, without value, money, price, etc. If one were to take population as the point of departure, it would be a very vague notion of a complex whole and through closer definition one would arrive analytically at increasingly simple concepts; from imaginary concrete terms one would move to more and more tenuous abstractions until one reached the most simple definitions. From there it would be necessary to make the journey again in the opposite direction until one arrived once more at the concept of population, which is this time not a vague notion of a whole, but a totality comprising many determinations and relations.” (p 205-6)
The economists of the 18th century, therefore, were always led back to a few important abstractions, and general relations, such as division of labour, money and value.
“When these separate factors were more or less clearly deduced and established, economic systems were evolved which from simple concepts, such as labour, division of labour, demand, exchange-value, advanced to categories like State, international exchange and world market. The latter is obviously the correct scientific method. The concrete concept is concrete because it is a synthesis of many definitions, thus representing the unity of diverse aspects. It appears therefore in reasoning as a summing-up, a result, and not as the starting point, although it is the real point of origin, and thus also the point of origin of perception and imagination.” (p 206)
Hegel's idealist dialectic saw the process as being one of the unfolding of The Idea, through a process of rational thought in Men's heads (actually the heads of philosophers), which then became materialised in the real world, via their actions upon it (actually via the actions of the state advised by the philosophers).
“This is, however, by no means the process of evolution of the concrete world itself. For example, the simplest economic category, e.g., exchange-value, presupposes population, a population moreover which produces under definite conditions, as well as a distinct kind of family, or community, or State, etc. Exchange-value cannot exist except as an abstract, unilateral relation of an already existing concrete organic whole. But exchange-value as a category leads an antediluvian existence.” (p 206)
In other words, as described, before exchange-value can exist, in its mature form, commodity production and exchange must become generalised in large, liquid markets, and this does not occur overnight. Before it reaches that stage, commodity production and exchange exists in varying degrees of development. Its only when towns become large enough to sustain sizeable markets that the process develops qualitatively. Commodity production and exchange dates back around 7,000 years, and, within this period, it also takes the form, as described by Marx, of the exchange of commodities still essentially for the purpose of direct consumption. That is certainly the case with systems of barter.
And, before even this barter can take place, on the basis of exchange-values, it is necessary that the values of the exchanged commodities be known, or else the relation of one to the other cannot be established, or else, as with the exchange of surplus products, takes place arbitrarily. This is reflected in the fact that the commodity is first a product, with its own individual value, before it can become a commodity with a market value/exchange-value.
Wednesday, 28 June 2023
The Poverty of Philosophy, Engels' Preface To The First German Edition (1885) - Part 9 of 14
Engels, then, sets out this brief critique of Rodbertus. He begins with Rodbertus' acceptance of the superficial appearance of economic categories, such as labour, capital and value etc. Rodbertus confuses value with exchange-value, thereby, eliminating the historical development of the category value from the individual value of the product, through to its manifestation as the social/market value of the commodity, which is, itself, the necessary basis for the emergence of exchange-value. It also, similarly, eliminates the historical development of the product into the commodity.
For Rodbertus, both the commodity and exchange-value spring into existence, ready formed, like Minerva from the head of Zeus, and, as well as confusing value with exchange-value, he also confuses exchange-value with use value.
“After thirty pages in which he mixes up use value and exchange value in higgledy-piggledy fashion with that power of abstract thought so infinitely admired by Herr Adolf Wagner, he arrives at the conclusion that there is no real measure of value and that one has to make do with a substitute measure. Labour could serve as such but only if products of an equal quantity of labour were always exchanged against products of an equal quantity of labour whether this “is already the case of itself, or whether precautionary measures are adopted” to ensure that it is. Consequently value and labour remain without any sort of material connection in spite of the fact that the whole first chapter is taken up to expound to us that commodities “cost labour” and nothing but labour, and why this is so.” (p 16)
He does the same with labour, thereby, not only failing to distinguish between wage-labour, serf-labour, or slave-labour, but also simple as against complex labour, abstract as against concrete labour, and so on. There is no concept of whether the labour is socially necessary labour,
“whether it is expended under normal average social conditions or not. Whether the producers take ten days, or only one, to make products which could be made in one day; whether they employ the best or the worst tools; whether they expend their labour time in the production of socially necessary articles and in the socially required quantity, or whether they make quite undesired articles or desired articles in quantities above or below demand – about all this there is not a word: labour is labour, the product of equal labour must be exchanged against the product of equal labour.” (p 16-17)
And, as Engels says, and as I described earlier, he must do this, because its only on this basis that labour expended is identical, and socially necessary that the utopia of a small commodity producing society, and use of labour money tokens can be justified.
“The other utopians of this tendency, from Gray to Proudhon, rack their brains to invent social institutions which would achieve this aim. They attempt at least to solve the economic question in an economic way through the action of the owners themselves who exchange the commodities. For Rodbertus it is much easier. As a good Prussian he appeals to the state: a decree of the state authority orders the reform.” (p 17)
That is the same approach as the state socialists, today, who call upon the capitalist state to nationalise this or that enterprise/industry, and to print money tokens to enable it to continue producing use values that are not use values, and to pay wages for labour that was not socially necessary, or, in the case of lockdowns, UBI and so on, labour that does not even occur!
“In this way then, value is happily “constituted", but by no means the priority in this constitution as claimed by Rodbertus. On the contrary, Gray as well as Bray – among many others – before Rodbertus, at length and frequently ad nauseam, repeated this idea, viz. the pious desire for measures by means of which products would always and under all circumstances be exchanged only at their labour value.” (p 17)
A version of this utopian theory has been produced by Paul Cockshott, and Alan Cottrill, which I have previously examined.
Tuesday, 27 June 2023
2. The General Relations of Production, Of Distribution, Exchange and Consumption, c) Lastly, Exchange and Circulation
c) Lastly, Exchange and Circulation
“Circulation is merely a particular phase of exchange or of exchange regarded in its totality.
Since Exchange is simply an intermediate phase between production and distribution, which is determined by production, and consumption; since consumption is moreover itself an aspect of production, the latter obviously comprises also exchange as one of its aspects.” (p 204)
In production, there is an inevitable exchange of activities and skills, associated with the division of labour. That applies in the workshop by immediately cooperative labour, and, in relation to a social division of labour. On the one hand, the latter leads to an increasing diversity of industries, producing components, for example. But, even in direct production, the direct producer, whose aim is personal consumption, produces commodities, or, initially, surplus products, that can be exchanged for other products required for their consumption.
“Exchange appears to exist independently alongside production and detached from it only in the last stage, when the product is exchanged for immediate consumption. But (1) no exchange is possible without division of labour, whether this is naturally evolved or is already the result of an historical process; (2) private exchange presupposes private production; (3) the intensity of exchange, its extent and nature, are determined by the development and structure of production: e.g., exchange between town and country, exchange in the countryside, in the town, etc. All aspects of exchange to this extent appear either to be directly comprised in production, or else determined by it.” (p 204)
Production, distribution, exchange and consumption are not identical, but are links within a single process.
“Production is the decisive phase, both with regard to the contradictory aspects of production and with regard to the other phases. The process always starts afresh with production.” (p 204-5)
Even in the most primitive state, to consume, its necessary to produce, even if that production amounts to little more than collecting the free gifts of Nature, and equally, there can be nothing to exchange without such production. Whatever mode of production, there can be no products to distribute without production.
“Distribution of the factors of production, on the other hand, is itself a phase of production. A distinct mode of production thus determines the specific mode of consumption, distribution, exchange and the specific relations of these different phases to one another.” (p 205)
In other words, as against the distribution of products, for consumption, initial factor endowments – ownership of land and capital – shape the nature of production, and social relations, which, in turn, determines the distribution of products.
“Production in the narrow sense, however, is in its turn also determined by the other aspects. For example, if the market, or the sphere of exchange, expands, then the volume of production grows and tends to become more differentiated. Production also changes in consequence of changes in distribution, e.g., concentration of capital, different distribution of the population in town and countryside, and the like. Production is, finally, determined by the demands of consumption. There is an interaction between the various aspects. Such interaction takes place in any organic entity.” (p 205)
Monday, 26 June 2023
Inflation Stays High, Rates of Profit and Interest Rise, Wages Rise
Across the globe, as I predicted at Christmas, inflation remains high. Again, as predicted, there is no sign of the recession that the speculators and catastrophists have clamoured for. Real wages have fallen, as pay increases have usually failed to match price rises, but not by as much as the speculators and catastrophists were predicting, as labour shortages made up for the weak-kneed response of union bureaucrats, and consequently the rate of surplus value, and rate of profit rose. But, that continued economic growth – not reflected in GDP – meant more labour employed, more new value and surplus value produced, so that total wages to households rose, facilitating continued and strengthening demand for wage goods, at the same time that, even without the rise in the rate of surplus value, total surplus value/profit also rose.
Last week, US headline inflation came in at 4%, down from 4.9%, the previous month, and down from 9.1% in June last year. That is significant progress but still leaves US headline inflation at double the Fed's target of 2%. Moreover, this figure is not really a good index of what is really going on. Inflation is a monetary phenomena, resulting from excess liquidity in the economy, as Marx describes in A Contribution To The Critique of Political Economy, and elsewhere. Money, and later the standard of prices, acts as an indirect measure of the value of commodities. However, when it comes to the price of any individual commodity, it may move up or down, not only because of changes in the value of the standard of prices, but also because of changes in its own value, or simply because of changes in the current level of demand and supply.
Inflation indices, produced by states, measure changes in the market prices of a range of goods and services, prices which change for these variety of reasons. Some goods and services may see a sharp rise in their market price, if demand for them rises, but supply is unable to respond quickly to that demand. That was seen as lockdowns were lifted. Similarly, market prices for some commodities may rise, because the supply of them is reduced, or the cost of supply, at the same level, rises. That is what happened when NATO and its allies introduced their boycott of Russian oil, gas and food supplies, reducing global supplies of all those commodities, and raising the costs of that supply. These are not measures of, or indications of inflation, but merely changes in the value/cost of production, or market price of individual goods and services.
The headline rate of “inflation”, therefore, is not actually a measure of inflation, but of the changes in the market prices of these selected baskets of goods and services. Different baskets produce different figures, just as the manifestation of actual inflation, can result in huge rises in asset prices – shares, bonds, property – alongside, modest rises, or even falls in the prices of goods and services. That has significant consequences. Over the last 40 years, if you were thinking of buying a house, for example, and saw house prices rising by 20% a year, or more, that gave you a strong incentive to buy a house as soon as possible, even if mortgage rates were high. With mortgage rates, during much of that period, falling, and getting close to zero, that gave an even greater incentive to do so, which is why that spiral of demand for property, as well as other assets whose prices were rising, was set in place.
During that period, talking to someone about the headline rate of inflation of 2%, if they were thinking of buying a house, was pretty irrelevant. The “inflation” they were interested in was this inflation of property prices, and, if they were looking to the need to provide for a pension and so on, the similar rapid inflation of the prices of shares, bonds and so on. If you had $1,000, in 1980, to spend buying US shares, that $1,000 was worth 13 times more in 1980 than it was worth in 2000, i.e. in 2000, it would buy you only a thirteenth of the number of shares it bought in 1980.
Today, that situation is reversed, which is why those lured into that Ponzi Scheme of ever inflating property and asset prices are feeling betrayed, and screaming about it, as are the speculators, and the conservative social-democrats, who built their entire world view on the idea that, instead of growing the real economy, and producing new value and surplus value, it was simply possible to get rich by inflating asset prices, producing capital gains, which could, then, be turned into revenue. In other words, asset stripping, the equivalent of the farmer that consumes his seed corn, rather than planting it, to produce more corn.
Today, we have the prices of consumer goods and services rising rapidly, and nominal interest rates rising – though in most cases they remain below the level of inflation – whilst the one set of prices that are not rising, and in many cases falling, is asset prices. In the UK, house prices are forecast to fall by around 30%. So, again, the headline rate of inflation is pretty meaningless if what you are actually interested in, currently, is the price of houses. If you are thinking about buying a house, the fact that your wages have risen by an average of 7%, then, puts you in a much better position to buy those cheaper houses. If you have savings in the bank, then a 30% fall in house prices, makes that money 30% more valuable than it was, whatever, happens to consumer price inflation.
If we look at US core inflation, then, this illustrates the point, because, in fact, it is now higher than the headline rate, after months of being below it, as these specific factors for individual goods and services, in the general basket moved their prices higher by larger amounts. One obvious factor, there, was the price of energy, which rose sharply even for the US, as a result of NATO's/EU's boycott of Russian oil and gas. In part, that was offset by Biden's use of the Strategic Petroleum Reserve, and those of other NATO allies. Again that gives a distorted picture, because those reserves were run down, and the other reserves built up by the EU ahead of Winter, meant that additional purchases were not required, putting downward pressure on global prices, as we now have entered the Spring and Summer. However, not only must stocks be rebuilt ready for next Winter, but also, those Strategic Reserves, must be rebuilt, having been run down to dangerously low levels. All of that at a time, when China, India and other economies are demanding more oil and gas, meaning that come the Autumn, those prices are likely to rise sharply, unless the current boycotts on Russian oil and gas are lifted.
US Core inflation, rose by 5.3% year on year, and the month on month figure rose by 0.4% the same as in the previous two months, indicating little change in core inflation in coming months. Core Inflation is little changed from the 5.9% it was at in June last year. At the same time, the US continues to produce more new jobs at a faster pace than the speculators have hoped for. Despite continual predictions by speculators and pundits that the economy was going to go into recession, and that unemployment was going to rise, as fewer newer jobs are created, the non-farm payrolls increased, last month by 339,000, significantly above the estimates, and the biggest rise since January. And, whilst the number of weekly initial jobless claims has ticked up to 256,000, on the four-week moving average, that is only half the kind of figure of around 400,000 traditionally seen during periods when the economy is going into recession. In fact, on a seasonally adjusted basis, the weekly figure actually fell.
It is labour that produces new value, and surplus value, and this increase in the amount of labour employed in the US and across the globe is the basis of the increased value and surplus value being produced, whatever the GDP figures suggest. As I have set out before, the GDP figures, measuring revenues are deceptive, because with inflation, a part of the surplus value produced is absorbed to replace the existing capital that has been consumed, i.e. a tie-up of capital. It is partially offset, because wages have not risen in line with prices. But, firms have been able to increase profit margins/rate of profit, even if, listening to some of the petty-bourgeois/small capitalists getting squeezed, that may not seem to be the case.
US profits are currently accounted for around 9% of US GDP, the highest percentage in a century.
That figure is almost double what it has been, on average, in the period between 1965-1985. It began to rise in the mid 80's, before falling in 2000, following the Tech Wreck, and 9/11, before rising again, and then dropping in 2008/9 as a result of the GFC. But, in short, it has been on an upward trend since 1985. A look at profit margins also shows a similar upward trend, but with more short-term volatility.
Again, despite the predictions of recession, therefore, the US economy saw GDP rise by 1.3% in the first quarter, and that figure was pulled lower by the increase in private inventories, which deducted 2.1 percentage points. The Federal Reserve is forecasting only 1% GDP growth for the year, meaning that it would have to drop to only around 0.5% in the second half of the year. That looks unlikely, as employment and demand continues to rise. In fact, the figure for the second half is more likely to be around 2%.
In the UK the picture is the same, but worse. Headline CPI remained at 8.7%, as in the previous month, but core inflation rose to 7.1%, from 6.8%. It confirms a rapidly rising trend since January, when it stood at 5.8%. The 7.1% figure is the highest for 31 years. Britain is suffering not only from the inflation caused by the years of excess liquidity pumped into the system to push up asset prices, and the excess liquidity pumped into circulation during lockdowns, but also from the same rising costs of energy and so on that the US suffered, as a result of the boycott of Russian oil and gas, but also from the effects of its idiotic decision to go for Brexit, massively increasing its costs of trading with its main trading partner the EU, as well as introducing huge frictions into its labour market at a time of large and growing labour shortages.
As with the US, those labour shortages are a result of continued economic growth, despite all of these frictions and additional costs imposed on the economy. As with the US, wages have not risen in line with headline prices, but average wages are rising by 7.2%, slightly ahead of the 7.1% rise in core prices. More importantly, as I have set out previously, the increase in the number of people employed, the fact that people are moving to better, higher paid jobs, means that incomes going into households are increasing at a faster pace than the individual wage data suggests. Consumer spending has, then, continued to increase, and yet, savings have also increased. Household Debt to GDP has fallen from 92.5% in February 2021, to 83.5% last month. The household savings rate which spiked to 22% during lockdowns, as households could not spend, and which dropped to 6.5% in January 2022, rose to 9.4% in January 2023, on a steadily upward trend.
Inflation globally has fallen, because central banks have attempted to reduce some of the excess liquidity they have injected into the global economy. The means of doing so is not the widely publicised rises in central bank policy rates of interest, but the introduction of QT, to reverse all of the QE undertaken. The annual rise in productivity and output, itself absorbs excess liquidity, provided it is not added to. Moreover, some of the “inflation” is actually just a result of changes in the prices of some goods and services, not actually inflation. That is why the changes in core prices have not seen the same kinds of movement, or, as in the case of UK core prices, have actually risen. The US, has been undertaking QT for many months, and it takes around 2 years for changes in liquidity to impact prices. The collapse of several US banks meant that the Federal Reserve was led to provide additional liquidity, but that seems, for now, to have subsided, though as interest rates continue to rise, its likely that other banks and financial institutions whose balance sheets are a fiction based upon grossly inflated asset prices, will also be exposed.
The same thing affected Credit Suisse, and was exposed in Britain, during the short premiership of Truss, as bond yields spiked, and pension funds were in danger of going bust. That again led to both the ECB and Bank of England, injecting additional liquidity, in opposition to its own intended policy of QT. A big factor, in the falls in “inflation” that have occurred, as stated earlier, is the fall in energy prices, as a combination of a mild Autumn and Winter, the use of stocks and reserves, led to reduced demand and lower prices over recent months. But, as also set out earlier, those stocks now need to be rebuilt, as demand rises into the Autumn and Winter, and does so whilst a growing global economy, will see rising demand. Yet, NATO/EU's boycott of Russian oil and gas is still in place, meaning that energy prices are likely to rise, unless an ever milder Winter comes to their rescue.
Those lower energy prices have meant that firms were able to sustain higher profit margins, and central banks did not need to inject additional liquidity to enable firms to raise prices. The fact that wage rises have also not kept pace with price rises, meant that profit margins were able to rise, and so reduced pressure on central banks to increase liquidity to enable firms to recover the higher cost of wages, and a consequent squeeze on profits. But, as labour shortages continue to increase, wages will inevitably rise, as firms compete for that available labour. The union bureaucrats have been particularly useless, tailing a long way behind their members. Whilst the average pay rise is running at 7%, the average increase in pay from simply changing jobs is running at 14%! And, before long, union members are going to get fed up of the prospect of ineffective one day strikes dragging on into the indefinite future, and will begin taking wildcat action, throwing up more militant and adventurous leaders, and moving to effective all-out strikes for higher pay. At that point, central banks will return to increasing liquidity, to enable firms to raise prices, to protect profits, and inflation rates will move into a second wave of rises.
As set out in previous posts, the increase in central bank policy rates of interest is not intended to tighten liquidity, and so reduce inflation. It is intended to encourage households and businesses to save rather than spend, and to slow the economy, even into recession, so as to increase unemployment, and so, hold back this growth in wages, and squeeze on profits. But, it cannot work, at these levels of nominal interest rates, because they remain below current levels of inflation. If households and businesses think those levels of inflation are only transitory, as central banks claimed for more than a year, then that may not matter. If they think inflation is going to fall to 2%, or even 3%, a nominal interest rate of 5%, will appear to them as a real rate of 2%. But, US core prices are still rising at 5.3%, meaning a US rate of 5% is still negative in real terms. In the UK, with core inflation at 7.2%, even the current rise of UK interest rates to 5% means that, in real terms they are – 2.2%.
So, rather than being an incentive for households to save rather than spend, they continue to be an incentive to spend rather than save, at least in relation to durable consumer goods, holidays and so on. The only area of spending in which they are an incentive to save rather than spend is in relation to assets. If you are thinking of buying a house, or moving to a better house, there is a strong incentive to save, if, as expected, house prices fall by 30%. Similarly, if you were putting money into a pension fund, or some kind of mutual fund, there is an incentive to put the money into the bank or money fund, because a sharp fall in the prices of shares and bonds, will mean that your money will buy much more of them following that crash.
And that sums up the problem faced by central banks and conservative social-democratic governments, as described in previous posts. That is the R* rate is much higher than the R** rate. For central banks to raise interest rates to a level that causes households to stop spending on consumer goods, or even borrowing to finance consumer durables, holidays etc., requires those rates to rise much higher, so that they are above current, and expected levels of inflation. But, already, the current levels of interest rates are causing asset prices to come under pressure, particularly in the property market. In short, they are likely to cause asset prices to crash long before they could cause the economy to go into the kind of recession the speculators are demanding to push down wages.
Sunday, 25 June 2023
The Poverty Of Philosophy, Engels Preface To The First German Edition (1885) - Part 8 of 14
Engels, then, sets out the contradiction in Ricardo's theory, in trying to reconcile the sale of commodities at their values, with his recognition of the average rate of profit. This contradiction was resolved by Marx, in demonstrating the transformation of exchange-values into prices of production. The bourgeoisie loved Ricardo's concept by which commodities exchanged at equal values.
“Justice and equality of rights are the cornerstones on which the bourgeois of the eighteenth and nineteenth centuries would like to erect his social edifice over the ruins of feudal injustice, inequality and privilege. And the determination of value of commodities by labour and the free exchange of the products of labour, taking place according to this measure of value between commodity owners with equal rights, these are, as Marx has already proved, the real foundations on which the whole political, juridical and philosophical ideology of the modern bourgeoisie has been built.” (p 15)
Yet, the reality was different, because a look at the prices of commodities showed that this equal exchange was not at all characteristic, and commodities that contained little current labour sold at high prices, and vice versa.
“And the petty bourgeois especially, whose honest labour – even if it is only that of his workmen and apprentices – is daily more and more depreciated in value by the competition of large-scale production and machinery, this small-scale producer especially must long for a society in which the exchange of products according to their labour value is at last a complete and invariable truth. In other words, he must long for a society in which a single law of commodity production prevails exclusively and in full, but in which the conditions are abolished in which it can prevail at all, viz., the other laws of commodity production and, later, of capitalist production.” (p 15)
That is precisely the petty-bourgeois world outlook that was presented by Sismondi, Proudhon, Rodbertus and the Narodniks, and continues, today, in the views of assorted petty-bourgeois ideologists.
“The criticism of this utopia has been so exhaustively furnished by Marx both against Proudhon and against Gray (see the appendix to this work) that I can confine myself here to a few remarks on the form of substantiating and depicting it peculiar to Rodbertus.” (p 15)
I have also set out Lenin's extensive criticism of it, in my series on Lenin on Economic Romanticism.
Wagnerian Opera Becomes Farce
Prigorzhin's rebellion started out like a Wagnerian opera, but immediately turned to farce. Like an opera, it was full of costume and backgrounds, overblown grand gestures, and a lot of unintelligible noise. But, even as the Valkyrie, began their ride, their horses were pulled up lame, and they limped home to obscurity. Zelensky, Prigozhin, and Putin, became Larry, Curly and Moe, taking comedic swings at each other. Rather than the Ring Cycle, it had more the duration and character of a rinse cycle, washing out scum.
And, indeed, that may not be a bad description of what it was really about. The day began with Prighozin claiming that his forces had come under attack by the Russian military, and was the spark for the rebellion. In fact, Prighozin makes many such claims, few of which are backed by any evidence of being true. Analysis, by western experts, of the video he provided in relation to this claim shows it was crudely doctored. Then, he walks with some of his mercenaries into Rostov, with no fighting, and sits in the Russian military HQ, for most of the day, talking to low level members of the Russian general staff. The soldiers in the town neither surrender to Prighozin, nor join his rebellion.
Following this, he puts out further notices that some of his forces are marching on Moscow, which is 1,000 miles from Rostov. In fact, rather than marching, they seem to take a leisurely drive, unobstructed, again with no fighting, surrender or forces joining him, along the M4. That is if it actually happened at all, because there was no video evidence of any such movement, which nowadays is fairly routine, and required.
Prighozin made several demands about the heads of the Russian army coming to meet him in Rostov, along with demands for their removal, changes in the way the war is fought - again as a warning to those in the West who see any rebellion as somehow favourable to their cause - requiring it to become more brutal, with a full mobilisation and so on. Not one of those demands was met, and yet, a few hours after it began, Prighozin told his mercenaries to turn around and return to bases "according to plan", which itself is an interesting turn of phrase.
Of course, sections of the western media, always ready with their chosen hyperbola, and ridiculous and inappropriate comparisons, talked about this being the equivalent of Julius Caesar crossing the Rubicon, or Mussolini's march on Rome. All total nonsense, because despite Prighozin's claims of having 25,000 men, the large majority of them are spread across Africa and other countries, with at most only about 10,000 in Russia, and only a fraction of them available to march on Moscow. That is a totally insignificant number compared to the forces of the Russian army, even just those available to defend Moscow, let alone those that come have swatted such a tiny force like a fly, at any point on the road from Rostov.
What is surprising is that Prighozin, unless he's gone mad, and that would require some of his senior commanders also doing so, would know that his forces were totally incapable of doing anything other than being swatted. The only other explanations for that would be that he was seriously misguided about how many regular troops would join him, which is unlikely, or else, he knew that he would be able to undertake this farce unimpeded. Why would that be the case? It reminded me immediately of the fake coup undertaken in Turkey in 2016 that enabled Putin's mate Erdogan, to clear out opponents, and strengthen his position.
Of course, despite the fact that this rebellion had all the hallmarks of a farce, that Prighozin got none of his demands, and has now had to relocate to Belarus, the UK media in its headlines talked about Putin on the brink, and so on. All weird conclusions in the extreme, until you remember that that media, as well as needing always to talk in apocalyptic hyperbole, is also simply the mouthpiece, the propaganda arm of the capitalist state, and, thereby, of NATO imperialism. Freedom of the press in western society means freedom for 99% of it to talk total bollocks, in support of the ruling class.
The idea that the total capitulation of Prighozin, in hours of launching a rebellion, without getting any of his demands, and with Putin only having to threaten a response, amounts to anything other than a victory for Putin, and strengthening of his position, can only flow from the false narrative that NATO/Ukraine has tried to present from the start that Russia intended to occupy the whole of Ukraine, and its failure to do so is a military failure, causing internal fracturing inside Russia. But, Russia never intended to occupy the whole of Ukraine, any more than it intended to occupy the whole of Georgia in 2008, although it easily could have done.
NATO would like Russia to have as its goal the occupation of the whole of Ukraine, because were it to try, it would inevitably fail, and be destroyed. But, Putin and his generals know that. Its why they never mobilised even a fraction of the forces and materials required for such a task to begin with, and only enough to occupy and annex the majority Russian areas of Eastern Ukraine, just as they did with Abkhazia and South Ossetia, in 2008. As former, NATO secretary General, George Robertson said, NATO had goaded Putin into invading Ukraine, whereas he would probably have preferred to have negotiated another Minsk Agreement. Now, they are trying to create a narrative to goad him, or his generals into that further invasion.
They need to do that for the simple reason, as I've set out before, that, so long as Russia sits put in Eastern Ukraine, where its had about nine months to embed itself, and prepare its defences, and where, it also enjoys, now the 3:1 defenders advantage, there is little chance of Ukraine making the long promised counter-offensive, or if it does, its forces, including those NATO provided weapons, would get minced. The promised Ukrainian Spring offensive, turned into a Summer offensive, and all accounts of it show it to be a rather lame and ineffective affair. Zelensky admits his best forces and equipment have been held back, meaning he dare not commit them, because already, with even a limited offensive he's lost hundreds, if not thousands of troops, and more than a dozen of the much vaunted Leopard II tanks provided by EU countries, some of which have been captured.
If Ukraine makes no headway in an offensive, and even the leaked US Defence Department papers show that NATO itself believes it can't, over the next year, then, with the Autumn and Winter months arriving in several weeks time, again, deferring any further offensive, Russia will have had time to make Eastern Ukraine impregnable to Ukrainian attack. That means that NATO will have failed, yet again, following its defeat in Afghanistan, and before that in Iraq, Syria, Libya and so on. So, NATO requires Russia to invade the whole of Ukraine, hence its current narrative, but Russia is unlikely to do so.
In fact, there is another possible reason for the theatrics of yesterday. Again some western propagandists have suggested its about Putin using it to remove the top generals that Prighozin demanded be removed. Unlikely, if Putin wanted to remove military top brass, he would just do it, as he has in the past. But, the move could have been a feint. In martial arts, fighters will distract from their real intention by using a feint. For example, a slight drop of the left shoulder, suggests an imminent left jab, but is used to disguise the fact of a right hook, or ridge-hand strike. A well signalled front kick to the stomach, can be turned immediately into a round kick to the head, by simply opening the hips, and pivoting on the supporting foot.
Prighozin's day out could have been a similar feint. Perhaps Putin and the GRU wanted to see what response came from inside Russia, to weed out opponents. There seemed to have been none, with Chechen leaders offering to go to put down Prighozin and so on. But, it might also have been designed to provoke a hasty attack from Ukrainian forces, turning the tables on NATO's tactics, drawing those Ukrainian forces into a trap, given that they have been reluctant to engage in any kind of significant offensive for fear of suffering further fatal losses. Prighozin and his forces are now relocating to Belarus, unless things have changed in the last few hours. From there, he might be used for another feint, launching commando style attacks into norther Ukraine, perhaps attacking Patriot missile sites, and so on. But, it will again, be simply a distraction from the main event of Russian consolidation of its position in the Donbass. Once that is achieved, its really game over for NATO's strategy.
Come Winter, there can be no further chance of a Ukrainian offensive, and as Autumn approaches, the EU will again be looking to build its gas stocks ahead of Winter. Its unlikely to be lucky enough to get two successive mild Winters. It has not, and could not have been able to build the infrastructure to switch to more expensive supplies of imported LNG, and now, following NATO blowing up the Nordstream pipelines, it cannot easily resume Russian gas supplies, without a major climb down, and rapprochement with Putin. With the global economy growing, and energy demand in China, India and elsewhere in Asia growing, energy prices are set to rise sharply, especially as the US and its allies need to also restock their hugely depleted Strategic reserves. In Europe, some North Sea gas production is also shut down, for necessary maintenance work.
So, the window for NATO and its allies in the EU is extremely limited. They needed to goad Russia into the invasion of Ukraine they had planned on happening, but they are not going to get it. The F-16's are no more use to Ukraine than are the Leopard II tanks, and so on, so long as Russia simply adopts a defensive position in the Donbass. They will just get shot down, if they are used in any kind of offensive role, whether in the Donbass, or more dangerously in the Black Sea, in a more aggressive attempt to step up the war by attacking Russian ships. So, as I wrote at Christmas, the likely outcome is going to be some kind of truce, and peace deal recognising the reality that the Donbass and Crimea are now part of Russia, allowing negotiations with Russia, and for the EU to be able to resume Russian energy supplies.
Saturday, 24 June 2023
2. The General Relations of Production, of Distribution, Exchange and Consumption, b) Production and Distribution - Part 8 of 8
Marx gives several examples of this. The Mongols were cattle-breeders, which required large tracts of land, and that was manifest in their conquest of Russia. When the Goths overran the Roman Empire, they found the fact that it had already uprooted the old peasant production, and created large landed estates, fitted well with their own mode of production, based on agriculture, using serfs, who were scattered across the countryside, and so could be adapted to their needs. Marx notes that plunder has been cited as one means by which conquering nations have operated, but, to plunder its necessary that something has been previously produced.
“Moreover, the manner of plunder depends itself on the manner of production, e.g., a stock-jobbing nation cannot be robbed in the same way as a nation of cowherds.” (p 203)
It may occur in the form of abducting slaves, but, as previously described, for slavery to exist, its necessary that social productivity is at a level whereby the slave can produce more than required for their own subsistence. As Engels notes, in many primitive societies, where such abductions took place, it was often not to obtain slaves, but to supplement the members of the tribe, to ensure its continuance. And, slavery is a very ineffectual mode of production, compared with others, so that it is only in limited spheres where slaves can then be used, as slaves, in some other society.
“or (as in South America, etc.) a mode of production appropriate to slave-labour has to be evolved.” (p 203)
Similarly, laws may be enacted that attempt to determine the distribution of factors of production, and so ensure a continuation of a given mode of production, but these cannot, in the end, prevent the playing out of social laws. The laws of primogeniture were intended to ensure the continuation of feudal property. If inherited property was shared amongst the many children of aristocratic families, then large estates would quickly have been divided into small plots. Primogeniture ensures that landed property passed only to the eldest male heir, thereby, ensuring the continued concentration of land ownership.
However, once capitalist production commences, landlords begin to buy the expanded range of commodities on offer, and there is a general transfer of value from rural areas to the towns. To continue to finance consumption, the landlord borrows money, using land as collateral. Bit by bit, land itself becomes a commodity, as its sold off to pay debts. New bourgeois owners of this land arise, in the form of capitalist farmers. As the old feudal agriculture is unable to compete with it, so it becomes dissolved, and the old feudal production and land ownership with it.
But, similarly, when, for example, after the French Revolution, land reform is instituted, and the old aristocratic estates are broken up, and divided amongst the peasants, this cannot prevent the operation of the normal laws of bourgeois production, which brings about the renewed concentration and centralisation of production. As Marx describes in The Eighteenth Brumaire of Louis Bonaparte, one means by which this occurred was that the peasants became indebted to banks, and so replaced the tribute previously paid to landlords, with tribute paid to banks in interest.
“Landed property tends to become concentrated again despite these laws.” (p 204)
And, this applies also to all of the reactionary policies of the petty-bourgeoisie, in trying to preserve small scale property (as Trotsky says the reflection also in their attempts to preserve the independence of small and weak states), and to hold back, and even break up large-scale capitals, via anti-trust laws, anti-monopoly alliances, and so on, just as with calls for large states to be broken up as with Brexit, or unified states to be turned into federal states, and even for such reactionary parochialism in demands for regionalism, devolution and so on.
More Squabbling In The Thieves Kitchen
Its hard to know the details and nuances of the rebellion by Prigozhin's Wagner group of mercenaries, but for Marxists, it makes no difference whatsoever to the general evaluation of the NATO/Ukraine-Russia war as an inter-imperialist war that is reactionary on both sides. Its just an example of a further squabble inside the thieves kitchen, a bit like the infighting in the Nazis with the Night of The Long Knives, launched by Hitler against the Strasserites. In similar vein, it may signify a feeling of confidence, by Putin, that the NATO/Ukraine counter-offensive has failed, and they are ensconced sufficiently in Eastern Ukraine, as to be able to take out Prigozhin and his "Dirty Dozen", "Rogue Heroes". Or it could be a power play by a section of Russian oligarchs tied to Prigozhin, but, if it is seems doomed to fail, given his small forces, and lack of access to long-term supplies.
Whatever, the details it simply further emphasises the reactionary nature of the war on both sides. For that camp of social-imperialists supporting Russia. it explodes the myth that this is some kind of national patriotic war for the defence of Russia against NATO imperialism. For the opposing camp of social-imperialists supporting NATO/Ukraine, it emphasises the point that, any defeat for Russia that does not come from a revolution by Russian workers, is itself reactionary, and might only result in a more right-wing, nationalistic regime, even more aggressive in its response to perceived threats on its borders.
The reality of the war has to be set in its global context. The ruling capitalist class, in the age of imperialism, is a class of rentiers, or as Marx and Engels called them, in Capital and Anti-Duhring, "coupon clippers". They are owners of fictitious capital, rather than real industrial capital. In fact, objectively, the collective owners of that real industrial, socialised capital, as Marx describes, in Capital III, Chapter 27, are the associated producers, i.e. the workers and managers within each company. Objectively, this socialised capital is the dominant form of property, making its owners, the working-class, the ruling class. But, they have not yet formed themselves into a class for themselves, conscious of their role as ruling-class.
So, control of that capital, remains in the hands of its non-owners, the shareholders, whose immediate interests are antagonistic to that of the industrial capital itself, as, again, Marx describes in Capital III. The interests of the real industrial capital is to maximise profit, and more specifically, profit of enterprise. To do the former, the industrial capital, needs to accumulate, and so employ additional labour, which is the source of surplus value, and, thereby, profit. That also coincides with the interests of labour, as Marx sets out in Wage-Labour and Capital, because it means higher levels of employment, and so wages, living standards, and so on.
One means of doing that, is, also, to remove barriers to the free movement of capital and labour, money and commodities, by removing national borders, and creating a global market. But, also, having maximised profit, industrial capital needs to minimise the amount going to interest, rents and taxes. That conflicts with the interests of the ruling class, whose revenues come from precisely those sources, and from capital gains. Shareholders, from the 1970's onwards, continually increased the proportion of profits going to pay dividends, or be handed back as straightforward transfers, rather than those profits going to accumulate additional capital. Because only they get a vote on how the capital of a company is used, capital they don't own, and also appoint the company executives to look after their interests, not the interests of the company, they increased these amounts way beyond what a market rate of interest on the money they loaned would have been.
However, because market rates of interest fell, as the supply of money-capital from profits grew, whilst the demand for money-capital, for investment in capital accumulation dropped, and at the same time the amount paid out in dividends rose, the consequence was to push share prices up astronomically. So, although the payment of interest/dividends rose massively (going from 10% of profits in 1970, to 70% by the 2000's), the rise in share prices meant that the dividend yield, i.e. the amount of dividend per share, fell. The same happened with bond yields, and with rental yields on property, as all these asset prices rocketed.
The owners of this fictitious capital, then, became hooked on obtaining capital gains on these assets, as their prices rose each year, and the ability to, then, sell a small proportion of those assets, turning the capital gain into money to be used as revenue. The social-democratic governments, also became hooked on this model, which is why Starmer and Reeves criticism of the Tories, today, over inflation and interest rates is thoroughly hypocritical, because, when Blair and Brown took over, in 1997, they continued this policy, developed under Thatcher, of fostering the illusion that wealth and affluence could come not from real capital accumulation, and new value creation, but simply by inflating asset prices. Hence the way, after 1997, a new UK property bubble was massively inflated, and which is again, now, bursting.
The interests of that global ruling class of coupon clippers is then to see a continual inflation of asset prices, but that model came to the end of the road with the 2008 global financial crisis, and has only continued to have a surreal existence since then, by having central banks print money tokens and engage in QE to a ridiculous level that resulted in trillions of dollars of assets, globally with negative yields, and with repeated administrative measures, such as lockdowns, to physically restrict trade and capital accumulation, so as to hold down wages, and interest rates, so as to avoid further bursting the asset price bubbles.
The modern social-democratic state is, then, schizophrenic. On the one hand, as with any state, it must protect the dominant form of property, upon which the fortunes of the state itself depend. That dominant form of property is real, socialised, industrial capital, whose interests require capital accumulation, removal of national barriers and so on (which is why it has resisted Brexit in Britain, Trump and co. in the US). On the other hand, it is the state of the ruling-class, and that ruling class remains the bourgeoisie, which has now become a class of money lending coupon clippers, whose immediate interests require, growth to be curtailed, so as to reduce wages and boost profits, and, at the same time, to reduce the demand for capital, so as to prevent a further rise in interest rates that will crash asset prices on a larger scale than in 2008.
The global ruling class of coupon clippers are not tied to the real industrial capital of any particular country, as they were in the 19th, or even early 20th century. They can and do own the shares of global, multinational companies, and the bonds of those companies, as well as of states across the globe. They own property across the globe. This is the nature of imperialism, and of the global ruling class. It shows the futility of those arguments that try to claim that Russia is not "imperialist". Its ruling class, as a fraction of that global ruling class, most certainly is. But, it also illustrates the nature of this war, as a war amongst different factions within that global ruling class, and so, not a war in which the workers should have any interest. Its not our fight, any more than if a bunch of bank robbers, having taken the loot back to their den, begin to squabble over how its divvied up.
And, this further squabble within the Russian faction of that global ruling class makes no further difference to that. The likelihood is that, as Russia has consolidated in Eastern Ukraine, and the NATO/Ukrainian counter-offensive has fizzled out like a dud, before it even really began, Putin, or his military top brass have decided that Prigozhin and his mercenaries can be disposed with. Predictably, mouthpieces for Zelensky's corrupt regime, like Paul Mason, have claimed that its a consequence of Russia's failure in Ukraine. That defies logic and the facts, as Russian forces secured Bakhmut, and even the leaked US Defence Department papers, showed that NATO does not see any possibility of Ukraine seizing back the territories in the East, at least in the next year, which really means never, because after another year of Russian entrenchment, they will have no chance, militarily, of recapturing them.
Mason, who claimed that Russia was facing imminent defeat more than a year ago, simply parrots Zelensky and NATO propaganda about Russia blowing up the Nova Khakovka dam, for example, just as previously we had USC supporters claiming that it was Russians that had exploded car bombs in Russia, not Ukrainian terrorists, and that it was Russia that blew up the Nordstream pipelines, and were shelling the Zaporizhizhia nuclear power plant and so on. The latter was ridiculous, because Russian troops were stationed there, so they would have been shelling themselves, and having control of it was necessary for supplying power to the captured areas of Eastern Ukraine. The car bombings in Russia, it was shown a few weeks later, were, in fact, carried out by Ukrainian agents, and with USC supporters, like Simon Pirani, having gone to great length to try to prove that it was not the US that was responsible for blowing up the Nordstream pipelines, it now transpires that the US, with the evidence mounting against it, has tried to shift the blame, itself on to Ukraine!
With Russia having consolidated its position in Eastern Ukraine, and with the NATO/Ukraine counter-offensive having proved a dud, Mason's argument that Russia is preparing to blow up Zaporizhizhia, that it blew up the Khakovka dam, and so on, is just more of that same silly propaganda that he has been pumping out for more than a year. The reality is that we do not know who blew up the dam, but as with those previous instances, there are very good reasons for thinking it wasn't Russia, and that, with NATO/Ukraine's much vaunted offensive going nowhere, there was every reason for Ukraine to have used some of those newly supplied UK Stormshadow missiles, or other weapons, to carry out a modern day equivalent of Britain's WWII, Dam Busters raid.
After all, its known that Ukraine planned an attack on the dam, at the same time it had used HIMAR's to attack other Russian held bridges required for its supply lines. The Washington Post, in extensive interviews with Ukrainian personnel reported, last December,
"Kovalchuk considered flooding the river. The Ukrainians, he said, even conducted a test strike with a HIMARS launcher on one of the floodgates at the Nova Kakhovka dam, making three holes in the metal to see if the Dnieper’s water could be raised enough to stymie Russian crossings but not flood nearby villages.
The test was a success, Kovalchuk said, but the step remained a last resort. He held off."
Its likely that Russia would, indeed have mined the dam, to be used in the event that Ukrainian forces were crossing it, but no such event was likely, and blowing it up, now, simply deprived Russia of its own crossing, as well as causing damage to territory now under its control, denying it of hydro-electric power, and potentially water to Crimea. Again why Ukraine would want to blow it up, besides those reasons, is what was also disclosed in the Washington Post article.
"Russia had to arm and feed its forces via three crossings: the Antonovsky Bridge, the Antonovsky railway bridge and the Nova Kakhovka dam, part of a hydroelectric facility with a road running on top of it.
The two bridges were targeted with U.S.-supplied M142 High Mobility Artillery Rocket Systems — or HIMARS launchers, which have a range of 50 miles — and were quickly rendered impassable.
“There were moments when we turned off their supply lines completely, and they still managed to build crossings,” Kovalchuk said. “They managed to replenish ammunition. … It was very difficult.”"
So, its quite possible that either Ukraine intended to blow up the dam to deny Russia a bridge and supply lines, whilst also inflicting this other damage on the, Russian controlled, Kherson region, and Crimea, or that it sought to inflict only partial damage, as in its earlier plans, but that, either the weakened state of the dam from those earlier attacks, and possibly in conjunction with hitting Russian munitions, caused it to breach catastrophically.
Either way, there is little reason to take the word of Ukraine or its NATO backers, as Paul Mason and the USC always do, any more than taking the word of Russia. In fact, as one of the military pundits on Sky News said recently, if you want a more unbiased assessment, some of the best comes from Russian military bloggers, many of whom are both no friends of Putin, but who have direct contact to members of the military actually engaged on the ground, and so also have no interest in spreading Ukrainian/NATO propaganda.
One of the reasons that Russian General Surovikin withdrew his troops from Kherson last year, was a recognition, and military intelligence, that Ukraine was going to blow up the dam to cut off a Russian retreat. Surovikin accomplished the retreat in good order, however, before Ukraine could blow up the dam, and, again, that makes it even less likely that Russia would then do so. Anyone who has played a military strategy game knows you do not blow up your own bridges and infrastructure before any enemy attempt to cross them, but only when they are in the process of doing so!
The nature of the NATO/Ukrainian propaganda/evidence that it was Russia, as with much more of that propaganda, also leads more to the idea that it was Ukraine. Ukraine has provided a video of a supposed Russian soldier called Yegor Guzenko. Guzenko, in the video, says that Russian troops had mined the dam, and blew it up to wash away Ukrainian troops downstream. However, the video, which appeared on the website of a Ukrainian blogger going by the name “Edgar Myrotvorets” - also the name of the infamous Ukrainian "kill list" - has actually featured this supposed Russian soldier on numerous occasions, and with him popping up in all sorts of places, hundreds of miles apart.
Guzenko has popped up on social media on numerous occasions apparently confessing to all sorts of war crimes by Russian troops, including kidnapping civilians, and executing Ukrainian prisoners. Yet, this soldier, having repeatedly made these admissions, then seems to be able to continue to go about his business in the Russian army, free from any charges by his superiors, or come back from his fellow soldiers, who he has just made accusations against! Yegor, who is also featured with facial hair, despite it being banned in the Russian army, is almost certainly not a Russian soldier, but Yehor, a Ukrainian impersonator, but western social imperialists are so gullible and desperate as to fall for even the most obvious bit of Ukrainian duplicity.
In addition to the story in the Washington Post about the Ukrainian missile strike on the dam, last year, there is even video footage of the strike, and yet that footage was actually shown, by mistake, following the dam breach, and presented as though it was the actual strike on the dam that caused it to fail. As with Nordstream, Zaporizhia and so on, there seems little advantage for Russia in such attacks, but everything to gain for Ukraine/NATO. That isn't proof they did it, but it certainly puts into perspective the claims by western propagandists that it was Russia, or, as with Paul Mason's latest claims that its evidence of Russia about to admit defeat!
Rather, they are more like the kinds of actions that Stalin pushed on the Chinese Communist Party following their defeat resulting from his Popular Front alliance with the Chinese capitalists of the KMT. They were simply adventures, designed to distract attention from the failure. As the NATO/Ukraine counter-offensive continues to fizzle, expect more such adventures and terror attacks.
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