Predictions For 2024 - Prediction 4 – A Range of New Commodities and Services Flood Into The Market

Prediction 4 – A Range of New Commodities and Services Flood Into The Market

The Innovation Cycle is driven by the condition of labour supply, which, in turn, determines the extent to which surplus value can be produced, and hence, determines whether capital is overproduced relative to that labour supply.

“Given the necessary means of production, i.e. , a sufficient accumulation of capital, the creation of surplus-value is only limited by the labouring population if the rate of surplus-value, i.e. , the intensity of exploitation, is given; and no other limit but the intensity of exploitation if the labouring population is given.”

(Capital III, Chapter 15)

As the productivity benefits of the last technological revolution decline, and capital accumulation takes on the form of extensive rather than intensive accumulation, so, increasingly, the size of the labouring population becomes the limiting factor on expanding the mass of surplus value. Neither the individual nor social working-day can be extended, so the potential to increase absolute surplus value disappears, and, in order to attract workers, in conditions where the demand for labour now starts to exceed supply, wages rise – nominal, real, and relative wages – causing a squeeze on profits. Ultimately, this results in a crisis of overproduction of capital, as any additional accumulation of capital, results in a further rise in wages, and decline in the mass of surplus value.

“As soon as capital would, therefore, have grown in such a ratio to the labouring population that neither the absolute working-time supplied by this population, nor the relative surplus working-time, could be expanded any further (this last would not be feasible at any rate in the case when the demand for labour were so strong that there were a tendency for wages to rise); at a point, therefore, when the increased capital produced just as much, or even less, surplus-value than it did before its increase, there would be absolute over-production of capital; i.e., the increased capital C + ΔC would produce no more, or even less, profit than capital C before its expansion by ΔC. In both cases there would be a steep and sudden fall in the general rate of profit, but this time due to a change in the composition of capital not caused by the development of the productive forces, but rather by a rise in the money-value of the variable capital (because of increased wages) and the corresponding reduction in the proportion of surplus-labour to necessary labour.”

(ibid)

The solution to this crisis of overproduction of capital, is to raise productivity, via a new technological revolution, which creates a new relative surplus population, and increases the rate of surplus value. Consequently, these new technologies are created for, and first applied in, production, as new instruments of labour, not as new consumer products. The internal combustion engine, electric motor and so on, were developed, initially, as means of raising productivity, not for the purpose of producing motor cars, or electrical products for personal consumption. But, the development of these base technologies, for that purpose, inevitably leads to them, subsequently, also, being used as the basis of new ranges of consumer goods and services too. If we take the internal combustion engine, developed to replace costly and limited steam engines, used to drive tractors, and trains, and also to replace the use of horses to pull road transport, its use in private motor cars was limited to a very small number of the ruling class, and only slowly extended to sections of the middle-class. In Britain, its only in the 1960's that car ownership starts to occur amongst the working-class.

Similarly, electric motors were introduced in factories to replace expensive and limited steam power used to drive large numbers of machines and equipment, just as electric lighting replaced gas lighting. But, it was not until after WWII, that there was a significant growth in the production of ranges of electrical consumer products, such as vacuum cleaners, washing machines, spin dryers, refrigerators and so on, as well as the introduction of new electrical goods, such as TV's. The technological revolution of the 1970's, which peaked in 1985, was again driven by the shortage of labour that created the crisis of overproduction of capital of the 1970's. The introduction of the microchip and so on, enabled the development of technology in printing, machine control (CAD-CAM), as well as in a whole range of administrative tasks, via the development of cheap computing power, as well as in communications systems.

Even in 1970, I was using a slide rule for calculations, at work, and the adding up of columns of figures was done using a mechanical adding machine. By 1972, basic electronic calculators were being used in offices, and by 1975, hand held versions were available for those that had need of them, though they remained expensive. In a matter of a few years, personal computers appeared in offices, and by 1985, they started to become cheap enough for small businesses to utilise them. The same microchip technology enabled the production of some of the first consumer electronic products based on them, such as video game consoles, such as the Atari, and also video tape players. It wasn't until the mid 1990's, that home personal computers started to take-off, largely also driven by the availability of the Internet, which, itself, did not expand rapidly until the end of the 90's.

In fact, therefore, given the power and flexibility of this technology, we are still, largely, in the phase of its development driven by its use to raise productivity. Even in terms of home PC's, and their evolution into mobile devices, such as smart phones etc., these are personal productivity tools, used as much for the benefit of raising the productivity of labour, and speeding up the rate of turnover of capital, as they are purely personal consumption goods. In previous years, I have set out the kinds of goods and services that these technologies are capable of providing, and there are no doubt many more that no one has envisaged, yet.

The fact that, during the last 30 years, and 20 years, in particular, realised profits were directed into financial and property speculation, rather than into real capital accumulation, in the development of consumer goods and services, means that this development has been prolonged compared to past long wave cycles. The majority of that development of new goods and services occurred in the 1990's, and early 2000's, with a lot of the subsequent development simply being the equivalent of the development of the motor car from the 1950's Ford Popular to the 1980's Ford Cortina. Just as the motor car has continued to develop from the 1980's Cortina, so too existing goods and services will continue to develop, but we have not yet seen the development of whole new ranges of goods and services.

Part of the reason for that is that, since 2010, governments have held back economic growth, and money has been diverted into financial speculation. Money revenues can be used for personal consumption, productive consumption, or savings. But, savings have increasingly taken this form of purchase of financial or property assets, whose prices were deliberately inflated, so as to produce capital gains. Similarly, a look at TV and online advertising shows that one of the industries that has grown is that of gambling. Consumers used revenues for that purpose rather than spending on new types of goods and services, whose prices tend to be high, and which produce high rates of profit for their producers. The owners of loanable money-capital, including firms in their control over realised money profits, had no great incentive, therefore, to invest large amounts of capital in the development of, and supply of, such new innovative goods and services, instead, preferring to, also, simply buy up existing financial and property assets, and obtain the same capital gains, as asset prices rose.

Again, this is peculiar compared to previous long wave cycles. The new cycle that began in 1949, saw, by 1962, relative wages rising, and asset prices falling in real terms, between 1965-85. The Innovation Cycle had previously peaked in 1935. On the basis of the new base technologies it produced, which first manifested as labour-saving technologies in production, the first new consumer products it created were also productivity raising, labour saving products, directed at domestic labour. A range of domestic electronic goods, from washing machines, to fridges and TV's, freed female domestic labour from the home to increase the supply of exploitable labour in the workplace.

These new consumer products were relatively cheap, and made more accessible by the introduction of consumer credit. It took until the 1960's, and early 70's – 15 -25 years after the start of the new cycle – before it spread to the widespread consumption of the more expensive commodities such as the motor car. But, during all that time, capital continued to flow into the production of these new ranges of consumer goods and services, and, in doing so, as in previous cycles, thereby, created the conditions for the crisis of overproduction of capital. During all that time, in order to do so, realised profits were retained and invested, and companies issued shares so as to obtain additional funds for capital accumulation, in doing so, increasing the supply of these financial assets and depressing their price, causing yields and interest rates to rise.

On the basis of previous cycles, asset prices should have started to fall, in real terms, around 2015, and that should have facilitated a drive for capital to be invested in new high profit areas of production, which means in the development and production of these new ranges of goods and services. The crisis of 2008, was a marker on the road of that process, but it is precisely the measures taken by governments and central banks after 2008 that have prevented the normal functioning of the cycle, slowing down its mechanism, and so dragging it out. As I have set out in other posts, that hibernation of the cycle does not mean it no longer functions, and the events of the last two years following the end of lockdowns illustrate that point.

In Britain, the NHS is in a state of collapse, and social care along with it. The existing base technologies, developed during the 1970-85, Innovation Cycle, provide most of what is required to develop the new ranges of goods and services to deal with that. They have made possible the development of wearable devices, to monitor the condition of the human body, in the same way that engine management systems have long monitored and managed the mechanical and electrical systems of vehicles etc. The development of mobile technologies makes it possible to constantly monitor humans for signs of potential problems, and have that dealt with by healthcare systems, in the same way that home security systems pass information to home security providers.

These individually tailored health monitoring systems, will almost certainly be promoted by private capitals, as the NHS collapses, in Britain, but its likely that something similar will happen elsewhere, as the large, Fordist healthcare systems applicable for the needs of the 20th century, are no longer the most effective solution. In the same way, the microchip revolution that made possible the development of industrial robots in the 20th century, make possible the development of cheap domestic robots in the 21st century, to assist in social care provision. The development of AI, still at an early stage, will facilitate that, as AI will be the basis of the next Innovation Cycle, driven forward, after a new crisis of overproduction of capital arises in the 2030'/40's.

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Lessons of The Chinese Revolution, Trotsky's Second Speech On The Chinese Question - Part 6 of 7

That condition that existed for the last 40 years, could not continue once the demand for labour exceeded the supply, and the clear manifestation of that was the global rash of strikes, and increases in unionisation that arose in 2022/3, once lockdowns were ended. The underlying economic reality was that the regime that had persisted from the mid 1980's, in which asset prices were inflated, by falling interest rates, and revenues were created by converting capital gains (asset stripping, consuming the seed-corn), was no longer tenable. Yet, the ruling class, which owns its wealth in the form of those assets (fictitious-capital) and had become dependent upon these continual, speculative capital gains, could not countenance any other regime.

Its state, therefore, was forced to act against the interests of real capital itself – and hence, also, the interests of the state, and longer-term interests of the ruling class – by attempting to restrain economic growth, and capital accumulation, so as to restrain wages (and their squeeze on profits), and interest rates, so as to prevent falls in the prices of speculative assets. It did so via, austerity, lockdowns, etc, but that simply heightened the contradiction further, as I said it would, at the time. Its notable that during lockdowns, and long before the war in Ukraine could be used as an excuse for inflation, the prices of those speculative assets soared again, as the massive increase in liquidity (reduction in the value of the standard of prices) flooded into that sphere. Between March 2020 and January 2022, for example, the S&P 500 rose by 120%! In Britain, despite the fact that lockdowns meant that people could not get out to be buying houses in great numbers, house prices rose during the same period by around 26%, again reflecting their status as speculative assets.

The conservative, social-democratic regime that existed from 1990, could no longer be sustained, without doing increasing amounts of damage to capital itself, demonstrating the extent to which the interests of the ruling-class of speculators and money lenders is, itself, no longer consistent with the interests of real capital, and why it is now the interests of workers, as objectively the collective owners of that real, socialised capital, that occupy that role. The ruling-class of shareholders/money lenders seek to maximise the amount of interest/dividends they receive, and/or the capital gains they obtain from the rise in the prices of their shares, bonds and property assets. But, the former reduces the profit available for capital accumulation (profit of enterprise), just as does the rent paid to landlords, or the price paid for land/property, and the latter has been achieved by holding back capital accumulation, so as to use profits to buy back shares, and having the state hold back economic growth, so as to reduce interest rates, and, thereby, inflate asset prices.

It is workers – who as Marx points out in Capital III, Chapter 27 are the collective owners of real, socialised capital – whose interests are consistent with the interests of that capital. It is workers who have an interest in its profits being used for capital accumulation, so as to safeguard their jobs and living standards. It is workers who have an interest, provided its under their control, to develop these productive forces, so as to raise productivity. Yet, the workers were excluded, except in the worker cooperatives, during this period, from exercising any such role, because their parties continued to try to represent the interests of the ruling class, by clinging to the conservative policies of the previous 20 years.

On the one hand, as this centre ground collapsed, the Tory Party, and its international equivalents, based on the petty-bourgeoisie, moved sharply Right, on to the ground of reaction, whilst the parties based on the working-class saw a move in the opposite direction, as represented by Corbyn, Sanders, or else new parties like Syriza, Podemos, Die Linke, the Left Bloc, and that of Melonchon arose. These first outbursts were necessarily confused, picking up existing tools that were themselves inadequate to the task, and had proved so, in the last period of crisis, in the 1970's, and early 80's.

Existing “Left” social-democrats were thrust forward, with all their historical baggage, which itself, usually contained a large amount of reactionary, national-socialist rubbish, as with Corbyn's tacit Brexitism. As Trotsky describes, therefore, those oppositional forces never punch at their real weight. Their ideas are muddled, and in a process of development; their leaders are inadequate, and often untested, a new leadership being in the process of formation; they lack the organisation and machinery at the disposal of the ruling class, and its agents in the labour movement.

But, the almost inevitable failures of those initial political reflections of the changed material conditions does not alter these underlying realities. It has simply diverted them into different channels, much as happened in the 1950's and 60's, when workers developed the shop stewards movement, to by-pass an ossified union bureaucracy, and found other political organisations through which to develop their ideological response.

In a sense, Starmer's response is a reflection of this reality, because it represents an understanding of the threat presented by a rising working-class wave. It is why he cannot tolerate Labour MP's even standing on picket lines with striking nurses, and other workers.

“The growth of the war danger will force Stalin to choose. He has made an effort here to show that the choice has already been made. After the massacre of the Chinese workers by the bourgeoisie, after the capitulation of the Political Bureau to Purcell, after the speech of Chen Duxiu in Pravda, Stalin sees the enemy only on the left and directs his fire against them.” (p 103-4)

And, it is not just Starmer. The centrists and left reformists that have tied themselves to that trend, and increasingly defined themselves by it, and their opposition to confused sections of the “Left”, under attack from it, have necessarily been led to apologise for Starmer, and to paint up the nature of those bourgeois forces, as the USC does with Ukraine. The classic example of that is the rapid trajectory to the Right of Paul Mason.

“Fraternization with Purcell and baiting Zinoviev, eulogizing and painting up the bourgeois leaders of the Guomindang and baiting the Left Opposition in the CPSU and in other parties – one goes closely together with the other. This is a definite course.” (p 104)

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Predictions For 2024 - Prediction 3 – E.V.'s Reach An Inflection Point

Prediction 3 – E.V.'s Reach An Inflection Point

Five years ago, in my predictions for 2019, I wrote that electric vehicles would become cheaper than petrol and diesel cars. Taking running costs and depreciation together, that is, now true, though the price of electric vehicles remains higher, particularly as the initial (30%) £3,000 discount off your first EV was scrapped by the government. The imposition of lockdowns between 2020-2022, has frozen the development, but with lockdowns removed, the pace of that development is set to accelerate once more. During lockdowns, many people couldn't buy any kind of new car, and even when lockdowns were ended, and car production resumed, waiting lists stretched out to more than a year, which pushed up the price of nearly new, used cars. The frictions caused by the aftermath of lockdowns, together with the increasing protectionism, as US imperialism attempts to deny China access to trade and technology, has also slowed that development, as well as raising the costs of EV production, and batteries.

During lockdowns, many people were also simply unable to drive in the way they did before. In my own experience, I went from driving around 20,000 miles a year, down to around 1,000, and in the following period that hasn't risen that much, yet. Consequently, many people have less reason to swap cars, given the initial cost of purchase. As people begin to drive more, but still over relatively short distances, the advantages of EV's become even clearer. Across the globe, demand and production of EV's continues to rise significantly, and this increased level of production, will itself bring economies of scale, reducing costs, and consequently prices, which will stimulate further demand, as has happened with all such new products in the past.

Car companies have invested far too much fixed capital in EV's to now, look backwards, or slow the transition. The faster they replace petrol and diesel the better for those companies, as they can utilise fixed capital more effectively, and, thereby, increase their rate of profit. Many had said they intended to stop production of petrol and diesel vehicles by 2025, but two years of lockdowns has delayed that, and, as governments have pushed back the date at which they are required to do so, that has fed into that. However, it seems clear that the producers will end production much sooner than required by law. One of the main reasons that governments have pushed back the date for ending petrol and diesel engine production, is that they have fallen down on the job of ensuring adequate charging infrastructure, and as they are, again, looking at measures of fiscal austerity that looks set to continue.

Governments have failed to ensure a planning and development environment in which all of the required number of charging stations can be established, and, unlike petrol stations, supplied by tankers, charging stations, particularly fast charging stations, require considerable infrastructure in terms of power supply, and connections to the grid. Moreover, there is a lack of consistency of the charging points and systems. Many are unreliable or non-functional, pricing varies considerably, and a plurality of suppliers have introduced a plurality of payment systems, required even to charge your car. For one thing it assumes you have a smart phone, in order to download the relevant app, and if you may never use it again, that is a deterrent. Different car producers also have different standards for connection to chargers. Governments should have ensured standardisation of all of that, and it is, again, an obvious advantage of regulation by a large single market such as the EU.

Increasing protectionism makes that more difficult, with Republicans in the US, already talking about delaying and obstructing EV production in the US, which will further damage the US car industry, as global producers steam ahead with EV production, leaving the US trailing technologically, and so damaging the interests of US car workers, in the years to come, not to mention US workers as a whole, as consumers. However, much as with the symbiotic relation between car producers and oil companies in the 20th century, so that relation continues with EV's. The big oil companies, like BP, are increasingly rolling out charging stations, such as BP Pulse. They have an incentive to make charging as simple as refuelling a petrol or diesel engine car, by simply plugging in, and using a payment card. To do that, it is in their interests to be able to standardise, and to have the car producers also standardising their charging systems.

The initial inflection point is going to come from all of those drivers who benefit from the cheapness of electric over petrol or diesel, and for whom the constraints of available charging points, and range is not a significant issue. There are probably few people, who drive down to Spain, as I used to do, more than a decade ago, and for whom, range anxiety would, then be a problem. The majority probably drive at most 100 miles a day, and can charge up their car overnight, or even at work. Just a few hundred yards from me, there is a large tech company with numerous charging points on its employee car park, and opposite, a Premier Inn with charging points for customers.

But, as the charging infrastructure improves, across the EU, even the undertaking of longer journeys need not be a severe problem. Even with a petrol or diesel engine, its necessary to take a break every four hours or so, and in that twenty minutes, the car can be recharged, provided adequate facilities are available. Modern SatNav and Infotainment systems not only detect when its necessary to refuel/recharge, but do so, whilst pointing to the nearest service station etc. Having that as simple as current arrangements for petrol and diesel may take several years, but it will follow inevitably from an accelerating pace of adoption of EV's.

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Chapter II, The Metaphysics of Political Economy, Seventh and Last Observation - Part 2 of 8

The other camp of bourgeois economists that arose were those that reflected the interests of that large-scale industrial capital, that developed out of the process of concentration and centralisation, driven by competition, and which is inherent within, rather than exogenous to, capitalism. Rather than seeking to reverse this process, they embrace it, and simply seek to manage it by that increasing role of the state. They are neo-liberals, or conservative social-democrats. As Marx and Engels put it, in Capital III, and in Anti-Duhring,

“This is the abolition of the capitalist mode of production within the capitalist mode of production itself, and hence a self-dissolving contradiction, which prima facie represents a mere phase of transition to a new form of production. It manifests itself as such a contradiction in its effects. It establishes a monopoly in certain spheres and thereby requires state interference. It reproduces a new financial aristocracy, a new variety of parasites in the shape of promoters, speculators and simply nominal directors; a whole system of swindling and cheating by means of corporation promotion, stock issuance, and stock speculation. It is private production without the control of private property.”

(Capital III, Chapter 27)

“In the trusts, free competition changes into monopoly and the planless production of capitalist society capitulates before the planned production of the invading socialist society. Of course, this is initially still to the benefit of the Capitalists.

But, the exploitation becomes so palpable here that it must break down. No nation would put up with production directed by trusts, with such a barefaced exploitation of the community by a small band of coupon-clippers.”

(Anti-Duhring p 358)

“The modern state, no matter what its form, is essentially a capitalist machine, the state of the capitalists, the ideal personification of the total national capital. The more it proceeds to the taking over of productive forces, the more does it actually become the national capitalist, the more citizens does it exploit. The workers remain wage-workers — proletarians. The capitalist relation is not done away with. It is rather brought to a head. But, brought to a head, it topples over. State ownership of the productive forces is not the solution of the conflict, but concealed within it are the technical conditions that form the elements of that solution.”

(Anti-Duhring, p 360)

The bourgeois economists of both these camps see the relations of capitalist production as natural and eternal, but they differ about whether what currently exists is capitalism, with the Libertarians frequently describing, even the US, as “socialist” or “crony capitalism”. If capitalism is natural, the providential result of all previous history, then, once those providential results are established, history ceases, because there is no longer any “bad” to be removed. There is stasis. Anything not conforming to that natural order, such as Stalinism, is an aberration to be restored, and when, in 1990, Stalinism collapsed, that is indeed what Francis Fukuyama declared - “the end of history”.

“Feudalism also had its proletariat – serfdom, which contained all the germs of the bourgeoisie. Feudal production also had two antagonistic elements which are likewise designated by the name of the good side and the bad side of feudalism, irrespective of the fact that it is always the bad side that in the end triumphs over the good side. It is the bad side that produces the movement which makes history, by providing a struggle.” (p 113)

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Northern Soul Classics - Before 2001 - Rufus Wood

 

Friday Night Disco - Rocking Goose - Johnny & The Hurricanes

Over the last week, since my post "Northern Soul Sheep and Goats " I have been chatting, by e-mail, with my old friend and Northern Soul aficionado, Keith, in between him sending me pictures of him enjoying the sun in Spain.  I've known Keith for just shy of 50 years, and not just in my opinion, but that of many others, he has the most prolific and detailed knowledge of Northern Soul, and Motown.  We have been swapping our picks of what are the worst records, being played, currently, with both of agreeing on "These Boots Are Made For Walking", as the most dire, being neither soul music, nor even good pop music, nor even danceable.  In the process, Keith reminded me of this record, which is also not Northern Soul, but, which, is very danceable, and was played in youth club and other discos, in the 1960's, and early 1970's.

Lessons of The Chinese Revolution, Trotsky's Second Speech On The Chinese Question - Part 5 of 7

Employment has continued to expand, and, as it has, with slowing productivity growth, so it has used up the relative surplus population created by the technological revolution of the 1970's/80's. The graph of UK labour supply to jobs illustrates that point, with the number of jobs now exceeding the number of workers to fill them.

That means, irrespective of what trades unions might do, with their bureaucratic, tailist leadership, and irrespective of workers taking industrial action for higher wages, the market itself drives wages higher, as a result of this imbalance of labour supply to demand. Its why employers, in particular industries, have been led to raise wages significantly to attract workers; its why the average pay rise for a worker moving jobs is 14%. It is the state, as employer, that is using its monopoly power to hold down public sector wages, to act as a drag on wages in general. The result is the massive deficit of workers in public sector jobs, notably in the NHS.

This increase in employment, and of wages, drives demand for wage goods, and, if larger companies do not meet it, because their executives have become more concerned to use profits to buy back shares, so as to inflate share prices, then other, smaller, less efficient firms fill the gap, which is one reason that productivity levels have been abysmal. But, that, ultimately heightens the contradiction, because the lower productivity means even more labour employed to produce the required increase in output, a contradiction that was only continued as long as those workers were not strong enough to demand higher wages, and could be more brutally exploited by conditions of precarity etc., like those of the 19th century sweat shops, described by Marx in Capital, and Engels in The Condition of The Working Class.

In addition, if large firms in western economies do not meet this rising demand for wage goods, then large, and growing firms in newly industrialising economies will, which is one reason those economies have closed the gap on the developed economies. It is also the material condition behind the increased support for those 19th century, and early 1900's ideas of protectionism returning, as, once again, the existing hegemon looks to hold on to its global monopoly power, which, in turn, leads to a slow down of global trade, and the global economy, once more pushing the increased liquidity out of the real economy, and into the fictitious economy, to inflate asset prices. As Marx put it, in The Poverty of Philosophy,

“In practical life we find not only competition, monopoly and the antagonism between them, but also the synthesis of the two, which is not a formula, but a movement. Monopoly produces competition, competition produces monopoly. Monopolists are made from competition; competitors become monopolists. If the monopolists restrict their mutual competition by means of partial associations, competition increases among the workers; and the more the mass of the proletarians grows as against the monopolists of one nation, the more desperate competition becomes between the monopolists of different nations. The synthesis is of such a character that monopoly can only maintain itself by continually entering into the struggle of competition.”

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Predictions For 2024 - Prediction 2 – Asset Prices Continue to Fall In Real Terms

Prediction 2 – Asset Prices Continue to Fall In Real Terms

In 2022, as I had predicted, asset prices crashed, as a result of interest rates rising. Some asset prices fell by 20-30%, in nominal terms. However, in real terms the crash was bigger than that. For thirty years, the continual devaluation of currencies/standard of prices, as a result of excess currency being thrown into circulation, manifested as, and was directed into, the inflation of asset prices. That was made possible because the excess supply of money-capital from realised profits, release of capital from the devaluation and moral depreciation of fixed capital, as against the demand for that money-capital, for the purpose of real capital accumulation, caused real interest rates to fall. The period of intensive accumulation, during that stagnation/Winter phase of the long wave cycle, held back the demand for money-capital, whilst states did not utilise the surplus money-capital, and low interest rates to borrow to finance the rejuvenation of infrastructure. On the contrary, during the 1980's, and 90's, they implemented measures of fiscal austerity, and oversaw a vandalising of both infrastructure, and public services.

That period of intensive accumulation/stagnation also meant that the relative surplus population continued to press down on the labour market, meaning that even though real wages may have risen, relative wages declined. For some, real wages also declined, as is always the case in such periods, when the “stagnant population” grows in absolute numbers, even if it shrinks relatively. The consequence of these factors meant that, the devaluation of the standard of prices did not manifest in an inflation of commodity prices, which exaggerated the inflation of asset prices, in real terms.

As the long wave cycle transitioned from that stagnation phase to the prosperity/Spring phase, in 1999 that brought with it a change in material conditions. The increased economic activity brought an increased demand for capital and labour, but as Marx sets out in Capital III, at this phase of the cycle, it is not enough to cause either relative wages, or real interest rates to rise. The relative surplus population still exists, and capital responds to the changed conditions, first, by using existing workers more extensively (full-time rather than part-time, permanent rather than temporary employment, and the use of additional overtime work), which means that relative wages do not rise, even though nominal and real wages do. The rate of surplus value does not fall, but nor does it continue to rise, whilst the mass of surplus value rises, as more labour is employed.

The supply of additional money-capital comes primarily from realised profits. However, some of those profits, over the years, do not go to fund consumption or capital accumulation. They form unused savings, money hoards, and, at times, these hoards can also be mobilised, as additional money-capital. In addition, there are money reserves in the form of amortisation funds, as well as those held by all households, reflecting the time between the reception of revenues, and their use for consumption. Additional money-capital does not come from the supply of additional/excess currency, which merely devalues the standard of prices, leading to inflation.

A contradiction, then, arises between real market rates of interest, and yields on assets, as well as the policy rates set by central banks. As the ruling class owned its wealth in the form of fictitious capital, and had become addicted to speculative gains on those assets, as yields on them continually declined (even becoming negative on bonds), central banks strove to keep those asset prices inflated, by reducing their own policy rates, and by simply buying up bonds (QE), and other assets, even as the reality of the real economy was creating conditions where real market rates of interest, determined by the relation between the demand and supply for money-capital, was heading in the opposite direction. That was seen in the fact that many small businesses could not obtain loans, and had to resort to expensive forms of borrowing such as the use of personal credit cards. Usury returned in the form of the mushroom growth of pay day loans providers. Only measures of ever more excessive liquidity, and purchase of assets, together with measures by governments to curtail economic growth, and so hold back the demand for money-capital, could square that circle.

The vicious austerity imposed, after 2010, most notably in the economies of Southern Europe, as well as in Britain, and some parts of the US, was one manifestation of that contradiction, coming at a time, when central bank policy rates, and yields on bonds were at the lowest levels for 5,000 years, and so when borrowing to finance such spending should have been more than feasible. The other manifestation of it, and reason those yields were so low, was that central banks increased the already excessive amounts of liquidity in circulation, and used it directly to buy up those bonds, pushing up their prices. In fact, illustrating the extent of the contradiction, they managed to push the prices of those bonds so high that more than $20 trillion of them, globally, had negative yields. It was possible to print “money”, we were told, in order to buy up worthless bits of paper, but not to print money to finance states to buy real commodities, to employ real workers, and produce real wealth.

This latter fact provided grist to the mill of the advocates of Modern Monetary Theory, but, thereby, also simply reinforced the delusion that what was being printed was “money”, whereas all that was being printed was money tokens, which further devalued those tokens. They didn't seem to understand that the reason that excess liquidity was not leading to an inflation of commodity prices, was precisely because it was not being used to buy commodities, but was being used to buy up existing assets, causing their prices to be inflated, instead. Had, the additional money tokens been used to buy up commodities, rather than existing assets, the consequence was equally going to be an inflation of commodity prices, and that is precisely what happened, when even more liquidity was created and handed to households during lockdowns, which then gushed out in a tsunami once those lockdowns ended in 2022.

The inflation of commodity prices, and crash of asset prices in 2022 was not simply coincidental. Commodity prices rose, because the devalued currency, now washed into the real economy, whereas previously it had been channelled into the purchase of existing assets. This ocean of liquidity now surged into the purchase of commodities, commodities whose own supply had been deliberately curtailed as a result of lockdowns. The value of those commodities, was now compared to the value of the massively devalued money tokens, and so inevitably prices rose sharply. As commodity prices rose sharply, and the economies surged, the demand for money-capital also rose sharply relative to its supply. Interest rates necessarily rose, and rising interest rates caused asset prices to fall sharply via the process of capitalisation.

In 2022, the inflation in commodity prices, of around 10%, meant that the falls in asset prices of between 20-30%, were the equivalent of a fall, in real terms, of 30-40%. Globally, bond prices suffered their biggest fall in history. In 2023, bond prices have continued to fall, but with periodic rallies, each time speculators have believed that central banks would be led to cut their policy rates, as inflation fell, or economies fell into recession. As bond prices have rallied, on another bout of such euphoria, towards the end of 2023, stock markets also rallied, as lower bond yields, make shares look cheaper. That euphoria is almost certainly misplaced, as have previous bouts during 2023.

Firstly, as set out in Prediction 1, the repeated claims about imminent global recession during 2023, all were proven false, and globally, employment continues to expand, often significantly, as in the US. The increase in nominal interest rates, whilst impacting asset prices, directly via capitalisation, did not have the same impact on the demand for capital, because real interest rates remained low, or even negative, given high levels of inflation. In addition, a lot of the capital accumulation could be financed via the mobilisation of existing money reserves, and commercial credit. With workers wages growing both as a result of increases in nominal hourly wages, and additional employment, and, now, rises in real wages, the potential to fund household consumption is not at all dependent on borrowing. The only area of consumption significantly dependent on borrowing is house purchase, which simply feeds into the further downward pressure on asset prices.

In 2023, economies inevitably slowed, from the frantic pace seen following the ending of lockdowns, in 2022, but there is no evidence of any impending recession, and so no indication of either a fall in employment, or of wages, or consequently demand for wage goods and services. On the contrary, as Prediction 1 set out, the likelihood is that the existing conditions will feed into more rapid economic growth in 2024. That comes, now, however, at a time when the relative surplus population has been reduced significantly, when protectionism and curtailment of free movement means that capital does not move so easily to where labour supplies exist, and vice versa, and so where the simple operation of the demand and supply for labour will cause wages to rise further. That comes at a time when productivity growth is stalled, and so where this rise in wages will also increasingly lead to a rise in relative wages/fall in relative profits.

In short, the supply of additional money-capital, from realised profits, is set to fall, relative to the increasing demand for money-capital, as the global economy expands. That means real market rates of interest will rise, and asset prices will fall. As in the past, for example, during the period 1965-85, that will be disguised, as central banks, once again, increase liquidity, so that firms can raise prices to protect money profits, leading to further bouts of commodity price inflation, as also occurred in the 1970's.

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Predictions For 2024 - Prediction 1 – Global Growth Rises

Prediction 1 – Global Growth Rises

The global economy entered a new long wave upswing in 1999. That upswing resulted in a rising demand for capital, causing interest rates to rise, which led to the global financial crash of 2007/8, as rising interest rates cause falling asset prices via the process of capitalisation. It was not the first such crisis, with previous instalments in 1987, 1990, 1994, 1997. 1998, and 2000. It was the most severe, and far-reaching, precisely because the response to these previous instalments had simply created the conditions for it. They promoted speculation in financial and property assets as against investment in real productive-capital, and so undermined the potential for an expansion of profit (and the revenues derived from it), whilst inflating the asset prices nominally derived from those revenues, creating ever lower yields, and requiring ever lower interest rates. It was also more severe, because the previous instalments occurred during a period of long-wave stagnation, when the supply of money-capital from realised profits, exceeded the demand for it, and so leading to a secular drop in interest rates, that promoted the blowing up of bubbles that subsequently burst.

The response of states to the 2008 crisis, starting from 2010, was to simply continue that process, but now on an even larger scale. It required central banks to introduce QE, and governments to introduce fiscal austerity, both to reduce their own borrowing requirements, and debt issuance, and to slow economic growth, and its consequent demand for labour and capital. This is the consequence of a global capitalist economy (imperialism) in which the global ruling class, consists, now, of a class of parasitic “coupon clippers”, owners of fictitious capital, addicted to guaranteed capital gains on their financial and property assets, underwritten by the state, and whose interests are, however, now, antagonistic to the interests of the dominant form of property itself, large-scale, socialised, industrial capital, which as Marx describes, in Capital III, is the transitional form of property between capitalism and socialism, its chrysalis shell, objectively owned by the workers/associated producers, but still controlled by shareholders.

The fact that the global crisis assumes the form of a financial crisis, of the kind described by Marx in Capital, rather than an economic crisis, i.e. a crisis of overproduction, is a reflection of this fundamental contradiction. Indeed, if there was any economic crisis, it was one of under-production, caused by this diversion of money and capital into speculation, and away from capital accumulation, rather than of overproduction. And, this becomes manifest in other ways.

The owners of fictitious-capital, and their representatives in board rooms, have huge amounts of power, and influence on the economy. But, they are not omnipotent. To the extent they use realised profits to buy back shares, and so on, rather than invest in additional capital, they slow the expansion of the economy. But, the more they use those profits in that way, the more they encourage other privately owned capitals to fill the void they leave behind. They also encourage capitals in developing economies to fill that void, in the global economy. Its no surprise that since the 1980's, there has been a disproportionate increase in the number of small, privately owned businesses, a fact that contradicts the long-term trend of capital concentration and centralisation. Nor is it any surprise that it has been the capitals in newly industrialising economies that have grown faster than those in developed economies, during that period.

Even in the age of imperialism, it is competition that characterises the fundamental driving force of commodity production and exchange, and of capitalism as its developed form. So, as the owners of fictitious-capital sought to strip their own assets, by devouring profits unproductively, and their states sought to hold back capital accumulation, and economic expansion, smaller capitals made hay, as did less developed economies. The laws of capital continue to grind on, and so, economies grew regardless, the demand for labour and capital grew regardless, and all the more as these smaller capitals were less efficient, requiring more capital and labour to achieve any given mass of output.

Since the 1980's, global employment more than doubled, and as the new upswing began in 1999, that pace quickened, with a 30% rise in the first decade of the new century alone. The growth in employment, slowly eroded the relative surplus populations built up over the previous 30 years, and as the productivity benefits of the previous technological revolution, of the 1970's, faded, with capital accumulation becoming more characterised by extensive rather than intensive accumulation, so that became even more notable. In Britain, the number of jobs now exceeds the number of available workers; in the US, job vacancies outnumber job seekers by 2:1. A rising number of workers, and even slowly rising wages means a growing demand for wage goods, and that same competition drives capital to seek to satisfy that demand. If the large oligopolies or developed economies will not, then, smaller capitals, and newly industrialising economies will.

After 2010, in the developed economies, governments held back growth via austerity, whilst they, and central banks, encouraged households to use any money to speculate in shares, bonds, or property, in search of capital gains, rather than to consume it in the purchase of goods and services. Hence the sluggish nature of growth, as against the renewed inflation of asset price bubbles, after 2010. Yet, the contradictions resulting from that were, thereby, simply intensified further. The price of bonds or shares, for example, depend upon two things, the revenue they produce coupon/dividend, and the rate of interest. But, if economies grow sluggishly, if at all, then absent a significant rise in the rate of surplus value, or fall in the value of constant capital, the mass of profit cannot grow significantly, and so the deductions from it (interest/dividends and rent and taxes) also cannot grow significantly, without further depleting the amount available for real capital accumulation.

By, the early 2000's, the benefits of the previous technological revolution had run out, in terms of raising productivity, and, thereby, the rate of surplus value. The depletion of the relative surplus population was not yet at the stage of causing a rise of relative wages, but it was no longer at a stage of being able to significantly drive down wages, so as to boost profits. So, that means of increasing the mass of profits was cut off. The same thing applied to the value of constant capital, the big falls of which occurred in the 1980's, and early 90's. The possibility of big releases of capital, no longer existed. Share and bond prices could only rise, then, if the proportion of profits going to interest/dividends rose, at the expense of real capital accumulation, and/or, if interest rates fell.

The first had certainly happened. As Andy Haldane noted, in the 1970's, dividends accounted for 10% of profits, and by the 2000's, they accounted for 70%. But, that could not continue, without overt asset stripping. The asset stripping took a different form. Large companies borrowed on bond markets, and used the proceeds, not to invest, but to buy back shares, inflating the share prices. Speculators, then, simply sold a portion of these shares, at these higher prices, realising a paper capital gain. However, a continued supply of bonds would cause a fall in bond prices, and rise in their yields, which, in turn, would cause speculators to switch from shares or property to bonds. Having central banks buy up bonds, prevented that problem, causing bond prices to rise, and yields to fall.

But, we are, now, at a point where it is near impossible to reduce real interest rates. In the last year, the rapid global growth seen in 2022, slowed, as was to be expected. The global trade war undertaken by the US and its allies, slowed global trade, which, in turn, slows growth. The boycotts and sanctions against Russia, China and others, raised costs, most notably for energy and agricultural products, which acts to cause a tie-up of capital, slowing capital accumulation and growth. The most notable effect of that was in Europe, both the EU and UK, whilst the US continued to see growth of over 5% in its GDP. The ending of globalisation, and introduction of colonial era protectionism, further raised costs and slowed growth.

However, that tends to be a one-off effect, and as we move into 2024, that effect will diminish. Any falls in energy and other primary product prices, will now lead to a release of capital and revenue, acting to stimulate consumption, both personal and productive. As new channels for trade bed in, following the introduction of near-shoring, friend-shoring and so on, simply base effects will result in higher levels of trade and economic activity this year compared to last. The growth of employment continues, and now, in absolute terms, means that the simple operation of supply and demand in the labour market makes it difficult to increase either absolute or relative surplus value. Rising employment and wages means rising demand for wage goods, and consequently aggregate demand. To fund this additional capital to meet demand, a higher proportion of profits must be retained, or more borrowing is required, meaning real interest rates will rise.

Because orthodox economics has fixated on inflation as the determinant of interest rates, it thinks that if inflation falls, interest rates will fall, but that is only the case with nominal, not real rates. Nominal rates are made up of two components. The first is basically the equivalent of wear and tear of fixed capital. It simply recompenses the lender for the devaluation of their capital resulting from inflation. A machine leasing company, that leases a machine for a year, must get back the wear and tear of the machine over that year, but if they only received that, there would be no point leasing the machine. They only lease it, if they also obtain interest, i.e. the current price of capital, itself, sold as a commodity – the rate of interest. Marx noted,

“For instance, if we wish to compare the English interest rate with the Indian, we should not take the interest rate of the Bank of England, but rather, e.g., that charged by lenders of small machinery to small producers in domestic industry.”

(Capital III, Chapter 36, p 597)

Whatever happens to inflation, and central bank policy rates, these interest rates are set to rise as the demand for capital rises relative to its supply. That means that asset prices will fall in real terms, and on occasions those falls will take the shape of market crashes. Stock and bond markets have rallied significantly in the past few weeks on expectation of significant falls in central bank rates early in 2024. That expectation is likely to be dashed, but, even if central banks do reduce their policy rates, real market rates of interest will rise. The period of the last 40 years in which speculators could make large capital gains from rises in asset prices is over, and so one cause of money-capital not going into real investment will disappear. Indeed, one reason that money revenues went into such speculation rather than consumption will also be removed. That means that both productive and personal consumption will rise, driving aggregate demand, and economic growth.

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Chapter II, The Metaphysics of Political Economy, Seventh and Last Observation - Part 1 of 8

Seventh and last Observation

“Economists have a singular method of procedure. There are only two kinds of institutions for them, artificial and natural. The institutions of feudalism are artificial institutions, those of the bourgeoisie are natural institutions. In this, they resemble the theologians, who likewise establish two kinds of religion. Every religion which is not theirs is an invention of men, while their own is an emanation from God.” (p 112)

Bourgeois economics sets up the idea of free competition, and a minimalist state as the “ideal type” of capitalism. Th emergence, once more, of monopolies, therefore, must be an anomaly that can either be ignored as a minor exception to the rule, or else requires corrective action to restore the natural order, but the corrective action itself requires the involvement of the state in the economic life of society, and in the property rights of the individual.

As competition, and the laws of capital led, not only to the re-emergence of monopolies/oligopolies, in the 19th century, but to their domination of the economy, the bourgeois economists essentially split into two camps. One camp of Liberals, or what, today, are called Libertarians/Anarcho-capitalists, generally supporters of the Austrian School of Mises and Hayek, continued to see this ideal type of capitalism as natural. They abhorred the capitalist monopolies almost as much as they abhorred the monopolies that workers tried to establish, in the form of trades unions, to defend their wages. But, they continued to see the development of these monopolies as aberrations, derived from the interference of the state in the economy,, just as the old feudal trading monopolies had been created by royal patronage. They represent the interests of the petty-bourgeoisie.

The natural order of things, for this school, was essentially that of a world of small, independent, peasant, commodity producers, each engaged in free competition with each other. In many ways, it is the world the Narodniks envisaged in Russia, or that Proudhon envisaged, but without the “bad” side of Tsarism/feudalism, and landlordism. Not that they saw the political regime of feudalism as necessarily worse than that of bourgeois-democracy, because , in large part, they saw the latter, and particularly its form as social-democracy, following workers gaining the vote, as the basis of the increasing role of the state, and its distortion of the natural order. As Hayek says, in his 1940 book, The Road To Serfdom,

"We have no intention, however, of making a fetish of democracy. It may well be true that our generation talks and thinks too much of democracy and too little of the values which it serves. It cannot be said of democracy, as Lord Acton truly said of liberty that it ' is not a means to a higher political end. It is itself the highest political end. It is not for the sake of a good public administration that it is required, but for the security in the pursuit of the highest objects of civil society, and of private life.' Democracy is essentially a means, a utilitarian device for safeguarding peace and individual freedom. As such it is by no means infallible or certain. Nor must we forget that there has often been much more cultural and spiritual freedom under an autocratic rule than under some democracies – and it is at least conceivable that under the government of a very homogeneous and doctrinaire majority democratic government might be as oppressive as the worst dictatorship.” (p 52)

One reason that Mises, Hayek and the other Classical Liberals/Libertarians saw this perversion of the natural order was the separation of ownership and control that arose when firms expanded in size, so that the owners had to employ professional managers. Hayek, in the above work, points to the development of this new, middle-class of bureaucrats, and notes its existence across the globe from the USSR to Nazi Germany, to the huge corporations of the US and Britain. Not surprisingly, he quotes approvingly from the contemporaneous work of the US, petty-bourgeois Third Campist, James Burnham, “The Managerial Revolution”, in which the same idea of the development of a new, bureaucratic-collectivist, ruling-class is established. The same idea continued to be purveyed, in later years, both by the Third Camp disciples of Burnham, but also by those of Hayek and his contemporaries at the LSE, such as Ralf Dahrendorf.

Rather like Sismondi, or the Narodniks, what Mises and Hayek et al saw was a real change in material conditions, but one which contradicted their view of what capitalism (or, for the Third Campists, Socialism) should be, i.e. their ideal type of free market capitalism, and so concluded it was a distortion, an aberration caused by exogenous factors that had to be corrected and reversed. Its the same thing that drives their disciples, like Rees-Mogg, to oppose the EU, and promote Brexit. Similarly, its what drives Burnham and the Third Camp to view the deformed workers' states as an aberration to be opposed and reversed. In each case, be it Sismondi, the Narodniks, Hayek or Burnham and the Third Camp, the analysis is subjective and superficial, it is moralistic, and the solution reactionary.

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Lessons of The Chinese Revolution, Trotsky's Second Speech On The Chinese Question - Part 4 of 7

In Britain's two-party system, this was not just played out in the Labour Party, which represents the most rational expression of the interests of the bourgeoisie. It has played out, also, in the Tory Party. Labour represents the rational expression of the interests of large-scale, socialised capital, and, thereby, of the bourgeoisie, because it is based on the working-class, whose interests reside in a rational development and accumulation of large-scale capital, i.e. social democracy. It can appeal for the votes of workers on that basis, which is what makes Starmer's current reactionary, petty-bourgeois nationalism, itself, irrational.

But, the Tory Party is based upon the petty-bourgeoisie, the 15 million or so people that own the 5 million small businesses, the self-employed and so on. Their interests are not at all represented by social-democracy, and its rational development of capital. They abhor it, as it sounds their death-knell, or at least is the basis of their own subordination to it. In government, however, Tory governments, like all Bonapartist regimes based on the petty-bourgeoisie, have always had to face the reality that the economy is based upon that large-scale, industrial capital, whatever they might proclaim with the invocation of the small business myth.

So, particularly under pressure from the permanent state apparatus, which always represents the interests of the ruling class, they have had to abandon their petty-bourgeois base, and pursue the interests of big capital. The experience of Truss, in the Autumn of 2022, was just the latest example of what happens when they try to diverge from that reality.

But that experience was, also, just a clear manifestation of how those underlying movements in class forces have played out in the Tory Party. In the last forty years, the petty-bourgeoisie grew prodigiously, on the back of deindustrialisation, casualisation and so on, and that necessarily was also reflected in the Tory Party. Brexit was its emblem.

“The Opposition is an expression of the class struggle. The organizational weakness of the Opposition by no means corresponds to its specific weight in the Party and the working class. The strength of the present Party régime lies, among other things, in the fact that it changes the relation of forces in the Party by artificial means. The present heavy bureaucratic régime in the Party reflects the pressure of other classes upon the proletariat.” (p 102)

That was true, but, in 1927, the long wave was also moving in a direction away from strengthening the position of workers. Today, the long wave has been moving in a direction towards the strengthening of workers, since 1999. It began to manifest, even in the mid 2000's, prior to the 2008 global financial crash, and even though, since 2010, states have deliberately slowed economies via austerity, lockdowns and policies of QE etc., to divert money away from the real economy and into the purchase of speculative assets, the underlying economic laws of capital, have continued to grind on.

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Chapter II, The Metaphysics of Political Economy, Sixth Observation - Part 5 of 5

But, this illustrates another point. Marx, Engels, Lenin and Trotsky could identify this objectively progressive role of capitalism, and of imperialism, without in any way supporting the means by which they achieve these progressive aims. On the contrary, it is the struggle of the working-class against these means that creates the dynamic of forward movement to a new higher form of society. Capitalism drives up productivity via technological development, whose consequence is a higher rate of exploitation of labour. The former is historically progressive, but this does not mean that we acquiesce in that greater exploitation of labour, rather than waging a struggle for workers' control over the much expanded surplus product.

Imperialism does away with all of the outmoded nation states, borders and peculiarities, which is progressive, as it creates a world economy and larger single markets, along with a global working-class. But, it does so via imperialist wars, colonisation and annexations. We do not acquiesce in the use of these means, but fight against them, and, in the process, posit the alternative of a new socialist society, able to fully realise those progressive aims, of the end of nation states, and the creation of a world single market and world state.

As Marx put it,

“Suppose, as M. Proudhon does, that social genius produced, or rather improvised, the feudal lords with the providential aim of transforming the settlers into responsible and equally-placed workers: and you will have effected a substitution of aims and of persons worthy of the Providence that instituted landed property in Scotland, in order to give itself the malicious pleasure of driving out men by sheep.

But since M. Proudhon takes such a tender interest in Providence, we refer him to the Histoire de l’économie politique of M. de Villeneuve-Bargemont, who likewise goes in pursuit of a providential aim. This aim, however, is not equality, but Catholicism.” (p 112)

It is not necessary to adopt the reactionary, providential aim of “anti-capitalism”, or “anti-imperialism”, to oppose NATO, or imperialist war, etc., but, nor is it necessary to support NATO and imperialist militarism, in order to argue for the progressive role that imperialism brings about, of a global equalisation, via competition and spread of capitalist production, development of productive forces, raising and equalising of living standards, creation of a world economy and so on.

For us those bourgeois ends are not our ends, but merely moments on the path to our ends.

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Lessons of The Chinese Revolution, Trotsky's Second Speech On The Chinese Question - Part 3 of 7

In soviet Russia, the economy, as Lenin described, was dominated by small scale, petty-bourgeois production. The introduction of NEP, encouraged the growth of these petty-bourgeois, and bourgeois classes. This change in the balance of class forces, necessarily, found its ideological and political reflection, and, as Trotsky says, because the Communist Party was the only party, it was fought out inside it.

After Lenin's death, and Stalin's takeover of the party, not only were many former Mensheviks and S.R.'s drawn into the party, but, also, openly bourgeois, and even Tsarist elements. At the same time, the Bolsheviks that gave their support to the Opposition were systematically and bureaucratically isolated, and purged. Trotsky refers to Ustrialov as one of those representatives of the new bourgeoisie that supported Stalin, and demanded the expulsion of the Opposition.

“On the other hand, when MacDonald appeals against intervention, he demands that the sensible “practical politicians” should not be prevented from putting an end to “the propagandists of the Third International“ – these are literally MacDonald’s words – , that is, that Stalin should not be disturbed in his work of smashing the Opposition. Chamberlain, with his brigand’s methods, wants to hasten the same process. The various methods are directed towards one aim: to smash the proletarian line, to destroy the international connections of the Soviet Union, to force the Russian proletariat to renounce its intervention in the affairs of the international proletariat.” (p 101)

And, today's “practical politicians”, as representatives of the bourgeoisie, also cannot countenance any opposition from the realm of proletarian internationalism either. The recent period, in the Labour Party saw something similar. The right-wing, pro-capitalist elements that dominate the PLP, and party machine, were overwhelmed by the upsurge in support for Corbyn, in 2015, but, having no concern for democratic principles, immediately sought to overturn the decision of the members. When that failed, and Corbyn won an even bigger victory, at the second leadership election, they sought to undermine him by other means.

Corbyn and McDonnell facilitated them by failing to move against the Right and Soft Left, and failing to democratise the party. As they appeased them, they even allowed their own supporters to be witch hunted, on spurious grounds of “anti-Semitism”, under which Corbyn was himself suspended from the PLP, eventually. But, the Right were not strong enough, even after Corbyn was led to stand down, to come out openly in their own capitalist class colours. Starmer had to first appeal to that progressive Corbynite membership that opposed Brexit, and wanted to stick with Corbyn's radical social-democratic agenda. Having lied his way to victory, Starmer, then, abandoned, not only the radical social-democratic policies, but even the anti-Brexit stance, as he sought to turn the party into a pale, kitsch version of UKIP. But, the forces that put him there will also remove him, because they need, also, to ditch Brexit, and Starmer has tied himself too closely to it.

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