Stalin and The Chinese Revolution, 3. Stalin and Chiang Kai Shek

3. Stalin and Chiang Kai Shek

For Marxists, opposition to imperialist military organisations, like NATO, and the demand for countries to withdraw from them, is fundamental and obligatory. Does that mean that we fetishise, and insist on such a demand, in the manifesto of workers' parties, at all times? No. Those parties are not Marxist parties, but bourgeois parties with which the majority of workers have not yet broken, and to which we must relate. At some points, emphasising the need for such withdrawal is appropriate, and, at others, not. So, when, a few years ago, Paul Mason argued that it was not necessary for Corbyn's Labour Party to emphasise withdrawal from NATO, if doing so might cost it the election, this was worth discussing. There is a qualitative difference between that and Paul Mason's current position, in which he argues that socialists should embrace NATO, and transform it into a force for progressive global change!!!

At least, though, Mason is honest enough to admit that he is not a Marxist, but the logic of his pro-imperialist position is adopted by other components of the USC that do continue to proclaim their “Marxist” credentials. The Chinese revolution had parallels to this too. Not only did Stalin, and the ECCI, proclaim that the KMT was the vehicle of progressive change, in China, and so subordinate the workers and peasants, and CCP, to it, but Stalin, on this basis, also brought the KMT into the Comintern, as a sympathising party.

“After the Canton coup d’état, engineered by Chiang Kai-shek in March 1926, and which our press passed over in silence, when the Communists were reduced to the role of miserable appendices of the Guomindang and even signed an obligation not to criticize Sun-Yat-Sen-ism, Chiang Kai-shek – a remarkable detail indeed! – came forward to insist on the acceptance of the Guomindang into the Comintern: in preparing himself for the role of an executioner, he wanted to have the cover of world Communism and – he got it” (p 264-5)

In similar vein, the social-imperialists of the USC give a left cover not only to Zelensky's corrupt, anti-working-class regime, and the Ukrainian capitalist state, but even to NATO imperialism and militarism!

Even as the KMT was being inducted into the Comintern, and the Left Oppositionists expelled from it, Chiang Kai Shek was preparing his coup against the Chinese worker communists. In the same way that the social-imperialists, today, bedeck themselves in Ukrainian flags (reminiscent of other idiot anti-imperialists who previously proclaimed “We Are All Hezbollah Now”), and carry the iconic images of Zelensky, so too Stalin and Chiang Kai Shek exchanged portraits.

“This strengthening of the ties of friendship was prepared by the journey of Bubnov, a member of the Central Committee and one of Stalin’s agents, to Chiang Kai-shek. Another “detail”: Bubnov’s journey to Canton coincided with the March coup d’état of Chiang Kai-shek. What about Bubnov? He made the Chinese Communists submit and keep quiet.” (p 265)

Of course, following Chiang Kai Shek's coup, the Stalinists tried to deny that the KMT was still a member of the Comintern, and attempted to dismiss the coup as all something they expected, because they always knew that it was allied with them “for its own interests”, to put it in the words of today's social-imperialists, who make the same apologetic argument for their alliance with, and subordination to the Ukrainian state and NATO.

Trotsky quotes from the minutes of the Politburo, in which he was the only one to vote against the admission of the KMT, and,

“They had forgotten the vote at the Political Bureau, when everybody, against the vote of one (Trotsky), sanctioned the admission of the Guomindang into the Comintern with a consultative voice. They had forgotten that at the Seventh Plenum of the ECCI, which condemned the Left Opposition, “comrade Shao Li-tse”, a delegate from the Guomindang, participated.” (p 265)

That was in the Autumn of 1926. A year later, and following the KMT's coup, in April 1927,

“...the Eighth Plenum in May 1927 declared in the resolution on the Chinese question:

“The ECCI states that the events fully justified the prognosis of the Seventh Plenum.”

Justified, and right to the very end! If this is humour, it is at any rate not arbitrary. However, let us not forget that this humour is thickly coloured with Shanghai blood.” (p 266)

Back To 2.  The Perspectives of the Revolution According To Stalin

Back To Table of Contents

Value, Price and Profit, Preliminary - Part 2 of 3

As set out in the introduction, as as Marx and Engels described, in Capital III, in periods of boom, and the initial period of crisis and over-exuberance, the amount of such credit automatically expands, and does so whilst the currency supply is not correspondingly curtailed, leading to an inflation of prices. But, in such conditions, workers are also in a strong position, due to labour shortages. They respond to rising prices by demanding higher wages. Keen not to have a strike, firms concede higher wages, confident that they can pass on the higher cost in higher prices. So sets in a price-wage spiral.

It does not matter that, in these conditions of relative labour shortages, it may be that it is wages that rise first, as firms compete for available labour, by bidding up wages. As Marx sets out, these higher wages do not raise the cost of production of commodities from the perspective of society. In other words, they do not change the amount of social labour-time required for their production. The higher wages only change the proportions in which that value of the commodity is resolved.

If the value of a metre of cloth is comprised of 10 hours for constant capital, and 10 hours for current labour, its value is 20 hours of labour. If there is no change in productivity, its value will remain 20 hours of labour, whether the 10 hours of current labour resolves into 2 hours for wages and 8 hours for profits, or into 8 hours for wages, and 2 hours for profits. That, of course, is not how the capitalist sees it, because they only see cost of production from their own individual perspective, not that of society as a whole. For them, the cost of production is what they must lay out as capital, with their profit also being an additional cost of production that must be met in exchange for them providing that capital.

A rise in wages does not cause a rise in the value/social cost of production of commodities, and so does not cause a rise in prices. It cannot be the cause of an inflationary spiral. However, because the capitalist sees things only from their own perspective, they see rising wages as a rise in the cost of production, and so, rather than it resulting in a reduction in their profits – the amount of free labour they get from the worker – they see it as the basis of a need to raise their prices. Indeed, because they calculate their profits as a percentage markup on these costs of production, they see it as the basis for raising prices by more than that increase in wages.

But, raising prices is not something in the gift of the individual capitalist, because prices are values expressed in money. The value of the commodity, despite the capitalist's perception, has not changed, and, if the value of money/standard of prices remains constant, it would be impossible for capitalists to raise prices. They would have to accept a fall in the general rate of profit. As Marx sets out, in Capital III, Chapter 11, this fall in the general rate of profit, would cause some prices to rise and others to fall, whilst others remained constant. The prices of commodities where the organic composition of capital is high would fall (capital would move to their production), would rise where the organic composition was low (capital would move out of their production) and would remain the same in spheres of average composition. Overall, there would be no change in the general level of prices.

Similarly, as Marx sets out in this pamphlet, a rise in wages/fall in profit, would cause a rise in demand for wage goods, and fall in demand for luxury goods. The prices of the former would rise, and the latter fall. However, higher prices in the former leads to higher profits, attracting additional capital, raising supply and so fall back in prices. The lower prices in the latter results in lower profits, egress of capital, fall in supply and a rise back in prices.

Back To Part 1

Stalin and The Chinese Revolution, 2. The Perspectives of the Revolution According To Stalin

2. The Perspectives of the Revolution According To Stalin

The social-imperialists of the USC, and its component organisations, demand the arming of Zelensky's corrupt, anti-working-class government, just as Stalin armed the anti-working-class government of the KMT. Social-imperialists like the AWL's Jim Denham, argue that imperialism and the capitalist state are the defenders of workers' interests. Exactly the same arguments were made, by Stalin, in support of the subordination of Chinese workers to the KMT, as the social-imperialists, and social patriots subordinate, today, workers to Zelensky and NATO.

Trotsky quotes the same “scandalous” arguments made by Stalin, as those seen, today, from the likes of Jim Denham and the social-imperialists.

““The revolutionary armies in China [that is, the armies of Chiang Kai-shek] are the most important factor in the struggle of the Chinese workers and peasants for their liberation. For the advance of the Cantonese means a blow at imperialism, a blow at its agents in China, and freedom of assembly, freedom of press, freedom of organization for all the revolutionary elements in China in general and for the workers in particular.” [Perspectives on The Chinese Revolution, p 46]” (p 264)

And, today, Jim Denham of the AWL, argues, similarly, that imperialism (NATO), and the Ukrainian capitalist state defends workers interests. Stalin claimed that the army of Chiang Kai Shek was the army of workers and peasants, bearing freedom for the whole population, “for the workers in particular”. The social-imperialists make the same false argument, today. Of course, all national armies comprise, mostly, foot soldiers from the labouring classes, even in professional armies, but they are under the control of bourgeois commanders, themselves instruments of a bourgeois state, fighting for bourgeois interests, not those of workers!

The social-imperialists of the AWL, of course, simultaneously deny that they are "pro-NATO", even as they promote it as a defender of workers' interests.  Responding to such a charge, from the SWP and Morning Star, Jim Denham writes, citing various articles on the AWL website,

"The latter article states plainly: “NATO remains far from a benign force. It is imperialist. We oppose NATO expansion, call for British withdrawal and advocate the organisation’s dissolution.”

But, that is no different to their methodology in general, in which they make these abstract statements that say one thing, to give cover to the pretence of continuing to be adherents of Marxism, whilst, in practice, for example, in supporting NATO's role in Ukraine, Serbia/Kosovo, Iraq, Afghanistan, Syria, Libya makes the abstract statements of opposition to NATO meaningless, and just a lie.  Their position is "Please, God, make me an opponent of NATO, but not, yet!"  It is similarly, "Please God, make me a Marxist, but not yet".

The lying, hypocritical nature of the AWL an be seen in this.  On the one hand, as the abstract statement of aims, above, sets out they seek the dissolution of NATO.  Here and  now, however, they call on that same NATO to provide weapons and logistical support to the imperialist state in Ukraine, and even condemn NATO for not having supplied enough or the latest weapons to the Ukrainian military.  They condemn those Marxists that oppose the supply of weapons by NATO imperialism to its Ukrainian proxy.  But, if they want NATO to supply those arms and logistical support, why do they, at the same time, call for NATO's dissolution?  If they achieved that latter aim, the former aim makes no sense, and could not be raised let alone achieved!  You could not demand that a non-existent NATO supplied weapons and logistics to Ukraine!

As Trotsky pointed out, the Stalinists did exactly the same in China, setting out numerous statements of their opposition to putschism, but, in practice, on a day to day basis encouraging the Chinese communists to engage in such action!  Not only did it sow confusion and demoralisation, but those of its rank and file, in China, tat tried to argue the official position, in opposition to putschism, when it came to these insurrections, found themselves expelled.

According to Stalin, little was required for the success of the revolution.

““The student youth (the revolutionary youth), the working youth, the peasant youth – all these are a force that can advance the revolution with seven league boots, if it should be subordinated to the ideological and political influence of the Guomindang.” [ibid p 55]” (p 264)

The social-imperialists argue in similar vein, because they have abandoned the concept of socialist revolution, and become bourgeois liberals, whose goal in life, now, is limited only to the perspective of bourgeois-democracy, and the continued exploitation of workers, under its auspices, but, perhaps, only with some amelioration of its condition.

“In this manner, the task of the Comintern consisted not of liberating the workers and peasants from the influence of the bourgeoisie but, on the contrary, of subordinating them to its influence. This was written in the days when Chiang Kai-shek, armed by Stalin, marched at the head of the workers and peasants subordinated to him, “with seven-league boots”, towards. the Shanghai coup d’état.” (p 264)

Today, Zelensky and NATO, and the EU, march to the reconstruction conference, in London, salivating at the prospect of extracting even more surplus value from Ukrainian workers, whose leaders have capitulated and completely abased themselves, and from the pillaging of Ukraine's considerable natural resources.

Back To 1. The Bloc of Four Classes

Forward To 3. Stalin and Chiang Kai Shek

Back To Table of Contents

Farage, Putin and The Brexitories

In one of the seemingly endless and vacuous TV Leaders debates and interviews, Nigel Farage has, again, done what he always sets out to do, which is to draw attention to himself, by challenging the established narrative of the “establishment”, and its main parties – Tory and Labour. He did so, on this occasion, by pointing out what any honest observer of events already knew, which is that NATO provoked Putin into the invasion of Ukraine.

I was going to say that anyone who draws attention to this fact is automatically branded an apologist of Putin, but that is not the case. Blair-right, former Secretary-General of NATO, George Robertson, also admitted that NATO had goaded Putin into the invasion of Ukraine. It would clearly have been hard to accuse him of being a Putin apologist, but the fact that he, also, drew attention to this fact illustrates that the two things are not the same. Moreover, Robertson did not draw, from his observation of this fact, the conclusion that Putin's invasion of Ukraine was, therefore, justified. Again, these two things are not the same, and one does not flow immediately from the other.

As Trotsky points out, Lenin noted that prior to WWI, the dominant imperialist powers – Britain, France and Russia – had similarly goaded Germany, Austria-Hungary, and Turkey into war. The former had been building up their armies and weaponry, ready for a war, and snapping at the heels of their adversary. Given the way that capitalism/imperialism works, therefore, it was no surprise that the latter, did not wait to be attacked. In those terms, that attack was “justified”, but that didn't mean that socialists had to support it.

“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?””

(Trotsky – Lenin On Imperialism)

In fact, back in 2008, following the ethic cleaning committed by the western backed Saakashvilli, in Georgia, and subsequent invasion of South Ossetia, by Russian forces, to end it, I wrote about the interview, on Newsnight of former Yeltsin Advisor, Alexander Nekrasov, who commented that, if a repetition of that week's conflict, in Georgia, arose in Ukraine, after Ukraine had joined NATO, then this would mean World War III.  Interestingly, it was in response to this post that I was contacted, by Paul Mason.  Reading the description of the ethnic cleansing in South Ossetia, by the western backed Georgian regime, its notable how it resembles the genocide being committed by the western backed Zionist regime against Palestinians, today.  The description of what might happen in Ukraine, if a similar pattern of what had happened in Georgia/South Ossetia happened, is pretty much exactly what has happened in Ukraine, since 2014.  Some of the comments, to that post including from the US, are also interesting.

The fact, however, that simply stating what is fairly obviously true, as Robertson had noted, that NATO goaded Russia into the invasion, does not, of itself, make Farage an apologist of Putin, also does not mean that he isn't!!! As the saying goes, just because your paranoid, it doesn't mean the state isn't watching you. The fact that the Tories and the media have drawn this simplistic link – as they do with anyone who challenges the established narrative – is simply a reflection of the degeneration of the political culture, in which we are asked to accept that there is always only a choice between one of two evils, in this case, either you back NATO/Ukrainian imperialism, or you back Russian imperialism, just as workers were told they could back British/French/US/Russian/Italian imperialism or German/Austrian/Turkish imperialism, in WWI, and British/French/US imperialism or German/Italian imperialism in WWII.

In WWI, as Lenin describes above, the gloss was added to this that the former were defending the fatherland, democracy and so on, presenting Germany, and the Kaiser, as a threat to such democracy – whilst the western allies not only denied democracy and freedom to millions of colonial slaves, and included in their ranks the brutal, Asiatic despotism of Tsarist Russia. In WWII, that narrative was only slightly changed, claiming the same defence of the fatherland and of democracy, but now with the lie that this was a war against fascism, the same fascism that those western states had welcomed, when it arose, in the 1920's and 30's, to smash down the workers' in Italy and Germany, and acted to threaten the workers' state in the USSR! For all of that time, from the 1920's and 30's, not only did the same denial of freedom and democracy to millions of British, French, Belgian and other colonial slaves continue, but the anti-Semitism that was also added as a cause upon which the war was fought, by those allies, also ran rife through the ruling classes of the US, Britain, France and so on. Churchill himself was a well known anti-Semite, along with the rest of his grotesque, racist and colonialist beliefs.

This facile insistence of a choice of one of two lesser-evils, of course, suits ruling classes, because, on each side of this dichotomy, the respective ruling classes present themselves as the “good guys”. Their own appeals to defend the fatherland, to patriotism, and use of the media, and all the other panoply of the ideological arms of the state, enable them to achieve that. Go to Russia, and you will find that a large majority of the population believe the nonsense that Putin and his regime pump out, just as in Nazi Germany, a large majority of the population, even of those that had opposed Hitler and the Nazis, needed little convincing that they were under immediate threat from western powers, and that they had to “rally around the flag”. The fact that “socialists”, and “communists”, then and now, associated themselves with their own ruling classes, facilitated that narrative by, then, Hitler, and, now, Putin. As Trotsky put it,

“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.”

(Phrases and Reality)

Everywhere you look, this same ridiculous presentation of a choice between two evils prevails whether it is a choice between the zombie-like Biden or the moronic fascistic Trump, the genocidal Zionist regime, or the Islamo-fascist Hamas, the Brexitory Sunak, or the Brexitory Starmer, the anti-working class Macron, or the anti-working class Le Pen. But, the reality is that workers do not have to accept that these grotesquely horrible options are the only ones they can choose.

Farage made the comment in relation to Ukraine, not because, it is a fact, as previously established by George Robertson, but, because it has, again, given him the headlines he relishes. As with his proposal for a £20,000 Income Tax threshold, the purpose is also to expose and put on the spot the main parties. But, as with that proposal, as I set out, previously, the fact its designed for that purpose, does not mean that its content is not valid. And, the two things are related. The main parties as they have talked about “inflation”, and a cost of living crisis, have tried to excuse their own culpability for it, by claiming that it was all the fault of Putin, and the invasion of Ukraine, but that is nonsense.

Inflation is the result of years of excess currency being pumped into the economy to push up asset prices – shares, bonds, houses/property/land – and specifically, in order to finance the furlough and other income replacement schemes made necessary by the imposition of the ridiculous lockdowns. Sunak was the architect of those furlough payments, but it was Starmer and Blue Labour that was most insistent on the implementation of the ridiculous lockdowns of the economy that made those payments necessary!

As for the sharp rise in energy and food prices, that resulted not from Russia's invasion of Ukraine, but from the UK and EU's decision, under instruction from NATO, to boycott Russian oil and gas, supplemented by the US's blowing up of the Nordstream pipelines, just in case a cold Winter had caused Europeans to change their minds! The rise in food prices was a result both of the rise in gas prices that flowed from that, because the gas is used to produce fertiliser, but also from the fact that Russia is by far the largest exporter of grain, and western sanctions on it, prevented a large part of those exports, pushing up global food prices. So, by making his factual point, Farage also draws attention to the fact that the cost of living crisis, and the hit to the economy – though it is even more apparent in the EU – is, itself, also, a consequence of the policies pursued by the Tories and by Blue Labour.

Of course, what Farage does not say, is that an even bigger hit to the UK economy, and to the living standards of workers, in Britain, is the Brexit that he championed. As I wrote at the time, the connections between Farage and Putin, on that score, were again, rather clear. But, the sensationalist media were, of course, keen to get ratings by having him on their screens and filling their pages, at every opportunity, and so paid little attention to those links. Moreover, it was not just Farage that had those links with Putin. As I wrote, then, the reactionary Brexit supporting wing of the Tories, also had those close links with Putin, just as they had with Trump, who, in turn, had those links with Putin.

Putin's aim in supporting Brexit, as with his support for Le Pen, and other nationalists across the EU, is to weaken the EU, or, if possible, break it up, because that removes a large imperialist bloc on Russia's borders, thereby, relatively strengthening the position of the Russia/China/BRICS imperialist bloc. But, in attacking Farage as a Putin apologist, the Tories also open up these old wounds of their own support for Brexit, and links to Russia, especially as they continue to push that damaging Brexit.

And, of course, it is not just the Tories. There were right-wing, nationalist Labour MP's that were part of Farage and Boris Johnson's “Leave” coalition also, and, now, Starmer is Brexiter in chief, as his reactionary Blue Labour proclaims that it will NEVER re-join the EU, or the Single Market, and so on, despite the terrible damage that is doing to the UK economy, and to British workers. In continuing to push that line, which even the clear majority of the British electorate reject, Starmer is, himself, not just insisting on damaging the economy, and the interests of workers, but is also doing the work of Putin, in weakening the EU!

And, of course, the more you draw these connections, the more the shifting alliances of various sections of the global ruling class, and of its factions appear. Starmer, of course, has continued to support and apologise for the genocide being committed by the Zionist regime in Israel, but who are also the backers of Netanyahu – Putin and Trump! Indeed, as Trump looks set to replace the walking dead regime of Biden, Blue Labour's David Lammy, who is lined up as Secretary of State for Foreign Affairs, has been led to claim that Trump is not a racist, and is misunderstood!

This is the cesspit that politics has become, and we are asked to choose between one turd or another.

Value, Price and Profit, Preliminary - Part 1 of 3

Preliminary

Marx begins his address with preliminary remarks, describing the conditions, in Europe, that I discussed in my introduction, of a rash of strikes for higher pay, provoked by rising inflation. On the one hand, there were those who, as now, saw inflation only as meaning rising prices, as a reflection of higher costs of production/values, and, in particular, higher wage costs. Marx had shown, in A Contribution To The Critique of Political Economy, The Poverty of Philosophy, Wage-Labour and Capital, and in Capital and Theories of Surplus Value, why that was false.

In general, values – the labour-time required for production – of commodities decline rather than rise, because social productivity rises. If prices, in aggregate, rise, therefore, this must be a consequence, not of a general rise in unit values/costs of production, but a greater fall in the value of the one commodity – the money commodity – used as the indirect measure of those values, i.e. its exchange-value. That does not mean that some values/costs of production may not rise, temporarily, for example, due to a crop failure, or wars, but that cannot be the cause of a general rise in prices over a longer period.

As Marx describes, in Capital III, Chapter 6, there was such a war that caused a rise in cotton prices, as well as a lack of supply of cotton. The US Civil War, and blockade of Confederate ports, stopped the supply of US cotton to Europe, resulting in rising cotton prices, and a break in the circuit of capital. It was the equivalent of the NATO/EU boycott and sanctions against Russian oil and gas supplies, in recent times. European textile producers had to turn to other potential suppliers of cotton in India and Egypt. They also sought out ways to reduce waste, to counteract these higher costs.

But, as Marx describes, the real basis of rising prices, in aggregate, was not rising values/costs, but a falling value of gold, resulting from the discovery of new gold fields. It was only necessary for the value of gold to fall more than the average value of other commodities for prices to rise. As Marx describes in A Contribution To The Critique of Political Economy, that is not the only factor. Prices are measured against a given quantity of gold, which forms the standard of prices. However, the state can and does, over time, reduce this given quantity of gold, represented by the standard of prices, whilst retaining its name, such as £, $, F etc. So, even if the value of gold remained constant, prices would rise, if the state reduced this quantity of gold represented by the standard of price. In reality, what this means is that the standard of price represents a smaller quantity of social labour-time.

In addition, as set out in the introduction, the amount of social labour-time represented by the standard of prices, is a function of how many of these tokens are thrown into circulation. It does not matter whether these tokens are themselves made of gold or silver and other metals, or are paper notes. What does matter is whether they are redeemable for the specified quantity of gold. If they are, then any excess will be driven out of circulation, as it is redeemed for gold, and so, any inflation of the currency is curtailed. But, in such conditions, the state often responds by reducing the amount of gold represented by the standard of prices, so that owners of the individual tokens cannot exchange them at their previous nominal value. Consequently, the inflation of prices would not be reversed.

As Marx sets out, in Capital III, the Bank of England, in the 19th century, raised or reduced the quantity of notes and coins in circulation according to the requirements of the circulation of commodities, determined by the quantity and value of goods and services produced. However, as Marx and Engels also set out, in Capital III, it is not only the quantity of goods and services that determines how much currency is required. As well as the use of currency as means of exchange, C-M-C, currency is used as means of payment. In other words, there is credit, or a system of mutually cancelling debts. Currency is then only required to meet the amount of net debt resulting from these exchanges. If the amount of trade conducted on the basis of credit rises, then, less currency is required in circulation. If the amount of currency is not reduced, then, it is devalued and prices are inflated.

Back To Introduction

Forward To Part 2

Northern Soul Classics - I'm In A World Of Trouble - The Sweet Things

 

Friday Night Disco - Check Out The Groove - Bobby Thurston

 

Stalin and The Chinese Revolution, The Bloc of Four Classes - Part 3 of 3

As Trotsky described, in relation to China, how on earth does any of this tally with the fantasy of the war bringing “national independence”, or of it, or the government, being “anti-imperialist”?! Its clearly, just as much nonsense as the idea that Brexit brought national independence, rather than subordinating Britain to the power of the global ruling class, to an even greater extent, as, indeed, Truss found out. Mason notes,

“But with Ukraine entirely dependent on the “kindness of strangers” this poses two long-term risks to its sovereignty and democracy. First, it hands a veto over the terms of any peace deal to Ukraine’s funders: they could force Kyiv to the negotiating table with Putin at any moment they choose, simply by switching off financial support.

Second, it risks handing the design of Ukraine’s socio-economic model to the private sector interests that will assemble in London this week. It was this second risk that concerned most of the speakers at the Another Ukraine Is Possible event.”

Well, duh, as anyone who had studied the history of popular fronts, of social patriotism, in WWI and II, or any of the other so called national independence movements of the last century, including China, could have told them, by subordinating yourself to the bourgeoisie, and limiting your horizons to purely bourgeois-democratic, national demands that is what always happens. Nor are these risks “long-term”, as Mason suggests, that subordination of Ukraine to the interests of imperialism, is happening here and now! The whole of this irrelevant conference of bleating liberals, posing as socialists, was reminiscent of the various schemas put forward by the Narodniks, in Russia, in the late 19th century, and attacked by Lenin, because they are thoroughly utopian in character, divorced from the reality of a capitalist/imperialist state, and its interests, as against the, at best, fanciful demands of liberals and reformists.

From the start, Marxists should have opposed Zelensky/NATO's war, as well as opposing Putin's invasion. The task was to insist on the interests of Ukrainian and Russian workers, a program of democratic demands, in both countries, aimed at mobilising them against the corrupt, illiberal, undemocratic regimes, in both countries. It should have aimed at a mobilisation based on political strikes, formation of factory committees, and so on. To defend workers' interests, it should have insisted on:

• extension of workers' and trades union rights,
• arming of the workers, and training under the control of the factory committees, and workers' councils.

In other words, a programme based on the principles of revolutionary defeatism. If we would not have defended, let alone supported this government and state, prior to the start of shooting, there was no reason to do so afterwards, as Marxists pointed out, in 1982, in relation to The Falklands War.

But, other than in the form of empty statements, the social-imperialists and social patriots could advocate none of that, because, like Stalin's subordination to the KMT, they are subordinated to Zelensky and NATO, leaving the fighting of the war to them. The fascists and jihadists are smart enough to ensure that, across the globe, they only arm and support their own reactionary forces, but the social-imperialists have been notable in demanding that arms be sent not to Ukrainian workers to defend themselves, but to Zelensky and the Ukrainian capitalist/imperialist state, i.e. to the enemy of the working-class. Having done so, of course, those social-imperialists are then led to deny that the capitalist/imperialist state is the enemy of the working-class, and, as with Jim Denham, ridiculously claim that it is the defender of workers' interests! It is a direct repeat of Stalin and the Comintern's errors in the Chinese Revolution, and its arming and support of the bourgeois nationalist government of the KMT, repeated again in The Spanish Revolution, and, in various forms, in every subsequent bourgeois nationalist movement.

But, the social imperialists, even if they had wanted to, could not have sent arms directly to Ukrainian workers, because those Ukrainian workers are not organised, independently, in revolutionary, military units, able to receive and distribute such weapons, but are themselves subordinated to the Ukrainian state and its military. The social patriots and social-imperialists could not organise such independent, revolutionary, military units, because their whole program has been based on a subordination to Zelensky/NATO, and its war against Putin.

Of course, had they actually have been adopting a Marxist position, based upon permanent revolution and revolutionary defeatism, in Ukraine, and had been successful in building such revolutionary units, defending workers interests, as opposed to the interests of imperialism and the Ukrainian oligarchs, they would have soon found opposition to them trying to send arms directly to Ukrainian revolutionaries, from their own imperialist states. Indeed, Ukrainian workers, in such conditions, would have found that not only would Zelensky's government have been waging the kind of class war measures listed above against them, of wage cuts, attacks on trades union rights etc., but would have been unleashing the Nazi paramilitaries against them too, to disarm them, and showing, thereby, the real class basis of the war, as a war for the interests of imperialism.

“In the rope placed around the workers by the bourgeoisie the threads (“paragraphs”) favourable to the workers are traced. The shortcoming of the noose is that it is tightened more than is required “by the interests of defence” (of the Chinese bourgeoisie). This is written in the central organ of the Comintern. Who does the writing? Martynov. When does he write? On February 25, six weeks before the the Shanghai bloodbath.” (p 263)

Such is the nature of the way workers' are “defended” by the capitalist state and imperialism, of course, “for its own interests”.

Back To Part 2

Forward To 2. The Perspectives of The Revolution According To Stalin

Back To Table of Contents

Value, Price and Profit, Introduction - Part 7 of 7

In this pamphlet, Marx covers all these issues, looking at the difference in labour supply in the US and Europe, and its effect on wages and prices, for example, but also the effect of the new gold discoveries, and inflation of prices due to the consequent fall in the value of money. But, he also covers the response of capital, the role of competition and so on. For example, as he sets out, as early as 1849, British agriculture faced labour shortages, because large numbers of workers were drawn not only into the better paid industrial jobs, but also into the huge expansion of construction jobs on the railways, and other infrastructure projects. Agricultural wages rose, in response, but British farmers could not raise prices, because, after the repeal of the Corn Laws, and associated tariffs, they had to compete against cheap agricultural imports from Europe. As with the US that faced labour shortages, the response of British farmers was to engage in technological innovation, introducing machines to replace labour.

By 1865, it was not just agriculture that faced labour shortages, but the economy as a whole. The consequence was rising nominal wages. But, the new gold discoveries also reduced the value of money, leading to an inflation of prices, as firms sought also to protect money profits against these rising money wages. The period of prosperity, begun after 1843, had turned into a period of boom, in the 1850's, as wages rose, fuelling more sharply rising aggregate demand, and, now, in 1865, had culminated in a period of crisis, as those rising relative wages squeezed profits, signifying an overproduction of capital. The same sequence was seen, as the period of prosperity, begun in 1949, turned into boom, between 1962-74, and into crisis, after 1974, before entering the period of stagnation from the mid-1980's to 1999.

In the 19th century, the period of crisis, after 1865, turned into the period of stagnation that ran until around 1890, and has been termed the First Great Depression. During that period of stagnation, new technologies were introduced (intensive accumulation), raising the rate of profit, and created the conditions for the new upswing after 1890. which brought a new, massive growth of the working-class, trades unions, and workers' parties. A similar thing occurred in the 1980's/90's stagnation that created the conditions for the new global upswing after 1999, and the sharp rise in the size of the global working-class.

Understanding these mechanics, described by Marx, in this pamphlet, is vital to understanding the conditions of the current period of upswing (though for the last 15 years that may not have seemed to the the case, in developed economies) and its manifestation, once again, in a strengthening of the social weight of labour, and attempts to defend profits against rising wages, via the use of inflation produced by central banks.

For this series of posts, I am working from the 1951, Allen and Unwin Edition of the work, and all page numbers relate to it.

Back To Part 6

Forward To Preliminary

Back To Table of Contents

Starmer's Zionist Allies Cite Hitler As Inspiration For Their Genocide In Gaza

Anyone inside the Labour Party that has mentioned Zionism and Nazism in the same breath has made themselves subject to immediate expulsion, as the equation of anti-Zionism with anti-Semitism, has run riot, and even just to question that equation, has itself laid you open to charges of anti-Semitism, and expulsion. Yet, it is a matter of historical fact that Zionism and Nazism are related, both ideologically, and historically. Just as, in the post-war period, Zionism and Stalinism were ideologically and historically linked, for a short period, before Zionism became entirely dependent upon US imperialism, for its survival. The Zionist terrorists, such as The Stern Gang, attempted to ally themselves both with the Nazi regime in Germany, and Mussolini in Italy.

To quote Wikipedia,

“Early Zionists were the primary Jewish supporters of the idea that Jews are a race, as it "offered scientific 'proof' of the ethno-nationalist myth of common descent".[55] Zionist nationalism drew from a German ethnic-nationalist theory that people of common descent should seek separation and pursue the formation of their own state.[50]”

Anyone paying attention, can point to numerous statements, however, by Zionist politicians in the government, in Israel, today, whose, racist and genocidal intent is unmistakable, in respect to the Palestinians, not just in Gaza, but in the rest of Palestine. Indeed, its clear that consistent with Zionism's declared goal of creating a Greater Israel, “From The River To The Sea”, as an exclusively Jewish state, and, therefore, different to every other state on the planet, a state that is by its definition, exclusivist and racist, the Zionists do not see their activity as limited to just continuing to steal, and forcibly evict Palestinians, but also other Arab populations, in Jordan, Lebanon etc. This is not a matter of just some bad actors in the current, Netanyahu government, but is central to the ideology and raison d'etre of the Zionist state itself.

But, now, that ideology is being clearly implemented in front of our eyes, as the Zionist state commits genocide against the people of Gaza. And, now, we have, not a member of the Labour Party drawing the links between this Zionist ideology, and its genocide in Gaza with Nazism, but a Zionist in Israel, themselves openly proclaiming it, as shown in this video. 

Unfortunately, Owen Jones still refuses to draw the inevitable conclusion from all of this, and continues to declare that Israel has lost in Gaza! In what surreal world can that be described as the case. In order to draw that conclusion, you would have to accept the Zionist claim that their aim in their attack on Gaza, was to destroy Hamas, and to retrieve the hostages. But, that was never the aim of the invasion. As in all such wars, it simply provided a pretext for it.

As I have set out, previously, the aim of the invasion, and subsequent genocide is not to destroy Hamas, and certainly not to rescue its hostages, but is precisely, genocide, to wipe out the Gazan population, firstly by military force, and, now, by allowing the survivors of it, to die from famine, pestilence and plague. They will either die, or be driven into the sea, or into Sinai, Lebanon, Jordan and Syria, where their presence will, again, be used by the Zionist regime, to wage its next set of wars of annexation. Already, the next one is being lined up in Lebanon, and those that think that Hezbollah will be able to resist it are, again, deluding themselves, as the Zionist state, backed by US imperialism, will simply overwhelm them with air power, whilst sitting behind the supposedly “defensive” Iron Dome, and Patriot Missile systems.

Yet, unlike Starmer's immediate condemnation of Putin as a war criminal, he continues not only to fail to condemn Zionist war crimes and genocide, but continues to argue for it to be armed, continues to act as apologist for it, and to expel any Labour member that dares point to it, whilst bureaucratically foisting Zionist apologists on to local Labour Parties ahead of them being slotted into his incoming Blue Labour government, as set out in this video. 

Stalin and The Chinese Revolution, The Bloc of Four Classes - Part 2 of 3

The “Left”, which has subordinated itself, and the working-class to Zelensky and NATO, in a Popular Front, is left bleating that Ukrainian labour and civic organisations have been given no role in that London conference of imperialist jackals. Why would any Marxist imagine they would? Its purpose is to discuss how best Ukraine's workers and resources can be exploited by imperialism! Mason, reported from an “activist” conference of those excluded, as, of course, they were bound to be excluded, despite their slavish subservience to the war being undertaken by Zelensky and NATO.

“The participants in the event, entitled Another Ukraine Is Possible, believe that, unless they can claw their way into the official reconstruction process, it will unleash a bonanza of privatisation and deregulation, leading to the Ukraine’s ultimate economic dependency on the West and the erosion of workers’ and women’s rights.”

But, why would a right-wing, anti-worker, capitalist regime, such as that of Zelensky, allow them into that process, especially when they are supporting his regime, without any quid pro quo, on his part? Of course, another Ukraine is possible, just as another EU was possible, and another China was possible, but not on the basis of the impotent bleating of a labour movement that limits itself to, and subordinates itself to the interests of the liberal bourgeoisie! As Trotsky put it, in relation to the wider context of war, and the subordination of workers interests to the bourgeoisie and its state, on the basis of the delusion that somehow, workers, could determine the basis of such wars,

"Where and when has an oppressed proletariat “controlled” the foreign policy of the bourgeoisie and the activities of its arm? How can it achieve this when the entire power is in the hands of the bourgeoisie? In order to lead the army, it is necessary to overthrow the bourgeoisie and seize power. There is no other road. But the new policy of the Communist International implies the renunciation of this only road.

When a working class party proclaims that in the event of war it is prepared to “control” (i.e., to support) its national militarism and not to overthrow it, it transforms itself by this very thing into the domestic beast of capital. There is not the slightest ground for fearing such a party: it is not a revolutionary tiger but a trained donkey. It may be kept in starvation, flogged, spat upon – it will nevertheless carry the cargo of patriotism. Perhaps only from time to time it will piteously bray: “For God’s sake, disarm the Fascist leagues.” In reply to its braying it will receive an additional blow of the whip. And deservingly so!"

(Trotsky - An Open Letter to the French Workers)

But, the USC and its affiliates do not even call for the Azov Battalion etc. to be disarmed, and even attack any suggestion of the role of the fascists in Ukraine, as merely Putin's propaganda! Paul Mason quoted, from the conference of these trained donkeys.

“Oksana Holota, a representative of the Confederation of Free Trade Unions of Ukraine (KVPU) told delegates:

“Russia is killing, destroying and annihilating Ukraine. Even before the full-scale Russian invasion, the level of social and material security was low. Since the start of the war income levels have decreased significantly. Social security has been removed, wages cut, hours increased and inflation is up. According to the World Bank the number of people below the poverty line is projected to hit 50%...

Unfortunately our union is currently seeing the liberalisation of labour laws: the adoption of changes to labour legislation that do not comply with international labour standards, which can lead to employers diktat. These changes look intended to destroy the union movement – and we oppose the adoption of such laws – and we ask for support.””

He also described the state of Ukraine's economy resulting from NATO/Zelensky's war with Russia.

• Fall in GDP: 29%
• Inflation: 30%
• Real wage decline: 11%
• Unemployment: 21%

Back To Part 1

Forward To Part 3

Of Course Workers Have Savings!

Keir Starmer has made the ridiculous comment that workers do not have savings. Of course, workers have savings, as Marx set out, even, 150 years ago, when they were far less affluent than they are today. Starmer's comment is a reflection of the extent to which he has adopted the perspective and ideas of the reactionary petty-bourgeoisie, and its attendant layers within the lumpen sections of society, as he has gone crawling on his knees in search of their votes.

If Starmer reads “The Ragged Trousered Philanthropists”, by Robert Tressell, he will come across the passage in which the workmen, during a lunch break are engaged in conversation, and the socialist, Owen, explains to his workmates that these savings are built up during periods when economic times are good, and employment is at high levels, pushing up wages, but that the workers need these savings, precisely because, those good times are inevitably followed, under capitalism, by hard times, when unemployment rises, and so where they must use those savings to compensate for having no wages, or reduced wages, which do not cover their outgoings. In China, where there is no comprehensive socialised welfare system, workers typically save half their wages, precisely for this purpose, as an insurance fund to cover not only their requirements in old age, but to cover periods of sickness and unemployment, as well as unforeseen health or social care costs.

Even in Britain, the DWP allows workers to have savings of up to £6,000 without it affecting the payment of means tested benefits, and that figure has been at around that level for about twenty years, meaning that, just to adjust for inflation, it should, today, be around £20,000.

It was always the case, prior to Thatcher removing credit controls, in 1987, so as to blow up asset price bubbles, and the attendant debt, that workers had to save significant sums, in order to accumulate around a 10%, deposit on a house, before a building society would give them a mortgage. Of course, prior to the asset price bubbles created by Thatcherism in the 1980's, the consequence was, also, that the average house price was itself much lower, making it easier to accrue that 10% deposit in absolute terms. When I bought my first, house, in 1977, for example, it cost £5,500, which was about the average, and was equal to approximately 2 years wages. Today, the average house price is around £300,000, and equal to around 10 years wages! That is a direct result of that asset price inflation, and Starmer's current housing policies of continuing with the Tories Help To Buy scam, will only make it worse.

The reason, we have a housing problem, stems from this asset price inflation, and treating houses as an object of speculation, rather than as a durable consumer good, needed for shelter. The problem is not one of supply, but of this speculative monetary demand. Compared to the 1970's, for example, there are 50% more houses, per head of population, today, which also demolishes the racist arguments of Reform et al, that housing shortages are a result of immigration. In 2017, the FT reported on the findings of Oxford Economics,

“that net additions to the housing stock have exceeded the growth of households.”

And,

“house prices have jumped especially in the capital as interest rates fell and not because there is insufficient housing.”

It is not the lack of supply that has pushed up house prices, but inflated monetary demand. That comes from those who buy houses, specifically for speculative purposes, but also, because single people who, prior to the 1980's, would never have considered acquiring their own home, rather than living with their parents, until they married, in their mid-twenties, now feel they must do so, or see the price of those houses, rise ever higher out of their reach, and so, by adding to that demand, at current exorbitant prices, contribute to the further inflation of that bubble. Even as late as 1971, married couples made up 70% of households, with single person households making up just 21%. Today, households made up of married, or co-habiting couples, comprise only 52% of households, whereas the number of single person households has rocketed to 41%.

The Tory media have claimed that the motivation behind Starmer's statement is that he is coming for workers' savings to tax, as he has cut off all other avenues of taxation even to fund his rather feeble spending plans, which already imply real terms cuts in government spending. Maybe, but unlikely, and doomed to failure if that is the case. 

As a result of western governments already undermining the security of global financial deposits, by first freezing Russian and other assets, and then, seizing the interest on those assets, they have created a deterrent to purchasing their debt instruments, leading to an increase in demand for gold, and other physical assets. Already, foreigners, in London, are moving out, and moving their financial assets out, ahead of the election. That means that the supply of potential money-capital is reduced, at a time, when global interest rates, and UK interest rates, in particular are rising, as the demand for that money-capital rises faster than supply. The last thing a Starmer government will want is to exacerbate that by encouraging UK savers to withdraw their savings, and buy gold, or other such physical assets, whose prices are rising.

More likely, is that, on the basis of his argument, rather than raising, to adjust for inflation, the amount of savings that workers can have, before they are denied means tested benefits, he will reduce it, or remove it altogether. That would deny large numbers of workers entitlement to benefits, which would save the government a huge amount, as they seek to cut public spending, especially as, the number of workers claiming sickness benefits has risen dramatically, due to the results of austerity on the health service, and the consequences of lockdowns on denying workers required treatment for chronic conditions, such as cancer and heart disease, not to mention the crippling effects of Brexit, on the health service, effects that the Brexit supporting Starmer is set to continue.

The idea that workers do not have savings is nonsense, not only for the reasons set out above, but, because as Marx sets out, in Capital I, II, and III, it is necessary for them to have such savings. Wages are the phenomenal form of the value of labour-power, that is to say the form it takes, in the real world, based on the supply and demand for it, and the consequent determination of a market price for it. Taken, in aggregate, it is then true that this value of labour-power is equal to what the worker must spend, over their lifetime, which leaves no surplus as savings. But, in just the same way that, as Owen described, in the passage cited above, workers must save during the better times, to cover their expenses during the lean times, this applies more generally, over the workers' lifetime.

As a child, the worker has no wages, but must consume.  Indeed, that consumption tends to be proportionately higher, because, in addition to food, shelter, and clothing they require childcare and they require education. These expenses are paid out of the wages of their parents, i.e. the wages of these adult workers must exceed their own consumption, in order to fund the consumption of their children, who physically represent the reproduction of their labour-power as the next generation. In turn, those children, who have consumed more than they earned (and so were in debt), when they become adults, obtain more in wages than required for their own consumption (have savings), which finances the consumption of their own children.

Similarly, when workers are too old to work, and so have no wages to cover their consumption, they must have savings in order to be able to continue to consume, as we do not expect workers to simply be killed off or scrapped, like a useless machine, when no longer working. Indeed, again, those savings need to be considerable, because, the older worker tends to require more for health and social care, as well as more for heating the home, and so on. It does not matter whether this saving is their own, held in bank deposits and so on, or is held by some private or social insurance fund.

The point is that it is savings, an excess of wages over current consumption, that the worker must accrue during earlier parts of their life. In fact, given the tendency of the capitalist state to purloin such social insurance contributions, and taxes from workers, and to not keep its end of the bargain when it comes to paying out pensions and benefits, its no wonder that Marx and Engels recommended that workers not trust it, and its welfarist systems, but to build up their own labour movement owned and controlled social insurance funds. Again, what can be seen behind Starmer's words, is the idea of utilising that welfarism, and benefits system as a means of disciplining workers, at a time when they have been rising from their knees. Welfarism is a means of ensuring that a section of the working-class is reduced to a state of serf-like dependency on the state.

Even in terms of current consumption, it has always been necessary for workers to have savings, as Marx described. The first industrial wage labourers, like all labourers since, were paid their wages in arrears. But, they had to consume in the intervening period. How could they do that? They had savings, because they did not simply come into the world, ready-made as wage labourers. Prior to that condition, they were independent commodity producers, or self-sufficient peasant producers.

As Marx sets out in Capital II, it is this, which means that they have “savings”, in the form of either money, or stocks of consumption goods, on which to subsist, until such time as they are paid their wages. Indeed, as Engels describes in his Supplement to Capital III, the reason that these independent commodity producers, are forced to become wage-labourers, in the first place, is not an inability to reproduce their own means of consumption, but an inability to reproduce their own means of production. That is why capitalist production begins in those spheres where the organic composition of capital is high, because either it requires a lot of expensive fixed capital, or a lot of circulating constant capital.

The independent commodity producers, even in the towns, continued to have small plots of land, so that they could continue to provide themselves with food and shelter, and so on, from their own and family labour, but what they could not reproduce, when they could not sell their commodities, was the value of the constant capital. The merchant capitalists that previously sold these means of production to them, now provided them free, whilst only paying the labourer for the value of their labour-power.

Its for this reason that capitalist production commences in the towns, rather than in agriculture. Eventually, of course, the petty-bourgeois producers, the small independent commodity producers, lose all possibility of, also, reproducing their own means of consumption, as Lenin describes, in relation to Russia. The small plots of land, and so on, attached to their cottages disappear, and they must sell all of their output, not only to reproduce the means of production contained in it, but also to reproduce their own labour-power/means of consumption.

Always struggling to do so, and to compete against bigger, more efficient capitals, it is this which creates the miserable condition of the petty-bourgeoisie, always facing failure and collapse into the proletariat, which determines its outlook, and its that class outlook that Starmer and Blue Labour has adopted, as it has abandoned the actual working-class, and gone in search of the votes of that reactionary petty-bourgeoisie, and its attendant layers amongst the lumpen proletariat, and backward, atomised, declassed sections of the population.

It is why that petty-bourgeoisie, and those attendant layers pushed through Brexit, and supports all of those elements of the ideas of Truss that came to grief when they confronted reality, and its why Starmer has also collapsed into those reactionary and delusional ideas. That my contemporary Stokie, John Caudwell, who started off with a similar working-class background to my own, but who became a petty-bourgeois businessman, and imbued its world-view, long before he struck lucky with selling mobile phones at just the right time, made him a billionaire, still holds those same reactionary, petty-bourgeois views, and feels at home with Starmer and Blue Labour.

Value, Price and Profit, Introduction - Part 6 of 7

As I have described, elsewhere, whilst economic stagnation produces rising rates of profit, greater supply of money-capital, falling interest rates, and rising asset prices, economic booms produce the opposite effect, and eventually crises. But, at the start of this latter process, the liquidity previously tied up in speculative asset purchases is released.

If the price of land rises, with other assets, from £1,000 per hectare to £2,000 per hectare, a farmer buying land to farm ties up an additional £1,000 of their capital unproductively. This is £1,000 that adds nothing to the value of their output, and is £1,000 that, otherwise, could have been used to buy seed, chemicals, equipment and labour-power. But, when, instead, rates rise, and asset prices, correspondingly, fall, the reverse is true. The farmer has £1,000 of capital released, when they buy land, and so their real capital accumulation, also, finds this flow of additional liquidity to fund it, irrespective of any change in currency supply by the central bank.

The same is true with the fall in other asset prices. As house prices fall, the cost of workers' shelter falls, reducing the value of labour-power, and so wages, releasing variable capital, but also releasing revenue previously expended, unproductively, on inflated house prices (rents), and now available for consumption of actual commodities.

As workers' pensions are funded from the revenues produced by bonds and shares, purchased by workers' and employers contributions, to buy the same quantity of bonds/shares, requires higher contributions, which raises the value of labour-power, reducing profits and diverting revenue and capital unproductively. But, as interest rates rise, and asset prices fall, the opposite occurs. Workers' and employers' contributions buy more bonds and shares, so funding pensions is cheaper. The revenues previously diverted into that unproductive activity are then released to fund consumption and real capital accumulation.

So, at the start of a new period of boom, for example, as occurred from around 1902 or 1962, (and from around 2012, but slowed as a result of austerity etc.), as the economy goes from simply utilising the excess supplies of labour created during the period of stagnation, to one in which relative labour shortages begin to develop, and nominal wages rise, firms are able to pass on the cost of these higher wages in higher prices, as liquidity increases via these various means – commercial credit expands, the velocity of transactions/circulation rises, liquidity is released from falling asset prices. But, again, it is not that rising wages, or other costs, are the cause of those rising prices. If central banks compensated for all of these other forms of additional liquidity, prices could not rise, the standard of prices would not be devalued.

If wages rise, as Marx shows, this does not increase the value of commodities, it simply reduces profit. The value of commodities only rises if productivity falls. If the value of constant capital (materials, fixed capital) rises, that does raise the value of commodities, but, generally, when output expands, this produces economies of scale and so higher, not lower levels of productivity, and so also a reduction not rise in the value of constant capital. The higher prices are not a consequence of higher wages or other input costs, but of inflation, of a fall in the value of the standard of prices due to excess liquidity in circulation.

In fact, just as the error, in 1847, was curtailing the currency supply, at a time when crop failures caused a rise in commodity values, so too, when economic activity expands rapidly, central banks should increase currency supply at a proportionally slower rate, or even curtail it, to compensate for this increase in liquidity from commercial credit, and so on, if they seek to maintain price stability. But, of course, they do not. At all times, when rising social productivity means that the unit values of commodities are falling, and so should result in falling prices, they inflate the currency supply to ensure rising prices, because, otherwise, nominal wages would also have to fall, provoking a backlash from workers. When relative labour shortages begin to cause not only nominal wages to rise, but also relative wages, central banks, even more, have to accommodate rising prices, to cushion the falls in relative profits, by allowing an inflation of the currency supply.

Back To Part 5

Forward To Part 7

Reform and That £20,000 tax Threshold

The Manifesto, or "Contract" as Reform branded it, was not a serious document, nor intended to be.  Like the whole of their approach, it was intended to simply get headlines, and be disruptive, but there are elements of it that expose just how bankrupt the "centre" politics of Blue Labour, have actually become, as the material basis of that centre-ground, in the real economy, has collapsed.

Take, for example, the position of Blue Labour on not removing the two-child limit on Child Benefits.  Reform say, they would remove it, and unlike Blue Labour, they would also significantly increase the Minimum Wage.  Reform can say it, because they know they will jot have to implement it, and it effectively challenges Blue Labour's attempts to portray itself, still, as any kind of social-democratic party.

Now, I've set out before why Marxists do not support these kinds of welfarist measures, for example, as Marx set out in The Critique of The Gotha Programme.  Rather than systems of bureaucratic taxes and benefits, the much simpler measure is to have a Minimum Wage, adequate to the reproduction of the working-class, and its up to workers then, how they spend that money.  However, if you are a liberal/social-democratic welfarist, who does support such concepts, the quickest way of reducing child poverty, here and now, which is what Blue Labour claims to want, is to raise Child benefits, and to scrap the two-child limit, as well as to raise the Minimum Wage.  The fact that, Reform propose this malevolently, does not mean that its wrong.

But, similarly, Reform have proposed raising the Income Tax threshold to £20,000 a year.  It would cost a lot of money, and, of course, Blue Labour, along with the Tories and Liberals, therefore oppose it, even though Blue Labour can, at the same time, propose spending billions more on armaments, and fighting imperialism's war in Ukraine against Russia etc.  However, a simple bit of reason shows that the proposal is eminently sensible, and only seems irrational and extravagant, because the economic model of conservative social-democracy, upon which that so called "centre-ground" is based, has collapsed!  It is only so expensive to do, because over the last 30 years, and the last ten years, in particular, tax thresholds have not risen in line with inflation, bringing more and more low wage workers into the tax net, and imposing ever more tax on them.

In what rational world does it make sense to have a Minimum Wage of £10 an hour, which for a 40 hour week, is £20,000 a year, but, then to reduce this minimum significantly by taking a third away from it in Income Tax and National Insurance?!!!  The current tax threshold is £12,000, which means that £8.000 is subject to 20% Income Tax, or £1,600, on top of which thee is National Insurance, which is just Income Tax by another name, and should be scrapped, to save the cost and bureaucracy of administering it.

It clearly makes eminent sense that a Minimum Wage, should be just that, and not reduced by tax and national insurance, so that, even were we to accept that £20,000 a year is a reasonable Minimum Wage, which it isn't, and should be at least £30,000, so that all the other nonsense of the cost of collecting tax from workers to, then, have the cost of paying out to workers as child and other benefits could be ended, it clearly makes sense to have the Tax threshold set at that Minimum level, just as also, it should exceed the level of state pensions.

That would not only save the cost of those benefits, built would also save the cost of the bureaucracy required to take in taxes from workers with one hand, only to employ more bureaucrats to assess and pay out benefits to workers with the other, a lot of which don't get claimed, put serf-like conditions on claimants, and can be cut or removed when the government of the day decides its an easy way to save money.

No one should be taken in by the flim-flam of Fartage, but that doesn't mean accepting the nonsense of the likes of Starmer and Reeves either.

Stalin and The Chinese Revolution, The Bloc of Four Classes - Part 1 of 3

“The Chinese revolution of 1925-27 remains the greatest event of modern history after the 1917 revolution in Russia. Over the problems of the Chinese revolution the basic currents of Communism come to clash. The present official leader of the Comintern, Stalin, has revealed his true stature in the events of the Chinese revolution. The basic documents pertaining to the Chinese revolution are dispersed, scattered, forgotten. Some are carefully concealed.” (p 261)

This work, by Trotsky, acts as a useful basis of a summary of all the preceding history and analysis.

1. The Bloc of Four Classes

The policy of Stalin, and the Comintern, was based on the concept of The Popular Front (often misleadingly termed the national united front). That is, it was based on class collaboration between the proletariat and bourgeoisie, in pursuit of the bourgeois-democratic, national revolution. This collaboration also draws in the peasants and petty-bourgeoisie. The same strategy was put forward, by the Stalinists, centrists, Menshevists and social-democrats as the basis of opposing fascism, in the 1930's, following the disaster of the Third Period, and consequential victory of Hitler. It, necessarily, involves the workers being subordinated to the bourgeoisie, and even just bourgeois-liberal politicians, for fear of them dissolving the alliance.

The Stalinists do not deny that the bourgeoisie only make this alliance “for their own interests”, nor that, at some point, they will break it, but still insist on the need, until then, to ally with them, to refrain from criticism of them, to play up their revolutionary credentials, and so subordinate the workers to them, and, thereby, disarm and disorientate the workers. It is the same stance taken by the Ukraine Solidarity Committee, in allying with Zelensky's corrupt, right-wing, capitalist government, and NATO, and of the inane comment of Jim Denham, of the AWL, that imperialism and the capitalist state, “defends workers' interests”!

Trotsky quotes an article from International Communist, March 1st 1927, setting out this subordination.

“On April 10 [1927], Martynov, in Pravda, most effectively and in a quite Menshevik manner, showed the correctness of the official position which insists on the necessity of retaining the bloc of four classes, on not hastening to overthrow the coalition government, in which the workers sit side by side with the big bourgeoisie, not to impose 'socialist tasks’ upon it prematurely.” (p 263)

In Ukraine, the government of Zelensky, supported by the USC, Ukrainian social-patriots, and western social-imperialists, openly attacks Ukrainian workers rights, and their trades unions. All of the above are left able, only, to bleat, impotently, about these attacks, carried out by their bourgeois allies, unable to effectively mobilise the workers against them, for fear of breaking their one-sided alliance with Zelensky and NATO standing behind him.

Indeed, as I write this (a year ago, in June 2023), a conference is taking place, in London, on 'the reconstruction of Ukraine' after the war, which, currently, shows no sign of ending with the victory of Ukraine, and its NATO backers, still less the fantasy that Russia would be made to pay (Versailles style) for that reconstruction.

In fact, such is the failure of NATO, and its G-7 economic manifestation in that regard that it has had to undermine its own international rules based order, and essentially seize Russian assets held in western countries, by using the interest on those, previously frozen assets, as a pot out of which to loan $50 billion to Ukraine.  That is something not even done during WWII, where the western allies maintained normal relations with the German central bank throughout.  That opens the door to Russia, China and others to follow suit and simply seize western assets in their own countries.  It means that, immediately, China and other countries (and their citizens and corporations) are likely to be more wary about buying western bonds or other paper assets, as the form in which their foreign reserves are held.  Already, that is one reason that countries have been returning to gold, for such reserves, sending the price of gold to new highs, whilst this restriction on bond buying leads to interest rates rising to higher levels than they would have been.

What the conference (which excluded representatives from Ukrainian workers or their organisations) is really about, as one of the main backers of the USC, Paul Mason, was forced to admit, is that it is preparing the ground for the US and EU imperialist capital to take advantage and move into Ukraine, to exploit Ukrainian workers and Ukrainian natural resources. 

That is in conditions where their leaders have debased themselves, in their subordination to Zelensky, where their organisations have been destroyed by Zelensky, and anti-worker laws introduced, under cover of a bourgeois-nationalist war. That same corrupt, anti-worker government has strengthened its ties not only with imperialism, but also with Ukrainian Nazis like the Azov Battalion and Right Sector, themselves connected to international organisations of white supremacists and other such paramilitaries. It is in conditions where, despite the population falling by huge proportions, as Ukrainians left the country, unemployment has soared.  In 2013, the unemployment rate was 6.3%, and rose to 10.6% at the end of 2014, following the coup, and stayed around that rate until the end of 2019, where it had fallen to 7.2%.  Since, then, it has doubled to 14.5%, with the actual number of unemployed rising from 2 million in October 2021 to 2.8 million in 2024.

Back To A Retreat In Full Disorder

Forward To Part 2

Back To Table of Contents