Value, Price and Profit, Part I - Production and Wages

I – Production and Wages

“Citizen Weston's argument rested, in fact, upon two premises: firstly, the amount of national production is a fixed thing, a constant quantity or magnitude, as the mathematicians would say; secondly, that the amount of real wages, that is to say, of wages as measured by the quantity of the commodities they can buy, is a fixed amount, a constant magnitude.” (p 10)

The first premise is clearly false. The quantity of national output changes, not only year to year, but, also, day to day. Firstly, capital is accumulated, and, thereby, more labour is employed, and the additional labour produces additional output. Secondly, the productivity of labour changes, as a result of division of labour, economies of scale, and the introduction of labour-saving technologies.

Nor can it be said that, although the quantity of output changes, the value of that output remains constant. If more labour is employed, it preserves and transfers a greater value of previously produced constant capital into current production, as well as creating a greater quantity of new value.

“Year after year you will find that the value and mass of production increase, that the productive powers of the national labour increase, and that the amount of money necessary to circulate this increasing production continuously changes.” (p 10)

This variable nature of the quantity and value of output is not affected by changes in wages.

“But if before the rise of wages the national production was variable, and not fixed, it will continue to be variable and not fixed after the rise of wages.” (p 11)

On the basis of his assertion that the level of wages is a constant, Weston argued that, although workers could enforce a rise in wages, it would provoke an inevitable response. But, Weston's argument, here, was inconsistent. He recognised that employers did enforce reductions in wages, but, equally, if wages are fixed, that should also provoke a reaction. In which case, that reaction could be workers forming unions to demand a wage rise! Yet, Weston argued against workers doing so.

In that case, Weston had to logically renounce his claim that wages are fixed, and argue that, whilst they can fall, they cannot rise, which would be a variation of the Lassallean Iron Law of Wages. That makes the determination of wages purely subjective, and a function of the greed and will of the capitalists.

“If in one country the rate of wages is higher than in another, in the United States, for example, than in England, you must explain this difference in the rate of wages by a difference between the will of the American capitalist and the will of the English capitalist, a method which would certainly very much simplify, not only the study of economic phenomena, but of all other phenomena.” (p 12-13)

But, such simplification comes at the expense of analysis and understanding, because, in reality, it explains nothing.

“... we might ask, why the will of the American capitalist differs from the will of the English capitalist? And to answer the question you must go beyond the domain of will. A person may tell me that God wills one thing in France, and another thing in England. If I summon him to explain this duality of will, he might have the brass to answer me that God wills to have one will in France and another will in England. But our friend Weston is certainly the last man to make an argument of such a complete negation of all reasoning.” (p 13)

In fact, an analysis would show that, irrespective of workers' forming unions, the determination of wages is far from solely the product of the capitalist's will. Wages are a market price for labour-power, and, as with the market prices of all commodities, are determined by supply and demand, which causes the market price to fluctuate above and below the market value/price of production of the commodity.  As Marx sets out in Capital III, Chapter 12, the price of production of labour-power is, then equal to the price of production of the commodities required for its reproduction.

“The history of these Unions is a long series of defeats of the working-men, interrupted by a few isolated victories. All these efforts naturally cannot alter the economic law according to which wages are determined by the relation between supply and demand in the labour market. Hence the Unions remain powerless against all great forces which influence this relation. In a commercial crisis the Union itself must reduce wages or dissolve wholly; and in a time of considerable increase in the demand for labour, it cannot fix the rate of wages higher than would be reached spontaneously by the competition of the capitalists among themselves.”

(Engels – The Condition Of The Working Class, Chapter 10)

An analysis requires consideration of the determination of the value of labour-power, and of the factors that lie behind the interaction of supply and demand, for it.

“The will of the capitalist is certainly to take as much as possible. What we have to do is not to talk about his will, but to enquire into his power, the limits of that power, and the character of those limits.” (p 13)

It is always the case that, in the end, capital has more power than labour, because capital only employs labour on condition that it provides a certain quantity of free labour. Capital can always be withheld, where that is not the case. That does not mean that capital ceases to be advanced, simply because a rise in wages results in a fall in the proportion of profits. For one thing, a fall in the proportion of profits is not the same thing as an absolute fall in the amount of profits. Weston, on the basis of his assumption, of a fixed amount of production, was inevitably led into that fallacy. But, if output is £100 million, with £50 million comprising constant capital, £25 million wages, and £25 million profits, the amount of profit will still rise if output rises to £200 million, comprising £100 million constant capital, whilst wages rise to £60 million, leaving £40 million for profits.

Before, wages and profit, both accounted for 50% of the new value created, whereas, now, wages have risen to 60% and profits have fallen to 40%. But, in absolute terms, profits have still risen, and competition between firms means that they are led to continue to advance capital in search of this greater mass of profits. Indeed, the conditions in which wages would rise, in this way, are those of the boom and crisis phases of the long-wave cycle, in which consumption is growing rapidly, raising aggregate demand, which leads firms to compete for market share. It is these conditions, in which labour becomes relatively scarce, pushing up wages. It is only when this culminates in profits no longer increasing, or even falling, as additional capital is advanced, that this results in a crisis of overproduction of capital, and its sudden withdrawal.

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Brexit Is Central - Part 2 of 6

In the proposals put forward by Labour and Tories, its clear that they both contain huge fiscal black holes of around £20 billion, to begin with, even before their miserly plans for additional spending are added, which, without additional taxes or borrowing, means more austerity, more cuts to spending, more real wage cuts for workers. Already, Starmer has made a point of saying that he will not pay doctors the 35% wage rise needed just to get them back to where they were in 2008! That is an indication of the attacks that workers can expect from a Blue Labour government, from day one, and is why workers need to organise now, in the workplace, in the unions, to resist the attacks of Starmer and Blue Labour. The unions should start, now, not only preparing for that industrial struggle, but also engage in the political struggle, inside the Labour Party, to get shut of the Tories like Starmer, Streeting and co.

The NHS is in a state of collapse, and what Starmer's refusal to pay doctors means is a willingness for it to collapse even faster, as those doctors move into the private sector, or overseas. That is no problem for Blue Labour whose leading members like Streeting have bragged about privatising large parts of the health service, but others of whom are already openly connected to those private companies set to profit hugely from that privatisation. The corruption in the Tory party, as seen with the provision of contracts during Covid, will be nothing compared to that in Blue Labour, as these careerists and parasites force their snouts into the trough. 

So, rather than the economy getting the kind of fiscal stimulus that the US has had in the last few years, the UK looks set for further significant austerity, taking demand out of the economy, and slowing it even further. However, there are contradictions, here, too, as I have set out before. For statists, the privatisation of the NHS, and other areas of state capitalism is significant, in its own right. However, the reality, in recent times, has been not only that such state capitalism failed to deliver for workers as consumers, but it was also even more oppressive and exploitative of them as employees, too. Despite the continued high levels of unionisation, it was in the state sector that governments used their power to hold down wages, and to impose cuts in pension provision and so on, whilst, in the private sector, rising demand, and consequent demand for workers led to rising wages and better conditions.

Blue Labour may well carry out its privatisation plans, but, its in those private companies that competition between them will, be intense for workers, more easily facilitating workers to get higher wages and so on, compared to Starmer's declaration of war on them in the NHS. This is not the 1980's, 90's, or even early 2000's, when governments could simply count on a working-class, on its knees to accept what was thrown at them without response.

Of course, the idea of growth stimulated by tax cuts was one tried by Reagan in the 1980's, which turned the US from being the world's largest creditor to the world's largest debtor, as both its fiscal and trade deficits rocketed, leading to a spike in interest rates, and the world's biggest ever crash in asset prices, in October 1987. The same idea was proposed on a much smaller scale by Truss, in 2022, with the same effect, and the swift removal of her government. That Fartage proposes to repeat that disaster tells us all we need to know about his agenda, and the extent to which he knows he will never be in a position to implement it.

Blue Labour has said it will not raise Income Tax, NI, or VAT, the biggest sources of tax revenues. Income Tax thresholds have already lagged way behind inflation, drawing millions of low paid workers into paying more tax, as a result of fiscal drag, so the scope for Blue Labour to raise tax by that method is also limited. It should be raising those thresholds to around £20,000 a year, so that no one on the Minimum Wage pays Income Tax or National Insurance.

Not raising VAT is defensible, because it is a regressive tax. Indeed, it should be reduced, not only for that reason, but for the reason that Marx set out in his programme for the First International. However, it produces so much revenue that to cut it would require significant tax rises elsewhere, or else a big reduction in state spending. The latter, of course, was the consequence that Marx sought, preferring that workers, collectively, organised their own social insurance and welfare, as part of the development of workers' self government. But, given where we are, any such immediate reduction would be imposed at workers' expense, without that workers' alternative being in place.

The point is that Blue Labour, indeed any government, is not a free agent in raising these taxes, particularly Corporation Tax, or various forms of Wealth Tax, or taxes on assets and capital gains. This was part of the fallacy of Brexit/Lexit that leaving the EU restored national sovereignty and independence. It is the lie behind all forms of nationalism and talk of national self-determination, in the age of imperialism.

Blue Labour talk about raising tax revenues by removing VAT exemption on private school fees. This measure, even on Blue Labour's estimates, raises pitifully little extra tax to fund the hole, even in current budgets. Its so little as to be essentially an accounting error. The global ruling class, likewise, would not be put off sending its kids to the top private schools by such an increase in costs, which, to them, would amount to pocket change. Indeed, by making those schools more exclusive, they would become even more attractive to the ruling class. However, those that will be deterred, and already are being deterred, are those sections of the middle-class, and even working-class, that send their kids to the less renowned private schools, in the hope of securing a better education for them.

Around 16-20% of current private students are estimated to be deterred, as a result of the increase in costs, with a consequent reduction in the estimates of how much tax will actually be raised. In fact, as those students then enter the state sector, the capitation means that the state will have to find additional sums to cover school budgets, leaving little net benefit. It would have been far better and more principled, to have just banned private schools, but that would really have meant, even on a tiny scale, taking on the ruling class, and its sources of power in society.

This small example of the limited scope of national governments, when it comes to taxation, is nothing, compared to the limitation when it come to the more significant forms of taxation on unearned income, and wealth taxes. The ruling class have always sent their children abroad to the best schools, to gain the benefit of access to foreign culture, and to network with the children of the ruling class of other countries, solidifying their common class interest against the working-class still mired in the idiocy of national life, culture and its limitations. Membership of the EU opened up that possibility for the children of the working-class too. Brexit, and the ending of free movement put an end to that as well, for British workers and their kids.

If Starmer wants to raise significant amounts of tax, even to finance his timid spending plans, ending VAT exemption of school fees will not cut it, and having ruled out Income Tax and VAT, that leaves, basically, Corporation Tax. But, if Blue Labour wants to grow the economy, it needs additional capital investment by corporations, not less. Increasing Corporation Tax means less profits available for reinvestment. Moreover, it will drive multinational corporations to move their activities out of Britain, and into the EU at an even faster pace than they have already been doing, as a result of Brexit.

The EU can get away with higher rates of Corporation Tax than Britain, because it is a much bigger market for those companies to operate in, and the other costs of that operation are much lower. The EU economy is seven times bigger than the UK, and so companies can operate on a larger scale, enjoying the economies of scale. Moreover, they do not face all the costs and frictions operating in that market that Britain faces outside it. So, the mass of profit and rate of profit is higher. Even with a higher rate of tax on that profit their mass of profit and rate of profit is higher than in the UK. That gives an incentive for companies to locate their production in the EU.

Even so, national governments inside the EU have been tempted to try to gain national advantage by introducing low rates of Corporation Tax. The Irish Republic did so, and successfully gained large-scale investment from tech companies like Apple. If allowed to continue, such beggar-thy-neighbour policies undermine the foundation of the single market. That is why the EU, as a single market that must increasingly move to a single fiscal policy as well as monetary policy – necessitating ever closer political union – intervened to stop that practice by Ireland.

Multinational companies can move capital from one national economy to another to obtain tax or other benefits, but they can't move capital out of the EU as a whole, because it is simply too big a market, too important to their profits to do so.

Consequently, if Starmer and Blue Labour, and this applies even more to the more ambitious plans of the Greens, just as it did to Corbyn's Labour, seeks to raise the tax revenues by increasing Corporation Tax, it will face an immediate capital strike, as well as an increased movement of capital from Britain to the EU, with a consequent slowing of the economy. Incidentally, this kind of social-democracy in one country approach also led to the failure of the Mitterrand government, in France, in the 1980's. As with the reactionary notion of Socialism In One Country, it shows that no progressive solutions are now possible on a purely national basis, and hence, again, why Brexit and re-joining the EU is central.

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Stalin and The Chinese Revolution, 4. The Strategy of Lenin and The Strategy of Stalin - Part 1 of 3

The petty-bourgeois socialists/nationalists and social-imperialists have based their subordination of the working-class to bourgeois-nationalist forces on false appeals to Lenin on The National Question. In fact, their argument has nothing to do with Lenin's position, but is, simply, a repetition of Stalin's distortion of it, as applied in the Chinese Revolution.

Trotsky sets out the crucial point.

“What tasks did Lenin set before the Comintern with regard to the backward countries?

“It is necessary to carry on a determined struggle against the attempt to surround the bourgeois democratic liberation movements in the backward countries with a Communist cloak.”

In carrying this out, the Guomindang, which had promised to establish in China “not a bourgeois régime”, was admitted into the Comintern.” (p 266-7)

In the whole post-war period, the “Left”, including those sections of it that proclaim themselves to be “Trotskyist”, followed the same course as Stalin, in China. Whilst paying lip-service to permanent revolution, they, in fact, threw their weight behind, not just bourgeois-nationalists that sought to cover themselves in socialist/communist camouflage, but also, outright reactionary, anti-working-class, nationalist forces, such as the Algerian NLF, Viet Cong, or the Khomeiniites in Iran, in 1979.

Their support for the corrupt, right-wing, anti-worker regimes in Ukraine and Russia, in which they have divided into two opposing reactionary imperialist camps, whilst continuing to use the same false appeals to Lenin for their subordination of the working-class, and international socialism, to the bourgeois-nationalists and imperialists, is the latest example, and, at the same time its culmination in a reductio ad absurdum – support for imperialism on the grounds of “anti-imperialism” - of that whole post-war development.

Lenin's position on The National Question was quite clear. We are in favour of the self-determination of the working-class, not of nations. Our goal is not, and as the theory of permanent revolution describes, cannot, now, be limited to the bourgeois-democratic, national revolution, but is the proletarian, international socialist revolution. But, in each case, since WWII, the petty-bourgeois “Left” has limited its goal to the former, and its politics, in relation to Ukraine, are simply a continuation of it.

It is the fact that our goal is international socialist revolution, as described in the theory of permanent revolution that determines the principle strategy and tactics, in our relations with other class forces in any such revolution. The reality of any such revolution is going to be that the revolutionary communist forces begin as a minority, and so must ally with other class forces, i.e. the poor peasants, and urban petty-bourgeoisie. Even large sections of the industrial workers may initially retain illusions in bourgeois-democracy. The point is that the materialist dialectic inevitably brings out the contradictions that expose those illusions, and split the workers from them, provided the communists respond accordingly. This is the point about the United Front, as a workers front, in action, as opposed to the Menshevist/Stalinist Popular Front, as an alliance of parties, usually on an electoral basis.

On every occasion, that strategy has been a disaster, not just in the 1920's and 30's, but, as seen with Popular Unity in Chile in 1973, as well as with the Lib-Lab Pact of the 1970's, and the French Popular Fronts of the 1970's and 80's, which first undermined the Stalinists, and then led to the inevitable disillusion and collapse of the "Socialists", who had initially benefited from it, opening the door to the rise of the petty-bourgeois Right of Le Pen.  The latest, cobbled together, unprincipled Popular Front, in France, will fair no better.  As with Macron, who symbolised the Popular Front in one man, as the basis of a purely electoral opposition to Le Pen, or as with Biden, it may win an ephemeral electoral victory against the Far Right, but only to dash illusions in it, as it fails and breaks apart on the rocks of its own contradictions, and unprincipled unity, and so, creates the conditions for an even greater surge of the Right.

Back To 3. Stalin and Chiang Kai Shek

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Brexit Is Central - Part 1 of 6

The main parties have engaged in a conspiracy of silence over Brexit, during the election. The Liberals have relegated it to the back of their Manifesto, and EU membership as a far distant goal, much as the Left sects do with Socialism, as they pursue their immediate interests. The Greens are slightly, but not much, more vociferous in noting the damaging effects of Brexit, but it s only the SNP and Plaid that really make more of it, rather hypocritically given their own nationalist and separatist agenda. There is the Rejoin The EU Party, but its really an irrelevance to the election.

Yet, Brexit, and the need to re-join the EU, is, itself, far from being an irrelevance. On the contrary. It is central, which is why the main parties have engaged in a conspiracy of silence over it, because it exposes the thorough bankruptcy and duplicity of their polices and politics. It does not matter what issue is considered, whether the economy, employment, workers' rights, taxation, the environment, migration, war, health and social care, education, science, transport etc., the damage done by Brexit, and the need to re-join the EU to resolve it, cannot be avoided.

Take the economy. It is 6% smaller than it would have been had Brexit not happened. That is a loss of £140 billion of wealth that could have gone to schools, hospitals, welfare, and raising living standards. It would have increased employment and so on. Nor has that damage ended. It will be a continuing and growing hit to the economy, for as long as Britain stays out of the EU, because it is the closest and biggest trading partner. By 2035, the economy will be more than 10% smaller than it would have been, equivalent to £311 billion of lost wealth, compared to had Britain remained in the EU.

All of the Brexiters claims about it enabling Britain to establish new markets on the other side of the world, epitomised by Truss's speech about selling port in China, were nonsense at the time, and proved to be such in what has followed. 

The trade deals done did not even replicate those Britain had with those countries as a member of the EU, and necessarily so, because the EU, as the world's largest single market has far more heft in trade negotiations than the relatively small British state. Its like expecting the corner shop to be able to negotiate as good a deal with suppliers as TESCO. In fact, the trade deals done with New Zealand and Australia, in desperation to be able to say a deal had been done, are very bad deals from a British perspective.

The Tories have tried to claim that the UK economy has done better than economies in the EU, but that is only in terms of recent growth, following earlier poorer performance. Moreover, there are specific reasons why EU economies have performed poorly more recently, though those reasons come down to self-inflicted wounds imposed as part of the imperialist conflict with Russia and China. The boycott of Russian oil and gas raised energy costs, and caused disruption for the EU on a greater scale than for the UK, which still has access to North Sea oil and gas, for example.

In addition, the EU economy is significantly driven by the powerhouse that is the German economy, and it has grown, in recent times, by its high value manufactured goods exported to China. But, as part of the growing global inter-imperialist conflict between NATO and Russia/China, increasing barriers to trade with China have been created, whose economy was also slowed by its imposition of lockdowns. With China facing restrictions on its exports, it has responded, in turn. Its notable that Germany has opposed the recent proposals to impose high levels of tariffs on Chinese EV's into Europe, recognising the potential for similar restrictions on its own luxury cars exported to China.

Moreover, the data on, for example UK exports, is interesting, because of the role of the UK in relation to gold trading. Sky News' Ed Conway has shown that the claims about an improved export performance since Brexit, put forward by Sunak, falls apart once you take the re-export of gold out of the figures.

But, the UK, outside the EU, has not escaped these rises in costs either. It not only took part in the boycott of Russian oil and gas, but, as the European agent of US imperialism, was in the vanguard of proposing it. The US and UK, of course, not only have their own domestic oil and gas production, but are home to the world's largest energy companies, operating around the world, and benefiting from those higher oil and gas prices.

Similarly, Britain, that was only a few years ago touting Brexit as enabling it to divert its attention to the faster growing markets in China and the Pacific, has also tagged along as the poodle to the US in that developing trade war with China. However, despite it joining the Pacific trade partnership, it has been unable to significantly increase its exports to China and the Pacific, and lags behind Germany in that respect. So, the slow down in China, necessarily, affected Britain less than Germany and the rest of the EU, because it was smaller to begin with. That would still have been the case had Britain remained in the EU.

Indeed, the latest data shows that not only has Britain's trade with the EU suffered, but so as its trade with other countries, because in order to produce goods that are sold to those other countries it is still reliant on components produced inside the EU, and Brexit has both caused delays in the supply chain, and raised the costs to Britain of those components, so that its prices to other countries have risen. Many other countries have shifted to buying from the EU directly.

The temporary effects of the recent boycott of Russian energy, and so on, are just that – temporary – but the damaging effects of Brexit are permanent, so long as it is outside the EU.

Forward To Part 2

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

That is how things actually stand from the perspective of values and prices. However, in practice, things work out differently. Firms do not have to accept a rise in wages resulting in lower profits. They trade with each other on the basis of commercial credit. Firm A raises its prices by 10%, and firm B buys inputs from A at this higher price as invoiced. Firm B passes on these higher costs, and its own, in the prices of its own output, as invoiced to C, who, in turn, raises prices by 10% invoiced to A. With no increase in currency supply by the central bank, commercial credit automatically expanded by 10%, and enabled the this devaluation of the currency and rise in prices.

Similarly, central banks ensure that liquidity is sufficient for all firms to raise prices, rather than suffer the required fall in profits, resulting from a rise in wages. Its on this basis that they describe a price-wage spiral, as rather being a wage-price spiral. The ideological purpose of that is to suggest to workers that there is no point seeking these compensating higher wages, and, if only they would desist, the inflation would end.

“There reigns now on the Continent a real epidemic of strikes, and a general clamour for a rise of wages. The question will turn up at our Congress. You, as the head of the International Association, ought to have settled convictions upon this paramount question. For my own part, I considered it therefore my duty to enter fully into the matter, even at the peril of putting your patience to a severe test.

Another preliminary remark I have to make in regard to Citizen Weston. He has not only proposed to you, but has publicly defended, in the interest of the working class, as he thinks, opinions he knows to be most unpopular with the working class. Such an exhibition of moral courage all of us must highly honour. I hope that, despite the unvarnished style of my paper, at its conclusion he will find me agreeing with what appears to me the just idea lying at the bottom of his theses, which, however, in their present form, I cannot but consider theoretically false and practically dangerous.” (p 9-10)

What Marx agreed with Weston about was that, ultimately, workers could not simply rely on trades union struggle for higher wages, to combat higher prices. In that struggle, labour would always lose in the end. If wages rose for a time, eventually, it would lead to capital being overproduced, and crisis. Capital would respond by technological innovation, labour would be replaced, and wages would fall. The solution could not be found within the confines of the wages system, but only outside it, by the abolition of the wages system itself.

However, Weston was in error, in his theoretical explanation of why workers could not win, by raising their wages. That theoretical error was the same as that made by Proudhon, of equating labour with labour-power, and consequently the value created by labour with wages.

Back To Part 2

Forward To Part I. Production and Wages

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

Forward To 4. The Strategy of Lenin and The Strategy of Stalin

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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

Forward To Part 3

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

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