Michael Roberts Fundamental Errors, VI – Inflation and Roberts' Confusion of Money With Money Tokens, and New Value With Total Value - Part 3 of 7

But, Marx, also, notes that its not only this change in the value of gold that affects the value of the standard of prices. The state that determines this standard, also determines how much gold it contains, i.e. what amount of social labour-time it actually represents. If the value of gold remains constant, but the state decrees that, henceforth, a £ will be equal to only 0.80 grams of gold, it means that the value of a £ is now equal only to 800 hours of social labour-time, not 1,000.

Equally, therefore, prices measured in these £'s will rise, and more £'s will have to be thrown into circulation. When the standard of prices loses any connection to a money commodity such as gold, its connection to social labour-time, however, remains. If, previously, a £, equal to 800 hours of social labour-time, required 1,250 £'s to be thrown into circulation, that will remain the case, because these 1,250 £'s, equal 1 million hours of social labour-time, the total value of commodities, whose equivalent they are. However, now, because in such a fiat system, these £'s cannot be redeemed for gold, if more than these 1,250 £'s are thrown into circulation, their total value, as money, remains 1 million hours of social labour-time, and so the value of each £ is proportionately reduced. If 2,500 £'s are put into circulation, each £ represents only 400 hours of social labour-time, and so prices measured in these £'s would double.

So, when Roberts says “if value grows, money supply will rise to match that value” this confuses and conflates money with currency, the error, also, made by Ricardo, as Marx points out. If value rises, then, as set out above, its equivalent form, i.e. its representation by money, does indeed rise, because this is a tautological relationship, but that is not at all the same thing as saying that “money supply”, i.e. the amount of money as currency will rise to match that value. It may be that the money supply, i.e. the amount of currency put into circulation may well be more or less than is required as the equivalent of this increase in value. For example, if the supply of currency remains constant, that would mean that each unit of currency, for example a £, would, then represent a greater quantity of social labour-time than it did previously, and the average unit prices of commodities would fall. If the total value of commodities rises by 10%, but the amount of currency put into circulation rises by 20%, then each unit of currency is devalued, represents a small quantity of social labour time than it did previously, and so average unit prices rise.

Roberts continues,

“However, new value growth (which we measure in hours of labour worked by the whole labour force in an economy) tends to slow relative to increased output of commodities. So prices per unit of output should tend to fall, as less labour time is involved in the production of output.”

Again, this is replete with errors and inaccuracies. New value growth is not measured by the increase in hours worked by the whole labour force, for several reasons. Firstly, the actual hours worked, are hours of concrete labour, and not the same as abstract labour, which is the measure of value. Secondly, even in terms of that abstract labour, it is only that labour that is socially necessary that is value creating. Thirdly, a lot of labour performed as set out earlier, is necessary for the functioning of society, and for the realisation of already produced value, but is not itself value creating.

Setting all that aside, Roberts' statement is still wrong, because as I have set out elsewhere, he has accepted what Marx called Adam Smith's “Absurd Dogma”, that the value of commodities resolves entirely into revenues, i.e. into the new value created by labour, which Marx shows is impossible.

Roberts wrote,

“The demand for goods and services in a capitalist economy depends on the new value created by labour and appropriated by capital. Capital appropriates surplus value by exploiting labour-power and buys capital goods with that surplus value. Labour gets wages and buys necessities with those wages. Thus it is wages plus profits that determine demand (investment and consumption)”,

which is simply Say's Law as amended by Keynes to account for savings and net investment.

The new value created is equal to v + s, i.e. the current labour performed, whereas the total value of output is equal to c + v + s. So, Roberts, like Smith and Say, (and Keynes) cannot explain where the demand for c comes from. V is paid in wages, and forms the demand for wage goods, whilst s forms the revenues of rent, interest, taxes and profit of enterprise which fund the personal consumption of the exploiting classes, and their state, as well as any any accumulation of capital (itself divided into c + v), but that leaves Roberts as with Smith, Say and Keynes having to explain where the demand for c itself comes from! Given that, as Marx sets out, c forms the largest and growing (as a result of rising productivity, as the basis of the tendency for the rate of profit to fall) component of production, both physically, and in terms of value, that is rather a large black hole in demand that Roberts cannot explain.

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Anti-Duhring, Part I, Philosophy, VI – Natural Philosophy. Cosmogony, Physics, Chemistry - Part 1 of 6

Philosophy, VI – Natural Philosophy. Cosmogony, Physics, Chemistry

Engels examines Duhring's application of his method to the question of the origins of the Earth and other planets. By this time, the idea that the solar system arose out of a hot gaseous disc, as proposed by Kant, had become established.

“The Kantian theory of the origin of all existing celestial bodies from rotating nebular masses was the greatest advance made by astronomy since Copernicus. For the first time the idea that nature had no history in time began to be shaken. Until then the celestial bodies were believed to have remained in the same permanent orbits and states from the beginning; and even though individual organisms on particular celestial bodies died out, genera and species were nevertheless held to be immutable. It is true that nature was conceived as obviously in constant motion, but this motion appeared as an incessant repetition of the same processes.” (p 70)

These previous conceptions are fully consistent with metaphysics. It imposes an inherently conservative framework, in which whatever exists, and is observed at the time, is taken to be the normal state, a state that has always been and always will be. Any divergence from this normal state, and path is, then, unnatural, and so attempts to prevent any such divergence from the natural balance, or to reverse any such divergence, become reactionary. That may be apparent, for example, in feudal regimes where the order of society is seen as being God given, absolute and eternal, but it applies equally to bourgeois society, which, once established, also, continually reproduces its own ideology, in which things such as markets, commodities, money, capital and wage-labour are presented as universal and eternal. It is seen in other spheres too, for example, the concept of a “balance of nature” is supposed to exist, which must be maintained.

Copernicus had established the model of the solar system we have today, in which the planets orbit the Sun, rather than as presented in the Bible, the Earth being at the centre of the universe. Yet, as Engels says, this was, at the time it was proposed, only a hypothesis. It required confirmation. That came in Le Verrier's calculation, based on it, of the necessity of the existence of Neptune, which was, subsequently, discovered, in 1846, by Galle.

Similarly, to Duhring's dismay, spectroscopic maps of the universe, also, proved the existence of the hot gas clouds from which star systems arise, consistent with Kant's theory. But, without the same kind of proof of how such systems arise, it also remained only a hypothesis, which enabled Duhring to pour scorn on it. At the time Engels was writing, no proof was possible, of Kant's hypothesis, but, now, we do have not only the theoretical models of the mechanism by which star systems are formed from nebulae, but we have the powerful telescopes available to actually see this process of star formation in action, in so called stellar nurseries.

“It was really fortunate for Kant that he could be content with going back from the existing celestial bodies to the nebular ball, and that he did not even dream of the self-identical state of matter! It may be remarked in passing that when contemporary natural science describes the Kantian nebular ball as primordial nebula, it is self-evident that this is only to be understood in a relative sense. It is a primordial nebula, on the one hand, because it is the origin of the existing celestial bodies, and on the other because it is the earliest form of matter which up to now we have been able to work back to. This certainly does not exclude but rather implies the supposition that matter passed through an infinite series of other forms before the nebular stage.” (p 72)

Again, although this could only be hypothesised, at that time, the Big Bang theory set out the mechanism by which that transpired, whilst the mapping of the existing, observable universe conforms to the computer simulations of that process, and the mapping of cosmic background microwave radiation is consistent with the residual effect from it.

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Predictions For 2025, Prediction 5 – Blair-Rights Challenge Blue Labour Leadership

Prediction 5 – Blair-Rights Challenge Blue Labour Leadership

Starmer was seen as one of the vanguard of Blairism, a view he seemed to encourage by his prominent role in leading the campaign, under Corbyn, for a second EU referendum, to overturn Brexit. But, the reality is that he is either the willing captive of the far-right, Zionist, Blue Labour Tendency within the Labour Party, that acts as a party within a party, with its own funding channelled through various billionaires and millionaires, often based in The Cayman Islands, or other tax havens, or else he is the active leader of that Tendency.

The far, right, Zionist, and nationalist nature of Stamer's politics has been shown not only in his rapid adoption of the far right's flagship policy, and crowning achievement, so far, of Brexit, but by his other, sovereigntist, monarchist and uber nationalist policies, whose visible manifestation is merely the gut-wrenching flag waving and forelock tugging to to all of the undemocratic, feudalistic institutions, but, also, in the overtly racist language and actions adopted in relation to Palestinians, as well as in relation to immigrants, and immigration. Again, the visible manifestation of that ideology, in the visits to the Italian fascists, to compare notes, is the least objectionable aspect of it. It simply makes it clear to all what the ideology, the political platform and the direction of travel of Blue Labour is. We have seen it before with Pilsudski, Mussolini, and Mosley.

However, as I have set out before, these reactionary, petty-bourgeois nationalist politics of Blue Labour do not represent the interests either of the ruling-class as owners of fictitious-capital, nor of the real, large-scale socialised industrial capital, upon which they ultimately depend. Those interests require membership of the EU, and in that, those interests tally with those of the working-class itself, objectively, also, as the collective owners of that socialised capital. It is no wonder that Blue Labour did so badly in the last General Election, getting even less votes than Corbyn's Labour obtained even in 2019, let alone 2017. No wonder too that, as Starmer and Blue Labour has gone even further to the Right in its pursuit of those far-right, nationalist politics, it has seen its popularity shatter even more, as its core, progressive, working class base rushes away from it in search of even just, more liberal, modernist, and democratic alternatives.

Blue Labour, now, not only stands lower in the opinion polls than the hated Tories that voters turfed out only a matter of months ago, but even lower than Reform, the even further Raving Right, than the Tories! Having basically gutted Labour's membership base and organisation with their witch hunts and purges, Blue Labour has now effectively eviscerated its electoral base too, reducing it to a level of insignificance not seen since its inception as a parliamentary party. Yet, it has done that even as it has a massive majority of seats in parliament, due solely to the fraudulent nature of the British electoral system that amounts to overt ballot rigging. But, that simply emphasises how fragile that superficial parliamentary representation is. It is a total fiction, not just out of line with the interests of the ruling-class and its state, but even out of line with the current ideas and wishes of the vast majority of the electorate. It is a fiction that must explode in contact with reality.

According to numerous inside political sources, the Blair-Rights, and others, are already plotting and organising for the removal of Starmer, whose own personal performance has been abysmal, even in terms of the abysmal politics and performance of Blue Labour as a whole. As I have set out, elsewhere, the key moment for the Blair-Rights is going to be the local elections in the Spring. Given the cycle of local elections, Blue Labour would be expected to not do so badly, but all of the current evidence suggests that it is going to do appallingly badly. Reform may improve their position, as the Tories are already splitting, with many of them defecting to Reform, at the same time as the more liberal, progressive, professional middle-class Conservatives peel off to the Liberals, and even Greens. Reform will no doubt get a further boost from a Trump Presidency, let alone any millions headed its way from the likes of Elon Musk.

At the same time, Blue Labour is seeing its own core vote haemorrhage to more liberal and progressive alternatives, be it the Liberals, Greens, or the various independents, who are being pulled by political gravity towards some kind of alliance if not formal organisation. Over the last few years, the Liberals and Greens have been gaining support at an increasing pace, as Blue Labour has surged to the Right. The local elections will see that trend accelerate even faster. That will be the point at which the Blair-Rights begin to make their move. Whether they succeed in removing Starmer at the first strike is uncertain, but to do so they will require the backing of the trades unions, already, themselves, being antagonised by Starmer and Blue Labour, with its anti-working class agenda, and paltry pay offer to public sector workers. The trades unions, keen to back any slightly progressive movement, and chance to salvage the hope that Labour might be able to recover its electoral fortunes, will be likely to subordinate themselves to the Blair-Rights for that purpose.

The Blair-Rights, of course, much as happened with the Popular Front in France, in the last elections, and as happens with all such Popular Fronts, will simply use the trades unions as useful idiots to achieve their own goals, before ditching them. The Blair-Rights have always wanted to free themselves from the trades unions, and current conditions give them an opportunity to do that, once they have defeated Blue Labour, and brought about a wider realignment. The outlines of that are fairly clear, and were drawn with the abortive alliance that was Change UK. Change UK was the epitome of Blairism, as the representative of conservative social-democracy, and agent of the ruling-class and its interests.

The continued disaster that is Brexit, the fact that the large majority of voters recognise it as being a disaster that they, now, want to reverse, combined with the fact that Starmer and Blue Labour have tied themselves to it, as it sinks, will become even more an albatross for them, as the ridiculous idea of a Blue Labour Brexit that works, becomes ever more apparently impossible. Some commentators have even noted that Starmer's pronouncements now sound like the ravings and inanities of Trump, in their formulation. Having failed with the EU, Starmer and Blue Labour will be driven to seek salvation themselves in the arms of Trump, in the company of their international bedfellows, such as Netanyahu. That of itself is likely to be too much for the ruling-class, and its Blair-Right representatives in Britain.

An electorally shattered Blue Labour in the elections, an increasing challenge to Starmer, a surging Liberal and Green alternative to it, will open the door for the Blair-Rights to propose a new realignment to fight off the drift to the Right. It will draw together the Conservative rump, after the Tories have split to Reform, the Liberals, and will, thereby, also form a pole of attraction for Greens. The Left must be ready to orientate towards it, to warn of the dangers of such Popular Fronts, as seen in France, but, also, to build within it, from the grass roots upwards, a real socialist alternative. Ironically, given Starmer's former role, the main thrust of this new formation is going to be the need to join the EU, to end the madness of Brexit. Again, the Left should be ready to intervene within that drive to challenge the Blair-Right narrative, and to argue the need to join the EU on the basis of building an EU wide, workers movement, breaking down national borders, and working towards the creation of a Workers' Europe.

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Michael Roberts Fundamental Errors, VI – Inflation and Roberts' Confusion of Money With Money Tokens, and New Value With Total Value - Part 2 of 7

The total value of commodities can rise for two basic reasons. Firstly, more commodities, in total are produced, with more labour, thereby, being expended. In other words, assuming no change in productivity, there is just an increase, in total, of the amount of labour employed, in the production of this greater mass of commodities. Unit values of those commodities remain constant. Secondly, the total number of commodities produced may remain constant, but a fall in social productivity means that each one of them, on average, requires more labour for its production. In that case, the average unit value of commodities rises. Put another way, if productivity falls, but the amount of social labour-time remains constant, fewer commodities are produced, and the unit value of each rises. A combination of these two causes may also occur.

In both cases the total amount of social labour-time expands, but in the first, there is no change in unit values, whereas, in the second, unit values rise.

What is the consequence of this in relation to money and prices. Money is the equivalent form of value. It is another way of expressing the total value of commodities, indirectly, or put another way is the monetary expression of total social labour-time. Because the total value of commodities rises, i.e. total social labour-time rises, the total value of money also rises. But, money, initially takes the form, itself, of a commodity, for example, cattle, and later gold. It is as a quantity of this money commodity that the values of all other commodities are expressed as prices, for example, the value of 100 litres of wine may be expressed as equal to one head of cattle. Price is just the same as exchange-value, but exchange-value in relation to a specific money commodity. If 100 litres of wine has a value of 1,000 hours of labour, and one head of cattle has a value of 1,000 hours of labour, it is this equality of value that is expressed in their quantitative relation to each other.

If gold is the money commodity, this same 1,000 hours of labour may be equal to 1 gram of gold, and it is then this 1 gram of gold, which represents the money price of the 100 litres of wine. But, gold, like cattle or wine, is itself a commodity, and its own value changes, as social productivity changes. So, a change in social productivity that causes unit values of commodities, in general, to rise, may cause the value of gold, also, to rise.

Suppose the total value of commodities is equal to 1 million hours of labour, in which case, here, its equivalent, in money, is 1,000 grams of gold. If, 10,000 commodities are produced, the average unit value of each is 100 hours of labour, and the average price is equal to 0.10 grams of gold. If social productivity falls, so that these 10,000 commodities, now, require 1.1 million hours of labour to produce, total value rises. However, ceteris paribus, the value of gold would also rise, now, requiring 1,100 hours of labour to produce a gram. So, the relation between gold and other commodities would remain unchanged. The 10,000 commodities would still be represented by 1,000 grams of gold, and the average unit price of a commodity would remain 0.10 grams of gold. This is the simplest illustration that an increase in unit value is not the same thing as an increase in unit price.

However, if social productivity remains constant, and the total value of commodities/social labour-time rises, simply because more labour is employed, and more commodities are produced, the total value of money will also rise in proportion, but will, also, now be represented by an increased quantity of the money commodity. In other words, if 11,000 commodities are produced, with an average unit value of still 100 hours of labour, the total value of money also rises to 1.1 million hours of social labour-time, and is represented by 1,100 grams of gold. In that case, unit values and prices remain constant, whilst the total of prices and values rises to 1.1 million hours of labour, and 1,100 grams of gold respectively. If the 1 gram of gold is given the name £1, then the average unit price is £0.10, and the total of prices is £1,100.

But, as Marx sets out, in the above work, although this physical quantity of the money commodity, starts off as the basis of the standard of prices, over time, the name of the standard of prices remains the same, but what it comprises continually changes. A Pound might begin as being equal to 1 gram of gold, but, as seen above, if the value of gold changes, then the amount of social labour-time represented by a gram of gold changes along with it. The money commodity is the only commodity whose own value and changes in that value, affects the prices of all other commodities. So, when new gold discoveries occurred, which meant that the value of gold fell, the effect was to cause the prices of all other commodities to rise relative to it. Each gram of gold represented less social labour-time, and so, also, more gold currency had to be thrown into circulation.

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