Anti-Duhring, Part II, Political Economy, X – From The Critical History - Part 11

Duhring makes the following comment, in relation to Law, a version of which can also be found, today, in the argument of proponent of MMT.

“Law too was obviously never able completely to eradicate the above-named basis” (namely, “the basis of the precious metals”), “but he pushed the note issue to its extreme limit, that is to say, to the collapse of the system”. (p 300)

Engels comments,

“In reality, however, these paper butterflies, mere money tokens, were intended to flutter about among the public, not in order to “eradicate” the basis of the precious metals, but to entice them from the pockets of the public into the depleted treasuries of the state.” (p 300)

That, of course, has been the goal of all states that sought to pay their bills by corrupting the currency, and passing off such devalued tokens at their face value. Marx discussed it in "A Contribution To The Critique Of Political Economy", in relation to the predecessors of Keynes, and the proponents of MMT, the Birmingham Little Shilling Men.

Engels returns to Petty and the further elaboration of these points.

“To return to Petty and the inconspicuous role in the history of economics assigned to him by Herr Dühring. Let us first listen to what we are told about Petty’s immediate successors, Locke and North. Locke’s Considerations on Lowering of Interest and Raising of Money, and North’s Discourses upon Trade, appeared in the same year, 1691.” (p 300)

Engels quotes Duhring's assessment.

“What he” (Locke) “wrote on interest and money does not go beyond the framework of the reflections which were current under the dominion of mercantilism in connection with the events of political life”. (p 300)

Marx deals with North, Locke, Hume, as well as Massie, in Theories of Surplus Value. Locke, in particular, represented the interests of the rising industrial bourgeoisie, as also, for example, set out in his Second Treatise on Government. As Marx sets out, in Capital, so long as restrictions existed on the lending and borrowing of money, it meant that it amounted to usury. Once those restrictions are lifted, it is not only those desperate for money that can borrow, but those who seek to borrow in order to invest in real industrial capital accumulation. When it is only the desperate who borrow, there is no limit to the usurious rates they will pay, especially given the limited number of lenders. But, when restrictions are lifted, whilst the additional demand for money-capital acts to raise interest rates, the fact that industrial capitalists will only borrow if the rate of interest is lower than their anticipated rate of profit, acts to put a cap on it.

Moreover, it is not the supply of currency/money tokens that is relevant, for the reasons set out earlier, in determining the rate of interest, but the supply of money-capital. The main source of new money-capital is realised profits. Other sources are money reserves (savings). So, when industrial capital expands, it produces greater masses of realised profit, and so increases the supply of money-capital, thereby, putting downward pressure on interest rates, as happened, for example, from the 1980's onwards.

Back To Part 10

Review Of Predictions For 2025 - Prediction 2 – Europe Draws Away From US Imperialism

Prediction 2 – Europe Draws Away From US Imperialism

The arrival of Trump, and his cabal of petty-bourgeois nationalists in the White House, as with other processes, made this prediction an inevitability. The moralists and idealists, who cling to the idea of a world divided into “good” and “bad”, “white hats” and “black hats”, “democracies” and “authoritarians”, not only were thrown into disarray, by the arrival of the “authoritarian” Trump, as leader of the “democracies” global alliance, upon which they had relied for so long, but, in order to deal with that reality, as with so much else, they have been led into simply denying it, as though it is not real, a temporary divergence from the true path, to which they will return. In order to sustain that delusion, they have been led to prostitute themselves even more at the feet of Trump, and his reactionary regime, most glaringly seen in the gut-wrenching sycophancy of the likes of Starmer, and of Rutte.

But, the more they deluded themselves into the idea that they could simply win over the moronic, narcissistic Trump by their increasing prostration and arse-licking, the more Trump simply treated them with the contempt they deserved. In that, Trump's petty-bourgeois nationalism also, coincides with the longer-term interests of US imperialism, and those interests do not coincide with those of EU imperialism. The liberals, idealists and moralists have continued to frame their narrative as one in which the world is at risk from the evil “black hats”, of the “authoritarian” regimes in Russia, China and so on. As Marxists, of course, we recognise the threat those regimes represent. But, our solution to that threat, just as with the threat represented by authoritarians within our our own states, is not to subordinate the working-class to the liberal bourgeoisie, and its class interests. Every time workers have done that, in the past, it has resulted in disaster, betrayal, and the victory of the forces of reaction. There is no reason to believe it would be different this time.

As I set out in the review of Prediction 1, for more than 30 years, globalisation represented the interests of an unconstrained US imperialism, as it invested real industrial capital, across the globe, exploiting vast reserves of labour, creating new masses of surplus-value. This huge mass of surplus-value, produced by labour in newly industrialising economies, was often, realised as profits, by US commercial capital, as this deluge of consumer goods, flooded into the US market. Wal-Mart still sources around 60% of its stock from China. As I set out in my book, this was the other side of the deindustrialisation of the 1980's, and the ability to realise the surplus value produced in China and elsewhere, was also the basis for employing a growing army of workers in the West, in retail, and a growing service sector.

But, China, India, South Korea, Malaysia and so on, just as with Japan before, and indeed the US, as it went from being a British colony, to an industrialised economy, changed the material conditions in which US imperialism found itself. The end of globalisation is not simply the result of a temporary rise to power of petty-bourgeois nationalists. It represents a recognition, by US imperialism, in particular, that its hegemony in the world economy has ended. It acts as a fetter on the further development of capital itself. US imperialism is not confronting Chinese imperialism because of the authoritarian nature of the Chinese regime, but because Chinese imperialism has now grown to an extent that it undermines US hegemony.

For all the propaganda about the expansionist intentions of Russia, as I set out earlier in the year, its not Russia that is talking about occupying Greenland, in order to secure control over the vast mineral reserves, and Arctic waters, it is the US. It is not Russia, nor China, that is talking about seizing the Panama Canal, but the US, just as it is the US that is seeking to provoke Venezuela into responding to the acts of piracy by the US, so as to give a pretext for another US forever war, as it seeks to consolidate its neo-colonial power in Central America. In Central and South America, just as in the Middle East, Africa and Asia, China has extended its influence, not by colonialism, not by the use of military might, but by the power of its capital. The US has no means of competing on that basis, and so seeks to revert to the methods of colonialism, as does the UK, as it acts as Trump's lap dog, and the proposals for the colonisation of Gaza.

The growing separation of EU imperialism from US imperialism is manifest in the talk of the need for the EU to increase its military spending. The rationale, as I set out during the year, is for the establishment of an EU army, and that would mean an inevitable separation from NATO. The discussion of that by the likes of Macron, and of Draghi, may be presented as a response to Trump's own distancing of the US from NATO and Europe, as well as the ridiculous talk about military attacks on Europe by Russia, but the reality is that the creation of an EU army is the necessary corollary of the growing political union, as the EU moves to the formal creation of a multinational state, as it faces the contradictions seen over the last 20 years of a single market, single currency and central bank, but a continuation of nation states within it. The greatest power the EU has in terms of its relations with Russia, is not an extension of its military power, but the development of the EU economy, and the raising of living standards within it. Subordination to US imperialism acts as a fetter to that development.

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Anti-Duhring, Part II, Political Economy, X – From The Critical History - Part 10

The main reason that the liquidity injections by central banks, in the late 1980's and after, did not result in higher commodity prices, and higher nominal interest rates, is because the liquidity was directed, by central banks and financial institutions into the purchase of existing financial and property assets, causing serial asset price bubbles, which also resulted in falling yields on those assets (because this kind of speculation is not investment/capital accumulation, and so does not result in increased production of surplus value, of which interest and rent are simply components along with profit of enterprise and taxes). The other reason is that rising productivity from the microchip revolution, reduced the unit value of commodities, so that without inflation of the currency, prices would have fallen.

Engels quotes Duhring's comment,

““All that was necessary was to assign to the ‘simple pieces of paper’ the same role that the precious metals should have played, and a metamorphosis of mercantilism was thus immediately accomplished”.” (p 299)

And notes,

“The metamorphosis of my uncle into my aunt can be immediately accomplished in the same way. True Herr Dühring adds appeasingly:“Of course Boisguillebert had no such intention.”

But how, in the devil’s name, could he intend to replace his own rationalist conception of the money function of the precious metals by the superstitious conception of the mercantilists merely because, he held that the precious metals can be replaced in this role by paper money?”. (p 299)

The mercantilists believed that there was something special about the amount of precious metal hoarded in state treasuries, as a measure of the wealth of nations. As Marx described in Theories of Surplus Value, its understandable that such ideas arise in economies that dominated maritime trade such as Britain and the Netherlands, just as its natural that they should identify surplus value/profit as arising from the process of trade/exchange, rather than production. In fact, as Marx also wrote, the mercantilists were not as stupid, in that regard, as some of their later detractors suggested.

Unlike Law, or the proponents of QE/MMT, they understood that this accumulation of precious metal arose from the ability to export more than was imported. It was not possible to increase the wealth of the nation by simply replacing precious metal currency with paper notes, so as to print more of them, any more than by reducing the amount of gold contained in a gold coin, and issuing more such coins.

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SNNS (22)

 

Review of Predictions For 2025 Prediction 1 – The Theatre of War Moves To Syria

Review of Predictions For 2025

Prediction 1 – The Theatre of War Moves To Syria

As I wrote in the addenda to this prediction, it was already confirmed by the time it was posted. The fall of the rotten Assad regime brought in an even more rotten and reactionary Islamist regime, as well as the inevitable chaos and communal conflict, as the country disintegrates, much as seen previously in Libya, and elsewhere. All to clearly, events appear to be following a well worn path, described previously in relation to the analysis of the Balkan Wars at the start of the 20th century, set out by Trotsky, and which led up to World War I. The rapidity of that fall probably took the Zionist state and US/NATO imperialism by surprise too, and that has led to a certain amount of sitting on their laurels during the last year.

The Zionist state quickly moved to colonise more land in Syria, as is its nature as a colonialist/imperialist state. The rapidity of the fall gave a certain amount of stability to the Islamist regime that took over in Damascus. Western imperialism, and its media mouthpieces which had previously noted the Islamist nature of the jihadists, quickly absolved it, much as all of the coverage of the corrupt and illiberal nature of Zelensky and his regime, prior to 2021, was quickly ditched when they sought to fight Russia to the last Ukrainian.

But, simply denying and attempting to hide the reality does not change it. The inevitable communalist and sectarian chaos is still unfolding in Syria. However much western imperialism tries to put lipstick on the reactionary, Islamist pig in Damascus, it does not change its nature, nor the contradictions that involves. Those contradictions have continually broken out inside Syria, as competing powers, using local communalist rivalries, jostle for influence. As with the aftermath of the Iraq War, it has also opened up space for a revival of ISIS in Syria, and it also has its own reactionary agenda. US imperialism, even in the last few weeks has seen its forces attacked by ISIS, giving it the pretext for more open intervention.

The front lines in the region have clearly shifted, just as, formerly, they shifted in Europe with the aggressive military expansion of US/NATO imperialism Eastwards, right up to Russia's borders, which inevitably provoked the military response into Ukraine by Russian imperialism, backed by its own imperialist bloc. Empires based on territorial expansion, created by military power, always become weaker, as they expand further. Its one reason that colonialism was superseded by modern imperialism, which rests, fundamentally, not on force, but on the power of industrial capital to conquer, by purely economic means, global markets, and, thereby, to exploit the global working-class, whilst offering it the prospect of rising living standards, security and the illusion of bourgeois-democracy/political freedom.

So long as US/NATO imperialism faced no real global economic competitors, the former dynamics gave it free rein, hence the rapid development of globalisation from the late 80's, into the 2010's. The petty-bourgeois moralism of much of the Left, meant it failed to analyse that expansion in Marxist terms, and, instead, simply presented it as being a continuation of the old forms of colonial imperialism that existed up to the 20th century, resting upon the use of military force. Whilst, of course, the use of overwhelming military might by US imperialism, in Vietnam, for example, gave credence to such a view, and certainly, in the 1960's, and early 1970's, facilitated a rapid growth of that petty-bourgeois Left, as it swam in the voluminous current of “anti-War”/Anti-Imperialist” protest, the reality was that force played only a subsidiary role in the expansion of imperialism, and globalisation in the post-war period. Indeed, as in Vietnam, the use of military force, more frequently proved itself to be inadequate, and even counter-productive. Imperialism has expanded rapidly in Vietnam, after the defeat of the US military.

The expansion of imperialism, of the dominance of monopoly capital, as Marx and Engels first described, and as Lenin later analysed, is a massively progressive development. Globalisation, the creation of an inextricably connected world economy, which that imperialism created in the 1980's and after, is, also, a massively progressive development. It is the fundamental basis, the creation of the material conditions required for Socialism. As Lenin put it,

““. . . State-monopoly capitalism is a complete material preparation for socialism, the threshold of socialism, a rung on the ladder of history between which and the rung called socialism there are no intermediate rungs”.”

(Left-wing Childishness)

But, just as the reactionary, petty bourgeois moralism that has dominated much of the Left after WWII, saw monopoly capitalism as something to be opposed rather than welcomed, on a national basis, so too, it opposed globalisation. The reality of imperialism was that it expanded rapidly, much as industrial capitalism itself had done on a national basis, precisely because it was able to provide billions of labourers with higher living standards, even as it exploited them more intensively. It rescued billions of them from the idiocy of rural life.

Marx and Engels pointed out that large-scale, industrial capital, inevitably takes the form of socialised capital, which is the collective property of the associated producers, whether that is in the form of a cooperative or a joint stock company. It is, they note, the transitional form of property between capitalism and socialism. The struggle, by the end of the 19th century, even, was, therefore, not to engage in some moralistic, Sismondian opposition to the development of this monopoly capitalism, but to bring about the required extension of the democratic struggle from the political sphere to the industrial sphere, to engage with “the property question”, and to ensure that just as workers achieved political rights, so, now, they obtained their rightful democratic control, in each enterprise, over their collective property.

It is why they opposed the petty-bourgeois, moralism of Sismondi who sought to hold back the rapid development of industrial capitalism, and, later, opposed the petty-bourgeois, moralism of Proudhon and his followers, who sought to oppose the economic struggles of the workers in the trades unions, because they saw it as antagonistic to the interests of the petty-bourgeoisie, whose interests they represented, with their reactionary, utopian views of a world of small commodity producers, a view also adopted by the Narodniks in Russia, and which also forms the basis of the Third Worldists/Maoists in the post WWII period. But, Marx and Engels, and later Lenin, whilst recognising the role that economic/industrial struggle plays in organising the workers as a class, also opposed the limitations on the further development of the class that Economism, trades union consciousness, also, involved. It is most clearly set out in “Value, Price and Profit”.

Huge amounts of political energy was wasted by the petty-bourgeois Left, in the last 70 years, opposing the expansion of monopoly-capitalism/imperialism, both within the national economies, and across the globe. Millions of former peasants and small commodity producers, however, flocked to the towns and cities in order to be exploited by global multinational corporations, and did so, not because they were forced, but because they saw the prospect of a much better standard of living. When the moralistic Left opposed colonialism, they were, in fact, pushing at an open door, and when, the old colonial empires collapsed, in the post-war period, they simply sought to continue as though the world had not really changed, understandably, as such a view implied a continuation of those mass mobilisations in which they had grown rapidly in the 50's, and 60's.

The progressive mobilisations, against colonialism and militarism, became reactionary mobilisations against monopoly-capitalism/imperialism, and its corollary of globalisation, which has raised productivity to unprecedented levels. The consequence is easily seen when the reactionary mobilisation against it, resulted in Brexit, for example. It has resulted in terrible economic consequences for the British economy, and for the living standards of British workers. A similar process is occurring, now, with the impact of Trump's Tariffs, in the US, which act as an additional drain on US profits. Similarly, the decision of EU leaders to boycott Russian energy has drained surplus value from European capital, and slowed its economy further, which will intensify as the EU pumps even more billions of Euros into funding the means of destruction to continue fighting the war against Russia.

Those that continued to frame their world view on the basis that the main enemy of US imperialism was China, failed, also, to recognise that, economically, it is the EU that continues to pose the biggest threat to US capital. Trump has simply been more open about it, just as he has also been more open in renaming the US Department of Defence to what it has always been, the Department of War. The period of US hegemony has ended, and consequently, the period in which it could expand its capital simply on the basis of the dominance of its capital, has also ended.

In the 1950's, for a short period, the central planning system in the USSR, faced with the need for a rapid industrialisation of its economy, outperformed its imperialist rivals. But, it never achieved the same performance as those rivals, when it came to the production of consumer goods, and the general living standards of its workers. So, although Stalinism was able to compete with US imperialism when it came to the production of capital goods, a lot of which, also, went into he production of military production, and competed with it, in terms of the space race, as well as the development of a science and technology, it never presented a challenge to US imperialism economically.

The idea that imperialism had to create welfare systems, and raise living standards of workers to prevent them being attracted to the offerings of the East is ludicrous. The border guards shooting people trying to escape were all on the Eastern side. The EU subordinated itself to US imperialism, not because it was economically challenged by Russia/COMECON, but, because, particularly in its devastated condition, it felt militarily challenged by Russia. Those conditions have gone.

The idea that Europe is militarily challenged, today, by Russia is hilarious. For four years, it has been bogged down in a war, just in Eastern Ukraine. True US/NATO imperialism has backed Ukraine massively to conduct its proxy war against Russia/China, including the use of its own special forces inside Ukraine, but China has likewise backed Russia, as it recognises that a defeat for Russia, would simply mean the war coming even closer to its own border, as US/NATO imperialism seeks to encircle it. A Russian military unable to quickly win in Eastern Ukraine, is not in any position to be considering any of the ludicrous schemes for an invasion of Europe that the western military-industrial complex propagandists are proposing, as a means of stirring up war fever, and justification for even more of workers taxes to be spent on war, rather than rebuilding shattered public services and infrastructure created by nearly two decades of austerity to pay for the bailing out of financial and property speculators.

We are told that Russia has been testing the West's borders with drones flying over various locations, and even Russian fighter jets. Maybe they have, or maybe they have not. That Lavrov invited European states to shoot down any Russian fighters actually over their territory, indicates where the balance of probability lies. The media continually refer to Russian jets or Russian ships near to British territorial waters, but near to is not inside. Given the expansion of NATO forces up to the Russian borders, it is clear what the context is.

US imperialism cannot simply expand on the basis of the dominance of its industrial capital any longer. The dialectic of that expansion is playing out. It is, now, the rising power of Chinese industrial capital that is asserting its dominance. So, US imperialism is led to resort increasingly to a defence of its global positions by military might.

Anti-Duhring, Part II, Political Economy, X – From The Critical History - Part 9

Having established these laws for precious metal coins, its then possible to analyse the laws for paper currency and credit. As Marx describes, where such currency is redeemable for gold, the same laws apply, but, where they are not redeemable, different laws apply. What Hume saw was that when the amount of gold in circulation increased, prices rose, and the value of the currency fell. As Marx notes, what Hume saw was correlation not causation. The increase in the amount in circulation was the consequence of a fall in the value of gold, as new discoveries were made. The lower value of gold required more of it to act as money, more to be put into circulation. But, with non-redeemable, i.e. fiat currency, these laws are turned on their head.

If an excess of fiat currency is put into circulation, it is not taken out to be redeemed for gold, or melted down. It stays in circulation, and the value of each note/token, thereby, falls. There is inflation, and is manifest as a rise in prices. The idea that convertible paper notes can fulfil the same function as precious metal coins, provided they are issued on the same basis, is quite different to the idea put forward by Law, the Pereire Brothers, or, today, the proponents of QE and MMT. As Marx describes, with redeemable paper, any excess circulation results in inflation and rising prices, including the price of gold. So, paper notes would be redeemed for gold at the official rate. In other words, if a £1 note is redeemable for ¼ ounce of gold, but the market price of gold rises to £1.20 per ¼ ounce, due to the inflation of the currency supply, the holders of the paper notes would redeem them for ¼ ounce of gold, which, in the market, they could sell for £1.20!

This is essentially what happened in 1971, when France demanded to redeem its Dollars at the official rate of $35 an ounce, when the market price of gold was actually $350 an ounce, causing Nixon to end convertibility of the Dollar. In fact, as Marx set out in "A Contribution To The Critique Of Political Economy", convertibility becomes impossible in a regime of paper currency, and credit.

Contrary to Law or MMT, or QE, printing more paper tokens does not create more “money”, for the reasons Marx sets out in "A Contribution To The Critique Of Political Economy", and summarised above. If the value of commodities, in total, is equal to 1 million hours of labour, then the equivalent form of that value – money – can, also, only be 1 million hours of labour, whether it takes the form of, say, 1,000 ounces of gold, each ounce with a value of 1,000 hours of labour, or the form of 1,000 paper notes, each note symbolising 1,000 hours of labour. The limiting factor is the 1 million hours of labour/value, and, if 2,000 £1 paper notes are put into circulation, (assuming each performs one transaction), then, the value of each note must be halved to only 500 hours of labour. Prices would double.

This is why, as Marx sets out in Theories of Surplus Value, quoting Massie, the idea put forward by the proponents of QE, that inflating the currency acts to reduce interest rates is a fallacy. It confuses money tokens with money, and confuses money with money-capital. The rate of interest is determined by the interaction of the demand for and supply of money-capital. The demand for money-capital is a demand for money to buy commodities, either for productive or personal consumption, or to pay bills for commodities already consumed, or similarly as prepayments for such consumption.

Suppose the demand is for £1 million, and that to satisfy this demand, an interest rate of 6% is required to produce the supply of £1 million of money-capital from its owners. The quantity of money tokens put in circulation is doubled, but, the result of that is that each token is halved in value, and prices double. It may, at first, seem to be the case that the increased supply of liquidity increases the supply of money-capital, and so causes interest rates to fall. However, in reality, the reduced value of currency means that the prices of commodities double. Instead of the demand for money-capital being £1 million, it rises to £2 million. So the rate of interest remains 6%.

“Massie laid down more categorically than did Hume, that interest is merely a part of profit. Hume is mainly concerned to show that the value of money makes no difference to the rate of interest, since, given the proportion between interest and money-capital—6 per cent for example, that is, £6, rises or falls in value at the same time as the value of the £100 (and. therefore, of one pound sterling) rises or falls, but the proportion 6 is not affected by this.”

(Theories of Surplus Value, Part 1 Addenda)

Indeed, for so long as the inflation persists, the suppliers of money-capital will require a higher rate of interest to cover the equivalent of depreciation of their capital. In other words, if they lend £1 million, today, with inflation running at 10%, they would require a return of £1.1 in a year's time just to maintain its net present value, before any actual interest is taken into consideration, just as, for example, someone who loans a machine, with a value of £1 million, would require the lessor to cover the wear and tear of the machine, as well as the payment of interest. On the basis of the above, example, they would require, at the end of the year, £1.1 million plus the 6% interest, the equivalent of a 16% nominal rate of interest.

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Forward To Part 10

Anti-Duhring, Part II, Political Economy, X – From The Critical History - Part 8

As Marx set out in “A Contribution To The Critique of Political Economy”, before you can understand the laws relating to the circulation of money tokens/credit money, it is first necessary to understand what money itself is, as the universal equivalent form of value, and, thereby, to understand the laws relating to the circulation of precious metal coins/tokens. An understanding of what money is, and, thereby, the laws relating to these coins, means that its possible to understand the error of “The Quantity Theory of Money”, put forward by Hume and others.

That theory contradicts the Labour Theory of Value, which also meant that Ricardo's acceptance of it put him at odds with his own theory of value. Instead of determining the value of the money commodity by the labour required for its production, and, thereby, determining, as “money”, only that quantity of this money commodity that was equal to the total value of commodities it acted as equivalent for, the Quantity Theory determined “money” to be all of the given money commodity, e.g. gold. It then took this total quantity of gold and set it against the total quantity of commodities, and, thereby, determined the average price of those commodities, or conversely, the value of a given amount of gold.

So, if the quantity of gold increased, the value of a gold sovereign is taken to have fallen, causing prices to rise. As Marx set out in “A Contribution To The Critique Of Political Economy”, this is wrong. The value of the money commodity is determined, as with any other commodity, by the labour required for its production. It is, then, only the quantity of this commodity that is equal to the value of all other commodities that constitutes money. Indeed, the amount of this commodity, say gold, that represents money, does not even have to physically exist – it s only “ideal” or “imaginary” gold.

In systems using precious metal coins, the quantity of these required for circulation is, then, determined by the nominal value of the coin, and the average number of transactions it performs – the velocity of circulation. If money amounts to 100,000 sovereigns, and each sovereign, on average, performs ten transactions, 10,000 sovereigns need to be put into circulation. If 20,000 are put into circulation, the value of each sovereign, as a money token, is halved. It is not money itself that is devalued, but the money token/currency. But, then, the owners of sovereigns would redeem them for gold at their nominal/face value or else they would melt them down into bullion, whose price (as against its value) would have doubled. The excess currency would, thereby, be removed from circulation.

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Forward To Part 9

Anti-Duhring, Part II, Political Economy, X – From The Critical History - Part 7

As Marx set out in “A Contribution To The Critique of Political Economy”, before you can understand the laws relating to the circulation of money tokens/credit money, it is first necessary to understand what money itself is, as the universal equivalent form of value, and, thereby, to understand the laws relating to the circulation of precious metal coins/tokens. An understanding of what money is, and, thereby, the laws relating to these coins, means that its possible to understand the error of “The Quantity Theory of Money”, put forward by Hume and others.

That theory contradicts the Labour Theory of Value, which also meant that Ricardo's acceptance of it put him at odds with his own theory of value. Instead of determining the value of the money commodity by the labour required for its production, and, thereby, determining, as “money”, only that quantity of this money commodity that was equal to the total value of commodities it acted as equivalent for, the Quantity Theory determined “money” to be all of the given money commodity, e.g. gold. It then took this total quantity of gold and set it against the total quantity of commodities, and, thereby, determined the average price of those commodities, or conversely, the value of a given amount of gold.

So, if the quantity of gold increased, the value of a gold sovereign is taken to have fallen, causing prices to rise. As Marx set out in “A Contribution To The Critique Of Political Economy”, this is wrong. The value of the money commodity is determined, as with any other commodity, by the labour required for its production. It is, then, only the quantity of this commodity that is equal to the value of all other commodities that constitutes money. Indeed, the amount of this commodity, say gold, that represents money, does not even have to physically exist – it s only “ideal” or “imaginary” gold.

In systems using precious metal coins, the quantity of these required for circulation is, then, determined by the nominal value of the coin, and the average number of transactions it performs – the velocity of circulation. If money amounts to 100,000 sovereigns, and each sovereign, on average, performs ten transactions, 10,000 sovereigns need to be put into circulation. If 20,000 are put into circulation, the value of each sovereign, as a money token, is halved. It is not money itself that is devalued, but the money token/currency. But, then, the owners of sovereigns would redeem them for gold at their nominal/face value or else they would melt them down into bullion, whose price (as against its value) would have doubled. The excess currency would, thereby, be removed from circulation.

Back To Part 6

Forward To Part 8

Anti-Duhring, Part II, Political Economy, X – From The Critical History - Part 6

Engels chronology is inaccurate. He writes that, in 1609, Thomas Mun's “A Discourse On Trade etc.” had appeared four years prior to the Breve trattato. In fact, Mun's work did not appear until 1621, having been written around 1615. Setting that aside, Mun's work is vastly superior, and was far more influential than that of Serra. The significance of Mun's work was that “it was directed against the original monetary system which was then still defended in England as the practice of the state, and that hence it represented the conscious self-separation of the mercantile system from the system which gave it birth.” (p 294-5)

This was the period in which Britain begins to challenge the Netherlands for the position of leading mercantile nation. As Marx describes, in Theories of Surplus Value, it is why, in Britain, the dominant ideas are those of mercantilism that surplus-value arises from exchange, as against the dominant ideas, in France, being those of the Physiocrats that surplus-value arises in production. This mercantilism, in action, arising from a rapidly expanding commercial bourgeoisie, i.e. merchants, in a symbiotic relation with the landed aristocracy that finances its overseas adventures and the creation of colonies, sets the basis for the legislation and creation of protectionist regimes and monopolies.

“In the edition of 1664 (England's Treasure etc.), which had been completely rewritten by the author and was published after his death, it remained the mercantilist gospel for another hundred years. If therefore mercantilism has an epoch-making work “as a kind of inscription at the entrance”, it is this book, and for this very reason it simply does not exist for Herr Dühring's “history which most carefully observes distinctions of rank”.” (p 295)

Marx recognised William Petty as the founder of modern political economy, but Duhring says,

“there was“ a fair measure of superficiality in his way of thinking” and that he had “no sense of the intrinsic and nicer distinctions between concepts” ... while he possessed “a versatility which knows a great deal but skips lightly from one thing to another without taking root in any idea of a more profound character”; .. that he “proceeds very crudely in economic matters”, and that he “achieves naivetés, whose contrasts ... may at times well amuse a more serious thinker”.” (p 295)

Petty represents a gateway between the ideas of the mercantilists, which held sway in Britan, and those of Ferguson, Smith and Ricardo, which recognised that the essence of value is labour, and that, consequently, surplus value, the basis of capital accumulation, is surplus labour. But, Engels notes, Duhring makes only only one fleeting reference to the fact that Petty introduced the idea that it is labour that is the essence of value, and labour-time its measure.

“In his Treatise on Taxes and Contributions (first edition 1662), Petty gives a perfectly clear and correct analysis of the magnitude of value of commodities. In illustrating this magnitude at the outset by the equal value of precious metals and corn which cost the same quantity of labour, he says the first and the last “theoretical” word on the value of the precious metals. But he also lays it down in a precise and general way that the values of commodities are measured by equal labour.” (p 295-6)

In practice, the ratio in which commodities exchange, their market prices, are also affected by fluctuations of supply and demand. Moreover, once capitalist production begins, commodities do not exchange at their values but at prices of production, the analysis of which was only provided by Marx.

“He therefore tries to find another way in certain purposes of detail.

A natural par should therefore be found between land and labour, so that value might be expressed at will "by either of them alone as well or better by both"

Even this error is an error of genius.” (p 296)

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Anti-Duhring, Part II, Political Economy, X – From The Critical History - Part 5

Duhring says,

“The role of money has at all times provided the first and main stimulus to economic” (!) “ideas. But what did an Aristotle know of this role? No more, clearly than was contained in the idea that exchange through the medium of money had followed primitive exchange by barter.” (p 293)

Yet, Aristotle had a greater understanding of money than did Duhring. Engels notes,

“But when “an” Aristotle presumes to discover the two different forms of the circulation of money, the one in which it operates as a mere medium of circulation, and the other in which it operates as money-capital, according to Herr Dühring he is “only expressing a moral antipathy.” (p 293)

Money arises, naturally, out of commodity production and exchange, not as currency, as Ricardo, falsely, believed, but as a means of indirectly measuring the value of the commodities being exchanged. In other words, to indirectly measure the value of A and B, and so the rate at which they should exchange, both are compared to a third commodity, whose value is well known and observed. The labour-time required to produce C is well known and it, then, becomes the standard for measuring the value of all other commodities. It becomes the money commodity, or general commodity.

Only subsequent to this is the role of money as currency established, and this role is usually performed not by the money commodity itself, but by a representation of it, a money token, or credit money. For example, when cattle performed the role of money commodity, exchanges were not mediated by physical cattle, but by leather strips representing cattle. But, as Marx describes, as soon s money enters the realm of circulation, in this form, it becomes possible for these leather strips, as representatives of money, money tokens, to be hoarded. Now, having hoarded the money, it can be used as capital. A merchant can start with money and buy commodities, not for the purpose of their consumption, but to sell them at a higher price, either taking advantage of buying in bulk, or selling in more distant markets where prices may be higher, or to which small producers cannot travel. Instead of C – M – C, there is M – C – M`. Or, the money may be lent to someone in dire need of it, on condition that, when its repaid, an additional sum – interest – is added to it , M – M`.

These are two distinct social phenomena – money as means of circulation/currency, and money as money-capital.

“When “an” Aristotle carries his audacity so far as to attempt an analysis of money in its “role” as a measure of value, and indeed correctly poses this problem, which is so decisive for the theory of money, “a” Dühring prefers to say nothing (and for very good private reasons) about such impermissible temerity.” (p 293)

Engels turns to Duhring's treatment of mercantilism, and says that it would be better to simply read List's account, which Duhring has essentially plagiarised. List, in Chapter 8 of his “National System”, wrote,

“Italy has been the forerunner of all modern nations, in the theory as well as in the practice and of Political Economy”, (p 294)

citing as,

“the earliest work written specially on Political Economy in Italy, that of Antonio Serra of Naples (in 1613), on the means of providing 'the kingdoms' with an abundance of gold and silver.” (p 294)

Duhring accepted this account, and so regards Serra's “Breve trattato

“as a kind of inscription at the entrance to the more recent prehistory of economics”.” (p 294)

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Anti-Duhring, Part II, Political Economy, X – From The Critical History - Part 4

Turning to the division of labour, Duhring says,

“In Plato’s writings on the state, people ... claim to have found the modern chapter on the economic division of labour”. (p 292)

Engels notes that this undoubtedly was a reference in Capital I, Chapter XII, in which Marx noted that “the views of classical antiquity on the division of labour are on the contrary shown to have been “in most striking contrast” with the modern view.” (p 292), i.e. the view presented by Duhring.

Plato's view, for his time, Engels notes, was full of genius, and yet Duhring has only contempt for it. Plato, basing himself on the commodity production and exchange of the Greek City state, analysed the developing social division of labour that is synonymous with the expansion of the market. But, Duhring complains that Plato did not refer to,

the “limit set by the actual extent of the market to the further ramification of professions and the technical dissection of special operations... only the conception of this limit constitutes the knowledge thanks to which this idea, which is otherwise hardly fit to be called scientific, becomes a major economic truth.” (p 292)

Plato may not have done so, Engels notes, but Xenophon did. According to Duhring, who, here, basically reiterates the view of Roscher, it is capitalist production that establishes the division of labour. A similar view was presented by Proudhon, and dealt with by Marx in The Poverty of Philosophy. Adam Smith had seen the social division as arising from trade. Marx shows that was wrong. Before trade within communities, even within households, a division of labour naturally arises, because its quickly seen that different people have different skills and aptitudes, and that productivity is raised by utilising that fact. It is not trade that begets the division of labour, but this division of labour that begets trade, first trade between different communities, and later, as the communes dissolve, trade between individuals.

What has also to be distinguished is this social division of labour that is synonymous with the expansion of trade, and the technical division of labour that only becomes possible within the factory, on the basis of large-scale production, and described by Smith in relation to the production of a pin.

“In a society in which commodity production is the dominant form of production, “the market”—to adopt Herr Dühring’s style for once—was a “limit” very well known to “business people”. But more than “the knowledge and instinct of routine” is needed to realise that it was not the market that created the capitalist division of labour, but that, on the contrary, it was the dissolution of former social connections, and the resulting division of labour that created the market (see Capital, Vol. I, Ch. XXIV, 5: “Creation of the Home-Market for Industrial Capital”).” (p 293)

In short, the dissolution of existing social relations, the freeing of serfs from the land, and their movement to the owns, leads them to become independent commodity producers. Each specialises in their own type of commodity production – a social division of labour – which is synonymous with the expansion of the market. You can only exchange with someone else if they produce something different to you. The market implies competition. Competition begets winners and losers, a differentiation into bourgeois and proletarians. It begets capitalist production. Capitalist production, on a large scale, in factories, begets a technical division of labour, within the factory, as each task is divided, and subdivided. At a certain point, even the production of these different components becomes the subject of a new branch of production, a new social division of labour, and the end result is globalisation of production, a global social division of labour, a single global economy.

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Anti-Duhring, Part II, Political Economy, X – From The Critical History - Part 3

In societies based on direct production, where commodity production and exchange takes place at the margins, it is impossible to properly theorise value, and, consequently, exchange-value. It is only when the period of more extensive commodity production and exchange begins, in the Middle Ages, as the former serfs and retainers move to the towns, to become independent commodity producers, that this begins to change. It is manifest in renewed interest in the subject, as seen in the writings of Thomas Aquinas, Albertus Magnus, Duns Scotus and Ibn-Kahldun.

“Everything that constitutes acquisition and funds (of goods) and wealth proceeds only from man’s labour… Without labour, these occupations (crafts, agriculture, mining) would yield no profit or advantage.”

(Ibn-Khaldum – ‘Prolegemenes’ Vol 1 p 311)

More specifically, it is seen when some of these independent commodity producer become capitalist producers, or where merchant capitalists begin to employ former commodity producers as wage labourers. As Marx describes in Capital, and Lenin describes in “The Development of Capitalism In Russia”, this takes a number of forms such as The Putting Out System, of Buyers-Up, and so on, but progresses to the stage of manufacture. This manufacture has a different meaning from that of today. Its meaning derives from the first part of the word “man” or “main”, meaning hand. It is production by hand, not machine. In other words, the existing hand production – handicraft production – is simply brought under one roof, by the capitalist. It is production on a larger scale, solely of commodities. Its a bit like capitalists who provide space in a hairdressing salon for individual self-employed hairdressers to operate, today. This manufacture marks the beginning of capitalist production proper, around the 15th century.

“Since political economy, as it made its appearance in history, is in fact nothing but the scientific insight into the economy in the period of capitalist production, principles and theorems relating to it, can be found, for example, in the writers of ancient Greek society, only in so far as certain phenomena—commodity production, trade, money, interest-bearing capital, etc.—are common to both societies. In so far as the Greeks make occasional excursions into this sphere, they show the same genius and originality as in all others. Historically, therefore, their views form the theoretical starting-points of the modern science.” (p 291)

But, for Duhring, who only sees economic science as arising at the point when it was, in fact, already in decline, and had become merely an apologia for bourgeois society, these earlier philosophers and economists had nothing to offer. He says,

“Strictly speaking, really (!) we have absolutely nothing positive to report from antiquity concerning scientific economic theory, and the totally unscientific Middle Ages give still less occasion for this” (for this — for reporting nothing!). “But as the fashion of vaingloriously displaying a semblance of erudition ... has defaced the true character of modern science, notice must be taken of at least a few examples” (p 291)

Aristotle wrote,

“Of everything which we possess there are two uses... The one is the proper, and the other is the improper or secondary use of it. For example, a shoe is used for wear, and is also used for exchange; both are uses of the shoe. He who gives a shoe in exchange for money or food to he who wants one, does, indeed, use of the shoe as a shoe, but this is not its proper or primary purpose, for a shoe is not made to be an object of barter.” (p 291-2)

In this can be seen the emerging recognition of the dual nature of the commodity as use-value and exchange-value, described earlier. But, according to Duhring,

“This thesis is “not only expressed very trivially and pedantically”; but moreover those who see in it a “distinction between use-value and exchange-value” fall prey to a freakish mood in which they forget that nothing has been left of use-value and exchange-value “in the most recent period” and “in the framework of the most advanced system”—which of course is Herr Dühring's own.” (p 292)

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Anti-Duhring, Part II, Political Economy, X – From The Critical History - Part 2

Marx quotes Ricardo,

“One would be led to think.., that Adam Smith concluded we were under some necessity” (this is indeed the case) “of producing a surplus of corn, woollen goods, and hardware, and that the capital which produced them could not be otherwise employed. It is, however, always a matter of choice in what way a capital shall be employed, and therefore there can never, for any length of time, be a surplus of any commodity; for if there were, it would fall below its natural price, and capital would be removed to some more profitable employment” (l.c., pp. 341-42, note).

Productions are always bought by productions, or by services; money is only the medium by which the exchange is effected.””

(Marx, Theories of Surplus Value, Chapter 17, p 499)

It failed to recognise the difference that rises, even with the introduction of money, C – M – C, whereby, the exchange of commodities splits into two distinct stages, C – M, and M – C, whereby it becomes possible for M, as the general commodity to be demanded in its own right, so that the total circulation falls apart, with C – M, not, necessarily, resulting in M – C.

Marx noted,

“Here, therefore, firstly commodity, in which the contradiction between exchange-value and use-value exists, becomes mere product (use-value) and therefore the exchange of commodities is transformed into mere barter of products, of simple use-values. This is a return not only to the time before capitalist production, but even to the time before there was simple commodity production; and the most complicated phenomenon of capitalist production—the world market crisis—is flatly denied, by denying the first condition of capitalist production, namely, that the product must be a commodity and therefore express itself as money and undergo the process of metamorphosis.

(ibid. p 501)

It creates the potential for all commodities to be overproduced simultaneously, as the one commodity, the general commodity – money – is hoarded.

“At a given moment, the supply of all commodities can be greater than the demand for all commodities, since the demand for the general commodity, money, exchange-value, is greater than the demand for all particular commodities, in other words the motive to turn the commodity into money, to realise its exchange-value, prevails over the motive to transform the commodity again into use-value.”

(ibid. p 505)

Classical Political Economy solved the riddle of the difference between use-value and value, and identified the essence of value as labour, but it failed to completely break from the limitations of the origins of the commodity as first product, and from the conception that all production takes place for the purpose of consumption – either directly or via exchange for other use-values/products.

“In fact, Marx says in Capital: “Political economy ... as an independent science, first sprang into being during the period of manufacture”; and in A Contribution to the Critique of Political Economy, page 29, describes “classical political economy ... as beginning from William Petty in England and Boisguillebert in France, and ending with Ricardo in Britain and Sismondi in France”. Herr Dühring follows the path thus prescribed for him, except that in his view the higher economics begins only with the wretched abortions brought into existence by bourgeois science after the close of its classical period.” (p 290-1)

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SNNS 21

 

Incompetent, Lying, Reactionary and Deluded

Blue Labour's budget is just the latest manifestation of its reactionary, petty-bourgeois nationalist character, and the inevitable bureaucratic, lying and deluded politics that goes with it. But, the chaos and farce that surrounded the budget shows that they are, also, totally incompetent. At least Mussolini was reputed to have made the trains run on time. The tragedy is that its not just Blue Labour that displays this incompetence, or the totally deluded, petty-bourgeois nationalist ideology that has no grip on reality, or solutions to the problems of late, monopoly capitalism, and specifically those of British capitalism. The entire political elite is in a state of utter confusion and disarray. In previous decades, these are the conditions in which a mass, revolutionary workers' party, would be kicking down that rotten door, but, alas, no such party exists, today.

At the time of the last General Election, I pointed out, as did many others, that Blue Labour's agenda made no sense, and it was either delusional, or else, simply lying, in order to win the election. To win the election, Blue Labour believed that they had to distance themselves from Corbyn's mildly progressive, social-democratic agenda, presented in 2019. To do that, all of those popular policies that Starmer had committed to, in order to lie his way to the leadership, had to be quickly ditched. Any whiff that a Labour government might increase taxes, spending, or borrowing had to be crushed, as giving a hostage to fortune. Hence the amazingly inconsequential and uninspiring economic agenda they put forth. But, even that agenda was clearly impossible to fund, without significant tax rises or borrowing, given the state of the public finances, which everyone other than Rachel Reeves, apparently, was able to discern.

The existence of a £20 billion “black hole” in those finances was only news to Rachel Reeves, when they opened the books, so it was claimed, even though, numerous others had pointed it out months before the election! The economic analysis and programme of Rachel Reeves was never airtight, but as the months ticked by, even more holes were exposed. To fill all of Reeves' holes, it was obvious that either taxes would have to rise, borrowing increase, or both. But, Blue Labour had committed to doing neither, and had jammed itself into a tight spot of its own making. It had come up with the delusional alternative of growth, as the means of raising its revenues, and so shrinking the deficit. It was both delusional and lying, because growth requires changes in the economy itself, which often take years, if not decades to bring about. Blue Labour could offer no evidence that it could raise growth other than minor measures such as changes to planning regulations and so on.

There are two major causes of slowing growth in the UK economy. One is falling levels of productivity. It is not alone in that. Global productivity always falls at this stage of the long wave cycle. The peak of the last Innovation Cycle arose in 1985, as the microchip revolution swept the globe, replacing labour and, hugely depreciating the existing fixed capital stock, which brought about a huge rise in the global, annual rate of profit, which, in turn, also, led to falling interest rates and rising speculation on rapidly inflating asset prices. That rise in productivity, and profits continued for another 20 years, as a period of intensive capital accumulation shook out labour, and old technology, replacing it with the new technologies.

But, in fact, that rising productivity from the 1980's until the early 2000's, was actually one cause of slower global growth, as is always the case in such periods. As Marx describes, the rising productivity means that gross output rises more slowly than net output, the physical counterpart of the higher rate of surplus value and profit. In past long wave cycles, its when that period of rising productivity, and intensive accumulation, transitions into extensive accumulation, so that every increase in capital means a greater increase in employment, also, meaning a slowing in productivity growth.

What is different in this cycle, as I have set out before, is that the global ruling class, particularly in the developed western economies, has become addicted to rising asset prices, and any speeding up of growth, based on extensive accumulation, means rising wages, and rising interest rates, which, then, causes asset prices to fall, and, in conditions where those asset prices have been inflated to astronomical levels by repeated injections of liquidity, then, even the slightest rise in those rates means global financial crashes, like that of 2008. Only if capital could continue to accumulate on the basis of rising productivity could it have avoided that. But, the main way it achieved that, as the effects of the 1980's Innovation Cycle waned, was by removing global barriers to trade, and expanding the global division of labour/globalisation of production.

Brexit, and petit-bourgeois nationalism has cut the legs off that option, and even sent globalisation into reverse. For Britain, and its economy, highly dependent on trade and its trade with the EU, in particular, Brexit was just about the most stupid course of action it could take. Yet, the main parties have pursued it, as they have chased after the votes of that reactionary petty-bourgeoisie that has imposed its numbers electorally, as it expanded by round 50% in the period since the 1980's, itself a consequence of the process of technology replacing wage-labour, and sending former workers into the ranks of the impoverished and precarious petty-bourgeoisie, as a plethora of small traders/white van men.

Despite the fact that the electorate clearly recognised this reality, and now overwhelmingly support reversing Brexit, the main parties – Blue Labour, Tories and Reform – are paralysed, because none of them wants to be the first to break ranks, in fear of losing a large chunk of its perceived electoral coalition. But, that is a delusion too. The Conservative Party is dead, as its core petty-bourgeois base has already simply rebranded itself as Reform. Reform itself has reached the peak of its electoral support, based on that petty-bourgeoisie, and as is happening with Trump in the US, its inability to deal with the economic reality it faces, leads to it disillusioning even that base. Again, in previous times, it would be precisely those conditions that would enable the working-class, led by a mass communist party, to draw that petty-bourgeoisie behind it, not by appeasing it, or forming unprincipled popular fronts with it, but by marching out in front of it with a clear progressive alternative.

That petty-bourgeoisie is currently fragmenting, hence a section is being driven into the camp of the fascists, as seen with Musk and Yaxley-Lennon. Electorally, that split means those parties have peaked, but as Trotsky noted in relation to that phenomena in Germany, its consequence is that the actual fascists then seek to move increasingly from the ground of electoral politics to that of street fighting and paramilitary organisation. Any attempt to continue to appease that reactionary petty-bourgeoisie is, therefore, irrational. The Conservatives, now only face losing the rest of their electoral support based in the aspiring, professional middle-class, if they chase after Reform. They have already moved in droves to the Liberals.

But, Labour has seen the same thing. Now, it faces a similar collapse, as its core working-class vote flocks to the Greens, Liberals and others, hastened, increasingly, by the workings of the first past the post system. Its only rational choice is to cut loose from the reactionary, petty-bourgeois nationalist agenda it has pursued, since Starmer became Leader, backed by the shadowy forces of Blue Labour, and its ties to Trump, Zionism and other global reactionaries, and to embrace the EU. But, it will have to ditch Starmer and Blue Labour to do that. The current cakeist nonsense of a UK-EU Customs Union and so on, are just the latest variation of the delusion of a Labour Brexit. There is no chance of Britain creating a new Customs Union with the EU, and even if there were, it is meaningless, outside the context of being inside the Single Market. It is the single market that removes all of the frictions to trade, not the Customs Union. It is the former that is fundamental to raising productivity for Britain, as the basis of growth.

But, currently, it is only the Greens that are offering this alternative – if you ignore the Rejoin EU Party. Even the Liberals are too cautious to promote their long-standing support for the EU, and, instead give credence to the nonsense about closer ties to the EU, a new Customs Union and so on. So, Blue Labour's agenda is based on a delusion of the potential for economic growth, whilst refusing to commit to the one thing that could bring that growth to fruition. Hence, as the last GDP data show, the UK economy continues to not just stagnate, but even contract. It fell in September and October, and looks like being a negative final quarter of 2025.

The chaos and incompetence ahead of the budget, has continued after it. Reeves was accused of again misleading voters in relation to the health of the economy, in order to justify raising taxes. What that really amounted to was an attempt to press Blue Labour into further measures of austerity by cutting welfare. But, Reeves has been knee-capped by even the timid backbench MP's, who have to face the wrath of voters day after day in their seats. In fact, again, a similar thing has been seen in the US. Trump's support is cratering because, no matter how much he lies and lies again about how great the economy is, the reality is that US voters see growth slowing as a result of his tariffs, and they see their cost of living continuing to rise.

Starmer and Reeves have attempted the same deception in the UK, and all the same diversions over immigrants, but it is failing, and will continue to fail. In Reeves' budget, she talked about having increased NHS appointments, cut waiting lists and so on, as well as dealing with potholes in roads, but everyone can see that these claims have no real foundation. If some potholes have eventually been filled, they are dwarfed by the others that have appeared, but every motorist, and even more every cyclist, knows that even the claims about dealing with the existing potholes, are a lie. Anyone trying to get NHS appointments also knows that whatever figures the government claims are highly suspect, and open to manipulation and interpretation.

Waiting lists don't grow if you don't get put on to them. Back in 2003 when I was the Senior Vice-Chair of Staffordshire County Council's Health Scrutiny Committee, I got to attend meetings of the Board of the North Staffordshire Health Authority, and, at my first meeting, the question of waiting lists was addressed. At the time, I was actually on a waiting list to get an operation on a torn cruciate ligament. But, my experience gave me cause to question the data that was being provided, and I pointed out that I had been waiting for far longer than the claims being made suggested should have been the case. In a break, one of the officials spoke to me about it, and having checked the computer system, informed me that I seemed to have just disappeared off it! Precisely the point I had been making in the meeting. Government computer systems are notoriously unreliable, and workers under increasing pressure to meet targets, are also prone to massage the data, as was seen classically in the centralised planning systems of Eastern Europe under Stalinism.

The contradictions that petty-bourgeois nationalists are facing are, therefore, increasingly exploding, and no amount of lying and boosterism is going to fool voters who see the reality of decaying infrastructure, collapsing public services, due to lack of workers, and the workers there are being grossly underpaid, after 30 years of austerity, as well as seeing growth slowed by the implementation of Brexit, and it also resulting in higher prices, all the while, the liquidity pumped into the system has kept asset prices astronomically inflated, itself meaning that millions cannot afford a home to live in, or to put adequate amounts into a pension scheme to cover their future retirement. Now, we have these governments pumping out further ludicrous claims about a potential Russian invasion of Western Europe, requiring billions more to be poured down the drain to fund military spending. This is the same Russia that has been bogged down in a war against Ukraine for the last 4 years, and which, the same NATO countries have told us all along, Russia was losing, and whose economy was on its knees, as a result!

The best defence of Western Europe would be increased spending on its own infrastructure, and public services, raising the living standards of its people, as something the workers of Russia could aspire to, not reducing the living standards of workers in Europe further by draining resources into useless military spending and further belligerence, such as led to the Ukraine War, which can only be seen by the workers in Russia, as a further threat to them, and leading them to back the militarism of their own reactionary rulers. But, the governments in Europe will not do that, because they know that their own main enemy is not Putin, but their own workers. Thatcher said it openly in 1984, when she described the miners as “The Enemy Within”. All bourgeois politicians see the organised working-class in that way, and, they know that any period of sustained economic growth, means, now, a growth in the economic and social position of that working-class, much as happened in the 1950's, 60, and 70's, and that means a greater confidence, organisation and assertiveness of that class.

Anti-Duhring, Part II, Political Economy, X – From The Critical History - Part 1

As noted in the Introduction, this section was written by Marx. In the earlier editions, Engels had to severely cut it, but, as he explains in his Preface to this Edition, he was able to restore it to Marx's initial contribution. Although it was written by Marx, it appears in Engels' name. I will continue on that basis, as though the words are those of Engels.

“Finally, let us take a glance at the Critical History of Political Economy, at “that enterprise” of Herr Dühring's which, as he says, “is wholly without precedent”. Perhaps here at last we shall find the definitive and most rigorously scientific treatment which he has so often promised us.” (p 290)

One of the main discoveries in this sphere that Duhring proclaimed, was that “economic science”, is “an enormously modern phenomenon.” By “enormously modern phenomenon”, Duhring means starting only in the late 19th century. In fact, as Marx sets out, in Capital I, philosophers had tried to wrestle with the concept of value going back, at least, 2000 years. Both in Greece and in China, at around the same time, they had sought to reconcile the two aspects of value – use-value and exchange-value – represented by the commodity. But, these societies were still ones in which direct production predominated. The majority of production was of products to be directly consumed not exchanged as commodities.

As Marx explains in Capital I, a product has value, i.e. it is the product of labour, and labour is value, value is labour. This value is necessarily individual value, because each individual use-value is unique. It is not general, abstract labour that produces it, but some specific, concrete labour, and, even more than that. If labourer A produces a kilo of yarn, on a given day, it may take them 8 hours. The next day, they may take 8.5 hours, the day after only 7.5 hours. Each kilo they produce is not only unique, in its use-value, i.e. the quality of the yarn, but, also, in its individual value, the labour-time taken for its production.

For the product, consumed by the producer, in conditions of direct production, this does not matter. As Marx describes, in Capital and Theories of Surplus Value, in the product, use-value and value (the basis of exchange-value) are inextricably linked. The producer only produces products if they are use-values for them, and the value of these products, the labour-time, they require to produce them (individual value), is what it is. They only expend this labour-time if they conclude the use-value resulting from it is worthwhile. So, in societies where such direct production still predominated, it is clear why the distinction between the product, and the commodity is somewhat a mystery to be unravelled.

But, commodity production and exchange – mostly exchange between communities not individuals – has existed for at least 7,000 years, as Engels sets out in his Supplement to Capital III. That inextricable connection of use-value and value of the product – I want this use-value, and its worth the labour-time to produce it – now appears differently, in relation to the commodity. I do not, want this use-value, but I recognise that it has value, and this value can be realised in exchange for other use-values I do want. Its value, now, “appears on its face”, as Marx puts it, in Capital I, as its exchange value or price.

It is not surprising, therefore, that, even when we come to the period of Classical Political Economy, of Smith, Mill, Say and Ricardo, confusion still persists, in relation to the nature of the commodity, as against the product, and it is manifest in Mill's Law of Markets, popularised as Say's Law. It continued to see in generalised commodity production and exchange the conditions that existed under direct production, where only the surplus products was exchanged, or, later, where, under conditions of barter, commodities were deliberately produced to be exchanged for others for such consumption, i.e. C – C.

Back To IX - Natural Laws of Economics.  Ground-Rent

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