Anti-Duhring, Part II, Political Economy, X – From The Critical History - Part 18

Engels is making the point, here, alluded to earlier, of the distinction between money as measure of value and money tokens/currency. A requirement for a money commodity, such as gold, is that it does itself have value, which is why things like Bitcoin are not money. But, a money token is, indeed, only a token of value, and need have no value itself, as with base metal coins or paper notes. On this point, therefore, Hume was inferior to Petty, and many of his own contemporaries. He, also, retained some of the old mercantilist prejudices and notions, “that the “merchant” is the mainspring of production, which Petty had long passed beyond.” (p307)

Contrary to Duhring's claims about Hume's concern with the “chief economic relationships”, Engels says,

“if the reader only compares Cantillon’s work quoted by Adam Smith (which appeared the same year as Hume's essays, 1752, but many years after its author’s death), he will be surprised at the narrow field covered by Hume’s economic writings. As we have said, despite the letters-patent issued to him by Herr Dühring, Hume remains a respectable figure in the field of political economy too, but here he is anything but an original investigator, and even less an epoch-making one. The influence of his economic essays on the educated circles of his day was due not merely to his excellent presentation, but much more to the fact that they were a progressive and optimistic glorification of the thriving industry and trade of the time — in other words, of the capitalist society which was then rapidly rising in England, and whose “applause” they were therefore bound to gain.” (p 307-8)

Engels cites as an example of Hume's polemic in favour of indirect taxes. Without mentioning his name, Hume polemicises against Vanderlint, who was “the stoutest opponent of indirect taxation and the most determined advocate of a land tax.” (p 308) The system of indirect taxation – consumption taxes – was used ruthlessly by Sir Robert Walpole to benefit the landlords and the rich, at the expense of the masses, just as Trump seeks to do, today, with his use of tariffs, which are also a tax on consumption.

Engels quotes Hume.

“They” (taxes on consumption) “must be very heavy taxes, indeed, and very injudiciously levied, which the artisan will not, of himself, be enabled to pay, by superior industry and frugality, without raising the price of his labour.” (p 308)

Tax, as Marx notes, cannot change values or general level of prices, but is ultimately, therefore, a deduction from surplus value, as with interest and rent.  They cause some prices to rise, but, equally, therefore, others to fall, as capital is reallocated to restore an average rate of profit.

Marx argued for direct taxes on income, as opposed to indirect taxes, not because of any concern for the supposed progressive nature of the former, but because he sought to limit the role of the state. He wrote,

“(a) No modification of the form of taxation can produce any important change in the relations of labour and capital.

b) Nevertheless, having to choose between two systems of taxation, we recommend the total abolition of indirect taxes, and the general substitution of direct taxes. [In Marx's rough manuscript, French and German texts are: "because direct taxes are cheaper to collect and do not interfere with production".]

Because indirect taxes enhance the prices of commodities, the tradesmen adding to those prices not only the amount of the indirect taxes, but the interest and profit upon the capital advanced in their payment.

Because indirect taxes conceal from an individual what he is paying to the state, whereas a direct tax is undisguised, unsophisticated, and not to be misunderstood by the meanest capacity. Direct taxation prompts therefore every individual to control the governing powers while indirect taxation destroys all tendency to self-government.”

(Instructions For Delegates of The Provisional Council of The IWA)

Back To Part 17

McDonnell For Labour Leader

The Labour Party is almost dead, poisoned by the venom of progeny of the marriage, made in hell, of Blue Labour and New Labour, in order to defeat Corbyn and a resurgent Left, after 2015. But, the biter has been bit. Mandelson, aka, the Prince of Darkness has been exposed to the light, and begins to disintegrate before our eyes, whilst his disciples rush to rescue his church, all the while being slowly dragged into the light themselves. One of the original apostles, Blair, is silent, whilst the other Brown, has sought to disown his master and all his works, particularly from the time of the 2008 global financial crisis. At the same time, Brown has sought to offer some solace to Starmer, who will be offered up as the sacrifice.

The revelation setting out the way the Prince of Darkness, riding a pale horse, acted in 2008, to pass information to Epstein, whose global financial connections with other members of the elite, enabled them to feather their own nest, only begs further questions to be asked, including some that were asked at the time about how and why the global ruling class were bailed out, by bailing out the banks, and why central banks and governments pumped literally trillions of dollars into stock and bond markets in the years that followed, whilst simultaneously draining trillions of dollars from the global economy, via financial austerity.

My novel, 2017, is a work of fiction, but draws on some historical events during the period after 1999. One such event is the strange behaviour of the UK, under the Chancellorship of Gordon Brown, in selling large amounts of gold from its reserves, just at the point when the price of gold had reached a nadir of around $250 an ounce, and was about to embark on a long period of secular rise that took it to nearly $2000 in 2011, and, after a period of consolidation, has now seen its price rise to over $5,000 an ounce. In my novel, I also discussed other suggestions on the sale of the gold at a time when many financial institutions had been shorting it, and when, a sharp rise in its price could have cost them billions of dollars.

Brown proclaims that Starmer is an honourable man, and that, although appointing Mandelson was a mistake, he believes that it was only a mistake. But, there is no grounds for claiming that Starmer is in any way honourable. Like Trump and Mandelson, he lies as easily as he breathes. We know that he was chosen by the unholy cabal of New Labour and Blue Labour to act as their vicar on Earth, the bland face they presented to the Labour Party, as they sought to seize control from Corbyn and the mass of the members. In that role, he presented himself as continuing the mildly progressive, and electorally popular, social-democratic agenda of Corbyn, but, it was simply a lie to get elected leader, and as soon as he had done so, every single element of that programme, no matter how electorally popular, was ditched.

For the conservative, social-democrats of New Labour, Starmer's commitment to the petty-bourgeois nationalist agenda of Blue Labour, symbolised by his support for Brexit, is anathema, but the Blairites of New Labour could not defeat the Corbynite majority in the party on their own. They needed an alliance with Blue Labour, and the cover of the need to win in the so called Red Wall seats. The ground had already been seeded. The idiotic and unprincipled position of Labour of refusing to oppose Brexit, under Corbyn, on the grounds that it had been voted for in the 2016 Referendum, and the false claims about needing to “win back” Labour voters in Red Wall, constituencies, fed into it. The use of the “anti-Zionism = anti-Semitism” lie, to oust Corbyn, and attack the Left, also provided the New Labour/Blue Labour alliance with a shared trope that could be used.

But, it is the conservative social-democrats (neo-liberals) of New Labour that have been used by Blue Labour, just as, in the past, the liberal politicians in Italy and Germany thought they could utilise the Fascists but found that they had themselves been used. The Prince of Darkness has fallen, but Beelzebub, in the form of Maurice Glassman, is ready to seize his throne, and to instruct his minions. The spawn of the marriage made in hell, has stepped forward to sacrifice himself in what appears a vain attempt to keep in place Starmer. McSweeney has gone, but Mandelson himself showed that such actions are far from being terminal.

By the end of the week, Starmer may well be gone too. The main thing saving him at the moment is that, neither New nor Blue Labour have a credible candidate to replace him. Streeting is himself a progeny of Mandelson's New Labour venture, and closely tied to Mandelson himself. He is also closely tied to all of those private healthcare vultures set to swoop on a collapsing NHS, and so bringing with it all the echoes of those relations between Mandelson, New Labour and big business. Burnham could have been an acceptable candidate for them, but is not in parliament, blocked by Starmer. Rayner is touted by sections of the media, but is also recently tainted by all the same kinds of sleaze and grasping. For the Left, despite what the media try to portray she has no credentials, and sat passively as Starmer's Deputy as he steadily decimated the party membership, and pushed ever Rightwards.

More significantly, none of those alternatives can save Labour, at this stage, from its inevitable demise, just as the repeated changes of leader of the Tories was unable to save them. For all the glaring deficiencies of Corbyn's Labour, it still turned Labour into a truly mass party, the largest in Europe, and, in 2017, secured the biggest increase in votes and seats since 1945. Even in 2019, having suffered 4 years of constant attack from the Right inside the party, and from the media, it still won more votes than did Starmer's Labour in 2024. Despite the deficiencies of Corbyn's politics, and of the Stalinoid elements behind him, the very prospect of a new Left Party, quickly attracted 800,000 people towards it.

The continued failure of Your Party to resolve its internal squabbles, has simply driven a large portion of those seeking such an alternative into the arms of the Greens. The fact that the Greens, despite their own petty-bourgeois agenda, have attracted over 150,000 members, and have surged in the polls to an extent that, in many seats, it will be they and not Labour that represents the credible alternative to Reform, shows that, the idea of Labour offering up just the same stale and failed politics of the last 30 years, will not fly. Only if the Blair-Rights could form an alliance/party with the Liberals and Left of the Conservatives, would they be able to appeal to any sizeable electoral base within the ranks of the progressive middle-class.

If Labour is to offer any real alternative on its own, its only hope, at this point, is to outflank the Greens on their Left, and, in doing so, to also appeal to those same sections of the progressive middle-class, in particular, by committing to reverse Brexit, as a precondition for growth. The only credible candidate to do that is John McDonnell. McDonnell could bring back large numbers of those that supported Corbyn's Labour. But, he would suffer the same problem as Corbyn with the hostile PLP, unless, to save their own skins, they were forced to acquiesce in his return. Either way, the mistake made by Corbyn cannot be repeated. The party must be thoroughly democratised, including instituting mandatory reselection of all MP's and councillors.

SNNS 29

 

Anti-Duhring, Part II, Political Economy, X – From The Critical History - Part 17

““In general,” Herr Dühring sermonises us, “the estimate of most of Hume’s commentators has been very prejudiced, and ideas have been attributed to him which he never entertained in the least”.

Herr Dühring himself gives us more than one striking example of this “procedure”.

For example, Hume’s essay on interest begins with the following words:

“Nothing is esteemed a more certain sign of the flourishing condition of any nation than the lowness of interest: and with reason; though I believe the cause is somewhat different from what is commonly apprehended.”.” (p 306)

As Marx sets out in Capital III, no such mechanical correlation can be adduced. The lowest rate of interest arises at that point of the cycle following the period of crisis. At that point, the rate of profit rises sharply, due to rises in productivity brought about by a technological revolution. There is, then, a large rise in the mass of realised profit, relative to the demand for money-capital. Such periods are characterised by slower growth and stagnation, and the low rate of interest encourages speculation in assets, rather than investment in real capital accumulation. Similarly, when economies are booming, the demand for money-capital rises relative to its supply, because, in such periods, the rate of profit is squeezed. The rate of interest rises to its highest point when this same process leads to crisis.

What can be said is that societies that had a long period of capital accumulation tend to have lower rates of interest. That is because, as Marx describes, they have, thereby, a larger pool of amassed savings. Many of those who were were formerly industrial capitalists – as with Engels – having retired, take their money-capital with them, and it forms a relatively growing pool that can be thrown in to the money market in addition to the constant flow of additional money-capital from realised profits.

The idea, put forward by Hume, as a commonplace, had, in fact, been put forward a century earlier, by Child. Hume never claimed to have originated this idea, and yet, Duhring says,

“Among the views (of Hume) “on the rate of interest we must mainly stress the idea that it is the true barometer of conditions” (which?) “and that its lowness is an almost infallible sign of the prosperity of a nation”. (p 306)

Engels notes,

“We have seen how Hume confuses every increase of the precious metals with such an increase as is accompanied by a depreciation, a revolution in their own value, hence, in the measure of value of commodities. This confusion was inevitable in Hume because he had not the slightest insight into the function of the precious metals as the measure of value. It was impossible for him to have it because he had absolutely no knowledge of value itself. The very word is to be found perhaps only once in his essays, in the passage where, in attempting to “correct” Locke's erroneous notion that the precious metals had “only an imaginary value”, he makes matters even worse by saying that they had “chiefly a fictitious value”.” (p 306-7)

Back To Part 16

Forward To Part 18

Anti-Duhring, Part II, Political Economy, X – From The Critical History - Part 16

Engels turns, now, to the related question of the rate of interest and the supply of money. As I have set out, elsewhere, the confusion extends not only to a failure to distinguish between money and money tokens/currency, but also money-capital. The rate of interest is a function of the demand for and supply of money-capital, and neither an increase in the supply of money nor money tokens equates to an increase in the supply of money-capital, which is largely a function of the rate of profit, and consequent mass of realised profit.

“Hume's arguments, expressly directed against Locke that the rate of interest is not regulated by the amount of money available but by the rate of profit, and his other explanations of the causes determining the high or low level of the rate of interest, are all to be found, much more exactly though less brilliantly stated, in An Essay on the Governing Causes of the Natural Rate of Interest; wherein the sentiments of Sir W. Petty and Mr. Locke, on that head, are considered. This work appeared in 1750, two years before Hume's essay; its author was J. Massie, a writer active in various fields, who had a wide public, as can be seen from contemporary English literature. Adam Smith's discussion of the rate of interest is closer to Massie than to Hume. Neither Massie nor Hume knows or says anything regarding the nature of “profit”, which plays a role with both.” (p 305-6)

Marx discusses these ideas in Theories of Surplus Value. The argument that a rise in the supply of money, i.e. of the money commodity, such as gold or silver, cannot bring about a rise in prices, unless that increased supply is a consequence of a fall in the value of that money commodity, was set out above. However, a fall in the value of the money commodity does bring about both an increase in the quantity of it required to act as money, and to be thrown into circulation as currency, and, also, a rise in prices.

As Marx sets out in "A Contribution To The Critique Of Political Economy", the same is true if the quantity of gold represented by the standard of prices, e.g. the Pound, is reduced. In other words, if the value of gold remains constant, but a Pound, now, represents only 1/8 ounce of gold, rather than ¼ ounce of gold, i.e. each Pound, represents only half the amount of social labour-time it did previously, more £'s must be thrown into circulation, and prices double.

But, in any of these cases, the increased supply of money, or of money tokens does not represent an increase in the supply of money-capital. If the value of money falls, requiring more money to be thrown into circulation, or if the value of money tokens falls, because the value of money remains constant, but additional tokens are thrown into circulation, the effect is a rise in prices, not a change in interest rates. If on one side of a balance there is 6 potatoes, and on the other side there is a 5 kg weight, it does not change anything if, instead, of the one 5 kg. weight there is 5 1 kg. weights. If the demand for money-capital is £1 million to buy commodities, if prices rise as a result of inflation, so that those commodities cost £2 million, then, the demand for money-capital will rise to £2 million, and this £2 million will have only the same value as previously was represented by £1 million, i.e. will buy only the same quantity of commodities.

There would be no effect on the rate of interest. If it was 10% before, it will be 10% after. Before, the £100,000 of interest bought a certain quantity of commodities, but, now, the same quantity of commodities are bought with the £200,000 of interest. All that has changed is the price labels.

Back To Part 15