Theories of Surplus Value, Part III, Chapter 20 - Part 93

The use of historic prices not only gives this illusion of profits or losses arising from changes outside the actual production process (capital gains and losses, or as Marx sets out, later, and in Capital III, Chapter 6, the release or tie up of capital, whereby capital is transformed into revenue, or vice versa) but also gives misleading calculations for the rate of profit. The yarn producer might have paid €10 for cotton, its historic price, but would be badly misled if they proceeded on this basis. The rise in the value of yarn from €30 to €40 does not represent an additional €10 of self-expansion of capital-value. It represents, in fact, the reality that, although the historic price of the cotton, consumed in its production, was only €10, its value was actually €20. This was not a self-expansion of value, but merely a change in the value of the cotton, arising from a change in productivity. That becomes apparent when the yarn producer, having sold the yarn comes to replace the consumed cotton. As described above, out of the €40, they must now spend €20, to replace the cotton, alongside the €10 to replace labour-power. The actual amount of profit, they obtain, equal to the amount of surplus value produced, which has not changed, is still €10. On the basis of the use of historic prices, it created the illusion that €20 of profit was created, even though the surplus value remained €10, so that on this basis, labour is not the only source of profit. It also then appeared that, the historic cost of the capital was €20, with profit of €20, so that the rate of profit was 100%. 

But, as Marx describes, in various places, the real measure of the self expansion of the capital, is the extent to which it enables it to accumulate. If the rate of profit really were 100%, it should enable the capital to employ twice as much cotton, and twice as much labour, as before. As Marx says, capital is a social relation between capital and wage-labour, and its expansion is an expansion of this relation. But, it's quite clear that this capital cannot double in size. Previously, €10 of profit enabled the capital to expand by 50%. It could employ 150 kilos of cotton, and €15 of labour-power. But, now out of the €40 received for the yarn, €20 is used to replace the 100 kilos of cotton, and €10 is used to replace labour-power, leaving €10 for accumulation. With the price of cotton now at €0.20 per kilo, the €10 of profit can only buy an additional 33.3%, alongside 33.3% more labour-power. The actual rate of profit, therefore, rather than doubling, has, in fact, fallen from 50% to 33.3%. 

In the coming chapters, we will see how Marx explains that the use of historic prices confuses Ramsay into this belief that additional profit arises from these changes in the price of constant capital, which are, in fact, an illusion, based upon capital gains or losses. It would only be true that, in the example above, the rise in the value of the cotton results in additional “profit”, if, as Ramsay does, and as the Temporal Single System Interpretation does, we assume that the capital is always liquidated, in full, i.e. converted into money, at the end of the year, and that production is not continuous and ongoing. In that case, the €10 of capital gain accruing to the yarn producer, could be pocketed in cash, with no requirement for them to have to reproduce their capital, and thereby to replace the cotton at its new higher value. But, that is not an analysis of capitalism, which is such a system based upon continuous and ongoing production.  The circuit of industrial, capital, as Marx sets out, in Capital II, is not M - C ... P ... C` - M`, with rate of profit then being calculated as the change in M` relative to M, where in both cases M represents actual money prices paid.   That is the circuit only of newly invested money-capital, or of capital that is being liquidated, i.e. where a firm is closing down.  The circuit of industrial capital is rather P ... C` - M`. M - C ... P, where the value of P, and and of capital value throughout this circuit, is expressed not in money prices paid, but only in money equivalent terms of the capital value, at current reproduction cost, i.e. with money acting only as unit of account.  Only on this basis can the self-expansion of the capital, be separated out from capital gains and losses, and an accurate measurement of the rate of profit be obtained.   Marx gives the expanded form of this circuit of industrial capital as,

What the yarn producer obtained was a capital gain, not additional surplus value. They had originally paid €10 for cotton, and its value rose to €20. It is the potential for such capital gains that leads to speculation, whereby capitalists seek to identify commodities, or assets whose current market price they believe to be lower than their market value, or where specific market conditions are likely to lead to the market prices of these commodities or assets rising sharply above their current market value. However, such speculative capital gains are not profits. It does not represent a self-expansion of capital-value. 

Back To Part 92

Theories of Surplus Value, Part III, Chapter 20 - Part 92

Bailey, on the one hand, defines a rise in the value of labour as a rise in the portion of the total product that goes to workers. 

“Now it is an increase in the portion of the product assigned to the labourer which constitutes a rise in the value of his labour…”” (p 153) 

he argues this on the basis that the value of labour is measured in terms of use values exchanged with it. 

““… but it is an increase in the proportion assigned to the capitalist which constitutes a rise in […] profits,”” (p 153) 

Here, he determines value not in terms of use values, but in terms of the quantity of labour they represent. And, by using two completely different definitions, and measurements of value, Bailey, thereby, concludes that there is no contradiction in his claim that the value of both labour and profits can rise simultaneously. 

“This absurd argument against Ricardo is quite futile since he merely declares that the value of the two portions must rise and fall in inverse proportion to one another. It merely amounts to a repetition by Bailey of his proposition that value is the quantity of articles exchanged for an article. In dealing with profit he was bound to find himself in an embarrassing position. For here, the value of capital is compared with the value of the product. Here he seeks refuge in taking value to mean the value of an article estimated in labour (in the Malthusian manner.)” (p 153-4) 

On Bailey's definition of value, not only is value simply exchange-value, and exchange-value only market price/historic price, but, on this basis, there are only ever historic prices. He writes, 

““Value is a relation between contemporary commodities, because such only admit of being exchanged for each other; and if we compare the value of a commodity at one time with its value at another, it is only a comparison of the relation in which it stood at these different times to some other commodity” (op. cit., p. 72).” (p 154) 

This is the same temporal definition of value, as used by the Temporal Single System Interpretation, as against the definition of value, used by Marx, of the current reproduction cost, determined by the average socially necessary labour-time currently required for reproduction, which varies according to changes in social productivity. But, on this temporal basis, as Marx says, value can never rise or fall, because, in order to determine such movement, it is necessary to compare its value at one time compared to another. Indeed, unless that is done, it's impossible to determine whether capital has self-expanded, or not, and by how much. This is something that Marx explores further in the next few chapters in looking at the confusion suffered by Ramsay, as a result of his use of historic prices. It means that changes in the value of the commodities that comprise the constant capital, can appear to create additional profit, thereby undermining the labour theory of value. In fact, all such changes amount to are capital gains rather than profits, or else a release of capital as revenue. 

It is something that confuses speculators, who also confuse capital gain with profit. If the price of cotton is €10 for 100 kilos, and €10 of labour-power turns it into 100 kilos of yarn, with a value of €30, €10 of surplus value is produced. The capital has self-expanded by €10. However, if the value of cotton rises to €20, which is passed on into the price of the yarn, which now sells at €40, it may appear that, in relation to the historic cost of the capital, a profit of €20 is produced, i.e. the historic cost of the capital was €10 for cotton and €10 for labour-power, and the yarn now sells for €40, giving a €20 profit. In that case, the capital would have self expanded by €20, even though, it has only actually self-expanded by €10, the amount of surplus value produced. The additional €10, is not profit, but is only a capital gain, resulting from the change in the price of the cotton, held in stock, from €10 to €20. 

As Marx demonstrates, in fact, on the basis that capitalist production is continuous and ongoing, this additional profit is a mirage, because, although, the yarn is sold for €40, in order to reproduce the consumed capital on a like for like basis, now, €20 out of this €40 must be paid to replace the 100 kilos of cotton, with the same €10 going to reproduce the consumed labour-power, so that the actual profit, remains only €10 of surplus value, the amount by which the capital has actually self-expanded. On the basis of a temporal definition of prices, and use of historic prices, we would have to conclude, as indeed Ramsay does, that labour is not the only source for the self-expansion of capital, and so the labour theory of value is thereby destroyed. 

Back To Part 91

Forward To Part 93

Northern Soul Classics - This Love Starved Heart of Mine (Is Killing Me) - Marvin Gaye

Only two weeks to go to the Stoke Town Hall, Northern Soul All-Nighter, and more classics like this from Marvin Gaye.  Get yourself along to it, and Keep The Faith.

Friday Night Disco - Proud Mary - Ike & Tina Turner

A No Deal Brexit Could Be A Bonanza For Ireland

It has generally come to be accepted that whilst Brexit will be bad for Ireland as well as Britain, a No Deal Brexit will be disastrous for Britain, but also very bad for Ireland.  Brexit will indeed, be bad for Britain, and have a negative impact on Ireland, though not as bad as has been stated, but, whilst a No Deal Brexit will be disastrous for Britain, it could mean a bonanza for Ireland.

Brexit will be bad for Britain for all the reasons that have been discussed over the last three years.  Undoubtedly, because Ireland's largest single trading partner is Britain, including all the trade that occurs daily across the border inside Ireland, it will, therefore, have a negative impact on Ireland.  Yet, the extent of that negative impact should not be overstated.  A lot of Ireland's economy has developed in recent decades on the basis of technology, and this production, is far less dependent upon the physical movement of goods.  Moreover, as part of the EU's Single Market and Customs Union of  around 450 million people (after Britain leaves), and economy of around $16 billion, compared to around just $2 billion for the UK economy, Ireland will have much greater ease in redirecting its trade than will the UK.

And, in any case, the fact remains that even if the UK leaves the EU, Ireland, along with other EU countries will continue to sell a similar amount of their goods and services to Britain as they do now.  In fact, even more so.  As the UK economy grows more slowly as a result of Brexit, and as foreign companies relocate out of the UK to Europe, so as to avoid, the problems of selling into Europe from outside the Single Market, and Customs Union, all those goods and services currently produced by those companies, and sold internally in the UK - as well as being exported to the EU, from the UK - will become imports to the UK, thereby diminishing UK GDP, and increasing its trade deficit with the EU.  The only difference will be that if the UK is outside the Customs Union, and operates under WTO terms, it will introduce a range of tariffs, as set out by the WTO, on those imports.  Indeed, as a result of the production being located outside the UK, into the EU,  the UK would almost certainly want to introduce such tariffs so as to make imports more expensive, so as to protect UK firms from the competition, and prevent the UK's trade deficit ballooning due to the rise in imports and fall in exports.

The consequence, of course, would be that as a direct result of these tariffs, the price of all those goods and services would become much more expensive for UK consumers, which means that workers in the UK would face a sharp drop in their standard of living at a time, when the relocation of production out of the country was pushing up unemployment, and thereby causing UK wages to fall.  But, in fact, even with high tariffs, its unlikely to prevent the UK needing to import these EU produces goods and services.  If all foreign car producers move production out of Britain, for example, and relocate to Europe, its not as though people in the UK will stop wanting to buy cars.  Its just that now those cars would have to be imported from France, or Germany, or Spain, or Belgium, and would be much more expensive, due to the tariffs.  The same is true with energy, food, other raw materials, and so on.

Already, that can be seen in relation to Ireland.  Even the threat of Brexit has caused financial firms to send tens of billions of pounds of capital out of Britain, mostly from London, to other EU locations.  Dublin has been one of the places to benefit from that, partly because many existing staff can transfer from London to Dublin, and the use of English makes such a transfer of operations easier to achieve.  But, what is true in relation to the high value, very profitable financial industry, applies to other high value production and services.  So, the effect of Brexit will have negative consequences for Ireland, as a declining Britain impacts on Irish trade with the UK, but, at the same time, that very decline of Britain can see a considerable movement of capital from Britain, to Ireland, creating employment and profits in Ireland that would otherwise have occurred in Britain. 

But, a No Deal Brexit, can mean a Bonanza for Ireland.  In the event of a No Deal Brexit, the UK's proposal has been set out in relation to the tariffs it would apply on a range of goods and services.  These range from 10% to 40%, and would apply to all those goods and services that are currently imported to Britain without tariffs inside the EU Customs Union.  But, at the same time, Britain has said that it will not impose any border checks on goods crossing the irish border into Northern Ireland.  That seems an amazingly reckless thing to do.  It means that Britain is inviting large scale legitimised smuggling into Britain, by the back door, using the Irish border as an open gateway.

The government was forced to admit that in the event of a No Deal Brexit, the channel ports would become clogged very quickly.  The EU will inevitably require UK exports to be checked at its borders, which means that UK exports will quickly seize up, leading to massive backlogs at Dover.  An obvious route for EU exporters wanting to avoid that will be to route their exports through Ireland, which inside the EU will have no such hold-ups.  As Britain proposes to have no border controls on goods moving from Ireland into Northern Ireland, a free flow of these goods into the North could occur, and as those goods would then be inside the UK economy, they would flow, freely, and tariff free across the Irish Sea, from Northern Ireland ports into mainland Britain.

Of course, in mainland Britain, those goods that have then entered tariff free into the UK, would be considerably cheaper than their counterparts, imported via other channels, that have had 10-40% tariffs imposed upon them, providing those that have imported through Ireland with significantly higher profits.  Indeed, it would make it lucrative for firms to establish production, or simply warehousing in Ireland, to be able to take advantage of such free money, provided to them by the British government. 

Rather as with the UK government's claim that it would not impose any border controls in Northern Ireland, which invites EU citizen's to migrate to Britain via that back door, the promise not to impose border controls so as to check goods crossing that border also seems designed to create a large scale movement that Britain would quickly seek to shut down. 

Theories of Surplus Value, Part III, Chapter 20 - Part 91

If Bailey's proposition is accepted, it still does not help in his argument with Ricardo. As Marx says, 

“Likewise the 225 quarters falling to the 6 men would still command 6 men and no more.) (Why does the almighty Bailey then forbid Ricardo to estimate the portion of the men, as well as that of the capitalist, in labour, and compare their mutual value as expressed in labour?” (p 152) 

Even in his own terms, Bailey arrives at contradictory and nonsensical conclusions, in trying to sustain his position. So, for example, he says, 

“Thus a rise in the proportion which went to the capitalist would be the same as an increase of the value of profits estimated in labour,” (p 152) 

Not only then does Bailey try to sustain his argument by first insisting in defining the value of labour in terms of use values, whilst defining profits instead in terms of a proportion of capital, but, here, he refers to the “value of profits”. But, his definition of value is exchange-value, measured in terms of the use values exchanged for a commodity. As Marx says, 

“How can he speak of the value of profits and an increase in their value, if “profit … does not denote an article which can be exchanged against other articles” (see above) and, consequently, denotes no “value”? And, on the other hand, is a rise in the proportion which went to the capitalist possible without a fall in the proportion that goes to the labourer?” (p 152) 

What Bailey does is not only to measure the value of labour in terms of use values, whilst measuring profit as a proportion of capital, but to confuse and conflate portion and proportion, in relation to the total output. Ricardo does not at all deny that the portion of output that goes to workers can rise alongside the portion that goes to capitalists. If total output rises from 100 units to 300 units, the portion going to workers might, as Bailey says, rise from 75 to 225 units, whilst that going to capitalists rises from 25 to 75 units. In that case, both obtain portions that are three times greater than they were before. But, the proportion of total output received by both remains 75:25. What Ricardo denies, correctly, is that the proportion going to both can rise. For example, if the proportion of total output going to capital rises to 50%, i.e. 150 units, it is tautologically true that only 150 units, or 50% of the total is left for workers, so that the proportion going to workers must, thereby, fall from 75% to 50%. Yet, despite this fall, in the proportion going to workers, the portion going to workers still doubles from 75 units to 150 units. 

In fact, it was this fact, that real wages could rise, as a result of rising productivity, whilst the same rise in productivity raised the rate of surplus value, which underlay the shift of industrial capital to a reliance on relative surplus value, and was the basis of Fordism and social-democracy, in the 20th century. 

“However, that Mr. Bailey calls the portion of the labourer “value” of “wages”, and the proportion [of the capitalist] value of “profits”, in other words, that the same commodity has two values for him, one in the hands of the labourer, and the other in the hands of the capitalist, is nonsense of his own.” (p 153) 

Back To Part 90

Forward To Part 92

Revoke Article 50 - Sign The Petition Now

The petition demanding that Article 50 be revoked has now gathered more than 1 million signatures, most of them just today.  Jeremy Corbyn has not ruled out calling for Article 50 to be revoked, which is a step in the right direction, as Theresa May appears from the accounts of some of those that have spoken to her, to be suffering some kind of delusional fantasy that might make her unfit to govern, and threatens the possibility of her irrational behaviour, and Britain crashing out of the EU by accident.

If she was the captain of a ship, this is the point where the Executive Officer would be consulting the ship's surgeon asking that the captain be declared unfit, and be relieved of their duty.  The question is, who in the Cabinet, and if not in the Cabinet then in parliament, will step up to theirr esponsibilities and get May to step aside to avoid a national disaster?

If you haven't signed the petition, do so now - Here.

Labour Should Demand “Revoke Article 50 Now!”

Brexit has caused an economic, social, political and constitutional crisis. According to a Sky Data Poll, 90% of people believe that Brexit has created a national humiliation. The same poll found that 60% of people blame Britain for the crisis, with only 7% blaming the EU. That, remember is not from some Remain supporting media outlet but from Sky, part of the Empire, of Trump's friend, and Brexit backing billionaire, Rupert Murdoch. It's clear that Theresa May and her government have no clue how to respond, and are allowing the country to drift ever closer, and in danger of falling over the precipice. Someone has to put an end to this chaos and potential calamity, with only a week to go, before Britain crashes out of the EU. It is time for Labour to now step up to the plate, and demand “Revoke Article 50, now!” This weekend, the mounting crisis will bring more than a million people out on to the streets of London to demand an end to Brexit. Corbyn's Labour Party should be at the head of that demonstration. If it isn't, Tom Watson's Labour Party will be, preparing itself to sweep Corbyn's Labour into the annals of history, for having failed to step up to meet its historic tasks. 

May's behaviour in parliament of describing parliamentary debate as time wasting, navel gazing, and “indulgence”, is simply a reflection of the authoritarian nature of her government, that is moving ever more steadily towards Bonapartism. Her speech to the nation, from Downing Street, on TV, appealing over the heads of parliament, directly to “the people”, is the classic action of a Bonapartist, preparing a coup to bypass parliament, and to claim the sole right to represent the “nation” themselves. It is a natural corollary of nationalism. May's repeated phrases such as “I know that you”, or “I am on your side”, illustrate that. Of course, such claims are ridiculous, because May is not on the side of the 48% of people who voted in 2016 to Remain in the EU, and even less on the side of the 56% plus of people who today say they would back Remain rather than Leave, still less the 76% who say they back another referendum. May is claiming for herself, the sole power of knowing what is, or what should be, in people's minds, and surprise surprise, what she claims to find there, just happens to coincide with what is in her own mind! But, if she is so confident in that, why does she not test her claim to be on the side of “the people”, by calling a General Election, or holding a referendum on her Brexit proposals? Undoubtedly, if May actually did think that her Brexit proposals would pass a new plebiscite, she would be quick to hold one, because such votes are the stock in trade of all Bonapartists and dictators. 

I warned several years ago that Britain was drifting towards Bonapartism. David Cameron, was the last in the line of conservative social-democrats that had held office over the last thirty years. But, the economic conditions, which had sustained such conservative social-democracy had ceased to exist, when in 2008, the underlying contradictions erupted in the financial crisis. The fact that Cameron could, just about, with the help of the Liberals, desperate for office under any conditions, get into Downing Street, corresponded to the fact that, central banks and governments could, just about, deal with the 2008 financial crisis, by recreating the conditions that caused it, on an even more astronomical scale, by printing even more money to use to buy up financial and property assets whose prices were inevitably collapsing. But, that did not resolve that crisis, it only deferred it, and made its next inevitable eruption that much more violent, when it comes, as I forecast in my book, Marx and Engels' Theories of Crisis: Understanding The Coming Storm. 

Cameron's government represented the pinnacle of conservative social-democracy, in Britain, much as the same could be said about Obama in the US, or Hollande in France. By failing to tackle the underlying reality, it was continually presented with a contradiction as appearance and reality continually bumped up against each other. And, that contradiction was working in the subterranean depths of society to create corresponding, contradictory social forces that reflected, often in distorted form, these underlying and contradictory material forces and conditions. In the US, it led to Trump, as Clinton necessarily failed to win, being herself a representative of that old failed, conservative social-democracy; in France it led to the danger of Le Pen, being confronted, not by the two old parties representing a continuation of that conservative social-democracy, but by Macron, who presented himself as a Bonapartist figure, above society, above the two old parties, always a danger, as in the US, where Presidential systems create the potential for Bonapartism, given that executive power is vested in the hands of a single individual. In Britain, in 2015, Cameron could only get into office, having himself given recognition to these conflicting and contradictory forces, as manifest most sharply inside the Conservative Party, by trying to conciliate the reactionary wing of the Tories with his proposal for a referendum. 

As I wrote a few weeks ago, Brexit, as with the election of Trump, is a reflection of the fact that the world is at an inflexion point, manifest in a struggle between two great class camps, one reflecting progress, the march of history, internationalism, and progressive social democracy, and the other reflecting reaction, looking backwards, attempting not just to hold up the march of history, but to turn the clock backwards, to force capitalism into the channels from which it has long since broken free, of the constraints of the nation state, and the dominance of small private capitals, and rampant free market competition. 

The media pundits have bemoaned May's attempt to blame MP's and to attack them, seeing it as short sighted, as it is those MP's she needs to back her. But, they fail to see that May knows exactly what she is doing here. It is a return to the Bonapartist strategy she has sought to implement all along, from day one, when she fought the election campaign on the slogan of “Strong and Stable Leadership”, putting her in the same camp as all those other Bonapartists and dictators her government was associated with, such as Duterte, of whom Liam Fox talked about their “shared values”, or of Netanyahu in Israel, whose Bonapartist regime has rested upon institutional state racism, against Palestinians and Arabs, and which now, in danger of losing office, has gone into alliance with an openly fascist party. It does not take a skilled investigative journalist to see the links between all of these dictators and Bonapartists, between the Tories/Farage/Bojo and Trump, Trump and Putin and Netanyahu, or Erdogan, or their support for those who would follow in their footsteps, in Europe, such as Le Pen, Wilders et al. The relations are there in open sight for all to see. 

May knew exactly what she was doing in attacking parliament, and appealing over the heads of MP's to “the people”, she was doing exactly what every other Bonapartist or aspiring Bonapartist has done in the past. That is to bypass democracy, and its institutions and appeal to the angry mob. It is what Trump has done in the US, in his attacks on Muslims, for example. And, given the death threats that a number of MP's have received, from Brextremist thugs and fanatics, the desperation of May's strategy is also there for all to see, But, May's problem is that she is a Prime Minister not a President. She is not elected by “the people”, but by parliament, by MP's, and can be sacked by them, when parliament so chooses. Parliament should have done that long ago, but Labour's opposition to May and the Tories has been pitiful, and the so called Tory rebels turned out to be RINOS (Rebels in Name Only), who, given the choice, when Labour eventually put down a motion of no confidence, baulked and backed May. 

May's further problem is that Bonapartists are usually demagogues, populists able to rally the angry mob, and May is ill-suited to that role, as her 2017 election campaign demonstrated. Bojo could have undertaken that role, but in 2016, the personal conflict between him and Gove, led to them both failing, and May stealing the job. But, it does not mean that one or the other might not yet step into it, sweeping May to one side. If Brexit is allowed to continue, contingency planning is already in place to introduce martial law to deal with the resulting chaos, and inevitable upsurge of popular anger that will ensue. 

May's further problem is that the conditions required for such a Bonapartist coup simply do not exist. The two great class camps are, in reality ill-matched, like a fight between a trained and disciplined martial artist, and a pub brawler. On one side stands the organised working-class, disciplined with its traditional, organisations; against it stands a rag-tag of small capitalists, each with their own individualistic agenda, and selfish goals, backed up by a phalanx of elderly Tories, clinging to their illusions of past colonial grandeur, but ill-equipped for street fighting, as they trundle along with their zimmer frames. A look at the current situation shows the Tory media continuing to fete the likes of Farage, who only has to fart for it to be reported as some significant political event, or Suzanne Evans, who continues to be invited on to programmes like Newsnight or Politics Live, despite representing absolutely nothing and nobody, and never, even when she was a leading member of UKIP, like Farage, able to get elected to parliament. Yet, despite all of this free publicity and propaganda that the Tory media provides for the Brextremists, the reality is that Farage is a busted flush. His sorry gang of Brextremists, started off as a couple of dozen forlorn pilgrims on the road from Sunderland, and quickly dissipated even further. And, the mob that the Bonapartists hope might come to their aid, amounts to only a few hardened fanatics, reduced to individual acts of terrorism, such as the murder of Jo Cox, and death threats to MP's. Compared to the millions mobilised on the streets demanding an end to Brexit, they constitute less than nothing. 

In those conditions, Bonapartists rely on the military backing their coup, but there is no indication that would happen.  The fact is that the dominant section of the ruling class, and its representatives in the state, are themselves opposed to Brexit, including those elements of the state that comprise the bodies of armed men.  There are undoubtedly supporters of the Brextremists among the colonel class, from where Bonapartist coups most often derive, as they represent the equivalent of, and come from the same small capitalist layers of society that provides the support for Brexit, as well as from some of the lower orders which have a close relation with fascistic orders, such as the BNP, and EDL.  But, in Britain's disciplined, professional army, it's unlikely under current conditions that they are strong enough to act against the will of the top commanding officers.

Had the Tories faced clear and principled opposition from Labour over the last three years, then it's likely that they would not have won the 2017 election. If they had, they would not have had the free run with their Brexit proposals they have been given, and Brexit would have been stopped long ago, and the Tories would be out of office. Labour's leadership bears a considerable degree of blame for the current situation, for failing to provide that clear principled opposition. It's not too late for Labour to do that. A vote of no confidence in the government should be tabled immediately, to call out the Tory rebels, and so called TIGGERS. But, it has been left too late for even a successful vote of No Confidence to remove May, before March 29th, because it has to be followed by a second such vote two weeks after the first. 

If the Speaker's ruling is applied consistently, May should be barred form even putting her vote to parliament again, unless she can get enough votes to agree to a suspension of standing orders, so that the vote could be held again. As things stand, she is likely to lose again. And, as I write, it has been announced that the EU has turned down May's request for a short extension.  But, the opposition have allowed things to run down so far that they have closed off their own alternatives. The idea that there could be indicative votes on alternative forms of Brexit next week is fanciful, just days before Britain crashes out in chaos. Corbyn's visit to Brussels, tilting at windmills and touting his ridiculous “Jobs First Brexit”, is even more fanciful, and wishful thinking. The only realistic option, at this late stage, is for parliament to vote to revoke Article 50, and it should demand a vote to do that immediately, so that no further time is lost. If May will not implement that demand, then parliament, should simply vote to replace her with a Prime Minister who will, and who will do so, before March 29th. Having revoked Article 50, that Prime Minister should then call a General Election, to elect a new parliament, with a fresh mandate. If the Tories want to fight that election on the basis of reintroducing some form of Brexit that is up to them. Labour should fight the election on a clear programme of opposing Brexit, and building a Workers Europe.

Addenda.

As I finished writing this, it was announced that already half a million people have signed a petition on parliament's website calling for Article 50 to be revoked.  The traffic of people wanting to sign has been so great that the site crashed.

Theories of Surplus Value, Part III, Chapter 20 - Part 90

Bailey can only proceed with his argument on the basis of his deception of measuring labour against the use values exchanged with it, whilst measuring profit against the historic cost of the capital used to produce it. So, he writes, 

““Whatever the produce of the labour of six men might be, whether 100 or 200 or 300 quarters of corn, yet so long as the proportion of the capitalist was one-fourth of the produce, that fourth part estimated in labour would be invariably the same.”” (p 152) 

And, as Marx responds, 

“And so would the ¾ of the produce accruing to the labourer, if estimated in labour.” (p 152) 

And, when Bailey, conversely, states, 

““Were the produce 100 quarters, then, as 75 quarters would be given to 6 men, the 25 accruing to the capitalist would command the labour of 2 men;”” (p 152), 

then, again, as Marx says, 

“and that given to the labourers would command the labour of 6 men” (p 152) 

Bailey also arrives at his false conclusions, on the basis of his use of historic prices. So, he equates the price of labour with the use values received in exchange for it. When output rises, therefore, he assumes the same proportional increase in the quantity of those use values going to labour. So, he says, 

“if the produce were 300 quarters, the 6 men would obtain 225 quarters, and the 75 falling to the capitalist would still command 2 men and no more.” (p 152) 

Of course, the point is that the value of the variable-capital is not determined by the money wages previously paid to the workers (the historic price of labour) but by the quantum of physical use values required for the reproduction of the labour-power, just as the value of the constant capital is not determined by the historic prices paid for it, but by the current reproduction cost, the amount of labour-time/value that must be expended for the replacement, on a like for like basis, of the commodities consumed in the production process. 

If productivity rises, so that total output rises, the quantity of use values required to replace the constant and variable-capital forms a smaller proportion of it. The capital value, thereby, falls so that the rate of profit rises. So, in Bailey's example, if output rises from 100 quarters to 300 quarters, that does not change the 75 quarters required to reproduce six workers (assuming they only require corn for their reproduction). It would, in fact, mean that the surplus product rose from 25 quarters to 225 quarters. Bailey's assumption that wages rise to 225 quarters would actually mean that, although their money wages remained constant, their real wage trebled. Even if we assume that, in Bailey's example, the workers require other use values to reproduce their labour-power, which they buy with corn wages, (and that the value of these other use values has not similarly been reduced), their wages would still be reduced proportionately to the quantity of corn that forms a part of their consumption, relative to other use values. 

Back To Part 89

Forward To Part 91

Tusk's Response Changes Nothing, But Changes Everything

This morning, I wrote that May had boxed herself into a corner, whereby she would have to revoke Article 50.  Subsequent to that, May alienated further members of her Cabinet and parliamentary party, by reneging on her commitment to ask for a longer extension to Article 50, as a fall back to a request to have a shorter extension.  At PMQ's, May also made it clear that she would no accept a longer extension, with the clear indication that if her deal is not agreed, and a short extension approved by parliament, she would resign, though as I said this morning, that statement could also be interpreted as her indicating that she is about to call a General Election.

The EU has responded to May's letter to them, requesting a delay until 30th June.  Donald Tusk has told May that the EU will agree only to an extension until 23rd. May, and then only if May can come to them, with Britain having agreed a deal.  So, on one level, Tusk's response changes nothing from the situation I described this morning.  The EU, as I suggested, has told May she can only have a short extension if May can first come to them with an approved deal.  Its clear that having had her deal voted down with huge majorities on two occasions, May cannot guarantee she can go to the EU with a deal.  Indeed, Tusk's response changes nothing in May's deal itself, which is what would have to be the case for May to be able to come back to parliament for a Meaningful Vote 3.  It only changes the conditions under which such a vote would be taking place.  Those changed conditions are, of course, what May has hoped for all along, of parliament having a gun to its head to vote for her bad deal, or be plunged into a No Deal.

But, the reality is as I said this morning, parliament has no more reason to vote for MV3 than to have voted for MV2, or MV1.  Indeed, for many there is now every reason to vote against.  For hardline Brexiters it means that there would be more chance of a No Deal crash out, which is what they want.  For Remainers it means more chance that there will be No Brexit, because, as the financial markets continue to indicate, everyone knows that when push comes to shove, May will not, and would not be allowed to push through a No Deal crash out.  The reality is that come next Thursday, if either three is no vote on MV3, or if as seems likely, MV3 is again voted down, the result will be that May will have to revoke Article 50.

But, Tusk's response has also changed everything.  It is clear that EU member states are fed up with Britain's behaviour.  They are now prepared to accept a No Deal Brexit, which will be inconvenient for them, but will be catastrophic for Britain.  By making clear that an extension to May 23rd, is dependent upon May getting a deal approved, it means that May must either reach across to get some compromise deal agreed, which seems impossible at this late stage, or else she might as well push for revoking Article 50 now.

The behaviour of May itself has started to give rise to some concern that she is not acting rationally, which means that an accident could happen.  With the timescale now concertinaed as a result of Tusk's response, and with May's dismissive attitude to parliament at PMQ's, it has already now provoked an unprecedented level of opposition to the government even from within the ranks of Tory MP's.  The potential now, that, even before next week, sufficient Tory MP's might express no confidence in the government is growing.  As I suggested some time ago, it is possible, as the danger of an accidental crash out materialises, that the financial markets may belatedly respond, increasing the aura of crisis surrounding the country, and leading to a Vote of No Confidence in the Government, with a caretaker government put in place, that agrees a lengthy extension of Article 50 with the EU, in order to undertake, a General Election, and arrive at a longer term solution.

That would mean that Britain would also have to take part in this year's EU parliamentary elections.  I suspect the result of those elections will be the opposite of what many are suggesting.  I suspect that anti-Brexit candidates would sweep the board in those elections, as the frustration and anger of opponents of Brexit is the force that has the wind in its sails, that will turn out in large numbers at those elections.  That is one reason the Tories do not want them to be held. 

May Will Now Have To Revoke Article 50

Theresa May says that she will not revoke Article 50, but her and her government's incompetence, and arrogance means she will almost certainly have to.

Parliament has twice rejected May's Withdrawal Agreement, by record majorities.  It has also voted not to allow a No Deal Brexit.  May has left it until the last minute to ask the EU for an extension of Article 50, leaving the EU increasingly frustrated at the incompetent way in which the British government has gone about the negotiations.  Even today, the EU are asking when the British government might get round to actually asking for the extension of Article 50, and providing some information, on what exactly it is that Britain desires the extension for.

The EU have made it abundantly clear that, unless May has an agreed deal that simply needs to be implemented, there is no point in them giving a short extension to Article 50.  But, of course, May, who has tried to ride roughshod over parliament, for the last three years, has no agreed deal, or any prospect of getting an agreed deal, as the massive majority against her existing deal showed.   So, the EU is right, there is only a point in them giving a long extension to Article 50, so that Britain might have some hope of reaching some agreement on what it wants, so as to proceed.  May is said to oppose the idea of a long extension to Article 50, and to be pursuing a request for a short extension to the end of June.

That is almost certainly, therefore, going to be turned down.  May will have the choice between accepting a long extension, perhaps for two years, or getting no extension at all.  A long extension will itself only be granted, by the EU, if May can show that the time will be used to arrive at some consensus on what Britain actually wants.  That means that May will have to say that she will use the extension, in order to formulate some alternative suggestions, and to obtain a substantial mandate for them.  Its unlikely, as the last three years have shown, that any substantial agreement is going to be reached by the current parliament.  The reason May called the 2017, General Election was that she thought, on the basis of the polls, and the fact that the Labour Right were doing all in their power to undermine Corbyn, that she would obtain a landslide majority, enabling her to push through her Brexit agenda.  In fact, it turned out that the Labour Right had misjudged the state of play as regards Labour voters, and their support for Corbyn, but also May had misjudged the degree to which voters had reacted to the Brexit vote, causing a groundswell of anger by Remain voters, who flocked to Labour as the only credible party capable of restraining a hard Brexit, and potentially stopping Brexit altogether.

If a referendum were to be held today, Remain would win by a substantial margin.  That is because there has been a significant demographic change since 2016.  Millions of old voters, who overwhelmingly voted Brexit, have died, whilst millions of young voters, who overwhelmingly back Remain have joined the electorate.  In 2016, it was a hardcore of mostly elderly nationalists and bigots that had a bee in their bonnet about foreigners that pushed through the Brexit vote.  A lot of Remain voters thought, as did most of the establishment - including most of the leading Brexiteers, who thought they could make outlandish promises they would never have to implement - that Leave would never win the referendum, and so did not bother to vote.  Today, it is Remain voters that are angry and mobilised, as shown by the three-quarters of a million of them that turned out on the People's Vote march.  By contrast, the self promoting Farage, is long past even being yesterday's man; his former UKIP vehicle has been reduced to a shell that houses an assorted bunch of racists from the EDL, BNP etc.; Farage himself has dreamed up his march from the North-East, which started out as a sad rag-bag of a couple of dozen die-hards, that, within 24 hours, had shrunk, even from that pathetic spectacle; Leave Means Leave, can only leave it to UKIP to mobilise a couple of thousand EDL/BNP thugs for their demonstrations.  The dynamic is now entirely with the Remainers and against the Leavers.  Just as Trump's victory in the US, rallied the left, who have been mobilised ever since, leading to left-wing candidates being selected to stand for the Democrats, and has led to those candidates being elected to Congress, in last year's elections, so the Brexit vote, has had a similar effect in mobilising the progressive anti-Brexit forces against it.  In another referendum, Remain will win by around a 60:40 majority.

But, for that reason, May will resist calls for another referendum to the end.  Instead, she will rely on mobilising that same core vote that pushed through Brexit, and which forms the basis of the Tories own core vote.  Rather than calling another referendum, which she knows she would lose, she will call a General Election, which all indications are she would win.  She would win a General Election, because of the useless leadership and strategy that has been provided by Labour.  Whilst May can rally her core vote, by adopting a hard Brexit stance, Labour, by itself continuing to stand on a pro-Brexit position, risks losing much of its own core vote, plus all those other voters that came to it in 2017.  There is no longer any point in voters, who oppose Brexit, voting Labour, because Corbyn and his front bench continually proclaim their intention to continue to pursue this anti-working class, reactionary agenda, which the last three years have, in any case, shown to be a fool's errand.   

So, May will be told by the EU that it is no extension of Article 50, or a long extension, on the basis that she calls an election or a referendum, to obtain a workable mandate for some agreed position.  May's strategy appears to be, therefore, to come back to parliament next week, having been given this ultimatum, and to again try to bully MP's into agreeing her deal.  The line is already being indicated by sections of the Tory media.  The line is this.  Labour MP's, and other Remainers have continually described what a catastrophe a No Deal Brexit would be.  So, faced with the choice, on March 28th. of May's Deal or a No Deal crash out, those Labour MP's will have no choice but to bite their lip, and back May's deal.  May would then go back to the EU, in a midnight flight, to get a short extension to Article 50 to push through the legislation.

But, ERG supporters, want a No Deal Brexit, so May's threat to them is no threat at all.  May's, gamble, therefore, relies on Remainer Tories, and Labour MP's being bullied into voting through her bad deal.  But, there is, in fact, no reason they would do that.  For Labour MP's to vote that way to keep a Tory government in office would be to commit political suicide.  Their local members would be quick to deselect them for having done so.  But, those Labour MP's must also know, as I have set out over the last year, and as May's current behaviour demonstrates, that the "Vote For My Deal, or I'll Blow My Brains Out" logic is an obviously empty threat.  If, on March 28th., MP's, as they almost certainly will, vote down whatever version of May's Deal, she might be able to put before parliament, then it's quite clear that, immediately after, the consequence will not be that Britain will collapse out of the EU, but will be that May will have to use an Order in Council, to revoke Article 50.  She will have to do so so, precisely she knows that crashing out of the EU without a deal would lead to immediate chaos, and a state of emergency.  It would quickly result in hostility to the idea of Brexit, and to those that have pushed it, reaching a fever pitch, with the government quickly being hounded from office, and condemned to the wilderness for at least a generation.  

It would mean that a General Election would have to be called, which Labour would win by a landslide.  Unfortunately for Corbyn, having been associated with the failed and disastrous Brexit fiasco, it would probably mean that his days as Labour Leader were also numbered.  Power would fall into the laps of all those Blair-right MP's who should have been consigned to history, but who will have been resurrected, due to Corbyn's disastrous strategy of pushing the reactionary nationalist agenda of Brexit, and of "Social-Democracy In One Country."

So, May, whatever she, and the Tory media, might want to pretend, so as to gain Labour MP's votes, would not push through a No Deal Brexit, if her proposal is again voted down.  But, in again trying to push that hopeless bluff, up to the last minute, May will have left herself with no option but to revoke Article 50, which, in any case, she has been mandated to do by Parliament, which has rejected a No Deal Brexit.

Of course, May, presented with the choice of no extension to Article 50, or a two year extension, on the basis of an election, would accept the latter.  In that case, we can expect, as I have said previously, that May will essentially drop her current deal, and go for a negotiated No Deal.  That would mean that she would then propose that Britain negotiate a Canada style free trade agreement with the EU.  That meets the requirements of the ERG and Tory base, not to be in the Customs Union and Single Market, enables them to negotiate their own trade deals, and to put an end to free movement, and the jurisdiction of the ECJ.  But, such an arrangement is not compatible with the Good Friday Agreement, because that requires Northern Ireland to be in the Single Market, so as to ensure the same regulatory regime as exists in the Republic.  So, May, as she had originally agreed last year, with the EU, would have to throw the DUP under the bus.   She would have to agree to carve out Northern Ireland from this deal, agreeing to a different set of conditions in Northern Ireland to those in the rest of Britain.  If, as she had hoped in 2017, she got a working majority, she could do that, because she would no longer be dependent upon the troublesome votes of the DUP. 

But, what happens in the General Election is still itself up for grabs.  Currently, Corbyn, is continuing to push the disastrous line that Labour would itself seek to push through Brexit.  But, just as left-wing activists in the US, have been getting selected to stand, and getting elected as Democrats, as the response to Trump unfolds, so the forces unleashed by Brexit, that led ultimately to the surge in Labour membership, will make itself felt on Corbyn's leadership.  Either Corbyn will himself have to change position, or get rolled over by the membership.  Two years ago, he managed to bureaucratically stop conference debating Brexit; last year with a massive groundswell of opinion demanding a change of line, he again managed to bureaucratically get the fudged composite through, with the help of McCluskey; but now the anger at his continued obfuscation and failure to follow the wishes of the vast majority of party members, and voters is rising.  There will be a demand for an emergency conference to change party policy to oppose Brexit, or at least to demand another referendum, with the party backing Remain. 

If May, calls an election, then the question of the referendum option disappears.  It will be a straightforward matter of party members demanding that Labour fight the election on the basis of revoking Article 50, and stopping Brexit.  Only on that basis does Labour have a chance of winning the coming election.  The sooner Labour shifts to that position, so as to mobilise its forces the better.

Theories of Surplus Value, Part III, Chapter 20 - Part 89

It is, in fact, impossible to obtain a rational understanding of exchange-value, here, without also accepting the existence of value, as an independent, and antecedent category. Measuring the exchange-value of any commodity, in terms of some other use value, can only indicate the proportional relation, and changes in it. Yet, the proportional changes can arise as a result of a rise or fall in the value of either commodity, or both. Nor can anything be determined, in this regard, by comparing changes in the exchange value of a commodity in relation to two other commodities. 

If 1 metre of linen exchanges for 1 litre of wine, and 1 gram of gold, and subsequently exchanges for only 0.5 litres of wine, but 2 grams of gold, is this because the value of linen has risen, but not as much as the value of wine, or has the value of wine risen, whilst the value of linen has remained the same, whilst the value of gold has fallen? 

“(Thus when corn becomes dearer, the value of labour falls because less corn is exchanged for it. On the other hand, if cloth becomes cheaper at the same time, the value of labour rises simultaneously, because more cloth can be exchanged for it. Thus the value of labour both rises and falls at the same time and the two expressions of its value—in corn and in cloth—are not identical, not equivalent, because its increased value cannot be equal to its reduced value.” (p 151) 

“Accordingly it can also be said of every other commodity that a rise in its value does not imply a fall in the value of the other commodity with which it exchanges, nay, may even imply a rise in value on the other side. For instance, supposing the same labour which produced 1 quarter of corn, now produces 3 quarters. The 3 quarters cost £1, as the one quarter did before. If 2 quarters are now exchanged for £1, the value of money has risen, because it is expressed in 2 quarters instead of one. Thus the purchaser of corn gets a greater value for his money. But the seller who sells for £1 what has cost him only ⅔ [of £1] gains ⅓. And thus the value of his corn has risen at the same time that the money price of corn has fallen.” (p 151-2) 

In other words, value and exchange value, are two entirely separate categories. The value of a commodity might rise, i.e. the labour-time required for its production rises, and yet its exchange value-as against some other commodity/ies may fall, simply because the value of these other commodities has risen by a greater extent. 

Back To Part 88

Forward To Part 90

Incompetent and Ignorant, or Just Arrogant and Authoritarian

Once again, the government has been seen to be not only incompetent, but also ignorant of the British Constitution.  Nearly 50 years ago, as a student of 'O' level British Constitution, as part of a course on "Public Administration", things like parliamentary procedure, and the fact that governments cannot present the same motion to parliament twice within a single session, were routine bits of knowledge young students were expected to know.  But, the highly paid professional MP's, and Ministers that comprise the government, with all of their highly paid, specialist advisors seem not to have known this basic fact of parliamentary procedure set out clearly in Erskine May.  They seem to have been taken by surprise that the Speaker, has, therefore, ruled that it would be out of order for the government to simply keep submitting the same motion to parliament, in the hope of eventually getting the answer they want.

If they had even read my blog post from last week, they would have been forewarned of such a possibility.  Information that I provided for them freely had they simply read it, as they sit on the  front benches playing with their smartphones.  If instead of playing Candy Crush, or looking at funny cat videos, with the sound of parliamentary procedure as merely background noise, they had read my blog post - The Government May Now Have To Revoke Article 50 - they would have read there,

"But, given that May's deal has been voted down massively on previous occasions, and that nothing will have changed, its not even certain it will even be voted on again. According to parliamentary procedure, it should not."

But, I was not displaying any specialist inside knowledge here.  Not only is such knowledge available to anyone who has studied 'O' level British Constitution, the possibility that the government might not be able to bring the same motion to parliament twice had even been discussed earlier by the media.  So, why didn't the government know that this would be the case?  Why have they been so taken aback, and offended that the constitution has been upheld?  After all, this is a government that has insisted that what the whole Brexit debate has been about is the question of parliament "taking back control", and is also about, having had one snapshot vote on leaving the EU, the electorate should be denied any further votes, on the same issue. 

Of course, the reality is that the government must have known the constitutional position in regard to bringing this vote forward repeatedly.  If not they are even more incompetent and ignorant than we have come to expect, even with our low expectations of them.  The reality is that the government has become so used to riding roughshod over the constitution, and basic elements of democracy that it thought that it could ignore constitutional niceties, like parliamentary procedure, and simply use its muscle to keep threatening parliament until such time as it got the result it wanted.  It is simply an illustration of the arrogance and authoritarianism that the Tories have shown over the last 9 years in office.

When the Brexiteering Tories coined the phrase "Take Back Control" , they, of course, did not really mean that the British people should take back control of their lives, because they have never had any such control for them to take back!

In terms of the economy, real control over things such as the level of the Pound, of interest rates, of levels of investment, long since passed out of the control even of national governments, let alone the people.  The value of the Pound is determined by the hundreds of trillions of Pounds traded in international money markets, every single day, by global billionaires, by huge international banks, and investment houses.  The way, during the ERM Crisis, the Bank of England had to raise interest rates to over 15%, and spent billions of Pounds of reserves trying to defend the Pound, shows how little control the nation state has over such things.  Indeed, its one reason why it is only the currencies of huge economies like the EU, US or China that have any hope of being able to exert control over the level of their currency, in the face of such astronomical money flows.

In terms of politics, they people also have also never had real control.  Their involvement is reduced to the most meagre, being asked to vote every four years for one set of politicians to simply replace those already in office.  And, they have always been encouraged to see even that level of involvement as an imposition, as the concerns of Brenda from Bristol illustrated.  They are encouraged not to get directly involved in politics, with those who do so continually being branded either as basically crooks, "only out for themselves", when they get elected to any position, or else as "extremists", if they are simply activists trying to exert some day to day oversight of those who might otherwise actually be guilty of such crooked, or corrupt behaviour.  But even if the political system, did encourage greater democratic involvement and control by the electorate, over politicians and governments, it would not really represent actual control.  For one thing, the government itself, as indicated above, has no real control over the economy, which is controlled by external economic and financial forces, much more powerful than the British state can muster.  Secondly, real control over parliament, as with real control over local Councils resides not with the MP's, or Councillors who are elected for short periods, and come and go, but by the permanent state bureaucracy, which remains in place year after year, decade after decade, and is a self-perpetuating,a nd self-selecting bureaucracy, whose upper echelons, appoint those in the positions below them, so as to ensure that those that follow them continue with their work, within the same ideological framework.  That ideological framework is not one that is geared to the interests of "the people", but to the interests of the dominant section of the ruling-class, the interests of the dominant section of capital.

When it comes to their daily lives, in its most important aspects, "the people" also have never had control.  The vast majority of "the people", today are comprised of the working-class, including those often described as "middle-class", that is people who must sell their labour-power for a wage, in order to live.  Such workers have no control over the wage they receive, because those wages are determined by the market, which, as seen above, means all of those trillions of Pounds, swilling around global markets, moving the Pound up or down, causing interest rates to move up and down, and determining whether billions of Pounds will be invested, creating jobs, in this country or some other, or none, and so dictating the demand for labour-power.  Workers, have no control over any of that.  Moreover, even if they are lucky enough to have a job, they have no control over the conditions of that employment.  At best, if they are in a workplace that is conducive for workers to organise themselves into a trades union, they might be able to prevent their conditions falling below a given minimal level, which is itself determined at any particular time, by all of these wider economic factors.   The people who get to vote on what the firm will produce, how they will produce, where it will produce it, and so on, are not the workers and managers in the firm, but a tiny group of shareholders, who have nothing to do with the company, other than that they have loaned money to it, in return for shares.  Its like your bank insisting that it can tell you what colour to paint your living room, what TV you can watch in your house, and who you can invite around, giving you no say in the matter, simply on the basis that they gave you a mortgage to buy the house!  In all those things the majority of "the people" have never had control in the first place, let alone be able to take it back!

Nor, indeed, had they had such control to take back, could they have taken it back from the EU,as the Brexiteering Tories suggest, because, as set out above, it was not the EU that would have taken away that control either.  It isn't the EU that exerts such control, but British and global capitalists, global capital markets, global speculators, and so on.  If control is to be taken back, or taken hold of at all, it is from those forces that it must be removed, not the EU.

The reality, is that when the Brexiteering Tories talked about "Take Back Control", they did not mean that the majority of British people should take back control over these things, that is the last thing they would want to see.  They did not even mean that the British parliament should take back control, as all of their behaviour since the referendum has shown, where they have tried to remove any involvement of parliament in the Brexit negotiations.  No, what they meant was that the relatively small segment of the people that make up the core support and membership of the Tory Party, whose economic and political interests are challenged by the EU, should take back control.  And, because that section of the population is a relatively small proportion compared to the millions of people that make up the working-class, they have increasingly had to rely on support from those sections of society that exist on its periphery, and who have always been the foot soldiers of demagogues, Bonapartists and dictators in the past.  They have had to rely on authoritarian measures, to try to cut parliament out of the process, to brand all who insist on any kind of democratic involvement and procedure being followed, as "Traitors", or "Enemies of the People", so as also to mobilise those dangerous classes as their stormtroopers.

The Tories hostility to Bercow's decision does not flow from any lack of understanding of parliamentary procedure, but is fully consistent with its authoritarian and arrogant behaviour over the last three years, as it pushes forward further towards the implementation of some kind of Bonapartist regime, of the kind seen elsewhere in the world, where the Tories hobnob with right-wing dictators and authoritarians.

Theories of Surplus Value, Part III, Chapter 20 - Part 88

But, of course, what applies to labour in Bailey's argument here, also applies to profits. If the value of corn rises, but the money wages of workers do not, then the value of labour/wages have fallen relative to corn. On the basis set out by Marx, that the value of labour-power is actually determined by the quantum of use values required for the reproduction of that labour-power, a rise in the value of corn would raise the value of labour-power, whatever may have been the case with the historic price/money wages paid to workers. To reproduce that labour-power, a greater proportion of the output of corn, from current production will have to be set aside for workers, and there will have to be increased money wages to buy it. 

A smaller proportion of society's total production of corn is then available as surplus product, and, to the extent that money wages rise, so that workers can buy the amount of food they need, money profits will be reduced. But, similarly, it's clear that, whatever those money profits might be, they will now buy a proportionally smaller amount of corn, now that its value has risen. The rate of profit cannot be measured against the historic prices of the capital advanced, to produce those profits, as Bailey, and the proponents of the Temporal Single System Interpretation argue, but only against the current reproduction cost of those elements of capital. It is that proportional relation which gives the true nature of the extent to which the capital has self-expanded. 

So, for example, the degree to which a miller can expand their production of flour, with €100 of profits, is determined not by the €10 per 100 kilo of corn he advanced last year, but by the €12 per 100 kilos of corn he must pay currently. The farmer, who uses the corn he produces himself, as seed, may only increase the seed they sow by 100 kilos, as they have done in other years, but the value of this seed, as part of their constant capital, now represents a value of €12 rather than €10. And, of course, the same is true in relation to the proportion in which a given amount of money profit can accumulate variable-capital. If, as a result of the rise in corn prices, wages rise from €10 to €12 per worker, the €100 of profit will now employ only an additional 8.5 workers, whereas previously it would have employed 10. 

Marx states, this, clearly, later in Chapter XX, when he writes, 

“The rate of profit (that is, the ratio of surplus-value to the total value of the capital advanced) can increase either because the quantity of capital [goods] advanced by the capitalist becomes objectively cheaper (due to the increased productivity of labour in those spheres of production which produce constant capital) or because it becomes subjectively cheaper for the buyer, since he pays for the goods at less than their value. For him, it is then always the result of a smaller quantity of labour.” (p 193) 

Back To Part 87

Forward To Part 89

Theories of Surplus Value, Part III, Chapter 20 - Part 87

Bailey, himself, arrives at a contradiction whereby he has to effectively recognise value as something distinct from exchange-value. In relation to labour, he says, 

““… a rise or fall of labour implies an increase or decrease in the quantity of the commodity given in exchange for it” (op. cit., p. 62).” (p 150) 

But, on the basis of Bailey's definition of value being nothing other than exchange-value, it makes no sense to talk about the value of labour rising or falling, because the value is always only whatever the exchange relation to other use values is at any particular time. 

“[From Bailey’s standpoint] there can be no rise or fall in the value of labour, nor in the value of any other thing. For one A I get today 3 Bs, tomorrow 6 Bs and the day after tomorrow 2 Bs. But [according to Bailey] in all these cases the value of A is nothing but the quantity of B for which it has been exchanged. It was 3 Bs, it is now 6 Bs. How can its value be said to have risen or fallen? The A expressed in 3 Bs had a different value from that expressed in 6 Bs or 2 Bs. But then it is not the identical A which at the identical time has been exchanged for 3 or 2 or 6 Bs. The identical A at the identical time has always been expressed in the same quantity of B. It is only with regard to different moments of time that it could be said the value of A had changed. But it is only with “contemporaneous” commodities that A can be exchanged, and it is only the fact (not even the mere possibility of exchange) of exchange with other commodities which makes [according to Bailey] A a value. It is only the actual “relation in exchange” which constitutes its value; and the actual “relation in exchange” can of course only take place for the same A at the identical time. Bailey therefore declares the comparison of commodity values at different periods to be nonsense. But at the same time he should also have declared the rise or fall of value—which is impossible if there is no comparison between the value of a commodity at one time and its value at another time—to be nonsense and consequently, also, the “rise or fall in the value of labour”.” (p 150-1) 

Here, the temporal view of value shared by Bailey and the Temporal Single System Interpretation, comes into inevitable contradiction with reality. Bailey's argument, whereby he defines the value of labour in terms of the use values that exchange for it, whilst profits are determined only in terms of a proportion of the capital employed, whose value is itself determined not according to its current reproduction cost, but on the basis of its original exchange relation, i.e. its historic price, is similar to the argument put forward by proponents of historic prices, as the basis for calculating the rate of profit.   According to that model, the value of commodities, as outputs, is to be calculated on the basis of current reproduction cost, but a la Bailey, the rate of profit is to be calculated, not in terms of what that profit, i.e. the value it represents, will currently buy/exchange for, so as to reproduce the commodities comprising the constant and variable capital consumed in production, and required for a continuation of production, but in terms of what proportion those profits stand to the prices paid for the consumed capital, in the past, perhaps even the distant past!

In other words, rather as with Marx's analysis of Mill, what it does, in order to deal with what it sees as an internal inconsistency in Marx's theory, rather than deal with that apparent inconsistency, it instead is led to deny reality, and to treat the determination of value for commodities comprising inputs differently to its treatment of the determination of the value of outputs.  Relating back to my discussion with the neo-Austrian supporter, my determination of whether to exchange, or the rate of exchange, is not based upon the fact that the bike found behind the barn has an historic price of zero, but is based upon what it would currently cost me to replace it

So, Bailey writes, 

““Labour is an exchangeable thing, or one which commands other things in exchange; but the term profits denotes only a share or proportion of commodities, not an article which can be exchanged against other articles. When we ask whether wages have risen, we mean, whether a definite portion of labour exchanges for a greater quantity of other things than before” (loc. cit., pp. 62-63).” (p 151) 

““… but when we ask whether profits have risen, we … mean … whether the gain of the capitalist bears a higher ratio to the capital employed…” (loc. cit., p. 63). 

“… the value of labour does not entirely depend on the proportion of the whole produce which is given to the labourers in exchange for their labour, but also on the productiveness of […] labour” (loc. cit., pp. 63-64). 

“The proposition, that when labour rises profits must fall, is true only when its rise is not owing to an increase in its productive powers” (loc. cit., p. 64). 

“… if this productive power be augmented, that is, if the same labour produce more commodities in the same time, labour may rise in value without a fall, nay even with a rise of profits” (loc. cit., p. 66).” (p 151) 

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Theories of Surplus Value, Part III, Chapter 20 - Part 86

According to Bailey, the value of labour is equal to a certain quantum of use value given in exchange for it. On this basis, whether these use values are plentiful or scarce, labour will always be exchanged for this same quantum, so that its value remains the same. But, in that case, the same should be true for every other commodity. If, today, I have €1, and it exchanges for 10 apples, then, tomorrow, whether apples are plentiful or scarce, it should still exchange for 10 apples, whether more or less labour is required to produce apples. 

“The most ordinary merchant does not believe that he is getting the same value for his £1 when he receives 1 quarter of wheat for it in a period of famine and the same amount in a period of glut.” (p 150) 

For Bailey, the only determining factor is how much of A, at any particular time, the owners of A are prepared to give up, in exchange for B, as opposed to how much the owners of B are prepared to give up in exchange for A. In other words, the basis of this exchange relation is purely arbitrary and uncertain, from one moment to another. The Austrians, like Bailey, do not seek to provide any underlying basis for it, other than the Earth shattering observation that “people act”! The marginalists attempt to provide a psychological basis for the rate of exchange, based upon the preferences of individual commodity owners. But, none are prepared to accept that whilst the demand for my commodity is a function of these preferences, the producers of these commodities do so on the basis of value, and not use value. The producer of widgets does not supply 1,000 widgets, because the €100 they obtain in selling them represents greater use value/utility. They do so, at least if they want to stay in business, because this €100 represents a greater quantity of exchange-value than they have had to expend in producing the 1,000 widgets, or, more correctly, than they will have to expend to produce a replacement 1,000 widgets. 

It seems a very odd aspect of theories of subjective value that the one thing they refuse to include as one of the factors determining these preferences, particularly the preferences of commodity producers, is the actual cost of production of the commodities they are considering in the process of exchange. I had a discussion with a supporter of the neo-Austrian School, once, in which they put forward this concept. We must establish a firm basis free of other complications that can apply for every exchange, they began. Such an approach is, of course, ridiculous, because it is ahistorical. Suppose, they went on, you found a bicycle behind your barn. You have no great use for the bicycle, but need a comb. Would you not then be prepared to exchange the bicycle for the comb? If I were to endlessly find bicycles behind my barn, I replied, in other words, if they were free goods, like air, which has no cost of production, the question of value does not arise, and nor does the question of exchange-value. I will be happy to give away an infinite quantity of such free goods that miraculously appear behind my barn like a cornucopia, to obtain other things I desire. But, in that case, why not assume that any other commodity I desire magically appears behind my barn? Or, why not imagine that every other person exchanging such goods gets theirs in infinite quantity from behind their respective barns, in which case it is impossible to determine any limitation on rates of exchange, so that the concepts of value, exchange value, and price all become redundant. 

But, in the real world, commodities, like products before them, have to be produced before they can be consumed, or exchanged, and that inescapable fact, which is the basis of The Law of Value, is the determinant of the value of products, and commodities, which thereby forms the basis of exchange-value. Tell me what it would cost me to reproduce the bike, and what, therefore, I have to obtain in order to be able to reproduce it, as opposed to what it would cost me to reproduce the comb, and I will tell you whether I would exchange it or not, I replied to my antagonist, or whether I would exchange the bike, instead, for €10, with which I could buy 100 combs! 

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