Friday Night Disco - Superstition - Stevie Wonder

The Rule of Unelected Ruling Class Judges - Part 6 - Two Bonapartes (2)

Two Bonapartes (2)

In the post-war period, Stalinism and most of the revolutionary socialists had a problem. The Third International had been born largely on the basis that Imperialism, as Lenin had outlined in his polemical pamphlet of that name, represented the highest stage of capitalism, and reflected that it had now become degenerate, and was no longer even relatively progressive. They saw the period of long wave crisis that began between 1914-20, and ran into the 1930's, when a period of stagnation, as part of the long wave downturn, set in, as signalling a condition of permanent crisis, and revolutionary upheaval. They were wrong. As Marx says, permanent crises do not exist. 

Even by the mid to late 1930's, the conditions for the next uptrend, that began in 1949, were visible. New production techniques, based upon Fordism and Taylorism, that had been developed in the previous two decades, to address the crisis of overproduction of capital, which arose from the conditions Marx describes in Capital, Chapter 15, and which have been outlined above, began to be rolled out intensively. Indeed, its this intensive accumulation that results in stagnation, as new machines and techniques mean that the existing levels of output, or modestly higher levels of output, can be produced both with fewer, more efficient machines, and with relatively fewer workers, so that the growth in aggregate demand is slowed. As Marx describes it, in Theories of Surplus Value, during such periods, Net Output increases relative to Gross Output. This is the basis for the rise in the rate of profit during all such periods of stagnation that prepares the ground for the next upswing. 

By the mid 1930's, in Britain and other developed economies, the manifestation of this is that a number of new industries, such as motor cars, petrochemicals, electronic domestic appliances, all based around the new technologies that had been developed in the previous period, begin to grow more rapidly, though not rapidly enough to lift the whole economy out of stagnation. The workers in these industries, often located in new geographic regions, are relatively well paid. In Britain, this development arises around the Midlands, and South-East, and, along with it, grows the development of new suburbs, themselves being developed with new building techniques, and the workers in these areas, with their higher wages, begin to become homeowners rather than renters for the first time. All of these tendencies, visible during the 1930's, become the basis of the sharp increase in growth in the post-war period. 

This sharp increase in growth is not consistent with the thesis set out by Lenin in 1916, and which had been taken on board both by the Trotskyists, and turned into a mantra by the Stalinists. The Stalinists, in the form of Varga's Law, declared that, because capitalism was in a period of decline it could not see such rapid growth, and that it could only see increasing immiseration of the working-class. They continued to argue this, even though it was plain for anyone with eyes to see that capitalism was expanding massively, and that workers living standards were rising hugely too. The Stalinists performed numerous logical and statistical acrobatics to try to prove that black was white, and that capitalism was not growing, and that workers living standards were falling. They did this even after Varga himself had abandoned the proposition.  The Trotskyists also kept believing that this period of growth could not continue, and that “the next crisis” could not be far away. 

But, even when recessions did materialise, during this period, social-democracy simply utilised the tools at its disposal via, Keynesian demand management to cut them short, as Mandel describes in The Second Slump. He identifies five recessions – 1953, 1958, 1961, 1970, 1974-5. 

Mandel sets out this effect by comparing the 1929-32 recession with the 1957-8 recession. In the first 9 months of both, they were of a similar severity. 

	1929 - 32	1957 - 8
Employment (non-agricultural	- 6.5	-4.2
GNP	-5.5	-4.1
Industrial production	-15.9	-13.1
Volume of Retail Sales	-6.1	-5.1
Orders For Durable Goods	-26.5	-20.1

But, the consequence of Keynesian intervention was that whereas the 1929 recession lasted for three and a half years, the 1957-8 recession lasted for just 12 months. 

Having spent more than a decade proclaiming that the next crisis was at hand, both Stalinists and sections of the Trotskyists, such as Mandel, effectively collapsed into Keynesianism. For the Stalinists, who had become nothing more than advocates of left social-democracy in one country, acting openly to sabotage any revolutionary struggles of workers, such as those of the French workers in 1968, and frequently aligning, in all sorts of cross-class popular frontist organisations, with Liberals, faith leaders and so on, this was a logical development. Its no surprise that many of the Stalinists, of that time, went on to be prominent advocates of Blairism. Many of the Trotskyists went the same way, the infection of their ideas with Lassallean and Fabian statism and reformism, meaning that their programmes abounded with calls for the capitalist state to nationalise this or that failing business, or to nationalise the commanding heights of the economy, with the self-activity and self-government of the working-class not even brought in as an afterthought. 

It was a collapse into subjectivism. It now appeared, on this basis, that capitalism by utilising Keynesian intervention could prevent crises, and so it was a purely subjective matter of whether it did so or not. On this basis we have the development of the Permanent Arms Economy Thesis, which says, basically, that the capitalist state deals with the problem of excess production by using it to finance an immense arms industry. This is an application of Keynesianism to explain the long-wave post-war boom, which, in turn, is simply an application of Malthus' idea that to avoid such overproduction, it was necessary to maintain a huge unproductive class of landlords, clergy and other parasites, who could soak it up. Similarly, the explanation for the growth of the welfare state, and of workers living standards, during this period, is again reduced to pure subjectivism.

On the one hand, it is that the capitalists made these improvements for fear of revolution, as workers looked to emulate the conditions of workers in the USSR. No really, some people did actually make this ridiculous argument, even after the 1956 Hungarian uprising. On the other hand, it was to be explained by workers militancy forcing these concessions out of capital. So, alongside left-social democratic reformism, and liberal welfarism, we also get a rise in syndicalism, and the idea promoted by groups like the International Socialists/SWP, that the wage rises of workers during the 1950's and 60's, were purely a function of workers militancy during that period, removing any objective basis for the determination of wages as the phenomenal form of the value of labour-power, as analysed by Marx. Gone is any recognition that wages, as such a market price, were driven up precisely by the condition of the expansion of capital during this period on the basis of extensive accumulation, and that as soon as those conditions reversed, all of this subjectivism, all of the calls for “more militancy” would collapse like a house of cards. 

Gone, in all of this, is any concept of objective laws driving these developments as described by Marx. 

Back To Part 5

Forward To Part 7 

Theories of Surplus Value, Part III, Chapter 23 - Part 18

[4. On Accumulation as Extended Reproduction] 

““Every accumulation of wealth provides the means for accelerating further accumulation” (op. cit., p. 29).” (p 379) 

Ricardo and Smith wrongly believed that accumulation takes the form of an increase in expenditure on wages. This flows from Smith's “absurd dogma” that the value of commodities resolves entirely into revenues, and thereby into wages. It sees any additional expenditure on materials and means of production as itself ultimately resolving into wages, because those additional means of production are themselves seen as resolvable only into revenues, and thereby into wages, i.e. the additional profit, interest and rent is only a consequence of the additional labour expended, and thereby the additional wages. 

As Marx has demonstrated, many times, Smith's absurd dogma is wrong, because the value of commodities/national output is not resolvable entirely into revenues/national income, because it comprises both capital and revenue, i.e. it comprises c + v + s, and only v + s represents revenue. A portion of the value of commodities/national output always comprises a component of capital that is not available as consumption/revenue, but which must always be reproduced, on a like for like basis, out of current production. 

The obvious example of that is the farmer who produced grain. A portion of the value of the grain they produce comprises the grain used as seed. This portion is never available as revenue to be consumed, as wages by their workers, or as profit by themselves, but must be continually withdrawn from the current output, to be used as seed once again, for the next year's production. These situations, where a portion of output is set aside, in kind, to be used to replace the consumed constant capital, have been described by Marx in relation also to the coal producer, who sets aside coal to fuel their steam engines, or the machine maker, who uses some of the machines they produce to replace their own worn out machines. 

But, Marx, in Capital II, and earlier in Theories of Surplus Value, showed, at length, that it is not only these instances where the constant capital is replaced, in kind, where this applies. All constant capital, consumed in the production of constant capital, has to be set aside from current production. As means of production, it is generally not suitable for consumption anyway, but it is its value that is also not available for consumption. That value is also removed from the value of current production, and set aside for this reproduction of the constant capital, on a like for like basis. Later, in the chapter, we will see what happens, when the portion of current production required to reproduce capital is reduced as a result of a rise in productivity, so that capital is thereby released to become revenue, and vice versa. 

And, what applies in relation to the reproduction of capital, here, applies also to the accumulation of capital. Accumulation does not involve only the accumulation of additional labour, via the advance of additional wages, it involves the accumulation of additional buildings, machines, and materials. 

“Ricardo’s view (derived from Smith) that all accumulation can be reduced to expenditure on wages, would be incorrect even if no accumulation in kind took place—which is the case, for example, when the farmer sows more seed, the stock-breeder increases his stock of cattle for breeding or for fattening, the owner of engineering works uses part of his surplus-value in the form of machine tools—and even if all producers who produce the elements of some part of capital did not over-produce regularly, counting on the fact of annual accumulation, i.e., the expansion of the general scale of production. Moreover, the peasant can exchange part of his surplus corn with the stock-breeder, who may convert this corn into variable capital while the peasant converts his corn into constant capital [by means of this exchange]. The flax-grower sells part of his surplus product to the spinner, who converts it into constant capital. With this money the flax-grower can buy tools and the tool-maker can then buy iron, etc., so that all these elements are turned directly into constant capital.” (p 379-80) 

Back To Part 17

Forward To Part 19

Theories of Surplus Value, Part III, Chapter 23 - Part 17

The fundamental principle, however, is a pure fiction, which arises from the appearance of commodity circulation. Commodities do not exchange in accordance with the labour that the producer has expended on them, but at their value, which includes not just that labour, but also congealed labour contained in the processed materials etc. 

“In capitalist production this appearance, which its surface displays, disappears. What does not disappear, however, is the illusion that originally men confront one another only as commodity owners and that, consequently, a person is only a property owner insofar as he is a worker. As has been stated, this “originally” is a delusion arising from the surface appearance of capitalist production and has never existed historically.” (p 378) 

Man comes on to the stage as a property owner before he becomes a worker. The first humans, as they separated from the rest of the animal kingdom, were owners of property even if it was only property in the form of use values freely provided by nature. And, each new generation of humans inherited property, in the shape of tools, weapons and means of production, produced by those that preceded them, either within their family, or their tribe or clan, 

“... by his relationship to other men, which determines his relationship to nature. The “propertyless labourer” as a “fundamental principle” is rather a creature of civilisation and, on the historical scale, of “capitalist production”. This is a law of “expropriation” not of “appropriation”, at least not simply of appropriation in the way Cherbuliez imagines it, but a kind of appropriation which corresponds to a definite, specific mode of production.” (p 378) 

Cherbuliez says, 

““The products are appropriated before they are converted into capital; and this conversion does not eliminate such appropriation” (op. cit., p. 54).” (p 378) 

However, Marx points out that this does not just apply to the products, but also to labour. The significance of Marx's circuit of capital, P... C` - M`.M – C ...P, and of the determination of values based upon current reproduction costs is again demonstrated here. In this circuit, M is the money equivalent of the value, i.e. current reproduction cost, of C, the commodities that comprised the constant and variable-capital previously consumed in production, and which must be physically replaced on a like for like basis. C` represents that fact that in that production process, a surplus product has been produced. But what is the nature of this surplus product? In other words, if we take a step back in this circuit we have C … P … C`, but C may comprise 100 kilos of cotton, 10% wear and tear of spinning machines, and 10 units of wage goods paid to workers, whilst C` comprises simply 100 kilos of yarn. There is absolutely no way of rationally comparing the use values that constitute the physical inputs at one end of the circuit with the physical outputs at the other, so as to determine that a physical surplus product has been created. 

The inputs and outputs can only be rationally compared by reducing them to their value, i.e. their current reproduction cost, as expressed in its money equivalent, and that is what Marx does. The creation of a surplus product, c = C` - C, is the consequence of the production process, and is the result of the fact that the new value created by labour is greater than the value of the labour-power which undertook that labour. Consequently, c = m, which equals the money equivalent of this surplus value, embodied within the surplus product, i.e. it is an expression of the current reproduction cost in money, where money acts merely as unit of account. 

“Raw materials, etc., and instruments belong to the capitalist. They are the converted form of his money. On the other hand, when he has bought labour-power or the daily (say 12 hours) use of labour-power, with a sum of money equal to the product of six hours of labour, then the labour of 12 hours belongs to him; it is appropriated by him before it is carried out. The process of production itself turns labour into capital. But this transformation is an act which takes place later than its appropriation.” (p 378-9) 

The products, i.e. raw materials, tools etc., bought by the capitalist are physically transformed from being merely commodities into being capital, because, in the production process, they are the conditions of labour, upon which the labourer is dependent, in order to produce, and which is the basis upon which the capitalist is able to appropriate unpaid labour from the worker. 

And, as the condition for the worker being able to work, which enables the capitalist to extract surplus labour, these means of labour become also formally capital, i.e. capital as self-expanding value, because they are the means by which living labour is absorbed in the production process, including the surplus labour, over and above what is required for the worker's reproduction. They are the means thereby that surplus labour is embodied within a surplus product, which is appropriated by the capitalist, and forms the basis of further capital accumulation. But, even in respect of the necessary labour absorbed by the means of production, it acts as capital precisely because, in doing so, it preserves the value of those commodities, which is then reproduced in the final output, so that the consumed means of production can be replaced on a like for like basis. 

“the labour-power appropriated before the [production] process is turned directly into capital in the course of the process by being converted into the conditions of labour and into surplus-value, [since] as a result of its embodiment in the product, it not only preserves the constant capital but replaces the variable capital and adds surplus-value.” (p 379) 

Back To Part 16

Forward To Part 18

Theories of Surplus Value, Part III, Chapter 23 - Part 16

What Cherbuliez says about the process of a formation of the average rate of profit, however, is very good, Marx notes. He quotes Cherbuliez' statement. 

““After the deduction of rent, what remains of the amount of profit, that is, of the excess of products over the capital consumed, is divided between the capitalist producers in proportion to the capital each has invested, whereas the portion of the product which corresponds to the capital used up and is intended to replace it, is divided in proportion with the capital actually used up. This dual law of division comes about as a result of competition, which tends to equalise the advantages of the different investments of capital. Finally, this dual law of division determines the respective values and prices of the different kinds of products” (loc. cit., pp. 71-72).” (p 376) 

In other words, Cherbuliez correctly identifies that the average profit that each capital obtains is proportionate to the capital it advances. But, this average profit is then spread across the total value of its output, i.e. is added to its cost of production, equal to the capital laid-out. It thereby constitutes its rate of profit or profit margin. The latter thereby differs from the former, i.e. its annual rate of profit, as the advanced capital differs from the laid-out capital. As Marx points out, his last sentence should read that the average rate of profit determines the price of production, rather than values and prices. 

“On the contrary, the determination of the value is the primary factor, antecedent to the rate of profit and to the establishment of production prices. How can any kind of division of the “amount of profit”, i.e., of the surplus-value —which is itself only a part of the total value of commodities—determine the “amount of profit”, that is, the surplus-value, that is, the value of the commodities? This is only correct if, by relative values of commodities, one means their production prices, The whole lopsidedness of Cherbuliez’s presentation arises from the fact that he does not examine the origin and the laws of value and surplus-value independently.” (p 377) 

Despite the fact that Cherbuliez, like Smith and Ricardo, fails to distinguish between labour and labour-power, he essentially describes the relation between capital and wage labour correctly. Marx paraphrases his comment. 

“People who neither receive anything by devolution (legal transfer, inheritance, etc.), nor have any possessions they can exchange, can “obtain what they need only by offering their labour to the capitalist. They only acquire the right to the things which are allocated to them as the price of labour, but they have no right to the product of their labour, nor to the value which they have added” (op. cit., pp. 55-56). “By exchanging his labour for a certain volume of means of subsistence, […] the worker completely renounces all right to the other portions of capital […] The distribution of these products remains the same as it was previously; it is not modified in any way by the above-mentioned convention. The products continue to belong exclusively to the capitalist who has provided the raw materials and the means of subsistence. This is an inescapable sequence of the law of appropriation, the fundamental principle of which was, conversely, the exclusive right of every worker to the product of his labour” (p. 58).” (p 377) 

Its clear, here, that the fundamental principle, set out by Cherbuliez, that “the worker has an exclusive right to the value resulting from his labour” (p. 48).” does not exist, here, because the capitalist appropriates that product and returns to the worker only the necessary means of their subsistence. But, as stated earlier, nowhere does Cherbuliez set out an analysis based upon the exchange of commodities at their values. 

“Cherbuliez does not understand nor does he explain how the law of commodities, according to which commodities are equivalents and exchange with one another in proportion to their value, i.e., to the labour-time embodied in them, unexpectedly leads to the result that on the contrary capitalist production—and only on the basis of capitalist production is it essential for the product to be produced as a commodity—depends on the fact that one portion of labour is appropriated without exchange. He only senses that a transformation has suddenly taken place.” (p 377-8) 

Back To Part 15

Forward To Part 17

The Rule of Unelected Ruling Class Judges - Part 5 - Two Bonapartes (1)

Two Bonapartes (1)

Why are the forces of progressive social-democracy and of socialism so weak? Part of the reason was given in Part 4. Marx's Critique of the Gotha Programme, kept secret, for many years, from the majority of party members, but echoed in similar warnings from Engels, after Marx's death, was an indication that the majority of so called Marxists were nothing of the kind. These Lassallean, statist ideas continued to dominate the Social-Democratic parties of the Second International, and were inherited by the Third International, as Draper describes in The Two Souls of Socialism. Following the creation of the Third International, the Second International, which was always a confederation of national parties, rather than a real International, became, at best, a talking shop, with its constituent national parties, moving steadily rightwards, becoming nothing more than social-democratic, reformist parties seeking to simply run capitalism more efficiently. At the same time, the Third International degenerated into Stalinism, itself a reactionary form of social-democratic reformism, which, based upon the theory of Socialism In One Country, was itself highly nationalistic, bureaucratic and authoritarian. The forces of Marxism, were confined to the small groups of Trotskyists scattered across the globe, themselves suffering from the statist conceptions of Lassalleanism that the Third International had inherited, plus an even smaller number of independent Marxists that found themselves outside any of these organised groupings. 

Other factors came into play. In the post-war period, the forces of social-democracy expanded along with the post-war, long-wave uptrend, which saw a massive expansion of capital. That expansion of capital, now clearly seen as an expansion of socialised capital, and its mature form as multinational capital, in the form of the multinational corporation, required a similar extension of the role of social democracy, and of the social-democratic state. It required that state to intervene even more aggressively to plan the macro-economy, to provide a level playing field, to establish conditions of long-term stability for capital investment, to expand the role of the welfare state, and incorporate the organisations of the working-class, such as the trades unions even more. And, as this growth of capital was manifest in a further expansion and integration of the global economy, and of the global reach of multinational companies, so it required the same kinds of role of the national social-democratic state to be extended internationally. It was manifest in the global para state bodies arising from the Bretton Woods Conference. Imperialism, the form of capitalism that arises on the back of the dominance of industrial capital, is a system based upon a hierarchy of states, and the implementation of a rules based system designed to ensure that each of those states abides by those rules, designed to enable capital accumulation, and the protection of capitalist property rights across the globe. 

“Imperialism” does not intervene, militarily, in the Falkland Isles, Afghanistan, Iraq etc., for the individual economic interest of the intervening powers, but to enforce those rules by which all states are commanded to obey, in order that the laws of capitalist property rights, and the ability of global capital to operate on the same set of rules are enforced. It is, in fact, an extension of those principles outlined by the US at the end of WWII, when it required the dismantling of the British, French, Spanish, and Portuguese colonial empires. A further manifestation of this growth in social-democracy is seen in the development of the EEC, which also reflects an acknowledgement that the days of the nation state are over, except for the very large states like the US, which are themselves federations of states. In the decades since the creation of the EEC/EU similar such economic/political blocs have developed across the globe such as with ASEAN, or MERCOSUR, and the latest of which is the African Continental Free Trade Area, bringing together 1.3 billion people.  (See also: What you should know about Africa’s massive, 54-country trade bloc) 

This growth of social-democracy, in the post-war period, proceeded in tandem with the accumulation of capital, and the growing dominance of large-scale socialised capital within it. The natural dynamic of this process not only meant that all of the features of greater planning and regulation, and the extension of that on an international scale become more apparent, but also that the concomitant absorption of the working-class, via a rise in corporatism, also proceeded, including proposals for increased industrial democracy, at least within bounds. The Frankfurt Parliament in 1848, had introduced co-determination laws, giving workers a right to sit on boards. After WWII, that was incorporated into German law, giving workers a right, in large companies to elect 50% of the members of supervisory boards. Given that far from this undermining German capital, in the post war period, but that German capital, particularly its manufacturing sector, grew and became a world leader in productivity, it became obvious, to the ruling-class, that such industrial democracy was not inherently contradictory to their interests. The more productive the industry, the more profits it produced, the more it could pay out dividends to shareholders. 

Moreover, the fundamental basis upon which social-democracy rests is the idea that there is no fundamental contradiction between the interests of labour and capital, and in the age of socialised capital this is interpreted as no contradiction with the interests of shareholders. If capital accumulates, the demand for labour-power rises, wages rise, as productivity rises, living standards rise alongside profits, as profits rise, so dividends and other forms of interest payments rise. All is well. In the post-war period, this is reflected in the growth of industry-wide collective bargaining between large industrial unions and employers confederations. It is manifest in the creation of mutuality agreements, whereby groups of workers agree to annual targets and improvements in productivity, brought about by their agreement to the introduction of new technologies, in return for annual increases in wages. 

At a national level, it sees the introduction of National Economic planning bodies such as NEDO, and also sees the representatives of organised labour and big socialised capital, from the TUC and CBI, brought together, on a regular basis, for beer and sandwiches in Downing Street. That, of course, meant that the millions of small capitalists were frozen out of proceedings during all of this period, belonging neither to the ranks of organised labour nor big socialised capital. This very fact, and the social tension it creates is itself reflected politically, as these excluded small capitalists seek political representation for their interests from the far right of the Tory Party, such as The Monday Club, and in fringe organisations associated with the Tory Right such as the National Association For Freedom, as well as from the fascist groups such as the National Front, as dramatised in David Edgar's play “Destiny”.   There has always been an open valve system between the Tory Party and these kinds of fascist parties.

The millions of small capitalists find themselves squeezed from both sides. In so far as they are in competition with these large capitals, they cannot effectively compete other than by trying to screw down their workers more aggressively, and by taking lower than average profits for themselves. As the economy grows, their own workers are able to simply take up employment in the larger companies which pay higher wages, provide better conditions, including education and training etc. In the larger small private capitals, workers are themselves able to join unions, and to demand higher wages. In so far as the small private capitals, rather than being in competition with big capital live from work sub-contracted to them by it, they find themselves completely subordinated to it. The larger capitals are able to dictate prices and terms to them, the larger firm often delays payments to them and so on. Finally, the very smallest private capitalists engage in those activities that it is simply not worthwhile the large capitals engaging in. These are the window cleaners, the gardening service businesses and so on. In most of these, the small private capitalist is a labourer in all but name, their profits are really just an equivalent of wages, and often these are less than the wages of actual wage labourers. 

All of this means that this class of small private capitalists is in antagonistic opposition both to organised labour and to large, socialised capital. 

By the late 1960's, there were signs that the post war long wave uptrend was coming to an end. The period from the 1950's saw wages and living standards rise substantially. Capital accumulated rapidly, but the social working-day expanded along with it, as married women and migrants were brought into the labour force. That meant that the mass of surplus value could expand rapidly too. By the early 1960's, this period of extensive accumulation begins to use up all of this available labour supply. There is less scope to bring in additional married women, though this is offset, to an extent, by the first generation of baby boomers entering the labour market. Increased immigration has seen racists encourage bigotry that already existed, having been inherited from Britain's colonial past. It sees the first immigration controls introduced since the introduction of the 1905 Aliens Act, brought in, similarly, following racist provocation to stop the migration of Jews escaping pogroms in Eastern Europe. 

The social working-day stopped increasing so rapidly because the workforce stopped growing so quickly, and because, with higher living standards, workers who had previously depended on working large amounts of overtime, could now begin to reduce the number of hours they worked, on the basis of enjoying a higher basic hourly wage. As the length of the social working-day stopped increasing so much, so the increase in the mass of new value produced, and so of surplus value began to slow down. And, as wages themselves rose, due to this relative shortage in the supply of labour-power, so this produces an actual squeeze on surplus value and profits, as described by Glynn and Sutcliffe. It creates the conditions for the period of crises of overproduction that runs from 1974 to 1987. 

This period of crises means that the conditions that underpinned social-democracy, and its forward moving dynamic ceased to operate. Social-democracy is a permanent, institutionalised popular front. In the period from the 1950's through to the 1980's, the all sections of the ruling class associated themselves with the Tory Party, even though it was the Labour Party that most accurately represented the interests of big socialised capital, and thereby also of shareholders, because, during this period, the Tory Party itself is a social-democratic party that maintains and extends the welfare state, only partly reverses some of the nationalisation programme of the Attlee government, and so on. It is the period of Buttskellism. We are frequently told today that part of the cause of Brexit is that people feel that their vote does not count, or change anything. But, in fact, this is nothing new. In this post-war period, 90% of the legislation of outgoing governments was simply taken over and implemented by the incoming government of a different colour. The majority of people regularly reported in surveys that they felt their vote did not change anything.   A February 1973 Gallup Poll, found that 71% of people thought that they did not have enough say in how the government runs the country, as against 23% who thought they did.  Sayings like “If voting ever changed anything they would abolish it”, go back decades. 

In the 1970's, we see the Wilson government set up the Bullock Committee into industrial democracy, which proposes to introduce a similar system of codetermination for British companies as existed in Germany. The EU, creates its Draft 5th Company Law Directive that similarly seeks to introduce this principle into company law for the whole of the EU. It represents the high point for this period of development towards progressive social-democracy, and as the period of crisis develops, so the nature of this social-democracy as a popular front manifests itself. Like all popular fronts, it sees the working-class thrown under the bus in the service of the interests of capital. 

Back To Part 4

Forward To Part 6 

Theories of Surplus Value, Part III, Chapter 23 - Part 15

Marx points out the contradiction in Cherbuliez argument that, 

“First the amount of profit grows at a rate at least as great as that at which “the total amount of the capital invested” grows, and then the rate of profit falls, because the total amount of capital invested grows more rapidly than the amount of profit. First P-c grows “at least” proportionally to C, and then P-c/C falls, because C increases even more rapidly than P-c, which increases at least as rapidly as C. If we throw aside all this confusion, then all that remains is the tautology that P-c/C can fall again although P-c increases, that is, that the rate of profit can fall although profit increases when the rate falls. The rate of profit simply signifies the ratio of P-c to C, [and this ratio declines] when capital increases more rapidly than the amount of profit.” (p 375-6) 

This means nothing more than that the rate of profit can fall even as the mass of profit rises, if the mass of capital rises more than the rise in the mass of profit. 

“But that this phenomenon is within the bounds of possibility, and even its existence, has never been called to question. The sole point at issue was precisely to explain the cause of this phenomenon, and Cherbuliez explains the decline in the rate of profit, the decline in the amount of profit in relation to the total capital, by the relative increase in the amount of profit which is at least proportionate to the growth of the capital. He obviously surmises that the mass of living labour employed declines relatively to past labour, although it increases absolutely, and that therefore the rate of profit must decline. But he never arrives at a clear understanding.” (p 376) 

In other words, Cherbuliez effectively obtains the correct view of the tendency for the rate of profit to fall, but without actually grasping or setting out, any of the justification for arriving at that conclusion. He appears to arrive at the conclusion that the rise in fixed capital results in a rise in social productivity, which means that although more labour is employed, absolutely, less is employed relative to output, and that the mass of material rises relative to labour, but nowhere is this set out clearly, or the mechanism by which this arises explained. 

“The closer one comes to the threshold of understanding, the more distorted the statements become, unless the threshold is actually crossed and [the greater is] the illusion of having crossed it.” (p 376) 

Back To Part 14

Forward To Part 16