Chapter 1 – A Scientific Discovery, 2. Constituted Value or Synthetic Value - Part 7 of 20

As Marx sets out in Theories of Surplus Value, Part 1, this was Smith's error. It is, indeed, the case that the individual commodity producer buys 10 hours labour with 10 hours labour, whether that labour they buy is in the form of wine, some other commodity or labour-service, for example, 10 hours labour on their land, or cooking their food. These are exchanges of revenue with revenue or labour. But, that is not at all the case where the capitalist buys labour-power. Here, commodity/money acts as capital, and the value of this capital is greater than the value of the wage goods/money that comprises it. It is variable-capital, precisely because its value is capable of self-expansion. Wage goods, with a value of 8 hours labour, now buys labour-power, and the contract between the worker and capitalist requires the worker to perform not 8 hours labour, but 10. That is an exchange of capital with labour. The value of capital, as capital, is greater than the value of the commodities that comprise that capital, by an amount equal to the average rate of profit.

“If a quarter of corn cost two days' labour instead of one, it would have twice its original value; but it would not set in operation double the quantity of labour because it would contain no more nutritive matter than before. Thus the value of the corn, measured by the quantity of labour used to produce it, would have doubled; but measured either by the quantity of labour it can buy or the quantity of labour with which it can be bought, it would be far from having doubled.” (p 53)

This also goes to the heart of the fallacy of using historic prices, as against current reproduction cost, as the basis for calculating profit and the rate of profit, as well as being the basis of Marx's explanation of the tie-up and release of capital, as set out in Capital III, Chapter 6, and Theories of Surplus Value, Chapter 22. For Smith and Ricardo, it is a consequence of confusing labour and labour-power, but, at its root, is the confusion of value with use-value, and the need to replace physical use-values “on a like for like basis”, for social reproduction to continue, on the same scale. As Marx put it in Capital III, Chapter 49,

“In so far as reproduction obtains on the same scale, every consumed element of constant capital must be replaced in kind by a new specimen of the same kind, if not in quantity and form, then at least in effectiveness. If the productiveness of labour remains the same, then this replacement in kind implies replacing the same value which the constant capital had in its old form. But should the productiveness of labour increase, so that the same material elements may be reproduced with less labour, then a smaller portion of the value of the product can completely replace the constant part in kind. The excess may then be employed to form new additional capital or a larger portion of the product may be given the form of articles of consumption, or the surplus-labour may be reduced. On the other hand, should the productiveness of labour decrease, then a larger portion of the product must be used for the replacement of the former capital, and the surplus-product decreases.”

If we take the variable-capital that Marx describes, here, the capitalist who employs 10 workers, who work 10 hours each, needs to continue to employ labour this scale, because their production is based upon it, and the more that production involves large amounts of fixed capital, the more that is the case. It would be uneconomic to employ only 8 workers, for example, if, then, 2 machines stood idle, and depreciated. But, besides that, these 8 workers would only produce 80% of the surplus value/profit that 10 workers produce, in the same conditions, and producing surplus value/profit is why the capitalist advances their capital.

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Imperialism, Inflation and Russian Energy Supplies

I recently noted that the argument that the imperialist sanctions and boycotts of Russian energy was a primary cause of inflation, was false. I have also, however, noted, consistently, that those same sanctions and boycotts, did result in higher costs of production for EU capital, were passed on to EU workers, and did act to slow the EU economy, particularly relative to that of the US. In other words, EU workers, were made to pay financially for the costs of NATO's war against Russia, in Ukraine, in the same way that Ukrainian workers are paying with their lives and limbs. NATO imperialism, and its media arm, of course, always present those costs as being caused by Russia, and not by the deliberate actions of NATO and the EU, to limit Russian exports.

In that previous post, I noted that, the price of EU gas had already risen from €5 per megawatt/hour in June 2020, to €35 per megawatt/hour in July 2021. In other words, a 7 fold rise. The price had risen steadily during late 2020, and through 2021, as had many other primary product prices, many of which have nothing to do with Russia, following the ending of lockdowns, and the surge of liquidity that was released into the global economy, from all of the money tokens printed by central banks, and expansion of credit.

In a recent Newsnight, it was claimed that this rise in prices in 2021, i.e. prior to the war, for EU gas, was a consequence of Russia, already, in 2021, starting to limit supplies to the EU, so as to raise the price ahead of its invasion of Ukraine. But, besides the fact that that implies both that a) Russia, at that time, planned to invade Ukraine, and b) that there would be some advantage to Russia from reducing the supply of gas, and raising its price to the EU.

The first seems unlikely, because Putin's preferred option seemed to be to try to use the EU as a lever for a new Minsk Agreement, which would give Russia some continued leverage inside Ukraine. Irrespective of that, the second makes no sense. Russia's leverage on the EU, and Germany, comes from the energy supplies, and if you cut those supplies and raise the price you have removed that leverage, only encouraging the EU to look for alternatives. Besides, the record shows that when those gas prices rose the most, going from that €35 in July 2021, to €339 in August 2022, it was the result of the EU itself boycotting the supply, and of NATO/G7, imposing sanctions on Russia to make it hard to export.

Moreover, the data does not seem to support the claim of those earlier higher prices being the result of reduced supplies to the EU from Russia. In the period, when EU gas prices rose seven fold, between June 2020, and July 2021, Russian gas accounted for pretty much the same proportion of gas imports into the EU. In July 2020, Russia accounted for 42.3% of EU gas imports. In January 2021, Russian gas imports to the EU actually jumped, much higher, accounting for 53.8% of EU gas imports. In June 2021, they accounted for 47.8%, and, in July 2021, 41.6%, almost identical to a year earlier. In 2020, the EU imported 152.6 billion cubic metres of Russian natural gas. In 2021, EU countries imported 155 billion cubic metres of gas from Russia. So, the data simply does not support the narrative that higher EU gas prices between June 2020 and July 2021, when they rose 7 fold, was a result of Russia reducing its supply of gas to the EU. On the contrary, during that period, Russian supplies rose by 2.4 billion cubic metres.

Moreover, look at the movement of another primary product that has nothing to do with Russian exports – copper. Its price went from $2.15 in May 2020, to $4.78 in May 2021. That was a more than doubling of its price. Or take Soybeans. Their price also doubled from $838 in June 2020, to $1600 in May 2021. Lumber prices went from $216 in March 2020 to $1700 in May 2021. That was an almost 8 fold rise. Iron ore had a three-fold rise, during the same period, and steel doubled. Coal prices trebled. Silver prices doubled. Wheat prices nearly doubled.

None of this rise in primary product prices, during that time, can be explained by a Russian invasion of Ukraine, which was still eight months into the future, nor to a NATO imperialist boycott and sanctions on Russian exports, which was to follow it. What it does coincide with, as I had predicted beforehand, and detailed as it happened, was the surge of all the liquidity, created by central banks, during lockdowns, that was unleashed, once those lockdowns were relaxed, and ultimately ended.

Lessons of The Chinese Revolution, The Chinese Revolution and The Theses of Comrade Stalin - Part 5 of 47

Stalin presented his theses “Problems of the Chinese Revolution”, in Pravda, on April 21st. 1927, though they had never been discussed by the Central Committee.

“Moreover, the theses of comrade Stalin are erroneous to such a point, they turn the matter upside down to such a degree, they are so permeated with the spirit of chvostism, they are so inclined to perpetuate the mistakes already made, that to remain silent about them would be a positive crime.”

(Trotsky “Problems of The Chinese Revolution, p 17-18)

The term “chvostism”, loosely translated, means “tailism”, and is also characteristic of large sections of the “Left”, today, which is influenced by the public opinion of the middle-class, largely studentist milieu in which it operates. It is certainly true of the social-democrats, as a result of their electoralism and lesser-evilism, which drives them increasingly to the Right. That pressure of public opinion, also feeds down, through social-democracy, on to those sections of the petty-bourgeois Left. Trotsky, also, later, describes this same process.

The Stalinists argued against any open discussion, on the basis that it could be utilised by the enemies of the USSR. The same line is used to justify bureaucratic censorship, and denial of debate, today, not just by Stalinists, but also by others on the Left, whose ossified sects have grown used to blind obedience, and whose fragile shells would easily shatter. It is used, also, by Starmer, for example, to prevent discussion over the racist, colonialist nature of Zionism, by equating it with anti-Semitism, as a pretext for expelling the Left, which, like all such witch hunts, escalates into an ever widening net in which any opposition or criticism becomes intolerable.

But, as Trotsky points out, any debate would only cover the ground already set out by Stalin, in his Theses, and so could pose no greater threat. Moreover, without such open debate, how could a proper, Marxist appraisal be formulated?

“It is not true that the interests of the Communist International conflict with the state interests of the USSR. The renunciation of discussion of the mistakes is not dictated by the interests of a workers’ state, but by a false “apparatus-like”, bureaucratic attitude towards the Chinese revolution as well as towards the interests of the USSR.” (p 18-19)

And, given the severity of the defeat of the Chinese revolution, not just for China, but for the world working-class, a discussion of the mistakes that led to it were all the more vital.

“The April defeat of the Chinese revolution is not only a defeat for the opportunist line but also a defeat for the bureaucratic methods of the leadership, through which the Party is confronted with every decision as an accomplished fact: the decision, it is explained, does not justify criticism until facts demonstrate its annulment, whereupon it is just as automatically, that is, behind the back of the Party, replaced by a decision which is frequently more erroneous, like the present theses of Stalin.” (p 19)

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Chapter 1 - A Scientific Discovery, 2. Constituted Value or Synthetic Value - Part 6 of 20

To arrive at Proudhon's conclusions would require a series of unrealistic assumptions. In essence, these assumptions involve the fallacies already described in relation to simple as against complex labour, and so on. Marx gives the example of the labour of a jeweller and weaver, in which the value created by the former, in a day, is equal to three of the latter, and two of some other type of labour. Marx's example is not quite accurate, because he fails to account for the value of constant capital, i.e. gold and gems or the former, flax for the weaver etc., but, discounting the preserved value of this constant capital, in the value of their output, Marx's argument is valid. He says,

“If three working days of different workers be related to one another in the ratio of 1:2:3, then every change in the relative value of their products will be a change in this same proportion of 1:2:3. Thus values can be measured by labour time, in spite of the inequality of value of different working days; but to apply such a measure we must have a comparative scale of the different working days: it is competition that sets up this scale.

Is your hour’s labour worth mine? That is a question which is decided by competition.” (p 51)

The measure of value, thereby, becomes simple labour, and so the value of commodities produced by complex labour is, then, just a multiple of that simple labour.

“If the mere quantity of labour functions as a measure of value regardless of quality, it presupposes that simple labour has become the pivot of industry. It presupposes that labour has been equalized by the subordination of man to the machine or by the extreme division of labour; that men are effaced by their labour; that the pendulum of the clock has become as accurate a measure of the relative activity of two workers as it is of the speed of two locomotives. Therefore, we should not say that one man’s hour is worth another man’s hour, but rather that one man during an hour is worth just as much as another man during an hour. Time is everything, man is nothing; he is, at the most, time’s carcase. Quality no longer matters. Quantity alone decides everything; hour for hour, day for day; but this equalizing of labour is not by any means the work of M. Proudhon’s eternal justice; it is purely and simply a fact of modern industry.” (p 52)

For the reasons set out above, this doesn't mean that all labour is of the type of machine labour. The skilled engineer uses a machine, but not in the way an unskilled machine minder operates a machine. The actions of the latter are determined by the speed and operation of the machine itself, whereas it is the engineer that uses the machine in the way they would use a tool, setting it up, determining its operation, speed and so on. And, many other forms of skilled labour continue, as with the jeweller etc.

That is why the product of an hour's labour by, say, a singer, actor, or footballer may be many, many times that of the product of a machine minder's labour. As I have set out, for example, in my response to Paul Cockshott, many years ago, it is why economies that may have relatively small populations, but whose labourers are disproportionately involved in such complex labour, can create more value, and surplus value than other economies with larger populations involved in only simple labour.

“All the “equalitarian” consequences which M. Proudhon deduces from Ricardo's doctrine are based on a fundamental error. He confounds the value of commodities measured by the quantity of labour embodied in them with the value of commodities measured by “the value of labour ” If these two ways of measuring the value of commodities were equivalent, it could be said indifferently that the relative value of any commodity is measured by the quantity of labour embodied in it; or that it is measured by the quantity of labour it can buy; or again that it is measured by the quantity of labour which can acquire it. But this is far from being so. The value of labour can no more serve as a measure of value than the value of any other commodity.” (p 52-3)

And, that is so for the reasons already outlined. The value of labour-power, as a use value/commodity is determined by the labour-time required for its production, i.e. the reproduction of the labourer, but this is not the same as the new value that the labourer can produce by the exercise of their labour in the labour process. Robinson may require 8 hours labour to live, but that does not stop him working for 10 hours; the peasant may need to labour for 3 days on their own land, but that does not stop them working another 3 days on the land of the Lord of the Manor; the wage worker may need work only 8 hours in a day to produce a value equal to the value of wage goods, required for their reproduction, but it doesn't mean they cannot work for 10 hours in a day, and, indeed, the capitalist will insist they do, so that he obtains his profit.

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Ukraine & The Corruption of The Global Ruling Class

A month ago, I noted that western countries have been pouring money and weapons into Ukraine at an astronomical rate, and, yet, the much hyped Spring counter-offensive never happened, and the Summer offensive launched has been a very timid affair indeed.  So where had all of the money and weapons gone? The history of the Iran-Contras, of Iraq, and elsewhere, provided the clue. Workers, in those western countries, suffer the consequences of higher prices for things like energy, the slowing effect on the economy, and also see their taxes go to fund these wars, whilst the workers, for example, in Ukraine, who fight these proxy wars for NATO imperialism, lose their lives and limbs. Meanwhile the money finds its way into the pockets of corrupt politicians and officials, a large part of the weapons disappears into the black market, again filling the pockets of those same corrupt officials. Now, we see that Zelensky has sacked all of the heads of Ukraine's regional military recruitment centres, for bribery. But, the fish rots from the head, and this is just another case, seen throughout history of the lower orders being used as scapegoats by the leadership.

The Guardian itself, in 2021, before the war, and at a time when western liberals were not afraid to tell the truth about the vile, reactionary and corrupt nature of Zelensky's regime, noted,

"On the campaign trail, Zelenskiy pledged to clean up Ukraine’s oligarch-dominated ruling system. And he railed against politicians such as the wealthy incumbent Petro Poroshenko who hid their assets offshore...

The Pandora papers, leaked to the International Consortium of Investigative Journalists (ICIJ) and shared with the Guardian as part of a global investigation however, suggest Zelenskiy is rather similar to his predecessors.

The leaked documents suggest he had – or has – a previously undisclosed stake in an offshore company, which he appears to have secretly transferred to a friend weeks before winning the presidential vote."

That was before those same liberals, decided that, at least for the duration of the war, Zelensky was a model of democracy, liberalism and probity, and anyone who said otherwise was just a Putin propagandist!

The reality is there is nothing new or unexpected, here. For all the attempts of those liberals, and social-imperialists to present this war as a “People's War”, a war for national liberation, or for democracy, it is nothing of the kind. It is an inter-imperialist war, reactionary on both sides, as different factions and shifting alliances within the corrupt, global ruling class fall out amongst themselves and jostle for position. Like all such processes, it has its phenomenal form, in the shape of the actual human actors on the stage of history that represent these competing interests that appear like the shadows of a kabuki theatre. On one side we have those like Trump, and the corrupt Putin regime, and on the other Hunter Biden, and the corrupt Zelensky regime.

The nature of the ruling class is, now, and has been, for nearly a century that of a global ruling class. It is a class of speculators, of owners of fictitious-capital (Global shares, bonds, property and derivatives), all of which it can buy and sell in an instant, at the press of a computer key, shifting its wealth from owning the share of US corporations, to German corporations, to Japanese, or Russian companies, or else to the government bonds of different countries, or the ownership of land and property. It has no national home, no affinity to any given state, and simply uses its ability to shift this wealth to influence, sometimes in the most direct manner, the actions of all governments and states to meet its interests. Just look at the way it responded to Liz Truss's government in the Autumn of 2022, for example.

But, like any sizeable group, it is not homogeneous, and, within it, arises different factions, different competing interests. Contrary, to the propaganda of the liberals and social-imperialists, those different interests have nothing to do with morality or questions of supporting “democracy”, as against authoritarianism or “fascism”. As Trotsky pointed out, in the 1930's, those are just labels, masks put on the façade of the political regime that hides the true face of the ruling-class's social dictatorship. They pick up and discard those masks as best suits their needs at the time.

For example, the ruling-class, in Britain and the US, and elsewhere, welcomed the coming to power of Mussolini, in 1922, when it was the means of suppressing a revolutionary Italian working-class that threatened their interests as owners of shares in all of these large companies. So, too, with the coming to power of Hitler in Germany, seen not only as the means of suppressing revolutionary German workers, but also of resuming their attempts to overturn the revolution in Russia, they had been forced to suspend in 1923, with the defeat of their fascistic White allies, by the Red Army.

As Trotsky points out, before, during and after such inter-imperialist wars, the different capitalist interests continually shift their alliances, as they see fit, having nothing to do with moral questions of democracy or fascism. In 1935, Britain entered into the Anglo-German Naval Pact, for example. And, in the second Sino-Japanese War, China was backed by an alliance comprising, the USSR, Britain, the US, and Nazi Germany, before Japan declared war on the US, and Germany allied with it, in 1941. During WWII, the fascist dictatorship of Vargas in Brazil, was also allied to US and UK “democratic imperialism”. Indeed, Vargas had been significantly assisted in his 1937 coup by Britain, following the 1935 Stalinist backed military rebellion.

The global ruling class has no interest in moral questions of democracy, freedom and so on, only the question of cold cash, and the expansion of its wealth and power. As a parasitic class of money-lenders, and speculators, whose wealth comes from draining profits in the form of interest payments, rather than the use of those profits for capital accumulation, and even more destructively, from speculative capital gains from inflated asset prices, which has required it, in the last 20 years, to deliberately hold back capital accumulation, and economic activity, so as to hold down interest rates, to prevent a repetition of the previous asset price crashes, most notably that of 2008, it has now become reactionary even in relation to capital and capitalism, which brought it into existence as a class in the first place.

That its decadence now manifests itself in this grotesque global corruption, and the squandering of human lives for that end, should be enough for us to seek to sweep it away at the earliest opportunity. Yet, we have the disgraceful sight of people who call themselves socialists lining up to back one camp or the other of these leeches. The first step to achieving the former, overdue, task is to drive out the latter from the ranks of the labour movement.

Lessons of The Chinese Revolution, The Chinese Revolution and The Theses of Comrade Stalin - Part 4 of 47

At the time of the events of 1925-7, in China, Trotsky and the Left Opposition (1923), were in a bloc with the centrist opposition of Zinoviev and Kamenev (1925), as a United Opposition. The public positions of this United Opposition were compromised by the fact that the 1923 Opposition opposed the entry of the Chinese Communist Party into the Kuomintang, but were outvoted, within it, by the 1925 Opposition that had returned to the position adopted by Zinoviev and Kamenev, along with Stalin, in February 1917, of support for a Menshevik stages theory, in which first a bourgeois-democratic/national revolution must be supported, manifest in a democratic dictatorship of the proletariat and peasantry, followed, some time later, after society has passed through a period of bourgeois parliamentarism, by a proletarian revolution.

Trotsky had set this out, in a letter to Max Shachtman, on December 10th. 1930, in which Trotsky noted that, when it came to voting in the Politburo, he had always, from as far back as 1923, voted against entry into the Kuomintang, and against the entry of the KMT into the Comintern, and so on. Given the conditions of the time, it was a tactical question of whether to avoid a split in the United Opposition, and the majority of the 1923 Opposition decided to avoid it, and Trotsky complied, in relation to his public statements. With the benefit of hindsight, he notes, he was wrong to have agreed to this formal acceptance too.

But, it was not that the events in China were an isolated incident, as previously set out. In 1923, in the German Revolution, similar wrong positions were adopted, failing to promote the creation of soviets when they were required, and then administratively seeking to create them, when the revolutionary wave had ebbed, demanding General Strikes, when the conditions for them did not exist and so on, which would then inevitably fail. In Britain, the Stalinist diplomatic manoeuvres led to the creation of the Anglo-Russian Committee, which gave left cover to the pro-imperialist leaders of the TUC, as they prepared to betray the General Strike.

The consequence of the defeat of the 1925-7 revolution, in China, confirmed Trotsky's prognosis and analysis. With the benefit of hindsight, its possible to argue Trotsky should have forced a split with the Zinovievists, as Lenin had done in April 1917, rather than compromise with their centrist positions. But, an exploration of alternative histories, based on “what-ifs”, is a pointless exercise. However, Trotsky learned from that experience, when it came to the Spanish Revolution, and the mistakes made by the centrists of the POUM and CNT, in joining the Popular Front government, and what were, now, the open betrayals carried out by the Stalinists.

The fact that Trotsky's writings in this period of the United opposition are not as sharp as they might have been, in relation to opposition to entering the KMT, has to be judged in this context. Also to be taken into consideration, in considering his opposition to entering the KMT, as against the position of Marx and Engels in joining the German Democrats, or Trotsky's French Turn, in 1934, is the fact that, in 1848, Marx and Engels supporters were a small minority, which, as Engels said, needed to get the ear of the German workers, who still looked to the Democrats. Similarly, the Trotskyists, in France, in 1934, represented a small minority, whilst French workers still looked to the Socialists. As Trotsky pointed out, the Marxist position is the independent organisation of the working-class, and its party, but, in these instances, no such party existed, only its nuclei or embryo, and the point was to build it.

But, that was not the case, in China. Not only did a global communist movement exist, as well as the USSR, on China's doorstep, but the Chinese Communist Party, itself, comprised more than 100,000 workers, many of whom were also armed. The need and the ability to preserve the independence of the workers, and their party, was, then, clear, but the Stalinists drove them into the arms of the national bourgeoisie, and the KMT of Chiang Kai Shek, as well as inviting the KMT into the Comintern. That despite the fact that, in 1926, Chiang Kai Shek had already shown his hand by organising a coup, in Canton.

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Northern Soul Classics - Could It Be - Richard Temple