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Wage-labour and Capital, Section I - Part 8 of 8

Unlike the slave or serf, the wage labourer is free, tied neither to the slave owner, nor the landlord. They are tied only for a contracted period to a given employer. Outside that period, they are free to sell their labour-power to the highest bidder. In times of labour shortage, competition between those bidders push money wages higher and vice versa. However, because, as a class, workers must sell their labour-power to live, although they can refuse to sell to any given employer, they cannot refuse to sell to all employers as a class.

Competition between workers prevents wages rising above the value of labour-power, and, because capital only employs labour in order to produce profits, the demand for labour-power itself is reduced if wages rise to a level, whereby, they erode those profits. The manifestation of that comes in the form of a crisis of overproduction of capital, whereby, first, the least efficient firms see their profits turn into losses, and they go out of business. But, capital also has the power to control the demand and supply of labour, when those profits are squeezed to this extent. When wages rise and profits re squeezed, capital engages in a technological revolution to replace labour with fixed capital (1820-43, 1865-1890, 1914-1939, 1974-99 periods of intensive accumulation). So, the demand for labour-power is reduced, relative to supply, because any given amount of output can be produced with less labour. The supply of labour-power rises, as population grows, but fewer of them are required to produce any increase in output. A relative surplus population is created.

As the supply of labour-power, relative to demand, rises so the market price of labour-power, money wages, fall. But, also, this technological revolution reduces the value of all commodities, as productivity rises, including the value of wage goods. So, as well as money wages falling, the value of labour-power also falls. For those workers in employment, that may still result in a rise in real wages. In other words, if the fall in money wages is less than the fall in the prices of wage goods, real wages (standard of living) would rise. But, that still means that relative wages would fall. In other words, the share of wages in total output would fall, as output grows by a larger proportion.

This was seen in the 1930's/40's, and 1980's/90's. On the one hand, unemployment rises, and structural long-term unemployment, in specific geographical areas and industries, grows disproportionately. But, for those in employment, and often, now geographical areas, and often also, new industries, living standards rise, as the value of existing wage goods falls, and new types of wage goods become available. On a global scale, that was seen from the 1980's onwards, as industrialisation of economies in Asia, Latin America and Africa went along with deindustrialisation in developed economies. Living standards in the former rose significantly in absolute terms, and relative to those in developed economies.

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The Chinese Revolution After The Sixth Congress, 4. Once More On The Slogan of The Democratic Dictatorship - Part 3 of 3

The revolution, when it came, both in 1905 and in 1917, was led by the workers. Those workers first established factory committees, and this was followed by the creation of workers' councils/soviets, in each area, to which delegates were directly elected from the workplaces. Rather than establishing bourgeois parliamentary democracy, the workers spontaneously established soviets, as an expression of their own self-government, as the workers in Paris had done, in 1871. The peasants followed suit, in rural areas, and, in 1917, in conditions of war, the soldiers and sailors, drawn from the ranks of the workers and peasants, also sent their own delegates that became a powerful weapon in the revolution itself.

Lenin and the Bolsheviks made the algebraic formula more precise, on the basis of these developments. They changed the formulation to The Democratic Dictatorship of the Proletariat Leading The Peasantry. But, by this time, it was also apparent that these soviets already held power in society. Although the peasants and petty-bourgeoisie still demanded the convocation of a National Assembly, in which their numbers would translate into political representation, and large numbers of workers still had illusions in such a parliament, it was clear that the only way it was going to be convened was if the soviets themselves brought it about.

But, if the soviets already held power in society, what was the point of a National Assembly, which would, at some point, have come into conflict with the soviets? Moreover, the National Assembly would reflect the numerical weight of the peasantry, as against the soviets, where it was the workers that held sway, and where the Bolsheviks were becoming dominant, on the basis of their opposition to the war, and the bourgeois-defencism of the Mensheviks et al. It was on that basis that Lenin raised the demand for “All Power To The Soviets”, and began to prepare the ground, not for a bourgeois parliamentary government, but a soviet government.

Stalin, Bukharin, Zinoviev and Kamenev had never accepted Lenin's dropping of the Democratic Dictatorship of the Proletariat and Peasantry, seeing it as capitulation to Trotsky and Permanent Revolution. In China, therefore, they resurrected that old formula. Indeed, the Stalinists even adopted the formula of the Democratic Dictatorship of the Peasantry and Proletariat.

In Russia, the peasants had established the SR's as a political party representing their interests. When the Bolsheviks established the Soviet Government, they shared power, in it, with the SR's, for eighteen months. But, in China, the peasants had not even risen to this level! They found their representation only through the Communist Party, and following the slaughter of the worker-communists in 1927, they formed an increasing social weight within it, thereby, having a crucial impact on the subsequent events, as it moved from the cities to rural areas, and proceeded on the basis of rural guerrilla warfare, rather than proletarian revolution.

“The year 1917 showed that when the peasantry bears on its back a party (the Socialist Revolutionaries) independent of the vanguard of the proletariat, this party proves to be in complete dependence upon the imperialist bourgeoisie. In the course of the period from 1905 to 1917, the growing imperialist transformation of the petty-bourgeois democracy as well as of international Social Democracy, made gigantic progress. It was because of this that in 1917 the slogan of the democratic dictatorship of the proletariat and the peasantry was really realized in the dictatorship of the proletariat, drawing with it the peasant masses. By this very token, the “transformation by growth” of the revolution, passing from the democratic phase to the socialist stage, already took place under the dictatorship of the proletariat.” (p 208)

That was seen again with the Popular Front governments in France, Czechoslovakia and Spain, in the 1930's. It is seen again, today, with Ukraine, where the social-democracy has affiliated itself directly with Zelensky's corrupt regime, itself directly dependent on US imperialism. And, worse than that, even outside Ukraine, it is manifest both in the position of social-democracy, but also of a petty-bourgeois “Left” that has tied itself to that imperialism in a most debased and debauched form, claiming that “imperialism defends the interests of workers”!!!

What makes this position so miserable is that China was a developing economy, seeking to carry through a bourgeois-democratic, national revolution, whereas Ukraine is already an independent, capitalist state, imperialist in nature, given the dominance within it of monopoly capitalism, and ties to global finance capital. It is already a bourgeois-democracy, albeit a grossly dysfunctional and corrupt one. If socialists should raise any demands, in relation to it, it is the need to oppose the current corrupt political regime of Zelensky, and for the implementation of measures of consistent democracy within it. Instead, both social democracy and the petty-bourgeois “left”, have thrown themselves entirely into the camp of that corrupt, illiberal and anti-working-class regime, and its imperialist backers, cutting off any possibility of a credible struggle for consistent democracy, let alone an independent working-class alternative.

That they do so under cover of claims of “anti-imperialism”, or “the right to national self-determination”, is merely a continuation of that petty-bourgeois, Stalinist/Menshevik Popular Frontism that the “Left” has pursued in relation to actual national liberation struggles for the last 80 years, i.e. it is “idiot anti-imperialism”. That has simply reached its own culmination in which “anti-imperialist”, national liberation, based on subordination of workers' interests to those of the bourgeoisie (bloc of four classes/Popular Frontism), has evolved into subordination of those interests to imperialism – just a different imperialism to the one, supposedly, being opposed. It is “anti-imperialism” as “pro-imperialism”, or to give it its true description – campism.  In essence, its no different to the campism of social-democracy, prior to WWI and WWII.

Trotsky explained why the betrayal and defeat of the Chinese Revolution, and subsequent stabilisation, made it impossible to raise the demand for the Democratic Dictatorship, in future.

“The period of inter-revolutionary stabilization corresponds to the development of the productive forces, to the growth of the national bourgeoisie, to the growth and the increase of the cohesion of the proletariat, to the accentuation of the differentiation in the villages and to the continuation of the capitalist degeneration of democracy à la Wang Jingwei or any other petty-bourgeois democrat, with their “third party”, etc. In other words, China will pass through processes analogous in their broad outlines to those through which Russia passed under the régime of June 3.” (p 209)

The Bolshevik evaluation that this would culminate in revolution had been confirmed. The contradictions, in Russia, had been sharpened by its more rapid capitalist development, spurred on by the regime of Stolypin.

“The social changes which the inter-revolutionary régime will introduce in China depend especially upon the duration of this régime. But the general tendency of these modifications is henceforth indisputable: it is the sharpening of the class contradictions and the complete elimination of the petty-bourgeois democracy as an independent political power. But this signifies precisely that in the third Chinese revolution, a “democratic” coalition of the political parties would acquire a still more reactionary and more anti-proletarian content than that of the Guomindang in 1925-27. There is therefore nothing left to do but to make a coalition of classes under the direct leadership of the proletarian vanguard. That is the road of October. It involves many difficulties, but there exists no other.” (p 209)

In Ukraine, not only the social-democracy, but also those that still claim to be Marxists, have adopted the diametrically opposite and reactionary policy. Instead of seeking to unite the revolutionary and democratic forces under the leadership of the working-class, they have adopted the position of Stalin/Bukharin, and subordinated the workers and democratic forces under the hegemony of the corrupt regime of Zelensky, the oligarchs, western capitalist states, and NATO imperialism. It is a betrayal of the international working class, and socialism on an epochal scale, equivalent to that prior to WWI.

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Wage-labour and Capital, Section I - Part 7 of 8

Money wages are merely the phenomenal form of these real wages, i.e. the money equivalent of the value of wage goods, required to reproduce labour-power.

“So much money for so long a use of labour-power. For twelve hours' weaving, two marks. And do not the two marks represent all the other commodities which I can buy for two marks? In fact, therefore, the worker has exchanged his commodity, labour-power, for commodities of all kinds, and that, in a definite ratio. By giving him two marks, the capitalist has given him so much meat, so much clothing, so much fuel, light, etc., in exchange for his day's labour. Accordingly, the two marks express the ratio in which labour-power is exchanged for other commodities, the exchange-value of his labour-power. The exchange value of a commodity reckoned in money is called its price. Wages are only a special name for the price of labour-power, commonly called the price of labour; for the price of this peculiar commodity, which has no other repository than human flesh and blood.” (p 19)

At the time of independent commodity producers, they might sell their output to a merchant. They sold the commodity, to the merchant, below its value, because the merchant saved them time and expense of taking commodities to market. Both shared the surplus-value of the commodity between them. When the merchants take on the role of employing these producers, via The Putting Out System, it still appears that what the producer is paid is a share of the value of the commodity, and that continues in the handicraft workshop and factory. In fact, that was not the case. What the worker was paid was not a share of the value of the commodity, but the value of their labour-power. Sometimes, the money wage might be more or less than that, depending on the demand and supply for labour-power at the given time.

Assuming that to be in balance, then, if wages fell below that level, in a given firm or industry, so that the supply of labour to the low paying firms would fall, causing them to have to raise those wages. Competition between all firms, for labour, would push wages up to the value of labour-power. But, these wages are not, then, the workers' share of the value of the commodities they produce, only the value of the commodity – labour-power – they sell, whose own value may represent a larger or smaller proportion of the value of the commodities they produce.

As productivity rises, so that the value of wage goods falls, and, so, the value of labour-power falls, 10 hours labour may be required to produce those wage goods, and so reproduce a day's labour-power, rather than 12. Consequently, the necessary labour, having fallen from 12 to 10, means that the surplus labour rises from 8 to 10 hours. The amount of new value produced, remains the same; the value of the commodity remains the same, but the workers' wages, now, constitute a smaller proportion of it.

“The capitalist buys the labour-power of the weaver with a part of his existing wealth, of his capital, the capitalist buys the labour-power of the weaver just as he has bought the raw material – the yarn – and the instrument of labour – the loom – with another part of his wealth. After he has made these purchases, and these purchases include the labour-power necessary to the production of linen, he produces only with raw materials and instruments of labour belonging to him. For the latter include now, true enough, our good weaver as well, who has as little share in the product or the price of the product, as the loom has.” (p 20)

Because the wage-labourer sells his labour-power to capital, for a specified period, that labour-power, and the product of the labour, does not belong to the worker, but to capital. This is the basis of the alienation of labour.

“Thus, his life-activity is for him only a means to enable him to exist. He works in order to live. He does not even reckon labour as part of his life, it is rather a sacrifice of his life. It is a commodity which he has made over to another. Hence, also, the product of his activity is not the object of his activity. What he produces for himself is not the silk that he weaves, not the gold he draws from the mine, not the palace he builds. What he produces for himself is wages, and silk, gold, palace resolve themselves for him into a definite quantity of the means of subsistence, perhaps into a cotton jacket, some copper coins, and a lodging in a cellar.” (p 20-1)

For the worker, life begins only outside this period, during which he has sold his labour-power to capital. And, because that labour-power is inseparable from his own being has sold himself to capital, for that time. It is in this sense that he is a slave – a wage slave. It is notable, that, today, as at other times when capital has been strong relative to labour, the capitalists seek to, also, control the workers even outside this contracted period, placing demands on their behaviour and so on. In other words, to turn the free labourer, once again into a slave. The labour performed outside that existence is his own, for example, tending a garden, decorating his home, caring for his family. It is not alienated.

“Labour-power was not always a commodity. Labour was not always wage-labour, i.e., free labour. The slave did not sell his labour-power to the slave-owner, any more than the ox sells his labour to the peasant. The slave, together with his labour-power, was sold to his owner once for all to his owner. He is a commodity which can pass from the hand of one owner to that of another. He is himself a commodity, but the labour-power is not his commodity. The serf sells only a part of his labour-power. He does not receive a wage from the owner of the land; rather the owner of the land who receives a tribute from him.” (p 21)

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Biden and Netanyahu's Good Cop Bad Cop Routine

Genocide Joe and Nazi Yahoo are playing good cop bad cop, following the insane Iranian missile attack on Israel that was itself deliberately provoked by the Zionist state bombing the Iranian Embassy in Damascus, using US F-35 jets and bombs, and which undoubtedly was undertaken with prior US approval, and certainly led to no condemnation of it by either the US or European imperialism.

The Zionist state provoked the attack, because it has been seeking, for the last six months, at least, to spread the current conflict, on a wider basis, into, at least, Lebanon and Syria, and parts of Iraq, where US and UK, and other EU forces remain stationed, some of which took part in shooting down the Iranian missiles whilst still over those countries. The Zionist state, has been hammered in public relations terms, across the globe, over the last six months. It has been seen to be committing genocide in Gaza, and has been stepping up its pogroms against Palestinians in the West Bank. During all that time, Genocide Joe, along with Starnak in Britain, and the political representatives of EU imperialism, have continued to stand shoulder to shoulder with it, continuing and increasing arms shipments to it, and wholesaling the ridiculous, and blatant lies that the Zionists have been retailing.

These other imperialist powers are, thereby, tarred with the same genocide brush that their client Zionist state is tarred with, and rightly so. At the end of the day, of course, that will make no difference to the policies of those imperialist powers, any more than it makes any difference to the Zionist regime. The idea that these states policies are determined by elections and the votes of their people, let alone by public opinion, is a delusion. That does not mean that they are immune to it either, or that they do not seek to minimise any such odium, by providing themselves with cover for their barbarous acts. That is why, as in WWI and WWII, for example, they looked to provide themselves with justifications for their imperialist adventures, defending “Poor Little Belgium”, in World War I, and fighting fascism in World War II, for instance. Hence all of the grotesque lies purveyed about October 7th, about babies being beheaded, mass organised rape and so on, as though the actual horror of that day was not enough of itself. Hence, also the need to provoke Iran into its attack, so as to provide the basis for another escalation and extension of the war.

The US is not going to stop providing weapons to the Zionist state, and nor are most of the European imperialist states, whether the ICJ rules that genocide has been committed or not. Quite clearly genocide has, and continues to be committed by the Zionist state. The pictures of emaciated children, even being provided by western doctors, show that Gaza has become the Zionists' Belsen, achieved in just six months of industrial scale bombing, and starvation, following years of isolating and destroying Gaza, which it turned into the world's largest open air concentration camp. Billions of people, across the globe, including in the West, have now seen what is happening, but they are powerless to do anything about it, short of a socialist revolution.

In the US, Biden, now, seems inevitably to be going to lose the elections in November, not just for himself but for Democrat senators and representatives. But, that will simply allow back the abominable Trump, and even more rabid set of Trumpists in the Congress, whose support for Zionism, and the genocide is even greater than that of Genocide Joe, and Holocaust Harris. In Britain, the Sunak half of the Starnak chimera is on its way out big style, but that only opens the door for the Starmer half of it, which is no less rabid in its support for Zionism, if not more so. It was Starmer that, at the start supported the war crimes and genocide of the Zionists, quite openly on TV, saying that they had a right to cut off food, water and energy to Gaza! The same can be said across Europe. Unfortunately, we do not have any socialist workers' parties that can provide a realistic alternative to them, which means that the imperialist states will continue to support the genocide and war crimes, and simply seek to cover their tracks, by blowing smoke in everyone's eyes by extending the war on a wider basis, into Lebanon, and so on, using Iran as the cover for doing so.

The western media, of course, point to the statements of Genocide Joe, of Sunak and others, in the days after the missile attack, to suggest that they are trying to pressure the Zionist state not to further escalate the war, in their response to the Iranian attack. Nonsense, it is simply a good cop, bad cop routine, as they try to provide themselves with PR cover, whilst giving Netanyahu the go ahead behind the scenes to extend the war, and divert the attention away from the continuing genocide in Gaza, and the increased pogroms against Palestinians in the West Bank.   And, of course, the Zionists need no encouragement for that.

Almost every 25-30 years, since its creation, the Zionist state has used some war to extend its territory. Its stated goal is to create a Zionist state on the biblical lands, from the river to the sea. As is always the case, religion or some other superficial cover is given for such ambition, which are, in fact, driven by more mundane economic interests. The Zionists need to create a much larger state, for the simple reasons that every imperialist state has been led to expand its territory, to create much larger single markets, in the age of imperialism. Indeed, more than that. The Iranian attack, if it had any useful purpose, showed just where the interests and allegiances of the neighbouring bourgeois Arab states reside. They joined in with US and European imperialism, in tracking and shooting down the Iranian missiles, just as they have failed to provide any effective aid to the Palestinians over the last 6 months, even leaving it to South Africa to haul the Zionists in front of the ICJ!

Those bourgeois Arab states, such as Egypt, Jordan and the Gulf states, are all themselves clients of US and EU imperialism, even if some have seen the way the global winds are blowing, and have started to hedge their bets by cosying up to China. As they embark on their own process of industrialisation and modernisation, they too, as with the states in Latin America, Asia, and Africa, recognise the reality that the day of the nation state is long gone, and that it is necessary to form much larger politico-economic blocs, single markets, and ever closer political union. Indeed, the US had been promoting such a process, encouraging a normalisation of relations between Israel, and these states. The road block for them has been the Palestinians, and that became obvious after October 7th. Not included in that scenario, of course, is Iran, or its own clients in Iraq, Lebanon, Syria, and Yemen. An extension of the war into Lebanon – US and European imperialism has already extended it partially into Yemen, in their direct attacks on the Houthis – into Syria, and Iraq, if not, immediately, into Iran, is fundamental to that process.

In the short term, the use of US and European imperialism, standing behind the Zionist regime, to isolate and cow the Iranians, whilst further expansion into Lebanon, and Syria is pursued, may be enough. On that basis, a stabilization of the Zionist regime, will enable the normalization of relations between Israel, Egypt, Jordan and the Gulf states. Either way, the idea that US imperialism is seriously seeking to restrain the Zionist state, is nonsense. It has had six months to do that, and has continually done the opposite.

There is, then, a logical dissonance in the view presented by Peter Beinart, here. He criticises Biden for his actions over the last six months, but, then, naively, applauds him for his actions in relation to the Iranian attack. Yes, of course, socialists do not want to see Israeli citizens hurt or killed, as a result of the Iranian missile strike, but the best way to have prevented that, for Biden, would have been to not have been supplying the Zionist regime with its high tech weapons, not to have been simply repeating ad nauseum the lies put out by the Zionist state, to have condemned from the start its genocide and other war crimes in Gaza and the West Bank, and to have condemned the Zionist bombing of the Iranian Embassy. US imperialism, and its European subordinates did none of that, for the reasons set out above, and yet Beinart seems incapable of drawing the line between the two, and arriving at the inevitable conclusion.

Beinart does the same thing elsewhere in his presentation. He concludes,

“Again, I support US military aid to Israel that allows it to shoot down rockets that would kill Israelis with Iron Dome or the Arrow System, as happened just in the last 24 hours, but not unconditional US support for reckless offensive Israeli military actions that lead to the potential for regional war. What I hope is that the Biden administration is now learning its lesson just as it seems to be opening the door to conditioning US military aid on Israel’s reckless behaviour in Gaza, that it will do the same vis-à-vis Israel’s behaviour vis-à-vis Iran.”

This is facile. It makes a false distinction between defensive and offensive weapons. Any martial artist will tell you there is no difference between offence and defence, indeed, any football coach will tell you that the best form of defence is offence. What is the point of the Iron Dome and so on, just as with the US “Star Wars” programmes? It is to provide the shield against any response from those that you have yourself attacked? Just think of the use of "the turtle" by Roman centurions.  That is precisely what the Zionist regime does as it continually attacks Palestinians in Gaza, for example. It has, now, simply enabled it to extend that principle into directly attacking Iran, just as it has previously attacked Syria, Lebanon and Iraq directly.

There was nothing “reckless” in the Zionists attack on the Iranian Embassy; it was a deliberately aimed act of provocation, supported by the US and European imperialism, with the specific intent of soliciting an Iranian military response, which, then, distracts from the imperialist backed genocide in Gaza, the pogroms against Palestinians in the West Bank, and provides the pretext for a wider regional war, in which the US and European imperialists will play a larger, direct role, and the Zionist state will annex additional territory, as has been its modus operandi from its inception.

The Chinese Revolution After The Sixth Congress, 4. Once More On The Slogan of The Democratic Dictatorship - Part 2 of 3

In order to carry through this political revolution, as in 1848, the bourgeoisie, with its small numbers, is forced to rely on the much larger numbers of the peasantry/petty-bourgeoisie, and the proletariat. To do so, it must also convince them that its interests are their interests, its revolution is their revolution. Is that true? No, its a fraud, as Marx sets out in The Communist Manifesto, The Eighteenth Brumaire, and so on, and Trotsky sets out, here. The petty-bourgeoisie and peasantry, because of their overwhelming numbers, certainly have an interest in such formal democracy, on the face of it, but, as Marx sets out, the petty-bourgeoisie and peasantry, because of its wide variation in conditions – rich peasants to starving subsistence peasants, and so on – and because of its innate individualism and atomisation, can never form the ruling class. It is led to always act as support for either the interests of the bourgeoisie or else the workers, i.e. society divides into these two large antagonistic class camps.

In order to overcome this deficiency, and where the other two classes are unable to impose their hegemony, the peasantry/petty bourgeoisie can be forcibly unified, under the leadership of some Bonapartist, strong leader. However, the state itself must pursue either the path of capitalist property, or of socialist property, or else fail. A Bonapartist regime, whilst resting on these intermediate social layers, must represent the interests of capital or labour, must be some form of capitalist state or workers' state, albeit with these bureaucratic deformities.

In Russia, the Marxists, in analysing this process of social evolution, therefore, identified these different social classes and their direction of travel. Given the huge size of the Russian peasantry, they saw a bourgeois-democratic state taking the form of a democratic dictatorship of the proletariat and peasantry. That is, in order for the small bourgeoisie to establish a bourgeois-democracy, and overthrow Tsarism, it would have to rely on the much larger forces of the peasantry/petty-bourgeoisie and proletariat. Engels had described, in his later Prefaces to The Condition of the Working Class, that, first, the bourgeoisie, as a whole, had recruited the support of the workers and petty-bourgeoisie, in 1832, and, when the big industrial bourgeoisie became dominant, it enlisted the support of the workers to defeat the commercial and financial bourgeoisie that still existed in a symbiotic relation with the old landed aristocracy, in 1848.

What the Marxists, in Russia, did not know was how homogeneous the peasantry would turn out to be, and, so, what ability it would have to develop its own Peasant Party, that would represent its interests in any parliament. If it was relatively homogeneous, and established such a party, that would enhance the social position of the peasants, giving them greater social weight in this new social dictatorship of the proletariat and peasantry.

The nature of the state, as a capitalist state, is signified by this term “Democratic”, i.e. one in which the political regime is that of bourgeois-democracy, or a parliamentary republic. That is because the development of the productive forces was still at a primitive level, making any rapid transition to socialist relations impossible, prior to socialist revolution, elsewhere, in Western Europe. It signified, basically, a period of transition, similar to that of the establishment of social-democracy, i.e. the increasing dominance of socialised capital as a transitional form of property.

The peasantry would seek to utilise this parliamentary democracy to carry through the agrarian revolution, supported by the proletariat. However, as Marx noted, and as Lenin and Trotsky describe, the peasants are a different class to the proletariat, with different class interests. As the agrarian revolution is completed, the differentiation of the peasantry throws more of them in the direction of the bourgeoisie, and that is all the more the case where these peasants are employers of wage labour, as the workers seek to raise wages etc.

As these different social weights, between peasants and workers, dependent not just on their overall numbers, but the degree of homogeneity, solidarity and so on, are unknown in advance, this formula of the Democratic Dictatorship of the Proletariat and Peasantry, is considered algebraic, meaning, only in practice, will the balance be determined. In practice, however, it became clear that, despite its size, the Russian peasantry did not have the cohesive power to give it a determining role in the revolution, and it was carried along behind the proletariat.

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Wage-labour and Capital, Section I - Part 6 of 8

In Capital III, Marx explains it, in terms of a piece of string, cut into three parts, being the equivalent of constant capital, wages and profits. Marx's theory, in contrast to the cost of production theory, says that the value of the commodity (length of string) is determined by the labour-time required for its production. In essence this divides into two components, the constant capital, and the current labour. If the commodity is yarn, its value might be 10 hours for cotton, used as raw material, and 20 hours of labour to process it into yarn, so the value of the yarn is equal to 30 hours.

If the value of cotton rises to 12 hours, then this is, indeed, now a component of the labour required for the production of yarn, so its value rises to 32 hours. If the yarn producer had bought cotton the before the rise in its value, they would still sell yarn at a value equal to 32 hours, giving the illusion of having made an additional 2 hours profit, and higher rate of profit. This is what confuses those that operate on the basis of historic prices, and a cost of production theory, such as Ramsay or the TSSI. Marx explains it in respect of Ramsay in Theories of Surplus Value, Chapter 22, and in general in Capital III, Chapters 6 and 47.

In fact, as soon as we adopt Marx's method, and see production as continuous, rather than divided into discrete time periods, the illusion is shattered. The yarn producer must replace the consumed cotton, and the price they must, now, pay to do so, is equal to 12 hours, not 10. So, immediately, the additional 2 hours of what appeared as profit, but was only capital gain, is used up, just to replace the consumed cotton. This is one difference between forming the value of the commodity, based on its components, as against looking at how the value of the commodity must be resolved into those components, so as to reproduce it. If the current labour required to process the cotton into yarn divided into 12 hours wages and 8 hours profit, then, previously the rate of profit (s/(c + v)), was 8/(10 + 12) = 8/22. But, now, it is 8/24, because a larger proportion of the value resolves into the fund required to replace the consumed constant capital (cotton).

The importance of the rate of profit is as a measure of the extent to which capital has expanded, and can be accumulated. Because the value of cotton has risen, and the rate of profit fallen, the extent to which capital can be accumulated has fallen. Less additional cotton can be bought, and so less additional labour can be employed to process it into yarn. In term of the analogy of the string, we now have to compare a piece of string of 30 centimetres with one of 32 centimetres. In the former cotton comprised 10/30, wages 12/30, and profit 8/30. But, now, c = 12/32, wages 12/32, and profit 8/32. The relative proportion of c has risen, and that of wages and profit fallen. This is a rise in the value composition of capital.

Now, suppose that instead of the value of cotton rising, the value of labour-power rises. That is the value of the food, etc. the worker requires rises, from 12 hours to 15 hours. The value of the yarn does not rise from 30 hours to 33 hours, as a result. The value of cotton remains 10 hours, and 20 hours of labour is required to process it into yarn, so that the value remains 30 hours. However, of this 30 hours (30 centimetres of string) 10 is resolved into the reproduction of constant capital (cotton), 15 is resolved into the reproduction of labour-power, and only 5 is, now, resolved, into profit, so that the amount and rate of profit falls. This is a consequence of a fall in the rate of surplus value.

A cost of production theory of value would, rather, conclude that the value of the commodity rises to 33 hours, being comprised of 10,15 and 8, and its this which forms the basis of cost-push theories of inflation. In practice, as I have set out, elsewhere, central banks, in order to protect profits from a wage squeeze, increase liquidity – in an economic uptrend, additional liquidity arises, also, automatically, from increased commercial credit between companies – which devalues the standard of prices, so that firms can, indeed, raise money prices, even though values have not risen. But, this simply creates a price-wage spiral, because, now, the money prices of wage goods rise, meaning that, if real wages are not to fall – and in times of high demand for labour, they will tend not to – money wages must rise, and so on. In conditions of tight labour markets, money wages will always rise to ensure that real wages do not fall, even if there are lags and leads between the rise in prices, and money wages.

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