Thursday, 31 July 2014

After Obama, What Next? - Part 9

Trotsky in his writings on Britain, after the betrayal of the General Strike, by the union and labour leaders, set out the approach to the United Front - “with the workers always, with the reformist leaders sometimes.” To the extent that the reformist leaders are moving forward, we can give them critical support. But, even when the reformist leaders are not moving forward that does not relieve us of the duty of “sticking with the workers” in the mass organisation, led by those reformist leaders. We cannot simply skip over the stage of the workers in these organisations breaking with the leaders and moving beyond the bourgeois social-democratic ideology.

In the US, that currently means that Marxists have to be active members of the Democrats, in order to gain the ear of the mass of workers that still look to that party as its representative. To the extent that the Democrat party leaders advocate policies of fiscal expansion, such as those set out above, or policies such as Obamacare, which represent a forward movement, Marxists can give them critical support, and oppose the efforts of conservatives to reverse them. But, our support for the workers in these organisations, be they trades unions, or social-democratic parties is not in any way conditional upon the official positions of these organisations and their leaders.

In fact, in every important respect, the official position of these organisations is irrelevant to our activity. We are not parliamentarists, who believe that it is necessary to commit organisations to particular positions, and for those parties and organisations to implement them from above. We are revolutionary socialists who believe that workers have to act themselves here and now, to change the material conditions of their existence, and in so doing to build up their own self-government. Marxists in the US, can be active in the trades unions and in the Democrats to be building worker owned and controlled organisations, providing social insurance, for example, that can provide health insurance for workers within the context of Obamacare. They can be working with workers in the healthcare industry to establish co-operative healthcare provision that can then work with these social insurance co-operatives.

In fact, building on the work being done by the International Co-operative Alliance, such co-ops could link up with similar co-ops in Canada and Mexico. They can link up with co-ops in the pharmaceutical industry, or those in biotechnology, such as have been set up by the Mondragon Co-ops, to break the hold of the big US drug companies.

Housing co-ops are common in the US, even amongst the rich. Marxists in the US, working through the political machinery provided by the Democrats, at a local level, can turn these organisations outwards into the local communities, to build further such co-operative structures, at a block and community level, thereby drawing in new worker activists.

Programmes for urban renewal, undertaken by such community co-ops, can then be drawn up and construction co-ops, employing unemployed workers, and providing skills training, can then be established to carry it out. The United Steelworkers have joined with the Mondragon Co-ops to draw up a new structure of trade union/co-op working, and to spread worker-owned co-ops across N. America. A similar link up with trade union locals, in the construction industry, could facilitate such a development.

These kinds of programmes of working-class self-activity, can be undertaken whatever the position adopted by the party leaders. Moreover, to the extent they grow, and pull in new worker activists, they provide the example of the kind of alternative co-operative society that could be built in place of capitalism. It also provides the basis for transforming the nature of the party, and taking it beyond the bourgeois limits placed on it by the current leaders.

Marxists should be adopting this approach now, as the best means of moving the Democrats forward, and establishing the basis for defeating the forces of reaction and conservatism in the coming Congressional and Presidential elections.

As things stand, the most likely outcome is for Hillary Clinton to win the Democratic nomination. She is likely to stand on the same kind of social-democratic agenda as she did previously. Given the divisions in the Republican party, the continuing role of the Tea Party, and the demographic shifts in US society, the likelihood is that she will win the Presidency.

But, that cannot be guaranteed. Obama and the Democrats failure to face down the Republicans, and the consequent lacklustre growth in the US economy, has seen his popularity decline significantly. A hard core conservative and populist vote will be mobilised by the Tea Party against the Democrats. Unless they can provide a bold and confident agenda that provides workers with a sufficient reason to turn out and vote, the Democrats could lose due to apathy.

That would be bad for US workers, but it would also be bad for big US industrial capital. A Republican victory in either Congress, or for the Presidency would see the US suffer from the same insane policies of austerity that have been implemented in the UK and peripheral Europe.

It would be likely to send the US economy into an unnecessary recession, at a time when it should be recovering more strongly. It would mean a further relative deterioration of the US economy relative to China. The underlying interest of big capital is then to resist such a development. However, economic interest does not map directly on to political perspective. That is why Marxists do not rely on blind economic forces driving history in our direction, but seek to create history via the agency of the working-class, acting consciously to change our existing material conditions, and thereby the ideas that flow from it. 

Wednesday, 30 July 2014

Capital II, Chapter 17, - Part 15

2) Accumulation and Reproduction on an Extended Scale

“Since accumulation takes place in the form of extended reproduction, it is evident that it does not offer any new problem with regard to money-circulation.” (p 348)

Accumulation occurs because a portion of the realised surplus-value assumes the form of money-capital, as opposed to simply money, used for unproductive consumption, by the capitalist. So, the question of where the money-capital comes from is already resolved. The question then is only that previously asked in relation to simple reproduction, which is where the money itself comes from. With simple reproduction, the total amount of value, to be circulated, in the economy, remains constant, and it was seen that the proportions in which this is divided i.e. how much is wages and how much is surplus value, does not change how much money is required to achieve that. The only requirement for additional money is to replace that used up by wear and tear.

But, with expanded reproduction, the actual amount of value to be circulated itself increases. So, money, in addition to that to cover wear and tear, has to be put into circulation.

The increase in the value of commodities being circulated is not due to a rise in their prices. It is due to an increase in the quantity of commodities being circulated. That increase is not due to a rise in productivity, which would have resulted in a greater quantity of commodities but the same amount of value. It is due to an increase in the amount of production – capital employed.

There are three means of providing the additional money required.
  1. Increase the velocity of circulation 
  2. Make use of existing money hoards
  3. Buy additional gold from producers 
The first is achieved by a number of methods. An improvement in economic conditions may itself speed up circulation, as people pay more promptly etc., and improvements in transport and distribution reduce circulation time. But, improvements in banking, the ability to net off payments via clearing houses, the increased use of commercial credit, etc. will all increase money velocity, so that a given amount of money will facilitate a larger volume and value of transactions.

The second may again arise automatically from an increase in trade. A shop may accumulate money in its till, which it will use to replenish its stock when it sees the need to do so. When trade improves, it may use that money more frequently to buy in stock. But, in general, money may sit idle in bank deposits when trade is depressed, and only be drawn into activity when trade improves. Small cash balances owned by workers and small traders may be inadequate to finance productive activity, but when trade improves, banks may amalgamate them into larger funds, able to be used productively.

Finally, where these methods have still not been adequate, the value of money tokens will rise above the value of the money-commodity – here gold. In that case, an incentive arises to import gold to use as money. The fact that capitalism has to expend considerable social labour-time in the production of precious metals for this purpose, represents a large waste of social wealth. That labour-time could have been used to produce real wealth. It is a big overhead, or faux frais of production, as Marx calls it, for capitalism. So, the more it is able to avoid it, the better. The improvements in banking etc. that speed up the velocity of circulation, the introduction of credit and paper money tokens, reduce the need for precious metals, and thereby free up labour-time for other activities.

“To the extent that the costs of this expensive machinery of circulation are decreased, the given scale of production or the given degree of its extension remaining constant, the productive power of social labour is eo ipso increased. Hence, so far as the expediencies developing with the credit system have this effect, they increase capitalist wealth directly, either by performing a large portion of the social production and labour-power without any intervention of real money, or by raising the functional capacity of the quantity of money really functioning.” (p 350)

Marx points out that it is, therefore, absurd to claim that capitalist production could continue on its present scale without credit.

Back To Part 14

Tuesday, 29 July 2014

After Obama, What Next? - Part 8

The reality of this reliance of big industrial capital on social-democracy lies behind Obamacare, just as it lay behind the expansion of welfarism in the US in the 1960's, under Johnson's “Great Society” measures, and before that with Roosevelt's “New Deal”. If US big capital is to overcome its current malaise and the challenges the US faces from rising economies in Asia, and elsewhere, it will require something equally sizeable, and to ensure the election of social-democratic governments to implement them, it will need to offer adequate incentives to workers to vote for these parties to bring it about.

The outlines of what big capital in the US requires, to meet these challenges, can be seen, and as in the past, some of these requirements also offer the potential to provide the necessary incentives to workers to vote for parties proposing measures to bring them about.

For example, US capital has gained a considerable competitive advantage, in the last year or so, as a result of the development of fracking, which has made available large supplies of oil and gas, at much reduced prices, thereby reducing the cost of constant capital in many industries. This may also explain the more recent shift in US foreign policy in the gulf away from the gulf states.

But, this advantage may be short-lived. The costs of oil extraction from fracking may rise quickly, and the ultimate supplies may not be that great. The US, as with other economies, needs a revolution in energy production that will require large scale investment in research and development. That level of investment in development usually comes only from the state, until its outcome can be shown to be profitable. (The example of space technology is classic here, where it is only now 60 years after the first space programmes, that private capital is beginning to take over the development of space ports, space tourism and so on.)

The US, like most of Europe, requires considerable amounts of capital expenditure to repair and upgrade its social capital. Almost every week, there are reports, in the US, of bridge failures, for example, This is just a manifestation of the fact that during the period of long wave downturn, the policy of conservative governments was to seek to rebuild the rate of profit on the basis of low wages and high levels of private debt. The increase in public debt arose, not because of large scale borrowing to finance investment, but because of tax cuts for the rich, and to cover increased revenue spending on welfare as unemployment and poverty rose, and as low-paying small employers were subsidised out of the public purse via the extension of in-work benefits.

Global interest rates are starting to rise, as a result of the shift in the Long Wave cycle from the Spring to Summer phase. But, they are still at historically low levels, as they were after WWII. This provides an historic opportunity for governments to undertake long-term borrowing, issuing 30 year and even 50 year bonds with interest rates on them locked in to these low rates, to cover specific infrastructure investment.

In the US, that would cover a nationwide programme of rebuilding bridges, roads, and rail; the complete refurbishment of its electricity distribution, to provide a smart grid; the development of the kind of 21st century communication network an economy like the US requires. In many ways, this is the kind of programme that Roosevelt implemented with the New Deal. But, Truman and Eisenhower were thereby also locked into this social democratic framework. In fact, that social-democracy was given its international aspect first as a result of the agreements reached at Bretton Woods, though some of the necessary basis was also laid at Potsdam and Yalta, by locking in western communist parties to a reformist function where they simply acted as a left-wing pressure groups on the main social-democratic parties.

In Britain, despite the debt to GDP ratio being at 250%, the same approach was taken, borrowing to finance the development of the welfare state, and to nationalise bankrupt staple industries, so as to provide the necessary social capital for investment and restructuring. And again the incoming Tory government in 1951, had to operate within this social-democratic framework. Leading to the term Buttskillism. Expenditure on the welfare state increased, and the majority of nationalised industries were retained in state ownership to ensure the required investment continued to be made.

In Western Europe, a similar effect was achieved by the first major example of social democracy and Keynesianism at an international level, via the Marshall Plan. So, even when conservative governments were elected, they could only be so by acting as social democrats. If social-democratic parties are able to learn the lessons of history, then in the US and Europe, they will seize the historic opportunity that current low levels of interest rates provides, to draw up big bold plans for such large scale investment. Labour should join with other EU social democrats to propose such a programme across the EU, that would reinforce its growing integration, at a material level. But, an ideological struggle by social-democracy globally is required to defeat attempts of reactionary and conservative forces to prevent further progress by their insistence on austerity and similarly backward looking solutions. This is all the more necessary as forces like the conservative parties are not the most reactionary forces that have to be addressed. More reactionary forces such as those of religious fundamentalism of all sorts, feed off the success of other conservative forces, and present an even greater threat.

Monday, 28 July 2014

The Law Of The Tendency For The Rate of Profit To Fall - Part 26

Fall In the Value Of The Variable Capital (10)


In Part 25, it was shown that the value of labour-power may fall as a result of the cheapening of wage goods from things such as the removal of tariffs and other impediments to trade. But, the main cause of a reduction in the value of wage goods arises from the rise in the social productivity of labour, i.e. from the same cause of the tendency for the rate of profit to fall. Any rise in productivity will tend to cause the value of wage goods to fall, and not just a rise in productivity affecting the production of wage goods directly.

For example, an improvement in productivity in the transport industry, will reduce the cost of transporting commodities to markets, which will thereby reduce prices; an improvement in productivity in the energy industry will reduce the value of all commodities, which require energy for their production, which is pretty much all commodities; an improvement in productivity in machine production industries will reduce the value of machines used in a range of industries, including the production of wage goods; an improvement in productivity in extractive industries for metals etc. will reduce the value of commodities which comprise metals, and so on. Moreover, all of these will tend to have secondary effects, so that, for example, a reduction in the value of energy will not only directly affect those industries producing wage goods, but will also affect the machine producers that provide those industries with their machines, it will affect the transport industry that delivers commodities to markets, and inputs to producers, and so on. 

The consequence then is that the value of labour-power falls, because less labour-time is required to reproduce it. The value of variable capital thereby falls, but this in no way represents a rise in the technical composition of capital, causing the organic composition of capital to rise, and the rate of profit to fall. In fact, the opposite may arise. In some industries, it may be the case that a fall in the value of labour-power, acts as a disincentive to replace labour with machines, as was seen earlier, because the machine must be cheaper, i.e. require less labour for its production, than the paid portion of the labour-power it replaces. For example, Marx gives the example of the use of women to pull canal barges, because their labour-power was so cheap that it was more profitable than using horses! As was stated earlier, the real determinant is not the organic composition of capital c/v, but the relation of c to the new value created by the labour power, i.e. c/v+s.

If v falls because the value of labour-power falls then not only will s/v rise, but for the reasons set out above, its possible that c/v+s may also fall, as this cheaper labour replaces machines, or animals in the production process. In that case s/c+v will rise on two counts, first the relative fall in the technical composition of capital, and secondly the rise in the rate of surplus value.

But, in conditions of rising social productivity this can only arise in specific industries. By definition, it cannot apply across the whole social capital, because the basis of that rising social productivity is that relatively less labour-power is being employed to process a greater quantity of material, and it is this, which is also the basis of the fall in the value of labour-power. But, this has a number of consequences, some of which have already been considered. I will examine these next.

Sunday, 27 July 2014

Should Sanctions Be Put On The United States?

Its estimated that there are now more than 1,000 civilians, mostly children, that have been murdered by Israeli forces in Gaza. The Israeli state only survives because of the financial, military and political support it receives from the United States. The weapons being used to murder Palestinian children at the rate of one an hour, including the F-16 warplanes, that rain down death and destruction, on a massive scale, are themselves provided by the US. Russia may or may not have provided weapons to the East Ukrainians, resisting the military offensive, launched against them by the regime in Kiev; there is no doubt that the US is providing the arms to the Israeli regime that are being used to carry out what the UN itself has described as War Crimes. If there is a case to impose sanctions on Russia, there is then an even greater case for the imposition of sanctions on the United States.

Paul Mason recently wrote,

“Let’s be clear: targeting civilians, and failing to avoid civilian casualties during military attacks, are both indictable as crimes under the fourth Geneva convention. The indiscriminate firing of rockets into Israel has been described as a war crime by Amnesty International. By midday Sunday, anybody following the Gaza events on Twitter would have enough evidence to ask the same question about Shujaiya.”

In fact, the UN Human Rights Council has voted to investigate Israel for these War Crimes, and as is always the case, in such votes, only the US voted against the motion. Compare that with Russia's support for the UN motion calling for an independent inquiry into the shooting down of flight MH17. Yet, it is the US that is proposing sanctions on Russia, not vice versa! Since that resolution, the UN itself has seen one of its schools, in Gaza, shelled by Israeli forces, with another large scale loss of life of Palestinian children. But, all US politicians, like John Kerry, can do is to express their “concern” at such blatant acts of murder.

As Paul Mason reported, whenever such brutal attacks occur, the US media automatically mobilises a massive propaganda machine to defend the war crimes of the Israeli regime. 

“My colleague, Matt Frei, tweeted that CNN’s Wolf Blitzer interview with Netanyahu was less a grilling more “a warm bath and a back rub”.”

Indeed, they are so sycophantic that you fully expect one of them to say, “While I'm already down here on my knees, can I offer you a blow job?” 

Channel 4, and other European media outlets have shown film of innocent civilians being shot by Israeli snipers, and then shot again when they have been on the ground. When others have sought to recover their bodies the snipers have shot at them too. As a result bodies have had to be left lying on the streets for days. Yet, the US is calling for sanctions on Russia because the Ukrainian separatists did try to recover bodies from the wreck, despite being under bombardment and mortar attack by the Kiev regime whilst they did so. Whatever the inadequacies of the separatists, its only because they acted to recover those bodies that they are now back in the Netherlands, whilst the bodies of dozens of murdered Palestinians remain on the streets, in the sweltering heat of Gaza.

But, of course, its not just the role of the US in providing the weapons of mass destruction used by Israel to murder Palestinian men, women and children. The US itself is directly responsible for the murder of hundreds of civilians by its own direct and deliberate military acts of aggression. Even without considering the hundreds of thousands of people who died because of the US's illegal war in Iraq, or the thousands murdered as a result of the US involvement in Libya, or its provision of weapons both directly and through its Gulf state allies to the jihadists in Syria, the fact is that the US itself directly every day kills civilians with its drone attacks. Those murders are often not reported, because they occur unseen, but even when some large scale death of civilians results from one of these attacks, they have now become so regular, and the US response that it was an “accident”, that it is simply “collateral damage” become so routine, that it is no longer news. Yet, when MH17 is possibly shot down, possibly by irregular Ukrainian forces, the US insists that this is so heinous that it can only result in sanctions being imposed on Russia.

So given the much larger scale murder committed by the US than by Russia, over such a long period that it can now only be described as pathological, should sanctions be imposed on the United States? No Marxist could propose such a course of action. Sanctions are imposed by one or more states against another. They are in essence a form of war themselves. Instead of being an act of military aggression, they are an act of economic aggression, that is often a precursor to actual military aggression. It is the waning economic power of the United States as a global player, and its increasing loss of political and strategic power around the globe, as new forces such as China, and the BRIC economies rise to challenge it, that is behind the US attitude to Russia.

The calls for action against Russia come just as Russia and other BRIC countries have come together to establish an alternative to the IMF, which is dominated by the US. It comes as Russia is forging a closer relation with the world's largest economy China, and working towards the establishment of a Eurasian economic zone similar to the EU. It comes as China is increasingly the dominant power in Africa, and the US is only now racing to try to catch up, with China already having signed trade and other deals with large numbers of economies in the US's own back yard in South America.

Marxists do not support the actions of cold war, trade war, or outright war by one capitalist state against another, whether that is the US against Russia or vice versa. Our concern is to work towards the unity of the workers of all these countries against their own ruling class, and that is not aided by supporting sanctions against the economy upon which those workers depend for their livelihood. That is also why sanctions and boycotts against Israel are wrong. The problems of the Middle East whether they be those arising from the creation of the state of Israel, or those arising from the Sykes Picot Agreement are problems arising from top down solutions imposed by capitalist states. The solution to those problems does not flow from further such top down action by states. It can only be created by the direct action of workers uniting across borders.

Saturday, 26 July 2014

After Obama, What Next? - Part 7

Just as the bourgeoisie as a whole needed the support of workers to defeat the landed aristocracy, so the tiny numbers of the big industrial capitalists are unable to defeat the much larger number of small and medium capitalists, and those that share their outlook, without the support of workers.

The British Liberal Party reflected that compromise, and the de facto alliance between these industrial capitalists and workers, and the US Democrats reflect it also. For a time, parties like the Labour Party and European social-democratic parties appeared to represent something different, but in reality, all they represented was a greater strength of the interests of workers within that compromise. In respect of the Labour Party, its commitment to the maintenance of capitalism, as the basis of furthering the interests of workers was never in doubt, and the interests of workers were always subordinate to those of big capital.

That is now simply more manifest, in the policies and actions of European social-democratic parties in general, and this was facilitated by the split in the international labour movement, into the Second and Third Internationals. There is then no real substantive difference between these parties and the US Democrats. They are all bourgeois workers parties, in the sense that they are parties with a bourgeois ideology, specifically geared to the interests of big industrial capital, that depend upon the support and activism of workers in order to win elections.

Ultimately, big industrial capital requires the election of these social-democratic parties, or for the social-democratic wings of conservative parties to be strong enough to represent its interests, as against a reversion to more primitive forms of capital. The economic power of big capital can usually outweigh the measures undertaken by conservative governments to benefit small capital, but, at times, the measures undertaken by those governments fundamentally threaten big capital. The austerity measures undertaken in the UK and parts of Europe, and advocated by the Tea Party in the US, have weakened the economic recovery after 2008. The US bore most of the cost of undertaking the required fiscal stimulus, therefore. But, the other consequence has been to strengthen conservative forces in Europe, even more, as a result of the resulting economic weakness.

Not only has this strengthened right-wing populism, but it has strengthened nationalistic tendencies, thereby undermining progress towards a single European state, which is a fundamental requirement of big industrial capital. If it is to be achieved, big industrial capital will require social-democratic governments across the dominant states of the EU, it will require co-ordinated fiscal expansion across the EU, to boost economic activity and employment, so as to undermine the tendency towards economic nationalism, and thereby create the material conditions to swing public opinion behind the need for greater political integration and the creation of a single federal state. Either that, or as happened in the US, it will be brought about forcibly by war.

Northern Soul Classics - I'm Coming To Your Rescue - The Triumphs

One of the 100 mile an hour dancers played last Saturday at the stoke nighter.  Another great night.  My only complaint is that a number of DJ's starting with Kev Roberts had so much bass on everything that it drowned out the actual music to a dull thud.  That apart great night, some great dancing, and my new dancing shoes were brilliant.