Friday, 23 June 2017

Friday Night Disco - Sweet Gypsy Jane - The Temptations

Theories of Surplus Value, Part I, Chapter 4 - Part 108

Destutt has only succeeded in showing that the industrial capitalists do not pay wages, rent or interest twice, once as money and secondly as commodities, because what is paid out first as money wages, rent or interest is “drawn back”, only in exchange for commodities of the same value. At best, the idea that this second exchange takes place on a basis favourable to the industrial capitalist explains the relative distribution of that profit. It does not, in any way, indicate the origin of the profit itself.

But, later, Destutt, echoing Adam Smith, actually alights, by accident, on the real source of the profit.

““Whence come their revenues to these idle men? Is it not from the rent which those who set their capitals to work pay to them out of their profits, that is to say, those who use their funds to pay labour which produces more than it costs, in a word, the men of industry? ”” (p 278) 

In other words, the profit arises not at all from these capitalists selling their commodities above their value, but from the workers creating more value than they are themselves paid as wages, in other words, creating a greater quantity of value than the value of their own labour-power.

“... a surplus-product which the industrial capitalist appropriates for himself, and of which he gives away only one part to those receiving rent from land and money. 

Monsieur Destutt concludes from this: not that we must go back to these productive labourers, but that we must go back to the capitalists who set them in motion.” (p 279)

If we take Smith's correct definition of productive labour being that which produces surplus value, then Destutt's argument leads to the conclusion that the only productive labourers are the industrial capitalists!

““They” (the industrial capitalists) “who live on profits maintain all the others and alone augment the public fortune and create all our means of enjoyment. That must be so, because labour is the source of all wealth and because they alone give a useful direction to current labour, by making a useful application of accumulated labour” (p. 242).” (p 279)

But, all this means is that the industrial capitalists set labour to work to produce use values. They do so by using accumulated labour to set this current labour to work. The value of the accumulated labour, in the form of wages, is less than the value produced by the labour it sets in motion.

“In the passage just cited Destutt naïvely epitomises the contradictions which make up the essence of capitalist production. Because labour is the source of all wealth, capital is the source of all wealth; the actual propagator of wealth is not he who labours, but he who makes a profit out of another’s labour. The productive powers of labour are the productive powers of capital.” (p 280)

Destutt writes,

““Our faculties are our only original wealth; our labour produces all other wealth, and all labour, properly directed, is productive” (p. 243).” (p 280)

On that basis, labour is not wealth. But, the act of labour thereby produces all other wealth. Only labour which produces profit for capital is properly directed, and thereby productive.

Destutt gives a good summary, Marx says, of Adam Smith's discussion of different types of consumption, and their effect. A firework and a diamond may have the same value, Destutt says, but the former once lit, is soon consumed and disappears, whereas the latter will still exist 100 years hence to still be enjoyed. This is a similar distinction as that between material and immaterial commodities. The same is true of services.

““The most ruinous consumption is the quickest, because it is that which destroys more labour in the same time, or an equal quantity of labour in less time; in comparison with it, consumption which is slower is a kind of treasuring up, since it leaves to times to come the enjoyment of part of the present sacrifices… Everyone knows that it is more economical to get, for the same price, a coat that will last three years than a similar one which will only last three months” (pp. 243-44).” (p 281).

Thursday, 22 June 2017

Theories of Surplus Value, Part I, Chapter 4 - Part 107

The third category of consumers that Destutt lists, who buy these overpriced commodities is the idle capitalists, and as the consumption of their workers also forms a part of their revenue, the two can be considered together.

“Here again there is the childish conception of the rent, etc., coming back, as there was above of the drawing back of the whole of the wages.” (p 275)

In other words, the industrial capitalist hands over £100 in rent or interest to the landowner or money-capitalist. These idle capitalists then buy £100 of commodities from the industrial capitalists, so that they “draw back” this £100. But, they achieve this “drawing back” only by handing over £100 of commodities to the idle capitalists instead! Even if they hand back only £80 in value, in exchange for this £100, they have only, in effect, reduced the amount they have handed to the idle capitalists to £80.

Destutt himself has said that rent and interest are only a deduction from the industrial profit, and so had this £100 not been deducted in the first place, it would not have needed to have been drawn back. Therefore, even had the industrial capitalist drawn back the entire £100, without giving any commodities to the idle capitalists in exchange, they would have only set this deduction from their profit to zero, rather than in any way added to it.

But, there is a further absurdity in Destutt's argument, yet one that is reflected in actual history. Suppose a landlord receives £100 in rent from an industrial capitalist. The landlord buys commodities from the capitalist with this £100. But, the capitalist sells commodities to him with a value of £80. The landlord, however, needs commodities with a value of £100. So, they sell a portion of their land to raise the additional £25 required to buy the additional commodities (they need to buy 25% more, which means £25 more than the £100 they have already paid.) 

The buyers of this land will be the productive-capitalists. Over time, therefore, all of the land will pass out of the hands of the idle landowners and into the hands of the productive-capitalists. But, at this point, the idle landowners will have no rent as revenue, and no means to buy commodities from the industrial capitalists. But, this process did, in fact, occur in history, as Marx describes.

“And Monsieur Destutt is quite right up to a certain point, although not at all in what he wants to explain. In the period of the declining Middle Ages and rising capitalist production the rapid enrichment of the industrial capitalists is in part to be explained by the direct fleecing of the landlords. As the value of money fell, as a result of the discoveries in America, the farmers paid them nominally, but not really, the old rent, while the manufacturers sold them commodities above their value —not only on the basis of the higher value of money.” (p 276-7)

Something similar has occurred more recently.  As the prices of financial assets, fictitious capital, (shares, bonds, property) bubbled to ever higher levels, so the yields on these assets fell lower and lower towards zero.  Instead of being concerned over the revenue these assets might produce, their owners became concerned only with the potential capital gains, arising from the ever higher prices.  Pension funds, depend upon the revenue from such assets to cover their future pension liabilities to pensioners, but as yields fell, they too saw the means of paying pensions being from out of these large capital gains, but which could only be realised by selling some of the underlying financial assets.  In other words, current liabilities were met by undermining the capital base of the pension fund, which then led to inadequate capital in the pension fund to cover future liabilities, particularly as yields on those assets fell to near zero.

Wednesday, 21 June 2017

A Tale of Two Cities

Numerous people have noted the contrast between Grenfell Tower, and its inhabitants, and the multi million pound properties within a short distance from it, and their inhabitants.  A tale of two cities in many ways.

One wonders just how much the decisions about cladding the outside of the tower, for example, were governed by a desire that those in the multi-million pound properties did not have to look out on the brutalist concrete architecture of the tower that previously existed.  Brutalist, and perhaps less aesthetic, but at least concrete is flammable (in the correct usage, meaning that you can apply a flame to it without it burning, as opposed to inflammable meaning you can't apply a flame to it without it burning), as one of the nearby residents noted having seen a fire in one of the apartments some years ago, which failed to spread.

In Dickens' A Tale of Two Cities the activity is spread between London and Paris, with characters moving between the two.  Some of the residents of Grenfell Tower are themselves migrants and refugees from other countries.  In contrast, many of those who own the multi-million pound properties nearby are far from refugees, many are foreign millionaires, who own the property in London, not as somewhere needed to live, but as merely somewhere to stash some of their money, in an asset that government and Bank of England policies over the years have deliberately inflated, and kept inflated so as to protect the private wealth of such individuals whilst simultaneously pricing millions of workers out of being able to buy a house, and at the same time thereby causing rents to rise, and private landlords to massively subsidised to the tune of around £11 billion a year in Housing Benefit payments.

When Jeremy Corbyn, quite rightly proposed, last week, that the immediate housing needs of Grenfell Tower residents should be addressed by sequestering some of those empty properties, it brought howls of anguish from the ranks of Tories and their supporters in the media.  Their empathy towards people made homeless by such an event obviously only goes so far, as far as pretty empty words, in the aftermath, but not as far as dipping into their pockets or seeing the rights of property infringed, even unused, empty property!

Sophy Ridge, on Sunday complained that the suggestion to sequester the empty property was ridiculous because of the cost for the government to compulsory purchase these multi-million pound properties.  Absolute nonsense.  If the property is empty, and earning no rent currently, the owners are losing nothing from allowing a homeless family to live in it, and they should be compensated by the payment of nothing for it, accordingly.  Indeed, a systematic programme of occupying and squatting empty properties across the country, would be a good immediate way of dealing with homelessness, and of encouraging property speculators to get their properties occupied or sell them, and thereby would act to bring property prices down, by getting some of the 1.5 million empty properties in the country on to the market.

The fire also showed the schizophrenic nature of the government in another way.  In the London Bridge terrorist attack, 8 people were killed and 48 injured.  Within 24 hours, the troops were on the streets, in support of the police and across the country, police were knocking down doors, and hauling dozens of people in for questioning or under arrest.  A similar response came with the Westminster Bridge attack, and the Manchester attack.

But, when Grenfell Tower burned, the response of the state seems to have been completely different.  The firefighters and paramedics did the best they could to save lives, and prevent injuries way beyond the call of duty.  But, already the official estimate of deaths runs to around 80, and the residents know the real figure is likely to be more like 150.  Yet, where were the troops to help with dealing with the fire?

When there are large forest fires, Hercules transport aircraft and helicopters are used to drop fire retardant or even just water from nearby sources on to the fire.  Yet, no such help was provided in this instance.  If the £100 billion being wasted on Trident were instead used on resources for real civil defence and security, then a more effective response would have been possible.  Indeed, the £100 billion wasted on Trident would have been much better used on providing adequate fire and other safety measures in these buildings.

But, also where have been the dawn raids by police, and the arrests of those responsible for the cladding on these buildings and so on.  It may turn out that many of the people who might be so arrested, or brought in for questioning are released without charge, but so have been many of those arrested and brought in for questioning following the terror attacks.  The point is that it shows a completely different approach when it comes to businesses when such events occur.  Its much the same with Health and Safety.  Never do you see police going into firms to investigate breaches of Health and Safety Law, even while they are being sent out to break up strikes against such bad employers.


Theories of Surplus Value, Part I, Chapter 4, Part 106

Next, Destutt lists the workers as buyers of these commodities above their value. But, Destutt, by his previous argument, has made it impossible to derive a profit by selling commodities to workers above their value. He told us that these commodities are not, in fact, bought by the workers, who have no wealth of their own, but are bought by the capitalists, with their own wealth that is given to the workers as wages.

But, if it is actually the industrial capitalists who are really the buyers of these wage goods, not the workers, then, by selling them above their value, this once again amounts to to them selling them to themselves above their value, and thereby simply swindling themselves! Moreover, this applies not only to the industrial workers, but also to the workers employed by the idle capitalists, who must also buy these overpriced commodities, out of the revenues they deduct from the industrial capitalists profit.

As Marx comments,

“First the capitalist pays money to the labourer as wages. Then he sells him his product “too dear”, and by so doing draws the money back again. But as the labourer cannot pay back to the capitalist more money than he has received from him, so the capitalist can never sell his products to him dearer than he has paid him for his labour. He can always only get back from him as much money for the sale of his products as the money he has given him for his labour. Not a farthing more. How then can his money increase through this “circulation”?” (p 273)

This is the point referred to earlier. Destutt believes that the capitalist is able to make this profit by “drawing back” the money wages paid to the worker. In other words, having paid £1 in wages, the capitalist draws it back in exchange for commodities. But, what the capitalist has given to the worker is first £1 in wages, and then £1 in value of commodities. Having given out £2 in value, they have only “drawn back” £1 in money.

As Marx points out, they could hardly get rich on the back of such an exchange.

“Here, therefore, the noble Destutt confuses the circulation of money with the real circulation of commodities. Because the capitalist, instead of giving the labourer directly commodities to the value of £1, gives him £1, with which the labourer then decides as he likes which commodities he wants to buy, and returns to the capitalist in the form of money the draft he had given him on his merchandise—after he, the labourer, has appropriated his aliquot share of the merchandise—Destutt imagines that the capitalist “draws back” the wages, because the same piece of money flows back to him, And on the same page Monsieur Destutt remarks that the phenomenon of circulation is “little known” (p. 239).” (p 273-4)

As analysed previously, the surplus value arises not from those exchanges, or the circulation of money and commodities, but from production. The surplus cannot be explained on the basis of cheating.

“If I go into a shop and the shopkeeper gives me £1 and I then use this £1 to buy commodities to the value of £1 in his shop, he then draws back the £1 again. No one will assert that he has enriched himself by this operation. Instead of £1 in money and £1 in commodities he now has only £1 in money left. Even if his commodity was only worth l0s. and he sold it to me for £1, in this case too he is 10s. poorer than he was before the sale, even though he has drawn back the whole of one pound sterling.” (p 274)

The same thing applies here in relation to wages. Had the capitalist simply given the workers £1 to spend, and then sold those workers commodities, for £1, whose value was only £0.50, then they would have cheated the workers out of £0.50, but it would only thereby have reduced the loss of the capitalist, who gave the workers the £1 to spend in the first place!

Tuesday, 20 June 2017

Theories of Surplus Value, Part I, Chapter 4 - Part 105

Destutt then gets into the same sort of contradiction that we have seen with other writers in trying to explain the profit of the industrial capitalists, and how this relates to the revenue of the workers, landlords and money lenders.

Having started from a position where all wealth is in the hands of the industrial capitalists, Destutt is first faced with explaining wages of workers, who “... have no other treasure but their everyday labour.” (p 271)

The real problem Destutt has here is a failure to understand what wages are. Wages are merely the phenomenal form of the value of labour-power, and that value is itself determined by the value of all those commodities required for the reproduction of labour-power. If Destutt understood wages in this way, and saw the workers wage as essentially an exchange of these commodities for labour-power, much of his confusion would be removed. Instead, Destutt sees wages as being simply money in the hands of the industrial capitalists paid to the workers, money which the workers then use to buy the commodities they require. The workers consumption, therefore, is paid for not by them, but by the industrial capitalists.

“ “It follows from this that the consumption paid for by this wealth is the consumption of the wage-labourers, in the sense that it is they whom it maintains, but at bottom it is not they who pay it. Or at least they only pay for it with funds existing beforehand in the hands of those who employ them. Their consumption should therefore be regarded as having been made by those who hire them. They only receive with one hand and return with the other.... It is therefore necessary to regard not only all that they” (the wage-labourers) “spend but even all that they receive as the real expenditure and consumption of those who buy their labour. That is so true that in order to see whether this consumption is more or less destructive of wealth that has been acquired, or even if it tends to increase it … it is necessary to know what use the capitalists make of the labour that they buy” (pp. 234-35).” (p 271-2)

Marx demonstrates later that what this amounts to is effectively the industrial capitalist paying the workers twice, once in the money wages, and secondly as commodities bought with those money wages. But, first, Marx looks at Destutt's arguments for where the surplus value comes from with which they pay revenue to themselves and the idle capitalists.

““I will be asked how these industrial entrepreneurs can make such large profits, and whence they can draw them? I reply that it is through their selling everything that they produce at a higher price than it has cost them to produce” (p. 239).” (p 272)

This is the same argument seen previously and dealt with by Marx in Volume I. Marx breaks down the groups who Destutt says these commodities are sold to above their value. First of all, according to Destutt they sell these commodities to themselves. But, its impossible to enrich yourself, individually, by selling the things you produce to yourself above their value, because that would be simply to swindle yourself! It would be to merely put into one pocket as a producer what you have taken out of the other pocket as a consumer.

Yet, this applies to the entire class of producers equally. If producer A sells commodities at 10% above their value to producer B, and producer B likewise sells commodities to producer A at 10% above their value, they have both equally swindled one another by 10%, so that it would have been exactly the same had they exchanged their commodities at their value. A first took £10 too much out of the pocket of B as a consumer, and put it into his pocket as a producer, but then B, as a producer, took this same £10 out of A's pocket as a consumer, and put it back into his own pocket, from whence it originally came!

Monday, 19 June 2017

Theories of Surplus Value, Part I, Chapter 4 - Part 104

[14.] Count Destutt de Tracy [Vulgar Conception of the Origin of Profit. Proclamation of the Industrial Capitalist” as the Sole Productive Labourer]


Destutt deTracy considers all labour productive, and it is only the idle classes who live off rent or interest that are unproductive.

““The real sterile class is the class of idlers, who do nothing but live what is called nobly on the products of labours performed before them, whether these products are realised in landed property which they farm out, that is to say, which they lease to a labourer, or whether they consist in money or goods that they lend for a return, which also means to lease them. Those are the real drones of the hive (fruges consumere nati)” (p. 87): these idlers “can expend nothing but their revenue. If they break into their funds, nothing replaces them; and their consumption, increased for the moment, ceases for ever” (p. 237). 

“This revenue is … only a deduction from the products of activity of the industrious citizens” (p. 236).” (p 269)

What then of the workers employed directly by these idlers? These workers consume commodities produced by the productive workers, but appropriated as revenue by the idlers.

“Here therefore we are dealing with labourers for whose labour the idlers directly exchange their revenue, that is, with labourers who draw their wages directly from revenue, not from capital.” (p 270)

Real political economy, Marx says, treats the capitalist as personified capital, as merely an agent of production. In this role, unlike the miser, who only amasses money, the capitalist amasses exchange value in order to amass productive-capital, and thereby to develop production.

“The enjoyment of wealth seems to it a superfluous luxury, until it itself learns to combine exploitation and consumption and to subordinate itself to the enjoyment of wealth.” (p 270)

According to Destutt, the origin of the revenues of the idlers – rent, interest – resides in the industrial capitalists who produce the surplus value in which the idlers share.

“In Destutt it is quite clear —as with Adam Smith before him —that what on the surface is glorification of the productive labourer is in fact only glorification of the industrial capitalist in contrast to landlords and such moneyed capitalists as live only on their revenue.” (p 271)

The industrial capitalists have in their hands the whole wealth of society, which they spend in order for it to come back to them with a profit. They also spend solely for consumption, just as with the idlers, but it is ““...in total moderate, because industrialists are usually unassuming” (p. 238).” (p 271)

Sunday, 18 June 2017

Theories of Surplus Value, Part I, Chapter 4 - Part 103

In a society based on barter, the kind of proportion between different types of commodity production that Marx describes above, ensures that there can be no overproduction. Even in a society based on simple commodity production, any such overproduction would only ever be partial and limited. This potential for overproduction arises because, as Marx says in Theories of Surplus Value II, as soon as commodities exchange with money, the demand for the general commodity, money, may exceed the demand for all other commodities, and so it does not get transformed into them.

But, it is only with capitalist production proper, machine production, that this potential for overproduction becomes transformed into an inevitability, as this increase in the production of use values expands massively. Yet, Say fails to recognise this difference, not just between capitalist production and simple commodity production, but even between simple commodity production and barter. So, he believes that overproduction cannot occur. Rather than there being overproduction, there can only be under-consumption, caused by an underproduction of other commodities to be exchanged.

“And moreover Monsieur Say teaches: “Sluggishness in the sale of some products arises from the scarcity of some others” (l.c., p. 438). 

Therefore there can never be too many tables produced, but at most perhaps too few dishes to be put on the tables. If physicians increase too much in number, what is wrong is not that their services are available in superfluity, but perhaps that the services of other producers of immaterial products are in short supply—for example, prostitutes ...” (p 268)

Marx also makes the point that, given any conditions of production, the amount of labour required is well known. However, that is not the case for immaterial production. For example, how many soldiers are required to defend a country? This is a problem that persists with trying to measure productivity for service production.

Saturday, 17 June 2017

Theories of Surplus Value, Part I, Chapter 4 - Part 102

[13. Say’s Conception of “Immaterial Products”. Vindication of an Unrestrained Growth of Unproductive Labour]


Marx then turns to an analysis of Say. Say also focusses on Smith's definition of productive labour deriving from its material substance. Say criticises Smith for denying that those services and immaterial goods constitute products. But, Marx points out that Smith makes no such assertion.

“Smith does not at all deny that these activities produce a “result”, a “product” of some kind. He even expressly mentions “the protection, security, and defence of the commonwealth” as “the effect of their labour this year” (the labour of the servants of the public) ([Wealth of Nations], O.U.P. edition, Vol. I, pp. 369-70] Smith, t. II, éd, Garnier, l. II, ch. III, p. 313).” (p 266)

Say calls those use values which are consumed in the instant of their production “productive of immaterial products”. By so doing, he seeks to avoid describing them as unproductive, simply by using a different terminology. But he writes, 

“...“that they do not serve to augment the national capital” (t, I, p. 119). “A nation in which there were a multitude of musicians, priests and officials, might be pleasantly entertained, well educated and governed admirably well, but that would be all, Its capital would not receive any direct increase from all the labour of these industrious men, because their products would be, consumed as fast as they were created” (l.c., p. 119).” (p 267)

Say ends up in all sorts of confusion and contradiction by focussing on the most restrictive sense of unproductive used by Smith. Say has argued that one kind of labour is as productive as another, but then argues that these various kinds of labour add nothing to the national capital.

Marx writes,

“And why not, if one kind of labour is as productive as the other, and the increase of productive labour is in general “advantageous for a nation”? Why is it not as advantageous to increase this kind of labour as any other? Because, Say replies with his characteristic profundity, because it is not at all advantageous to increase productive labour of any kind above the need for this labour. But then surely Garnier is right. For it is equally advantageous—that is, equally disadvantageous— to increase the one kind of labours as to increase the other kind above a certain quantity.” (p 267)

Whether labour is expended in producing material or immaterial products, only that labour which is necessary should be expended, and as Marx sets out in Capital III, that applies not just to the individual commodity unit, but to the social production. For example, linen might be produced by the most efficient means available, so that each metre contains only the necessary labour, but if 1 million metres of linen are produced when only 800,000 metres are demanded at its price of production, then 20% of the labour expended was not socially necessary. As Marx sets out, this definition of socially necessary means that the various commodities must be produced in the right proportions, so that they can be exchanged with each other. This applies equally to immaterial products as material products. A society may require a given amount of production of education or healthcare, for example, relative to the amount of food, clothing and shelter produced.

Say's logic, Marx says, is this.

“It is not so useful for a nation to increase the “producers of immaterial products” as to increase the producers of material products. Proof: it is absolutely useless to increase the producers of any kind of product, whether material or immaterial, beyond what is necessary. Therefore it is more useful to increase the useless producers of material products than those of immaterial products. It does not follow in both cases that it is useless to increase these producers, but only the producers of a particular kind in their corresponding branch of production.” (p 268)

Northern Soul Classics - Everything's Gonna Be Alright - P.P. Arnold

Friday, 16 June 2017

Friday Night Disco - Superman - The Commodores

Theories of Surplus Value, Part I, Chapter 4 - Part 101

[12.] Earl of Lauderdale [Apologetic Conception of the Ruling Classes as Representatives of the Most Important Kinds of Productive Labour]


Marx says he will examine Lauderdale's apologetic for profit later. It is that capital gets paid for doing what labour would have to have done, or could not do.

Lauderdale opposes Smith's view on accumulation and also on productive and unproductive labour, arguing that what Smith calls the “unproductive powers of labour” are only the “productive powers of capital”.

He rejects Smith's view of surplus value being created by labour in production, arguing, 

““If this, however, was a just and accurate idea of the profit of capital, it would follow that the profit of stock must be derivative, and not an original source of revenue: and capital could not therefore be considered as a source of wealth, its profit being only a transfer from the pocket of the labourer into that of the proprietor of stock” (l.c., pp. 116-17) [p. 157 ].” (p 265)

Lauderdale basically uses the same objections as Garnier in attacking Smith's view on productive labour. That is, he picks on Smith's arguments about material as opposed to immaterial production, rather than the definition of productive labour as that which exchanges with capital, and is productive of surplus value.

For Lauderdale, as for others such as deTocqueville, the profit arises from the saving of labour. This argument was encountered previously too. For example, suppose we take a productive labourer such as a carpenter. If this carpenter employs a cook, so that he saves his own time cooking, and is thereby enabled to perform productive labour, in carpentry, isn't the labour of the cook thereby productive, because it enables this additional carpentry?

The answer is no. The time spent cooking his own meals would have been unproductive for the carpenter, and it cannot be transformed into productive labour simply because it is performed by someone else now on his behalf.

Lauderdale writes,

“ “The labour of the manufacturer fixes and realises itself in some vendible commodity… Neither the labour performed by the menial servant, nor that of which the necessity is supplanted by circulating capital,” < by this he means money> “do naturally stock, or store themselves up in such a manner as to be transferred from one to another for a defined value. The profit of the one and the other alike arises from saving the labour of the owner or master. The similarity is indeed such that it is natural to suppose the same circumstances which led the one to be deemed unproductive, would naturally create the same impression with relation to the other.” > And thereupon he quotes Smith, Book II, Chapter II, > (Lauderdale, l.c., pp. 144-45) [pp. 195-97].” (p 266)

The succession of these arguments against Smith would then be “Ferrier, Garnier, Lauderdale, Ganilh.” (p 266)

Thursday, 15 June 2017

For A Workers and Tenants Inquiry Into the Grenfell Tower Disaster

Phil is quite right when he says that the Grenfell Tower disaster is Class War.  This disaster is a direct result of years of Tory austerity, and playing up to the Rachmanite landlords, whose numbers have been massively swelled by all of the hype and incentives given by the state for the Buy To Let brigades.  As with the continued numbers of workers lives that are lost or destroyed in industrial accidents, or from industrial diseases, it gives the lie to the Tories and the gutter press onslaught against "Health and Safety Gone Mad!"

This kind of disaster occurs somewhere in the world every week, and as in this case, that somewhere is nearly always within workers communities, and often the poorest workers communities, not in those of the rich.  It is a direct result of treating workers like cattle, attempting to squash them into the cheapest, least extensive spaces possible.  Britain has vast amounts of open space.  There is twice as much of the country taken up by golf courses as there is by private residences!  Yet, Britain has the smallest property sizes anywhere in Europe, and we are still being told the country is overcrowded, that the Green Belt has to be maintained, rather than providing workers with the decent living space they need.

The government, and the other representatives of the capitalist and landlord class will try to sweep this under the carpet as soon as they can.  There will be a big hue and cry over this one tragic event, but by that precise means they will try to present it as an unusual event, rather than one that we can expect with greater regularity unless something is done about it.  The residents in the building have said that they had complained to the Council many times, and been brushed off.  That indicates the basic problem where workers either as workers, or as, in this case tenants, do not own and control either the means of production, or their immediate environment.

Had the tenants in this building had real ownership and control over it, they would have acted immediately upon their concerns.  Indeed, had they owned and controlled the building collectively, they would have ensured that the work on the building would have been done properly, so as to ensure their safety, and well-being from the start.  Indeed, if workers as tenants were able to own and control their immediate environment, they probably would not choose to live in such buildings in the first place, and would instead work with other workers, organised as construction co-operatives, to create a decent and safe living environment in its place.

To stop the Tories, the Council and the landlords from sweeping this tragedy and its implications under the carpet, we need a Workers Inquiry, not just into this tragedy, and what led up to it, but into all of the other similar situations that workers find themselves in, as tenants.  The Fire Brigades Union, has all of the expertise required to undertake the investigation of what caused the fire and what enabled it to spread so quickly; the construction workers unions have the expertise to reveal what deficiencies in the building and maintenance work existed; UNISON should investigate why the Council and its officers did not pick up this problem, and why it was that tenants complaints and warnings had been brushed off; and the tenants in this tower, and all the others like it, via their tenants associations can provide background information on who knew what and when, and what the actions of the Council and landlords were that led up to it.

In fact, it indicates why we need to co-ordinate Tenants Associations across the country, to share information, and take collective actions, such as general co-ordinated national rent strikes demanding that all issues be addressed.  The Labour Party, with the TUC and residents Associations across the country should, indeed set a date, for a month long national rent strike, on the basis of a set of demands that councils deal with rogue private landlords, that they demand that all outstanding repairs are undertaken within that month and so on.

In the 1980's, Thatcher gave away vast swathes of state owned assets with her right to buy legislation, and Cameron introduced a similar right for Housing Association Tenants, even though Housing Associations are supposed to be non-state organisations.  As I suggested some time ago, Labour should reverse that process.  Labour should commit itself to giving all private tenants the same right to buy that council tenants were given.  They should enable all private tenants to buy the property they live in with the same 60% discounts that council tenants were given.  Labour should commit itself to working with the Co-operative Housing Federation, and using its National Investment Bank, to ensure that tenants are able to borrow the remaining 40% of the value of the property.  That is particularly important in cases such as this, where it makes sense for the tenants to form their own Housing Co-operative, so as to buy the building from the landlords.

It would also be a powerful means to start to address the question of Britain's Housing Crisis, by developing additional co-operatively owned and controlled properties, and estates, and to improve the environment and condition of the existing housing stock.

But, for now, as well as extending our sympathy to all those involved in this tragedy, and once again witnessing the tremendous spontaneous co-operative and compassionate response of ordinary people whenever such crises arise, we need to begin to organise our own workers and tenants inquiry into this slaughter, and to hold this responsible to account, whilst peparing to take action to prevent its recurrence.

Theories of Surplus Value, Part I, Chapter 4 - Part 100

It is illustrative of the time that Smith was writing, compared to the situation in the early 19th century that he could comment,

““The demand for productive labour, by the increase of the funds which are destined for maintaining it, grows every day greater and greater. Labourers easily find employment; but the owners of capitals find it difficult to get labourers to employ. Their competition raises the wages of labour, and sinks the profits of stock” ([ibid., p. 395], [Garnier], l.c., t. II, p. 359).” (p 264)

Smith's concept of accumulation can perhaps be glimpsed from this comment also, that its basis is the fact that the means of consumption annually increase, and given that he argues that commodities can always command more labour than that required for their production, this steadily rising mass of commodities provides the basis for a continued rise in the labour commanded.

As Marx notes, Smith equates accumulation with the increase in the variable capital, a mistake also made by Ricardo. But, as Marx notes, at the time Smith was writing, the amount of constant capital used by workers, in production, was much smaller. But, Smith's comment here, about this steadily rising level of demand causing wages to rise, is also at the root of the Law of Falling Profits developed by Smith, Ricardo, Malthus and others, which Marx demolished in Capital III, and more specifically in Theories of Surplus Value II, Chapter 17.

Marx notes that Smith here develops yet a further definition of productive labour. Smith divides capitals into those which employ more or less productive labour and consequently raise the exchange value. There is an element here, perhaps, of Marx's development of the organic composition of capital, and the recognition of its role in relation to the value of commodities and rate of profit.

Smith orders these capitals as agriculture, manufacture, commerce and retail.

“On the whole he sees their productivity in the fact that they put into motion productive labour.” (p 264)

Wednesday, 14 June 2017

Theories of Surplus Value, Part I, Chapter 4 - Part 99

Unproductive labour, including those who perform no labour at all, is maintained out of revenue. Either it is maintained directly out of revenue, for example, as the receipt of rent on land, or interest on stock, or else it is maintained indirectly out of revenue, because workers, landlords and capitalists purchase services from unproductive labourers out of their own wages, rent interest and profits.

““Unproductive labourers, and those who do not labour at all, are all maintained by revenue; either, first, by that part of the annual produce which is originally destined for constituting a revenue to some particular persons, either as the rent of land, or as the profits of stock; or, secondly, by the part which, though originally destined for replacing a capital, and for maintaining productive labourers only, yet when it comes into their hands, whatever part of it is over and above their necessary subsistence, may be employed in maintaining indifferently either productive or unproductive hands. Thus … even the common workman, if his wages are considerable, may maintain a menial servant; or he may sometimes go to a play or a puppet-show, and so contribute his share towards maintaining one set of unproductive labourers; or he may pay some taxes, and thus help to maintain another set … equally unproductive. No part of the annual produce, however, which had been originally destined to replace a capital, is ever directed towards maintaining unproductive hands, till after it has put into motion its full complement of productive labour.… The workman must have earned his wages by work done, before he can employ any part of them in this manner. The rent of land and the profits of stock are everywhere… the principal sources from which unproductive hands derive their subsistence.” These two sorts of revenue “might both maintain indifferently, either productive or unproductive hands. They seem, however, to have some predilection for the latter….”” (p 261-2)

Smith, here though demonstrates the confusion referred to earlier by Ricardo. He overstates the importance of the gross product compared to the net product, or surplus value. For Smith, the important point is how much of the product is required to reproduce the capital, relative to that which forms the revenue as profit and rent. So, he writes,

““The proportion, therefore, between the productive and unproductive hands, depends very much in every country upon the proportion between that part of the annual produce, which, as soon as it comes either from the ground, or from the hands of the productive labourers is destined for replacing a capital, and that which is destined for constituting a revenue, either as rent or as profit. This proportion is very different in rich from what it is in poor countries” [Wealth of Nations, O.U.P. edition, Vol. I, pp. 370-73].” (p 262)

Smith draws his conclusion from comparing capitalist agriculture to feudal agriculture. In the former, where production advances more rapidly, a large part of the value of the product must reproduce the capital consumed in production, whereas in the latter, a large portion goes as rent to fund the lavish lifestyle of the landed aristocracy.

But, as Marx and Ricardo point out, it is not the proportion of the value of the commodity that is required to reproduce capital that determines the potential for accumulation, but the proportion of the surplus value, and the extent to which it is used productively rather than as revenue.

Smith makes a similar point, in relation to the profits of industry and commerce. In capitalist economies, he argues the rate of profit is lower than existed previously, and where these high profits facilitated high rates of interest. The amount of interest on stock, in capitalist economies, is much greater, he says, because the amount of stock itself is much greater. In fact, where he is speaking of the rate of profit here, he is speaking of the profit margin, and he could have made a similar point. That is that the mass of profit was much greater, because the quantity of commodities is much greater. By the same token, if the rate of profit is measured against the advanced capital, then it can be seen that the annual rate of profit rises, even as the profit margin shrinks.

Smith also draws social conclusions from this division of the product into capital and revenue. For example, where the population draw their livelihood from the investment of capital in productive activity they are “ industrious, sober and thriving”, whereas where they draw it from the expenditure of revenue, for example, the residents of a court, they are “idle, dissolute and poor”. (p 263)

Smith, therefore, in similar vein to Weber's Protestant Ethic, moralises over the virtue of frugality, whereby savings are used to provide for productive labour.

“The conclusion of this moral tale is that these (frugality and prodigality) average out among private individuals, that in fact “wisdom” prevails.” (p 263)

As a consequence, Smith argues, great nations are not laid low by private prodigality, but may be so by public prodigality. A state which maintains a large number of courtiers and other unproductive elements, such as clergy and so on, will thereby drain resources that could have been used productively. Smith includes in this category large armies, which produce nothing, either in peace or war, but which must be maintained.

Tuesday, 13 June 2017

Labour's Brexit Stance Now Makes Even Less Sense

Labour's position on Brexit, following last year's referendum, never made any sense.  Following the General Election, it now makes even less sense.

The position of accepting the referendum result was based on a form of democratic primitivism.  But, the idea that because a majority of the electorate voted for what was a reactionary policy, is no reason why a social-democratic party should lie down, play dead and simply adopt that reactionary policy themselves.  The biggest factor of those voting for Brexit, by far, was a xenophobic dislike - and in some cases more than just dislike - for foreigners, and in particular immigrants.  That was shown by the rise in racist attacks that occurred following the referendum result.  Why on Earth would any kind of progressive party, let alone a social-democratic party want to kow-tow to such reactionary sentiments?

Even if we set aside the reactionary xenophobic sentiments of those who were the core support for the Leave vote, the idea that Britain outside the EU, is somehow a better alternative is itself, a reactionary concept that lines up British workers with British capital, as in some way having more in common than do British workers with their EU comrades.  The idea that just because a majority of public opinion, in a one-off vote, at a point in time, voted for Brexit, Labour should adopt that same reactionary policy is nonsensical.  It is the same kind of triangulation, and constant chasing after public opinion that we expect from the Blair-rights, not from Corbyn's Labour.  We should be shaping that public opinion, by a principled advocacy of progressive politics, not tailing it.

And, after all, the referendum result was narrow.  Had 16 and 17 year olds been given the vote, the result would probably have gone the other way.  Moreover, since last year's referendum, 2.5 million young people have registered to vote.  It is largely on the back of their votes that Labour did so well in this election, and deprived the Tories of their majority.  Surveys show that around 75% of these young voters oppose Brexit, indeed one major factor in them registering to vote, and mobilising to oppose the Tories, is the fact that, by failing to do so last year, it allowed the Brexit vote to win.  As I wrote the other day, for Labour now to continue to provide a pale version of the Tories Brexit policy, to present what amounts to little more than a UKIP-lite policy in respect of the free movement of workers, is to betray all of those young workers, and to risk them deserting Labour when the next election comes.

After all, had those 2,5 million young workers been registered and voted last year, the result would have been a significant majority for Remain.  In what way then does it make any sense to persist on the basis of an old vote that no longer represents the current situation?  In 2015, the electorate voted in a majority Tory government.  It wasn't the last word on the matter.  Just two years later, the electorate, largely with the help of these young voters, took the Tories majority away.  So, why is it not reasonable to demand another vote on Brexit?  After all, although Jeremy Corbyn did a large number of meetings during the referendum campaign, the media showed little of it, as they concentrated on the Tory infighting.  But, had Labour organised the kind of campaign just seen, in the election, but putting forward a programme of hope, of campaigning for a workers Europe, then its quite likely that the referendum result would have been quite different.

In the election, it is quite clear that Labour did best not just where there were large numbers of new young voters, but also where there was a strong support for Remain.  The two things in fact go together.  Despite trying to chase after the reactionary Leave voters, Labour won over only about a quarter of former UKIP voters, whereas the Tories won over more than half of them.  The remainder either stuck with UKIP, or went back to being passive as they had been before UKIP gave them a hobby horse to ride.

Just from a practical and tactical point of view it makes no sense for Labour to stick with its UKIP-lite stance to try to win over those UKIP voters, because in doing so it not only commits itself to a reactionary policy, but it also risks losing all of those progressive young voters it has just won, as well as cutting itself off from all those voters who support the SNP, Plaid, the Greens and Liberals, all of whom support Remain.

In fact, the idea of a Progressive Alliance has been suggested by some.  The election showed why it was a nonsensical idea.  Most voters realised what those who put forward the idea of a Progressive Alliance failed to understand.  That is that it was only Labour that had any chance of forming a government.  A vote for the Liberals, or the Greens, or for the nationalist parties, was more than just a wasted vote, it was a vote that split the anti-Tory vote, that denied Labour votes that could have enabled it to win more seats, and potentially to have formed the government.

Labour needs to crush these diversionary parties, by sucking the oxygen from their ideological basis. It has to be Labour that offers the workers of Scotland and Wales a solution to their problems, a solution that requires their unity with English workers not their separation from them.  It has to be Labour that provides the policies required to protect and enhance the environment, not the Greens.  It has to be Labour that shows that it is the defender and proponent of individual rights and freedoms alongside collective rights and freedoms, not the Liberals.

In the last election, these parties went nowhere.  Even the SNP has clearly passed its best before date. But, the idea that any kind of Progressive Alliance could be formed with them is ludicrous given their pro-Remain stance, if Labour continues to oppose free movement of workers - as Dianne Abbot says, one of the most fundamental of workers' individual and collective rights and freedoms - and continues to support Brexit.  The voters who came behind Labour at this election and left these other parties to do so, did so, tactically to oppose a hard Tory Brexit, but that does not mean as the Tories are now claiming that this signifies that 80% of voters supported Brexit!

The contradictions of Brexit, which were never addressed during the appalling referendum campaign are now manifesting themselves, as the Tories have to rely on the votes of the DUP.  Northern Ireland requires a open border with the Irish Republic.  But, the only way of having such an open border is if Britain remains in the Customs Union.  For a country like Britain, with the size of its economy, its dependence on trade into the EU, and so on, it makes no sense at all to be in the Customs Union, and not in the Single Market.  But, to be in both the Customs Union and Single Market, means to be bound by their rules, to have to pay to be a member, and to be bound by the ECJ.  It then makes no sense, not to be inside the EU itself!

The only reason being given for not being in the single market is the requirement for the free movement of workers.  But, Labour as a progressive social-democratic party, indeed even as any kind of progressive democratic party, should be in favour of the free movement of workers whether we are in or out of the single market.  The idea that workers should not be free to move around the globe, to sell their labour-power wherever they can obtain the best price for it is an idea that belongs in the Middle Ages along with all of the other feudal monopolies and restrictions of workers liberty.

Yesterday, Barry Gardiner, on TV argued that Labour is in favour of having all of the same benefits as being inside the Customs Union and Single Market, but without actually being a member!  Yes, I would like to have all the benefits of being in a sports club without having to be a member, or paying any membership fees.  Not surprisingly, there are not many organisations that seek to destroy themselves by offering such advantages to non-members over members!  What Barry was suggesting was nothing different than the policy of "Have cake and eat it" that Bojo was criticised for putting forward only a few months ago.

Its one thing to have as a strategy to embarrass the Tories a policy of holding them to their own stated commitment to negotiate for Britain such unachievable aims, but to then adopt those same unachievable aims yourself, as your policy stance is the height of lunacy.

Labour members should begin to put motions for annual conference to set Labour's policy to be to oppose Brexit with all our might.  The starting point should be to defend the basic right of workers to free movement, to be able to sell their Labour-power where they can obtain the best price for it.  The consequences of Brexit have already been seen in the 96% drop in EU nurses registering to work in the NHS, at a time when the NHS already faces severe shortages, and when a large number of existing EU nurses, have left both the NHS and Britain.

Labour now has the potential for forming a government in the next few months, but its clear already that even the prospect of Brexit is seriously damaging the UK economy.  The Pound is set to sink further, whilst already the decline in the Pound has pushed inflation up to over 3% on RPI, and is set to rise much further.  Whatever the Bank of England does with official interest rates, the cost of borrowing for Britain in capital markets is set to rise.  A Labour government seeking to adopt the kind of programme put forward by Corbyn and his supporters will face an attack by international financiers.  In fact, that is one reason why it would be beneficial for Britain to be in the Eurozone let alone the EU, because whilst the international financiers can attack the Pound, it is much more difficult for them to do that against the Euro.

Either way, any kind of radical Labour programme can only be pushed forward with the support of workers across Europe.  So, this is the worst time that Labour could be considering cutting itself off from those workers via Brexit.  Labour should commit itself to opposing Brexit vigorously, and providing a programme of hope based upon working with workers and socialists across Europe, to forge a Workers Europe.

Theories of Surplus Value, Part I, Chapter 4 - Part 98

The same confused dual definition that Smith uses in defining productive and unproductive labour reappears in his treatment of the commodities already in society's consumption fund. For example, he writes,

““A dwelling-house, as such, contributes nothing to the revenue of its inhabitant; and though it is, no doubt, extremely useful to him, it is as his clothes and household furniture are useful to him, which, however, make a part of his expense, and not of his revenue.”” (p 260) 

But, Smith wants to include any buildings used productively such as factories, shops and offices not only as fixed capital for the capitalist who uses them productively to create a profit, but also for the owner of the building who rents it to the capitalist. Smith's justification is that it produces a revenue for both.

Smith similarly divides the purchase of imports into those consumed by 'idle people' such as foreign wines and luxury goods, and those bought by the industrious who buy additional materials and tools so as to employ more people and produce a profit.

The first form of expenditure increases consumption, but without increasing production to meet that consumption.

“On the other hand “employed in the second way, it promotes industry; and though it increases the consumption of the society, it provides a permanent fund for supporting that consumption; the people who consume reproducing, with a profit, the whole value of their annual consumption” ( [ibid., p. 324], [Garnier], l.c., t, II, p. 232).” (p 261) 

Whilst all of that part of production which constitutes revenue goes to support inhabitants whether they are engaged in productive labour or not, the larger the proportion which goes to support productive labour, Smith says, the greater the future expansion of production.

““Both productive and unproductive labourers, and those who do not labour at all, are all equally maintained by the annual produce of the land and labour of the country. This produce … must have certain limits. According, therefore, as a smaller or greater proportion of it is in any one year employed in maintaining unproductive hands, the more in the one case, and the less in the other, will remain for the productive, and the next year’s produce will be greater or smaller accordingly…” (p 261)

Smith's confusion over the value of commodities is repeated once more, here. On the one hand, he recognises that, of the total product, a portion must be used to replace the constant capital consumed in that production, but he is trapped by his view that the value of the commodity resolves itself entirely into revenue. So, he writes,

““Though the whole annual produce of the land and labour of every country is … ultimately destined for supplying the consumption of its inhabitants, and for procuring a revenue to them; yet when it first comes either from the ground, or from the hands of the productive labourers, it naturally divides itself into two parts. One of them, and frequently the largest, is, in the first place, destined for replacing a capital, or for renewing the provisions, materials, and finished work, which had been withdrawn from a capital; the other for constituting a revenue either to the owner of this capital, as the profit of his stock, or to some other person, as the rent of his land…

That part of the annual produce of the land and labour of any country which replaces a capital, never is immediately employed to maintain any but productive hands. It pays the wages of productive labour only. That which is immediately destined for constituting a revenue… may maintain indifferently either productive or unproductive hands. …” (p 261)

So, Smith divides the value of the commodity here into a portion that reproduces the capital consumed in production and the surplus value, which forms a revenue as profit, interest, rent and taxes. Of the former, the capital is resolved just into variable capital, which pays wages, because, for Smith, the constant capital itself ultimately resolves into wages.

Monday, 12 June 2017

Theories of Surplus Value, Part I, Chapter 4 - Part 97

In Capital II, Marx criticised Smith's view that productive supply does not exist prior to capitalist production. Obviously, the concept of accumulation involves the existence of such a productive supply. Marx cites Smith.

““In that rude state of society, in which there is no division of labour, in which exchanges are seldom made, and in which every man provides every thing for himself, it is not necessary that any stock should be accumulated, or stored up beforehand, in order to carry on the business of the society” (that is, after assuming that there is no society). “Every man endeavours to supply, by his own industry, his own occasional wants, as they occur. When he is hungry, he goes to the forest to hunt”—and so on ([ibid., p.301], [Garnier], l.c., t, II, pp. 191-92) (l. II, Introduction). “But when the division of labour has once been thoroughly introduced, the produce of a man’s own labour can supply but a very small part of his occasional wants. The far greater part of them are supplied by the produce of other men’s labour, [which he purchases with the produce ], or, what is the same thing, the price of the produce of his own, But this purchase cannot be made till such time as the produce of his own labour has not only been completed, but sold.”” (p 259)

As Marx sets out, elsewhere, the idea that the division of labour is the result of exchange is false. In a primitive commune, where the social product is consumed collectively, there is still a division of labour with some members involved in hunting and gathering and others involved in food preparation, care of the old and young etc. There is often a division between hunters and cultivators, and those involved in the production of pottery etc. But, in each of these cases, it is not true to say that no stock or productive supply is involved.

“(Even in the first case he could not eat the hare before he had killed it, and he could not kill it before he had produced for himself the classical “bow” or something similar. The only thing that seems to be added in case II is therefore not the necessity of a stock of any sort, but the “time… to sell the produce of his labour”.) 

A stock of goods of different kinds, therefore, must be stored up somewhere, sufficient to maintain him, and to supply him with the materials and tools of his work, till such time at least as both these events can be brought about. A weaver cannot apply himself entirely to his peculiar business, unless there is beforehand stored up somewhere, either in his own possession, or in that of some other persons, a stock sufficient to maintain him, and to supply him with the materials and tools of his work, till he has not only completed, but sold his web. This accumulation must evidently be previous to his applying his industry for so long a time to such a peculiar business, … The accumulation of stock must, in the nature of things, be previous to the division of labour…” ([ibid., pp. 301-02], [Garnier], l.c., pp. 192-93).

(On the other hand, according to what he has stated at the beginning, it appears that no accumulation of capital takes place before the division of labour, just as there is no division of labour before the accumulation of capital.)” (p 259)

In fact, as Marx sets out in Capital II, the size of the productive supply undoubtedly does rise as capitalist production expands. But, that is just a feature of that very expansion. Taken as a proportion of the total production, it will, in fact, decline, in part because rising social productivity will continually increase the rate of turnover of capital.

Smith argues that an increased division of labour is only possible if the stocks of each component are continually increased, as each worker must have a stock of components to hand to ensure their continuous operation.

Sunday, 11 June 2017

Theories of Surplus Value, Part I, Chapter 4 - Part 96

In Smith's analysis, the value of a commodity always commands more labour than the new labour that went into its production, and a portion of the new labour is unpaid labour that comprises a revenue for others besides the worker. But, productive labour is only that which exchanges with capital. Any expenditure out of revenue, therefore, is an exchange with unproductive labour.

“In order for revenue to be exchanged against productive labour, it must first be transformed into capital.” (p 258)

In other words, realised profit, money must be used not as revenue, but must become money-capital, destined to be metamorphosed into productive-capital. But, Smith via his second definition of productive labour, as any labour which creates value as material wealth, blunts his analysis, because now it could appear that accumulation is possible not by first transforming a portion of revenue into capital, but merely by using a portion of revenue directly to exchange with unproductive labour used for material production.

Smith also develops a version of the concept of “human capital” used by bourgeois economists. He does so by comparing the skills acquired by labour to fixed capital.

““Fourthly, of the acquired and useful abilities of all the inhabitants and members of the society. The acquisition of such talents, by the maintenance of the acquirer during his education, study, or apprenticeship, always costs a real expense, which is a capital fixed and realised, as it were, in his person. Those talents, as they make a part of his fortune, so do they likewise that of the society to which he belongs. The improved dexterity of a workman may be considered in the same light as a machine or instrument of trade which facilitates and abridges labour, and which, though it costs a certain expense, repays that expense with a profit” ([Wealth of Nations, O.U.P, edition, Vol. I, p. 308], [Garnier], l.c., t. II, ch, I, pp. 204-05).” (p 258)

Marx demonstrates, elsewhere, what is wrong with the idea of human capital. The skills and talents of any worker are only variations of the labour of any worker. Whether they result in the product of this concrete labour labour being of a higher value than that of simple labour, and by what multiple, can only be determined in the market. The value of the labour-power itself will be determined by the labour-time required for its production, quite independently of that.

What Marx does not address, but which is a valid area of inquiry, is the nature of intellectual labour involved in scientific and other forms of research and development. For example, a large part of the value of new drugs is attributable to the highly complex labour of scientists that goes into their development for years prior to the production process itself. This value, although it has the nature of variable capital, being used for the purchase of wage labour, which creates surplus value, is also like fixed capital. That is that the amount of capital so advanced is fixed and does not change with the volume of output. £1 million spent on the wages of scientists to develop drug X, remains £1 million, whether 1 million or 1 billion units of X are produced, with the difference only being that in the former case £1 of this value is recovered in the value of each unit of X, and in the latter case, it is only £0.001.

As with fixed capital, the more use values produced, the smaller the proportion of this fixed cost is incorporated in each unit. Like fixed capital, this capital does not have to be continually reproduced as happens with circulating capital. It only has to be reproduced, as with fixed capital, when a new drug is to be developed. Finally, like fixed capital it suffers a sort of wear and tear, and a moral depreciation. Over time, the value of any drug will tend to diminish, as competitors produce generic equivalents. But also, any new drug that represents an advance over it, will cause a sharp fall in its value, and thereby of the scientific labour used for its development.

Saturday, 10 June 2017

Theories of Surplus Value, Part I, Chapter 4 - Part 95

Suppose the capitalist has the £50 once more to spend, and uses £12.50 for their own consumption. They come to advance the remaining £37.50 for labour-power, but find still only 100 workers available. Competition between capitals for labour-power will drive wages higher, from £25 to £37.50. But, the value produced will remain £50, so that the profit will now fall from £25 to £12.50.

But, Marx says, Smith knows that there will be enough labour-power. Partly, that is because of the annual rise in population, but also there are also all of those reserves Marx described in Volume I.

“... partly unemployed paupers, or half-employed labourers, etc. Then the large numbers of unproductive labourers, part of whom can be transformed into productive labourers by a different way of using the surplus-produce. Finally the same number of labourers can perform a greater quantity of labour. And whether I pay 125 labourers instead of 100, or whether the 100 work 15 hours a day instead of 12, would be quite the same thing.” (p 257)

Of course, there are periods where this is not true. Marx describes, in Value, Price and Profit, the ten year period between 1849 and 1859, when agricultural wages rose, for example. There will always be periods when labour-power of the required quality will be in short supply, or may be in the wrong location. But, over the longer-term, these shortages are countered by periods of surplus, when wages fall below the value of labour-power.

In the examples above, constant capital was set to zero, but of course, in reality, it cannot be. Moreover, this is important because the value of the constant capital also acts as a constraint on the accumulation of capital, alongside the value of labour-power. It is not possible to employ more workers without employing more material for them to process, more tools and machines to work with.

As Marx sets out in Volume I, in those industries where the cost of constant capital is more expensive, this limits the amount of labour-power that can be employed. For example, if a capitalist has £10,000 to invest, then if they are working in gold, and the material costs £8,000, this leaves only £2,000 to spend on wages. If they are working in silver, and the material costs £2,000, this leaves £8,000 to spend on wages. This is significant given that it is only the labour that produces surplus value.

For a society, therefore, the lower the value of constant capital, the more capital can be used to employ labour-power, and so the greater the mass of surplus value it can produce. As Marx puts it,

“It is incidentally an error of Adam Smith’s—directly connected with his analysis of the total product into revenue—to say that with the increase of the productive capital—or with the growth of the part of the annual product which is destined for reproduction—the labour employed (the living labour, the part of capital expended in wages) must increase in the same proportion.” (p 257-8)

Northern Soul Classics - What Is Soul - The Furys

Friday, 9 June 2017

Friday Night Disco - She's Looking Good - Wilson Pickett

Oh What A Night!

I've waited thirty years for this election.  Having sat up all night to watch the results, the lack of sleep has been worthwhile.  As I said on Wednesday, I anticipated, against all the opinion polls and pundits that Labour would win.  Gauging those undercurrents that Trotsky talks about, that flow like subterranean streams, listening to the way young people were talking and being enthused, via the channel of my sons and their friends, it was clear that all of the previous assumptions made by the elite and their bubble were going to be upset.   Well not quite a victory, but certainly a moral victory, and most certainly a defeat for the Tories, and their plans for hard Brexit.

It was 1983, when Labour last put forward a similar progressive social-democratic programme.  The defeat that year was an aberration, or should have been.  Labour had been at an all-time high in the polls, and looking certain to oust Thatcher at that election, were it not for the outright treachery of the Gang of Four, who split the anti-Tory vote, and were it not for the fact that Thatcher sent thousands of young working-class men to fight and die in a pointless war in the Falklands, solely in order to rally the people around the flag for narrow Conservative Party electoral advantage.  But, she should never have been allowed to repeat that again, and the aberration should have ended in 1987.  Instead, Neil Kinnock ensured it persisted, by creating a civil war inside the party, as he attempted to gut the party of its most determined, most conscientious activists, so as to shift the party further to the right.

Jeremy Corbyn has put an end to that rot, but he has done so despite that attempts of the Right, the Blair-rights, Kinnockites, and soft-left to stop him.  Had they known he would win the leadership election, they would never have allowed him to get on to the ballot, and when he did they then have used every minute, as Lord Mandelson advised them, to do everything they could to undermine him, including a blatant disregard of the party members, by organising the coup and second leadership bid against him.

The last thing that Corbyn and his supporters should now do, is to offer any kind of olive branch to those wreckers.  Without them, without their constant attempts to undermine him over the last two years, Labour would have won this election.  If we want to win the next one, which may be just months away, Labour needs discipline, it needs a single clear message, and that means silencing all of those voices of the wreckers.  It would have been preferable to have done it before this election, by introducing mandatory reselection of MP's.  That is now a priority, along with other measures to democratise the party.  The McDonnell amendment needs to be pushed through, in fact, the party needs to go further, removing any privileges for MP's and MEP's in relation to the nomination of party leader etc.

Any examination of history shows the way revolutions eat their children.  In the French Revolution and the Russian Revolution, it was the real revolutionaries who worked to bring it about, but who once the revolution was successful, were pushed aside by those who had been marked by their absence from view, their antipathy to the revolutionaries, and who then took credit for the heroism of others.  The Corbynistas and the Left should ensure that such elements are allowed no breathing space within which to establish themselves, now that the hard work has been done.  On the contrary, it is necessary now to consolidate, and to crush all those other diversionary elements such as the Liberals, Greens, Plaid etc. who will seek to ride on the back of the Corbyn wave, but who simply act to divide the forces of the working-class against the main enemy.

In fact, the result of a hung Parliament is the best outcome given the conditions.  Without having gone through a process of mandatory reselection, to get rid of all the anti-Corbyn elements within the PLP, a Labour victory would have been a pyrrhic victory that would have led to failure down the road.  The immediate consequence would have been a run on the Pound, and an attempt by the global financial elite to undermine the government.  With few experienced Corbynite MP's, Jeremy would have been led to bring back to his front bench a lot of the old Blair-right and soft-left MP's, who not only would be glad to take up such positions, but who would then use those positions within Cabinet to hold him, McDonnell and their allies hostage.  They would have made Corbyn simply a figurehead, useful as a scapegoat, until such time as they were able to undermine his wider base, and get rid of him.  A casual reading of "The Prince", by Machiavelli, shows how these machinations work.

The situation of a hung parliament gives Corbyn and his supporters a useful breathing space.  I haven't had time to analyse all the results yet, to know how many additional Corbynite MP's have been elected, but they provide a basis for Jeremy to strengthen his support within the Shadow Cabinet, and to give supporters additional experience.  It provides time for the Left in the party at large to consolidate, to start ensuring a tight grip over branches and constituencies, to ensure we have a majority of Conference delegates, and increased control of the NEC.  It means we can start selecting Left-wing candidates for next years' local council elections, and begin organising the necessary strategy to oppose austerity at a local level.  We need to connect up LP organisations with workplaces through workplace LP branches, and by reuniting District Labour Parties with Trades Councils, as local organs of struggle.  We need to develop innovative ways of drawing in Tenants and Residents Associations into party structures, and to build closer ties with the Co-op Party, and the Co-operative movement itself.

The election result means that the dynamic of Brexit is reversed, if not stopped in its tracks.  The Tories are having to rely on the bigots of the DUP to be able to form a government.  But, the DUP will demand concessions from the Tories.  The Tories will be unable to put major elements of their Manifesto into a Queen's Speech, if they want it to pass.  The DUP will insist that the Dementia Tax, the Pensions Triple Lock, and the cuts in the Winter Fuel Allowance are scrapped.  But, apart from those specific proposals their was little else in the Tory Manifesto!  But, more significantly, the DUP will insist that the Tories negotiate an open border with the Irish Republic, in return for their support.

But, an open border can only happen if Britain remains inside the Customs Union.  In turn, although its possible to be in the Customs Union, without being inside the single market, logically, for a country like Britain, the two things go together.  But, if Britain is to be inside the Customs Union and single market, which also requires accepting free movement, and the role of the ECJ, as well as making payments to the EU, there is very little advantage in not being inside the EU itself, so as to at least have a say in the making of the decisions that you are going to be bound by.

Hard Brexit is dead, but as the EU negotiators pointed out from the beginning, there is only a choice between Hard Brexit and no Brexit.  Brexit is effectively dead.  Moreover, if Labour has any sense, it will welcome that fact.  Labour's success in this election comes down overwhelmingly to the mobilisation of the support of millions of young people.  As I pointed out on Wednesday, those young people have been screwed by the older UKIP/Tory generation that voted for Brexit.  Of the 18-30 year olds, around 75% voted for Remain.  The BBC in its results analysis, showed that in Tory marginals, Labour had by far the best results, in those seats that voted Remain, even in those seats like Canterbury that were way down Labour's list of target seats.  Those seats were also the ones where a high percentage of young voters registered and turned out to vote Labour.

Labour failed to win over any significant of UKIP voters, by adopting a Brexit-lite strategy.  In fact, in Stoke South, Labour lost to the Tories, in a heavily Leave supporting seat.  As John Curtice pointed out some months ago, the rational strategy for Labour was not to run after these reactionary UKIP voters, but to hoover up all of the progressive elements that opposed Brexit.  Labour should reject the reactionary backward looking, insular ideology, and instead put forward a programme of hope, based upon working with other social-democrats and socialists across EU, to transform the EU, and build a Workers Europe.

It would be an act of treachery, if Labour now failed to support those millions of young people who oppose Brexit, and turned out to vote Labour, if Labour were to simply continue to put itself forward as merely a UKIP- lite party of Brexit, and restrictions on free movement.  Labour should now commit itself not only to opposing Hard Brexit, which in any case is dead, but to providing an aspirational, forward looking agenda of building workers co-operation across the EU, of establishing EU wide workers organisations, a thorough democratisation of EU institutions, the harmonisation of taxes and benefits, the further integration of fiscal and monetary policies and institutions, and requirement for all to be within a single currency union, as part of the development of a federal United States of Europe.

This is just the beginning.  Workers of Europe Unite.  Build a Workers Europe.