The Rate of Exploitation of Bank of Palestine Workers, or the Issue of Socialist Strategy and Tactics

Introduction

John Clarke, former major organizer for the Ontario Coalition Against Poverty (OCAP), recently posted the following on Facebook:

Fayaz Karim is with Judy Rebick and 

21 others

As the so called Western Civilization sits back and enable genocide.

‘Robbery as a Political Decision – Israeli Army Robs Bank of Palestine in Gaza’ – See Palestine Chronicle, Feb 11/24 for full story

Israeli soldiers seized 200 million shekels ($54.29 million) from the Bank of Palestine headquarters in Gaza and the move “was decided at the political level.”

We can end profit-making in long-term care, secure fair pay for vitally important work, legislate minimum paid sick days for all workers, revitalize income supports to shore up our social safety net, and restore the hard-won rights of front-line heroes. And we must rethink taxation of those who can well afford to pay more, to ensure that the massive wealth being increasingly held by a few is shared for the good of us all.

The Ford Conservatives need to learn from this example and order the private sector to ramp up production of these supplies – or retool factories if necessary,” said Fred Hahn, President of CUPE Ontario, highlighting feeder plants and other manufacturing facilities across the province. “They’ve had no problem unilaterally issuing orders that override the freely-negotiated collective agreements [my emphasis] of front-line workers. They now need to use their power to order the immediate production of PPE for everyone who needs it.

It has often been noted that we can produce enough food to provide a healthful diet to everyone in the world without damage to the environment. Since good diet is the basis of human health, and since providing food in ways that are environmentally friendly is
crucially important ecologically, a rational economic system would take these goals as the highest priority. Judged by such criteria our economic system is a miserable failure.

The left here in Toronto (and undoubtedly elsewhere) draw little connection between fighting against the genocide that has occurred in Gaza and the West Bank and the fight for a socialist society. It seems, rather, that the left react to crises without aiming for anything other than stopping the immediate crisis (recently, the Russian invasion of the Ukraine, now the Israeli genocide against Palestinians). There is no distinction between strategy (aiming for a socialist society) and tactics (addressing immediate needs and problems). (For such a distinction, see the post The Idealization of International Law by the Social-Democratic or Social-Reformist Left: The Case of the Genocide of the Palestinians by the Israeli Government).

Indeed, the focus seems to be exclusively on “Palestine” against “Israel” and the United States (although, of course, the United States is one of the major opponents to the creation of a socialist society).

The focus on countries rather than the wider social issues should not lead to one-sided analyses of the situation in Palestine and Israel. Two such one-sides analyses are Marxisms that focus mainly on the conlict between the two, and Marxisms that relegate that conflict to a minor issue when compared to the capitalist nature of the countries.

As Oded Nir (2020) has written, in “Israel’s Two Marxisms,” in 231-256, New Understanding of Capital in the Twenty-First Century, pages 245-246:

The first approach (arguing for the primacy of the economic) begins by asserting capitalism as the totalizing force: more and more parts of reality becoming structured by capitalism, either in the external limitations put on them, or in their very structure. The organization of the world in a totality here, as it is for Georg Lukács (Lukács 1971,
90), not some methodological first principle or belief, but the result of a historical development – the expansion of capitalism. That the Israeli-Palestinian conflict is, in the last analysis, of the same order as capitalism’s contradiction, is a way of articulating in thought this totalizing process in reality.

Nadir characterizes the first approach as the more subjectivist approach whereas the second approach is the more objectivist approach. Neither approach is sufficient to characterize the Palestinian and Israel conflict, he implies, and he suggests that what is needed is a synthesis of the two. Pages 251-252:

It should be clear by now that it is not the case that one of the two variants of thinking discussed in this article is the true Israeli Marxism, while the other is fake or misleading. For it can be asserted that a fully-fledged Marxism is precisely one that can somehow
unite the two, in a specific context – the political project and the different understanding of all of reality that it implies coinciding in some original and productive way with the analysis of the objective system of capitalism and its contradictions. The invention of this
unity – always ephemeral and stubbornly depending on sheer belief just as much as facts – is precisely the temporary solution for the gap between the two kinds of “Marxism.” And so the final point of this essay is the following: that, perhaps surprisingly, it is not the case that there is already in existence some correct position of Israeli Marxism, waiting to be taken up by parties, organizers, and the masses. No: this Marxist position is still waiting to be invented, coinciding completely neither with the objective description of the system, nor with a subjective structuring of all reality in the name of achieving a goal.

Although the focus on the conflict between Palestine and Israel may not be reducible to capitalist economic relations, the tendency of the left to idealize Palestine while throwing in here and there the words “imperialist” (related to the United States) and “capitalist” without in any way linking this to the daily lives of those in Canada who are exploited and oppressed by employers hardly enlightens workers, citizens, immigrants and migrant workers about the nature of exploitation and oppression in Canada; indeed, I suspect that many who support Palestine and oppose Israeli’s genocidal efforts are social democrats or reformers who do not consider working for an employer to require a radical change by creating a socialist society without a class of employers and the associated economic, political and social structures.

Marxists need to engage in a critique of capitalist exploitation and oppression wherever it occurs and in whatever form–but you would not know that such exploitation and oppression has occurred in Palestine (apart from Israeli exploitation and oppression of Palestinians).

The following thus has a political purpose: to inquire into the extent to which the Bank of Palestinine workers are exploited by the Bank of Palestine.

What is the Bank of Palestine? I use two sources for characterizing it. Firstly, from Adam Hanieh (2016), “Absent Regions: Spaces of Financialisation in the Arab World,” in pages 1-21, Antipode, page 17:

Gulf capital’s involvement in many of the banks analysed in Table 4, for example, has enabled leading Egyptian, Jordanian and other Arab capital groups to embark on their own processes of expansion and internationalisation.24

Note 24 on page 19 reads:

One example is the Bank of Palestine, founded in 1960 by the Gaza-based Al Shawa
family. In 2008, the Kuwaiti conglomerate MA Kharafi & Sons became BoP’s largest
shareholder, taking 9% of the bank’s capital, with the Al Shawa family retaining a significant holding. Following this investment, BoP significantly expanded, increasing its number of branches by more than 50% in five years, and becoming the leading Palestinian bank in the West Bank and Gaza Strip.

So, the Bank of Palestine is controlled by a regional group of Arab financial capitalists, with the Palestinian capitalist family Al Shawa (sometime spelled Shawaa) still holding substantial investments in the bank.

The second source is the 2019 Bank of Palestine annual report (I use the 2019 annual report since Covid undoubtedly skewed the data for later years, at least until 2024), page 4:

Bank of Palestine has a long embedded presence and experience in Palestine dating back to 1960. Bank of Palestine is constantly growing to be financially inclusive, and socially responsible at the cutting edge of global financial practice and innovation. The bank has the most widespread branch network in Palestine (73 branches), a paid up capital of $204 million, and assets of over USD 5.26 billion, with 1,731 employees serving more than 1 million customers. BOP is engaged in retail, corporate, micro & SME, and Diaspora banking operations. BOP is the sole agent for issuing and acquiring Visa and MasterCard in Palestine with over 6,000 Point of Sale merchant terminals nationwide. BOP is involved in large project finance loan syndications.

The Nature of the Rate of Exploitation

But what is the rate of exploitation? And why not use the usual rate of profit or the rate of return? The rate of profit is calculated as profit divided by investment. Since employers purchase both the means for work–buildings, computers, office supplies, raw material–and hire workers–we can classify investment into two categories: c, meaning constant capital, or the capital invested in commodities other than workers; and v, or variable capital, the capital invested in the hiring of workers for a certain period of time (wages, salaries and benefits).

The purpose of investment in a capitalist economy is to obtain more money (see The Money Circuit of Capital), and the additional money is surplus value when it is related to its source: workers working for more time than what they cost to produce themselves. The relation between surplus value and variable capital (or wages and salaries) is the rate of surplus value or the rate of exploitation, expressed as a ratio: s/v.

When the surplus is related to both c and v and expressed as a ratio, it is the rate of profit: s/(c+v).

In Marxian economics, you cannot simply use the economic classifications provided by employers and governments since such classifications often hide the nature of the social world in which we live. The rate of profit underestimates the rate of exploitation since the surplus value is related to total investment and not just to the workers. Furthermore, it makes the surplus value appear to derive from both constant capital and variable capital.

I decided to look at the annual report of some of the largest private companies (if they are available) in order to calculate the rate of exploitation at a more micro level than aggregate rates of surplus value at the national or international level. Politically, this is necessary since social democrats here in Toronto (and undoubtedly elsewhere) vaguely may refer to exploitation–while simultaneously and contradictorily referring to “decent work” and “fair contracts.” Calculating even approximately the rate of exploitation at a more micro level thus has political relevance.

Conclusions First

As usual, I start with the conclusion in order to make readily accessible the results of the calculations for those who are more interested in the results than in how to obtain them.

The Rate of Exploitation of Bank of Palestine Workers

To calculate the rate of surplus value, we need to divide “Final Adjustment of Surplus value (s)” or “Profit before taxes” 77,665,479 by “Adjusted Variable capital or Total personnel expenses 68,676,750.

So, with the adjustments in place, the rate of exploitation or the rate of surplus value=s/v=77,665,479/68,676,750=113%

This means that, in terms of money, for every $1 of wage or salary of a regular Bank of Palestine worker receives, the Bank of Palestine receives $1.13 surplus value or profit for free.  Alternatively, for every hour worked, a Bank of Palestine worker works an additional 1 hour 8 minutes for free for the Bank of Palestine. Or, within one hour of work, a worker receives an equivalent of her hourly wage in 28 minutes and works for free for 32 minutes for the Bank of Palestine.

Of course, during the time that the worker works to receive an equivalent of her/his own wage, s/he is subject to the power of management and hence is unfree (see, for instance, Management Rights, Part Four: Private Sector Collective Agreement, Ontario and   Employers as Dictators, Part One).

In a 6-hour (360 minutes) work day, an individual Bank of Palestine worker spends 2 hours 49 minutes (169 minutes) to obtain her/his wage for the day, and s/he spends 3 hours 11 minutes (191 minutes) for free in obtaining a surplus value or profit for the Bank of Palestine.

In a 7-hour (420 minutes) work day, an individual Bank of Palestine worker spends 3 hours 17 minutes (197 minutes) to obtain her/his wage for the day, and s/he spends 3 hours 43 minutes (223 minutes) for free in obtaining a surplus value or profit for the Bank of Palestine.

In an 8-hour (480 minutes) work day, an individual Bank of Palestine worker spends 3 hours 45 minutes (225 minutes) to obtain her/his wage for the day, and s/he spends 4 hours 15 minutes (255 minutes) for free in obtaining a surplus value or profit for the Bank of Palestine.

In a 9-hour (540 minutes) work day, an individual Bank of Palestine worker spends 4 hours 14 minutes (254  minutes) to obtain her/his wage for the day, and s/he spends 4 hours 46 minutes (286 minutes) for free in obtaining a surplus value or profit for the Bank of Palestine.

In a 10-hour (600minutes) work day, an individual Bank of Palestine worker spends 4 hours 42 minutes (282 minutes) to obtain her/his wage for the day, and s/he spends 5 hours 18 minutes (318 minutes) for free in obtaining a surplus value or profit for the Bank of Palestine.

In a 12-hour (720 minutes) work day, an individual Bank of Palestine worker spends 5 hours 38 minutes (338 minutes) to obtain her/his wage for the day, and s/he spends 6 hours 22 minutes (382 minutes) for free in obtaining a surplus value or profit for the Bank of Palestine.

It should be noted that I have used the verb “obtain” rather than “produce.” In Marxian economics, bank, credit union and insurance workers, as well as sales workers do not produce surplus value but rather transfer the surplus value already produced. This does not mean that these workers are not exploited capitalistically; they are used impersonally by the employer to obtain surplus value and a profit. Furthermore, things produced by others are used by employers such as TNB to control their working lives in order to obtain surplus value or profit. (I leave the issue of how banks exploit workers as consumers to others more competent to deal with the issue; the point here is to focus on the exploitation of credit union workers as workers and not as consumers.)

Political Considerations and Conclusion

Again, the rate of exploitation measures the extent to which workers work for free, producing or obtaining all the surplus value and hence all the profit for employers. However, even during the time when they work to produce or obtain their own wage, they are hardly free. They are subject to the power and dictates of their employer during that time as well.

Even if workers were not exploited, they would still be oppressed since they are used as things (means) for purposes which they as a collectivity do not define (see The Money Circuit of Capital). Does that express something fair? Management rights clauses (implied or explicit in collective agreements give management as representative of employers–and as a minority–the power to dictate to workers what to do, when to do it, how to do it and so forth–and is not the imposition of the will of a minority over the majority a dictatorship? (See  Employers as Dictators, Part One). Is that fair? Do union reps ever explain how a collective agreement somehow expresses something fair? Is that fair?

I have been unable to determine whether Bank of Palestine workers belong to a union. If the situation of Canadian bank workers is typical, they likely do not. Would, however, their becoming unionized turn their situation into one where they had a “fair contract” and “decent work?” I think not. Unions can limit exploitation and can control some aspects of their working lives, but in principle workers are things to be used by employers even with unions. This does not mean that a non-unionized environment is the same as a unionized environment. With unions that are independent of particular employers, that is to say, are real unions, there is an opportunity for workers to develop organizations of resistance against the power of particular employers.

The ideology of unions–that somehow they can produce a “fair contract” and “decent work” (see for example  Fair Contracts (or Fair Collective Agreements): The Ideological Rhetoric of Canadian Unions, Part One: The Canadian Union of Public Employees (CUPE) and Fair Contracts or Collective Agreements: The Ideological Rhetoric of Canadian Unions, Part Three: Unifor (Largest Private Union in Canada))–needs, though, to be constantly criticized. Workers deserve better than the acceptance of such ideology by the left.

Should workers not be discussing why they must work for an employer, whether Bank of Palestine or some other employer? Should they not discuss whether they are exploited? Should they not discuss whether, as they work, they live under an economic dictatorship (see for example  Employers as Dictators, Part One)? Should workers not be discussing whether an unelected management should have power over them? Should workers not be discussing how to organize to abolish this dictatorship? Should workers not be criticizing anyone who claims that their working situation is fair, good, decent and all other such platitudes?

Finally, should not the radical left be attempting to link up various ways in which property is expropriated without an equivalent–whether via exchange and contracts or via military means? Should they not be attempting to link up the strategy of abolishing the class power of employers and the associated economic, political and social structures and immediate issues? In this context, should they not be trying to link up the military appropriation of a bank’s assets and the appropriation of a surplus value by employers both abroad and at home? Are they?

More generally, should not the issue of how Palestinian workers are exploited or superexploited on a daily basis be addressed, whether by national capitalists or foreign capitalists? And should not all issues be linked to a struggle for a society without a class of employers and the associated economic, political and social structures?

Data on Which the Calculation Is Based

The calculation of the rate of exploitation is undoubtedly imperfect, and I invite the reader to correct its gaps. Nonetheless, the lack of any attempt to determine the rate of exploitation at the city level has undoubtedly reinforced social-reformist tendencies.

Surplus Value (Profit)

US dollars
Gross Income 230,832,007
Profit before tax  51,795,049

Interest income 160,857,087
Interest expense (43,830,406)
Net interest income 117,026,681 [160,857,087-43,830,406=117,026,681]

Net financing and investment income 37,000,873
Net commissions 48,345,990
Net interest, financing, investment and commissions income 202,373,544 [117,026,681+37,000,873+48,345,990=202,373,544]

Foreign currency gain 17,978,791
Net gains from financial assets  2,214,059
Change in fair value of investment properties 1,186,495
Recovery (impairment) of expected credit losses on investments  234,267
Bank’s share of results of associates (note 11) 421,968
Other revenues  6,422,883
Gross profit 230,832,007 [202,373,544+17,978,791+2,214,059+1,186,495+234,267+421,968+6,422,883=230,832,007]

Expenses
Personnel expenses (note 35) (73,379,864)
Other operating expenses 36 (55,673,291)
Depreciation and amortization (17,780,549)
Expected credit losses on direct credit facilities and Islamic financing, net (30,691,140)
Credit facilities not previously provided for and written off (1,497,114)
Palestine Monetary Authority’s fines (note 38) (15,000)
Total expenses (179,036,958) [73,379,864+55,673,291+17,780,549+30,691,140+1,497,114+15,000=179,036,958]
Profit before taxes 51,795,049 [Gross Income 230,832,007-Total expenses (179,036,958)=51,795,049]

Adjustments of Surplus Value (s) (Profit)

In Marxian economics, it is necessary to make certain adjustments since some categories that an annual report uses do not reflect accurately the amount of surplus value (profit) and variable capital (wages/salaries and benefits) the specific capitalist produces or obtains. I will also exclude some categories from adjustments when appropriate and will explain why I do so.

I will address some of the items in the above account in order, but actual adjustments will only be effected when expenses are considered.

Foreign Currency Gain

This does not seem to require any adjustment in this instance. If more information were available, a case could be made to exclude it: It is unclear whether the change in the value of currency is due to the exploitation of its own workers or other workers–a very complicated issue that would require much more work and skill to address properly. It would be very difficult to separate out the exploitation of Bank of Palestine workers and the exploitation of the class of workers.

Bank’s share of results of associates

The idea of calculating a particular rate of exploitation should aim to determine, as accurately as possible, to what extent a specific capitalist company exploits a specific group of employees. The above category “Bank’s share of results of associates” pertains to joint ventures. If the joint ventures involve little control over the exploitation of other workers, they probably should be excluded for that reason. However, in the annual report, in note 11, we read:

Investment in associates
The details of this item are as following:

Abraj Co, for Development & Investment (Abraj)  Percntage Ownership Subscribed Capital  21%.
The Palestinian Company for Money Transportation and Valuables and Banking Services (Aman) 30%.

* Abraj Company for Development and Investment (Abraj) was incorporated in 2008 in
Palestine with goals of conducting all kinds of construction, real estate and
commercial activities.
** The Palestinian Company for Money and Valuables Transfer (Aman) was incorporated
in 2008 in Palestine. Aman provides money transfer services alongside transferring
valuable collectibles and commercial papers inside and outside Palestine.

It is likely, given 21% and 30% ownership, that the Bank of Palestine exerts substantial influence over the exploitation of the workers in these companies. Given such presumed influence,  it should be included as part of surplus value (profit). Consequently, there is no need to make an adjustment in this case.

So far, there has been no need for adjustements to surplus value. That, however, changes when we consider expenses.

Note 35 elaborates on the category “Personnel expenses”:

Salaries and related benefits 48,345,507
VAT on salaries 7,552,252
Provision for employees’ end of service 6,292,825
Bonuses and rewards 3,368,711
Medical and insurance expenses 3,260,387
Bank’s contribution to saving fund 2,067,636
Clothing allowances 958,649
Training expenses 826,524
Transportation 707,373
Total personnel expenses 73,379,864 [48,345,507+7,552,252+6,292,825+3,368+711+3,260,387+2,067,636+958,649+826,524+707,373=73,379,864]

In another section of the annual report, we read the following:

Senior Executive Management Salaries and Bonuses
General Manager, Deputy General Managers, and Assistant General Managers’ salaries and bonuses amounted to USD 4,703,114.

An adjustment to the amount expressed in the category “Salaries and related benefits” is necessary because of the nature of the activity of some of those who receive this amount (managers): this compensation is not mainly for the coordination of the work of others but for the exploitation of others–it is pure surplus value.

I will assume that the $4,703,114 is distributed between the subcategories “Salaries and related benefits” ($1,334,403 being attributed to salaries) and “Bonuses and rewards” (4,703,114=1,334,403+3,368,711). The $4,703,114, accordingly, must be deducted from total personnel expenses and added to “Profit before taxes”:

First Adjustment of Surplus Value (s) (Profit) and Variable Capital (Salaries/Wages and Benefits)

First adjustment of Surplus value (profit) or Profit before taxes 56,498,163 [51,795,049+4,703,114]
Adjusted Variable capital or Total personnel expenses 68,676,750 [73,379,864-4,703,114=68,676,750]

Second Adjustment of Surplus Value (s) (Profit) 

The second ajustment involves a more detailed elaboration of the category “Other operating expenses” in note 36:

Palestine Deposit Insurance Corporation fees* 10,725,278
Telephone, postage and fax 5,791,786
Maintenance and repairs 5,447,438
Advertising and promotions 5,099,345
Cash shipping expense 3,763,386
Professional fees 3,562,216
Utilities 2,194,633
Board of Directors bonuses 1,982,420
Social responsibility ** 1,928,878
Stationery and printing 1,703,972
License fees 1,392,923
Insurance fees 1,290,691
Rent 1,257,039
Travel and seminars 1,084,146
Subscriptions fees 1,062,287
Fuel 986,202
Printing checks 705,057
Hospitality and ceremonies 437,810
Vehicles expense 59,807
Sundry 5,197,977
55,673,291 [10,725,278+5,791,786+5,447,438+5,099,345+3,763,386+3,562,216+2,194,633+1,982,420+1,928,878+1,703,972+1,392,923+1,290,691+1,257,039+1,084,146+1,062,287+986,202+705,057+437,810+59,807+5,197,977=55,673,291]

* The Palestine Deposit Insurance Corporation was established in accordance with Law No,
(7) of the year 2013 whereby banks must accrue an annual subscription fee starting in
2014 for the corporation’s account at 0.3% of total deposit balance specified under this
law. On December 1, 2019, a circular No. (3/2019) from the Palestine Deposit Insurance
Corporation was issued regarding reducing the minimum subscription fee to (0.2%-0.8%),
and as at January 1, 2020 the subscription fee percentage will be 0.2% of the average
total deposit instead of 0.3%.
** The Bank is committed to support social responsibility projects and activities in Palestine
through contributions towards the development of various sectors including education,
youth, innovation, sport, health and environment, culture and arts, development and
economic, diaspora affairs, humanitarian effort and women empowerment, In addition,
the Bank encourages its employees to participate in voluntary work by engaging them in
developmental projects in cooperation with partner organizations and humanitarian
initiatives. Social responsibility represents 4.95% and 4.82% of profit for the years 2019
and 2018, respectively.

Although the subcategory “Palestine Deposit Insurance Corporation fees”  is an expense from the point of view of the Bank of Palestine, the source for its expenditure comes from the surplus value obtained from its workers. Consequently, the amount of this subcategory must be added to surplus value or profit (“Profit before taxes”):

Palestine Deposit Insurance Corporation fees* 10,725,278

Second temporarily adjusted surplus value (s) or profit (Profit before taxes) 67,223,441  [56,498,163+10,725,278=67,223,441]

Third Adjustment of Surplus Value (s) (Profit) 

Advertisements and promotions 5,099,345

This category requires adjustment if it involves the sale or purchase of commodities since in Marxian economics such expenses are costs from the point of the particular capitalist but really are paid out of surplus value from the class point of view.  This is so because work performed  to sell commodities and services involves expenditure of surplus value in order to fund it. Consequently, the amount of this subcategory must be added to surplus value or profit (“Profit before taxes”):

Third temporarily adjusted surplus value (s) or profit (Profit  before taxes) 72,322,786 [67,223,441+5,099,345=]

Fourth Adjustment of Surplus Value (s) (Profit) 

Board of Directors bonuses 1,982,420

The same logic applies to this subcategory as salaries and bonuses of managers, with the exception that it is not necessary to deduct from the subcategory “Salaries and benefits” since bonuses for the board of directors is itemized independently of “Salaries and benefits.”

Fourth temporarily adjusted surplus value (s) or profit (Profit before taxes) 74,j305,206 [72,322,786+1,982420=74,305,206]

Fifth Adjustment of Surplus Value (s) (Profit) 

Social responsibility  1,928,878

This subcategory is actually a philanthropic activity. The money required to be “socially responsible,” though it may appear to derive from the benevolence of employers, must derive from somewhere since benevolence in itself creates nothing–and it is not generally from the wages of workers or costs of production. Consequently, the origin of this individual expense is surplus value. Indeed, philanthropic activity often hides the exploitative source of such activity. From P. Nickel and A. Eikenberry (2010), “Philanthropy in an Era of Global Governance,” at pages 269-280, Third Sector Research, pages 276-277:

The key point made by Ryan is that blights on the system, such as those addressed
by philanthropy, are not external. Much of the suffering that philanthropy aims to
alleviate is not the result of a lack of philanthropy, but that of a system that makes
philanthropy possible and necessary. Philanthropy is able to act as the social policy
of the ruling classes in its distribution of resources, allowing wealthy elites to not
only get to decide social policy because of their wealth but also to cover up the
hegemonic control they have in society, which perpetuates their wealth and powerful
positions (Arnove 1980; Roelofs 1995). This is particularly true in an era of global
governance, in which the responsibility for alleviating social problems is devolved
to those with the financial, organizational, or political resources to gain access.
When we treat philanthropy and poverty as individual successes and failures
rather than as the outcomes of one social system that facilitates both, we forget
that philanthropic governing capacity is the result of the accumulation of massive
amounts of money. In the case of Bill Gates, it is the accumulation of billions of
dollars. Why do we not discuss it as such, preferring to discuss his philanthropic
governing capacity as an act of benevolence? How does this fact – that today philanthropic governing capacity is possible only through the circumstances that allow
for a few to pursue massive amounts of profit – become transformed from a political
issue into what Ben Agger (1989) calls a “de-signified fact” that we mistakenly
interpret as fate instead of a political choice? Agger’s (1989, p. 52) answer in his theory
of fast capitalism is that we have reached a stage of capitalism in which money
and its uneven distribution are now taken as pre-given facts and we fail to recognize
that money and the power relations it sustains tells us a lot about the social structure
in which we live:

Money’s falsehood lies in the truth it conceals about capital/labor relations, namely that money is possible only if workers are robbed of surplus value. But money is not simply a text to be read against an external standard of validity, namely that of critique . . . Money has utility. It also tells the truth in its reified social relation dispersed into the exterior environment.

Philanthropy disguises money as benevolence and thus disguises that it is possible
only through capital–labor relations. This understanding, which disguises how
philanthropic governing capacity is derived, is then dispersed uncritically into the
exterior environment, inhibiting social action on well-being through its insistence
on change through the pursuit of profit, or money. Philanthropy’s capacity to act,
money, is particularly difficult to criticize because money is just as easily associated
with the achievement of well-being (wealth) rather than the denial of well-being
(poverty). Hence, profit derived from marginality appears to be the only means by
which to facilitate social action. As global philanthropists exercise philanthropic
governing capacity, they further their own capacity to profit through the stabilization
of the myth that money is benevolent.

Our awareness of how philanthropic governing capacity is achieved, most often
through labor relations that result in the denial of well-being for some and extreme
wealth for others, is lost in the seemingly natural medium of money. The social
relationship embedded in money proceeds to make social policy via philanthropic
governing capacity. When money is used to control the distribution of resources,
resources are distributed as social policy according to those who have managed
to accumulate it. This is distinctly exclusionary because social policy comes to
be dictated by profit in the hands of the few who are able to amass wealth, further
marginalizing those who already have been denied well-being. Social policy
that is dependent on philanthropists’ discretionary exercise of governing capacity
legitimates the very system that it is assumed to oppose. It legitimates profit’s creation
of philanthropic governing capacity by appearing to be benevolence rather
than profit. Philanthropists depend on the social system remaining the same if they
are to continue to govern.

Consequently, the amount of this subcategory must be added to surplus value or profit (“Profit  before taxes”):

Fifth temporarily adjusted surplus value (s) or profit (Profit  before taxes) 76,j234,084  [74,305,206+1,928,878=76,234,084]

Sixth Adjustment of Surplus Value (s) (Profit) 

Insurance fees 1,290,691

The logic for including this subcategory has already been explained above. Consequently, the amount of this subcategory must be added to surplus value or profit (“Profit before taxes”):

Sixth temporarily adjusted surplus value (s) or profit (Profit before taxes) 77,524,775 [76,234,084+1,290,691=77,524,775]

Seventh Adjustment of Surplus Value (s) (Profit) 

Rent 1,257,039

As I wrote in another post:

Another expense category is also relevant for making adjustments–the category “Rent.” The rent of buildings, like the rent of equipment, is an expense both at the level of the firm and at the level of the economy as a whole. However, in the case of occupancy, rent also includes the capitalized value of land, and this capitalized value of land is derived from surplus value (see Jorden Sandemose (2018), Class and Property in Marx’s Economic Thought: Exploring the Basis for Capitalism). Again, without further information, it is impossible to tell or determine the proportion that is paid for the rental of buildings and the rental of land. I will assume that 10 percent of rent is due to the exclusive ownership of land (a non-produced means of production).

Consequently, 10 percent of the amount of this subcategory (125,704) must be added to surplus value or profit (“Profit before taxes”):

Seventh temporarily adjusted surplus value (s) or profit (Profit for the year before taxes) 77,650,479 [77,524,775+125.704=77,650,479]

Eighth and Final Adjustment of Surplus Value (s) (Profit)

Hospitality and ceremonies 437,810

As I wrote when calculating the rate of exploitation of Palestinian workers by PADICO:

It is not clear to me whether this subcategory should be included as a real expense or funded through surplus value. Since it is not clear, I will not  change the calcuation based on this subcategory.

I suspect that it should be deducted from surplus value, but I will leave it as is since the exact nature of what is covered by hospitality remains unclear.

Palestine Monetary Authority’s fines (note 38) (15,000)

Note 38 reads as follows:

This item represents fines imposed by PMA on the Bank and its subsidiary amounted to U.S. $ 15,000 for the year ended on December 31, 2019 due to penalties related to noncompliance with PMA instructions and the related laws and regulations.

The fine is an expense from the point of view of the Bank of Palestine, but the source of payment for the expense is surplus value (just as the source of a fine against workers would be wages). Accordingly:

Eighth and final adjustment of surplus value (s) or profit (Profit before taxes) 77,665,479 [77,650,479+15,000=77,665,479]

The Rate of Exploitation of Bank of Palestine Workers

To calculate the rate of surplus value, we need to divide “Final Adjustment of Surplus value (s)” or “Profit before taxes” 77,665,479 by “Adjusted Variable capital or Total personnel expenses 68,676,750.

So, with the adjustments in place, the rate of exploitation or the rate of surplus value=s/v=77,665,479/68,676,750=113%.

This means that, in terms of money, for every $1 of wage or salary of a regular Bank of Palestine worker receives, the Bank of Palestine receives $1.13 surplus value or profit for free.  Alternatively, for every hour worked, a Bank of Palestine worker works an additional 1 hour 8 minutes for free for the Bank of Palestine. Or, within one hour of work, a worker receives an equivalent of her hourly wage in 28 minutes and works for free for 32 minutes for the Bank of Palestine.

Of course, during the time that the worker works to receive an equivalent of her/his own wage, s/he is subject to the power of management and hence is unfree (see, for instance, Management Rights, Part Four: Private Sector Collective Agreement, Ontario and   Employers as Dictators, Part One).

I have been unable to find any specific references to the number of hours Bank of Palestine workers work per day. I will assume a variable working day of 6, 7, 8, 9, 10 and 12 hours.

In a 6-hour (360 minutes) work day, an individual Bank of Palestine worker spends 2 hours 49 minutes (169 minutes) to obtain her/his wage for the day, and s/he spends 3 hours 11 minutes (191 minutes) for free in obtaining a surplus value or profit for the Bank of Palestine.

In a 7-hour (420 minutes) work day, an individual Bank of Palestine worker spends 3 hours 17 minutes (197 minutes) to obtain her/his wage for the day, and s/he spends 3 hours 43 minutes (223 minutes) for free in obtaining a surplus value or profit for the Bank of Palestine.

In an 8-hour (480 minutes) work day, an individual Bank of Palestine worker spends 3 hours 45 minutes (225 minutes) to obtain her/his wage for the day, and s/he spends 4 hours 15 minutes (255 minutes) for free in obtaining a surplus value or profit for the Bank of Palestine.

In a 9-hour (540 minutes) work day, an individual Bank of Palestine worker spends 4 hours 14 minutes (254  minutes) to obtain her/his wage for the day, and s/he spends 4 hours 46 minutes (286 minutes) for free in obtaining a surplus value or profit for the Bank of Palestine.

In a 10-hour (600minutes) work day, an individual Bank of Palestine worker spends 4 hours 42 minutes (282 minutes) to obtain her/his wage for the day, and s/he spends 5 hours 18 minutes (318 minutes) for free in obtaining a surplus value or profit for the Bank of Palestine.

In a 12-hour (720 minutes) work day, an individual Bank of Palestine worker spends 5 hours 38 minutes (338 minutes) to obtain her/his wage for the day, and s/he spends 6 hours 22 minutes (382 minutes) for free in obtaining a surplus value or profit for the Bank of Palestine.

It should be noted that I have used the verb “obtain” rather than “produce.” In Marxian economics, bank, credit union and insurance workers, as well as sales workers do not produce surplus value but rather transfer the surplus value already produced. This does not mean that these workers are not exploited capitalistically; they are used impersonally by the employer to obtain surplus value and a profit. Furthermore, things produced by others are used by employers such as TNB to control their working lives in order to obtain surplus value or profit. (I leave the issue of how banks exploit workers as consumers to others more competent to deal with the issue; the point here is to focus on the exploitation of credit union workers as workers and not as consumers.)

Political Considerations and Conclusion

Again, the rate of exploitation measures the extent to which workers work for free, producing or obtaining all the surplus value and hence all the profit for employers. However, even during the time when they work to produce or obtain their own wage, they are hardly free. They are subject to the power and dictates of their employer during that time as well.

Even if workers were not exploited, they would still be oppressed since they are used as things (means) for purposes which they as a collectivity do not define (see The Money Circuit of Capital). Does that express something fair? Management rights clauses (implied or explicit in collective agreements give management as representative of employers–and as a minority–the power to dictate to workers what to do, when to do it, how to do it and so forth–and is not the imposition of the will of a minority over the majority a dictatorship? (See  Employers as Dictators, Part One). Is that fair? Do union reps ever explain how a collective agreement somehow expresses something fair? Is that fair?

I have been unable to determine whether Bank of Palestine workers belong to a union. If the situation of Canadian bank workers is typical, they likely do not. Would, however, their becoming unionized turn their situation into one where they had a “fair contract” and “decent work?” I think not. Unions can limit exploitation and can control some aspects of their working lives, but in principle workers are things to be used by employers even with unions. This does not mean that a non-unionized environment is the same as a unionized environment. With unions that are independent of particular employers, that is to say, are real unions, there is an opportunity for workers to develop organizations of resistance against the power of particular employers.

The ideology of unions–that somehow they can produce a “fair contract” and “decent work” (see for example  Fair Contracts (or Fair Collective Agreements): The Ideological Rhetoric of Canadian Unions, Part One: The Canadian Union of Public Employees (CUPE) and Fair Contracts or Collective Agreements: The Ideological Rhetoric of Canadian Unions, Part Three: Unifor (Largest Private Union in Canada))–needs, though, to be constantly criticized. Workers deserve better than the acceptance of such ideology by the left.

Should workers not be discussing why they must work for an employer, whether Bank of Palestine or some other employer? Should they not discuss whether they are exploited? Should they not discuss whether, as they work, they live under an economic dictatorship (see for example  Employers as Dictators, Part One)? Should workers not be discussing whether an unelected management should have power over them? Should workers not be discussing how to organize to abolish this dictatorship? Should workers not be criticizing anyone who claims that their working situation is fair, good, decent and all other such platitudes?

Finally, should not the radical left be attempting to link up various ways in which property is expropriated without an equivalent–whether via exchange and contracts or via military means? Should they not be attempting to link up the strategy of abolishing the class power of employers and the associated economic, political and social structures and immediate issues? In this context, should they not be trying to link up the military appropriation of a bank’s assets and the appropriation of a surplus value by employers both abroad and at home? Are they?