Introduction
I participated in a group called No One Is Illegal here in Toronto last year. The group decided to provide a zoom reading meeting every week to discuss the book A People’s Guide to Capitalism, by Hadas Thier, with many participants not belonging to the group but interested in understanding more about capitalism. We read the book in parts, with each participant taking turns to read out loud a section, with questions to be asked and discussed after each section or difficult part. The group did not finish the book–the number of participants dwindled; it is unlikely that there was much emotional attachment to understanding–despite the participants’ apparent interest in understanding the nature of capitalism.
I sent along some comments to the group (but not to the other partcipants) in order to provide the group with my understanding of the nature of capitalism–which does not always coincide with Thier’s view.
Continuation of the Review
If the following is true, what should NOII’s political position be with respect to reformist positions that refuse to acknowledge this practically? What should its position be with respect to, for example, the slogans “$15 and Fairness,” Fair contracts,” “decent work,” “decent wages,” etc.?
Page 149:
For Marxists, understanding the system’s propensity to break down is central to our analysis of capitalism, as well as the potential for its revolutionary overthrow. We’ve seen that at its best, a “healthy” capitalist economy depends on exploitation, poverty, oppression, and environmental destruction in order to function. But even this “health” gives rise to contradictions, which are only resolved through crises. …
Understanding capitalist crisis is central to the theory and politics of revolutionary Marxism. For Marxists, understanding the system’s propensity to break down is central to our analysis of capitalism, as well as the potential for its revolutionary overthrow. We’ve seen that at its best, a “healthy” capitalist economy depends on exploitation, poverty, oppression, and environmental destruction in order to function. But even this “health” gives rise to contradictions, which are only resolved through crises. ….
The volatility and destruction brought upon by endemic, periodic crises make capitalism a fundamentally precarious system, and at the same time open the way toward class struggle and the potential for revolution.
Is there also not a danger of a shift towards more right-wing and possibly even fascist positions and organizations during an economic crisis?
The following quotes, which extend into chapter seven, seem to imply that there is such a thing as a “real economy” (concrete labour that is simultaneously social labour?) in a capitalist economy. There are certainly degrees of fetishism, with for example, interest-bearing capital (M-M’, where M’>M) is more fetishistic than M-C(=L+MP)…P…C’-M’ since M’ is linked to the capitalist production process. However, the real capitalist production process is certainly surreal since human beings are treated as means to the end of obtaining more and more money—by using their own antecedent products to further exploit them. See my similar criticism below of Jim Stanford’s characterization of the “real economy” below.
[All bold are my emphases]
Page 152:
Thus while profits recovered after the financial meltdown of 2008, investment in real production did not materialize for some years.
Page 192:
Marx explained the relationship between the creation of value and credit as that of fictitious capital. Fictitious capital is not real, existing capital, but claims on future capital.
Is not all capital “claims on future capital” in a certain sense? Investment of M in means of production (MP) and labour power (L) is a claim on future capital in that capital really does not come into existence until surplus value has been produced and realized through sale. Once this process becomes the norm, then money and other financial instruments can be sold as capital, with claims for an additional stream of income for the use of money—as if surplus value arises from money itself independently of the process of production.
On the other hand, in “real” capitalist production (“real” production), does not surplus value also appear to arise from the means of production independently of labour? Does this not form part of the capital fetish? Consider the difference between the rate of surplus value and the rate of profit. The rate of surplus value is s/v whereas the rate of profit is s/(c+v). In the case of the rate of profit, the surplus seems to arise from the joint use of means of production and variable capital rather than from the use of variable capital alone. And this is the “real” economy of capitalism.
Pages 195-196:
The convoluted nature of these processes does not mean that fictitious capital is devoid of any substance or worth. But assigning a value to credit based on future expectations of growth creates the conditions for wild speculation. Moreover, as we’ll see below, when claims on a future value are packaged up and used as collateral for further investments (i.e. your bank takes the money you owe, and sells that debt in exchange for a second investment), or is used to create derivative financial products, suddenly a whole façade has been erected in which exchanges can be made, and losses and profits booked, apart from real activity in the productive economy.
Page 201:
Credit therefore allows for a great deal of speculation and gambling that has little relationship to production and the “real” economy.
The last quote Thier places in quotation marks—appropriately. The real economy in a capitalist economy, given its dual nature of abstract labour and concrete labour, is hardly the same as the social concrete labour process, where human needs are satisfied directly through people working for each other and satisfying each other’s needs.
Credit and other processes of financialization are further developments of the “real” economy of the split between social labour and concrete labour—between our social being and our material being (our beings as parts of the natural world). The performance of abstract labour and the production of value forms part of the “real” capitalist economy, and this “real” economy requires a further exchange process if the material process is to be also a social process (as I argued in my first set of comments).
This reference to a “real” economy that is somehow non-fetishized can then result in treating the capitalist economy as somehow split into a pure social concrete labour process and an artificial process of commodification and financialization.
[The following is mainly copied from a post on my blog.]
This is in effect what the former economist for the Canadian Auto Workers union (CAW, now Unifor) Jim Stanford (author of the book Economics for Everyone: A Short Guide to the Economics of Capitalism) does in a webcast posted on YouTube titled Economics After COVID: The Need for National Reconstruction Planning (https://www.youtube.com/watch?v=XUSIxXvk8BE). The webcast has Mr. Stanford referring to the relationship between health and the “real economy.”
The webcast is supposed to be an analysis of what the economy should be after COVID. Mr. Stanford’s analysis, however, fails to grasp the specific historical nature of the present economy, which is dominated by a class of employers.
Mr. Stanford states:
“The economy is not a thing in and of itself. The economy is what we refer to as the work that people do to produce goods and services and then how those goods and services are distributed and used.”
Mr. Stanford, however, treats the real economy as if it were some sort of pure labour process in general, producing use values that people need for their lives, or alternatively that the economy in the present is actually or really a socialist economy, where the purpose of work is to satisfy the needs of workers and others.
As a consequence of his characterization (actually reduction) of the present economy to a pure labour process of producing social use values, he incorrectly claims that there is no contradiction between the health of workers, citizens, immigrants and migrant workers and the economy:
So, you can’t have an economy that is healthy if people aren’t healthy, and this false trade-off between the economy and public health was a giant self-inflicted wound in our response to Covid.
It is hardly a “false trade-off between the economy and public health”–because the current economy includes the sacrifice of workers for the benefit of the class of employers.
Ironically, it is Stanford and not the conservatives whom he criticizes who fails to understand the real nature of the present economy. He states:
Doug Ford [premier or head of the provincial Progressive Conservative government of Ontario] , Jason Kenny [premier or head of the United Conservative provincial government of Alberta] and Erin O’Toole [leader of the official opposition party the Conservative Party of Canada] themselves implied that there was some kind of trade-off between public health and the economy.
For representatives of employers–and unfortunately for workers as well–there is definitely a trade-off between “the economy” (which workers do not control but, quite the contrary, the economy controls the workers) and the health of workers. The health of workers is secondary to the drive for accumulation of more and more profit and more and more money.
Diverse governments of countries dominated by a class of employers have responded differently to the pandemic, in part at least, because of their divergent assessments of the impact reducing the employment of workers will have on the pandemic in the country. Obviously, the kind and extent of workers’ responses to the pandemic also have influenced governments’ responses. However, before the pandemic emerged, governments (and employers) were already involved in making decisions that jeopardized the future health of workers, citizens, immigrants and migrant workers.
In a previous post (Working and Living in a Society Dominated by a Class of Employers May Be Dangerous to Your Health), I quoted Mike Davis in his work (2020) The Monster Enters: COVID-19, Avian Flu and the Plagues of Capitalism:
But this time around there was little mystery about the identity of the microbe—SARS-CoV-2 was sequenced almost overnight in January—or the steps necessary to fight it. Since the discovery of the HIV virus in 1983 and the recognition that it had jumped from apes to humans, science has been on high alert against the appearance of deadly new diseases with pandemic potential that have crossed over from wild fauna. This new age of plagues, like previous pandemic epochs, is directly the result of economic globalization. … Today, as was the case when I wrote Monster fifteen years ago, multinational capital has been the driver of disease evolution through the burning or logging out of tropical forests, the proliferation of factory farming, the explosive growth of slums and concomitantly of “informal employment,” and the failure of the pharmaceutical industry to find profit in mass producing lifeline antivirals, new-generation antibiotics, and universal vaccines.
Forest destruction, whether by multinationals or desperate subsistence farmers, eliminates the barrier between human populations and the reclusive wild viruses endemic to birds, bats, and mammals. Factory farms and giant feedlots act as huge incubators of novel viruses while appalling sanitary conditions in slums produce populations that are both densely packed and immune compromised. The inability of global capitalism to create jobs in the so-called “developing world” means that a billion or more subsistence workers (the “informal proletariat”) lack an employer link to healthcare or the income to purchase treatment from the private sector, leaving them dependent upon collapsing public hospitals systems, if they even exist. Permanent bio-protection against new plagues, accordingly, would require more than vaccines. It would need the suppression of these
“structures of disease emergence” through revolutionary reforms in agriculture and urban living that no large capitalist or state-capitalist country would ever willingly undertake.
To treat the “economy” in its present structure as if it were some pure structure that satisfies human needs, over which some kind of superficial or artificial “superstructure” is imposed, as Stanford does, surely distorts the real nature of the economy in which we live. That social structure has led to immense gains in the productivity of labour–while simultaneously reducing humans and the rest of the natural world to mere means for the ever-increasing accumulation of money (and means of production). Furthermore, if that ever-increasing accumulation of money stops due to an economic crisis (itself a result of the development of a capitalist economy–as Michael Roberts (2009), in his book The Great Recession Profit cycles, economic crisis A Marxist view, argues), then millions workers are thrown out of work and the production of many commodities is reduced.
Covid and the Trade-Off Between the Health of Workers and the Health of an Economy Dominated by a Class of Employers
Stanford’s words continue to ring hollow as he tries, in vain, to separate ‘the pure, good economy’ from the ‘bad, capitalist economy’–within the capitalist economy:
The best thing to do for the economy is clearly to keep people healthy and stop the pandemic and then rebuild and that means protection and that means income support and that means a plan to rebuild once we can back to work. It doesn’t mean sacrificing ourselves for “the” economy, which actually means just sacrificing ourselves for our employers and to even cut their pay.
Some representatives of employers surely did not know what was best for the capitalist economy–whether to shut down for as long as necessary until the number of deaths and infections were reduced, to leave parts of the economy (in addition to essential economic structures, such as food, hand sanitizer and mask production) functioning or to leave most of the economy dominated by a class of employers functioning. But “sacrificing ourselves for our employers” even in normal times is run of the mill. Why is it that there are, on average, over 1,000 deaths officially at work per year and more than 600,000 injuries in Canada (and many more deaths when unofficial deaths are included (see Working and Living in a Society Dominated by a Class of Employers May Be Dangerous to Your Health).
Stanford reminds me of another social reformist or social democrat–an author whom Marx criticized long ago-Pierre-Joesph Proudhon.
From Karl Marx, Capital: A Critique of Political Economy, volume 1, page 181, note 4:
From this we may form an estimate of the craftiness of petty-bourgeois socialism [such as Proudhon’s], which wants to perpetuate the production of commodities while simultaneously abolishing the ‘antagonism between money and commodities’, i.e. abolishing money itself, since money only exists in and through this antagonism. One might just as well abolish the Pope while leaving Catholicism in existence.
Proudhon treated the market, exchange, commodities and money as permanent features of our lives, but he wanted to eliminate the contradictions that flowed from these social conditions. He generally treated exchange of commodities and money and money and commodities as if they could be treated independently of the class relation of employers and workers.
Stanford, similarly, treats the production of use values within a society dominated by a class of employers as independent of or isolatable from the social contradictions that flow from their production as both commodities and as capital. This production of use values for our needs is somehow the “real economy” and is not subject to overproduction, underproduction, sudden surges of employment and sudden surges of unemployment–not subject to crises. Nor is it subject to exploitation and oppression; otherwise, it would be necessary to admit that the health of workers and the maintenance of an economy dominated by a class of employers are necessarily at odds with each other.
But wait. When workers produce use values in a society dominated by employers, are they not subject to the power of the representatives of the employer (whether private or public)? Are not workers in such situations oppressed and, in the case of the private sector at least, exploited? (The question of whether workers in the state sector are exploited I leave open). It is illegitimate to treat work in a society dominated by a class of employers as if it were not–and that is what Mr. Stanford does.
Stanford seeks to ignore the integrated nature of exchange of commodities for money and money for commodities with the exploitation and oppression of workers, who are treated as mere means for the ever increasing accumulation of money (see The Money Circuit of Capital).
By the way, informally I have been following the statistics on the number of infections and deaths on the website Worldometer for some time (https://www.worldometers.info/coronavirus/). In general, on the weekends, when there are fewer workers at work, the number of infections and deaths decrease, and as the working week proceeds, the number of infections and deaths increase. Undoubtedly there are other factors at work here, but surely one of the factors is, on the one hand, the requirement by employers that their employees work and, on the other, the need for non-essential workers to obtain a wage or salary by working for an employer.
Stanford’s denial that there is a trade-off between the economy and the health of workers, therefore, rings hollow. Before the pandemic, there was a trade-off, and during the pandemic there has been a trade-off. The health of workers is necessarily put in jeopardy if an economy dependent on a class of employers and the attendant economic, political and social structures is to continue to exist and expand. (The same could be said of the natural world in which we live and the response of social democrats or social reformers–see The Money Circuit of Capital, The British Labour Party’s 2019 Manifesto: More Social Democracy and More Social Reformism, Part One and Socialism and Central Planning: Mr. Gindin’s Analysis of The Political Situation of Workers in General, Part One.)
Further Evidence that the Health of Workers and the Health of an Economy Dominated by a Class of Employers Are at Loggerheads
Protecting Oneself from a Tornado Versus Having to Work for an Employer to Obtain Money
The seriousness of Mr. Stanford’s denial that there is a trade-off between the economy and the health of workers can be seen from a relatively recent event in the United States: the tornado that hit Mayfield, Kentucky. From the website https://www.nbcnews.com/news/us-news/kentucky-tornado-factory-workers-threatened-firing-left-tornado-employ-rcna8581?cid=sm_npd_nn_fb_ma&fbclid=IwAR2oyQiJ3BH2KPYvP0NOPavpJwZw2W-zuoB7R2YEnOd2ES8TtBANVPvIjWM:
“Dec. 13, 2021, 3:57 PM EST / Updated Dec. 14, 2021, 7:49 AM EST
MAYFIELD, Ky. — As a catastrophic tornado approached this city Friday, employees of a candle factory — which would later be destroyed — heard the warning sirens and wanted to leave the building. But at least five workers said supervisors warned employees that they would be fired if they left their shifts early.
For hours, as word of the coming storm spread, as many as 15 workers beseeched managers to let them take shelter at their own homes, only to have their requests rebuffed, the workers said.
Fearing for their safety, some left during their shifts regardless of the repercussions.
At least eight people died in the Mayfield Consumer Products factory, which makes scented candles. The facility was leveled, and all that is left is rubble. Photos and videos of its widespread mangled remains have become symbols of the enormous destructive power of Friday’s tornado system.
Kentucky Gov. Andy Beshear said Monday that 74 people were confirmed dead in the state.
McKayla Emery, 21, said in an interview from her hospital bed that workers first asked to leave shortly after tornado sirens sounded outside the factory around 5:30 p.m.
Employees congregated in bathrooms and inside hallways, but the real tornado wouldn’t arrive for several more hours. After employees decided that the immediate danger had passed, several began asking to go home, the workers said.
“People had questioned if they could leave or go home,” said Emery, who preferred to stay at work and make extra money. Overtime pay was available, but it wasn’t clear whether those who stayed were offered additional pay.
Supervisors and team leaders told employees that leaving would probably jeopardize their jobs, the employees said.
“If you leave, you’re more than likely to be fired,” Emery said she overheard managers tell four workers standing near her who wanted to leave. “I heard that with my own ears.”
About 15 people asked to go home during the night shift shortly after the first emergency alarm sounded outside the facility, said another employee, Haley Conder, 29.
There was a three- to four-hour window between the first and second emergency alarms when workers should have been allowed to go home, she said.
Initially, Conder said, team leaders told her they wouldn’t let workers leave because of safety precautions, so they kept everyone in the hallways and the bathrooms. Once they mistakenly thought the tornado was no longer a danger, they sent everyone back to work, employees said.
Anyone who wanted to leave should have been allowed to, Conder said.
Elijah Johnson, 20, was working in the back of the building when several employees wanting to head home walked in to speak with supervisors. He joined in on the request.
“I asked to leave and they told me I’d be fired,” Johnson said. “Even with the weather like this, you’re still going to fire me?” he asked.
“Yes,” a manager responded, Johnson told NBC News.
Johnson said managers went so far as to take a roll call in hopes of finding out who had left work.
Company officials denied the allegations.
“It’s absolutely untrue,” said Bob Ferguson, a spokesman for Mayfield Consumer Products. “We’ve had a policy in place since Covid began. Employees can leave any time they want to leave and they can come back the next day.”
He also denied that managers told employees that leaving their shifts meant risking their jobs. Ferguson said managers and team leaders undergo a series of emergency drills that follow guidelines of the Federal Emergency Management Agency and the Occupational Safety and Health Administration.
“Those protocols are in place and were followed,” he said.
A 24-hour hotline is available as of Monday for employees to call about hazard pay, grief counseling and other assistance, he said.
Autumn Kirks, a team lead at the factory who was working that night, denied Monday afternoon on MSNBC that people’s jobs were threatened if they didn’t go in.
‘It’s just devastating’: Kentucky factory survivor loses boyfriend in tornado strike
DEC. 13, 202106:29
But another employee, Latavia Halliburton, said she witnessed workers’ being threatened with termination if they left.
“Some people asked if they could leave,” but managers told them they would be fired if they did, she said.
The first tornado warning passed without any damage, but several hours later, another warning was issued. Once the second tornado siren sounded sometime after 9 p.m. Friday, Conder and a group of others approached three managers asking to go home.
“‘You can’t leave. You can’t leave. You have to stay here,’” Conder said the managers told her. “The situation was bad. Everyone was uncomfortable.”
Mark Saxton, 37, a forklift operator, said that he would have preferred to leave but that he wasn’t given the option.
“That’s the thing. We should have been able to leave,” Saxton said. “The first warning came, and they just had us go in the hallway. After the warning, they had us go back to work. They never offered us to go home.”
As the storm moved forward after the second siren, the employees took shelter. The lights in the building started to flicker.
Moments later, Emery, who was standing near the candle wax and fragrance room, was struck in the head by a piece of concrete.
“I kid you not, I heard a loud noise and the next thing I know, I was stuck under a cement wall,” she said. “I couldn’t move anything. I couldn’t push anything. I was stuck.”
Search for survivors continues after deadly tornadoes across 6 states
DEC. 13, 202103:21
Emery, who was trapped for six hours, had several chemical burn marks on her legs, her buttocks and her forehead from the candle wax. She also sustained kidney damage, her urine is black, and she still can’t move her legs because of the swelling and from having been motionless for so long.
Employees who wanted to go home early said they were mistreated.
“It hurts, ’cause I feel like we were neglected,” Saxton said.”
Mr. Stanford’s conclusion that there is no trade-off between the economy and the health of workers flies in the face of such tragedies.
Protecting Oneself from Dangerous Working Conditions Versus Having to Work for an Employer to Obtain Money
The same could be said of the Westray Mine deaths (really mass murder) in Nova Scotia, Canada, in 1992. What was the Westray Mine Mass Murder? From Tom Sandborn (2016), Hell’s History:
The USW’s Fight to Prevent Workplace Deaths and Injuries from the 1992 Westray Mine Disaster Through 2016. page 23:
… the lethal disaster had been made inevitable by Westray management negligence, corner cutting and speed-up, as well as by company decisions to ignore and/ or disable crucial safety equipment. One of the disabled sensors, attached to a machine called a “continuous miner” in the mine’s Southwest 2 tunnel, was supposed to detect methane levels
as the explosive gas was released from the coal face by the machine’s excavation. Instead, the unmonitored level of methane reached a critical level and a spark from the machinery ignited it. The methane explosion drove fine particles of highly flammable coal dust (which should have been regularly ventilated out of the mine and/or “stone dusted” with ground rock to make it less volatile, but was neither properly ventilated nor stone dusted), into the air and created a secondary explosion that drove a fireball through the mine’s tunnels, killing the 26 men on the night shift in less than a minute.
The “real economy” (material production through concrete labour) was not separated from the process of pursuing profit, and workers well knew that:
Alan Doyle has bitter memories about the dangerous practices encouraged at Westray.
“That mine was a place called hell,” he told me in 2016. “It was run through intimidation. The inspectors were led around by the nose and mainly ignored. Once an inspector caught them with a bulldozer underground with unshielded sparks coming off it. Once the inspector left the mine, the foreman ordered Robbie to take the dozer back underground ‘… if he wanted to keep his fucking job.’”
Workers, more or less consciously, understand that there is indeed a trade-off between the “economy” (dominated by a class of employers) and their own health; otherwise, they would not fear being fired for complaining. This is economic coercion (see my critique of John Clarke, a Toronto radical, who refers to economic coercion as a necessary feature of capitalism and then ignores this fact in his own definition of social problems and social solutions “Capitalism needs economic coercion for its job market to function” (Ontario Coalition Against Poverty: OCAP)).
As I wrote in another post (The Issue of Health and Safety in the Workplace Dominated by a Class of Employers):
…a study from a skills and employment survey in Britain (Fear at Work in Britain. Gallie, Feldstead, Green, & Inanc, 2013) found that workers’ feared job loss, unfair treatment and loss of job status; available historical statistics for the first two categories show that such fears have increased. In addition, when I took a health and safety course at the University of Manitoba in the early 1990s, the instructors (both government employees and trained in the science of occupational health and safety and inspectors themselves) implied that workers often would not complain because of the economic climate of high unemployment.
Mr. Stanford’s separation of the real economy from the actual economy is a figment of his own social-democratic imagination. His economics is–for social democrats and social reformers, not for workers.
I pointed this out when criticizing Stanford’s purely exchange theory of money, which involves no connection between the purchasing power of money (and the power of those who hold it) and the work or labour process (see Economics for Social Democrats–but Not for the Working Class, Part Two: Critique of the Social Democrat Jim Stanford’s Theory of Money, Part One).
Marx’s dual theory of labour (concrete labour producing use values and abstract labour producing value, which needs to be exchanged for money in order to be or function as value) is much superior for workers to the “economics” offered by Mr. Stanford. Marx’s dual theory of labour connects abstract labour to value and hence money while also distinguishing this process from the concrete labour process of producing use values–but there is no separate existence of the two aspects of labour in a capitalist economy. The money economy and the labour process are necessarily related in a society dominated by a class of employers.
By denying that the economy dominated by the class of employers can be divorced from the “real economy” (concrete labour), Marxian economics acknowledges the experience of workers–that their health and safety and the economy are often at loggerheads.
Conclusion
A pattern seems to be emerging of a social-democratic or social-reformist trick that covers up the real social world in which we live. Mr. Stanford flies to the “real economy” (a fantasy economy that does not exist in a society characterized by the domination of a class of employers and the associated economic, political and social structures and institutions) to hide the fact that workers’ health is often sacrificed for the benefit of both individual employers and for the benefit of the class of employers. There is a real trade-off between the health of workers and the “economy”–as an economy dominated by a class of employers.
There is no such thing as a “real economy” separate from a class economy in a capitalist system. To view such a real economy as somehow existing now is to assume that we need not radically transform the economy at both the macro and micro levels. Why bother if the real economy somehow already exists?
Since there is no such thing as a separable “real economy” in a capitalist economic and political system, unfortunately there is a definite trade-off between the health of workers and the health of an economy dominated by a class of employers.
Of course, if the economy or the life process of workers producing their own lives were to be under their control, this trade-off would be abolished since the lives of workers would be the priority. The production of use values to satisfy the needs of workers-citizens would not then lead to such a trade-off. However, it is illegitimate to assume that such an economy exists in the present; by making such an assumption, Mr. Stanford, like his social-democratic or social reformist comrades, can then avoid the conclusion that the primary task is to abolish the conditions that prevent such an economy from arising.
This is a key trick or method of social democrats or social reformers everywhere. They assume a situation in which what ought to be the case in fact actually is the case. Stanford assumes that the “real economy” somehow purely occurs–as if how workers produce in this society independently of how they are oppressed and exploited and, similarly, how what they produce is distributed and consumed is independent of the capitalist market system.
Of course, it should be the aim of a socialist movement to produce a society where what is produced, distributed and consumed assumes a form worthy of human beings. However, Stanford, by assuming that what may arise in the future exists in the present, eliminates any need for struggling for achieving that goal in the present. If a pure human (and humane) economy can somehow exist in the present, then why bother aiming for the realization of such an economy in the future (with action in the present to achieve such a goal)?
This trick does a great disservice to the working class.
The social-reformist or social-democratic left do not seem capable of dealing with the real lives of workers, where their health and welfare are often sacrificed for the benefit of employers.
As Jack Nicholson said in the movie A Few Good Men–“You can’t handle the truth!” Mr. Stanford and his social-democratic or social-reformist followers cannot handle the truth.
Pages 177-181: The hypothetical example involves “cooking the books” and is either dishonest or simply mistaken.
On page 181, we read:
“The process of accumulation therefore tends to increase the rate of surplus value through advances in productivity, but at the same time, it raises the organic composition of capital, and consequently lowers the rate of profit.”
The hypothetical example, however, shows that at the end, the rate of surplus value is less than at the beginning (which then of course, if the occ increases, must necessarily lead to a decrease in the rate of profit. (It is only in the intermediate phase in the hypothetical example, that the rate of surplus increases: from 130% (1,300,000s/1,000,000v) to 360% (1,800,000/500,000). It then drops down, as the technique is generalized, to only 100% (500,000s/500,000v).
There are two determinants of the rate of profit: the organic composition of capital (occ), and the rate of surplus value. There is an inverse relation between the occ and the rate of profit; as occ increases, the rate of profit declines, and as occ decreases, the rate of profit increases. (There are various ways of expressing occ: c/v, c/(c+v), (s+v as total living labour as a flow, presumably)/(c+v) (conceived, presumably, as a fixed amount, or “deal labour.”
On page 181, we read:
In short: an ever-greater proportion of capitalists’ investments go to machinery and technology rather than increasing the size of the workforce. (The workforce may very well expand, but not at the same pace as the growth in machinery.)
Why can an increased workforce not compensate for increased machinery and technology? And further, even it does not, why cannot an increased rate of surplus value (through the intensification of the working day, for example) compensate? Thier assumes what needs to be proved.
Christoph Henning (2014) has tried to show, in his Philosophy After Marx: 100 Years of Misreadings and the Normative Turn in Political Philosophy, page 71:
p = s/K
where K = c + v = total advanced capital
(constant and variable).
If we now divide the numerator and the denominator by L, where L = s + v (total living labour), we obtain the following result:
p = (s/L) x L/K
where L/K = (s + v) / (c + v) (the organic composition of capital). If we now divide the numerator and the denominator of s/L by v, we obtain the following (because L = s + v):
p = (s/v)/(s/v+1)x L/K.
His argument for the tendency for the rate of profit to fall is:
“While the rate of surplus value can influence the equation, it cannot do so indefinitely; in fact, the more it increases, the less influence it exerts. It may increase almost to infinity without being able to influence the dominant tendency, since an increase in s/v causes (s/v) / (1 + s/v) to approach the limit value of 1. Thus the rate of profit does depend on the organic composition of capital. But since K/L increases, L/K decreases, and with it p, the rate of profit.”
[The following are my own notes on Henning:
“1. (s/v)/(s/v+1): as s/v increases, so too does (s/v+1);
2. let us call s/v=z
a. z/z+1: as z increases, If z=1, then z/(z+1)=1/2; if z=2, then z/(z+1)=2/3;
b. if z=3, then z/(z+1)=3/4;
3. 1/2 and 2/3: the difference: 3/6 and 4/6: difference=1/6
4. difference between 2/3 and 3/4: 8/12, 9/12; 1/12.
5. but what if we compare z=2 and z=4 (doubling of z)?
a. z=4: 4/5; z=2=3/4; 3/4 vs 4/5: 15/20 vs. 16/20=1/20
-
it would probably be necessary to use calculus to determine this properly: the rate of change of the numerator with respect to the rate of change of the denominator (and I lack this knowledge).
1. s=1, v=7; s/v=1/7; (s/v)/(s/v+1)=(1/7)/(8/7)=1/8;
2. s=2, v=6: s/v=2/6; (s/v)/(s/v+1)=(1/3)/(4/3)=1/4; ((1/4-1/8)/1/8))=100%
3. s=3, v=5: s/v=3/5; (s/v)/(s/v+1)=(3/5)/(8/5)=3/8; ((3/8-2/8)=1/8; (1/8/1/4)=50%
4. s=4, v=4: s/v=1; (s/v)/(s/v+1)=1/2; ((1/2-3/8)=1/8; (1/8/3/8)=1/3=33.3%
5. s=5, v=3: s/v=5; (s/v)/(s/v+1)=(5/3)/(8/3)=5/8; (5/8-1/2)=(1/8); (1/8/1/2)=1/4=25%
6. s=6, v=2: s/v=3; (s/v)/(s/v+1)=3/4; (3/4-1/8)=1/8; (1/8)/(5/8)=1/5=20%
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s=7, v=1: s/v=7; (s/v)/(s/v+1)=7/8; (7/8-3/4)=1/8; (1/8)/(3/4)=1/6=16.7%”
Henning then goes on to write (pages 71-72):
Applied to reality, this does not mean that ‘collapse’ would be the direct result, as Grossmann would have it (in an argument that amounted to an indirect defense of Kautsky), since it is still possible for the mass of profit to increase. To put this more accurately, the mass of profit will in fact increase cyclically.
What this does mean, however, is that vulnerability to crises increases over time. Achieving an adequate profit requires the investment of ever greater masses of capital. Small capitalists (so-called ‘small businesses’) may find this increasingly difficult, as recurrent merger waves show. Wages have to be depressed ever further to arrest the fall in the rate of profit; more innovative technology is needed ever more urgently in order to be able to compete successfully. Yet this simply accelerates the fall in the rate of profit. While the rate of profit may recover during the crisis, it will have to rise to a higher level vis-a-vis the previous cycle, due to the changing organic composition of capital, and this means that any additional increase in the rate of profit will require an intensification of class struggle (such as by continuously depressing wages and welfare benefits). All of this corresponds to phenomena that no one alive today is unfamiliar with. On the contrary, high unemployment, rapid technological development, the ever greater mobility of capitals that seek ever more rapid returns, the persistent dismantling of social and ecological standards – all of these things have plainly come to be the rule rather than the exception. Thus appearances clearly confirm Marx’s law.
Page 184:
“What are these countereffects? First, capitalists can make up for a drop in profitability through good old-fashioned exploitation. Never willing to let their profits slide, capitalists always respond to diminished returns by increasing exploitation. Thus we see the many variations of attacks on the working class, which raise the rate of surplus value through means other than laborsaving technology. Teachers in New York City are asked to work a longer day without compensation.”
Teachers may well be exploited, and an extension of the working day would then increase their exploitation. But how are state employees theorized as exploited? Thier provides no guidance here.
Do teachers in New York City produce surplus value? A rather poor example. They may perform surplus labour, but that is not the same as surplus value.
Page 184:
The rate that the value of technology drops may not always keep up with the rate at which new technology needs to be procured (for instance, if you need twice as many printers, but the price of printers doesn’t drop in half). But overall, the rate at which investment in constant capital rises is at least stunted by this countervailing tendency.
Why not completely negate the tendency for occ to increase by cheapening of c? Thier provides no theoretical reason for excluding this.
Page 185:
As the mass of profits grow, class relations become increasingly polarized.” In what sense “polarized?” Politically? If so, what evidence is there that that is so? Or is there evidence that the working class may be confused and divided in various ways, going in one direction on on issue, another direction on another issue, ignoring relevant issues, etc.?
Page 187:
Nevertheless, whatever the scale and fury of economic crises, none automatically translate to revolution or the end of capitalism. As Russian revolutionary Leon Trotsky put it, “There is no crisis which can be, by itself, fatal to capitalism.” Rather, crises create objective conditions, which make struggle, and ultimately the overthrow of capitalism, possible. But this depends on the subjective element—the confidence, organization, and politics of the working class. These are topics that lay outside the scope of this book….
But if if depends on the subjective element:
a. the confidence of the working class
b. the organization of the working class
c. and the politics of the working class,
then surely we need to focus on criticizing those who inhibit such confidence, organization and politics whose aim is the abolition of the class power of employers.
The Abolitionary 