Socialism
means never having to say you’re sorry…
(apologies
to Erich Segal, Love Story, Hollywood
1970)
Capital profit after sales is drawn
from surplus value, that is, what remains when wages, production costs and
obligations have been met. This in turn derives from how much value the workers
produce which does not return to them in the form of wages for the whole time
worked. Labour-power is the commodity a capitalist buys which increases value in production; raw
materials and machines simply pass on their own value with nothing added (and
machines depreciate). The value of labour-time is made up of the socially-necessary
cost of the individual worker, including sustenance, shelter, clothing,
transport, education etc. – and the raising of future workers. The worker works
for say, ten hours but is paid back his or her value for, say, five of these
hours. The value created during the rest of the hours goes to the employer.
Because unpaid labour-power alone grows value in the production process, it is
the basis of capitalist profit. Workers produce surplus value because of the
difference between their wages and the value that their labour-power produces.
To optimise the productivity of this
effort, and to withstand competitors over – say – sale prices, productivity per
worker is generally increased when supplied with ever-more efficient and
up-to-date machines (means of production – ‘dead labour’ in Marx’s terminology)
but this will likely reduce the number of workers needed unless there is a
growth in output due to increased demand. Automation is feasible so long as
there are areas within the economy as a whole which are not automated, and as
long as we need human workers to build the robots. With total automation
surplus value diminishes; such living workers that are left will be more
drastically exploited therefore to maintain surplus value ( as at Amazon - more
of this anon). To compete with rivals over market prices, capitalists are
forced into ever-greater modernisation and automation to achieve higher speeds
in greater output, and so to saw off the branch of the tree they are sitting
on. And so expansion must be rampant, because one answer to a decline in
surplus value-created profit is to increase the scale of the operation and
either expand the market or expand the company’s share of the market,
frequently by buying out rivals or creating mergers. There is also the profit
in buying cheap and selling dear as found from foreign trade. Another means is
to keep wages static or reduced so that more surplus value accrues to the
capitalist, requiring perhaps the prohibition of strikes and/or unions, or by
expanding production into the low-wage economies of developing countries or
backward regions of one’s own. Many products we consume are made by poorly-paid
women, as well as children: illegally in countries where child labour laws
exist but are not enforced. For example,
Amazon’s supplier Foxconn exploits children in the manufacture of Alexa in
China, a flouting of Chinese labour laws. (Guardian, 9th August
2019).
The capitalist paradox is that the
goods made or services produced have to be sold to a plenitude of buyers on the
market, by and large the selfsame workers who, in a Western country like the
UK, make up about 80% of the population. The capitalist needs to beat down
wages as best he or she can, but at the same time relies on the beaten to buy
the goods, otherwise the capitalist is likely to be ruined. Gluts appear when
unsold goods lie piled up in factories or warehouses, or airline tickets cannot
be sold. Indeed, with the resulting unemployment, the remaining workers have no
bargaining position and so the embattled capitalist must cut their wages
further. Or, what amounts to the same economic result, we have usually
temporary full employment through sub-low wages, no fringe benefits or
pensions, and insecure contracts, with fragmentation of the workforce.
The ‘answer’ to ‘under-consumption’
lies in easy credit for workers to enable them to carry on purchasing.
Consumption is a form of production, producing the ‘demand’ for the goods and
services created by the workers themselves. But the usury involved can be
merciless, perhaps up to £1000% p.a. – another form of ‘production’
exploitation by the merchant-capital end of capitalism, which pre-dates
industrial capital. But recourse to ‘easy credit’ has a limited lifespan before
towering debts set in. The collapse of the sub-prime mortgages in the USA which
led to the near-collapse of the financial system in 2008 is a good example of
this. And sub-primes are back!
An
alternative is a more generous public social and health provision which would
put steady purchasing within the workers’ reach. But capitalist gain from
healthier market sales as a result is nullified by the state’s taxes needed to
pay for it. From the capitalist point of view, this is Peter (the capitalist)
being robbed to pay Paul (the worker). The bulk of taxes needed to fund this
provision – if one includes corporation tax – falls on the employer class. Of
individuals, 43% of adults in the UK pay no income taxes (up from 38% in 2010),
while individual adults in the top 1% pay 27% of the whole income tax revenue.
(Daily Telegraph, 6th August 2019). Of course poll taxes like National Insurance
and VAT on commodities and services hit all classes but most adversely the
low-paid.
Public
incursion into the economy has wider implications. State profits from public
enterprises are ploughed back into the state coffers, unavailable to private
investment. When the East Coast Line was returned to public ownership, the
service became more efficient and the Treasury was the recipient of the
profits, having previously been the loser in making over enormous subsidies to
private investors. It worked well as a public railway, but the point was that
it shut out the private investor, which made the East Coast Line’s return to
private ownership as soon after the mess from previous privatisations had been
cleared up absolutely necessary from the capitalist viewpoint. With the
long-term decline in the overall rate of profit, state funding of railways,
health, social services, housing and so on is seen as the competitor for
dwindling private investment opportunities.
At
one time – for example with civic ‘gas and water socialism’ from the so-called
Progressive Era in turn-of-the-20th-century America and the urgent
need for vast infrastructural repair in post-World-War-II Britain – the state
took on production activities beyond the investment capabilities of private
capital, and indeed was a necessary supplier to the latter in terms of cheap
energy (business, as in pre-privatising Britain, usually gained lower rates for
energy supplies from the state suppliers than did domestic users) while mass
cheap public transport was necessary if the workforce were to arrive at the
factories and shops on time! But in time, as traditional areas of private
investment failed to soak up increasing capital accumulations, new opportunities
had to be found, at home and abroad; at home they presented themselves as the
already-formed and functioning (and often profitable) state-run facilities. ‘State’
capitalism becomes absorbed by actual private capital, with the added advantage
that taxes can be appropriated as ‘subsidies’ to privatised companies from the
state after their privatisation, and so less ‘wasted’ on social goods and
services. ‘Subsidies’ also include elaborate legal forms of tax avoidance.
Meanwhile,
capitalist expansion and the world market in the post-war years were sufficient
to bring in a higher rate of profit than today’s, even though the highest
tax-rate in the three decades after the war was the equivalent of 93 pence in
the pound in Britain and similar to the dollar in the USA! Now capitalism in
both countries can barely struggle along, it seems, on a top tax rate of 40%.
In this context, Labour’s aim to bring
back – at least in part – the socialism of Attlee’s Labour (1945-51) looks
quixotic or cranky to today’s neoliberal world – and dangerous. Social wealth
is not necessarily capital wealth, except where for example council
housebuilding is undertaken by private contractors. A public park or
playing-field is absolutely valueless because the land is not being monetised for
production, private housing or even privately-run fairgrounds. Capital must
therefore buy up as much green space as possible for investment purposes.
Everything ultimately should be privately owned, if publicly subsidised – even
the Houses of Parliament if this were ever to be pushed through (for say,
luxury apartments). For capitalists social-democratic Labour’s present plans
represent the thin edge of the wedge for a larger demonetisation, which spells
doom for capital and capitalism. The present Right-wing urgency to monetise
everything in sight is propelled by capital’s now-chronic fall in overall rate
of profit. Capital survives by expansion and ever-further exploitation: so
Labour has got to be steamrollered over (for a programme that looks mild by
comparison to the post-World War II Labour agenda) or else Labour must itself
reverse the trend to monetisation by turning demonetisation into the new ‘trend’. This it can only do if it is
genuinely a mass movement of colossal proportions.
* * *
The 1% plus the rest of the better-off
20% might indeed save capitalism as the growth in minority wealth (especially
at the higher end of this category) provides expansion in luxury production.
This turns out yachts, private jets, helicopters, luxury cars, expensive
properties, precious gems, private schools, hospitals and clinics, wines at
£100 and £1000 a bottle, prestigiously-labelled cosmetics, accessories and
clothes, exclusive resorts, clubs, restaurants and hotels, etc. A certain
amount of this may be viewed in TV advertising today. This side of the market
could conceivably keep capitalism going forever, whatever the penury of the
many. However, tensions appear within the higher classes. Billionaires (growing
in numbers if not profusely) can swallow up skilled labour and force up prices
that millionaires can no longer access and afford, while those on £100,000 a
year will begin to feel themselves pauperised not to speak of those on a mere
£60,000 or so. What about army generals, US senators, top-grade civil servants
and judges who can no longer access what they had been used to accessing due to
the shock-effects of the ever-greater purchasing powers of the seriously
rich? How many revolutions and coups
have been instigated around the world by malcontent colonels? What about
fascism drawing from the resentments of a middle-class that feels ‘cheated’ out
of what it believes are rightfully its own? If I were a millionaire as opposed
to how I am presently placed I feel sure I would resent billionaires much more
than in fact I do, because billionaires can arrogate to themselves what
millionaires felt was within their grasp, or almost. Who is content with the
second-best thing when the first-best seems so nearly reachable? Who will never
live in ‘Millionaires Row’ in Kensington because it has become exclusively
‘Billionaires Row’? What happens when trillionaires come on the scene? Disputes
over property development in high-class neighbourhoods show what happens when
the richer neighbour attempts to flaunt what is his by means of seemingly
outrageous development. Land is certainly not increasing even if private wealth
amongst the 0.01% of the 1% is - exponentially. And with climate change we will
see areas such as coastal regions and cities flooded by rising sea levels,
which means even less land than now for the accumulated billionaire wealth to
get its claws into, at the expense of everyone else. Indeed, true wealth is
best characterised by the amount of fossil-fuel consumption it uses per capita.
So we should be expropriating our billionaires before they expropriate all of
us. And before the trillionaires arrive.
* * *
Findings of the Peterson Institute
(Washington DC) have shown Phillip Inman that ‘wage stagnation in the US (and
therefore probably the UK too) is more likely to be caused by technology
hollowing out the market for skilled blue- and white-collar jobs rather than
competition with China and the Far East. This tells us there are fundamental
issues to confront aside from the loss of access to our biggest trading
partner, the EU’. (Observer, August 4th 2019.)
I’d suggest that automation poses an
existential threat to capitalism in general because it diminishes the
profit-side of surplus value, the basis for the enrichment of a system deriving
its profit from working human beings. A robot transfers its value to the
product but does not make the operation more profitable as a result because a
robot cannot be exploited. Those who make them can be, but not after robots
start producing themselves. Robots are just one more machine cost. ‘Wage
stagnation’ for existing US workers shows this: that there isn’t enough in the
kitty to pay proper living wages and show a profit at the same time. Automation
is ideal for socialism because it can eliminate soul-destroying work without a
need for a profit as a result. The ‘profit’ comes in the form of life fulfilment
through creative activities and caring opportunities. But without socialism an outdated, outmoded capitalist
system will become ever more desperately repressive and oppressive in a semi-automated
and then more fully automated society. Perhaps the ‘hand-made’ luxury
industries might hold out but they could not carry on in a non-capitalist wider
context. The system is total or it is not at all. And faced with the need to ‘blow
the expense’ in saving the world from burning up, we must socialise all
production while democratising how we are to govern ourselves, and we must do
this now.
Meanwhile
capitalists are becoming so anomalous that right now it would be in their best interests
to turn into Luddites, their worst working-class enemies 200 years ago: smash
the machines, before they smash you!
No comments:
Post a Comment