Author: nicholasjayboyes

Skilled Labour. The Metric System. Technological Progress.

~ nicholasjayboyes

Skilled Labour. The Metric System. Technological Progress.

It is sad to see the state of the workers, whose misplaced rebellion to keep their jobs skilled, results in strikes against more advanced machinery being used in the industries they work in. 

“U.S. ports already lag those in Europe and Asia in their use of technology. And Daggett (International Longshore Workers Union president ed. ) wants to keep it that way, by prohibiting the operators of marine terminals from automating cargo handling.”

““If it was up to them, they’d like to see everybody lose their jobs. … They don’t want to pay anybody,” he said in a recent union video. “Someone has to get into Congress and say, ‘Whoa, time out.’ This world is going too fast for us. Machines got to stop. … What good is it if you’re going to put people out of work.””

“The dockworkers’ challenge is not unique. Technology has been eliminating some jobs and creating others for more than two centuries. In recent decades, elevator operators, secretaries, and steelworkers all have seen demand for their services upended by mechanization.”

Washington Post 10 5 2024

https://www.washingtonpost.com/business/2024/10/05/port-strike-workers-jobs-automation-union/

This group of people who profess to be a radical workers organization are trying to organize to keep low wage workers out of their industry.  They want to be superior to the unskilled workers, the proletariat.  They are more like an aristocracy than a movement to organize the workers.

To accomplish this they are trying to keep their jobs skilled labor, by coming out against improvements in industry.  By keeping the skill in their labor they hope to remain high paid, as opposed to unskilled labor.

They seem to be fighting modern technology.  

“On the picket line outside Red Hook Terminal at the Port of Newark, strikers this week agreed that automation is their chief concern.”

“Lydia Ortiz, 60, said she notices each day the work that is performed by machines. No humans sitting in the toll booths, thanks to E-ZPass. Scarcely a worker to be seen at the grocery store checkout lines, filled with self-checkout machines.”

““They want everything automation,” she said. “We’ve got to support families, no?””

 Washington Post ibid.

Which is misguided; it is the system of capitalism that is making the machinery a burden for workers, who are losing their jobs and becoming proletarians.  It is the fact a capitalist is using the machinery and is incentivized by the profit he can make by using it, instead of technological development to make life easier for the workers, by making it take less labor to produce the same product, that the ILU feels threatened by modern industry.  

In an environment where workers owned the means of production,  like a cooperative, technological achievements would absolutely lower the hours needed to be worked by the worker in his respective industry. 

It is in this respect that organization of the proletariat becomes imperative. That instead of strikes for wage increases, by keeping labor skilled, a new method is tried.   

The ILU is facing a losing battle.  It is impossible to stop modern technological improvement,  regardless of the fact it throws people out of work.  We saw this with the power loom, an invention that shook the foundations of Europe. It allowed for a 12 year old boy moving a stick and pulling a lever to replace the labor of more than a dozen hand weavers.  It was burned publicly, according to Karl Marx in Capital.

This caused the previously skilled workers to become proletarians. But it did not stop the march forward of technology, the loom was eventually adopted. 

The transition from the integrated steel mills to the electric arc furnace struggle is occurring now.  US Steel is a coking mill, producing virgin steel.  Losing money, it was being sold to Nippon Steel, a Japanese company, planning to invest in coking steel technology.  The unions were against the Japanese company buying it; skilled workers were needed in US Steel, but the industry was becoming rapidly outdated.  The electric arc mill technology that smelts recycled materials, the steel that it produces is the same, but it is not virgin.  Nevertheless it looks unlikely the sale of US Steel will go forward, Trump is against it..

Obviously it saves a ton of money to simply recycle, and most new mills are recycling mills.  It requires less labor to produce steel in an electric arc mill, and they are often not union.  The workers are more often relatively unskilled, compared to conventional steel production. And here again we have the struggle of skilled workers vs unskilled, union labor and unskilled general laborers.

US Steel will not be sold, both Trump and Biden agree.  What will become of the skilled workers clinging to privilege, well paid with generous pensions, seems to be being decided.  Nippon Steel will not be buying US Steel, or so it seems.  But the issue of recycling vs virgin steel production will not be going away any time soon.

It is the same with the longshoremen.  It’s like being against the metric system because it is going to cost American workers jobs.  Obviously it will cost less to use a more scientific system of measurement; how can a non metric company compete in the world market?  We see this with Chinese Electric Vehicles, 100 % tariffs, taxes on import, due  to the inability of non metric gasoline powered motor producing industry to produce EV’s competitively. 

But good luck getting a metric conversion  through Congress and the Senate.  The Republican bourgeoisie will vote against it for protectionist reasons, the liberal progressive bourgeois will do it to keep American skilled labor, like the US Steel workers and the longshore workers, in their well paid jobs. 

America will go metric, they are the last country in the world not to.  Technology will continue to advance whether or not it is advantageous to the labor union aristocracy. The very presence of a proletariat proves this. As productivity increases, machinery always becomes easier to use, and the producers less skilled.

As far as these ILU workers go, and skilled workers in factories general go, they should organize unskilled workers.  Strikes to increase wages, by keeping labor skilled that could otherwise be done easily with machines, is futile.  Lowering hours, with a decent minimum wage, makes more sense than trying to reform capitalist shops.  

Employee ownership works; in retail, a branch of production, for instance. It is cheaper, and higher quality products are available for far less cost than the capitalist stores.  The only strikes should be to gain control of the means of production, towards worker control of industry.  If anything, less hours, even with less pay, would be a start to the road to employee ownership.  The workers could pack a lunch, and give up bars and restaurants for their own stoves in the kitchen.

This may sound ridiculous, but is it any more strange sounding than suggesting technological progress is detrimental to society?  Machinery may put men out of work, the power loom’s introduction caused suffering.  But attempting to stop it, rather than taking control of it and using it to benefit everyone, seems wrongheaded.  

Nicholas Jay Boyes

Milwaukee Wisconsin

American Democratic Republic

The Gens and Private Property

~ nicholasjayboyes

The Gens and Private Property

The level of ignorance towards the native Americans, and other peoples like the early  Romans and Germans who were in the lower stages of barbarism, is something common to modern conditions.  The lack of knowledge of the kinship structure of man in this condition was part of the effort to root out these often matrilinear family systems.

Clearly  history shows that the monogamous patriarchal family we know now is a historical product, part of the class structure, and the level of technological development.. It was not until men began to acquire property, according to Friedrich Engels in his book The Origin of the Family, Private Property, and the State, that it became necessary to remove the matriarchy that was ruling in previous conditions, when men just fished and hunted and had little or no property as we know it, and the women did the domestic work, that the general breakdown of the society governed by the system of gens begins. 

Prior to the formation of the state, the society was ruled by the gens, or kin, groups.  There was little or no real property, men were just starting to become pastoral.  When people domesticated cattle society began to move towards patriarchy; the men were taking care of the animals, rather than just hunting and fishing, the domesticated animals becoming the basis of property.

As the labour of herding fell to the man,  and the property connected to it was his, it was inevitable that soon the men would overpower the matriarch that was part of early barbarism, and replace it with the patriarch.  When property could be inherited, when a man’s possessions could remain property of someone even though its owner was dead, the transfer of power away from inheritance in the gens only began to transform society further away from gentile society.  Having the inheritance switch from the matriarch and her family to the man’s sons, marked the end of matriarchy. 

At this point money is invented, based first of cattle which was used as money, then the precious metals. This allowed for debts to form, and mortgages on property begin to form.  Classes are now formed, and the society is forced to create a mechanism to protect the class structure.  This organization is called the state. This form of society quickly replaced the gens., the corrosive power of private property and money starts to dissolve the old kinship group, especially the matriarchy.

Prior to the state the gens protected  its members if they were sick, or if there was crime.  There was the right of vengeance for murder, but beyond this there were little laws in the gens; there was no theft, burglary, fraud etc.  as there was little property.  

The state completely overrules the gentile society, and classes are formed, often of landowners and later hereditary nobility forms.  The Romans  reached this point, and the longing for a return to life under the gens was part of why the German Odacer, who was a barbarian,  could overpower Rome, where the state was formed.  People longed for the old gentile society, before usury and large landowners, to return.

But after Rome fell to the Germans, the land became private property, and the gens was unable to survive.  The amount of land the Germans found themselves with hastened the end of gentile society.  The Germans could not  control all the land they now owned and nobility came to be resorted to for territorial control.  The longing for a return to the gentile life was impossible to satisfy; the state was formed, and in a short period of time, the  peasants were in the same condition they were under the Romans. 

Slavery was part of ancient culture under the Romans.  Large scale agriculture was heavily reliant on slaves, when Rome fell the land was parceled out to individuals.  But it was not passed down to the gens as inheritance, and soon there were usurers and large landowners.  It is at this point a new feature of society develops, a person whose job is to exchange products for another, the merchant.  The commodity is developed, production is for society rather than for one’s self.  Handicraft had preceded this, and production was still primarily for oneself and family. With money it becomes possible for production to be for exchange purely.  The merchant  provides the commodities now, everything exchanged gradually becomes more of a commodity  with the intervention of money.

The state comes along the whole way.  It reaches its apex of power with the condition of civilization we know now.  An instrument developed as a mechanism to maintain the class structure, it survives on taxes.  It even borrows money as bonds, it debts, are traded on the stock market;. speculation on the states debts becomes common.  

Manufacture is the intermediate state between what we know now as heavy industry, and handcraft.  Manufacture starts when handicrafts are replaced by groups of people producing for money, under a single individual.  The commodity is formed, the producer no longer produces for himself and his small family, he doesn’t know who will be consuming the product he helped produce.

This gives way to large industry, where the producer uses machinery, and his race or sex are not barriers to the capitalists who own the machinery, the women and children are all used by the capitalist.  The producer does not own the means of production, its efficiency at producing a surplus is the reason it is used.  It does not matter to the capitalist who works the machinery, it is often the man who is not working due to fear of rebellion by him against the state.  His children are less likely to rebel, so are used for labour.  His wife is in the same position.  The same mechanism that caused the patriarchy to form now is taken to the point of dissolution.  Private property comes to be its opposite,  the producer is propertyless.  At best he owns a small home in a city, he is the modern proletariat.  

Divorce becomes easier with women working.  There are less impediments to divorce by the woman, she no longer has to ask the man’s permission to divorce.  Property also falls in half to the woman. Large scale industry seems to be a return  of the woman to power, at least as more equal than in previous historical conditions to the male.  As he owns no real private property,  there is less dominance as things were when the patriarchy formed. 

It is at this point we leave off at.  But first a word about the state.  Formed due to classes, it begins to die out as the means of production gradually come to be controlled by the workers, and become not owned by anyone, at least not by a capitalist..  A socialist society without class would seem to be the antithesis of the organization created to maintain class, the state. If there is no class, what does the state become?  What would it be for?

Perhaps like the capitalist state what remains is the security mechanism, the police for shoplifting etc., but not in control of industry. A socialist society would still have to have security, but just because industry was no longer controlled by capitalists it does not follow industry must be owned by the state. Rather it is not owned by anybody, the state just keeping it from being looted etc.

Engels conclusion in the book mentioned above, the state is to maintain classes is completely right.  It seems inevitable it will  be less powerful as classes are less a dominant force in society.  Unfortunately, it looks like society has a long way to go before the state as we know it becomes a thing of the past

Nicholas Jay Boyes

Milwaukee Wisconsin

American Democratic Republic

Monopoly, Trusts., Joint Stock Companies.  Imperialism.  Ecological Consciousness and Materialism.  8 1 2024

~ nicholasjayboyes

Monopoly, Trusts., Joint Stock Companies.  Imperialism.  Ecological Consciousness and Materialism.  8 1 2024

In Vladimir Lenin’s book Imperialism, the Highest Stage of Capitalism, he talks about how the system of capitalism gets away from competition and free markets, only to be replaced by trusts, joint stock companies, and state ownership of production.  

This seemed like new territory, but if you read Friedrich Engels Anti- Duhring, you can see that in Karl Marx and Engels time there were already trusts, monopolies, and joint stock companies. By the late 19th century, there was already concentrated ownership of the means of production,  and crisis due to overproduction was a reality.  There had been a crisis about once every ten years, and every time ownership became more concentrated, until there were large trusts and monopolies.

Engels’ Anti- Duhring was published in 1878, Lenin’s Imperialism the Highest Form of Capitalism was published in 1917.  Engels’ observations of the direction modern industry was going was pretty much dead on; by 1917 most large industry in Europe and America was in trusts, or monopoly.  

In this respect Lenin’s observations, although nothing new to Marx and Engles, show the strength of Engels work; he was able to predict the progression of capitalism, from handicrafts, to manufacture, to large industry, then to joint stock companies.  He also predicted the demise of capitalism, and the shift to employee ownership and nationalization without compensation by the workers.

But the point I’m making is Lenin did not discover all he wrote in his book about imperialism, rather Marx and Engels had already shown what trusts and joint stock companies represented by 1875.

Lenin was a gifted thinker, and had a good understanding of Marxism.  By 1917 he grasped what Marx represented, and his book in 1902 What is to be Done? shows he had a knowledge of social democracy in Germany, and was at the beginning of his writing as a Marxist.

What Lenin learned from Engels was the theory of social progression, from the early stages of capitalism, when production was by individuals, or a family unit, for instance raising sheep, shearing wool, using the spinning wheel to make yarn and weaving it etc., then Engels and Marx trace this production, referred to as handicraft production, to the presence of the merchant, who at first trades the surplus from the family, the wool in our example, and provides money and access to goods the individuals doing the handicrafts could not get, often from far away.

The next step is the merchant and property owner begins to put together production in larger groups, manufacture.  The individual weavers, doing handicraft labour, are replaced by a collection of individuals producing not for themselves, but socially.  This is the first stage of commodity production, handicrafts are replaced by collective production, rather than for immediate consumption by the individual who created the product, controlled by a capitalist.

The next stage is large industry, where it is production of commodities, but instead of workers simply put together to produce commodities by dividing up the work, it is replaced by machinery.  The labour is made simpler, the job now working, for instance, a power loom, where the wool is milled by a large machine, and skill is less important, it is a low skilled job primarily.  The worker does not own the loom, rather works for a capitalist, who obtains his product without exchange with the labourer , at least not as any commodity he is selling.    

But the exchange of the commodity is the same as it was under the manufacturer ; the person in charge of the manufacture still simply trades his product for its value. Its value is the amount of labour required to produce it, regardless of whether or not it is paid for.  

And in all commodity production the worker does not own the means of production, and the exchange of the commodity labour power means the worker does not receive the entire value of the commodity he produces, rather part of the value is kept by the capitalist as surplus value.

Large scale industry makes massive collective production a necessity, competition forces the capitalist to invest in ever larger machinery, further making it impossible for the worker to ever be able to purchase the means of production.  The producers work on machinery they do not own, and ownership of the means of production remains in the hands of the bourgeoisie.   Every invention to save labour is used to compel the worker to labour more, to create an ever larger amount of surplus value for the capitalist.

This is the point where capitalism becomes dominated by joint stock companies and trusts.  The trust is when a few large companies control an entire production process, and as a monopoly determine the price of the product, rather than by supply and demand, and competition.

The latter was already happening by the time Engels wrote Anti During in 1875.  Lenin saw this stage in 1917,  as he had left Russia as an exile.  Russia was still an agricultural country just coming out of feudalism and serfdom in 1902, when Lenin wrote What is to be Done?.  

But by a strange confluence of factors, Russia had a revolution in 1917, and Lenin was chosen to lead it.  It was an early attempt to put the ideas of Marx and Engels into practice.  

But the center of these ideas remained Western Europe, as it was here the worker had experienced these stages I mentioned above play out in real  history. In retrospect, we should have seen the shift from trusts and monopoly ownership to the next stage, social ownership, would never really be understood in Russia.  What they tried to do was skip a stage in society, to go from agriculture and manufacture directly to socialism.  

What they built lasted about 75 years, and was for its time a remarkable achievement.  But by 1989 their vision of socialism was faltering, and without a strong movement in the west where large scale industry was in the form of trusts and monopoly, and partial state ownership in the joint stock company as a buyer and owner of shares, a capitalist arrangement, society began to falter,. When Russia returned to capitalism, industry became owned again, sold off at absurd prices to capitalists. Russia could no longer practice the socialism they tried in vain to produce.

The ecological movement was rooted in large industry, satellites to record the warming, for instance, and the windmills and solar panels to stop it. It was tragic; by 1989 Russia was exporting petroleum, nuclear energy, and metals.  When the Chernobyl nuclear reactors melted down, it was clear a main export was a disaster  waiting to happen.   In time even Germany would scrap nuclear power altogether, as the Fukushima reactors in Japan, built by America’s General Electric and Japan’s Hitachi., also melted down. 

This left Russia with a dangerous export nobody wanted: Russian reactors.  But the return to capitalism in 1991 did not make the Russians any more free of nuclear energy, and they’re still trying to export what is basically the same technology used in Chernobyl.   

The Americans and the French are still trying to build nuclear energy, but a reactor  now costs about 10 billion dollars to produce, putting in question if it is an investment to make a profit or a doctrinaire experiment. 

Russia did not make the transition to renewable energy before or after the fall of socialism there.  Compounding their  problems was they had put massive investments in petroleum production, drilling oil with no real concern for ecology.  When it became clear climate change was coming, the pumping of oil the main cause, Russia was reverting to capitalism.

And instead of producing renewable energy, Russia just kept pumping as much oil as possible for export. They never even looked back.

Russia has yet to start a recycling program, and its metals production suffers from this.  The end of socialism did not bring recycling.  Whether their exports of metals are even competitive is questionable; the ecological cost of production cannot always be materially measured.  What does a strip mine for bauxite really cost?   

Had Russia kept trying to build socialism, they may  have become ecological.  But what they went through proved the opposite.  What they built for its time was once state of the art, but without experience of capitalist ways, gained through centuries of living under capitalism in Britain, France and their colonies, the latter built for capitalism, Russia was destined to fail.

The failure of Russia was not due to a failure of Marx and Engels.  At worse we can say ecological thinking was in its infancy then, in Anti- Duhring ecology is only starting to be mentioned.  For example the dreams of modern sewage filtration, and the embrace of Charles Darwin in Anti-Duhring.  

But the socialism of Russia seemed to have no ecological compass,it was designed as a paradise for humans.  But as far as Marx and Engels theories go, they clearly saw the direction the society was taking.  Lenin only sharpened the ideas of the 19th century about trusts and monopolies being in control of this stage of capitalism. But Marx and Engels remain the founders of thought about what modern capitalism represents.  That will not change, the only thing different today is ecological.  Industry has moved forward allowing us to pollute less, and understand our symbiotic relationship with ecology.  It is not  a matter of man’s mastery of nature, this effort was coming to a close in the 21st century.  What we have learned is without ecological consciousness, industry is impossible.  Clearly decomposition is the heaviest industry, and recycling and composting precisely this.  If man had mastery of ecology we wouldn’t be having a climate change problem, clearly symbiosis with nature is the answer, rather than crude mastery through destruction of ecosystems. The question becomes if we ask workers to pressure their boss to , for instance, use less petroleum. Does this sound like a good idea? Should we be surprised when he no longer can ask his boss for ecological progress?

It is left to the workers on their own to fix ecology. Asking the bourgeoisie for concessions results in physical suffering by the worker, following him for the rest of his life. They never forgive anyone who questions their authority, for instance asking them to use less petroleum. It is a compelling reason why capitalism will never reform itself.

Nicholas Jay Boyes

Milwaukee Wisconsin

American Democratic Republic

8 1 2024

Capitalism and Monopoly

~ nicholasjayboyes

In Friedrich Engels Socialism, Utopian and Scientific, he talks about trusts, cartels, and joint stock companies.   The book is from 1883.  The relevant passages read:

“As a matter of fact, since 1825, when the first general crisis broke out, the whole industrial and commercial world, production and exchange among all civilized peoples and their more or less barbaric hangers-on, are thrown out of joint about once every 10 years. Commerce is at a stand-still, the markets are glutted, products accumulate, as multitudinous as they are unsaleable, hard cash disappears, credit vanishes, factories are closed, the mass of the workers are in want of the means of subsistence, because they have produced too much of the means of subsistence; bankruptcy follows upon bankruptcy, execution upon execution. The stagnation lasts for years; productive forces and products are wasted and destroyed wholesale, until the accumulated mass of commodities finally filter off, more or less depreciated in value, until production and exchange gradually begin to move again. Little by little, the pace quickens. It becomes a trot. The industrial trot breaks into a canter, the canter in turn grows into the headlong gallop of a perfect steeplechase of industry, commercial credit, and speculation, which finally, after breakneck leaps, ends where it began — in the ditch of a crisis. And so over and over again. We have now, since the year 1825, gone through this five times, and at the present moment (1877), we are going through it for the sixth time. And the character of these crises is so clearly defined that Fourier hit all of them off when he described the first “crise plethorique”, a crisis from plethora.”

“In these crises, the contradiction between socialized production and capitalist appropriation ends in a violent explosion. The circulation of commodities is, for the time being, stopped. Money, the means of circulation, becomes a hindrance to circulation. All the laws of production and circulation of commodities are turned upside down. The economic collision has reached its apogee. The mode of production is in rebellion against the mode of exchange.“

“The fact that the socialized organization of production within the factory has developed so far that it has become incompatible with the anarchy of production in society, which exists side by side with and dominates it, is brought home to the capitalist themselves by the violent concentration of capital that occurs during crises, through the ruin of many large, and a still greater number of small, capitalists. The whole mechanism of the capitalist mode of production breaks down under the pressure of the productive forces, its own creations. It is no longer able to turn all this mass of means of production into capital. They lie fallow, and for that very reason the industrial reserve army must also lie fallow. Means of production, means of subsistence, available laborers, all the elements of production and of general wealth, are present in abundance. But “abundance becomes the source of distress and want” (Fourier), because it is the very thing that prevents the transformation of the means of production and subsistence into capital. For in capitalistic society, the means of production can only function when they have undergone a preliminary transformation into capital, into the means of exploiting human labor-power. The necessity of this transformation into capital of the means of production and subsistence stands like a ghost between these and the workers. It alone prevents the coming together of the material and personal levers of production; it alone forbids the means of production to function, the workers to work and live. On the one hand, therefore, the capitalistic mode of production stands convicted of its own incapacity to further direct these productive forces. On the other, these productive forces themselves, with increasing energy, press forward to the removal of the existing contradiction, to the abolition of their quality as capital, to the practical recognition of their character as social production forces.

“This rebellion of the productive forces, as they grow more and more powerful, against their quality as capital, this stronger and stronger command that their social character shall be recognized, forces the capital class itself to treat them more and more as social productive forces, so far as this is possible under capitalist conditions. The period of industrial high pressure, with its unbounded inflation of credit, not less than the crash itself, by the collapse of great capitalist establishments, tends to bring about that form of the socialization of great masses of the means of production which we meet with in the different kinds of joint-stock companies. Many of these means of production and of distribution are, from the outset, so colossal that, like the railways, they exclude all other forms of capitalistic expansion. At a further stage of evolution, this form also becomes insufficient. The producers on a large scale in a particular branch of an industry in a particular country unite in a “Trust”, a union for the purpose of regulating production. They determine the total amount to be produced, parcel it out among themselves, and thus enforce the selling price fixed beforehand. But trusts of this kind, as soon as business becomes bad, are generally liable to break up, and on this very account compel a yet greater concentration of association. The whole of a particular industry is turned into one gigantic joint-stock company; internal competition gives place to the internal monopoly of this one company. This has happened in 1890 with the English alkali production, which is now, after the fusion of 48 large works, in the hands of one company, conducted upon a single plan,…“

“In the trusts, freedom of competition changes into its very opposite — into monopoly; and the production without any definite plan of capitalistic society capitulates to the production upon a definite plan of the invading socialistic society. Certainly, this is so far still to the benefit and advantage of the capitalists. But, in this case, the exploitation is so palpable, that it must break down. No nation will put up with production conducted by trusts, with so barefaced an exploitation of the community by a small band of dividend-mongers.

“In any case, with trusts or without, the official representative of capitalist society — the state — will ultimately have to undertake the direction of production. [4] This necessity for conversion into State property is felt first in the great institutions for intercourse and communication — the post office, the telegraphs, the railways.

“If the crises demonstrate the incapacity of the bourgeoisie for managing any longer modern productive forces, the transformation of the great establishments for production and distribution into joint-stock companies, trusts, and State property, show how unnecessary the bourgeoisie are for that purpose. All the social functions of the capitalist has no further social function than that of pocketing dividends, tearing off coupons, and gambling on the Stock Exchange, where the different capitalists despoil one another of their capital. At first, the capitalistic mode of production forces out the workers. Now, it forces out the capitalists, and reduces them, just as it reduced the workers, to the ranks of the surplus-population, although not immediately into those of the industrial reserve army.

Friedrich Engels Socialism, Utopian and Scientific

Chapter 3

So essentially by 1883 this was visible, the transition of capitalism to what Lenin would call ”imperialism”, in Imperialism, the Highest Form of Capitalism, in 1917.  In 1883 Karl Marx died, and it is not clear what condition he was in near the end of his life, and if he cooperated with Engels to write the book just quoted from.  

Anyhow, the presence of monopoly trusts and joint stock companies is alive and well in Milwaukee, Wisconsin in June of 2024.   The electric and gas company, Wisconsin Electric, owns the electric and natural gas factories, with no competition.  They seem to determine the price, and own the power lines too.  It has been like this as long as I can remember.

Also the cable company Charter (Verizon)  is currently in a cartel with AT&T and the  other cable companies to keep the government from capping the fee for low income people to get internet at $30.  AT&T is good at running monopolies.

“AT&T officially broke up on Jan. 1, 1984. Its 22 members were formed into seven independent Regional Holding Companies or the Baby Bells.”

Google search ATT break up to baby bells

Dec 7, 2020

So AT&T is no stranger to organizing trusts, which is what we see:

“AT&T, Charter, Comcast and Verizon are quietly trying to weaken a $42.5 billion federal program to improve internet access across the nation, aiming to block strict new rules that would require them to lower their poorest customers’ monthly bills in exchange for a share of the aid.”

“In state after state, the telecom firms have blasted the proposed price cuts as illegal — forcing regulators in California, New York, South Carolina, Tennessee, Virginia and elsewhere to rethink, scale back or abandon their plans to condition the federal funds on financial relief for consumers.

Washington Post April 15 2024

https://www.washingtonpost.com/business/2024/04/15/telecom-lobbying-price-caps-broadband/

Article continues:

NCTA – the Internet & Television Association, whose members include Charter and Comcast, would be the name of the trust this group is being called.  

“In detailed guidelines issued in 2022, the Biden administration suggested that internet plans should cost consumers no more than $30 per month — though it allowed local officials to propose alternatives.”

“The opposition underscores the vast power and reach of the telecom industry, one of the most formidable political forces in capitals across the country. “

Ibid.

Here we have AT&T, Comcast, and Charter, all together to fight lower cost internet.  Their fixed price in New York is now $65 for internet, and it interferes with their ability to create surplus value if they have to provide cheap internet.  

One may ask why a state program to cap internet prices, and to pay state money to ATT would bother them.

The answer to this is obviously taxes are a part of the surplus value, a division of this.  This is why AT&T, Comcast, and Charter have built a trust, they are trying to refuse to pay part of their surplus value to make the internet affordable to low income people. 

The evidence is precisely what AT&T is doing now, which is to try to build a cartel like they had in telephones with their internet cable business, prior to being broken up in 84.

Lenin wrote in 1917

“Cartels come to an agreement on the terms of sale, dates of payment, etc. They divide the markets among themselves. They fix the quantity of goods to be produced. They fix prices. They divide the profits among the various enterprises, etc. “

“Competition becomes transformed into monopoly. The result is immense progress in the socialisation of production. In particular, the process of technical invention and improvement becomes socialised. “

“The German economist, Kestner, has written a book especially devoted to “the struggle between the cartels and outsiders”, i.e., the capitalists outside the cartels. He entitled his work Compulsory Organisation, although, in order to present capitalism in its true light, he should, of course, have written about compulsory submission to monopolist associations. It is instructive to glance at least at the list of the methods the monopolist associations resort to in the present-day, the latest, the civilised struggle for “organisation”: (1) stopping supplies of raw materials … (“one of the most important methods of compelling adherence to the cartel”); (2) stopping the supply of labour by means of “alliances” (i.e., of agreements between the capitalists and the trade unions by which the latter permit their members to work only in cartelised enterprises); (3) stopping deliveries; (4) closing trade outlets; (5) agreements with the buyers, by which the latter undertake to trade only with the cartels; (6) systematic price cutting (to ruin “outside” firms, i.e., those which refuse to submit to the monopolists. Millions are spent in order to sell goods for a certain time below their cost price; there were instances when the price of petrol was thus reduced from 40 to 22 marks, i.e., almost by half!); (7) stopping credits; (8) boycott.

“Here we no longer have competition between small and large, between technically developed and backward enterprises. We see here the monopolists throttling those who do not submit to them, to their yoke, to their dictation. This is how this process is reflected in the mind of a bourgeois economist:

“Even in the purely economic sphere,” writes Kestner, “a certain change is taking place from commercial activity in the old sense of the word towards organisational-speculative activity. The greatest success no longer goes to the merchant whose technical and commercial experience enables him best of all to estimate the needs of the buyer, and who is able to discover and, so to speak, ‘awaken’ a latent demand; it goes to the speculative genius [?!] who knows how to estimate, or even only to sense in advance, the organisational development and the possibilities of certain connections between individual enterprises and the banks. . . .”

“Translated into ordinary human language this means that the development of capitalism has arrived at a stage when, although commodity production still “reigns” and continues to be regarded as the basis of economic life, it has in reality been undermined and the bulk of the profits go to the “geniuses” of financial manipulation. At the basis of these manipulations and swindles lies socialised production; but the immense progress of mankind, which achieved this socialisation, goes to benefit . . . the speculators.”

Lenin Imperialism, the Highest Form of Capital

Chapter one

Here we see Lenin reaffirming what Engels said about joint stock companies, trusts, cartels.  Speculation becomes an integral part of commodity production, the Stock Exchange becomes a center of imperialist activity.  The banks use credit in the form of massive amounts of capital, channeled through investment bankers who gamble on joint stock assets on the financial markets.  Speculation runs rife, large bureaucracy becomes the norm for financial capital.  The banks include huge luxury office space in skyscrapers; a class who no longer labours at creating commodities, rather exists by drawing interest from production of commodities,  becomes ascendant to control of markets.  

Sometimes the state is in control of production, like railroads and the Post Office.

“In any case, with trusts or without, the official representative of capitalist society — the state — will ultimately have to undertake the direction of production. [4] This necessity for conversion into State property is felt first in the great institutions for intercourse and communication — the post office, the telegraphs, the railways.”

Engels ibid. see above

The passenger railroad Amtrak is nationalized property, the bourgeoisie cannot get it together to build passenger railroads anymore. The state run Amtrak runs on freight lines often.  The freight lines in the west are all owned by two large companies, Union Pacific and BNSF, the latter owned by Warren Buffett’s Berkshire Hathaway. I don’t really know how much competition there is between Union Pacific and BNSF, but with a duopoly, you can only  imagine. 

How close to state ownership like Amtrak these railroads are is a matter of opinion.  They are both joint stock companies,  Buffet controls the BNSF, and is not an engineer.  Rather he controls financial capital, as a sort of banker.  He invests capital gained through production for surplus value, gained through his exploitation of the proletariat.

If Amtrak could make a profit, it would no longer be owed by the state.  But even if it was not state owned, it would probably be spun off into one company or two, and would be a monopoly.  Capitalists are way to connected to producing automobiles to produce railroads.  

The Post Office, where the bills from our monopolized companies are sent to us through, is owned by the state. It is not an example of socialism, taxes are also paid through it. It is an essential part of the capitalist system, it is just not making a profit.  They hire veterans who are supportive of the capitalist  system to run it, they get favored status on the entrance exam.  Its leadership is picked by the White House, by capitalists. 

Even if the industry is state owned, it is still part of capitalism.  In this respect it is also a monopoly, the Post Office sets prices for mail delivery.  Of late it has been receiving some competition from UPS, the private post office, which delivers packages. It is an attempt to remove business from the state owned post office, which now moves mostly letters. But the postage rate is set by the capitalist state. 

“Prices and fees are then subject to review by the Postal Regulatory Commission (PRC), an independent agency created by the Postal Accountability and Enhancement Act of 2006 (PAEA) as a successor to the former Postal Rate Commission.

Google search post office rates governed by

June 19 2024

Which means the prices are set by the PRC, not by competition. Here we have the state company determining prices, controlled by capitalists.

Once Marx wrote Capital, he showed very clearly how the capitalist system was functioning.   This was 1863, and it is still relevant, in particular in the east, where capitalism is returning.

But the presence of trusts, cartels, joint stock companies, etc. is a more recent development.  Engels saw it, and Lenin later based his writing on Engels.  He developed Engels works further, when history had proven Engels correct.  The trusts are all real, the speculation part of capitalism.  Engels was correct,  Lenin picked up on this.

Nicholas Jay Boyes

Milwaukee Wisconsin

American Democratic Republic

Notes on Ha Joon Chang Economics 4 2 2024

~ nicholasjayboyes

Notes on Ha Joon Chang Economics

Ha Joon Chang’s book Economics presents many economics principles in a way that is easier to  understand than Keynes, in other words, without essentially redefining the whole language of political economy to overshadow and conceal concepts like profit and surplus value.  These concepts, although not much mentioned by Chang when discussing the production process, are part of his description of financial capital, which he is talented at.

“Money is what others in your society owe you,  or your claim on particular amounts of the society’s resources.  

P.18 Ha- Joon Chang Economics 2014 Bloomsbury Press

Which places money as a commodity, a special one capable of representing other commodities.  The commodity represents social labour, done by the worker not for himself or his own enjoyment, rather for society, although mediated by the capitalist, who owns the means of production.  It is this disconnection that forms the basis of capitalism, the worker does not own the means of production he is labouring on, and the product he is producing  is a commodity, it is labour for society, not his personal enjoyment as a particular object he has created,

Here we see money as commanding commodities,  a claim on societies resources, social labour as “ societies resources”, rather than individual desires.

“So what is the capitalist economy, or capitalism? It is an economy in which production is organized in pursuit of profit, rather than your own consumption (as in subsistence farming) or for political authorities (here comes his dig against socialism, in parentheses here)- as in feudal or socialist economies where political authorities, respectively aristocrats and the central planning authorities tell you what to produce.” 

Ha – Joon Chang Economics p. 27

Well we must remember Chang is a Cambridge professor, so this should not surprise us (at least the misrepresented account of what socialism represents).  The part about production being organized to create profit is right. But to compare feudalism, whose labourers were often slaves or serfs, basically chained to the land, without earning money, which would have been contrary to their status as slaves, to socialism neglects that if nothing else slavery no longer exists, rather it was removed in cooperation with socialists, in 1863 when Karl Marx was involved in the Civil War, which emancipated the slaves, and with it the last vestiges of feudal society whose economic system was still  prevalent.  Incidentally at this point in 1867 the right to participate in universal suffrage was extended to freed black male slaves, a direct result of socialist cooperation with Abraham Lincoln.

Ha Joon Chang seems to think central planning is a repressive process, but look at agriculture under capitalism, with its more than 10 billion dollars worth of yearly farm subsidies, controlled by massive bureaucracies in the capitalist state with billion dollar budgets,, and you see central planning is a real part of collectivized agriculture, and is not feudalism.  The land is not rented, the landlord is not part of late capitalism, at some point he became redundant in the late 18th and early 19th centuries, and was replaced by large scale capitalist farmers, whose only goal was profit.   

The ethical argument for collectivized agriculture, that it ends rural backwardness by allowing for the once farmers to move to the city, where they will be more culturally advanced, as there are museums, theaters, libraries, etc. in the city that are not present in the country is a strong one.  Given the pull of rural society, backwards Republican bourgeois strongholds, compared to the urban proletariat, literate and industrialized more heavily, especially as of late with computers and the internet, it is hard to see any alternative to large scale collectivized agriculture.

To make it worse, to even be able to compete with a large farm vs a small one, requires money for tractors, harvesters, trucks, etc.  Unless you are a small organic farm, with a following in the cooperatives or Whole Foods organic food stores, competition with capitalists is difficult.

But what differentiates feudal from socialist agriculture is not central planning, it is the farmer owns his own land under socialism, individually or collectively.  Either he outright owns a farm,  with no landlord, rent or profit, or he labours in a collective farm with employee ownership of some sort, which differs from slavery obviously, that should be clear to our economist, who disparages the worker who has had the audacity to question the capitalist control the means of production. 

Chang seems to dis socialism anytime the world profit or profits comes up.  He never spells out exactly what profit is, instead goes right into financial capital  and an average rate of profit.  He also does not square off with what a community represents, no less a concept like surplus value.  It’s just more and more defense of profit, and financial capital.

About the only thing valuable about his “beginners guide to economics” is he does point out there is more financial capital today than previously.  But he does not see interest is  a subdivision of surplus value, like taxes.  Consumed by the fetish of interest bearing capital,  profit removed from the factory, he displays the many ways financial capital in form of bonds, stocks, derivatives, etc. make a profit for their owners.  

If it seems too complicated don’t worry, he even says himself of the myriad financial transactions he discusses they are all too difficult to understand, even to him.  It is abstraction basically, and Chang is caught up in it.  

He takes the vulgar view here:

“Capitalists own the means of production either directly or,  more commonly these days,  indirectly by owning shares(or stocks) in a company- that is , proportional claims on the total value of the company- that owns those means of production.  Capitalists hire other people on a commercial basis to operate these means of production. These people are known as wage labourers, or simply workers. Capitalists make profits by producing things and selling them to other people through the market, which is where goods and services are bought and sold.

Ha Joon Chang Economics p. 27

His view of profits being made by people selling things in markets shows the vulgar view of profit, namely it does not occur in production, rather when the commodity is exchanged for money.  First and foremost,  the value of a commodity is the amount of labour time contained in it, regardless of whether or not it is paid for.  David Ricardo showed us this on the first page of his book Principles of Political Economy and Taxation in 1817. Surplus value is the amount of unpaid labour contained in the commodity, its value (the commodity) is the amount of labour time required to produce it.  Its exchange value is how much money it is worth, which does not determine how much labour time is required for its production, it is a measure of it.  The unpaid labour, essentially profit, is not created by exchange, it is already present in the commodities value, realized by being sold at its price of production in the market. 

Indeed goods and services are bought and sold in the market, but this is not the cause of profit. It is the relationship with the wage labourers he identified who “operated on a commercial basis to operate these means of production” with the capitalist that is the source of the unpaid labour, the profit. Just what the “commercial basis” that makes one man owners of these means of production, that are “more commonly these days”  owned by more than one capitalist, and wage labour, remains a mystery not solved by Chang. This influences his views later of financial capital  and interest.

He then proceeds to show that much has changed since Adam Smith wrote Wealth of Nations.  Banking, stock exchanges, corporate bonds, are all touched on.  Things have changed, and Chang grudgingly accepts that the goal of production is the same, the quest for surplus value.  Adam Smith, however limited he was, is still further along than this fellow as he recognized the value of a commodity  is the amount of labour required to produce it, whether or not it is paid for.  He saw surplus value as part of the cost of production, not as coming from exchange, which our vulgarian just suggested.

He does acknowledge the quest for profit is the same as in Adam Smith’s time on page 33, when he says

“…competition among profit- seeking firms may still be a key driving force of capitalism, as in Smith’s scheme.”

Chang p. 33

Which is as close as he gets to looking at how Adam Smith viewed profit, and how surplus value is created  in production.  

“But it is not between small, anonymous firms which, accepting consumer tastes, fight it out by increasing the efficiency in the use of given technology. “

Chang p.33 ibid.

Smith  understood technological changes driving profits as,  for example, the power loom was making its introduction felt around his time.  His example of the needle making factory also fits in with a basic knowledge of commodity production and what Marx referred to as an increase in relative surplus value when a company invests in better machinery to remove a competitor, or create a profit windfall.  The needle example shows although Smith did not spell this out exactly like Marx,  he still understood what changes in the means of production represented.

These are just a few takes from his Economics book, which claims to explain for the beginner economics,  which he also suggests is simply a political concept.  In other words,  political economy is not a science. Fitting words to a man who cannot use the word “profits “without disparaging workers.

Nicholas Jay Boyes

MIlwaukee Wisconsin

American Democratic Republic

4 2 2024

Central Planning.  The USDA.  Collectivization of Agriculture.  3 14 2024

~ nicholasjayboyes

Central Planning.  The USDA.  Collectivization of Agriculture.  3 14 2024

When looking at what we know of as capitalism, it is very planned out.  The agriculture is all capitalistically owned, with larger farms and wage labour the rule.  The farm grows one crop, corn, for instance, rather than several crops for small scale consumption, or a small market.

In order to make it work the government has to pay subsidies, money paid  to the farmers to grow  (Or not to grow) a certain amount of corn, in our example.  This money is distributed based on the size of the farm,  the larger the farm, the more subsidies they are given.

This discourages small farmers, and collectivizes agriculture, resulting in a planned expenditure of labour and materials on several large farms rather than many small ones.  This resembles central planning, a socialist concept.  The farmers get paid to grow a set amount of food, and it is capped.

The logic is if the crops were grown without the cap on production, the market would get glutted, and they would have to do things like dump the milk, as it would be so cheap it would be unsaleable.

The latter happens sometimes, as it did in the last crisis, when the milk was dumped due to Covid.  The price of milk was capped at $2.19 a gallon, it was being dumped at this price.  The stores rarely sold it for less, it was discouraged.

This form of central planning is part of large scale agriculture, and is also financed by banks.  Financial capital is part of agriculture; farmers have to get loans to pay for equipment, and other capital expenditures. This further cements capitalism on the land, and makes growing food impossible on a small scale, as competition between the collective farm and the small farm squeezes out the small farmer, who are removed from the land  resulting in their joining the ranks of the urban proletariat.

What is left is large farms, and central planning.  The United States Department of Agriculture (USDA) is part of this process. The large companies like Monsanto also put the screws in small agriculture, by patenting the seeds, and requiring farmers to buy from them.  The USDA is subordinate to the larger farms and companies, its budget comes from the profits of these companies and large farms.

It seems to be “in” these days for capitalist economists to make fun of socialist central planning, like Ha -Joon Chang does in the book Economics, on p. 153- 154.  Chang should remember  that without central planning for agriculture, the market would surely be constantly glutted, and food wasted. I mean, what is the purpose of an organization like the USDA if it is not central planning?  Food safety inspections? Its 2024 budget is $384.35 billion dollars split between 22 sub components.  That’s a lot of food inspections!  The Farm Service Agency alone pays 1,262 thousands millions ($1.262 billion) in salaries alone.

If you want to see American socialism, Direct Government farm payments are forecast at $10.2 billion in 2024.  This is pure cash to farmers to grow as the USDA predicts the value of commodities to be, and how much can be grown to fit the needs of the market.  It goes to large farmers who collectively control the market for agricultural products.  This is central planning.

Socialist collectivisation and central planning of agriculture is pretty similar to what the Soviet Union tried to do.  It conquered Germany after only 28 years of operation.  It is effective on certain commodities, generally the more common needs of a population.  It may be more difficult for industrial products, rare motor parts, etc.  But it worked well for grain.

It would seem the US has a central planning strategy for capitalists, and the USDA, if nothing else, knows about it.  If you look at the money it is in capitalist owned fertilizer and pesticide companies, seed dealers (often overlapping like Monsanto), the large banks who bankroll the capital, and the state, it is done with scientific accuracy, central planning only not by the workers, by and for the bourgeoisie.

I would like to hear what Chang would say to this when poking fun at central planning.  Regardless of if there is another way to control agriculture,  central planning seems to already be here.  It is only that it is for capitalism not socialism.

Nicholas Jay Boyes

Milwaukee Wisconsin

American Democratic Republic

3 14 2024

Slavery and Universal Suffrage.  Emancipation and Abraham Lincoln.  Influence of Marx and Engels and the End of the Slave Trade. 2 19 2024

~ nicholasjayboyes

Slavery and Universal Suffrage.  Emancipation and Abraham Lincoln.  Influence of Marx and Engels and the End of the Slave Trade. 

In the 20th century a conflict arose between followers of Karl Marx and capitalists.  The socialist camp was in control of most of Europe, and there were no elections there.  

They simply appointed popular leaders, union officials, cooperative leaders, etc.  


Nevertheless this lack of universal suffrage we are told was considered to be a goal of Marx by the Eastern Europeans who led the Soviet Union. 

Perhaps given for example Vladimir Putin’s hold on power in now capitalist Russia, shows dictatorship is the only thinking that can hold down the bourgeoisie.  

But how different the message in the Americas.  Here Marx was in contact with Abraham Lincoln when he was elected, and was a supporter of him.   Clearly universal suffrage for enslaved black Americans was a goal of the Civil War, and Marx had to have supported this.  I mean, he supported the election of Lincoln, whose stated goal was emancipation of the slaves.

“Passed by Congress February 26, 1869, and ratified February 3, 1870, the 15th Amendment granted African American men the right to vote.

Google search “When did slaves get the right to vote?” 2 19 2024

Here we have Marx supporting a popular leader who brought the right to vote to millions of enslaved people. The color of their skin did not stop Lincoln or Marx from emancipating them.  

I have written extensively about Marx, Engels, and Lincoln’s correspondence during the war.  Marx was part of planning and execution of wartime strategies, he was well known as a writer for the New York Daily Tribune between 1852-1861.  He supported universal suffrage for Lincoln, and conversely for slaves.

You really could not get a more different answer about what Marx represented than what we saw in the 20th century, when America and Russia had conflict.  America did not really claim Marx;  racism still  exists, and there are still many monuments not yet down glorifying the slave owners rebellion.  The South hates Marx, and fears all socialism.

But why though?  Is it because black people now have the right to vote?  That would be something Marx brought to the Americas, when he was involved in abolition.  

It runs contrary to the current European Union message all socialists cannot be allowed to take part in elections there, so the Red Flag no longer flown there.  The Soviet Union according to them looks quite a bit different than it does here.  Is the argument really the Marxists are against suffrage for  black people?

It would be interesting to hear one of the leaders who made communism and the Communist Party of the  Soviet Union illegal, the largest opposition party in most of Europe even today, down by law, to hear them square  off with freed slaves who the Marxists brought universal suffrage to in America, which is still in effect today.

Clearly someone is not telling the whole truth, and judging at all from the Germans who lead the EU, there is much propaganda and censorship regarding this.  They want a monopoly on universal suffrage.  But by not allowing the opposition workers movements to take part in suffrage by making the CPSU illegal, their soft belly is clearly seen under their armor.  Clearly their fragile notions of democracy do not hold up to reality. 

Although there are economic disparities between blacks and whites in America, all people enjoy the rights fought for in the Civil War.  It wouldn’t have been equality without the right to vote for the freed slaves.  It did take a little more time for women to receive the right to vote, they received suffrage in 1926 even if they were black.

As usual the bourgeoisie is using ignorance to control its workers again.  What would a person say who was emancipated by Marxists to suggestions socialism was an ”evil empire”?  

Experience in America with Marx leads one to considerably different conclusions about the progress of socialism.  Marx and Engels left a large mark on society here.  They remain relevant, their ideas still very much part of life here.

Nicholas Jay Boyes

Milwaukee Wisconsin

American  Democratic Republic

2 19 2024

Value. Profit. Surplus Value. Contradiction Between Rate of Profit and Surplus Value 12 27 2023

~ nicholasjayboyes

Value. Profit. Surplus Value. Contradiction Between Rate of Profit and Surplus Value 12 27 2023

It is essential to understand what the concept value represents, if you want to begin to understand political economy. What seems rather straightforward becomes tied up and difficult to understand the deeper one goes in it.

Adam Smith in his Wealth of Nations in 1775 showed he understood the importance of value, and its connection to the labour process. Value is the entire amount of labour time required to produce a product, whether or not it is paid for. David Ricardo noted this in Principles of Political Economy and Taxation 1817, in chapter one. He owes much to Adam Smith though, which formed the basis for his work.

Adam Smith understood the law of value, but could not directly put forward its inner essence, the presence of surplus value, the unpaid section of the product’s production. The fact it is not paid changes nothing in its value, but by connecting profit with surplus value, as Adam Smith did, confuses what surplus value is.

Because profit is the unpaid labour of the worker, the unpaid section offer workday, it was easy to overlook the contradiction, and lump all of capital that produced this unpaid labour into profit. Surplus value , onto other hand, is the relationship of the worker, wage labour, to the owner of capital. It is calculated by the amount of labour present in the product, paid and unpaid. Profit is the unpaid labour calculated in the entire expenditure including the machinery and raw materials.

This shows that the rate of surplus value can be very different when machinery becomes very advanced, compared to more mundane labour, with many workers but less machinery. The profit rate is higher where more manual labour is used than the sector of production where the labour uses more machinery. This is due to the profit rate being calculated onto total capital expenditure, the ratio of surplus value to the amount of product produced.

Machinery does not create surplus value, only labour can do this. Harnessing natural processes is not what creates the unpaid section of the workday, the value of a commodity is the amount of labour time required to produce it. Less labour is required to produce the product under conditions of modern industry. It requires more souls to produce the product without machinery, with a lower rate of surplus value, but at a higher rate of profit, as the machinery that is calculated with the variable capital, the cost of labour, lower for the owner of large means of production. Even a higher rate of surplus value is obscured when the total value of all the machinery and raw materials are calculated with cost of machinery, the constant capital. The profit rate falls.

Our other producer, whose rate of profit is the average rate, now has a larger section of his expenditure on raw labour. The product was worth more, its value falls with the constant march forward of modern industry. which reduces the amount of labour required to produce the commodity. The person with the machinery can now undersell his competitor, lowering the cost of the product, and the amount of unpaid labour accruing to the individual commodity.

It may seem the more primitive production is making more surplus value, but the cost of this is translated in the product, which falls with machinery becoming more advanced. The sector the machinery is unleashed on shows less profit, as the cost of the machinery is attached to the expenditure, but the surplus value rate can rise, Even if the worker receives higher wages, it is still cheaper to employ him with the help of machinery than without. The profit rate may have been higher prior to the introduction of the machinery, but productivity was lower. With the introduction of machinery, the worker creates more with less labour, resulting in more surplus value. But profit does not show this. This is the contradiction Adam Smith left us, which couldn’t be solved until the surplus value was directly examined. It wasn’t until about 1863 until profit and surplus value would be directly differentiated by Karl Marx, who would eventually cause revolution in the 20th century with his work. It is still causing revolution, and the theory of value still stands.

The study of political economy has to start with the theory of value. The value of the product is the amount of labour time required to produce it, and even if it were all paid labour (which it is not) its value would still be the amount of labour required to produce it. It changes nothing if it is not paid for. It just means part of the commodity is not owned by the worker, rather its production creates the compulsion for him to continue laboring, and the harder the labour the more surplus value, and the less and less chance of the worker to ever be able to buy the machinery he is harnessed to. The harder he works the less control his environment he gets. But if anything this reaffirms the law of value; his labour is still creating the value of the commodity, it is just that more is shared with the capitalist when machinery is more advanced.

The interesting thing is Smith and Ricardo grasped surplus value, yet Ricardo calls it profit. Both see the surplus value; they grasp it is present and can even see the theory of value, yet still do not directly differentiate between profit and surplus value. Ricardo should lave grasped this, but did not. Apparently a half a century more of industrial capitalism was required to unravel what was left to us from Adam Smith and Ricardo. Both were brilliant, a definite study, but inadequate to understanding the difference between surplus value and profit. You have to study Karl Marx to understand this latter difference.

The question what value is has yet to be common knowledge, which should tell us something. Someone doesn’t like the conclusions this brings forward. In many regions of Europe, the study of Marxism is illegal. And this in societies that lived under revolution for decades. They seem to be trying to put the genie back in the bottle, often violently. A universal suffrage minus the workers party, is practiced. There are whole institutions dedicated to removing Marx from political economy, some even purporting to be places of higher learning.

But for all their efforts, the theory of value remains. And the contradiction between the rate of profit and the rate of surplus value remains, becoming more important than ever as of late.

Nicholas Jay Boyes
Milwaukee Wisconsin
American Democratic Republic
12 27 2023

Unproductive Labourers.  Surplus Value.  Smith and Ricardo.

~ nicholasjayboyes

The whole motion of capitalist society revolves around the theory of value, put forth by David Ricardo.  

“The value of a commodity, or the quantity of any other commodity for which it will exchange, depends on the relative quantity of labour which is necessary for its production, and not on the greater or less compensation which is paid for that labour.

David Ricardo 

Principles of Political Economy and Taxation

London 1817

Which pretty much agrees with Adam Smith, who also put forth the ideas of surplus value in Wealth of Nations.  

Karl Marx would follow these luminaries, focusing like a laser beam on the surplus value, and illuminating the real relationship between capitalist and worker, and just how offensive this is to the worker.

All of capitalism revolves around creating surplus value, the unpaid secretion of the workday.  Whether it be rent, profit, the subdivision of profit we know as taxation;, without surplus value, everything stops functioning.

At least, as capitalist society.  By putting forth this theory, the theory of value, Ricardo very directly put forth an idea theory that is still relevant more than 200 years later.  It is still controversial, and Baron Keynes, (The General Theory of Employment, Interest and Money, a book by English economist John Maynard Keynes published in February 1936). who could not square off with more obvious implications, much of which was already in Adam Smith’s work, for instance on unproductive workers, and attempted to pull the curtain on the theory.  His technique was firstly to change all nominal meanings used by the past thinkers, instead we have for instance “margins” instead of “profit”, resulting in a puzzle to be solved with new language etc..

But he could not remove Marx.  All he could do about the contradiction, a contradiction he was directly part of, as he was a baron, in the unproductive classes, was to mystify political economy.  He never squared off with the reality the bourgeoisie does not labour, and its surplus value, created in production of the commodity, its most basic form , contains the conflict between capitalist and worker.   The state bureaucracy, the clergy, the private company bureaucrats, etc. to Adam Smith, were all unproductive.

Unable to change reality, Keynes set out to redefine the language of political economy, hoping the contradiction would simply go away.  He combines this with mathematics, designed to make the phenomenon of profit something other than what it is, simply the unpaid section of the workday, which does have mathematical connotations, but nowhere near the Calculus Keynes uses to cloak it, 

Thus Keynes marks the beginning to mid 20th Century, which sought to glass over the contradiction of unproductive classes, in this case through mystification, by making political economy inaccessible through making profits ”margins”, the  presence of a class of workers rendered semi employed by capitalism, as the “marginal disutility of that amount of employment”, rendering it unintelligible even to those familiar with political economy. 

In this effort this bourgeois represents the decline of political economy in the early 20th century, and is an example of why Ricardo’s theories are still controversial today, ditto Adam Smith.

“The labour of some of the most respectable orders in the society is, like that of menial servants, unproductive of any value, and does not fix or realize itself in any permanent subject; or vendible commodity, which endures after that labour is past, and for which an equal quantity of labour could afterwards be procured. The sovereign, for example, with all the officers both of justice and war who serve under him, the whole army and navy, are unproductive labourers. They are the servants of the public, and are maintained by a part of the annual produce of the industry of other people. Their service, how honourable, how useful, or how necessary soever, produces nothing for which an equal quantity of service can afterwards be procured. The protection, security, and defence of the commonwealth, the effect of their labour this year will not purchase its protection, security, and defence for the year to come. In the same class must be ranked, some both of the gravest and most important, and some of the most frivolous professions: churchmen, lawyers, physicians, men of letters of all kinds; players, buffoons, musicians, opera-singers, opera-dancers, etc. The labour of the meanest of these has a certain value, regulated by the very same principles which regulate that of every other sort of labour; and that of the noblest and most useful,  produces nothing which could afterwards purchase or procure an equal quantity of labour. Like the declamation of the actor, the harangue of the orator, or the tune of the musician, the work of all of them perishes in the very instant of its production. 

Adam Smith

Wealth of Nations Chapter 3

Which was revolutionary,  and still reverberates.  Faced with this, our economist can only try to redefine the language, and make this idea unintelligible in a jumble of mathematical equations and subterfuge designed to make political economy calculus.

It was left to Marx to put together these ideas, which he did in Theories of Surplus Value.  The Ricardian theories play out, Smith’s thesis is allowed full  play, resulting in a revolutionary exposition of political economy still unanswered by bourgeois writers.  

Nicholas Jay Boyes  

Milwaukee Wisconsin

American Democratic Republic

10 23 2023

revision 9 20 2025

Value.  Its Forms. Concept of Surplus Value.  David Ricardo, Adam Smith. 8 11 2023

~ nicholasjayboyes

Value.  Its Forms. Concept of Surplus Value.  David Ricardo, Adam Smith. 8 11 2023

The science of political economy brought us knowledge of the theory of value, and consequently unblocked the hidden mechanisms that are how the capitalist system is really working.  It is not a simple set of rules; it is not common sense to be able to discern what the innards of the capitalist system look like.  

Writers like Adam Smith, and David Ricardo had already determined the value of a commodity is how much labour is contained in it.  David Ricardo was very direct about this, the first sentence of his book on the Principles of Political Economy and Taxation he wrote:

“The value of a commodity, or the quantity of any other commodity for which it will exchange, depends on the relative quantity of labour which is necessary for its production, and not on the greater or less compensation which is paid for that labour.

David Ricardo Principles of Political Economy and Taxation

London 1817

Which is very straightforward.  It means it is not what the labourer is paid that determines the value of a commodity, rather value is the amount of social labour time required to produce the commodity, paid or unpaid.  This concept becomes important as vulgar political economists, as Marx called them, said profit was merely added on the value of the product after it was produced, a surcharge so to speak.  

In order for this to work every merchant and capitalist would be adding money to the value of his product when he sold it.  Every capitalist would be having to charge an extra amount of money in all parts of production, every time something had to be sold there would be a surcharge for profit passed on. 

It becomes obvious each dealer would mutually swindle the other out of the extra amount of money every time they met and bought from each other.  What was lost would be gained in mutual swindling, ultimately eventually devolving to the consumer who would have to pay for this fictitious capital first tacked on by  the producer, and the surcharge otherwise would be extra on all exchanges.  

What this would accomplish is not clear.  Clearly though, it views surplus value as a mere addition to the value of a commodity, above its cost price.  How could labour be being compensated for with all this mutual swindling?

To really understand it you have to see what David Ricardo just said, labour is not always paid for, “the greater or less compensation which is paid for that labour.” is not the value of the commodity.

So we see the labourer is not simply selling commodities, and surcharging unpaid labour from his contribution.  And it also certainly looks rather ridiculous after having stated this, as Ricardo clearly did, to label Ricardo a vulgarian. Clearly this statement leads to the recognition of the fact labour is not always paid for, but the value of the commodity produced by this labour remains in the commodity.  That is what profit is, it is not a surcharge rather it is what is left over after the labour and the material elements of production are paid for.  It is the excess in the value of the commodity appropriated by the capitalist due to his ownership of the means of production. It differs from pure surplus value as the latter is calculated on the amount of labour paid for, what Marx called variable capital.

In reading Adam Smith and Ricardo,  what became clear to Marx, which was also clear to Ricardo and Adam Smith,  the labourer working part of his day for no pay is the very basis of capitalism. It is possible to begin with as soon as it is possible for a man to be able to produce enough food for two or three men in a day, as opposed to simply himself.  If one man can produce enough to feed himself and three others,  the two others no longer have to be farmers. They can be supported by the surplus the farmer creates.  

He is not compensated for the surplus he creates. A whole system of society forms around this.  Once there is a surplus, the landowner and capitalist become possible, who consume the surplus value of the labourer.  The workers set free by the surplus value of the farmer who provides a surplus find themselves without land or money, and the capitalists who by one way or another, for instance piracy, slavery, etc. get control of money can begin to subordinate all of society to labour for them on means of production the workers do not own.  

The workers are paid enough to survive and continue labouring, with some additions for a wife and children, or the race of workers would not survive long.  But the fact is all labour in capitalism sweats surplus value.

The content of the labour is for society; the nature of what a commodity is is a product not consumed by its producer.  It may be that a worker sometimes consumes his production, but it is generally not considered to be part of his consumption, it is for instance on a screw, a washer, a gear, etc.  His labour is social labour, and it is on machinery he does not use or otherwise control.  

Thus we see David Ricardo and his statement become clear.  Political Economy solves one of the most basic of relationships, what the value of a commodity consists of.  It does not solve what is socially necessary as a wage for labour.  Adam Smith, who also saw value as created by labour, tried to suggest the value of corn (food in general), was the value of wages. It is a compelling argument, but in a temperate climate needs increase exponentially.  It was more true before society was so industrial; on the other hand it is still agriculture that provides much of the raw material for production. There is only sort of a socially determined amount and price of agricultural goods, in winter more expensive in the north.

But regardless of how much wages are socially acceptable, Ricardo is right when he places the value of a commodity is how much labour it costs to produce it. The surplus value created only shows it was produced by a capitalist, it is the unpaid section of the workday, and without it you would have no capitalism.

Nicholas Jay Boyes

Milwaukee Wisconsin

American Democratic Republic

8 11 2023