At the start of what is looking like what could be a crisis, the question is if the financial bubble will burst. The speculation on financial capital is reaching a fevered pitch, with investment in money capital feeding a market that is now further and further away from industrial capital, and is producing a mountain of financial services, hedge funds, money markets, etc.
The bourgeois are in bonds heavily too, speculating on the ability of the state to be able to pay off its debts, with the interest paid for by taxes.
The purpose of circulation capital, merchants capital, is to make the turnover of capital occur more smoothly. Credit and the large banks are also connected with this, they use the stored money to do banking operations that include loaning out money to capitalists to smooth the exchange of commodities.
But beyond this lies the world of joint stock companies, which are simply companies with several owners. The stock is a title to ownership of the company, and the companies control capital.
But is all this buying and selling of stocks really a movement of industrial capital?
To some degree yes. But it is invested in by money market funds, and other financial services that draw interest from industrial capital. They are a cost of production, and we should always remember the value of a commodity is the amount of labour contained in it, whether or not it is paid for. David Ricardo showed us this in his Principles of Political Economy and Taxation. Clearly circulating capital does not miraculously create value; the exchange of commodities does not create surplus value, what Ricardo called profit (surplus value). The surplus value is the unpaid section of the workday, based on the amount of labour required to produce a commodity. Profit is calculated on the whole capital expenditure, including the means of production and raw materials.
All this speculation and corresponding financial capital has formed a bubble, and in the end, if it breaks, industrial capital will be all that remains. And if you are a country that has leveraged other countries resources, with money from the home country, importing much more than exporting, financial capital becomes increasingly more important.
The question becomes how much financial capital has accumulated, and what happens when there is overproduction, and crisis occurs. At this point large amounts of capital are destroyed, we saw this as the markets were crashing of late. The money is just wiped off, the financial capital rendered useless paper.
Perhaps this is due to the fact the bank does not produce commodities, rather it is connected with merchant capital, circulating capital. It also makes the process of production turn over more quickly by means of credit, making turnover more smoothly than if the industrial capitalist had to be the one who had to sell his own commodity.
The banks also invest financial capital in industry, in the 20th century they were quickly becoming ever more powerful. The ability to gain seats in joint stock companies led to the monopoly conditions, led by JP Morgan, who controlled US Steel, most of the eastern railways, General Motors, etc. Financial capital was connected with this, he used credit to buy companies, which he obtained through the bank.
But the question remains how much is financial capital used to simply turnover commodities? The stock market is still called the ‘“Stock Exchange”, implying something tangible is being exchanged.
“What does a mercantile exchange do?
“The Merc trades several types of financial instruments: interest rates, equities, currencies, and commodities.
Google search mercantile exchange
“Equities, also known as stocks, represent an ownership stake in a company, giving investors a claim on the company’s assets and earnings. Investors purchase equities to gain potential returns through capital appreciation (an increase in share price) and dividends. The value of equities fluctuates based on market demand, company performance, and economic conditions, making them a popular but inherently risky investment.”
Google search equities
Equities seem to now equal stocks., as the jargon in capitalism changes sometimes; Milton Keynes would have been proud of this one. People buy stocks “to gain potential returns through capital appreciation (an increase in share price) and dividends.”
“Capital appreciation is the increase in an investment’s market value over time, leading to a higher price than its original purchase price. This growth occurs due to factors like increased demand, better asset performance, or favorable market conditions. Investors seek capital appreciation for passive growth, while the actual profit realized from selling an asset is known as a capital gain.”
Google search capital appreciation
So now we know profit results from selling an asset, which is an active relationship of the owner of stocks to his glorified hoard.
“Passive growth” refers to growth achieved without continuous, active effort, appearing in several contexts including investment strategies where wealth accumulates over time with minimal management)….
Google search passive growth
And naturally investors in stocks want to think or do as little as possible, and still be able to wring the surplus value out of the workers, whose labour represent the profit..
” increased demand, better asset performance, or favorable market conditions” as reasons for the exploitation of the proletariat is not clear. There are conditions which make it easier or harder for the bourgeois to reap the profits from is ownership of means of production, referred here to as assets. Sort of a more technical term for the accumulation of capital in stock, obtained upon selling, “capital gain”.
google’s explanations are always witty. I don’t know who writes them. It would not seem to be a task to just let a computer so to say wax philosophically ab.out
The bubble occurs when financial capital is divorced from reality, when circulating capital starts to cease to function,
But it is definitely better to be a producer of commodities than a financial capitalist speculating on the price of commodities when the crisis comes. I think that should be obvious, the bubble may break, and the speculation on financial capital becomes more risky. The next stage will be in production, when the companies who all rely on China for cheap raw materials and machinery have to pay double for them (Trump’s now on now off again tariffs in 2025). . The financial capital may cushion the blow, but when the merchant cannot pay the bill at the port, his creditors will be the first to react. The spectacle of yards in port, parked, waiting for a consumer, and conversely a working class suffering layoffs and loss of employment, the result of the speculative bubble breaking.
And there are the exports to China, now tariffed 138% by them to enter, now not tariffed, etc. . America produces commodities China uses, they may have a huge deficit in overall trade, but they still rely on products from America. Overproduction will likely occur here too, unless new markets are found for finished commodities. As far as commodities produced in both countries jointly, the tariff would be a real impediment to production.
The speculation on financial capital has created a bubble. Overproduction is looking likely, we will probably again see the state in its role to bail out the failing companies and agriculture. We see this taking effect in regard to the threat by Trump to lower the price of money to banks to near nothing. A large subsidy to capitalist industry. It is also a clever way to use the states money, the segment of surplus value separated off and called taxes, by alternately pulling the taxes out of the surplus value, then returning them to capitalists who are having trouble making a profit. The only question is, is it using the state money to make a profit? The bourgeois has a fetish about state assets capable of making a profit, they are sold off, often at bargain basement prices, to any capitalist who wants to take the risk of running them. I fit is the state making money here, it is quite clever. But it is also not capitalism.
Generally it is agriculture that is subsidized and bailed out; the milk wasted and dumped as it cannot be sold at $2.19 a gallon. The government paying farmers to dump the milk. At the same time the soup kitchens with long lines, often outdoors in winter.
This is a recurring feature of capitalism. It may be here again, crisis. If it is, it was sparked by Donald Trump’s protectionism. The taxes on imports could cause overproduction, social overproduction, at home and abroad. He backed off this time, but it could be enough to cause confidence investors had in dealing with Americans to be depleted; how can they be trusted? It is a crisis at least partially of their own making.
Bonds and Surplus Value. Rates of Interest and Capital.
With the focus on the debts of the state, the question in the bourgeois press seems to only be what to do with the money. The 2022 state’s whole budget was 6.27 trillion dollars. “In FY 2022, the federal government spent $6.27 trillion and collected $4.90 trillion in revenue, resulting in a deficit.” more about this below.
“The federal government spends money on a variety of goods, programs, and services to support the American public and pay interest incurred from borrowing. In fiscal year (FY) 2022, the government spent $6.27 trillion, which was more than it collected (revenue), resulting in a deficit.”
“The U.S. Constitution gives Congress the ability to create a federal budget – in other words, to determine how much money the government can spend over the course of the upcoming fiscal year. Congress’s budget is then approved by the President. Every year, Congress decides the amount and the type of discretionary spending, as well as provides resources for mandatory spending.”
“Money for federal spending primarily comes from government tax collection and borrowing. In FY 2022 government spending equated to roughly $3 out of every $10 of the goods produced and services provided in the United States..”
“A budget deficit occurs when the money going out exceeds the money coming in for a given period. On this page, we calculate the deficit by the government’s fiscal year.”
“In the last 50 years, the federal government budget has run a surplus five times, most recently in 2001.”
“To pay for government programs while operating under a deficit, the federal government borrows money by selling U.S. Treasury bonds, bills, and other securities. The national debt is the accumulation of this borrowing along with associated interest owed to investors who purchased these securities.”
“A budget deficit occurs when money going out (spending) exceeds money coming in (revenue) during a defined period. In FY 2022, the federal government spent $6.27 trillion and collected $4.90 trillion in revenue, resulting in a deficit. The amount by which spending exceeds revenue, $1.38 trillion in 2022, is referred to as deficit spending.”
Ibid. Treasury.com
Here at least we finally start to cut to the chase. “To pay for government programs while operating under a deficit, the federal government borrows money by selling U.S. Treasury bonds, bills, and other securities. The national debt is the accumulation of this borrowing along with associated interest owed to investors who purchased these securities.”
There is the discussion we should be having. It is not what to spend the debt on, social welfare, the military, etc. It is the debt itself.
The bond market is where the money that pays the deficit comes from. The state issues paper on its debts, payable at a later date, with surplus value, interest, attached to the money. The money ultimately comes from taxes, which are a subdivision of profits.
It doesn’t mean your boss has suddenly become generous; the repressive function of the state is also present, and he funds this through the taxes on the paycheck, for instance. His ownership of this money is shown in times of crisis by bailouts of banks, the clergy, business owners. Generally under capitalism the only time the state owns something is if it is being bailed out.
“At $4 trillion, the assortment of grants, loans and tax breaks (paid out for Covid) exceeded the cost of the Afghanistan war. More than half, or $2.3 trillion, went to businesses which in many cases were not required to show they were impacted by the pandemic or keep workers employed.
Oct 5, 2020
Google search size of govt bailout during covid usa
Which is where the taxes go in times of crisis, to keep the investors making a profit. If you have ever tried to retire, you know the money you were taxed all those years of working did not go into your bank account.
The bonds that are sold are paid for by taxes. The commodity they are speculating on has yet to exist, materially.
Any assets of the capitalist state that are capable of creating a profit are always sold off when deemed able to create surplus value.
As I stated earlier taxes are not the property of the worker, any more than the surplus value, profit, is. Regardless of the fact a dollar amount is printed on every paycheck with the word taxes on it, it is no more the workers property than the other section of the workday worked without pay, the surplus labour. In the latter case it is obvious the division of paid and unpaid labour is in the hands of the employer.
The bonds carry a rate of profit. For example:
“The 10 Year Treasury Rate is at 3.70%, compared to 3.72% the previous market day and 2.86% last year. This is lower than the long term average of 4.25%. The 10 Year Treasury Rate is the yield received for investing in a US government issued treasury security that has a maturity of 10 years.
Google search 10 year bond rate
“What Is a 10-Year Treasury Note?
“The 10-year Treasury note is a debt obligation issued by the United States government with a maturity of 10 years upon initial issuance. A 10-year Treasury note pays interest at a fixed rate once every six months and pays the face value to the holder at maturity. The U.S. government partially funds itself by issuing 10-year Treasury notes.
“Understanding 10-Year Treasury Notes
“The U.S. government issues three different types of debt securities to fund its obligations: Treasury bills, Treasury notes, and Treasury bonds. Bills, bonds, and notes are distinguished by their length of maturity.
“Treasury bills (T-bills) have the shortest maturities, with durations only up to a year. The Treasury offers T-bills with maturities of four, eight, 13, 26, and 52 weeks. Treasury notes have maturities ranging from a year to 10 years, while bonds are Treasury securities with maturities longer than 10 years.
The idea is the money paid for the bond will return with a profit to the buyer; with interest. Whether this is paid in small portions or in a lump sum really makes little difference; it pays out the surplus value. In the end the value of the $100 bond is 3.7%, or a profit of $3.70 every 6 months.
So we see what is really being discussed as regards the debt limit. It is how much of the capitalist’s money will be raised this year from taxes, with interest, what will be indebted at 3.70% interest every 6 months in 10 years.
In attempting to make it an issue of bread and butter to the worker, we see no mention of bonds in the bourgeois press. Yet this is exactly what we are talking about.
This money, the 1.38 trillion dollar deficit, is all surplus value. The whole state budget of 6.27 trillion dollars, is all from the unpaid section of the workday. And this is not the average rate of profit the capitalists are bringing in, the average rate of profit is probably higher than 3.7%. There is a general knowledge among capitalists what the average rate of profit is, but they are like a freemasonry and will not provide this for the worker to digress upon.
Nevertheless we see the real issue of what the debt really represents is more difficult to get at than simply how the money is going to be divided up. The mechanism of bond markets is the interest is paid for by taxes. The whole discussion comes back to speculation on the tax dollars, the bond market. It seems unlikely the Republican bourgeoisie will upset the apple cart, so to speak. How much more likely are you to find yourself investing in 10 year bonds if you are a member of this group? They stand to benefit most from the debt. Look there they are speculating on it. Their following believes this money to be theirs, that the taxes are their property. They appear to be legitimate, at least if you accept capitalism.
The state is used primarily for security. Two thirds of the money spent goes for this. We know interest payments on the 32 trillion dollar debt take a trillion dollars a year, paid to bond owners. There is no “National Debt factory” somewhere in Wisconsin producing commodities. Rather we know the debt is all speculation on tax money,
Trump and Musk may be able to save a little by making government smaller, by removing bureaucrats. But it is nowhere near what is being paid out every year as interest on the national debt. Have they even saved a trillion dollars yet?
The bonds are still being sold. The Treasury’s papers are still being circulated. Until you approach the real source of the national debt, the bond market, you will never be able to contain it.
So now that the Republicans finally, after 20 years, gained the sanction of universal suffrage, they have been active. One of their main projects has been to shake up the federal bureaucracy. They have Elon Musk in charge of a semi official post to make government more efficient.
They have sent most all federal employees notice they can quit and receive 6 months pay, without having to work the 6 months.
It seems to have resulted in tens of thousands of federal employees deciding to quit their posts. It is not clear if they plan on replacing them, and how this would make the government more efficient if they do. It may be cheaper for a little while, as a younger person, a Trump supporter, gets a job. But in the long term, it is difficult to see how this could result in a large savings of money, as in time they would receive a similar paycheck.
To save money they are removing the “soft power”, the aid that small countries receive to make them support Washington. This type of thing would seem to be something they would not be so apt to do, as these small countries receiving aid sometimes prove strategically important.
Nevertheless the national debt is now 36.2 trillion dollars, Musk has suggested he can make government save trillions of dollars by making it smaller. Thus the logic behind allowing a billionaire to run roughshod over Washington’s bureaucracy.
I don’t think anyone would not agree Washington”s is bloated; we remember the 100 dollar toilet seats, the two hundred dollar screws of the Pentagon budgets we periodically hear about. Or workers in the bureaucracy receiving 6 digits a year, and not doing any lifting, or producing a commodity.
Many of the people Musk has removed may not be essential, and the government getting smaller to pay off the debt may work. But we have overlooked something, a thing about the national debt Musk is not attempting to tame.
That national debt is sunk into the bond market, and someone is drawing interest from it. The money, the state’s debts, are being speculated on. There are investors who have bought ten year bonds, and are speculating on tax money being collected and spent ten years from now.
Figure 5 percent on a trillion dollars of bonds, that’s 50 billion dollars every 6 months. The bond’s interest rates are currently at 4,45%, paid every 6 months, known as a “coupon payment”. It is easier for me to use 5%, so bear with me.
So figure half (which is absurd I know, the total is probably much larger) of the national debt was in these 10 year bonds, that’s about 16 trillion dollars. Every 6 months our money creates 5%, that’s 16 50 billion dollars. That’s 800 billion dollars, and in ten years, at every 6 months, a total of $16 trillion has been paid as interest on our bonds that have matured, over a period of 10 years.
So if you figure the whole 36.2 trillion dollars the debt really is, is in 5% bonds, that’s 32 trillion dollars in interest that has to be paid on the debt in ten years with “coupon payments”.
According to Google , in 2024, the interest payments on the national debt totaled $882 billion. Our calculation is more than double this, but even if it were half, and in this case half the national debt was not in bonds, rather it was simply paid for by taxes, $882 billion every year for ten years is 8 trillion 82 billion dollars.
Which when you think about it is probably for more money than Musk can save by gutting the bureaucracy.
But if it was twice this, which we calculated first, on a 6 month interest payment (coupon payment), we get a total of about 17.64 trillion dollars in ten years.
The point of this is to suggest you are going to pay off the debt just by making government smaller, without attending to the source of funding for the government, which is often in bonds, you may not get too far. Clearly the national debt is speculation on tax dollars being paid to the Treasury, paying interest to investors.
If they want to lower or remove the national debt, the first thing that would have to be done would be to stop issuing bonds. Straight taxes carry no interest rate. If you just did that you would save trillions of dollars, and in ten years you would have paid off a large amount of debt, even if you consider Google’s number for the interest on the debt.
Just what they are speculating on is a real question. The state does not produce commodities that can be sold and make profit, they are not speculating on GM auto production, or Union Pacific railways, which as a joint stock company would pay dividends.
Rather this is speculation on the debts of the state, paid for by taxes. The surplus value flows in every 6 months as interest on the 10 year note, keeping our bourgeoisie in power.
It would be a remarkable turn of events if Elon Musk reduced the size of the bond issues. This would result in less surplus value accruing to the bourgeois who buy these bonds, something which would seem the opposite of Musk’s set of prerogatives. It is just too attractive to speculate on tax money being paid; I mean, they very rarely default. They could not pay in 2009, and their credit rating fell. But other than that, it just never happens. They paid it back eventually, but the bourgeoisie does not like their credit rating being downgraded. They basically always pay the interest, bonds are pretty much a safe speculation.
Without looking at the source of funding for the state, bonds, reducing the expenditure of the state looks more like a doctrinaire experiment than reality. These billionaires like Musk are just too sunk into speculating, on the tax money, to give up their cash cow, even to satisfy Elon’s desire for thrift.
When looking at the concentration and consolidation of the joint stock companies, the socialization of commodity production must be noted. As the trusts and monopolies dictate production, they are planning what to build, and how much to charge for the commodities they produce in large factories.
Agriculture uses the state as a planning organization; the United States Department of Agriculture (USDA) disburses tens of billions of dollars to large farmers in an attempt to decide what will be grown, how, and by who.
Competition was used to determine by supply and demand the price of a commodity in the earlier stages of capitalism. The companies would produce as much as possible to drive their competitor out of business, and to maximize surplus value. The USDA keeps this under control by paying farmers not to grow, a central planning structure indicating socialization of production, under capitalism.
Production of many of the main commodities, gas and electricity for individual households and businesses, for instance, is owned and controlled by Wisconsin Electric and Gas (WEPCO). There is no competition, the price is determined by the production of gas from the wells, and coal from the mines, and then wherever WEPCO can get away with selling it for a price they set, not by competition with other companies,it is sold by them ot consumers.
Much of the price of gas and oil, according to the monthly bill, is distribution of gas through the lines, which are wholly owned by WEPCO. The electricity lines, the high voltage ones, as well as the smaller lines, are all property of WEPCO. This is a large part of the cost, and we know WEPCO makes a profit through its ownership of these means of production.
WEPCO is no longer using nuclear energy;. There is only one electrical generator left in Point Beach, 25 km from Green Bay,the last of Wisconsin’s nuclear energy experiment. It was built in 1970, and has been running for 55 years now. It was designed to go about 40 years, but the bourgeois fetish with nuclear energy has meant the constant danger to Green Bay of a meltdown to squeeze another ten years out of it.
Obviously Point Beach’s days are numbered. Nuclear energy is too dirty, it leaves a spent reactor and waste product mankind has yet to find a way of safely disposing of for 100,000 years, the length of time before the waste is safe to be handled by humans again.
There are tons of this stuff just sitting in the spent reactors, a monument to bourgeois disdain for ecology, and future generations who live and use Lake Michigan.
WEPCO now uses coal and gas for generation of electricity, and with Donald Trump in power this will probably not change, at least not soon. His idea that climate change is not important should keep coal being used for power generation for some time to come. Even switching to natural gas looks unlikely as Trump supports coal production.
I have previously noted the state of the grocery markets, the presence of a smaller and smaller number of owners of the stores. WalMart, Kroger, and Albertsons control most of Milwaukee”s markets. Piggly Wiggly is Albertsons, Pick and Save is Kroger. These two stores used to have competition, but given they were planning to merge, how much competition are we to believe is occurring? They planned to remove competition through a merger, they are no longer together?
Which ultimately leads to revolutionary activity, such as employee owned stores like Woodmans. The product is sold at its va;lue, determined by how much labour it contains, whether or not it is paid for. .
The alternative of a cooperative for production, proletarian socialization of industry, is the direction society seems to be traversing.
But there is more. Karl Marx said “ the antithesis of capital is living labour”. He meant that the individual doing the labour a capitalist would be doing, instead of the contractor, a capitalist, is revolutionary. Doing it yourself also removes the capitalist from production. Plumbing your own drain, for instance, removes a capitalist company coming with the plumber. This saves money, and the instructions for small repairs of this type are all over YouTube.
Youtube brings us much closer to socialism; there are recipes on it a person can cook themselves, and avoid going to the restaurant, which is owned by a capitalist.
Living labour is a direction society is starting to traverse more and more, reducing the power of large capitalists. Setting up a rooftop solar panel system is currently expensive, although it pays for itself eventually. The panels are becoming cheaper, and it is probably no accident it is China, with “ one country, two systems” that produce 80% of the solar panels.
A more self-sufficient lifestyle, with labour for one’s self and family, combined with the cooperatives, restricts capitalists from total domination.
There was a time in the past all manual labour was considered to be something to be avoided. We see this today as luxury cars, for instance, are equipped with a driverless system. Even if it was safe, (it will always be like riding a motorcycle), the labour of even driving your own car is unpalatable to the bourgeoisie. Imagine cutting your own wood, or cooking for yourself?
Things are starting to change. Many people have had enough of the monopolies controlling their lifestyles, and are ready to start to do more for themselves. Combined with the knowledge that cooperatives work, the trust’s days may be numbered. Living labour and a changing pattern of ownership, made necessary due to the lack of competition, where WEPCO owns the gas and electricity, produces the commodities, and sets prices, is shifting towards solar generation from home, and other forms of renewable energy..
Socialization of production is occurring in land ownership for agriculture, and production of commodities in the factories. The days of small shops and competition have given way to trusts and monopolies in control of society. A central planning mechanism by capitalists, dictating what and how much to produce, has taken root. Ownership is increasingly in the hands of a few families, who own the shares of joint stock companies, and reap the surplus value. Manual labour is still considered demeaning to the bourgeoisie who own the stocks, but the amount of energy required to produce the lifestyle of luxury looks increasingly ridiculous. A $150 meal for the family at the restaurant, etc. shows the foolishness of our bourgeoisie, whose waste of energy looks much like Roman society’s extravagance towards the end of their rule. Luxury production is mostly this, and this bourgeois is in control of the state. Elon Musk, who produces luxury automobiles; Sheldon Addison, casino owner; contributed more than 350 million dollars to Trump to get reelected. It worked too. The disdain for manual labour could not possibly be more felt than now. Imagine Musk cutting his own wood, or making himself dinner. It’s just not going to happen.
The trajectory of capitalism has not changed, we are just in its late stages. Pressure for a simpler life without luxury production is becoming more socially acceptable. The simplest answer is usually the right one, Occam’s Razor, comes into play. It should be possible to cook a better meal than the restaurant, at a fraction of the cost, and energy usage. When we get over washing the dishes and cooking,, manual labour,, our vision of society changes. Material conditions change, and with it our consciousness. A quest to produce it yourself comes to be.
Try as they may, regardless of the size or sophistication of their latest technology, there is no changing material conditions. Even with all the new weapons, the fact remains the companies are owned by a monopoly, a duopoly, or cartels.
Every crisis consolidates ownership further, as the companies concentrate ownership. Often bought in crisis conditions, for ridiculously low prices, or merged by companies with larger wallets to absorb functioning capital, more and more joint stock companies dominate industry.
It is rare now to have a large company not listed on the stock exchange, the center for trading of joint stock companies. The days of an industry being private property of an individual have basically come to an end.
With this change competition begins to fall behind making surplus value by setting prices due to monopoly. When there are only a few large companies owning, say, electricity and gas, and distributing this gas to consumers on their own lines, it is not hard to see competition come to an end.
Wisconsin Gas and Electric produce all the electricity from power plants here Milwaukee Wisconsin, and also own the lines for transmission of high voltage to Milwaukee. They also own the gas lines, and distribution facilities, including pipelines. There is no alternative source in any sense, and short of cutting your own wood, the houses are all gas burning forced air heating. Solar is still prohibitively expensive, and Wisconsin Gas and Electric do not pay for excess production from solar generation in homes.
This has been building for some time. It is a common feature of industry to become concentrated in a few hands, often in the form of monopolies. They set prices as they control the production facilities, the distribution,the lines etc., and do not practice competition.
The days of competition regulating the price of major commodities is rapidly fading. The grocery stores are now all consolidated into huge markets, dominated by WalMart, Kroger, Albertsons, and Costco. Smaller family owned stores are becoming rare, only for an item or two needed between visits to the big stores. Kroger and Albertsons attempted a merger, which looks like a failure, but would have meant about half of grocery stores would have been controlled by WalMart and Kroger Albertsons combined as one company.
The largest computers cannot stop the consolidation of industry, the growth of joint stock companies and monopoly conditions. It is a built in condition of late capitalism, described by Friedrich Engels in Anti Duhring in the 1890’s; the growth of joint stock companies, and concentration and consolidation of industry. here is a quote
T0″he 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 socialization of great masses of means of production which we meet with in the different type of joint stock companies. Many of these means of production are, from the outset, so colossal that , like the railways, they exclude all other forms of capitalistic exploitation. At a further stage of evolution this form also becomes insufficient. The producers on a large scale in a particular branch of 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 the particular industry is turned into a gigantic joint stock company; internal competition gives place to 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 on a single plan, with a capital of &6,000,0000.”
“In the trusts, freedom of competition changes to its very opposite- into monopoly; and the production without any definite plan of capitalistic society capitulates to the production a definite plan of the invading socialistic society. Certainly this is so far still to the benefit 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.”
Anti Duhring First wellread books edition 2017
Part 3 socialism II Theoretical p. 329
Which is optimistic that a society will not tolerate trusts and monopolies, which is precisely what we have learned to do. The important part is trusts and monopoly were recognized by Engels as being the dominant form of capitalism.
This was published in 1890. Vladimir Lenin published Imperialism, the Highest Form of Capitalism, in 1916. Clearly Lenin agreed with Engels, and developed this idea further.
It is all connected, and the presence of these monopolies looks unlikely to change. Internet service is also dominated by two large companies, one of which has been the subject of antitrust activity, American Telephone Telegraph, AT&T. The only choice is Charter, also called Spectrum, and these companies cooperate to keep the price of internet at a set price, by removing, for instance, subsidies by the state to keep the price of internet low for seniors. There is AT&T again controlling prices; last time it was their long distance telephone service, broken up by congress, resulting in the baby Bells.
Computers are dominated by Apple, who produce most often computers used in homes. International Business Machines, IBM, is no longer a competitor of home computers to Apple, who are close to monopoly. Google as the search engine, also a monopoly, caps off much of our computing.
This list could continue, but I think I have made my point. Consolidation and concentration of ownership into joint stock companies, often exerting monopoly power, is a fixture of modern capitalism. Rarely it is addressed as antitrust by capitalists who want to artificially change what is a dominant feature of capitalism, to control the market by monopoly.
Every capitalist wants to drive his competitor out of business. When they are successful at this, they control the market, competition ends, and they then set prices for the commodity they control. It seems to be universal; there are no sectors of the economy left untouched by consolidation of ownership. Breaking them up is only a temporary fix, AT&T for instance is now back to its old self again, in a duopoly of internet service with Charter, as they own the fiber optic cables. Antitrust activity towards AT&T, breaking up the long distance telephone to the baby Bells, did not stop AT&T from again attempting to set prices by control of markets,this time in internet transmission .
This system is a form of capitalism referred to as imperialism in the late 19th century and early 20th century by Friedrich Engels, and later by Vladimir Lenin. It was becoming more obvious then that joint stock companies would dominate capitalism, and consolidation of ownership would only continue.
Names like J Peirpont Morgan, and his domination of 20th century large scale industry, is a case study in the growth of monopolies and trusts. By the early to mid 20th century Morgan’s empire included railroads, Steel production (US Steel), General Electric, AT&T…. Morgan personified the bourgeoisie of the 20th century, with control of markets for just about every large industry.
When the next crisis comes the trend will no doubt continue. Capitalism is at the stage where competition is becoming rare, only lasting a few years in a new industry, until monopoly control and joint stock ownership is achieved. Crisis comes and ownership is consolidated further, the likes of which are a recurrent theme in capitalism. It seems unlikely this will end without leaving capitalism, antitrust does not deter companies from concentration ownership of the means of production (like AT&T) from continuing to exert monopoly power over the industries they own, it just sets them back a decade or so. It is just way too tempting to remove competition by these capitalists , and set prices.
Foxconn, Wisconsin, and Delusions of Grandeur 10 23 2020
In 2017 Foxconn and Donald Trump announced they would be building an LCD screen factory in Wisconsin. Mount Pleasant was chosen to host the factory, south of Milwaukee, near Racine Wisconsin.
This was when the bourgeois Paul Ryan was speaker of the House of Representatives, the congressman from the district of what was promised by Foxconn to be a huge project. Scott Walker, another Republican bourgeois, was governor then. Donald Trump came to Wisconsin to officially open the project, digging the first shovel of soil in 2018 with the leader of Foxconn, Terry Gou.
It was done with fanfare, and reported by the press as a major accomplishment for Trump and his followers Paul Ryan and Scott Walker. But from the start there were strange things about the factory, a 4 billion dollar state subsidy approved by Scott Walker, that was to arrive as 250 million dollars a year to Foxconn. There was also the diversion of 7 million gallons a day of water from Lake Michigan, which was to be returned polluted.
Along the same lines there was little or no Environmental Impact Statement, the project was simply approved by the government to go forward.
Perhaps at this point it should have been clear something was wrong with this picture. There were no protests, but opposition to the factory due to ecological concerns was common among the people who inhabited the regions near the Great Lake that was going to be polluted to make the LCD Screens, with heavy metals. It was also going to create air pollution on a large scale.
But the project seemed to be going through, and by 2018 work was underway building the beginnings of the factory. There were huge buildings constructed on land that had to be removed from the residents, often against their will. A dome started to take shape, and the factory was being built. The state and local government began investing 400 million dollars into construction of roads and bridges for the factory in Mount Pleasant.
“Hopes were high among the employees who joined Foxconn’s Wisconsin project in the summer of 2018. In June, President Donald Trump had broken ground on an LCD factory he called “the eighth wonder of the world.” The scale of the promise was indeed enormous: a $10 billion investment from the Taiwanese electronics giant, a 20 million-square-foot manufacturing complex, and, most importantly, 13,000 jobs.
“Which is why new recruits arriving at the 1960s office building Foxconn had purchased in downtown Milwaukee were surprised to discover they had to provide their own office supplies. “One of the largest companies in the world, and you have to bring your own pencil,” an employee recalls wondering. Maybe Foxconn was just moving too fast to be bothered with such details, they thought, as they brought their laptops from home and scavenged pencils left behind by the building’s previous tenants. They listened to the cries of co-workers trapped in the elevators that often broke, noted the water that occasionally leaked from the ceiling, and wondered when the building would be transformed into the gleaming North American headquarters an executive had promised.
“The renovations never arrived. Neither did the factory, the tech campus, nor the thousands of jobs. Interviews with 19 employees and dozens of others involved with the project, as well as thousands of pages of public documents, reveal a project that has defaulted on almost every promise. The building Foxconn calls an LCD factory — about 1/20th the size of the original plan — is little more than an empty shell. In September, Foxconn received a permit to change its intended use from manufacturing to storage.
“Soon, the office began to fill with people who had nothing to do. Many just sat in their cubicles watching Netflix and playing games on their phones.
The Verge
The Eighth Wonder of the World
10 23 2020
Foxconn was attempting to gain state money to build by gaming the system to make it look like they had been hiring, as the subsidy was based on how many employees they had hired. The office for Foxconn was being packed full of bureaucrats, to make the required number of employees to be able to get the Treasury’s money to keep building.
It was the employees who began to see there was something wrong, that Foxconn was not what it seemed. Working for Foxconn was a rough job, with no real work to do in the office, in a broken down old building.
“Even the handful of jobs the company claims to have created are less than real: many of them held by people with nothing to do, hired so the company could reach the number required for it to get tax subsidy payments from Wisconsin. Foxconn failed at that objective, too: last week, Wisconsin rejected the company’s subsidy application and found it had employed only 281 people eligible under the contract at the end of 2019. Many have since been laid off.
“Foxconn did not return repeated requests for comment.
“It’s not unusual for either the Trump administration or Foxconn to make announcements that prove hollow. But for Foxconn, the show went on — for two years, the company, aided by the vocal support of the Wisconsin GOP, worked to maintain an illusion of progress in front of a business venture that never made economic sense.
The Verge ibid.
The jobs never came, and Foxconn would not get their subsidy. But the money for the roads and bridges would be spent, all to host what was supposed to employ 13,000 workers, at a 10 billion dollar investment.
The illusion Foxconn had of a partially completed factory that would soon be producing LCD Screens continued for several years, until now, where it is now obvious there will be no 10 billion dollar LCD factory in Mount Pleasant. But in the leadup to this realization, the Republican bourgeoisie tried to mislead the public about the progress made by Terry Gou and his Foxconn factory.
“That illusion has had real costs. State and local governments spent at least $400 million, largely on land and infrastructure Foxconn will likely never need. Residents were pushed from their homes under threat of eminent domain and dozens of houses bulldozed to clear property Foxconn doesn’t know what to do with. And a recurring cycle of new recruits joined the project, eager to help it succeed, only to become trapped in a mirage.
“Foxconn would spend the next two years jumping from idea to idea — fish farms, exporting ice cream, storing boats — in an increasingly surreal search for some way to generate money from a doomed project. Frequent leadership changes, a reluctance to spend money, and a domineering corporate culture would create an atmosphere employees described as toxic. Many of the employees The Verge spoke with have since left the company, and all of them requested anonymity out of fear of retaliation. It has been a baffling ordeal for the people who thought they were building the Silicon Valley of the Midwest — “Wisconn Valley,” Walker called it — all the more so because so many others still believe the vision.
The Verge ibid.
The broken promise of an LCD factory led to attempts to figure out how Foxconn could possibly make a profit doing something other than producing LCD Screens. By this time desperation was starting to set in, and it was clear the factory would never produce LCD’s, or any commodity for that matter.
“Foxconn’s Wisconsin saga began two days after Trump’s inauguration, when the company’s founder and CEO, Terry Gou, told reporters he was considering building a $7 billion factory in the US and employing as many as 50,000 people.
“A contract with WEDC (Wisconsin Economic Development Corporation, a state-run organization that administers the Foxconn deal and approves the tax subsidies if the hiring quotas are met) signed in November made it official: nearly $3 billion in “refundable” tax credits, most likely to be made in the form of direct payments to Foxconn. Combined with infrastructure the state promised to build, approximately $800 million in additional incentives mostly from the small town of Mount Pleasant, where the “Fab” was to be located, and other contributions, the package totaled more than $4 billion. In a best-case scenario, the Legislative Fiscal Bureau found the state wouldn’t break even until 2043. Depending on how many people Foxconn hired, each job would cost taxpayers somewhere between $200,000 and more than a million dollars. The average subsidy in the US is around $24,000 per job.
“Such announcements are far from unusual for Gou, and often, nothing comes of them. In Vietnam in 2007, in Brazil in 2011, in Pennsylvania in 2013, and in Indonesia in 2014, Foxconn announced enormous factories that either fell far short of promises or never appeared. Just this year, the industries minister of Maharashtra, India, which aggressively pursued one of Gou’s multibillion-dollar projects in 2015, finally confirmed the factory isn’t coming, saying the state had learned a lesson about believing businesses promising big investments.
Ibid.
Yet the illusion of Foxconn building in Wisconsin continued, and the subsidy for building was not negated until 2020, when a new governor, a member of the liberal progressive bourgeoisie Tony Evers, removed the subsidy.
“…the 1,040 people Foxconn intended to hire by the end of 2018, per its contract with the state, or even the 260 needed in order to receive subsidies, an audit found the company had managed to hire only 113. At the Mount Pleasant campus, it had erected a single structure, a 120,000-square-foot space that sat virtually empty. Its very name, “the multi-purpose building,” seemed noncommittal. As for the promised LCD factory, the “Fab,” Foxconn boasted in a letter that a contractor had moved 4 million cubic yards of dirt. As 2018 came to an end, the company froze budgets and canceled planned career fairs. The project entered a complete stall.
“Foxconn’s vacillations spilled into public view in January 2019, when Woo told Reuters, “In Wisconsin we’re not building a factory,” having finally discovered it was unprofitable to make LCDs in the US. The comment caused an uproar. State Republicans swiftly blamed Evers for driving Foxconn out; the administration expressed surprise at the change; Trump spoke with Gou, and Foxconn immediately announced that LCD production was back on. “Great news on Foxconn in Wisconsin after my conversation with Terry Gou!” Trump tweeted, claiming credit for bringing Foxconn to Wisconsin a second time.
Ibid.
In Works volume 4 I detailed when this occurred, Terry Gou’s admitting the factory could not be built in Wisconsin, as there was no way the company could compete in America. It looked like the end of Foxconn, until Donald Trump intervened to keep the illusion going, saying he was keeping the project going. At this point many of us were starting to question whether or not the factory would go forward.
“If the factory was meant to earn Trump’s goodwill, the January incident showed that the company couldn’t simply vanish as it had elsewhere. Foxconn was stuck in Wisconsin, and it needed to find a way to cut its losses. Employees at every level of the project were enlisted in a search for something — anything — Foxconn could do to generate revenue.
“In meetings at Racine’s City Hall, Foxconn representatives and city officials started developing a plan, elements of which Racine submitted to a competition called the Smart Cities Readiness Challenge in 2019: camera-festooned autonomous vehicles would patrol high-crime areas, the city said in its proposal, guided by 5G cells mounted on lamp posts. Self-driving vehicles — retrofitted golf carts at first, then shuttles as soon as 2020 — would ferry Racine’s workers to Foxconn’s campus. Foxconn, the city noted in the submission, was a “particularly important stakeholder” and would help provide financing and technology.
“But when city officials started asking basic questions about the sort of infrastructure they needed to build in order to accommodate Foxconn’s technology, Foxconn employees found they were unable to get clear answers from the company. “They were losing confidence, and then we parade in more new shiny ponies, and more people who couldn’t answer what should have been easy questions,” an employee said.
“Foxconn only ever got as far as buying the golf carts. They arrived from China disassembled, in orange, pink, and other festive colors. One employee described them as “the biggest pieces of shit,” like something “bought off Wish.com.” Unable to make them autonomous, Foxconn put them in storage in the multipurpose building. At one point, the company discussed outfitting them with lights and turning them into security vehicles, but the subsidiary in charge of security refused to pay FEWI (Flying Eagle Wisconsin, the Foxconn subsidiary run by Alan Yeung initially tasked with laying the foundation for the Wisconsin project) for the carts, according to one employee. As the divisions bickered, bored employees would come down from the Milwaukee headquarters to race the carts around the empty building, until the batteries finally died.
Ibid.
It looks like Racine was easily fooled by promises of high tech industrial development from capitalists; in the form of a company from Taiwan, that would make a massive amount of profit doing manufacturing in Mount Pleasant. The fraud is a product of the more reactionary bourgeois desperation to appear to be making progress by partnering with large capitalist companies, that society would miraculously prosper if the workers just accepted their leadership, and supported them.
Racine should have known they were being taken, that Scott Walker was not telling them the whole truth about who was going to invest in their city. But their trust of Republicans led them to believe the false promises delivered by a billionaire with the support of Donald Trump, Paul Ryan. and Scott Walker.
“Earlier partnerships announced with local companies like Rockwell Automation had been followed by total silence. (Employees say they quickly fizzled; Rockwell did not return a request for comment.) Of the $100 million gift Gou promised the University of Wisconsin-Madison, the school confirmed that only $700,000 ever arrived.
“The original plan had been grandiose: the sphere was to be the dot in the “i” of a complex of data centers spelling out “Fii” (Foxconn Industrial Internet) when viewed from the air. But according to three employees, Foxconn balked at the cost. An employee with knowledge of the project said that Foxconn finally moved forward with the sphere — and only the sphere — when the architect told the company it had to put a deposit down for the steel if construction was going to finish in time for a long-promised visit from Trump.
“But the building without the data centers was just a glass orb in a field — at best, “really, really, really expensive office space,” in the words of one employee. Adding to Fii’s troubles, FEWI (Flying Eagle Wisconsin, the Foxconn subsidiary run by Alan Yeung initially tasked with laying the foundation for the Wisconsin project.), also trying to cut its losses, had “tricked” Fii into buying more land than was needed for the sphere, according to a second employee. A Foxconn executive briefly entertained an elegant solution, according to two employees: starting a Foxconn tree farm, so the company could get free trees for the terrarium-like interior of the sphere that Gou wanted, and sell the excess trees for profit.
“It’s endless,” said an employee, noting with frantic exasperation that the sorts of tropical trees Foxconn wanted can’t even grow in Wisconsin’s climate. “When you’re desperate and you have no product to sell and the only asset you have is land, what can you do? You build on it or you grow crops on it.”
Ibid.
The sphere now sits empty in Mount Pleasant, Wisconsin, surrounded by farmland. There are roads to it though, thanks to the state that picked up the costs of building them to the factory. The buildings that were supposed to be factories are now considered useful for storage. Their official purpose is now this, storage.
“In many ways, the Foxconn debacle in Wisconsin is the physical manifestation of the alternate reality that has defined the Trump administration. Trump promised to bring back manufacturing, found a billionaire eager to play along, and now for three years the people of Wisconsin have been told to expect an LCD factory that plainly is not there. Into the gap between appearance and reality fell people’s jobs, homes, and livelihoods.
“The buildings Foxconn has erected are largely empty. The sphere has no clear purpose. The innovation centers are still vacant. The heart of the project, the million-square-foot “Fab,” is just a shell. In what an employee says was a final cost-cutting measure, only the portion that was to host the Trump visit was ever finished. Recent documents show the “Fab,” once intended for use as manufacturing, has been reclassified as a massive storage facility.
“WEDC, as part of its audit of the company’s 2019 subsidy application, had Foxconn survey its employees about what they were working on. Not a single respondent mentioned LCDs because no one is working on LCDs, and they never were.
“The project has fallen orders of magnitude short of its hiring and investment targets. WEDC found Foxconn had only 281 eligible employees at the end of 2019, 13 percent of what it had originally aimed for. (Many of the employees Foxconn tried to claim were paid too little or hired too late in the year to get a paycheck in 2019.) After this year’s layoffs, it is nowhere near meeting its 2020 target of 5,200 employees. Foxconn itself acknowledged, in its subsidy submission, that it has so far invested 2.8 percent of the $10 billion it promised. It has built less than 2 percent of the 20 million square feet of manufacturing space it originally planned.
“The company’s desperate quest to maintain appearances caused it to fail repeatedly and in ways more destructive than mere ordinary failure would have been: local businesses were strung along, civil servants spent years figuring out what the company is doing, residents were removed from land the company didn’t need, and again and again recruits were lured in by the vision of a grand manufacturing renaissance in Wisconsin.
“That vision got Gou regular access to the White House during a trade war and gave Trump a groundbreaking and almost a ribbon-cutting, too. But maintaining the mirage required a culture of secrecy. Employees were warned not to talk to the press (including, specifically, me). Many were afraid to speak — afraid of getting fired, or of retribution even after they’d left. Publicly, the company issued announcement after announcement — innovation centers, career fairs, smart cities, AI 8K+5G, the AI Institute — each one erasing the memory of the last missed deadline. (One employee quipped that one of the few things Foxconn succeeded in making in Wisconsin was press releases.) The illusion was defended by GOP officials at all levels of government, from Mount Pleasant to the State Assembly to the White House, who accused anyone pointing out that the project was off track of trying to scuttle it for partisan ends, as if the existence of the factory were open to debate and positive thinking might make it real.
“…in actual reality, the project has succeeded in manufacturing mostly this: an endless supply of wonderful things for the President to promise his supporters. This past weekend, in an interview with a local Wisconsin TV station, Trump insisted Foxconn had built “one of the most incredible plants I’ve ever seen” in Mount Pleasant and would keep its promises and more if he was reelected.
It was another Trump promise that was an illusion. The grandiose claims of 13,000 jobs, 10 billion dollars for a small town in Wisconsin, was designed to fool people to support him.
Clearly all that would have occurred if Scott Walker was still Governor, and Paul Ryan Congressman, was the fraud would have continued.
But in the end it had to fail, and reality to make itself felt. It was after hundreds of millions of dollars were spent by the state to build the roads, bridges, etc. to support the Foxconn factory, which will never make LCD Screens, or employ 13,00 people.
The factory is a monument to an illusion, and illusion of a bourgeois with worldly connections bringing investment into small town Wisconsin. Although the office referred to in the article was in Milwaukee, Racine and Mount Pleasant are more like suburbs, the latter mostly rural. It was to convince Trump’s rural following he could deliver investment, and this would result in prosperity.
It seems to have failed. It is a relief that the LCD Screens will never be produced here, as it would damage the ecology of Lake Michigan, which is why I was always against it. Hopefully if anything is produced there, it will have to have a real Environmental Impact Statement, not the farce we were handed last time. But in reality, it looks like nothing will ever be produced there. It is a dream of something that was an illusion, like Trump’s vision of America, that society would progress if everyone just believed capitalism was working.
A Paradigm Shift Away from Laissez Faire Economic Ideas 5 1 2021
There is an idea that had gained traction in the 80’s in particular, that was if capitalists made large profits, and used the money as revenue, the workers would benefit. This idea was called”laissez faire “. There were also fantasies about not having to use the state to prop up capitalist industry.
The presence of this large group of people who are mostly service workers, producing mostly luxuries, restaurant workers, for instance, is part of capitalist industry. Every increase in productivity displaces workers in industry; the machinery becomes more advanced, the labour less skilled, or redundant with the advances in machinery.
This creates a constant industrial reserve army of workers, what Marx called attention to, who are lucky to find employment, and it is often unskilled if they do, as the job the worker used to do has been eliminated. It is replaced with a machine, and an unskilled worker.
These workers who have been shed by modern industry are often forced into luxury production, or used as some form of menial servant. The service industry is basically this. This is supposed to be a consolation for a displaced worker, that the wealth will trickle down somehow when the bourgeois create capital through the exploitation of the worker, and the worker can become a low wage service worker now that he is no longer producing necessary commodities.
They spend their revenue on these luxury goods, which do not increase profits. Luxury production is not goods for the workers to consume. This form of production is for the bourgeoisie, and is for them an expenditure, rather than an investment.
The jobs this supports are not much different from menial servants, which are what Malthus suggested the workers should be thankful for; a large number of workers displaced by industrial progress harnessed by capitalists who are reduced to menial servants. We see this in the number of service occupations that are not far removed from Mathus’s menial servants.
There is more profit to be made as industry progresses, and machinery that displaces workers increases surplus value when productivity increases. It creates the industrial reserve army of workers, a capitalist phenomenon. The work is unskilled, and throttling the capitalist mechanism forward creates these workers.
Perhaps they could content themselves as being porters, barmaids, massage workers, etc. The surplus value has to go somewhere, its production can only be reinvested to a certain degree. The population rising justifies the surplus; it is for more workers to be able to labour.
But what happens to the surplus when the workers can only consume so much of it, as they are paid wages that are not able to consume all they are producing? If they were paid the value of their labour by the capitalist, there would no longer be a capitalist. The whole system is based on producing a surplus, and it has to be consumed somehow.
This provided Malthus and the bourgeois a way out, namely increasing the number of servants and menial labourers. This would seem to be a root of the laissez faire economic ideas which were popular in the 80’s.
Advancement of machinery lowers the value of the product. It is not the fault of machinery the capitalist relationship of exploitation exists. It is a social order, a historical condition. It is the way it is used, that more expensive machinery reduces the workers control of the means of production.
The presence of large numbers of people who are in menial labour indicates a surplus is coming from somewhere, supporting the unproductive classes. Trickle down ideas justified the increased number of these people.
But the question of if it really did is being rejected. It may have created more capital, but it increased the proportion of the working class, and left about 1,000 families in control of most of the joint stock companies shares. They control the surplus value, and laissez faire was a theory that supported them. The idea of the state money being somehow separate from profit was just plain silly, every crisis bailouts of trillions of dollars occurs with the state money.
This is because taxes come from profit, and it is claimed by those who pay into the pot, so to speak, of state money. It is used in times of crisis to keep the business making a profit.
Clearly all capitalists do this. Yet they suggest the state should have less role in capitalist industry, which is a contradiction.
But the question of where the surplus goes that cannot be reinvested seems to be answered by expenditure of revenue by our capitalist. The unproductive expenditure would seem to be at odds with abstinence, which is often preached as justification for a bourgeois to have gotten control of business and made a profit, allowing for them to exploit the working class.
On one hand you have the capitalist wanting more consumption of his commodity, on the other hand his workers are paid minimum wage, and expected to be spendthrifty.
The consumption of luxury items and menial servants, the basis of the restaurant industry, is from the surplus value created in production for capitalist enjoyment. It doesn’t matter to them the dishwasher or busboy is an unskilled worker getting minimum wage, working 12 hours a day. This is supposed to be right, the wealth is trickling down. But from the perspective of the worker the condition is considerably different. On one hand you have massive wealth, accumulating capital, on the other an industrial reserve army of workers, who have to labour in luxury production or as service workers for the minimum of wages. Trickle down economics not only justifies their position, it perpetuates the exploitation of a class who is destined to labour.
Ecological Material Conditions and Theories of Value
The climate is changing, it is getting hotter everywhere, due to the burning of fossil fuels and deforestation. Heavy reliance on fossil fuels has actually increased the global temperatures.
“Since 1901, the average surface temperature across the contiguous 48 states has risen at an average rate of 0.16°F per decade. Average temperatures have risen more quickly since the late 1970s (0.31 to 0.54°F per decade since 1979). Eight of the top 10 warmest years on record for the contiguous 48 states have occurred since 1998, and 2012 and 2016 were the two warmest years on record.
“Worldwide, 2016 was the warmest year on record, 2020 was the second-warmest, and 2011–2020 was the warmest decade on record since thermometer-based observations began. Global average surface temperature has risen at an average rate of 0.17°F per decade since 1901 , similar to the rate of warming within the contiguous 48 states. Since the late 1970s, however, the United States has warmed faster than the global rate.
United States Environmental Protection Agency (EPA)
Climate Change Indicators
The temperature in Lytton British Columbia on June 29th 2021 was 49.6 degrees Celciuis.
“Lytton, a village in the Fraser Canyon located about 260 kilometres northeast of Vancouver, also saw record-breaking highs of 47.9 C on Monday and 46. 6 C on Sunday. Before this week, the highest temperature ever recorded in Canada was 45 C in Saskatchewan in 1937.
“On Tuesday alone, seven locations in B.C. met or exceeded the 45 C mark, including Lytton, Cache Creek (47.4 C), Grand Forks (45 C), Kamloops (47.3 C), Kelowna (45.2 C), Lillooet (46.7 C) and Osoyoos (45 C).’
“The BC Coroners Service said there has been a significant increase in deaths since Friday, with extreme heat suspected to have played a role.
“From Friday to Monday, there were 233 reported deaths in the province, up from an average 130 deaths over a four-day period.
“In Vancouver, police said Tuesday they have responded to more than 65 sudden deaths since the heat wave began on Friday. The city normally sees about three or four sudden deaths every day.
CBC 6 29 2021
Climate change is racking our world. Deforestation in British Columbia, due to the logging and timber industries, who have been at it for years, are a contributing factor. Cutting the forest, especially the old growth, raises temperatures. Photosynthesis in plants creates oxygen, it breaks the Carbon Dioxide, fixing the carbon in the plant, and and storing it in the process. The Oxygen is given off from the photosynthesis, which all animals breathe.
Deforestation removes the forests ability to fix CO2 from the atmosphere; the cut trees are no longer producing oxygen, and transpiring water, cooling the climate. British Columbia, like Alaska, has been cutting the old growth pristine forests to make a profit. In twisted logic they feel the forests are just sitting there doing nothing, they see no value in the forests, so they cut them down mercilessly.
This has been the dominant economic idea since Adam Smith wrote Wealth Of Nations, when a forest was seen as being a free resource, sometimes with rent paid to the landowner to log it, but basically a resource to capitalists, when we consider the landowner as being one of them. To make a long story short, the value of a commodity is how much labour is required to produce it. The current idea of a forest is it is worth the amount of trees or minerals beneath it. It is open game for capitalists to remove the trees and mine the metals or petroleum underneath it.
Recognition of forests as important for stopping climate change is only just beginning. The idea of an old growth forest as a resource with a price tag is the paradigm. It is not seen as a priceless work of art for future generations of humans or sovereign ecological territory, rather the value of it is as a commodity that can be bought or sold.
By only seeing activity that creates a material commodity as being productive, capitalism is rapidly destroying the ecology. In BC and Alaska this perverse logic still exists, in a condition not much different from Adam Smith’s time. The consciousness of the human being has been expanding with technological development, we now have satellites in space orbiting Earth, and we can map out climate change scientifically. Our data shows consistent warming in the last century, which is damaging ecology. In the past we could only record temperatures on the ground, often without even computers to help us.
Now we are mapping climate change with powerful computers, and the Republican bourgeoisie are left to question the science.
This group of dinosaurs is caught in capitalist logic, which considers ecology to have no value besides as exchange value, money, which can be had by logging.
This paradigm has to change. The logging of old growth in BC and Alaska is resulting in climate change. The economic ideas have to change, ecology must have value beyond simply a resource for human exploitation. The land has to be viewed as more than a commodity which only has exchange value as a resource to exploit, sold to create capital.
A revolutionary shift in consciousness is taking hold, with climate change starting to figure into the capitalist mind. Even large capitalists are seeing the science, the liberal progressive bourgeoisie is shifting towards acknowledging climate change as real, and recognizing that society is going to have to change their economic ideas to stop the ecological consequences of uncontrolled exploitation of the ecology for exchange value. The Republican bourgeois are way behind, Donald Trump disbelieved climate change was real, he thought it was a hoax designed to keep the ruling class weak, and hinder the ability of capitalists to make a profit. The ruling class seems to still be largely subordinate to Trump; he is still the leader of their party.
Perhaps it is an issue of quality, where the right not to make a mess is part of the value of a commodity. Clearly simply the amount of labour required to log a forest cannot continue to be the value of a commodity. Something is going to have to give, political economy is not a completed science. The ideas of value and surplus value are still evolving, our science demands we formulate new ideas of value including the life of other species, ecology, in what we consider the value of a commodity to be. This shift in material reality, a world where climate change is recognized, and forests are not simply judged as x amount of dollars worth of trees, has to be the reality.
Specifically we have to change the practice of the value of a commodity to include ecology as an integral part of it. The right not to make a mess, the idea behind recycling, is there to guide us. The days are gone when a forest can simply be exploited with no real view of climate change and ecological destruction. Political economy is coming with, its laws changing with new ideas, it is the essence of the science.
Society is ready for further progress. It is up to us to figure how the value of a commodity is not simply what the base cost of exploitation of ecology is, rather social and ecological factors figure into the value of a commodity. A paradigm shift brought forward by the natural sciences, meshing with economic ideas. A revolutionary change of the consciousness level of the human being.
Events in Afghanistan as the Army Leaves There 8 14 2021
As Joseph Biden prepares to completely leave Afghanistan on the 31st of August, 2021, the Taliban has made enormous gains in placing areas under their control. The major cities are falling daily, the Taliban now close to conquering Kabul, the largest city and the Capital.
Biden has said ““One more year, or five more years, of U.S. military presence would not have made a difference if the Afghan military cannot or will not hold its own country. And an endless American presence in the middle of another country’s civil conflict was not acceptable to me,” Biden added.” in the Washington Post.
It is a bold move to end the 20 year long war, started by Republican George Bush II. It’s been a Republican war, with Donald Trump pumping up the air war, like George Bush II did. Barack Obama did keep the war effort going; but it was something he inherited from George II. Under his rule they got Bin Laden, mastermind of the attacks on the New York skyscrapers. They found him in Pakistan, living comfortably in a modest house with a garden. He was killed by the Americans, mostly as revenge. But the war was started by George II, and perpetuated by Trump.
Since the start of the war, there was always the question of what the goals were. It was for capitalism, obviously, but it was never really enunciated clearly, as it was in Iraq. There it was nationalized oil, which was an accomplishment of the Baath Socialist Party. Thus overthrow the government, and get the wells back under Exxon Mobil and Chevron making a profit again. The invasion of Kuwait started with the wells there being nationalized by Saddam Hussein. The goals were clear, not to allow for the petroleum to be the property of the Iraqi people through nationalized ownership, as they were under the Baath Party.
But Afghanistan always sort of looked like revenge. Why was it necessary for George II to go to war? To get even with the Taliban for attacking New York, but it could have been handled differently with more level headed thinking. Iran is currently under American sanctions, and it drives them nuts. It can seriously hinder the regular functioning of the ruling class. Afghanistan could have simply been put under sanctions, until they gave up Bin Laden. It may have not been as severe a punishment viewed by all the world’s people, a message not to fight the Americans. But it may have averted what is now obviously becoming a military failure the minute the Afghans have to fight for themselves.
George II, like Donald Trump, did not command a majority in universal suffrage. Yet George II was fighting “dictatorship vs. democracy”. Trump too, often called his bourgeoisie “pro democracy”. This was connected to the 9/11 incident; the rest of the world did not see the legitimacy of George II as a leader of democracy, and someone attacked the country under his leadership. It was like Trump, everybody knew he did not command a majority, yet we were all expected to go along with it.
It was George II’s war, he was a “war president”. The Republican bourgeoisie he represented should be remembered as having started the war, Biden’s liberal progressive bourgeois the end of it.
The Taliban came to power fighting the Soviet Union, and they were trained and armed by the Americans in the war against the Soviets. They found them in Pakistan’s religious schools, where the Taliban would claim their name from, Taliban means “student” in Pashtun. They were recruited to fight by the Americans, and they defeated the Russians.
The point is, the bourgeois taught these people how to fight, and they turned against them. Now it looks like the Americans and their NATO European Union support have also lost the war there. Kabul may fall shortly, as have Kandahar, Herat, etc. Short of something strange happening, Afghanistan is lost. The war is ending, without a victory for NATO or the Americans. No profit is going to be made there, the investment of a trillion dollars in the war effort there for 20 years is lost.
There are Republicans who still want to fight war there, but given the failure of the Afghan Army, it certainly looks like the only thing that was stopping the Taliban from taking power was the presence of the American Army there. The minute NATO and Americans pulled people out of there, the country started falling. They had 20 years to train the Afghans, would another 20 years be enough for them to take care of themselves?
Biden may be in favor of the Embargo against Cuba, and upset with China. But under his leadership the country is making a hard choice that Trump was unable to make; to extricate themselves from a conflict that they were not winning. Although not everybody agrees with it, he did attain the sanction of universal suffrage to govern, and it was his decision based on the will of the majority. Perhaps that above all else will be remembered in the end.
Nicholas Jay Boyes
Milwaukee Wisconsin
American Democratic Republic
8 14 2021
Here’s another one from the archive:
Afghanistan Falls to the Taliban 8 19 2021
On the 15th of August, 2021, America lost the war against Afghanistan. The largest city, the capital Kabul, fell to the Taliban. The rest of the country by this point was mostly under Taliban control, and the capital falling ended America’s 20 year war, which was a failure.
A nonessential evacuation order (NEO) followed, with a scene resembling the fall of Saigon, an airlift operation from the airport in Kabul. The rush of thousands of Afghans and others attempting to board aircraft to escape resulted in several deaths, with some clinging to military aircraft during takeoff.
About a day later, the military part of the airport was up and running again, with a few thousand Army men guarding the retreating Americans. The press was able to exit, and a few thousand Americans, some diplomats.
Ashraf Ghani, the hand picked diplomat who was running the government, fled to the United Arab Emirates, where he is currently. He fled the country as the government fell, NATO and the American’s leader who was responsible for Afghanistan.
Joseph Biden joins the ranks of Harry Truman, who lost in Korea, John F. Kennedy, who failed to stop the Cuban revolution, and Gerald Ford, who saw the loss of Vietnam. The repeated failure of the Army to win victories against people in the developing world, in this case against a group with no aircraft, in the face of a massive aerial bombing campaign, showed again the weakness of the bourgeoisie, unable to stop peasants after 20 years and more than a trillion dollars spent, on the Afghan Army.
For years we were used to hearing the desperation of the Taliban, when the Americans were losing it was due to suicide bombers, etc. The way it looks now is the minute they started pulling out the men, which Donald Trump had originally agreed to, but could not as he was not elected, Biden was instead, and Afghanistan fell to the Taliban. If anything Biden delayed the inevitable; Trump said May 20th the war would end, BIden was 2 months later.
Yet the Republicans, and some Democrats, are suggesting this was Biden’s fault, that he misled the people by ending war there. We all know Trump’s agreements were often lies, that he often said he would do something, then failed to carry out his decisions; that things would have looked different if Joseph Biden had not commanded a majority of 7 million votes to Trump.
The only difference would have been we all know Trump was lying when he agreed to remove the American Army on May 20th.
Joe Biden stuck to his word, and honored the agreement, and the rest is history. Biden’s decision was a courageous one, standing up the Pentagon in a war started by Republicans under George Bush II, continued by Barack Obama and Donald Trump. The bourgeois finally had to admit the war was costing them men, and was not returning treasure or profits. Even if there was victory, Afghanistan would never have brought the Americans the trillion dollars they spent there in the war. The people they had in their proxy army were mostly illiterate, some even had trouble taking basic commands, like adding up numbers.
Like Vietnam, the airlift is bringing back the bourgeoisie and their supporters from the Kabul airport, many lucky to have saved the skin on their backs. It is not clear how long the Nonessential Evacuation Order will take to be completed, perhaps until the Taliban have had enough. There are still thousands of people trying to fly out of Kabul, and only the military side of the airport is still flying.
It remains to be seen if this is a once in a generation spectacle. Syria was also lost, although it was not as clear looking. Trump had bombed Syria many times, and the Americans are not in control of Syria, Bashar Assad is still in power. They always said removal of Assad was the goal of the Army being deployed there. Another failure, although a slower less sensational one.
The war this time lasted 20 years, the longest yet, only to result in a loss. It must be quite demoralizing, to have lost thousands of men and a trillion dollars, in a small country without even an air force. George II got them into it, and was unable to win; Obama inherited what looks now like a hopeless battle from George II. It was remarkable it lasted this long, the pandemic made fighting in a conflict overseas without vaccinations, Trump’s predicament, impossible to maintain. Even with vaccines, the virus is still spreading, and more than 600,000 people in America have died from Covid 19. The military is just now starting to receive orders to vaccinate all their people. Not good conditions to be tooling around the other side of the world trying to stop peasant rebellion.
The blame lies with the first efforts to support the Taliban against the Soviet Union, which they won. But look what was left behind, the Taliban in power. The same group they armed and trained overthrew their American supported government. The rest of the blame lies with the Republican bourgeoisie, who chose war over sanctions when the skyscrapers were attacked in 2001.
They did get Bin Laden, but revenge was the main motive keeping the conflict going. With only capitalism the motive for fighting, things finally came to a head in August of 2021, when the Army they created was conquered, mostly without even a fight. The flight of Ashraf Ghani to the UAE symbolically ended the foreign invasion of Afghanistan.
Nicholas Jay Boyes
Milwaukee Wisconsin
American Democratic Republic
8 19 2021
Wait there’s more:
The American Occupation of Afghanistan Ends 8 30 2021
The last flight left Afghanistan loaded with the soldiers, ending almost exactly 20 years of war. The pictures of the helicopters evacuating the diplomats from the rooftop a powerful symbol of the end of American intervention in Afghanistan.
It was the second superpower to lose a war there in less than 50 years. First it was the Soviet Union that was removed from Afghanistan in 96’ by the Taliban, with American assistance. They supported the rebels who fought the war against the Communist Party there, and successfully removed the government the Soviet Union had established there.
The same Taliban would refuse to surrender Bin Laden, mastermind of the attacks in 2001 that struck the skyscrapers in New York. Bin Laden, who came from a royal family in Saudi Arabia, would eventually be caught in Pakistan, although at some point he was living in Afghanistan, according to the Americans.
America’s longest war would last 20 years, cost trillions of dollars, yet end in a retreat from the last remaining enclave of control, the Kabul airport. They airlifted a little over 100,000 people in a period of a few weeks; the spectacle of thousands of Afghans who got on the tarmac was another memorable event, much like the airlift from Saigon in 1975.
They got most of the Americans out, anyone left is now on their own in an Afghanistan no longer under the Americans and NATO. The last of the diplomats left, their embassy shuttered, its contents destroyed in order to keep it secret from the Taliban.
The agreement Donald Trump made with the Taliban to leave and end the war was accomplished by Joseph Biden, something that escaped the former, who tried to suggest if he won the election the soldiers would stop fighting by May. We all know Trump was notorious for lying, we came to expect it in the 4 years he was in power. The epitome of Trump lying was his suggestion that the landslide victory of Biden by 7 million votes in suffrage was a fraud. There are still some believers who think someone like me would vote twice.
Voting twice is fraud, Punishment for fraud includes the following: Jail or Prison sentence: A misdemeanor conviction could carry a sentence of up to a year in a local jail, while a felony conviction carries a maximum sentence of 20 to 30 years in federal prison. How would you like to have that on your criminal record? You would never get a job again. The idea that there were thousands of Milwaukeeans who voted twice is being entertained by the State Legislature here of late. Although Joe Biden was preferable to Trump, finding even a dozen ballots cast twice simply has not happened.
The point is we were used to the Republican bourgeoisie and their bold faced lies, and the argument seems to be that Trump would have changed his mind and the Taliban would not have taken power.
So here we are again, like lifting the mask mandates, something the Republicans said they wanted, a May 20th return of the Army home from Afghanistan they are now rejecting. The Covid 19 pandemic continues, the reactionaries afraid that getting vaccinated is really a shot that is going to affect your mind, and you will start liking Joe Biden and Nancy Pelosi.
So here we go again, their own decisions resulting in reality. The pandemic is raging in the South, more than a thousand dead a day; Florida, Texas, Alabama etc. the epicenters of the Delta variant of Covid, due to the politicization of masks and vaccination by the Republicans,
All Biden did is do what Trump told us he wanted to do, like stopping mask mandates, ending the war, etc. It’s been their own decisions that have gotten them to where they are today, there is noone to blame but themselves.
And it was the Republican bourgeoisie who were in power when the war started, under similar conditions. Like Donald Trump, George Bush II did not command a majority in universal suffrage, yet it was “democracy vs dictatorship” in Iraq and Afghanistan. George II could have simply applied trade sanctions on Afghanistan, until they gave up Bin Laden.
Instead 20 years, trillions of dollars, and no treasure returning, American companies making a profit by employing Afghan workers, etc.
They taught the Taliiban how to overthrow the government when they fought the Soviet Union. They won, but in time the knowledge they gave them came back to haunt the Americans. The Taliban, armed with no airplanes; only guns, rocket launchers, and landmines have overthrown what was once a superpower. The nuclear weapons did not help them, or the night vision goggles, stealth aircraft, etc.
The Taliban are not a western movement. The ideas they have did not agree with the Soviet Union either. Are we really to believe that Nato and the Americans value the rights of women more than the Soviets did?
Yet the more liberal ideas of the west are trumpeted as what was lost to the Taliban. They could have just left Russia in control of Afghanistan and the rights of women if anything would be better than what the occupation brought. Equality was a value of the communists the Taliban removed in 96”.
We will soon see what the effects of this loss of territory means to places still occupied, like Iraq. If the oil gets nationalized again we will know for sure they lost. When ExxonMobil and Shell no longer pump the oil there will be no treasure returning home to American capitalists. Departures from bourgeois society such as industry capable of making profit that is not owned by capitalists always proves to be controversial.
It is not clear what Afghanistan is moving towards with the removal of Russia first than the Americans. But it was the fault of the bourgeoisie they are where they are today.
The amount of money the national debt comprises is more than 30 trillion dollars according to the National Debt Clock website. This money carries interest, and it is this process which is what is referred to below.
“… fictitious capital, the object of gambling on the stock exchange, which is actually nothing but the selling and buying of entitlement of a certain part of the annual tax revenue.”
Karl Marx Theories of Surplus Value volume 3 p. 111
“ By fictitious capital Marx here means the capital of the National Debt which is brought into being by loans (of the bourgeois or bourgeois landowner state) and never intended to be invested as capital and on which the creditors are paid interest on the taxes, imposed on the people. “
Footnote in Prometheus books edition #40
“U.S. Budget Deficit & The National Debt. The National Debt is the total amount of money owed to all external parties by the US government. Most of that debt is in the form of outstanding government securities such as treasury bills, notes, and bonds that the government has issued.
Mar 22, 2022
Google search “is the national debt paid for with bonds or stocks?” 8 10 2022
The state’s money comes from profit, taxes are a subdivision of this profit. You have to first have a profit before the capitalist state can pay taxes, and the state’s money is not investment, at least it makes no profit. Rather it is revenue, and revenue refers to money spent that does not create surplus value, the object of capitalist production.
All production is carried out to create surplus value, if there is state production it is something needed by capitalists they cannot produce and make a profit doing so, but is essential, like city buses, the passenger train, the highway system, etc. so the worker can, for instance, get to work in the factory on time.
The bond market is speculation on the state’s taxation in the future. It is an investment on something that has not yet been created; there is no commodity 10 years from now when the bond matures that will be sold. It is pure speculation on the income of taxes, gambling in the stock exchange on the states debts.
Marx calls this “fictitious capital”, as it creates no real surplus value, rather is speculation on the annual tax money. If it was capital it would make a profit. The company is not run firstly to pay taxes, then to make profit, rather the opposite, to make a profit then to subdivide this into taxes. Industrial capital and agricultural capital create the surplus value, it is the unpaid section of the workday. The state does not create surplus value, it is an expenditure of capitalists, and claimed by them as revenue.
We are somehow supposed to feel that we have some say over taxes, as if the amount of taxes displayed on the paycheck would be the property of the worker if it did not have to be paid by the bourgeois.
Being privy to his tax expenditures is sort of interesting, perhaps we should have the whole profit printed on the paycheck? If you want to hear the capitalists cry bloody murder, try bringing a vote on that. If the taxes did not have to be paid, there is no reason to assume the capitalist would not simply pay the worker the same, and keep the money. It’s not like the worker is buying into something, an investment of sorts. This money is directly from the profit, the worker does not choose how much he wants to give, and when liberal progressive bourgeoisie soften a little, and use the taxes for ecology or more worker friendly things, there is usually a corresponding retrogression.
This type of speculation indicates fictitious capital is still alive and real, just as it was in 1863 when Marx wrote Theories of Surplus Value. The bond market is still large, and if it carries interest, the amounts of which are a sizable sum of money. Have we ever seen taxes go down, under either party? In the real world, not the Ivory towers, life is a different experience.
Taxes do come from the worker, it is part of the unpaid section of the workday, the surplus value. When it is paid directly by the worker it is calculated for beforehand by the employer as a part of his wages..
We thus see a society that is still functioning the same 167 years after being described by Marx in Theories of Surplus Value Volume 3.
Ecological Era 
You must be logged in to post a comment.