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

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

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

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

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

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

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

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

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

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

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

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

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

Nicholas Jay Boyes

Milwaukee Wisconsin

American Democratic Republic

3 14 2024

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Nicholas Jay Boyes

Milwaukee Wisconsin

American  Democratic Republic

2 19 2024

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

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

David Ricardo 

Principles of Political Economy and Taxation

London 1817

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

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

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

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

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

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

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

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

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

Adam Smith

Wealth of Nations Chapter 3

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

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

Nicholas Jay Boyes  

Milwaukee Wisconsin

American Democratic Republic

10 23 2023

revision 9 20 2025

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

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

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

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

David Ricardo Principles of Political Economy and Taxation

London 1817

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

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

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

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

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

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

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

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

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

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

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

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

Nicholas Jay Boyes

Milwaukee Wisconsin

American Democratic Republic

8 11 2023

Slavery in the Colonies. Emancipation and its Legacy.  6 27 2023

The Reuters news people are writing a history of slavery in America, it is at:

https://www.reuters.com/investigates/special-report/usa-slavery-lawmakers/

And:

https://www.reuters.com/investigates/special-report/usa-slavery-lawmakers-overview/

“President Abraham Lincoln issued the Emancipation Proclamation on January 1, 1863, as the nation approached the third year of the Civil War.

Google search emancipation proclamation 

Prior to this there is little real archival information for black slaves, beyond death notices from slave owners, whose wills included slaves, and tax notices filed by the slaveowner.  Sometimes a family kept writings from the ancestors, often 4 or 5 generations removed, that included a record of slaves owned by the person.  Generally it includes a dollar amount, as it was in a will or if the estate was sold after the death of the slave owner.  

Reuters shows a consistent connection between serving as a Congressperson, Senator, Supreme Court Justice, and even president, and having descendants that owned black people.  They found 100 people whose ancestors owned slaves, the southerners more commonly directly linked to slavery.

It is relevant because here we see the legacy of slavery and the position of the descendants of slave owners, who may have suffered abolition, but nevertheless remained politically powerful, and eventually got their fortunes back.  And it only took about 100 years.

It is also relevant that these powerful people in government, our bourgeoisie, are totally opposed to Karl Marx and his writings. They seek to kill by silence his writings such as Capital.  They have convinced their workers Marxism is immoral, as Marx was not a Christian.

Nevertheless we retain records of the real events Marx took part in. Here is an example: 

https://www.marxists.org/archive/marx/iwma/documents/1864/lincoln-letter.htm

This letter was written by Marx for the International Working Men’s Association on January 25 1856.  

Here is another:

https://www.marxists.org/archive/marx/works/1861/11/26.htm

The latter shows the contradiction of what the Republicans became, after the Civil War.  At some point the descendants of the slave owners became leadership in the party.  The Reuters article names many, for instance Mitch McConnell, Senator from Kentucky.

According to the Reuters article: 

Direct ancestor: Joseph Farrington

Number of enslaved: 12

Generations removed: 4

In this case we know little detail of the human beings Mr. Farrington owned.  We just see a powerful man whose family history has a rather interesting connection to slavery.

Continuing to delve into Reuters we find: 

“Lindsey Graham

U.S. Senator from South Carolina

DIRECT ANCESTOR: Joseph Maddox

RELATIONSHIP: Great-great-great-grandfather

NUMBER ENSLAVED: 8

“The great-great-great-grandfather of Senator Lindsey Graham, a Republican from South Carolina. After the death of Graham’s direct ancestor, Joseph Maddox, a receipt from the sale of his estate was prepared. Dated February 1, 1845, it shows the sale of eight people Maddox had enslaved. Among them were five children: Sela, Rubin, James, Sal and Green. The “Negro man Sam” was sold for $155.25. Their names are listed alongside items including a sorrel horse ($10.50) and a folding table ($9.87).

Reuters see above ibid.

How about this one:

“Pete Sessions

U.S. Representative from Texas

DIRECT ANCESTOR: Richard Sessions

RELATIONSHIP: Great-great-grandfather

NUMBER ENSLAVED: 96

“One of the wealthiest slaveholders was Richard Sessions, the great-great-grandfather of Representative Pete Sessions, a Republican from Texas. A family history written by the congressman’s grandfather in 1975 tells a riches-to-rags story involving the Sessions’ cotton plantation along the Mississippi River: a place called Luna Landing in Chicot County, Arkansas, where more than 80% of the residents in 1860 were Black.

“The family book depicts the affluence of Richard Sessions before the war. It also documents the dependency of his fortune on the labor of those he enslaved.

“Richard Sessions owned about 770 acres of some of the most fertile land in the South. By 1860, census records show, the 43-year-old Sessions was among the richest 1% in America. His land in Chicot County was valued at $75,000. His personal wealth – measured largely in human property – was far greater: $200,000, or $113 million in today’s money by one calculation.

“An 1860 local tax list indicates he owned $1,000 in household furniture, two “pleasure carriages,” and at least eight horses, 30 mules and 40 head of cattle.

“Sessions had 96 enslaved people working his land and tending to his family, according to the slave schedule portion of the 1860 census.

“Many slave schedules listed each person who was enslaved, individually, but almost never named them. The census taker’s entry for those in bondage by Sessions is even more impersonal. It grouped the enslaved by age and sex: There is an entry for three unnamed 55-year-old men, for example. Thirteen 25-year-old men. Twelve 15-year-old girls. And so on.

Reuters ibid.

Although ruined in business by the Civil War, which emancipated his slaves, the family today is still bourgeois.  It would seem to be that way for many of the people in the article; they suffered financially by abolition, but remained powerful, governing America 160 years later.

Another one:

Joe Wilson

“U.S. Representative from South Carolina

DIRECT ANCESTOR: Stephen H. Boineau

RELATIONSHIP: Great-great-grandfather

NUMBER ENSLAVED: 16

“Joe Wilson is the Republican Congressman from South Carolina who famously shouted “You lie!” at America’s first Black president, Barack Obama, during a joint session of Congress in 2009. Wilson has at least five slaveholders among his forebears. His ancestors first enslaved Black people during the 1700s, Reuters found.

“Among the slaveholders was Wilson’s great-great-grandfather, Stephen H. Boineau. In 1860, he enslaved 16 people, ranging from an 8-month-old girl to a 50-year-old man. Boineau also worked for another enslaver as an overseer – a man who enforced plantation rules and monitored the conduct of the enslaved.

“Wilson did not respond to five requests for comment.

Reuters ibid.

“Among 536 members of the last sitting Congress, Reuters determined at least 100 descend from slaveholders. Of that group, more than a quarter of the Senate – 28 members – can trace their families to at least one slaveholder.

“Those lawmakers from the 117th session of Congress are Democrats and Republicans alike. They include some of the most influential politicians in America: Republican senators Mitch McConnell, Lindsey Graham, Tom Cotton and James Lankford, and Democrats Elizabeth Warren, Tammy Duckworth, Jeanne Shaheen and Maggie Hassan.

“In addition, President Joe Biden and every living former U.S. president – except Donald Trump – are direct descendants of slaveholders: Jimmy Carter, George W. Bush, Bill Clinton and – through his white mother’s side – Barack Obama. Trump’s ancestors came to America after slavery was abolished.

“Two of the nine sitting U.S. Supreme Court justices – Amy Coney Barrett and Neil Gorsuch – also have direct ancestors who enslaved people.

Article continues

“Reuters found that at least 8% of Democrats in the last Congress and 28% of Republicans have such ancestors. The preponderance of Republicans reflects the party’s strength in the South, where slavery was concentrated.

“Few were willing to discuss the subject: Only a quarter of those identified as having slaveholding ancestors offered any comment to Reuters. Among the silent are politicians who previously have spoken publicly, sometimes eloquently, about the legacy of slavery and the need for racial healing. The reticence underscores the enduring sensitivity of slavery as a political issue, an unease that genealogist Burroughs suggests is greatly amplified for many people when one’s own kin are linked to the brutal institution.

Reuters ibid.

Reuters went so far as to contact the people referenced in this article, and most were silent.  Part of living in America for many includes a past history sometimes hard to face.  For Wisconsin, it is what happened to the natives.  While there was never slavery in Wisconsin, their men marched to Civil War under Lincoln, president from Illinois, to emancipate the slaves, it is a shame they could not have felt the same way towards the suffering of the native peasants who were run off their land to create capitalism as we know it today.

But for many it did not stop there, a legacy of slavery remaining also, especially in the South. Not only did they remove the natives,  they used slave labour to farm the land, often to its demise and then moving further west to do it again.  

If one is to point to a family history, as many a representative will do when trying to gain the sanction of universal suffrage, of hard work and good business sense allowing for a bourgeois to become Congressman,  the reality of many includes human bondage.  Although there are few today who would suggest ending abolition, some of the main protagonists in the story such are Karl Marx and Friedrich Engels, whose ideas are still being met with violence.  There is still a sore spot about when the southern man was confronted by the proletariat, and forced to give up ownership of the human beings he held in bondage.  It has yet to be forgiven, and it will not be in my lifetime. It is part of a history few read, it is the real life struggle of the workers in their daily lives, how they labour, their real material conditions. Their non ownership of the means of production, and the human bondage practiced by their so-called “betters” ancestors.

The Reuters article seems to be the first of a series.  More on this soon hopefully.

Nicholas Jay Boyes 

Milwaukee Wisconsin

American Democratic Republic

6 27 2023

An agreement was reached a few days prior to default on the debt by Washington.  In the agreement reached, there will be no limit to the amount of bonds the government can offer to pay the bills of the state.

Which would seem to have been inevitable, given it was simply the Republican bourgeoisie who were having trouble with how their money was being spent by the less extreme section of the bourgeoisie, the liberal progressives.  

The suggestion they lowered spending, when to pay for their day to day expenses with bonds, rather than straight out taxes, looks absurd.  Rather this money, in bonds, will carry an interest rate, and will be issued by the Central Bank, as bonds. Even if they did lower spending, what is going to be spent will be more expensive than it would be if it were simply paid for by taxes, rather than the roundabout way of issuing bonds to be paid back at a later date.

Although the money comes from selling commodities, as all value is created by labour, it is claimed as profit by the capitalist, and some of it is subdivided out to pay the expenses of the capitalist state.  The worker can claim this to be his, it is produced by him, but so is profit, which he cannot claim as his own.  Taxes on the worker like sales taxes, which tax things like pens and papers, books, computers etc. are all simply repressive.  Given the conditions, you would be hard pressed to find a worker who would agree to pay a sales tax.  Yet that is the argument  when taxes are due, that the state money is property of the worker, and the liberal progressive is spending too much of it. 

Given it is a division of profit, the Republican bourgeoisie who comprise most of the owners of capital must see a conspiracy to spend their money due to universal suffrage they could not control.  But why issue bonds?  Why not lower the cost of the state by simply raising taxes to pay for what the bonds are going to?

Instead any money saved will go to paying off the interest on the state’s debt, as bonds.  So where was the controversy?

In the 2008 recession the debt rating was downgraded. Prior to this, and since then, there has never been default.  This time the rating has fallen, but only because the debt was in question for so long, as capitalists argued about their profits from bonds, and how much to issue.  Although they never intended to not pay for the maturing bonds, a few weeks away from a default has rattled investors.

The whole issuing of bonds is speculation on the ability of the state to pay off its debts at a future date of purchase of the bond.  It comes to 3.7% interest on a ten year note.  There is no commodity involved, it is pure fetish. It is money that creates interest from its power as capital.  It is not machines, or a product speculated on that will be built, like a ship or railroad.  It is pure speculation, the trading of tax money, fictitious capital.  At best the capitalist spreads around the wealth a little, as instate college tuition.  But make no mistake, the repressive power of the state is not being removed.  It just carries an interest rate now.

The industrial capitalist recognizes this, and deducts from his surplus value this money. It is part of the interest, which is going to bonds. Perhaps this sweetens the pot for him, so to speak, as the money is not simply taxes, it has a return date with interest for his fellow capitalists who buy bonds.  But he still has to pay. The financial capital is still all created in production, and its circulation can only be made cheaper by the intervention of credit, in this case bonds. The state is using its authority to issue bonds, financial capital.

The currency is obviously a cost of production, the money stored up here for circulation an expense.  

But with bonds comes interest, making it seem superficially that the state has created a profit, and paid back the bond.  

This is simply not the case, the capitalist state is not running factories to pay off their debts.  If there were assets that could produce a profit that were run by the state they would be privatised.  There is no “ National Debt Incorporated” production facility hidden somewhere in the deep west., making  profit paying off the bonds debts.  

Instead, there is the surplus value, which is calculated by what is left over after the cost of labour, the variable capital, wages, are paid for by the industrial capitalist. The rest of the expenditure comes from the constant capital, the expenditure on machinery and raw materials.  The latter becomes important in drawing  the distinction between surplus value and profit. 

The financial capital carries the interest the capitalist has to pay out as part of  his expenditures.  He calculates for this, and here we have him using the Central Bank for credit.  It’s where the bonds are issued, the money coming from selling commodities.  The fact the commodities have not been built yet changes nothing.  It is a form of credit, and in times of crisis the bonds are considered viable assets, even though there are failing banks containing them.  Loans to smaller banks are made by the Central Bank based on bonds as assets.

Which seems like a great deal of fictitious capital.  And a group of investors who are ultimately speculating on the taxes that will have to be paid if the whole thing goes south.  When the banks become “too big to fail”,  it seems as though there is no cost spared to pay for the bonds that are becoming due. 

The latest exercise in the issuing of bonds expands the credit mechanism of the Central bank further.  With the economy coming back from the Covid crisis, short of a few notable bank failures, it seems prosperity is being felt again.  At least there are still paper products on sale, rather than empty shelves in the pandemic.  The Central Bank looks able to handle issuing large amounts of debt, for the day to day expenditures of the state.  But in the end there will always be a question of just why taxes are being traded, rather than simply paid for by capitalists, the former what bonds really represent.  

Nicholas Jay Boyes 

Milwaukee Wisconsin

American Democratic Republic

6 5 2023

After the fall of the three banks Silicon Valley Bank (SVB), Signature Bank, and then Signature Bank, is it going to happen again? Pacific Western Bank (PAC) seems to be experiencing some of the same problems the other failures had, as money becomes more difficult to be had.

Things seem to be starting to snowball; the banks fail, making it harder to borrow money.  The interest rate rises, the Central Bank reacts to this by raising the official interest rate, and the banks find it harder and harder to access capital.  

The PAC Bank, which also did considerable business in California, is teetering.  Its depositors are going away to larger banks, as its assets were tied to interest rates on long range investments.  Like in the 2008 crisis, when interest rates spiked, leaving holders of variable rate mortgages subject to a double digit interest rate practically overnight, the speculation on long term loans like mortgages has to be having an effect on the mid sized bank.

As money becomes more difficult to be had,

“Another midsize bank faced a crisis of confidence on Thursday, as Pacific Western Bank said that it had lost nearly 10 percent of its deposits over the last week, sparking a renewed plunge in its already depressed share price.

“The deposit flight, which amounts to billions of dollars, was detailed in a regulatory filing that suggested new trouble at the Los Angeles-based lender. The bank’s stock fell 23 percent, a much steeper decline than other banks that have been the focus of investors’ worries after the recent collapses of Silicon Valley Bank, Signature Bank and First Republic Bank.

“PacWest, with $44 billion in assets and branches primarily in California, grew fast as a lender in the technology world, a similarity to some of the fallen banks that has proved unfortunate of late. In its regulatory filing Thursday, PacWest said that the seizure and sale of First Republic at the beginning of May “heightened market and customer fears of additional bank failures, including PacWest.”

“On May 3, the bank confirmed that it was looking to sell itself or raise more money, a sign of weakness in its business that sent its shares down sharply. Around that time, the bank said that it had “not experienced out-of-the-ordinary deposit flows.”

New York Times May 11 2023

The shares are connected to the ability of the bank to use credit to consolidate capital.  Banks are sort of like objects with gravity for capital, they exert a pull from all other capital around them to consolidate into a large mass. The bank holds capital, the deposits are even used as capital, lent out at an interest rate so the bank makes a profit from its deposits. 

That is part of the reason it is important when viewing a bank to look at  their deposits.  It is part of their capital, and if deposits start to wane, the bank cannot make a profit as easy.

The last three failures were tied to a run on the deposits of the banks, resulting in the state having to repay the depositors, who held more than the previous level of $250,000 that was insured by the Central Bank.  The latter rule went to the wayside when the banks failed, even though the average deposit size of an average person was $7,000.

So the millionaires got bailed out with the banks.  SVC’s assets were sold to JPMorgan for a little more than 13 billion dollars, a bank previous to failure holding 200 billion dollars or more in assets.  This sale was accomplished with the aid of the state, the Central Bank overseeing the transaction.

The larger banks were forced by the Central Bank to come up with about $30 billion to help bail out First Republic bank, to no avail. The bank went under, now in the process of its assets being sold at bargain basement prices to another big bank presumably,  like SVB did with JPMorgan.  That was a sizable amount of capital, 30 billion dollars worth.  Where did it go?  It was like a bucket with a hole in the bottom, the Central Bank plan just kept pouring more water into it. 

If PAC fails it will be another bailout, bringing into question how the Central Bank can keep coming up with these massive sums of capital.  The national debt rate is in question, the Congress divided about raising it again.  The banks seem to be where a trillion dollars went in 2008, this time they are in hundreds of billions.  How will they pay? By speculating on commodities that are not yet produced, fictitious capital, raising the debt ceiling, trading the tax money.

The Western Alliance Bank so far has yet to fall, although it is facing deposit problems like the three other bank failures.  Once there is a question of safety of deposits, investments move from small bank to big bank.  The big banks were “too big to fail”, and investors know they will not lose everything if a big bank starts to fail.  The Central Bank will bail them out.

But every bailout seems to raise the national debt further, now at biblical proportions.  Will there be commodities produced that will be able to pay off the debt? It is pure speculation; all we know is capitalists sure think so.  If they did not you would never see the national debt rise. 

So far there has been no effort seen to get the big banks to bail out PAC like they did First Republic.  Perhaps the big bankers are learning their lessons, and conversely the Central Bank.  Clearly the interest rates rose as a reaction to the tightening of credit, with the possibility of bank failure the cause of rising interest rates by the Central Bank.  

You can probably expect the national debt to keep rising, as the Central Bank keeps selling more and more bonds to bail out the banks. The proceeds will come from profit, diverted from the pot for taxes by the bourgeoisie.  It remains to be seen if this is simply a credit problem; if it is being a costly one.  

Nicholas Jay Boyes

Milwaukee Wisconsin

American Constitutional Democratic Republic

5 13 2023

edit 9 20 2025

Speculation and Financial Capital.  Three Bank Failures.  5 2 2023

There has been a series of bank failures, with Silicon Valley Bank (SVC) bank, Signature Bank, and First Republic bank all going under.  The state has bailed out the banks completely, as in the case of SBC and Signature, although they have suggested the big banks have an insurance policy to bail out banks that is somehow not part of taxes. 

Of course, given taxes are a subdivision of surplus value, it really is only an accounting shell game of where the surplus value is really going.  In the end, value is created by labour, and this surplus value represents the hours worked by the worker producing commodities he is not paid for. 

The failure of the banks was tied to speculative investment. When it became clear the banks were no longer going to be able to make a profit for its investors, the speculative bubble burst, leaving the banks devalued. 

Once the failures became imminent, people fled the banks with their deposits. This led to SVB, and Signature Bank not being able to guarantee its depositors, many of whom had uninsured money in the bank, as the state only provided $250,000 insurance on deposits.

This would change, and SVB and Signature, upon failing, had the state insure the whole investments, and the deposits.  It meant if you were a millionaire, you would be compensated for your millions, even though the banks failed.    

Which is clearly in bailout territory.  The latest bank to fail is First Republic Bank. 

“JPMorgan Chase’s purchase of First Republic Bank is intended to end a budding financial crisis, but it risks doing so by reviving a political battle over the power of the nation’s largest financial institutions.

“California state regulators closed First Republic early Monday after ruling it was “unsafe or unsound” and named the FDIC to sell off its parts.

“JPMorgan’s prominent role in the First Republic saga drew fire from lawmakers such as Sen. Elizabeth Warren (D-Mass.) and highlighted the limits of restructuring implemented in the wake of the 2008 financial crisis. JPMorgan — and other supersized banks — benefited in recent weeks as deposits fled regional lenders for the perceived safety of larger institutions, and now gained again by outbidding others for what was left.

Washington Post May 1 2023

https://www.washingtonpost.com/business/2023/05/01/first-republic-bank-seized-jp-morgan/

Which marked the end of First Republic Bank. Apparently its assets went on the chopping block, with JPMorgan buying up the devalued investments at bargain basement prices.

It should be noted Elizabeth Warren supported the bailout of SVB and Signature Bank, when its depositors and investors in its paper realized their money was not insured.  They stood to lose billions, much of it in mortgage and securities speculation.

Capitalist state to the rescue; Warren would support a complete bailout for all investments in SVB, and Signature Bank, which resulted in the bailout of the billions in investments of financial capital, tied to speculation.  

And as predicted, investors removed their money from the failing banks to the safety of the big banks, the banks considered “too big to fail” in the 2009 crisis.  

An interesting use of taxes.  Unfortunately, this use does not seem to be making anyone a profit, except perhaps JPMorgan, who saw new investment and deposits, as people removed their money from the smaller failing banks, to them.   The investments JPMorgan just bought could prove to be able to make a profit in time, we don’t know what exactly they just bought.  Probably some sort of speculation on Mortgages, securities, etc., which are now devalued severely, but could one day be worth something.

“All banks with more than $50 billion in assets are required to file with the FDIC a “resolution plan” designed to provide insight into how the institution could be wound down in the event that it fails.

“In its most recent version, submitted at the end of last year, First Republic said that “its focused business model, uncomplicated structure and conservative market share” would make it easy to wind down in a crisis.

““First Republic believes that a resolution of the Bank by the FDIC would not require the use of any extraordinary government support and would substantially mitigate the risk that the failure of the Bank could have a serious adverse impact on the financial stability of the United States,” the bank said in the December document.

“First Republic’s failure is expected to cost the FDIC about $13 billion, the agency said. The money will come from the FDIC’s deposit insurance fund, which insured banks pay into every quarter.

Ibid. Washington Post

As said the FDIC has an accounting technique that allows for the banks to save up money to bail themselves out when their excessive speculation results in a loss of returns on their money.   At best we can say this surplus value is not divided off the state as taxes, rather is a hoard, in case of failure, insured by the FDIC, the state.

“its focused business model, uncomplicated structure and conservative market share” (see above) seems to have put the state’s insurance policy of bailouts for billionaires to the test again. Apparently the 13 billion dollars the state, which supports the FDIC, that just went to bail out First Republic: “…would not require the use of any extraordinary government support and would substantially mitigate the risk that the failure of the Bank could have a serious adverse impact on the financial stability of the United States,” the bank said in the December document.

ibid.

Well that’s an optimistic picture of how much capital is tied up in insuring banks.  The 13 billion dollars certainly would not have a “serious adverse impact” on the FDIC.  

Just how much surplus value does this mysterious investment for insurance in the banks in the FDIC come to?  Apparently, according to First Republic’s bourgeois, this 13 billion dollars will cause no harm at all to the FDIC’s hoard.  A drop in the bucket.

That’s three banks now that have had their assets sold to the highest bidder by the state, their depositors bailed out.  A few more of these smaller banks falling will equal a big bank. As we are constantly reminded, we have no say over where the profit, which taxes are divided off of, is going.  Whether or not it is a special hoard guaranteed by the state for banks when they have trouble investing their financial capital and making a profit, or if it is simply the surplus value created that is part of all commodity production in the land of capitalism, in the end it is the worker who pays.  

Nicholas Jay Boyes

Milwaukee Wisconsin

American Democratic Republic

5  2 2023

In a remarkable case, FOX News, the mouthpiece of the Republican bourgeoisie, was made to admit they lied about the elections, and pay a large amount of money to Dominion company due to defamation. 

“Fox News has settled a defamation lawsuit from the voting machine company, Dominion, over its reporting of the 2020 presidential election.

“In a last-minute settlement before trial, the network agreed to pay $787.5m (£634m) – about half of the $1.6bn initially sought by Dominion.

“Dominion argued its business was harmed by Fox spreading false claims the vote had been rigged against Donald Trump.

“The deal spares Fox executives such as Rupert Murdoch from having to testify.

“The judge in the case is not required to give his approval for the agreement.

“Fox said Tuesday’s settlement in one of the most anticipated defamation trials in recent US history reflected its “commitment to the highest journalistic standards”.

BBC 4 18 2023

https://www.bbc.com/news/world-us-canada-65318654

Under Donald Trump and to this day there are Republicans who only trust FOX News for information. This trial clearly showed FOX knowingly spread lies and propaganda to support Donald Trump’s falsehoods about the electronic voting machines being rigged to reject votes for him in favor of Biden. 

Dominion proved beyond a reasonable doubt FOX knew Dominion voting machines were not rigged, yet published cable news saying the machines were giving fraudulent results in favor of Joe Biden.  Internal documents in the case showed not only that the people behind FOX News knew Trump’s statements about having lost the election due to fraud were false, yet the profit motive reigned over truth, and out of fear of losing customers, did not tell the truth about the election, and supported Trump’s lies. 

The settlement was reached as Dominion had shown that FOX News knew they were lying, yet published the articles on Cable Television anyways, making themselves therefore liable to publishing false claims. 

It would have been interesting to see FOX News owner Rupert Murdoch testify, along with his entourage, and his hosts.  Instead he settled for a sizeable amount of money, 787.5 million dollars, and avoided testifying.

“The Fox statement added without elaborating that the network “acknowledges the court’s rulings finding certain claims about Dominion to be false”.

“Dominion chief executive John Poulos told a press conference the deal included Fox “admitting to telling lies, causing enormous damage to my company”.

“Justin Nelson, a Dominion attorney, told reporters that “the truth matters”.

“”Lies have consequences,” he added. “Over two years ago a torrent of lies swept Dominion and election officials across America into an alternative universe of conspiracy theories, causing grievous harm to Dominion and the country.”

BBC ibid.

The attachment to cable news like FOX as a source of quality journalism remains a social problem.  The whole format of the system whereby a company or individual can buy time for his political and social message to be on; the advertisements that FOX interrupts a broadcast for every 5 minutes or so, are not only annoying to the viewer,  but is where the money FOX News is reliant upon to stay on air is coming from.  It is not hard to understand how this affects the content of the news; the corporations know they can control the news as they hold the purse strings for FOX News.

Combine this with an election cycle and it just gets uglier.  There are basically no stops, the Citizens United ruling allows unlimited money to flow to companies like FOX for propaganda supporting the Republican bourgeoisie.

The ruling shows FOX News deliberately spread lies on their cable news station, destroying Dominion’s business.  And another company, Smartmatic, is seeking 2.7 billion dollars from FOX for the same reason,  namely defamation suggesting their machines were rigged against Trump.  

The whole thing is really quite ridiculous, given voting is still done on paper.  Whether you get an absentee ballot, or actually go to the polls to vote, you mark a paper ballot, and sign it to show it is yours.  The absentee ballots require a signature from the voter and a witness.  If there was fraud it would be easily proved, simply count the paper ballots. 

But like many Trump fantasies, including the danger of absentee ballots, this fiction of the machines being rigged against Trump, was entertained by FOX News, even though they knew it was not true, resulting in their finally having to admit their news is not always the truth, rather it is infotainment designed to create large profits for the owners of FOX News.

It is not clear how much money FOX is worth, and another lawsuit, if a similar outcome is reached, could result in a large loss of capital for FOX News; 787.5 million dollars is still a lot of money.  We can only assume Dominion will supply Smartmatic with the information they used in their case; after the defamation Dominion voting machines may no longer be used, meaning they are no longer a competitor of Smartmatic.  

Rupert Murdoch seems to have deep pockets. He has settled other lawsuits recently, and the bill is growing.  Just how much profit can FOX News bring in a year?  The 787.5 million dollars is a lot of money paid for advertising.  That’s 78,750 advertisements at $10,000 a piece. The number of minutes a year is 525, 600.  If you divide it up it is one one minute advertisement  every 6 minutes. 

That’s a lot of advertisements.  And given it may cost less than $10,000 for a spot, perhaps at midnight, etc., 787.5 million dollars is going to seriously tax FOX News, and another expensive lawsuit may be coming, Smartmatic for 2.7 billion dollars.

Rupert Murdoch has shown the profits are driving it to lie to his audience, to the viewers who watch his station.  The lawsuit and settlement show FOX News is willing to do this to stay in business providing cable news television, regardless of who it hurts, even other capitalists.  You would think it would rattle his viewers as he had to admit his station does not publish the truth, and knows it.  A day of reckoning seems to be coming, indeed, when it is clear FOX News is a paid for mouthpiece for rich capitalists.

Nicholas Jay Boyes

Milwaukee Wisconsin

American Democratic Republic

4 22 2023

revision 9 20 2025