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Thursday, November 29, 2018

A Lesson in Marxist Economics

Workers produce things, not directly for themselves or for the personal use of their employer, but for him to sell for money. Things made in this way are called “commodities” – that is, articles produced for sale on the market. The worker receives wages, the employer receives profit – something that was left after the consumer had paid for the articles, and after the capitalist had paid wages, the cost of raw materials and other costs of production.
What was the source of this profit? Indirect robbery. Making the worker work more hours than is necessary for his keep, and appropriating the value of what he makes in those extra hours of work – the “surplus value.” The capitalist uses a part of this surplus value for his own maintenance; the balance is used as new capital – that is to say, he adds it to his previous capital, and is thus able to employ more workers and take more surplus value in the next turnover of production, which in turn means more capital – and so on. The capitalists have a compulsion to accumulate. Capital appears in the form of accumulated money, thrown into circulation in order to increase in value. No owner of money capital will engage in business in order to recuperate exactly the sum initially invested, and nothing more than that. By definition, the search for profit is at the basis of all economic operations by owners of capital. Competition in a capitalist mode of production is competition for selling commodities on the market. While surplus-value is produced in the process of production, it is realised in the process of circulation, i.e. through the sale of the commodities. The capitalist wants to sell at a maximum profit. A capitalist has to strive constantly to get the better of his competitors. This can only occur through operating with more capital. This means that at least part of the surplus-value produced will not be unproductively consumed by the capitalists and their hangers-on through luxury consumption, but will be accumulated, added to the previously existing capital. The logic of capitalism is therefore not only to ‘work for profit’, but also to ‘work for capital accumulation’. ‘Accumulate, accumulate; that is Moses and the Prophets’, states Marx. It is competition which basically fuels this terrifying snowball logic: original investment – accumulation of value (surplus-value) – accumulation of capital – more accumulation of surplus-value – more accumulation of capital.  The growth of the value of capital means that each successful capitalist firm will be operating with more and more capital. Marx calls this the tendency towards growing concentration of capital. But in the competitive process, there are victors and vanquished. The victors grow. The vanquished go bankrupt or are absorbed in a merger. No amount of capitalist ‘self-regulation’, no amount of government intervention, has been able to suppress this cyclical movement of capitalist production. Nor can they succeed in achieving that result. This cyclical movement is inextricably linked to production for profit and private property
 The main weapon in competition between capitalist firms is cutting production costs. More advanced production techniques and more ‘rational’ labour organisation are the main means to achieve that purpose. The basic trend of capital accumulation in the capitalist mode of production is, therefore, a trend towards more and more sophisticated technology. The compulsion for capital to grow, the irresistible urge for capital accumulation, realises itself above all through a constant drive for the increase of the production of surplus-value. Capital accumulation is nothing but surplus-value capitalisation, the transformation of part of the new surplus-value into additional capital. There is no other source of additional capital than additional surplus-value produced in the process of production. The history of the capitalist mode of production is therefore also the history of tighter and tighter control of capital over the workers.
Capital is simply money and commodities assigned to create a profit and be reinvested. Profit is made by the "magical" addition of surplus value to the value inherent in the product. The "added value," the profit, is produced by workers. And this capital is born to expand or die. To be useful, the investment must result not only in a profit but in a growing rate of profit. Capitalism is an irrational, disorganized operation that enormously rewards crooks, gangsters, exploiters, con-artists, gamblers, stock manipulators, and all manner of corruption. It's a ruthless economy that survives by inflicting anguish on untold billions. The underlying profit system is perpetuated by mostly unknown industrialists and financiers, and the governments they own. The value of a commodity comes from the labor invested in it, including the labor that manufactured the machinery and extracted the raw materials used to create the item. And the boss' profits do not come from his smarts or his capital investment or his mark-up, but from the value created by labor - specifically, surplus-value.
Surplus value derives from unpaid wages. The worker is never paid for the value of the product, only for the value of her or his labor time, which is considerably less, and which meanders widely depending upon the historical, cultural and social conditions of a country.
Labor-power is miraculous, like the Virgin Birth. You get more out of it than you put in. Workers produce a commodity which has more value than what they get in wages to keep them functioning. This differential is surplus value, which is the source of capital.
The only way to eliminate all basic sources of disequilibrium in the economy calls for the elimination of generalised commodity production, of private property and of class exploitation, i.e. for the elimination of capitalism.
The Socialist Party is the champion of the class interests of the working class and constitute a revolutionary party.  The liberation of the working class is only possible through the overthrow of private property of the means of production and rulership, and the substitution of production for profit with social production for use. The Socialist Party recognise that the power of the State is an instrument of class domination and that the social revolution for which the working class strives cannot be realised until it has captured political power.
 Automation, cybernetics, robotics, whatever you call it, is a genuine innovation, not merely a little more of the same. It is the way of producing more, better, with less work. That can spell trouble for our economic system tends to reverse the normal ways of thinking about economic problems.  It is an economy of production for profit rather than for use and thrives on scarcity. The media is filled with reassurances conceding that there will be job-losses and hardships, but in the long run, more jobs will be created, as experts tell us we’ve had this before, and we’ve seen that, in the end, technological innovation led to more jobs instead of fewer. It is clear that capitalism can assimilate rapid technological advances only if it can expand greatly, to invest new hoards of capital and thus re-employ some of the displaced workers. If capitalism succeeds in accomplishing a more complete automation – which is the logical end which industry is heading the effects will be devastating.
Socialists will produce for use according to a reasonable plan and without a thought for the odious notion of profit. And with no insatiable parasitic class to maintain, socialist society will produce abundance for all. That's a fact. The global human family will arrange its standard of living as easily as families do today.

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