Tuesday, November 20, 2012

Rocket in My Pocket Guide to Marxism, Again

Value, Commodity, Value/Commodity Production, The Logic of Capital

In Steps:

1. Not for nothing does Marx start out his critique with the exploration of the commodity as the embodiment of the facets of value.

2. For Marx, the distinction between production of commodities and production of capital under capitalism is meaningless. That's kind of the whole point to all three volumes of Capital. The means of production are produced, accumulated, as commodities, as values. Again and again Marx describes capital as the self-expansion of value. He doesn't say self-expansion of commodities, he doesn't say self-expansion of means of production. He says self-expansion of value. Accumulation of value is the determinant of capital.

3. The means of production are produced as commodities and accumulated as capital-- useless without engaging with labor organized as value-producing. The means of production can only transfer their value, their cost, through the production of commodities.

4. Expelling labor from the production process, increasing the portion of the technical component, reducing the cost of the production of commodities, produces greater masses of commodities, greater masses of means of production, that require again, engagement with wage labor to maintain accumulation. At the same time the continuous, relative or absolute, expulsion of labor power reduces the proportion of value-creation, in the valorization process.

5. Capital is, has been, overproduced beyond the ability to maintain a profitability capable of sustaining the process of accumulation/ valorization. Capital does not, cannot, do this separate and apart from its existence as commodities, separate and apart from the the existence of the means of production as commodities, as values. Capital has no existence separate and apart from value, from "value-seeking," from human labor power organized as both a commodity and a "means of production." The means of production are in conflict with the relations of production. The valorization process and the labor process have become "mutually exclusive," mutually expulsive.

6. The result is, as Marx notes, the "calling forth" of crisis, stagnation, breakdowns in circulation, in exchange--- the self-devaluation of capital. The overproduction of capital is the overproduction of the means of production is the overproduction of commodities.

In Leaps:

The critical element is that of the transformation of surplus product into surplus value. That is the change that changes everything.  Product is no longer being expropriated from the direct producers, leaving them no way to satisfy their needs; rather the only way for producers to satisfy their needs is by selling their labor-power as a value, at its value [more or less], yielding not product as such, a "simple commodity," but surplus value, value expanded.

The expropriation of product from the direct producers, even for purposes of exchange, does not augment the accumulation of-- get ready-- the means of production as capital for  the expansion of value producing activity.

There is no "law of value" organizing production without that.

Marx begins Capital with the discussion of the facets of value, deriving from those facets the abstraction, or distillation, of labor as labor-time.

Once he has derived that shared aspect/universal attribute of all commodities, he then shows how that characteristic must be the result of a specific historical relation of labor to the conditions of labor, to the means of production.

He begins with the "logic" of the commodity, and establishes that this logic can only be the result of a socially specific relation of labor.

Does Marx ever argue anywhere that the law of value distributed the total available labor-time of society prior to modern capitalism? On the contrary, he points out that while all societies grapple with this allocation of labor to the needs of reproduction, only with modern capitalism do we encounter value as the means for effecting such allocations.

 Marx says in his Economic Manuscripts:

"Wealth is the disposition over time"-- wealth is the ability to dispose of, organize, accrue time.

Time here is a social category. And as such time is expression of social labor. Wealth is the disposition over social labor. However it is only under certain historically specific conditions that that time, that unit and mass of social labor is expressed as value.

Whereas forms of private property can express the disposition of, the power over, the time of personal labor and/or the labor of others, value only represents wealth when it embodies the command of, the disposition over the time of others.

Value production requires a transformation, a revolution as it were, in the relation of the laborer to his/her own labor, to, in part, a relation of the laborers to their collective, social labor. That labor must be stripped, dispossessed, "denatured" from its connection to the immediate, specific, and determinant products of labor that satisfy the subsistence requirements of the laborers.

This is a social transformation that in fact makes labor useless to the laborers save for its use as a means of exchange for subsistence or the value equivalent of the means of subsistence.

That is how value becomes the law of value and takes hold of social production; becomes the disposition over the raw, "uniform," essential, abstraction labor-time.
The law of value is nothing other than the dominant social relation between classes.  Economics is, or becomes nothing other than the moment of class struggle.

S. Artesian
November 20, 2012

Rocket in My Pocket Guide To Marxism, Onward

Rate of Surplus Value, Rate of Profit:

The rate of surplus value is the rate of surplus labor, that is to say that portion of the working day that is free to the capitalist after the workers have reproduced the value of their own labor power, which is the necessary labor.

 If the working day is 8 hours, but the workers reproduce the value of their wages in 4 hours, then the rate of surplus value is s/v or 100%. If the necessary labor time drops to 2 hours, then the rate of surplus value is, s/v again, 6/2, or 300%.

So if the portion of the working day necessary for reproducing the wage is reduced, the proportion of surplus labor, manifested as surplus value rises as a fraction of the total working day.

The rate of profit is derived from the surplus value in relation to the total capital advanced by the capitalists-- that is the constant capital made up of the means of production, raw materials, etc. plus the wage. The relation is s/c+v. Using our previous example as a baseline, let's say the value of the constant capital was 12. The rate of profit in the base conditions was 4/(12 + 4)= 25%.

Now if we alter production so that v declines to 2, and in so doing c increases to 28, we have a new rate of profit that is 6/(28+2)= 20%. 

Suppose the rate of surplus value is improved further so that the wage is reproduced in only 1 hour. Now we have a surplus value (surplus labor) of 7. And we have a rate of profit of 7/(28 +1) =24.13%.

Why then would capitalists invest in C? First, more capital is regenerated; value has expanded from 12 + 4 +4= 20, to 28+2+6= 36, and capitalists have (almost) no choice. Value has the shelf-life of dead fish in the summer sun. It exists only in its reproduction, its accumulation. 

In addition the application of greater quantities of C, and the expulsion of proportionately greater amounts of v, pushes greater masses of surplus value into the markets where the profits are then allocated, apportioned, according to the size of the capitals and their relative efficiencies. 

The increased applications of technology, and science, to production are refracted through lower costs of production which allow the more efficient capitals, through the prices of production, or the "average price" or the price reflecting the socially necessary labor time, to claim the portions of surplus value thrown into the exchange process by all other capitals, thus offsetting, a bit, the reduced rate of profit of the more efficient capitals. 

S. Artesian
November 20, 2012

Saturday, November 17, 2012

The Death Agony of Anti-Imperialism, 2 Egypt, 1

1.   The organization of landed property, of the landed estate, and of landed labor in Egypt was driven and determined by that which could not truly be appropriated as property—water.  Water and the lack thereof, regulated, so to speak, the oscillations between scarcity and abundance.  Water and the lack thereof imposed an approximate egalitarianism; a communalism among those who settled along the banks of the Nile, just as water and the lack thereof compelled a rough equality among the Bedouins, the nomads of the desert.

The medieval village of both Upper and Lower Egypt was a communal economic unit.  Village land was held in common.  In Upper Egypt in particular, village lands were periodically redistributed among the cultivators, a redistribution based on the pattern and degree of the Nile floods. 

The village was a fiscal unit, responsible as a unit for the payment of taxes to the intermediaries of the most recent conquerors.  

The village was a labor unit, responsible for maintaining the irrigation works upon which agriculture depended.   

The village was also responsible for supplying the corvée labor required by the governors, the bey, the wali, the pashas, viceroys for road building, or for labor on their estates.

Land itself did not exist as private property.  It was “held in trust” for the sovereign, the conqueror.   

Those who worked it were cultivators, proprietors, “custodians.”  Regardless of the formal, jurisdictional designation of land, the tenure in land still resolved itself along the lines of oppressed and oppressor; exploited and exploiter, the taxed and the tax-collector, fellahin and shaykhs, fellahin and notables, fellahin and multezim.

Under successive invasions and occupation—Byzantine, Arab, Mamluk-Ottoman, Ottoman-Mamluk, the village retain its functions as the basic unit of production.     Through successive invasions and occupations, the system of appropriation of that production was modified, altered, but never transformed.  The collectors changed, their mode of reproduction did not. The economy remained one of surplus product but subsistence production.   

 “Tribute is better than booty,” said the Caliph Umar after the victory of his army in Egypt.  “It lasts longer.”  Indeed it does, but tribute is not value; tribute is not the accumulation of the means of production, in land, labor or instruments, for the purposes of increased accumulation. 
Egypt was the prize of the Middle East.  It was the granary; it was the center, the entrepōt, of cross continent trade.  It was however, an economy almost completely dependent upon nature.
It was, often, a benevolent nature.  The Nile floods covered the fields with layers of rich silt, replenishing the soil with the organic elements necessary to cultivation to the degree that no additional fertilizing was necessary.  In the 16th and for much of the 17th centuries, basin irrigation, in which the Nile waters were channeled through the elevated banks of the Nile to the lower lands, the basins, required much less labor per acre and per unit of output than the French peasant agriculture of the same period. 

Regardless of how benign, how accommodating nature might or might not be in any year, the demands of the sovereign upon the tax farmers, upon the shaykhs, upon the notables for tribute did not slacken but rather increased.  Between the 16th and 18th centuries, average real taxes increased 35 percent per feddan (approximately an acre).  Additionally,   the lands cultivated by the fellahin were taxed at a rate higher than that assessed on the lands of the notables, the wealthy, and the portions of land that the tax farmers reserved for themselves. 

The distinction between booty and tribute, between plunder and taxation, became immaterial. The compulsory labor service on the estates of the wealthy, the public works, the pressure of increasing taxes, and the variation in tax rates all drove greater masses of land into the hands of the tax farmer, and greater numbers of the fellahin off the land completely.   The agricultural system broke down under the burdens that did not allow for its reproduction.   Famine, plague, pestilence, depopulation, those hand-maidens of the “natural economy” under social stress cycled through Egypt during the 17th and 18th centuries.  By the time of Napoleon’s invasion, the population of Egypt had declined to less than 4 million.  During Roman times, the population had been accurately measured at over 7 million.  At the time of the Arab conquest, the population may have been as high as 14 million.  

The village system was capable of providing some protection to the fellahin from the demands of the conquerors.  It could not, however, resist both those depredations and compensate for the short-comings of the natural economy. The village organization was inimical to capitalism in its “classic” form, of the yeoman farmer in England dedicating all production to the market in order to accumulate the values necessary for further accumulation, and thus achieving a measure of welfare, of well-being.  

The decomposition of the village unit that occurs under the pressure of taxation, and that increases as the failure of the economy obscures the line between tribute and looting, was not more conducive to an indigenous, incipient modern capitalism.  Dispossession of the small producer, flight of the small producers, accumulation of property in land is necessary, but it is not sufficient.  The small rural producer has to be transformed into the laborer.  The dispossessed rural producer has to have somewhere to go… to be able to materialize the loss of holdings, of usufruct, of cultivation as the raw capacity to labor. 
One or more places the fellahin could not go were the cities, for production and services in the cities were tightly controlled by a guild system that included merchants, artisans, and transporters. 
There was no free labor market in the cities.   Moreover, the cities in Egypt lacked a separate corporate status.  They were seats of administration, of transfer trade, or artisan production, but there were no separate, dedicated, independent municipalities.  Immigration from the rural areas was restrained by both of these factors, and both, the guild system and lack of municipal governments, persists until the close of the 19th century.  

Already said but it bears repeating, Egypt was the prize, the jewel; granary and entrepōt.  It was the headquarters of the Red Sea version of the galleon trade, the transfer trade.  Reaching its peak between 1690 and 1725,  this import and re-export trade,  with Egypt straddling Africa, the Arabian Peninsula, and Europe accounted for one-quarter of all Egypt’s imports, and almost half of all Egypt’s exports.   Like all good middlemen, the merchants facilitating this trade, lived well living off the arbitrage, the difference between purchase price and sale price.  And the successive invaders and occupiers taxed the arbitrage.  

In this transit trade, Egypt balanced the deficits it ran with Africa and Arabia by the surplus it ran with Europe.  The import and re-export of coffee was the key to maintaining this balance.  The coffee trade is estimated to have provided rates of return in excess of 30 percent at its peak. 

Egypt’s encounter with European markets, however, was Egypt encountering Europe encountering the “New World;” encountering Europe and its colonies in the Caribbean.  France initiated coffee cultivation in its colonies.  By the close of the 18th century, “French” coffee had captured one-fifth of the market in the Levant.  

Cloth exports also declined.   However in the last three years of the 18th century, while Egyptian agriculture was declining under the demands of the Mamluks, Egypt exported 120 million kilos of wheat to Europe. Still, the surplus Egypt accrued in the European markets had become a deficit.

2.   Napoleon came, he saw, but he never conquered.   He was able, however, to break the power of the Mamluks in Lower Egypt and drive them into Upper Egypt.  Then Napoleon abandoned his army in Egypt.  The Ottomans and the British combined to the force the French from the country.

The French Revolution is the midwife, la sage-femme, attending the birth of “modern Egypt.”  What Napoleon’s Army could not do, conquer the Mamluks, Muhammad  ′Ali could, massacring them in 1811.  

′Ali’s goals were not the liberty, fraternity, equality of the Revolution.  Nor was his goal the establishment of private property, although his desire to break, and break-up, the power of the large estates was real enough since the large estates represented competition to his rule, and his revenues. 
Revenues were the thing for ′Ali, or rather, one of two main things, the other being independence from the Sublime Porte, from the Sultan of the Ottoman Empire.  Either/or, or both, ′Ali’s transformation of Egypt’s agricultural production was not the product of some “incipient capitalism,” nurtured in the bosom of peasant production, and for several reasons.  First, and perhaps foremost, is the historical reality that peasant-based production, that is to say small cultivator subsistence production, or “subsistence plus [surplus] production does not give rise “naturally” or automatically or even generally to capitalist agricultural production.  Secondly, in the case of Egypt, the fellahin were never really a peasantry, individual owners, and individual cultivators.  The village as an economic unit endured.  Not serfs, not a peasantry, and certainly not the “yeoman farmers” at the origins of English capitalism, the fellahin as a social class, in its fragmentation, differentiation, and recomposition is the point of intersection for Egypt’s uneven and combined development. 

′Ali’s transformation of Egypt’s agriculture was the product of Egypt’s encounter with the “world markets”—actually the markets of European capitalism.

Revenues were the thing that would make the wali a king; or at least the pasha a khedive.   Revenues meant producing commodities for markets; production for the capitalist markets of Europe meant all production would present itself as production for exchange.  Subsistence was derivative to, derived from, that exchange.  

Cash crops, indigo, sugarcane, wheat, and most importantly cotton—commodities-- meant revenues for Egypt.  Commodities meant accumulation for the European market as each commodity was purchased and consumed in the reproduction of value. 

Wheat had been the primary cash crop exported to Europe, but the Corn Laws in England and the introduction, and maintenance, of tariffs upon Egyptian wheat by successive French governments, along with growing competition from production in Russia, dramatically reduced the cash the crop was garnering. ′Ali brought saw big money in the superior long-staple cotton of Egypt.

If cotton was money, was to become money in the markets of European capitalism, then the market-driven production of cotton required extension of the area devoted to this production and more intensive cultivation of the land already given over to its production.    ′Ali brought in European experts, providing them with entire villages to direct in the planting and harvesting cotton.  

Cotton cultivation is one thirsty business.  More cotton requires more land and much more water.  Cotton required much more labor.  Egypt’s shift to commodity production is marked by a shift in the technique of cultivation—from basin irrigation of fields, where the Nile’s water and silt flowed into low-lying fields, to perennial irrigation, where water is lifted, pumped through canals to lands above the water level.
It’s a thirsty business, and a labor intensive one.   That labor was provided by the fellahin, of course, through the corvée, of course.  “Modernity,”   “Progress!” demanded it.  

Progress indeed.  In the 16the century, corvée labor was provided with a wage.  By the 18th century, no compensation was provided.  In the 19th century, the corvée laborer might or might not receive a meager wage, but more often than not had to provide his own water and food.  

Progress indeed.  The area under cultivation more than doubled between 1800 and 1830.  Those plots that had been abandoned by the fellahin in the last years of the 18th century and the first years of the 19th century were absorbed into the large landed estates.  Those plots that were not abandoned were impaired by the corvée.   Perhaps 400,000 fellahin were supplied to the corvee᷄   for periods up to four months every year

Progress indeed.  The fellahin responded to the corvée with passive resistance, active rebellion, and flight.  

Again, smaller plots were absorbed into the larger plots as the fellahin fled, or fell into arrears on taxes, or defaulted on debts to, not banks which had little penetration of the countryside, but to individual money lenders, in large part foreigners, protected from Egyptian law by their foreign status and the “mixed courts” which were created to protect that status.  

Progress indeed. ′Ali’s introduction of military conscription, “opening” the ranks of the army to “citizens” increased the burdens on the fellahin.  Forced away from the means of their subsistence, and their families’ subsistence, for periods even greater than those of the corvée, again the fellahin responded with resistance, flight, and in this instance, self-mutilation.  Such is the meaning of progress. 

A whole century of progress was unfolding.  There was progress in extending and intensifying cash crop production.   Progress established private property in land. 

There was progress in building railroads, constructed by the fellahin, of course, since there was no “free labor” market in the cities. 

There was progress in constructing the Suez Canal, a modern product of corvée labor.

There was progress in irrigation, in output and land productivity, for a time at least.   In the 19th century, areas under cultivation more than doubled.    Labor productivity was not, however,  a measure of, or measured by, such progress, as the fellahin worked more days, longer hours to a degree that exceeded the increases in output. 

Progress:  the pashas, about 12,000 in number now owned, as private property, about 45 percent of the cultivated area.  The rich peasants and village officials (shaykhs) comprising about 15 percent of those owning land, owned 35 percent of the cultivated area.  Small peasants (0-5 feddans), making up 80-90 percent of landowners owned 20 percent of the cultivated area. 

There was progress in banking, and even more progress in bankruptcy.  At the end of the century, 37 percent of the fellahin working plots of 0-5 feddans (with 3 feddans considered the minimum size required to meet subsistence requirements) were in debt.  Three-quarters of that debt was owed to the moneylenders.  More than 40 percent of fellahin families were landless.  

There was progress in national bankruptcy as the de facto subjugation of Egypt to its foreign debts became the de jure rule of the Caisse de la Dette Publique.

There was not so much progress in that critical component of extended and intensive irrigation, drainage.  Lack of drainage allowed salts to build up in the soil eventually reducing yields, and raised the below ground water levels such that the roots of the cotton plants drowned.

Progress indeed.   Here’s progress in a nutshell:  Due to the increased amounts of standing water in the irrigation canals and the raising of the ground water levels, insect pests, parasites, and pathogens proliferated.  Malaria increased.  Schistosomiasis, blood parasites attacking humans after germinating in the snails living in the irrigation canals, infected more than half the agricultural population.  

Emerging from all this progress was a specific configuration of Egyptian capitalism.  The reorganization of Egyptian agriculture, its engagement with the European markets, the penetration of European investment, and the demands of the European banks did not throttle some sort of historical progression from feudalism to “modern” capitalism in favor of the mis-named, mis-apprehended “primitive accumulation.” 
The original accumulation transforming Egypt in the 19th century was that of the shaykhs, the pashas, and the khedive, of accumulating property in land, that is to say, separating the fellahin from the means of their own subsistence, transforming the fellahin into a rural labor force and thereby creating private property in land.  

The point of original accumulation is the establishment of the social relations of capital accumulation, that is to say the dispossession of the producers; the transformation of the producers into the laborers.  This was accomplished by ′Ali and his successors, Abbas, Said, and Ismail. 

3.  It is almost axiomatic to the analysis of, and analysis of a country through, uneven and combined development that “backward” relations of production remained embedded in the rural economy while the “modern” relations— of industrial capitalist and industrial proletariat—are implanted into the urban centers.   From this axiomatic misinterpretation of history, it is concluded that the backward rural economy is “feudal” or “semi-feudal” or “neo-feudal” and that the agricultural laborers are peasants toiling under “serf-like” conditions.   

The real content of history, happily, is blind to axiomatic interpretation, even those from an astute, and acute, a critic of capitalist reproduction as Rosa Luxemburg.  In her Accumulation of Capital, one of the great, flawed, works of materialist analysis, Rosa argues that the history of Egypt in the second half of 19th century is the history of the interplay of large-scale capitalist enterprises, public debt, and the collapsing peasant economy.   The fellahin were never a peasantry as the word is usually construed, as the peasantry that existed in England in the 15th, 16th, 17th centuries.   

Rosa had missed the critical, determining factors in the development of Egypt’s relations with the world markets: 

That capitalist relations had already developed in and transformed the rural economy prior to the second half of the 19th century:

That by 1858 private property had achieved its “ultimate” title, winning legal sanction; 

That the codification of private property does not turn fellahin into peasant, ex-peasant, or farmer;

That the formal right  to private ownership has no economic content for the fellahin in that the average size of the fellahin holdings is too small to provide subsistence for the individual cultivator much less the cultivator with family;

That land ownership by fellahin serves to veil the relationship of fellahin to shaykh, fellahin to pasha, fellahin to khedive—which relationship is that of the wage-laborers to the capitalists;

That establishment in the 19th century of capitalist relations in agriculture does not penetrate the urban centers of Egypt.

The inability of cities in Egypt to establish for themselves a separate, economically independent, corporate status as cities had established in Europe. made the cities refuge, not for those dispossessed from the land, not for those fleeing conscription or the corvée, not for those possessing only their labor power to exchange, but rather for the absentee landlords, the pashas, the notables, the government and military officials, the merchants, the money-lenders of Greek, Lebanese, Italian origin, and for the guilds who maintained tight control over providing the services to patrons that a city would have provided to its citizens.

The city was the area where the wealthy could live as if their wealth was a wealth through land  rather than through aggrandizement of the labor power absorbed in the rural production of values.  The “semi-feudalism” in Egypt persists not in the dominant relations of agricultural production by in the affectations and poses of the urban wealthy.  

This fact is of utmost significance for the course of class struggle in Egypt, the “national revolution,” for “economic development,” in that Egyptian capitalism never produces a class capable of undertaking such development.  Egyptian capitalism never produces a class capable of “substituting” for an industrial bourgeoisie.   

The Egyptian state whether under the Khedive, the heel of the Caisse de la Dette Publique, the Wafd Party, the Revolutionary Command Council, the Liberation Rally, or the National Democratic Party can only maintain itself to the degree that it prevents social revolution.   Indeed, the accommodation with the “national revolution” forced upon the advanced capitalist countries, the occupiers of Egypt, is established on the ability of the “national revolution” to more effectively suppress the proletariat and the prospects for social revolution. 
Where Umar said “tribute is better than booty, it lasts longer,” Foster Dulles said, “better Nasser than Lenin.  We’ll last longer.”

Marx remarks the wage relationship “veils” the unpaid labor at the origin of capital accumulation, of value production.  In the history of the countries of Asia, the Middle East, Latin America, Africa, the wage relation itself is veiled in the organization of rural production.  But a wage relation it is.  So the issues and conflicts within the capitalist markets are never, and never simply, issues and conflicts of economic development, but rather of class struggle; of the emancipation of labor from the social obsolescence of capital.\

November 17, 2012

Next:  The Death Agony of Anti-Imperialism, Part 3:  Egypt, Part 2