LOV and Tory chaos
cburford at gn.apc.org
Sun Jul 2 10:24:18 MDT 1995
Law of Value and Tory Chaos
I really wanted to join in Will
Brown's thread on Tory Chaos. It is sweet to see our enemies in
distress. And as Thatcherism went much further in the UK under
Thatcher, than it did in the USA under that actor Reagan (your
right wing is just catching up!) our lessons may be of interest to
But I also wanted to complete the circle by developing Will's points
more explicitly in relation to a broadly marxist framework influenced
by the concept of the Law of Value. I have found Justin's most
telling points not allusions to Sraffa (or rather to Steedman) as
having convincingly disproved the LTV, but in saying that the LOV
comes over to him as an article of faith. In this Justin may be
speaking for thousands of marxists, ranging from the sceptical to the
loyal but puzzled. Therefore I would like to take the opportunity to
show there is a relevance, to an exciting development in British
How much relevance? Well a think a theory at this level of generality
certainly will not explain the particular price of a car, nor will it
really have any easy answers of a practical nature. It will,
however, I submit, illuminate the overall pattern of events, and
give a perspective from which left-wing, democratic and socialist
policies may be formed.
The Conservative Party is the hegemonic party of the British bourgeois
party political system. It has been in power for two thirds of the
last fifty years. It has been in power continuously for over 15 years
and steered through most profound changes to the economy and the
politics of this country.
There is a political dynamic going on with its own interesting
contradictions. Broadly we have a system with strong attractors to
a two-party structure, with a third smaller party. The lesser party,
has been handling its internal contradictions with a greater show of
outward order and has been expert in its public relations for several
years now, in amplifying every little nuance of disagreement within
the government. It has been helped in this, I agree with Will Brown
by the great attention and the rapid feedback systems of the modern
media. It is remarkable that with the economy going through
at least something of an upturn, the Conservative Party is a score or
more points behind in the opinion polls and has been so consistently
for a long time. Many Conservative MP's have to consider whether they
will lose their seats at an election in two years time.
There is also a political feeling of staleness. In the States you
may be glad to know that a Thatcherite agenda does run out of steam
after while. The bad news for you, is that it takes 10 years to do so
and leaves enormous social and economic damage behind in the process.
Tory newspapers, in particular those owned by that great
internationalist from Australia, Rupert Murdoch, have turned against
But all these social and political details are but epiphenomena on the
underlying economic dynamics. The British Conservative Party is
being crucified on the Law of Value, I submit.
The Conservative Party has split seriously on two previous occasions:
the Repeal of the Corn Laws, in the 1840's and tariff reform later
in the nineteenth century. This was about Free Trade, and as I recall
Engels's essay on Free Trade, it is always difficult for different
sections of the bourgoisie to move the same way at the same time on
Now in the later twentieth century, there are fifty years of control
of tariffs in a broadly free trade international framework and
bourgois strategy in a country like Britain, with a declining manu-
facturing market share has three options in relation to the larger
supra-national markets that have emerged, and they are to do with the
process of trying to maintain the accumulation of capital and the
relationship between capital and labour, central I would say to LOV.
Option 1. England is best as a centre for tourism and for financial
services. Finance capital wants all obstacles to the rapid movement
of money removed. London must compete to retain its position as the
leading financial centre in this time zone. Its main rivals would
be Frankfurt and possibly Zurich. Last year in a decision that was
seen as significant, Deutsche Bank moved a large part of its business
from Frankfurt to London.
The importance of finance capital in the British political system is
underlined by a previously unreported detail of the Irish struggle.
The Irish conflict was unlocked after the IRA bombed the Baltic
Exchange in the City of London. This is a crucial centre for
finance capital. Its quaint name indicates the early history of
capitalism described by Engels in his essay on the Law of Value.
The streets of the City of London were cordoned off on a continuing
basis. Confidence had to be restored. A deal with the IRA was worth
it. A friend with no interests in the IRA has been doing an economics
course by correspondence from our "Open University". This course
could be studied by IRA members in long term custody. The opening
of one of the key modules has a very interesting feature on the Baltic
Exchange. Coincidence? I think not. Why shouldn't the IRA study
economics, and what better way to catch up than through the Open
University, while in prison?
The British conservative party cannot ignore the interests of finance
capital. Finance capital wants a single market and a single currency,
and it would be ruined by obstacles to unity with Europe.
This interest is expressed for example by Edward Heath and Geoffrey
Howe in the Conservative Party.
Option 2. British capitalism should continue to accumulate by
moving down market in terms of the skills of the workforce, paying
them less, in direct payments, and in terms of the social wage,
coming through the welfare state. This strategy has been the growth
strategy of Thatcherism, and areas of the country formerly
very seriously damaged by the destruction of heavy industry have
seen some revival through the inflow of Japanese capital for the
assembly of cars for example, in the North East of England, and in
South Wales. The attractions for Japanese capital are that it has
its foot inside the door of the European Common Market, has access to
a large skilled workforce at low rates of pay, can work in English,
has broken unions, and a Conservative government in London,
protecting it against all unnecessary costs imposed on employers
by the European Union in its "Social Contract".
This strategy is represented by Michael Portillo, who is a shade too
young and inexperienced to be a viable Prime Ministerial candidate.
He is looked down upon intellectually by John Redwood who overestimates
the role of pure logic in politics and stepped forward as John
Major's direct challenger.
This section of the bourgeoisie is objectively linked, incredibly, with
the little Englanders, who think that English football thugs are a
bit embarrassing but they are at least patriotic about the Union Jack.
The objective class position they represent is that of small to medium
capitalists who think they can become great again by England being
a sort of South Korea, assembling products with cheaper less-
skilled labour, for Japanese transnational companies.
Option 3 Is essentially the social democratic bourgois strategy still
favoured by the German Christian Democrats (even though they are
retreating on the social wage). It remains an active strategy willing
to intervene to keep European industry with a competitive edge world-
wide in technology and education. It is willing to spend
significant collective funds on education and training. It is willing
to maintain to a significant degree a socialised health system.
It is proactive on labour relations requiring major companies to have
a supervisory board with trade unionists represented.
All this is
relatively easy in Germany because the processes of the uneven
accumulation of capital have placed it in a hegemonic economic position.
The crunch is whether in a market of over two hundred million
people, such a country can effectively subsidise by massive capital
transfers the countries on the periphery, in which capital is not
concentrating so intensively. Just as Ireland has been for decades the
poor relation on the fringe of the British economy, so Britain now
is the poor relation too much on the fringe of the economic power
house of western Europe, between Germany, the low countries, parts of
France, Switzerland, and the richer part of northern Italy.
Michael Heseltine, is the clearest and foremost champion of a pro-
European focussed bourgeois strategy, which aims for Europe to compete
with the US, Japan and the far east, with the highest skills levels and
a sophisticated social guidance of industry. It is highly significant
that he left the Thatcher cabinet insisting that a helicopter firm
should have been helped to form a deal with a European company rather
than an American company.
It is in this scenario that the question of a single currency becomes
extremely hot. A single currency only works across a state structure
embracing 200 plus million people if there are ways of winning
consent that all major sectors of the population are getting something
out of it. There has to be a mechanism for redistributing capital
to the poorer periphery. Unlike your healthy and vigorous mechanism
of pork-barrel politics which keeps the United States economically
united, [you Americans think that a written constitution matters; it
is the unwritten bits that sometimes matter most!]
the arrangements of the European Union for redistributing
funds are relatively new, not well known, seen as burocratic and
as at best some sort of bonus, rather than as the process by which
participation in this vast market is bought.
A subtext of the Contract on America which I pick up is the proposition
that individual states will be able substantially to cut the social
wage to the workforce. This sounds like it could be taken advantage of
by American politicians wanting to take option 2 for capital
accumulation, and could break up the United States to some degree as
an economic union, and of course lead to a competitive cycle of
downward bidding of the social wage in all states. Which in turn
would put pressure on us Europeans to cut the social wage again,
and strengthen the credentials of the Portillo wing of the British
By the firm way John Major has gambled he may just be able to
stabilise his party temporarily but it will be by the way he
bridges these extremely profound contradictions of British capitalism
at this moment of British history. At the G7 summit in Ottawa, he
dropped a remark about him being a one person coalition. He was not
having a sudden attack of schizophrenia, nor was he suddenly and
consciously being converted to dialectics, but he was giving expression
to how he has to handle the contradictions.
This weekend his supporters no doubt with his approval, are signalling
that unlike his challenger Major has support from both wings of the
Conservative Party. The implication is that if he has to resign
through too many abstentions, there will be an election run-off
between Heseltine and Portillo and that might split the party. My guess
is that in the event of an election the process of manoeuvre would
create understandings between them that would bridge the
contradictions in a new way. Heseltine is clever enough that if he wins
he would make Portillo foreign secretary, to make bruising remarks
about Europe for a time, while the real interests of British finance
capital and the more enlightened transnational wing of British
industrial capital work quietly to take advantage of the European Union
for longer term plans.
Everything is on a cusp however. The British conservative party is
still highly likely to lose the next election. Events in the next week
could set it on a course to a split that could keep it out of
power for a generation.
Obviously details of my analysis are fair game for debate, but I
really wanted to try hard to link the political crisis to the
dynamics of the contradictions about the accumulation
I don't know if this post could have convinced Justin that relating
politics to the Law of Value can be much more interesting and
illuminating than a recitation of the catechism. I hope others will
find this way of arguing relevant. In particular I would like to hear
about the attacks on the social wage in the Republicans Contract,
and how that affects the competitive position of the US of A.
Chris Burford, London.
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