ALB
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Well, the pro-US section of the capitalist class beat the pro-EU section both in the 2016 referendum and in the general election last December and so get the power and legitimacy to implement their policy. So there’s going to more of these sort of restrictions to trade and barriers to travel to the Continent. The pro-EU capitalists are just going to have to lump it like the rest of us.
Elections are how the capitalist class settle disputes amongst themselves and why they attach importance to who controls political power. Our view too of course and why we say that the workers should aim at getting control of it too, both to take it out of the hands of the capitalist class and to use it to play a key role in the socialist revolution from capitalism to socialism.
https://www.tuc.org.uk/news/tolpuddle-martyrs-festival-2020-goes-online
There doesn’t seem to be any provision for online stalls !
The government has just announced, via that oddity Gove, that it is going to spend £705 million to make the border with the rest of Europe “the world’s most effective and secure border”.
https://www.bbc.com/news/amp/uk-politics-53375713
What a waste and what an unnecessary inconvenience for ordinary people wanting to travel to the Continent and back. Less border controls not more would be better for them.
It reminds me of a Minister some years ago returning from Brussels and announcing that he had secured Britain’s exemption from some agreement amongst other EU member states abolishing border controls between them. He trumpeted this as a good thing but it meant that people from Britain would have to go through the hassle of queuing to show their passport to get back in while in large parts of Europe people could move from country to country as if there wasn’t a border.
It meant in fact that the border posts fell into disuse and became overgrown with weeds. Now that was good news about borders and is what will happen to them everywhere when we get socialism.
It seems that the government has decided to encourage, perhaps make it obligatory, for people to wear masks as a substitute for staying at home as this will not interfere so much with profit-making business activity. They know this will be less effective in stopping the spread of the virus than a lockdown but regard the extra cases and deaths that will result as a price worth paying.
They are trying to justify this in the grounds that capitalism is driven by popular consumption and so this needs to be revived (some of them may even believe this) but the fact is that capitalism is driven by business investment for profit. If this falls so does popular consumption as the main source of money for this comes from working for wages.
I am not sure to what extent they can be held personally responsible for the extra deaths as, after all, they are operating within the framework of a capitalist economy and such an economy can’t keep going for long unless profits are being made.
Good point. I read more into the ruling than was there. It’s not making the land the property of the tribes just a re-arrangement concerning which department of the US state deals with criminal cases involving members of the tribes.
Here’s the bad news. They like all landowners will be expropriated when socialism comes and all that is on and in Earth becomes the common heritage of all humanity rather than the private property of some rich individual or some group.
Yes, we are getting there. If Marx hadn’t added the bit at the end about issuing £1 notes being a “trick” well known to bankers, the passage could have been taken as a something that was theoretically possible. But the addition suggests that he was referring to something that had actually happened. Since he is talking about a situation where bank notes were convertible into a fixed amount of gold and since he specifically mentions £1 notes, this can only have been between 1821 (when convertibility was restored after the end of the Napoleonic Wars) and 1826 (when the issue of £1 notes was banned).
£1 notes had a bad reputation because they were considered as encouraging speculation and the Act that provided for the restoration of convertibility laid down that no new ones should be allowed to be issued after 1823. However, this was not implemented as bankers lobbied for the ban to be postponed, and it was until 1833. Bankers favoured £1 notes because it meant that they could lend to a wider group and so lend more (at that time bank loans took the form of giving the borrowers bank notes) and get a larger income from interest.
The extra lending that this led to was considered to be one of the causes of the financial crash of 1825 (the first capitalist crisis). Hence the ban on issuing £1 notes brought in 1826 Bank Notes Act.
In his ‘The role of Bank of England note issues amongst the causes of the panic of 1825’ George Pickering writes that “it was argued at the time that these small notes had played a significant role during the 1825 crisis, by raising prices, encouraging speculation, and driving specie out of the banking system” (emphasis added; ‘specie’ meaning gold).
This last was precisely the point Marx was making that, with a currency composed of gold coins and convertible paper money, the amount of currency could not be increased beyond what the economy needed and that any attempt to do so by issuing more paper money would merely lead to less gold coins circulating. He chose to use £1 notes as the example because this was what had happened in the period 1821-26 as a result of bankers having successfully lobbied for the postponement of the ban on issuing £1 notes that was supposed to have come in in 1823.
So Marx did not make a slip; he deliberately chose to mention £1 notes in view of their dodgy reputation.
What he was not suggesting was that the gold coins that were driven out of circulation ended up in the pockets of the bankers. What they gained was more income as interest on the more loans that £1 notes enabled them to make — until a lot of them went bankrupt in the crash of 1825.
Marx was not saying that bankers were all tricksters, as those who see problems that capitalism causes as being due to a flawed or fraudulent banking system claim. In any event, the “flaw” of banks being able to issue £1 notes was eliminated by capitalist legislation.
According to this, the Bank Notes Act of 1826 banned the issue of £1 bank notes and required their withdrawal from circulation by 1829:
https://encyclopedia-of-money.blogspot.com/2010/01/banking-acts-of-1826-england.html?m=1
It is significant that all the Newcastle £1 notes on sale date from the early 1800s and those after 1830 are all £5 or £10 notes. Incidentally, the person who made the forged one on sale there was taking a big risk as the penalty for forging notes was being put to death.
So no £1 notes would have been circulating in England when Marx was living there and writing Das Kapital (1850s and 60), though there will have been people alive who could remember them.
I still say it is curious that Marx should have referred to issuing one pound notes as if it was something bankers might do occasionally.
Did Marx make a slip or was he referring to a practice that dated from before 1826 (which, as Das Kapital was published in 1867, would be like us referring to what happened before the 1980s, e.g. pre-decimal currency and ten bob notes; which wouldn’t be unreasonable).
It was the last comment (I think) from someone called Joy. Here’s what she originally sent. All that got through was a comment that the re-think wasn’t radical enough without being able to go on to say what a radical rethink would be.
“There’s never been a better time to ‘rethink’, but the rethinking has got to be truly radical. It has taken a blip in capitalism for millions of people worldwide to be thrown on the scrapheap and be plunged into despair, for people who never thought it would be possible to have to resort to foodbanks in this country and to face starvation elsewhere. That’s how precarious capitalism is for nearly all of us with its imperative to sell, sell, sell, to consume, consume, consume. Once something happens to prevent that, all hell breaks loose. But, if we don’t do something significant now, the regime we live under will just carry on and all the well meaning attempts to make things better – for example the green movement, the feminist movement, the BLM movement – will just be co-opted by the system, absorbed into it and there won’t be that fundamental change that’s necessary. By fundamental change I mean looking beyond producing things for profit and instead producing for need via a collective, voluntary effort by humanity as a whole. In that sense the Covid crisis has pointed the way. It’s shown that we can get together collectively and help one another in a constructive organized way. The lesson we need to take from this is that we can and have to organise society in just this way. It’s the need we all have to make money to survive that has caused Covid-19 and that, even without any virus crisis, causes wars and poverty. If we don’t move to a rational, resource-based organisation of society where we are all economically equal, we can ‘rethink’ till we’re blue in the face, but it will be the same old same old.”
I don’t think our critic has read the article but has just assumed what it was going to say. The title of the article itself — ‘Working class lives matter — makes it clear that we don’t support ‘IDPOL nonsense’. It is an aspect of the poverty problem. Misidentity politics is a dangerous divisive distraction.
Incidentally, perhaps unexpectedly, David Aaronovitch’s column in the Times of 25 June was headed ‘Poor lives matter whatever their colour’.
https://www.thetimes.co.uk/article/poor-lives-matter-whatever-their-colour-g2p7vv572
Exactly! The whole financial superstructure which capitalism requires is an enormous waste of resources and there’ll be no banks or money in socialism.
But now we have started discussing that passage from Marx, there is something curious about it. Marx mentions one-pound notes but there hadn’t been any issued in England since the middle of the 1820s, a situation regularised by the Bank Act of 1833 which laid down that only Bank of England notes of at least £5 were legal tender. After that the only banks that could issue one pound notes were in Scotland and Ireland and weren’t issued in England again till 1914. I suppose Marx chose to write of one pound notes for ease of explanation (after all, it wouldn’t have mattered whether they were £1 or £5 notes as long as they were notes) or maybe he was referring to what used to happen in the 1820s.
Good idea to have transferred this from that toxic animalist thread (which I am sure I won’t be the only one not to look at). The link should have been called “The difference between Private Capitalism and State Capitalism”. We are more interested of course in what they have in common— minority ownership of productive resources; production for sale with a view to profit; and the wages system— and is why are opposed to both.
You say that you think Marx meant that “the bankers were using notes to gain more control over the financial sector.”
This doesn’t stand up for a number of reasons.
First, the context of the passage itself. Here it is in full:
“Since the quantity of money capable of being absorbed by the circulation is given for a given mean velocity of currency, all that is necessary in order to abstract a given number of sovereigns from the circulation is to throw the same number of one-pound notes into it, a trick well known to all bankers.”
As can be seen from the opening part (omitted from most quotes) Marx starts from the premises (which he had demonstrated in the previous part of the section) that the economy only needs a given amount of money to buy and sell goods and services. Where the currency is composed of gold coins and paper money convertible on demand into a fixed amount of gold, if banks increase paper money then the amount of money needed will not alter. Marx mentions one possible result — that a certain amount of gold coins would drop out of circulation. Another would be the excess notes come back to the bank. Either way the amount of money in circulation remains the same.
Whatever happens, it is difficult to see how the bankers gain more control over the financial sector or that Marx could be saying this. His basic argument is precisely that they can’t control the amount of currency in circulation.
The school of economic thought that he was arguing against (the Currency School), on the other hand, did argue that the banks could influence this and that what issuing more bank would lead to would be a rising price level ( inflation); which was considered something to be avoided and that this could be done by limiting the power of banks to issue notes.
You said you have read up about banking in the middle of the 19th century so you will know that the Currency School won over the government and their theory was behind the Bank Charter Act of 1844 which sought to limit the amount of notes that could be issued (by giving the Bank of England a monopoly on their issue and saying they could only issue a limited amount of paper money not backed by gold).
This certainly gave the Bank of England more control over the currency but Marx pointed our that it wouldn’t work. He was proved right and every time there was a financial crisis the government had to suspend the operation of the Act and issue more paper notes without gold backing than was normally permitted.
Marx criticism of the banking legislation of the time was that it was not some trick to defraud the public, but that it was stupid even from a capitalist point of view.
Not necessarily. The gold (coins) that drop out of circulation don’t become the property of the bankers. If they are deposited in a bank they remain the property of the person who deposited them.
There were also limits to how far a bank could go in issuing bank notes. These were in effect liabilities (in the accounting sense) for the bank with a holder of one of them entitled to exchange it for a gold coin. If a bank issued too many notes it risked finding itself unable to honour them if too many exercised their right to convert them into a gold coin.
In any event, even at the time Marx was writing, commercial banks could no longer do this. The Bank Act of 1844 established a monopoly in the issue of paper money for the Bank of England (some banks were allowed to continue issue notes — a few in Scotland and Northern Ireland still can — but only if they were backed by an equivalent amount of Bank of England notes).
This Act also places a limit on the total face value of paper notes without them being backed by gold that the Bank if England could issue. This was known as the “fiduciary issue”; any notes issued above this limit had to be backed by an equivalent among of gold in the Bank’s vault.
What I hadn’t realised before you mentioned this quote (it’s in chapter 2, section 2b) was the extent to which it is cited on the internet to try to show that Marx thought banks and bankers were tricksters. When Marx used the (German) word for “trick” it wasn’t in the sense of fraud but in the sense of a feat or performance as by a magician or in cricket a bowler doing the hat trick (for those who don’t understand cricket, that’s bowling three batsmen out in three successive balls, which is hardly fraudulent). In the French version, which Marx saw to the press, the word is “truc” which has no connotation of fraud or even self-interest.
If this quote is taken to mean that Marx thought that bankers were tricksters that’s a misinterpretation.
In that section of Capital he is discussing what determines the amount of currency in circulation when the currency is (as it was in his day in Britain but which of course has long since ceased to be the case) gold coins and paper money convertible on demand into a fixed amount of gold. What he is saying here is that one way to take gold coins out of circulation is to increase the number of convertible notes. This only works because the total amount of currency in circulation is determined by the needs of the economy (number of transactions to be done).
Marx was arguing against a school of economic thought (known as the Currency School) that supported the Quantity Theory of Money according to which the level of prices was determined by the amount of currency issued. If this theory was correct then the “bankers’ trick” would not work. What should happen instead is that the general price level would go up, with the amount of gold coins in circulation staying the same. Marx’s point in this passage is that the fact that issuing more convertible paper notes does not lead to this but to less gold coins circulating shows that the Currency School’s theory was wrong.
There is more on this (and so on the background to this passage) in this article from the December 1983 Socialist Standard:
http://socialiststandardmyspace.blogspot.com/2019_12_02_archive.html?m=1
