West African Countries

West African Countries

Data from Wikipedia

Country	Population	GDP: $bn	Currency	President	Status
Senegal	13,711,597	$13.472	CFA franc	Abdoulaye Wade
Gambia	1,705,000	$736	Dalasi	Yahya Jammeh
Cape Verde	567,000	$1.768	C. Verde  escudo	Pedro Pires
Guinea Bissau	1,647,000	$826	WA CFA franc	Malam Bacai Sanhá
Guinea	10,057,975	$4.394	Guinea franc	Alpha Condé	Elections 2010
Sierra Leone	6,440,053	$1.877	Leone	Ernest Bai Koroma
Liberia	3,955,000	$876	Liberian dollar	Ellen Johnson Sirleaf
Côte d'Ivoire	20,617,068	$23.635	WA CFA franc	Laurent Gbagbo	Disputed
Burkina Faso	15,746,232	$8.105	WA CFA franc	Blaise Compaoré
Ghana	23,837,000	$31.2	Ghana cedi	John Atta Mills
Togo	6,619,000	$2.865	CFA franc	Faure Gnassingbé
Benin	8,791,832	$6.650	WA CFA franc	Yayi Boni
Nigeria	152,217,341	$173.428	Naira	Goodluck Jonathan
Cameroon	18,879,301	$22.223	CA CFA franc	Philémon Yang
CAR	4,422,000	$1.986	CA CFA franc	François Bozizé
Equatorial Guinea	676,000	$10.413	CA CFA franc	Teodoro Obiang
São Tomé + Príncipe	163,000	$0.191	Dobra	Fradique de Menezes
Gabon	1,475,000	$11.016	CA CFA franc	Ali Bongo Ondimba
Congo Republic	3,686,000	$9.532	CA CFA franc	Denis Sassou Nguesso
South Africa	49,991,300	$287.219	Rand	Jacob Zuma

The Holy Trinity

Capital Volume 3, Part 7

Revenues and their Sources

Capital Volume 3, Part 7, Revenues and their Sources

The last part of the last book of Capital begins as Volume 1 ended, with a reminder that capital is not a thing, but a relationship. In Part 1 of our chosen text, Chapter 48, The Trinity Formula (download linked below) Marx says:

“Capital, land, labour! However, capital is not a thing, but rather a definite social production relation, belonging to a definite historical formation of society, which is manifested in a thing and lends this thing a specific social character. Capital is not the sum of the material and produced means of production. Capital is rather the means of production transformed into capital, which in themselves are no more capital than gold or silver in itself is money. It is the means of production monopolised by a certain section of society, confronting living labour-power as products and working conditions rendered independent of this very labour-power, which are personified through this antithesis in capital…”

Shortly afterwards, Marx turns to a summary of the illusory and impossible conception of the same relationship as seen by self-serving “vulgar” bourgeois economists, starting like this:

“Vulgar economy actually does no more than interpret, systematise and defend in doctrinaire fashion the conceptions of the agents of bourgeois production who are entrapped in bourgeois production relations. It should not astonish us, then, that vulgar economy feels particularly at home in the estranged outward appearances of economic relations in which these prima facie absurd and perfect contradictions appear and that these relations seem the more self-evident the more their internal relationships are concealed from it, although they are understandable to the popular mind. But all science would be superfluous if the outward appearance and the essence of things directly coincided. Thus, vulgar economy has not the slightest suspicion that the trinity which it takes as its point of departure, namely, land — rent, capital — interest, labour — wages or the price of labour, are prima facie three impossible combinations.”

Later in this paragraph (section III of the chapter), Marx refers to Volume 1 (“Book 1”) and contrasts the irrational bourgeois concept of value with the true understanding of surplus value.

To finish by returning to Engels’ introductory remarks: Yes, Capital Volume 3 is important. It is not superfluous. Volume 3 is directly helpful in the current circumstances of “Global Economic Meltdown” and “Debt Crisis”. But Volume 3 does not render Volume 1 redundant. On the contrary, Volume 3 relies upon and leans upon Volume 1 and constantly confirms Volume 1, throughout.

The last Chapter of Capital Volume 3 is Chapter 52, “Classes”, and it ends: “[Here the manuscript breaks off.]”

Engels provided a supplement to Volume 3 which can be found on MIA, here.

Picture: A representation of the “Holy Trinity”.

Please download and read this text:

Capital Volume 3, Chapter 48, The Trinity Formula (7327 words)

Ground Rent

Capital Volume 3, Part 6

Ground Rent

Capital Volume 3, Part 6, Transformation of Surplus-Profit into Ground-Rent

In this 11-chapter part of Capital Volume 3, Karl Marx relates capital (reproduction of surplus value) to the much older concept and practice of rent, and shows how rent becomes part of the capitalistic system.  Our chosen Chapter 38 (download linked below) deals with the “surplus-profit” over and above the general rate of profit, that may arise from fortuitous factors like the possession of a waterfall; and the concept of differential rent as a means of taking account of such a variation from the norm.

But first, we exploit the summarising paragraphs on rent that Marx gives in the Introduction to this section. They bear upon the question of mining as much as upon agriculture (shortened):

“The analysis of landed property in its various historical forms is beyond the scope of this work. We shall be concerned with it only in so far as a portion of the surplus-value produced by capital falls to the share of the landowner. We assume, then, that agriculture is dominated by the capitalist mode of production just as manufacture is; in other words, that agriculture is carried on by capitalists who differ from other capitalists primarily in the manner in which their capital, and the wage-labour set in motion by this capital, are invested. So far as we are concerned, the farmer produces wheat, etc., in much the same way as the manufacturer produces yarn or machines. The assumption that the capitalist mode of production has encompassed agriculture implies that it rules over all spheres of production and bourgeois society, i.e., that its prerequisites, such as free competition among capitals, the possibility of transferring the latter from one production sphere to another, and a uniform level of the average profit, etc., are fully matured. The form of landed property which we shall consider here is a specifically historical one, a form transformed through the influence of capital and of the capitalist mode of production, either of feudal landownership, or of small-peasant agriculture as a means of livelihood, in which the possession of the land and the soil constitutes one of the prerequisites of production for the direct producer, and in which his ownership of land appears as the most advantageous condition for the prosperity of his mode of production.

“Just as the capitalist mode of production in general is based on the expropriation of the conditions of labour from the labourers, so does it in agriculture presuppose the expropriation of the rural labourers from the land and their subordination to a capitalist, who carries on agriculture for the sake of profit…

“For our purposes it is necessary to study the modern form of landed property, because our task is to consider the specific conditions of production and circulation which arise from the investment of capital in agriculture. Without this, our analysis of capital would not be complete… (Or, instead of agriculture, we can use mining because the laws are the same for both.)

“Landed property is based on the monopoly by certain persons over definite portions of the globe, as exclusive spheres of their private will to the exclusion of all others. With this in mind, the problem is to ascertain the economic value, that is, the realisation of this monopoly on the basis of capitalist production.

“With the legal power of these persons to use or misuse certain portions of the globe, nothing is decided. The use of this power depends wholly upon economic conditions, which are independent of their will. The legal view itself only means that the landowner can do with the land what every owner of commodities can do with his commodities. And this view, this legal view of free private ownership of land, arises in the ancient world only with the dissolution of the organic order of society, and in the modern world only with the development of capitalist production…

“In the section (in Volume 1) dealing with primitive accumulation we saw that this mode of production presupposes, on the one hand, the separation of the direct producers from their position as mere accessories to the land (in the form of vassals, serfs, slaves, etc.), and, on the other hand, the expropriation of the mass of the people from the land.

“To this extent the monopoly of landed property is a historical premise, and continues to remain the basis of the capitalist mode of production, just as in all previous modes of production which are based on the exploitation of the masses in one form or another. But the form of landed property with which the incipient capitalist mode of production is confronted does not suit it. It first creates for itself the form required by subordinating agriculture to capital. It thus transforms feudal landed property, clan property, small peasant property in mark communes — no matter how divergent their juristic forms may be — into the economic form corresponding to the requirements of this mode of production.

“One of the major results of the capitalist mode of production is that, on the one hand, it transforms agriculture from a mere empirical and mechanical self-perpetuating process employed by the least developed part of society into the conscious scientific application of agronomy, in so far as this is at all feasible under conditions of private property; that it divorces landed property from the relations of dominion and servitude, on the one hand, and, on the other, totally separates land as an instrument of production from landed property and landowner — for whom the land merely represents a certain money assessment which he collects by virtue of his monopoly from the industrial capitalist, the capitalist farmer; it dissolves the connection between landownership and the land so thoroughly that the landowner may spend his whole life in Constantinople, while his estates lie in Scotland. Landed property thus receives its purely economic form by discarding all its former political and social embellishments and associations, in brief all [its] traditional accessories…

“The rationalising of agriculture, on the one hand, which makes it for the first time capable of operating on a social scale, and the reduction ad absurdum of property in land, on the other, are the great achievements of the capitalist mode of production. Like all of its other historical advances, it also attained these by first completely impoverishing the direct producers.”

Once again, Marx refers back to Volume 1. What is more, Marx provides reasons why the land question in South Africa is so intractable. Land is part of capitalism, and so are mines. There can be no going back, but only forward, because in its productive aspect, land has never been more socialised. Only in its ownership can it become more socialised, and in this respect, fully and finally, only by abolishing capitalism.

As with banking, so also with landowning: Under capitalism the take is a portion of surplus-value. This part shows how such rent arises and how it is calculated for the various conditions, of which the first one given is as clear as any, and can serve as an example.

Please download and read this text:

Capital Volume 3, Chapter 38, Differential Rent: General Remarks (3752 words)

Interest-Bearing Capital

Capital Volume 3, Part 5

Interest-Bearing Capital

Capital Volume 3, Part 5, Division of Profit into Interest and Profit of Enterprise. Interest-Bearing Capital.

This is a long part of Volume 3 and really too much with its sixteen chapters (21 – 36), almost a book in itself, to be covered in a single discussion. Therefore let us concentrate as before on the question of whether Volume 1 of Capital is undermined or over-ruled by Volume 3.

Marx makes it clear that this is not the case at the beginning of Chapter 23 where he writes:

“Interest, as we have seen in the two preceding chapters, appears originally, is originally, and remains in fact merely a portion of the profit, i.e., of the surplus-value, which the functioning capitalist, industrialist or merchant has to pay to the owner and lender of money-capital whenever he uses loaned capital instead of his own.”

These pages contain great good sense and a lot of assistance to people trying to make sense of the “Global Economic Meltdown” that has been going on since 2008, now generally referred to as “the crisis”. As an example, here are some paragraphs from our sample Chapter 29, Component Parts of Bank Capital, (download linked below).

“We shall now consider labour-power in contrast to the capital of the national debt, where a negative quantity appears as capital — just as interest-bearing capital, in general, is the fountainhead of all manner of insane forms, so that debts, for instance, can appear to the banker as commodities. Wages are conceived here as interest, and therefore labour-power as the capital yielding this interest. For example, if the wage for one year amounts to £50 and the rate of interest is 5%, the annual labour-power is equal to a capital of £1,000. The insanity of the capitalist mode of conception reaches its climax here, for instead of explaining the expansion of capital on the basis of the exploitation of labour-power, the matter is reversed and the productivity of labour power is explained by attributing this mystical quality of interest-bearing capital to labour-power itself. In the second half of the 17th century, this used to be a favourite conception (for example, of Petty), but it is used even nowadays in all seriousness by some vulgar economists and more particularly by some German statisticians.[1] Unfortunately two disagreeably frustrating facts mar this thoughtless conception. In the first place, the labourer must work in order to obtain this interest. In the second place, he cannot transform the capital-value of his labour-power into cash by transferring it. Rather, the annual value of his labour-power is equal to his average annual wage, and what he has to give the buyer in return through his labour is this same value plus a surplus-value, i.e., the increment added by his labour. In a slave society, the labourer has a capital-value, namely, his purchase price. And when he is hired out, the hirer must pay, in the first place, the interest on this purchase price, and, in addition, replace the annual wear and tear on the capital.

“The formation of a fictitious capital is called capitalisation. Every periodic income is capitalised by calculating it on the basis of the average rate of interest, as an income which would be realised by a capital loaned at this rate of interest. For example, if the annual income is £100 and the rate of interest 5%, then the £100 would represent the annual interest on £2,000, and the £2,000 is regarded as the capital-value of the legal title of ownership on the £100 annually. For the person who buys this title of ownership, the annual income of £100 represents indeed the interest on his capital invested at 5%. All connection with the actual expansion process of capital is thus completely lost, and the conception of capital as something with automatic self-expansion properties is thereby strengthened.

“Even when the promissory note — the security — does not represent a purely fictitious capital, as it does in the case of state debts, the capital-value of such paper is nevertheless wholly illusory. We have previously seen in what manner the credit system creates associated capital. The paper serves as title of ownership which represents this capital. The stocks of railways, mines, navigation companies, and the like, represent actual capital, namely, the capital invested and functioning in such enterprises, or the amount of money advanced by the stockholders for the purpose of being used as capital in such enterprises. This does not preclude the possibility that these may represent pure swindle. But this capital does not exist twice, once as the capital-value of titles of ownership (stocks) on the one hand and on the other hand as the actual capital invested, or to be invested, in those enterprises. It exists only in the latter form, and a share of stock is merely a title of ownership to a corresponding portion of the surplus-value to be realised by it. A may sell this title to B, and B may sell it to C. These transactions do not alter anything in the nature of the problem. A or B then has his title in the form of capital, but C has transformed his capital into a mere title of ownership to the anticipated surplus-value from the stock capital.”

It remains the case that in Volume 3, Karl Marx is constantly referring back to Volume 1, and reminding us that whatever “financial” profits (as we would now call them) there may be, these are only portions of the surplus value generated at the point of production by the capitalistic exploitation of living labour-power.

Picture: Max Keiser, of Russia Today’s “Keiser Report” television programme, in a London taxi. Keiser is particularly eloquent about the role of “fictitious capital” in present conditions, which appear not to have changed at all from the time of Karl Marx.

Please download and read this text:

Capital Volume 3, Chapter 29, Component Parts of Bank Capital (5397 words)

Money-Dealing Capital

Capital Volume 3, Part 4

Money-Dealing Capital

Capital Volume 3, Part 4, Conversion of Commodity-Capital and Money-Capital into Commercial Capital and Money-Dealing Capital (Merchant's Capital)

Since 2008 in particular, the world has been described as being in a “global economic meltdown”. This crude bogey is not in fact a new phenomenon. The nature of banking and money-dealing has been well known since the publication of Capital Volume 3, as was noted in various publications at the start of the “meltdown”. One good example is an article by Dave Lindorff in CounterPunch on 3 October 2008, which quotes Chapter 30 in Part 5 of Capital Volume 3 (“Money Capital and Real Capital”) to show that Marx had in that chapter described the working of the “meltdown” very completely and very concisely.

Here is the quote, with Lindorff’s edits:

"In a system...where the entire continuity of the...process rests upon credit, a crisis must obviously occur -- a tremendous rush for means of payment -- when credit suddenly ceases and only cash payments have validity. At first glance, therefore, the whole crisis seems to be merely a credit and money crisis. And in fact it is only a question of the convertibility of bills of exchange into money. But the majority of these bills represent actual sales and purchases, whose extension far beyond the needs of society is, after all, the basis of the whole crisis. At the same time, an enormous quantity of these bills of exchange represents plain swindle, which now reaches the light of day and collapses; furthermore, unsuccessful speculation with the capital of other people; finally, commodity-capital which has depreciated or is completely unsaleable, or returns that can never more be realized again. The entire artificial system of forced expansion of the [economy] cannot, of course, be remedied by having some bank, like the [Federal Reserve], give to all the swindlers the deficient capital by means of its paper and having it buy up all the depreciated commodities at their old nominal values. Incidentally, everything here appears distorted, since in this paper world, the real price and its real basis appear nowhere, but only bullion, metal coin, notes, bills of exchange, securities. Particularly in centres where the entire money business of the country is concentrated, like London [or New York]...the entire process becomes incomprehensible."

Broadly it appears that the ability of bankers and of traders in financial instruments to create money is unrestrained. In Marx’s time there was a link between money and gold and silver, and this link remained officially until the 1970s. The de-facto position of gold remains, but even gold has now been fictionalised to an extent.

This is therefore another area wherein the writings of Karl Marx, particularly here in Capital volume 3, speak directly to the bourgeois economists of today. Marx is however quite explicit in saying that the source of increase of wealth in capitalist society remains one and the same as before: surplus value extracted by the exploitation of labour power paid for with wages at the point of production.

In Chapter 19, on “Money-Dealing Capital” download linked below) Marx states at the beginning:

“A definite part of the total capital dissociates itself from the rest and stands apart in the form of money-capital, whose capitalist function consists exclusively in performing these operations for the entire class of industrial and commercial capitalists. As in the case of commercial capital, a portion of industrial capital engaged in the circulation process in the form of money-capital separates from the rest and performs these operations of the reproduction process for all the other capital. The movements of this money-capital are, therefore, once more merely movements of an individualised part of industrial capital engaged in the reproduction process.”

There is nothing in the above to suggest that Capital Volume 1 has been surpassed or rendered obsolete. On the contrary, Capital Volume 1 is hereby confirmed as continuing to be the essential and necessary basis and foundation in reality upon which the ever-more-fantastic world of money-dealing is erected.

Marx concludes the chapter as follows:

“It is evident that the mass of money-capital with which the money-dealers operate is the money-capital of merchants and industrial capitalists in the process of circulation, and that the money-dealers' operations are actually operations of merchants and industrial capitalists, in which they act as middlemen.

“It is equally evident that the money-dealers' profit is nothing but a deduction from the surplus-value, since they operate with already realised values (even when realised in the form of creditors' claims).”

“Nothing but a deduction from the surplus-value” is as plain a statement as could be, and this corresponds to the current jargon of “the real economy” or else “Main Street” as opposed to “Wall Street”.

Please download and read this text:

Capital Volume 3, Chapter 19, Money-Dealing Capital (3323 words)

Tendency of the Rate of Profit to Fall

Capital Volume 3, Part 3

Tendency of the Rate of Profit to Fall

Capital Volume 3, Part 3, The Law of the Tendency of the Rate of Profit to Fall

The most well-known insight of Capital Volume 3 is the Law of the Tendency of the Rate of Profit to Fall, often abbreviated to “TPRF”.

Chapter 13 (linked below) describes the Law very directly and simply.

The TPRF is not a mystical law. The TPRF is in the first place a consequence of the simple fact that surplus value extracted from wage-workers is the only source of increase, and profit is surplus value related to the cost of labour-power plus all the capitalists’ other costs, or what Marx calls “constant capital” (where wages are called “variable capital”).

The tendency for these other costs (the “constant capital”) to increase over time in relation to the amount of labour-power used is what causes the TPRF, the tendency of the rate of profit to fall.

The constant capital includes technology and the cost of technological inputs rises as more scientific methods are used, in relation to the amount of labour applied.

This produces an apparent paradox: When productivity rises, profits fall. The more “capital-intensive” is a business, the less profit is made in proportion to the amount of money invested.

Does this mean that capitalism is going to fade away? Does it mean that there is an entropy in play for capitalism, like the winding-down of the solar system? So that profits will eventually reduce almost to zero, and the capitalist relationship therefore become unsustainable and cease to exist?

Perhaps Karl Kautsky might have thought so, but there are “counteracting influences”, some of which Marx describes in the following Chapter 14 of Capital Volume 3. Wikipedia (here) lists Marx’s ones as follows (and then follows with some additional ones of its own):

• more intense exploitation of labour (raising the rate of exploitation)
• reduction of wages below the value of labour power
• cheapening the elements of constant capital by various means
• the growth and utilization of a relative surplus population (the reserve army of labour)
• foreign trade reducing the cost of industrial inputs and consumer goods
• the increase in share capital which devolves part of the costs of using capital on others.

Do the “counteracting influences” balance out the TRPF and produce a capitalist equilibrium?

No, not exactly. Instead, what we actually have is a very dynamic, unstable, and finally political, living world. We have constant crises, contradictions, and conflict.

“Marxism” is for many purposes a hidden science in capitalist society. For example, the business pages of newspapers seldom relate what is happening in businesses from day to day to theories of surplus value. Marx gets a nod now and again but mostly he is ignored.

But it is not the case that in the world of economic theory, Marx is never consulted by bourgeois economists. The terrain on which the parlay happens is here, in Capital Volume 3. The TRPF and its countervailing tendencies are familiar to bourgeois economists. They have their own variations on the problematisation of the TPRF, or its equivalent as they see it, such as “the law of diminishing returns”.

Please download and read this text:

Capital Volume 3, Chapter 13, The Law As Such (9109 words)

The General Rate of Profit

Capital Volume 3, Part 2

  

The General Rate of Profit

Capital Volume 3, Part 2, Conversion of Profit into Average Profit

The source of increase under capitalism is surplus value. This is the truth that is revealed in exhaustive detail in Capital, Volume 1, and it is not going to be contradicted here in Volume 3.

But what is called “profit” is not the increase as a whole, but the increase less the other costs of production.

Marx’s definition of the rate of profit is “the ratio of surplus labour (s) to necessary labour plus the value of components and materials used in production (v + c) – the capitalist’s costs of production.”

Labour power is paid for at cost, but yields more labour than is required to reproduce labour-power.

All other inputs such as materials, equipment and general overhead expenses are inert costs that have no regenerative power. They are simply consumed in production and their cost is passed on directly to form part of the commodity price of the resultant product.

Only labour can produce surplus value. All other inputs, even if their cost is passed on in full into the selling-price, go to reduce the overall rate of profit. When labour and the corresponding surplus-value it produces become a smaller proportion of the whole, the rate of profit on the whole outlay is less.

It follows that the only way that profit can be made is by the employment of people. This is in turn is why the threat of employers to employ machinery instead of people is hollow. To make more money, the capitalist must generally employ more people.

The jargon used today is “labour-intensive” versus “capital-intensive”. In a capital-intensive business, the costs of other inputs are higher in proportion to the labour-power employed, and the rate of profit is consequently lower.

This is shown in the table given at the beginning of the well-known Chapter 9 of Volume 3 (download linked below).

This chapter is full of quite simple examples, interspersed with categorical general statements. It is readable to people with a business background.

In general, the chapter is about the development of the overall “economy” out of its individual-capitalist parts, so that we now enter the world of “financial markets”, with an idea of what comes through from the basic relationships and what begins to feed back from the overall (social) level so as to affect individual enterprises.

Please download and read this text:

Capital Volume 3, Chapter 9, Formation of a General Rate of Profit (7453 words)