Tuesday, January 31, 2012


A short story by Anton Chekhov

[Anton Chekov, a Russian,  ( 29-1-1860—15-7-1904) was considered to be among the greatest writers of short stories in history. On the occasion of his birth day on 29th January, one of his short stories is reproduced here.]

"HERE goes, I've done with drinking! Nothing. . . n-o-thing shall tempt me to it. It's time to take myself in hand; I must buck up and work. . . You're glad to get your salary, so you must do your work honestly, heartily, conscientiously, regardless of sleep and comfort. Chuck taking it easy. You've got into the way of taking a salary for nothing, my boy -- that's not the right thing . . . not the right thing at all. . . ."
After administering to himself several such lectures Podtyagin, the head ticket collector, begins to feel an irresistible impulse to get to work. It is past one o'clock at night, but in spite of that he wakes the ticket collectors and with them goes up and down the railway carriages, inspecting the tickets.
"T-t-t-ickets . . . P-p-p-please!" he keeps shouting, briskly snapping the clippers.
Sleepy figures, shrouded in the twilight of the railway carriages, start, shake their heads, and produce their tickets.
"T-t-t-tickets, please!" Podtyagin addresses a second-class passenger, a lean, scraggy-looking man, wrapped up in a fur coat and a rug and surrounded with pillows. "Tickets, please!"
The scraggy-looking man makes no reply. He is buried in sleep. The head ticket-collector touches him on the shoulder and repeats impatiently: "T-t-tickets, p-p-please!"
The passenger starts, opens his eyes, and gazes in alarm at Podtyagin.
"What? . . . Who? . . . Eh?"
"You're asked in plain language: t-t-tickets, p-p-please! If you please!"
"My God!" moans the scraggy-looking man, pulling a woebegone face. "Good Heavens! I'm suffering from rheumatism. . . . I haven't slept for three nights! I've just taken morphia on purpose to get to sleep, and you . . . with your tickets! It's merciless, it's inhuman! If you knew how hard it is for me to sleep you wouldn't disturb me for such nonsense. . . . It's cruel, it's absurd! And what do you want with my ticket! It's positively stupid!"
Podtyagin considers whether to take offence or not -- and decides to take offence.
"Don't shout here! This is not a tavern!"
"No, in a tavern people are more humane. . ." coughs the passenger. "Perhaps you'll let me go to sleep another time! It's extraordinary: I've travelled abroad, all over the place, and no one asked for my ticket there, but here you're at it again and again, as though the devil were after you. . . ."
"Well, you'd better go abroad again since you like it so much."
"It's stupid, sir! Yes! As though it's not enough killing the passengers with fumes and stuffiness and draughts, they want to strangle us with red tape, too, damn it all! He must have the ticket! My goodness, what zeal! If it were of any use to the company -- but half the passengers are travelling without a ticket!"
"Listen, sir!" cries Podtyagin, flaring up. "If you don't leave off shouting and disturbing the public, I shall be obliged to put you out at the next station and to draw up a report on the incident!"
"This is revolting!" exclaims "the public," growing indignant. "Persecuting an invalid! Listen, and have some consideration!"
"But the gentleman himself was abusive!" says Podtyagin, a little scared. "Very well. . . . I won't take the ticket . . . as you like. . . . Only, of course, as you know very well, it's my duty to do so. . . . If it were not my duty, then, of course. . . You can ask the station-master . . . ask anyone you like. . . ."
Podtyagin shrugs his shoulders and walks away from the invalid. At first he feels aggrieved and somewhat injured, then, after passing through two or three carriages, he begins to feel a certain uneasiness not unlike the pricking of conscience in his ticket-collector's bosom.
"There certainly was no need to wake the invalid," he thinks, "though it was not my fault. . . .They imagine I did it wantonly, idly. They don't know that I'm bound in duty . . . if they don't believe it, I can bring the station-master to them." A station. The train stops five minutes. Before the third bell, Podtyagin enters the same second-class carriage. Behind him stalks the station-master in a red cap.
"This gentleman here," Podtyagin begins, "declares that I have no right to ask for his ticket and . . . and is offended at it. I ask you, Mr. Station-master, to explain to him. . . . Do I ask for tickets according to regulation or to please myself? Sir," Podtyagin addresses the scraggy-looking man, "sir! you can ask the station-master here if you don't believe me."
The invalid starts as though he had been stung, opens his eyes, and with a woebegone face sinks back in his seat.
"My God! I have taken another powder and only just dozed off when here he is again. . . again! I beseech you have some pity on me!"
"You can ask the station-master . . . whether I have the right to demand your ticket or not."
"This is insufferable! Take your ticket. . . take it! I'll pay for five extra if you'll only let me die in peace! Have you never been ill yourself? Heartless people!"
"This is simply persecution!" A gentleman in military uniform grows indignant. "I can see no other explanation of this persistence."
"Drop it . . ." says the station-master, frowning and pulling Podtyagin by the sleeve.
Podtyagin shrugs his shoulders and slowly walks after the station-master.
"There's no pleasing them!" he thinks, bewildered. "It was for his sake I brought the station-master, that he might understand and be pacified, and he . . . swears!"
Another station. The train stops ten minutes. Before the second bell, while Podtyagin is standing at the refreshment bar, drinking seltzer water, two gentlemen go up to him, one in the uniform of an engineer, and the other in a military overcoat.
"Look here, ticket-collector!" the engineer begins, addressing Podtyagin. "Your behaviour to that invalid passenger has revolted all who witnessed it. My name is Puzitsky; I am an engineer, and this gentleman is a colonel. If you do not apologize to the passenger, we shall make a complaint to the traffic manager, who is a friend of ours."
"Gentlemen! Why of course I . . . why of course you . . ." Podtyagin is panic-stricken.
"We don't want explanations. But we warn you, if you don't apologize, we shall see justice done to him."
Certainly I . . . I'll apologize, of course. . . To be sure. . . ."
Half an hour later, Podtyagin having thought of an apologetic phrase which would satisfy the passenger without lowering his own dignity, walks into the carriage. "Sir," he addresses the invalid. "Listen, sir. . . ."
The invalid starts and leaps up: "What?"
"I . . . what was it? . . . You mustn't be offended. . . ."
"Och! Water . . ." gasps the invalid, clutching at his heart. "I'd just taken a third dose of morphia, dropped asleep, and . . . again! Good God! when will this torture cease!"
"I only . . . you must excuse . . ."
"Oh! . . . Put me out at the next station! I can't stand any more. . . . I . . . I am dying. . . ."
"This is mean, disgusting!" cry the "public," revolted. "Go away! You shall pay for such persecution. Get away!"
Podtyagin waves his hand in despair, sighs, and walks out of the carriage. He goes to the attendants' compartment, sits down at the table, exhausted, and complains:
"Oh, the public! There's no satisfying them! It's no use working and doing one's best! One's driven to drinking and cursing it all. . . . If you do nothing -- they're angry; if you begin doing your duty, they're angry too. There's nothing for it but drink!"
Podtyagin empties a bottle straight off and thinks no more of work, duty, and honesty!

third bell: train passengers were given 3 warning bells: the first (single) ring indicated 15 minutes until departure; the second (2 rings) indicated 5 minutes; and the third bell (3 rings) sounded as the train left the station


Monday, January 30, 2012

Implementation of reservations in government jobs and disbursement of credit to dalit entrepreneurs

As per the Ministry of Personnel, Public Grievances and Pensions, out of a total 76137 backlog vacancies in various ministries in the central government and in the central PSUs, the government could fill up only 26472 vacancies in 3 years exercise of special recruitment drive.

As per the data released by the Reserve Bank of India in December 2011, the credit disbursements to dalit entrepreneurs dropped by 33.8 percent this year(2011-12).  The disbursement of credit to dalit entrepreneurs through 20 odd schemes run by the Ministry of Social Justice has dropped to Rs 1670 crore between April and October this financial year, where as durig the same period in 2010, Rs 2524 crore was lent to the companies run by the members of Sceheduled Castes and Tribes. In such case how the mandate of 4% of the government procurement from dalit and tribal vendors can be implemented?

As per the data of the National Sample Survey Organisation, the percentage of self employed households among the Scheduled Castes was 14 in rural areas and 29 in urban areas, compared with 17 and 37 percent for the higher castes.

The economic census of private enterprises for 2005 showed that the percentage of ST, SC, OBC and higher castes owners in the total private enterprises was 2,6,30 and 61 respectively in urban areas, whereas it was 6, 10, 40 and 45 in rural areas. The share of private entrepreneurs belonging to the  scheduled castes and scheduled tribes is far less than their share in the population.

The government’s pious words favouring improving the lot of the scheduled castes and scheduled tribes are not resulting in much improvement. A struggle is required against the policies of the government to change this situation for the better.

(This is based on the article “UPA Govt Must Be Made to Walk the Talk” by G.Mamatha in “People’s Democracy”  January 29 issue.)

An Introduction to Marx’s Capital—Part-16

(This is based on “Marx’s Capital” written by Ben Fine and Alfredo Saad-Filho, translated and published in Telugu by Prajasakti Book House and also based on the book “The People’s Marx” which is an abridged popular edition of the 3 volumes of Marx’s Capital, edited by Julian Borchardt and published by Prajasakti Book House and “Marx’s Capital, An Introductory Reader” by Venkatesh Atreya and 6 others published by Left Word)

                            (For Part-15, please see the blog entry dated 29-1-2012)

Commodity, Labour Theory of Value, Labour Power, Labour and Commodity Fetishism

Now let us summarise what we have noted so far on commodity production, labour theory of value, labour power, commodity fetishism, surplus value, exploitation and technological changes. In this part, we will summarise what we have noted on commodity production, labour theory of value, labour power, and labour and commodity fetishism.

The labour theory of value


  1. A commodity has use value and exchange value.

  1. A commodity has use value, that is, it satisfies some human want. It is a useful thing. Otherwise it will not be sold and hence will not be produced.The use value of a commodity cannot be measured. If a use value is produced for self or for family and hence not meant for sale, it is only a use value and not a commodity.

  1. A commodity has exchange value besides its value, that is, a definite quantity of one commodity can be exchanged with a definite quantity of another commodity. (x quantity of commodity a= y quantity of commodity b)

  1. When the two commodities are thus exchanged, it means there is some thing common in them  in equal quantity. That common thing in equal quantity in them is their exchange value or simply, value.

  1. The value cannot be any of the physical or chemical properties of a commodity, since 100 grams gold cannot be exchanged with 100 grams cotton just because they are equal in weight; one litre petrol cannot be exchanged for one litre kerosene just because they are equal in volume. Similarly commodities cannot be exchanged on the basis that they are equally hard or equally soft, or having the same color or texture etc.  

  1. When it is not any of the physical or chemical property that gives value to the commodity, the only thing left is that the commodity is the product of human labour. It is the common factor in all commodities.

The labour theory of value

  1. Any commodity is the product of nature and labour. “Commodities are produced from other commodities, either raw materials or finished products, which in turn have been produced from raw materials sourced from nature and so on. Thus each commodity embodies within itself several other commodities, the ultimate source of which being the raw materials found in nature. What transforms raw materials into finished products, or one set of commodities into another set of commodities? It is the application of human labour. One can argue that the transformation of one set of commodities into another set of commodities cannot be achieved by applying labour alone. Labour has to be applied on a certain technique of production. But techniques are embodied in the means of production, like tools and machines. These means of production are also commodities, which have first been conceived or designed and then transformed from other commodities, with application of labour.” (The Three Stories of Capital and their Relevance Today-Prasenjit Bose, Marx’s Capital, An Introductory Reader)

  1. Therefore what gives value to a commodity is the labour embedded in it. But how it can be measured? By the labour time required to produce it.

  1. But a worker with less skill may take more time to produce a commodity where as a worker with more skill will take less time. Similarly with a higher technology the commodity can be produced with less time where as with a lower technology it takes more time. Does it mean the value of the commodity will vary with the skill/technology of the labourer who produced it?

  1. The value is a socially accepted value. This means the value of a commodity is equal to the labour time socially necessary to produce it, with the average skill and technology available in the particular society at a particular period.

  1. Thus the labour theory of value says that the value of a commodity is equal to the labour time socially necessary to produce it.

Concrete labour and abstract labour-the two aspects of the human labour

  1. In any society (except the simple primitive fruit gathering/hunting society) there is division of labour where in different kinds of use values are produced at different work places.

  1. When the use value is produced for immediate consumption by the producer, it is not part of the social production. But when it is produced for exchanging with another use value, it is a part of the social production.

  1. The labour that produces the commodities thus has a two fold character. The labour produces use values. In that respect it is a concrete labour,  a particular kind of labour producing a particular kind of commodity—the labour of a weaver is a concrete labour producing the use value, cloth; the labour of a carpenter is a concrete labour producing the use value, table, etc., Thus while giving the usefulnesss to the commodity, the labour is concrete labour.

  1. But all concrete labours are human labour in abstract, where in the brain, nerve and muscle are expended. In this aspect, any kind of labour is an abstract labour. Any concrete labour can be reduced to and measured as abstract labour. Suppose the daily wage of an unskilled manual labourer is Rs 200/- and that of a software engineer is Rs 2000/-. This means what? Both are units of the same kind of labour, the homogenous human labour, called the abstract labour. Other wise they cannot be measured as the quantities of the same unit. The skilled labour is the multiplied unskilled   labour. Hence the one day skilled labour of the software engineer is equal to 10 days labour of the unskilled labour.

Value is a social relation, the relation between individual labour to the total labour of the society

  1. The concrete labours producing different use values at different work places are brought together and measured against each other when those use values are exchanged. But while measuring so, they are not measured as concrete labours, but they are measured as absolute labour, homogenous human labour, as units of the labour time socially required for producing the commodity. Thus value is a social relation; where in the different concrete labours are measured as units of the socially necessary human labour. This means the value of a commodity is the fraction of the total labour of the society which is socially allotted for producing it.

Price is the money form of value

  1. Price is the value expressed in money terms. Price is not exactly equal to the value. It fluctuates around value, depending up on factors like supply, demand, taste, technology, skill etc.(If the demand is more, the commodity will be sold at a price which is more than its value and if the demand is less, the commodity may be sold at a price less than its value. But on average, over a definite period, the average price will be equal to the value. But what ever may be the supply and demand factors, the price of 100 grams of rice cannot be equal to the price of 100 grams of rice. It is because the labour time socially required to produce 100 grams of gold is several times more than the labour time socially required to produce 100 grams of rice.

  1. If in future due to the development of technology, the socially necessary labour time for producing 100 grams of gold and 100 grams of rice becomes equal, then the value of gold and rice will be equal.

The distinguishing feature of capitalism

  1. In simple commodity production, the producer, with his labours, produces the commodity and exchanges it for another commodity.

  1. In capitalist commodity production, the capitalist hires wage labourer to produce the commodity and then sells it.

  1. But what the capitalist purchases is not the labourer himself, but only the labour power of the labourer. The labour power is the capacity of the worker to labour, to work. Therefore there is a distinction between labour power and labour. Marx is the first social scientist who made this distinction.

  1. The most important distinguishing feature of capitalism is that labour power has become a commodity which can be sold and purchased. In slavery, the slave himself was the property of the slave owner. In feudal society, the peasant is bonded to the estate of the lord and he has to contribute his labour free of cost to the lord. In capitalist society, the worker is free. He is free in two aspects. He is free from the means of production, and hence he has to sell his labour power for his subsistence. Otherwise he cannot get any work since he has no means of production (land, building, machinery, raw materials etc).  But he is free to sell his labour power to any capitalist, for wage.

  1. Therefore to make the workers available for the capitalist production, the peasants were separated from their land and the artisan was deprived of his trade and thus they were separated from the means of production and were compelled to sell their labour power for subsistence.

  1. Thus capital is a social relation in which those having the monopoly on means of production stand as capitalists on the one side and those who are deprived of the means of production stand as the workers on the other side in the production.

  1. Labour power becoming a commodity is the most important distinguishing feature of capitalism.

Commodity Fetishism

  1.  In capitalism, production is organised based on the social relationship between the capitalist and the worker. Commodities have value due to the social relation between the individual labour to the social labour. It is the measurement of the labour of the individual as the part of the total labour of the society. It is thus a social relation. But this relation appears as the relation between things, say commodity x=commodity y. It appears that the commodity is having value intrinsic to it, apart from the socially necessary labour time, a social relation, which is the real value in it.

1.      The production in capitalist system is the result of the social relationship between the capitalist as the owner of the means of production and purchaser of the labour power; and the worker as the seller of his commodity labour power to the capitalist. But this relationship appears as the relationship between things, between commodities.

2.      As a result it appears that the capitalist has the commodity machene, raw material, etc and those commodities give profit to the capitalist; similarly the worker has the commodity labour and it gives him his wage. Thus it appears that the inanimate objects (commodities) are having the mystic property of giving profit to its owner. On the other hand, the living being, the worker, is treated as a factor in the production, human capital.

3.      Fetishism is the attribution of religious or mystic qualities to inanimate objects. In religious fetishism, the inanimate objects are attributed the qualities of human beings. Similarly in capitalism, the commodities are attributed the quality of giving rise to profit, and having a special quality called value. The introduction of money has complicated these appearances still more. Thus in capitalism, the commodities appear to have the special qualities, the mysterious qualities of having value, of giving profit etc. It also appears that there is free exchange between the worker and the capitalist, since the worker freely sells his labour and the capitalist pays for it fully. This phenomenon wherein commodities appear to have these mysterious qualities is called the “commodity fetishism”. It appears that commodities are having the life so that they come into relationship with each other and with human beings.

4.      Since relations between the classes (capitalist class and the working class) appear as the relation between commodities and consequently money relations, it results in alienation. Alienation means separation between things that naturally belong together.Alienation in society (social alienation) means separation of people from the aspects of their human nature.  

5.      In capitalist society the worker has no control on his work process, that is, he has to work as directed by the capitalist who purchased his labour power for his (capitalist’s) use. The worker does not own the product, since the product belongs to the capitalist. Thus the worker is alienated from his work and the product of his work. The capitalist also is alienated since his actions are not decided by his free will, but decided by the imperatives of profit, competition, stock market etc .

6.      Therefore for both the capitalist and the worker it appears that some external powers are controlling them,  and not their social relations in production, as capitalist and worker. When a capitalist becomes bankrupt, or when a woker loses job, they blame an impersonal force or thing like the break down of a machene, changes in the consumer preferences, competition or economic crisis, but will not understand it as the result of the capitalist relations of production, as the result of the relations of production established between them as capitalist and worker.

7.      But there is a difference between religious fetishism and commodity fetishism. We can be clear from the religious fetishism in our mind and can keep away from worshipping such fetishes in practice. But how ever great we may understand, we cannot wish away these appearances –price, profit and wage, by an act of our will. These are the real appearances of the underlying realities of social relations. But the underlying realities are grasped from time to time through the consequences of the practical realities. The reflection of such realities like  unemployment, poverty, price rise, vast inequalities,  economic crisis etc  in our thinking   becomes the subject of both material struggle ( struggle between the capitalists and working class and middle class)  and ideological struggle ( The debate why there is unemployment, poverty and crisis in the capitalist society and whether these problems are the inalienable characters of the capitalist system itself and therefore whether these problems can be cured with in the system or the transformation, the changing of the capitalist system into a new social system is required etc.,).

Sunday, January 29, 2012

Maxim Gorky’s Quotations

“When work is a pleasure, life is a joy. When work is a duty, life is slavery!” 

“Remembrance of the past kills all present energy and deadens all hope for the future” 

Happiness always looks small while you hold it in your hands, but let it go, and you learn at once how big and precious it is.

“Only mothers can think of the future-because they give birth to it in their children”

“When one loves somebody everything is clear - where to go, what to do - it all takes care of itself and one doesn't have to ask anybody about anything”

“Be good, be kind, be humane, and charitable; love your fellows; console the afflicted; pardon those who have done you wrong.

“Everybody, my friend, everybody lives for something better to come. That's why we want to be considerate of every man--Who knows what's in him, why he was born and what he can do?”

“You can't do without philosophy, since everything has its hidden meaning which we must know”

An Introduction to Marx’s Capital—Part-15

(This is based on “Marx’s Capital” written by Ben Fine and Alfredo Saad-Filho, translated and published in Telugu by Prajasakti Book House and also based on the book “The People’s Marx” which is an abridged popular edition of the 3 volumes of Marx’s Capital, edited by Julian Borchardt and published by Prajasakti Book House and other references)

                            (For Part-14, please see the blog entry dated 28-1-2012)

Machinery and technological changes

  1. We noted earlier that the pursuit of the capitalists for relative surplus value is the reason for continuous technological up gradation of the machinery in the factory. With technological up gradation, productivity is increased so that the consumer goods and services required for the workers for their sustenance of labour power can be produced in less time socially necessary, so that the socially necessary labour time or the necessary labour time of the working day is reduced along with consequent increase in the surplus labour time.

  1. In the evolution of the technological changes, initially the physical power of the worker will be replaced by the power of the machine. Thereafter the tools of the worker become the appendages of the machine. The worker becomes the appendage of the machine, to feed the machines with raw materials or to watch over them. In this process the worker becomes the servant of the machine. The worker has to attend to the requirements of the machine in its movements in the work process.

  1. Earlier when the production was carried out by the worker with his tools in the factory before the advent of the machines, the worker worked with his tools in a skilful way. The worker controlled the tool.

  1. But with the advent of machines, the tools have become incorporated in the machines and the worker has become the appendage to the machine.

  1. This development of technology which is a continuous process has its contradictory effects on the worker. The machine simplifies the work of the worker and hence deskills him, making his earlier skills unnecessary. But since a number of such new simple skills are required, the worker becomes multi skilled. Also, the physical stress in the work is lessened by the machine, but at the same time the pace and the intensity of the work increases.

The historical role of modern industry

  1. On the historical role of the modern industry and technological development, Marx makes the following important observation:

“Modern industry never looks upon and treats the existing form of a process as final. The technical basis of that industry is therefore revolutionary, while all earlier modes of production were essentially conservative. By means of machinery, chemical processes and other methods, it is continually causing changes not only in the technical basis of production, but also in the functions of the labourer, and in the social combinations of the labour process. At the same time, it thereby also revolutionises the division of labour within the society, and incessantly launches masses of capital and of working people from one branch of production to another. But if modern industry, by its very nature, therefore necessitates variation of labour, fluency of function, universal mobility of the labourer, on the other hand, in the capitalistic form, it reproduces the old division of labour with its particularisations.

We have seen how this absolute contradiction between the technical necessities of modern industry and the social character inherent in its capitalistic form, dispels all fixity and security in the situation of the labourer; how it constantly threatens, by taking away the instruments of labour, to snatch from him his means of subsistence, and, by suppressing his detail function, to make him superfluous.

We have seen, too, how this antagonism vents its rage in the creation of that monstrosity, an industrial reserve army (means unemployed), kept in misery in order to be always at the disposal of capital; in the incessant human sacrifice from among the working class, in the most reckless squandering of labour power and in the devastation caused by a social anarchy which turns every economic progress into a social calamity.

This is the negative side.

But if , on the one hand, variation of work at present imposes itself after the manner of an over powering law that meets with resistance at all points, modern industry, on the other hand, through its catastrophes imposes the necessity of recognising , as a fundamental law of production, variation of work, consequently fitness of the labourer for varied work, consequently the greatest possible development of his varied aptitudes.

It becomes a question of life and death for society to adapt the mode of production to the normal functioning of this law. Modern industry, indeed, compels society, under penalty of death, to replace the detail- worker of to-day, grappled by lifelong repetition of one and the same trivial operation, and thus reduced to the mere fragment of a man, by the fully developed individual, fit for a variety of labours, ready to face any change of production, and to whom the different social functions he performs, are but so many modes of giving free scope to his own natural and acquired powers”. (Capital, Volume I, pp 457-58)

Productive and unproductive Labour

  1. According to Marx, when the labour is hired by the capital to produce surplus value directly, it is productive labour. The productive labour is hired by capital and produces commodities for sale.

  1. All other kinds of labour not producing surplus value directly, are unproductive labour under capitalism. The self employed are producing commodities for sale. But they are not wage labour. Hence they are unproductive labour. The government employees working in the offices, the managers no directly engaged in production, the cashiers, accountants, sales people even if employed by the industry are unproductive labour since they are not engaged for producing surplus value.

  1. A doctor if works on his own and earns is unproductive labour. But if he is hired  by a corporate hospital for its profit, then his labour is productive labour since it is hired for producing surplus value or profit.

  1. The unproductive workers also are exploited, although they do not produce any commodity. For example banking and commercial sectors are unproductive in that the labour hired in these sectors is not producing any commodities for sale or any service for sale. But here also the workers will work beyond the necessary labour time that is work for more time than the labour time equal to the value of their wage.

  1. The surplus value generated by the productive labour in the commodity producing sectors is shared by the capitalists engaged in commercial activities (selling the commodities produced) and the finance capitalists who provide the money to the industrial capitalist on loan. The surplus value generated in the commodity production is shared by the commercial capitalist as the distributor’s profit (the industrial capitalist sells his commodity to the commercial capitalist at lesser price and the commercial capitalist sells it at its actual price). The banker or financier gets a share in the surplus value generated in the production, in the form of interest. The industrial capitalist gets a share in the surplus value generated in the production, as industrial profit. He also pays to the government taxes from the profit thus generated. Thus the taxes paid by the capitalists are from the surplus value generated in the production.

  1. This can be illustrated as below:

a)      Price of the commodity produced=say Rs 100

b)      As per the formula we have noted earlier, the price of a commodity=cost + profit

c)      But cost=c(constant capital, the value of the machine and raw material transferred to the commodity)+v(variable capital, the wage given to the worker for producing the commodity)

d)      Therefore price=(c+ v)+s(surplus value, which is nothing but profit in money terms)

e)      Let us assume that in this price of the commodity Rs 100/-, c=Rs 60, v=Rs 20/- and s=Rs 20/-.

f)        In the s (surplus value) of Rs 20/-, the industrial capitalist who produced the commodity, say, retains Rs 15/- for himself. In such case, he will not sell the commodity to the commercial capitalist at Rs 100/- which is its price. He will give it to the commercial capitalist for Rs 95/- only so that the commercial capitalist gets the profit (commercial profit) of Rs 5/- by selling it for Rs 100/-. From the Rs 15/- profit got by him, the industrial capitalist pays interest to the banker on his loan, say, Rs 2/- and also pays Rs 1/- to the government as tax. Then he will have a net profit of Rs 12/-. Thus the surplus value of Rs 20/- generated by the industrial capital was shared by the finance capital, the industrial capital, the commercial capital and the government. Also, if the land on which the factory is built is taken on rent, the rent of the land will be paid to the landlord from this surplus value of Rs 20/- generated by the industry in the production.

g)      The workers in banks or commercial establishments help in organising the finance, and commerce will be given wage from this share of the surplus value generated in the production.


Saturday, January 28, 2012

News on Telecom Sector

Telcos failed to reverify the prepaid connections in Assam and North East

TD SAT reserved the order on the petition of the private operators on the penality imposed by DoT for their failure to reverify the prepaid connections in Assam and Nort East which was the requirement for fulfilling the security concerns.. The operators involved are Airtel, Vodafone,and  Idea.

World Economic Forum at Davos-Sunil Mittal says collection of spectrum charge additionally will lead to tariff hike

In the press conference at the sidelines of the WEF, he said the proposal of the Telecom Commission to charge the 2G spectrum held by the telecom operators beyond 4.4 MHz(Earlier TRAI said beyond 6.2 MHz) if implemented would lead to increase in tariff.

BSNL’s publicity work under CBI lens for irregularities

Complaints were received by CVC alleging wrong doings in handling marketing and advertisement work in BSNL. They relate to unauthorised appointment of a part-time Director in BSNL and assigning advertisement related jobs to a non-empanelled and ineligible agency.The CVC forwarded the case to DoT. After receiving the DoT’s report, the CVC conducted a probe. Since there were several commissions and omissions by certain BSNL officials, the Commission decided to refer the case to CBI for detailed investigation.

Telecom is no more the ‘finest’ story-Sunil Mittal
At the WEF in Davos, Airtel Chief Sunil Mittal told on the sidelines to the media that telecom in India is no more the finest story since the telcos have paid a ridiculously high amount for 3G bidding since there was no enough 2G spectrum allotted for years. This overpayment of about Rs 1,00,000 crores for 3G  and BWA spectrum has taken the lights out of the industry. The amortisation of the money that was paid for 20 years and the interest on it is bothering telecom industry. He said that the growth story is intact, but the investment side is weak because people are not opening up to that extent. It also impacts foreign investments

The debt of the telecom industry

The total debt of the telecom industry is estimated as Rs 275000 crore. In this from PSU banks it is Rs 1,00,000 crores. SBI Rs 25000 crore. Indian telcos have been traditionally large borrowers as they built and expanded networks, and aggressively bid for 3G and broadband licenses. But the 2G scam coupled with poor uptake of 3G services, mounting losses and slow growth has also resulted in domestic banks cutting off funding for telcos. Telecom Minister Kapil Sibal sought the intervention of the Prime Minister and Finance Minister to get banks to start lending again to mobile phone companies. Consequently the finance ministry has asked for a change in the norms to allow spectrum to be used as collateral by lenders of telecom companies and asked telecom ministry to make policy changes to ensure that airwaves can be seized by the banks in the event of a default or cancellation of mobile permits. At present all spectrum is owned by the government and is given on a 20 years lease to the operators on the condition that it will be returned to the government. The finance ministry also said that the lenders must be part of any consultation related to cancellation of mobile permits. Banking Secretary D.K.Mittal in a January 20 communication to DoT has called for a standstill period for consultations with secured lenders before canceellation of the  licence of any teelcom company.

6, 00,000 employees in top 4 software companies

As on 31-12-2011 the number of employees in the 4 top software companies is 5.91 lakhs. The total number of employees in the IT sector is 20 lakhs.

DoT for a one time fee for spectrum beyond 6.2 MHz

The Telecom Commission decided to charge a one time charge for extra spectrum beyond 6.2 MHz from the telecom operators, from the date of allocation of spectrum.Besides this, the Commission also decided that the government will also charge for the spectrum between 4.4 MHz to 6.2 MHz on the basis of auction, after notification is issued. As per the TRAI’s recommendation, the spectrum beyond 6.2 MHz should cost Rs 4571.87 crore per MHz(All India). But it will be collected on circle basis.

(Source:The Economic Times and The Hindu Business Line)


An Introduction to Marx’s Capital—Part-14

(This is based on “Marx’s Capital” written by Ben Fine and Alfredo Saad-Filho, translated and published in Telugu by Prajasakti Book House and also based on the book “The People’s Marx” which is an abridged popular edition of the 3 volumes of Marx’s Capital, edited by Julian Borchardt and published by Prajasakti Book House and other references)

                            (For Part-13, please see the blog entry dated 25-1-2012)

Absolute and Relative Surplus Value

Surplus value and exploitation

  1. In our earlier study we came to understand that in a working day, the labour power creates its own value in some period and surplus value in the remaining period. The value and surplus value both are taken away by the capitalist. The capitalist pays only for the value  and will not pay for the surplus value . This appropriation of the surplus value created by the labour power by the capitalist is the exploitation.

  1. We further noted that in a working day, the hours of labour necessary for creating the value by the labour power is the necessary labour time and the hours of labour in which the surplus value is created by the labour power is the surplus labour time. Thus the one day labour time of the worker is divided into necessary labour time and surplus labour time. We also noted that the rate of exploitation (e) is the ration between the surplus labour time (surplus value) called s and the necessary labour time (value) called v and noted the formula of the rate of exploitation as e=s/v.

Absolute Surplus value

  1. Suppose in a working day the worker works for 10 hours and creates value in 5 hours (necessary labour time)  and surplus value in the next 5 hours(surplus labour time). Therefore the rate of exploitation is s/v=5/5=100%.  
  2. But if the capitalist has to increase the rate of exploitation of the labour power, what he has to do?  He will resort to the following methods:

(a)    By increasing working hours

(i)                 One method is without changing the technology and on the basis of the existing method of production, he can increase it by increasing the surplus labour time from 5hours to 6hours, keeping the necessary labour time as the same  5 hours(means without increasing the wage). In such case the working hours will be 11 hours instead of 10 hours.
(ii)               In such case the rate of exploitation=s/v=6hours/5 hours=120%. The surplus value thus increased by increasing the working hours is called as the absolute surplus value.

(b)   By increasing the intensity of the work

(i)     If increasing the working hours is not possible due to the struggles of the workerers, still the capitalist will try to produce the absolute surplus value. How? By intensifying the work, by increasing the speed of the work utilising new machenes with higher technology, so that in 10 hours, the result of 11 hours work can be there.The breaks in the work will be eliminated by saying that the speed of the machene requires no break in the work.In this case the wage will remain the same, but work will be intensified so that 11 hours work is done in 10 hours.

(ii)   By constant supervision by middle management, by penalities including the threat of dismissal etc to make the worker do intensified work.

(c)    By extending the work to the whole family including children

By extending the work to the whole family-if every body in the family is a worker, the umber of workers seeking work will increase and it will result in decrease in wages so that the necessary labour time is reduced(labour time required to create the value of the wage) and as a result, the surplus labour time will increase. In the earlier days of capitalism, and even now here and there, the children were also made to work in the factories.

(d)   Piece-wage rates, and overtime

The piece wage rate system (wage given on the basis of units of the commodity produced) makes the worker to intensify his work. Overtime work with a higher wage rate   induces worker to work beyond the normal working hours. But the capitalist will see that this overtime work is only for generating additional surplus value and not for generating entire surplus value.

Relative Surplus Value

  1. If it is impossible to increase the working day beyond certain hours and impossible to increase the intensity of the work beyond a certain level, the surplus labour time can still be increased by reducing the necessary labour time. If in a working day of 10 hours the necessary labour time is 5 hours and surplus labour time is 5 hours, the surplus labour time can be increased to 6 hours by reducing the necessary labour time to 4 hours, with working hours remaining the same 10 hours.

  1. If the necessities of the woker (food , clothing, housing, other services etc required to maintain his labour power for one day) can be produced in 4 hours instead of 5 hours, then it is possible to reduce the necessary labour time from 5 hours to 4 hours. In such case, the surplus labour time is 6 hours and the necessary labour time is 4 hours and the rate of exploitation is 6/4=150%.

  1. But how the necessities of the worker can be produced in less time? By increasing the productivity of the labour producing the necessities of the workers, and the labour in those branches of industry which supply the consumer goods industry with raw materials and machinery. This will result in making the necessities cheap and consequently help in reducing the wage.

  1. In this case since the surplus value is increased relatively by reducing the necessary value (necessary labour time or wage), the surplus value thus increased is called as relative surplus value.

  1. Therefore to assist this general raise in the relative surplus value, the capital tends to increase the productivity in order to cheapen the commodities, and by cheapening the commodities, to cheapen human labour.

  1. Hence the object of all the development of the productiveness of the labour within the capitalist production, is to shorten that part of the working day during which the labourer must work for his own benefit, and by that very shortening to lengthen the other part of the working day, during which the worker works gratis (without remuneration) for the capitalist.

Ways of exploitation

  1. Thus (a) the increase in working hours (In England when the capitalist system was developing, at first the laws were made to increase the working hours), (b) increase in the intensity of work with or without mechanisation, supervision of middle management, threats to jobs etc and other coercive methods etc (c) bringing the entire family into work (d) piece wages and over time are the methods followed by the individual capitalists to increase the absolute surplus value. But the working class struggles against these methods and it acts as a barrier for expanding the absolute surplus value beyond a limit.In the earlier days of capitalism when the working class was not sufficiently organised, all these methods were used to increase the absolute surplus value. The capitalist will always try to administer this medicine of coercion as far as possible, to increase his profit. The unorganised sector in our country is still remaining as an example. Not only  this, even in IT sectore, the working hours are more than 8 hours.

  1. But relative surplus value (reducing the necessary labour time in the working day so that the surplus labour time expands) can be generated without any increase in the working hours and without the necessity for coercion. It involves reducing the value of the labour power(wage) (in relative terms, that is, not in money terms, but in terms of the comparison between necessary labour time and surplus labour time). By improving the productivity of the consumer goods industries making the wage bundle (food, clothing, housing, and services required for the worker to live and maintain his labour power), the commodities used by the worker and his family for their living are made cheap. To make the consumer items cheap, the industries producing these items should have high technology machinery and the value of such machinery also should be cheap. Therefore to shorten the necessary labour time in the working day, the effort of the individual capitalist is not sufficient since he cannot produce all these items in his factory. It requires the collective effort of the capitalist system itself. That is why there is always an urge in the capitalist system to improve the technology in order to reduce the necessary labour time.