A nation-building project must be balanced with a multi-branched economy with manufacturing at the base. There are some neo-liberal pundits and journalists prepared to deny manufacturing and promote only “profitable” sectors as successful away from such industries as traditional engineering and raw material production. The approach is very dangerous for the future of the economy. The Corbynites and John McDonnell have begun the discussion in the anti-austerity movement by highlighting the basis of the alternative economy. McDonnell clearly understands the necessity of balancing the economy with manufacture at the base.
The significance of the steel industry starting with the closure of redcar and switching off the coke ovens is devastating as is the proposal to shut down many Tata monopoly steel plants. Like the closure of coalmines it is difficult or next to impossible to restart plants once closed. Once skills are lost it will be extremely hard to regain them. Such devastation should be resisted with fervour. Not only are the future of local communities at stake but also the future of the entire British economy.
Plans for the British economy must take into consideration a balanced, proportionate development of the national economy. The law of balanced development of the national economy arises in opposition to the law of competition and anarchy of production – predominant particularly where Monopoly prevails. Solutions to the economic crisis lie in shifting the emphasis towards the economic law of balanced development of the national economy.
The laws of value operate and add value particularly in the social production sectors of the economy.
The laws of political economy are objective laws, which reflect the fact that the processes of economic life are law-governed and operate independently of our will. People who deny this postulate are in point of fact denying science.
Some people are talking about nationalisation not of part, but of all the means of production, that is, the conversion into public property of the means of production not only of industry, but also of agriculture. Today, with the decline of Britain in a post colonial period, where Manufacturing is close to only 10% of GDP, the Monopoly Capitalist Economy is in decline then modern definitions need to be considered on principles regarding the concrete conditions.
The European Union and its forerunner, Common Market, has its history in iron and steel. In fact the monopoly agreements across Europe were decided upon quite early. Germany was to takeover most production on the Ruhr for steel and coal. Later the diminishing of British Coal led to the more or less eradication of the industry in the 1980’s. Partial demise of British steel also took place. Starting in 1979 with Ebbw Vale in South Wales, the reduction in Sheffield Steel and huge steel complexes like ‘Round-Oak-in the Black Country, West Midlands, also the scaling back of production at Corby. Scaling back in Wales at Port Talbot, Llanelli near Swansea and Llanwern in Newport. The recent problems are caused by competition mainly from the EU and only some from the rest of the world.
The idea that neo-liberal, ‘market forces’ deciding the fate of such important industrial economic sectors is ludicrous.
As the global multinationals as well as finance capital, are not to be trusted to invest in manufacture and infrastructure, it is necessary for state intervention.
Certain parts of the social economy should definitely pass back to the public sector that have been privatised and have proven to be ineffective, Monopolies that operate in a cavalier fashion or are loose cannons and should indeed be restricted. Banks need to be totally taken under state control. Once upon a time Britain developed capitalism and the concentration of production both in industry and in agriculture where it had reached a high point of concentration. Now production has been somewhat dismantled (particularly under the Thatcher years and the EU programme) and is in decline compared to bigger powers. It is also being abandoned by global capital to other parts of the world where profits from capital and resources are cheaper. It is therefore necessary to re-evaluate and carry out measures that can re-new and regenerate the economy and provide a path forward under the new conditions.
There are indeed very dangerous conditions and circumstances arising out of the present economic crisis. Factors where certain sections of capital and the ruling elite are hell bent on shifting the entire burden of the crisis onto the backs of the people. Under these circumstances Workers, pensioners, youth and even small and medium producers are faced with ruin. There are dangers of fascism and war. If certain sections of the elite, Monopolies, financiers and aristocracy do not heed the warnings then the working class should lead the entire people and assume power without waiting until capitalism has succeeded in destroying the economy.
The Law of Value
In Britain, the sphere of operation of the law of value extends, first of all, to commodity circulation, to the exchange of commodities through purchase and sale, the exchange, chiefly, of articles of personal consumption. Here, in this sphere, the law of value preserves the function of a regulator. The law of value is not confined to the sphere of commodity circulation. It also extends to production. It influences production, and this fact cannot be ignored when directing production. As a matter of fact, consumer goods, which are needed to compensate the labour power expended in the process of production. The law of value also regulates surplus value in private monopolies and the claim on added value produced by labour as well as the tax claims by government.
In Britain the law of value, does lead, in spite of the low rate of expansion of production, to periodical crises of overproduction.
Value, like the law of value, is a historical category connected with the existence of commodity production. If commodity production does diminish then the law of value will diminish also.
The amount of labour expended on the production of goods is measured through value and its forms, as is the case under commodity production, but directly and immediately – by the amount of time, the number of hours, expended on the production of goods. As to the distribution of labour, its distribution among the branches of production could be regulated not solely by the law of value, but out of the balanced sectors of a multi-branched economy and the consequent growth in society’s demand for goods. Production can be regulated by new requirements of society, and computation of the requirements of society could acquire paramount importance for planning bodies.
If the law of balanced development of the national economy rises against the law of value regulating the “proportions” of labour distributed among the various branches of production, then light industries, which are the most profitable, might be developed to the utmost, and preference might be given to heavy industries, which are often less profitable, and some-times altogether unprofitable.
A multi branched balanced economy needs heavy industry and it might be incomprehensible if a number of heavy industry plants which are still unprofitable and where the labour of the worker does not yield the “proper returns,” are closed down, and why new light industry plants, which would certainly be profitable and where the labour of the workers might yield “big returns,” are not opened. It may also be incomprehensible if workers are not transferred from plants that are less profitable, but very necessary to our national economy, to plants, which are more profitable.
Obviously, we should have to cease giving primacy to the production of means of production in favour of the production of articles of consumption. What would be the effect of ceasing to give primacy to the production of the means of production? The effect would be to destroy the possibility of the continuous expansion of the national economy, because the national economy cannot be continuously expanded with-out giving primacy to the production of means of production.
Manufacture as a proportion of GDP is falling currently below 10%. This cannot continue. Even after the Second World War and into the 1960’sm manufacture ony reached just over 30%. Manufacture as a producer of wealth should aim to be be higher even that this figure.
It would be wrong to draw the conclusion from this that the law of balanced development of the national economy annuls the principle of profitableness of production.
If profitableness is considered not from the stand-point of individual plants or industries, and not over a period of one year, but from the standpoint of the entire national economy and over a period of, say, ten years, which is the only correct approach to the question.
The temporary and unstable profitableness of some plants or industries is beneath all comparison with that higher form of stable and permanent profitableness, which we should get from the operation of the law of balanced development of the national economy.