Cooking the Books: From Workshop to Counting House

The demise of Rover – the much-lauded competition that is built-in to capitalism means there are losers as well as winners – has revived the debate about the decline of manufacturing industry in Britain. Matthew Parris, the former Tory MP turned journalist, recalled a debate he had last year with fellow Times columnist Anatole Kaletsky: “I asked whether it really was true that  trade balance didn’t matter, and manufacturing things didn’t matter, any more. Anatole argued that where in the world an item is manufactured is unimportant as long as we get the profits. I think Anatole won that debate” (Times, 9 April).

The “we” in question of course is not the wage and salary working class living and working in Britain but the British capitalist class. And, from their point of view, Kaletsky was right: all a particular group of capitalists need be interested is the amount of profits they can rake in. But it is still true that without manufacturing – somewhere in the world – there would be no profits to rake in. The original source of all profits is the surplus value produced in that section of the economy that changes the form of material things, and which includes, besides manufacturing proper, agriculture, mining, building and transportation .

Capital invested in other activities such as banking, insurance, buying and selling, advertising, consultancy and the like, which do not produce anything (despite them calling themselves an “industry”), gets a share of the surplus value produced in the productive sector. Basically, rather than productive capitalists investing a part of their capital in financing these activities essential to capitalism as they would otherwise have to, a situation has evolved whereby these activities have been hived off, as it were, to separate capitalists who specialise in them.

The price the productive capitalists have to pay for not having to be their own bankers, insurers, sellers, advertisers, etc is that they have to share some of their surplus value with the capitalists with money invested in these activities. This comes about, as Marx explained in the first part of Volume III of Capital, more or less automatically through competition amongst capitals to obtain the best rate of profit resulting in all capitals tending to receive the same rate irrespective of whether the activity in question is directly productive of surplus value or not.

This is the sense in which Kaletsky is right when he said that “where in the world an item is manufactured is unimportant as long as we get the profits”. The dominant section of the British capitalist class and its stewards, the government of the day, has decided to go along with the economic trend for the manufacture of certain goods to be transferred, because of lower production costs, to Asia or South America, and to get its share of the surplus value produced there by concentrating on providing services at world level that are essential to capitalism but intrinsically non-productive, mainly in the fields of banking and consultancy. It’s a sign that we are already living in one world from an economic point of view.

The decline of manufacturing in Britain means a change in the composition of the working class here but it does not mean that those working in the non-productive sector of the economy are not exploited. They are, to the extent that they are paid less than the share of world surplus value their work procures for their employers.