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John Passant

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December 2008



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My interview Razor Sharp 18 February
Me interviewed by Sharon Firebrace on Razor Sharp on Tuesday 18 February. (0)

My interview Razor Sharp 11 February 2014
Me interviewed by Sharon Firebrace on Razor Sharp this morning. The Royal Commission, car industry and age of entitlement get a lot of the coverage. (0)

Razor Sharp 4 February 2014
Me on 4 February 2014 on Razor Sharp with Sharon Firebrace. (0)

Time for a House Un-Australian Activities Committee?
Tony Abbott thinks the Australian Broadcasting Corporation is Un-Australian. I am looking forward to his government setting up the House Un-Australian Activities Committee. (1)

Make Gina Rinehart work for her dole

Sick kids and paying upfront


Save Medicare

Demonstrate in defence of Medicare at Sydney Town Hall 1 pm Saturday 4 January (0)

Me on Razor Sharp this morning
Me interviewed by Sharon Firebrace this morning for Razor Sharp. It happens every Tuesday. (0)

I am not surprised
I think we are being unfair to this Abbott ‘no surprises’ Government. I am not surprised. (0)

Send Barnaby to Indonesia
It is a pity that Barnaby Joyce, a man of tact, diplomacy, nuance and subtlety, isn’t going to Indonesia to fix things up. I know I am disappointed that Barnaby is missing out on this great opportunity, and I am sure the Indonesians feel the same way. [Sarcasm alert.] (0)



Business cycle or Depression?

Is this a boom bust business cycle or are we headed for a depression?

Gwynne Dyer, writing in the Canberra Times, (‘Old problems in a new era’ CT Monday December 29 Opinion p 15) says that until some genius discovers a way to abolish the business cycle, recessions are bound to occur.

Marx was the first person to identify the boom/bust cycle as a normal part of the way capitalism works. But he also discovered a problem at the heart of capitalism – the tendency of the rate of profit to fall.

This comes about because it is human labour which creates value, yet competition forces business to invest more and more in capital.

Capital does not create value.  As capital investment normally occurs at a greater level and rate than investment in labour, the tendency for the profit rate to fall inevitably asserts itself.

There are countervailing tendencies. Attacking workers’ living standards is the usual response.

This includes cutting jobs, wages and conditions, making workers pay (more) for social services and lengthening the working day without recompense. Australia for example already has the second longest working hours in the OECD.

And even though real wages in Australia have been increasing over the last decade or so, labour’s share of national income is at its lowest in over 40 years.  

Now that the economy is starting to tank, the employers will look to cut that share even further, this time through real wage cuts, and sackings.

Increasing productivity is another way to address falling profit rates, but this is often nothing other than forcing workers to do more with less.  This increases stress on the remaining workforce.  

Just ask waterside workers after Patrick’s victory on the ports led to massive speed ups and massive stress.

Destruction of value – either on paper as is happening now, or physically through war – can also help  address the falling profit rate, but at great human cost. For example it was the second world war which ended the Depression.

So is this present recession merely part of the business cycle or is it a crisis of profitability?

General profit rates in the developed world are low, much lower than a decade ago and much much lower than the halcyon days of the 60s.

I think it’s a crisis of profitability .

Marx, the genius Dyer should have talked about, did posit an alternative – a truly democratic society in which production occurs to satisfy human need, not to make a profit.

This is socialism. We are yet to see such a society anywhere.

Clearly Marx’s vision for socialism is not on the agenda at the moment.

So what will happen? As Lenin said, capitalism can survive any crisis if workers accept the attacks on them.

But let’s see how workers around the world respond to the crisis of profitability. One spark could light the flame of freedom.



Comment from Jason
Time January 17, 2009 at 6:05 pm


I was wondering whether you were familiar with and, if so, what you thought of Steve Keen’s criticisms of Marx’s labor theory of value.

The book in which Keen puts forward his argument is reviewed here: . The review is by an American Maoist, who agrees with Keen that machinery can also add surplus value and that the falling rate of profit theory is ‘completely wrong’. The reviewer sees the crises of capitalism relating predominantly to crises of overproduction.

I tend to agree with the reviewer that capital can also create value (eg a factory of robots could create surplus value in the same way that a factory of humans can) and that Marxists should ditch the labor theory of value as it is normally construed.

Comment from John
Time January 17, 2009 at 9:16 pm


Thanks. I’ll try to read the review. The LTV is at the heart of Marx’s analysis of capitalism.

He developed the theory of over-production (as compared to say Keynesian under-consumptionism, or even marxist theories of under-consumption.)

I think robots transfer the labour value embodied in them, not create it. If all production were to be robot produced then we do not have capitalism. But there will be human agency involved.

I’ll check up some basic sources for an alternative view to the one you posit about machines being able to create value.

by the way Socialist Alternative is having a day school in Sydney on the Russian revolution on 2 Feb. Are you in Sydney? It might be OK to go along to to get an idea of our views.

There are two streams – one for those with little knowledge of the revolution and one for those with a bit of an understanding.

Just a thought.

Comment from John
Time January 18, 2009 at 4:20 pm


I read the review. To me the author fundamentally misunderstands the labour theory of value.

Surplus value arise because human labour produces value over and above its own value. Workers are paid wages yet reproduce more in value than the socially necessary labour time required to regenerate and reproduce themselves. Robots cannot do that. Here’s a snippet from a website ( I found which I think explains it better:

The bourgeois press is full of the wonders of high technology and the introduction of robots in almost fully automated factories. But they neglect to mention an extremely important element in the economic laws of motion governing capitalist society: robots do not produce surplus value.

As Marx demonstrated long ago, machinery or constant capital is the result of past labor and past surplus value. Profit does not come from machinery itself. It is the labor of a worker, known in Marxist terms as variable capital, that produces surplus value, from which profit is derived. Workers produce a greater value than they receive back in wages, and it is the unpaid portion of their labor that produces surplus value. But a robot is not a worker. A robot is fixed or constant capital, which does not produce profit. Only unpaid human labor produces profit.

With fewer workers and more constant capital, the organic composition of capital changes, resulting in a falling rate of profit. This is an invariable law of the capitalist process of production. It cannot be gotten around.

The more dead or constant capital and the less human or variable capital used in production, the higher the organic composition of capital. This invariably leads to a decline in the rate of profit.

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