P

Parliament. Subject to certain commitments to the European Union, Parliament is the centre of power in Britain. It makes the laws and provides for their enforcement.

The Socialist Party has always insisted that parliament can and should be used in the process of establishing socialism - not because we are parliamentarians, but because we are democrats. The basic function of the state, controlled by parliament, is to protect the interests of the capitalist class. For working class emancipation it will be necessary to gain control of the state through parliamentary action, in order to dispossess the capitalists of the means of production. When a majority of the working class are socialist they can use parliament by sending elected delegates there to formally carry out the socialist revolution, thereby neutralising the legitimacy and effectiveness of any counter-revolution.

Left-wing criticism of the parliamentary road points to the failure of Labour governments and similar regimes around the world. But these point up the futility of reformism, of a largely non-socialist working class voting for governments to administer the profit system. The working class has never tried to capture political power for socialism. Of course, the insurrectionist left wing reject the parliamentary road because they reject democracy; they expect violence because, being a minority, they must impose their views on the rest of society - including the working class. (See also DEMOCRACY; STATE.)

Peasantry. Those who work on the land and possess their means of production: tools and the land itself. Peasants had to pay a rent or a tribute to maintain their possession of the land. Production by the peasantry takes place outside capitalist social relations and no surplus value is created. (See also FEUDAL SOCIETY.)

Phillips curve. After the economist A.W. Phillips (1914-1975), the theory that there is a trade-off between inflation and unemployment: governments could have either higher inflation and lower unemployment or lower inflation and higher unemployment. Until the 1970s, that is, when Britain and many other states had both rising inflation and rising unemployment (so-called ‘stagflation’). That discredited the Phillips Curve, but basically the same idea is still being pushed by politicians, union leaders, some economists and the Bank of England.

In the modified version of the Phillips Curve, inflation and unemployment levels are said to be controlled by interest rates, through the Bank of England (as ‘lender of last resort’) setting their base rate which will determine the interest rate in other financial institutions and their charges for loans and mortgages. Allegedly, if the Bank of England sets higher interest rates this will deter inflation but will also deter investment and job creation. On the other hand, lower interest rates are said to allow inflation to rise but also increase investment and job creation. However, this explanation confuses cause and consequence. When the general price level is steadily rising financial institutions will need to offer an interest rate which is above the inflation rate, otherwise depositors will lose out in real terms. In other words, interest rates are largely a reflection of inflation, not its cause.

Persistent inflation is the sole responsibility of governments when they issue more currency than is needed for economic transactions to take place. Inflation, apart from extreme exceptions, has no bearing on unemployment levels; the rate of unemployment is determined by the functioning of the labour market and the profitability of production. (See also INFLATION; INTEREST; UNEMPLOYMENT.)

Popper, Karl (1902-1994). Philosopher of science and critic of Marxism. He argued that the test of a scientific theory is not whether it can be verified, since no amount of observations can verify it, but that it is open to being falsified by experience. A theory is said to be scientific if it fits the facts and generates predictions capable of being proved wrong. Popper thought that his philosophy could demarcate between science and non-science but is not itself a scientific theory (so the objection ‘What falsifies the falsifiability principle?’ is entirely misplaced). Popper's explanation of the logic of scientific discovery has been widely influential, but it is overshadowed by Thomas Kuhn's explanation of how science is actually conducted in practice. Kuhn argues that normal science is governed by paradigms which dictate what kind of scientific work should be done and what kinds of theory are acceptable. Eventually normal science produces a series of anomalies which cannot be explained within a paradigm, leading to a scientific revolution (‘paradigm shift’) as the old paradigm is replaced by a new one.

In The Open Society and Its Enemies (1945) Popper claimed that Marxism is not a scientific theory since it cannot be falsified, or else when it was falsified its supporters shifted their ground to protect their theory. His attack on Marxism was based partly on a misunderstanding of what Marx wrote and partly on the experience of the Communist Party in Russia. Popper concluded that the totalitarian nature of the Communist Party in action in Russia showed that Marx’s theories were totalitarian, rather than the more plausible conclusion that the Communist Party’s claim to be Marxist was and is false.

Popper criticised Marx using a misquotation in his book The Poverty of Historicism (1957). Popper attacked the notion that there are laws of human development, and that knowing these laws enable us to predict the future course of human history. He misquoted from Marx’s Capital, where he says the aim is ‘to lay bare the economic law of motion of human society’ (i.e. any human society). Marx actually wrote that his aim was to lay bare the economic law of motion of ‘modern society’ (i.e. capitalist society). The economic law of capitalism, Marx’s law of value, is in fact quite specific to capitalism. The Socialist Party does not claim to predict the future course of human history; but we do claim to know how capitalism operates and what it is and is not capable of doing. (See also MARXISM; SCIENCE.)

Reading

Thomas Kuhn, The Structure of Scientific Revolutions, 1996

Kuhn online: www.marxists.org/reference/subject/philosophy/works/us/kuhn.htm

Bryan Magee, Popper, 1997

Popper online: http://elm.eeng.dcu.ie/~tkpw/

Price. What must be given in exchange for something. According to capitalist economic theory, prices are the means for determining the rational allocation of resources in a money economy. But, in fact, prices under capitalism are not intended for the purpose of organising production. The function of pricing is to fix costs with a view to making profit. In practice, costing and pricing are ultimately about calculating the exploitation of labour, enabling the capitalist class to live and accumulate capital from the wealth that the working class produces but does not consume. (See also PROFIT.)

Prices of production. In Marxian economic theory the ‘price of production’ is the

price sufficient to yield the average rate of profit on capital advanced. Actual market

prices fluctuate around prices of production through the equalisation of profit rates.

(See also LABOUR THEORY OF VALUE.)

Primitive accumulation. The historical process by which capitalism came into existence. This entailed the transformation of the use of existing means of production into their use in capitalist production. This did not initially require any additional accumulation of means of production or new technology, just their operation according to new social relations. Once this had occurred the process of competitive accumulation gathered its own momentum.

For capitalist economic history, Britain became the first industrial nation ‘spontaneously’; that is, without the help of direct state intervention. This interpretation, however, does violence to the history of violent expropriation of the agricultural population from the land. The state did critically intervene in the interests of the emerging capitalists in two ways:

• Enclosure movements, enforced by the state, dispossessed the peasantry of both common and individual land usages. The landless labourer was created.

• Wage legislation and systems of social security, most notably the Poor Law

Amendment Act of 1834, forced long hours and factory discipline on the landless labourer. This turned the landless into wage labourers.

It is important to note, though, that the creation of capitalism in Britain has been somewhat different than on the continent. The forcible dispossession of the peasantry from the land was more extensive than in the rest of Europe. For this reason a much larger proportion of the population was transformed into wage labourers in the eighteenth and nineteenth centuries. Nevertheless, the formation of a class of wage labourers out of the agricultural population remains an important starting point for an analysis of primitive accumulation. (See also FEUDAL SOCIETY.)

Reading

Rodney Hilton, The Transition from Feudalism to Capitalism, 1976

Michael Perelman, ‘The Theory of Primitive Accumulation’ from The Invention of Capitalism, 2000 (online at http://tiny.cc/ac64i)

Primitive communism. Propertyless, stateless, classless, moneyless society based on common ownership before the advent of class society. Most of human history has been in the stage of primitive communism, before the rise of class society about 8,000 to 10,000 years ago. Even now there are a few primitive communist tribes surviving on the outskirts of capitalism in Asia, Africa and South America. The usual reason why socialists insist on the evidence for primitive communism is not because they provide a model for the future - they had undesirable features such as poverty - but because they show that property is not an inevitable and eternal feature of human society. (See also PROPERTY.)

Reading

Maurice Bloch, Marxism and Anthropology, 2004

Productive and unproductive labour. Productive labour is that employment which creates surplus value for the capitalist, whereas unproductive labour does not. For example, a chef employed by a capitalist to work in his hotel is productive, whereas if that same chef were employed to work in the capitalist’s home she would be unproductive. Nowadays, though, most unproductive labour is carried out in the state sector of the economy.

The distinction is useful for analysing the structure of capitalism. For instance, it sets theoretical limits for the size of the state sector of the economy, since this must be paid out of the surplus value arising from productive labour. No value judgement is implied on the importance or worth of either type of work and the working class carries out both productive and unproductive labour.

Productivity. The relationship between the production of goods and services and the inputs of resources used to produce them. But there is often confusion about what constitutes ‘production’. In everyday language a car is said to be ‘produced’ by the workers who assemble it, and the bread to be ‘produced’ by workers in the bakery. However, the labour of these workers is only a part of all that required to produce cars and bread. As Marx put it:

‘We must add to the quantity of labour last employed the quantity of labour previously worked up in the raw material of the commodity, and the labour bestowed on the implements, tools, machinery and buildings with which such labour is assisted’ (Wage, Price and Profit, chapter VI).

Let us assume that the ‘previous’ hours of labour needed to produce a commodity are 80, and that the ‘last’ hours are 20 - a total of 100 hours. Let us further assume that without additional investment, but merely by simplifying the last operation, it becomes possible to reduce the necessary hours from 20 to 10. It then only takes 90 hours in all, in place of 100. Productivity will have risen by about 11 per cent. But if ‘productivity’ is calculated - wrongly - on the last operation only, it will appear to have increased by 100 per cent. Would anyone be so foolish as to look at in that way? Well, yes, it often happens. A news report about the introduction of a new machine operated by two people instead of the former ten will be presented as ‘two do the work of ten’, as if the making and maintenance of the machine did not absorb additional labour. So productivity in that example will be said, wrongly, to have been multiplied by five.

As Marx explained, the amount of labour that is saved is not the whole saving on the last operating process, but the difference between that amount and the additional labour required for the new equipment (Capital, vol. 1, chapter 15). (See also LABOUR THEORY OF VALUE.)

Profit. That part of the social surplus value which is appropriated by capitalist enterprises. The rate of profit is calculated on the ratio of surplus value to the total capital invested (s/c+v). Distributed profits as dividends form part of the privileged income of the capitalist class. However, because of the pressure of competition from other capitalist enterprises, most profits are re-invested and accumulated as capital.

Capitalist economics attempts to explain profit in two ways:

(a) By buying cheap and selling dear. Some sellers can profit in this way, but the seller's gain is exactly offset by the buyer's loss. The total amount of value in existence remains unchanged. If all sell dear then they cannot buy cheap and all lose as buyers exactly what they gain as sellers. Exchange, in this explanation, is a zero-sum game.

(b) As a reward, either for the sacrifice of present consumption for investment by the capitalists, and/or as a reward for risking their capital in investment. Professor David McLellan attacked the labour theory of value by claiming that ‘it overlooks the fact that capital accumulation requires deferred consumption, and capital therefore unavoidably commands a premium over and above the labour it embodies’ (The Blackwell Encyclopaedia of Political Thought, 1991). However, this is an attempt at justification of profit as reward, not an explanation of the source of profit, which is what the labour theory of value is concerned with.

Generally speaking, vast personal fortunes and the social accumulation of capital can only be satisfactorily explained as the result of the unpaid labour of the working class being appropriated by the capitalist class in the form of profit. (See also CAPITAL; EXPLOITATION; LABOUR THEORY OF VALUE; SURPLUS VALUE.)

Proletariat. The working class ‘who, having no means of production of their own, are reduced to selling their labour power in order to live’ (Communist Manifesto, 1848). This of course includes everyone involved in the reproduction cycle of labour power: wage and salary earners but also students, housewives, pensioners, and so on. (See also LABOUR POWER; WORKING CLASS.)

Property. Ownership rights. These rights are socially determined and therefore vary from society to society. Property rights are a reflection of the social relations between people, because they define who does and who does not have legal access to their use - in particular, the means of life. Under capitalism, the main right to property is the right to draw an unearned income from the ownership of land and invested capital. The working class is propertyless in the sense of not having any regular income sufficient to live on other than through the sale of their labour power.

Socialism will be a propertyless society in the sense of there being no ownership rights, or exclusion rights, to the use of the means of production, because it will be based on common ownership and democratic control. (See also COMMON OWNERSHIP.)

Reading

Alan Ryan, Property, 1988

Proudhon, Pierre-Joseph (1809-1865). A self-educated French artisan. The term ‘anarchism’ was first used in Proudhon’s book What is Property? (1840), in which he gave the famous reply: ‘Property is theft’. However, he did not mean this phrase to be taken literally, as Marx did in his attack on Proudhon in The Poverty of Philosophy, 1847. Proudhon was in fact in favour of private ownership. He made a distinction between ‘property’ and ‘possession’; and he rejected property - the capitalist right to draw rent, interest and profit through ownership of the means of production. He favoured possession: individuals could have exclusive use of land and tools on the condition that they did not live on unearned income. In Proudhon’s conception of an anarchist society individuals would have an equal right to possess, based on a ‘mutualist’ system of equivalent exchange between self-governing producers and financed by free credit. Marxian socialism, therefore, is rejected on the ground that it would violate the right to possess by establishing common ownership.

Proudhon was critical of some aspects of property society (unearned income, the state), but not others (commodity production, capital). And this remains true of many anarchists today. (See also ANARCHISM.)

Reading

Alan Ritter, The Political Thought of Pierre-Joseph Proudhon, 1980

Proudhon online: http://dwardmac.pitzer.edu/Anarchist_Archives/proudhon/proudhonbio.html