MDA-D428Cuadro de textohttps://www.academia.edu/5433706/Notes_of_Lectures_on_Economics_by_John_Maclean_for_the_Scottish_Labour_College

"These notes on economics were prepared by the Scottish working class leader John Maclean, and used for his lectures to the Scottish Labour College in Glasgow in the early 20th Century. Marxists.org has the text of them, and the link in this page leads to it. My father taught for the Clydebank Workers Educational Association from about 1947 until 1952 and these notes come from his files. The memory of John Maclean was still alive in Glasgow when I went back to live there in 1972 - I met people in the street who swapped stories about him. Arriving in Queen Street station in 1973 I ran into Hamish Henderson, who I already knew from Edinburgh days, and who immediately took me into a bar where he sung his John Maclean March to me, and not uncharacteristically introduced me to the 'half and half', a justly-respected libation, over which we toasted John Maclean to the solemn endorsement of a small but reverent crowd. John Maclean used to present weekly seminars at the McLellan galleries, which hold around 1000 people. I'm not sure if these notes were a part of what he talked about there. The notes have a tremendous clarity and directness, without any dumbing down. Mclean's aim was that his audience should know exactly how the system worked, in order to make something better."More Info: Notes on economics by the Scottish working class leader John Maclean, used for his lectures to the Scottish Labour College in Glasgow in the early 20th Century

ScottishLabourCollege.

NOTES OF LECTURES ONECONOMICS.GivenbyJohnlVlaclean.

LECTURE I.

" y.

Po,JiticalEconomyor Economicsis thesciencethatexaminesthe

factsof thecapitalistproductionanddistributionofwC

" , :'"i>'. , ":Scottish.LabourColle.ge..

NOTES;OF LECTURESONECONOMICS. ..;':

, : ' .. '\GivenbyJohnMaclean. 1

LECTUREH."'p "

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Presentdayeconomistsspeakof a Unit of Utility ,btl'f ...J5o . .. ..... .........

unit exists in fact. Labour alone..de,termines '. .: :' 1.

r,abourinvolve's twootherterms,LabourPower:.:,an'qYVah!e.. , ':co:.I.abour"'P()"'er' is the:energystoredup in the bQdy :'a

to work. COmpare ''lith Pot,entialElle,rgy In.

Dynamics,aswaterin Loch Katrine, pendulumathighestpoint.

LabourisLabourPol\verin motionthroughexer.ciseofbr'a}i/ .muscle. .Comparewith Kinetic Energy in . :gs .

Katrine flowing throughthepipes,po\yder . pendulum .". ." ;..... "

ValueisLabourdepositedin substanceof Airis. a substance,of Utility withoutValuebecauseit

no Value is a superficial aratiobetweentwocommodities;as,onehattwolbs.butter. Itisthe thatthe'invisibleyatueispr,eosentin thehatandinthebutterin approximately., \ . . .. . . ...

.quantlhoes.

Every commodity hasa visibleaspect,"thematerial theUtility; a'ndtheinvisibleaspect,theValue.aspect,yieJd:ingExchangeValue. InValuethereis.nomatte,r and fJrenoUtility.

Labouris,measuredbythehour. Theunitis theLabourHour

LabourTime is thatneededtoproducea commodity, andjis'measuredin LabourHours. . . ':i ..

(

' . t .. ..... . . . '1'Threepoints.mustbenotedaboutValue=creating"Labour: ".. . . I

" L Oornplex or skilled labour must be reducedto simple,. labour,e.g.,I joiner':shour=2 simplelabourhours(sa).

Variationsof wagesindicatethisto? certainextent. ' . J '.

" . 2. C'oncret,elabourmustbe reducedtoabstractlabour.Labour'.is whenwethinkof it in the prooe.ssof commodities. . A particular.kind of brain. r;n

ScottishLabourCollege.

NOTES OF LECTURESONECONOMICS.GivenbyJohnMaclean. LECTURE III.

Lawsof Value, The greaterthe time takentomake acommoditythegreate,rits value: thelessthetime, thelessits value. (2) Thel greaterthe productivity of a classofcommoditiesthelessthevalueof eachcommodity: thelessthe productivity thegreaterthe valueof each. An articlenormallymadein 40hourswill havetwicethe:valueof oneinadein 20hours.Productivitymeansthenumberof articlesor thepar:tofanarticleturnedout in onehour. If 10 loavesareturnedout

hour,andhalfahat,eachloafhasatwentiethofthevaluea hat. I

Testsof the Labour=TimeTheGryof Value.A rnughestimateof thetime takentoproducecommonarticles

andof their will showthat theprioesapproximate,lyagreewith thetimetakentomakethearticles.

\Ve know thatclerksin costingdepartmentsof largebusi'nesse,sbasetheCOost00 acontractonthetimecalculatedtoturnoutthejob.

E\'erycapitalistknowsthatin thestruggle\vith competitO'rshecanonly survive if hecancontinuouslysucceedin cuttingdownthe! time takento.producehiscommodities. Theraceis tothelspeediest.

ThefoUmvingarea fewofthemethodsadoptedtospeedupproduc.tionthat reducethetime of production

J. (xroupingofworkelfs:a rowofmasons,onemaygeta littleextratosetthe areput in chai'ns,theswiftestatthe Inheavywork, " BreatheJrs" everyhourenablemoreworktobedone. InAmerica,scientificelxpe,rimentwith simplelabour is greatly reducingthetimeof production.

2. Subdivisionof.labour; or differentiationof functionwithadaptiOinof tool. In Bournevilleandelsewhereworkersarecinematographedto find out theextrern,estpossiblesubdivisionandtohelpin thecuttingO'utofeveryneed-less bodily motion. There are thousands of varieties of knives and hammers, each be,st suited for a particular kind of 'York.

3. Use of machinery and most pO\verful driving force. Prq-oeosses become linked together by belts or moving plat-forms, and in the end all the processes get knit together in O'ne machine, as in newspaper printing. Ne:w machines cut out older types because more" efficient," i.e., more

productive or more speedy. Steam is giving place to electricity, gas, oil, etc., where these are " less ex pen-

" i.c., more time-saving. Good firms have special- ' ists to experiment, improve and invent. Money baits are offered workers for ., sugge'stions." Thus wb hct\'e democratisation of invention. Technical education in colleges and uriiversiticls is impe.rative, and research' in pure scienoe; for without all this no effident manage-ment or great ., advancement" in methods. is. possible.

4. Use of former wast,er. for bye-products; e.g., coal tar products.

5. Improved supervision of workers by foremen, etc. A fore-man may stand ove'r a man at a job with watch in hand to find out the least time necessary. He may also watch to improye methods. pa'pers 'devote themselves to organisation so as tOo e:nable overseers to ke,ep a tight grip Oof the wo.rkers.

6. Cunning is used as 'well as force, as in individual piecework, collective piece.work t "ability wage," bonus, system!:!J ( profit-sharing," etc. These methods are used to speed-up the "yorker by the bait of temporary increases. Prices in the end are broken, and the wages fall back to the old level of purchasing with increased output. One system of bonus.: given 100 hours to do a job; if a worker does it in 90 hours, he gets paid for 90 hours and for 5 out of the 10 saved. Another system: mUltiply 90 by 10 and divide 100. The worker here gets 9 out of the 10 hours saved.

7. Improved business methods in offices: typewriters, shod-hand, Esperanto, telephone, telegraph, press, machine calculators, ready reckoners, etc.

8. Besides technical papers, exhibitions and fairs diffuse new methods of saving' time and stimulate newer methods.

9. In business they say that" time is money." As a rule, the larger the production the greate1r the possibility of eC0nomising time. Hence Trusts. Seel "Repo.rt of Committe1e O'n Trusts" (Cd.

Any \vOork,er, using his eyes., will find further proofs. Read technical pape'rs, business organisation papeJrs like " System, ': and factory improvement papers like " The Facto>ry." The proofs of the Labour-tirpe Theory If Value are overwhe:lming.

Scottish Labour College. NOTES OF LECTURES ON ECONOMICS. Given JohnMaclean.

LECTURE IV.

In theMiddleAgesguildsfixed theconditionsof productionandexchange', As themeansofproductionweresimpletoolsandwererareJyaltered,itwaseasytofix prices.accordingto. thelengthof thelabourtime.

TodaywehaveJno guildsandwehave:continuousimprovementsin themeth0'dsofproduction. Themarketsarevastly'wider,in somecases(cotton,wheat)beingworldmarkets. Thereisalso.remarkablefluidity of capitalandlabour. Theresult-anarchy 0' pro.duction and keen competition. Prices and industry fluctuate violently.

An economic law l1m;t;,., instead of a human law,_- regulates prices, keeps them within limits in normal times, working through the anarchy and fluidity. This law is calJed the Law of Suplply and Demand. Capitalists invest in industrie,s yielding the' bighe,st rate of profit. Capital is always at hand to plunge into this, or that industry to' the comparative neglect of others. The number of commodities produced is changed so that prices and profits are changed.

The tendency in industry is for profits. to' average out about the ,same in all industries with certain allowances for risk 'and change of fashion olr \vhim. Prices are thus kept strictly within limits, and rise and fall about a normal1evel of prices as the tides fluctuate about the sea-Ieve1.

The Law of Supply and Demand in the end acts so as to' bring normal prices to a level indicating the Value of each com-modity; i.e., an article normally seEing at has hvice the valu,e of (is produced in twice the number of labour hours as) ano,thc,r sold at 10/-.

Law of Snp,ly-The greater the supply the lower the price; smaller the supply the, highe,r the price.

Law of Demand:-The great.er the demand the highe,r the' price; the smaUe:r the demand the lower the price.

Endless combinations of these opposing forces make ,the

study of market prices fascinating.

Still, the main concern for us is the see-saw balancing of industrial output as a whole, as regulated by the: flow hither and thither of capital. This flow is determined by the: rate of profit earned in the respective industries organised by companies..

Ceylon recently afforded in its simplest aspect the connection of industries. \iVhen the price of rubber \vent up a few years ago, huge, profits were made. A great many new com-panies were formed and vast, stretches within the torrid zone w,flre given over to rubber pla'ntations. This happe1ned in Ceylon, 'r.ea plantations, \vere sacrificed. In the end the increased supply of rubber reduced the price of and the profit in this commodity. The induced scarcity of tea follOr\,ving on the shrinkage of plantations brought in its train an increased price: of the cheaper classes of tea. Pe'rhaps this time some rubbelr plantations have again been given over to the growth of tea. In the larger world the effect is the same although the phenomena are more complicated.

. The Law of Supp]y and Deinand applies not only to commodities but to \vages, rents, stocks and shares, the bank rate, etc.

Since 1914 the State control of industrie,s has led to a stoppage of competition inside Britain. Only international competition now pmvails.

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Sco.t1ishLabourCollege.

NOTES OF LECTURESONECONOMICS.(riyenbyJohnl\laclean.

LECTUREV.

Two commoditiesLabour=Powerand Golddeserve specialexaminationanddiscussion.

Labour=Powerisstoreduphumanenergy.Thistheworkersellsiforawage. It iswrongtostatethattheworkersellshisLabour.WehaveseenthatthecapitalistuseseverydevicetosquceeeasmuchLabourouto.f the aspOossible. At thesametimehetriestOo payasIowaWageaspossible. If he'paidfor Labour,theso() opposingpressuresof maximumoutputatminimumwageswouldnotbeneeded.

\Vageis themOoney orPriceof LabourPower.

\Vagesrise and fall in obedience.to. the Law of Supply andDemand. For facts, see" Riches. and Po,verty," and the " LabourGazette." 'Nhen

Scot1ishLabourCoUeg,e.

NOTES OF LECTURES ONECONOMICS.GivenbyJohnMaclean;

LECTUREVI.

YV,e haveseenthattheValueof LabourPorwerisestimatedby . 30oC. Hrs. 7/6Rate0 f Exp1oitatIonc= Tli= /6or3co percent.the cost of keepinga family of fivCl. Read Rowntrees 100. 2: rs. %

" Pnverty,a Studyof To'wn Life," chap.iv.

Ratleof Interest"vould riseto7! percent.Theworker,toiling 60hours(say)a week,producesthreetimes,

atleastasmuchValueashisLabourPo'wlerisworth;e.g.,fOlf eve,ry3of Valuehecreates,hereceives;1 aswages. Importantresultsof IncreasedProductivity:-With this '1 he can purchase20 hours'worth of com-modities. The" Censusof Production" and"An Enquiry I. The havealargernumberof commoditiestosell:intO' thevVagesof theWorking Class"prove this. If a henoekelenercompetitionin t1;1e homemarkets. Thoseworkingyearis 300 days,theNecessaryLabourTimeis loa with bestmethodscut,pricesandyetgethigherprofits.daysandthe LabourTime is200days. In Surplus_ Price,cuttingmeansbankruptcyo'r many. EliminationLabourTimel theworker creat,esSurpluscommoditiescon- of the"weakest" leadsto trustificationtheuniversaltainingSurplusValue. ThisSurplusValueis thesourceof of capitalism. (See"Reportof CommitteeInterest, Profit, Rent, and other forms of "Unearned onTrusts'')Income."

2. GoodsnQot soldmustbesentabroad. Tosecuremarkets-cOllonisation, treaties, tariffs, armies, navies, wars,LetProductivityequalI. annexation. Thus, this European \Var was an"economic necessity." Read Bernhardi, Treitschke,

200 Commodities,madein ICl hours,cost10/ (say) Usher's. "PanGermanism," " PanAmericamism,"100 " (N,C) " 5"(N.T.)" (V.ofLP.) and"TheChalleng.eof the Future,"and Brailsford's

"War of Steel and Gol'd." YVar 'with America is100 It (S.c.) u 5 " (COC. 5Hn. 5/ 3. IncreasedcapitalistprQofitsinduoeincreasedluxuries. What:\.ateofExplOltatlOl1 =-H !./ or100percent.

100 5 IS. 5 cannotbeconsumedis turnedintonew capitalfor homeandforeig'll use. "Peacefulpenetration" of backwardcountriesbecomesnecessaryChinaby Japan.If theGapitalwere 100), theRat,!;,of Interestwould be5 per

cent. (reducingtozeroall otherformsof S.V.) Surpluswealthcannotbeusedupquickly enough,sopiles

of wealth accumulate. Hence periodic crises withLetProductiyityequal2.feverishcompetitionandlower prices,a new incentiveto improvedmethodsof production.

400 Commoditiesmadein 10 hours,cost10/-100 5" (N.C.) 2} " (N.T.)" 2/6(V.ofL.P.) l!nemploymentI'eadsto reducedwages,andthis reduction" arouses.workers tofonll tradeand industrial unions300 " " (.3.C) ,,(S.T.)" 7/6(S.V.) \;I,dth strikesandlockoutsandRevolution.

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:ScottishLabourCollege.

NOTES OF LECTURES ONECONOMICS.,GivenbyJohnMaclean.

LEC'TURE

l(iold, theworld'smoneycommodity,alniostexclusively,canonlydo thework of moneybecauseit is subjectto theLaw o,fValue. T'venty hours'worth of gold normally exchnngesfor twenty hours'worth of any othercommodity.

'Wemustnotefour disttnctstagesin. theevolutionof money:-

1. Exchangeofonearticlealwaysfor thesameone;e.g.,bowsandarrows.for cattle, say.

2. Exchange0. onearticlefDr a growingnumberof Dthers;e.g., bows and arrQows for cattle, ornaments, cloth,grain, etc. These1\vo stages.appearin savage.andbarbaricsocic.tie;s.

.3. Many articles then expresstheir value in one generallyrecognisedone; e.g., armour, grain, wine, etc., are,"aluedin cattle,say. CattlehereactastheUniversalEquivalent. Jn somecountriesshells,grain, etc.,haveeachactedas, theU.E. Theestablishmentof a U.E.becomesnecessarywith the grQowth of markets andbazaarsandthedevelopmentDf a commercial likethePhrellicians,for it savestimeandtemper.

+ At lastthemetalsareusedastheU.E.,first byvveightandthen as coins.. In most countriesnickel, copperandsih',er coinsarenO'w tokenmoney,sothatgoldtendstobecometheonlyre'3lmoney. TokenmoneyisworthmMein coinform thanin bullion form. Go']dbecomesmoney"'henit actsastheUniversalEquivalent.

:Price is the of a commoditye,xpressedin goldactingasthemoncycommodity. Nannalpricechangesare

VII.

duetochangesin thevalueof commodities,or the: ofthemOoneycommodity,0'1' both. Studentsfind mosttlifficulty 'in unde,rstandingwhy pricesshDuld rise "'hengQold is mOoreeasily

Thefollo'\ving illustrationsshouldhelp:-

J. ProductivityequalsI. 20Commoditiesequalto I OZ. goM(4nearly)equalto 40Hoursvalue.

Variable. Constant.

2. Productivityequals2. 40Commoditiesequalto I oz. gold(4) equalto' 40 Hoursvalue.

Variable. Constant.

Productivityequalsto 10Commoditiesequalto I oz. gold(4) equalto40 Hoursvalue.

Thelessthetimo.1.O'produceeachcommoditythe10\\'cr theprice;themOirethetimethehig'he rtheprice. .

Constant. Variable.

3. Productivityequals2. 20 Commoditiesequal to 2 oz.gold ('8 equalto' 40Hoursvalue.

Constant. Variable.

Productivityequals.to 20CommoditiesequaltOo ?t oz.gold('2) equalto' 40 Hours",lIue.

Thelessthetimetoproducegold, thehighertheprice,etc.

4- Vary bothsidesanda multitudeof results. accrue.

. _. .... .-.. ,.... ........... ........;.'........

http://www.marxists.org/archive/maclean/works/lectures.htm

LECTURE VIII Law I - The greater the productivity of commodities, the less

the time to produce each; the less the value of each and therefore the LOWER the price.

Law II - The greater the productivity of gold or silver, the less the time to produce either: the less the value of each ounce or pound, the less the value of coins made from the bullion of either, and therefore the HIGHER the prices of commodities will be.

Law I is easy to grasp. Law II is difficult to grasp because here the standard (money commodity) varies in value. It should be noted that if the money commodity and all other commodities increase in productivity at the same time and rate, no change price takes place.

Historic Proof of Law II (See Prices "Money and its Relation to Prices"):

When Spaniards brought American gold to Europe in Elizabeths reign, When Californian and Australian gold fields were discovered about 1850, At the present when the Rand is pouring out large volume of gold.

Historic Proof of Law I: After 1817 when England adopted a gold standard, After 1870 when Germany and the Latin countries adopted gold.

In the first instances prices rose because gold had less value; in the latter they fell because gold had a greater value.

Owing to price-rising, injustice is done in paying debts after a number of years and hence to arrive at a strictly accurate payment of debts, statisticians have devised INDEX NUMBERS. The three systems referred to in Ashleys "The Rise in Prices and the Cost of Living". The index number helps to show the SECULAR MOVEMENTS of prices.

[Figures showing SECULAR MOVEMENTS in NORMAL situation and under effect of the Law of SUPPLY AND DEMAND]

At one time countries had a double standard - gold and silver. The rates of value had to be fixed for coinage at about 15oz. silver = 1oz. gold. As in the bullion market this ratio did not obtain. It was found that the metal over-valued by the State remained as coin whilst the other metal was melted in obedience to Greshams Law:- that bad money drives good money out of circulation. For facts, see Gides "Political Economy".

Because of experience, countries have now become MONOMETALLIST, although in international trade gold and silver do equally well since they are both treated as bullion.

I

ScottishLabour

NOTES OF LECTURES ONECONOMICS.GivenbyJohnMaclean.

LECTUREIX.

.Functionsof money (see "Money and the Mechanism of banks, particularly in the Bank of England. A certain-Exchange,"byJevons): minimum is always in circulation. Let the moneyo.r' this

countrybe 100,000,000,and let theminimum in elrcula-

I. l\Ieasure0. VaJuethroughprice;dealtwith already. tion be50,000,000. Let theGovernmententera EuropeanWar,andtogettheuseO'f theg"O'ld for foreign purchases,

2. Mediumofexchange. issue. InconvertibleNO'tes., It cansafely issue50,000,000

worth. ShQluldit issue100,000,000worthby theoperationD E F c. M. c. ofGresham'sLaw, papernoteswoulddrive outthegold

20Hats 5 andpriceswould double. This happened,vith Britain andSuit s 20Hats 20Hats 5 I Suit FranceduringtheNapo,leonicViars(Frenchassignats);with5 I Suit theNorthernState,sinltheAmericanCivil Viar (greenbacks).

The flood Q1f papermoney issuedby all Statesduring theThe money passes from F. to E. and then to D. It keeps Great\Varhasraisedpriceseyery w here.

movingon, whereasthecommoditiesdropout, and tobereplaoedby othe.rs.

3. Meansof Payment', Herethecredit systementerswithitscheques,c1C

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/' J

ScottishLabourCollege.NOTES OF LECTURES ONECONOMICS.Gh'cnbyJohnMaclean.

LECTUREX.

Functions,of Money.

I.THE CHEQUE.

3. Meansof Payment(continued).Thebusinessmaneyery

dayputs,his drawingsintD a bankandgetsa Cheque

Book. \i\1hen hehas.a debtof 20,say,.;'.

writclSouton a preparcdleaf in his cheque

amount,andgivesthis slip to his creditor.

presoC1nts it andeithCtr getsmoney or has.

tD pay, he

book the

TheJatte,r

theamount

transferredto his b'l.'nk book. I f hehas. nD dealings

with thatbankhe: tak,esit to his O\\ln. He, is credited

with 20. Hisbankthendeals.with thefirst bank. If

the]:lttcr bankhashadanotherchequehandedin by a

clientwith aclaimonthesecondonefor 20,thebanks

simply swopthet,vo. chequesandarequits.

All bankbranchesina townmeetevery dayandsquareaccounts.

If bankA owesb,1l1k B 1000,a notetothateffect is'sent

to,theheaciquart,crsof bothbanks. This is donefO:[ m;ery

town. Thebanksnotify theirbankagentsi'n: London,andthey

seethatadjustmentsaremadethroughthe,mediumof the

Bank of England. By this meansthe bankingsystemI of

Britain (of theworld)is knit up. Thesameappliesto the railways. By thismeans.onlyaminimumofgoldpassesftom

theBankof Eng'landtoothClr banksandviceversa.

Papermoney doesllll right till a crisis come'S, when'gold IS

demanded. Supposea merchantgets 100,000woifth ofg'oodsfrom amanufacturertosdl. If thegoodsdonotsell

thenthemerchantfails topay for them. Themanufacturelr

needsthemerchant'smoneytopayhisdebts. Not getting

it, hefails. Sothobadinfluence Thebanksthat

advanoedto thes,emenlose, sothepeoplewhodepositedin

th(; banksfeel uneasyandrushtogettheir hardcashout.

Onebankcannotpayall andcIos.esdown. A rushis. made

on otherbanks. Thebankrategoesup very high; manu-

facturers.unableOor unwilling topaythishighratefor loans,

closedQt\:vn, andunemploymentensueso Thusproceedsthe

crisis (seeHyndman's" IndustrialCrisesof.theNineteenth

Century.'')

2. ThePostalOrder.

A paysdownin PostOfficeX 1,andgets.a P.O.andsendsit

to B, whOocashes.it at OfficeY. At PostOfficeY just

beforethis1 may havebeendeposited,andat X shortlyafterwardsI mayhavebeenlifted on thepresentationofa P.O. .Thusthetransmissionofcashis avoidedby theuse

of paper. Thesameappliesto internationalandnational

tradethroughtheiuseof Bills of Exchange.

tV

LECTUREXI.

BULs of Exchan.geandExchang,eRates.Parof Exchange:1 4.86dDllars 25.22francs 20.43marks.

Thesesumsall cOl1ltain thesameweight of goJd. 1hIringFebruary,]916, ,1 exchangedforabDut4.76dollars;Sep-tember,1919,about4.16dollars. The.exchangeswerehenceconsidered"unfavourable" or "againstBritain," becausesovereignscouldpurchasefowerdollarsthannOormally. Thiswasdue tD extraimports from the United Stat.e,s and toreducedexportsthereto, togetherwith extra risks in thetransfe.rof goldtobalaneeaccounts. To pull theexchangesbacktowardstheParDf' Exchangethe:British GD'vernmentsentgold from LondDnandOttawatoN c\v YD'rk, raisedawar loan in New York, and finall y sold BritishO\\'nedAmericanbonds(shares)tD Americanpurchasers.Theonlyoneof theseexpedientsnormally resortedtois theshipmentof gD'ld, andonly small quantiti.es noed as a rul,eo hesentfrD'm country to. cO'untry. '\Ne can therefore say that the\\,orld'stradeis donewithouttheuseDf gold.

The BiU of Exchangel takesthep1aoeof gold in inbernationalcommerce,andtheupsanddownsOof theRat.eof Exchangetend tOi equalis,C'imports and exports. ,Bills, however,arebasedDn goldandcanonlybeconsideredasconvenientsub-stitubes. To showhDW 'tradeis conductedkt us takethefollowing illustrations.:-

1.(a) LetA in NewYork send486dOollars'wDrthDf goods toB in London. A sendsa Bill requestingpaymentofthegoodsthme'months(say) after B gets. theHi)l. B signstheBill andreturnsit toA. (A usuallysellshis Bill to a banker\\'ho sendsit to his agent inLondon. Theagentgets it signed by an " acceptor,"afirm takingtheresponsibilityof B, fOol' acommission.I t wastosm'e" acceptors:'from bankruptcythattheMoratoriumwas,cnforoed).

(b)LetC in NewYork buy atthesame time100wDrth ofgoodsJromD in London, payablein threemonths.To, savel the risk andcostof sendingso\'oreignsanddOollars acrossthe,Atlantic, A's Bill is.madeuseof.C paysA in NewYOork 486 dollars receivestheBill in exchange. C sendsit toD in LDndO'n in pay-mentfOor the100 of goods. D presentsit toB who pays100 insteadof 486 dollars. All "aresatisfied.

2. Let A send972 dollars'worth to H, .andle,t C purchasefromD 100worthasbefore. C still buysBills fromA to' payD. AsC'sdemandis fDr 486dollars'wo'rthof Bills andas.A has972 dollars.' wO'rth to sell, Cpays483 dDllars for the486dollars'worth. A hasto sendfor gDld to B tD pay theothe,r 486doll

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ScottishLab(}ur College.

NOTES OF LECTURESONECONOMICS.GivenbyJohnMaclean.

LECTUREXII.

Throughtheuse of banknotes,cheques,bills,ofexchanges,and 100onrawmaterial,rentof building,machinery andotherpaperforms., it hasbeenshownthatgoldis little used. tear,andwages. The workmenmakefinished prod';lcts.of in \vholesaletradeandmanufacture. Lessthan.a sovereign greatervaluethan100,say110. ThesearesoldfDr thatis neededfOor theexchangeof 100worth of goods,. Yet, sum. Thusarisesthesurplus,c.alledSurplusValue.without the goldenbasis,credit paper\vould be valueless.

Duringpanic,peopleonly acceptgo.id. This. importanceof ConstantCapital,80} ( )[100 { V . bi C 't] IIO 100+10gold is provedby theexpedientsof belligerentcountriesto ..J ana e apla, 20 "

cornerall floatinggoldcoins. M - C.C. + V.C.........P.........C.l 'M.l (M. + m.)

Money asCapital.Anartisanmakesboots'wDrth 1 a pair:. Classificationof Capital:-He a pai'r ann ; J. Hethenbuysa waterproof\vorth1. Heendswith the.samevalueashestartedwith. (1) FixedCapital, Buildings,machinery }' ( )Constant

(2)CirculatingCapital,Coal,oil,chemicals,rawmaterials a CapitaL

c. l\I. C.I (3) CirculatingCapital,Wages (b) VariableCapital.I pair boots ;6"1 I waterproof.

(I) adds\vearandteartOo form yalueO'f a commodity. (2) addsits tQltal valueto thecommodity. (3) addsa newvalueWhenmon...;y IS llsedascapitalone goods,tOo sellthemgreaterthan thevalueof LabourPower. If (3) doesat a higherprice. A (;';1.pitalistbuys,goodsat1000. Henot, it is uselessto thecapitalistpurchase'r.sells,themat1, roo. Thistrnns'adiondiffers fromthefirst

in: manyrespects.1. II.

M. c. :M: I 10Ibs.cottonat10/- 20hrs. 20Ibs.cottonat 20/ 40hrs.J,ooG waterproofs, .1,100 (Cr,OO:l+JO(l). I spindle ,,2/ 4< " -! spindle " ti/- t: It

1L.P.for6hrs.at3/ 6 I L.P.for12Ius.at 6/ I I "" Ther getting of the 100, the is, the, capitalists'

r5/30hrs. 30/ 60hrs.mothe,. Exchanges normally arc of equivalents. \ ,Vhencecomesthe100: Although realisedill exchange,it is pr9-

Outlay27/ Income30/-duoedin,thefactory. ThepurchaseofLabourPOo\\erenables OutlayIS/ IncomelS/-

the.capitalisttOo get morethanhegi\'cs. Hespends, say,_ No surplusva1ue. Surplusvaluer, 3/.

t

"'"""''1",,11'''''.11.. r; 'It "til.'"1

Scot'Hsh Laboqr College.

NOTES OF LECTURES'ONECONOMICS.Givenby Maclean.

LECTURE

Theearlierfroo tradeeconomistsmguedthatprofit \vasmadein

commercel,in theprocessof circulation, insteadof in factory, in the sphere of production. C:omme!rce hereexcludestra:1)]sit, simplymarketbuyingandselling. Undercapitalismgoodscanbesold merchantto merchantataprofitt butthisprofit is creatooin theworkshop. Assumingthatfull valueis paidtomanufacturer,\ve canshowthatnoincrementof value,noproilt is possiblebyexchange. Sup-poseAand 13 by barterexchange. They exchang.evalu1es. BothmaygainuSCJvalues,butnoextra

I. Supposeselle'rsdispos,eof 100worthof goodsat 10;they gain 10 pelr cent. But they becomebuyers,and

havetopay 10percent.morefor othergoods. Theyfind themselveswith different usevaluesbut with the

sameamountof yalue.

100\vorth of goodsat ..90;theysave10pencent. Butin sellingthesegoodsagain,

or "IOO worth of others, the,y only get90' Thebuyersarejust in thesameDositionasthesellers.

2. Supposebuyers

3. SupposeA sells;640\vorth of goodsto B, andgets;{soworthof his i'll! return. A gains10 and B los.es10, butthetotalvaluehasnotincreased. Thusmayweseethatnot in circulation is profit produced,although.itmaybe realisedthere.

III.

toshowhowsurplusyalueariseswhenall formsof constantcapitalareconside,red:-

_____.__"_

XIII.

;615,000.

Buildings worth.:30,000 excluded) 1,000.worth 100,000 10,000

Accessories... ... ... ... 2,000

RawMaterial ... ...... 50 ,000\"lages.............'" 20,000

Profit (includingRent) ... I7,000

Sdlin'gPriceofProduct... .,. .,. ......

Profit, percent. Rateof Explo,itation,85 percent.

Senior's, LastHour Illustration in support of LancashireI.HLLO> againsttheTenHOllr Bill.

Yarn. IIrs.

20Ibs.cotton... 20/. Ibs. 8

spindle ... 4/ Ibs."'ages... 3/ 2 Ibs. I.!5 Profit ... 3/ 2 Ibs.

30/ 201bs. I2

Seniorwouldhavearguedthatin the'lastI I5thhourstheprofitwasmade. This assumesthat thevalueof the Labour-Power,the-l spindleandthe20 Ibs. of cotton'werecreatedin I I5th, I 35thsand 8 hours respectively. Absurd.Valueof L.P. createdin 6 hoursandprofit createdin 6hours. After Ten HoursBill passedthe capitalistsmade largerprofits.

http:1",,11'''''.11

V,",v...",11 1,,,a"'"I'

NOTES OF LECTURES ONECONOMICS.GivenbyJohnMaclean.

LECTUREXIV.;{,

Anotherillustration0. theSeniorLastHourFallacy: In 2. thepercentagehasfallen, but the. total profit hasrisen.

Thishappens\"hen theconstantcapitalincreaseswhile the

TotalCapital,,100,000,madeup of \'ariable capital remainsstationery, o.r when the'constant'

incrcas,es quickerthem thevariablecapital. Theproportion

(a) FixedCapital(BuildingsandPlant),80,000. of cOonstantto variablecapital in n total capital is called

(b) CirculatingCapital(RawIVlaterial andvVages)20,000. theOrganicCompositiono{ Capital.

GrossProfit, IS percent.,15,000.I. Total Capital, 100 CC. 50+ V.C. 5'

Total Value, ,100,000+ .15,000115,000.NettProfi,t, 10percent.,10,000. 2. Total Capital,I 100 Cc. .80+ V.C. 20.Lengthof day, I It hoursor23halfhours.

2/23of II5,000.Illustration2. is saidtohayea liigherOrganicCompositionof

Capital,becausetheratioof constantto variablecapitalin itThisseemstoshowthatthenett profit wasproducedin thelast

is largerthanin CaseI; 4 to I insteadof I to1.hourofeachday;i.el., if thedaywere'shortenedbyanhour

all profit wouldgo., Butprofit ismadeduringa halfdayatleast. Thereforea.shorter(bywouldnotkill all profit. The tendencyof capitalistdevelopmentis tmvards a Higher

COompositionof buttherateof del\'elopmentin thisOrganicCompositionof Capital. direction varies from industry to. industry. This has an

influenceon prices.andmakesthem normally deviatefrOomA DecliningRateof Inte.restmaybeaccompaniedby a tota! thenorm'al laid dO\\'11 i'l1i theearliernotes. ThisdifferenoBincreaseof profits. Proof:- hasbeencalledtheMarxianContradiction,andis supposed

to bOowl IVlarx's s.ysbemover. (SecBohm Bawcrk's, " ClosoCapital Profit Percentage \Nages of the "Marxian System," Hilferding's, "BohmBawerk's

1. ISBo 'JO,OOO 1,000 10percent. ,1,000 Criticism Oof :vlarx," andBoucley's"TheoreticalSystemOof

.2. 1912 .10,000 ' 5 percent. ,1,000 l'vlarx.")

t.

Sco,ttish Labour College., NOTES OF LECTURES ON ECONOMICS. GivenbyJohnIHaclean.

LECTURE XV.

UndercapitalismSurplus.Valueisnotdistributedtothecapitalists

t0' thenumberof employeesengaged,butaccord-

ing: tothelamount0'f capitalneeded. T?e.normalprice:ofan

article is. f0'undby thecapitalistin amostempirical,th0'ugh

practicalmanne(. He calculatesthe normalexpense,on

wages, rawmaterialsal}d acce.ssorie's,depreciation,taxers

.andrates)rent, etc., andthenaddstheamountneededto

yield hiscapitaltheaverageor normal rate:of interestat

thetime. Thecapitalist,working undernormalconditions.,

finds thatall thes.eitemsaddedtogetherapproximate the

110rmalmarketprice. Somecapitalistscall.the neit outlays

theCostPrice.althoughothersagaininclude.in CostPrice

,or Cost0'1' Productionthenormalinte:rest. Marx calls this

latterthe: Price0'f Production. It is clear that themore

:capitalneededperworkc,r, themoreinterestmustbeadded

to' theCOlst of his totalproducts,andvice versa. Surplus

Value is thus unevenlyspread,and this raisesQir lowers

pricesabove0'r below thenormalpricecoincidingwithihe

"Val ueI.'Clvet.

Illustrationof thelVlarxian Gontradiction

Boots

Hats

Capital

1,000

10,000

R.ofInterest

Spercent.

"

Hours

1,000

1,000

Wages

100

100

Profit

50

500

SellingPrice

150

600

Totals T1,000 2,000 200 550 750

TotalValueProduced 75

I S.V.toBootl\lanufacturer.150

SurplusValue(asProfit).Total

I S.V.toHatManufacturer.Wages 1200

NormalSellingPriceof Hats,il)oo.NormalValueI..elvel, 37.5 (half of .750).

NormalSellingPriceof Boots,.ISO.

He.reweseethattheNormalSellingPrioC'of Hatsisabov,CIthe

NormalValueLe:ve1;0'r above,theleyel oughttobeat,

if thesellingprice,were.toindicatethetimetakentoproduce

thehats. Similarly theN.S.P.of Bootsis belowthelevel

indicatedby thenormaltimeof production.

.,.

..;., .. ..". '"" .,,:;0; ;:",:' ",-- ' :'" ' '. . ...

ScoftishLabourCollege.

NOTES OF LECTURES ONECONOMICS.GivenbyJohnMaclean.

LECTUREXVI.

Monopoly Price.

monopoly existsprices tend to be highelr than whc;recompetition.pr,cyails. Therefo.rethe uni,"crsal urgetowards

cartels,pools,combines,trusts,absolutemonopoly. Profit,

nothigh price, beingtheultimateobjectin production,thatprico is, charged'that r,ealises the highestprofit. vVhc,re

prioes rise abnormally then "substitutes"eme!rge. SCL

Marshall's"Economicsof Industry"andhis"Principles"

on the Law of Substitution. Here is an illustration of1\IonopolyPrice:-

SURPLUS.

People. Rate. Drawings.

100,000 2d. 20o,oood.

400,000 Id. 400 ,oood.1,000,000 ?rd. soo,oood.

Thechargedeterminedonwouldbe1 d.opoly Price. A Corporation owning its tramswould l)e,forcedtOo charge

TheTheo,ryofMalthus. !t

Malthusattributedthepovertyat the beginning of the centurytothetendencyfor populationtooutstripproductiOl;

Hecontendedthatpopulationtendedtoincreasein Geomci -

rical Ratio, whilst productiont.endedto increasein Arith-

metical Ratio.

ArithmeticalRatioI,2, 3, 4, 5, 6, 7, 8, 9, 10, etc.

GeometricalRatioI,2, 4, 8, 16, 32, 128, 256, 512,

Expenses. Profits,.

J8o,oood. 20,000350,oood. 460,000d. 40,00