In the last part of this module we looked at the general analysis of the circulation of capital. Using the circuit of capital we understood various stages of the circuit, we understood various phases of the circuit, the stocks and flows that lie hidden in the circuit. Now we would like to go back to investigating some of the issues related to the question of realization of surplus value. We are going to divide this discussion about the realization of surplus value into two parts. The realization of surplus value will involve two types of questions. One question will relate to the question of aggregate demand. So, we will try to understand the issues related to the generation of aggregate demand. The other question or other sets of questions would relate to what we can call the use value basis of production. What the use value basis of production refers to is what we today call the product mix of output meaning how much consumption goods are produced and how much machinery is produced. We will see that both these issues are important to understand the question of realization of surplus value. So, let us start with the question of aggregate demand. What the question of aggregate demand really boils down to can be understood again using the circuit of capital. So, let us write the circuit of capital. So, the capital starts with the sum of money goes to the market, purchases two types of commodities means of production labor power brings them together in the production process. The finished commodity comes out and then it is sold for a sum of money. Now the question of aggregate demand really boils down to two types of issues. One is the issue of finance and the other is the issue of spending. So, let us first look at the issue of finance. Now the issue of finance can be really understood quite easily by considering the two ends of the circuit. Now we know in the process of production value has been created not only value, but surplus value. So, therefore, the value of C prime which is the finished commodities is bigger than the value of C which is the bundle of commodities that was purchased by the capitalist to start out the production process. The value of C is represented by the sum of money M. Therefore, the system if it started out with the sum of money will need some extra sum of money at this point to realize the value contained in C prime because of the simple fact that the value of C prime is bigger than the value of C which was purchased with the sum of money M. So, value of C prime will need to be met or will need to be realized in a quantity of money M prime and we know M prime is bigger than M. And therefore, the difference between the two which is the representation in monetary form of the surplus value there will need to be generation of some source of finance to purchase this additional value which has been created the surplus value. So, the question is how does the capitalist system provide this finance this additional finance to realize the extra value that has been created and embedded in the commodity bundle the finished commodities. And there are two ways in which the system can provide this extra source of extra finance to realize this surplus value. The first is the setting that Marx talked about which was the commodity money system. So, when Marx was discussing the structure of capitalism what we had was a commodity money system. So, gold or silver was used as a commodity when we are in the context of a commodity money system this extra source of finance can be found if the production of gold is kept pace with the rest of the economy. So, that period after period extra gold of the amount of delta M is produced which will then be useful to realize this extra surplus value. Now, gold being a commodity will be produced, but gold has the important feature that in a commodity money system it is the money commodity. Therefore, it does not need to be sold to realize its value when it is created it already has its value. So, therefore, if the system is able to produce gold in a commodity money system at the rate that is necessary to realize this extra value, then the capitalist system will be able to generate the extra finance to continuously keep realizing the value and surplus value produced. And this discussion is present in towards the end of volume 2, but you might say that we no longer live in a commodity money system and that is true from the early 20th century onwards especially from mid 20th century onwards we do not have a commodity money system. So, when we do not have a commodity money system what is the mechanism available to a capitalist system to make sure that the means of realizing this surplus value is available. What the capitalist system does when we are in a non commodity money system? So, we are now in a non commodity money system and here the role of the central bank becomes important. In a non commodity money system the money commodity is replaced by the provision of credit and the provision of credit in a mature capitalist economy is ultimately controlled by the central bank of the economy. The central bank makes available what economists call high powered money through the commercial banking system the high powered money provides the amount of credit that is necessary to the system to the whole capitalist system both to support its production and consumption needs. So, when we are in a non commodity money system what becomes important is the provision of high powered money by the central bank. Once the central bank is able to provide the adequate amounts of high powered money the system generates the amount of credit that is necessary to realize the commodity the extra surplus value that has been created. So, therefore, either in a commodity money system or in a non commodity money system the capitalist system does have mechanism to make available adequate amounts of finance that is necessary to purchase the commodities that have been produced and therefore to realize the value and surplus value that has been generated. Now, even if adequate finance is available there is still an additional issue of spending. So, even if the banking system is able to provide credit it might still be the case that key economic actors are not willing to take up that credit and make spending. So, therefore, the second issue is about spending there can be cases where the capitalist system has lot of credit available, but it is not used to finance actual expenditures. And we know that we have lived through a financial crisis where this has become very important. So, there are tons of cash which are lying idle with firms, but those are not being used to make investment. So, even if finance is available it is possible for capitalist economic actors important economic actors in capitalism not to convert that finance into spending. So, the additional issue of spending becomes important when there is adequate spending in the system the system does well realizes all the surplus value that is reinvested and the circuit of capital goes on and on the flow of value increases, but for example there might be a case when capitalist do not invest. When capitalists do not invest even if finance is easily available what does that what does that imply well what that implies is that some of the surplus value that has been produced will not be realized. In other words the turnover time of capital will go down sorry the turnover time will go up meaning capital each atom of value will require a longer amount of time to traverse the circuit meaning the turnover time goes up that means what happens there is a slow down. So, the speed which with capital traverses the circuit from here to here goes down and therefore there is a slow down of the flow of value. What does that mean it means there is a slow down of the economy. So, economic economic growth falls when economic growth falls some sector of the economy has to step in and increase spending so as to revive growth. In capitalist economies there is the state with fiscal policy the state often steps in when capitalist investment has fallen and that is what revives the amount of spending back again the turnover time falls and the growth process kicks goes up. So, this is the fluctuation of the economy that we today know as the business cycles. So, the fluctuations of business cycles are created by the spending decisions which lead to fluctuations in demand and we can use the circuit of capital to understand how the fluctuations of demand lead to fluctuations of growth through an increase or decrease in the turnover time which is merely and reflection of the increase or decrease of the spending of key actors in the capitalist economy. Now, one thing that I would like to emphasize is that in a capitalist economy the key economic actor which makes all the spending decisions or which is the source of all spending decision is the capitalist. It is the capitalist who has to use the sum of money to purchase different commodities which is the beginning of all other kinds of spending because when the capitalist uses a part of his sum of money to purchase means of production what that means is that commodities produced by other capitalist have found the market. So, then that makes available finance to those capitalist in turn to make additions to their capital stock by investing. The other part of the spending goes towards purchasing labor power. Labor power when it is sold converts the commodity that is owned by workers into incomes that is their wage income. Those wage incomes in turn go towards purchasing consumption goods. So, that is another spending, but the important thing to realize is that the source of all spending is the capitalist making the investment and therefore, when we think about fluctuations of demand in a capitalist economy our analytical focus should be to try to understand why there is a fluctuation in the spending of capitalist because that is the main source of all kinds of spending in the economy and therefore, all kinds of short run fluctuations that arise because of spending and fluctuations of demand come from fluctuations in the spending decisions of capitalists. So, that is the set of issues that we need to understand when we think about the question of aggregate demand. Now, let us move on to the second aspect of the realization of surplus value which is to understand the issues related to what I have called the use value basis of production or what modern economists call the product mix of output. So, let us see what this entails. As always we can organize our discussion with reference to the circuit of capital. So, to motivate the discussion let us rewrite the circuit once again. So, the capitalist goes to the market to buy two types of commodities which are then brought to the production process, finished commodities arise and then they are sold. Now, what we want to concentrate on now is to think about the first stage of the circuit. What the capitalist is doing is purchasing two different types of commodities. Part of the money is used to purchase means of production and part of the money is used to purchase labour power. Labour power in turn needs to purchase consumption goods. So, therefore, the investment decision of the capitalist relies on the availability of the correct proportion of means of production, let us call them machines and consumption goods. Let us call them food because food will be needed by the workers whom the capitalist hires and the capitalist will need to buy the machines and the raw materials for the production process. So, therefore, there has to be some way in which the capitalist system produces the right mix of consumption goods and production goods because without the right mix when the capitalist comes to the market with the sum of money, if there is an excess or a shortage of either of these the process of production of capital will halt and there will be problems. So, the use value basis of production or the right product mix of output relates to the question of how the capitalist system is able to generate the right amount of production goods and consumption goods. So, this is the question that had been discussed by lots of economists before Marx. Some progress had been made by a group of economists, French economists known as the physiocrats. Marx borrowed some key insights from physiocrats, but then reverted to answer this question for a capitalist economy. What he did was to bring about a conceptual innovation by thinking of the economy as being divided into different departments. We will now follow his analysis which is also known as the analysis of the reproduction schemes to answer this question of how the capitalist system is able to produce the right mix of production and consumption goods that is necessary for the smooth functioning of the system. To do so, we will follow Marx and divide the total economy into two parts. So, the total economy is composed of two departments, let us call that department one and department two. What is the difference? Department one produces means of production and department two produces means of consumption. So, the question of how the economy generates the correct amount of means of production and means of consumption really boils down to the question of the correct size, the correct relative size of these two departments. One department which produces the means of consumption, another which produces the means of production. Now, to answer this or to address this question about the correct proportions, let us think of the total amount of value created in department one. So, the total amount of value created in department one, let us call that w one. That is the sum of the constant capital used up in production of department one, variable capital used in the production of department one and the surplus value generated in the production of department one. So, w one refers to the total value created in department one. That in turn is composed of c one which is the total constant capital used, v one the total variable capital used and s one which is the surplus value used. In a similar way the total value created in department two, let us call that w two. That is composed of c two which is the constant capital used in department two, v two which is the variable capital used in department two and s two which is the surplus value generated in department two. Now, let us think a little bit about these components c one, v one and s one and similarly c two, v two and s two. C one and c two what do they represent? Well, they represent the constant capital used up in the production in department one and department two. Therefore, c one and c two will need to be replaced because that is the means of production used up. So, therefore, c one and c two also represent the demand for new means of production. So, they are the demand for means of production. What about v one and v two? v one and v two represent variable capitals in the two department meaning they are the wage which has been used to purchase labour power. Now, the wage is the income of the worker. What will they do with it? They will use it to purchase consumption goods. Therefore, v one and v two represent the demand for consumption goods. The third component is s one and s two and that is more complicated, but also more interesting. What is s one and s two? s one and s two represent surplus value generated in the two departments. Now, the surplus value as we have seen in the circuit of capital can be used in two different ways. Part of it is used for consumption. So, it gives rise to a demand for consumption goods, but part of it can be reinvested in the production process which generates which is used to hire more workers and buy more machines. So, therefore, it can demand it can generate the demand for means of production also. So, s one and s two can represent the demand for both means of production and means of consumption. So, let me move s one and s two here because this is probably not visible. S one and s two represent the surplus values generated in the two departments. Now, we know that surplus value can be used to support the consumption of the capitalists in which case it leads to a demand for consumption goods, but part of the surplus value can also be used to reinvest in the production process in which case part of it will be used to purchase means of production. So, s one and s two leads to the demand for or can lead to the demand for means of production and means of consumption. Now, in our analysis to understand the basic issues involved, we will look at a simple case. The simple case will be where all the surplus value is used for consumption. That simple case is known by Marx is called by Marx as simple reproduction. What does that mean? Simple reproduction means that all the surplus value is used for consumption. If all the surplus value is used for consumption, then none of it is used for reinvestment. What does that mean? It means that the revenue that is generated by selling the commodities, one part of it goes towards recouping the cost. The other part is surplus value. If all of the surplus value is used for consumption, that means the scale of production remains constant over time because there is no reinvestment, there is no growth of the means of production. Therefore, the scale of production remains fixed. That is what Marx means by simple reproduction. But even in the case of simple reproduction which is unrealistic, it is useful to study simple reproduction because it allows us to understand the structure of relations that must prevail between the two departments to ensure that there is smooth reproduction over time. After having understood the simple case of simple reproduction, we can then study the case of expanded reproduction where some of the surplus value is plowed back into the production process which leads to an increase in the scale of production and growth of the capital stock. But the essential ideas remain the same and therefore, we can abstract from ignore this other complication which arises because of growth to understand the basic logic by just studying the case of simple reproduction. So, that is what we will do in this class. When you study the notes, you can look at the appendix, there is a detailed discussion of expanded reproduction. But the essential ideas can be understood even by just looking at simple reproduction. So, let us look at simple reproduction. So, we want to understand the structure of relationship thus that must prevail between the two departments to ensure smooth reproduction over time. So, to do that, let us look at both the supply and the demand sides of the market for the output of the two departments. Let us start out by looking at department one. In value terms, what is the total supply of output produced by department one? Well, the total value of output produced by department one is W 1 which in turn is the sum of C 1 plus V 1 plus S 1 that we have already seen that W 1 is C 1 plus V 1 plus S 1. So, in value terms, this sum C 1 plus V 1 plus S 1 represents the total output, the total supply of commodities produced by department one. Now, let us look at the demand side. Where does the demand for the output of department one come from? Well, department one produces means of production. Means of production will be demanded by the two departments because a part of the means of production that has been used in the production process gets used up and will need to be replaced. If we look at department one, C 1 represents the part of constant capital that is used up in the production process. Therefore, for the production process to keep going, that will need to be replaced and that is why C 1 represents the demand for means of production that arises from department one. Similarly, C 2 represents the demand for means of production that arise from department two because department two produces W 2 which itself is the sum of C 2 plus V 2 plus S 2. C 2 represents the value of constant capital used up in the production of means of consumption. So, the amount of machinery used up in producing food, well those machineries will need to be replaced if the production of food has to go on in the next period. Therefore, C 2 becomes the second source of demand for the means of production which is produced by department one. Now, let us look at department two. The total supply that is the total value of output produced by department two is C 2 plus V 2 plus S 2. What is the demand? Well, demand for means of consumption comes from two sources. All the workers involved in production in department one will earn the wage income V 1. All of the wage income will be used for making consumption, purchasing consumption goods. So, V 1 is one source of demand, V 2 is the wage income of workers in the second industry the second department that will also be used to purchase consumption goods. So, part of the demand for consumption goods comes from the wage income of the workers involved in the two departments. The second source of demand for consumption goods comes from capitalist, capitalist also need to eat. And since we are studying simple reproduction, this is the case where all of the surplus value is used for consumption. And therefore, S 1 is also the source of demand for consumption goods and so, also is S 2. So, the total demand for the output of department one comes from the consumption needs of workers and the consumption needs of capitalists. Now, let us take up any of these two equations to find the condition for equilibrium. Condition for equilibrium is when supply is equal to demand. So, when I say that the system needs to smoothly reproduce over time it means that there is neither excess supply nor excess demand nor is too much output produced nor is too little. That can happen only when the total supply and total demand are equal. Now, let us take this equation both sides of this equation have this term C 1 which we can cancel out. So, what remains of this equation is that V 1 plus S 1 is equal to C 2 or what we are saying is C 2 divided by V 1 plus S 1 is equal to 1. Now, this is precisely the condition which defines the relative size of the two departments that is necessary to ensure smooth reproduction over time. Let us understand what this is saying. This is saying that the total amount of capital constant capital used in department two that is in the department that produces means of consumption must be exactly equal to the sum of variable capital and surplus value produced in the other department. So, therefore, this condition gives us a way to find the relative size of the two departments which is necessary to ensure that there is smooth reproduction. What will happen if this reproduction condition holds? If this reproduction condition holds then there will be neither too much output produced nor too little output produced and by output we do not only mean the total amount of output, but also the right composition. Neither will too much machines be produced, neither will too much food be produced, neither will too little machines be produced, neither will too little food be produced. Just the right amount of food and machines will be produced which will be what the system needs to make sure that the process of production continues smoothly over time. So, with this analysis Marx clarified that what is essential to ensure that smooth reproduction takes place over time in a capitalist system is a key idea about proportionality. Even in this simple framework we are able to see that the system will be able to produce and reproduce itself over time smoothly without getting into problems of shortage of commodities or glut of commodities is only if the two departments are related to each other in a specific way. Now, these could be specific numbers say this could be 100, this could be 50, this could be 25 and then plugging those numbers we will get a specific ratio that must be maintained between these two departments to ensure that the system reproduces itself over time smoothly. If the system is able to generate this ratio this relative size of the two departments then it will be able to smoothly reproduce itself over time. What if it does not what if there is a shock to the system because of which the size of department one becomes too large compared to the size of department two and by too large I mean too large with reference to this condition. If that happens then the system will get into what Marx calls crisis of disproportionality because in that case too much means of production will be produced then will be necessary to for the demand of the system and therefore, that will that can very well be the beginning of a crisis. Now, since the capitalist system is a crisis prone system every 30, 40 years it gets into deep crisis. The analysis of crisis is a very important topic of of Marx's political economy. Marx never got the chance to write out a systematic account of capitalist crisis, but we do find scattered notes and scattered comments on crisis in various parts of his texts. And it is possible to reconstruct a comprehensive theory of crisis on the basis of those notes, but in this course we will not have time or occasion to get into that, but nonetheless I would like to flag this issue that a crisis of disproportionality is very much one of the important ways in which a system can get into a crisis. There are other ways in which the system can get into a crisis, but that is something that we are not going to be discussing in great detail. With that we come to the end of this module. In this module we have looked at the main argument laid out by Marx in volume 2 of Capital which relates to the question of realization of surplus value. Since surplus value is realized through the sale of commodities, what is important is the sphere of circulation. That is why in the first part of this module we began with a general analysis of the circulation of capital. We looked at the circuit of capital at its various aspects and understood very important concepts. With that then we understood and returned to the question of about the realization of surplus value. We looked at the issue of aggregate demand and we also looked at the issue of the correct product mix or the use value basis of production. With that we come to an end of the analysis that Marx laid out in volumes 1 and 2. The next module will take us into volume 3 and let me briefly say how it will be related to what we have so far studied. In volume 1 we studied the process of generation of surplus value and also its accumulation. In volume 2 we understood how the surplus value that has been generated can be realized through sale. In volume 3 we will then analyze how this surplus value that has been generated gets redistributed throughout societies and emerges as the income of different fractions of the ruling class. The capitalists who are involved in production, the merchants, the money capitalists and the resource owners. That is the main argument we will see in the next module.


Welcome to another capsule on international relations for the Shankar IAS Academy. The topic today is the recent visit to Washington of our Minister for External Affairs, Dr. S. J. Shankar. Dr. J. Shankar has been a major player in the developments in India-U.S. relations in different capacities. But his present visit was a challenge even for him because it took place in exceptional circumstances. It had no parallel in history and said no time had India approached the U.S. in an acute health emergency for which much-needed material to fight a life-and-death battle with a pandemic was necessary. However much we may have projected it as a bilateral visit to a friendly country, the world saw it in the context of the anxiety in India that the second wave of COVID-19 had overwhelmed us and after having claimed victory over the first wave. Even worse, India had given away a stock of medicines and vaccines to other countries to match the Chinese vaccine diplomacy.  The success of the visit would be judged in India and abroad on the basis of what it achieved in getting massive quantities of vaccines. The fact that the Minister met a number of manufacturers of vaccines spoke volumes about the objectives of the visit. Actually there was a commitment at the level of President Biden to help India as much as possible given his own constraints on the U.S. law to conserve health assets for the needs of his own country. He even went to the extent of offering to waive IPR and patient restrictions on American medical equipment to pave the way for transfer of technology, machinery and vaccines to India. Even before the present acute crisis in India, the Quad had already decided to launch a vaccine program involving U.S. technology, Japanese investment, Indian manufacturing capacity and Australian logistics. Therefore, there is a certain inevitability about the success of the Minister's visit as far as the vaccines are concerned. But how fast it will be delivered and how many thousands of lives will be saved will be the real test of American solidarity with India and the success of the visit of the Minister. The Minister's visit had many other important dimensions, even in normal circumstances. This is the first most important political visit since President Biden took over. China is very much a preoccupation with both the U.S. and China. And convergence of the views and strategy of the two countries will determine the future of the globe. We consider China as an adversary and the U.S. views it as a competitor. But in substance, we are likely to be on the same side. As a country with a land border and a history of conflicts, India may be circumspect, but India is very much on its way to become a committed partner in the Quad. The present freeze in the military situation in Ladakh is a matter of extreme concern to India. And any discussion on the subject between the Minister and Secretary of State Anthony Blinken would have helped. The visit must have provided an opportunity also for an exchange of views on Russia on the eve of the U.S.-Russia summit in June. There have been some concerns in Russia about Indian proximity to the U.S. and described in India about Russia's moves on China and Pakistan. But Russia lived up to its reputation of being a permanent friend by sending Russian vaccines to India expeditiously. The U.S. position on the purchase of the Russian S-400 missiles may also have been discussed. The American deadline for withdrawal of troops from Afghanistan is fast approaching, but an agreement on a new dispensation is not yet in sight. The U.S. has shown interest in involving India in the negotiations, but its proposal for a new format has not materialized. At the same time, India hopes that a complete withdrawal will not take place without a viable dispensation in place. Dr. Jay Shankar may have been updated on the situation. No lease important were the developments in Vienna on the Iran nuclear deal. Iran has already agreed to extend the agreement with the International Atomic Energy Agency to monitor Iran's nuclear activities. But the question of withdrawal of sanctions before renewing the deal remains unresolved, but there is still hope as the negotiations continue. India's interest in ending sanctions without giving a free hand to Iran to proceed with its nuclear activities is well known. Minister Jay Shankar must have caught up with the American Initiative on Climate Change, about which India has considerable concern. The U.S. and China are engaged in promoting pledging of reduction in emissions without any commitment to provide technology and funding to developing countries. India must have made our reservations clear to the Americans this time in time for the Glasgow Conference in November this year. Secretary of State Blinken had visited the Middle East even when Minister Jay Shankar was in Washington, and the two ministers must have exchanged ideas on the most recent developments. The U.S. stood step-fast with Israel, but the role it played in bringing about a ceasefire and extending assistance to rebuild Gaza are hopeful signs of support to the two nations for Iran. The U.S. will continue to pursue to build upon the Abraham Accords and build peace in West Asia, and it can expect India's support. The meeting of the third minister had with the U.N. Secretary General to seek international cooperation to fight the pandemic was long overdue. If only the U.N. had taken on the coordination of the international efforts to battle the pandemic, the situation would not have been catastrophic in many parts of the world, including India. China may strengthen its resistance to the U.N. initiative because of the renewal of the call for another investigation about COVID-19. But it's very important that the United Nations must take over the coordinating efforts on COVID-19 to prevent a threat to international peace and security. In all these respects, Dr. Chai Shankar's visit was important. Although we do not know the details of the outcome, it must have helped us to understand each other better and also clarifies the issues on which there were shades of differences in opinion. Perhaps this visit may also have helped to prepare the ground for Prime Minister Narendra Modi to visit Washington in the near future. Thank you.


Good morning, Cloud Natives, and welcome back to Chicago. We're here at KubeCon, CloudNativeCon. My name's Savannah Peterson, joined with John Furrier. It's day three, the energy is still thriving. Are you still as excited about Kubernetes as you were day one? It's up and running, the book is here, you got signed copy, I mean, you got beam in the mouse. I'm a spoiler, I know, we've got our favorites in some of our good friends here casted by beam. Tom, you've been on the show almost as much as I have, great to have you back. How are you doing today? I'm good, I'm good, a little bit tired was a great event. We got a lot going on at our booth. It was great to see the level of conversations going up yet again, we had a lot of demos, a lot of interest in the product, that was really good. But what I'm most excited about was stepping up my game here again, because I've always tried to bring a next level guest with me, and now we have the one and only Michael Kate. I don't know how I'm going to do after this, because I sort of, I met the ceiling, I'll have to bring our CTRC or something, yeah. I love that, well Michael, we're very happy to have you. The pressure's on now. Yeah, yeah, no pressure, right. No pressure, right. Great game, let's go. So why are you so great? I, yeah, good one. Well Michael, you spoke, you did the co-located events, D-Bass Day, tell me a little bit about your show experience, the conversations you've been having. Yeah, like kicking things off with the co-located event, we had D-Bass Dev Day, we had data on Kubernetes, and it's just amazing to see 300, 400 people over two of those co-located events, just listening about data in and around Kubernetes, and it's like, there's a time when a certain author of this book would be like, don't run, don't run data anywhere near your Kubernetes cluster. So that conversation, that data responsibility, the people around keeping the lights on there, they're here, and we're having those conversations. So that's kind of been the trend for me over the week. Yeah, so you feel like there's been a real evolution then in the conversation? Yeah, I think, like, so my first KubeCon, which was the one during the pandemic, which was just, there was a lot of developers, developer-centric, a lot of developers, a lot of engineers, and that progression has definitely come off to the SRE, the platform engineering folks, the operations people, the people that keep the lights on. I come from an infrastructure background, I've been in the VM world for many years, or VMware Explorers, it is this week actually in Europe, and then this evolution of coming here. So seeing the same people actually, like there's a lot of old, friendly faces that I recognize here. Well, and that's good, speaking of friendly faces, we had Kelsey Hightower on the show. He signed the book, tell me a little bit about the book here, folks, I'm going to make sure they can get a nice little ISO of it. We'll even do a little signature on the inside. Woo, bookmark flying out, yep. Properly signs. Yeah, so this is Kelsey's book where if you ever want to get involved with Kubernetes, like that day one, where do I go, where do I start? Well, it's best to go and do it the hard way, and he famously authored this book to get hands on, but understand the nuts and bolts of Kubernetes. Now, I feel like we're well ahead of that. I always talk about it being you've got to walk that line to understand what it is, what are the building blocks, but I feel like with some of the companies here, we've massively simplified what that Kubernetes up and running actually looks like today. You probably don't need a book like that, which we were giving it away and it's great, and people need to understand what the nuts and bolts, the building blocks of Kubernetes is. Well, and the adoption curve is definitely something that's been a challenge for Kubernetes, and I do feel we've talked a lot about it on the show, very much at an inflection point, things are happening now, this isn't just a conversation, it's execution. That said, complexity is still the biggest challenge with Kubernetes, so perhaps, well at least perhaps, I might need to read this book, at least to pro myself up. Tom, how do you think the, well actually I want to talk about it, you had a release at the show, tell me about that. So, we released a product, version 6.5 of Kasten K10. Focus is really on enterprise scale and security, and one thing I want to link to that on the security topic is one thing we've been seeing at these shows is how the use cases are evolving. So, when you look back at the videos of us talking two years ago, we'd be talking about backup all day long, every day all day, but today the use cases are more varied. We're seeing for example, a lot more customers talk about migrating their applications, so our application mobility functionality comes in there, but we're also talking to a lot more CISOs and people on the security level, and that is where this release and also the previous release has been focused on. One of the features is integration with Iron Bank, which allows us to grow in the federal space as well, and where security is even more important than the traditional customers that we have been working with. I mean, that's interesting, because that points to some of the things that you guys are hitting on, which is the maturization of Kubernetes operationally, the next level problems are security. Yeah, absolutely. Data protection, threats coming in, so you've got data protection and threats, and then how do you get that data back? So like the whole conversation elevates as Kubernetes starts to get more operational, and then two, you've got younger generation coming in that'll learn how to get up to speed on Kubernetes. So you have the folks who are building it, figure things out. Now it's in production, running stuff, more clusters. Now you've got new talent coming in, it's little skills gap issues. How do you guys see that? Because now that's like the next level of challenge is okay, it's running. So in a way it makes our go-to-market a little bit more complex, because we used to just focus on people who are getting up to speed. So most of our go-to-market efforts were really educating. We did a Dummies book back in the days, Kubernetes backup for Dummies. We started our whole KubeCampus effort to get people up to speed faster. I was going to bring it up if you didn't. And that one is still going strong. We're getting close to 30,000 people on there. That's so impressive. We've run more than 16,000 labs. So we're still working on those people early in the journey because the market is growing. But then at the same stage, or at the same time when I see the level of conversations that our salespeople, that our technical salespeople have, where Michael is also involved, that's really going deep. And the questions that we're going are really about people who now have been using Kubernetes for several years, and where security becomes an issue. Customers that are now like, okay, we've been using this in the cloud, but we really think, I mean, X came up this week, right? With their whole move to on-premise. They're not alone. We're having customers tell us like, we want to move from the cloud to on-premise because it's whatever reason they may have might be too expensive, or they have other compliance, traditions. Yeah, exactly. So, but that is like next level conversation, people who've actually been using it for a while. It's a platform conversation now. It's really involved. Yeah, absolutely. I think to go on to like Tom's point there as well, is that migration of the application, maybe we started off using some of our assets that we'd already spent. Like we already have virtualization maybe on-premises, and now we're growing up, we want to take advantage of the cloud. So, as much as we see big, big enterprises coming back, but we're also seeing big, big companies going into the cloud, and taking advantage of things like Red Hat OpenShift on AWS or ARO on Azure, because that gives them a complete, the same look and feel that they had on-premises now in the cloud, and all of the benefits of that as well. So, it's not always about cost and bringing it back, and that's a big thing for us is we're ultimately agnostic to the Kubernetes distribution, whether it's OpenShift, Kubernetes, blah, blah, blah, but we can help move that workload, move that application from A to B, and I think that's a compelling conversation that we're having on the show floor. Flexibility is just off the charts, but now you have an optionality from a customer's perspective. They can move whatever they got to do on the architecture basis. Yeah, that freedom of choice is obviously massive for that aspect. You know, flexibility, freedom of choice, it's one of my favorite topics whenever we talk product marketing, because you can see it as, it's so generic, everybody can say flexibility, freedom of choice. It becomes cliche. But when we dig into what we actually mean by that, the support for this whole ecosystem, it's part of Cloud Native, it's part of DevOps, it's no longer I'm going to build an application with this and that tool. No, I'm going to build an application, I'm going to use 20 tools, and they all need to work together. And you know what, next month I might change my mind on that tool or that database, and I want to switch it, and you guys all need to support me in doing that, or even switch from one stack to another. So flexibility is absolutely key, however shallow it might sound, there's a lot about it. This is a key point, Savannah and I, we're talking about this all week, is that when you look at architecting these Cloud Native complex environments, it's a systems construct. And so you need to have elements that aren't going to lock you in, or have consequences. So flexibility here is not just a cliche, hey, we're flexible, customer satisfaction, we're great. No, this is actually a systems element, as customers start to figure out the environment, and it's use case driven, it's basically customer- 100%, and things are moving so fast right now too, we don't even know what tools we're going to need. You know, I like the word no lock-in, because no lock, I've been in the storage industry for a while, and no lock-in used to be like this big important feature, but we don't really do it, and it was very dangerous to talk about it. No lock-in in this world needs to be the default. It's not even a feature, if you have anything that looks like a lock-in, it's just not acceptable. You're locked in by not being locked in. Basically, because you have the flexibility, again, this is back on the system side, it's not a feature, because every customer will be different because they have a different environment, and their use case will be defined by their distributed computing architecture. Just to add on to that, we always talk about lock-in, but actually, and actually it's Kelsey Hightower, so I'm stealing this from him, but he talks about lock-out, like being locked out of functionality, why can't I go and use Cloud SQL or Big Data, and understand what BigQuery, sorry, in Google, to understand a bit more about that data or that workload, so being locked out of features and functionality as well as being locked in to, oh, I've got to stay here because that's how we've architected it. I mean, that's called foreclosing up future value. If you get locked out, you don't have the ability to get that value. Exactly that. Locked out and left behind.  That's why you have me here. Michael, you mentioned that you contributed something to the community, you gave something away here, tell us about that. We did, so we contributed the project called Canister. Canister is an open-source project, has been for a number of years, 2016, 2017 maybe, but really the focus there is raising awareness of data protection or availability. Resilience inside and outside of Kubernetes, like a lot of data points will be generally a staple set or an operator model within Kubernetes, but equally we've got PAS-based services such as AWS RDS that link into that application. How do we protect that? There's some other open-source data protection tools out there. It's unclear where they're going in terms of who maintains that, who's what features and functionality are they bringing. What we're doing is we're going into the application, providing that consistency. Databases haven't, as much as we have loads of databases available to us in the cloud native world, they're still transactional, they're still moving parts. We have to think about the consistency of that like we have done for years, so Canister brings that capability. It works on a blueprint model, so if you've got a Postgres database, we dive into that, make sure that we co-west that workload and then we take a backup of that and send it off to object storage or something along them lines. So that's open-source, it uses these blueprints, we want to encourage, raise awareness of data protection and availability in Kubernetes, but equally enable people to write against that using our blueprint framework. So hopefully we see some good community adoption around that. That's great. I mean, community is the core of this event and we heard that the keynote this morning, a culture of inclusivity.  It's one of those things that, I don't know, makes me feel good. I love to see the collaboration. Tom, since we've had the pleasure of having you on the last three KubeCon shows, what's the biggest difference between Amsterdam and here in Chicago? That's a really good question. I was going to say the weather was kind of similar. I'm sorry, I'm a spring, it's the same. Chicago and winter almost. No, I think I see a lot of, or quite a few new companies. So that's really interesting. I agree. The ecosystem is growing. Companies are getting bigger, companies are getting smaller with respect to presence. That's one thing. The collaboration is even to the next level between the partners as well. I see a lot of partner activity at our booth, for example. We have a full event of theater presentations and every time I was watching, there was a partner presenting in our booth. So that's really good. And yeah, as mentioned before, if even possible, the deeper conversations that we're seeing effectively. We're talking to airline companies, we're talking to insurance companies. We're no longer just talking to the absolute, take geeky people. It's real business. It's real customers with real projects. And it was present to an extent in Amsterdam, but it keeps going up. So that's really a positive takeaway here. I couldn't agree with you more. I feel like we've actually tipped over that inflection point and everyone's out and running, not just wondering what's going to happen next, which is just exciting. I'm pumped about it. I want to talk a little bit more about our swag. Tom, you always bring great swag on the show. We've got a little octopus, I think this is. Is this like a finger puppet? Oh my God, wait, it's reversible? Oh my gosh. Okay, reversible, wow. So depending on your mood, this is great. What's your mood today, John?  No hesitation, we're happy here on theCUBE. I also love, and I noticed this about you right away, you always have a bit of a focus on sustainability. It matters. There's so much, actually, fun fact. 80% of swag ends up in the landfill after the first year. So I love that you give away, I mean, their bags are sustainable, check this out, I have a backpack at home, I still use. They didn't pay me to say that, that's just the truth. And then you've also got, this is very fun, we've got utensils and a bottle opener. So I know what's coming on my next camping trip. Thanks for bringing us some fun supplies. Looking forward to Paris, I'm sure we'll see you there. Michael, what do you hope you can say in Paris that we can't say yet? I think the continuation of Kubernetes and storage. I think there's storage in general in the tech world. We've been talking about it for many years. And I think there's a lot of features and functionality around things like changebot tracking that are still very infant in terms of Kubernetes storage. So I think we'll see that evolution, I think, hopefully as we're involved in that changebot tracking implementation from a Kubernetes point of view, then hopefully we'll see that moving along nicely by the time we get round. And that's just going to encourage more and more people to trust Kubernetes for a place to put your data. It's going to be that first-class citizen. And I think on top of that, I think on top of that, Kubernetes isn't just for container orchestration. I think we're seeing from Red Hat, we're seeing OpenShift virtualization, putting VMs in there. Now, obviously there's a recent big acquisition happening in the virtualization space. That opens up a door to see different workloads, more workloads inside the Kubernetes cluster, which actually then pushes that into a control plane API versus, oh, it's just a container orchestrator. But I think it's going to get exciting next year around that, different workloads. I hope we can get excited and talk about it on the show in Paris. Tom, what about you? What do you want to say next time we have you? It's unusually warm for Paris this time of the year. Amen! Literally what I want us to be talking about. Let's hope it's good, it's good. No, I think I want to echo what Michael is saying. We want to see this growth. We want this trend to continue in a very positive way, deeper conversations, more interesting customer case studies. I'm hoping to maybe bring some new interesting customer case studies to the interview as well, to the booth, because hearing from customers is even better than hearing from partners collaborating together, right? So I really hope that more and more customers will speak out about their experience, the bad and the good, and pitfalls to avoid, and how to make things better for your business. So yeah, that would be really good evolution. I love that. We were talking about how fun a conference of just post-mortems would be to learn from this. And I do, I mean this community, the way that everyone shares is really awesome. So we certainly welcome those customer stories. Tom, it is such a pleasure to have you on every time. Michael, thank you for gracing us with your presence. You are great. He wasn't kidding. So we'll see. You lived up to expectations. Yeah, you lived up to expectations. You lived up to the hype. You lived up to the hype, just like AI. No, I'm kidding. And John Furrier, it's always a pleasure to share the stage with you. And thank you all for tuning in to day three's coverage of KubeCon, CloudNativeCon, here in the second city. My name's Savannah Peterson, and you're watching theCUBE, the leading source for emerging tech news.


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