Saturday, July 31, 2010

Sonic Youth

The Pathfinders Column from the July 2010 issue of the Socialist Standard

What do you do if you’re young, you’ve got no money, and you want some kind of social life that actually involves human to human interaction? You can’t go to pubs, restaurants, clubs or the cinema without money. Parks close after dark. You can go to a friend’s house if the parents allow it but it’s hardly neutral ground and in any case you can’t meet a whole group that way.

There are places in this country which are so dull, so devoid of sheltered places to meet, so lifelessly unlit after dark, that many young refugees from the parental TV sofa end up hanging around outside the local supermarket. This is not because they have a love of supermarkets. They’re certainly not going to buy anything. The neon light attracts them like moths, because the alternative to hanging around in a lit area is hanging around in a dark one. And if you’re young and you do that, chances are you’ll get arrested on suspicion of being a mugger or a rapist. Either that, or what’s infinitely worse, you could get mugged or raped by the genuine article.

So the answer to the question, what you do with no money and a desire to be sociable, is hang around in a shop doorway admiring cornflake box pyramids and BOGOF promotions. That is, until the proprietor calls the police and you get moved on or pulled in.

For, not surprisingly, the supermarket owner is not keen on seeing a bunch of hoodies loitering about in his shop doorway, since he knows it to be a scientific fact that two or more adolescents when combined together exhibit a strong repulsive force on passing trade. Even one hoodie is enough to make senior citizens scurry nervously away from the premises, he reasons, while three is definitely a police matter and five a civil emergency.

This is not very conducive to good relations with the society that has forced this lifestyle on you as a young person. The more you exert your ‘right’ to a social life the more likely you are to end up with a police record. Unfortunately it’s your own fault for not being a rich kid with a car and a fat allowance.

As this problem is deeply annoying for everyone involved, one might expect it to be solved by local authorities providing suitable meeting shelters, but that would be far too simple. Instead, displaying a genius for discriminatory technology that only capitalism could possibly come up with, there is the Mosquito. The Mosquito is a recently invented device which exploits the mildly interesting fact that the human audio range deteriorates with age. The philanthropic inventor realised that by zeroing in on high frequencies that only under 25s can usually hear, he could devise a hugely irritating sonic weapon that would be unheard by most shop users but would drive any adolescents crazy, presumably as well as any passing dogs.

It’s not quiet either, with a maximum output potential of 108 decibels, according to the manufacturer. This is a rock-band-in-your-living-room noise level. An airliner’s jet engines at one nautical mile before landing deliver around 106 dB while a helicopter 100 feet above your head gives 100 dB. Decibels are an expression of ratios, not a straightforward arithmetic scale, so the Mosquito is, for instance, 16 times louder than a domestic 70 dB vacuum cleaner and 8 times louder than a typical 85 dB household smoke alarm.

3,000 have already been sold in Britain for installation outside Spar shops and the like, while controversy has mounted over human rights and safety questions. No testing for health risks took place before the Ig Nobel prize winner went on sale, and some councils have reacted by banning it, although the government in 2008 declared that it had no intention of imposing any ban.

Those over 25 with no kids and no particular concerns about letting off jet-engines near babies might want to worry nonetheless that the Mosquito has another frequency setting, this time one which we can all hear. This is the shape of things to come, as the technology of non-lethal weaponry becomes ever more sophisticated. Military-grade 150 dB sonic weapon LRAD has already been used as ‘crowd-control’ against desperate civilians after the Katrina hurricane disaster, as well as in warzones and against Somali pirates, and is the weapon of choice on luxury liners (‘Cruise lines turn to sonic weapon’, BBC Online, 8 Nov 2005).

As every capitalist knows, what’s great about non-lethal weapons is that you can use them whenever you like on the great unwashed without (much) fear of legal difficulty. Pretty soon landowners will be able to save a fortune on guarding their estates by installing weapons that make trespassers throw up, soil themselves, go blind or feel as if they’re on fire. With new ‘Phasr’ dazzling laser-guns already being tested by police and other military products like the Active Denial System (a microwave pain ray) likely to follow suit, the social unrest widely anticipated due to savage government cutbacks may well stimulate a huge growth market in such weaponry.

Meanwhile, the young people congregating outside supermarkets with the ear-defenders under their hoodies might be wondering why society hates them so much. But really, society doesn’t hate young people in particular. Capitalist society just hates anybody who doesn’t have any money, which in general terms is most of us. Young people grasp situations quickly, as evidenced by the fact that some of them are now downloading the Mosquito frequency as a ‘silent’ ringtone so they don’t have to turn their phone off in school. But what they really need to grasp is that capitalism is their class enemy, and that isn’t going to change as they get older.

Friday, July 30, 2010

The axe falls – will anyone take on the axeman?

From the July 2010 issue of the Socialist Standard

The Con Dem coalition government is promising a new “Age of Austerity”. What should workers do about it?

Economic crises are like a universal acid, washing away all bullshit, leaving behind the unvarnished truth. The kind of economic analysis found just yesterday only in obscure academic journals or little-read Marxist periodicals is today on everyone’s lips and is assumed to describe the most elementary and obvious facts. It seems we are again being compelled to face with sober senses our real conditions of life. Only yesterday, for example, we were assured that the economy would be rescued by an injection of newly printed money and by bailing out bankrupt banks. Now, the G20 finance ministers have told us it’s time to sober up and get real. At their meeting held in Busan, South Korea, on 4-5 June, they announced an end to Keynesian illusion, and a return to the law of value. Sure, the rich got their bail-outs – the famed discipline of the markets is not for those with soft hands. But now it’s time to snatch away the buckets and leave ordinary working people to their fate in the sinking ship. Billions of pounds of state handouts for the capitalists; a new round of austerity for the working class.

The new chancellor, George Osborne, took the announcement from the G20 as a vindication of his own outlook and, with the prime minister, David Cameron, promptly embarked on a propaganda campaign to prepare us for the worst. Although Cameron’s speech on 7 June was presented as an exciting opportunity for radical change, with plenty of fine words about strengthening and uniting the country, about consultation and debate and “difficult decisions”, it was actually, as the Financial Times admitted, a “softening-up exercise for the real pain to come” – namely, cuts in state spending that would be “more savage than anything contemplated by even the Thatcher government”. By sleight of hand, the origin of most of the debt, the speculative activity of capitalists, has been hidden. The blame and the bill is instead being laid at the door of the state services relied on by the poorest people in the country and, as unemployment rises, more and more workers. Cameron says that the cuts he is preparing will affect "our whole way of life". But as trade unionists were quick to point out on the BBC website, what Cameron meant was your way of life, not his nor that of the rest of his class. As Unison general secretary Dave Prentis told the BBC: "There was nothing in [Cameron’s] speech that told the rich, the banking and financial sector or the city speculators that their privileged way of life will change."

Cameron and Osborne are being urged on by the credit ratings agency Fitch, which warned that the result of delay or hand-wringing over the savage cuts, which are not nearly savage enough to please Fitch, would be a downgrade in the country’s credit rating. The pressure is also being piled on by world events. As the Socialist Standard was going to press, the global economy looked to be heading into more big trouble – there were question marks hanging over the viability of eurozone banks; the euro continued to edge closer to collapse; US employment took a further nose dive; Germany and Spain announced new austerity measures; Hungary hinted that it might have to default on its debt, sending its stockmarkets and currency plummeting; and market risk and fear indices ticked upwards. The axe is falling, and it’ll be the working class that’ll take the worst of the hit. We were told the gory details when the government’s ‘Emergency Budget’ was presented on 22 June.

There was one interesting detail in Cameron’s speech that perhaps needs some explanation: Greece. “Greece stands as a warning of what happens to countries that lose their credibility, or whose governments pretend that difficult decisions can be avoided,” said Cameron. He was presumably referring for rhetorical effect to the policies of the Greek government in the recent past, which were little different in substance from those pursued by previous Labour and Tory governments before the universal acid of crisis made everyone change their minds. In terms of the current austerity decisions being forced on Cameron’s government, the Greek government seemed little slower than he has been in attempting to implement the necessary (for capital) reforms. The Greek prime minister, George Papandreou, accepted bail-out money from the EU and the IMF, then set about softening up the population for the demanded cuts, such as freezing public-sector salaries, raising taxes and slashing pensions, much like Cameron is doing now (although without the immediate threat yet of bankruptcy or IMF intervention).

So why the reference to Greece? There is indeed an important lesson to be learnt from Greece, one that has got Cameron and his class concerned. The lesson is to be taken not so much from the excesses or otherwise of its government, but the famed rebelliousness of its people. Instead of meekly accepting that it must pay the price for capitalism’s crisis, and waiting for the austerity measures to be handed on down, the Greek population immediately set about angrily resisting them. There was a general strike in the country on 5 May along with a 100,000-strong demonstration that ended in the death of three people (shamefully, these deaths were not at the hands of the police, but of demonstrators who set a bank building on fire). Anger over the deaths from all sides threatened to derail the protests. But since then, the struggles have continued. There have already been further demonstrations and strikes by transport workers, dock workers and journalists, and further strikes were on the cards as the Socialist Standard went to press. Indeed, as the Wall Street Journal amusingly reported, when a tourism workers’ union planned to officially announce strike plans, the union overlooked the fact that Greece’s journalists were striking on the same day, so nobody showed up to the planned news conference.

The ruling class has been watching these developments nervously, and the drama is far from played out: “…the main concern,” says a report from Reuters, “is whether governments rethink austerity measures as a result.” (An astonishing admission on the face of it – that popular opinion might influence the decisions of democratic governments is seen as a “concern”.) Further strikes and protests have been planned in Greece, France, Germany, Romania, Spain, Italy, and Portugal – and of course here in Britain, there is the ongoing BA strike, the coming BT strike, and perhaps more to come. The “concern” though is for now muted. As Reuters points out, the strikes in the rest of Europe are expected to be “tamer” than the Greek battles, and Britain’s tamer still because there has just been an election – the government can therefore rely on its democratic legitimacy to force through measures. That and unions are weak – membership has fallen since Thatcher fought the unions in the Eighties, and, according to the latest figures, continues to fall today (the influx of new members worried by the crisis has so far been offset by losses due to redundancies and retirements). And the success of Thatcher’s anti-trade-union legislation means more and more strikes are being challenged in the courts on highly dubious grounds, threatening to make strikes all but illegal.

But muted concern or not, the ruling class must still be asking itself just how much austerity the working class will be prepared to take. The working class has already lost many of the reforms introduced as part of the social democratic consensus after the Second World War – it traded them for a mortgage and a credit card. Now these too are in danger of being snatched away. The capitalist class and its governments are scrabbling around for the least-worst options to restore profitability without provoking working class unrest. It seems unlikely that the working class and its organisations are strong enough to stop these austerity measures being imposed, let alone imposing their own demands. But we must start from where we are. David Cameron and the new government will be expecting that you’ll just take whatever’s coming to you. We must try to prove them wrong.

While we’re fighting these essential defensive battles, we must also lift our eyes from the present game and consider just what kind of game we’re playing, and whether it’s a fit one for us and our children and grandchildren. Greek public opinion, as hinted at in our report from the country last month, expresses anger, but also confusion. As Stathis Kouv√©lakis, a teacher of philosophy at King’s College, London, says, in an interview with Esquerda.net (see here), Greek opinion is divided and oscillating: “[T]he oscillation is between anger and resignation, I would say, between the will to act, to protest, to do something about this, and the perception that perhaps there is no credible alternative…. These are the terms of the debate, and it’s still open.” This is where socialists have their most vital contribution to make – a clear idea about alternatives is not mere utopianism, but an important ingredient in inspiring successful struggle. An upturn in class war, such as we’re seeing in Greece, and may perhaps soon be seeing in this country too, is the only basis on which socialism can begin to make sense and seem like a credible and possible alternative to capitalism for the working class as a whole.

Stuart Watkins

Wednesday, July 28, 2010

Business Growth in Conflict With the Environment

Film of a Socialist Party talk given by Glenn Morris in London on the 3rd July 2010. You can access all five parts of the talk here.

Wednesday, July 21, 2010

Waste and Want: Grapes of Wrath revisited

Cross-posted from the World Socialist Party of the United States website

In his famous novel The Grapes of Wrath (Chapter 25), John Steinbeck described how food was destroyed during the Great Depression:

Carloads of oranges dumped on the ground. The people come for miles to take the fruit, but this could not be. How would they buy oranges if they could drive out and pick them up? And men with hoses squirt kerosene on the oranges… A million people hungry, needing the fruit – and kerosene sprayed over the golden mountains.

And the smell of rot fills the country.

Burn coffee for fuel in the ships… Dump potatoes in the rivers and place guards along the banks to keep the hungry people from fishing them out [with nets]. Slaughter the pigs and bury them…

And children dying of pellagra must die because a profit cannot be taken from an orange. And coroners must fill in the certificates – died of malnutrition – because the food must be forced to rot.

A few more facts. In 1933 alone, the federal government bought 6 million hogs and destroyed them. Vast quantities of milk were poured down the sewers. 25 million acres of crops (the area of a square with sides 200 miles long) were ploughed under. In Brazil, 69 million bags of coffee, equivalent to two years’ output, were destroyed. All to keep up prices.

What about this time round?

The current depression seems set to be at least as deep as that of the 1930s, but it is still at an early stage. As real wages continue to fall and austerity measures bite harder, there will be further decline in “effective demand”, which is determined mainly by workers’ ability to buy back what they have produced. Falling prices and profits will then lead to new scenes reminiscent of those portrayed by Steinbeck.

The process has already begun.

In March 2010, reports appeared that Florida strawberry growers, faced with a flooded market and a sharp collapse in wholesale prices, were leaving huge tracts to rot in the fields. Most of these farmers did not allow people in to pick fruit for themselves. They were afraid that cucumbers and other new crops they were planting between the rows might be harmed.

Not only the strawberries went to waste but also the water used to grow them. Cultivation of the wasted strawberries drained the groundwater and caused local water shortages.

Bulldozing houses

There have been reports from around the United States of the destruction of houses, many of them newly built. Most foreclosed houses can no longer be sold at auction, even for prices as low as $500. They end up in the hands of banks that see no medium-term prospect of reselling them and conclude that the cheapest solution is to tear them down. This happens not only to individual houses but often to whole streets. In May 2009, a bank decided to bulldoze an almost finished housing complex in California rather than spend the few hundred thousand dollars needed to complete it.

Meanwhile the ranks of the homeless continue to swell. They are in desperate need of housing but generate no “effective demand”.

Slashing clothes and shoes

In early January 2010, The New York Times ran a story about two major retail chains, H&M and Wal-Mart, throwing out unsold clothes in trash bags. First they are made unwearable: employees are told to slash garments, slice holes in shoes, cut sleeves off coats, fingers off gloves, etc..

The response to this article included internet testimony from ex-employees of other large stores, revealing how widespread these practices now are.

Cheryl: “I worked at Dillards for several years. They do the same thing. Their logic was that if they donated it [to charity] people would try to bring it back to exchange for other merchandise.”

Martha: “Yeah, I used to work at a store where they would rip the bed sheets, blankets and pillow cases if they couldn’t sell them, then throw them away… I thought it was dumb. I wanted to take it and donate it, but they didn’t let me.”

Nat: “I used to work for H&M and hated to cut the clothing [that] I knew we could have given away to those who needed it. We destroyed EVERYTHING and I found it so stupid. It was such a waste and sad!”

Maryliz: “This just makes me sick. How terrible, especially right now with people freezing to death. They could have been saved if they had sufficient warm clothing. Shame on the companies that do this.”

Maggie: “I got so mad that my managers wouldn’t box up [unsold food] and take it to shelters that I called corporate headquarters… They wouldn’t let the food be donated! Some blather about how that would devalue the brand, because people would just go to that shelter to eat the food instead of coming and paying for it.”

The vintage

Steinbeck finishes Chapter 25 with the passage that gives his book its title:

“In the eyes of the hungry there is a growing wrath. In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage.”

There is ample cause for wrath. But wrath is not enough. The managers who got Maggie so angry have to act as they do. (Otherwise they won’t remain managers.) They have to pursue the commercial logic of maximising profit or minimising loss. The idea of giving people what they need, simply because they need it, is inconsistent with this logic. It expresses a different, human logic, which will come into its own once we reorganize society on a different, human basis.

Stefan

Monday, July 19, 2010

The Wobblies (1968)

Book Review from the March 1968 issue of the Socialist Standard

The first sign of a workers radical movement of any appreciable size in America follows similar path to the English movement during the thirties of the last century. It was loose, sweeping, all-embracing, and came to grief when the internal elements sorted themselves out and attempted to express their different ideas in action, Though hazy and ill informed, it was yet fundamentally working class. This movement was the Knights of Labour, founded in 1869. The new movement was secret and hedged about by ritual, grip, sign and password. It both sought to protect the interests of labour against violent and ruthless oppression and, at the same time, advocated a new society, the basis of which was to be the nationalisation of certain public utilities combined with co-operative institutions. It recognised no identity of interest between employer and worker. One of its prominent advocates, Powderley, stated "To point .. out a way to utterly destroy the system [wage system] would be a pleasure to me."

The Knights of Labour made slow progress until 1885 when it fought a successful railway strike against the powerful Jay Gould employers combination, which brought a rush of members. It failed however to secure the adhesion of the skilled workers, the aristocracy of labour at the time, and in due course the struggles between the elements concerned with fighting for better wages and conditions of labour, the trade union element, and the theoretical and utopian groups, combined with a number of unsuccessful strikes, reduced the organisation to impotence.

In opposition to the Knights of Labour another organisation entered the field in 1881, the American Federation of Labour, which catered almost entirely for skilled labour. At first its leader, Samuel Gompers, gave lip service to socialist principles. This was soon eclipsed in the work of building up a wealthy and exclusive organisation of skilled workers that received recognition from the employers by adhering to the anti-working class principles of co-operation with the employers, opposition to strikes, and the barring of lower paid workers by the demand for high trade union dues. These skilled workers endeavoured to maintain a closed shop on the ground that the entrance of unskilled labour into their field of labour was a menace and a threat to their standards of living. It was this principle that induced the AF of L as well as other groups of workers, to discriminate against negro workers.

Towards the end of the nineteenth century, owing to the feverish industrial expansion, the conditions of the workers, particularly the unskilled and the immigrants grew steadily worse. As one writer put it: "By 1890 the workers were enclosed within the wages system by the exhaustion of the free lands which for generations had served as a refuge for the more rebellious masses of the industrial centres". (O'Neal).

In 1877 the Socialist Labor Party was formed which was to have considerable influence on the first conference of the IWW through its most knowledgeable member, Daniel De Leon, This party advocated the ballot as the best policy for working men but declared that members should "maintain friendly relations with trade unions and promote their formation upon socialist principles."

At the outset of its career the SLP was affected with the contemporary co-operative and reformist ideas, most of which it gradually shed, particularly under the influence of Daniel De Leon, taking its stand more and more upon the basis of the class struggle. However the divergent views of members on the respective merits of industrial and political action, and also upon its centralisation of power within the party, led to a split and the formation of the Socialist Party of America at the end of the century.

Up to 1895 the SLP had attempted to capture the craft unions by the policy of "boring from within", but their efforts met with such little success that they gave up the job and decided to form their own trade union, the Socialist Trades and Labour Alliance.

In the meantime three militant trade unions had been developing - The Railway Union, the Western Federation of Miners and the National Union of Brewery Workers. Of these the Western Federation of Miners was to be the most influential section in the early development of the IWW.

In January 1905 a secret conference was held in Chicago attended by members of the Western Federation of Miners, the Brewery Workers, the Socialist Party of America and the SLP. This Conference drafted an invitation to representatives of labour unions and socialist factors in both America and Europe "to help found a revolutionary labour movement on industrial lines." The Manifesto stated that the new movement "must consist of one great Industrial union embracing all industries, providing for craft autonomy locally, industrial autonomy internationally, and working class unity generally." This was in harmony with Father Hagerty's chart, which laid out in a circle, lined up every department of industry, transportation, agriculture leading to an inner circle of controls and a centre of general administration. It is a pity that Patrick Renshaw in his book* has not included this chart amongst his illustrations as it gives a good picture of what the IWW aimed at.

At the Industrial Union Congress in Chicago, June 1905, the IWW was founded. Those who took part in its foundation held widely divergent views which came into conflict at the Congress and caused internal strife during the following years. The delegates consisted of representatives of anarchism, industrial unionism, Socialist Labor Party and Socialist Party of America members as well as pure and simple trade unionists.

The first bone of contention was political action. After some fierce discussion in which anarchists like Trautmann and Lucy Parsons bitterly opposed any connection with politics De Leon succeeded in getting included in the Preamble the following clause:
"Between these two classes a struggle must go on until all the toilers come together on the political, as well as on the industrial field, and take hold of that which they produce by their labour through an economic organisation of the working class, without affiliation with any political party."
Two years later, when the SLP left the official party the clause was altered to read:
"Between these two classes a struggle must go on until the workers of the world organise as a class, take possession of the earth and the machinery of production and abolish the wage system."
At least the latter phrase is clear and did not lend itself to the muddled interpretation of the original.
In 1905 and 1906 internal strife was fierce centering upon antagonism to the SP of A members who openly advocated political action. At the 1906 conference the De Leonites united with the anarchists to expel the SP of A members from the IWW. The next year me anarchists and industrial unionists succeeded in removing the SLP which formed a rival IWW which did not last long.

Over the years the IWW carried on its agitation with varying success and against the fierce hostility of employers and governments. There is not space in this review to record its history. The IWW set out to organise in the beginning its unskilled migrant workers who were being harried from one place to another and lived on starvation pay. The author sums up the position as follows:
"Thus during the twenty years from 1891-1910, more than 8,000,000 of the 12,500,000 foreigners who settled in America came from Italy, Poland, Hungary, Bohemia, Slovakia, Croatia, and Greece. These people, from peasant farming or trading stock, were alien by race, religion, language and customs to the American way, The sharp transition bewildered, often angered them, much more than it had the Irish or Germans of an earlier era. So it was among this new, many-tongued nation, called into being to nourish the appetite of industry, that the Wobblies concentrated much of their revolutionary effort."
According to Patrick Renshaw the IWW membership never exceeded 100,000 at any one time in spite of the energy put into the movement and the territory covered. Its statements and even its songs show that its advocates understood the class struggle but unfortunately started off on the wrong foot by holding aloof from political action. In spite of their mistakes and internal strife its advocates were unquestionably sincere and courageous in their pursuit of industrial unionism. They must have been for their organisers and advocates literally took their lives in their hands wherever they went, meeting with persecution and brutality at the hands of local capitalist organisations and, in some instances, like Frank Little and Wesley Everest being savagely done to death. Paul Brissenden describes the attitudes towards them as follows in the 'preface face to his "History", an excellent and sympathetic work on the same subject published in 1919:
"The popular attitude towards the Wobblies among employers, public officials and the public generally corresponds to the popular notion that they are all arch-fiends and the dregs of society. It is the hang-them-all-at-sunrise attitude. A high official of the Federal Department of Justice in one of our Western states gave the writer an instance. On a recent visit to a small town in a distant part of the state he happened upon the Sheriff. That officer, in reply to a question. explained that they were "having no trouble at all with the Wobs" "When a Wobbly comes to town" he explained, "l just knock him over the head with a night stick and throw him in the river. When he comes up he beats it out of town." Incidentally it may be said that in such a situation almost any poor man, jf he be without a job or visible means of support is assumed to be, ipso facto, an IWW. Being a Wobbly, the proper thing for him is pickhandle treatment or - if he is known to be a strike agitator - a little neck - the party."
The influence of the IWW spread to different countries but it was probably at its peak just before the 1914-1918 war. It was opposed to the war and in 1917-1918 over a hundred of its leading members were arrested, charged with sabotage and subversion and given sentences of up to 20 years in jail. This practically put an end to the movement although it still carries on in a small way and publishes the Industrial Worker from Chicago.

In spite of the bitterness of its struggles the members of the IWW had a sense of humour and a grasp of the class position as witness the songs they sang, such as the following, by Joe Hill:

Long-haired preachers come out every night
Try to tell you what's wrong and what's right;
But when asked how 'bout something to eat.
They will answer with voices so sweet :
You will eat, bye and bye,
In that glorious land above the sky;
Work and pray, live on hay,
You'll get fare in the sky when you die.
Working men of all countries, unite
Side by side we for freedom will fight,
When the world and its wealth we have gained
To the grafters we'll sing this refrain:
You will eat, bye and bye,
When you've learned how to cook and to fry
Chop some wood, 'twill do you good,
And you'll eat in the sweet bye and bye.
Yes, the Wobblies had a sense of humour and, in spite of the fact that they were on the wrong track, the present writer has always had an admiration for their courage and persistence in the face of persecution.
Gilmac.
*THE WOBBLIES. By Patrick Renshaw. Eyre and Spottiswoode.
Cross-posted from the Socialism Or Your Money Back blog.

Sunday, July 18, 2010

A front line service

The Cooking the Books column from the July 2010 issue of the Socialist Standard

“‘Voters must agree on cuts or the nation will be hit with £70bn a year interest bill,’ says Cameron”, reported the London Times (8 June). It’s part of a government propaganda drive (gleefully supported by the media) to soften us up for the ‘new Age of Austerity’ and ‘years of pain’ capitalism is forcing them to implement.

Cameron said that “on current trends, Britain would be paying by 2015 £70 billion a year in interest on the national debt – more than the present budgets for schools, climate change and transport put together.”

This calculation is based on nothing being done to cut the present budget deficit – the excess of government spending over income – and covering it by more borrowing, i.e. by increasing the so-called “national” debt (which is more properly called the Government Debt). It’s being bandied about to try to get workers to accept that the budget deficit should be reduced mainly by cutting government spending on benefits and services workers have come to accept as part of their standard of living.

Cameron, Clegg, Osborne, Cable and the others are saying we must all make sacrifices to reduce the deficit. But not quite all. Not those capitalists, national and foreign, who lend the government money. Paying interest to them is part of government spending, but servicing the Government Debt is obviously the frontest of “front line services” since the government has no intention of even thinking about cutting these payments.

Payment of interest on the Government Debt is, like welfare benefits, a “transfer payment”, that is, a transfer via the government of income generated from production to some other group who don’t or can’t participate in production. The beneficiaries in this case are those who have lent the government money, mainly various capitalist institutions and corporations. The money transferred to them comes from “the taxpayer” who, in the end, are the recipients of profits and other property incomes.

The income of the holders of the Government Debt is sacrosanct because it’s part of a contract that can’t be broken without dire consequences. A government can renege on its debts but the “international community”, i.e. the rest of the international capitalist class, will never forget. They won’t lend the government money in future except under more onerous conditions (notably at a higher than normal rate of interest). And they won’t forget the debt. So, repudiating paying the contracted rate of interest on the Government Debt either totally or partially or even slightly is just not an option, given the way the world capitalist economy works.

The government could in theory reduce the deficit by increases taxes. However, given that these ultimately fall on profits and that profits are what makes the capitalist economy go round, their margin of manoeuvre here isn’t much wider than over interest payments on the national debt.

What’s left then? Only cutting government expenditure. What in Gladstone’s day was called “retrenchment” (the Liberals have gone back to their 19th century roots). This can be on anything including preparations for war (“defence”) and subsidies for particular capitalist industries, but the obvious target will be the total bill for the salaries and pensions the government pays its employees and various payments that are made to other people or to provide services for them.

What a future capitalism has to offer workers: struggles to try to slow down things getting worse in a world that it technically capable of providing plenty for all.

Friends (?) in need (2010)

From the July 2010 issue of the Socialist Standard
Waking up on the Seventh of May, the voters might have experienced a measure of confusion. In the polling stations they had done their civic duty, after months of suffering bombardment from the three main political parties on the theme that we are in a mess and unless you do as you are told it will get even worse, to the point of social collapse too horrible even for seasoned politicians and propagandists to contemplate. You must take immediate action to forestall such a disaster by helping to put a new government into power. But it is important that you are careful to support the right party and not vote for one party when you really support another - for example vote Liberal Democrat when you would prefer a Conservative government. Or vice versa. Or, even worse, to complicate the matter by introducing other parties like Labour, Scottish and Welsh Nationalists, UKIP. So that was what the voters did, in their millions.
But on the day after it became clear that no one party would have a majority of elected MPs, which made forming a government rather more complicated than had been intended. British capitalism held its collective breath; the Stock Exchange, traders and bankers twitched and writhed; this was not what popular suffrage was supposed to be all about. But the day was saved when the three big parties announced a change in their attitude. No longer contesting over one of them being in government alone, they were suddenly certain that the best – the only – way out of the crisis would be for two of them to make up a government in alliance. Majority government was, in other words, no longer the smart option; it had become the old, stale politics. In its place was Coalition – the new, resuscitating politics. And if this made the voters confused – well so were the politicians.
Cameron And Clegg
Just over a week before polling day the leaders of the Tories and the Lib Dems had assured us that they were in no doubt about the disastrous consequences of their rival being elected at the head of a new government. On 26 April this is what David Cameron thought about Nick Clegg:
“It's now all becoming clear...he's only interested in one thing and that is changing our electoral system so that we have a permanent hung Parliament, we have a permanent coalition, we never have strong and decisive government...he wants to hold the whole country to ransom just to benefit the Liberal Democrats.”
(This view of Clegg – as a ruthless, scheming manipulator – differs from Cameron's previous contempt for him as “a joke”, but never mind). Meanwhile Clegg had expressed his own doubts about Cameron's character and political ambitions:
“The Conservatives are so desperate that they have resorted to a crude form of blackmail. David Cameron and George Osborne are stoking up fears in the markets, actively trying to destabilise the pound and reduce the Government's ability to borrow. It's like a protection racket; vote for us or our friends in the City will lay waste to your economy, your savings and your job.”
But hard words had to be smoothed away by the prospect of a Coalition. In that teeth-grinding press conference in the garden at Number Ten, with both leaders behaving like affectionate old school chums, Cameron sniggered when reminded of his sneer that Clegg was a joke. Instead he he trumpeted that this Coalition would mark a “historic and seismic shift” in British politics, with Tories and Lib Dems united on the key principles of “freedom, fairness, responsibility”. And Clegg, not to be outdone for florid vacuity, announced that the government with him as Deputy Prime Minister would be “a source of reassurance and stability”. After which all that was left was for the Lib Dems to explain to their local parties and to their voters why the prospect of being a voice in government was so seductive as to persuade them to drop so many of the policies which were central to their their appeal for votes. But dishonouring election pledges is the very stuff of government – something Deputy Prime Minister Clegg and his party may become even more familiar with in the near future.
Along with the celebrants of the Lib Dem once-unforeseen elevation into the dangerously dizzy heights of power – like Nick Clegg, David (tragically briefly) Laws, Danny Alexander – were those who were outraged at what they saw as a blatant betrayal of what had comforted them as their party's vital policies.
MacDonald
This is not first time an election has exposed those whose energy has blinded them to the cruel reality of the political system they were immersing themselves in – its brutal cynicism, its ready acceptance that its policies are there to be modified, compromised or if need be wiped out, its leaders ready to accept, indeed revel in, what they had repeatedly said would be unacceptable.
The general election of May 1929 resulted in a hung Parliament with the Labour Party, under Ramsay MacDonald, winning the most seats. Outside Westminster, in the mines, factories and shipyards an historic slump was gathering and unemployment rising. By August 1931, with the situation worsening almost by the day, MacDonald might have done the honourable thing and admitted that his party's government was impotent, confused, disintegrating. Instead he approached the Liberal and Conservative parties with a proposal to form a Coalition. With the other leaders –Baldwin and Samuel – he went to inform the King who, when told that MacDonald had the resignations of his Cabinet ready, replied that he “trusted there was no question” of MacDonald's being among them; it was up to them to “come to some arrangement”. A Coalition government, combining Tories and parts of the Labour and Liberal Parties and led by MacDonald, took over.
In the following general election MacDonald's National Labour Party was all but wiped out and the remnant of the Labour Party reduced to a derisory fragment. All this while the slump ground on. There is no reason to believe that now, in the time of Cameron and Clegg, the situation is any different from the 1930s – that the disasters of capitalism are any more curable by two parties in fragile unity than they were by one separately.
Ivan

Saturday, July 17, 2010

Is there an alternative?

Book Review from the July 2010 issue of the Socialist Standard

Capitalist Realism: Is There No Alternative? Mark Fisher, Zero Books, 2010

Mark Fisher’s very short book is a quick and entertaining read and makes a good companion to David Harvey (see above/last month). Where Harvey focuses mostly on the how and why of the capitalist crisis, exploring its historical, geographical and economic aspects, Fisher instead looks at how recent developments have impacted on the cultural and psychological spheres. It has led us to a situation where, he argues, “it is easier to imagine the end of the world than the end of capitalism”. The deathly legacy of Thatcher’s insistence that “there is no alternative’ lingers on.

Fisher’s insights are drawn partly from the heads of philosophers and partly from his own personal experience. The philosophers he quotes are famous for their obscurity and difficulty, but Fisher does a good job of making their ideas accessible for the general reader. That will put readers in a better position to decide for themselves whether the obscurity is worth penetrating.

Fisher is more interesting and amusing when he turns to his personal experience in Britain’s education system. It’s hard not to sympathise with him as he does his best to inspire dozing teenagers with learned cultural-studies discourses on Doctor Who while they slouch across their desks, plugged into their iPods, snacking on crisps. And that’s the most rewarding part of Fisher’s job. The rest of it is spent filling out forms trying to convince bureaucrats that what he has just done is of some worth in the capitalist market place.

But I’ll counter Fisher’s personal experience with my own. I, too, was once a teenage student, dozing on my desk while a professor tried his best to knock some education into me. But outside of the classroom, I was enjoying and making the most of a period of never-to-be-repeated freedom (from parental control, from capitalist work, from the responsibilities of adult and family life), and pursuing my own interests, including educating myself in socialist politics. Of course I’m not suggesting that all Fisher’s students are doing likewise. But the point is that he doesn’t know what they are doing. At a minimum, you’d have to ask them to find out.

A study of history and the social sciences, particularly anthropology, consistently reveals that things are rarely quite as they seem. Workers are never quite as oppressed and docile as they figure in the imaginations of Marxist professors. Management control is never as total as the managers and bosses dream. We are never as lost in the unrealities of television and the spectacle as French philosophers imagine. There’s always a hidden undercurrent of imaginative engagement and resistance. It’s always much more rewarding when an author has gone to the trouble of finding it and encouraging its development than denying its existence and wallowing in gloom.

Fisher concludes with some political proposals that he dresses up as exciting and new, but is mostly old fare – for example, the reinvigoration of the left, the awakening of a ‘public’ consciousness, more worker control over the labour process, popular control over the state, and so on. But to end on a positive note of agreement, Fisher at least points in vaguely the right direction if you’re after a convincing answer to the question in the subtitle of the book. Yes, there is an alternative, he says, but the working class will have to organise politically if it ever wants to see it.

Stuart Watkins

Pieces Together

From the July 2010 issue of the Socialist Standard

WORLD CUP REALITY

"No nation in the world has a gulf between rich and poor as great as South Africa's. Despite billions of euros in investments related to the 2010 World Cup, last year more than a million South Africans lost their jobs. During the first three months of this year, 171,000 entered the unemployment rolls. The official unemployment rate is over 25 percent, the highest level seen in the past five years. Unofficially, it is estimated to be closer to 40 percent. A recent study completed by the University of South Africa concluded that 75.4 percent of South Africans fall below the poverty level – and almost all those poor are black. 'Persistent poverty, rising levels of unemployment and violent crime, together with the crisis in the public health sector," writes Amnesty International in its annual report, have contributed at least as much as corruption and nepotism to the often violent protests that have recently shaken South Africa.'" (Spiegel On Line, 3 June)

"PEACE-LOVING" BRITAIN

"Britain signalled a new openness on nuclear weapons yesterday, revealing that its stockpile will not exceed 225 warheads, including up to 160 that are ready for action. William Hague, the Foreign secretary, said: 'We believe that the time is now right to be more open about the weapons we hold.'"(London Times, 27 May)

CHEAPENING WORLD ANNIHILATION

"The Pentagon has now told the public, for the first time, precisely how many nuclear weapons the United States has in its arsenal. That is exactly 4,802 more than we need. Last week, Secretary of Defense Robert Gates and Secretary of State Hillary Clinton testified before the Senate to advocate approval of the so-called New Start treaty, signed by President Obama and President Dmitri Medvedev of Russia last month. The treaty's ceiling of 1,550 warheads deployed on 700 missiles and bombers will leave us with fewer warheads than at any time since John F. Kennedy was president. Yet the United States could further reduce its reliance on nuclear weapons without sacrificing security. Indeed, we have calculated that the country could address its conceivable national defense and military concerns with only 311 strategic nuclear weapons." (New York Times, 21 May)

BETTER LATE THAN NEVER

"Nicolaus Copernicus, the 16th-century astronomer whose work was later condemned by the Catholic Church as heretical, was reburied by Polish priests as a hero yesterday, 467 years after he was laid to rest in an unmarked grave. His reburial in a tomb in the cathedral where he once served as a church canon and doctor indicates how far the church has come in making peace with the scientist whose revolutionary theory that the Earth revolves around the Sun helped to usher in the modern scientific age. Copernicus, who lived from 1473 to 1543, died as a little-known astronomer working in what is now Poland, far from Europe's centres of learning." (Independent on Sunday, 23 May)

Friday, July 16, 2010

Weekly Bulletin of The Socialist Party of Great Britain 151

Dear Friends,

Welcome to the 151st our weekly bulletins to keep you informed of changes at Socialist Party of Great Britain @ MySpace.

We now have 1578 friends!

Recent blogs:

  • Much ado about National Insurance
  • The 'tesco-isation' of charity
  • Are you a wage slave?
  • Quote for the week:

    "...the leisure which Socialism above all things aims at obtaining for the worker is also the very thing that breeds desire - desire for beauty, for knowledge, for more abundant life, in short. Once more, that leisure and desire are sure to produce art, and without them nothing but sham art, void of life or reason for existence, can be produced..." William Morris, The Worker’s Share of Art, 1885

    Continuing luck with your MySpace adventures!

    Robert and Piers

    Socialist Party of Great Britain

    They Say: “We Can’t Afford it.”

    From the July 2010 issue of the Socialist Standard

    The aspirations of the majority of the world’s population are being frustrated by capitalism’s economic constraints.

    In May 2010, the Coalition government in the UK announced cuts of £6.2 billion in an attempt to begin to reduce the budget deficit of £156 billion for 2009/2010. These cuts will very noticeably affect people’s lives. For example, it was reported that £780 million would be cut on transport, £836 million on communities and local government and £325 million on education. Devolved administrations in Scotland, Wales and Northern Ireland will have to cut back £704 million. Local authorities will be expected to reduce expenditure by £1.165 billion. Many more expenditure reductions were announced in the June emergency budget.

    It is vital to realise that this economic crisis is just the latest in a series of slumps which are quite natural to the capitalist system. In the past, supporters of this system have quite mistakenly believed that politicians would be able to rid society of the detrimental effects of the trade cycle. Gordon Brown is particularly infamous for his claims to have “abolished boom and bust”. Past slumps have, of course included the Great Depression of the early 1930s, and recessions of the mid 1970s, the early 1980s and 1990s.

    Reforms = Continuation of Capitalism

    When confronted with the case for genuine socialism, many apologists for the capitalist monstrosity have maintained that through the introduction of reforms, political leaders would be able to establish a “fairer” and “better” society.

    Let’s look at aspects of this reform movement. In 1942, the Social Insurance and Allied Services were created by Beveridge in order to aid those who were in need of help, and/or in poverty. The benefits were designed to aid the sick, unemployed, retired or widowed. When state welfare reforms were introduced after the Second World War, they did produce some improvement in working class living conditions in the UK, for example in the areas of education, housing, child employment, work conditions and social security. No doubt, one motive for these reforms was an attempt to distract workers attention way from more radical, left-wing ideas, which claimed to offer an alternative to capitalism. Such motives had been employed in Germany during the 1890s by Bismarck.

    The benefits from reforms have, in reality done little more than to keep workers and their families in an efficient condition for employment. In economically developed countries, such as those in Europe and North America, whilst the worst excesses of poverty have been partially alleviated, most of the social problems of inequality, unemployment (or the threat of it), sub-standard housing etc., remain.

    The reforms which are made in capitalist society, have to be reconciled with the profit-making needs of the system. These reforms will often be turned to the benefit of the capitalist class at the expense of any working class gain. This explains the limited nature of reformism as far as the workers (the majority of people) are concerned, and how many of the supposed benefits can be eroded. Take for example social security, housing and education.

    Underlying the whole system of the provision of “benefit” to those unable, for various reasons, to take part in the employment process, is the suspicion, encouraged by the ruling class, that many of those in receipt of these benefits “may not deserve them”. The value of the benefits, such as Job Seekers’ Allowance, Income Support and state pensions frequently declines over periods of time, since the government insists that the previous levels “cannot be afforded”. Pressure is put upon claimants to “justify” their claims.

    As regards social housing, council house building is a minute fraction of what it was 50 or 60 years ago and the cost of having a roof over one’s head has become much greater, causing through mortgages, huge levels of indebtedness.

    In the sphere of education, tuition fees and student loans have put enormous pressure on the young who are seeking to increase their knowledge and skills, in most cases, in order to make themselves “more employable on the job market”. According to the online student magazine Push, in 2009 students faced an average debt of £5,000 for each year of study. Some students in London have debts of around £30,000 by the time they finished their courses. When these students do finish their studies, they will most likely have to find a place to live, on a more permanent basis. Hence, the need for majority to take out a mortgage and build up even more debt for themselves. How much of this was foreseen by the reformist proponents of large-scale higher education and home “ownership” under capitalism?

    It’s the Working Class who make the sacrifices

    Most economists and political commentators are saying that the UK’s budget deficit and indebtedness will usher in a period of significant austerity. This problem is a global one, as is the economic crisis. To take just one example, the problems of Greece have been well publicised. In order to receive loans from the Euro-zone countries and the International Monetary Fund, wage freezes, pension cuts and tax rises are being introduced.

    David Cameron and other apologists for the status quo claim that the whole population will have to make “sacrifices”. What these defenders of capitalism utterly and deliberately fail to tell us is that the overwhelming burden of the sacrifice will have to be made by the working class. The rich will, for the most part, as usual keep their privileges and luxurious lifestyles. Perhaps, the average multi-millionaire or billionaire will only be able to “afford” two yachts in the Caribbean, instead of the more normal, three. Perhaps, some of the wealthy will have to delay refurbishment of their opulent gated homes, for a few months etc. The reality is that capitalism can never be made to work in any other way. It always works in the interests of the rich minority and against the interests of the majority of the population, no matter how many reforms are introduced.

    The socialist answer to all this is firstly to point to the absurd contradictions which capitalism presents. We are being told that many reforms and much social expenditure cannot be afforded. Yet, huge sums of money are squandered on the destructiveness of the armed forces and on the wastefulness of financial services. The society in which we live, possesses immense wealth, on a global scale. Just think of the power of modern technology, compared with the technology of only 40 years ago. Just think of how greatly the processes of automation in industry have been developed in recent decades. Also, bear in mind the huge potential of the world’s labour force which could contribute towards expanding society’s wealth still further. However, under capitalism many of these productive resources are being and will be underused or abandoned since they cannot be “afforded” (in reality, it is not profitable to employ them). All the reforming of the capitalist monstrosity is not going to make any significant difference. The problem will still be there, unless…, unless people finally realise that there most certainly is an alternative to this austerity madness.

    The Socialist Alternative

    That alternative consists firstly of people becoming aware that conditions most certainly do not have to be as they are at present. The majority needs to come together and to realise that instead of a small, profiteering minority owning nearly all of the planet and its resources, we, as the overwhelming majority must take possession of those resources, manage and use them in the interests of the whole of humanity, with production of goods and services for human need and, not for profit making which benefits only a small minority.

    In such a society where the resources of the world are owned and controlled by the people of the world, there will be absolutely no need for the money system and its inherent enormously wasteful financial apparatus. With the democratic introduction of common ownership, will come the abolition of money and all forms of exchange. In their place, each individual will be able to make their own voluntary contribution to the production of society’s wealth and in turn, will be able to draw from the common store, according to their own self-defined needs.

    In such a world, notions of “indebtedness” and not “being able to afford” things in monetary terms, will be considered completely archaic and utterly out of place.

    Through the pages of this journal and of other socialist literature, and by communicating with socialists, people can become aware of this alternative. So, the next time you hear a politician supporting policies of austerity and talking about there not being enough money to do something worthwhile, think of the socialist alternative where we will not need money in the first place. Instead, the world’s people will be empowered to contribute their knowledge and skills to the common good (that of society as a whole, including themselves, as individuals). In such a system, humanity will also have, at its disposal, technology designed and frequently refined to benefit all of the world’s people.

    Vincent Otter

    Wednesday, July 14, 2010

    Easy Rider

    From the July 2010 issue of the Socialist Standard

    The actor Dennis Hopper died on 29 May. Together with Peter Fonda he wrote the script for the 1969 cult film Easy Rider in which he also played Billy. Here’s a couple short extracts from the film:

    GEORGE: You know this used to be a hell of a good country, can't understand what's gone wrong with it.

    BILLY: Man, everyone's got chicken that's what happened, man. Hey, we can't even get into a, like, second-rate hotel, a second rate motel, you dig. They think we're going to cut their throats or something, man. Like, they're scared, man.

    GEORGE: They're not scared of you. They're scared of what you represent.

    BILLY: All we represent to them, man, is someone who needs a haircut.

    GEORGE: No. What you represent to them is freedom.

    BILLY: What the hell's wrong with freedom! That's what it's all about.

    GEORGE: Yeah, that's right. That’s what it’s all about. But talking it and being it, that's two different things. I mean it's really hard to be free when you're bought and sold in the market place. Don't ever tell anyone that they're not free because they'll get real busy killing and maiming to prove that they are. Oh yeah, they'll talk to you and talk to you and talk to you about individual freedom but they see a free individual it's going to scare them.

    BILLY: Man, it don't make them running scared.

    GEORGE: No, it makes them dangerous.

    * * * * *

    BILLY: Oh, wow... what... What’s that, man. What the hell was that?

    WYATT: Huh?

    BILLY: No, man, like, hey man, wow! I was watching this object, man, like the satellite we saw the other night right and it was going across the sky, man, and then it just suddenly, yeah, it just changed direction and went whizzing right off, man. It flashed . . .

    WYATT: You're stoned out of your mind, man.

    BILLY: Oh yeah, I'm stoned, man. But like, I saw a satellite, man, and it was going across the sky and it flashed three times at me and zigzagged and whizzed off, man, and I saw it.

    GEORGE: That was a UFO beaming back at you. Me and Eric Heisman was down Mexico two weeks ago. We seen forty of them flying in formation. They've got bases all over the world now. They've been coming here ever since 1946 when the scientists started bouncing radar beams off of the moon. And they have been living and working among us in vast quantities ever since. The government knows all about them.

    BILLY: What are you talking, man?

    GEORGE: Well, you just seen one of them, didn't you?

    BILLY: Hey man, I saw something, man, but I didn't see it working here, you know what I mean.

    GEORGE: Well, they are people just like us, from within our own solar system. Except that their society is more highly evolved. I mean, they don't have no wars, they got no monetary system, they don't have any leaders, because I mean each man is a leader. I mean each man... Because of their technology they are able to feed, clothe, house and transport themselves equally and with no effort.

    WYATT: Wow!

    Housing madness

    The Cooking the Books column from the July 2010 issue of the Socialist Standard

    A photo of a row of empty newly-built houses in Dublin was featured on page 4 of the London Times’s Bricks & Mortar supplement of 14 May. According to the accompanying article, “a recent estimate suggested that there were 345,000 empty homes in Ireland”. Why? Is it because there are no people living in substandard housing in Ireland? Or because the housing problem has been solved there? Neither. It’s because there’s no market – no paying demand – for them. The people who need better housing or to move house cannot afford to pay. It’s as simple as that.

    This situation arose in classic capitalist fashion. Houses like everything else under capitalism are produced to be sold with a view to profit. They are not produced simply for people to live in. A few years ago, when the capitalist economy in Ireland was expanding, there was a strong demand for new houses, which speculative builders in Ireland thought was going to continue. In any event, they felt that they rather than their rivals would benefit from the demand for houses. So they arranged for more to be built:

    “This nation of builders became a nation of developers. Massive tax incentives encouraged people to invest. You’d have been a fool not to. Buy one day for €100,000 (£86,750), sell a week later for €200,000. Nobody asked if Ireland needed these buildings or whether they were being built in the right places.”

    But then came the slump of 2008 (itself sparked off by overproduction of houses in relation to paying demand in the US) and the market for houses collapsed. “Too many” had been built:

    “Developers can’t get rid of them, nor can some pay off the bank loans they used to build them. The banks can’t acquire them because they are worth so much less than their loans.”

    Meanwhile, the other side of the Irish Sea, banks and building societies have a different problem but still arising from the fact that houses are produced for sale and not directly for people to live in. They can’t get the money to re-lend at a rate of interest that those who want to buy a house can afford.

    Banks and building societies are intermediary financial institutions which make their profits by borrowing at one rate of interest and re-lending it at a higher one. They borrow money from two sources: the money market (“wholesale”) and individual depositors (“retail”).

    According to the Financial Times (22/23 May) the Council of Mortgage Lenders has

    “…warned that its own members – who make roughly 94 per cent of all the mortgage loans in Britain – are facing higher costs as they compete for retail deposits to replace maturing wholesale loans. This is likely to mean that rates on mortgages may have to rise even if the Bank rate remains on hold.”

    The “higher costs” are the increased rate of interest they will have to offer depositors to get these to lend them money, but, if they are to make the same rate of profit, this will have to be passed on to those to whom they lend money to buy a house. But, as houses buyers may not be able to afford the higher interest, mortgage lenders are not prepared to give them loans as they wouldn’t make enough profit, with the result that, in the words of the article’s headline, the “housing market recovery shows signs of stalling”. A neat illustration of how banks cannot just create the money they lend. A neat illustration too of how capitalism is not a society geared to meeting needs.

    Monday, July 12, 2010

    The government declares class war

    Editorial from the July 2010 issue of the Socialist Standard

    The ‘savage cuts’ in spending by government departments, cuts in housing benefit, a two-year pay freeze for public servants, less indexation for welfare benefits, price increases due to higher VAT, announced in the 22 June Emergency Budget, and openly trailed as inaugurating a new ‘Age of Austerity’ and ‘years of pain’, confirm that the role of governments is to run the state machine in the general interest of the capitalist class, the tiny minority of super rich who own and control the means of wealth production. That governments really are the ‘executive committee of the ruling class’ that Marx said they were.

    In fact, in a throwback to the 19th century, this particular government is overwhelmingly composed of members of the ruling class (see back page). And these millionaires have the cheek to tell us that we must tighten our belts and change our way of life while – even, so that – theirs can continue.

    In reducing corporation tax the Chancellor followed the advice of a fellow Tory writing in the Times (17 June) to choose “the interests of employers and wealth creators. That won’t be popular but healthier businesses – free of tax and red tape – are essential for generating tax revenues, exports and new jobs.”

    Note the arrogance of these people in describing themselves as ‘wealth creators’ when in fact it is employees, not employers, who create wealth by transforming materials that originally came from nature into useful things. What employers do is organise that the maximum amount of this newly-created wealth goes to their business as profit.

    But the Tory did have a point. Under capitalism the engine of growth is capital accumulation by businesses and this is fuelled by profits. In this sense, tax receipts and jobs do depend on profit-healthy businesses, even if only as by-products which are used to try to convince the general public that it is in their interest that priority should be given to profits.

    That priority has to be given to profits at the expense of the living standards of working people and their dependants is confirmation that capitalism is a system that does not work in the interest of the wealth-creating majority, only in that of the profit-taking minority. Which is why it must go.

    In the meantime we have to live with it. That doesn’t mean we have to take what the government has planned lying down. The precise cut in our living standards is not something the government can decree. It depends on how determinedly we resist. In other words, on the class struggle. But, since the cards under capitalism are always stacked against us, this will only be a defensive, rearguard action to try to stop things getting worse.

    Yet another reason why we should be organising, not just to limit the damage, but to put an end to capitalism and usher in a society based on common ownership and democratic control of productive resources, so that production can be geared to satisfying people’s needs instead of being subordinate to making profits for the few.