Thursday, April 24, 2014

No One’s in Control (2012)

The Cooking the Books column from the September 2012 issue of the Socialist Standard

Since World War Two governments have adopted various policies to try to control bank lending. This, to try to make the economy work smoothly without booms and slumps or “stop-go” as it used to be called. They are still trying.

At first they tried fixing a limit on the total amount of bank loans. Then they required banks to hold a given percentage of their assets as cash and hoped to influence  bank lending by increasing or decreasing this (this was known as “fractional reserve banking”, though this term has since taken on a wider meaning). This in turn was eventually abandoned in favour of trying to influence bank lending by manipulating interest rates.

Over time the language changed too. Instead of talking of controlling bank lending, economists began to talk about controlling the “money supply”. This led to a redefinition of money, which had previously meant currency (notes and coins issued by the state), so as to include bank and other loans. There are now at least five official definitions of money (M0, M1, M2, M3 and M4). Even so, economists have still found it necessary to maintain a distinction between “base money” and “bank money”, the former being what is directly controlled by the central bank (notes and coins plus banks’ cash reserves with the central bank, which is what M0 measures).

The failure of all these policies has led to a controversy among economists which is still going on. Some have come to the conclusion that the level of bank lending is linked to the state of the economy and so cannot be controlled by the central bank. This is undoubtedly true.

Banks lend more to businesses (and individuals) when the economy is expanding and less when it is not. This is being confirmed today when, despite government exhortations and incentives, the banks are not keen to lend more; they have calculated that with a depressed economy the risk of them not getting their money back is higher. Nor are established businesses keen to borrow as they know that the market for their products is stagnating.

So, on this point, these economists are right. However, some of them don’t see the banks as merely reacting to the state of the economy but as contributing to it by their lending policies; they attribute to banks an autonomous power to influence the economy. This leads them to offer a purely monetary explanation of the present (and past) economic downturn, in, precisely, the irresponsible use by the banks of their ability to “create money” outside the control of the central bank.

It also leads them to offer a purely monetary solution. Here some of them have crossed the fringe to join the currency cranks in advocating a return to gold-based money (as if there weren’t economic downturns when this applied) or to require banks to lend only what they’ve got (as if this wasn’t the case anyway).

Since the economic cycle is built in to capitalism, and slumps occur when during a boom one sector overproduces in relation to its market, their reforms won’t stop this any more than anything the central bank can do. The capitalist economy can be controlled neither by monetary policy nor by banking reform.

Sounds From the Park: An Oral History of Speakers’ Corner (2014)

From the April 2014 issue of the Socialist Standard

Sound and some fury

Sounds From the Park – An Oral History of Speakers’ Corner. Bishopsgate Institute exhibition (till 30 April), London, with associated free booklet, website and local radio broadcast.

Partly financed through the Heritage Lottery Fund, this is an attempt to explore and record the open-air speaking and debating forum that arose at Speakers’ Corner, Hyde Park, from the late nineteenth century onwards.  The project makes the point that open-air speaking is something of a dying art, and Speakers’ Corner is arguably the last example of it, certainly in the UK.

The right to meet and speak freely in Hyde Park was enshrined in the Parks Regulation Act of 1872 and it has been a popular venue for political protest and debate ever since. As the booklet explains, ‘between 1885 and 1939 there were around 100 open-air meetings every week in London alone. After the Second World War they gradually disappeared, in parallel with the rise of radio and television, leaving Speakers’ Corner as the sole survivor’.

The project involved interviewing speakers, hecklers and regular visitors past and present. Perhaps the biggest criticism of the project is that there are very few audio or visual clips of the speakers themselves speaking or dealing with hecklers in the Park, and the material relies mainly on the interviews conducted, which gives it a more reflective and passive feel than might have been intended.

Of the four outputs, the website ( is probably the most impressive, with pages on various noteworthy interviewees, including three current members of the Socialist Party. Several other Party members from the past are featured in reminiscences (like well-known orator from the 1930s, 40s and early 50s Tony Turner) and in photographs (such as the wonderfully evocative picture at the exhibition of Steve Ross on the platform in the 1970s). As might also be expected, the Methodist and pacifist speaker Lord Donald Soper – who spoke at the Park tirelessly for decades – features prominently too.

The Socialist Party has long had a noticeable presence at Speakers’ Corner – indeed, we are the one political organization that has maintained a regular presence there for the majority of its existence. Many of the Party’s most well-known orators who featured in an article on open-air speaking in the June 2004 centenary edition of the Socialist Standard cut their teeth in the Park, and for all its faults Barltrop’s The Monument contains as good an analysis of this phenomenon and the Socialist Party’s role in it as can be found. Also Steve Coleman – a former regular Party speaker in the Park himself – contributed usefully to the discussion of this phenomenon in his Stilled Tongues, From Soapbox to Soundbite.

Today, many would argue that Speakers’ Corner is something of a shadow of its former self. The Socialist Party maintains a sporadic pitch there and other political speakers still periodically appear too (such as the anarchist Tony Allen – who wrote a book on the subject called A Summer In the Park a few years ago – and Heiko Khoo from Socialist Appeal). But the crowds are now ever more composed of tourists from the hotels of nearby Park Lane and Bayswater and the speakers are predominately of a religious bent, with as many Muslims as Christians. This tendency towards domination by religious demagogues is a shame, because as a rule they rely much less on an analysis of current events than the political speakers, making instead a timeless appeal to faith that disregards reason and evidence. It can also be argued that the comedic value of some of the contemporary speakers often lies less in their wit and originality (as was previously evidenced in deliberate entertainers like Norman Schlund and Martin Besserman) than in their near-hysterical religious sectarianism and general lack of self-awareness.

The sparks of controversy and repartee generated by Speakers’ Corner are now more often found in other arenas for discussion, including online. But this project has played its part in chronicling something that has been of real use to the working class movement over time and which has served to introduce many to a distinctive socialist viewpoint that can stand out – head and shoulders – in any crowd.