Monday, June 16, 2014

Socialism and uneven world development

From the Summer 1986 issue of the World Socialist

It might be thought that the present uneven development of productive resources throughout the world could be brought into greater balance within capitalism itself. It might be said that as modern productive techniques have been brought into use in one place, there should be no great difficulty in setting these up in other places where they are needed, but under capitalism this question cannot be considered solely as a technical or practical problem. The pace at which productive organisation develops is governed entirely by the operation of capital, and this applies in all parts of the world.

Certainly there is a pressure on productive organisation to develop, but this can only take place within the constraints of the profit system. The economic factors which hold back development include the fact that means of production only come into use as invested capital, therefore capital must be available. This in turn depends upon the market opportunities for invested capital to be operated profitably. Other factors are involved, but without available capital and market capacity, development within capitalism cannot take place.

It was not therefore enough for underdeveloped countries to throw off colonial domination. The ruling elites who replaced colonial power still faced the problem of finding the capital resources for developing their independent states as profitable capitalist enterprises. It is often thought that a state of underdevelopment presents unique economic advantages in that particular opportunities exist for bringing backward economies swiftly into line with the more advanced countries. But their backwardness involves a low market capacity at home, and the ability to take advantage of gaps in the world market tends to rest with the advanced economies which are already the most cost efficient in terms of industrial and manufacturing organisation. It is quite true that multinational corporations can operate their capital in underdeveloped countries, taking advantage of cheaper labour and a timid work force with little experience of trade union organisation. But this does little to realise the class aspirations of the ruling elites who expect to accumulate their own capital from the exploitable populations who are under their direct control. The great concentrations of capital reside in those countries where capital has been accumulated from the exploitation of workers over many generations in an advanced economy.

So the ruling elites in underdeveloped countries have taken out massive loans amounting now to many billions of dollars, but with the deepening world depression and weakening prices of many key export commodities, they now find they face impossible debts. Trade goods such a sugar, coffee, cocoa, cotton, zinc, copper, aluminium, rubber and vegetable oils, have slumped in the world markets and this means that development hopes have been buried under mountains of debt. It also means that many underdeveloped countries are so drained of foreign exchange that they cannot import vital supplies of even such things as books and medical supplies. Development projects have been halted.

Even before the famines of Ethiopia and sub-saharan countries, the warning went out that African countries could find themselves overwhelmed by a natural hazard such as drought if this should happen against the background of economic stagnation.

There is no foreseeable prospect that the great disparities of development may be evened out within capitalism.

The development of capitalism as a world system has included the development of communications of every kind. Even in the 19th century, Karl Marx was aware of the importance of communications in overcoming the problems of distance in the organisation of production:
A relatively thinly populated country, with well developed means of communication, has a denser population than a more numerously populated country, with badly developed means of communication (K Marx, Capital, Vol. I, Allen and Unwin, p.346).
This now includes not only transport such as roads, railways, shipping and air travel, but also a world system of electronic communications which provides for instant world-wide contact between all peoples. For this reason it can be said that we now live in a "global village". What this means is that socialism would have no difficulty in organising the world as one productive system directly for human needs.

It is likely, however, that when socialism is established some populations could enjoy greater advantages arising from prior development within capitalism. These populations could benefit from developed industry, manufacture, agriculture, energy supply and systems of transport and distribution. Together with this there would already exist health and education services, a highly developed system of administration including planning departments, local services and an accumulation of statistical information which would be immediately useful in the organisation of society directly for needs.

In many parts of the world these useful facilities may not exist.

One of the first priorities of world socialism would be to rapidly expand food production in line with needs. World action would include assistance with any local agriculture that was poorly developed in relation to local needs. Comparing the present position between Africa and Europe, for every 1,000 hectares of arable land in Europe, there exists 60 available tractors and over 6 combine harvesters. In Africa, for the same land area, there are only two tractors and 0.2 combine harvesters. In South America, where food production could be vastly increased through irrigation schemes, of the 108 million hectares of arable and permanent crop land in use only 5.5 per cent is irrigated. Similarly in Africa only 4 per cent is irrigated.

Another problem which would require urgent world action in socialism is the housing problem. Even in Europe the housing problem is bad enough, with many homeless families and chronic urban blight. Throughout the world, particularly in Asian capitals and such cities as Mexico City, millions of people live in the squalor of shanty towns, with no sewage, supplies of clean water or decent services.

Free from all the constraints of capitalist production, people throughout the world would concentrate their energies on solving these problems, taking the necessary initiatives in their own areas. It is likely, however, that the world centres of developed industry and manufacturing would initially need to supply machinery and equipment, installations, storage facilities and technical know-how to the underdeveloped areas, to assist with such projects as housing development and irrigation schemes for food production. As well as this it is likely that there would be an urgent need to set up education and health services, and infrastructures for transport and communications.

As a world system organised directly for human needs socialism cannot be conceived in any exclusive regional context. Concern and action for need would be universal. Notwithstanding any particular advantages which may exist in some regions as a result of capitalism having previously developed the forces of production there, in socialism such advantages would be at the disposal of the whole world community. This is what the socialist object spells out when it speaks of common ownership and democratic control of the means and instruments for producing and distributing wealth by and in the interests of the whole community. The whole community is simply every person on earth.

Even within capitalism, where individual workers in the developed countries are preoccupied with their own problems of getting by as best they can, they show concern for the needs of other people who live in desperate circumstances. This is indicated by the support given to charities such as Oxfam, War on Want, and the surge of response to the starving of Ethiopia through Live Aid. Voluntary medical workers and agricultural experts are willing to devote part of their lives in assisting with urgent problems. Dockers in Southampton who loaded a grain ship for Ethiopia without wages did so simply to help other people in need. This is the spirit of concern and cooperation that socialism would release. It would be organised in a practical and controlled way on the basis of common ownership, democratic control and production solely for needs.

The administrative machinery for such collective world action already exists. An adapted form of the United Nations Organisation could provide an instrument of organisation working through such bodies as the Food and Agricultural Organisation, the World Health Organisation as well as other existing world bodies. Such bodies could co-ordinate the initiatives of world action in dealing with world problems.

Who can doubt that the existing material resources of humanity could be swiftly mobilised for the work of creating decent living conditions for all people? Without the national divisions which now exist as rival capitalist states, without the insane waste of military and the allocation of resources for the forces of destruction, without the constraints of production for profit which now crush the skills and energies of people and their spirit of cooperation, the world community in socialism could immediately get on with the urgent work that has to be done.

The days of national politics are long since ended as a useful framework of political action. The existing reformist parties offer nothing more than a destructive future within a framework of national divisions. The worst prospect is that they will lead humanity into annihilation in a nuclear holocaust. That is the ultimate logic of world capitalism.
Pieter Lawrence

The Recession that Roared

The Cooking the Books column from the June 2014 issue of the Socialist Standard

‘It’s official: the Great Recession has ended. Growth set to match record peak of 2008’ was the front page  headline in the Times of 9 May, anticipating the publication of figures which would show that in April GDP had reached the same level as in March 2008. This, after six years: ‘The British economy shrank 7.2 per cent in the 15 months from April 2008, before suffering the slowest on record’.

This was always going to happen sooner or later but the terminology is interesting. ‘Recession’ was a word introduced by economists in the 1950s and 60s to describe the small, short-lived reductions in production which occurred during the long post-war boom. It was meant to suggest that ‘depressions’ as larger, longer-lasting reductions had become a thing of the past. In this sense a ‘great’ recession should be an oxymoron, but bourgeois economists still cannot bring themselves to use the D-word.

The course of capitalist production is upward but in cycles: a boom ending in a ‘crisis’, followed by a ‘slump’, followed by a recovery, followed by another boom and so on. There is no such thing as a permanent boom as boom conditions inevitably lead to overproduction in one key industry in relation to its market and to this having a knock-on effect on the rest of the economy.

Equally, there is no such thing as a permanent slump. That’s because what happens during a slump (clearance of stocks, devaluation of capital, falling real wages, lower interest rates) creates the conditions for a restoration of profitability and so, in the profit-driven economy that capitalism is, for a recovery, however long this might take.

That is why, throughout the depression, we were always careful not to say that capitalist production would not be able to recover; in other words, that  the capitalist economy had broken down and/or entered a period of permanent stagnation. Others were not so careful. A case in point being the Trotskyist group around the paper Socialist Appeal whose editor, Adam Booth, wrote in its 26 November 2013 issue an article entitled ‘The permanent slump – an organic crisis of capitalism’. This, he claimed, would have happened thirty years ago had workers not been lent money to buy things. He went on:
‘The use of credit to artificially maintain demand and avoid a crisis is a symptom of the contradictions of capitalism itself: primarily the contradiction of overproduction, due to the nature of capitalism as a system whereby production is in private hands and is only for profit, which means that – since profit is nothing but the unpaid labour of the working class – the working class (as a whole) can never afford to buy back (with wages alone) all that they produce. The current crisis is a reflection of this contradiction unravelling itself on a global scale. All the chickens have come home to roost for the capitalists, and now they – and society as a whole – are faced with an organic crisis of capitalism and a new normality.’
The fallacy here is that the market for goods under capitalism is confined to what workers can buy. But what workers can’t buy, capitalists can, not necessarily or even primarily consumer goods but the elements of production (raw materials, machinery, energy, factories, etc); in a word, investment.

The boom/slump cycle is in fact a reflection of the fluctuations in what capitalist firms chose to invest in the light of the prospects for making a profit.

Pieces of paper

A Short Story from the Winter 1984 issue of the World Socialist

George did odd jobs for us every Saturday. He was a tall man . . .  sixty odd . . . ascetically lean of frame and face and his clothes showed, at least, secondary ownership in their shortness and looseness.

He always washed and valeted my car and, in the season, helped Mary in the garden. His manner always seemed slightly obsequious but there was something in the way he called me "sir", or "Mister" Stevens, that I always found slightly disconcerting.

He had been with us—on Saturdays only, of course—since the time when his reward was a £1 note. Now it was a fiver. Mary said she was ashamed to give him a fiver for five or six hours work but there was no way we could afford more. Indeed, when I finally succumbed to Mary's persistent pressure and bought our second car—a five-year old Renault 4 that looked its age—we agreed that she would use it sparingly and George's fiver would pay for the petrol.

When he arrived the following Saturday morning, Mary was upstairs. The previous evening I had argued that, since it was her car that had created the need for us to dispose of George, she should tell him. There'd been a good deal of banter at first but, as always happens when we talk about things related to our domestic budget, Mary becomes defensive and angry. We both knew she would not carry out her threat to get rid of the car but the scene did become unpleasant and Mary slept with our baby daughter, Carol, that night.

As I said, next morning when George arrived Mary stayed upstairs. All morning I'd been thinking about George. He rarely mentioned anything about his personal life to me but, over the years, Mary had learnt a lot. She always made him a cup of tea and they would talk during the short period he would spend with her in the kitchen.

The accumulated tit-bits of George's revelations added up to a fairly full biography of poverty and misery. His father had died in the First World War, six months before George was born, and his early years had be'en a grim apprenticeship in privation before "the real luxury" (his actual words, often quoted by Mary when she talked about him) of army life during the Second World War. He had not been wounded—not hit with a bullet or shrapnel or anything like that—but he had spent six days in a farm outhouse in France, pinned down by crossfire between a stubborn rearguard of panzers and a section of the advancing allied forces. The experience had been pretty grim— one could almost say, harrowing—and had undoubtedly left a mark on George.

One of his two comrades was killed the first day when the outhouse was swept with machine gun fire from one side or the other. His body had lain "laughing"—again, a direct quote—in the corner, frightening George and his companion more than the hellish cacophony outside. After two days, without food and with the water gone, George and his comrade decided to make their escape during a lull in the fighting.

His companion was in front as, bending low, they prepared to move through the door of the outhouse. When he was shot he fell back onto George. He lived for three more days, across in the corner opposite the laughing corpse, and, all the time, he maintained a delirious soliloquy in a sad, low voice.

The man was obviously one of those characters who had read a great deal; a sort of autodidact, full of unconnected knowledge. Unquestionably deranged, he punctuated his monologue every now and then with a question and then proceeded to answer his own question. These questions and answers were, apparently, quite fierce assaults on the values and standards that underpin our whole way-of-life. Not the sort of talk that a reasonable, civilised human being would normally indulge in but, in the thick of it, so to speak, dying and all that . . . I suppose, really, some men die less bravely than others. George was not too sure about the answers the dying man had given himself but he did, unfortunately, remember the questions and he did remember the other saying, a short time before he fell silent forever, "How can patriotism be a good thing? It's a fucking killing disease!"

The experience had left a grim shadow on George's mind. He was obviously a wee bit . . .  well, not quite . . . right. Not crazy, you understand; just a bit . . . peculiar.

He always talked about the less seemly things. I'm in insurance and one day I was foolish enough to comment on some aspect of my work. George said, "Humanity should be its own insurance". I was slightly non-plussed. "What do you mean, George?" I asked, indulgently. He looked at me, his mind probably back in that hellhole in France, then he seemed to draw back, "Just seems to me, Mr Stevens, that people can make enough of the things they need to ensure them against every contingency. It's the paper, sir, the pieces of paper, that cause all the problems." I didn't say anything in reply; George was . . .  innocent, so naive, and, as I have said, a little . . .  peculiar.

It was his peculiarities I was thinking about as I asked him to sit down at the table in the kitchen that Saturday morning. I had decided to give him the fiver first, and, then, the bad news—and I wouldn't ask him to clean the car or attend the garden. Christ! Mary had left me in a bloody spot and now she was huffing in the bedroom. All because of a miserable, second-hand banger. What the hell—I couldn't afford a fiver! Irrelevantly, I thought about being forty next birthday.

When George had sat down I gave him the tin of beer I normally held over for myself—for Sunday. He listened to my explanation; I was completely frank— though I maybe did overstate Mary's need for the Renault. When I was finished, he was silent and I felt the need to go on. The proffered fiver lay on the table between us—stark, embarrassing. "Of course, George, you realise, with the mortgage, the rates, the payments on the car . . . well, really, everything, and the recession . . . Less demand for insurance now. Ironically, more need, but less demand. Business is in a hell of a way. Well, you know it yourself, there's acres of unsold cars down there at the car plant—I'm told they are going to lay off another eight hundred next week—probably another load of lapsed policies! But what can they do? No point making more cars to rust in the fields beside the others. Jesus, George, if Mary could have done without the car—say car easy; it's really an old banger—probably another headache! But, with Carol starting school and all . . . "

I looked at him; his eyes were half-closed and his face was set in such a curious way that the thought occurred to me that his . . . his mental state might not be quite as congenial as I had imagined. Desperately I searched for words that might assuage his anger and I found them in the most disarming honesty of self-analysis I had ever subjected myself to. It was my moment before death; a brutal revelation of my hidden anger. Anger at my life, my job, anger, even, at Mary—my God! even at the child! How easy it would be if it was only me—if I were alone! George's voice stopped me and, fleetingly, I reflected that he was alone.

"Mister Stevens". It was as though he had shouted "stop!". Then, quietly, "Mr Stevens, it's all mad, isn't it, sir? All the pretence. Disguising ourselves even from ourselves. You know, Mr Stevens, there's the world out there . . . a veritable fairyland of everything. Everything. And there's more besides; oh, aye, far more for everybody that needs or wants more, if we were allowed to grow it or make it. And, y'know, few would really want more if everybody had enough. But it's the pieces of paper, Mr Stevens . . . The pieces of paper. The bloody title deeds, the certificates, the banknotes—the whole, bloody, wasteful documentation of human servitude. It's the pieces of paper that restricts and demeans us. If we could only use the technology, the machines, the computers and all the rest, use them in the same way as our primitive forefathers used their clubs and spears, we'd maybe be civilised. Jesus, sir, even the language of it all is . . . obscene . . . humiliating!"

I had never heard George swear before and I was, frankly, a little afraid. Hoping to terminate the interview, I stood up, lifted the five pound note from the table and forced it into George's hands, clasped on the table. "It is a funny old world, George", I said, with more lightness than I felt. Then, really feeling the moment, "I really do wish I could help you, George—you know . . . help in an ongoing way. Something sort of . . .  permanent. But what can I . . ."

He stood up, uncrumbling the note in his hands, then he bent across and, almost ceremoniously, left the fiver in the middle of the table. I was startled when he put a hand on my shoulder, but his eyes were soft and, strangely sad and, when he spoke, his voice was laden with . . .  with pity!

"No, Mr Stevens. I don't want to hurt you, sir, nor would I want to. But you really need the money, Mr Stevens. Oh, you do, sir! Funny how a miserable little piece of printed paper can come between people . . .  cause hurt. And it can cause hurt, sir, hurt and hunger—even death. I wish I could help you, Mr Stevens; you and the millions of others. But it's hard to see beyond the bits of paper."

I bought two new car mats for Mary's Renault with the fiver and it was the difference between love and war in our house that weekend! She didn't sleep in Carol's room on Saturday night and, for a long time, we both lay in bed talking about George. Mary listened while I told her all about the morning's conversation. She was quite distressed; she really liked old George. Afterwards, when we had changed the subject, she said, quietly and irrelevantly, "Isn't it funny the way the war affected some people".
Richard Montague

Socialism —A world of unity

Editorial from the Winter 1987-88 issue of the World Socialist

The modern age is noted for its declared desire for a world of accord. Over the past century since communications have brought the human population into closer contact, national leaders have never ceased to proclaim their desire for a world of peace. This has been rhetoric without substance. If mere words were enough, the speeches of statesmen would have long since realised the unity of all people. But alongside these "peaceful" tirades, and in spite of international institutions such as the League of Nations, The International Court of Justice, and the United Nations Organisation, humanity has remained divided. We are threatened by mutual annihilation.

During this time, killing techniques have been rapidly developed and have never been so sophisticated or horrific. The century numbers the war dead in many millions. The development of world communications has been accompanied by the greatest mass slaughter in history. Never have so many people been under arms, and never in the past have the productive resources of humanity been so greatly allocated to the means of waging war.
Yet the technology which has given us the long-range nuclear missile has also given us photographs of the Earth from space. These are the images of one world, inhabited by one human species. Those astronauts who have witnessed this view of humanity's home in space describe it as a beautiful place. It contains the natural resources which could provide the needs of everyone if only we could live and work together in cooperation. The question is, why doesn't it happen?

Why is it that in spite of a universal need for peace and material security, in spite of a world system of production and highly developed communications of every kind, humanity still remains divided? Why are we armed to the teeth, living in tension, and in some places, still fighting wars? What happened after the "wars to end all wars'?

Are there reasons, inherent in the differences of history, language and culture, which prevent people from cooperating together? No; to imagine this is to deny the fact that cooperation does take place between people from different countries. It is common that people respond to the desperate plights of others in countries where there is famine, or such disasters as floods or earthquakes. It is not true to say that ordinary people are pre-occupied by a compulsion to bomb and kill others in distant lands. On the contrary, experience shows the reverse to be true. People have to be conscripted for war under penalty of imprisonment or death if they refuse, then trained and mentally conditioned by propaganda to fight. War imposes stress and anxiety on all those who find themselves involved; and when war ends there is relief and celebration. So what are the facts about this divided humanity?

The human population is divided amongst 160 rival capitalist states, including the state capitalist nations of China and those under the dominion of the Russian state capitalist Empire. Within nations populations are divided again by economic class. Privileged minorities own or monopolise natural resources and the means of producing wealth. The vast majority are non-owners, compelled to live by selling their only means of life, their mental or physical energies, for a wage or salary. This is the modern system of wage slavery which divides all communities and all nations, where the rich and the powerful maintain their dominant position through governments who control different portions of the Earth's surface. The world's working class produce the commodities which their national masters then own and sell for a profit on the markets.

Governments stand not the slightest chance of bringing about a world of unity. They are driven under the relentless pressure of economic competition to pursue strategies based on rival capitalist interests. This is the cause of constant international tension, the reason why nations remain armed to the teeth, and why, from time to time, struggles over trade routes, sources of raw materials, spheres of political and military influence, break out into war. Governments and the entire system of exploitation which they represent are an anachronism which must be swept away.

Against the inevitable conflicts between rival capitalist groupings, the world's working class can have no interest in a divided world. Whereas capitalists are bound by the terms of their existence to compete and, through their governments, to organise for war, the interests of workers are in common the world over. In the conflict between wage labour and capital it is capital which is inherently competitive and exploitative, and therefore must maintain a divided humanity. Only labour, the world over, has the common interest which can establish world unity.

Pursuing this interest and organised as the World Socialist Movement, workers must strip the world's capitalist class of their monopoly of the means of life and establish a world system where all resources and all means of production are held in common by all humanity.

This will be a world of common ownership, democratic control, cooperation and production directly for needs. This will be a world without frontiers where machinery of governments will have been converted into a system of democratic administration at local, regional and world levels; where the obscene waste of resources in the military will have been re-allocated for useful production. In Socialism, communications such as transport, information technology, radio, telephone and television links would be immediately adapted for the benefit of all people. Thus the useful structures of existing world organisation, both technical and administrative, would serve the common interests and needs of one people in one world.

The positive action to establish this can only come from one source, which must be separate from the actions of governments; this must be the world's working class organised politically as a single socialist movement. In 1848 Karl Marx declared that workers have no country; that they have a world to win. Against the toll of human misery since that time, and against the appalling prospect of continued world capitalism, we repeat it now with greater urgency.