Saturday, December 20, 2014

Money – a waste of resources (2011)

The Material World Column from the July 2011 issue of the Socialist Standard
Perhaps you think that the money system is a necessary means of allocating scarce resources. In that case, you won’t regard the resources that society devotes to operating the money system as waste. But have you tried to assess the sheer scale of these resources? 

One approach is to see how many people are kept busy at tasks that would not exist in a society without money. I focus on the United States, but I don’t think the overall picture is much different in other countries. My figures come from the May 2010 National Occupational Employment and Wage Estimates of the Bureau of Labor Statistics of the U.S. Department of Labor ( 

The occupational classification used in US government statistics divides the employed workforce into 22 broad occupational groups, which are subdivided into specific occupations. When we search these groups for money-related occupations, here is what we find.

Group 11. Management occupations

There are 516,000 sales, marketing and advertising managers, plus 479,000 financial managers. At least a fifth of all managers manage monetary flows rather than material processes.

Group 13. Business and financial operations occupations

This group includes:

1,072,000 accountants and auditors
221,000 financial analysts
272,000 purchasing agents
63,000 claims adjusters, examiners and investigators
262,000 market research analysts and marketing specialists
184,000 cost estimators, etc.

Some of the market research analysts might still be needed in a socialist society for the non-manipulative analysis of consumer preferences.

Group 33. Protective service occupations

This group includes:

1,007,000 security guards
644,000 police officers
111,000 detectives and criminal investigators
458,000 jailers and correctional officers

As most crime consists of offences against property, few of the functions performed by these two million people will exist in a socialist society.

Group 41. Sales and related occupations

All of the 13,438,000 people in this group directly service the money system. Here we find: 4,155,000 retail sales workers; 1,172,000 supervisors of retail sales workers; 3,354,000 cashiers; 1,748,000 sales representatives; 415,000 counter and rental clerks; 319,000 insurance sales agents; 289,000 telemarketers, etc.

Group 43. Office and administrative support occupations

This group includes:

1,675,000 bookkeeping, accounting and auditing clerks
556,000 tellers

883,000 clerks processing and collecting bills
232,000 clerks processing insurance claims and policies
40,000 meter readers, etc.

Other money-related occupations lie scattered among various other groups. Actuaries, tax inspectors, teachers of business studies – the list goes on and on. Then, combining related occupations assigned to various groups, we discover 145,000 people working at casinos and other gambling joints and 519,000 people who do nothing but handle loans (interviewing and checking out loan applicants, processing repayments, pursuing defaulters, etc.).

There are many money-related jobs that the occupational classification does not allow us to count separately. Thus, Computer science occupations must include many people working with computer systems for storing and processing financial information, while Legal occupations includes many people working in areas like commercial law and inheritance.

Next there are all the people who design, manufacture, transport, install and repair money-related machinery and equipment, such as ATM machines, cash registers (for all those cashiers!), safes, slot machines, credit card verifiers, gambling machines, and those contraptions which prevent you from getting into the underground without a ticket. Not to mention the people who actually make coins, banknotes and gold bars!  
Then there are the workers who build, maintain and clean the premises used by banks, insurance companies and other money-handling offices, those who transport money handlers to and from work, and so on.

My best estimate is that about one fourth of employed Americans are engaged in tasks that would not exist in a moneyless society. To these people we must add members of the armed forces, workers in military industry, most non-working prisoners, the unemployed as usually understood, and the unemployed as unusually understood (otherwise known as the idle rich). All these people could be making a useful and productive contribution to society.

Let’s return now to the question of waste. The money system is commonly justified as a rational way of coping with scarcity of resources. And yet, as we see, the operation of the money system consumes enormous human and material resources. We should also take into account the resource costs of such capitalist practices as built-in obsolescence, the use of patents to suppress innovation (Socialist Standard, February 2007) and luxury production for the wealthy (Socialist Standard, June 2011).

So how serious would the problem of scarcity be if all these costs were eliminated together with capitalism and the money system? Can any reasonable person avoid concluding that money is itself largely responsible for the problem to which it is supposedly the solution?

How Capitalist Dumb-ocracy Deals with Vital Questions (2014)

From the December 2014 issue of the Socialist Standard
The Japanese government is keen to restart the country’s nuclear reactors without real public debate
The 2011 Fukushima nuclear disaster, like any great crisis in society, laid bare the half-hidden—or ‘half-forgotten’—truths of capitalism. People in Japan and around the world were reminded of how companies sacrifice safety in pursuit of profit; how politicians are bought off by those companies; and how capitalists treat the victims of disasters as so much collateral damage.
The aftermath of the disaster has also revealed just how narrow democracy is under capitalism. This has become clear in the way decisions are being made on whether to restart some of Japan’s 48 nuclear reactors. The question of whether the reactors are safe enough to be restarted is of great concern to people living in Japan, but, as is so often the case under capitalism, the decision is not really in their hands.
The Nuclear Regulation Authority, a new administrative body formed in 2012 by merging the Nuclear Safety Commission and Nuclear and Industrial Safety Agency, is tasked with the approval of the applications submitted by energy companies to restart reactors. The government of Prime Minister Shinzo Abe is quite happy to have the NRA take direct responsibility for the decision, not only to avoid blame in the case of another disaster but also to foster the impression that the decision is being made on a strictly scientific basis, in line with the stricter safety regulations introduced in June 2013.
The new rules call for the construction of sea walls to protect plants from the largest tsunami anticipated and the installation of filters to remove radioactive substances vented from reactor cores during an emergency. The rules also require the installation of a separate control room to operate the reactor in the event of a disaster. But certain ‘grace periods’ are allowed for companies to operate reactors before meeting some of these requirements.
In July, the NRA issued its preliminary approval for restarting the two reactors at the Sendai Nuclear Plant in the southern prefecture of Kagoshima, operated by Kyushu Electric Power Co. The final decision will be made by the NRA after verifying the required design changes at the plant and its operating structure.
The government recognizes, however, that a decision made by the NRA alone would lack credibility in the eyes of many, so the approval process also calls for a certain degree of consent among those living near the nuclear plant But that local approval (or disapproval) is not legally binding in any way—and it is limited to the city where the plant is located (Satsumasendai) and the Kagoshima prefectural assembly.
In essence, this ‘informal approval’ is just a fig leaf to cover the fact that the decision has been reached by the NRA commissioners (appointed by the Prime Minister) that the Sendai plant should be restarted.
As expected, the Kagoshima prefectural assembly approved the restarting of the reactors on 7 November (by a vote of 38 to 9). The same day, the governor of the prefecture, Yuichiro Ito, backed the decision—although he tried to sidestep his own responsibility by calling the decision ‘unavoidable’ and claiming that the central government would assume final responsibility in the case of an emergency.
Prior to that approval, the municipal assembly and the mayor of Satsumasendai approved the decision to restart the plant, on 27 October. It was a foregone conclusion that the city would approve the decision since it receives a massive annual subsidy of roughly \1.2 billion (£6.6m) a year, as well as another \400 million (£2.2m) for a nuclear fuel tax.
Of course, in the case of a disaster, the fallout would certainly not be limited to Satsumasendai. There are in fact eight other municipalities located within a 30km radius of the plant. But, unlike the host city, they receive few subsidies related to the nuclear plant.
The town of Ichikikushikino, with a population of 30,000, is as close as just 5km from the plant in some places, yet only receives a subsidy of \90 million a year (£495,000 - less than 1 percent of its annual income). Given the risks it faces, the town’s residents had asked to be included in the informal approval process. The request was turned down for fear of opposition; and in fact half of the residents later signed a petition opposing the restarting of the Sendai plant.
Along with the bogus ‘approval’ process at the local level, the NRA held a series of ‘town hall meetings’ in October to reassure residents in Kagoshima of the safety of the Sendai plant. But the number of participants at those meetings was limited and they were not allowed to record the proceedings or ask questions regarding evacuation plans.
The way the government has sought to limit public input and evade criticism extends to the choice of the Sendai nuclear plant to begin the safety screening process. The plant’s location in Kagoshima made it an obvious choice for a number of reasons, despite the fact that its reactors are 30 years old.
First of all, the prefecture is a long-standing stronghold of the ruling Liberal Democratic Party. Currently, 70 percent of the assembly members are LDP-affiliated. From a simple geographic perspective, the decision also made sense to the Abe administration, since Kagoshima is far removed from Fukushima and from Tokyo, which is the centre of a powerful anti-nuclear movement.
Another factor is that Kyushu Electric is one of the regional utility companies that is still in the red, with losses of \36.5 billion (£200m) in the first quarter of fiscal 2014 (compared to the \52.5 billion profit of Tokyo Electric posted for that same period). This means that the company plausibly can make the argument that the restarting of its nuclear plants is vital to its business.
Other utility companies had been making that argument in trying to get their reactors back online, while also threatening consumers with higher rates and their own workers with lower wages (and making good on both threats), but now that these companies are profitable again despite the nuclear shutdown, their ‘good-for-business’ argument has become a bit harder to swallow.
Prime Minister Abe seems to hope that once the Sendai plant is approved, the decision can serve as the template for approving reactors in other prefectures, including those where the conditions are less favourable to his administration. In other words, the approval process is proceeding according to a political—not a scientific—logic, with more attention paid to massaging public opinion than ensuring public safety.
The basic argument of the government on the need for nuclear power comes down to profit- or ‘economic growth’, to use the favoured expression. The problem, though, is that the Japanese public is aware that even in the heyday of nuclear power, when most of the reactors were up and running, providing around 30 percent of Japan’s overall energy supplies, the economy was not exactly booming. And those who have reflected a bit more on their own life experiences, if they have lived long enough, would know that economic growth is no guarantee of better living conditions for workers.
It is true that Japan is a country that lacks energy resources, forcing it to import more oil and gas in the absence of nuclear power. This is a situation that would be faced even in a post-capitalist world. But under capitalism the objective or scientific aspect of the problem is intertwined with the question of profitability, so that the debate is always limited by that reality. This makes it hard to distinguish between the technically and the economically feasible.
Today, the debate over what safety measures are possible or whether more renewable energy can be generated come down to a question of money, not pure science. In a socialist world, people living in Japan could finally have a rational debate on how to generate enough energy for their own needs. The conclusion might be reached that the benefits of nuclear energy to Japan outweigh its obvious risks. But that would be a decision the community could reach democratically, weighing all of the evidence. No such democratic process exists in Japan or anywhere else today, nor could it exist under a system that revolves around profit.
Michael Schauerte

The Titanic Disaster 100 Years On (2012)

From the April 2012 issue of the Socialist Standard

This April will witness the 100th anniversary of the sinking of the RMS Titanic. Many words will be written in the capitalist media about the disaster, but what of the class aspects of the tragedy and has anything really changed in the last century?
The Titanic came into being purely for the speedy conveyance of the rich and wealthy classes between Britain and the US. Opulence and luxury were the watchwords of her design and construction, rather than safety. Designed around class division and reflecting the extremes of wealth and poverty in Edwardian Britain, the vessel featured Turkish baths, gymnasiums, electric lifts, ballrooms, dining rooms, a swimming pool and a library for the first class passengers – all designed to attract the wealthiest clients and secure the biggest returns for the investors in White Star Lines.
The now famous story of the Titanic's maiden voyage and her striking an iceberg off Newfoundland is too familiar to need repeating.  Also familiar is the often quoted lack of adequate lifeboat provision, although according to the maritime laws at the time, Titanic surprisingly carried more than she was legally required to. What is more interesting from a socialist's perspective is how the class divide, evident in the design of the vessel, continued to make itself felt throughout its operation and right on to the end of the disaster.
The ship carried a total of 2,224 people including crew, and 1,554 of these died on that fateful night, mostly from drowning and hypothermia in the near freezing waters. For the survivors, it is more than apparent that class was a survival factor. At the time, the standard procedure was for women and children to go first into the lifeboats, but significantly, aboard the Titanic, this meant first and second class women and children and not those in steerage. No second-class children and only one from first class died, but 52 children from steerage perished. Of the first-class female passengers, 97% survived, some with their lap-dogs, as did 86% of second-class women. By comparison, only 46% of third-class women made it off the ship. Men of all classes bore the brunt of the death toll, but again, significantly, 84% of third-class men died against 33% in first class. Overall, the third-class passengers and crew amounted to 80% of the total lives lost that night.
Various enquiries into the disaster inevitably focused the blame on members of the dead crew and the poor safety provisions. Whilst the latter criticism may be valid, no enquiry ever took into account the significance of a vessel such as Titanic in the first place, nor touched on the inherent class divisions on board which resulted in such tragedy for the 'lower orders'. To do so would have been to call into question capitalism itself. Titanic, for example,had sufficient lifeboats for first-class passengers only, not for third. Further, hardly any mention was made of the US immigration laws which required complete physical isolation of the third-class passengers from the rest of the ship. This alone meant that many steerage passengers never even knew of the existence of lifeboats, let alone where they might be found. Many were physically prevented from escaping from the vessel until it was too late.
The Socialist Standard of the time drew more incisive conclusions and made the comparison with other disasters to befall the working classes.  The May 1912 edition reported:
It must not be forgotten, however, that capitalist companies invariably choose for responsible positions those men to do what they are paid to do. It is all moonshine to talk of the captain being in command. They command who hold his livelihood in their hands. If he will not take risks and get the speed they want, then he must give place to one who will.
So at the bottom it is the greed for profit and the insatiable desire for speed on the part of the rich that is responsible for the disaster, whatever conclusion the Committee of Enquiry may come to.
“The actual details of the wreck afford a further opportunity of pressing home a lesson. The evidence of the survivors and the evidence of the official figures of the saved, show that even on the decks of the sinking liner, and to the very end, the class struggle was on. Those who had clamoured for speed were the first to monopolise the boats, and the way was kept open for them by the officers' revolvers. Even the capitalist newspapers are compelled to admit the significance of the figures. Of the first class men 34 per cent were saved: of the steerage men only 12 per cent. Figures like those are eloquent enough without the evidence of the officer who admitted that he kept steerage passengers from a half-filled boat with shots from his revolver.
Much has been made of the fact that the cry "Women and children first" was raised, and it is not necessary to cast aspersions on the courage of any man who survives. The salient fact is that it was not a question of courage but of class. "Women and children" meant women and children of the wealthy class. Of first class women and children practically all were saved, some even with their pet dogs. Of the steerage women and children more than half perished. The "chivalry" of the ruling class does not, save in very rare instances, extend itself to the class beneath them.
The awful loss of life has not prevented the Titanic from becoming a commodity along with everything else in capitalism. Apart from the massive profits made from two major films (A Night To Remember, 1958; andTitanic, 1997, which grossed $1.8 billion) and dozens of minor ones, the discovery of the wreck by Dr Robert Ballard in 1985 has spawned even more interest and bickering over the profits to be made from the disaster.
In 1994, RMS Titanic Inc., a subsidiary of Premier Exhibitions Inc., was awarded ownership and salvaging rights by the United States District Court for the Eastern District of Virginia. On 24 March, 2009, it was revealed that the fate of 5,900 artefacts retrieved from the wreck would rest with a U.S. District Judge's decision. On 12 August, 2010, Judge Rebecca Beach Smith granted RMS Titanic Inc. fair market value for the artefacts but deferred ruling on their ownership, and the conditions for their preservation, possible disposition and exhibition until a further decision could be reached. On 15 August, 2011, under a French court decision, Judge Smith granted RMS Titanic Inc. title to thousands of artefacts from the Titanic that it did not already own. The grant of title was subject to a lengthy list of conditions relating to the preservation and disposition of the items. The artefacts can be sold only to a company that will abide by the conditions and restrictions as set out. RMS Titanic Inc. can profit from the artefacts through exhibiting them.
In addition, the current anniversary will see the re-release of the 1997 movie Titanic in 3D, at least two new mini-TV series and a £77million exhibition at the former Harland & Wolff shipyard in Belfast. One can expect a rake off from other merchandise.  But more macabre (and indicative of the profiteering nature of capitalism), is the offer by a UK travel company of a full transatlantic cruise which will follow the exact route of the Titanic.   The cruise will keep the exact timings and pause over the spot of the sinking. This dubious event also offers its patrons the opportunity to dress up in period costume and 'enjoy' themed entertainment and food from the era.
The sinking of the Titanic and the interest in it will continue for some time yet, but it is sad that the same conditions which brought about her very existence 100 years ago are still prevalent today. The widening wealth gap; the vastly different treatment of people based purely on their income; and the poor treatment of workers in the rush for speed and profit are all hallmarks of the system that was in place in 1912 and is still with us today. Disasters on the same scale as the Titanic are still happening and for the same basic reasons.  Despite the massive loss of lives throughout the past century, the working classes are still not learning from the lessons once experienced by their forefathers. The class divide apparent in Edwardian Britain and reflected in the Titanic disaster, still exists in modern-day Britain and the answers offered by socialists then apply just as clearly today. As the Socialist Standard concluded at the time:
We are not of those who expect any great results from this ocean tragedy. Working-class lives are very cheap, and the age that abolishes the Plimsoll Line at the demand of those greedy for profit is hardly likely to insist upon the provision of proper means of life-saving or the careful navigation of passenger vessels. Murder by wholesale may be committed without doing violence to "law and order," so long as it is committed by the capitalist class in the "legitimate" scramble for profits.
David Humphries