Saturday, December 31, 2016

What causes famine? (1989)

From the December 1989 issue of the Socialist Standard

One popular explanation of the cause of famines sees them as being due simply to not enough food being available. People starve because there's no food for them. What could be more simple? And if there's no food available that's because of some natural disaster—some so-called Act of God which we can’t do anything about— like flooding in Bangladesh or a drought in Ethiopia.

This simplistic view has been challenged and effectively refuted by Professor Amartya Sen in his book Poverty and Famines: An Essay on Entitlement and Deprivation that appeared in 1982. Sen showed that in most recent famines the food was available: what wasn’t available were "access rights" to it, whether money or the ability to directly grow food, on the part of those who starved.

Professor Sen returned to this theme in a radio broadcast on BBC3 on 21 March. After referring to his early experience when a schoolboy of the Bengal famine of 1943, one of the worst famines that has taken place in recent times, which he showed to have been falsely attributed by the authorities to not enough food being available. Professor Sen stated his basic case:
In every society the amount of food a person can own and consume depends on a set of rules governing his legal entitlement given by ownership, and possibilities of production and exchange. If food were to be distributed equally, the aggregate food availability would indeed determine how much food each person could get. But obviously this does not happen in any actual society. To decide whether a person will m fact be able to acquire enough food, we have to see what he owns, what he can produce with what he owns, what he can get in exchange. and so on. Starvation will result if a person is not able to establish ownership over an adequate amount of food through these means. Starvation is a social outcome reflecting an entitlement failure. Availability of food is only one influence among many affecting that outcome.
Turning to the 1974 famine in Bangladesh, he explained that what happened was that a flood destroyed the jobs of many millions of rural labourers who would normally have earned money planting and transplanting rice. With no jobs they had no income and so no money to buy food, despite 1974 being a record year for food availability over the period 1971- 75. As Sen put it, "what killed the Bangladeshi rural labourers was not any physical lack of food, but the failure of the social system to give them adequate entitlement to the food that was there”.

A similar situation had occurred in Ethiopia in 1973 except that it affected peasant farmers working their own land rather than rural wage workers. Here there was indeed a drought that did adversely affect crop production, but it wasn't this that caused people to starve, at least not directly as in the popular “not enough food" explanation for famines.

Because they had less of their particular food crop to sell, the peasants in the Wollo province, which was the centre of the famine, suffered a reduction in their income and were therefore unable to buy food to replace that which they were unable to grow themselves. It was this collapse of their income, not the failure of their crop as such, that led to the famine. Professor Sen again: “Had there been only a fall in food output in Wollo, without a simultaneous decline in the local population's economic fortune, food would certainly have moved into Wollo under the pull of the market”.

Nor could the famine be attributed to a lack of transport facilities, another reason sometimes advanced as a cause of famines, since the main North-South road from Addis Abba to Asmara runs through the worst hit area of Wollo. There was a movement of food along this road—out of Wollo. This happened, as it did in the notorious Irish famines of the 1840's, because purchasing power in the area had fallen more than output, so that market forces led to the "surplus” (to market requirements) being exported to areas where people did have the money to pay for it.

So, famines are features of a society in which entitlement to food is not direct but by means of money. Professor Sen sees the solution as lying in establishing mechanisms which would ensure that every person has enough money to always be in a position to buy enough food to stop them starving. He thereby ignores the obvious solution: establish a society in which people would have free and direct access to food as of right, a moneyless, socialist society based on the common ownership and democratic control of the world's resources. In such a society nobody would ever starve because food would be being produced for its natural purpose of feeding people.
Adam Buick

Marx’s Contribution to the Critique of Reformism (2009)

From the June 2009 issue of the Socialist Standard

Marx wrote a book 150 years ago that shows why money exists today and how we can get along fine with out it tomorrow

A Contribution to the Critique of Political Economy, first published in 1859, only consists of two chapters (apart from its famous Preface). Marx had intended it to be the first instalment in a massively ambitious project that was to include six separate “books” addressing, respectively, the topics of capital, landed property, wage labour, the state, international trade, and the world market. The first book on the topic of capital was to have included four “sections” dealing with: capital in general, competition, credit, and share capital.

In other words, the two chapters of Contribution (“The Commodity” and “Money, or Simple Circulation”) are just the first “instalment” of the first section of the first book – to have been followed promptly by a second instalment that would move on to introduce capital, its circuit, etc.

Things did not exact proceed according to the original plan, needless to say. Not only did Marx fail to complete the six books, he did not even publish the additional chapters on capital for the first section of Book one. This has led to scholarly debates over the degree to which the content of the three volumes of Capital – of which Marx only oversaw publication of the first volume – correspond to the six books he had first envisaged.

Even taken on its own, however, Marx’s two-chapter book presents us with much of the knowledge we require in our effort to dispel the reformist illusions still so widespread today. The problem with reformism, as we can learn from Contribution, is not that it is overly pragmatic and insufficiently idealistic, but that it is thoroughly impractical and utopian, based as it is upon a surprising ignorance of the fundamental characteristics of capitalism as a society of commodity production.

Proudhon undone
Marx viewed Contribution as a work with an important “polemical” aspect. Yet any reader expecting the stirring rhetoric or vivid imagery of the sort found in The Communist Manifesto is sure to be disappointed. Instead of “A spectre is haunting Europe – the spectre of communism,” the first line of Contribution is: “At first sight the wealth of bourgeois society appears as an immense heap of commodities; and the individual commodity as its essential determinate being.” It is a wonderfully succinct sentence that explains why Marx must begin with the analysis of the commodity, but not likely to appear on many t-shirts or bumper stickers.

The “exceedingly serious and scientific air” of Contribution, as he described the book to his friend Engels around the time of its publication, was not the result of some erudite pose Marx struck, but because his analysis of the commodity and money deals with some of the most abstract elements of capitalist society. Marx told his friend that he hoped the scholarly style would oblige reviewers of the book to refrain from the usual “tendentious vituperation” “take [his] views on capitalism rather seriously.” Unfortunately, as he would later complain to Ferdinand Lasalle, his views were neither attacked nor criticized in Germany, but “utterly ignored,” which he thought was “bound to have a serious effect on sales.” 

Yet Marx’s primary interest was not the reaction from the scholarly world, or even the badly needed book royalties, but the influence that Contribution would have on the socialist movement in Europe. He hoped the ideas in the book would help to wipe out the reformist fantasies that still clung to the movement; for the mid-nineteenth century, much like today, was an age when all sorts of self-styled “revolutionaries” were peddling commodity-production sludge in shiny new buckets labelled “Socialism.”

Marx was particularly eager to expose the pseudo-socialist ideas of Jean Pierre Proudhon, then fashionable in France. Marx described “Proudhonist socialism,” in a February 1859 letter to Joseph Weydemeyer, as the wish to “retain private production while organizing the exchange of private products, to have commodities but not money,” insisting that “communism must above all rid itself of this ‘false brother.’” Marx even told Engels, in July of that year, that if he were to review Contribution the first point to emphasize would be that the book “extirpates Proudhonism root and branch.”

The way Marx uproots Proudhonism in Contribution, however, is not through a narrow polemic aimed at that ideological tendency alone, but rather by means of a scientific analysis of the commodity and money, which reveals their inseparability and how both forms characterize capitalism as one particular historical mode of production. So his analysis serves us equally well today in our own efforts to expose the fallacy of reformism in whatever shapes it may take.

The uncommon commodity
The term “commodity” is nearly synonymous with “product” these days, perhaps because we are so accustomed to the capitalist market economy. Yet Marx uses the term commodity in Contribution to refer specifically to products of labour that are produced for exchange, rather than to directly satisfy the material needs of the producers. As such, the commodity has both a use-value, as a thing that satisfies some human want, as well as an exchange-value, as something that brings to its owner money or another commodity of equal worth.

Use-value pertains to the properties of any product of labour as a physical thing. So use-value is not the aspect which specifically characterizes the commodity.  From the taste of wheat,” Marx writes, “it is not possible to tell who produced it, a Russian serf, a French peasant or an English capitalist.” In any society, there is a need to produce useful things in order to satisfy human needs and sustain the society as a whole, but only under capitalism does the vast bulk of this material wealth take the form of commodities, as Marx points out in the first line of Contribution quoted earlier.

In short, use-value presents no great mystery, and is not even an actual economic form, so Marx sets it aside to concentrate on the aspect of the commodity that does characterize the commodity as such: exchange-value. The key question initially is: What determines the exchange-value of a commodity?

This is a question that had been posed already by Adam Smith – and later by David Ricardo – and Marx agrees with their fundamental answer, known as the “labour theory of value,” which states that the level at which a commodity will be exchanged depends upon the amount of labour expended for its production.

This theory is vital to an understanding of how capitalism functions as a commodity-production society. It shows that something – although not the conscious decisions of human beings – guides commodity exchange. Adam Smith famously used the expression “invisible hand” to depict this hidden force, but it seems more appropriate to speak of the invisible hands of the workers who labour to produce each commodity.

In Contribution, Marx develops the labour theory of value, arriving at a far clearer understanding of the labour “objectified” within the commodity to constitute its value, which he defines using such expressions as “uniform homogenous simple labour” or “abstract general labour”; and he also emphasizes that this labour is expended “under the generally prevailing conditions of production” in a given society. In short, we can say that the abstract time-time socially necessary to produce a given commodity constitutes its value and fundamentally determines the level at which the commodity is exchanged.

The issue for Marx, however, is not merely how commodity exchange is carried out. He also ponders why labour under capitalism must take this materialized or objectified form (as the “substance” of value). And Marx begins to answers this question by introducing examples of production relations where labour does not take that form and products of labour do not assume the commodity form.

Marx notes, for instance, the example of medieval society, where “services and dues in kind” were performed directly to satisfy particular needs (albeit those of the feudal landlords), so that we are dealing with the “distinct labour of the individual in its original [concrete] form.” Another example he gives, which corresponds in some important respects to socialism, is the “communal labour in its spontaneously evolved form as we find it among all civilized nations at the dawn of their history.” In this case, the labour of each individual in the society is expended directly as one part of the overall labour, rather than the individuals each producing their own private products that are then exchanged as commodities.

Under commodity production, in contrast, the starting point is the labour “privately” expended by the various individuals who produce commodities for the market. Instead of the social relations between these individuals being clear from the outset, as in those two examples Marx raises, the producers are carrying out production in accordance with their own private aims and will. It is only when their commodities are exchanged that the producers first enter a social relation with one another.

This is why, under such social production, relations between human beings within production necessarily present themselves as relations between things (money and commodities). “Only the conventions of everyday life,” Marx writes in Contribution, “make it appear commonplace and ordinary that social relations of production should assume the shape of things, so that the relations into which people enter in the course of their work appear as relations of things to one and another and of things to people.”

People are so used to the relations of commodity production that they find it difficult to imagine social relations of production that are not mediated by the exchange of commodities and money, which is one reason that reformist ideas manage to seem so pragmatic.

Demystifying money
Marx’s analysis in chapter one of Contribution shows us that it is only under specific social relations of production, where the starting point of production is privately expended labour, that products of labour will take the commodity form and that the labour expended will take the form of value. In other words, these are socially specific economic forms – not the reflection of some eternal state of human affairs.

And the same is true of the money form. Marx points out that money in fact “represents a social relation of production” and that the “all of the illusions of the Monetary System arise from the failure” to perceive this fact. Money only possesses its strange, magical power within certain social production relations.

Marx reveals the source of that power in Contribution by reducing the money form to the simplest form of value, where one commodity expresses its own value using the use-value of a different commodity. In that simplest form, “the use-value of one commodity is brought into relation with the use-values of other commodities” so that the exchange-value of the commodity “manifests itself in the use-values of other commodities.” This is no different than the value of a commodity being expressed in the use-value of the commodity gold. Instead of gold intrinsically having a power as money, Marx shows that the power stems from a specific relation in which gold (or some other commodity) becomes the physical embodiment of value, so as to give tangible form to the intangible element of value. 

Marx further demystifies money by explaining how it is that a particular commodity is excluded from other commodities to become money. He explains this emergence of a single commodity – as the “universal equivalent” (money) – as resulting from a contradiction confronting commodities in the exchange process, where “only by being realized as exchange-values can they be realized as use-values” and vice-versa. The way out of this “vicious circle” is the exclusion of one particular commodity as the universal equivalent, so that a commodity owner can first exchange a commodity for that special commodity, which can be used to purchase whatever commodity is desired.

But it is not as if the commodity producers gather and debate which commodity should be chosen as that universal equivalent. “Money is not the result of deliberation or of agreement,” Marx argues, “but has come into being spontaneously in the course of exchange.” In any area of commodity exchange, historically speaking, there were always some commodities more frequently exchanged than others, such as fur, hides, rice, or cattle, to mention a few examples. By being exchanged for so many other different commodities, such “special” commodities would already bring those other commodities into a relation with each other, where their values could be expressed in the special commodity and they could also compare their values relative to each other via that commodity.

All sorts of commodities have played that role as “universal equivalent,” but ideally, Marx says, the function would require a commodity with the physical qualities of “unlimited divisibility, homogeneity of its parts and uniform quality of all [its] units.” These happen to be qualities that characterize precious metals, which accounts for why gold and silver eventually come to exclusively play the role of the money-commodity. “Although gold and silver are not by nature money, money is by nature gold and silver,” is the witty way Marx explained this point in Capital.

It would require many more paragraphs to adequately explain these aspects of Marx’s essential theory of money presented in Contribution – not to mention his explanation of the functions in money in chapter two – but the main point here is just to convey some idea of how well he grasps the profoundly social and historical nature of money and its inseparable connection to commodity production.

Reformists have trouble understanding that commodities and money only exist under specific relations of production, and this also accounts for their inability to imagine fundamentally different social relations where there is no need or room for those economic forms to exist.

Michael Schauerte

Friday, December 30, 2016

A Seasoning of Goodwill (2016)

The Pathfinders Column from the December 2016 issue of the Socialist Standard

Rather than festive, people are getting restive. In the western world post-Brexit and Trump - and doesn't that sound like a comedy duo, like Cannon and Ball or Hinge and Bracket? - liberals have lately sensed a gut-wrenching lurch towards lunacy.

But look on the bright side. People are talking about politics again because it's not boring anymore. Even kids in school are doing it. Ok, they're talking about it in a bad way, because they're appalled by the bare-faced dishonesty of it all, but at least they're engaged.

So now is when we should be stepping up our own efforts to popularise the socialist revolution. And we should do it in a way that acknowledges, in the aftermath of Brexit and Trump, that whatever intellectual debate is taking place on the surface it is the deep and visceral fears underneath that we really need to address.

Crime in socialism is a big fear we should discuss, and the breakdown of social order. But even deeper than that is the fear of famine.

Why famine? To take the UK as a local example, with apologies to overseas readers, a non-socialist will certainly ask why, in a world where money and trade have just been abolished, foreign farmers will agree to donate food, and foreign drivers transport it to ports, and foreign sailors ship it across to us, using vast amounts of polluting marine diesel also donated for our benefit? And if they don’t do all that, then given the high density of population in these islands, won't we face immediate famine?

Well, let's find out, using some basic assumptions and back-of-the-envelope calculations.

A little enquiry among farming types will turn up an oft-cited piece of country wisdom, which is that you can feed a family of four on an acre of land, more or less, give or take. How big is an acre? Well, not very big, in fact just 220 by 22 yards. If you allow 4 people per acre, this gives you 988 people per square kilometre. So if you find the maximum cultivable or productive area of a given country, and multiply that by 988, you can get an approximation of the maximum sustainable population (MSP) of that country.

The maximum cultivable area of the UK - meaning land good for annual crops like wheat or permanent crops like fruit trees - is just 23 percent of total land area, or around 56,600km². This might not sound like much, however when you times this by 988, you get an MSP of 55,924,752. This is rather more impressive, though still shy of the current UK population estimate of 65 million.

However we have not included pasture land, currently used for dairy and beef cattle, sheep and goats. The main thing wrong with this land, from an arable point of view, is that it's not flat enough for tractors and combine harvesters. Given that pastured beef consumes around 20 times the energy it produces (grain-fed beef is around 40:1, see here), it could make sense to convert this pasture to intensive allotments which would yield on average 20 times more food. If you include this land, the total farmable land area goes from 23 percent to 75 percent.

Even this does not include woodland, which constitutes 11 percent of the remainder, and which could in theory be turned to good account using well-established 'wild farming' techniques like permaculture and forest gardens. Most of what's left is lakes (ok for fishing), parks, golf courses and mountains. Urban development, cities, roads, buildings etc only account for about 4 percent.

So if push came to shove, the tiny islands of Britain could convert 86 percent of their land to agriculture. On a land area of 241,590km2 this gives a theoretical MSP of 238,631,640.

But that's nearer the population of the USA than of Britain! So now it's time to question the assumptions. First, could an acre really feed 4 people, year in, year out? Farmers in Britain with smallholdings say they can be generally self-sufficient on vegetables using around an acre, but there is a limit to what you can grow in the British climate, and soil quality, light, drainage and other variables will also affect yield. And you also need to let land lie fallow or else exhaust it or drench it in polluting nitrate fertilizers, so it would be wise to slash that figure in half.

But even so, and even allowing some meat farming so people can still enjoy the odd burger or sausage butty, it's hard to see how there's any obvious danger of famine. Rather than being a basket case, socialist Britain might even be a net exporter.

Currently the UK produces about 75 percent of its food and imports the rest. But it imports things you can't easily grow here, mostly Mediterranean fruit and veg, coffee, rubber and wine, and exports things the world enjoys, mainly whisky. Imports come from around 28 countries, and the government view is that the more sources you have the better, since your supply is less likely to be interrupted.

But this may not hold when socialism is first established, because global priorities may be more concerned with feeding starving people elsewhere than providing Brits with their morning orange juice and cappuccinos. And though it may be cheaper in capitalism to ship tomatoes from Spain than grow them in UK greenhouses, the same economics may not hold in a non-market moneyless economy. In short, though socialism will be global, it will be smart for people to produce as much as possible locally without relying on fleets of container ships.

And what if, despite all this, people in these islands can't meet their food needs, as many will fear? Here's the thing about famine – it is largely a capitalist phenomenon, not just economically but also demographically. If in socialism a place can't support a population, there is nothing to stop the population moving somewhere else. A similar MSP calculation gives Ireland a potential to feed 2.5 times its current population, while the USA could feed its people 5 times over on arable land alone, without considering the much vaster cattle regions. The same story is true pretty much everywhere – go check it and see. People don't take up much space at all. It's capitalism – and the rich - that engulf resources and create misery. So next time someone looks fearful about socialism, have patience, and work through the figures with them. They'll soon realise that a socialist diet will be a lot better than just boiled spuds seasoned with goodwill.

Monday, December 12, 2016

Ghost of Christmas past (1981)

A Short Story from the December 1981 issue of the Socialist Standard

During an ambitious interlude, brief but puzzling, in my dreamy mid-twenties I got a job at the famous factory on the arterial road which ran out through the industrial estates of the western suburbs. The architect, now long forgotten, had designed the place with reference to an Aztec temple but I presumed any irony in this was unintentional. A job at the factory was a matter for some envy locally for pay and conditions there were better than average; cheap and efficient canteens, overalls for the factory workers, lavatories of gleaming white tiles with endlessly dispensing Initial towel cabinets.

For a long time the company was consistently successful — consistently profitable — and in no small measure was this due to their skill in persuading everyone who entered the temple that they were part of a big, happy, cooperative family. The work force was divided into several layers, each distinguished by the scope of its privileges. Lowest of all were the hourly paid, who sulked around the place dredging swarf from the oily sumps of machines, trundling grimy trolleys of scrap metal to unknown destinations or renewing exhausted Initial towels. Above them — but not by much — were the weekly paid staff who watched over the screeching machines protected by fantasies about their gardens, car, or next holiday; or who in the office typed invoices or went through lowly clerical jobs like checking credit ratings.

And then there were - at the summit of ambition for most of the employees - the monthly staff who were usually supervisors in administration. They had several privileges, one of them being to eat in a separate dining-room with linen-covered tables and pert waitresses instead of queueing up at the works canteen where the same food was sold at a lower price. Another privilege was the annual invitation to the Christmas Dinner.

This great event, two or three days before Christmas, started early in the evening with the gathering in the factory bar of suited men and sateencd women at a table as long as a cricket pitch, laid out in a parade ground of glasses brimming with sherry, gin and cocktails. Although exuberance was not exactly discouraged, in the monthly staff it was expected to be muted. But there were a few who had decided that their career would prosper better through a reputation for loud candour and they were often quite drunk by the time the assembly was ushered into the company ballroom for dinner.

There they sat down to a menu which never varied. Grapefruit segments. Prawn cocktail. Turkey. Christmas pudding. Mince pies. Cheese. Coffee. Champagne. Port wine. At each table a self-appointed parent beckoned a wine waiter and, with a surreptitious pressure of crackling paper into palm, urged that the diners at that table be “looked after”, under the impression that they alone were capable of such cunning bribery. The waiter pocketed the tip and if he was seen again that evening it was only faintly, in the dim shadows on the far side of the room.

As the last fragment of cheese was finger-dabbed from plate to mouth the catering manager called for silence and the Managing Director rose to speak. It was part of the company’s family Christmas tradition that the MD would now give everyone a present like announcing an improvement in the pension scheme or a shorter working week - although on the occasion I heard him tell the monthly staff about a worsening of their conditions there was no diminution in the fervour of their applause. The MD always sat down amid some tension because it was now time to reveal the identity of the person selected to make the reply and then to propose a toast to the company.

This was a closely kept secret; even the chosen person knew nothing of it until that very morning, which allowed little time to prepare a speech and have it approved by the directors. Not that anyone ever complained, since it was more or less a promise of eventual promotion to the higher ranks of management. The more ambitious monthly staff all considered themselves best qualified to receive this mark of preferment and they went through agonies of suspense on the day waiting for the telephone summons, eventually crumpling their speech into the waste paper basket and composing instead some nasty jokes about their rivals.

After the reply it was all over. Last goblets were drained, disappointments plastered over, hands pressed, backs slapped then out into the night glowing in the lights of the huge tree set up at the temple entrance. For a short time loud banter and seasonal greetings rang out in the frosty air, then there was the revving of sulphurous engines and the Anglias and Morris 1 10s shuddered onto the arterial road, carrying sour cargoes back to the wall to wall neuroses of suburbia.

All that was a long time ago and it will not happen again. The company recently announced that the factory is to be closed. They blamed the world-wide recession, foreign imports, high interest rates. All those monthly staff will be transferring their frustrations to the dole queue where, they once insisted over lunch in their chic dining-room, only the idle or feckless are to be found. “I am incensed” bellowed the local MP when he heard about the closure. “It throws a shadow over this Christmas and next Christmas could be even bleaker” said one of the redundant workers. For him, and for the others, the company is no longer a big, happy family; now it means fear and misery amid the bright lights and the tinsel of the -what was it again — Festive Season.

The realities of capitalist society are harsh and insistent and there is no gentle way in which to face them.

So Merry Christmas folks OK?

And, uh, Happy, er, New Year.

The Catholic Church, Capitalism and Socialism (2016)

From the December 2016 issue of the Socialist Standard
Pope Leo XIII's encyclical Rerum Novarum,or ‘Rights and Duties of Capital and Labour’ of 15 May 1891 can be seen as the social manifesto of the Roman Catholic Church. Its popularity as a social document has diminished probably even more than the atrophying authority of the Church itself, but while, effectively, other Papal pronouncements remain as Church policy only because their renunciation would bring into serious question the authority of their Papal authors, Rerum Novarum still reflects the acknowledged social doctrine of the Church.
Leo begins by denouncing on moral grounds the chasm between rich and poor – which, paradoxically, is an inevitable feature of the class society which he steadfastly supports, capitalism wherein originates the 'enormous fortunes of some individuals and the abject poverty of the masses.'
The Pope spells out his vision of what would be morally and economically correct for the working class in a society where the Church’s moral guidance would underpin capitalism: The wages of the working man – 'a woman by nature is fitted for home-work' – should not be regulated by free contract only and 'ought not to be insufficient to support a frugal and well-conducted wage earner… if a workman’s wages is sufficient to comfortably support himself, his wife and his children, he will find it easy, if he be a sensible man, to practice thrift; and he will not fail, by reducing expenses, to put by some little savings and thus secure a modest source of income… The Law should support ownership.' This in various ways is repeated and emphasised not only in this Encyclical but in succeeding Encyclicals by later Popes. Wealth, property. ownership, these are all ‘natural rights’ enthusiastically endorsed by the Church.
The Church, in the person of Leo and his successors, affirms that society should not be classless: 'It is impossible to reduce human society to one dead level… It is a great mistake to take up with the notion that class is naturally hostile to class and that the wealthy and the working-men are intended by nature to live in mutual conflict… Capital cannot do without Labour nor Labour without Capital.' The Pope here is obviously taking a swipe at socialism but does not say why he thinks socialists would want to either reduce or elevate human beings to one 'dead level' nor does he tell us how Capital could dig a field.
In his On the Reconstruction of the Social Order (May 1931, Pope Pius XI re-affirms and endorses the attitude to the social question put forward by Leo XIII. Especially does Pius leave no doubt as to the attitude of the Church in relation to socialism/communism. He again encourages Catholic workers to organise in Catholic trade unions and finds it unfortunate that these sectarian organisations have not attracted the numbers that what he calls the Socialist and Communist unions – by which he means non-sectarian – attract.
Pius trenchantly defends the right of private property; by this he does not mean one’s habitation or items of personal value. He means capital, effectively the minority ownership of the entire means of life of the whole of society. Still, the Pope laments 'There are those who falsely and unjustly accuse the Supreme Pontiff [himself] and the Church of upholding the wealthier classes against the proletariat.'
Pius on behalf of the Catholic Church answers those who think they can reconcile religion with the concept of a society based on common ownership and the production of goods and services solely for use. Indeed, the one truth we could find in all this Papal nonsense is Pius’s assertion that ‘No one can be at the same time a sincere Catholic and a Socialist properly so- called.’

Sunday, December 11, 2016

Prohibition (1925)

From the December 1925 issue of the Socialist Standard

We are not opposed to the Prohibition— of swipes and adulterated water. Nor do we, like the brewer and his friends, pretend that Prohibition is a matter of vital concern to the workers. There is a Socialist view on this matter, but, like our views on all questions, it is in conflict with those of the reformer. The brewer endeavours to convince us that drinking is a noble and commendable act, for the same reason that the Nonconformist cocoa manufacturer boasts of the food value of his product and supports the Temperance movement. Profit greed determines what they think good for the dear worker, and the Temperance reformer with the anti-Prohibitionist reflect their interests. “Drink causes poverty! ” says the former, in his inverted reasoning. The fact is that the workers are born poor and must remain poor within the capitalist system because wages never provide more than a bare existence even to the life abstainer. “Without drink,” the reformer tells you, "money formerly so spent could be used to purchase things more necessary.” He incidentally plays upon a weak spot by the glad news that such alternative expenditure will mean more wor-r-r-k. In face of the ever-increasing army of unemployed, willing to accept a job at the lowest possible price, the idea that the workers would continue to receive the same wage after a lowered cost of living—is a joke. The sum spent on drink is an item in the average wage; if it should become no longer necessary, the abstainers’ previous advantage will disappear. As a result of Prohibition, those engaged in the brewing industry, including auxiliary workers, publicans, barmen, maids, cork and glass makers, sign writers, carmen, etc., would lose their employment. In actual practice this is the fate of the present unemployed whose numbers are in excess of the requirements of capitalistically produced wealth. Some claim that drink causes wretchedness, but the pathologist could prove quite the reverse. We know by experience that poverty surroundings cause depression. Drink is merely an attempt to counter its effects. In a city like Glasgow, where poverty and slumdom stalk naked and unashamed, the craving for stimulants almost becomes a disease with some of the very poor. Unable to afford ordinary spirits, they resort to methylated spirits as. a substitute. It is vile living conditions that cause people to become hopeless sots; it drives them to the glamour of the tavern. Whilst capitalism persists, most moderate drinkers will continue by habit to take to the present method as the line of easiest resistance to obtain a makeshift social intercourse and infuse a little colour into a grey world. As to the need in the future for alcoholic beverages, that can be safely left to a generation wise enough to realise that this earth provides the only opportunity that they will have to enjoy paradise. Those who produce the best will have the best, for with the coming of a sane system of society the cheap and nasty pleasures reserved the workers will be laid to rest with all the sordidness of the present system. 

The Collapse of Capitalism (1922)

From the February 1922 issue of the Socialist Standard

There is a notion widely held in certain circles that capitalism is in a state of collapse, or at least, that its collapse is imminent; and this is interpreted to mean that the existing system of society will reach a point at which the production and distribution of commodities will cease, and the whole of the mechanism of Society will fail any longer to operate. Those who propagate this conception naturally accept the view that the tactics of the working class organisation must be framed with this collapse always in mind.

The illustration given recently by one of them—Mr. Palme Dutt—was the comparison of the present social order to a house admitted to be in a far from perfect condition. Of the occupants there was a section which considered redecoration and repair to be sufficient, while another section thought that nothing less than demolition and building anew would meet the needs of the situation. These sections represent the reformists and revolutionaries respectively. Now, however, the war and the Russian revolution have brought new factors to bear, and the dispute has been removed to another plane, the only question now being not whether to destroy, but how to rebuild. The house is said, in fact, to have collapsed about the ears of the dwellers through its own rottenness.

This sounds plausible indeed, but argument by analogy is dangerous. Has capitalism collapsed? and to what extent have the war and the Russian revolution altered, apart from having merely intensified, the previous structural defects?

The Third International lays it down that “The present is the period of the breakdown of Capitalism,” but does the evidence support this or do the “Third’s” adherents act as if it were true? The answer is decidedly no.

In America Max Eastman (Communist) says “This statement is not true of the United States in the same immediate sense that it may be true of Europe. We are not in the period of the breakdown of
Capitalism . . . ” (Liberator, October.)

He continues: “We (the American Communists) are employing tactics that could never be appropriate in any other period.” Now, the American Communist Party has “gone west,” and it is generally agreed that part, if not all, of the cause of their failure, was their attempt to apply a policy based on a condition of affairs which did not exist. Does that support the view that Capitalism is in collapse?

In Canada, which was wildly alleged to be on the verge of revolution at the time of the post-war Winnipeg strikes, a general election has just taken place which has led to the defeat of the conservative party by avowedly capitalist Liberals; the election having been fought on a tariff issue. There has not, apparently, been one Socialist returned.

In Australia, despite its heavy roll of unemployed, and its wage reductions, the "Proletarian” (Melbourne, 7th November) writes: "But until the full force of the present world depression reaches our shores the Australian working class will not be very susceptible to Communist propaganda.”

In Europe, where the full effect of the trade depression has been felt, does the economic system show any noticeable lack of vitality, or do the capitalists act in any but their accustomed aggressive manner towards the workers? In spite of the enormous amount of unemployment, curtailment of production, and relative overstocking of markets, are there any strikingly new factors to be considered after one has allowed for the expected after-war depression, the destruction of the war and the blockade, the new political frontiers and the chaos of the exchanges, all of them more or less normal phases of capitalism or the usual experiences after previous wars?

The struggle for markets may have been intensified, but does this call for new revolutionary tactics?

What of the Russian revolution? Here, again, the importance has been overestimated. The replacing of Czarist feudal Russia by a capitalistic republic even if the latter remains permanently under the Bolshevik Government, is the net result of the revolution, and it has only loomed so large because of the more or less accidental circumstances that it was the Bolsheviks who were brought into prominence by it.

If capitalism were in collapse would the Bolsheviks be relying on capitalist enterprise to rebuild Russia, a process which they admit will take decades at least? Would our own Communist Party feel the need to ally itself with the Labour Party to get the latter into power? The fact is the capacity of the capitalist system to recover from its depression has been under-rated and the Communists have in practice been forced to discard their theory. From the day when Marx and Engels wrote “There is a spectre haunting Europe—the spectre of Communism" there have continually been people who have under-estimated, as well as others like Hyndman, who never understood, but were always seeing revolution imminent in every momentary pause or set-back in capitalistic development.

In the minds, too, of some of its adherents, this theory of collapse is nothing but a failure to appreciate the Marxian viewpoint. The idea of an actual physical stoppage of production is not Marxian. Societies do not collapse like jerry-built houses. Marx wrote :—"The knell of capitalist private property sounds when the monopoly of capital becomes a fetter upon the mode of production, which has sprung up and flourished along with it, and under it,” but as Boudin particularly points out (Theoretical System of Karl Marx) "He does not say that production under the old system must become impossible before a revolution sets in" and again, "as far as the purely mechanical breakdown of capitalism is concerned . . . it is not a physical breakdown, as would be necessary in order to exclude the necessary intervention of conscious human activity, but rather a moral bankruptcy. Certainly there is absolutely nothing in the capitalist system to prevent it from relapsing into a sort of new feudalism or slavery . . .  ” (p. 253). What Marx did mean, therefore, by the idea of the breakdown of Capitalism was the working-out of its inherent contradictions plus recognition by the workers that the continued existence of a system of society based on their exploitation is unnecessary and intolerable and that the class of exploiters no longer performs useful social functions. The moment of that recognition is the moment of the overthrow of class domination.

But it may be said “Capitalism can no longer employ its wage slaves, nor feed the unemployed.” But did it ever? Is unemployment new? and did Capitalism even in its days of most virile expansion and development provide an adequate standard of living for workers, employed or unemployed? Did the capitalists trouble about security for their victims? Everyone knows they did not: and yet the system survived.

It is of no use waiting for the system to collapse, nor preparing a new economic structure to replace it. It will not go until the workers determine that it shall go, and the pressing service revolutionary organisations can perform is to prepare the workers’ minds for the possibility of the immediate establishment of Socialism. To return to Palme Dutt’s analogy, we have not yet reached the stage of convincing the worker that there is anything wrong with the house at all; he still thinks it is the unneighbourliness of the people upstairs or in the house next door.
Edgar Hardcastle

Saturday, December 10, 2016

Marx and Lenin - Distorted Views (1933)

Book Reviews from the December 1933 issue of the Socialist Standard

Karl Marx by R. W. Postgate. 1s. 6d. 

Lenin, by R. Palme Dutt. Is. 6d. (Hamish Hamilton, Ltd., 90, Great Russell Street, W.C.1.)

The above two booklets form part of a series purporting to deal with the pioneers of Socialism and issued at a uniform price. Containing less than a hundred pages each, it is obvious that the subjects suffer a great deal from compression. This is particularly noticeable in the case of Marx. Unfortunately, this is not the only serious defect.

Mr. Postgate's volume has its good points. The thirty pages dealing with Marx’s life are brightly written. The first part of the Communist Manifesto is fairly well paraphrased in the shorter chapter on Historical Materialism, and the first book of Capital is summarised in another chapter somewhat longer. Then follow the final ten pages, in which the author seeks to show that Marx’s dialectical method is out of date and useless. The attempt is cheap, scrappy and quite unconvincing. Because the Bolsheviks obtained political control in Russia and the Nazis have followed suit in Germany, Mr. Postgate thinks that Marxian dialectics have gone phut! He would substitute "Modern psychology." Apparently, what we require to know, in order to understand latter-day history, is (not the material conditions existing in Russia or Germany, as the case may be) but the psycho-analytical interpretation of the dreams of Lenin and Hitler. Which is as good as saying that any such understanding is for ever impossible. Let us suppose, for the sake of argument, that Hitler is a sadist, or that Lenin suffered from paranoia; does that teach us anything worth mentioning about the movements with which they were associated ? Obviously not.

On page 89 we are told that "Socialism may be possible, it may be probable, but it cannot be inevitable." Mr. Postgate repeats the stale dualism that the inevitability of Socialism would make action in its favour unnecessary. His difficulty reminds one of the poser put by Alfred Lester to the old lady whom he showed round the village fire station: "Does a hen lay an egg because it wants to or because it can't help it?"

To the dialectical materialist the answer is obvious. The hen's "want” is simply the more or less conscious reflection of an unavoidable, organic necessity. Mr. Postgate is evidently of the opinion that the hen could (if it wanted to) keep on twiddling the egg round the interior of its anatomy for an indefinite period.

The economic conditions which make Socialism possible simultaneously make it necessary. Indeed, logically, there can be no distinction between the terms. Socialism can be possible only if the forces making for its establishment are stronger than those retarding it, in which case it is inevitable. Seeing, however, that society consists of human beings, social development must inevitably consist of the more or less conscious activity of human beings. The social development will force them to recognise the problem and the solution to it. Mr. Postgate's final chapter, however, merely sums up the fallacious attitude which peeps out in his winding up of his earlier chapters.

For example, on page 72 he says: "We see that the labour theory of value explains the growth and composition of capital as accurately at least as any other." What acuteness! One would have thought that if the theory which finds the source of value in labour is accurate, then “other" theories (which find it elsewhere) are decidedly inaccurate. On page 80 he rehashes Bernstein's doctrine of the survival of the "middle-class," and regards the “Fascist revolution" as the work of this section. He fails entirely to see that the intense political reaction of this section on the Continent is the strongest possible evidence of the desperate insecurity of their position as a result of the development of large-scale capitalist production.

Mr. Postgate follows the current fashion among "intellectuals" of professing to regard the economics of Marx as of much less importance than the materialist conception of history. The absurdity of this is apparent on the face of it. According to Marx's view no epoch can be understood apart from its economic basis. His critical examination of capitalism as a system of production is, therefore, of fundamental importance. The understanding of previous history is necessary, since out of the past capitalism arose; but, in Marx’s own words, we have not merely to explain the world but to change it, and must therefore understand what it is that we wish to change.

To sum up, Mr. Postgate displays the stamp of superficial mediocrity; patronising genius, he endeavours to push it aside. It is almost a relief to turn from this flippant, over-grown schoolboy to the somewhat humourless Mr. Dutt.

In spite of the manifest bankruptcy of “Communist" theories (both official and opposition), he eulogises Lenin as having added something of importance to the work of Marx. Approximately two-thirds of the book are taken up with a general description of the life and times of Lenin, especial stress being laid upon his critical attitude towards the leaders of the Second International. Lenin, however, rejected one type of opportunism only to fall into another. The circumstances of the large class of small property owners in Russia, mainly peasants, were different from those of their counterpart in Western Europe, such as the peasantry of France. They still had an active role to play in relation to Tsarism. They had no notion or intention of abolishing capitalism, but they did wish to enlarge their property by breaking up the landed estates of the nobles, large and small.

Lenin was largely instrumental in securing an interchange of support at the critical moment between the politically active elements of this class and the Party which he led. He did this in the name of the world revolution of the working-class; but sixteen years after the Bolshevik seizure of power that revolution is not above the horizon. The attempts of Lenin’s followers to foment it by hot air have failed, from China to Peru. In Russia itself we find Stalin, with his doctrine of "Socialism in one country," occupying the place of Lenin and Trotsky, with their notions of immediate world change.

Like Mr. Postgate, Mr. Dutt cannot forbear to have his little dig at the Second International parties succumbing to Fascism and Nazism, and writhing under the whip of the counter-revolution. He forgets that his own withers are rather badly wrung. Just over ten years ago, The Worker's Weekly (of which he was then Editor) repeatedly assured us that a Communist Revolution would occur in Germany in the course of the following month. Apparently it is still waiting for a German Lenin to descend from the clouds.

Mr. Dutt devotes several pages to an outline of Lenin’s views as to the relation between the workers in the large capitalist countries and the populations of the relatively backward areas of Asia and Africa. On page 70 he advances once more the fantastic notion that part of the tribute from the Colonies is used by the capitalists "To buy off the upper strata of the working class in the imperialist countries." Does Mr. Dutt seriously contend that the workers of these countries fail to produce the equivalent of what they consume as a class ? What kind of "revolutionary Marxism" is this?

On page 77 we are told that "The dictatorship of the proletariat is a dictatorship of the immense majority against the minority of exploiters." This is an attempt to make Lenin's position square with that of Marx and Engels in the Communist Manifesto. We have ample testimony from Lenin himself that his dictatorship was, on the contrary, one of the few over the many. See, for example, "The Soviets at Work" (pp. 33-37), where he defends the decrees “Granting dictatorial powers to individuals," and "Demands the absolute submission of the masses to the single will of those who direct the labour process."

In supporting the Bolsheviks the workers and peasants of Russia merely changed their political masters. These new masters may be more efficient and humane than the old, but they are masters none the less. The emancipation of “the masses" remains to be accomplished. The Russian dictatorship was the outcome of Russian anarchy—the counterpart of the well-nigh hopeless chaos, both in the workshops and on the land, which followed the military debacle of 1917. It is one thing to import ideas into a country like Russia, however, and quite another matter to import the conditions to which these ideas correspond. Under such circumstances even a hundred Lenins could not prevent “Socialist" ideas becoming a cloak for reactionary practices.
Eric Boden

Wednesday, December 7, 2016

Rumpelstiltskin - a fairy story for adults (1988)

A Short Story from the December 1988 issue of the Socialist Standard

Long ago in a kingdom now gone there lived a miller who had a very beautiful daughter. The miller was so proud of her and so eager to move up in the world that one day he went to the king and told him that his daughter was so clever that she could spin gold out of straw.

The king was prepared to talk to people like millers, and even listen to them, because he desperately needed gold to pay for his silks and spices from the East, his increasingly sumptuous woollen fabrics and carved furniture and stone castles, and to finance the wars he kept engaging in to keep hold of his kingdom and. wherever possible, expand it. The taxes and fines he and his nobles were able to extract from the serfs and artisans and small manufacturers like the miller were no longer enough to pay for all this, and he was prepared to listen to anyone who could tell him how to get more gold.

"Bring her to the palace in the morning," said the king, expecting that a witch with such powers must be ugly. When he saw her he was astonished by her beauty, but he did not say so. He led her to a chamber where there was a great quantity of straw, a stool and a spinning wheel and said. "You must spin all this into gold before morning. or you will be put to death." The poor girl protested that she could not do it, but the king was unmoved. The door was locked and she was left alone, weeping loudly.

As night fell the door was suddenly unlocked and in hobbled a little hunchbacked man. "Who are you?" sobbed the maiden.

"I hear you have need of a master spinner. I am the best in the land."

"Are you a dwarf?" asked the maiden.

"If you say so," said the little man. "My mother was so poor that all her other children died, and so did she. I am the runt of the litter."

“I have to spin all this straw into gold before morning, or the king will have me put to death. Can you do it?"

"What will you pay me?"

"My beautiful necklace."

The little man nodded his head, sat down at the spinning wheel and began to spin. Whirr, whirr, whirr went the wheel, and one bobbin was full of gold thread. Then he set up another. Whirr, whirr, whirr, thrice round again, and a second bobbin was full. And so he worked all night until all straw had been spun into gold.

At sunrise the dwarf left with her necklace in his pocket, and soon afterwards the king came in He could hardly conceal his surprise and pleasure at seeing the gold. But he had the spinning wheel and the girl taken to another room containing much more straw. "If you value your life you will spin all this into gold before sunrise."

The miller's daughter was in despair. "What shall I do now?" she wept. "No magic will save me a second time." But the words were scarcely out of her mouth when the door sprang open again, and in stepped the dwarf. "What will you give me this time?"

"This ring from my finger." The hunchback took it. sat down and once more began to spin. Faster and faster went the wheel all night long until all the great pile of straw had been turned into bobbins of fine gold.

The dawn came and the king appeared. He was delighted, but he was far from satisfied. He had begun to see a way in which he could make himself the richest king in the world. He might marry the girl and make her spin gold whenever he wanted it. But just to be sure he had her taken into yet another room piled high with straw and commanded her on peril of her life to turn it all into gold by morning.
The miller s beautiful daughter waited for the dwarf to appear again, and sure enough he did. "That is a great deal of straw. What will you give me to spin it all into gold before morning?"

"I have nothing left to pay you with. "

The little man tugged his thin beard and pondered for a moment. Then he said. "I have no child. When you are queen you must give me your firstborn infant. For that I will do the work. "

Desperate to save her life and thinking it impossible that she should ever be queen the girl agreed. Once again he began to spin. The wheel fairly sang, so fast he span, and by morning he had finished it all.

When the king arrived he was overjoyed. "You are a very beautiful girl," he said. "Fit to be a queen. I will make you my wife."

The miller was extremely satisfied. At the royal wedding of his fair daughter he was dressed in fine new clothes and strutted about as though the king had already made him a duke.

A year went by and queen gave birth to a fine healthy boy child. By this time she had quite forgotten her promise to the little hunchback. Then one day he was brought before her. "Your majesty," he said, "it is time to pay your debt."

The queen was terrified. She offered him all the riches in the kingdom, but he said. "I do not want wealth. You must keep your promise."

Then she wept and groaned as if her heart would break until the dwarf took pity on her. "I will give you three days and if during that time you can manage to guess my name I will let you keep your child. "

All night the queen lay awake trying to think what to do. She knew that she could never discover his name by guessing, so in the morning she sent out spies into the countryside to try to find out the dwarf s name.

When he came before her she tried him with all the strange names they had gathered. "Is your name Caspar, Melchior, Balthazar?" But at every one the dwarf said. "No, that is not my name."
Again the messengers set off throughout the kingdom and came back with names like Ribs-of-Beef. Spindleshanks and Hunchback. but when the little man appeared he said to every one. "No. that is not my name."

On the third day the queen’s spies came back with no more names, but one of them said. "As I came to a high mountain near the edge of the forest where the foxes and hares say goodnight to each other I saw a little hovel with a fire burning outside. Dancing round the fire was a little hunchbacked man and he was singing:
Today I've brewed, tomorrow I'll bake
And then I shall the Queen's child take.
Little does my lady dream
That Rumpelstiltskin is my name.
When the dwarf appeared the queen pretended to be still guessing. "Is your name Hans?”


"Is it Conrad?"

"No, it is not?"

"Then are you called Rumpelstiltskin?"

"A witch has told you!" shrieked the little man and he stamped his right foot so hard upon the ground that it was buried up to his thigh.

Some say that as he tried to pull it out he tore himself in two. Others have it that it was the new queen who had him put to death for trespassing and poaching in the king's deer forest. But whichever account is true it is plain that the queen had no pity on the little stunted man who had done all the work for which she had taken the credit. Through the product of his labour the miller's daughter had become queen. She and her father had come to power in the kingdom, and they were just as ruthless and avaricious as the king had been.
Ron Cook

The Poison of Nationalism (1973)

From the March 1973 issue of the Socialist Standard
In the struggle to win the minds of the working class Socialists have to contend not, on the whole, with rational critiques of the Socialist position but with deeply held and unquestioned values. A few of these, for example, might be religion, "human nature", "a fair day's wage for a fair day's work" or the association of Socialism with Russia. One of the strongest of these sacred beliefs, and one of the biggest obstacles to the establishment of Socialism, is nationalism ― the loyalty felt by many members of the working class to "their country", the political unit in which they happen to reside.
Socialists hold that the only real divisions which exist in the world are horizontal ones, between different social and economic groups. In advanced capitalist countries this consists in a division between the capitalist class, which owns and controls the means of production, and the working class, which owns none of them and which has to sell its mental and physical labour-power to the capitalist class in order to live. Feelings of loyalty to a nation-State are purely subjective, having no basis in reality; the working class in Britain has more in common with the workers in other countries than it has with the British capitalist class.
Classes not Kingdoms
There, is however, an alternative view of the world. This is the belief that the important divisions are not horizontal, between different classes, but vertical, between various nations. A "nation" consists, according to this view, of a hierarchy of men and women who, although having differing incomes, social status and power, all have a common interest in working in harmony for the benefit of the whole unit and, if necessary, in fighting against other nations to defend this interest. This completely erroneous outlook is the one held by most members of the working class and nearly all political parties (including the Labour Party). Most historians reject Marx's declaration that "the history of all hitherto existing society is the history of class struggle", preferring instead to see history as a succession of struggles of nations against foreign domination, of subjects against tyrannical kings and of nations and races against each other.
Broadly speaking, nationalist ideologies and movements represent the interests of the capitalist class. Nationalism as such did not exist in pre-capitalist society and its growth and development represents the parallel development of the capitalist class. Nationalism as we know it today first made its appearance during the French Revolution. In the early stages of the revolution cosmopolitan ideas were prevalent ― it was believed that the rest of Europe would be inspired by France's example and would likewise overthrow the old order. When this failed to materialise strong feelings of nationalism developed; France was seen as a chosen nation, picked out to be the standard-bearer of revolution throughout Europe.
Ambidextrous Creed
Politically, nationalism is ambiguous, in that it can take on a "rightwing" or a "leftwing" form. This depends upon the position of the capitalist class in the particular time and place. If political power is held by the aristocracy or nobility, and the middle-class is struggling to assert itself, then nationalism will have "leftwing" connotations. This was the case in Europe until 1848, when nationalism was a romantic, revolutionary force against the traditional ruling class. However, once the bourgeoisie has captured and consolidated its power, then nationalism becomes a conservative and rightwing force.
. . . and in Ireland now
Although every nationalist movement believes it is unique, there exist basically these two forms of nationalism side by side. In the advanced parts of the world ― the United States, Britain, Western Europe ― nationalism is conservative, whilst in pre-industrial countries engaged in struggles against a foreign ruling class, nationalism is a "leftwing" force.
The World Socialist Movement opposes all nationalist movements recognizing that the working class has no country. There are certain other groups ― the Communist Parties of the world, and the so-called revolutionary left ― which, though claiming to have a class outlook, have a wholly opportunist and ambiguous attitude to nationalism, which reflects not so much the interest of the working class as it does Russian or Chinese foreign policy. These groups fully accept the mythology of the existence of "the nation". For example, from an Anti-Internment League pamphlet:
"The people of each nation have the right to determine how they shall be governed. Foreign interference is a fundamental attack on that right. When one nation takes offensive action against another, by introducing troops or in any other way, we cannot sit on the fence . . . And so to Ireland: Ireland is a nation; Ireland is not Britain; and the Irish have a right to decide whether or not they wish to have any association with the rest of these isles."
This attitude is a complete denial of Marxism; it is almost incomprehensible that people who describe themselves as Socialists should write of the "right to re-establish Irish nationhood" (from the same pamphlet). The Irish republican movement is in essence no different from any other nationalist movement; it was brought into being because of the need of a fledgling capitalist class to break away from Britain and erect protective tariff barriers in order to build an industrial economy. Socialists give the IRA and Sinn Fein no support whatsoever.
What Marx Meant
It will be argued that Marx and Engels supported nationalist movements and that therefore Socialists should do so today. Such an assertion is based on a faulty understanding of the materialist conception of history. Marx and Engels were living in an era when the bourgeoisie was engaged in a struggle to assert itself against the old feudal regimes. The victory of this class was a historically progressive step at that time in that it brought about the re-organization of society on a capitalist basis, the essential precondition for the establishment of Socialism; and it created an urban proletariat, the only class which can bring about Socialism. This was why Marx supported the rising capitalist class in their bid to capture political power. However, once capitalism reaches the point where Socialism is a practical proposition, there is no need for Socialists to advocate the capitalist industrialization of every corner of the globe; they can concentrate fully on the task of establishing Socialism. Hence we give no support to any nationalist group, and in place of the opportunism and hypocrisy of the myriad Bolshevik groupings in advocating "national self-determination", Socialists echo the rallying cry of Marx and Engels, "Workers of All Countries, Unite!"
Brendan Mee

Sunday, December 4, 2016

The Sinking Pound (2016)

The Cooking the Books column from the November 2016 issue of the Socialist Standard

‘Hard Brexit fears push sterling to a fresh low’ read the headline in the Times (7 October) reporting that the pound had fallen to its lowest level against the dollar for 31 years. Others are suggesting that it could eventually fall, ironically, to £1 = 1 Euro.

Until 1973 most of the world’s currencies were tied to a fixed rate with the US dollar and so also to each other. If a country wanted to change this it had to get the agreement of the IMF. Governments tried to avoid such a formal devaluation as this was regarded as a recognition that they could not control the part of the capitalist economy they presided over as they had claimed in order to get elected.

Such devaluations reflected a situation where a country’s exports were doing badly, generally because their prices were uncompetitive due to a higher than average rate of inflation. This resulted in more capitalist firms wanting to sell the country’s currency than to buy it (to pay for its exports). Governments tried to hold the fixed rate by using their reserves of other currencies to buy their own currency. When this couldn’t be kept up, they had no alternative but to seek the permission of the IMF to devalue, i.e., to lower its exchange rate with the US dollar and so with other currencies too.

When the Labour government was forced to devalue the pound in November 1967 the Prime Minister, Harold Wilson, famously declared that ‘it does not mean that the pound here in Britain, in your pocket or your purse or in the bank, has been devalued.’

This was technically true but disingenuous as, while a pound would still buy a pound’s worth of goods in Britain, one effect of devaluation is to raise the price of imported goods. As many of these are consumer goods or enter into their production, the effect is that ‘the pound in your pocket’ will eventually come to buy less than before the devaluation.

Nowadays, with floating exchange rates, governments don’t need to formally change the exchange rate of their currency. They can just let market forces decide what the exchange rate is by the demand for it. Because a falling exchange rate increases the price of imported goods governments do not necessarily always want this, so they still intervene in the currency market to try to keep the rate from falling.

On the other hand, when they want to try to increase exports, they let it fall. In fact, now that under WTO rules tariffs can’t be used as a weapon of economic competition, letting a country’s exchange rate fall has become a replacement. The euro, which in effect established a fixed rate of exchange between the currencies of the member-countries all renamed “euro”, is in part an attempt to prevent this kind of economic competition. One reason Britain stayed out was to be able to continue to use this weapon.

The current fall in the value of the pound was exacerbated  by a rousing patriotic declaration by the Prime Minister at the Tory Party Conference that, with Brexit, Britain was to become an independent, sovereign nation again. To which the currency markets gave a decisive ‘that’s what you think’, illustrating yet again that no country can escape from the operation of the economic laws of world capitalism as well as reflecting the speculators’  assumption that, if Britain leaves the single market as well as the EU, British exports are likely to suffer.