Tuesday, May 10, 2016

The Myth of Swedish Socialism (1994)

From the December 1994 issue of the Socialist Standard

In spite of all that has happened in Europe since the collapse of the Berlin Wall and the demise of Russian-style state capitalism, there is still a tendency for leftwing parties to refer to themselves as “socialist" and to claim the mantle of representatives of the working class.

The Swedish Social Democrats are no exception. In fact, their leader, Ingvar Carlsson, having just taken power from the conservatives in September with 45 percent of the votes cast - the biggest swing to the left in sixty years - declared his party to be "classically socialist".

The foundation of this assertion appears to be the fact that the Social Democrats have for years pursued Keynesian policies and that they have a welfare system the envy of Europe.

Sweden has indeed an enviable welfare system compared with those of other European countries, with unemployment benefits, for instance, still standing even after a recent reduction at 80 percent of average take-home pay, but at the same time Sweden has 14 percent of its workforce unemployed.

The unemployment statistics were what Carlsson largely capitalised on in the run-up to the recent election, promising that future Keynesian policies would ensure that no one under the age of 25 would be out of work for more than 100 days. At the same time the Social Democrats were intent on cutting child care grants, reducing pensions and raising taxes. In short, everyone was being told they must shoulder the burden of Sweden’s current economic crisis - a crisis evident in most European countries at the moment

Sweden's welfare system, as Peter Cohen recently pointed out in an article “The Model That Never Was" in the July-August issue of Monthly Review, "can be traced to the same factors that generated the Beveridge report . . .  a higher standard of welfare for workers means less ‘absenteeism’, a lower employee turnover and higher productivity, which means greater profits”.

That the granting of benefits to the working class of Sweden had an ulterior motive - the maximisation of profits - was only to be expected from the Social Democrats. themselves never representatives of the working class. In fact, as Peter Cohen also pointed out, the history of the Swedish Social Democratic Party since the first world war shows that it "not only accepts capitalism, but defends it against any attempt at change".

On Hitler's 50th birthday it was the Social Democrats who sent their blessings along with troops to take part in the celebrations. And it was the Social Democrats to whom Hitler turned to provide the Nazi war machine with iron, raw materials and weapon technology, while the voice of Swedish protest, the "communists", were interned.

Since 1945 Social Democrat governments have seen to it that Sweden participated wholeheartedly in an assortment of imperialist ventures, including GATT, IMF, OECD and the World Bank. They permitted Sweden to be used as a US communications centre for projected nuclear strikes, backed Pinochet in the wake of his coup in Chile, refused to impose sanctions on racist South Africa at the request of Swedish workers' organisations and openly connived with the CIA, Mossad and the West German Bundesdienst.

Neither can LO, the Swedish equivalent of the TUC, be considered an ally of the working class. In 1983 it urged wage restraint on behalf of the Social Democrat government who feared Sweden losing overseas markets to foreign capitalists. The same year the West German steelworkers came out on strike, a move meant to hit the car companies at a crucial time. To avoid any havoc this would have caused, the Social Democrats and the LO ignored requests for sympathy action with the West German working class and were only too happy to send supplies of steel to the German capitalists.

In the past five years 100,000 jobs have been cut in the welfare sector and it is unlikely that these workers will be reinstated by Carlsson. Moves are already underway to dismantle the public education system and to introduce more private schools. Nor do Sweden’s unemployment statistics look like improving, with recent reports showing that the country's biggest companies see no recruitment drive in coming years, although all expect the near future to bring huge profits.

In reality the Social Democrats in Sweden, like every other party in power in Europe, have to defend the interests of Big Business and can remain in power only by kow-towing to the rules of capitalism. That they call themselves "socialists” is an insult to the millions of workers who put their misguided trust in them. That they are so guilty of class-collaboration is the reason why they are so "classically unsocialist”.
John Bissett

The Panama Papers: All in it Together (2016)

From the May 2016 issue of the Socialist Standard
Capitalism is an expensive business. In any society where the population is divided between those few who own but do no productive work, on the one hand, and the many who have to work but own little, on the other, it is obviously necessary to build up a powerful and far-reaching state apparatus to protect the owning few. Each country’s owning class has to safeguard itself both internally and externally. Internally, it must construct and maintain police forces (overt and undercover), courts, prosecuting machinery, prisons and so forth, in case the propertyless many should rise against them, and attempt to construct a different society – or even just to try and replace the present leaders. Externally, it must construct and maintain armies, navies, air-forces and so on in order to prevent any other country’s capitalist class trying to seize part of its property, and also to support any attempt it may make to seize territory at present held by another country’s owning class.
All this costs money, a great deal of money. Britain is building a new super-prison in Wrexham, with places for 2000 inmates, at a cost of £250 million. And that’s just building it. Apparently it costs about £40,000 a year to keep each prisoner in jail - or £65,000 a year if you include the costs of the police, courts etc. But these expenses, enormous as they are, are dwarfed by the amount a capitalist class will pay out to defend its property from possible attack by foreigners (or possibly to acquire more property from foreigners). The United States is planning to procure a new generation of bombing planes (to destroy the buildings of hostile countries and kill their citizens); there are 175 of them, the total cost being estimated at between $40 and $50 billion. (That’s somewhere between twenty-eight thousand million pounds, and thirty-five thousand million pounds – which comes to about £100 for every man woman and child in the United States.)
So where will the money come from? The answer becomes more obvious the more you think about it. If you want food, you have to go and get it (and pay for it) at a place where they have food, e.g. a supermarket. If you want clothes, you go to a place where they sell clothes. And if you want money, you have to get it from the people who have money. There’s no point in demanding significant contributions from all those people who have to work for a living. When the economists examine the finances of people with low and middle incomes, they always say it’s a matter of swings and roundabouts. Taxation is demanded from many such people, and many others get various kinds of benefits. At the end of the day, it’s merely redistributing the income within that (very large) group of people. Apart from all that, of course, if the working class as a whole did have to pay serious taxes, it would mean much greater pressure for higher pay to make up for it, and in the end the capitalists as a whole would be taking with one hand and having to give back with the other.
All this being so, the money to run the state and preserve it from dangers both internal and external has to come from the capitalists themselves. But while all ruling authorities acknowledge this, and have strict laws in place in order to collect sufficient money from the rich to operate the state machine, the individual capitalists will often be tempted to reduce as much as they can their own personal tax burden. And this is where ‘offshore’ companies and similar dodges come in. Recently many documents – emails, correspondence etc – have been leaked from an influential law firm, Mossack Fonseca, in Panama. The firm has apparently acted for many wealthy people round the world who wished to conceal money or property from the authorities in their own countries. The leaked data from this single firm make it clear that the further up the power scale a wealthy person is in their particular country, the more they will be tempted to fiddle their tax affairs in such a way that they end up paying very little or sometimes nothing: like a member of a tug-of-war team who cheers on the others but personally does very little tugging.
One way to make your affairs ‘tax-efficient’ as the lawyers say (i.e. putting your money where it is safely out of sight of the local tax-collectors) is to establish a company or trust in one of several countries round the world that advertise themselves as ‘tax-havens’. Money gained illegally can also be stashed away quietly, since criminals often find it difficult to explain how without any very obvious sources of income, they are suddenly in possession of a lot of cash (a Rolls-Royce parked outside a terraced downmarket house would cause inconvenient curiosity). Through these secretive companies it’s possible to ‘launder’ money, for example when offshore companies (with anonymous owners) buy houses in London’s booming property market. ‘World leaders, criminals and billionaire sheikhs have secretly poured hundreds of millions of pounds into London properties, leaked offshore data reveals. The cache of documents from a Panamanian law firm confirms the capital as the go-to place for wealthy foreigners and criminals anxious to protect their anonymity and assets’ (Times, 6 April).
Capitalism is fundamentally the same throughout the world, but local history and local conditions often mean that the local version looks different on the surface. Different politicians have different names for their own version of capitalism – some try to get votes by calling it socialism, some even have the nerve to call it communism – but in fact it is recognisably the same the world over. And being the same, the local politicians share the same desires: how to hide their own wealth, while at the same time getting the rest of the country’s rich people to hand over enough of the readies to enable the country’s capitalist system to survive and prosper. Here are a few of those listed by theTimes or the BBC as being connected with these offshore subterfuges, who appeared in the Panama papers – either their own names came up, or the names of family members or close friends:
·        Sigmundur Gunnlaugsson, Iceland’s prime minister (in fact there are links in the data to twelve present or former heads of state or prime ministers); poor old Sigmundur had to resign.
·        David Cameron, Britain’s premier, who is going to host an anti-corruption summit in London  shortly; there were also calls for his resignation.
·        Gianni Infantino, the new head of FIFA (just installed to ‘clean up the mess’, because of the  peculiar financial transactions of the last lot).
·        Gonzalo Delaveau, head of the Chilean branch of the anti-corruption watchdog, ‘Transparency  International’.
·        James Ibori, ‘the corrupt Nigerian governor who is known to have bought property across London’.
·        Leyla and Arzua Aliyeva, who ‘are said to have amassed vast business empires’ since daddy –  President Aliyev of Azerbaijan – came to power in 2003.
·        President Macri of Argentina.
·        Two close associates of Marine Le Pen, head of France’s National Front.
·        A close associate of President Pena Nieto of Mexico.
·        Alaa Mubarak, son of the former Egyptian dictator.
·        Sheikh Khalifa Bin Zayed Al Nahyan, President of the United Arab Emirates.
·        Mariam Safdar, the daughter of Nawaz Sharif, Prime Minister of Pakistan (and two sisters of hers).
·        Kojo Annan, son of the former head of the U.N.
·        Kalpana Rawal, Deputy Chief Justice of Kenya’s Supreme Court.
·        Ayad Allawi, former Prime Minister of Iraq.
·        Dr Saraki, President of the Nigerian Senate.
·        Rami Makhlouf, cousin and close associate of President Assad of Syria.
·        Li Xiaolin, daughter of the former Prime Minister of China.
·        Petro Poroshenko, president of Ukraine.
·        Kim Chol Sam, a senior official of the North Korean regime.
·        Close associates of Vladimir Putin.
·        Brother-in-law of Xi Jinping, president of China.
Plus lots of others: e.g. Hans-Joachim Kohlsdorf, former senior executive of Siemens, Europe’s largest engineering company, Michael Geoghegan the former HSBC boss, David Hunt, ‘one of Britain’s most feared gangsters’ according to the TimesDominic Chappell, now principal owner of British Home Stores, Tarek Obaid, the founder of Anglo-Saudi oil company Petro-Saudi (and a ‘leading investor’ in a company running a dozen academy-type schools). And, of course, Mossack Fonseca, with 300,000 clients, is only one firm among dozens in the business of helping people to hide away their assets. It will be seen that there are people here from all sides of the various hostile groupings and power blocs into which capitalist countries naturally cluster themselves. They may denounce each other ferociously, but they are all alike when it comes to seeing if they can avoid paying their fair share of the enormous costs of running capitalist countries. The laws operating in each country are very often different, but even so it is quite possible that none of those named broke any laws: it was merely a question of being able to enjoy wealth but not pay taxes on it.
David Cameron appeared on the list because his father, Ian, had operated two offshore trusts, one in the British Virgin Islands, one in Jersey. In 2012 he criticised Jimmy Carr, comedian, who had joined an offshore tax-avoidance scheme: he said it was ‘morally wrong’. When asked about Gary Barlow, a pop star, who had campaigned alongside Cameron for the Conservatives in the 2010 election, and who had joined a similar scheme, he said he hadn’t had time to look into yet; though he had found sufficient time to give Barlow an OBE in 2012. So it’s a little embarrassing that Cameron and his wife bought shares in his father’s off-shore fund in 1997 for £13,500, and sold them thirteen years later for £31,500, two-and-a-half times as much – a very acceptable profit made through offshore trading. Not to mention that Cameron’s education (Eton, fees now £32,000 a year, and Oxford, where Cameron joined the Bullingdon Club – dress-suit to wear at club dinners: £3,500) was presumably paid for by his father’s offshore activities.
So it seems that’s how ‘morally wrong’ can be financially right.
Alwyn Edgar

Workers Elect - What? (1911)

Editorial from the January 1911 issue of the Socialist Standard

The excitement is over and the “most momentous question of modem times” is decided—for the second time. The fatuousness of the whole proceeding save from the point of view of those concerned to throw dust and gain time is indicated by the fact that the returns are almost identical with those of eleven months previously.

Of course, those fiends of darkness, the Lords, have been again soundly thrashed, and this time the road to the Liberal "Earthly Paradise” is to be unbarred. True, the noble creature whom Providence has granted the privilege of empire, the monopoly of work, and a big dinner once a year, has not betrayed that intense interest the occasion would seem to call for. But the wily ones know how to move him, and have judiciously prodded him to the polls — and for what ?

To place Britain at the mercy of the foreigner say some. To end or mend the Lords say others.

To bind his fetters tighter; to give his exploiters another lease of life; to check Socialism (Mr. Lloyd George—vide speech)—thus only can the Socialist answer.

The first have succeeded in roping in a large proportion of working cattle, but the wicked foreigner and his Radical allies are still at large.

The Liberals, on the other hand, are jubilant They have, in a measure, succeeded. True, they are still dependent upon factions to keep them in office, but they have what they asked for: a large majority to do things to the House of Lords. With this cry and a few minor promises they are returned fairly secure in office.

All these good people, Liberal, Conservative or what not, are quite honourable gentlemen, of course, imbued with a love of “British fair-play.” Consider, for instance, the way in which the spokesmen of both parties handle that old "Clarion” wheeze, the Referendum. The Tories with a great show of democracy, proposed to put the more momentous measures to a vote of the electors. Trust the people! was their election cry. The Liberals, however, the "People’s Party,” denounced it as unsound, impracticable, and revolutionary. The vaunted democracy of the latter is exposed in their attitude on this matter, while the sincerity of the Tories may be gauged from the fact that no sooner was it evident that they could not win than Mr. A. Chamberlain repudiated this extravagant “trust” in the people.

However, we are faced with a situation where the “People” are to come into their own. There are to be all kinds of democratic reforms, destined, it seems, to keep the Liberal party in power indefinitely. Some of these, they say, will have to be deferred ’til 1913—or, we suggest, 2013, so rapid is the age. But if the deluded proletarians will but examine the whole list,— "limitation of the Lords' veto," unemployment assurance, payment of members, and the rest — they will see that when all are enacted (if ever they are) their poverty-stricken, driven-beast existence will remain intact. "Down with the House of Lords” is even better as a vote-catcher than the more precise and much milder Asquithian phrase, and, as a trick to obscure the fact that a clean sweep of the House of Commons is required to make any real betterment in the condition of the workers possible, it speaks volumes for their devilish cunning, if not for their ingenuity.

No, friends, it is not because there is a Lords’ veto that we are in poverty and misery; it is because the means of livelihood are private property. Hence it is the whole social system, with its property basis, that we have to attack. And our line of attack is not through the Lords, but by working-class organisation —and through the Commons.