Sunday, June 19, 2016

What is capitalism? (1978)

From the October 1978 issue of the Socialist Standard

Capitalism is the form of society which (with only minor exceptions) exists throughout the world today. It is the system of society which is responsible for the major problems of the world but is incapable of solving those problems. Take one of the most basic of human requirements, housing. This is a problem that has been “about to be solved” over and over again. Yet, as is well-known, it remains. And when appalling slums are offered “cheap” to the workers, they fall over themselves in the rush to get at them. The GLC, for instance, have a policy of offering unusable property at very low rents to families who can’t get anything else. And of course those workers who could not afford other accommodation rushed in hundreds to try to get these miserable abodes. (See for example The Times 21/8/76). If there were no housing problem, workers would not be queuing up for slums.

But although workers are still facing similar problems to those of their parents and grand parents, the capitalist class, even in the midst of the current crisis, are doing quite well thank you. The Daily Mirror pointed out that although last year workers’ living standards were pushed down, “it was the rich wot got the pleasure. Profits and dividend payouts jumped by one sixth.” (8/4/78)

Now to the question: “What is this system that gives profits to the rich and slums to the poor — what is meant by the term “capitalism”? One thing can be stated with confidence; if workers want to do something about the problems that face them throughout the world it is necessary to have an understanding of how this society works, and why it cannot solve their problems.

Now it is true that capitalist society takes different forms in different parts of the world. Much depends on the level of development of any particular country. Detailed examination of, for example, the Russian system will reveal many differences from the form of capitalism in the USA. Nevertheless, all forms of capitalism, no matter how diverse, exhibit the following five basic characteristics:

1) Property
Society is based on property. This means that it is recognised (almost inevitably via a complex legal process) that individuals, groups or the state own wealth, in whatever physical form wealth takes. The converse of this is that it is also recognised that other individuals or groups do not own wealth.

2) Commodities
Society produces what are called “commodities”; that is, the need of the class that owns wealth to for exchange or sale. The production of commodities is of course much older than capitalism. In previous forms of society, though, the production of commodities for sale was a relatively minor aspect of wealth production. Under capitalism it is the major social form. In previous forms of society commodity production existed as a small part of the social structure. Today the social structure exists as a huge machine for the production of commodities.

3) Profits
Profits are realised when commodities are sold. That is, a surplus is received by certain sections of society. This surplus is something that is derived from the following simplified process: The majority of people (the workers) sell their working ability (known as “labour-power”) to the minority of people (the capitalists) approximately at its value; that is, at its cost of production and reproduction. Because of the special quality of this labour-power when it takes part in the production process, it produces both its cost of production and reproduction and something over. But when the worker sells his labour-power to the capitalist, he receives as wages from the capitalist only his cost of production and reproduction— what it cost (roughly speaking of course) to produce the worker and keep him fit for production. The “something over”, the balance, is kept by the capitalist. The extra which the worker has added is, in general terms, the source of all profit.

4) Accumulation
The driving force of the system is accumulation; that is, the need of the class that owns wealth to increase the wealth they own. As Marx put it, in a well known phrase: “Accumulate, accumulate. That is Moses and the prophets.” The ability of the capitalists to accumulate comes from the profits produced by the workers being used by the capitalists to increase the production of commodities to allow for the possibility of further profits.

5) Classes
Society is divided into classes. Those individuals who own wealth constitute one class; that is, they are a group of people with the same economic interest, the receipt of profits. They are the buyers of labour- power. The rest, the propertyless class, are the workers; they are the sellers of labour-power. They live off wages, the price of labour-power. The economic factor that binds them as a class, a group with a common economic interest, is the receipt of wages. They are what Marx called the “free” class. That is they are free from property; they have no property (or none of any social significance). And they are also free in a second sense that they are freely available for sale to the highest bidder on the labour market.

It is this system of society which is now responsible for the major problems in the world. Paradoxically, it is this system that enables the potential solution to the problems of the world to be developed. It is this system of society that needs replacing with Socialism.
Ronnie Warrington

Here’s to Success! (2006)

From the March 2006 issue of the Socialist Standard
Do you think everyone has an equal chance of success in life? That whatever family circumstances you were born into make little or no difference to the prospect of your getting on in the world? If so, think again. Danny Dorling, a Professor of Human Geography, was interviewed in the Guardian of 8 February. Where you are born, he claims, is the main thing that determines your status, health and wealth in later life. And by the end of your first two decades, your future is mostly decided:
‘By 18 or 20 your life is largely mapped out for you. You’ll either have interesting jobs where you use your mind your whole life, or your life will be working in a servile occupation.’
In addition, inequality in Britain has increased: in 2000, the wealthiest 1 percent owned 23 percent of the wealth, compared to 18 percent in 1990.
This is all very well, and certainly Dorling’s website at http://www.worldmapper.org is worth a look. But Socialists have news for the good professor: what determines your standard of living, your control over your life, etc. is which of the two main classes you belong to. The overwhelming majority of people are members of the working class: selling their mental or physical abilities for a wage or salary (or else depending on another family member who does so). A small minority are members of the capitalist class: they own enough property, whether in the form of land or shares, so that they do not need to work for a living. The contrast between interesting jobs and servile occupations is a division within the working class. The capitalists, as millionaires and billionaires, do not have to get a job — though they often have some cushy number with a title such as Managing Director or Chair of the Board, where they make sure that the interests of shareholders in a company are being looked after properly.
These classes are not castes: it’s certainly possible for a person to move from one to another. Members of the working class do occasionally become capitalists, largely through a sizeable slice of luck. But in almost all cases, the class you are born into determines whether you will grow up as an exploiter or a wage slave. So, if ‘where you are born’ determines how your life will pan out, that has to be seen as a matter of class, not of geography.
Paul Bennett

Obituaries: Harry Morrison, Les Dale and Bob Miller (2004)

Obituaries from the July 2004 issue of the Socialist Standard

Harry Morrison
Our comrades of the World Socialist Party of the US have informed us of the death of comrade Harry Morrison in his 92nd year. Born in 1912, he came to the US from Canada (as an illegal immigrant) in 1937 where he met and joined the Workers Socialist Party (as our US companion party was then called). After moving to Los Angeles for a while, he finally settled in Boston where he earned a living as a salesman.

For many years Harry Morrison was on the editorial committee of the old Western Socialist for which he wrote the editorials and editorial replies to letters as well as numerous articles under the pen-name of “Harmo”. He was also a member of the WSP’s NAC and its secretary, an outdoor speaker – or “soapboxer”, as the Americans call them –  an indoor debater and radio scriptwriter and a broadcaster (the WSP having its own programme on a local Boston station in the 60s and 70s). After health problems caused him to slow down his socialist activity, he wrote some books: one of which, The Socialism of Bernard Shaw, in which of course he showed that G. B. Shaw wasn't a socialist at all, was published in 1989.

Our US comrades have published an appreciation of Harry Morrison's life and socialist activities on their website.
  

Leslie Dale
Les Dale, our friend and comrade for many years, died on 22nd May in Newport Hospital on the Isle of Wight, aged 84 years.

He and his wife Queenie joined Ealing Branch in 1952. Les accepted our case after discussion with another comrade (the late Jack Law) during their time on the land together as conscientious objectors during the Second World War. Right from the outset, he became active in the work of the branch, soon excelling at the job of literature secretary. What heady days they were, with rapidly increasing sales of the Standard plus much other literature besides. His experience was put to good use when we worked together on the production committee of the Standard in the late 1950s and early 60s.

Les had a very fine knowledge of horticulture and agriculture and was also well versed in medieval history. With his firm grasp of the materialist conception of history he wrote periodically for the Standard and gave lectures on his favoured topics to various Party branches.

Sadly, his wife died of leukaemia at the early age of 48. It was a bitter blow to all who knew her, but Les showed great courage in carrying on despite his grief. Now that he is also gone, we will miss him greatly but will cherish the memory of his erudition and his keen philosophical wit.
                                     

Bob Miller
Bob Miller, who died last month aged 67, first joined the old Merseyside Branch of the Party in 1970 after having been active in the National Secular Society, but left the Party for a time after a branch disagreement. When Merseyside Branch revived in the 1980s, Bob rejoined and was a stalwart at meetings and worked hard selling the Standard, most typically at Williamson Square in Liverpool for many years. At one point BBC local radio used recordings of Bob on his pitch there in one of their programmes analysing the distinctive Liverpool ‘scouse’ accent.

For a short while Bob served on the Party’s Executive Committee and took his duties seriously and with a certain degree of dedication. He remained a staunch socialist until the end, the last 15 years or so of his life blighted by unemployment, this being in no small part related to his activities as a militant trade unionist in Merseyside during the 1970s and early 80s.                                       

DAP

Living on Tick (2016)

From the June 2016 issue of the Socialist Standard
From Shakespeare’s Shylock to Dickens’ Scrooge, moneylenders have generally had a bad literary press, probably revealing people’s instinctive reaction to them, but their place in society remains central. We examine the role of debt in working-class life.
Robert Roberts’ The Classic Slum describes life in Salford in the first part of last century. The pawnshop was an essential part of the local community; many people were dependent on the short-term loans offered, with women often pawning the family’s ‘best’ clothes on Monday until the following Saturday. There was a social hierarchy among the working class, with skilled workers at the top, and various ‘disreputable’ individuals at the bottom; and position ‘was judged not only by what one possessed but also by what one pawned’. True destitution meant pawning not just clothes but also pots and rugs, and finally not being able to redeem what had been left with the broker. The interest charged was usually a penny in the shilling per week; sky-high, but less than the moneylender, who charged threepence in the shilling per week.
Pawnbroking is not now the widespread industry it was in the days Roberts was writing about, but it began to grow again from the 1980s. There are now over two million loans a year, and the market as a whole is worth £850m, though the average loan is less than £200 and is for three or four months. The National Pawnbrokers Association states that 88 percent of loans are redeemed, but that still leaves around 250,000 which are not (though this does not mean that the value of the goods has been completely lost). The NPA describes pawnbroking as ‘a serious alternative to using the services provided by the High Street bank’ and ‘a modern, friendly and convenient way of getting cash quickly’. They claim it is cheaper than a bank loan or using a payday lender.
In July 1954 war-time food rationing came to an end, as did restrictions on hire-purchase (‘never-never’) agreements for consumer durables such as radios, fridges and vacuum cleaners. This meant buying what were then relative ‘luxuries’, in contrast to buying essentials such as furniture this way back in the 30s. Nowadays, hire purchase is often used in buying cars, including companies buying a fleet of cars. For personal consumers, it avoids the need to pay a big sum up-front, but it can lead to problems: if you return an item after paying less than half its cost, you have to pay enough on top of what you’ve already paid to make up that half cost (so you might get just three months’ use of something but have to pay a year’s worth of instalments).
The extreme case of hire-purchase is that of the weekly payment stores, which make big profits, primarily from the massive interest rates they charge on their loans and the service cover they also sell. Back in 2012 the Guardian gave an example of an oven that could be bought from one such company for £562 (or £389 elsewhere) but would cost a whopping £1433 if bought on weekly instalments from that same company with service cover over three years. Sales pressure plus an inability to pay by other means can easily result in people taking on such commitments without quite realising what they are letting themselves in for.
If people are having trouble repaying any kind of debt, they may well have recourse to one of the payday loan companies that now exist on almost every high street. But these again are incredibly expensive, with annual interest rates sometimes topping several hundred percent. The debt charity Step Change gives an example of someone borrowing just £200 for twenty days at the maximum allowable rate of 0.8 percent a day. If you repaid the loan on time, you would pay back £232, which is already quite a stiff rate of interest. But if you are late, then the interest mounts up, a late fee is added and you have to pay interest on the late fee. If you are ninety days late repaying, you would repay £400 (double the original loan, and the legal maximum that can be charged).
As this suggests, being poor is in itself expensive. Using prepayment meters for energy is more expensive than a standard tariff; and borrowing money means a higher rate of interest if you do not have a good credit record. No wonder debt counselling has become a minor industry in its own right. Some writers have even referred to there being a ‘poverty industry’.
Mortgages are of course the biggest source of debt, while students typically have over £40,000 in debt when they graduate. But plenty of people borrow – especially from payday loan companies and even doorstep lenders – to pay for everyday expenses such as food and energy as they struggle to make it to the next payday. They also borrow to pay for Christmas and so avoid disappointing their kids. And they borrow to pay off existing debts, which can swiftly lead to things spiralling out of control. Losing your job, falling ill, the break-up of a relationship: all these can tip people over the edge into chronic indebtedness.
The Money Charity provides a great many statistics on the extent of debt. For instance, in February this year, the average debt per household, including mortgages, was over £54,000. Outstanding consumer credit lending was £180bn, including £63bn on credit cards. Every day over two hundred people are declared insolvent or bankrupt, and twenty-five properties are repossessed. Other sources have noted the big increase in household debt over the last year or so, with the average increasing by over a third to £13,500 (mortgages aside). Shelter reported that one in ten parents thought that they might be unable to pay their rent or mortgage bills in January this year. Moreover, in March the increase in borrowing was the biggest since March 2005, before the recession began, leading debt charities to become increasingly worried.
The definition of ‘problem debt’ is when a family pays more than 25 percent of their gross monthly pay on servicing unsecured debts, and this applied to 3.2 million families by 2014 (up from 2.5 million in 2012). The pressure of debt can be overwhelming. In the words of one man who eventually did cope with his problems: ‘I felt like I was drowning, felt trapped. There was no light coming from anywhere, it was horrendous. And at one point I did go really dark and I did want to end it all’ (BBC Online, 20 January). Some people do in fact commit suicide because of their debt problems. In November 2013, for instance, a 60-year-old man from Southampton killed himself after taking on £20,000 in debts from twelve payday loan firms: his jobseeker’s allowance had been stopped on the grounds that he was fit to work, even though he had an illness that prevented him from swallowing (Daily Mirror, 22 July 2014).
Pawnbroking dates back at least to Ancient Greece, but it takes capitalism, with the cash nexus touching almost all aspects of life, with the never-ending influence of advertising, and with the insecurity felt by many workers, to make so many people subject to the worry and pressure of debt.
Paul Bennett