Saturday, September 3, 2016

Running Commentary: Times past? (1980)

The Running Commentary column from the December 1980 issue of the Socialist Standard

Times past?
It was bad enough Lord Matthews laying the Evening News to rest but the possibility of closing down The Times was a threat to this thing called the British Way of Life nearly as grave as Tony Benn’s daft promise to create a thousand Labour peers.

Without “the Thunderer” the clubs of Pall Mall and the better class breakfast tables throughout the land would never be the same again. Little wonder that there was such agonising; the gutters of Fleet Street ran deep with the bibulous tears of potentially redundant hacks.

The Times, set concrete hard in smug self-esteem, could hardly have been expected to appreciate a certain irony about its plight. As a world famous pillar of support for capitalism, it has sounded some of its loudest thunder in defence of the system’s basic principle by which production depends on the chances of a profit being made.

The great newspaper itself is now caught in the net of this inexorable demand of property society no profit, no production. For years The Times has been published at a massive loss which has been smoothed over partly by profits from other parts of the parent group and partly by the Thompson family’s private wealth.

Now that the bleeding has to stop, The Times—and its nervous sisters in Fleet Street are predictably laying the blame on allegedly greedy and irresponsible workers. Of course if those workers had been prepared to work twenty-four hours a day without eating they could have gone without wages and The Times would have been profitable enough to satisfy even the Thompsons.

For the Thompson Organisation to blame workers who press wage claims which might be unwisely timed is as irrelevant as workers who become redundant blaming incompetent management. In these matters the capitalist system is the culprit and in asserting its profit prioritites it does not discriminate not even in favour of its most ardent supporters.

Fallen star
Even more shattering that the possible loss of The Times was the actual death by suicide of Lady Isobel Barnett whose famous charm, wit and intelligence earned her the admiration and gratitude of countless television-addicted workers throughout the land and so also contributed to the enrichment of this British Way of Life.

The downfall of so glittering a star

(who was also rich, which is often calculated to win the admiration and gratitude etc. etc. . .) was bound to provoke a flood of sorrow. There were many hints that it was somehow indecent to have prosecuted her for shoplifting and some questioning about the whole of this practice. (Shoplifting, when all is said and done, is outlawed by capitalism as theft; many shops display brusque notices “Thieves Will Be Prosecuted”.)

The offence is most typically committed by females who are under acute emotional and financial pressure single mothers struggling to feed and bring up a family on the laughable benefits of Social Security, elderly women who, because their children have grown up and left home and they are no longer readily employable, fear that their useful life is at an end.

Lady Barnett did not come into that category. The Daily Telegraph, which customarily has little sympathy for “public figures” who fall from grace, was unkind enough to indicate that she was an habitual, compulsive shoplifter, someone who may have been classifiable as needing treatment to programme her into conformity with capitalism’s property laws.

Except that she should not have needed that. She was, after all, once a magistrate who sat in judgement on others who had broken those laws. On this point, she seemed to have suffered some confusion; in the dock herself, she chose trial by jury rather than trust her fate to the local bench in which she might have been expected to have more confidence.

The point will not be lost on the sort of people Lady Barnett once dispensed the “justice” of capitalism to—the wretched, frightened, confused workers who, having broken capitalism’s law, are daily paraded through the courts and, having tremblingly accepted their punishment, are forgotten. Unlike Lady Barnett.

Turning the screw
Whose heart did not bleed for his shareholders, when Lord Matthews appeared on television to insist that, unless the Cunard seamen agreed to the line registering two of their ships under a flag of convenience, the company would sell the ships—and eventually even the QE2 as well.

Matthews argued that this was unavoidable because the ships could pay their way only by employing the cheaper workforce available under a flag of convenience one way of tapping an international pool of labour in order to bring down wages. Under this pressure the seamen accepted what Matthews, in his genial way, described as a “good old British compromise” and agreed that one of the ships would be registered.

On shore, workers in British Leyland did not have even a compromise open to them when they tried to resist the company’s 6.8 per cent pay offer. In yet another episode in their long retreat before the onslaught on their conditions by the Edwardes management, they accepted the terms. Had they resisted, the company was promising to shut down within 48 hours.

The Ford Motor Company, whose recent publicity campaign urged buyers to “share in our successes”, is in process of imposing a new code of discipline on their workers which will involve the sacking of strikers and the suspension without pay (which is not sacking) of anyone who refuses to do a striker’s work.

And over all this looms the government’s determination to keep essential workers like firemen and hospital staff and water and sewage workers to a 6 per cent rise — that is, to impose a severe cut in their living standards.

That the screw can be tightened on the workers in this way is a grim symptom of the deepening slump in world capitalism. Mounting unemployment is remorselessly undermining the workers’ bargaining strength, depriving them of many of their weapons in the struggle to maintain their standards and so leading to further turns of the screw.

The immediate future for the working class is grim. It promises that the class division of capitalism, with its unending strife, its disruption and its wastefulness, will never be more clearly, nor more harshly exposed.

Unequally poor (2007)

Book Review from the February 2007 issue of the Socialist Standard

Branko Milanovic - Worlds Apart: Measuring International and Global Inequality, (Princeton University Press £22.95)

How unequal is the world, and is inequality getting worse? Has globalisation increased or reduced inequality? These are some of the questions that Milanovic deals with here, but he starts by discussing how inequality should be measured. Three different ways of doing so can be distinguished. The first is unweighted international inequality: examine the per capita income or GDP of a country, irrespective of its population.

The second is population-weighted international inequality: do the same, but take account of the fact that different countries have different-sized populations. The third is world income distribution: measure the incomes of all individuals in the world. This last is the most informative, but it requires a great deal of information for every country, much of which is simply not available. So it is the first as well as the third concept of inequality that Milanovic makes use of.

Even then, though, there are varying ways of quantifying inequality - but the contrasts between Gini co-efficients and Theil entropy indices can probably be ignored for present purposes. Between 1982 and 2000, unweighted international inequality increased, i.e. countries diverged in their economic  performance, with poor countries doing on average less well than the rich. One interesting way of looking at events is to classify countries in terms of wealth (i.e. GDP per capita) and compare how they fared between 1960 and 2000.

Milanovic divides countries into four groups in 1960: 41 rich countries (all at least as rich as the poorest country in Western Europe), 22 'contenders' (no more than a third below this poorest Western European country, and so within striking distance of joining the rich), 39 in the Third World (between one-third and two thirds as well off as this same poorest Western European country), and 25 in the Fourth World (GDP per capita less than one third of the poorest country in Western Europe).

By 1978, only three contenders had made it into the rich group, while eight rich countries had fallen into the class of contenders and three into the Third World. Of the Third World group, just two had become contenders and 14 had joined the Third World. None of the Fourth World countries had moved into a higher group.

Between 1978 and 2000, a further eleven contenders had fallen into the Third World and two into the Fourth World. Milanovic gives a lot more figures, but it is plain that there was far more downward than upward mobility. Algeria, for instance, counted as a rich country in 1960, a contender in 1978, and a member of the Third World by 2000. Bulgaria was a contender in 1960, in the Third World in 1978 and the Fourth in 2000.

In 2000 all African countries bar five were in the Fourth World: Milanovic refers to 'the unremitting downward mobility of the entire continent', a picture more or less repeated in Latin America. But of course this says little about the incomes of actual people, since even poor countries can contain rich individuals.

This is where the third concept of inequality, world income distribution, comes in. In terms of purchasing power parity, the top 10 percent of the global population receives about half of world income. Between 1988 and 1993, the poorest 85 percent of the world saw their real incomes decline; things were not quite so bad between 1993 and 1998, except for the very poorest 10 percent.

Milanovic's book contains a lot more information that we can't summarise here. While all the statistics, tables and charts mean that it's often hard going, it certainly gives a vivid picture of the unequal condition of the world today, and the fact that things are not in the process of changing.
Paul Bennett

Away with leaders (1980)

Editorial from the December 1980 issue of the Socialist Standard

Much ink has been spilled over the American presidential election and over the battle to elect the leader of the Labour Party in succession to Callaghan who may, if the Thatcher government continues as at present, find himself Prime Minister rather sooner than he now expects. The issue under debate, in America and among the Parliamentary Labour Party, has been leadership.

The first assumption in the debate, the common ground on both sides, is that the personality, the background and the abilities of a leader is of such significance that the election should turn on it. Was Carter too indecisive and erratic? Is Reagan too old, too belligerent, a Hollywood cowboy out of his depth?

Has Michael Foot really recovered from his time of callow leftist loonery and in any case would this man who habitually wears sports jackets and anoraks pay proper respect to the ceremonial roles of being Prime Minister?

It is on such matters that workers vote for or against a leader—which means that they vote for capitalism, under the delusion that by changing a leader or two they are changing the system for the better. Thus American workers are now congratulating themselves, that Reagan will bring them security and prosperity (as well as showing the Iranians who is boss). Labour MPs are hoping that Foot, when the voters allow him to try, will so effectively grapple with the crises of British capitalism that their party will hold power for evermore.

If there was any realistic basis to those ideas, capitalism would have a very different history. We can assume that political leaders are aware of the problems which plague capitalism (indeed Thatcher seems unable to talk about anything else) yet clearly they are powerless to eliminate those problems. If leaders were successful, each one would be part of a progress towards a safer, abundant, stable world. In truth, each new leader is confronted with the same mess as their predecessors. And as each one relinquishes leadership they hand on to their successor those same problems: thus Callaghan has handed to Foot the same parcel of despair as he inherited from Wilson, who took it over from Gaitskell . . .

To make some sense of this it is necessary to look to the basis of the situation. It is not to state the obvious — because to most people it is not obvious — to say that leaders exist only by virtue of their followers. They exist because the overwhelming majority of the working class shrink from recognising their own knowledge and experience of society, preferring to put their faith in others who, it is assumed, have some special knowledge and ability.

Workers in this frame of mind, who do not admit to their capacity and their achievements in organising and operating modern society, are workers who support the class privilege social system of capitalism. In most cases, they can conceive of no other way of running human affairs and are suspicious of anyone who discusses a world without poverty, war — and leaders.

But capitalism cannot exist without its inevitable problems; it traps its leaders just as surely as it does those who are led. Even if a leader may wish to be different, to stand out for some apparently novel policy, they are similarly ensnared and quickly exposed for their inability also to climb out of the trap.

Yet all the time there is a way out, the propagation of which has been the work of the Socialist Party of Great Britain throughout our existence. As a first step out, the world working class must recognise that they have the knowledge and the ability to administer and operate a modern society — its machinery of production, distribution, communication. They will then realise that in fact they do all of this already, but in the interests of a minority ruling class when they could do it in their own interests, to the benefit of the majority.

From this basic knowledge it is but a short step for the working class to see that they must act for themselves in the overthrow of capitalist society and its replacement with socialism. For this, because it will be the act of a conscious majority, no leaders are necessary — indeed, socialism cannot be imposed on the majority of society by a minority of allegedly better equipped leaders.

Socialism will be a democratic, participatory method of organising human affairs. It will be a society in which all human knowledge will be freely available to help the decision making processes; its democracy will be real and meaningful, ensured by the very consciousness which brought socialism into being.

These principles are operating, as far as it is possible under capitalism, within the Socialist Party of Great Britain, the only political party in this country which insists that its membership understands and supports the principles of socialism. The Socialist Party is without leaders; it is a democratic party whose members cooperate and participate in the work of socialist propaganda in equal standing.

Workers who despair of the apparently endless procession of cynical, futile leaders and candidates for leadership should consider the proposition that the alternative is not to switch their support from one leader to another but to join the socialist movement, where in the struggle to bring in the society of common ownership and free access they can have, and express, full confidence in themselves.

Open Secret (2016)

Book Review from the September 2016 issue of the Socialist Standard

'Wealth Secrets of the 1%', by Sam Wilkin. Sceptre £9.99

There’s no secret, really, is there? The one percent get their wealth by exploiting the rest of us, by paying us less in wages than the value of what we produce. This is not, however, the kind of thing that Sam Wilkin deals with here, since he is really concerned, not with how the capitalist class in general become rich, but with how and why some capitalists, in contrast to others, become very rich indeed. His answer is by ‘gaming the system’: by having the government introduce regulations that make competition difficult, and by making it more or less impossible for companies, especially banks, to lose money.

One chapter deals with the robber barons, the common term for a number of American capitalists who made vast fortunes in the last few decades of the nineteenth century: the likes of Carnegie, Rockefeller, Vanderbilt, Pierpont Morgan. As a comparison, Bill Gates’ wealth is less than one percent of US economic output, whereas John D Rockefeller’s net wealth was nearly two percent of US economic output at the time. The robber barons all despised competition, as it reduced their profits, and were able to acquire valuable patents and enforce vastly-profitable monopolies. For instance, Vanderbilt controlled all the railway lines into New York, while by means of a cartel Rockefeller owned nearly all of the oil-refining business. Morgan’s US Steel made tremendous profits by buying up other steel companies, eliminating competition and keeping prices high.

Wilkin also examines the methods used by Gates and Microsoft, focussing on the way they employed intellectual property ownership to gain a monopoly on some lucrative technologies. Microsoft did not create DOS, the operating system it originally made its money from; it just used its power and cunning to obtain a contract to sell DOS, helped by the fact that Gates’ father was a lawyer, so he had some background in legalese. As Wilkin says, there are two distinct issues: coming up with technological innovations and making money from these innovations are by no means the same thing. And profiting from a technology product has more to do with it being widely used than with it having the best features.

One point that emerges from the book is that there is no basis for claims that capitalism used to operate by means of a free market with unfettered competition, with this having been replaced by crony capitalism, where the state provides licences and protection for some companies. There has always been state interference with the workings of the capitalist economy, and competition has always been limited in various ways.

We mentioned earlier that Wilkin is not concerned with exploitation and the real origin of profit: those who produce the wealth receive little attention here. He does refer to the Homestead strike and lockout of 1892, at the works of Carnegie Steel, in which nine workers were killed by thugs employed by Carnegie and Henry Clay Frick. This is given the euphemistic description ‘an exceptionally heavy-handed crackdown on striking workers’. 
Paul Bennett


Editorial from the November 1930 issue of the Socialist Standard


It has been an argument of long standing among Labour Party supporters that the activities of their party, even if not directly concerned with Socialism, are justified because they are leading towards it. They have ridiculed our policy of working directly for Socialism as “ impossiblism. ”

Mr. Ramsay MacDonald repeated this justification for the Labour Party at its Conference held at Llandudno in October. He said:—
The Government’s pledges were those of Socialists convinced that the capitalist system cannot be made to work. If his opponents objected that the Government had not reached the Socialist goal, he answered, “ No, we haven’t, but we are going to get there.”
                                            (News-Chronicle, 8th October.) 
Mr. MacDonald’s statement is hardly compatible with Mr. J. H. Thomas’s admission at the Conference of the National Union of Railwaymen on 5th July, 1929, that the Government proposed to tackle the unemployment problem while “accepting the present order of society.”

Nor does it fit in with the significant fact that the Liberals put the Labour Government into office, keep them there, and are carrying on friendly secret discussions with them. Are we to believe that Mr. Lloyd George and his party would support a Government which is going towards Socialism ?

A direct negative to Mr. MacDonald’s claim has been made by one of the members of the Labour Government, the Earl de la Warr, who is Parliamentary Secretary to the Ministry of Agriculture.

Speaking at Crewe on October 12th, to a meeting of farmers and landowners, he dealt with the plea that the Labour Government is "going to get ” to Socialism. He said :—
The first criticism of the [Labour Government’s] Marketing Bill . . . was that it was a step to Socialism and involved nationalisation of the land . . . “Really,” said the Earl, “I must confess that for sheer drivelling nonsense and attempted appeal to prejudice I have never read the like of this.”
(Daily Herald, 13th October.)
Then there is Mr. Herbert Morrison, Minister of Transport. Under his London Traffic Scheme the railways, buses, tubes, and trams are going to be placed under the control of a statutory public body. The organisation is to be managed by 
a small board consisting of persons of proved business capacity . . . such as would command the confidence both of the investing public and of the users of transport in London . . . Such a board should function as freely as possible from political interference.
(Daily Telegraph, 3rd October.)
The shareholders are, of course, to be given shares in the new organisation, in place of their present shares; they are to lose nothing.

The official statement from which the above extracts are taken, was issued by Mr. Morrison, and in it he justifies his scheme by referring to the precedent of the Port of London Authority.

It is not so long ago that Mr. Herbert Morrison explained just what sort of thing the Port of London Authority is. In a letter to the Daily Herald on July 30th, 1923, he protested against Labour supporters showing approval of the P.L.A. He wrote :—
The Port of London Authority was established by Mr. Lloyd George some years ago to enable the capitalists of the Port to have the advantages of public credit and to do for themselves collectively what they and a number of private companies had been unable to do with success individually. . . . The Port of London Authority is a capitalistic Soviet . . . the constitution of which is thoroughly objectionable from the Labour and Socialist point of view, and which has certainly not been as friendly to the workers of the Port of London as it might have been.
In face of the actual legislation carried out and proposed by the Labour Government, it is difficult to understand how its members can still believe that they are moving towards Socialism. Once in office they have found, as we foretold, that the capitalist system cannot be run except upon principles which, save in matters of detail, are the same as those which guided the Conservatives and Liberals when they were in office. To retain capitalism is a practicable policy, although an unsatisfactory one from a working class standpoint. To abolish capitalism and establish Socialism will be practicable as soon as the working class have been won over to Socialism. The Labour Party has sought to justify a third policy, which is that of trying to abolish the evils of capitalism while keeping the system itself. Events are proving that the task is an impossible one.

What is marxian economics? (1980)

From the November 1980 issue of the Socialist Standard

At the moment output is falling, unemployment is growing, prices are rising all things that no one wants to happen, but which nevertheless do. What this means is that the human social activity of producing and distributing wealth is not under the conscious control of human beings. They do not control the conditions under which they produce and distribute wealth but, on the contrary, are subject to laws which, while not themselves laws of nature, operate as if they were, as an external force governing human activities. Economics is precisely the study of “the laws” which govern human activity in the field of wealth production and distribution.

An important point must be made straight away: economic laws only come into operation under certain social circumstances—when, in fact, the production and distribution of wealth is not under conscious social control. When, as today, the means of production are monopolised by a section only of society and are used to produce wealth to be sold on a market with a view to profit. In other words, economic laws are the laws of capitalist production and they will not operate when capitalism has been abolished through the establishment of socialism (when production will be for the direct use of the whole community). This is why we said that these laws are not natural laws.

To say that they are would be to assume that capitalism was the natural form of human society. Which is the mistake made by the early theorists of economics or “political economy” as it was then called, such as Adam Smith and David Ricardo who Marx criticised for doing so. Indeed this is what Marx’s Critique of Political Economy (the title of a book he published in 1859 as well as the sub-title of Capital) basically amounts to. Nevertheless, as long as capitalism exists, these laws exist and operate just like natural laws; they govern human activity in the field of wealth production and distribution and act as external constraints on what humans can do.

An understanding of these laws is very important; it is in fact a basic part of our case since it leads to the conclusion that capitalism just cannot be reformed so as to serve the common interest and therefore must be abolished if today’s social problems are to be solved. Our interest in economics is simply to understand how capitalism works, and not at all to recommend policies for governments to pursue. This is an important point since “economics” and “economists” today are regarded, and regard themselves, as policy advisers.

How, then, does capitalism work? The man who first analysed this in an adequate way was Karl Marx in his work Capital, first published in German in 1867. He wrote a number of other works on economics too, but the best introduction is the talk he gave in 1865 which was published after his death under the title Value. Price and Profit (also known, in some reprints, as Wages, Price and Profits). As far as economics is concerned, we are Marxists as Marxian economics is an integral part of our theory.

If you look at the way capitalism works, the first thing that strikes you is that everything is bought and sold. Goods are all produced to be sold and nobody can get what he wants or needs except by buying it. Capitalism, then, is a buying and selling society in which wealth takes the form of an immense accumulation of items for sale, or commodities. This is why Marx begins his analysis of the capitalist mode of production by examining the commodity. A commodity is not simply an item of wealth, something useful; it is an item of wealth that has been produced for exchange, for sale. Commodities were of course also produced before capitalism existed, but in the past were only a secondary feature. Capitalism is the commodity society par excellence, where everything, including the mental and physical energies of human beings, is bought and sold.

Commodities exchange with each other in fixed proportions and Marx set out to discover what determined the exchange-value of a commodity, what determined, in other words, the proportions in which they exchange one for another. He came to the conclusion that the exchange-value of a commodity was determined by the amount of socially necessary labour needed to produce and reproduce it. This Labour Theory of Value is the basis of Marxian economics and without a knowledge of it it is impossible to adequately understand the other aspects of capitalist economic life such as money, prices, the rate of profit and crises.

This theory is explained in the pamphlet Some Aspects of Marxian Economics which we have just published and which is available for 40p from our Head Office, 52 Clapham High Street, London SW4 7UN.