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Banking Reform: is it relevant?

2011-10-01T10:21:00.001-04:00

From the October 2011 issue of the Socialist Standard

Banking reforms are never going to stop capitalist crises.

Last month the Independent Commission on Banking, chaired by Sir John Vickers, published its final report. As expected, it recommended that banks should separate their ordinary High Street activities from their more risky (and more profitable) investment banking (their dealings in derivatives, securitised loans, etc). The aim is to avoid a future bail-out of the whole of a bank in the event of another banking crisis like that of 2007-8. If this happened again a bank’s investment arm would be allowed to sink or swim while the proposed requirement for extra capital reserves for the High Street arm should be enough to allow it to weather the storm.

The banks are up in arms and have been lobbying strongly against any such reform because it will hit profits for their shareholders, first, by tying up more of their capital and accumulated profits in reserves and second, by constraining their investment banking activities, since without the prospect of an eventual government bail-out they will become more risky and so more costly to fund. It remains to be seen how successful this lobbying will be, but the government has said it will accept the Commission’s recommendations and implement them sooner or later, if later rather than sooner.

Should we as workers care either way? In a word, no. This is an internal problem for the capitalist class, a fight between two of its factions. The non-banking faction is annoyed at having to pay for what it regards as the irresponsible activity of the banks which contributed to making the 2007-8 crisis worse than it would otherwise have been. They don’t want to be put in this position again and have been exploiting people’s dislike of banks to gain their support for moves towards more bank regulation.

People don’t like banks because they perceive them as parasitic on real activity. Indeed they are, but they are still essential to capitalism. Whereas, the role of industry is to profit by investing money in production, the role of banks is to lend industry that money and, in return, receive a share of its profit in the form of interest. Since profit is derived from the unpaid labour of those who work, banks are parasites on parasites.

But don’t banks lend to individual workers as well as to businesses? Yes, they lend workers money to buy a house or a car or some other big expenditure which couldn’t be paid out of monthly wages or salaries. Banks naturally charge interest on these loans but calculate that in time they will get both the interest and the loan back out of the future wages of the borrower. So, to this extent, worker-borrowers are affected by the level of interest rates.

Does this mean that low interest rates could be said to be in the interests of the working class? It’s not as simple as that because other workers are savers and prefer high interest rates. Some populist demagogues (such as reform-dangling Trotskyists) propose low interest rates for borrowers and high interest rates for savers. At the time of the Northern Rock crisis Militant said that they had “always demanded nationalisation, but on the basis of safeguarding all jobs as well as giving favourable deals to ordinary depositors and mortgage holders” (The Socialist, 19 February 2008.) But it’s not possible to pay depositors a higher interest rate than that offered to borrowers, as banks (and building societies) get their principal income from the difference between the rate they pay depositors and the rate they charge borrowers.

In any event, this is an academic issue since interest rates are not fixed to benefit workers and there is nothing workers can do to influence them.

How banks work
The Report does provide an insight into how banks work. There’s no nonsense here about banks being able to make loans out of thin air by a mere keyboard stroke. Banks are recognised as “financial intermediaries” whose role is to “bring together savers and borrowers”. Banks of course do other things as well (such as deal in derivatives and securities, and underwrite share issues). The Report proposes to “ring-fence” a bank’s “core economic function of intermediating between depositors and loans” from these other activities. It proposes that only what it calls “ring-fenced banks” (which will include building societies) should be able to take deposits from and provide overdrafts to individuals and small and medium-sized businesses (fewer than 250 employees). If they choose, they will also be able to accept deposits from bigger but non-financial businesses and make loans to them. Non-ring-fenced banks will not be able to take deposits from or make loans to individuals or small businesses, but they will be able to do everything else they have been doing until now.

The clear assumption throughout the Report is that a bank’s loans are financed out of its deposits. Ring-fenced banks will, however, be able to borrow money from the money market in a limited way to cover a short-term need to make payments. Here, the Report makes a reference to the famous (or notorious) cash reserve which banks have to keep to deal with withdrawals, and which forms the basis of so-called “fractional reserve banking”. The reserve is not very high now (about 2-3 percent) and doesn’t all have to be kept in cash; part may be held as very liquid assets (i.e. assets that can be converted more or less instantly into cash). “Within a bank”, says the Report, “the treasury function maintains an appropriately sized pool of liquid assets so that it can be confident of meeting its obligations to pay out depositors and other creditors”. The rest of what is deposited with the bank it can lend out (if it can find enough suitable borrowers).

This aspect of banking (which applies equally to building societies, credit unions and savings clubs) has given rise to all sorts of misunderstandings and confusions. Some even believe it to mean that when a bank receives a cash deposit it can immediately make a loan of many times the amount. As stated, the Report doesn’t give any credence to this sort of nonsense. It simply takes it for granted that banks make loans out of deposits.

The Report does propose a new capital ratio requirement. This is the ratio of a bank’s own capital to its assets (loans) and is not the same as the cash reserve requirement. The Report suggests that this should be “at least 10 percent of risk-weighted assets”. This would not normally restrict the amount a bank can lend, nor is it intended to. The money to build up its capital to the required level would not come from depositors but from the bank’s profits or from a share issue. Similarly, a ratio in excess of 10 percent would not mean that the bank would lend more. The Report sees this as increasing a bank’s “loss-absorbing capacity, and is trying to ensure that banks have enough capital and accumulated profit to sustain a potential big loss.

The Report does not go the whole hog and propose a complete separation of “ring-fenced banks,” as was done in America from the 1930s till 1991. Lloyds, HSBC, Barclays, etc can continue to exist as universal banks, but they will have to take legal steps to “ring-fence” their lending and deposit-taking to and from individuals and small businesses, and so separate them from their investment activities. No doubt the banks are already thinking up ways to get round this and, when the present crisis is history, to launch a campaign for de-regulation.

One thing that the banking reform will not do is to stop another economic and financial crisis, as some politicians are suggesting. We hold no brief for the banks but they did not cause the present slump. This was caused by capitalism’s tendency to overproduce for particular markets in a boom, not by monetary policy or institutional arrangements, even if they were an exacerbating factor. So, no banking reform is not going to eliminate the boom/slump cycle that is built-in to capitalism.

Adam Buick

Libya: job done?

2011-10-01T01:12:00.000-04:00

The ‘Arab Spring’ flowered in Libya in February of this year. A series of protests against living conditions, then against the government, quickly escalated into a civil war aimed at removing the dictator Muammar Gaddafi. On 19 March, the British government, with its American and French partners, launched a bombing campaign, ostensibly to ‘protect citizens’ from Gaddafi’s troops. Just six months later, on 15 September, the French president, Nicolas Sarkozy, and the British prime minister, David Cameron, landed in the Libyan capital, Tripoli, to declare, in effect, ‘job done’.

But what job is being done? If you’re gullible enough to believe the rhetoric of politicians, then Western intervention in Libya was all about protecting citizens from dictators and helping revolutionaries establish democracy. But the real reason for Nato’s concern is quite obvious. The real reason is oil.

You needn’t take socialists’ word for it. Mustafa Abdul Jalil, a former Gaddafi henchman and now chairman of the National Transitional Council, was anxious to assure Cameron and Sarkozy of the intentions of the new regime: “The supportive role of France and Britain will have a future influence. Until now we have signed no [oil] contracts and we will honour all previous contracts. But our friends will have a premier role according to their efforts in supporting Libya,” he said (Financial Times, 15 September).

Indeed, it’s so blindingly obvious that the Western intervention in Libya was about oil that it is instructive to watch commentators who are obliged, for ideological reasons, to deny it.

George Friedman of Stratfor.com, for example, in one of his regular email reports (30 August), said that he “sympathised” with those who thought the war must be about oil and tried to find “a deep conspiracy” to explain it. But Friedman dismisses the “theory” for the simple reason that Gaddafi “loved selling oil”, that he would simply change the arrangements about oil if pressure was brought to bear because he “was as cynical as they come”, and it was therefore “not necessary to actually go to war to get whatever concessions were wanted”. Friedman then concludes that the official explanation is therefore “the only rational one”.

It’s a daft argument. Friedman is dismissing a silly theory no one believes in – that there was a “deep conspiracy” to start a war to steal Gaddafi’s oil – in order to discredit and dismiss a different theory which is obviously true, but socialist, and hence to be suppressed – the theory, namely, that all capitalist economies have a vital strategic interest in guaranteeing their supplies of raw materials, most crucially oil, and that therefore those countries’ states pursue foreign policies with such interests in mind. Formerly, that meant installing and arming the dictatorships the Arab Spring rose up to overthrow. Since the Arab Spring, it has meant scrambling to come up with some other way of installing or supporting regimes that will be subservient to Western capitalist interests.

And it is in this sense that, for now at any rate, the Nato intervention seems to be going so well. For a relatively low cost, and with relatively few Western casualties, Britain, France and America looks like it has got rid of a tyrant they had struggled to control for decades, staged a brilliant PR exercise supporting a democratic revolution in the Middle East, and are about to help install a regime friendly to its vital strategic oil interests in a country with the largest oil reserves in Africa. Job done indeed.

Media moguls and tabloid hacks are old news

2011-09-29T08:32:00.000-04:00

From the September 2011 issue of the Socialist Standard

Tabloids and ruthless reporters pre-date Murdoch’s era by many decades.

Rupert Murdoch and his sleazy crew of phone-hacking journalists are easy to hate. But even if Murdoch’s media empire crumbles, other media moguls and conglomerates will simply pick up the broken pieces. And tabloid reporters will continue to write titillating stories about celebrities and crime with or without recourse to phone hacking. Murdoch, of course, is hardly the first to build up a newspaper empire. One way to put the current scandal in some historical perspective, is to watch two classic Hollywood movies: Citizen Kane (1941) and Ace in the Hole (1951).

A Pre-Murdoch Mogul

In his film Citizen Kane, Orson Welles plays the role of newspaper owner Charles Foster Kane, who he models on the real-life tycoon William Randolph Hearst. The media empire that Hearst built, beginning in the late 19th century, bears more than a superficial resemblance to the present-day empire of Murdoch.

In the film we see the obscene amount of wealth and power concentrated in the hands of Kane and how he uses his network of newspapers to influence public opinion and politics, to the point of not only cheerleading for war (as Murdoch has often done) but even furnishing a casus belli for the Spanish-American War. Kane tells a correspondent, “You provide the prose poems, I’ll provide the war.”

Even the meddling of newspaper tycoons in politics seems, if anything, worse in the Hearst era as depicted in the film – or at least more blatant. Kane uses his newspapers to build up an image of himself as the people’s crusader, and then to launch his own political career, taking on the corrupt politician, Jim Gettys, in the gubernatorial election. His opponent is no chump when it comes to using the press either and beats Kane in the election by exposing his adulterous affair.

For all of its insights into the brutal reality of journalism, the film may give the profession more credit than it deserves. At times Welles seems to imply that Kane’s tragedy stems from his veering away from the muckraking journalism of his early years when he even exposed economic scandals that touched on his own business interests.

There is an interesting early scene in the movie where Kane, admitting that as a capitalist owner he is just another scoundrel, says his duty as a newspaperman is, “to see to it that decent hardworking people in this community aren’t robbed blind by a pack of money-mad pirates just because they haven’t anybody to look after their interests.” Kane thinks that the fact he has “money and property” makes it possible for him to play this role. And it is hard to tell whether Welles as director thinks that Kane could have looked after the interests of hardworking people, or whether he recognizes the absurdity of a man with “money and property” defending the interests of those who lack both.

Kane may not in fact be as split in two between good journalist and bad capitalist as he claims, for in the same scene he adds, “If I don’t look after the interests of the underprivileged maybe somebody else will, maybe someone without money and property.” This seems to imply that the split between Kane the stockowner and Kane the journalist corresponds to the difference between his narrow interests as an individual capitalist and his broader interests as member of the capitalist class—two different shades of greed. If this is a point Welles was trying to make, he was a bit too subtle for his own good.

Ironically, the campaign Hearst led to suppress Citizen Kane did more to expose the newspaper tycoon’s obscene influence on society than the film itself. Hearst did not succeed in physically destroying Welles’ film as he had tried to do, but he did use the full power of his newspapers and columnists to coerce movie theatres not to screen it.

A Wilder View of Things

The 1951 film Ace in the Hole, written and directed by Billy Wilder, centres on a character far lower on the journalistic food chain, the newspaper reporter Chuck Tatum (Kirk Douglas).

The film opens with Tatum arriving in Albuquerque, New Mexico and begging his way onto the staff of a local newspaper, The Albuquerque Sun-Bulletin. Tatum’s only hope at this stage in his career, after being fired from a string of newspaper jobs, is to chance upon some sensational story that will land him back at a big-city paper.

His opportunity finally arrives a year later when he is the first reporter to discover that a man, Leo Minosa, has been trapped inside an ancient Indian burial mound. Tatum is quick to realize that each day that Leo remains stuck is another day of exclusive reporting. To elbow out other tabloid sharks and drag out the rescue operation as long as possible, Tatum enlists the services of a corrupt sheriff up for re-election.

Tatum thus crosses the line between simply reporting a story and influencing how it plays out—all the while posing as Leo’s saviour and claiming, “I don’t make the news, I just report on it.” Tatum’s self-interested attitude disguised as compassion is no different from the outlook of today’s obnoxious reporters who feed on human tragedy.

Billy Wilder makes it perfectly clear that Tatum is no exception in the news racket by introducing other vicious journalists who almost make Tatum look decent by comparison. Tatum knows most of them by name from former jobs, and not one of them ever helped him when he was down on his luck. So when they plead, “Hey Chuck, we’re all in the same boat,” his icy response is that he is in the boat and they are in the water, “So let’s see if you can swim, buddies.”

Tatum knows the public’s appetite for “human interest” stories. He digs through the photo album of Leo Minosa to fashion a compelling profile and uses his skills as a writer to transform Leo’s estranged wife Lorraine into the picture of wifely fidelity because “that’s how the story reads best.”

Just as Tatum expects, the public eats up his story, even flocking to the site of the burial mound by the hundreds to take part in what has literally become a media circus, replete with amusement park rides and carnival performers. These onlookers are eager to believe that their own morbid curiosity and craving for entertainment actually constitute a sort of human compassion.

Wilder’s criticism cuts much deeper than the world of tabloid journalism and its readership. Tatum and the other reporters are not the only ones dazzled by money and power. There is Leo’s wife who wants to peddle enough hamburgers and Navajo rugs at her husband’s store to make her escape to New York, the young cameraman working with Tatum who is losing his innocence and dreaming of a world bigger than Albuquerque, the contractor beholden to the sheriff who agrees to the most time-consuming rescue method out of fear of losing his job, and all the carnies, musicians, and other riffraff who flock to the site to make a buck off the crowd. Even Leo, the victim, had gone into the cave in the first place to get his hands on some Native American relics to sell.

Money is the magic substance that brings together this crowd of strangers in the New Mexico desert, forming what a radio reporter there describes as a “new community” which has sprung up. But once the show is over and there is no more money to be made, this community dissolves in a matter of minutes. Leo’s “friends” take off in search of the next new thing, leaving behind his grieving parents.

Although minor characters, Leo’s parents are important: their love for their son contrasts sharply with the selfish and superficial human relations around them. In several scenes we see Mr Minosa refusing any payment from Tatum and others, mistaking them for his son’s saviours. And his devout wife is so lost in prayer for her son that she is almost oblivious to the obscene scramble for cash going on around her. Whenever Mr or Mrs Minosa enters a scene it immediately highlights how crass and downright bizarre the world of commerce is – a world where nothing is sacred, where everything and everyone has a price.

Setting the film in a part of the country where there are still traces of a pre-capitalist society is another way that Wilder makes our familiar money-centred world seem grotesque. The Native American rugs and pottery Leo had sold in his store were not originally commodities for the market but things for direct use or “sacred items” buried with the dead. What a remarkable contrast between that extinct society, where people had not been connected by money and the manic scenes of product peddling in the movie.

Tatum’s brand of journalism is perfectly suited to the money-mad society in which he lives. Wilder does present us with a character who might seem an alternative to Tatum: the upstanding owner of The Albuquerque Sun-Bulletin, Mr Boot, whose motto is “Tell the truth.” But Boot is only able to follow that motto by limiting his reporting to rather inconsequential local stories about soapbox derbies and rattlesnake hunts. When, later in the film, he says that he thinks the sheriff is corrupt and wants to expose him some day it does not sound convincing. A guy like Mr Boot has to stay in Albuquerque because he would not last a week in the cutthroat big-city newspaper business.

The films of Welles and Wilder and the past century of journalistic history are a warning to those who might think the end of Murdoch will mark some qualitative improvement in journalism. Take away Tatum, and another shark swims into his place: topple Kane’s empire, and another tycoon rises up. And the same will be true if Murdoch and his crew one day meet their demise. It is foolish to call for a reformed journalism but leave in place the profit motive that drives tabloid excesses.

Michael Schauerte

Too much debt or too little profit?

2011-09-17T00:29:00.002-04:00

The Cooking the Books column from the September 2011 issue of the Socialist Standard

“Debt being the problem, creating more debt can’t solve it” was the title of a recent thread on the Zeitgeist global forum. Given all the fuss in the media about government debts (or “sovereign debt”), this is not surprising, but it is not debt that is the problem. Government debt is a symptom of the problem.

Government’s borrow money to cover the gap between what they spend and what they raise as taxes (the budget deficit). Like all borrowers, governments anticipate being able to repay their debts with interest out of future income, in their case, future tax revenue. Most taxes fall, in the end, on the new value created in production, and either taken directly as taxes on profits or indirectly as sales taxes and taxes on personal income.

Since the current slump broke out in 2008 new production has fallen and is nowhere near the level it was before, so putting governments in difficulty, some more than others. The anticipated income as tax revenue to repay their loans has not materialised. The current sovereign debt problem is thus a direct consequence of the continuing slump.

Governments typically borrow by issuing bonds for sale at a given face value and fixed rate of interest, repayable in a given period of time which can be as short as a month or as long as 30 years or more, say £100 at 5 percent interest per annum. Once taken up, the bonds become tradable and are bought and sold. The price at which they are traded is determined by the laws of supply and demand, not by their face value, but the amount of interest remains the same.

If, as has happened to Greek, Irish, Portuguese and now Spanish and Italian bonds, those wanting to sell (supply) exceed those wanting to buy (demand) then their price falls. If it falls, say to £90, the government still has to pay the same amount of interest on them (in this case £5). The ratio between this amount and the bond’s price is known as their “yield”. In our example it would be 5/90 or 5.55 percent. In other words, the rate of interest will have risen from 5 to 5.55 percent and this will be the rate the government will have to offer on future bond issues. Which presents a problem when the loans come up for renewal, as they continually do.

The governments of the Eurozone countries and the European Central Bank are not trying to solve the sovereign debt crisis of some of their members by creating more debt. They are trying to reduce the likelihood of the holders of these debts (amongst them leading European banks including some in Britain) not getting all their money back. This is why they are pressing the governments affected to reduce their budget deficit by reducing their spending, i.e. by imposing austerity. They have also come up with various schemes to keep interest rates on these governments’ bonds down as interest payments on them are part of government spending.

What all this confirms is that interest is secondary to profit. Debt and the interest on it is not the root problem. Interest is a share in the surplus value created in production. If not so much surplus value is being created – and a slump is precisely a drop in production including of surplus value – then there is less available to pay interest, either directly by businesses or indirectly via governments.

Creating more debt is indeed not the solution. But neither is creating less debt. If capital accumulation resumed and reached previous levels, there would be no further talk of a “debt crisis” as international investors would be assured that the surplus value would be there from which the interest on their loans and investments could be paid.

If, on the other hand, capital accumulation does not resume quickly enough, as some are beginning to fear, then the investors may well lose some of their investments. But it won’t be the result of too much debt but of too little profit.

The riots: not the way to help ourselves

2011-09-16T11:49:00.002-04:00

From the September 2011 issue of the Socialist Standard

Self-regarding and typically under-employed, those exotically nominated experts in human behaviour have offered many wordless thanks for the unheralded events that enlivened the streets during those August nights. Suddenly they found the immediate future looking decidedly rosy with the prospect of well-paid sessions of unexciting analysis from TV sofas responding to badgering by equally tedious chat-show figureheads. Then there was the blossoming market for anaesthetic contributions to the newspapers, offering the seamier among them some help in recovering from the consequences of their exposed habit of phone-tapping. All of which sprang from the reassuring assumption that there was an easily accessible explanation, handily encapsulated in a slogan or even a single word, for the mobs with their rioting, looting and violence. This was a process to be helped in accordance with the weight of the qualifications of the “expert”. Even more so if their theories or explanations could be presented as original but neglected.

Previous

There is, as usual, no lack of precedent offered by those same experts and commentators. For example from London's recent history there were the events in Brixton in 1981 and the disturbance in Broadwater Farm Estate in 1985 in which a policeman was killed, for which a black man was sentenced to life imprisonment only to be exonerated in 1991. Inevitably, there were official enquiries after the disturbances, yielding the assurance that “lessons will be learned” – a phrase which has been worked to exhaustion in response to the present crisis, demonstrating how futile and misleading it is. Because the “lessons” have often revealed faults – shortcomings, errors or deliberate provocations such as racist bigotry on the part of the police – which have persisted to the present. So when it comes to the inevitable probing of this year's disturbances the starting point should be the police killing of Mark Duggan on 4 August and the attempt to dismiss the family's concern until, on 6 August, the threat of serious demonstrations on the streets burst out, spreading across London and to other cities.

In their response – or perhaps lack of it – the police seemed to be following an established procedure. This was not the first such case in which the official version, coming immediately after the event, was quickly shown to have a worryingly tenuous relationship with the truth. It brought back memories of the death of Ian Tomlinson during the G20 demonstrations in 2009. It then required some years of probing before the facts of Tomlinson's death were established and, however reluctantly, accepted by the police. One result is that a police officer, condemned by the inquest, is now due to stand trial for manslaughter.

In the case of Mark Duggan the police said initially that they had been forced to shoot him after he fired the first shot at a police officer, whose life was saved only because the bullet struck his radio. It did not take long for this version to be blown away, when the Independent Police Complaints Commission stated that there was no evidence to prove that Duggan had fired a gun. But beyond this confusion – if that is an adequate word for it – there is the hard reality of the actual social situation, of unyielding divisions, of inequality, poverty, sickness, despair... The police can deny any obligations arising from this, except to act as the enforcers of the essential principles of capitalist society, whatever misery they cause.

Opportunistic

We have not seen the last of the verbal strategies used to conceal the nastiest facts about those recent public disorders. For example there was a newly minted vocabulary to denounce the looters, which had them as “opportunistic” offenders against property. This paid no heed to the fact that we are actively encouraged to accept that very word in admiration of much of what is rapturously accepted within capitalist society. Like the bankers and their infamous bonuses, or hedge traders gambling on a forecast movement in share prices. Like the exploitation of any and every development for whatever advantage it can allow a political party. Like the flood of lies designed to conceal the tragic reality of the wars in Iraq and Afghanistan. All of them opportunistic.

Then there was the dismissal of the looters' claim that as things are now they can have little sense of ambition for their future and were merely trying to ease their poverty by helping themselves from the shelves of convenience stores or giants like ASDA. A youth worker from East Ham told the media that young people feel “trapped in the system...disconnected from the system and they just don't care”. This was countered with the argument that young people can hardly complain about poverty when they are wielding the latest models in so-called social networking technology, suggesting that they could cope with their problems as stoically as others such as elderly vulnerable people.

The limits of this case were shown by a social worker in a part of London unaccustomed to social disorder among its leafy green open spaces who was almost speechless with rage on behalf of one of his clients who is housebound, blind and incontinent, and whose (paltry) special laundry allowance has been cut off by the local council. This woman is scared of the rioters in her locality, and the social worker, while not at all likely to join them, has something of an understanding of their motivation. He is not at all impressed by the millionaire ex-Etonian, David Cameron whining about “...sickening scenes... This is criminality, pure and simple, and it has to be confronted and defeated” – which brings us stark memories of Thatcher's opinions about the riots which periodically broke out while she was doing something called putting the Great back into Great Britain: “Nothing, but nothing, justifies what happened...They were criminal, criminal...”

Bullingdon

And in case there is any doubt it should be made clear that she was not referring to the earlier activities of Cameron, Osborne and London Mayor Boris Johnson who helped themselves ease the boredom of swotting during their time at Oxford by joining the Bullingdon Club which, apart from dressing up in fancy evening suits devoted themselves to wrecking restaurants and other such places, often to the fear and annoyance of other people there. It was Johnson who came back from his very costly recent holiday to join the chorus about the looters' behaviour being “criminal” without recalling those leisure time activities of his younger days; perhaps he had forgotten that in his case there was a rich parent to defuse any resentment and dissuade the Bullingdon's victims from any intention to refer the matter to the courts.

But for anyone caught up in, or suffering from, those recent nocturnal mob activities, there was no such relief; their lot was fear and anxiety about their safety – or even their survival. For them any anger, desire for revenge about the looters would be perfectly understandable, if as futile as the whole machinery of so-called justice and order. The fact is that riots do not emerge from nowhere or nothing. Social disorder, damage to life and home, are part of the daily assumptions about life within capitalism. Even David Cameron has had to acknowledge that these forces are inexorably at work when he referred to “120,000 most troubled families” in this country (he did not mean those with someone in the Bullingdon Club).

Teaching

The police sent to control this year's outbreaks were stronger in their weaponry and protective clothing than those in the past. This is represented as progress in the verbiage of the politicians and of those experts when what it in fact demonstrates is that the problems persist and show no sign of fading into history. Any meaningful investigation of the origins of the riots and looting cannot disregard their link to the effects of unemployment and the other persistent features of working class life – to poverty whether unemployed or in work, to poor housing and unnecessary disease all adding up to a burden of social deprivation which needs a relatively minor provocation to bring an explosion of anger and violence.

Is this the best we can expect in a world capable of satisfying human needs? Must our society be distorted by the toxicity of social ulcers? The looters deceived themselves that through the shattered shop fronts they were not just helping themselves to material goods but in a sense re-arranging social assumptions. As the enquiries into those events will eventually tell us, there are lessons to be learned here, but we reject the notion that these come best from those who claim the right to teach us, discipline us and punish us. Better to help ourselves by working for a peaceful, co-operative, abundant community.

Ivan

Marxism and Democracy

2011-09-16T10:20:00.004-04:00

Book Review from the February 1941 issue of the Socialist Standard

A useful addition to Socialist Literature

Lucien Laurat’s Marxism and Democracy (Gollancz, 1940, 7s. 6d.) was first published, in French, early in 1939 under the title "Marxism in Bankruptcy" (Marxisme en Faillite). It is a useful addition to Socialist literature and cannot fail to be of help to students of Marxism. While the author has decided views on the many controversies he deals with, he states a reasoned case and almost always gives the source of his many pointed quotations from the writings of Marx, Engels and others. He is not a doctrinaire, to whom Marx's writings are a text to be studied word by word and followed as a kind of Bible. As he says: "A Marxist cannot be orthodox unless he continually questions even the truths he has already acquired, including the words of Marx himself " (p. 48). But having considered the theories of the Bolsheviks, as well as the criticisms levelled at Marx from various hostile quarters, he shows once more how well the mature ideas of Marx and Engels accord with the developments and experiences of the years since their death.

The book will be of special interest to those who have read THE SOCIALIST STANDARD for a number of years. While on a few (but important) points his views differ from those of the S.P.G.B., it is remarkable to find him meeting one after another of the many misrepresentations of Marx with precisely the same arguments as those worked out in the ranks of the S.P.G.B. during its 36 years. Stating that one of his aims "is to disentangle the real ideas of Marx and Engels from the incredible confusion caused by their commentators," he summarises his conclusions as follows:—

the ideas of Marx and Engels changed and developed as they learned from historical experience; secondly, that it is false to present them as apostles of violent methods at all costs; and thirdly, that whoever ascribes ideas of non-violence à la Gandhi to them would be equally wrong. In the light of the experience gained in the course of their lives as militant Socialists they decided that under a democratic regime the workers would be able to achieve their aims by peaceful means, providing that Capitalism did not itself destroy that democratic legality without which there could be no question of the successful adoption of peaceful means. (p. 37.)

Among the points he deals with on precisely the same lines as the S.P.G.B. are the Bolshevik claim that Marx and Engels advocated dictatorship on the Russian model (pp. 38-43)—in passing he raps the knuckles of Mr. G. D. H. Cole for the same error; the Bolshevik claim that Marx favoured the smashing of the machinery of the capitalist state (p. 44) ; the notion that Marx and Engels preached nationalisation (p. 45); and the claim that Bolshevik organisation and tactics were Marxian. Laurat shows, as did the S.P.G.B., that "the Bolshevist organisational theory . . . although labelled Marxist, in reality represents a lapse into Blanquism, and has its roots in the backward state of Russia in general and of the Russian working classes in particular " (p. 122).

He points out interestingly how the Great War, 1914-1918, had as one of its consequences that it stirred into activity and drove into some of the workers' organisations great masses of workers whose political experience and understanding were not superior to the experience and understanding of workers who had been in such organisations before 1914, but greatly inferior. "Unacquainted with the ideas and methods of Socialism, except for a few ill-digested slogans," these inexperienced raw recruits were the material on which the Communists, with their theory of an intelligent minority leading the unenlightened masses, were able to work successfully. The backwardness inside Russia and the backwardness of these workers outside Russia combined to produce results which have been deplorable for the working class and Socialism.

One of the questions on which Laurat holds a different view from that of the S.P.G.B. is that of Socialists collaborating with capitalist parties. His argument is that in the period of ferment after the last war "the strength of the Socialist parties had very considerably increased. Socialism judged, with very good reason . . . that it was now strong enough to exercise a considerable, if not decisive influence on the Government. However, it was nowhere strong enough to take power alone " (p. 152).

There were three alternatives: (1) To share power with bourgeois parties whilst waiting until they had won over a majority of the electorate ; (2) to entrench themselves in intransigent opposition and decline the responsibilities of power until the situation was ripe; and (3) to try to seize power by force.

The last solution was the Bolshevik solution. It failed to produce Socialism and necessarily failed to do so:—

Even in power alone, ruling by terror, and no longer hampered by the resistance of their bourgeois colleagues, the Socialist ministers, or commissars of the people, would still find themselves face to face with hard economic reality, peremptorily forbidding the immediate establishment of Socialism. (p. 153.)

The second solution he likewise rejects, because "when a Socialist party has between 40 and 45 per cent, of the seats in Parliament it is impossible for it to abstain from participation except at the price of feebly handing over power to a bourgeois coalition in which the extreme Right would have every chance of seizing the principal levers of government and weakening democracy " (pp. 153-4).

Nothing remains in practice but the first solution: Socialist participation in the Government, in spite of all the risks attached to it (p. 154).

Laurat here fails to face up to the fact that his first "solution'' led to the discrediting of the parties that adopted it and in doing so it helped to weaken parliamentary democracy and to turn the workers to Fascist or Communist doctrines of dictatorship. The weakness of his argument should have been obvious to him. He concedes (p. 153) that refusing the responsibility of office (which means in all these instances refusing the responsibility of administering capitalism) is conceivable "in countries where the parliamentary representation of Socialism was still relatively feeble." He also concedes (p. 152) that much of the support on which the "Socialist" parties relied was that of "immature" masses who had declared for "Socialism" "often by instinct rather than by knowledge and reflection." All of which boils down to the simple fact that the "Socialist" parties (by which he means such parties as the Labour Party) had made the fundamental error of building up their membership and fighting elections on a programme which attracted instead of repelling the "immature masses" who did not understand Socialism. In other words, the parties with 40 to 45 per cent. representation in Parliament had it under false pretences.

It is surprising that Laurat is blind to this, because elsewhere he stresses the importance of real Socialist understanding. As he puts it on page 119, these workers are "in need above all things of a strong dose of Socialist education."

Readers of THE SOCIALIST STANDARD will appreciate Laurat's final plea that the working class "must reject the 'leader' cult more and more categorically. Unfortunately, far too many workers are still addicted to this cult, though it reeks of both Fascism and Bolshevism, and has nothing whatever to do with Marxism (pp. 253-4).

As there are other important points in the book it is hoped to return to them in a further article.

It is a pity that the book costs 7s. 6d., and has no index. The translator, Mr. Edward Fitzgerald, is to be congratulated on his work.

Edgar Hardcastle

Old Labour

2011-09-16T10:06:00.004-04:00

Book Review from the September 2011 issue of the Socialist Standard

Chavs: The Demonization of the Working Class. By Owen Jones (Verso Books 2011)

This well-received book has a snappy title and the subtitle fairly summarises one of its main themes. But a careful reading of its pages, and especially the concluding chapter, suggests a more descriptive title: “Down with middle-class Conservatism and New Labour. Up with the working-class Old Labour.”

Jones writes at the end of the introductory chapter:, “Class prejudice is part and parcel of a society deeply divided by class. Ultimately it is not the prejudice we need to tackle; it is the fountain from which it springs.” Tackling ‘the fountain from which [prejudice] springs’ is open to different interpretations. But the context makes it clear that for Jones the ending of the class system by the substitution of socialism for capitalism is not one of them.

The following chapters range over the inconsistent media treatment of the disappearance of middle-class and working-class children, the horrors of Thatcherism (no argument there), and the blaming of the victims in ‘broken Britain’.

In his concluding chapter – the author develops some of his Old Labour ideals:

“Instead of economic despots ruling over the British economy with nothing to keep them in check, key businesses could be taken into social ownership and democratically managed by workers – and consumers for that matter. It would be a real alternative to the old-style, top-down bureaucratic form of nationalization…”

Nationalisation is not, of course, the same thing as socialism, nor is it a step on the road to socialism. It is one of the two forms of capitalism: state (or officials acting on behalf of the capitalist class – as a whole) and private (ownership by individuals or corporations).

“The new class politics would be a start, to at least build a counterweight to the hegemonic, unchallenged politics of the wealthy… Working-class people have, in the past, organized to defend their interests; they have demanded to be listened to, and forced concessions from the hands of the powerful. Ridiculed or ignored though they may be, they will do so again.”

With those few stirring words Jones introduces his cunning working-class plan designed to achieve the new – improved – status quo. First, step up delivery of the loaves we produce into the ample larders of the rich and the powerful. Then fight them peacefully for crummy concessions. Good luck!

Stan Parker

Why society is falling apart

2011-09-16T09:45:00.003-04:00

Editorial from the September 2011 issue of the Socialist Standard

In 1997, as New Labour was first being elected, we carried a series of articles about the future of capitalism. In the light of the London riots, which spead with devastating effects through many other towns and cities across England a few weeks ago, it seems timely to reproduce some of the most salient points this month. They seem even more apposite now than they were then, and are all the more tragic that they were so predictable.

The social and moral codes which developed alongside the rise of the capitalist class during the system’s ascendency have been undermined. The nuclear family, the bourgeois work ethic and the sanctity of private property have all taken a battering under pressure from the rampant and ruthless individualism unleashed by the market itself. For any system of society to survive and prosper it needs its own codes and regulations of behaviour, but those that developed within bourgeois society are now being ceaselessly undermined.

This putrefying of capitalism's social basis and codes has taken on a number of forms, all of which are symptomatic of a society which is, to coin a phrase, ‘ill at ease with itself’:

The ongoing break-up of community relationships and the atomisation of the individual. This has been particularly characterised by the development of a competitive "every person for themselves" type culture as the dominant one in society, and by the appearance and consolidation of seemingly unbridgeable generation gaps.

The massive explosions of crime and drug taking, phenomena which were once peripheral or isolated in pockets, but which are now generalised throughout the market economy.

The increases in violence and social disorder, spurred on by the horror and violence infecting the media (especially for children), and the re-appearance – generally for the first time since capitalism's turbulent infancy – of mass rioting on a regular basis, which has turned major cities at the heart of capitalism into uncontrollable war zones.

The continuing, if not increasing, political vacuity of the capitalist class which has been mirrored in the rise of a nihilistic ‘no future’ culture among large sections of young dispossessed workers who see no progress and no hope beyond their pint glass or next ‘hit‘.

The massive corruption of capitalism's political apparatus, which is particularly evident in Britain, but which is in fact a feature of the modern nation state virtually across the globe.

It is in these ways that capitalism is undermining the principles and continued existence of collective life . . . and all the signs are that it will continue and probably deepen, for there are few if any forces or tendencies within capitalism operating in the opposite direction.

Filling the prisons is no solution on many grounds, not least of which is cost, and no government following this line has yet really succeeded in reversing the process which the market has started. None of the political appeals to "family values" are likely to succeed either as the very continued existence of capitalism and the forces it has unleashed make that near impossible.

Appealing to some sort of higher morality or set of values within the context of the market is clutching at straws, a long way from a considered and practical response to the problem. If the social decadence infecting society is to be overturned it has to be tackled at source – and that means the abolition of the market and the poisonous relationships which spring from it.

A Denunciation of Nationalism

2011-09-16T09:27:00.002-04:00

From the August 1952 issue of the Socialist Standard

The Indian, M. N. Roy, who was at one time prominent in the Communist International, but later broke away and took a line of his own, recently wrote for the Manchester Guardian (21/6/52) an article "Asian Nationalism. Its Roots in Race Hatred."

In it he puts the case that the Asiatic nationalist movements are not just movements to secure independence from the foreign governments that kept them in colonial subjection, for even after achieving independence they continue to preach the same anti-foreign doctrines as before. He quotes Mr. Nehru, Prime Minister of India, and advocate of Indian nationalism, as having admitted that he does not know what nationalism is:

"What exactly is nationalism? I do not know, and it is extremely difficult to define. In the case of a country under foreign domination it is easy to define what nationalism is. It is anti-foreign power. But in a free country it is something positive. Even so, I think that a large element of it is negative or anti-, and so sometimes we find that nationalism, which is a healthy force, becomes—maybe after liberation—unhealthy, retrogressive, reactionary, or expansive."

Yet though Mr. Nehru could not define nationalism he went on to declare that it "warms the heart of every Asian" and that "any other force that may seek to function must define itself in terms of this nationalism."

Mr. Roy says this is nonsense and that what Mr. Nehru's explanation really means is that nationalism is "race hatred kept alive artificially."

"Asia nationalism is an unmixed evil. It has not got the saving grace of a cultural and idealist origin as in the case of earlier European nationalism."

Although Mr. Roy notices that between the wars European nationalism developed into fascism, and quotes the statement of the late Lord Acton that nationality sacrifices everything "to the imperative necessity of making the nation the mould and measure of the State," he does not appreciate the simple fact that nationalism has been and is everywhere the form in which each capitalist group tries to carve out a place for itself in the world of warring capitalist states. If he did he would not be at all surprised that the politicians who have used nationalism to gain independence from a colonial power need it just as much afterwards in order to persuade the workers to go on fighting capitalism's battles.

If it is an illusion to think that nations can be friendly in a capitalist world provided that they are all "independent," it is equally an illusion on the part of Mr. Roy to think that the Powers, great and small could dispense with nationalism.

At least one thing Mr. Roy has correctly summed up. Discussing the disappointing results of national independence from the worker's point of view, he says that when India and other countries achieved independence, "absolutely nothing changed except the personnel of the State machinery."

On one thing we can put Mr. Roy right. He says of the "reforming Liberals and the revolutionary Left: in the Western countries" that, disregarding the bitter experience and irony of history which had shown them nationalist movements starting with men like Mazzini and ending with regimes like Mussolini's, they "vied with each other in patronising colonial nationalism." Whatever the Liberals and Labourites did, the S.P.G.B. certainly did not fall into this error but always condemned nationalist propaganda whether at home or abroad, in Europe or in Asia.

Edgar Hardcastle

Which kind of capitalism – or the alternative?

2011-06-29T07:53:00.000-04:00

Editorial from the June 2011 issue of the Socialist Standard
Around the middle of the last century there were a group of nice people who called themselves Moral Re-armament. They saw some nasty things about the world in which they lived, but they put this down to miscreants who behaved in illegal or immoral ways. They approved of well-earned profits, a fair day’s work for a fair day’s pay, and all that jazz. The Socialist Party debated with them.

Then came the unacceptable face of capitalism, in the shape of the ‘bad cops’ who did a bit too much of what the ‘good cops’ were doing routinely. Greed was good, but too much of it by the wrong people was bad. Workers who wanted more wages or salaries were to be deplored. Capitalists who wanted more profits were OK – they helped to ‘grow the economy’.

The latest take on the profit system is that we have two kinds of market – the fundamentalist and the free. The fundamentalist market is the one in the black hat. It is part of a bidding culture that sets one group or interest against another. If one wins the other loses.

According to Philip Pullman (Guardian, 29 January), this bidding culture has “imported the worst excesses of market fundamentalism into the one part of our public and social life that used to be free of the commercial pressure to win or lose, to survive or to die, which is the very essence of the religion of the market”.

But Pullman is not optimistic about the future. “I’m afraid these fundamentalists of one sort or another will always be with us. We just have to keep them as far as possible from power.”

Now the oxymoronic free market. Very beneficial to the capitalist class, not so beneficial to the working class. Owners of capital are free to invest in it to ‘earn’ rent, interest or profit. Workers are free to offer themselves on the labour market – they may or may not get employment. Whether they do or not – especially if they do not – they suffer material and mental deprivation,.

Moral or immoral, with or without an acceptable face, involving fundamentalist or free markets, capitalism shouldn’t be supported by the majority it exploits.

We don’t have to choose the lesser of two evils – we can help towards something better. A world where the resources of the planet have stopped being the property of rich individuals, corporations or states and have become the common heritage of all. On that basis goods and services can be produced directly to meet people’s needs without the intervention of markets. Neither a free market nor a controlled market but a non-market society.

Brown re-invents the wheel

2011-05-04T21:52:00.001-04:00

A Cooking the Books column from the April 2011 issue of the Socialist Standard

Gordon Brown has written a book. Not gossip about what went on between him and Tony Blair but about the Crash of 2008 and what he thinks should be done to avoid another one. Called, Beyond the Crash, the subtitle of the first part could well have been “How I saved the world from financial meltdown.”

He writes that by 26-27 September “the choice was clear: either we had to step in and accept all the associated risks, or simply leave the free-market system to collapse”:

“We were facing a situation that risked becoming worse than 1929. No one trusted anyone in the banking system, and people were predicting not a recession but a depression. People were panicking, asking which would be the next bank to collapse. The financial system was looking over an abyss.”

Brown puffs himself for discovering that the way to end a financial panic in which banks and other financial institutions are afraid to lend to each other is for the government to make more money available. As if governments hadn’t done this in the past, even in Marx’s day.

In Volume III of Capital, Marx quoted extensively from the parliamentary reports into the financial panics which occurred in 1847 and 1857. This from the Report on the Commercial Distress, 1847-8:

“[T]he bankers and others finding that they would not rely with the same degree of confidence that they had previously done upon turning their bills and other money securities into bank-notes, for the purpose of meeting their engagements, still further curtailed their facilities, and in many cases refused them altogether; they locked up their bank-notes, in many instances to meet their own engagements; they were afraid of parting with them… The alarm and confusion were increased daily; and unless Lord John Russell…had issued the letter to the Bank…universal bankruptcy would have been the issue.”

Lord John Russell was the Prime Minister and his letter to the Bank of England suspended the Bank Charter Act of 1844. Engels explained in a footnote what this meant:

“The suspension of the Bank Act of 1844 permits the Bank to issue any quantity of bank-notes regardless of the gold reserve backing in its possession; thus, to create an arbitrary quantity of fictitious paper money-capital, and to use it for the purpose of making loans to banks, exchange brokers, and through them to commerce.”

Marx wrote of “a point where either the entire industrial world must go to pieces, or else the Bank Act”, and went on:

“Both on October 25, 1847, and on November 12, 1857, the crisis reached such a point; the government then lifted the restriction for the Bank in issuing notes by suspending the Act of 1844, and this sufficed in both cases to overcome the crisis.”

So Brown did nothing extraordinary. He merely did what the capitalist class expect their government to do when there’s a financial panic that threatens to seize up commerce and production – make more money available to the banks. As in similar circumstances in the past, this stopped the immediate financial panic. But it didn’t stop the coming slump, as GNP fell from that quarter on and is nowhere near its pre-crisis level even today.

Lord John Russell was more modest. He didn’t write a book about how in 1847 he had saved the world from universal bankruptcy.

What then must we do?

2011-05-04T20:37:00.000-04:00

Editorial from the May 2011 issue of the Socialist Standard
Mervyn King, the governor of the Bank of England, kicked off a speech he gave earlier this year by stealing the words of the 19th century Russian novelist Leo Tolstoy, author of War and Peace and Anna Karenina. (The speech is available here.) King turns the opening sentence of the latter novel to his own purposes, stating that, ‘all happy economies are alike; each unhappy economy is unhappy in its own way’. He then goes on to tell us what ‘happy’ economies look like: they ‘combine growth, stability of prices and of the financial system, fiscal sustainability, supply-side flexibility and low unemployment’. He leaves aside the puzzling coexistence of such blessed happiness with historically unprecedented levels of stress, anxiety and depression, and presses on instead to give some of the reasons for the present unhappiness.

One reason we might be feeling glum, speculates King, is that most of us are getting poorer. Real take-home pay has already fallen 12 percent and is likely to fall again in 2011 to 2005 levels. ‘One has to go back to the 1920s to find a time when real wages fell over a period of six years,’ says King. But this ‘squeeze in living standards is the inevitable price to pay for the financial crisis and subsequent rebalancing of the world and UK economies’. Here King inadvertently invokes the ghost of another 19th century radical thinker, but does not mention this one’s name: it was Karl Marx who taught us that capitalism inevitably goes through periods of ‘rebalancing’ (i.e., of restoring profitability by destroying capital and devaluing labour), which inevitably leads to a squeeze in living standards (for the working class).

King concludes his speech with Tolstoy ‘s conclusion to Anna Karenina. This is that, despite life’s ups and downs, happiness is less important than trying to live in the right way. King must have been smugly proud of his intellectual prowess, connecting something as dull as a long speech on inflation with the words of one of the world’s best loved novelists. But the result is revealed as putrid when you compare King’s intent with that of Tolstoy’s.

Tolstoy was disturbed and horrified by the high levels of poverty and misery in the towns of the Russia of his day, and turned his mind to identifying the cause of the misery in his book, “What Then Must We Do?” Tolstoy followed Jesus in arguing that the first thing rich men like himself (and Mervyn King) could do would be to ‘get off the backs of the poor’ by giving up their own wealth. King misses this advice.

Tolstoy recognized that even such grand gestures of charity would not make a dent in the problem, because the problem is rooted in the whole system of property ownership and money, backed up by the tyranny of the state machine, which Tolstoy said must all be abolished. King strangely missed these lessons too. Tolstoy was on the right lines because he had the courage and intellectual honesty to pursue social problems to the root, and to state his conclusions regardless of the harm it might do to his previously existing beliefs, or social status or wealth. That makes Tolstoy a truth-telling hero.

What it makes Mervyn King we leave our readers to decide for themselves.

Pity about the politics

2011-04-04T20:56:00.001-04:00

Book Review from the April 2011 issue of the Socialist Standard

Hobsbawm: History and Politics. Gregory Elliott, (Pluto Press, 2010)
Once upon a time, the teaching of history in Britain was a fantasy world in which the emphasis was on the doings of kings and queens, statesmen and Prime Ministers, the role of Empire and ‘facts’ to be learned by rote. About 60 years ago this began to change and to some extent this can be attributed to the thinking of Karl Marx and his insistence that history had to be understood in its material contexts – that is, how wealth was produced, the parts played by social classes and the technology they used.

E.J. Hobsbawm along with other notable historians of this period such as E.P. Thompson, Christopher Hiil and Rodney Hilton produced works informed by Marx’s theory of history. Hobsbawm gained critical and commercial success with The Age of Revolution: Europe 1789-1848, (1962), The Age of Capital: 1848-1875 (1975), The Age of Empire: 1875-1914 (1987) and The Age of Extremes: The Short Twentieth Century, 1914-1991 (1994). These and other works of Hobsbawm have been reprinted many times and have gained him a reputation as probably Britain’s best known historian and Marxist.

However, when it comes to Hobsbawm’s politics a very different picture emerges. Hobsbawm, Thompson, Hill and Hilton were at one time all members of the Communist Party of Great Britain (CPGB). But whereas Thompson, Hill, Hilton and many others saw the error of their ways – especially after the suppression of the uprising in Hungary by Russian military in 1956 – and resigned, Hobsbawm remained in the CPGB until its dissolution in 1991. As a cheerleader for the CPGB and the Russian empire, Hobsbawm defended the leading role of the party advocated by Lenin, and dismissed the view that the emancipation of the working class had to be the work of the working class itself – the cornerstone of any Marxian politics. Even now, aged 93, he is still unapologetic about his political beliefs. Hobsbawm the historian had some interesting things to say, but his politics remain anti-Marxist.

Lew Higgins

Libya: brutality and hypocrisy

2011-04-04T20:16:00.000-04:00

From the April 2011 issue of the Socialist Standard

When the popular movements against long-standing despots in the Arab world spread from Tunisia and Egypt to Libya the Western powers thought that something they had long wanted – regime-change in Libya – was about to be handed them on a plate. But they didn’t have the same control over Gaddafi as they did over Moubarak and Ben Ali and so could not arrange for him to bow out. His own man, and true to form, Gaddafi chose to try to brutally repress the movement. With the support of mercenaries and some sections of the population armed with superior military power, it was looking as if he might succeed.

Faced with this prospect, the Western capitalist powers have decided to play the military card too and have launched a series of bombing and missile raids against the armed forces loyal to Gaddafi. Since, under the UN charter, wars not authorised by the UN are “illegal”, they have had to present their action as being to protect the civilian population against the very real exactions of the Gaddafi regime. Even so, when claiming that the military intervention is motivated by humanitarian concerns, British Prime Minister Cameron has always added that it was also in the “national interest”.

The “national interest” is in fact that the interest of the capitalist class of a country, not of its population. Their interest in this instance is, as in Iraq eight years ago, to have a friendly and reliable regime in an important oil-producing country. That’s what the bombings are really about.

If a desire to protect civilians from being shot down by governments was the real motive, why are the Western capitalist powers not also intervening to stop the despots in Yemen, Bahrain and now Syria from doing this (as they have done)? And why did they not intervene to stop Israel slaughtering civilians in Gaza three years ago?

At least they haven’t had the effrontery to claim that their aim is to bring political democracy. How could they when their bombing campaign is being partly funded by the despotic regime in Saudi Arabia? And in which war planes from the hereditary despots who rule Qatar are taking part?

It is not so much that the Western powers have double standards as that the foreign policy of capitalist states is not conducted according to any abstract standard. There is no such thing as an “ethical foreign policy”. What motivates their diplomatic and military activity abroad is a desire to protect and promote the economic interests of their capitalist class.

Some are urging support for the Gaddafi regime on the ground that, despite everything else, it is “anti-imperialist”. Not us. As Socialists, we naturally sympathise with workers anywhere struggling to get the added elbow-room to wage the class struggle that political democracy represents, but we denounce the hypocrisy and cynicism of the ruling classes of the Western powers in invoking humanitarianism to once again resort to killing and destruction in pursuit of their sordid “national” interests.

Was the crisis just a mistake?

2011-03-29T21:19:00.001-04:00

From the March 2011 issue of the Socialist Standard

The Financial Crisis Inquiry Commission set up by the US government reported at the end of January. They concluded that the crisis of 2007 and 2008 was the result of “human action and inaction, not of Mother Nature or computer models gone haywire”, but “of human mistakes, misjudgments, and misdeeds” and so avoidable (http://www.fcic.gov).

Obviously, the crisis was the outcome, even if unintended, of decisions by humans to behave in particular ways, but that’s not at issue. We need to know why the economic decision-makers involved took the decisions they did. What was the context of their decisions? What were the constraints acting on them?

The driving force of capitalism is the pursuit of profits by competing enterprises. As the Commission put it, “in our economy, we expect businesses and individuals to pursue profits…” If there is a chance to make a profit from some activity then the businesses in that field will go for it. If the profits are high enough then other businesses will enter the field to share in the bonanza.

This is what happened in the US. From 1997 until 2006 there was a boom in house building and buying. Big profits were to be made from lending money either directly to housebuyers or to businesses that did so. Easily able to borrow funds at relatively low rates of interest, the Wall Street investment banks decided to get in on the act, and in a big way,

“The large investment banks and bank holding companies,” the Commission reported, “focused their activities increasingly on risky trading activities that produced hefty profits.” The prospect of making “hefty profits” out of lending money to build and buy houses led them to borrow more and more money to take part in the chase after them:

“In the years leading up to the crisis, too many financial institutions, as well as too many households, borrowed to the hilt, leaving them vulnerable to financial distress or ruin if the value of their investments declined even modestly. For example, as of 2007, the five major investment banks – Bear Stearns, Goldman Sachs, Lehman Brothers, Merrill Lynch, and Morgan Stanley – were operating with extraordinarily thin capital. By one measure, their leverage ratios were as high as 40 to 1, meaning for every $40 in assets, there was only $1 in capital to cover losses.”

Note the matter-of-fact acceptance here that banks cannot create money out of thin air but are dependent on themselves borrowing the money they lend.

The Commission criticised the investment banks and other financial institutions for taking such risks but could those involved in making these decisions have decided otherwise? Could they have decided to forgo the chance of making the ‘hefty profits’ that were there to be taken? No, because if one of them decided not to pursue these profits, the others would have enthusiastically taken their place. It wasn’t a mistake on their part. Given the competitive, profit-seeking nature of capitalism they had to take the decisions they did. In that sense the financial crisis was not avoidable.

It was outside the remit of the Commission to examine the housing boom whose collapse in 2006 triggered the financial crisis. They merely recorded that “when housing prices fell and mortgage borrowers defaulted, the lights began to dim on Wall Street”. If they had gone further into the housing boom and why it ended, they would have discovered that it was a classic case of the pursuit of profits leading to overproduction (too many houses being built in relation to what people could afford to buy) and perhaps revised their view that “the profound events of 2007 and 2008” were not “an accentuated dip in the financial and business cycles we have come to expect in a free market economic system.”

Look back, move forward

2011-03-29T21:04:00.001-04:00

Cross-posted from the Socialism Or Your Money Back blog

Two things are utterly predictable whenever there is a mass protest, or a demonstration of significant size, and the anti-cuts demonstration organised by the TUC on 26 March was no exception. The first is that the police will do their best to turn it into a riot and to intimidate all present with violence. The second is that, regardless of police actions, most people will come away with a new sense of purpose and meaning in their lives – awake and invigorated, full of the collective joy that spontaneously arises when human beings get together to show their strength of feeling or merely their urge for festivity. After many decades of a relatively lonely and boring struggle to survive, a struggle that those in power have faithfully promised us will get worse in the coming years, people will have come home on 26 March at the least relieved that "I'm not alone".

That's the positive side. Unfortunately, with the decline of the traditional left and trade unions in this country and around the world, and the accompanying lack of faith in democracy and political parties, it's hard to know what exactly to do with those feelings – how to transform a feeling of solidarity and commitment to opposition into something that will last, something capable of delivering long-term, lasting change for the better.

That lack of faith is not just confined to the mass of people who are not ordinarily involved in politics. It is sometimes declared to be a positive thing from those committed to radical change. The thinking is that the traditional political parties and trade unions and so on have held us back – their ideas have been tried and failed and defeated, and their hierarchical structures and outmoded ideas are boring and not fit for purpose. Instead, we are to celebrate spontaneity and freedom – to get together in small groups and do exactly whatever we want.

There is something to the argument, but it has lost its appeal in the face of a major attack from the ruling class and its representatives who control the state machine. An extremely serious economic crisis that started with the banks has changed the game. The rich were rescued by huge state bail-outs. The costs of the crisis were shifted instead to the state – and the state intends to shift the burden to us, by slashing our jobs, pensions, social services, benefits, and so on. The attack is organised and centralised – shouldn't the opposition be too?

There are no easy answers to these questions, and we don't pretend there are. But perhaps it's time to hear once again a voice that has been marginalised for over a century. From the formation of the Labour party in 1906, and then the Russian revolution in 1917, socialism has come to mean either state management of welfare capitalism, or state dictatorship over a centralised economy. But these rightly discredited ideas marginalised a previously existing conception that it might be worth reviving. The word socialism was already beginning to lose its original meaning by 1894, which caused William Morris, one of the Victorian age's greatest polymaths, to say:

"I will say what I mean by being a Socialist, since I am told that the word no longer expresses definitely and with certainty what it did ten years ago. Well, what I mean by Socialism is a condition of society in which there should be neither rich nor poor, neither master nor master's man, neither idle nor overworked, neither brain-sick brain workers, nor heart-sick hand workers, in a word, in which all men would be living in equality of condition, and would manage their affairs unwastefully, and with the full consciousness that harm to one would mean harm to all—the realization at last of the meaning of the word COMMONWEALTH."

The 20th century did its best to let the curtain fall for ever on this vision of socialism, but a small number of dedicated activists have done their best to keep it alive. We in the Socialist Party count ourselves among their number. We say that it is right that people have lost faith in traditional politics – it has proved by its actions what it is all about. But to say that therefore we must give up on a vision of the future, and an organised commitment to attaining it, is to throw the baby out with the bathwater.

The inspiring struggles for democracy and against austerity we are seeing emerging around the world have a common cause – they are the divided and isolated battles of workers against the relatively united attack of the world's ruling class in its attempt to resolve its economic crisis. We need to follow the ruling-class example – come together and organise in order to resolve the crisis in our way. That is, by organising a political party dedicated to taking state power out of the hands of the ruling class, and to establishing socialism. And given the extremely serious nature of the ecological catastrophe we are all facing, this is not just a nice idea. Increasingly, it's a matter of survival.

Stuart Watkins

Egypt: The hard road to political democracy

2011-03-14T20:43:00.000-04:00

From the March 2011 issue of the Socialist Standard

What will happen in Egypt now? Will the army keep control until a new leader acceptable to the West emerges?

At the time of going to press, the “revolution of anger” in Egypt seems to be entering a new phase. Tahrir Square has been reopened to traffic and commerce. Massive political demonstrations are over, at least for the time being, but strikes and protests by various groups of workers continue. The employees of the National Bank of Egypt have forced the resignation of its chairman, a Mubarak ally. Ambulance drivers, public transport workers, and even the police are demonstrating for better wages and conditions.

Many Egyptians are dissatisfied with what has been achieved so far, and with good reason. Mubarak has gone. But what sort of democrat is the man who took over from him on 31 January – Omar Suleiman, assassin and torturer-in-chief of the dreaded Mukhabarat (General Intelligence Service)? The demand to suspend the emergency law that permits detention without charge has not been met, nor have political prisoners been released. The ruling military council has set no firm timetable for elections and transition to civilian rule. They have made plenty of promises, but who is naïve enough to trust them?

To understand what is happening in Egypt, we must first understand the nature of the ruling regime.

A military oligarchy
The regime is not a personal dictatorship. It can survive the removal of Mubarak or any other specific figure. It is a military oligarchy. The main power centre is the supreme command of the armed forces (the eleventh largest in the world). In addition, there is a ruling party – under Nasser the Arab Socialist Union, renamed by Sadat the National Democratic Party – but its role is secondary.

The military regime has its origins in the Free Officers’ Movement, which overthrew the British colonial puppet king Farouk in 1952. Its domestic and foreign policy has changed over time, under the successive leadership of Nasser, Sadat and Mubarak, but the regime itself has remained the same. It has never been in the least bit democratic.

Why then does the Trotskyist International Socialist Review tell us that Egypt “has been ruled by a dictatorship for 30 years, with arrests and torture a constant occurrence” (socialistworker.org/2011/02/11)? Only 30 years? Didn’t Nasser too jail thousands of political opponents? Ah, but those were “progressive” and “anti-imperialist” jails – and that makes all the difference, doesn’t it?

Before regaining independence, Egypt was ruled by a succession of empires. Before that it endured the despotism of the pharaohs. Mubarak too was popularly known as “the Pharaoh”. Egypt has been a dictatorship for 11,000 years.

From Nasser to Sadat and Mubarak
This is not to deny important differences between the Nasser and post-Nasser periods.

Nasser conducted a protectionist policy on behalf of national capital. A state-owned iron and steel industry was created. The Aswan Dam was built. In 1956 the Suez Canal was nationalised, leading to armed invasion by Britain, France and Israel. Social reforms were undertaken. Land was redistributed and rents paid by tenant farmers controlled. A minimum wage was established. There were also reforms in the areas of housing, health, education, women’s rights and family planning. In foreign policy Egypt was formally non-aligned; in reality it became a client state of the Soviet Union.

Nasser’s successor Sadat expelled Soviet advisers, realigned Egypt with the West (and eventually with Israel), and replaced protectionism by an “open-door” policy. Currency controls were loosened and foreign companies invited to invest in tax-free “enterprise zones”. Mubarak went further in the same direction. Cheap food imports were allowed to flood the country, ruining Egyptian farmers. The gap between rich and poor widened. The country fell deeply in debt to the international financial institutions and became financially dependent on US aid.

Much of state industry was privatised. As was later to occur in post-Soviet Russia, valuable state assets were acquired on the cheap by a handful of businessmen with inside connections. That is how Ahmed Ezz, a close friend of Mubarak’s son Gamal, emerged overnight as a wealthy steel tycoon.

Another lucrative scam was the legal requirement that a foreign investor must give (not sell) a local partner a 20 percent stake in his venture. The “local partner” always happened to be a general or high official.

Mubarak and his family were themselves the greatest beneficiaries of this “crony capitalism”. The family fortune has been rumoured to be as much as $70 billion (£43.5 billion). Both of Mubarak’s sons are billionaires in their own right. Most of this money is held in British and Swiss banks or invested in American real estate.

It should be noted that under Mubarak the regime did not serve the interests of the whole capitalist class. Some businessmen did very well, while others lost out. For example, Ezz used his political clout to force other businessmen to buy his steel rather than importing cheaper steel from China. Similarly, it was difficult for businessmen lacking inside connections to obtain bank loans. This helps explain why some businessmen back the opposition.

The clan and the regime
While most Egyptians want an end to the military regime, the immediate target of the “revolution of anger” was the “Mubarak clan” – Mubarak, his family and their closest allies and associates. The demonstrators wisely took care not to offend the military as an institution. According to some analysts, the Mubarak clan had powerful enemies inside the regime (resentful, perhaps, that they were not getting their fair share of the loot) who used the protests to mount a “half-coup” – meaning a coup against the clan but not the regime. Perhaps this is to overstate tensions inside the regime. It is clear, however, that there were people in the ruling group who did not belong to the Mubarak clan and who were prepared to sacrifice it in order to save the regime. (Apparently they were encouraged to take this step by the Obama administration.)

This was one reason why no attempt was made to use the army to suppress the protests. Another likely reason was that the generals judged that the soldiers and junior officers could not be relied upon to obey orders to shoot into the crowds. The security police – the “thugs” who mysteriously appeared “out of nowhere” riding horses and camels – could be used, because they were more isolated from ordinary people and more effectively under clan control, but there were too few of them to scare off the enormous masses of demonstrators.

Youth movements and trade unions
The key role in organising the demonstrations seems to have been played initially by the April 6 Youth Movement. This organisation began as a Facebook group set up to call on all workers to stay at home on 6 April 2008 in solidarity with striking textile workers. (There has now emerged a new umbrella organisation called the Youth Coalition for the Revolution of Anger.)

So the demonstration organisers appear to have been closely connected with the workers’ movement and, in particular, with the campaign to create independent trade unions to replace the old state-controlled Egyptian Trade Union Federation. The textile workers tried to establish an independent union in 2006–2008, but large-scale arrests of activists made this impossible at that time. One of the major gains of the “revolution” was achieved on 30 January, when an independent trade union movement finally emerged in the form of the Federation of Egyptian Trade Unions.

An important point that media coverage fails to convey is that the mass political demonstrations are only part of the upheaval. There are also numerous strikes and protests over “bread and butter” issues. That is not surprising when you consider the rising prices of staple foods and the fact that 40 percent of Egyptians have to survive on under $2 (£1.30) a day. While political demands are uppermost in Cairo, it seems that material demands are much more prominent in other cities. In Port Said, for instance, crowds angry over the shortage of housing set fire to the local state security headquarters, the governor’s office and the main post office.

The opposition parties
The regime selectively and intermittently allowed opposition parties to exist but restricted their activity. As a result, these parties are all very small – except for the Moslem Brothers, who despite being illegal were able (like Islamists in other countries) to take shelter in the mosques. Observers estimate that only 5 percent of Egyptians support any of the parties.

Almost all of the opposition parties belong to one of three categories.

First, there are several liberal capitalist parties that advocate civil rights and “free enterprise.” An example is the New Wafd Party. These parties are backed by a number of prominent businessmen.

Second, there are various Islamist parties. The Moslem Brotherhood is the largest of these, but not the only one.

Third, there are parties that regard themselves as leftist or socialist. What this usually means in the Egyptian context is loyalty to the legacy of Nasser, so it is more accurate to call these Nasserite parties. Thus, the National Progressive Unionist Party (known for short as Tagammu) “defends the principles of the 1952 revolution”.

Some parties combine Nasserite with Islamist ideas. For example, the Umma Party stands for “socialist democracy with Sharia (Islamic law) as the main source of legislation” (!). Finally, there is also an environmentalist Green Party.

It is hard to see what can come out of the negotiations that Suleiman is conducting on behalf of the regime with leaders of various opposition parties. None of the parties played any part in organising the “revolution” and few demonstrators regarded the parties as representing them. In fact, due to popular suspicion the negotiations may further weaken the parties’ base of support. A report from Suez mentions mass resignations from the parties participating in the negotiations, including Wafd and Tagammu, and connects this development with the creation of a Council to Protect the Revolution in Al-Arish (near the border with Gaza).

Who would win free elections?
The weakness of the parties makes it very difficult to predict who would win free elections if they were held today. As the theme of social justice has been prominent in the upheaval, the popular appeal of the liberal opposition may be limited. Social protest can work to the advantage of either Islamists or the left. Given the secular nature of the protests (not only were Islamic slogans conspicuous by their absence: there were also slogans in support of Moslem-Christian unity), the left may do quite well. The Moslem Brothers obviously have considerable support, but they themselves apparently do not think they are strong enough to gain power at this stage.

The existing left-wing opposition parties, however, are handicapped by their Nasserite orientation. To the extent that the demonstrators are against the military regime and committed to democracy, they might hesitate to vote for parties that hark back to an earlier form of the same anti-democratic regime. And, of course, only the older generation has direct memories of the Nasser period. So conditions may be favourable for the emergence of a new democratic left, possibly linked to the independent trade unions. There may even be potential for the spread of genuine socialist ideas.

Dragging out the transition
The uncertain outcome of elections is one reason why the generals aim to delay the transition to democracy as long as they can. They may also seek to retain a power of veto and other prerogatives even after a civilian government takes office, as well as an ability to reassert control whenever they consider it necessary – as in the “Turkish model”.

The wish to delay democratisation is clearly shared by the American and European governments on whom the Egyptian generals depend. These governments are great champions of elections, but only provided that the outcome is predictable and acceptable to them. They need time to prepare the ground for such an acceptable outcome – in particular, to select parties and politicians who can be trusted to respect Western interests and then give them financial, PR and other aid to help them win. Candidates for this role – El-Baradei, for instance – are well aware that pleasing Egypt’s Western patrons is at least as vital to their prospects as pleasing their fellow citizens.

How much time is needed? Statements from the ruling military council hint that six months may not be enough. German chancellor Angela Merkel has drawn a parallel between the transition in Egypt and the process of German reunification, suggesting that a whole year may be needed. And just in case the results of political engineering are disappointing, the generals and their patrons probably want to keep open the option of dragging out the transition indefinitely, perhaps co-opting a few handpicked opposition figures into what remains basically a military regime.

In the meantime, it is the job of the regime to restore and maintain “order” and “normality”. Ordinary people must stop making trouble and get back to work! To achieve that, the regime can be expected to combine – or perhaps alternate between – sweet talk and arrests, appeasement and repression. Neither approach will easily succeed.

As socialists, we do not regard political democracy in itself as sufficient to emancipate humanity. But we do recognise that it provides by far the best conditions for the development of the socialist movement. That is why we wish those well struggling for political democracy in Egypt – and, indeed, throughout the world

Stefan

Kropotkin

2011-03-06T09:13:00.000-05:00

Book Review from the March 2011 issue of the Socialist Standard

Mutual Aid. An Introduction and Evaluation. By Iain McKay. AK Press.

Socialists have always recommended Kropotkin’s Mutual Aid, including it on lists of books for sale. Kropotkin was an anarchist, but had been a scientist (geographer) himself and in this book was writing as science writer. It was originally written as a reply to T. H. Huxley, the biologist known as “Darwin’s Bulldog”, who had argued that both in nature and in human society “life was a continual free fight, and beyond the limited and temporary relations of the family, the Hobbesian war of each against all was the normal state of existence”.

Huxley was a biologist and an expert on Darwin’s views, but here was expressing a popular prejudice; in fact, more than this, a view that justified the division of society into rich and poor, oppressors and oppressed. As Iain McKay puts it in this pamphlet:

“In its most extreme form, this became ‘Social Darwinism’ which (like much of sociobiology today) proceeds by first projecting the dominant ideas of current society onto nature (often unconsciously, so that scientists mistakenly consider the ideas in question as both ‘normal’ and ‘natural’). … Then the theories of nature produced in this manner are transferred back onto society and history, being used to ‘prove’ that the principles of capitalism (hierarchy, authority, competition, etc.) are eternal laws, which are then appealed to as a justification for the status quo!”

Kropotkin produced the evidence from scientific studies to show that this was not the case, neither in nature nor in society. In nature a “struggle for existence” certainly went on, but cooperation (“mutual aid”) was just as much “a factor in evolution” (the book’s subtitle) as competition. It wasn’t just a struggle of members of the same species against each other to survive and so leave more offspring; in many species cooperation was a survival strategy with the less cooperative having less chance of survival and so leaving less offspring.

McKay goes into detail to show that many sociobiologists, including Dawkins himself, accept this, even if on the basis of mathematical models. Kropotkin can be seen as a bit of a sociobiologist himself in that he too argued from animal behaviour to human social behaviour. Only two of his book’s eight chapters are devoted to biological evolution, the rest dealing with human social behaviour and social evolution. However, these are governed by quite different factors that have nothing to do with genetics. But Kropotkin did at least turn the tables on the Social Darwinists by arguing that it was capitalism, not socialism, that was against human nature.

McKay’s 60-page pamphlet is a useful account of the background, significance and influence of Kropotkin’s book.

Adam Buick

Brooker's Bile

2011-03-06T05:13:00.000-05:00

TV Review from the March 2011 issue of the Socialist Standard

Television is a “flickering fibbing machine”, according to uber-critic Charlie Brooker in How TV Ruined Your Life (BBC2). Using a snappily-edited mix of archive clips, flippant sketches and scalpel-sharp observations, his six-part polemic describes how manipulating and distorted television has become.

Brooker bases his argument on ‘Cultivation Theory’. This claims that if we spend too much time gawping at the goggle-box, then our expectations, morals and fears are more likely to be influenced by what we see on screen than what we experience in real life. For example, television has conditioned us to be frightened of dark city streets because this is the setting for so much televised violence. And, he argues, production companies have got away with this by presenting violence in a glossy, titillating way through public information films (“government-approved mini horror movies designed to fear you into not going all dead”) and scare-fests like Crimewatch and Wire In The Blood.

In his second episode, Brooker focuses on how different demographic groups are portrayed on television. Young adults are “mindless jigging gits”, dads are “tragic shuffling pitiful individuals”, and older people are “hilarious irrelevances”. TV encourages us to perpetually look youthful – and makes us feel inadequate if we don’t – through dross like the “devastatingly mean makeover show” Ten Years Younger. This trend manifests itself as ‘aspirational television’, where Brooker’s bile is focused in episode three. The theory behind aspirational programming is that “if you watch beautiful fun-loving people on TV you’ll somehow feel like they’re your friends, whereas in reality of course you’re essentially just a tramp staring at them from the other side of the room”. Some of his examples are jaw-droppingly unedifying, like My Super Sweet 16 UK. This docu-soap follows slappably-spoilt brats, including one who stages an X-Factor-style audition to judge which of his sparkly-eyed acquaintances are fit enough to attend his birthday party. How our relationships are influenced by television is the target of Brooker’s next episode. With hilarious bitterness, he shows us how television perpetuates the myth of ‘the perfect relationship’ through adverts that turn toothpaste into an aphrodisiac.

On first impression, it’s easy to dismiss Charlie Brooker as misanthropic and sneering. But his acerbic tone is really just a way of filtering out those viewers he would consider too shallow to appreciate his arguments. Buy into his style, and Brooker’s work is refreshingly perceptive, even exhilarating.

Mike Foster

Capitalism will not be controlled

2011-03-05T14:54:00.000-05:00

The Cooking the Books column from the March 2011 issue of the Socialist Standard

Gordon Brown will go down in history as a failure. Politically, as a prime minister who never won an election. Economically, as the man who arrogantly and pompously announced that his policies had led to the end of the boom/bust cycle, only to find himself a year or so later presiding over capitalism’s biggest slump since the 1930s.

Philip Collins commented on this claim in his column in the (London) Times on 7 January:

“Weirdly, the Labour Party appeared to have concluded that capitalism had become stable, ordered and pliant. They need to read their Marx again, They’ll find a picture of capitalism as creative, destructive, radical, disruptive and prone to cycles of boom and bust, even when commanded to behave by Labour chancellors.”

But had they ever read Marx in the first place? Not that the Labour Party has ever accepted Marx’s analysis of capitalism. They haven’t even used the word “capitalism” for years. A previous Labour Prime Minister, Harold Wilson, once famously declared that he had never got beyond a long footnote on page 2 of Capital.

Brown, on the other hand, as a leftwing student leader in his youth and as author of a book on the ILP leader Jimmy Maxton, would probably have read some Marx. As would his successor as chancellor, Alistair Darling, if he really was once a member of the International Marxist Group (though he might have therefore been more familiar with Lenin than Marx). The Miliband brothers would have heard of Marx and his ideas from their father and perhaps even read some.

Collins used to be a speechwriter for Blair but he doesn’t seem to have made Blair make this criticism of Brown. They, apparently, had other things to argue about. But his description of Marx’s view of capitalism is substantially correct.

If Harold Wilson had persisted he would have found (some 500 pages later) Marx’s description of the course of capital accumulation:

“The life of industry becomes a series of periods of moderate activity, prosperity, over-production, crisis and stagnation” (chapter 15, section 7).

In a boom the competitive struggle for profits leads to overproduction (in relation to its market) of one sector of the economy that then spreads to other sectors. Capital accumulation stalls. During the resulting slump the conditions are created (through lower wages, interest rates, and asset values and the elimination of unprofitable businesses) for a slow recovery and eventually another boom which, like the previous one, will eventually bust. And the cycle continues.

Brown’s Tory opponents forget that he wasn’t the first chancellor to have claimed to have ended the boom/bust cycle. Nigel Lawson, Thatcher’s chancellor from 1983 to 1989, also believed he had done so. David Smith, the economics editor of the Sunday Times, recounted in his 1991 book From Boom to Bust:

“Even before an economic miracle was being proclaimed in the late 1980s, the Conservative Party’s boosters had declared that Nigel Lawson had achieved something, without explicitly trying for it, that had eluded all previous post-war Chancellors. He had, it was said, abolished the business cycle, a boast that Lawson was happy to live with…” (p. 196). “…until,” Smith added, “it proved to be woefully misplaced,” when the recession of 1990-91 broke out.

So, it’s not just commands from Labour chancellors to behave that capitalism ignores. It does the same to commands from Tory chancellors too. In fact, to commands from any government, including Tory-Liberal coalitions, as the decline in GNP in the last quarter of 2010 showed.

What’s the alternative?

2011-03-01T14:28:00.000-05:00

Editorial from the March 2011 issue of the Socialist Standard

“What’s the alternative?” As capitalism remains mired in crisis, and criticisms of the system become more commonplace and compelling, expect to hear this question asked more and more. It is often used politically and rhetorically – because every sensible person is supposed to know the answer. The idea that “There Is No Alternative”, or TINA, is one of Thatcher’s enduring political legacies. It will often be asserted angrily in political debate, which is revealing. No one feels the need to angrily assert the truth of the law of gravity. No one, then, should feel the need to angrily assert the fact that there is no alternative if there isn’t one. They do because there is.

The Trades Union Congress (TUC), a federation of Britain’s main trade unions, has organised a national demonstration against the government’s spending cuts, which will take place on 26 March. The demonstration has been called a ‘March For The Alternative’. Which sounds great. At last, after decades of ‘TINA’, an alternative! Unfortunately, the TUC’s alternative looks much the same as ‘business as usual’. The alternative, according to them, is ‘Jobs, growth, justice’. This is indistinguishable from what every political party in this country, whether of the left or right, promises every election time. We should not be too surprised by this. The TUC, like all trade unions, exists to win a better deal for wage-slaves. This is a laudable aim, and we support it.

But we do not just want to win a better deal for wage-slaves. We want to abolish slavery. We are wage-slavery abolitionists. As one socialist famously put it, we ought not to exaggerate to ourselves what these trade-union struggles and demonstrations and ‘actions’ can achieve. “We ought not to be exclusively absorbed in these unavoidable guerrilla fights incessantly springing up from the never ceasing encroachments of capital or changes of the market.” Instead, we need to organise for something new.

That was Marx in 1865. Unfortunately, his advice has been mostly ignored, including by those counting themselves as his followers, ever since. As the linguist and social critic Noam Chomsky puts it, “the effort to overcome ‘wage-slavery’ [has] been going on since the beginnings of the industrial revolution, [and] we haven’t advanced an inch. In fact, we’re worse off than we were a hundred years ago in terms of understanding the issues.”

Chomsky is right, and it’s the reason we in the Socialist Party devote so much of our time and energy to promoting an understanding of the issues. We seem, in fact, to be the only political organisation in this country to take this task at all seriously.

The alternative, then, is not the amelioration of our suffering under the wages system. It is the abolition of modern slavery – the emancipation of labour. Under slavery, you are sold to a master once and for all. Under wage slavery, you hire yourself out by the hour or the week or the month. The basic relationship between master and slave has not changed. We need to get rid of the master, take the means of making a living under our collective ownership and control, and organise our own lives, democratically, and on the basis of freely organised, freely given work. In a word, the alternative is socialism.

Lazy workers?

2011-03-01T06:01:00.000-05:00

Cross-posted from the Socialist Courier blog

A defense of capitalism often heard by socialists is that socialism would be impossible because without the goad of the wages system workers would be too lazy to work, but recent statistics seem to contradict that argument:

"A record 5.26 million people worked unpaid overtime last year, clocking up an average of more than seven hours a week without pay, according to a new study. The TUC said workers were missing out on almost £5,500 a year, worth £29bn to the economy. One in five employees regularly put in extra unpaid hours last year, with public-sector workers most likely to work unpaid overtime,said the TUC. The number of workers doing unpaid overtime was the highest since records began in 1992, the research found, with 5.26 million people clocking up an average of seven hours 12 minutes unpaid overtime every week." (Independent, 25 February)

Doom and gloom

2011-02-28T22:42:00.000-05:00

The Cooking the Books column from the February 2011 issue of the Socialist Standard

In November David Segal of the New York Times interviewed a number of economists to see what ideas they had about how to get out of the current slump (See here).

His opening words were “we are not going to shop our way out of this mess”. Which is true enough since capitalism is not a system geared to meeting consumer demand but one driven by capital accumulation out of profits. Consumer demand merely reflects capital accumulation. If capital accumulation stalls, as at present, so does consumer demand. Consumer demand can only increase if capital accumulation does; it can’t wag the dog.

The silliest suggestion came from Professor James K Galbraith who proposed paying unemployed workers their full social security benefits when they reached 62 which, he claimed, would create jobs because “they would have 22.5 percent more purchasing power than they would if forced to wait until the age when full Social Security benefits kick in”. But where would the money to do this come from? Only by transferring it from somewhere else in the economy, but this wouldn’t increase overall demand. Since he was also recorded as saying that “we’re likely to see a situation that makes people angry and miserable for years” he didn’t seem particularly convinced that his proposal would be adopted.

Professor Gar Alperovitz saw the way-out as via more employee-owned enterprises. “If the economy and the government don’t have an answer to the problem,” he said, “people are forced to try social enterprise.” But such enterprises – small businesses such as laundries – are not going to generate enough investment to get capital accumulation going again. In fact they survive largely by paying lower wages and accepting lower profits than a business normally would. Most will probably eventually go bust anyway.

Others realised that only something that would stimulate capital investment might work. Someone suggested investing in “green energy initiatives” but wasn’t too convinced that this would happen as, not being profitable in the short run, it would require government subsidies to get started. Someone else suggested that as the average age of the population was rising there would be more demand for medical treatment and that this could generate investment in technological breakthroughs in this field.

A mad marketeer from the Cato Institute pointed out, correctly as it happens, that “time was a key ingredient to a recovery”. Yes, time for the slump to create the conditions for a slow recovery, through unemployment exerting a downward pressure on wages and spare capital exerting a downward pressure on interest rates, both of which help to restore the rate of profit. He, however, looked forward gleefully to another consequence: governments cutting their spending to lower taxes on profits. “I think,” he said, “we also have a bubble in the labor market for state and government employees and over the next two years we might see as many as one million of these employees lose their jobs.”

Professor Andrew Caplin saw the answer in a growing inequality of wealth and income providing jobs for “the poor and middle class to cater to the economy’s biggest winners” servicing them as cooks, nutritionists and financial advisers. "Professor Caplin worries,” reported Segal, “that this concept might be caricatured as ‘cater to the rich’.” As well he might, but, given capitalism, he was on the right track. Increased inequality – a shift in favour of property-incomes – is a necessary, though not a sufficient, condition for a resumption of capital accumulation and, when it eventually does, will lead to a further increase in inequality.

That‘s all capitalism has to offer – periods of pain alternating with periods of increased inequality. It‘s not so much economists as the system they study, capitalism, that‘s dismal.

Ghana – can oil make a difference?

2011-02-28T21:55:00.000-05:00

From the February 2011 issue of the Socialist Standard

Who fill benefit from the discovery of offshore oil in Ghana?

The fanfare and euphoria that greeted the discovery of oil in Ghana is not only based on the assumption that it will help boost the not-so-healthy economy of this poor nation but more fundamental though unvoiced factors also account for the uproar. The dismal reality of the actions of the global oil magnates in African countries is one such factor. They act in brazen defiance of the norms of civility and dignity of the local populations. The humiliating treatment meted out to Liberia’s Charles Taylor due, in part, to his refusal to do business with Dick Cheney’s Halliburton is a prime illustration of such corporate arrogance. But more importantly, the expectation of Western oil companies to make their super-profits is also a cause of the excitement.

The debates
When the actual pumping started in mid-December, the world media was replete with all sorts of stories about Ghana hitting the jackpot. As discussions on the issue livened up attracting comments and analyses from Ghana and especially the BBC and RFI, the Squealers of the Ghanaian government got down to work. Amidst all this confounding hullabaloo, the spokespersons rebuffed the claims of the ‘prophets of doom’ that Ghana will go the way of Nigeria, Angola, etc, where the oil wealth has become a curse rather than a blessing. They claimed that stringent measures have been put in place to forestall the intolerable prospect of corruption, mayhem, kidnappings and killings that Nigerians have to contend with all these years on account of the petro-dollars.

However, it soon came to light that as of the time the Squealers were frantically trying to convince the doubting Thomases to drop the deep-seated cynicism that makes them attribute negative theories to the project, the legislature had not even deliberated on the matter in parliament yet. Not that parliamentary approval is of any relevance here since, generally, laws passed under this money-dominated economic system are either in favour of the rich and powerful or against the poor. But the fact that it had not yet been done suggests that, contrary to government claims, no precautionary had been taken against the possibility of Ghana going the way of Nigeria, Angola and co. Or, even more seriously, that the Western companies rushed the Ghanaian authorities into having the drilling started without ensuring that adequate protective legal instruments are duly concluded. This creates the impression that, contrary to what the Ghanaian authorities claim, the investors are, and this is obvious, the senior partners of the whole enterprise.

Then, later, some concerned Ghanaian observers intimated that even before the drilling got started, Ghanaian policy-makers were already using the anticipated oil proceeds as collateral to contract loans from abroad. An ominous beginning if the insinuation is well-founded.

Production relations
The development of modern industry, brought about by the profit-oriented economic system, makes it necessary for the production of wealth to be socialised. This means that the point of production is not the individual factory, goldmine, oilfield, etc but it is society. It follows therefore that those who control society are the ones who effectively control the use of the wealth produced. It is neither those who do the hard labour nor those who manage the workplace, i.e. the factory, goldmine or oilfield.

As the state is the recognised controlling body of any society, it is an undeniable fact that whoever controls the state, whether directly or indirectly, is the de facto controller of society and, by extension, the wealth produced.

It is also common knowledge that the political leadership in Africa, and indeed in all former colonies, have, to a large extent, the same tastes and lifestyles as the ruling elite of the former colonialists. The two groups share the same consciousness. Both work towards the preservation of the status quo – the exploitative relations of production – as it is the guarantor of their luxurious, albeit parasitic, lifestyle.

The so-called New World Order being vigorously pursued by these leaders in the West and their “experts” and advisers is nothing but an attempt at intensifying the exploitation of the world’s resources in the interests of the Western big business community whose interests Western governments serve. This insignificant minority of multi-billionaires control the wealth and political leadership of the West by virtue of their ownership of the means of production and distribution of wealth – land, factories, railways, the media, communication networks etc.

The states and governments of the former colonies are under the complete control of the Western powers and if any of these poor countries shows the slightest sign of attempting to resist Western domination, such a country is brutally forced to ‘cooperate’. That is in conformity with the near-invariable practice of the powers that be. There are too many examples of this state of affairs to need any mention here. Thus the whole of society and its resources are effectively controlled by the rich minority and they alone determine what to produce and how to use the wealth thereof.

Consequently, governments of the peripheral countries, who also represent their local business community, will, in accord with inherited convention, leave no stone unturned in enticing Western multinational corporations to come and invest in their countries. They do so with the hope that the local money-owners may get the chance to pick some crumbs falling from the sanguinary table of the foreign investors.

To facilitate foreign investment, the governments are ordered to create an ‘enabling environment’, an expression which is a euphemism for holding down the ordinary citizenry for the investors to mercilessly exploit them by way of cheap labour.

The Ghanaian reality
In Ghana, those at the helm of affairs, in routine fashion, fail to realise that not all are fools. Gold, bauxite, manganese, diamonds, cocoa, timber, just to name a few, have been produced since time immemorial. If ever any ordinary citizen benefited from the proceeds of these resources by way of, maybe public conveniences, untarred roads, ill-equipped health centres, few schools or some such tokens of basic necessities, then it was an unintended necessity.

That an overwhelming majority of Ghanaians have been wallowing in abject poverty whist a few cabal of the old boy network live in stinking affluence tells a lot. Though information on how the national cake is distributed is deliberately made unavailable or at best scanty, yet it is not entirely unknown. The several coups d’états, firing squads, commissions of enquiry etc are open pointers as to how the cake is shared.

Today, oil is being pumped and, in this world of money-based economy, exploitation cannot be avoided since production is carried out for the sake of making profits. It would be a contradiction to have a money-based system without profit. If investors will not make a profit, they will keep their money, but if they will realise a profit, they are going to do so at the expense of the worker and the host country. Then their collaborators in the form of local politicians and business people will be given the task of using sophistry to cover up the truth. Since the Ghanaian masses are effectively excluded from the decision-making process, except for the periodic elections during which time they are hoodwinked into voting for which bunch of looters to come and rob them, they are left helpless.

Corporate journalism
Those who could have saved the situation are the journalists who, at least, are able to glean into the corridors of power and have an idea of what is going on in there. Now, it is received opinion that Ghana is one of the few countries in Africa where press freedom has developed to a stage that is almost ineradicable. It is therefore expected, and observers of the Ghanaian oil scenario have concurred with this, that the vibrant press will serve as an uncompromising watchdog over the operations of those involved in the business. It is thus claimed that the eagle-eyed vigilance of the ubiquitous journalists will put fear into officials who may try to get involved in any financial misconduct. But the snag is the kind of journalism that is practised in Ghana and, indeed elsewhere in this profit-oriented world.

Corporate journalism is stunted journalism. The media houses operate to make a profit, just like the oil companies pumping the oil. And since the process of making profits necessarily entails shady deals, graft and unconventional methods, the media personnel cannot but play the game according to the rules. And that, exactly, is their stock in trade.

However, it is not to be discounted that there are individual journalists who may profess genuine intent in their work. But corporate media as an institution is an indispensable cog in the profit-making machine and hence works in accordance with the odious practices of the system. And that is precisely why they refer to themselves as the fourth estate of the exploitative ruling class.

Not surprisingly, the media coverage is appallingly terrible. It would not be an overstatement to say that over ninety percent of media activities is devoted to three trivial issues.:

1 Entertainment – to divert attention from real issues of official theft, but not to genuinely satisfy people’s spiritual needs.

2 Advertisements – to promote the consumption of worthless or fancy goods.

3 Misinformation – to keep the masses ignorant.

An instructive case of such disinformation was seen on New Year’s Day when BBC’s Network Africa was summing up the important events of the past year – 2010. It was written by Elizabeth Ohene, a former BBC journalist and also a former minister in the previous government in Ghana. She wrote that she was surprised to learn that Ghana had just been promoted from a least developed country to a ‘middle income’ one. Who did it and why?

All said and done, Ghana may not go through the kind of physical violence and killings that is the lot of Nigeria today. However, it will surely experience the other aspect of what is happening in oil-rich Nigeria. The oil corporations will siphon off more than the lion’s share of the proceeds from Ghana. Then the political and business leadership will stash away as much as they can. And finally, the ordinary citizens, like their counterparts in Nigeria, will continue to live below the needless but inescapable poverty line.

Suhuyini

Inconsistent

2011-02-24T22:59:00.000-05:00

Book Review from the February 2011 issue of the Socialist Standard

Ecology and Socialism: Solutions to Capitalist Ecological Crisis. By Chris Williams. Haymarket Books 2010.

The introduction bodes well with clear statements of where the blame lies for the ecological mess we’re now in. ‘We live in a social system predicated on endless expansion” and ‘The blind, unplanned drive to accumulate that is the hallmark of capitalist production – the profit motive – has created the problem of climate change, not individuals” profligate natures or overpopulation.’ The book’s title is ‘Ecology and Socialism’ and the ecology side is explained admirably well. (Williams gives ecology courses as part of his work at Pace University, N.Y.) but not the socialist aspect.

The first four chapters cover the science of climate change, debunk the myth of overpopulation (an excellent chapter that can be read in isolation) and ‘make the case as to why there can be no such thing as sustainable or environmentally friendly capitalism’. Williams’s arguments are backed up with well-documented notes in which he refers to a host of well-known and well-respected ecologists, scientists and writers, along with named articles and reports. Although he repeatedly states that capitalism as a system is the cause of the world’s environmental problems he also stresses that it is neoliberalism that has speeded up the process detrimentally. In fact, at this stage, by pages 57/58 some reforms to neoliberalism are listed as being a way ‘to roll back the hostility’ that small farmers have suffered.

Unfortunately, from a very promising beginning, Williams quickly negates the case he started to build ostensibly for socialism by saying in one breath the productive forces need to be in the hands of the producers and in the next that we, as workers, must fight for “good unionised jobs”. There is a definite lack of coherence in his argument from hereon in. He writes of “solutions”, but how many solutions can there be to capitalist ecological crisis? If the argument has been all the way through that it is capitalism that has caused the ecological crisis then the solution must be single and particular: get rid of the cause.

He does address the difficulty of writing for an American readership in that the general misconceptions widely held by many US citizens as to what socialism actually is may prevent them from serious consideration of these or similar arguments. Perhaps it is this that has led to his muddled thinking when attempting to lay out what socialism is? He states and agrees with Marx’s position that ecology (nature) and socialism are inextricably linked but goes on to muddy the water by detailing more of an overhaul than an overturn of capitalism. He claims that separate nation states and borders could not exist but nowhere is there any mention of a moneyless world. And that the government needs to be pushed into making changes – as it has been before – by millions of people fighting for change in this area or that; but no mention of how reformism is an endless treadmill of two steps forward and two steps back.

In comparing the US situation with that of Europe he has this to say, ‘As European capitalism has survived and prospered with tougher governmental regulatory controls and greater restrictions on corporations, it is clear that we can win important and life-enhancing reforms without threatening the overall structure of capitalism.’ Are we to seriously consider that ‘European capitalism’ has done or is going to do anything beyond nodding towards serious climate change reversal? And what of the statistics of the unemployed, homeless, malnourished; how do they fit into the ‘important and life-enhancing reforms?’ Then he goes on to say that reforms, theoretically possible in capitalism, will only be made if politicians are ‘forced’ to implement them (by us). So now, it seems, we are to devote all our spare time and energy to demonstrations and strike action for a bit of reform here and there. Surely if all that mass energy is to be rallied we go for the whole thing – system change – now heard so often, and even featured on the book’s cover, but obviously misunderstood by many to mean a system of reforms. To end the chapter there is a hint that he doesn’t really support what he’s written when he writes of competing capitalist states that can’t plan and coordinate on the global level required and that, ‘such planning could only realistically come about through a completely different way of organising production – one based not on making a profit but meeting human need’.

Williams doesn’t seem to have really come to his own conclusion yet as to what he sees as the alternative. Where are his proposals as to how we rid ourselves of the profit motive? If we don’t rid ourselves of money how do we rid ourselves of the profit motive? He offers plenty of solid argument to back up the idea that only a society not driven by the profit motive would benefit both labour and nature positively and yet Williams seems to shy away from total commitment. How can he write that nothing short of totally remodelling the world on a social, political, technological, cultural and infrastructural level within a fully democratic process carried out by those who will be affected by those decisions, with no nation states or borders and therefore no resource wars – and then add that the Global South will require ‘technological help, capital and training’ (my emphasis).

He has shot himself in the foot by seemingly offering an alternative, having given ample reasons why capitalism can’t change its logic, but by being far too ambiguous about the solution(s) he offers. Conspicuous by its absence is just what Williams proposes is our actual route to this ill-defined alternative society.

Janet Surman

Let the walls come tumbling down

2011-02-24T22:06:00.001-05:00

From the February 2011 issue of the Socialist Standard

How much longer are you willing to sit around and let a tiny minority divide us?

According to the Bible, 1400 years before our saviour arrived on Earth, the walls of Jericho came tumbling down; demolished by the buglers of the Israelite army marching around the city walls blowing their trumpets. No mention is made of any aural damage.

Walls, have had several roles in society since their inception. Several thousand years ago our ancestors would have built rudimentary walls for shelter against the elements, and these eventually evolved in to the walls of communal living spaces.

With the emergence of private property walls began to assume a new role in society: the defence of landed property. Kings, queens, emperors and a motley assortment of nobles laid claim to the land through divine approbation and conquest. What had once been held in common ownership gradually came to belong to a tiny minority that enforced their ownership through coercion.

Fortress and City walls were not enough for some rulers. The threat of losing the property that had been stolen from the majority led to the construction of fortifications of immense proportions. The Great Wall of China was under construction from the 5th century BC up until the 16th century to protect the Chinese Emperors from a northern threat to their borders. Nowadays, it is a major tourist trap. However, it is doubtful whether the tourist guides reveal that ‘it is estimated that over one million workers died building the wall’ [wikipedia.org].

Medieval walled cities had become commonplace, but walls also served another purpose for those in power, and that was for imprisonment. Dungeons were often used to hold prisoners prior to execution or transportation. And, there was also debtors' prison, where the debtor was imprisoned until the debt was repaid. But it wasn't until the 19th century that the modern prison system took root, beginning in Britain, when incarceration was viewed as a punishment in its own right. Walls could now be seen to confine members of society as well as repel them.

The Berlin Wall demonstrates how capitalist states can contain and control their populations. The construction of the ‘Wall of shame’, as the West Berlin state dubbed it, began on the 13th of August 1961. The state capitalist élite of East Germany declared that it was erected as a defence against fascists who were conspiring to impede the ‘will of the people’ from the building of a socialist state – which is a contradiction in terms. Its real function was to prevent the mass emigration of East German workers to the private capitalist workshops of the West. However, by 1989 the economic decline of the Russian empire led to a change in policy by their ruling élite, and access to Russian coercion was to be denied to the puppet states. It was this that brought about the tumbling of the Berlin Wall.

Amid the rejoicing some people in power were not as jubilant as the East Berliners, and millions elsewhere. Margaret Thatcher, wary of a united Germany, was reported to have pleaded with President Gorbachev ‘not to let the Berlin Wall fall’, and to ‘do what he could to prevent it happening’ (The Hindu, Sep 15 2009). Similarly, the French President, François Mitterand warned Mrs Thatcher that a unification of Germany could lead to them making ‘more ground than Adolf Hitler had’, and ‘that Europe would have to bear the consequences’ (London Times, 10 September 2009). Both quotes offer an insight into how the competitive nature of capitalism affects the thinking of its leaders, and directly works against the overwhelming majorities’ hopes, dreams and desires of living in a humane world.

Israel's ruling élite ordered the construction of their wall in 1994, and duly baptised it the 'Separation Barrier'. You would have thought that the Israeli's might have recalled the wall that the Nazi's imprisoned 400,000 Jews behind in what became known as the ‘Warsaw Ghetto’ prior to their elimination, but evidently memories are short, and propaganda long. The justification for its construction is that it has been built to protect Israeli's from Palestinian suicide bomb attacks. Opponents regard the wall as a means to further annex Palestinian land, and that security is just a subterfuge. The wall also violates international law as laid down by the International Court of Justice. However, ‘justice’ under capitalism inevitably pans out as ‘might is right’, especially when the US is your Godfather.

The establishment of an Israeli state was the goal of Zionism and its founder Theodor Herzl’s entry in his 1895 diary reveals the thoughts of a ‘righteous’ man:

“We must expropriate gently the private property on the state assigned to us. We shall try to spirit the penniless population across the border by procuring employment for it in the transit countries, while denying it employment in our country. The property owners will come over to our side. Both the process of expropriation and the removal of the poor must be carried out discretely and circumspectly” (Righteous victims, p. 21-22).

The Israeli 'settlers', are also opposed to the barrier, but their opposition is because it appears to relinquish the Jewish claim to the 'Land of Israel'. This is the land that God promised to the descendants of Abraham. This is a biblical deal struck between God and the Jewish ‘people’ some 3500 years ago. It is also the ideological engine of Zionism, and the Likud party’s rationale for the expansion of Jewish settlements in the West Bank and Gaza.

Voltaire once wrote that ‘if God did not exist, it would be necessary to invent him’, and like the ancient mariner, Jonah, who was supposedly swallowed by a whale, millions of people swallow the Bible’s fairy tales as literal truths. And this suits the powerful; if it didn't the Bible, and all of the other ‘holy books’ would have been consigned to the fiction shelf of the Children's Library a long, long time ago. Within the Bible’s pages we have a superman walking on water, and feeding four thousand people with a shopping bag of groceries. The Red Sea opening up to allow the 'chosen people' to cross, but the 'all loving' God deciding in his infinite wisdom to drown the pursuing Egyptians. There's a man whose hair is the secret of his immense strength. A midget slaying a giant. Talking snakes, talking bushes, a dead man coming to life, and the useful trick of turning water into wine. Pages and pages of fantasy. But, in the hands of religious fanatics, and conniving élites these tall tales create intense misery for millions of people. And the 'Separation Barrier' is a symbol of that suffering.

Another 'separation barrier' has been constructed in the 'land of the free'. This 1951 mile long wall acts as a ragged border between the United States and Mexico. The justification from the US side about why they have erected this wall is that it is to deter drug smugglers and prevent illegal immigration. On neither count can the US authorities claim any success. The US is awash with drugs, as is the rest of capitalist society, and the answer to drug abuse does not reside in the construction of a wall.

The US Border Patrol in 2005 apprehended 1.2 million people trying to cross over from Mexico, and by their own estimates they only catch 1 in 4. In a country where it is estimated that 40 percent of the population live below the poverty line, it does not take a George Bush to understand what it is that drives these people to leave their homes and families for an uncertain future in a hostile country.

The North American Free Trade Agreement (NAFTA), like every other trade agreement is always constructed to benefit the few to the detriment of the many. Contrary to the rhetoric of the capitalist media, NAFTA had a predictable effect on the Mexican people. The peso crashed soon after the NAFTA was passed, and those already struggling were pushed further in to penury. Economic migration became inevitable as this Oxfam report underscores:

“NAFTA has created dramatic economic dislocations in Mexico. These economic impacts, among other factors, are leading Mexicans to migrate…For example; imports of U.S. corn have severely affected the local Mexican agricultural sector. NAFTA arrangements have helped increase the imports from 3 million metric tons in 1994 to more than 5 million metric tons in 2002. Also, the brief rise in outsourced U.S. manufacturing that helped the Mexican economy has ceased as these factories have now moved to Asia” (OXFAM; USDA, Nadal, 2002).

Even the walls that once gave us a feeling of security is undermined by capitalism as the debt incurred on the commodity that people have been persuaded to call their homes, has been transformed in to four walls of anxiety through the threat of unemployment, or just a few upward ticks in interest rates. The question is how much longer are you willing to sit around and watch a tiny minority dominate your life? Why not help us to bring the walls of capitalism tumbling down? We are asking you, as Shelley, once did to:

“Rise like lions after slumber
In unvanquishable number
Shake your chains to earth like dew
Which in sleep had fallen on you.
Ye are many. They are few.”

Andy Matthews

Training to kill, training to sell

2011-02-10T21:11:00.001-05:00

The Material World Column from the February 2011 issue of the Socialist Standard

Is aggression part of our human nature? Are we born killers? Socialists don’t think so. Nor, as it so happens, does Lieutenant Colonel Dave Grossman, a military psychologist who claims to have invented a new science called “killology”.

In his book On Killing, Grossman shows that without special conditioning almost all of us are extremely loath to kill anyone. For the “masters of war” (as folk singer Julie Felix called them) this is a big problem. Brigadier General Marshall found that only 15-20 percent of American foot soldiers in World War II ever fired their rifles (and some of those deliberately missed). Similar results have been obtained for the American Civil War and World War I.

We have powerful inhibitions against killing our own kind, and these inhibitions remain strong even when we are under direct threat of being killed ourselves. Trauma in war veterans is rooted mainly in feelings of guilt at having killed. Medics and others who though constantly exposed to the danger of death are not required to kill rarely suffer trauma.

How then did so many people manage to get killed in these wars?

Well, a tiny minority (2 percent) did enjoy killing and made a vastly disproportionate contribution to the body count. Also, inhibitions are much weaker when due to distance or for some other reason you can’t see your victim’s face. Where weapons are operated by teamwork, social pressure comes into play and the sense of personal responsibility is diffused. Finally, a soldier will generally kill if an officer is right behind him yelling: “Kill him, for Godsake, kill him!”

Training to kill
In response to Marshall’s study, the US armed forces developed more realistic and psychologically intrusive training methods. During physical exercise new soldiers chanted: “Kill, kill, kill, kill!” Instead of aiming at the bullseye on a geometrical target, they learned marksmanship by shooting at human-shaped silhouettes. And they were forced, by means of specially designed head and eyelid clamps, to watch many hours of gory war films that desensitised them to the sight of carnage.

The new conditioning methods were effective. The proportion of soldiers who fired their rifles soared to 50 percent in the Korean War and 90 percent or higher in Vietnam. At last soldiers were made to act like efficient killing machines. Of course, they were not really machines. As human beings they paid for their “improved performance” in intensified trauma.
Today’s young people are also being conditioned to kill by watching increasingly violent films and television programming. Most dangerous of all are interactive video games that simulate armed combat. Using the same methods as in military training, they inculcate the practical skills as well as the psychological response mechanisms needed for efficient killing.

Training to sell
I was struck by one of the reader’s reviews of On Killing at the Amazon site. The reviewer, a sales manager, comments that his profession has a problem that closely resembles the generals’ problem of soldiers who are reluctant to kill. Many of us, it appears, are not just insufficiently aggressive to kill people. We even aren’t aggressive enough to clinch a sale!

Perhaps, the reviewer muses, the same methods that work so well on soldiers could be adapted for use in the field of sales. The mind conjures up an image of squads of uniformed salespeople at boot camp, chanting “Sell, sell, sell, sell!” as they run.

The literature on training sales personnel discusses a dire condition called Inhibited Social Contact Initiating Syndrome or (more narrowly) Sales Call Reluctance. This syndrome, we learn, affects over a quarter of salespeople. They have negative thoughts and emotions that inhibit them from trying hard enough to sell things. Companies can test job applicants to screen out those prone to the malady by purchasing a “diagnostic” questionnaire (110 questions).

The emotions that inhibit sales workers from performing well are of various types – at least twelve, according to “behavioural scientist” George W. Dudley, author of The Psychology of Sales Call Reluctance. Many, for instance, feel embarrassed to solicit sales from individuals of higher social status than themselves.

The main problem, however, is lack of aggression. People feel “distress, fear and anxiety” at the mere thought of seeming “pushy”.

Imposing your will
Sales coach Paula Crutchley has a confession to make: “When I first started in business, I sometimes felt overly concerned about the feelings of others.” (Shame on you, Paula!) View the initial sales contact as building a relationship, she advises. “This point of view will make the process easier on your soul.” Although she has learned not to be “overly” sensitive or considerate, her soul is still giving her trouble.

Her colleague Tom Crouser expresses a tougher outlook. Here is his comment on the “toxic condition” of “yielding to others”: “Children are taught that it’s rude to impose your will on anyone. But selling is all about imposing your will on others.” Being a manager, he adds, is also all about imposing your will on others.

The soldier, the salesperson and the manager do indeed share a common plight. They are required by their bosses to dominate others. However, it is not their own will that they impose, but rather the will of those who dominate them and others through them. In order to impose this alien will, they must constantly suppress their own. The clash between this inner will and the insecurely internalised will of the boss causes them agonising inner conflict and confusion. The class struggle rages within their souls.

Stefan

Made in Dagenham

2011-02-10T13:03:00.000-05:00

Film Review from the February 2011 issue of the Socialist Standard

Made in Dagenham, depicts the true-life struggle of female workers for equal pay, in 1968 in the Ford Plant in Dagenham.

Produced by ‘BBC Films’, it stars Sally Hawkins as Rita O’Grady, the girls’ main spokesperson, Rosamund Pike, as Lisa Hopkins, the wife of a Ford executive, who opposes him when the women strike, and Miranda Richardson, who delivers a crackerjack performance as Minister for Employment, Barbara Castle. Castle is initially angry that after two years of Labour goverment, with a large minority, they’ve had 26,000 strikes, lost five million working days and now, these women want to add to it.

Ford’s Dagenham plant in 1968 was the fourth largest auto manufacturing plant in the word, producing 3,000 cars a day. It comprised an area of 42 million square feet, employed 55,000 men and 187 women. The women were previously classified as semi-skilled, but were demoted to being unskilled with a corresponding pay cut, which wasn’t objected to by the Union.

According to their shop steward, played by Bob Hoskins, “This has nothing to do with being unskilled. Ford decided to pay you less, because they can, because you’re women.”

Initially, the strike, opposed by the Union, was to upgrade the women to semi-skilled status but under O’Grady’s fiery leadership, became a battle for equal pay for equal work. The women, all 187 of them, sewed seat covers, but nowhere in Made do you see one man doing that; equal work?

Most of the movie deals with opposition from men in various areas. The overall view is, in 1968, most Englishmen were chauvinistic. Though this reviewer hasn’t lived in England since 1966, he knows the depiction was reasonably accurate.

Without seat covers the Plant shut down. Laid-off male workers bitterly opposed the strikers, which caused problems in the marriages of couples who were both employed at Ford. O’Grady’s husband was extremely nasty when their fridge was repossessed. This made the women more bitter, considering they were supportive of the men when they were on strike.

Union leaders begged them to return to work. One, in a fit of profundity, declaimed, “Marx said men make history; he didn’t say women make history.” The word ‘man’ in the greater sense, which is how Marx meant it, carries no gender connotation.

In desperation, an executive from head office in Detroit came over to put the world to rights. This economic genius argued, to grant equal pay, would shoot up the price of product, which would kill the market. Surveys have shown, an average of 7 percent of the price goes to wages and salaries, including that of high-price CEOs. A few years before the strike London busmen were out all summer for higher wages. A survey, conducted a year later, showed that for every pound received in extra fares, only two shillings (then one tenth) went towards wages.

Perhaps the most perceptive comment in the movie is when Lisa Hopkins tells the guy from Detroit, Ford should take a leaf from Vauxhall’s book and not be so aggressive towards the union. Though Hopkins didn’t say it, this aggression stems from the early days when Henry Ford did all in his considerable powers, to prevent unions getting a foothold in his plant.

After crashing the Union’s national conference, the delegates vote in favour of equal pay and Castle, realising the women won’t quit, sides with them even after being warned by Harold Wilson, “Don’t upset Ford, I’ve enough trouble with Americans.” The women settle for 93 percent of their demand. In 1970 the UK Parliament passed the Equal Pay Act, which was soon adopted by other countries. Even Ford management accepted it.

The movie, directed by Nigel Cole, is well acted, fast moving, totally absorbing and contains some humour, arising from real life situations. Perhaps, the funniest is when an attractive girl finks on the rest by entering the plant for a photo shoot and double crosses the company.

Though Made is recommendable, this reviewer has one small quibble. The thrust of it is no different to millions of movies; you don’t know what you can do until you try. Certainly, one must admire O’Grady and her friends, who had no previous experience of negotiating and propagandising. Nevertheless, Made depicts people fighting for improvements within capitalism. At one point, the shop steward says, “Someone has to stop those exploiting bastards from getting away with what they’ve been getting away with for years.” Meaning forcing them to be less exploitative. The question of no exploitation full stop, is never addressed. One thing which Marx said that the union official never repeated is “…abolition of The Wages System.” The most a Socialist can say about the women is their aims were alright as far as they went, but they didn’t go far enough. For real equality, a society where all will stand equal in relation to the tools of production, is the only answer.

Steve Shannon

Ed’s dad

2011-02-10T11:10:00.000-05:00

The Cooking the Books column from the February 2011 issue of the Socialist Standard

“My Dad,” Labour Leader Ed Miliband told BBC Radio 5, “would have considered himself a socialist too, but he would have said we need to have public ownership of everything.” ((London) Times, 27 November).

It’s true, his dad, Ralph Miliband, was a leftwinger who identified “socialism” with full-scale nationalisation, or state capitalism – as we pointed out in a review of his book The State in Capitalist Society in the August 1969 Socialist Standard:

“This is a confusing book in which Miliband sets out to prove what he takes to be the Marxist theory of the state. Although he does define his terms he uses words like ‘capitalism’ and ‘class’ in a non-Marxist way. Capitalism, he holds, is based on private enterprise, private profit and private accumulation. This raises suspicions, which are confirmed, that he has an odd view of Socialism too. Russia, he says, is ‘collectivist’, ‘non-capitalist’ and, in an unguarded moment, even ‘socialist’. The concept of state capitalism is clearly unintelligible to him and is nowhere discussed, not even in relation to nationalisation in the West.”

Nationalisation is not socialism as it is only a change of owner and employer, leaving workers still having to sell their labour power for a wage or salary and still exploited for surplus value. In the West the former owners were paid compensation and so continued to receive a property income but as interest on government bonds rather than as dividends. In Russia the beneficiaries were those who dictatorially controlled the state and awarded themselves a privileged income as bloated salaries, prizes, country houses and other benefits in kind.

Ralph Miliband’s best known book is probably his 1961 critical history of the Labour Party from a leftwing Labour point of view, Parliamentary Socialism. In the concluding chapter, entitled “The Sickness of Labourism” he observed:

“By the late fifties, the Labour leaders, obsessed as they were with the thought of electoral success, had come to be more convinced even than were their predecessors that the essential condition for that success was to present the Labour Party as a moderate and respectable party, free from class bias, ‘national’ in outlook, and whose zeal for reform would always be tempered by its eager endorsement of the maxim that Rome was not built in a day – or even in a century. Never indeed had Labour leaders been so haunted by a composite image of the potential Labour voter as quintessentially petit-bourgeois, and therefore liable to be frightened off by a radical alternative to Conservatism.”

Plus ça change. There was nothing new about New Labour, except that Blair succeeded where Gaitskell failed in getting rid of Clause 4, which committed Labour on paper to full-scale state capitalism.

He went on to quote from the study of the 1959 General Election by David Butler and R. Rose their view that the Labour Party “as in all recent elections …played down any claim to stand, as a socialist party, for a radically different form of society …it asked the voters to say that it could administer the mixed economy welfare state better than the Conservatives”.

Which is precisely what Ed Miliband is on record as promising to try to do. As he told the Observer (29 August): “I’ll make capitalism work for the people”. Oh no, he won’t – because that’s not possible, not even if he followed his dad’s line and nationalised everything. State capitalism can’t be made to work for the people either.

The power to change the world

2011-02-10T10:56:00.000-05:00

From the February 2011 issue of the Socialist Standard

It is always inspiring to see people power in action, as in Tunisia last month, where it forced the local dictator to flee after twenty-three years in power. It shows that people are not always passive victims but have the potential to topple capitalism not just dictators.

In all countries society is divided into two classes: those who own and control productive resources and want them operated to bring them a financial profit and the rest of the population who depend on them to live.

All governments have to give priority to profits and profit-making as this is what drives the capitalist economy. When profits are under pressure, as at present, they have to impose an added austerity on the population which inevitably brings them into conflict with them.

One of the key jobs of any government is to keep the population quiet, basically to avoid them rioting. In a developing capitalist country such as Tunisia this can’t be done without regular recourse to brute force. Which is why most of the governments of such countries are more or less authoritarian, compared, that is, with those of the more developed countries where lies and trickery generally do the job.

This situation is tacitly accepted by Western governments as they want social peace, however obtained, in the countries where they have profit-seeking investments. They need governments there that keep the people down. As long as a government does this they can expect support, as Ben Ali got from France for years. But woe betide a dictator unable to stop the population getting out of hand. He may initially continue to be supported but eventually an exit strategy will be prepared for him – exile in a country where he and his family can live off the loot all far-seeing dictators stash away.

When a dictatorship is toppled people feel empowered by what they have done but that is not enough. One demonstrator in Tunisia, asked what he expected to happen next, replied simply “I don’t care. I’m just glad to see the back of him”. But “what next?” is the key question as kicking out a dictator does not change the economic realities of capitalism – nor the repressive role of governments.

We take no pleasure in pointing out that any new government in Tunisia, even though less corrupt (or not corrupt at all) and enjoying more legitimacy, will still have to keep the population down in the interests of capitalism.

The only way the population in Tunisia, and elsewhere, can avoid having to protest at an artificial scarcity being imposed on them in a world of potential plenty is to join with workers in the rest of the world to get rid of capitalism, its class rule and its production for profit. This means making the natural and industrial resources of the Earth the common heritage of humanity. It means establishing a world without borders where the resources which already exist can be used to provide plenty for all

The great debt swindle

2011-01-29T05:06:00.000-05:00

The Cooking the Books column from the January 2011 issue of the Socialist Standard

Channel 4’s sponsorship of right-wing propaganda masquerading as objective journalism hit a new low in November last year. The storm surrounding the broadcast of the widely condemned Great Global Warming Swindle had barely settled when the channel issued a new swindle, Britain’s Trillion Pound Horror Story, made by the same people. The previous programme was a propaganda offensive on behalf of those who deny (and profit from) climate change. This new programme aimed to achieve a similar victory (for the rich) on the economic front.

That the programme was propaganda and not journalism was signalled to the alert viewer early on when the presenter, Martin Durkin, said he wanted to put the size of Britain’s accumulated debt, £4.8 trillion, into perspective – supposedly the whole point of the documentary. How did he go about achieving this?

Well, firstly, he quite rightly drew attention to the fact that many people struggle to make proper sense of very large numbers (how many zeros are there in a trillion?). A brief explanation and a moment’s thought will end this struggle. But we’d be no nearer understanding. Is four trillion a big number? When compared to the number of digits on our hands or pounds in our bank accounts, well, yes. But when we’re talking about state debt? If so, just how big?

To answer that, it would be necessary to put the number in a comparative context. Is the British debt a big one in comparison to other Western countries? In comparison to GDP? Is it big compared with what it has been historically? Who is the debt owed to and why? How much does it cost to service the debt? What would be the consequences of restructuring or defaulting? Five minutes with Google will turn up the answers to these questions. But Durkin tried a different tack. He put the size of the debt into context by telling us how big a pile of banknotes it would make (helpfully reminding his audience that a banknote is very thin indeed) and how long it would take to chuck the debt out of a window. A puzzling strategy, until you understand that the aim of the programme was not enlightenment, but ideological justification for slashing state spending (most of the debt is made up of future liabilities for the state pension and pensions for public-sector workers).

Durkin’s key, unchallenged dogma was the idea that the private sector creates all the wealth in society, and the public sector is a parasite that damages economic health by sucking up that wealth to line the pockets of pampered bureaucrats. This was smugly presented as an unquestionable truth and used to batter opponents. But it’s rubbish. The truth is that wealth – the totality of a country’s useful things and services – is socially produced by workers in both the public and private sectors. What’s not so obvious is why so much of this wealth flows into a small handful of private pockets in the form of money, some of which then ends up in the state’s coffers.

This is indeed something of a mystery. But it’s not an impenetrable one. Getting to the bottom of it would require the kind of popular documentary we desperately need. But we’d do best not to rely on Martin Durkin ever making it.

Wikid Games

2011-01-27T01:11:00.001-05:00

From the January 2011 issue of the Socialist Standard

Wikileaks is currently under heavy attack.

In order to make it impossible to ever fully remove Wikileaks from the Internet, Wikileaks is currently mirrored on 1426 up-to -date sites (from WikiLeaks website)

Once upon a time, if you wanted to keep a secret, you locked it in a drawer and held the only key. When states wanted to keep secrets, they used huge underground warehouses with security locks and armed guards to store the vast quantity of information compiled by their spies, spooks and secret police. Most of this information was useless, and most of it never saw the light of day. Then the information revolution happened.

A very large wired information network looks exactly like a sieve, and that's essentially what it is. Information leaks out of it in any number of ways, on purpose or by accident. When you can hold the personal details of 50,000 people on a pen-drive no larger than a cigarette lighter and when these can fall out of pockets on the tube train home, the potential for leakage is gigantic. Then there is email, which is not secure and which has become the preferred mode of communication for all businesses and public services. Just a few emails brought about 'Climategate' in 2009, in which a few careless phrases by researchers at the University of East Anglia fatally undermined the authority of the Independent Panel on Climate Change.

The recent WikiLeaks' exposure of the private lives and opinions of the world's movers and shakers has been so prodigiously covered in the press that the details are scarcely worth covering again, yet from a socialist standpoint the furore deserves to be set within a wider context than the conventional media never discusses. The capitalist class, as indeed all hitherto ruling classes, owes its power not only to its private ownership and control of wealth but also its private ownership and control of information, and inevitably socialists must ask themselves to what extent the overthrow of the latter is likely to lead to the overthrow of the former.

While controlled leaks have always been a tool of government, or internecine feuds within government, it was rare until recently for damaging information ever to escape and when it did, retribution was punitive. When in the 1970s Philip Agee, a CIA agent working in the UK, published an exposé of CIA operations including names of operatives, the US authorities reacted with fury, had him deported and mounted a smear campaign against him involving sex allegations and alcoholism that ran to 18,000 pages (Guardian, 19 December). In 1971 Richard Nixon was tape-recorded speaking thus of Daniel Ellsberg, another Pentagon mole gone public: "Let's get the son of a bitch into jail.... Don't worry about his trial. Try him in the press."

Mud, glorious mud
The founder of WikiLeaks, Julian Assange, has made no secret of his involvement in the leaks, so one would be astonished not to see governments trying to fling whatever mud they could at him. And sure enough, he is currently on bail in the UK and facing possible extradition to Sweden to answer sex crime allegations, followed by a possible further rendition to the US to face a lifetime wearing an orange jumpsuit in a certain Cuban seaside resort.

That these allegations are a frame-up is a conclusion that many people have leapt to with a conviction thus far unsupported by the known facts, however it is undeniable that the whole business looks damned fishy. If the UK or Swedish authorities go one step further and allow the Americans to get their hands on him, the affair may well blow up to become the Dreyfus case of the 21st century.

But how do you try a website? WikiLeaks is a game-changer for state security forces and radicals alike, challenging the whole notion of secrecy and calling into question what if anything can be kept secret. The universal state condemnation of WikiLeaks rings increasingly hollow and comical when one looks at the massive public support for it. The vast number of mirroring sites – sites that duplicate WikiLeaks – means that WikiLeaks could not realistically be shut down without shutting down the internet.

It isn't only source websites which pose a problem for state security, it's also destination sites. If you wanted to leak a confidential document in 1950, there would only be a few newspapers or small printing presses to leak it to, most of whom would not risk touching it. Conventional media tend to have a symbiotic, back-scratching relationship with government which ensures that newspapers are self-regulating so direct news bans – D notices – are rarely invoked. Media bosses are capitalists themselves and have no interest in rocking the boat. But the other side of the information equation is publication and distribution, and the internet has created unlimited scope for both.

Thus Wikileaks can sidestep conventional media and leak to anywhere, even to the Socialist Standard if it chose to, which means that the capitalist class has for all practical purposes lost control of the mass media. It cannot hope to strike mutually agreeable deals with every media outlet, especially not those avowedly hostile to it, and any attempt to coerce or threaten such outlets would be likely to blow up in its face and make matters worse.

Off with their heads
Aside from the allegations against Julian Assange, Wikileaks itself is not however above criticism. Its foundation in 2006 is shrouded in some mystery. Founders allegedly include Chinese dissidents, mathematicians, technologists and journalists, yet none have been identified. There is supposedly an advisory board of 9 members, yet one 'board member' has said that his involvement is minimal and that the board is merely 'window dressing'. One volunteer told Wired Magazine that Assange considers himself "the heart and soul of this organisation, its founder, philosopher, spokesperson, original coder, organiser, financier, and all the rest". Indeed, WikiLeaks is not even a Wiki anymore because Assange has removed public editing access to it, and has moved away from being a mere whistleblowers' conduit to a full publisher in his own right. Whether or not he set out to do so, Assange does seem to be going for personal glory but in doing so is drawing down all the fire on himself. One-man-bands don't play well when they're playing against the state. One way or another, American and European state agencies are out to get WikiLeaks which is why the obvious move is to go for a decapitation strike against Assange himself.

Even if they succeed in bringing down Assange, there is no stopping what he started. This month a former Wikileaks advisor is set to found a new website called OpenLeaks, which aims to avoid the problems WikiLeaks has encountered, specifically by being governed democratically and by remaining as a conduit for anonymous information rather than empire-building into a publishing enterprise. At heart is the open source philosophy which holds that cooperative and transparent endeavour is more productive and progressive than the secretive and territorial ethos which underpins most capitalist activity: "Our long term goal is to build a strong, transparent platform to support whistleblowers – both in terms of technology and politics – while at the same time encouraging others to start similar projects" (Wikipedia, OpenLeaks). There is a parallel here with file-sharing sites, which started as centrally controlled databases (Napster) that were easy to target and kill, before evolving into distributed peer-to-peer systems which had no centre and could never be nailed down and neutralised. There is a further parallel to be made here with democratic models in politics. Socialists oppose leaders and vanguardist leadership-based groups on the left, not only in fact but also in theory, because top-down hierarchy structures are too easy to neutralise. In fact, as a distributed, egalitarian and transparent organisation, we could lay claim to being the original political Open Source movement.

All of a Twitter
There is a momentum of workers' disgust at capitalism at the moment, at least in the western countries, starting with the sub-prime collapse which exposed nonsensical business logic, then massive bail-outs and bankers bonuses, together with squalid parliamentary expense fiddles, followed by the most savage cuts in living memory and attacks on the poor and those on benefits. Anyone who thought 'the yoof of today' could never be motivated by politics is having to eat their words as students pour onto the streets, camcorders in hand to record and upload police cavalry charges onto YouTube just as the police attempt to deny them. Meanwhile 'hacktivists' attack banks with massive Denial of Service offensives and the spontaneously organised UK-Uncut group occupy and picket the stores and offices of banks, mobile phone companies and high street stores accused of large scale tax avoidance. Though one could always quibble with these activists' grasp of the bigger picture over tax, or their tactics in singling out individual companies when, after all, they're all at it, you've got to admire how the digital native generation are mobilising their opposition in ways that the ruling class has not anticipated and is ill-prepared for.

The grubby game that is capitalism is being exposed as never before in its history, and more people are getting to know about it every day. The genie is out of the bottle, and there's no putting it back in. These are interesting times for socialists.

Paddy Shannon

Cable unconnected?

2011-01-24T05:08:00.000-05:00

The Greasy Pole column from the January 2011 issue of the Socialist Standard

In those heady post-election days last May Cameron and Clegg, smirking at the media assembled in Number Ten's garden, assured the nation that Coalition would be the only remedy to the maladies which Gordon Brown and Alistair Darling had so cruelly brought down on our innocent heads. One of the most conspicuous advantages sprouting from this venture into the New Politics (a phrase with implications rather more menacing than they were ready to acknowledge) would be the governmental presence of Vince Cable, influencing official policy on the economy. With all that what could possibly go wrong?

Well just a little over six months later the answer is that an awful lot is going wrong – and not only with what are called the ordinary people who fear for their chances of surviving the cuts but also for the Coalition itself, which can hardly be described as stable and united. For one thing there is the Alternative Vote, suspected by Tories nervously sitting on wafer-thin majorities as a convenient back-door into Parliament for any thrusting LibDem. And then, more calamitous, there has been the schism within LibDem ranks over their surrender to raising university tuition fees after they had in the mass signed that pledge not to do any such thing. Even worse – leading for them on this issue has been the hitherto saintly, all-knowing, all-wise Vince Cable who had the job of working out the details of the policy and then trying to persuade the rest to go along with it.

Joke
Cable rocketted to national prominence in December 2007 when, as stand-in leader while the LibDems were electing a successor to Ming Campbell, he drew attention to the new Premier Gordon Brown's “…remarkable transformation in the last few weeks from Stalin to Mr Bean, creating chaos out of order rather than order out of chaos”. (We should not be misled by the consequent rapturous laughter into rating this feeble effort at a joke as historically amusing – MPs are irritatingly liable to relieve their boredom in that way. Even if it had the effect of giving Cable some much needed publicity). Cable's leader Nick Clegg is not famous for making jokes – perhaps because of his sensitivity in the matter after David Cameron said he was one. But he does display a kind of infant passion to develop the necessary political cunning. Looked at in that way it is not difficult to detect a possible strategy involving Cable's allocation to defend the rise in tuition fees.

Train Wreck
It is, after all, not so long ago that Cable was a serious contender for the leadership and – after the Mr. Bean joke and Clegg's first fumbling among the front bench there was expressed regret among the LibDems that he had been so easily allowed to drop out. It could not have helped his case to have to defend the official party line in what Clegg expected to be a “train wreck” of a debate – before which Cable behaved like someone suffering from a serious head injury, apparently unable to decide whether to oppose, or support, or abstain on the increase according to whether he was talking about keeping a pledge or defending Coalition unity or what he called the national interest. In the end, of course, he gave in to blatant, self-interested ambition and held on to his wretched job by going along to the Commons where, professorial spectacles clinging perilously to the end of his nose, he mounted an emphatic defence of the policy which he was supposed to have grave doubts about.

Shell Oil
It is clear from Cable's record that he is no stranger to doubt and confusion. Beginning as a Liberal he moved to Labour then the SDP before returning to what had been re-invented as the LibDems. During this journey he experienced what must have been a seriously instructive spell in the 1970s Scottish Labour Party, including a period as a Glasgow councillor. Eventually his multiple attempts to get into Parliament yielded him the verdant, pricey seat of Twickenham. Heavily qualified as an economist, he was a university lecturer and a Treasury Finance Officer in Kenya. From 1995 to 1997 he was Chief Economist to the oil giant Royal Dutch Shell. During that period the suppression of the people of Nigeria whose lives had been devastated by the Shell operations became an international scandal as the murderous military dictatorship of Sani Abacha developed in intensity and barbarism. In an abrupt loss of his famous powers of grasping a situation, Cable denied any responsibility in, or knowledge of, those calamitous events: an interviewing journalist found him “deeply evasive and avoiding all questions”, another who later asked a spokeswoman for a comment was told “…he does not feel that he knows enough about the latest developments to be able to comment”.

Confidence
This kind of record is important in sizing up a political ruler who, with an eye to winning high office, is touting for our support. In the case of Vince Cable we have to consider his reputation for unwavering prescience about capitalism's endemic crises which enabled him to sprout into prominence with his (distinctly unoriginal) forecast of the doom which would follow the credit boom. But how usefully did he apply this? In fact he allowed his insights to languish unattended, unspoken. Asked whether he had publicised the disastrous image in his book The Storm he lamely replied: “No, I didn't. That's quite true… But you're quite right…I haven't been to the States for years and years, so I wouldn't claim to have any feel for what's been going on there.” This unconvincing blather leads us to question what gain there is for human society in putting our confidence in leaders such as Cable. How could he be any more reliable and effective than the hordes of malicious swindlers before him? What is stopping us from preferring to have confidence in ourselves to change the world as it needs to be?

Ivan

Proper Gander

2011-01-24T04:45:00.000-05:00

From the January 2011 issue of the Socialist Standard

“Success and money motivate me. My first word wasn’t ‘Mummy’ – it was ‘money’”. This came from the deluded mouth of Shibby Robati, one of the latest bunch of wannabes to appear on The Apprentice (BBC1). The programme brings together sixteen of “Britain’s brightest business prospects” to compete for a job with a “six-figure salary” working for entrepreneur Lord Alan Sugar. Each week, the contestants are split into teams who compete to win a task, usually to promote and sell a product. Someone from the team which makes less money is ‘fired’ at the end of each episode, until Lord Sugar is left with his new apprentice. Contestants fall into two categories: those whose ego outweighs their talent, and those whose talent is outweighed by their ego. Take, for example, Stuart Baggs, presumably an eight-year old who’s sneaked onto the show, who boasted that “everything I touch turns to sold”. Or Melissa Cohen who, with all the self-awareness of concrete, said “I’m charismatic. I’m intelligent. I’m a damned good businesswoman. I’m at the top of my game and I’m unbeatable”, before she got fired in week four.

Laying into these charm-vacuums is easy because they put themselves forward and are therefore ‘fair game’. But any criticisms should be accompanied by a little guilt, because there’s something sad about how those taking part in The Apprentice have been shaped by the business world. Even allowing for the selective editing to emphasise their faults, none of the contestants are likeable. There’s hardly any warmth on display – you wouldn’t want to go for a pint with any of them. And if you did, instead of a chat they would start pitching to you about how they would market Guinness. Sugar-daddy Alan at least has some wit to lighten his boardroom eviscerations, but who would aspire to the iciness of his co-judges Nick Hewer and Karren Brady? Unfortunately, the young contestants have fallen for a narrow, corporate definition of ‘success’, which hinges on how sharp your suit is and how many people you can trample on. The result? A winner who is 20 percent mannequin and 80 percent smugness.

Mike Foster

E.P. Thompson's The Making of the English Working Class

2011-01-24T03:02:00.000-05:00

Cross-posted from the Socialism Or Your Money Back blog

Book Review from the December 1968 issue of the Socialist Standard

The Making of the English Working Class by E. P. Thompson

Thompson's excellent work, 800 pages long and first published in 1965, has now been brought out as a paperback. Applying the Marxist view that men make their own history but only out of the materials at hand, Thompson traces the formation of working class consciousness (by which he means the awareness among industrial workers that they were a separate class in society apart from the ruling landed and commercial oligarchy and manufacturing middle class) under the impact of tbe industrial revolution between 1780 and 1832. But this was not a passive process; working class consciousness was forged out of the struggles of London artisans, weavers, field labourers and Irish migrants against oligarchic government and the factory system.

The early working class is often seen as an ignorant rabble. Thompson exposes this myth and shows how the independent craftsmen who spearheaded the resistance to capitalism, in tbe Midlands and the North as well as in London, were in fact well-informed and literate with their own view of what society should be like - basically a simple and stable community with a secure place for all.

Wilkes and Liberty, Tom Paine and radicalism, the Corresponding Societies, the pernicious effects of Methodism, Peterloo, the early trade unions, the Cato Street Conspiracy, Robert Owen and Owenism are among the names and events in radical and working class history examined in detail.

Thompson's book deserves a place on every socialist's bookshelf alongside Thorold Rogers' Six Centuries of Work and Wages, the classic history of the workers in England which it (to a certain extent) replaces and certainly supplements.

Adam Buick

Engineering the Earth

2011-01-16T11:38:00.001-05:00

The Pathfinders Column from the January 2011 issue of the Socialist Standard

A new theme has recently emerged in the debate on climate change – geoengineering. This newly coined word – literally, “engineering the Earth” – refers to the prospect of deliberate large-scale human intervention in the climate system to counter global warming. The Royal Society has a useful report online: Geoengineering the Climate (2009); popular accounts include James Fleming’s book Fixing the Sky (2010). Opponents of geoengineering have responded with a counter-report: Geopiracy: The Case Against Geoengineering (ETC Group, 2010).

Geoengineering schemes

Geoengineering schemes are numerous and diverse, but almost all fall into two broad categories.

(1) Schemes to remove CO2 (carbon dioxide) from the atmosphere. Special installations (“scrubbers”) might suck air through a spray of lye – an alkali that binds with the acidic CO2 in the air, producing washing soda. Or the oceans could be “fertilized” with iron particles to foster the growth of CO2-absorbing plankton. Another idea is to use carbon-eating microbes. Planting forests also falls into this category.

(2) Schemes to redirect solar radiation – either to reflect it off the Earth’s surface or atmosphere or to deflect it away from the Earth altogether. These schemes are of three types:

(2a) Reflection from the surface. The albedo (reflectivity) of the Earth’s surface would be enhanced by such means as painting roofs and roads white, genetically engineering crops and grasses with more reflective foliage, and covering deserts with reflective polyethylene-aluminium sheeting.

(2b) Reflection from the atmosphere. One scheme of this type is “cloud bleaching”, in which an armada of robot ships equipped with giant fans plough the seas and propel water aloft to make clouds more reflective. Another popular scheme has spaceplanes continuously injecting aerosols, probably masses of tiny sulphate particles, into the stratosphere. This would mimic the dimming and cooling effect of large volcanic eruptions.

(2c) Deflection away from Earth. Light-scattering material – say, aluminium threads or small disks – would be placed in Earth orbit or further out toward the Sun, shielding the Earth from part of the solar radiation. Another idea is to use locally available glass to build a huge mirror on the Moon.

These schemes vary widely in terms of likely effectiveness, lead time, risks and costs. Many would counter global warming but create or exacerbate other serious environmental problems. Aerosols may harm the ozone layer and further disrupt the monsoon cycle – also a likely effect of covering deserts or bleaching clouds. Where would all that CO2 removed from the atmosphere go? Stored underground, it would be bound to leak; dumped in the oceans, it would soon turn them into a vast lifeless acid bath. And what if a space-based system to deflect solar radiation suddenly broke down for unknown technical reasons?

Politics of geoengineering

The most active promoters of geoengineering are corporate-funded American think-tanks. These are the same think tanks that churn out propaganda denying that global warming exists! But the contradiction is only apparent. While logically inconsistent, both these positions make it possible to argue that there is no need to reduce greenhouse gas emissions, thereby safeguarding the immediate profit interests of the corporate sponsors.

Largely in reaction to such exploitation of the theme, some environmentalists reject geoengineering altogether, rightly arguing that technological fixes cannot solve what is at root a social problem. The Geopiracy report quotes Albert Einstein as saying: “We cannot solve our problems with the same thinking we used when we created them.”

Nevertheless, scientists make a cogent case when they argue that it is necessary to combine sharp cuts in greenhouse gas emissions with carefully selected geoengineering measures. Global warming has been even more rapid in recent years than predicted by the most alarming past projections. The process now has such powerful momentum that even if emissions were to cease completely and immediately – a hypothetical achievement beyond the capacity even of world socialism, supposing it magically conjured into being – geoengineering might turn out to be the only way to avert or at least minimise the catastrophes in store for us.

Cheap, quick and scary

The twin priorities of a socialist world community, if it existed, might have to be to move as quickly as possible to a technological structure with near-zero greenhouse gas emissions and to embark on a diverse and environmentally acceptable geoengineering program, if indeed such a programme could ever be found. Such a programme might comprise various Earth- and space-based elements as insurance against particular elements proving less feasible or effective than expected.

Assuming the continued existence of capitalism, the crucial criteria in selecting schemes for implementation, whether at the national or the international level, will be financial cost and lead time. Capitalists always hate spending more than they absolutely have to, even if it is for the purpose of saving the planet. A short lead time is essential because they will delay even that minimal expenditure until forced to respond to serious threats to the stable functioning of their system – the inundation of London and New York, perhaps. But then they will demand quick results.

Indeed, some analysts have already guessed what this (relatively) cheap and quick fix is likely to be – the “doping” of the stratosphere with sulphate aerosols. Unfortunately, this scheme is also one of the scariest. Besides the threats to ozone and the monsoon cycle, the filtering of sunlight will have a homogenizing impact on the regional and seasonal climatic pattern. Writers speculate about the psychological impact of the day sky never being blue, only a dull greyish white – although by way of compensation we are promised redder sunsets.

Stefan

Muddle class

2011-01-13T03:02:00.000-05:00

The Cooking the Books column from the January 2011 issue of the Socialist Standard

“‘Triple crunch’ will see lower middle classes £720 a year worse off” read the headline in the Guardian (25 November) reporting on a study about the prospects over the next few years of those currently earning between £12,000 and £30,000 a year. Economics Editor Larry Elliott commented “once upon a time this group would have been dubbed lower middle class”. No, it wouldn’t. They’d have been called “working class” and most of them today would still regard themselves as this.

You can of course define class in any way you like, and sociologists have come up with all sorts of ways – by occupation, by income, by leisure activities, by dress, by accent. George Orwell once described his family of origin as “lower-upper middle class”. The term “middle class” is in everyday use but generally to refer to occupation rather than, as in the Guardian report, income. Even we socialists sometimes use it in this way in conversation, but the correct Marxian position is that classes are defined by their relationship to the means of production.

If you don’t own any means of production yourself you are working class because you are dependent for a living on going out onto the labour market and trying to find an employer to buy your working skills. This, whatever your occupation or income (so the working class is not confined to manual workers in industry, as some leftwing political groups mistakenly think). In a country like Britain that’s the vast majority of the population. If you own enough means of production to employ others without having to work yourself (even if you choose to) you are a member of the capitalist class.

So what about the middle class? Who are they? Or, rather, who were they? Historically, in Britain, they were rich people who were not landed aristocrats and whose income derived from the profits of industry and trade rather than the rent of land. In the 19th century they were a group that was conscious of their class interest and waged a class struggle against the landed aristocracy to further it, achieving success with 1832 Reform Act which gave them more political power and the Repeal of the Corn Laws from 1848.

When Marx was examining capitalism there really were three distinct classes defined by their relationship to the means of production: the big landowners (the “upper” class), pure parasites whose income was derived from being in a position to extort a payment from land-users; the capitalist class (the “middle” class) who invested in production for profit; and the working class (the “lower” class), who produced the wealth on which the other two classes lived.

In other words, the middle class was the capitalist class as the class between the upper, landowning class and the lower, working class.

Since Marx’s time the “upper” class and the “middle” class have merged into a single, capitalist class. So, far from us being “all middle class now”, there is no longer any middle class (the middle class of yesteryear having become the upper class). It’s rather the case that “we are all working class now” – including most doctors, lawyers and scientists. As Marx and Engels pointed out already in 1848:

“The bourgeoisie has stripped of its halo every occupation hitherto honoured and looked up to with revered awe. It has converted the physician, the lawyer, the priest, the poet, the man of science, into its paid wage-labourers”. (Communist Manifesto)

A mining incident

2011-01-11T15:34:00.001-05:00

From the January 2011 issue of the Socialist Standard

Mining accidents are frequent such as the recent ones in Equador, Columbia, China, New Zealand. Many without the coverage nor with the happy outcome of the Chilean incident. A socialist who worked in the mines as a Bevin Boy in the 1940s recalls conditions there and the fear miners have of rockfalls.

In a coalmine the roof is held up – when the coal is extracted from beneath it – by posts made out of H-section steel. In the mine where I worked, Penallta Colliery in the Rhymney valley, near Ystrad Mynach in South Wales, most of the coal seams were something under five foot, so most of the posts were about 4ft 6in. They were expensive, and so were the flatter pieces of steel which went across the top of two of these posts. My lonely job was to go round and see that all these steel supports were retrieved as the coalface went forward, not merely left behind and lost. (Only about one employee in six in a coalmine is actually digging out the coal – they are called colliers; all the others are getting the coal back to the pit shaft, repairing the tunnels, moving the conveyor belts forward, building stone packs behind the conveyor belts to stop the roof at the coalface collapsing too quickly, looking after all the machinery, and doing all the other ancillary jobs.) I went most days into the “N” district (which was about two miles from the pit shaft) down the No.3 road, or tunnel. The tunnel roof was getting very unstable, as well as very low. With half a mile of rock and earth above it, the roof of each tunnel gradually sinks, until it is “repaired”, that is hacked out again to a reasonable height. In the old days, when the tubs of coal were pulled out along the rail tracks by horses (and they were horses, though they were always called pit ponies), the tunnels had to be repaired as soon as they got below about seven feet, because horses won’t crawl on their knees. You could explain how necessary it was to maintain profitability, but a horse pretends not to understand. Men, however, will crawl if necessary, so as to keep their jobs. I’m not sure what that tells you about the comparative intelligence of horses and men.

Now in due course horses were replaced by engines. Every so often along each tunnel they would build an engine, which pulls a long thick steel cable (winding it round a rotating drum like a barrel), fastened to the front of a train of tubs; when the train arrives at the engine, the cable is unhitched, and another cable, running along to the next engine, is fastened to the front tub instead; and the train resumes its progress to the pit-head. (In South Wales the tub is called a tram or dram, and the train is called a journey.) But when horses were abandoned, you didn’t have to repair the road (or tunnel) so often; it could go down to about four foot high, or just high enough to let the tubs, loaded with coal, pass underneath. Men, naturally, are prepared to walk long distances bent over almost double. Human beings who have been brainwashed, or forced by economic necessity, into spending their working lives half a mile underground, accept worse than that without complaining.

If a road is not repaired in time, the great pressure (from both above and below) to squeeze it flat will take over, and the tunnel collapses. Every time I made my solitary trek along the No.3 road, the roof was more and more unstable. Little bits would fall out of the roof as you passed, and you wondered if your steel-capped boots were going to create enough disturbance to make the whole thing cave in on top of you. When a roof is on the point of collapse, any little agitation might be enough to bring it down. As you went along, bent down to get under the low roof, you would squint sideways to try and see what was happening. Shakespeare says that cowards die many times before their deaths: that was me, all right, every time I went down the No.3 road. One day I made my usual fearful way along this tunnel, and I could see it couldn’t hold up much longer. Little runs of dust or small stones were falling from the cracks. But luck was on my side, and I got through the bad bit of the road, perhaps a couple of hundred yards, to the next engine. At an engine, of course, you were safe. If an engine is destroyed it costs money to replace, while if a man dies you just get another one free of charge; so when a roof over an engine got a bit dodgy, it was made secure immediately. (An ordinary bit of tunnel is allowed to get worse and worse before the mine management finally has to take men from other work in order to repair it; you might lose money doing that too soon.) This particular day, as soon as I got to the engine, and sank trembling on the bench to wipe the nervous sweat from my brow, a great roar came from behind me, an overwhelming noise. A huge cloud of dust billowed past. I felt a great sense of relief: I almost laughed. It had missed me! Now they would have to repair the road, to allow the miners to get in and the coal to get out. I would never have to walk under that rotten roof again. Almost certainly, my progress along the tunnel, with boots kicking against the rocks and the rails that made up the tunnel floor, had been enough to tip the crumbling roof over the edge.

When the noise subsided, I took a few tentative steps back along the tunnel, and stared up at the great hole in the roof which had been opened up by the fall. Then I resumed my walk towards the coalface. Not far along, I met one of the No.3 district firemen (the name in South Wales for foremen – besides their electric head-lamps they had a little Davy lamp, with an open flame, to test for gas) coming back to see what the noise was. I showed him, so he said, “Well we’re cut off. There’s been a fall in the face between the No.3 and No.2 roads.” This sounds much worse than it was. The colliers in the face were already working to clear the fall there, and a couple of hours later you could get along the face and out of the district that way. It took them longer to clear the fall on the No.3 road, and when it was repaired, it became (comparatively) almost a pleasure to walk along it – if you can fancy strolling along a hole eight hundred metres deep in the earth, where only your cap-lamp stands between you and absolute, total, blackness.

Alwyn Edgar

Allotments are not enough

2011-01-10T23:21:00.001-05:00

Book Review from the January 2011 issue of the Socialist Standard

Life Inc. By Douglas Rushkoff. Vintage Books 2010

One Christmas Eve, the media theorist and author Douglas Rushkoff was mugged outside his apartment in Brooklyn, New York, but when he warned his neighbours about the crime via a community website, he received not thanks nor sympathy but a tirade of abuse. His neighbours were angry that reports of crime in the neighbourhood would drive down property prices. How did it come to this? How did our neighbours come to be more concerned with the market price of their house than with the wellbeing of the community they live in? How did people come to act more like corporations – concerned only with the value of their assets – than like human beings? Those are the questions Rushkoff sets out to answer.

The problem, according to Rushkoff, is ‘corporatism’. By this he means the rise then global dominance of big corporations, and the suppression of every aspect of life that comes into conflict with the need of those corporations to make profits. This dominance then became so total that we internalised corporate values and came to treat life itself as if it were a corporation, with no right to exist or say anything unless whatever it was doing or saying brought home the dollars. Rushkoff’s argument is wide-ranging and detailed, sweeping from the origin of the corporation in the 16th century to modern-day consumerism, the globalisation of finance, individualism, New Age spirituality and the cult of home ownership. The book is full of arguments socialists will perhaps already be aware of, but with plenty of new and interesting details, including some entertaining journalistic investigations into the attitudes of those who run corporations, and the delusions of those who are their most desperate victims. Rushkoff gives an excellent account of how the world went mad, and is particularly good at showing how an abstract-sounding historical analysis actually plays out at the level of individual human lives.

He even touches upon the concept that would have made his book better still – capital. But because he does not define or develop or investigate this key concept, his book all but ignores the most important part of the story. Like so many utopian thinkers before him, he proposes to lop off the bits of society he doesn’t like, without considering whether these might be socially necessary aspects of the normal functioning of capital – the functioning of which is to be left intact while the reformer goes about his business. In other words, Rushkoff does not consider whether the real cause of our problems might not be the corporation as such, but the circulation and accumulation of capital, of which the corporation is merely a form that has proved to be particularly useful. To use Rushkoff’s own words from a slightly different context, our problems are “everything to do with excess capital’s need for a place to grow”, with “the needs of capital”. The corporation meets those needs perfectly. Just not human needs.

This may seem like nitpicking, but the full political importance of the criticism emerges when Rushkoff comes to his proposed solutions. He says he has no problem at all with ‘commerce’, for example, and if he has a problem with the circulation of money as capital, then he doesn’t mention it. (His analysis of money in the book doesn’t make it entirely clear, but he seems to associate the circulation of capital with ‘saving’, which he sees as necessary and good, but in need of being separated from money’s role as means of circulation.) But these are the key forces that give rise to the corporation and to the problems Rushkoff quite rightly wants us to rebel against. He is therefore urging us to swim against the tide, when it might be more sensible instead to climb out of the water.

There is a strange contradiction in Rushkoff’s argument. He insists that he is not interested in building a ‘utopian’ nor a centralised, political movement for social change. Resistance to the system is, he says, ‘futile’, because the flexibility, ingenuity and sheer power of corporations will always defeat any opposition. This certainly has some truth to it: any oppositional movement must take extremely seriously the power of capital to flee – or better, incorporate and sell – rebellion. But Rushkoff proposes instead a series of measures that are equally doomed. He says we must take the power back by buying from local organic shops, patronising local cafes, growing our own veg, making our own local money, using less petrol in our cars, coaching our own children for the local football team, and so on. Every one of these acts, according to Rushkoff, is “another nail in the coffin” of the system. But he’s already shown us in the rest of the book that the wealth and power in society is concentrated in a very few hands, and defended by the state.

It’s not at all clear why the all-powerful corporations that can brush off mass movements for social change as a minor irritant should tremble and topple if we plough what little spare time we have into an allotment. Nor does he seem to realise that the very enterprises he wants us to support rely on working-class wages – wages that are earned almost entirely from working all day in big corporations or for the state – to survive at all. Never mind the clever green sales pitch: small business enterprises are as dependent on big capitalism and big corporations and state subsidy as the rest of us.

The problems we face as a society are too big and too systemic for these kind of small-scale, easy answers, and any proposed solutions must be as inevitably political as they are social and economic. The fact that even brilliant, big thinkers such as Rushkoff fight shy of these obvious facts, even while they are forced by the reality of their investigations into all but admitting them, reveals a great deal about the ideological victories of the past thirty years – and of where the most important political battles remain to be fought.

Stuart Watkins

The cold reality of state power

2011-01-03T18:30:00.000-05:00

Editorial from the January 2011 issue of the Socialist Standard

There are plenty of reasons for socialists to be cheerful as we go into the New Year. Our class is once again on the move, fighting to protect its interests, and talking about its future. This is a very good thing. But New Year optimism always gives way in the end to the gloomy realism of a bleak January morning. It is in this spirit that we point to some worrying counter-developments.

On 3 December, Spanish air-traffic controllers walked off the job and called in sick en masse in protest at the imposition of worse working conditions and longer hours. The right of workers to take collective action to protect their interests, including withdrawing their labour, would be considered by most to be a fundamental human right. But under capitalism, the right of capital accumulation to proceed uninhibited is also a fundamental right. Between equal rights, force decides. So the Spanish state declared martial law, sent in the military, and armed police forced the workers back to their desks under threat of a six-year prison sentence. That’s the freedom of labour for you.

Meanwhile, the newspapers have been dominated over the past couple of months with revelations from the WikiLeaks website, which leaked secret communications between US diplomats and their seniors, and earlier posted evidence of atrocities by Western armed forces against civilians in Iraq and Afghanistan. The real significance of these leaks is not so much their content – informed opinion was already aware of most of what was going on. It is that the leaks threaten to make ‘informed opinion’ available to more people. This is, from the point of view of the ruling class and its state, a disaster. First you give people information about what’s going on in the world. The next thing you know they’ll be wanting a say in it. That’s not conducive to flexible labour markets. And so the more extreme sections of the US commentariat called for the murder of WikiLeaks founder Julian Assange; the website has been under continuous attack ever since from hackers and businesses; and Assange has been threatened with extradition to the US to face espionage charges. That’s the freedom of information for you.

Finally, a growing protest movement in the UK against the cuts in state spending on education and other vital social services, led for now by students and university lecturers’ unions, is facing increased state repression. Demonstrators, mostly young adults and children, have been provoked and terrorised by armed police, ‘kettled’ for hours on freezing cold streets without access to food, water or toilet facilities, and then savagely beaten with truncheons. No one is spared this state thuggery: a disabled man with cerebral palsy was beaten by the police and dragged from his wheelchair across a road, and one young man had to have emergency brain surgery after a beating. A death at the hands of the state thugs cannot be very far away. And yet all the talk from the media and the police is of increasing the repression – snatch squads, targeted searches and water cannons have all been mooted. That’s the freedom to protest for you.

What we’re facing is the simple fact that our class enemies hold state power, and will use it, ruthlessly to protect their interests and defend themselves from the threat of democracy. Which is why the Socialist Party argues for the prime importance of taking state power out of their hands.

All in it together?

2010-12-31T05:45:00.000-05:00

From the December 2010 issue of the Socialist Standard

Some are less in it than others.

The gap between those at the top of society, and the rest of us, is actually getting bigger. That applies throughout capitalism, and it is the case even in Britain, after thirteen years of Labour Governments – which promised to run capitalism in the interests of all of us. This inequality has even got Conservatives worried. So much so that sometimes you see an article in The London Times, the house-journal of British capitalism, which make you wonder if some disgruntled sub-editor has put it in as a joke. Michael Portillo, former Tory M.P. and indeed former aspirant for the job of Tory leader, has just made a speech about the way things are going. Anatole Kaletsky, the London Times economics expert (who, clearly, is very far from being a Socialist), complained that the inequality “is putting democracy in danger” (London Times, 10 November). Portillo (wrote Kaletsky) denounced the “greedy, irresponsible behaviour of Britain’s wealthy financial and managerial elite”.

“The chief executives of middle-sized financial companies [who of course are also large shareholders] receive average salaries of £2 million and continue to vote themselves pay increases, at a time when ordinary workers face cuts in their pay and pensions. Such disparities could prove incompatible with democracy, according to Mr Portillo.”

Reports from other countries suggest that this is a general trend in capitalism throughout the world. What about America, self-appointed world’s policeman, raising the banner of freedom and a fair society across the globe?

“Another shocking statistic quoted by Mr Portillo: inequality has now become so extreme that America’s 74 richest citizens receive more income than the bottom 19 million combined.”

David Cameron says “we are all in this together”. As usual, some are more in it than others. And what very many people are in, up to the neck, is the muck and slime at the bottom of society.

Why do Portillo and Kaletsky, both enthusiastic supporters of capitalism, fear this trend in society? It’s simple. In the end, if you take a typical worker, whose head has been filled since he was born with propaganda that the capitalist system is the best system of society ever devised by man, and is indeed the only possible system – if you take him and kick him hard enough, finally even he will turn round and kick you back. If there were a lot of extremely poor people, then a well-to-do person could hardly walk down the street without the fear of a physical attack by someone demanding money.

There is a story that in the days of Charles II a settler in the American colonies returned to London for a visit, and he brought two Native Americans with him, to impress them with the flaunting displays of wealth in the capital city. When the visit ended, he proudly asked them that they thought of the ostentatious spectacle. They were greatly puzzled. “Why”, they asked, “don’t the poor people kill all the rich people?” Clearly there were a lot more poor than rich: and since the majority could easily overcome a small minority, why did they not take such an obvious step to put an end to such manifest unfairness? The answer, of course, is the unremitting barrage of propaganda in all “civilized” societies to persuade everyone that rich people are rich because they are in some way better than the rest of us. (The Native Americans had not been subject to that kind of bombardment.)

Why is this making some supporters of capitalism unhappy? It’s simple. If you refuse benefits to someone who “refuses to take a job”, what will he do? Lie down somewhere out of sight and quietly die? Or try and knock some richer people over the head and grab their money?

If you go to South Africa, you can see what might happen. Because of government policies during the half century after the war, when apartheid regimes kept down the great majority of South Africans who didn’t have a white skin, and refused them any worthwhile education, and any equal chance in the job market with whites, not to mention any reasonable place to live, etc – because of all that there is a great gap between the richest and the poorest. Well-to-do South Africans travel along the well-constructed broad roads in their expensive air-conditioned cars, passing black South Africans who are walking along the hard shoulder, and who live often in shacks without water on tap, or electricity, or mains sewage. The result is a very high crime rate. Poor people see wealth all round them, and not surprisingly want to grab a bit for themselves.

South Africa has one of the highest homicide rates per capita, if not the highest, in the world. So you pass large houses surrounded by high brick walls, with prominent notices outside – “Armed Response”: which means that if you dare to offer any threat to the owners of the house (e.g. if you try and pinch anything), they will use guns to try and kill you. If you are driving a car in Johannesburg, you are very unwise to stop at a red light, because this will be an open invitation to someone holding a gun to step into the car, and order you out. The car is then driven off, and you can walk – carjacking, it’s called. An acquaintance of mine, who was an ambulance driver, actually lost his ambulance in just that way – ambulancejacking. Now, of course, apartheid is overthrown, and everyone can vote, but the main change so far is that the new successful black politicians, and their relatives and friends, are all suddenly (surprise, surprise) much richer; so some thousands of black people are now driving expensive air-conditioned cars, and living in houses protected by “Armed Response”. But there is still an enormous discrepancy in wealth between the richest and the poorest, along with the high crime rates which always accompany such inequality.

So the theory among some members or supporters of the upper class is that it may be cheaper in the long run, and certainly more pleasant, to keep social benefits at a level which means that rich people have less fear of being robbed in a personal attack, or of having their houses burgled.

Alwyn Edgar

Can the Tea Party save the American Dream?

2010-12-30T16:37:00.001-05:00

From the December 2010 issue of the Socialist Standard

The right-wing Tea Party movement is, according to some commentators, turning into a mass, ‘grassroots’ movement and revolutionising politics in America. Is it?

If the ‘lame-stream media’, to steal an appropriate phrase, is to be believed, then there has been a ‘massive’, indeed ‘historic’, change in the biggest economy and the most powerful country on the planet. The United States’ mid-term elections, held last month, midway between the four-yearly presidential elections, saw the biggest swing to the Republican Party for 72 years. The Republicans now hold a majority in the House of Representatives, and fell just short of control of the Senate, only four years after voters handed both chambers of the US Congress to the Democrats. A conservative revolution has swept the nation. At least, that’s the lame-stream view. But in truth, nothing much has changed.

The Republicans and the Democrats are essentially two wings of the same party – the Business Party – and there’s very little to choose between them. During election campaigns, significant policy differences are downplayed or ignored completely – largely because they don’t exist – and which wing wins depends on which has succeeded in attracting the most investment from sections of the capitalist class, spent the most money, and delivered the most effective PR/advertising campaign.

As for what voters themselves might be thinking, the election results don’t tell us all that much, as Stefan points out on our American party’s website (See here). The truth is that most voters, and a disproportionate number of Democrat voters, stayed at home, and that the success of the more ‘progressive’ Democrats was at least as noteworthy as the success of the more-right-wing Republicans – in fact, a lower proportion of Americans voted Republican in 2010 than in 2008. In any case, as a result of the way the electoral system works, the votes of just 3 percent of citizens make all the difference between a Democratic and a Republican landslide. So much for the rise of conservatism.

But perhaps the most interesting thing about the election, and the campaign leading up to it, was the growth of the so-called Tea Party movement. This is a network of hundreds of supposedly ‘anti-establishment’ conservative groups across the US, which, if nothing else, energised the Republican Party and made the election campaign slightly more interesting. No one knows just how many Tea Partiers there are – it’s not a single organisation with a membership or leadership – but it has had a significant impact on American politics, if only because the lame-stream media has obligingly given it a voice and credibility.

The relatively lame performance of the Tea Partiers in the election would seem to draw into question the common claim that the Tea Party represents a significant popular force, with a mass ‘grassroots’ following. But last month more than half of Americans in a Rasmussen poll said they view the Tea Party favourably – that’s despite the fact, or perhaps because of the fact, that the Tea Party has no manifesto, no clear policies, and no clearly expressed ideas about what it would do should it win power. Instead, the party makes its stand on reducing the deficit without specifying how, cutting taxes, ‘taking back’ America from a supposedly corrupt ‘establishment’, and abolishing vast swathes of government, including such evils as environmental protection legislation, subsidised healthcare for the poor and elderly, and unemployment benefit.

To the extent that this is a grassroots movement, then, it is a movement of people organising against their economic interest. The reasons why this happens are many, not least of which is that people have been conned into it by a PR campaign funded by billionaire businessmen. But the Tea Party is also saying things – about the bankruptcy of the economy, about the rottenness of government and other institutions – that ordinary people are increasingly interested in hearing.

Why has the Tea Party risen to prominence now?

The context for the rise of the Tea Party is a profound and deep crisis – economic and ideological. Let’s take the economic aspect first. It is certainly true, as apologists for capitalism will be quick to tell you, that capitalism has continued to be very good at creating massive amounts of wealth. But whose wealth? The wealth of the nation is now concentrated in fewer hands than it has been for 80 years, says Robert Reich, a professor of public policy at the University of California at Berkeley, and former secretary of labour under Bill Clinton (See here). Almost a quarter of total income generated in the United States is going to the top 1 per cent; and the top one-tenth of one per cent of Americans now rake in as much as the bottom 120 million. In 1973, chief executives were on average paid 26 times the median income. Now the multiple is 300. That’s what they mean when they say nothing can match capitalism for creating wealth.

At the other end of the scale things are getting pretty desperate. Wages for the majority of the population have stayed flat since 1973, while work hours and insecurity have increased. And that’s for those ‘lucky’ enough to have a job. America is facing ‘the worst jobs crisis in generations’, says Andy Kroll in a report for TomDispatch.com (5 October), with the number of unemployed exploding by over 400 percent – from 1.3 million in December 2007, when the recession began, to 6.8 million this June. As a result, 11 million borrowers – or nearly 23 percent of all homeowners with a mortgage – now find themselves ‘underwater’, that is, owing more on their mortgages than their houses are worth. In June of this year, over 41 million Americans were relying on food stamps from the Federal government to feed themselves. That’s an 18 per cent year on year increase. Thirty cents of every dollar in personal income now comes from some form of government support.

In short, capitalism is in its biggest crisis since the Great Depression. This means that wealth is returning to its ‘rightful owners’, the capitalist class; the workers, meanwhile, must make do with austerity.

The American Dream

Meanwhile, the related ideological crisis is presenting itself as the ‘end of the American dream’, or, as Edward Luce in the Financial Times (30 July) puts it, a crisis in the consciousness of the middle class. Lame-stream media commentators often have lots to say about the ‘middle class’, but they will very rarely define what they mean by the term. This is very wise on their part, because it would quickly become obvious that the ‘middle class’ includes just about everybody, which would make people think about just what it is they’re supposed to be in the middle of. The ‘middle-class’ couple Luce interviews for his article work as a ‘warehouse receiver’ (he lugs stuff around a warehouse) and an ‘anaesthesia supply technician’ (she makes sure nurses and doctors have the stuff they need) – surely working-class jobs by any definition. Hilariously, Luce cannot even bring himself to describe the woman’s father – an uneducated miner – as working class without wrapping scare quotes around the term. ‘Working class’ is clearly a taboo term – the working class is not supposed to exist.

Still, it’s not a taboo socialists respect. As working -class people, with jobs, living in the richest country on the planet, and with a joint income about a third above the US median, Luce’s interviewees could think themselves not too badly off, relatively speaking. They lived in a house on a nice, tree-lined street, never went hungry, and turned on the air-conditioning when it got too hot. Once upon a time, says Luce, ‘this was called the American Dream’. Now, it’s a different story. Their house is under threat of repossession, their son was kicked off his mother’s health insurance and only put back on at crippling cost, and, as the couple say themselves, they are only ever ‘a pay cheque or two from the streets’. Who isn’t? We’re all middle class now, after all. This ‘economic strangulation’, as Luce puts it, began long before the recession – as we pointed out above, wages have been flat since 1973 – but is only now being really felt as the credit cards are cut up, jobs lost, and state spending on social services cut back.

But it’s not just that things are bad. Americans are also losing confidence that things will get any better: a growing majority of parents do not think their children will end up better off than they are, for example. Another important ingredient in the American Dream has gone off. It is this growing majority of disaffected working-class people, who had been convinced that they were middle class and doing pretty well, who are looking for answers. And unless they look very hard indeed, beyond the lame-stream, the only answers they’re hearing with any coherence at all are coming from the Tea Party.

The appeal of the Tea Party

It can’t be denied that Tea Party ideas have some superficial appeal. The Tea Party was described by Ben McGrath in The New Yorker as a collection of, among other things, “Atlas Shruggers”. No doubt McGrath could be confident that his American audience would understand what he meant by this. Atlas Shrugged is a novel by Ayn Rand and, according to an often-quoted American survey of readers, was ranked second only to the Bible as a book that had most influenced their lives. It was a tiny, unrepresentative and biased survey, but still, there’s no doubt that the book provokes strong feelings among its readers and admirers and is a best-seller in the US – no small achievement given the book’s length and the fact that it is explicitly a novel exploring abstract philosophical ideas. The strong feeling it provokes in most socialists is revulsion – it is a manifesto for unrestrained capitalism, proclaims the virtues of selfishness, and the characters we are supposed to look up to as models of human moral virtue are vile, self-serving monomaniacs and workaholics.

But it’s not hard to see the appeal of Rand’s ideas either. She is committed, at least in theory, to individual freedom, independence from all authority, and writes inspiringly of human achievement – in Rand, human life is not a pit of despair, but an exciting adventure, full of possibility. The best social and economic system for realising human potential, according to Rand, is capitalism. But not really-existing capitalism – more a utopian vision of what a free market, laissez faire future might be like if only people acted rationally and according to their own interest, and the state got off people’s backs. Rand was interesting, but wrong. Marx’s Capital shows that capitalism – even when it is operating perfectly well, without corruption or unnecessary state interference – must necessarily produce misery and exploitation; and that the state, far from standing in the way of free markets, was an absolutely essential tool for creating and maintaining them.

The truth is that, whatever the appeal of the Tea Party or Ayn Rand to working-class people, the ideas are unlikely to have the desired impact for one good reason: the business elite and the capitalists, who Rand and the Tea Party hold up as models of human virtue, don’t like them either. As Lisa Lerer and John McCormick put it in a cover story in Bloomberg BusinessWeek (13 October), Tea Party ideas:

“… may sound like a corporate dream come true – as long as the corporation in question doesn't have international operations, rely on immigrant labour, see the value of national monetary policy, or find itself in need of a subsidy to boost exports or an emergency loan from the Fed to survive the worst recession in seven decades. Business leaders who favour education reform, immigration reform, or investment in infrastructure can likely say goodbye to those ideas for the short term as well.”

So there’s little danger of capitalists going too far in supporting “free market” or “laissez faire” capitalism – they understand their own business interests too well. The only remaining danger is that these ideas will continue to have a poisonous appeal for the working class, and to radical movements genuinely searching for answers to social problems. It’s up to socialists to provide better answers and get them out there. Can the Tea Party save the American Dream? Probably not. Socialists certainly hope not. The American Dream has always been just that – a dream. Now, though, the dream is turning into a nightmare. It’s time to wake up.

Stuart Watkins

Zero-sum games

2010-12-28T14:19:00.001-05:00

The Cooking the Books column from the December 2010 issue of the Socialist Standard

“Currency trading,” wrote Anatole Kaletsky in the (London) Times (8 September), “is undoubtedly a zero-sum game for the world as a whole, in the sense that every currency trader’s profit represents a cost borne by some other trader, business or consumer. Despite this, however, currency trading can be hugely profitable for Britain, if most of the profits are made in the City of London and most of the losses are borne in some other country”.

This is very true but it doesn’t just apply to currency trading. It applies to all profit-chasing.

The source of all profits is surplus value arising from the unpaid labour of productive wage and salary workers. Although this surplus value is created in production it is only “realised” (i.e. converted into money) on the market, but each capitalist firm does not realise the surplus value produced by its own workers. If this were the case then labour-intensive industries would tend to be the most profitable. In fact, however, they are no more profitable than industries which employ more machinery and less labour.

The tendency under capitalism is for the same amount of capital to realise the same profit. This comes about through an averaging of the rate of profit, the average being the total amount of surplus value produced divided by the total amount of capital invested.

As Marx explained in Volume 3 of Capital:

“Thus although the capitalists in the different spheres of production get back on the sale of their commodities the capital values consumed to produce them, they do not secure the surplus-value and hence profit that is produced in their own sphere in connection with the production of these commodities.” (Chapter 9).

In effect the whole capitalist class exploits the whole working class:

“The basic notion in this connection is that of average profit itself, the idea that capitals of equal size must yield equal profits in the same period of time. This is based in turn on the notion that capital in each sphere of production has to participate according to its size in the total surplus value extorted from the workers by the total social capital; or that each particular capital should be viewed simply as a fragment of the total capital and each capitalist in fact as a shareholder in the whole social enterprise, partaking in the overall profit in proportion to the size of his share of capital.” (chapter 12).

This is why profit-chasing by all capitalist firms is a zero-sum game. The total amount of profits that can be realised by all firms together is limited by the total amount of surplus value that has been produced. Each capitalist firm – more accurately, each block of capital – strives to secure the maximum amount of profit it can. It is in fact through this that the averaging of the rate of profit comes about as capital leaves low-profit fields to flow into fields with higher profits.

The more profit one firm realises the less there is for the others. This means that firms are competing not only against other firms in the same field of activity but against all other firms. It’s a competitive struggle for profits amongst all blocks of capital.

On the world level, as Kaletsky pointed out about currency trading, the more profit the capitalist firms in one country can secure the less there is for the capitalist firms of other countries. Which is why international rivalry and downward pressures to be “competitive” are built-in to capitalism and why world cooperation for the common good is ruled out.

Kennedy to run U.S. capitalism

2010-12-27T11:10:00.001-05:00

From the December 2010 issue of the Socialist Standard

THE 50 YEARS AGO COLUMN

Mr. Kennedy’s victory at the American polls came as the culmination of years of patient ambition and at the end of a campaign of open cynicism, such as we have come expect from capitalist political parties.

When he started his attempt to win the Democratic nomination, Mr. Kennedy had several question marks against him. The principal of these was whether he could unite the trade unions, the industrial cities and the backward Southerners into supporting him. We now know how skilfully he did this, by the careful choice of his Vice-Presidential candidate and by the promises and opinions which he uttered. Such was the success of these tactics that, long before election day, many on-the-spot correspondents were prophesying that Kennedy's campaign would be irresistible.

Mr. Nixon showed a similar determination to win the presidency. Here is a man with an established reputation for single-minded ambition which has led him into some unsavoury actions. Many people will remember Mr. Nixon introducing his pet dog into a television programme in which he was offering evidence of his integrity as a servant of the American public.

Mr. Kennedy based some of his case upon an appeal to the patriotism of American workers, alleging that United States' influence abroad has steeply declined during the Eisenhower presidency. Nixon's reply—similarly an appeal to patriotism—was that it was insulting even to suggest that U.S.A. is a second-rate power.

This, then, was an election campaign of by no means an unusual kind, in which members of the working class were asked to vote on issues of personality, nationalism and capitalist power politics, none of which has the slightest effects upon their basic interest (…)

It is depressing that American workers should be impressed by—indeed be part of—slick, high pressure salesmanship and cynical drives for power. For after the shouting and the ballyhoo have died, capitalism, in America and the rest of the world, remains unscathed.

(From editorial, Socialist Standard, December 1960)

Woolas – another fine mess

2010-12-25T15:48:00.000-05:00

The Greasy Pole column from the December 2010 issue of the Socialist Standard

There are limits. As Phil Woolas, until recently the MP for Oldham East and Saddleworth, was confronted when the Election Court found that during his campaign in May 2010 he lied about his Liberal Democrat opponent. Rather more complicated and exciting, if the Court judgement stands there will be a succulently fascinating by-election which promises to expose the ruthless assassinatory tactics of the participating parties, including the fact that, for all their mock indignation at Woolas' methods, the LibDems are not noted for having any more scruples than the rest. It will also provide the LibDems with an opportunity to explain to their angry, bewildered supporters why, in their euphoria at being part of the Coalition, they betrayed the election pledges they made – such as on child benefit and university tuition fees. It is likely to be an ugly, if entertaining, experience in which it has to be borne in mind that the whole process, for example Woolas and his mangling of truth, happens in order to transform one of the mendacious, grovelling candidates into an Honourable Member who, for example, cannot henceforth be denounced as a liar because the worst that is allowed to be said about anyone who gets to sit on those benches is that they suffer from some confusion over reality. Those are the kinds of limits which Woolas is said to have offended against.

Lumley
There are some significant differences of opinion about Woolas' conduct of his career as an MP and a Minister. On the one hand a Labour Party member who contested for the candidature in the 1995 by-election saw him as “...a hard-working member and a decent and conscientious person”. But a political correspondent prefers “a political bruiser, not universally liked, whom some colleagues think got what he deserved at the election court...” And in the Guardian Julian Glover weighs in with “...an unpleasant authoritarian and parliament will be better off without him...” That first election campaign in 1995 was notable for the rancour of Labour's personal attacks on the LibDem candidate as being “high on tax and soft on drugs”. This designed exploitation of some nasty, deep-rooted prejudices impressed even Peter Mandelson, who admitted “...not only our opponents but some in Labour would denounce our 'negative' tactics...For tactical reasons, I felt we had little choice”. Woolas won the re-arranged seat in 1997 and thereafter rose steadily up the greasy pole until in October 2008 he became minister responsible for Borders and Immigration. It was then, in May 2009, that he was trapped into a confrontation, before a horde of ravenous TV cameras, with the popular actor Joanna Lumley to answer for the Labour government effectively refusing Gurkha ex-soldiers to settle in this country. Woolas wordlessly squirmed in embarrassment – Lumley breathes rather than speaks and was using hazy concepts like fairness and gratitude while he had to have regard for his budgets – and agreed to re-open the matter.

Cable
One inconvenient outcome of Woolas' electoral misdemeanour was the stimulus it gave to the pressing question of why similar penalties are not unvaryingly applied to any MP who employs false promises to smooth their way to Westminster (although if that were the case there would be very, very few bottoms on the green benches). The actual response has been worked to exhaustion by LibDems fearfully insecure of their place in the Coalition. Here, for one, is Vince Cable in the House of Commons on 12 October: “Yes I signed the pledge (on university tuition fees). But the current financial situation is appalling, truly appalling. All pledges have to be re-examined from first principles”. But this is the man who was promoted to us by his party as not just an agile ballroom dancer but an economist so deeply learned as to be able to see beyond the economic horizon to what is approaching and to take the necessary steps to avert any crisis such as the one which is now gripping the world. So it is necessary to ask: are there any other disasters which Cable has failed to see? And from the prolix depths of this ignorance did he offer any other pledges, attractive to a spellbound electorate, which he is now about to renege on?

Clegg
And what about the LibDem leader who, smugly satisfied at having outsmarted all rivals – including Cable – for the top job, felt able to patronise him as the most hopeful therapist for British capitalism? Since the LibDems slithered into partnership with the Tories Clegg has been under the most severe pressure about the party's disowned promises. This is how on 23 October he referred to child benefits and tuition fees: “I feel very bad. I have had to eat those words...this is not capricious, it is not ideological, it is not happening overnight, it is thoughtful and it is a plan over four years...” And in the Commons on 10 November: “I of course acknowledge that this is an extraordinarily difficult issue ... Because of the financial situation we have had to put forward a different policy...” But Clegg has been touted around the political scene as a hugely knowledgeable, clever operator. With such a glowing reputation how could he have been so insensitive to the gathering storm that he not only made those pledges but allowed the rest of his party to do likewise? Why should we have any confidence that he will become any more hopeful over the next four years?

Clegg and Cable now pose as serious politicians, relieved and grateful to have been put right about the election pledges which, they now admit, were recklessly ill-informed. Are their excuses really the best they can offer to cover their impotence and dishonesty? Are there any other pledges which they will betray in the hope of nurturing their sleazy ambitions? Should we, in other words, believe anything they and their like say? Is it not preferable to treat then all with the contempt they deserve while we work on for the revolutionary change in society.

Ivan

dancing with dynamite

2010-12-23T06:44:00.001-05:00

Book Review from the December 2010 issue of the Socialist Standard

Dancing with dynamite. Social movements and the State in Latin America. By Benjamin Dangl. AK Press. $12.

Anarchists and anti-parliamentarists are always pointing to the overthrow of Allende in Chile in 1973 as an example of how the ruling class will not accept defeat at the polls, not even by leftwing reformists let alone by the election of a majority of socialist MPs.

They are behind the times. The last 15 or so years have seen the election and survival of leftwing presidents in a number of South American countries (Bolivia, Venezuela, Brazil, Ecuador, Argentina, Uruguay and even Paraguay), some of them with programmes more radical than Allende’s. There was indeed an attempt to overthrow one of them (Chavez in Venezuela in 2002) but this failed due to popular resistance and the refusal of the armed forces to back it.

Of course this doesn’t show that the ruling class might not stage a coup in the event of a socialist election victory, but it does rather undermine the argument that elections can never be a way to win control of political power.

In this book, brought out by an anarchist publishing house, Dangl examines the relationship – the “dance” – between “social movements” (in favour of land rights, legalising factory occupations, getting amenities in shanty towns) and the elected leftwing governments. He argues that the social movements should not put up candidates themselves nor let themselves be dominated by leftwing parties; instead, they should maintain their independence and continue to employ “direct action” to try to get what they want.

However, he is unable to take up a strict anti-parliamentarist stance because he can’t deny the logic of the movements preferring a government that will help them to leaving political power in the hands of those opposed to their aims. None of the movements have, as Dangl is obliged to record, adopted this stance but have voted and even campaigned for the leftwing presidents.

The case for a mass socialist movement not taking electoral action is just as weak since this would be to leave the apparatus of the state in enemy hands. A socialist movement is no more likely to do this than the present-day social movements in South America have.

Adam Buick

Marx and Engels and the 'Collapse' of Capitalism

2010-12-23T05:43:00.000-05:00

Cross-posted from the Ragged Trousered Philanthropist blog

From the April 1969 issue of the Socialist Standard

In 1786, three years before the outbreak of the French Revolution, Gracchus Babeuf wrote:

"The majority is always on the side of routine and immobility, so much is it unenlightened, encrusted, apathetic . . . Those who do not want to move forward are the enemies of those who do, and unhappily it is the mass which persists stubbornly in never budging at all."

The events of 1789 disproved his gloomy predictions but, by the time Babeuf became prominent, the reaction was already setting in. His slogan of "The revolution is not finished, because the rich absorb ail wealth and rule exclusively, while the poor work like veritable slaves, languishing in poverty and counting for nothing in the State" was not taken up by the peasants and artisans. Faced with this, Babeuf and his followers planned an insurrection in which they would seize power, constitute themselves as the 'Insurrectionary Committee of Public Safety', crush all opposition and — only then — introduce democracy. It was this method of conspiracy and coup d'etat which became the standard technique for 19th-century insurrectionaries such as Blanqui and which formed the inspiration for their innumerable secret societies and abortive rebellions.

From the start, Marx and Engels were scathing about this concept of revolution. For them it was self-evident that "the emancipation of the working class must be the act of the working class itself" and that, in any case, "revolutions are not made intentionally and arbitrarily" as the plotters imagined.

"It goes without saying that these conspirators by no means confine themselves to organising the revolutionary proletariat. Their business consists in forestalling the process of revolutionary development, spurring it in to artificial crises, making revolutions extempore without the conditions for revolution. For them the only condition required for the revolution is a sufficient organisation of their own conspiracy. They are the alchemists of the revolution." [See here.]

Yet, however devastating the attack which Marx might make on the Blanquists and others, in one aspect he and Engels were in a very weak position. If they maintained that it was the entire working class which would be responsible for establishing socialism, how wouid they square this with the obvious fact that the mass of workers still gave every sign of being as "unenlightened, encrusted, apathetic" as they had been in Babeuf's time? To counter this, Marx and Engels fell back on the theory that it was the crisis in capitalist production which would galvanise the masses into revolutionary activity.

Even in their earliest writings both Marx and Engels attached great importance to crises: but over the years their observations caused them to modify their ideas, especially in relation to the business cycle. In his Outlines of a Critique of Political Economy (Deutsche-Franzosische Jahrbucher. 1844) Engels mentioned that slumps occur every five to seven years, "just as regularly as the great plagues did in the past". He repeated this in Principles of Communism (1847) while, in the Condition of rhe Working Class in England in 1844 (1845), there are references to five-year and five to six-year cycles. Marx held similar views during this period. for in an Address on Free Trade delivered in Brussels in 1848 he drew attention to "the average period of from six to seven years — a period of time during which modern industry passes through the various phases of prosperity, overproduction, stagnation, crisis and completes its inevitable cycle". At the same time they both expected crises to become "more frequent and more violent" Wage Labour annd Capital. Marx. 1847) and "more serious and more universal" (Outlines of a Critique of Political Economy Engels. 1844).

Ten-year cycle
By the time Marx came to publish Capital (Volume I. 1867) he was writing that "the course characteristic of modern industry" was "a decennial cycle (interrupted by smaller oscillations" — and adding that as accumulation advanced the "irregular oscillations" would follow each other more and more quickly. This perspective was echoed by Engels in most of his writings in the 1870s and early 80s as well. (See Dialectics of Nature. Anti-Duhring (1878), articles in the Labour Standard (1881), for example). Although Engels continued to put this line for some time after Marx's death (see his letter to Kautsky. November 8 1884) there was a new development during his last ten years in that more and more he came to maintain that an era of chronic stagnation had overwhelmed capitalism. As early as January 1884 in a letter to Bebel (January 18 1884), he wrote that "the ten-year cycle seems to have broken down" and, that same year, he made a similar point — although more hesitantly — in his Preface to Marx's Poverty of Philosophy:

"The period of general prosperity proeeceding the crisis still fails to appear. If it should fail altogether, then chronic stagnation would necessarily become the normal condition of modern industry, with only insignificant fluctuations."

From then until his death in 1895 his writings were full of references to "permanent and chronic depression" (Preface to the English edition of Capital, Volume I. 1886), to the "chronic state of stagnation in all dominant branches of industry" (Preface to the English edition of The Condition of the Working Class in England. 1892) and to "chronic overproduction, depressed prices, falling or disappearing profits" (Capital, Volume III, 1894).

Parallel to this development of their ideas on the business cycle, Marx's and Engels' theories on the relationship between crises and revolution also went through a number of phases. As we have seen, in their early writings both held that the crises in capitalist production would become "more frequent and more violent". But, if this is seen as an absolute tendency, it must mean that eventually capitalism will be brought to a point where it can no longer recover. At any rate, this was certainly Engels' interpretation of the trends taking place in the 1840s and he repeatedly implied that crises would produce a revolution independently of the level of socialist consciousness reached by the working class:

Every new crisis must be more serious and more universal than the last. Every fresh slump must ruin more small capitalists and increase the workers who live only by their labour. This will increase the number of the unemployed and this is the main problem that worries economists. In the end commercial crises will lead to a social revolution far beyond the comprehension of the economists with their scholastic wisdom. (Outlines of a Critique of Political Economy, 1844.)
The revolution must come; it is already too late to bring about a peaceful solution: but it can be made more gentle than that prophesied in the foregoing pages. This depends, however, more upon the development of the proletariat than upon that of the bourgeoisie. In proportion, as the proletariat absorbs socialistic and communistic elements, will the revolution diminish in bloodshed, revenge, and savagery. (Condition of the Working Class in England, 1845).

Thus, although the extent to which socialist ideas had penetrated the working class might be important in influencing the revolution which Engels thought he saw emerging in England, that was the limit of their role. In both these works, it is the increase in misery of the workers which Engels stresses as the vital factor in the development of their revolutionary activity — rather than their growing understanding of socialism as an alternative method of organising society to capitalism. This contrasts sharply with some of Marx's writings of the same period, where he puts all his emphasis on the spread of socialist concepts among the working class:

"It is true that, in its economic development, private property advances towards its own dissolution; but it only does this through a development which is independent of itself, unconscious and achieved against its will — solely because it produces the proletariat as proletariat, poverty conscious of its moral and physical poverty, degradation conscious of its degradation, and for this reason trying to abolish itself." (Holy Family, 1845.)

In fact, socialist consciousness was considered of such vital importance by Marx that he grossly exaggerated its depth and extent

"There is no need to dwell here upon the fact that a large part of the English and French proletariat is already conscious of its historical task and is constantly working to develop that consciousness into complete clarity." [In 1845!]

The upheavals in France, Germany, and elsewhere in Europe in 1848, however, had a profound influence on Marx, and for a time at any rate his enthusiasm got the better of him and he was evidently prepared to suspend his former commitment to socialist consciousness. His writings of this period suggest that it is the commercial crisis and the resulting hardship of the workers which are the critical factors in inducing the working class to turn to revolution. The articles he wrote for the Neue Rheinische Zeitung in 1850 all revolve around the axiom that "crises produce revolution", and since the revolutionary tide had by then ebbed away, that "a new revolution is only possible as a result of a new crisis". Naturally, Engels' earlier ideas readily accommodated themselves to this new development in Marx's thought and together they wrote:

"With this general prosperity, in which the productive forces of bourgeois society develop as luxuriantly as is at all possible within bourgeois relationships, there can be no talk of a real revolution. Such a revolution is only possible in periods when both these factors, the modern productive forces and the bourgeois productive forms, come in collision with each other."

This was the line they they were to take throughout the 1850s. Living in exile in London and Manchester, they anxiously searched for any signs of the next crisis — and oscillated between wild optimism and more justified impatience in time with the fluctuations in world trade. In September 1852 Engels is writing to Marx that "with the the temporary prosperity ... the workers (in France) seem to have become completely bourgeois after all. It will take a severe chastisement by crises if they are to become good for anything again soon." By April 1853, however. "Europe is admirably prepared; it needs only the spark of a crisis". (Engels to Weydemeyer). When the required spark didn't materialise he became more cautious but in 1857, when a crisis really did develop, they were both certain that "now our time is coming". As early as September 1856, Marx had recognised the symptoms of the approaching disruption in industry and had written to Engels: "This time, moreover, the thing is on a European scale never reached before and I do not think we shall be able to sit here as spectators much longer". The following year, in the midst of the crisis, he is "working like mad all through the nights at putting my economic studies together so that I may at least have the outlines clear before the deluge comes." (Letter to Engels, December 8, 1857). Meanwhile Engels was maintaining that a really chronic crisis would be needed to stir the workers into revolution since "the masses must have got damned lethargic after such long prosperity" (Engels to Marx, November 15, 1857). When trade started to pick up again at the end of December 1857 both of them were sadly disappointed and, a year later, we find Engels returning to a familiar theme: "The English proletariat is 'becoming more and more bourgeois".

The crisis of 1857 and its failure to evoke a revolutionary response from the working class had a big impact on Marx. So when he came to publish Capital (Volume I, 1867), although he outlined the cycle of modern industry as "a series of periods of moderate activity, prosperity, over¬production, crisis and stagnation", there were no references to revolution automatically arising from this sequence. But if Marx seems to have largely shaken himself free of his former romantic notions, they remained well in evidence in Engel's writings. Anti-Duhring (1878) in particular was as outspoken in its commitment to the idea that capitalism would 'collapse' as any of his earlier works had been.

"... this mode of production (capitalism), by virtue of its own development, drives towards the point at which it makes itself impossible."

Anticipating Rosa Luxemburg, Engels wrote that "if the whole of modern society is not to perish, a revolution in the mode of production and distribution must take place" and that the working class would be "forced to accomplish this revolution", "under penalty of its own destruction". Crises, then, were still seen as "means of compelling the social revolution".

Until the early 1880s Engels's ideas on crises and revolution hardly showed any advance on those he had held 30 years before. This is made clear enough by a letter he wrote to Bernstein in January 1882.

"That crises are one of the most powerful levels of revolutionary upheaval was already stated in The Communist Manifesto and was treated in detail up to 1848 inclusive in the review in the Neue Rheinische Zeitung, where, however, it was shown too that returning prosperity also breaks revolutions and lays the basis for the victory of reaction."

But after Marx's death in 1883, with Engels deciding that capitalism might well be entering a phase of chronic stagnation with correspondingly less chance of acute crises occuring, his emphasis naturally shifted from the earlier concept of a crisis-provoked revolution to the view that the capitalist system would be driven into an economic impasse. Thus in his preface to the first German edition of Marx's Poverty of Philosophy (1884) he refers to "the inevitable collapse of the capitalist mode of production which is daily taking place before our eyes to an ever greater degree". Four years later, in his introduction to Marx's Address on Free Trade, he writes that society will be "brought to a deadlock, out of which there is no escaping but by a complete remodelling of the economic structure which forms its basis".

Engels's correspondence during his last ten years is also an interesting record of his tendency to imagine that capitalism would 'collapse'. In a letter to J. P. Becker in June 1885 he assessed the political currents at work in England and concluded that "the masses will turn socialist here too. Industrial over-production will do the rest". As late as 1893, in a letter to Danielson (February 24, 1893), he is still convinced that there are "economic consequences of the capitalist system which must bring it up to the critical point", that "the crisis must come".

Yet although at times during this final period of his life, Engels was to foreshadow the determinism of the leaders of the Second International on this question, at others he came near to the position of the Socialist Party of Great Britain and its companion parties. As we have shown, as long as Marx was alive, it was he rather than Engels who emphasised the need for socialist consciousness as a precondition for the overthrowing of capitalism by the working class. But with Marx dead, Engels seems to have become aware of the need to stress this himself. Although he could not free himself entirely from the ideas which had dominated his thinking on revolution for over 40 years, yet he could also write that:

"... the old bourgeois society might still vegetate on for a while, so long as a shove from outside does not bring the whole ramshackle old building crashing down. A rotten old casing like this can survive its inner essential death for a few decades, if the atmosphere is undisturbed. So I should be very cautious about prophesying such a thing" (the collapse of bourgeois society). (Letter to Bebel, October 24, 1891).

When this is coupled with other statements he was to make, to the effect that "where it is a question of a complete transformation of the social organisation, the masses themselves must also be in it, must themselves have grasped what is at stake, what they are going in for with body and soul" (Introduction to Marx's Class Struggles in France, 1895), one gets an entirely different slant from that conveyed in some of his other writings.

This study of the attitude of Marx and Engels towards crises and the concept of capitalism 'collapsing' shows, then, the extent to which they were influenced by the various phases which capitalism passed through in 19th-century Europe. If we have outlined some of the mistaken attitudes they adopted this is not to detract from the immense contributions they made to socialist thought. What it does mean, however, is that it was left to other socialists to produce a more penetrating analysis of the role of crises in capitalist production. What was most useful in their work on this topic was later summed up in the pamphlet Why Capitalism Will Not Collapse which the Socialist Party published in 1932:

"Until a sufficient number of workers are prepared to organise politically for the conscious purpose of ending capitalism, that system will stagger on indefinitely from one crisis to another."

John Crump

Beyond “peak oil” –- dirty oil

2010-12-22T17:13:00.003-05:00

The Material World Column from the December 2010 issue of the Socialist Standard

It is widely held that the world has reached or possibly passed “peak oil” – the point beyond which oil production is expected to decline. Some suggest that “peak gas” is likely to follow within a few years, while two recent reports claim that even “peak coal” too might be reached by 2025 (energybulletin.net/node/29919). If so, 20 years from now all three hydrocarbons may be in decline.

This is good news, isn’t it? Doesn’t it force the capitalists to switch to cleaner and less harmful sources of energy?

Yes, market forces will push things in this direction, but not very fast. It is projected that even in 2040 oil production will have fallen only to half its current level (peakoil.com). The normal functioning of capitalism will take several decades to complete the transition – much too late to prevent climatic catastrophe.

But there is worse. The main near-term prospect is rapid expansion in “non-conventional” oil extraction from oil sand (or tar sand), oil shale and deep-water offshore deposits. These forms of “dirty” oil are far more damaging to the environment even than the ordinary kind.

A barren moonscape

Oil sand is a thick mixture consisting of 10 percent bitumen (crude oil), 85 percent sand, clay and silt, and 5 percent water. Its first commercial exploitation is proceeding in the Athabasca region of northern Alberta, Canada. This entails removing it from the ground and delivering it to initial processing plants. The output of these “upgraders” is pumped through pipelines to refineries in various parts of the US for further processing. The US already imports more oil from Canada than from any other country.

As Antonia Juhasz says in The Tyranny of Oil (Harper 2008, pp. 291-2), “millions of acres of boreal [subarctic] forest have been transformed into a barren moonscape. Mammoth, lumbering creatures of steel have replaced the wildlife. The machines work 24 hours a day, 365 days a year, ripping vast open pits into the earth, up to 3 miles wide and 200 feet deep. Among the machinery is the world’s biggest dump truck, which stands three stories high.” (See also: Andrew Nikiforuk, Tar Sands: Dirty Oil and the Future of a Continent, Greystone Books 2008; National Geographic, March 2009 for photos; onearth.org/node/2243.)

Fort McMurray, the centre of the industry, attracts workers from Canada’s depressed Maritime Provinces and from as far away as India and China. The pay is high, but so is the cost of living. And so is the level of pollution – even higher than in China’s cities. Many die before their time of cancer or lung disease.

Cooking rocks

Oil shale is a type of rock that when crushed and heated to 430˚ C. releases a solid material called kerogen that yields a heavy oil. There are vast deposits of oil shale in the Green River Formation (GRF), which mostly lies under public lands in the western American states of Colorado, Utah and Wyoming. The rock is mined from deep below the surface, hauled, crushed, and then “cooked” in huge furnaces or “retorts”. However, Shell is working on a new technology to cook the shale in the ground, using electric resistor heaters like those in your toaster, so that the oil can be extracted in liquid form (Juhasz, pp. 296--318).

Oil sand and oil shale still account for under 10 percent of global oil extraction, but this proportion will increase as new deposits are opened to exploitation and conventional oil production declines. The Orinoco oil sands in Venezuela contain at least as much oil as those in Alberta; other countries, such as Trinidad and Madagascar, have smaller deposits. Australia has a substantial amount of oil shale and a processing facility in Queensland.

Being very costly, extraction from oil sand and oil shale is only profitable when oil prices are sufficiently high. This is why operations in the GRF in the 1960s and 1970s were abandoned, only to be resumed in recent years. Unfortunately, continuing high demand for oil and its declining supply is likely to keep prices high.

Impact on global warming

We all know that hydrocarbons are the worst energy source in terms of greenhouse gas emissions. And yet the production and consumption of oil from these non-conventional sources has a much greater total impact on atmospheric greenhouse gas levels even than the use of conventional hydrocarbon sources. Producing a barrel of oil from oil sand is estimated to emit about three times as much greenhouse gas as producing the same barrel by conventional means, largely due to the massive amounts of energy needed to mine, transport, upgrade and refine the oil sand. Another factor is the loss of carbon sink from permanent stripping of the boreal forest. Despite claims to the contrary, the forest is not and cannot be reclaimed after the oil sand is extracted.

Offshore drilling for oil or gas in water deeper than 150 metres – and many rigs drill in much greater depths than this – also adds to global warming, because it releases methane into the atmosphere from methane hydrates (ice-methane compounds) on the seabed. Methane is a greenhouse gas 23 times more potent than carbon dioxide.

Despite all the talk about the need to do something about global warming, despite all the policy strategies, emissions targets and ingenious incentive schemes, governments have failed to constrain the extraction of dirty oil. If even this energy source, the most harmful of all, cannot be ruled off limits, then what can be the purpose of those strategies, targets and schemes? Presumably only to conceal the helpless complicity of governments in face of the blind and relentless drive of capital to expand.

Stefan

Rosa Luxemburg and the Collapse of Capitalism

2010-12-22T09:09:00.001-05:00

Cross-posted from the Ragged Trousered Philanthropists Blog

From the January 1969 issue of the Socialist Standard

Fifty years ago on 6th January began the hopeless Spartakist rising against the Social Democrat government of Germany. It led to the brutal murder of Karl Liebknecht and Rosa Luxemburg, two well-known and courageous opponents of the first world slaughter. Luxemburg, as an opponent of both reformism and Bolshevism who understood the worldwide and democratic nature of socialism, had views on many subjects near to those of the Socialist Party of Great Britain. However, there were certain basic differences between our views and hers. The following article discusses one of them: the collapse of capitalism.

(1)

Rosa Luxemburg was murdered on January 15 1919. Her head was first smashed in with the butt of a soldier's rifle and she was then dumped in the Landwehr Canal. With her death, the uprising of the Spartakus Bund in Berlin collapsed—as it had been doomed to do all along. In fact, the real tragedy of this affair was not its brutality but the waste of it all. Why had Luxemburg allowed herself to become involved in such a useless adventure in the first place?

The only adequate explanation seems to lay in her conviction that capitalism had been driven to an impasse, that its internal contradictions had brought it to the point of breaking down. Speaking to the founding congress of the Communist Party of Germany on 3Oth December 1918, she had outlined her analysis of the current situation:

"I need hardly say that no serious thinker has ever been inclined to fix upon a definite date for the collapse of capitalism; but after the failures of 1848, the day for that collapse seemed to lie in the distant future. We are now in a position to cast up the account, and we are able to see that the time has really been short in comparison with that occupied by the sequence of class struggles throughout history... what has the war left of bourgeois society beyond a gigantic rubbish heap? Formally, of course, all the means of production and most of the instruments of power, practically all the decisive instruments of power, are still in the hands of the dominant classes. We are under no illusions here. But what our rulers will be able to achieve with the powers they possess, over and above frantic attempts to re-establish their system of spoliation through blood and slaughter, will be nothing more than chaos. Matters have reached such a pitch that today mankind is faced with two alternatives: it may perish amid chaos, or it may find salvation in socialism …. Socialism is inevitable, not merely because the proletarians are no longer willing to live under the conditions imposed by the capitalist class, but, further, because if the proletariat fail to fulfil its duties as a class, if it fails to realise socialism, we shall crash down together to a common doom."

This was not a new idea, which Rosa Luxemburg had suddenly come up with in 1918. The implication that at some time capitalism would almost mechanically collapse had run like a thread through her writings over the previous twenty years. At the time of the revisionist controversy, she had used this as one of her main weapons against Bernstein and his supporters. Bernstein had written in Neue Zeit that "with the growing development of society a complete and almost general collapse of the present system of production becomes more and more improbable because capitalist development increases on the one hand the capacity of adaptation and, on the other—that is at the same time—the differentiation of industry." The development of the credit system, of employers' organisations, improved means of communication and information services were all tending to stabilise capitalism suggested Bernstein. Quite apart from his other heresies, Luxemburg was especially indignant about this because it seemed to her that the revisionists were undermining one of the "fundamental supports of scientific socialism". Hitting back in her Reform or Revolution (1899), she put what she took to be the orthodox position:

"Socialist theory up to now declared that the point of departure for a transformation to socialism would be a general and catastrophic crisis…. The fundamental idea consists of the affirmation that capitalism, as a result of its own inner contradictions moves toward a point when it will be unbalanced, when it will simply become impossible . . . Bernstein began his revision of the Social Democracy by abandoning the theory of capitalist collapse. The latter, however, is the corner stone of scientific socialism. Rejecting it, Bernstein also rejects the whole doctrine of socialism . . . Without the collapse of capitalism the expropriation of the capitalist class is impossible."

It ought to be mentioned that Luxemburg is here overstating her case, since Bernstein was not disputing the theory that the capitalist system could collapse but merely suggesting that in practice this possibility had been eliminated by the modifications which capitalism had undergone. However the failure of a major crisis to develop during the years before the First World War served to make the left wing of the German Social Democratic Party (SPD) more adamant than ever that capitalism's breakdown was on the way. This was one of the main points which Luxemburg set out to demonstrate in her principal theoretical work—the Accumulation of Capital—written in 1912. Here she argued that capital was undermining its own ability to accumulate by its inevitable tendency to eliminate the peasantry in the advanced countries and by also destroying the pre-capitalist economies of the colonies. Capital is ruthless in its drive to achieve this end, says Luxemburg. but at the same time it is producing an 'economic impasse', since capitalism is "the first mode of economy which is unable to exist by itself, which needs other economic system as a medium and soil."

Although it strives to become universal, and, indeed, on account of this its tendency, it must break down — because it is immanently incapable of a universal form of production. In its living history it is a contradiction in itself, and its movement of accumulation provides a solution to the conflict and aggravates it at the same time. At a certain stage of development there will be no other way out than the application of socialist principles.

In stressing Luxernburg's emphasis on 'collapse' we must be careful not to attribute too crude a theory to her. Of course, she also pointed out that the working class had a positive role to play in this process and even suggested that the workers might be able to seize power before the actual breakdown stage had been reached. But, while recognising this, it is even more important not to underestimate the grip which this idea had on her. Luxemburg was a woman of immense experience in the German and Polish social-democratic movements and was also one of the foremost Marxist scholars of her day. Her intransigence had even won her the admiration of the Socialist Party of Great Britain. She was altogether superior to the romantic and volatile Liebknecht and yet when it came to the crunch, she was as confused as him in her estimate of the situation. A week before her death she was writing: "The masses are ready to support any revolutionary action, to go through fire and water for Socialism." This, of course, was patent nonsense. The working class in Germany had no clear idea of what Socialism was or how it could be achieved. Not only was there no chance of overthrowing capitalism, but even the limited aim of unseating the government was hopeless—as J. P. Nettl in his sympathetic biography records:

"It was clear probably by the evening of the 6th (January 1919) certainly by the morning of the 7th that there was no chance of overturning the government, and troops were known to be moving steadily into Berlin."

Luxemburg, then, had mistaken the economic dislocation following Germany's defeat for the 'collapse' of the capitalist system and since to her the choice seemed one of a desperate gamble for Socialism or else "crashing down to a common doom" she staked her life on the former.

(2)

What distinguished Rosa Luxemburg from the other leaders of the Second International was not her emphasis on the theory that capitalism would 'collapse' but rather, her exceptional courage which caused her to pursue her ideas at whatever he risk to herself. In fact, over the years, most prominent leaders of the social-democratic parties had at various times expounded the view that capitalism would crash down in some form of immense economic crisis.

Kautsky, as the principal theoretician of the German Social Democratic Party, deserves special attention in this respect. When the SPD congress adopted a new programme at Erfurt in 1891 this was taken as a model for the other parties of the Second International and Kautsky's commentary on, and elaboration of, this document in Das Erfurter Program (1892) was accepted as one of the classic texts of social democracy. Here he predicted a very grim and uncertain future for world capitalism. The general tendencies he saw, or thought he saw, were a steady rise in the reserve army of the unemployed, a "constant increase in chronic over-production", and a virtually complete saturation of the markets. He conceded the point which Bernstein was later to make, that the credit system is a means of developing capitalist production but remarked that it also causes the ground on which the capitalists stand to "vibrate ever more strongly". His conclusion was that:

"…in short, the moment seems to be near, when the market for European industry not only becomes incapable of expansion but begins to contract. But that would spell the bankruptcy of the entire capitalist society."

By and large, Kautsky stuck to this position—and the revisionist controversy forced him to go even further. For example, in his Krisentheorien (Neut Zeit, 1901-2), he rejected the suggestions of Bernstein and Tugan-Barnovsky that capitalism's periods of depression were becoming milder and maintained instead that they were becoming sharper and more prolonged. Again, he predicted that a period of chronic stagnation was approaching. Only much later was he to put forward a more sophisticated view. In The High Cost of Living (Kerr edition 1914), he admitted that his earlier predictions of chronic overproduction had been wrong. Here he puts far greater stress on the role of the working class in the overthrowing of capitalism, although he still thinks that the business cycle is of vital importance. During boom periods, says Kautsky, the working class is best able to organise itself, but high wages and full employment make it less revolutionary. The subsequent crisis and slump increase the misery of the workers and this gives rise to an upsurge in class consciousness. This alternation of boom and slump would alternately organise and revolutionise the workers, each time leaving them better equipped to establish Socialism, and in the end, the working class would be "compelled to cause the overthrow of the capitalist system on pain of its own destruction."

A particularly crude variant of the collapse' theory is that based on the idea of under consumption—that is, the concept that since the workers' wages are insufficient to buy up all the commodities which they alone produce, this will eventually cause capitalist production to seize up. Although this train of thought suffers from the obvious weakness of completely overlooking the role of the capitalist class as consumers, it was widely accepted among the parties of the Second International. Bogdanov, the principal economist in the Russian social-democratic parties, referred in his Short Course of Economic Science to the 'relative shrinking of the market for articles of consumption' which would set in motion "the conditions which lead to the destruction of the whole system of capitalist production" and Ernest Untermann of the Socialist' Party of America in his Marxian Economics makes the same point:

"the keeping of wages at the lowest level of subsistence threatens periodically to wreck the entire capitalist system, because the working people are the principal consumers, and they cannot begin to absorb the immense quantity of goods made by them."

Hyndman of the Social Democratic Federation was another leader who continually exaggerated the impact of crises. Echoing Kautsky, he predicted that they would "follow one another at ever-shortening distances" and that they would "last longer each time that they come". He also shared the general belief in their magical properties, maintaining that if the workers failed to take conscious action to substitute "organised co-operation for anarchical competition" then this would be achieved anyway ("unconsciously and forcibly") by the commercial crisis and its aftermath.

One could go on indefinitely quoting such examples but perhaps it is more important to spotlight those who criticised the theory of collapse. Louis Boudin in his Theoretical System of Karl Marx more than once pointed out that the "cataclysmic conception of the breakdown of capitalism is not part of the Marxian theory" and that the "theory of a final catastrophe which has been much exploited by Marx-critics is the result of their woeful ignorance of the Marxian philosophy". But, despite this, there are references to capitalism breaking down elsewhere in Boudin's book and presumably inconsistencies are due to the fact that he wrote it as a series of articles for the International Socialist Review over a relatively long period. Apart from Boudin, however, there were two distinct tendencies which consistently opposed the collapse theory.

Revisionists such as Bernstein, Otto Bauer and Hilferding did so because, in this way, they sought to justify and strengthen the reformist tendencies within the social-democratic parties. This accounts for the gusto with which Bauer and Hilferding (and Pannekoek—but for different reasons) attempted to refute the arguments in Luxemburg's Accumulation of Capital. To them it seemed that if it could be demonstrated that capitalism would not break down, then this would he ample justification for abandoning revolution altogether and for simply concentrating on modifying the harsher injustices of capitalist society. Of course, they did not put it as blatantly as this and still clung to the face-saving formula that gradually the expropriators would be expropriated But, arguing theoretically, they were quite prepared to suggest that capitalism could maintain itself indefinetly by adopting what today we would call a state-capitalist form. Thus Otto Bauer wrote in his Finance Capital (Der Kampf. June 1910):

"The entire capitalistic society would be consciously controlled by a single tribunal, by which the extent of production in all departments would be determined, and by, which by means of a scale of prices, the product of labour would be divided between the cartel magnates on the one hand, and the whole mass of the other members of society on the other, The anarchy of production at present prevailing would thus be brought to an end: we should have a consciously regulated society in an antagonistic form."

The most coherent opposition to the theory of capitalist collapse, however, came from the Socialist Party of Great Britain. This is not to imply that in the period before the First World War our early members disregarded the importance of the crises in capitalist production altogether. On the contrary, they were naturally influenced by social-democratic ideas and as result tended to exaggerate the repercussions of the crisis more than we would today. But, despite this, the Socialist Party was clearly distinguished from all shades of social democrats by its emphasis on socialist understanding as the critical factor in any potentially revolutionary situation. Certainly, some statements appearing in the Socialist Standard had mechanistic undertones:

"The revolutionary forces at work within the capitalist society must eventually evolve to the point of upheaval. The result will be the downfall of capitalism and the consequent exhaustion of the forces which have destroyed it. Having accomplished its mission, revolution disappears and the new system starts to grow, not from a revolutionary base, but from an evolutionary base." (June 1907).

and these provoked one correspondent into writing that "the whole of your teaching may, in fact be summed up a 'Preach economic consideration as the sole factor in social development, and wait until the crash comes!' " But the editorial committee made our position quite clear in its reply to this critics:

"It is inevitable that economic development will bring things to a crisis, but whether from out: of this crisis will arise the Socialist Commonwealth depends upon whether sufficient of the working-class have been made Socialists, and have been class consciously organised. Obviously, then, to, ´wait until the crash comes' may be the policy of reform pedlars, but is decidedly not the policy of THE SOCIALIST PARTY OF GREAT BRITAIN."

In other words, even conceding that a crisis might be the most opportune moment for stripping the capitalist class of its wealth and instituting Socialism, the Socialist Party hammered home the simple point which it has since never failed to stress—that there can be no Socialism without a majority of the working class understanding what needs to be done and prepared to take decisive action to establish the new society.

John Crump

Education as tainted by capitalism

2010-12-21T03:21:00.001-05:00

From the December 2010 issue of the Socialist Standard

State schools have always turned out various grades of worker. Now universities are to be allowed to charge the going market rate for their courses.

The Browne review of higher education in England proposes the abolition of the £3,290 cap on tuition fees and declares that there should be no limit on what universities can charge their students. It plans for typical fees of up to £12,000 per year for a degree course, with a continuation of the system of loans. In addition to a loan for the tuition fees, most students would have a further loan (for maintenance) of £3,750 and would have interest to pay on that, as well.

Once in employment, former students would begin to repay the cost of their loans (together with interest) from a salary level of up- to over £9000 per annum, upwards. This is not a high income to have to start paying back the loan, particularly for workers living in cities, where the cost of living is higher. Therefore, huge numbers of young people, on modest salaries will face these loan repayments, on top of either having to pay high rents for accommodation or taking out large mortgages. Economists have been advising people not to get further into debt but the Browne Report will undoubtedly contribute to the level of debt rising significantly for many.

The university guide, Push, estimated in August 2010 that student indebtedness could rise to £25,000 for a degree course. Clearly, for many with the extra expenses of accommodation, books, other course materials, etc, the figure would be substantially higher, quite likely, in access of £30,000.

So, the result of this is that most working class students will have an unenviable choice: either (1) to enter higher education and to be burdened with enormous amounts of debt, especially when accommodation and maintenance are considered, or (2) having to give up higher education altogether, with the probable consequence of stunted intellectual growth, temporarily, at the very least.

This is all capitalism can offer the vast majority of people: a huge burden of debt which induces a form of enslavement or missing important opportunities in life in order to reduce the debt.

As regards schools, dubious methods are being resorted to by more affluent parents in an attempt to get their children into schools which occupy a higher position in the league tables of the exam treadmill. Many of these better off parents often try to segregate their children from those of poorer backgrounds, through the use of tutors, private schools and faith schools. Desperate efforts are made by some parents in an attempt to get their children into the desired schools. The measures employed include moving house into the catchment area of the targeted school or allowing their children to move temporarily into the homes of relatives or friends who live in the sought after catchment area. All of this, in an attempt to deceive the LEA (Local Education Authority).

Then, there are the exams themselves: GCSEs, AS-levels and A2-Levels, with the perennially critical claim that “standards are dropping” in comparison with the past. Lesson time is largely devoted to the demands of passing these exams, rather than giving students a real understanding and appreciation of the subjects which they are supposed to be studying. In fact, many believe that lessons are much more about how to pass the exams rather than learning about the subjects for their own sake. Numerous teachers complain about the rigidity of the syllabus and about how their lesson plans are being constantly supervised, something which previously only applied to those who were in their first six months probationary period.

Aims of the Education System
Political leaders and mainstream educationalists usually claim that the purpose of education is along the following lines:

(1) Acquisition of knowledge, development of mental and physical skills and personality to enhance the life of an individual.

(2) The achievement of the above, it is then declared, will enable individuals to make a contribution towards the overall economic, social and cultural wealth of society.

To a limited extent, in the developed countries at least, much of this has been partially achieved. However, in a class-based society such as capitalism education, like much else, is subordinated to the interests of the ruling class. Those interests fundamentally involve the creation of profit which is a vital source of the wealth of the capitalists.

Although on occasions, mainstream education may refer to isolated ideas which criticise some of the policies of ruling elites (generally policies which took place in the distant past, such as Britain’s involvement in the slave trade from the 16th to the 19th century), the reality is that the education system has rarely radicalised students, apart from a brief period in the 1960s and 1970s. Usually it has taught them to accept the status quo and to fit into it. This lack of radicalisation of students has been maintained through the following factors:

The very limited nature of the education received by many students. Most of that education is geared to the demands of industry and commerce.

Capitalism has so far at least, managed to pressure most students into thinking more about getting employment at the end of their course, rather than to consider becoming radical.

The prevalence of status quo ideas in the education system: the values of religious organisations in feudal times and, since the beginning of the industrial revolution, the values of the capitalist class.

In more recent times most people’s understanding of the society in which they live has been influenced hugely by an expanding media, much of which is controlled by wealthy corporate owners and other commercial interests.

In the present society the main aim of education is to provide the knowledge and skills base necessary for employment in capitalism. A workforce educated according to the demands of the profit system will then maintain and, in favourable trade cycle periods, boost the wealth of the owners of the means of production.

An obvious consequence of these objectives of education has been a strong emphasis on subjects considered to be relevant to employment: maths, English, science, computer and business studies. The Education Reform Act of 1988 set up the National Curriculum which was designed to standardise what was taught in schools. The intention of this was to facilitate assessment and led to the creation of “league tables” showing the academic performance of schools in exams. Most significantly, maths, English, science and information technology were established as compulsory subjects up to the minimum school leaving age of 16. In contrast, under the 2002 Education Act, subjects such as history, geography, foreign languages, art and music could be dropped at the age of 14 since most of them were thought to be less relevant to the employment process.

Education and Income Group
Under capitalism, there has always been a very strong income factor determining educational achievement. Children from better off homes overwhelmingly do better than those from poorer families. The children from deprived backgrounds are frequently and erroneously labelled as being “less able” by those educationalists who are entirely ignorant of the vital socio-economic factors influencing educational development and the gaining of qualifications.

A useful book which refutes the claims of the “less able” educationalists is Education and Working Class by Jackson and Marsden, written in 1962 and which has been on the reading lists of many teacher training courses. The authors concentrate mainly on differing levels of educational achievement within the working class itself (as mainstream sociologists frequently do). They show by statistics and surveys, how children of unskilled manual workers are far more likely to leave school early, with few qualifications. In contrast to this, those with white collar, managerial parents, were more likely to pass a greater number of school exams and then to go on to university. Aspects of the book may be criticised by socialists for its emphasis on the material, social and economic divisions within the working class itself, rather than including a comparison with the children of the capitalist class. Nevertheless, it is still of significant value since it illustrates clearly how a lack of material resources and encouragement can seriously affect a child’s progress in education.

In 2007 a report entitled Chicken and Egg: Child Poverty and Educational Inequalities by Donald Hirsch, shows how little has changed, after another 45 years of capitalism. By the age of three, Hirsch concludes that “being in poverty makes a difference equivalent to nine months’ development in school readiness.” He continues: “At each stage of compulsory schooling, the poverty gap grows. In particular, there is a big jump early in secondary school, with poor children nearly two years behind by the age of 14.”

Hirsch adds: “Children who do badly at primary school are less likely to improve at secondary school, if they are poor. Children who are only slightly below average at primary school are more likely to be among the worst performers at secondary school, if they are poor.

Young people with parents in manual occupations remain far less likely than others to go to university. Even though their prospects have improved, they have not been the main beneficiaries of university expansion. Children of non-manual workers are over two and a half times as likely to go to university than children of manual workers.”

Like Jackson and Marsden, Hirsch is mainly looking here at different layers of the working class. All the same, it is a clear demonstration of how material circumstances in capitalism affect outcomes in education.

In February 2010 the Sutton Trust supported research which showed that “the vocabulary of children from the poorest backgrounds lags more than a year behind that of their classmates from richer homes by the time they start school.”

“Those from the poorest 20 percent of homes, where household annual incomes averaged £10,300 before tax, had an average developmental age of 53.6 months…Children from families in the richest 20 percent, on around £80,000 reached a development age of 69.8 months.”

In other words, children from the more affluent homes had a developmental age more than 16 months ahead of those from poorer homes. This is clearly a result of material circumstances.

Certainly, the demands of the capitalist education system, to restrain monetary expenditure and investment, cause highly significant barriers, particularly for children from more deprived backgrounds. Additionally, these cutbacks create real problems for many other working class children from less deprived backgrounds. The wealthy can purchase places for their children in private schools and universities, usually without any fear of indebtedness. For the rest of the population (the working class), the situation is very different and in recent years these inequalities have been increasing rather than diminishing.

Education in Socialist Society
So, what would education be like in a socialist society? A detailed description obviously cannot be given since it will be up to the people at the time to decide upon exactly which forms education would take. However, it is very clear that, in complete contrast to capitalism, socialism will put human need first. The welfare and needs of people, both as individuals and as a community will be treated as a priority.

The importance of developing to the full, the mental, physical and social abilities and talents of everyone, as individuals, will undoubtedly be recognised. Most significantly, education will inevitably be considered a lifelong process and certainly not something to be compartmentalised into time slots, like happens under the present system. As a result of this, people will be able to lead far more satisfying lives than could ever be even remotely achieved under capitalism. This satisfaction would derive from the contributions to the overall material, intellectual social and cultural wealth of society which people would be able to make and, of course, from the fact that, as individuals, they would be able to enjoy the fruits of the common store.

A quotation from Chapter 2 of the Communist Manifesto sums up the situation well:

“In place of the old bourgeois society, with its classes and class antagonisms, we shall have an association, in which the free development of each is the condition for the free development of all.”

Here, the term “free development” can be taken to include education. In socialist society, there would be no financial constraints since the monetary system will have been abolished and production will be carried out solely for human need. The stresses and strains of cutbacks and needless austerity measures will finally have been abolished forever and at last, humanity will be able to move forward, considerably through genuine and effective education, towards real progress, both as individuals and as a community.

Vincent Otter

Inside the Socialist Party of Canada

2010-12-20T20:16:00.002-05:00

Cross-posted from the Socialism Or Your Money Back blog

From the online magazine Digital Journal.

Some believe that the recent financial meltdown was caused by free markets and capitalism, which has drawn many people to look at the alternative: Socialism. The Socialist Party of Canada wants to define what socialism really means.

At several demonstrations in Toronto, this journalist has come across a lot of members of the Socialist and Communist Parties of Canada. The representatives hand out information on certain events occurring and their stance on the issue. It was time to finally speak with the party and understand their points of view.

The Socialist Party of Canada (SPC) distinguishes itself from the left-leaning parties, such as the Liberal Party, the Green Party and the New Democratic Party, by not representing the “capitalist class” and not being “managers of the capitalist system.”

On Thursday, Digital Journal had the opportunity to speak with Socialist Party of Canada representative and content contributor to the publication journal Imagine, John Ayers, to discuss the idea of socialism, what the party’s views are in terms of foreign policy and the current political establishment and system.

According to dictionary.com, socialism is defined as: “a theory or system of social organization that advocates the vesting of the ownership and control of the means of production and distribution, of capital, land, etc., in the community as a whole.”

However, Ayers feels that socialism and communism have been misunderstood due to the media and various governments around the world that call themselves socialists but do not represent the idea or have the vaguest notion of what it actually is.

About the party
The first Socialist Party of Canada began in 1904 and ended in 1925. The second SPC began in 1931 and continues to this day and is part of the World Socialist Movement.
“We have an idea, which when implemented by the majority worldwide, will end all war, all poverty, all inequality and provide everybody with the needs they have.” said Ayers. “Capitalism can’t do that, which is obvious right now.”

Even though the party does not have the proper funds to operate on a level as the main political parties, Ayers says that the party is mainly operating on an educational basis by publishing brochures, pamphlets and other methods to get out the proper information.

“Our electoral system is based on whoever has got the most money wins and we have to a lot of money, we don’t have a lot of money,” notes Ayers. “Right now we’re basically an educational phase.”

What will happen if the SPC gets elected? First the voters must understand what their view of socialism is. Ayers calls the ideology of the SPC as “scientific socialism” as they study the work of Karl Marx and use his economic theory as a basis of socialism but “don’t take his work as gospel.”

Socialism and ideas
The quintessential question is then: What is socialism? Ayers explains the following:
“Socialism is a society based on the common ownership of the means of producing and distributing wealth. Managed democratically in the interest of all mankind. That necessarily means an end to the class system, to money, to employment, to wages and necessarily means a society based on voluntary labour and free access for everybody to all goods produced. It is a production for use and not for profit.”

Ayers adds that this idea has never been practiced and certainly the Green Party, NDP and those who say they are socialists are not because they don’t have the same idea of socialism and communism due to their attempts of trying to be popular and “putting a happy face on capitalism.”

If elected, the SPC would use parliament and legislative powers to end the private property and state systems. In place of it, voluntary labour would be implemented and power would be given to local and production councils, which would be democratically elected and ultimately be the foundation of socialism.
“Most of the stuff won over the past 50 years are disappearing such as the health care system, proper wages, etc.,” notes Ayers. “The only thing we promote is establishing a socialist society. Promoting capitalism can never work and benefit the working class.”

Foreign policy and war
Remembrance Day was on Thursday and it was only fitting to understand the party’s stance on Canada’s foreign policy and war. Ayers says the party’s foreign policy would be to “join the hands with socialist parties around the world,” which would result in no war and nothing to fight over because “wars are fought over economics.”

War, according to Ayers, is a struggle between two capitalist classes and their attempt to gain control over strategic and trade routes. However, in the end, says Ayers, “humans don’t need wars” because we’re the ones who get killed and “it solves nothing.”
“Once we’ve established socialism,” says Ayers, “all of this is gone. The military complexes are gone.”

The current state and can the government change?
According to Ayers, ultimately nothing is going to change. The SPC representative cites Toronto mayor-elect Rob Ford as an example because he is someone who is not going to change the system but ran on a campaign promise of ending the gravy train and changing the corrupt city hall.
In the end, says Ayers, the municipal government is going to get bigger and make union workers poorer. Although one public official can “tweak” little things in government, if you want real change then you have to “remove it entirely” in order to have a “society that is viable, equitable and worth living in.”

The current system does not give people freedom or the freedom to travel: “If you don’t have money for a bus ticket, you can’t go anywhere. But people with billions of dollars can travel anywhere and have their voices heard easily.”

“It’s the system itself that creates war, poverty and global warming,” says Ayers. “The government, managers of capitalists, have done absolutely nothing.”

Ireland’s recession

2010-12-20T17:05:00.001-05:00

From the December 2010 issue of the Socialist Standard

The only flourishing industry in Ireland now seems to be economic punditry.

A fellow socialist recently sent me an economic article critiquing the contrasting financial approaches of the various governments in Europe to the current crisis. It wasn’t the first article that I’ve read on this subject! Ever since the storm broke in autumn 2008, the media in Ireland has filled the airwaves/newspaper pages with an endless procession of economists commenting on various aspects of Ireland’s severe economic situation and either second guessing the government’s decisions on various policy matters or attempting to persuade the people that they have much cleverer solutions to ‘our’ problems. Part of my weariness with all this analysis stems from the fact that as a socialist I know booms and slumps are an inevitable part of the economic operation of capitalism and there was clearly an unsustainable boom occurring in Ireland over the years 2004 to 2008. So now we have the consequent contraction which is just going to have to be endured as long as capitalism governs our lives.

In fact, the only flourishing industry in Ireland now seems to be economic punditry and whether you open a magazine, turn on the TV, listen to the radio or surf the net for news, you won’t have long to wait until you encounter the predictions of economists mainly drawn from either academia or the financial institutions or on some rare occasions, the trade unions. Because Ireland’s situation is deemed so critical, we even have Nobel prize winning economists from the United States commenting on us, while just a few years ago we wouldn’t have merited any attention from them as they’d probably have been pre-occupied with China.

In fact one popular media economist, David McWilliams, currently has a travelling roadshow where he tours the country, filling halls and theatres with his views. As the publicity blurb for his ridiculous ‘Outsiders’ tour goes “McWilliams believes Ireland’s political and social divide is not so much about rich and poor, young and old, urban and rural, but about Insiders and Outsiders”. This strange mixture of showbiz and economics has climaxed in a ‘Kilkenomics’ festival held in Kilkenny in late November where stand up comedy will be interspersed with economic analysis. On its website one of the topics listed for discussion is to be ’23 Things they don’t tell you about Capitalism’. As the man said, you couldn’t make it up!

What’s tiresome about all the contributors to this public debate, is that in spite of furious argument over some superficial points, essentially they’re all singing from the same hymn sheet. Corrective action is needed to deal with Ireland’s soaring debt and it’s only the time scale (whether it should be over 4 or 6 years) and the areas of public spending to be excluded from cuts (such as old age pension) that are in contention. It is now anticipated that a general election is only months away and it’s noticeable that the main opposition parties have moderated their criticism of the government’s budget approach; they know full well that room for manoeuvre is extremely limited and if elected (which seems very probable at the moment) they will be implementing the hair-shirt budgets over the next four years.

To give some background, it now seems accepted that whatever reality lay behind the Celtic Tiger had by about 2003/2004 been replaced by an old-fashioned, foundation-less credit boom based on the expectation that property (both residential and commercial) was destined to appreciate at a significant level beyond any other type of investment. This led to a frenzy of construction, some clearly insane even to non-socialists, where perfectly functioning warehouses, hotels and office blocks were demolished so their footprint could be used for even more profitable apartment blocks and fancier hotels.

By 2006 the unsustainability of what was happening began to be widely commented upon in everyday life though this didn’t seem to flag any warning bells with Brian Cowan, the then minister of finance, subsequently promoted to Taoiseach (Prime Minister). The crash has highlighted a structural weakness in Irish politics whereby that opaque interaction between the politicians and leading business people (particularly property developers) masked the rationale for economic decisions. By 2008, a huge proportion of Irish government revenue was attributable, directly or indirectly, to the construction sector in terms of which has now all but vanished. This has left an almost twenty billion euro gap between the government’s annual income and expenditure. The problem has been exacerbated by the government’s initial decision to give a very wide ranging guarantee to all the main banks’ creditors. As the scale of loses (fifty billion and counting) has turned out to be much greater than anticipated, this has increased Ireland’s need to borrow. Whether the government naively underestimated the risks from this banking strategy or was responding to the pressing needs of some well-connected business people has been hotly debated since.

The predominant response to date in Ireland has been a fearful resignation rather than any outright ‘resistance’ as has intermittently been seen in the strikes and demonstrations of France and Greece. Partly this is due to an apathy to the potential power of real politics, that has been engendered amongst great swathes of the electorate, resulting from so many broken promises by reformist parties over the years. Unemployment has risen sharply and emigration as a social phenomenon has returned. A reduction in living standards is seen as inevitable in the medium term. There has been a deliberate divide and rule strategy employed by the ruling class with a vociferous campaign, championed by the media outlets controlled by the media tycoons Tony O’Reilly and Denis O’Brien, waged against public sector worker to separate them from private sector employees.

That is not to say that people are not angry about the situation and the heavy penalties and burdens they are now expected to bear as a result of reckless and profligate activities of bankers and developers. What is perceived to be most galling is how when the senior executives in many financial institutions knew that the balloon was going up, they negotiated or arranged legally watertight generous exit packages for themselves, without a care for the consequences to the mass of the people. It certainly has raised questions about the ‘fairness’ of the system which is a clearly welcome development for socialists. Of course some of the discontent is mis-directed, with talk of betrayal by the government, when the recession is an inevitable part of the capitalist cycle albeit in this exacerbated by the greed and incompetence of the local ruling class.

The power of capitalism over people has never been more nakedly exposed. The government’s daily mantra is the need to restore confidence in Ireland’s position to ‘the market’ when we know ‘the market’ is fundamentally that very small number of people who control multi-billion financial investment decisions. So each government action is quantified as to whether it has reassured the markets (which we’re constantly told is a good thing) or has caused uncertainty (‘a very bad thing’) as the more uncertain the markets are, the greater the interest rate Ireland must pay on the loans it needs to raise. The fact that it’s naturally in the market’s interest to either doubt, or at least feign doubt, about Ireland’s economic outlook in order to justify higher loan charges is never commented upon which shows the whole deal is really a gigantic scam. Perceived wisdom is that it should be easier to make socialists in a recession when the shortcomings of capitalism are more evident. This capitalist recession will eventually end and the Irish economy at some time in the future will inevitably return to growth. If there are more socialists in Ireland at that future time, then at least one positive outcome will have resulted from this sorry and preventable mess.

Kevin Cronin

How I became a socialist

2010-12-20T13:02:00.000-05:00

Cross-posted from La Bataille Socialiste blog

From the September 1975 issue of the Socialist Standard

We have received the following from a reader of Varldssocialism in Sweden and publish it for the similarity between experiences of pseudo-revolutionary organisations there and in Britain.

In the early sixties a « radical » consciousness arose among some of the students in the industrialized countries. The Cuban revolution had taken place and the struggles in South Vietnam escalated. The Berlin wall was built. From the late fifties, I had more or less been attracted by the idea of « the dictatorship of the proletariat » and sympathized with Russia and the other « socialist » countries. I accepted all catchwords uncritically and started subscribing to propaganda magazines from these countries. I sympathized with the Communist Party of Sweden and subscribed to My Dag (New Day), the party’s newspaper. Encouraged by a workmate, I became a party member at the beginning of 1962. Since no theoretical studies were pursued in the party at that time, the majority of the membership were profoundly ignorant theoretically. Perhaps one would have remained ignorant even if studies had been pursued. Everything told by the party leadership was accepted, and naturally one thought it was awfully « revolutionary » to distribute reformist election propaganda before every election. The party encouraged the membership to participate in the pacifist Campaign Against Nuclear Weapons, and many of us took part in the Campaign’s Whitsun marches.

For a time I was also a member of the party’s youth league, Democratic Youth, who mostly pottered with hobbies and boycotts against South African goods. I belonged to the more inactive members in the party, at least at the beginning. Gradually I undertook the task to collect the members’ subscriptions in a dwelling-house area. On May Day we always would march in the demonstrations of the Social-Democrats and the Trade Union Federation. I travelled as a tourist to all European « socialist countries » except Albania. To the so-called Baltic- Sea Week in Eastern ermany I travelled several times, and I thought it was awfully remarkable. And what did I learn? Not a jot! In the mid-sixties, the antagonism between the two « communist » giants Russia and China had been sharpened. Throughout the world new « communist parties » were founded, which supported China and her European ally, Albania. In 1966 the so-called cultural revolution was introduced in China. I began to think it was good that the people over there fiercely attacked the domestic bureaucrats and also the bureaucracy and « revisionism » in Russia and other « Communist » countries. But since I was still ignorant, I swallowed the Chinese party’s lies about Lenin’s and Stalin’s Russia as a real socialist example.

Shortly after the party’s change of name to Left Party Communists at their congress in 1967, I resigned my membership. Instead I joined the Communist League Marxist-Leninist (KFML), a Maoist organization that was founded at their midsummer conference the same year. Now I regarded myself as a real revolutionary. I participated in so-called Marxist studies, which among other things consisted in learning to rattle off a lot of Mao Tse tung quotations by heart. I went about about selling Ghiston (The Spark) and Marxistiskt Forum (Marxist Forum), periodical of the KFML. I undertook the task as cashier and secretary of a local branch. Later I also joined the Swedish Clarte League, a Maoist students’ league, and the United NLF Groups, supporters of Viet Cong.

In May 68, students and workers revolted in France. This even influenced young people in other countries. Here in Sweden the so-called occupation of the Students’ Association building in Stockholm took place. Within KFML, Clarté League and the NLF movement an opposition had emerged during the spring, partly the « rebel movement » and partly the so-called appelianism. The « rebel movement » was strongly influenced by the Chinese cultural revolution, and was a spontaneous reaction to the stalinist bureaucracy within KFML, Clarté League and the NLF movement. They developed into a kind of fanatical, religious sect, where they tortured each other and read aloud from the red book of Mao Tsetung quotations. After a couple of months their movement was dissolved.

Appelianism derived from the Communist Working Circle, a Maoist group in Denmark. Its chairman is Gotfred Appel. Their « theory » is that the capitalists in Europe and North America take super profits from the countries of the third world and use these profits to bribe « their » workers. Therefore they thought that postering with reform struggle was to waste time. Instead one should try to induce the workers in North America and Europe to support national « liberation movements » in the third world thereby they would become class-conscious and be secured on the side of Leninism, they hoped.

Since I was still equally ignorant, I thought this sounded reasonable and left KFML, Clarté League and the nfl movement at the beginning of 1969. Now I had at last learned something, namely that reform struggle could not be something for a socialist organization to potter with. In late summer 1971 a number of persons broke away from one of the appelianist organizations and formed the Manifesto Group. They started publishing a journal called Hammaren och Skaran (Hammer and Sickle), which also appeared in English. The group I belonged to, mostly consisted of older ex-members of the Communist Workers’ League of Sweden, which had been founded in 1956 by a group that broke away from the Communist Party. It ceased to exist in the mid-sixties.

As a result of personal antagonism, our group broke with the other two appelianist groups and started a close co-operation with the newly formed Manifesto Group. We studied some material from the Progressive Labor Party, an American organization which had broken with Maoism but still clung firmly to Stalinism. They now claimed that capitalism had been « re-established » in China. Further they rightly claimed that the NLF of South Vietnam did not fight for anything but capitalism. Otherwise, they were incorrigible reformists. We also read Gorter, Pannekoek, Ruehle, Mattick, Kollontay and Others.

At the beginning of 1973 we got in touch with Varldssocialism (World Socialism) and read some SPGB material. We agreed with much of what SPGB said, but opposed parliamentarism. We had been influenced by the Dutch and German left communists, who in the twenties fiercely criticised Lenin’s policy. We had now approached some sort of council-communist outlook, the foremost characteristic of which is anti-parliamentarianism and advocacy of workers’ councils. However, we soon relinquished the council idea, and began to question organizations and programs on the whole. At this point the majority of our group broke with the Manifesto Group which was now charged with « syndicalism » and « anarchism ». However I myself left the « appelianist » group and joigned the Manifesto Group, which was soon dissolved and stopped publishing Hammer and Sickle. Instead we began to publish a series of pamphlets, which formostly carried situationnist, but also council-communist stuff. Some titles we also publish in english.

We now almost understood what socialism (communism) really meant. We understood that the Russian, Chinese and all other revolutions in reality had been capitalist. We also understood that a socialist revolution could only be worldwide. However, later the « organization » even began to question Marxism and claimed that conceptions like socialism and revolution were meaningless. They also claim that the class conception is meaningless and that- the working class will never carry socialism through. They mean that every individual should instead concentrate upon trying to get out as much enjoyment as possible from life. I agree with this, but capitalism sets up very limited bounds to how much « enjoyment » people can reach.

I think their view is a manifestation of defeatism, therefore I have now stopped working for this group. I have changed my mind concerning parliamentarism, and now sympathize entirely with the World Socialist Movement, the only movement that stands for SOCIALISM, the abolition of the wages system! I now understand that neither social-democracy, Leninism-Maoism-Stalinism, Trotskyism, Appelianism, Anarchism, Syndicalism or Situationism can be an alternative to capitalism. After fifteen years of ideological confusion, I now understand what socialism really means and hope to be make a contribution for it.

Y.E.H.

Currency wars

2010-12-17T22:44:00.000-05:00

The Cooking the Books column from the December 2010 issue of the Socialist Standard

“More than a dozen countries”, the (London) Times (11 November) reported, “have been intervening in the foreign exchange markets to weaken their currencies and protect exporters, raising fears of a rerun of currency wars that damaged the world economy in the 1930s.”

The 1930s – that’s the spectre currently haunting those in charge of trying to run capitalism. Then, faced with the contraction of world trade, states tried to grab as much as was left by resorting to protectionism, export subsidies and devaluations. The conventional wisdom is that this only made things worse, deepening and prolonging the depression.

The World Trade Organisation (WTO), and its predecessor GATT, have made it difficult for states to adopt protective tariffs and export subsidies. So, all that’s left, to try to get the better of their rivals (and it’s a war of each against all), is to devalue their currencies.

Strictly speaking, since the collapse in 1971 of the Bretton Woods agreement, which had laid down fixed exchange rates between currencies, the sort of formal devaluation that the Labour governments of the 1960s were forced to carry out no longer occur. Currencies now “float”, which means that their exchange rate with other currencies is determined by supply and demand on foreign exchange markets.

Normally (if there’s a level playing field) what would happen is that the more a state exported the higher would be the demand for its currency due to those buying the exports having to acquire some to pay for these. This would lead to the currency’s exchange rate rising; which would make its exports more expensive. Similarly, a state with a balance of trade deficit would find its currency’s value fall; which would make its exports cheaper. So matters would be more or less self-regulating.

That’s the theory. The real world is rather different, since governments can influence the exchange rate of their currency by affecting the supply and demand for it. If they want to keep its exchange value low (so as to encourage exports by making them relatively cheaper) they can increase the supply on foreign exchange markets by themselves selling more there (printing more if necessary). Which is what has been happening:

The US points the finger at China but China is not the only state trying to grab a bigger share of world trade in this way. One of the main reasons why Britain didn’t join the euro was that this would have prevented it letting the pound float downwards to encourage exports. The US too has recently been increasing the supply of dollars (via “quantitative easing”) with this end partly in view as a means of putting pressure on China to upvalue the yuan.

The matter was the main item of the agenda of the G20 summit in Seoul in November, but all that was agreed was to adopt a pious declaration condemning “competitive devaluations” and wishing for “market-determined exchange rates”. Some sort of agreement may eventually be cobbled together. But maybe not. The competitive struggle for profits built-in to capitalism has already prevented agreement on a further round of tariff reductions, let alone on what to do about the threat of climate change.