Forever Blowing Bubbles (2007)

From the May 2007 issue of the Socialist Standard

  Those attracted by the 'buy-to-let' bonanza, turning themselves into mini-rentiers in a bid to escape wage slavery forever, are likely to get their fingers burnt.

Rarely a week goes by without the TV news reporting that house prices in the UK are at 'an all time high'. And rarely does a week go by without newspapers like the Daily Mail running stories about how rising interest rates are going to negatively affect house prices and end up bankrupting half the country. In the popular press, if house prices are rising it is a case of 'feel the wealth'; if there is a sense they might decline it is 'fear for the future' instead. You could be forgiven for thinking that the health of the entire economy rested on rising house prices.

In a sane society, of course, houses and other buildings would be wanted simply as desirable places to live in rather than as supposed generators of wealth, and it is tempting to suggest that an economy based on house prices can only come about because the generation of real wealth through industry must no longer be an attractive or viable proposition. Though superficially appealing, this would be wrong. The sphere of production is where real wealth is created, not in the realm of buying and selling houses or anything else. The inherently cyclical nature of the market economy and the various sectors within it (not all of which move in the same direction at once) means that throughout the history of capitalism 'bubbles' have developed in everything from tulip bulbs to micro-chips, based on periodic excess demand, speculation, and the psychological momentum which develops when people perceive that particular assets or commodities are increasing in value.

Since the 1970s and 80s, the way people view housing in the UK (and many other countries too) has changed. In capitalism's 'property-owning democracy' houses are seen as a store of wealth and those buying them are encouraged by an entire industry of property firms, banks, building societies and estate agents to pin their faith on ever-higher house prices. That this is peculiar never occurs to most, but it is one of the strangest facets of the modern economy. What other commodity, when subject to massive price rises, garners such a positive response - rising car prices, food, or furniture? Only houses - and precisely because, in a society where over half of all households have less than £1,500 in savings, they are now seen as the main store of wealth and, ultimately, as an investment.

Rising prices are nearly always seen as being bad, except when it comes to house prices - indeed, with annual house price increases often running between 10 and 20 per cent in recent years, this has been viewed as especially good. What makes it odd is that a house is the single biggest thing most people ever purchase, and in a great many cases it eats up a higher proportion of income than all other expenditure put together, which is one reason why falling house prices are not the one-sided disaster usually supposed (at least not for buyers).

Importantly, houses are evidently not a source of wealth for most people with huge mortgages to pay - they are a source of debt. Average household debt in the UK is currently around £45,000 and four-fifths of this is accounted for by mortgage debt. There is widespread confusion about the extent of debt involved in buying a house too, as the powers of compound interest are not always apparent - few with a typical 25-year £120,000 mortgage will realise that even at current (comparatively low) interest rates they will be paying back a total of around £270,000 in today's money.

Myths about house prices
There are problems with houses as a store of value in that they are an illiquid asset (you cannot convert them into cash easily) and, other things being equal, merely buying and selling them is what economists would call a 'zero sum game' - and not even this if costs and taxes are taken into account. This is, of course, unless you can (profitably) add value to them in other ways, are wealthy enough to own more than the one you live in and can sell at a real profit to the original price paid, or you sell up and move somewhere prices are cheaper on a like-for-like basis.

Spurred on by the popular press and relentless so-called 'property porn' programmes on television, myths about houses and UK house prices abound, the following probably being the most prevalent, and illustrative of the present speculative bubble:

• House prices never go down
• Buy-to-let is a sure-fire winner
• Renting is 'dead money'.

The idea that house prices never go down is as bizarre as the notion that stock markets never fall. And it is just as incorrect, redolent of the kind of short-sighted mania that occurs during any bubble, from the 'tulip-mania' affecting Dutch tulip bulbs of the 17th century to the recent 'dot com' crash. The United States - which has had far higher levels of home ownership than Britain over the last 150 years or so - has seen several house price crashes, including after the bubbles of the 1830s, 1880s, 1920s and 1970s. A Florida mansion, for instance, bought in 1925 during the bubble of the 'roaring twenties' would not have reached its initial buying price again until forty years later.

Since the increase in home ownership in the UK over recent decades, a similar pattern has emerged. Just as with the stock market, the overall price trend may be upwards, but with some very noticeable periods of decline. The picture is sometimes partially obscured by the effects of general inflation, but once this is stripped away, it is clear.

For instance, the property boom of the early 1970s led to an 18.1 percent fall in house prices in real terms (i.e. taking inflation in account) between 1975-77. When the recession of the early 1980s hit, real house prices fell again. As unemployment took off to the highest levels since the Second World War, between 1979-82 house prices fell 17 percent (accounting for inflation). Then, as house ownership spread among the working class under the Thatcher government and levels of indebtedness soared to pay for it, the biggest crash was the most recent one in the 1990s, plunging millions of people into 'negative equity', where their houses were worth less than their outstanding mortgages, ending with hundreds of thousands of homes being re-possessed by the banks.

On this occasion, house prices fell 37.3 percent in real terms from their peak during the 'Lawson boom' in 1989 and didn't recover fully on this measure until the beginning of 2002 (using the nominal 'headline' figures, the average UK house price in 1989 peaked at £62,782 and eventually rose above this level again in early 1998, but this doesn't take inflation into account as £62,782 was worth considerably less in 1998 than it was in 1989). The bottom of this crash was in late 1993, and after that the housing market first started to recover, and then soared, to the extent that the average UK house is now around £180,000, an increase in real terms of over 150 percent since the 1993 low (all figures supplied by, or calculated from, the Nationwide Building Society quarterly surveys). This is over three times the rate at which the UK economy as a whole grew during the same period.

As a housing bubble, it is unparalleled in the history of the UK economy. Apart from the usual cyclical upswing and the relative boom in the UK economy over the last decade, it has been fuelled by two other factors. The first is the particular, continued expansion of the financial services sector centred in London and the South-East, which has had a 'ripple effect' on house prices across the country. The second has been the 'buy-to-let' bonanza, whereby people, realising that owning just the one house isn't the best way of taking advantage of a rising market, borrow speculatively to buy two or more instead, hoping that the rental yield from the houses purchased will cover their massively increased mortgage payments. This development has, in turn, partly been sustained by the influx of migrant labour from Eastern Europe which has provided a rental market when most people in the UK have been encouraged to buy.

While historically it has often been the case that it is cheaper to take out a mortgage than rent (one of the few advantages of mortgages is that they are a cheaper form of debt than most), nevertheless this has not always been so. The over-supply of rental accommodation in many areas is such that is now cheaper to rent than to buy, and the rental yield received by the 'buy-to-let' brigade (the market rent for property divided by its price) is currently falling to around 4 percent.

Unsustainable debt
How has this house price bubble been financed? Purely and simply through debt, and increasing amounts of it. The two best measurements of the growing indebtedness underpinning UK housing market rises are average incomes as a proportion of average house prices, and the average multiple of income allowed by banks and building societies when they agree mortgage levels with house buyers.

The average house price to average earnings ratio tends to increase notably during housing bubbles as prices rise at rates that far outstrip any growth in incomes. The long-term UK average has been for house prices to be around 3.5 times average earnings, though in the early-mid 1970s bubble this rose to over 4.5 times earnings, and in the late 1980s bubble to just under five times earnings. Today, it stands at nearly seven times average earnings.

The salary multiples which banks and building societies use to determine how muchthey will lend house purchasers when they grant mortgages has also increased massively. This had to happen because house prices have risen far more than wage increases. In the 1970s it was rare for financial institutions to issue mortgages that were greater than three times household income, then it went up to four times income in the 1980s until Abbey confirmed what many knew to be a reality last year when they admitted that they (and others) now lend at multiples of five times income, placing a massive financial burden on those with mortgages. What this huge indebtedness means is that the risk of default on mortgages, including mortgages for 'buy-to-let', is now significant; but this is a risk financial institutions have taken in the hope that rising house prices can be maintained forever.

Housing as an investment
Those who have been persuaded by the financial institutions and the media to get onto the 'housing ladder' largely on the grounds that it will be a good investment, might not have realised that in the popular game there are snakes as well as ladders whereby you can go down as well as up. This is largely due to the cyclical rhythm of the market economy (where it is better to buy when prices are low and sell when they are high, rather than follow the herd and buy near the peak when things have never looked better, just before it all turns to dust). Furthermore, there is a phenomenon at work behind all this that is rather revealing.

Within capitalism there's a variety of competing asset classes for those who are looking to expand their wealth (primarily capitalists and large institutions, but also anyone else with some spare cash to invest). These mainly include equities (company shares), bonds (such as government gilt-edged securities), cash in savings accounts, and property (commercial and residential). Led by financial institutions like Barclays Capital and Credit Suisse First Boston, there is quite an industry comparing the performance of these leading asset classes. Some are far more volatile than others, with equities being the most volatile, cash the least so. But property has been the next most volatile asset after equities with considerable short-to-medium term risk attached to it. While historically performing better than cash or bonds, property has performed noticeably less well than equities too (even though shares are rightly viewed as risky short-to-medium term assets by most - apart from when there's a bubble, of course).

The US sub-prime market
Such has been the rush to buy houses at almost literally any price that the fortunes of the housing market have spilled over to affect other assets. Most notably, in February and March world stock markets were adversely affected by growing problems in United States' sub-prime mortgages, caused by what are now falling house prices there.

Sub-prime mortgages are those offered in the US to customers with poor credit ratings or already high debt levels. Because they are riskier, interest rates tend to be higher than those on safer (prime) loans. But as the US housing market falters, more sub-prime loans are going bad and at an even faster rate than expected, with over an eighth of them already in arrears (Money Week, 2 March).

The bursting of America's housing bubble could have widespread impacts on US financial institutions and others who have exposure there (in the UK, this ranges from HSBC bank to construction firms like Taylor Woodrow). And it is perfectly possible that the UK housing bubble may follow suit, with similarly high prices and unsustainable levels of debt no longer being able to defy gravity. Indeed, the entire housing bubble phenomenon is wider than commonly supposed - while the US and UK economies have a particular problem with their housing markets, so do many other countries where identifiable bubbles also exist, from Ireland and Spain to New Zealand.

Where next?
Past history demonstrates that sooner or later, the current housing bubble will end in tears. When asset prices become completely disengaged from what is happening in the real economy where wealth is produced and value created, and are only sustained by ever increasing amounts of indebtedness, it cannot last - capitalism just doesn't work that way. Its growth is not planned or smooth and some sectors expanding rapidly beyond that which the market can bear is a natural feature of the system. When the crash comes, it will return markets to more realistic levels that are more in line with real incomes and values, and this is what has happened on every other previous occasion.

Just as the major world stock markets (including the UK) lost a colossal 50 per cent of their value in the 'dot com' crash of 2000-2003, before beginning their more recent recovery, so - sooner or later - the housing market will follow suit. And two factors in particular could be the trigger for it when it happens.

The first of these is interest rates, which have already been moving higher, and this movement could be propelled further by the backwash from the US sub-prime mortgage problems. Increases in interest rates have been associated with housing market crashes on the majority of occasions they have happened, and for obvious reasons.

The second issue is unemployment. There is a noticeable but unsurprising correlation between movements of house prices in the UK and rising and falling unemployment. Rising unemployment in the mid 1970s helped burst that particular housing bubble, and it also played a major role in the housing market corrections of the early 80s and then of the early to mid 90s, both of which coincided with more general economic slumps. When unemployment began to rise again last year, house prices tailed off, much to popular concern, but since then unemployment has eased slightly and house prices have resumed their upward trend.

What will trigger the crash this time is impossible to tell in advance, even if rising interest rates and unemployment are the most likely causes. Interestingly for those who now see houses primarily as investments rather than places to live, competing returns on asset classes might also give us a clue.

One of the tell-tale signs of a pending stock market crash is when the earnings yield on shares - effectively the profits from capitalist enterprises in relation to share prices - falls below the yield on long-term government bonds, which gives a signal to investors and capitalists generally that the risk associated with owning shares is no longer worthwhile and that investments like gilts are more attractive, being safer and suddenly with a better comparative return. The two most significant stock market collapses since the 1929 Wall Street crash have been 1974, when the UK market, for example, lost three-quarters of its value, and the aforementioned 2000-3 tumble, when the market halved in value. On both occasions, the earnings yield on shares had fallen by some margin below the yield on long-term government bonds (on both occasions the gap was more than 1 percent).

The analogy for the housing market at present is this: if housing is now very much an asset class for investment purposes, it compares unfavourably. According to the Financial Times, the earnings yield on UK equities is currently around 7 percent and for 10 year government bonds just under 5 percent. The rental yield on residential property is now 4 percent and falling, which means that 'buy-to-let' is looking like a lot of debt and a lot of risk for a very poor reward (nowhere near enough to cover mortgage payments).

The lessons from this situation seem clear:

• that in capitalism what goes rapidly up must come down at speed too, in housing as in much else;
• the vast majority of people in society who do not own enough wealth to buy houses outright and who must effectively pay by instalments are likely to be squeezed ever harder by an uncontrollable financial system;
• those attracted by the 'buy-to-let' bonanza, turning themselves into mini-rentiers in a bid to escape wage slavery forever, are likely to get their fingers burnt.

Sooner or later the bubble will burst, and it will be wage and salary earners without 'independent means' - drowning in debt - who are likely to be hardest hit, as the market economy solves a problem it created in the only way it knows.

Dave Perrin

Martian Story (1958)

Apologies for some of the old fashioned language. The only excuse - and it's a thin one - is that the article dates from the late fifties, and reflects the sexism of the time. (Of course, things have changed, right?)

For all that, I still think it's a good wee piece for getting the socialist ideas across, and who knows: Maybe Mars is a sexist society? (At the time of posting the article on the blog, David Bowie was unavailable for comment.) - Imposs1916

From the No.6 1958 issue of The Western Socialist

During one of those long weekends that crop up every so often, an adventurous Martian, deciding for a change to visit the earth, gathered the wife and kids together and set off through space. Arriving after a while at his destination, he and his family started out to see the sights and met a sad-looking Earthling. There was a dialogue.

Martian: "Why such a gloomy puss, my friend?"

Earthling: "Hungry."

Martian: "Hungry! How come? The crops around here look good. The factories look big and plentiful."

Earthling: "That's just the trouble. The crops are too good. The factories are too plentiful. We've produced too much."

Martian: "Hungry because you've produced too much?"

Earthling: "Say, Mac, what's the matter? Ain't you been around?"

Martian: "Well - ah - I am a stranger in these parts, if that's what you mean. How can you be hungry if you've produced too much?"

Earthling: "That's always the way it is. When you produce too much, you're no longer needed at the factory. You lose your job and this means you have no wages to buy the things you've produced. So you go hungry."

Martian: "That's strange. I'll have to try and figure it out. But how much worse must conditions be when you're not producing too much?"

Earthling: "That's where you're wrong. When there isn't very much, the wheels of industry are turning full time, everybody is working and we have prosperity. When we have the least, that's when we have the most. It's when we have too much that we don't have enough. And when we have too much, we have to wait for the surplus to become wasted or destroyed or used up somehow till there's hardly any left and we can all have enough again."

Martian: "Get the kids back in the saucer, ma! We're going home!"

J.A.MacDonald

The article was found via the literature archive of the Socialist Party of Canada.

An A to Z of Marxism

NOTE TO THE READER: This text was written in the 1980s. Hence, suggested further reading is rooted in books of that period. Parts of this text was originally published in the now defunct Irish magazine, Socialist View, in the late 1980s.

Foreword

This dictionary is intended as a reference-companion for the socialist. It is aimed particularly at the newcomer to the socialist movement who may be unfamiliar with socialist terminology.

Our approach has been to combine brevity with clarity, as far as possible, with cross-referencing and a guide to further reading at the end of most entries.We have been selective.

We have concentrated on those words and ideas that are relevant to the case for socialism. In addition, there are many biographical entries of individuals and organisations of interest to the socialist movement. The inclusion of any of these should not necessarily be understood as an endorsement of their ideas and practices. Likewise, many entries have suggestions for further reading but the views expressed in these books are not necessarily the same as those of the socialist movement.

It will be obvious that there are some errors, omissions and unworthy inclusions. We make no claim to comprehensive, final and definitive truth. This dictionary can and should be better. We therefore invite suggestions and constructive criticisms for use in future editions of this dictionary.

A to E can be accessed here.
F to J can be accessed here.
K to O can be accessed here.
P to R can be accessed here.
S to U can be accessed here.
V to Z can be accessed here.

The making of “killing machines” (1996)

Book Review from the May 1996 issue of the Socialist Standard

On Killing. By Lt. Col. Dave Grossman. (Little-Brown.)

Wartime killing, what can be and has been learned from it, and how that affects society as a whole, is the subject of Grossman's book On Killing. It is a must read for any who believe that humans are killing machines, only restrained from killing by fear of punishment. Grossman also tangentially addresses both social and anti-social behaviour. Grossman accepts war as a requirement of human society, and provides little insight into solutions, but the value of the book is its presentation of an important facet of human behaviour with a generally scientific approach.

Grossman seems to have had three major points to make when writing this book. The first, and the focus of the first half of the book, is that soldiers have a very strong revulsion for killing. He presents compelling historical evidence from military historians, and their interviews with veterans, to support this claim. Grossman says that some of the evidence is open to question, but overall it offers little room for doubt.

The second point is that US Vietnam veterans have not had the necessary and traditional processes to facilitate the rationalization and acceptance of their killing experiences.

This has left them with a significant rate of Post Traumatic Stress Disorder, manifesting itself as "recurrent and intrusive dreams and recollections", "emotional blunting, social withdrawal, exceptional difficulty or reluctance in initiating or maintaining intimate relationships, and sleep disturbances. These symptoms can in turn lead to . . . alcoholism, divorce and unemployment."

The third is that the techniques which have been used successfully by the military to bypass the human revulsion for killing are now in widespread use on youth.

Grossman explains the factors he believes most influence whether a soldier will kill, and finds predisposition to killing in only about 2 percent of soldiers.

The most startling evidence to many will be that in WW I and II, most soldiers (80-85 percent) did not even fire their guns, because they could not bring themselves to kill even when they were being fired at by the "enemy".

Grossman tells us that the military then developed conditioning techniques, based on the "operant conditioning" pioneered by B.F. Skinner. In the U.S.-Vietnam war, only 5% of US soldiers failed to fire. This evidences the degree to which human beings can be conditioned to do almost anything, and Grossman provides evidence from other studies showing similar results.

Perhaps most frightening is his discussion of using the same conditioning on society in general, and on youths in particular. Grossman argues that this conditioning is now the heart of many violent films and video arcade games. He does not fall into the trap of seeing every killing in film as creating sociopathic viewers. He relates that the U.S. military incorporates (the enemy is bad), and control in its conditioning, so that the soldier has a "justice" (the enemy is bad), and control in its conditioning, so that the soldier has a "reason", and must be told to kill. In the films and video arcade games he criticizes, "justice" is often absent: killing is done for the sake of killing, and there is no control.

Grossman provides evidence to support his contention that this conditioning towards violence is actually having substantial results in U.S. society. Although a correlation between violence on TV, in film, and in video games, and violence in society does not prove causation, Grossman notes: "there comes a point when, in spite of this type of reasoning, we must accept . . . the verdict of 217 correlation studies".

He suggests that the solution to this societal conditioning may be "to censure (not censor) those who exploit violence for profit".

He's pointed to the real problem, but doesn't see it.

Steve Szalai

Philosopher, heal thyself (2007)

From the June 2007 issue of the Socialist Standard

In March the philosopher Julian Baggini published a much commented on book, Welcome to Everytown. A Journey into the English Mind (Granta, £14.99), about the everyday attitudes to life of people in an average English town (in the event, a part of Rotherham). He also writes a regular column in the Skeptic. In the Autumn 2006 issue he gave as an example of "a priori reasoning based on fundamental convictions, rather than empirical reasoning based on the facts of experience" the case of a "utopian socialist (or perhaps anarcho-syndicalist, she wasn't quite sure)" he had met who "was convinced that if we were to abolish money and unshackle people from the oppressive yoke of advanced consumer capitalism, we would all behave well and honourably, doing our all for the common good without concern for personal reward". He went on "for our socialist, her self-evident first principles are that the only fair society is one where wealth is distributed equally, and that human beings are sufficiently virtuous that they would do whatever it took to make such a society function".

He then set out the alleged factual case against this. First, "any faith in the intrinsic goodness of humanity is surely untenable after Auschwitz, Bosnia, Rwanda and the countless other acts of barbarity our species has perpetrated". Second, "people actually pursue their own narrow self-interests and competitive advantage". Third, we can see "the naturalness of hierarchy by looking at the behaviour of our primate cousins". Socialists recognise this as of course the hoary old "human nature objection", a pessimistic view ultimately derived from the Christian dogma that we are all born sinful and depraved which is still a deeply rooted popular prejudice.

We don't know if Baggini's acquaintance actually expressed herself in the terms he sets out or whether he has made her into a straw-woman he can easily knock down. We can broadly go along with her argument even if we wouldn't want to be committed to saying that humans are (to speak like a moral philosopher) intrinsically good or virtuous (and that we'd prefer to talk of distribution according to needs rather than equal distribution). But his objections reveal him to be guilty of precisely what he accuses her of: arguing from an already decided position without taking into account "the facts of experience".

People certainly do pursue what they perceive to be their own interest - and why not, as biological organisms we seek to survive in the best way we can - but is it really the experience of all human societies that their individual members always and only, or even predominantly, pursue "their own narrow self-interests and competitive advantage"? What about the societies where, given the way that society is organised to secure the means of subsistence, people have taken a broader view of their self-interest, seeing this as being served by cooperating with others rather than trying to do them down all the time? In fact, not even capitalism, whose structure encourages unbridled individualism and competition between people, could survive if people didn't also cooperate.

The "facts of experience" are that the various different kinds of society that humans have lived in in the course of their history and pre-history show that our species is capable of a wide variety of different behaviours. This has been confirmed by physical anthropologists and anatomists who have identified the biological features - brain capable of abstract thought, larynx and other organs capable of speech, long period to maturity - that allow "human nature" to be flexible, adaptable. Not infinitely adaptable, but enough to be able to live in a society without money, competition to satisfy material needs, or hierarchy.

It's a nice thought that gorillas, chimps and orangutans are our cousins. They do look a bit like us, but, scientifically, we are a lot more distantly related than that. We do share a common ancestor but that could have been as long ago as 10 million years. After that their ancestors and ours went their separate ways. They ended up as they have, with a relatively restricted range of possible behaviours.

In contrast, the homo line evolved into a species without any particular way of surviving in the rest of nature and whose members are capable of adopting a behaviour appropriate for surviving in a wide variety of different environments, both social and physical. Our "primate cousins" didn't. Which is why it is invalid to infer anything about human behaviour from theirs. It is true that we share over 99 percent of genes with them, but that just confirms that the huge difference between them and us as to how we survive in nature is not due to biology but to our ability to adapt.

It was Marx who said that philosophers only interpreted the world. Baggini hasn't even done that here. All he has done is reflect the prejudices of his day.

Adam Buick

Prince Harry and Iraq

Latest post from the SPGB blog, Socialism Or Your Money Back:

The War is over for Harry the Ferocious

Review of J. Crump's "Hatta Shuzo and Pure Anarchism" (1994)

Book Review from the January 1994 issue of the Socialist Standard

Hatta Shuzo and Pure Anarchism in Interwar Japan. By John Crump. (Macmillan Press)

It is a little known fact, brought out by John Crump in this ridiculously priced new book, that until they were crushed by the militarist State in 1936 there was a small but flourishing anarchist movement in Japan. As elsewhere various currents existed, the main ones being the anarcho-communists and the anarcho-syndicalists.

The anarcho-communists, as their name suggests, were anarchists who were communists in the sense of standing for a society based on common ownership where people would produce goods and services to be taken and used without buying and selling and in accordance with the principle "from each according to their ability, to each according to their needs". In other words, they stood more or less for what we call Socialism.

The anarcho-syndicalists, on the other hand, were anarchists who embraced the doctrine of syndicalism. This arose at the turn of the century and taught that what workers should do to end their exploitation was to organise in unions (or syndicats in French, hence syndicalism). Unions were seen as providing the means both of defending workers' interests under capitalism and, once capitalism had been overthrown in a general strike, of administering the new society.

While in other countries anarcho-communists and anarcho-syndicalists co-existed without seeing any fundamental incompatibility between their respective views, this was not the case in Japan. In the 1920s a group of "pure anarchists" emerged determined to rid the anarchist movement of what they regarded as the contamination of syndicalism. Prominent among them was Hatta Shuzo (1886-1934), a former Presbyterian clergyman.

The theme of Crump's book is that Hatta's critique of syndicalism was an important contribution to revolutionary theory. Hatta's criticism was radical. He disagreed with the syndicalist aim of a society and economy run by industrial unions, and he disagreed that the class struggle of workers for higher wages and better conditions could ever lead to a moneyless, stateless society.

A society run by industrial unions, said Hatta, would be a society which would perpetuate the occupational divisions which capitalism imposed on workers. In addition, the relations between the separate union-run industries would have to be regulated either by some central administration, which he claimed would amount to a government and so give rise to a new ruling class (his weakest argument, this), or by some form of commercial transaction even if conducted in labour-time vouchers rather than money as most syndicalists proposed. In other words, a syndicalist society would be a sort of capitalism run by the unions.

Hatta argued that the basic units of an anarchist society could not be industrial unions but only "communes", or local communities where real links of solidarity could exist between people and which would combine agriculture and small-scale industry so as to be able to satisfy all their needs. Hatta evisaged these having to be self-sufficient, but why? He forced himself into arguing this unreasonable and unnecessary position because of his mistaken belief thar any permanent administrative structure beyond local level (such as one that might facilitate local communities having free access to the materials and goods they did''t produce) would provide the basis for a new ruling class. Why should it if everybody had free access to what they needed and those who staffed it had no armed force at their disposal?

As to how he envisaged a communist society coming about, his views were even more wildly wrong than the general strike of the traditional syndicalists. He advocated the so-called "creative violence" of an anarchist minority which would, supposedly, arouse the peasant and worker masses to spontaneously express their "natural anarchism". In other words, he lived up to the popular caricature of anarchists as bomb-throwers. In doing so he overlooked that minority violence can never lead to a free society, only to repression by the existing State or the rule of a new minority. For communism (or socialism) to be established, as Crump points out, the mass of the prople must understand the nature and purpose of the new society. Such democratically-organised majority action, we would add, need not be violent and can use existing political institutions such as the ballot-box and parliament. Who needs violence when you're the majority?

Adam Buick

There is a Japanese language page on World Socialism on MySpace that you can access here.

If John were Prime Minister (2007)

Cut and pasted from the SPGB blog, Socialism Or Your Money Back

Now that the SWP's wish has been granted and Phoney Blair has announced the date he is going, there will be a Labour Party election to replace him as Leader by Gordon Brown, the dour son of a Presbyterian minister who wants us all to display the Union Jack on Empire Day or whatever he proposes to call its replacement. But he's not going to get a free run. There are, apparently, still some people in the Labour Party who consider themselves socialists. They have now agreed on a champion to do battle with Brown: one John McDonnell, the MP for Hayes and Harlington in West London and chair of the Campaign Group of Labour MPs.

Ever since Blair announced his intention to go, they have been distributing leaflets, stickers and videos and are currently trying to recruit people to join the Labour Party just so they can vote for him. Although they disdain New Labour type spin, someone came up with the clever idea of calling their campaign and website "John4Leader".

"I am campaigning," McDonnell says, "for a Labour Party which puts people before profit, defends jobs and services, and supports peace over war. Join me."

Until the 1990s this is what Labour used to say when not in office but what they never did when they were elected. John (as we've been invited to call him) doesn't seem to have understood why. He seems to think that the putting of profits before people, cutting jobs and services and supporting war rather than peace which all Labour governments have always done were just mistaken policy choices, rather than something imposed on any government charged, as all governments are, with running the political affairs of a capitalist country in the interest of its capitalists.

All governments have to put profits before people because capitalism, the system within which they have to work, runs on them. They are what makes it go round. If profits are not given priority then problems begin to appear. Capitalist firms don't have enough incentive to go on investing at the same or a higher level and unemployment and relocation to other countries result.

Rewards
John's opponent, Gordon, has understood perfectly well that, where you have production in the hands of profit-seeking businesses, to keep production going you've got allow these businesses to make profits. As he told an "Enterprise Conference" in 2005:

"My message today – and my mission in government – is that Britain should be not only the most stable environment but the most attractive location to do business and to create new businesses . . . We will continue to look at the business tax regime so that we can provide the best possible incentives for investment in wealth creation and rewards for success." (Times, 4 February 2005)

It is this understanding that businesses must be allowed to do what they exist to do and seek and make profits as "rewards for success" that makes Gordon a far more suitable chief administrator of British Capitalism PLC than John with his illusion that under capitalism people can be put before profit.

Once you've given yourself the "mission" – actually, faced up to the realities of governing capitalism – of seeking to create the best conditions for profit-seeking businesses to operate and flourish, the rest follows.

John wants to "defend jobs", but that's not the way capitalism works. Competition means that there are losers as well as winners. While the latter enjoy the "rewards for success" in the form of higher profits, the losers suffer the penalty of failure in the form of lower or no profits. Losing firms have either to cut back on production or go out of business altogether or be taken over by more ruthless competitors. In whichever case, the result is job losses.

John doesn't say how he would prevent this but we can guess that it would be either by subsidising loss-making businesses or by trying to protect them from foreign competition behind tariff walls. This could be done (after Britain had first withdrawn from the EU and the World Trade Organisation) but, now that capitalism is more global than ever before, the results would be disastrous for the economy of any country whose government tried them. There'd be an economic slump and mass unemployment. A leftwing Labour government under John might then respond by imposing a siege economy, with shortages and rationing as in Cuba, Zimbabwe and the other countries that have gone down this road, but we don't fancy their chances at the next following election.

Reforms
It's the same with the reforms John is promising. "I will increase the Basic State Pension to £114 a week and immediately restore the link to earnings". "I will introduce a Real Living Minimum Wage of at least £7 an hour". The only chance of these figures being attained is if there's an inflation of the currency – highly likely under a leftwing Labour government – leading to an increase in the general price level. If they were to be attained by taxing profits to pay for them, this would be a disincentive for businesses to invest. In fact, it is because he doesn't want to do this that Brown, as Chancellor of the Exchequer, has been seeking to reduce taxes on profits. Which is why he and the present Labour government have been cutting back on public services of every sort, from local libraries, post offices and sports facilities to hospital wards and care for the aged.

Then, there's foreign policy. War and preparations for war by maintaining adequately equipped armed forces are a gigantic waste of resources but one the capitalist class are prepared to bear since they know, as Blair has recently underlined, that in international relations "might is right", the bigger the club you hold the more chance your views have of being taken into account in commercial and diplomatic negotiations. And of course the aim of every government's foreign policy has to be to further the interests of its capitalists by helping them secure markets and safe and reliable sources of raw materials and energy.

A leftwing Labour government could, as John promises, "withdraw British troops from Iraq and Afghanistan, and scrap Trident". It is now clear that the Bush and Blair governments made a big mistake, in terms of their aim of ensuring secure and reliable oil supplies for capitalist industry in the West, in invading Iraq. They have made matters worse and are now desperately seeking an exit strategy that will minimise the advantage they have given to Iran, their main rival for hegemony over the Middle East.

John, however, thinks that British capitalism need not be concerned about oil supplies from the Middle East or anywhere else. If I were PM, he says, "I will implement a green energy policy based on renewable power sources". Easier said than done, given that British capitalism depends on burning fossil fuels for 90 percent of its energy and that (in fact, because) renewable power sources are more expensive. If Britain under John opted to just use wind power, tidal power, hydro power, etc this would so raise production costs generally as to render practically all UK-produced goods completely uncompetitive on the world market and we'd be back to a siege economy.

A John government would have the power to "scrap Trident" nuclear weapons but this would be tantamount to deciding to relegate British capitalism from a second to a third rate power. We don't know who John is going to appoint as his Foreign Secretary – Jeremy Corbyn, perhaps – but whoever it is will have to realise the worst nightmare of another one-time Labour leftwing firebrand, Nye Bevan, of going naked into the Conference chamber. As Frederick the Great of Prussia, who knew a thing or two about these things, put it, "diplomacy without arms is like music without instruments".

In short, John and his colleagues are not living on this planet. They have a quite unrealistic programme that, if implemented, would lead to economic chaos and mass unemployment. The only thing that could be said in their favour is that it is not really meant to be implemented. That it's just a harmless list of pious wishes.

So, no John, we shan't be joining the Labour Party just to vote for you. What would be the point? We have seen the past and it doesn't work.

ALB

[An earlier version of this article appeared in the March 2007 issue of the Socialist Standard.]

Greasy Pole: Hazel Blears – nuts in May? (2007)

From the May 2007 issue of the Socialist Standard

The question is not who will be the next Deputy Leader of the Labour Party so much as who would want the job in the first place. None of the hopefuls to succeed the risible John Prescott has felt able to campaign as an exuberant optimist, encouraging the party to look forward to building on ten years of glowingly successful government. Far from it; in almost identical phraseology all of them have argued that what Labour needs now is to undergo some kind of purgative re-assessment of its record and its objectives, raking over the rubble of old controversy in the hope of finding something fresh and voter-seductive, to prove that they are still the party of progressive change. All of them call for a "debate" but only political zombies will be persuaded that this means a free-ranging discussion from which a constructive consensus will emerge. Anyone with a vote to cast in this election - and who is deceived enough to think it worthwhile to cast it - should be more than a little confused; some of them may choose between the candidates by reference to their having some personal eccentricities.

Which brings us to Hazel Blears - the Right Honourable Privy Counsellor, Member of Parliament for Salford, previously Parliamentary Under Secretary of State at the Department of Health and Minister of State at the Home Office, now Labour Party Chair and candidate for the post of Deputy Leader of the Labour Party - who makes a point of being different. To begin with she is not one of your run-of-mill party hack carpet-baggers, forced onto a constituency by party headquarters. She was born, brought up and partly educated in Salford, where her father worked as a maintenance fitter. She was a councillor in Salford, chairing the Community Health Council there for several years and, inescapably, she supports Salford Reds, the local Rugby League team. Among her passions is motor cycling - in appropriately black leathers astride a pedigree, vintage Italian machine.

Supporters
All of this designed to prove that she is unstuffy, approachable, honest. "I am never," she announced "complacent" – as if anybody should be, in face of the record of the party she aspires to lead. Her candidacy attracted what might be called a variegated band of support. Apart from MPs like Stephen Pound, who strives never to be taken seriously, there were the likes of Alan Milburn, who sees her as "energetic, innovative, gets things done" and David Blunkett, who thinks she has energy "more . . . than anyone I have ever come across". Of course, support from someone like Blunkett may not always be helpful and the same can be said about the endorsement of Tony Booth, Cherie's father, who applauds the fact that Blears has "come up the hard way herself, she really knows and understands what life is like in working class communities" - as if an understanding of working class life has ever affected how political parties behave towards them. Such unremitting praise for an aspiring politician need not impress anyone who is willing to contrast it with the real experience of how those politicians measure up in their efforts to run capitalism. So what else, in the real world, is there to say about Blears?

Disengaged
Announcing her candidacy, she confessed that the Labour Party is far from being in robust health for while it must "remain the party of success and aspiration" there is a problem about members' motivation: "after 10 years in office some members feel disengaged . . . we should recognise that one product of a lengthy period in office is that some party members feel left out. They don't have a relationship with their Labour government, other than what they read in newspapers". She did not venture any deeper into why that "disengagement" should have happened, probably because to do so would have confronted her with that government's abysmal record, which has so often left party members angry at their own impotence. For example there was the refusal - supported by Blears - to allow party members to vote on the matter of renewing Trident before it was voted on in Parliament. There was the allegation that Blears abused her position in the chair to run an undercover campaign for the Deputy Leader's job. If proved, this would be just one more example of the sleaze which Blair's government has been so readily and deeply involved in. Then there was the fact that Blears appealed for the votes of party members by selling them cringe-inducing tat like tee shirts ( "Nuts About Hazel" – men £16.80 each, women £10.30), clocks (£15.90) and coffee mugs (£9.90). Questioned about this on Sky News, Blears airily advised the viewers that "in politics you've got to be able to campaign" - which leaves nothing to be said about her campaign, her party and the politics of capitalism.

Left Wingers
Coming up the hard way as approved by Tony Booth would have taught Hazel Blears something about politics - about back-stabbing, about lies, about betrayal. Like so many other tediously aspirant Labour ministers she started out as an ardent left winger, a devotee of, and driver for, Barbara Castle, the flame-haired rebel who moved from left to right wing in time to be Harold Wilson;s Minister of Labour and help compose the notoriously anti-trade union White Paper In Place of Strife. As an activist, Blears opposed the abolition of Clause Four, so necessary to Blair's design for New Labour but her time as an MP has been smoothly conformist, as she voted in favour of Control Orders, replacing Trident, Foundation Hospitals, University Top-Up Fees. There was just one rebellious blip in this when, last December, she was exposed picketing against the closure of the maternity unit at Hope Hospital in Manchester. This was embarrassing for Blears because, although some other ministers - John Reid, Jacqui Smith - had joined similar protests in their constituencies, during her time at the Department of Health she had help to draft the plans for such cuts and as a member of the Cabinet she had approved the closure she protested against. Her attempts to excuse herself - that Labour;s overall policy for the NHS is sound but she differed on this particular way in which it was applied - was too feeble even for a wobbling ex-left winger to use. But she survived; perhaps it was all that energy.

But Blears has recently taken to describing her constituents as "the people of Eccles and Salford". This is not a slip of the tongue; forthcoming boundary changes could cause a run-off for a new, redrawn constituency, with Blears standing against the present Eccles MP Ian Stewart. Perhaps she is already preparing her campaign to hold on to the nomination. When it comes to using a bit of ruthless cunning the woman who likes to be different shows that she is the same as the rest.

Ivan

Death of a Film-maker (2003)

From the November 2003 issue of the Socialist Standard

Elia Kazan, born Kazanjoglous in Constantinople of Greek parents, who was taken to America when he was four years old, died in September aged 94. He became an actor, theatre and film director and, later, an author. He was not always considered to be a particularly nice person, and was something of a loner and individualist "anarchist". Writing his obituary in the Guardian (September 30), David Thomson observes that "he was a demon, a man who left his mark everywhere". He was, says Thomson, a genius. And according to the Times obituarist (30 September), "he was responsible for some of the most creative filmwork to come out of America".

Elia Kazan in 'Waiting For Lefty'.

Kazan went first to school in New York and, then, from 1930 to 1932 he studied drama and acting at Yale School of Drama. From there, he joined the Group Theater, first as an actor and later as a stage manager and director. Prominent in the New York Group Theater was Clifford Odets. In 1933, Odets began writing plays; and in 1935, he wrote in three days a one-act play, Waiting for Lefty, which won him the New York Theater League contest. Elia Kazan played Lefty at the Group Theater. And Lefty, the hero of the play? He was Sam Orner, a New York taxi-cab driver who, as a teenager in 1913, joined the Young People's Socialist League, the unofficial, leftist youth section of the reformist Socialist Party of America. After travelling all over the United States as an organizer for the Industrial Workers of the World, the "Wobblies", Orner joined the Socialist Educational Society of New York, largely formed in 1921 by expatriate members of the SPGB, in 1923. The SESNY later became the New York Local of the Workers Socialist Party of the United States.

In the early 1930s, Sam Orner became the organizer for the New York cab drivers. In 1934, they went on strike, and it was this strike and Orner's part in it that formed the subject of Clifford Odets's play. Kazan and Odets of course knew Orner who, following the strike, fell foul of the Mafia mobsters who were attempting to get control of the union, the International Brotherhood of Teamsters. They badly beat him up, and he was hospitalized. But a comrade managed to get him out of the hospital before the mob could kill him. Sam Orner remained an active member of the WSP(US) until his death in 1973.

In December, 1930, the Workers' Film and Photo League was formed, which was a Communist Party "front" organization. The focus of its film production was newsreels and documentaries. Conflicts soon arose, however, between those who wanted to continue with documentaries and those who wanted to produce fiction movies of a social realist type. The schism led to the formation of Nykimo Films.The most celebrated, but now largely unknown, work by Nykimo was Pie in the Sky, a fifteen-minute satire starring Elia Kazan. What there was of a story, or plot, involved two tramps in a junkyard mocking so-called middle-class, bourgeois, values. In the words of Dan Georgakas (Encyclopedia of the American Left): "The film has considerable verve, with the tramps taking on organised religion in a manner not seen since the Industrial Workers of the World assaults on the Salvation Army". In 1938, Kazan directed his first film, a 20-minute documentary, People of the Cumberland, about the plight of Tennessee miners.

With his wife, Molly Thatcher, Elia Kazan joined the Communist Party in 1934. But he was not cut out to be a loyal and obedient party member. He commented twenty years later:

"The streets were full of unemployed and shaken men. I was taken in by the Hard Times version of what the Communists' advertising and recruiting technique claimed to have as a cure for depressions, and a cure for Nazism and Fascism."

He said that he was disgusted with the Communist Party's "system of discipline that suppressed personal opinions, and tried to dictate personal conduct". He hated the secrecy and paranoia of the Stalinists. He claimed that he resigned from the Communist Party, but another version has it that he was expelled either in 1935 or 1936.

In 1942, Kazan directed his first important play, Thornton Wilder's The Skin of Our Teeth, on Broadway. He also developed a close association with Arthur Miller and Tennessee Williams. During this time, his career took off as a movie director. In 1947, he won an Oscar for his direction of Gentleman's Agreement, an indictment of anti-Semitism. And in the same year Elia Kazan co-founded with Robert Lewis the influential Actors' Studio, which was responsible for developing the natural, psychological and realist "method" style of acting first evolved by Roman Stanislavsky at the Moscow Art Theatre during the 1920s, and which launched the career of Marlon Brando. First, there was A Streetcar Named Desire and, by 1949, Death of a Salesman.

Elia Kazan's first Hollywood film using the "method" style of acting was Viva Zapata!, from a script by John Steinbeck. In it, Brando played Emiliano Zapata, the Mexican revolutionary. Inevitably, the ten-year conflict had to be telescoped into a few short episodes. The storyline was, however, reasonably accurate; Brando was plausible, and "there was a feeling of heat and dust", in the words of Thomson. Nevertheless, the script does distort certain events, and is in part complete invention. In 1954, Elia Kazan directed another powerful film, On the Waterfront, also with Marlon Brando, which exposed the mob's control of the union Local in the New York docks. In the film, Brando is beaten up just like, in real life, Sam Orner was in the 1930s. Kazan probably remembered that.

The so-called Cold War between the Soviet Union and the United States emerged just before the end of the Second World War. Almost overnight, allies became enemies. And the chief threat allegedly facing the United States was said to be "the worldwide international communist conspiracy", represented primarily by Soviet Russia. The "enemy within" was the Communist Party in particular and its "fellow travelers" and, in general, "reds", "lefties" and anyone who did not consider American capitalism to be the best of all possible systems.

The House Committee on Un-American Activities (HUAC), which had existed under various titles since 1930, became a permanent inquisitorial committee in 1946. It was armed with the power to compel testimony anywhere in the United States under subpoena. Witnesses summoned before the HUAC were judged to be either "friendly" or "unfriendly". All known Communists, sympathisers and many others who had been little more than vague anti-Fascists in the 1930s and 1940s, were hauled before the Committee. A few were jailed (the Hollywood Ten), and many were either fired from their jobs or found it impossible to obtain a job. The Committee was particularly concerned with so-called "reds" in the film industry.

Elia Kazan was summoned to the Committee on April 11, 1952. He was considered to be a friendly witness; and, like his old comrade, Clifford Odets, he "named names". He said that it was "a difficult moral dilemma", after "much soul-searching". And, anyway, he claimed that all the individuals that he named were already known to the HUAC as Communists or fellow-travelers. But Kazan was never forgiven by the Communists, many former Communists as well as many others who said that he should have never co-operated with the state.

Elia Kazan was no socialist but, within the limitations imposed by a profit-making film industry, he was able to highlight, sometimes quite dramatically, some of the problems as well as the struggles of ordinary workers, in a number of the movies that he directed. And that, at least, was something.

Peter E. Newell

The Centenary of Marx. (1918)

From the May 1918 issue of the Socialist Standard

Into the midst of the greatest slaughter the world has ever known obtrudes one of those arbitrary divisions of time called a century, in this case marked off by an event of great interest for the working class.

On the 5th of May, 1818, at the old German town of Trier, was born a boy whose discoveries, research, and propaganda were to mark an epoch in human knowledge and progress, and who stands out as an intellectual giant in a century noted for its number of great intellects. This boy was Karl Marx.

After the customary school course and attendance at the universities both of Bonn and of Berlin, Marx wished to take up a lectureship in philosophy, but was advised not to do so by his friend, Bruno Bauer.

At 24 years of age Marx was offered the editorship of a new paper called the "Journal of the Rhine" (Rheinsche Zeitung), run by a radical section of the growing commercial class.

It was while in charge of this paper that the social questions and problems pushing themselves forward in that transition period induced Marx to take up the studies of economics and social development, resulting in his world-famous works.

This editorship, conducted with conspicuous ability, involved Marx in a running fight with the censorship, a fight that ended in 1843 with the suppression of the paper.

Marx, now married, moved to Paris and helped to found the "German-French Annals" (Deutsch-Franzosische Jahrbucher) that ran for a short time. It was while engaged on this paper that he met Frederich Engels, who became his closest friend and co-worker for the remainder of his life. Engels, even before Marx, though two years younger, had already got rid of his Hegelian views and undoubtedly helped Marx to free himself completely from the bonds of this Ideal Philosophy.

Marx now joined the staff of the Paris "Advance" (Vorwarts) and in conjunction with Heine and others produced the pamphlet The Holy Family, a satirical criticism of German philosophical Idealism.

His meeting with Engels brought out the fact that both of them had reached the same conclusions on the question of social development independently of each other.

When Marx's continued attacks upon the Prussian Government led the latter to persuade M. Guizot, the French Minister, to expel him from France and he removed to Brussels, he and Engels worked out their theory of the "Materialist Conception of History" in the MSS. of two large volumes that the unsettled circumstances of the time prevented being printed. As Marx puts it, however, the MSS. "had accomplished our main purpose - the clearing up of the question to ourselves".

It was while in Brussels that Marx delivered his lecture on "Free Trade," and those on "Wage-Labour and Capital," afterwards published as pamphlets. Here, too. he wrote his famous Poverty of Philosophy, in answer to Proudhon's Philosophy of Misery - a volume that is a fine example of keen analysis and powerful argument dressed in the scathing sarcasm of which Marx was a master, as well as an instance of the acknowledgment and credit he always gave his predecessors. Many of the authors mentioned would have been forgotten long ago had Marx not rescued them from oblivion. Every one of the critics who so loudly claim to have discovered forerunners of Marx - Anton Menger, Beatrice Potter, James Connolly, etc. - have had these "discoveries" placed in their hands by Marx.

It was while in Brussels that Marx and Engels joined the Communist Alliance, which in 1847, after changing its constitution, instructed Marx and Engels to draw up a manifesto of its principles.

The result was the world-renowned pamphlet The Communist Manifesto, published early in 1848, and probably the most remarkable and widely-read pamphlet ever printed. Even to-day, seventy years after its first publication, its principles still apply, and some of its tactical methods remain the best for the working class to follow.

Under the storm raised in Belgium by the February (1848) Revolution in France, the Belgian Government expelled Marx, and once more he went to Paris. But he did not stay long. Revolution was spreading in Germany and he returned to Cologne to start the "New Journal of the Rhine." As the Clerical "Journal of the Cross" put it, the new paper attacked everything holy, from the king and administration of the realm down to the policeman. Small wonder that the victorious reactionary government of 1849 suppressed the paper in May of that year.

Marx returned again to Paris but was ordered to leave France, and he came to London, where he stayed till his death.

To obtain a living he wrote articles for various papers. Those he contributed to the New York Tribune on the Revolution in Germany have since been published in book form by his daughter Eleanor, under the title "Revolution and Counter-Revolution"* in the "Social Science Series." Another series of articles dealing with the Crimean War has been published under the title "The Eastern Question." The pamphlets on the Life of Lord Palmerston and the Secret Diplomatic History of the Eighteenth Century are also-compiled from these articles.

Early in 1852 Marx wrote the 18th Brumaire of Louis Napoleon, the most brilliant application of the Materialist Conception of History to a particular set of events that has yet been written. The career and character of Napoleon III. has been mercilessly exposed in this pamphlet, while the analysis and explanation of the events leading up to his seizure of power in 1851 sweep away the cloud of fog and mystery in which the muddled historians of the master class have wrapped that event.

In the same year as Darwin's Origin of Species appeared (1869) Marx published his Critique of Political Economy, that later, modified and expanded, formed the first volume of Capital.

Here again forgotten authors are brought to light and credit given them for their work. The manner in which John Gray completely anticipated Proudhon by about 16 years in his scheme of exchange is a case in point.

In London Marx found both the materials - in the Reading Room of the British Museum - and the social conditions necessary for the production of his master work, Capital.

Of this epoch-making production, that ranks with Darwin's Origin of Species and Morgan's Ancient Society as standing above all the other grand intellectual efforts of the 19th Century, he only lived long enough to see the first volume through the Press. From the mass of materials he had gathered in his studies, some of which had been roughly arranged in the order intended for publication, Engels prepared the second and third volumes for the Press. They have since been published in English by Kerr & Co., Chicago. The first volume was published in 1867.

During 1863-64 Marx took part in the efforts to form an "International Working Men's Association" that was finally launched on the 28th September, 1864. It was to the Congress of this Association in 1865 that he read the paper now published as Value, Price, and Profit. This magnificent propaganda pamphlet is the best simple summary of the fundamentals of Marxian economics yet produced, and is a sample of the clear and direct style Marx could use when not dealing with the more technical parts of the subject.

He drew up the addresses of this body on the Franco-German War, the third of which, entitled Civil War in France, is a magnificent sketch of the rise and fall of the Commune of Paris of 1871 and a scathing indictment of the politicians who surrounded and succeeded Napoleon III. It is also another fine example of the application of the Materialist Conception of History to a particular event.

Marx died on 14th March, 1883, after a long illness, his end undoubtedly being hastened by the death of his wife in 1881 and his favourite daughter, Jenny, in 1882.

Marx's life-work falls into two main divisions. The first is his criticism of political economy and the second is his analysis of social development. His theoretical studies and literary work is more largely concerned with the first division as a glance at the list of his works published in English will show.

This list includes the pamphlets on Wage-Labour and Capital, and Free Trade, and also the Critique of Political Economy, Poverty of Philosophy, Value, Price, and Profit, and the three volumes of Capital.

In addition, though not yet translated into English, Kautsky from Marx's materials (left by Engels) has published some volumes on Theories of Surplus-Value.

Of Capital it is no exaggeration to say that no work ever written on economics has attracted so much attention and attempted criticism. Every professor of political economy and every petty journalist feels bound to criticise, without having troubled to read, Marx's unanswerable exposure of the present system. The two great features of Capital are the solving of the riddle of Value and the demonstration of the appropriation of Surplus-Value. While, as Marx points out, both William Petty and Benjamin Franklin hit upon the true nature of Value, its analysis and working-out was not achieved until Capital appeared. By his discovery of the two-fold character of labour - its abstract and concrete qualities - he was able to prove that values of commodities are determined by the quantity of necessary social labour-time taken to produce (or reproduce) the commodities. The complete and overwhelming truth of this statement is shown among other things by a simple fact. Every improvement in machinery, every increase in "efficiency," whether of the individual employees or in their organisation, has one object in view - to shorten the time taken to produce a given article, and so increase the profits of the masters.

With the enormous masses of wealth always present in modern capitalist society under our eyes, it has practically become impossible to deny the existence of Surplus-Value. The question fiercely debated was, whence this surplus? Marx, in a long, closely-reasoned analysis, has shown that this surplus is provided by the unpaid labour-power of the workers. Put into simple terms, and referring the reader to Capital for its demonstration, this means that the wages of the worker are always less than the value of the articles he produces in the time covered by those wages. This is fully admitted in all business transactions, as no employer will engage a worker unless he can make the engagement "pay"- that is, unless he obtains a profit as a result of employing that worker.

The weirdest theories have been put forward to gloss over this glaring fact, from what may be termed the "discount" theory of Bohm-Bawerk to the "money makes money" nonsense of the yellow Press journalist.

On the subject of social development the list, and size of the works, is much smaller. It includes the Communist Manifesto, the 18th Brumaire, the sketch of the general theory in the Preface to the Critique of Political Economy, Revolution and Counter-Revolution, to some extent The Eastern Question, and the addresses of the International on the Paris Commune.

Marx's son-in-law, the late Paul Lafargue, has given a splendid description of the Materialist Conception of History and how to apply it in one of his finest essays - "Marx's Historical Method." He brings the work of the 18th century Italian philosopher, Giambista Vico, from the shelf where it had lain forgotten, to show how even at that time ideas of the materialist forces in history were beginning to take shape. The following quotations from Lafargue's essay will illustrate this.

"The social world, says Vico, "is undoubtedly the work of man, whence it results that we may and must find its principle nowhere else than in the modifications of human intelligence."

Again he says :

There necessarily exists in the nature of human affairs, a universal mental language, common to all nations, which designs uniformly the substance of the things playing an active part in the social life of men and expresses it with as many modifications as there are different aspects these things can take on. We recognise its existence in proverbs, those maxims of popular wisdom, which are of the same substance in alienations, ancient and modern, although they are expressed in so many different ways.

Perhaps Vico's most striking statement, considering the age in which he lived, is when he says that it is not man's virtues but his vices which are the active forces in history. It is not "disinterestedness, generosity and humanity, but ferocity, avarice and ambition which create and develop societies."

Contemporary with Marx, but working in an entirely different field of science, the great American ethnologist Lewis H. Morgan, independently arrived at similar conclusions to both Vico and Marx.

In his monumental work Ancient Society Morgan says:

It may be remarked finally that the experiences of mankind has run in nearly uniform channels; that human necessities in similar conditions have been the same; and that the operations of the mental principle have been uniform by virtue of the specific identity of the brain of all the races of mankind. (P. 8.)

In the preface to the first volume of Capital Marx says:

"The country that is more developed industrially only shows to the less developed the image of its own future." (P. XVII.)

Vico thought the human forces that developed societies were due to divine intelligence. Morgan held the view that it was the ideas of property that was the chief factor in that development. "It [the idea of property] not only led mankind to overcome the obstacles which delayed civilisation, but to establish political society on the basis of territory and property. A critical knowledge of the evolution of the idea of property would embody, in most respects, the most remarkable portion of the mental history of mankind." (Ancient Society, p. 6.)

But whence the change in the ideas of property? What is the "divine intelligence" behind man's vices? Marx and Engels answer, "the mode of production."

The most unstable factor in society, the one that is continually changing, is the method of producing and distributing the articles needed to satisfy man's requirements. This change having reached a certain stage of development, is hampered by the existing relations of property. A struggle arises between those interested in developing the means of production and those interested in preserving existing property relations. These two sets of individuals form two different classes, and their conflict, based on their economic conditions, forms the CLASS STRUGGLE that has characterised every change in the forms of society.

The individuals carrying on this struggle usually claim, and often imagine, they are fighting for certain ideals as "Freedom of Industry," "Liberty to choose one's employer," but sooner or later the real interests involved are exposed. Marx has given some splendid illustrations of this factor in the 18th Brumaire.

Year by year the development of capitalism is demonstrating the truth of this theory with ever-increasing clearness. Those who for years have sneered at Marx now calmly appropriate his discoveries, and apply them to certain problems, not only without acknowledgment, but with the suggestion that they have made the discovery themselves.

Thus Mr. Bernard Shaw wrote last November some articles for the Daily Express on "How to settle the Irish Question." In the early 1880's Mr. Shaw accepted and defended the theories of Marx till a debate took place with Professor Wicksteed in the old Socialist magazine Today on the theories of Marx v. those of Jevons. Mr. Shaw defended the former. Shortly after the debate Mr. Shaw announced his conversion to the Jevonian theory. Since then he has ever been ready to sneer at Marx and Marxians.

In the articles mentioned Mr. Shaw easily shows the folly of the Sinn Feiners' idea of relying on their own force to obtain freedom from England. But when he comes to explain the vigorous agitation by Ulster for preserving the Union he has to adopt, without the slightest hint that it is not his own original idea, the "out-of-date" method of Marx. In his second article he says:

Ulster should study the Tariff Reform Movement in England before shouting any such ultimatum. That movement was a very simple one. The manufacturing Midlands in England wanted to manufacture everything that was used in England, and demanded a Tariff to keep foreign goods out. The coast towns of England, being maritime carriers, wanted everything used in England manufactured abroad, and everything made in England sent abroad to pay for it. That, and not the principles of Free Trade, which nobody in the country understood or cared about (except Mr. Balfour, who was forced by his party to go back on them) was what defeated the Tariff Reform League. Now Belfast is a coast town and dockyard, as overwhelmingly interested in Free Trade as Portsmouth or Southampton.

Further on in the same article he says:

"Ulster is far more in the grip of modern industrial civilisation than the other provinces" and "is dependent for its materials as for its credit and cash on the international capitalist civilisation of which it is a part. It is this very dependence that makes Ulster cling to the Union and dread separation".

What is this but the explanation of certain simple phenomena by the sneered at Marxian method?

And to show how slender is the solidarity of the classes in Ulster he has to accept the facts of the class struggle so fiercely denied by all good Fabians. For in the same article he says that if Home Rule were passed the Ulster employers, when elected, "would be only too glad to combine in the Irish Parliament with the Catholic farmers of the South to curb the pretensions of the industrial proletariat."

Such are Time's revenges!

Not only with Mr. Shaw, however. The Independent Labour Party have throughout their existence repudiated and attempted to belittle the teachings of Marx. They published with glee Bernstein's book in which he tried to show that Marx was wrong and in need of "Revision." Now, to their chagrin this world-war has driven Bernstein to repudiate his former work and to admit that Marx's teachings were correct. Nor is this all. The I.L.P., while allowing its members in Parliament to vote the War Credits, and some of them to take part in the recruiting campaign, denounced the war as the result of secret diplomacy. The agitation fell as flat as ditch water. Then some of their writers started to use the formerly despised Marxian method and sought the explanation in the economic interests involved. Only by this method have they been able to present a case against the war.

From every quarter the truth is standing forth as to the economic conditions that are at the root of this war, and powerfully demonstrating the soundness of Marx's analysis. French capitalists claim that Germany annexed Alsace-Lorraine for its coal and iron, but also admit that this is the reason they want these provinces "restored." England upon declaring war at once started to take control of the German Colonies and the road to the East through Mesopotamia. When Japan started to enter Siberia the Manchester Guardian admitted that her action was exactly the same as Germany's in Western Russia—forcible annexation for commercial purposes. And, as pointed out previously in the Socialist Standard, America only entered officially into the war when her economic interests began to be endangered.

When this military carnage has ceased the capitalist class will combine to a greater extent than before. In many canes the "national" boundaries will be ignored and the capitalists of groups of nations will combine to control whole series of industries in the world-competition. The elimination of competition between those forming these combinations will mean a more economical and efficient management of those industries, which in simple language means that fewer workers will be required to manage the same amount of wealth production and distribution as before, resulting in an increase in the number of unemployed.

To ensure a smooth working of these huge complex organisations it will be necessary to persuade the workers to increase their "efficiency" by further enslaving themselves, under the cloak of "taking part in the management." With this object the Whitley Committee was appointed, and its recommendation of "Joint Councils of Employers and Employed" is one more added to the long list of devices introduced to swindle the workers into assisting to make worse their conditions of existence.

Of much greater importance is the obtaining of power to safeguard and expand these enlarged economic interests. Whitley Committees will be useless here, and the only road to this power is the possession of the political machinery that controls the armed forces, powers of taxation, and of the enactment of laws.

In many cases the capitalist may not trouble to seek election himself. He can send his agents, as his paid servants, to carry out his instructions. This has the additional advantage that if opposition is aroused by any of their actions, he can leave his agent to be the public scapegoat (and sometimes remove him - to a better paid office) and so divert attention from the real enemy.The number of "salaried" wage-slaves is steadily increasing and these people are finding a growing difficulty in obtaining employment. Hence the competition among them for the political jobs of the master class. Lawyers and journalists swarm into the political organisations of the masters - the Tory and Liberal Associations, with their subsidiary bodies the Tariff Reform and Free Trade Leagues, etc. - in their hunt after jobs. Still there is not room for all here, and a large number are left to seek a footing elsewhere. To these the Labour Party have now officially opened their doors, so the future will see an increased competition of office and job hunters in the political field. This will result in further confusing the minds of the uninstructed workers, particularly as these candidates will call themselves "democratic," "labour," or even "Socialist."

When returned to Parliament under these conditions they will obey the orders of the master class, just as the Labour Party have done before and during the war.

But the more efficient and economical production of wealth will mean an increasing insecurity of life with the consequent greater misery of the mass of the workers. The latter will be forced by these very facts to study more and more the economic and historical questions before them. As they do this they will realise in ever-growing numbers the correctness of the teachings of Marx, Morgan, and Engels, and will organise to take control of political power for the purpose of abolishing capitalism.

Only by this method can they obtain control and ownership of the means of production and organise them with the object of satisfying the needs and wishes of society under the best conditions available within their knowledge and with the result of making happiness and leisure the portion of every member of society. To this end Marx devoted the best years of his life, and the fruits of his labours are a legacy of inestimable value to the working class.

Jack Fitzgerald

More of the author's writings can be accessed in the Jack Fitzgerald Archive at the Marxist Internet Archive.

Goodbye To Bambi (2007)

From the SPGB blog, Socialism Or Your Money Back

Enfeebled by their thrashing at the polls in 1997, the most damaging comment the Tories could think of about Tony Blair was to liken him to a political Bambi - a young, doe-eyed innocent, deficient in any ambition or ability to control the wild beasts in his party and their scheming to bring back Clause Four. Those who were closer to the New Labour heart knew differently. Even before all the results were in on that night in May 1997, an iron discipline was being imposed on Bambi's party. Jonathan Freedland, a Guardian reporter and a Labour supporter, was unable to celebrate Blair's victory because he was brusquely ejected from the Hall as he was in a "forbidden zone" there. Three years later another Guardian writer, Andrew Rawnsley, recalled the situation: "Power within the party had been concentrated at the top. Discipline was everything. Dissenters were ruthlessly smothered and marginalized".

According to Blair (and to most other politicians) "The only purpose of being in politics is to make things happen" - which leads to the questions of what are the "things" and whether it is worthwhile, in terms of human interests, that they should "happen". Naturally, Blair is quite clear in the matter. In his farewell speech to the party members in his Sedgefield constituency he congratulated himself on what he had made happen during his ten years in Number Ten: "As for my own leadership, throughout these ten years . . . one thing was clear to me - without the Labour Party allowing me to lead it, nothing could ever have been done" and in more detail: ". . . more jobs, fewer unemployed, better health and education results, lower crime, and economic growth in every quarter . . . The British are special, the world knows it, in our innermost thoughts we know it . . . This is the greatest nation on Earth".

These extravagant claims are based on a number of minor changes in working class conditions which some people - Labour politicians - may choose to interpret as improvements but which, compared to the everyday grinding problems of capitalism, are insignificant. For example we were invited to vote for Blair's party because they legislated for an increase in paid maternity leave from 18 to 29 weeks; because there has been a rise in rate of employment of lone parents, so that the poverty of people with children may be just a little less severe; because during Blair's ten years at the helm recorded crime fell, after the passage of no less than 53 criminal justice bills, some of which have created a crisis of overcrowding in the prison service while alarmingly eroding some civil liberties.

At the same time the number of children officially assessed as living in relative poverty rose by 100,000 to 2.8 million, making nonsense of Labour's stated objective of cutting this figure by half by 2010. Then there has been the matter of governmental sleaze, in which Labour assured us they would be a refreshing improvement after the Tories but which began with the Bernie Ecclestone affair and which was exposed in the recent scandal of the award of honours to anyone rich enough to "lend" the party large sums of money. And of course there has been Iraq, which deserves to be the event by which Blair is best remembered - the war which he secretly agreed with Bush to support, which he attempted to justify with lies about the existence of powerful weapons and which has now plunged that hapless country into a chaos of murder and destruction.

Blair began his time as prime minister with high hopes from an electorate deceived by the Labour Party's propaganda machine that here was a new, fresh leader to usher us into a secure future. It took some years to expose him as a typically ruthless and manipulative, if highly skilled, practitioner of the cynical art of capitalism's politics. He will not be missed.

Ivan