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Loss of Dignity

From the Socialist Courier blog:

Spare a tear for the plight of this luckless billionaire:

"One of the world's richest men is selling his £40 million house in London's "Billionaires' Row" after Barratt Homes was granted permission to build flats next door. Lakshmi Mittal led the opposition of his well-heeled neighbours when the house builder applied for permission to put up an apartment block in The Bishops Avenue, Hampstead. However, the plans were approved and now, even though the luxury flats are being marketed at between £4 million and £11 million each, Mr Mittal has put his stately pile, Summer Palace, on the market." (Daily Telegraph, 29 February)

Imagine the indignity of having to share your street with people who can only afford a £4 million house. It doesn't bear thinking about. Our sympathy goes out to the poor ill-treated man.

Richard Donnelly

Letter: What's capitalism, again? (2001)

Letter to the Editor from the September 2001 issue of Socialist Standard

What's capitalism, again?

Dear Editors,

In "What is Capitalism?" (Socialist Standard, December 2000), you claimed it would be impossible to support the world's present population in an economy of self-employed small producers. You warned of the danger that anti-capitalists would be diverted by the "small is beautiful" strand in Green and anarchist thinking.

This is not so obvious as you seem to think. The present degree of concentration of capital is not the result of some inherent dynamic in the development of technology, but of state subsidies to gigantism. There is a whole literature by Walter Adams, Barry Stein, F.M. Scherer, etc on economy of scale, showing that even heavy manufacturing reaches peak efficiency at relatively low levels of production—in the case of autos, 3 percent of the US market. Kirkpatrick Sale argued that most light consumer goods could be produced locally in factories of fewer than fifty workers.

Even such a decentralized condition is not the economy of self-employed artisans you wrote of. But a decentralized, market industrial economy does not automatically imply capitalism. I agree with the mutualist Benjamin Tucker that the extraction of a surplus from labour (i.e., capitalism) is impossible without state intervention to guarantee privilege and subsidize accumulation. Without the legal money monopoly to keep capital scarce and expensive, and thereby maintain labor discipline, wages would rise to value added and bargaining leverage would increase astronomically.

As a Wobbly I firmly support direct action to achieve workers' control of large employers. But in the small business sector, it is better simply to dismantle the state system of privilege and let a real free market lead to de facto worker ownership. And market relations between worker-controlled firms, including large industrial plants, avoids the iron law of oligarchy. The tendency of federated planning bodies to end up rubber-stamping the decisions of a permanent technical staff is illustrated in LeGuin's The Dispossessed.

Small-scale, organic farming may be more labor intensive than mechanised agriculture, but it can be much more efficient in output per acre. Output could be drastically increased by intensively rebuilding the soil with leguminous cover crops, composting all wastes, and using cisterns and rain traps to conserve water for irrigation. The Third World has plenty of labor available. The main reason for hunger is the fact that hundreds of millions of peasants in the past generation have been evicted for cash crop agriculture. The solution is not the "Green Revolution", but getting rid of generals, landlords, and the West's fraternal assistance to death squads.

Finally, keep up the good work. Free market/mutualist types in the libertarian socialist community may disagree with you on many things, but we are also eager to cooperate on the things we have in common: eliminating subsidy and privilege, ending transnational corporate imperialism, and dismantling the jackboot police state.

Kevin A. Carson , Lovell, Arizona, USA.

Reply:

You defend the notion that a market economy need not necessarily be capitalist. The article itself already conceded this point in connection with what Marx called "simple commodity production", but questioned whether such an economy could be established today, indeed whether it had ever existed anywhere, suggesting that "the nearest that may have come to it would have been in some of the early colonial settlements in North America". It is therefore interesting that you should call in to defend such an economy Benjamin Tucker (born in Massachusetts in 1854) whose mentor was Josiah Warren (born in Massachusetts in 1798).

Basically, the individualist anarchist Tucker idealised the economy of the early colonial settlements in North America and advocated a return to this ideal. According to him, if the state were abolished and a complete laissez-faire market economy allowed to operate, competition would ensure that all goods sold at their labour-time cost and that the rate of interest fell to zero, thus eliminating profit and interest. He assumed that the competing units would be self-employed farmers and artisans or co-operatives formed by them. You want to introduce "worker-controlled firms, including large industrial plants", as another competing unit.

We agree that capitalism could not exist without a state but argue that capitalist exploitation occurs as a result of the normal operation of market forces. Profit does not arise from the state intervening to allow capitalist firms to sell their goods above their labour-time value, but from capitalist firms employing wage labour selling goods at this value but only having to pay their employees the value of their labour-power, which is less being determined by its cost of production. So, to eliminate profit, such an economy would not have to involve anyone working for wages. We must also doubt whether in such an economy the rate of interest really would fall to zero as that would assume that lenders could be found prepared to lend their money at zero interest.

It is because capitalism is based on wage-labour that we talked about a theoretical non-capitalist market economy having to be based on self-employed farmers and artisans. It would also have to be an economy based on handicraft rather than industrial production. The reason for this is that where there is industrial production the work involved in turning the raw materials into a finished product is no longer individual, but collective. You yourself recognise this by introducing worker-controlled industrial firms into Tucker's rather smaller-scale economy (so, incidentally, conceding our initial point that an economy of small-scale independent producers could not provide enough to maintain the world's present population). But this would bring some inevitable consequences.

First, since industrial production can produce goods at a lower cost per unit than handicraft production, with complete laissez-faire, competition would eliminate most of the independent, self-employed artisans. In other words, industry would begin to be concentrated into the hands of the firms employing industrial methods of production.

Second, it wouldn't stop here. With complete laissez-faire, competition would result in those firms which employed the most productive machinery winning out against those employing out of date and so less productive machinery. So, there would be a tendency towards a yet greater concentration of industry into the hands of the big firms, which would get bigger even if still at this stage worker-controlled co-operatives.

But what about the displaced independent artisans and the members of bankrupt workers' co-operatives? How would they get a living? Would they not be obliged to sell their skills to the worker-controlled firms that had won out in the battle of competition? But if wage labour appeared then so would profits and exploitation even if these profits would accrue to the members of the worker-controlled firms. Some might be prepared to share these with their new employees, but the continuing competitive pressures would oblige them to give priority to investing them in new, more productive machinery so as to be able to stay in business and not go bankrupt themselves. In fact, this has been the long-run tendency with such firms under capitalism today, as with the kibbutzim in Israel and the various Mennonite enterprises in North and South America. They have begun to employ wage labour and orient their production towards making profits and accumulating these as new capital.

In short, even if it were possible to go back to the sort of economy Benjamin Tucker envisaged, the tendency with laissez-faire would be for capitalism to develop again. This is fact is openly recognised by his political cousins, the so-called "anarcho-capitalists", who see this a good thing rather than a bad one.

Having said this, we can accept that there has been a degree of over-centralisation under capitalism and that a socialist society could sensibly introduce some decentralisation, particularly of food production, but this would have to be on the basis of the common ownership and democratic control of productive resources and the consequent complete disappearance of the market, money, banks and the rest of the paraphernalia of buying and selling. Only on this basis can people democratically decide the degree of centralisation and decentralisation that corresponds to their preferences freed from the pressures of economic competition and market forces—Editors.

Famine or Feast? Britain alone wastes 20 million tons of food a year

From the Class Warfare blog:

Crikes, the story would have passed me by if Alan’s blog hadn’t alerted me to it. I’m getting slack in my old age. Hot on the heels of two earlier postings (here and here) on world food shortages and how the UN is begging for $500 million to help provide food assistance to the world’s starving millions, comes news that Britain is throwing away half of all the food produced on farms, according to the starkest estimate yet of the amount of edible produce we produce.

The Independent reports:

“About 20m tons of food is thrown out each year: equivalent to half of the food import needs for the whole of Africa. Some 16m tons of this is wasted in homes, shops, restaurants, hotels and food manufacturing. Much of the rest is thought to be destroyed between the farm field and the shop shelf.”

The cost of the waste is put at a staggetring £20 billion ($40 billion) and eighty times the amount that the UN is asking for to feed the starving largely in Africa and Asia.

Forty-four per-cent of the population of Burundi is starving – that’s bout 4 million people. The food thrown away in the UK last year would meet the equivalent of Burundi's shortages more than 40 times over.

Lord Haskins of Skidby, a former government adviser on rural affairs and chairman of Northern Foods has urged governments to press their citizens to help "avoid disaster by dramatically reducing the ... unacceptable levels of food waste, which are a shameful feature of most modern consumer societies". He called recent controversy over supermarkets' free distribution of plastic bags "a red herring". He argued, "If consumers ate a bit less and wasted a bit less you'd help to solve the problem. If the world was vegetarian then you'd solve the problem completely." One-third of wheat grown globally is fed to livestock reared to end up on the dinner table.

Tony Lowe, the chief executive of FareShare, the national food charity, said: "Unfortunately, we live in a world where many people do not have access to food in general, and good-quality food specifically, while at the same time millions of tons of perfectly fine food are being disposed of. In the UK alone, the extent of food poverty is staggering, as millions of people with low or no income find it harder to access affordable, nutritious food."

If this is the amount of food wasted in tiny Britain, then it begs the question just how much is thrown away each year globally. Whilst we have over 800 million on this planet chronically malnourished, the simple truth must be that the earth produces enough food to make the planet morbidly obese. As ever, the profit motive kicks in and whether you are obese or emaciated depends, as ever, on your purchasing power.

Meanwhile, the Independent provides a list of ten tips to help cut the waste mountain. Note this is not ten tips to stop global hunger, like abolishing capitalism, freeing production from the artificial constraints of profit and establishing a global system of free access to the necessaries of life! While critical of the current global food “crisis” the Independent simply accepts capitalism is here to stay and suggests individuals change their personal habits. The master class gets off ‘scot free’ again!

John Bissett

Editorial: The Disarming Truth (2008)

Editorial from the March 2008 issue of the Socialist Standard.

Fifty years ago this Easter CND was effectively born from demonstrations held outside the Atomic Weapons Research Establishment at Aldermaston, Twenty-five years on from Easter 1958, the Campaign for Nuclear Disarmament (and similar movements) had risen again, able to mobilise millions onto the streets of capital cities throughout Western Europe in response to a return to cold war US/USSR rhetoric.

During the 50 years of CND's history some things have changed: Trident has replaced Polaris and Faslane submarine base has replaced Greenham Common cruise missile base as the focus for protest. Meanwhile the global nuclear stockpile is now double what it was in 1958, and the number of nuclear states has also more than doubled.

And it wasn't just the badges with the distinctive CND logo that were recycled from the 60s to the 80s: the same kilogrammes of uranium or plutonium from scrapped and ageing warheads have been thoughtfully reused ten years later in the next generation of killing technology.

Despite the laudable aims then – as embodied in their title – the reality of CND is that it has been a front: a cover for the little-known CPPTSRNP (Campaign for Possible Partial, Temporary and Reversible Slowing of the Rate of Nuclear Proliferation). A bit more accurate, if a little clumsy when put on a banner, and hardly a good rallying cry for supporters of course. But CND has, by whatever measure you wish to use, failed. Not through lack of effort of course – no other issue dominated politics throughout the 60s, 70s and 80s.

The parties of the World Socialist Movement are unique in opposing all war – not just certain types of war or certain situations. This is based on a recognition that the interests of the working women and men who usually make up the cannon-fodder and collateral damage of war can never be aligned with states and governments. We oppose the monopoly that the global owning class have over ownership of the Earth's productive resources that are the usual spoils of armed conflict. We see little value therefore in pleading with our rulers to continue their capitalist battles, but to request that they use only this or that weapon.

In the Socialist Party we were sometimes told by CND supporters that there just wasn't enough time to work for socialism: there were only weeks or months left to stop nuclear annihilation and that objective had to be the priority. Thankfully that prediction proved to not be the case. But it is a common objection to the case for socialism, that there is some immediate more pressing campaign that – with just one final shove – will be won, and only then can we start to look to changing the basis of society.

The history of movements to reform one part or another of capitalism has been a history of failure in the main part. We can choose to tinker at the margins or to get to grips with the problem. We can complain about the symptoms, plead with our rulers, or make the decision to address the cause. The history of CND should give us no confidence that reformism is fit for purpose – certainly not with regard to trying to do away with weapons.

We predict that unless the war machine that is capitalism is politically challenged by a majority – armed with nothing more or less than an understanding of how it works – then in another 50 years we will still have wars raging round the globe, with ever more sophisticated weaponry. And of course, we will still have CND. The choice is between a world to win and a world to lose.

Weekly Bulletin of The Socialist Party of Great Britain (36)

Dear Friends,

Welcome to the 36th of our weekly bulletins to keep you informed of changes at Socialist Party of Great Britain@MySpace.

We now have 1194 friends!

Recent blogs:

Greedy bastards

The politics of joining

The workfare state: enforcing the wages system

This week's top quote:

"Journalism is one of the devices whereby industrial autocracy keeps its control over political democracy; it is the day-by-day, between-elections propaganda, whereby the minds of the people are kept in a state of acquiescence, so that when the crisis of an election comes, they go to the polls and cast their ballots for either one of the two candidates of their exploiters." Upton Sinclair, The Brass Check, 1919.

Continuing luck with your MySpace adventures!

Robert and Piers

Socialist Party of Great Britain

Guns and Toys (2008)

Book Review from the March 2008 issue of the Socialist Standard

The Real Toy Story. By Eric Clark. Black Swan. £8.99.

It is probably not very surprising to learn that the toy industry is very competitive, is driven by marketing considerations and is threatened by children’s growing interest in computers. However, Eric Clark does add some interesting further considerations.

The US toy and doll industry is a $22 billion business and is by far the world’s largest. Two big manufacturing companies (Mattel and Hasbro) and three big retailers dominate the industry, independent manufacturers and toyshops having mostly gone bankrupt or been taken over. The big retailers include Toys R Us and Wal-Mart, the supermarket chain that sells masses of toys as a way of getting kids and their parents inside the shops. Manufacturers are desperate for Toys R Us to survive, since without it Wal-Mart would be so powerful it would drive down even further the prices it paid to the toy companies.

Toys and dolls are also used to entice families into fast-food restaurants; McDonald’s is now the world’s biggest distributor of toys. Girls are apparently less keen on fast food than boys, hence the emphasis on toys aimed at girls being given out with meals for kids.

Toys are relatively resistant to ups and downs in the economy, as parents are reluctant to cut back on buying for their children. A rising divorce rate helps sales too, as both parents will be buying separately. Yet the toy industry has one great fear: KGOY, kids getting older younger and so losing interest in toys. This has been the case, for instance, with Barbie, the doll that now falls out of favour by the age of six or seven. A rival, Bratz, is aimed at pre-teens and features ever-skimpier clothes. As Clark says, this ‘is all part of the sexualizing of younger target groups for marketing reasons’.

Games are mostly made in the US and Europe, since their manufacture is highly automated. But toy production overwhelmingly takes place in China. This is partly because labour power there is cheap, of course: in the case of one electric toy that retailed in the US at $45, just 81 cents were paid in direct labour costs. But it also means that the suppliers, not the US-based toy companies, have to undertake the investment in factories and equipment and bear the risk of idle capacity at quiet periods. All this has backfired recently, however, with reports of toys made in China being dangerous and having to be removed from retail shelves.

Clark also observes that toys nowadays tend to ‘do everything’ and leave less and less to the child’s imagination and creativity. Under capitalism the innocence of childhood takes second place to the demands of marketing and profit-making.

Paul Bennett

Can the media be made democratic? (2008)

From the March 2008 issue of the Socialist Standard

That there was once a press free from commercial or governmental influence is a myth.

Since the early twentieth century American journalists have been fascinated by the uneasy relationship between democracy and a media industry that has grown immensely powerful and profitable. The opinion that the democratic process has been undermined – epitomised by declining electoral turnout – by an industry more concerned with increasing corporate profits than the meaningful dissemination of information has repeatedly led to demands for media reform.

In the first part of the twentieth century the American writer and journalist Upton Sinclair drew attention to the corrosive influence of advertising that led newspapers to adapt content to suit powerful sponsors and encourage editorial self-censorship. Sinclair's book The Brass Check (1919) was a scathing attack on a monopolistic press, in which he said that commercial journalism had become "a class institution serving the rich and spurning the poor," with the task of "hoodwinking of the public and the plunder of labour". Brought in some years after the publication of Sinclair's book, the Federal Communication Act of 1934 was widely seen as the first real attempt to curb media monopoly and reinvigorate the supposedly democratic values embodied in the American Constitution through "public interest, convenience and necessity." But these and later reforms failed to consider one possibility: What would happen if the government ever saw public information as secondary to free market economics? What would happen if the government actually joined forces with the media to communicate a common ideology that devalued "democracy"?

Media deregulation
According to Bill Moyers, one of America's best known and respected post-war journalists, this is exactly what happened under the banner of media deregulation. Beginning with Ronald Reagan, deregulation sowed the seeds for a consolidation that eliminated much of the independent media and prompted editorial policy to downgrade the importance of news. But the crowning achievement in the demotion of meaningful news came later with the 1996 Telecommunications Act, which was passed with the support of both political parties. This legislation allowed communications conglomerates and advertisers to join forces to dismantle competition safeguards and devise "new ways of selling things to more people" across the full array of digital and conventional media. Within the media corporations the strategy eliminated remaining divisions between editorial and marketing functions to "create a hybrid known to the new-media hucksters as 'branded entertainment.'" (Bill Moyers, Journalism and Democracy, Alternative Radio, 8 November 2003).

Moyers' assessment of the American newspaper industry is equally gloomy. Here, according to a study by the Consumers Federation of America, two-thirds of today's newspaper markets are monopolies. Not satisfied with this stranglehold, the major newspaper chains have combined with the trade group representing almost all of the broadcasting stations to lobby for further autonomy to extend cross-ownership of media, claiming that this will strengthen local journalism. Moyers notes that in typical fashion none of the organisations involved felt it necessary to report this news, remarking, "they rarely report on how they themselves are using their power to further their own interests and power as big business, including their influence over the political process". He draws further evidence from the book, Leaving Readers Behind: The Age of Corporate Newspapering, which concludes that the "newspaper industry is in the middle of the most momentous change in its three hundred year history – a change that is diminishing the amount of real news available to the consumer".

Looking back over American history, Moyers says that during the War of Independence freedom and freedom of communication were the "birth twins in the future United States", but that today freedom of communication has become an obstacle to corporate profits and has been abandoned. He says that the media that once championed democracy now works hand in glove with government to intentionally undermine democratic values. He identifies certain developments that have ambushed democracy. These include censorship by omission, government refusal to disclose or debate in public, and the overarching power of media giants that "exalt commercial values at the expense of democratic values" to produce "a major shrinkage of the crucial information that thinking people can act upon".

But according to Moyers perhaps the most repugnant development is the rise of a "quasi-official partisan press ideologically linked to an authoritarian administration that in turn is the ally and agent of the most powerful interests in the world". This convergence, he says, "dominates the marketplace of political ideas" promoting the "religious, partisan and corporate right" to engage "sectarian, economic and political forces that aim to transform the egalitarian and democratic ideals embodied in our founding documents". He goes on to provide examples where investigative newsgathering and scrutiny over government, police and the courts has been abandoned to cut costs, avoid institutional embarrassment and maintain this coalition of vested interests. In the absence of a strong opposition party to challenge this hegemony, the task of defending democracy, he says, falls to a reformed media.

The recurrent theme that runs throughout Moyers' account of the American media is a yearning back to a romanticised "Golden Age", when a free and independent press kept its subscribers fully informed with important news that enabled them to act. He points to the newspapers at the time of the American War of Independence and in particular to Tom Paine's pamphlet Common Sense that helped mobilise opposition to the British. Moyers says that as a journalist Paine practised a principle in need of restoration: "an unwavering concentration to reach ordinary people with the message that they mattered and could stand up for themselves." But was this really a "Golden Age" of democracy or was it, as Sinclair believed, just another instance of the press propagating a class interest under the guise of democracy? Put a different way, has a press free from political or commercial influence ever existed?

Romanticised past
For many, a belief in the abstract democratic ideal is closely linked to the myths surrounding the origin of the Constitution and the founding of America as a separate country. But far from being a revolutionary event that encouraged a genuine development of democratic values, the War of Independence was a strictly conservative affair. The colonial rebellion was not the work of enraged peasants but of landed gentlemen, who argued their case on the principles of the British constitution by demanding free assembly, trial by jury, and no taxation without representation. Despite pretensions of being "enlightened" – sweeping aside monarchy, aristocracy and the established church – the new republic was never designed to be anything other than an oligarchic state. The political institutions and Constitution mirrored instincts of conservatism and constructed an array of checks and balances motivated by paranoia, suspicion of central government power, and religion that laid the foundation for laissez faire economics.

The expulsion of the British eliminated the constraints of the feudal social order substituting in its place the abstract principles that "all men are created equal" and that power is derived from "the will of the people". The desire to protect and then extend private property rights sanctified by religious superstition led to a type of liberty intended to allow the pursuit of individual aims and wealth unconstrained by government interference. To those who took up the reins of power, government was to be judged not by its ability to promote prosperity but by its capacity to leave people alone to pursue private ends. The principle that personal opportunity should be maximised also struck a chord with Puritanism that saw the acquisition of money as the just result of hard work and "the Lord's blessing".

This moderate civic liberty was deemed more important than any tendency towards democracy, and the architects of the Declaration of Independence – the land and property owners – were quick to construct a system of government based on the division of power that would guard against the "excesses of democracy". They adopted a definition of "the people" which excluded women, non-landowners and slaves.

While it is undoubtedly true that writers like Tom Paine were influential in pushing the colonial revolt further than originally intended, it is also clear that the real beneficiaries of the break with Britain were the landowners and wealthy traders who were able to expand their own wealth without interference. Although Paine's call to arms, based on abstractions and ideals, appealed to the ordinary person, the benefits accrued were material and went to the wealthy.

The "democracy" practised today in America is usually held up as the ultimate symbol of "liberty". But from its outset this system was not envisaged as a condition in which individuals would be kept informed and use the knowledge acquired in the decision making process. On the contrary, this type of "democracy" was constructed as the institutional means to exclude the people from this arena by limiting involvement to the periodic election of someone, normally submissive to a political party, who would make decisions for them.

In capitalist society the media has always had a role to play in the promotion in this kind of vision. The production of a successful newspaper, for example, has always meant that journalistic integrity and editorial objectiveness have been subordinate to the institutional requirement of production for profit. From the moment that newspaper became a commodity and subject to advertising patronage and market forces, the genuine dissemination of information was always going to be the first casualty.

Prevailing ideas
So the media, in America as elsewhere, has a vested interest in driving out all but the most benign opinions and instilling a set of values and a code of behaviour that integrate people into class society. But this does not mean that the media are necessarily part of some conspiracy. While the media's role is to circulate information presented in the context of society's prevailing ideas, which have a strong influence over the way people think, this does not mean that the media originate these ideas. In general, the ideas presented by the media are rooted in the social milieu and are traceable, in the main, to the material conditions and the economic relations of society. The class that controls society's economic structure shapes the institutions that arise in order to manage the economic conditions in its own interests and perpetuate its ascendancy over society. As well as its control over society's coercive powers and the means by which the wage and salary earners live, this class also exercises persuasive powers, based on legal rights, traditions, customs and, as in America, historical myth that works its way into the consciousness of the working class. In a society divided by class, based on economic interests, the prevailing ideas are therefore a reflection of the needs and aspirations of the dominant class, which explains why many members of the working class often think and act in ways that are in contradiction to their real interests. The media therefore speaks not just for itself but for the whole of the capitalist class.

There are two reasons why Moyers' belief that a reformed media can resurrect an abstract vision of "democracy" conjured up from a romanticised image of America's past does not stand up to scrutiny. Firstly, the type of democracy he seems to want has never really existed, and secondly he fails to appreciate that capitalism and genuine democracy can never co-exist. Moyers does not criticise the economic system that compels the media to act in the way it does and does not see that in this system the media cannot operate in any other way – as if in a vacuum, uninfluenced by market forces. Media reform, which tinkers with the detail but leaves the underlying causes firmly entrenched, is, it could even be argued, actually dangerous because it reinforces the belief that capitalism can be made to work in the interests of the working class, when the opposite is patently the case.

Steve Trott

                 

Marx and the BBC (2008)

Book Review from the March 2008 issue of the Socialist Standard

A Socialist Critique of the BBC, Albert Einstein, Amartya Sen and Muhammed Yunus. By Binay Sarkar, Avenel Press, 2007

Don't be put off by the title; when you read it – as you should – it all makes sense. In 1999 Karl Marx was voted the “Greatest Thinker of the Millennium” in a BBC online poll. Then in 2005 he was voted the “Greatest Philosopher” in a BBC poll. And yet the BBC has always had a problem in dealing with such a great thinker and philosopher, perhaps because he didn't win a Nobel Prize. In the philosopher contest they invited Francis Wheen on to a BBC radio programme to explain Marx's theories but he said they were a form of economic determinism, in that economic relations determined all other features of society, including ideas.

It's a popular misinterpretation, one which Albert Einstein didn't repeat when he declared to the world that he was a socialist in an article entitled Why Socialism? in 1949. Einstein's analysis of capitalism is still broadly acceptable today even if his conception of socialism is not, being essentially a form of state capitalism. Amartya Sen, a professional economist, also has a state capitalist view of socialism but his understanding of present-day capitalism looks muddled when compared with the analysis of the Nobel Prize-winning physicist Einstein.

Sen won the 1998 “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel” (not to be confused with the Nobel Prize, which is awarded by the Nobel Foundation) for his contribution to “welfare economics.” Sen correctly saw that famines were caused by poverty and not an inability to feed starving people. However, he put forward a set of “market entitlements” which were meant to combat poverty; but as this left the class monopoly of the means of life untouched it should not be surprising that this could not reduce poverty or famines.

Binay Sarkar exposes these and other reformist illusions, along with Muhammed Yunus's plans for “Banking for Peace.” Yunus was awarded the 2006 “Nobel Peace Prize” (given by the Norwegian parliament, not the Nobel Foundation) for his “commitment to the Grameen cause.” This envisaged fighting poverty by lending money, mainly to women, to facilitate self-employment projects and promote women empowerment. But as Adam Buick points out in his Introduction to this book, banking “is an integral part of the capitalist system of production for profit which is the cause of modern wars.” Despite the excessive use of quotations, this book deserves to be in every socialist's collection.

Lew Higgins

Cooking the Books: Who would work for nothing? (2008)

The Cooking the Books column from the March 2008 issue of the Socialist Standard

"That would never work! A typical response, I imagine, to the description of a society where people work because they want to, on a voluntary basis". So began the lead article in last month's Socialist Standard.

The article was about the transformation which work would undergo in a society where it was no longer a source of income for workers and a source of profit for employers, but a means of producing useful things and providing needed services to improve the quality of our lives. But even under capitalism, these critics might be surprised to learn, many people already perform voluntary work.

According to nfpSynergy, a research group for charities, almost 19 percent of people do unpaid voluntary work in Britain (London Times, 21 January). This – nearly 1 out of every 5 people – is fairly consistent across all age groups. People volunteer for all sorts of jobs: driving people to and from hospital appointments, helping out in hospital shops, looking after people just out of hospital, teaching school kids to read or do maths, teaching English to immigrants, mentoring new parents, serving in charity shops.

If the critics of socialism were right in their view that it is human nature to be lazy and that nobody would work unless compelled to by economic necessity, this would not happen. Most volunteers under capitalism will be doing so because they want to do something useful and help other people. But even if their motivation was to overcome boredom or to meet and be with other people, that would still be a practical refutation of the view that people are naturally lazy. The reasons why people work, even for an employer, are much more complex than the simplistic assumption that that it's just for the money.

In fact, the government has adopted a policy of actively encouraging "volunteering" as it is called, as a means of saving money on providing certain services. In 2001 Gordon Brown, then the Chancellor of the Exchequer, launched an initiative to encourage more over-55s to volunteer. As it happens, according to nfpSynergy, this proved to be a bit of a flop. But 16 percent of the 55-64 age group – nearly 1 in 6 – volunteering in 2007 is still fairly impressive. It is certainly enough to refute the view that, if the whip of economic deprivation was removed, nobody would do any work.

But capitalism distorts everything, even the readiness of people to work for no monetary reward. A whole paid profession has grown up – for which an organisation like nfpSynergy provides reports – of people employed to motivate and organise volunteers. And a large proportion of volunteers are engaged in fundraising for charities, a pretty useless activity in itself only necessary under capitalism even if done on an unpaid basis.

The widespread existence of volunteering shows that people are prepared to work for other reasons than individual economic necessity. Of course, as in any form of human society, in socialist society too arrangements will have to be made to provide what its members need to live. That will still be a necessity, but that does not mean that these arrangements cannot be based on people volunteering to work, for all sorts of reasons (pleasure, social recognition, wish to do something useful, social contact, even a sense of duty). Socialism could work without economic coercion.

Material World: Still in Chains: South Africa After Apartheid (2008)

From the March 2008 issue of the Socialist Standard

"They never freed us. They only took the chain from around our neck and put it on our ankles." Anti-apartheid activist Rassool Snyman to Naomi Klein.

The fight against the system of racial segregation and white supremacy called apartheid ("apartness" in Afrikaans) was one of the great liberal and left-wing causes of my generation. It was a fight not only for political democracy in South Africa but also for socio-economic reform.The Freedom Charter, adopted by the African National Congress in 1955 (www.anc.org.za), called for "restoring national wealth to the people" (understood as nationalization of the mines, banks and "monopoly industry"), "re-dividing the land among those who work it to banish famine and land hunger," improved pay and working conditions, free healthcare, universal literacy, and decent housing for all.

Apartheid as a political and legal system was dismantled in the early 1990s. South Africa's capitalists did not on the whole object. Apartheid had brought them immense profits from the exploitation of a cheap captive labour force. But it had its drawbacks. By denying training and advancement to a large majority of the workforce, it created a growing shortage of skilled labour. Capitalists are often willing to accept a measure of social change, provided that they can set its limits.

Little change
Although apartheid is gone, economically South Africa is still one of the most unequal countries in the world. Almost all the land, mines and industry remain in the same (mostly white) hands. Almost half the population lives below subsistence level. Unemployment is widespread; children scavenge on dumps and landfill sites from sunrise to sunset seven days a week. Life expectancy is falling (a drop of 13 years since 1990) as AIDS, drug-resistant TB and other diseases spread.

Even segregation still exists in practice. The wealthy take shelter in "gated communities" from the violence pervading the shantytowns. As the wealthy are no longer exclusively but only predominantly white, the proper name for this is class rather than race segregation.

True, efforts have been made to improve living conditions. Close to two million new homes have been built. (Whether they count as "decent housing" is another matter.) Water, telephone and electricity networks have been expanded. But while millions were rehoused, millions were also evicted for rent arrears.

Nine million people were connected to the water supply, but during the same period ten million were disconnected as the price rose out of their reach.

Caught in a web
How did the main reform goals of the Freedom Charter come to be abandoned? Political journalist William Mervin Gumede tells the story in his book Thabo Mbeki and the Battle for the Soul of the ANC (Cape Town: Zebra Press 2005).

While political negotiations, conducted in the glare of publicity, moved the ANC toward government office, parallel and almost unpublicized economic negotiations, led on the ANC side by Thabo Mbeki (now president), ensured that when the ANC did take office it would be unable to act against white business interests. A new clause of the constitution made all private property sacrosanct. Power over economic policy was ceded to an "autonomous" central bank and international financial institutions.

"The ANC found itself caught in a web made of arcane rules and regulations… As the web descended on the country only a few people even noticed it was there, but when the new government … tried to give its voters the tangible benefits they expected the strands of the web tightened and [it] discovered that its powers were tightly bound"(Naomi Klein, The Shock Doctrine pp. 202-3).

Relentless pressure
The ANC hierarchy came under "relentless pressure" from local and international business, the (business controlled) media, foreign politicians, the World Bank and IMF, etc. It was "an onslaught for which the ANC was wholly unprepared" (Gumede, p. 72). This does not mean that crude demands and threats played a crucial role. It was a process more of seduction than intimidation, aimed at integrating a set of new partners into the institutional structure and social milieu of the global capitalist class.

This meant providing opportunities for ANC officials to go into business or train at American business schools and investment banks. Leading figures were lavished with hospitality:

"Harry Oppenheimer [former chairman of Anglo American Corporation and De Beers Consolidated Mines] was eager to entertain Mandela at his private estate, while Anglovaal's Clive Menell hosted him for Christmas (1990) at his mansion . . . While separated from his wife, Mandela's home for several months was the palatial estate of insurance tycoon Douw Steyn . . . His daughter Zinzi had a honeymoon partly financed by resort and casino king Sol Kerzner, and Mandela spent Christmas 1993 in the Bahamas as a guest of Heinz and Independent Newspapers chairman Sir Anthony O'Reilly." (Gumede, p. 72).

It seems churlish to begrudge Mandela a little luxury after 27 years in prison. But what were his benefactors' motives?

The markets: stern taskmasters
Nevertheless, the most effective form of capitalist influence was the impersonal pressure of "the markets." As Mandela told the ANC's 1997 national conference: "The mobility of capital and the globalization of the capital and other markets make it impossible for countries to decide national economic policy without regard to the likely response of these markets" (Klein, p. 207). And the markets punished the slightest sign of deviation from the "Washington consensus" with capital flight and speculation against the Rand.

Mbeki was the first to grasp what was needed to win the markets' confidence. Precisely in order to live down its "revolutionary" and "Marxist" past, the ANC leaders had to prove themselves more Catholic than the pope. "Just call me a Thatcherite" – quipped Mbeki as he unveiled his new "shock therapy" programme in 1996.

South Africa could not afford the protectionist measures with which Malaysia, for instance, warded off the Asian financial crisis of 1997. Orthodoxy, however, was never rewarded with the hoped-for flood of foreign investment. The markets are stern taskmasters: they demand everything and promise nothing.

A sell-out?
It is not altogether fair to say that Mandela or Mbeki "sold out." They simply saw no escape from the "web" spun by global capital. Indeed, at the national level there is no escape. Reformers in other countries, such as the Solidarity movement in Poland and Lula's Workers' Party in Brazil, have gone through much the same experience on reaching office. Socialists have long said that socialism cannot be established in a single country. Now we also know that under conditions of globalization even a meaningful programme of reform cannot be implemented in a single country.

Capital is global. That is its trump card against any attempt to defy its dictates that is confined within national boundaries. The resistance to capital must also be organized on a global scale if it is to have any chance of success.

Stephen Shenfield

UN predicts food aid rationing

From the Class Warfare blog:

The Financial Times has reported that the UN's World Food Programme, charged with relieving hunger in underdeveloped countries, is drawing up plans to ration food aid in response to spiralling prices.

"The World Food Programme is holding crisis talks to decide what aid to halt if new donations do not arrive in the short term.

"Josette Sheeran, WFP executive director, told the Financial Times that the agency would look at 'cutting the food rations or even the number or people reached' if donors did not provide more money. 'Our ability to reach people is going down just as the needs go up,' she said.

"WFP officials hope the cuts can be avoided, but warned that the agency's budget requirements were rising by several million dollars a week because of climbing food prices."

Back in November, Josette Sheeran said (Guardian, 3rd November 2007):

"There are 854 million hungry people in the world and 4 million more join their ranks every year. We are facing the tightest food supplies in recent history. For the world's most vulnerable, food is simply being priced out of their reach."

One major factor, impacting food prices and mentioned elsewhere on this blog, is that pertaining to the growing of crops to supply the biofuels industry.

As Food First reports today on its home page.

"FACT: Ethanol is helping drive food prices out of control without lowering the price of gas – Corn planted for ethanol competes for farmland with corn for food production and with other food crops. This drives up the price of all food crops, especially those that contain corn products—which is most of our processed food. Meat is more expensive because our beef cattle eat corn, not grass. Food prices have increased by 25% over last year! Gas prices still went up by 80%..."

The insanity is that the UN is introducing rationed food aid programmes because it exists as part of a system in which the rationing of commodities is the order of the day. Indeed, rationing has been the order of the day since capitalists realised they could make huge profits by limiting supply.

Food shortages are very much rooted in a system that manipulates supply and demand to keep prices high. Stories are legion about farmers being paid to take land out of production, of governments stockpiling food, to keep prices low. I remember not so many years ago writing a lengthy letter to the local press screaming my anger at the EC's decision (back then) to destroy 3 million tons of fruit and at the cost of £52 million, because, quite simply, too much had been produced and, it if it was allowed to enter the market, prices would have crashed. And now arable is being used for the biofuel matket!

And its nothing new. This has gone on for decades. John Steinbeck's Pulitzer Prize winning The Grapes of Wrath (1939), set against the backdrop of the Great Depression, highlighted the issue in California, where tens of thousands of hungry, migrating farmers and their families, encountered mountains of rotting fruit, guarded by law enforcement officers instructed to shoot anyone who dared pick so much as a decomposing apple.

Organisations like Food First (Institute for Food and Development Technology –) are clear that the world today produces enough grain alone to provide every human being with 3,500 calories a day. "That's enough to make most people fat!" they assert. And this estimate does not take account of many other universally eaten foods—vegetables, beans, nuts, root crops, fruits, grass-fed meats, and fish. Indeed, if all foods are considered together, sufficient is available to provide at least 4.3 pounds of food per person a day. That includes two and half pounds of grain, beans and nuts, about a pound of fruits and vegetables, and nearly another pound of meat, milk and eggs. Put that on a platter in front of most people and ask term to eat it and the thought of it makes them quite nauseous. This much is asserted in a 2006 document entitled 12 Myths About Hunger.

The document further observes how "the problem is that many people are too poor to buy readily available food. Even most 'hungry countries' have enough food for all their people right now. Many are net exporters of food and other agricultural products."

In other words, if you're hungry in this world it is inevitably because you lack the purchasing power to buy food. The golden law of capitalism as ever comes into play – "can't pay, can't have". Poor people simply do not constitute a market; no profit can be had for them. It is far simpler, and far more lucrative, to create an artificial shortage which maintains prices at a profitable level. And with biofuel crops entering the equation of late, the problem is only exacerbated.

John Bissett

Weekly Bulletin of The Socialist Party of Great Britain (35)

Dear Friends,

Welcome to the 35th of our weekly bulletins to keep you informed of changes at Socialist Party of Great Britain @ MySpace.

We now have 1191 friends!

Recent blogs:

'Pro-life' hypocrites

How We Live and How We Could Live

Upton Sinclair and 'The Jungle'

This week's top quote:

"But first, 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." William Morris, How I became a socialist, 1894.

Continuing luck with your MySpace adventures!

Robert and Piers

Socialist Party of Great Britain

Profit Laundering: what’s justice got to do with it? (2008)

From the February 2008 issue of the Socialist Standard

"Tax Havens Cause Poverty" proclaims the home page of the Tax Justice Network. No, they don't. The profit system does.

The Tax Justice Network thinks that world poverty can be effectively tackled by reforming the international system of taxing profits so as to eliminate tax havens and tax dodging – "profit laundering" as they aptly call it – by capitalist corporations.

This would make no essential difference. World poverty is not caused by corporations behaving badly. Their "bad" behaviour as identified and described by the Tax Justice Network is not bad from a capitalist point of view. It is normal, and in fact it is not possible to alter it – either by legislation or by appealing to the "morality" or "ethics" of corporate leaders. It's the way the capitalist profit system works and can only work. As long as you've got capitalism, in the famous – or infamous – phrase, there is no alternative. No alternative, that is, to capitalist corporations pursuing the maximisation of profits above all else. This is not a matter of choice by corporate executives. It is not because they are personally greedy or insensitive and deliberately choose to run their corporations in this way. It's the reflection in their minds of the underlying logic of the system of which in the end they – like the rest of us in fact – are just cogs.

But what is this underlying logic? What is capitalism?

Capitalism
Basically, it's the market system. Not just markets – they existed before capitalism – but a whole economic system where every aspect of the production and distribution of wealth takes place via the market, by means of a vast network of buyers and sellers. This includes the buying and selling of labour – or, more accurately, of labour-power, of a person's ability to work. In fact, capitalism is based on the existence of a class of people whose only productive resource is our ability to work in some capacity or other (whether so-called manual or so-called intellectual) which we are obliged to sell on the labour market for a wage or salary. But sell to whom? To those who own the other resources essential to production: land and natural resources, and mines, factories, transport, communications. In other words, capitalism presupposes the division of society into two classes: those who own the means of wealth production and those who don't. This is not a 50:50 division, more like a 5:95 one. So capitalism is a class society. Like everything else under capitalism, the relationship between these two classes is a market one, one of buying and selling.

But there's more to this particular market relationship than to that between other buyers and sellers. In other cases, it is a simple exchange of something of one value for something else of an equal value. Such an exchange of equal values is also involved in the wage contract – we get as our wage or a salary more or less the value of the labour-power we are selling – but human labour-power has the unique property of being able to create new value. The difference between wages and salaries and the new value added in the course of producing some good or service is the source of profit, which it is the aim of every capitalist and every capitalist enterprise to extract and maximise.

Some of this profit is creamed off by fat cat directors and owners to support an extravagant life-style but most of it is re-invested. If a capitalist firm did not do this with a view to keeping its productive methods up to date so as to be able to produce as cheaply as possible, it would lose out in the battle of competition with its rivals and, eventually, either go bankrupt or be taken over by one of them. So, under the pressure of market competition, capitalist firms are forced to accumulate most of their profits as more capital.

This competitive struggle to make and accumulate profits as more and more capital is the essence of capitalism. It's an impersonal economic mechanism that imposes itself on all enterprises involved in producing for the market, whether they are owned by individuals, corporations, the state or even by a workers' co-operative. The logic of profit always ends by imposing itself, even on governments, and there's nothing that can be done to stop this as long as capitalism lasts.

Taxes
Despite what some ideologists of a "pure capitalism" claim, capitalism cannot exist without the existence also of a coercive state – and never has. In fact, the state helped capitalism come into being, as by establishing trading monopolies like the East India Company and as by driving peasants off the land and into factories. But the state produces nothing (unless it is itself involved in production, as it sometimes has been) and so has to be financed by a levy on those who possess wealth or who control the production of wealth, i.e. by taxes. As the 19th century economist (and MP) David Ricardo showed a long time ago, in the end the burden of taxation falls on property and property-incomes such as rent and profit (any taxes on wages are passed on to the employer). Taxes on profits of course reduce the wealth of capitalists but they generally accept the principle of paying taxes as they recognise the usefulness of the services that the state provides them, not least the armed force to back them up in conflicts with other capitalists supported by their state over markets, trade routes, sources of raw materials and investment outlets. But they are not masochists; they'll only pay the taxes they absolutely have to. And a whole business has arisen to advise them how to minimise their tax burden.
Some companies are better able to do this than others, and the Tax Justice Network have a point when they say that:

"The ability of transnational corporations to structure their affairs through paper subsidiaries in tax havens provides them with a significant tax advantage over their nationally or locally based competitors. Local businesses, no matter whether they are technically more efficient or more innovative than their transnational rivals, will be competing on an uneven field. In practice, of course, differential tax treatment favours the large business over the small one, the international business over the national one, and the long-established business over the start-up". (John Christensen and Richard Murphy, Development Journal, September 2004).

Quite true. But why should we, as wage and salary workers, worry about this? Why should we get involved in this dispute between two sections of the capitalist class as to how the tax burden should be shared between them? Why should we take the side of small business as against large business, or national business or businesses in the Third World against international business? Taxation is not our concern as wage and salary workers. Even if multinational corporations were forced to pay more taxes (which is not inconceivable), this would not benefit us, It would only benefit their smaller, national-based competitors. And it wouldn't benefit the mass of the people in the Third World either. Only the business and political elites there who would then have more money to spend on their armed forces and their privileged lifestyles. "Tax Justice" is not our concern.

Corporations
The profit logic imposes itself irrespective of the type of enterprise. In Adam Smith's day – the middle of the 18th century – most enterprises were run by individual capitalists who risked all their money; there was no distinction between their personal wealth and that of their business. So, if their business failed they were ruined. As capitalism developed more and more capital was needed to start and sustain a business. This problem was partly overcome by partnerships, but this was complicated legally and partners were also still personally liable for the debts of the business; so, if it went under they went under too.

The solution, found and implemented from the middle of the 19th century, was the limited liability company. This was a legal business entity in which people could invest money to be used as capital but only be liable in the event of bankruptcy for the amount of their shareholding. Hence the name in Britain of limited liability company. In France it was called a "nameless [i.e. impersonal] society" and in America a "corporation". Whatever they were called, all had a separate legal personality, allowing them to sign contracts, pay taxes, sue and be sued as if they were real people. Even if, as the recent film The Corporation has underlined, they were real people they would be locked up as dangerous psychopaths. No real person is so cold and calculating and so obsessive about pursuing a single aim.
As might have been expected, many of the early company promoters and directors were rogues who swindled and robbed those who put up the money for their companies, i.e. the shareholders. Legislation was therefore introduced to protect shareholders. Company directors were required to act in such a way as to exclusively further the financial interests of the shareholders, i.e. to make as much profit for them as they could. All their acts as directors had to be justified by this end: they had to try to maximise profits and were not allowed to siphon off money for themselves nor, it could be added, to spend it on "ethical" objectives which they might personally favour.

As Christensen and Murphy noted in their article:

" … tax minimization through elaborate and frequently aggressive tax avoidance is regarded as one of the prime duties that directors are required to perform on behalf of their shareholders."
"Compelled by the profit logic, and by a legal principle that asserts that tax payers may organize their affairs in such a way as to pay the least tax possible under the law, the majority of large businesses have been structured so as to enable tax avoidance in every jurisdiction in which they operate."

The Tax Justice Network thinks that this can be changed, both by changing company law and by appealing to corporate executives to behave"ethically", but they are wrong. Company law – and the legal obligation on corporations to be "a pure money-making machine" – is a reflection of the underlying economic reality of capitalism which, as we saw, is the impersonal economic mechanism of the making and accumulation of profits as more and more capital. No law will ever be passed that goes against this impersonal logic of profit – and, even if it were, it wouldn't work. Any government which tried it would cripple industry within its borders by rendering it less competitive internationally, so provoking an economic crisis and mass unemployment – and the coming into office of a government that would repeal the legislation in question. Within capitalism there is, quite literally, no alternative to corporations being pure money-making machines.

So, if there's no way out under capitalism what are we in the Socialist Party proposing? Basically, to end capitalism, not trying to patch it up or trying to make it work in some other way through tax reforms. Capitalism. So, we're talking about a world-wide change, a global change in both senses of the term. Both world-wide and thorough-going.

To end the operation of the impersonal economic mechanism of the pursuit and accumulation of profits as capital, the first thing that must happen is that the natural and industrial resources of the planet must stop being the property of rich individuals, corporations or States and become instead the common heritage of all humanity. On this basis, the productive resources of the world can be freed from the tyranny of profit-driven market forces and become available to be used, under democratic control, to simply turn out the things that the world's population needs to live and to enjoy life, in accordance with the principle "from each according to their abilities, to each according to their needs".

In the current atmosphere of cynicism, apathy and alienation, to talk in terms of a world-wide democratic revolution to replace world capitalism with world socialism must seem incredibly utopian. Be that as it may, it is the only way out and until people organise to abolish the capitalist profit system the problems we have been discussing will continue. The real utopians are not us, but those like the Tax Justice Network who still think that you can doing something constructive within the capitalist framework of class ownership and production for profit. You can't.

Adam Buick

Kosovo: Open for Business (2008)

From the Socialism Or Your Money Back blog:

After decades of uneasy existence as part of Serbia the newly independent state of Kosovo has emerged with its inevitable new anthem and new flag. But there are real political concerns best not forgotten in the ballyhoo and hopes for a brighter future.

One man interviewed by the BBC's Mark Mardell described how during the war he fled his village with many relatives under attack by Serbian troops. He had to leave his aunt behind and she was burnt to death. He said: "Kosovo is rich in minerals and rich in farming land, is rich in all other aspects. Here, we provided wealth for so many years for the whole of Yugoslavia, there is no reason why we cannot provide now for just Kosovo. That's why I'm saying Kosovo has a bright future." (Mark Mardell's Euroblog: 'Mining Kosovo's Future' 29 January)

Alongside the declared humanitarian reasons for the UN intervention in the Balkans in the 1990s there were other, economic and political, considerations also in play. It is these interests that will shape future developments in the states of the former Yugoslavia and dominate the lives of workers there.

The New York Times (8 July 1999) carried an article by Chris Hedges about the Stari Trg mining complex in Trepca, Kosovo. Possibly inadvertently, it gave an insight into some of the considerations that surrounded the decision to intervene. According to Hedges, "The sprawling state-owned Trepca mining complex, the most valuable piece of real estate in the Balkans, is worth at least $5 billion."

It was the reported view of the mine's director, Novak Bjelic, that "The war in Kosovo is about the mines, nothing else. This is Serbia's Kuwait - the heart of Kosovo. In addition to all this, Kosovo has 17 billion tons of coal reserves." The Yugoslav web site www.yugoslavia.com (now defunct) described Trepca as having the "richest lead and zinc mines in Europe." The capacity of the lead and zinc refineries ranked third in the world and the area as a whole represented some 80% of Yugoslavia's mineral deposits. The problem was they were old and inefficient and seriously polluting.

According to Michael Palairet of the University of Edinburgh, a leading authority on the economic and social history of the Balkans,

"The Trepca system 'as a rule' lost money under Yugoslav socialism … Because of Trepca's incapacity to generate funding of its own for investment, all investment funding had to be financed externally, by fund providers who did not anticipate that they would see any return on (or of) their capital."

In his opinion the $5bn figure quoted above was exaggerated. However while Trepca consistently performed poorly, this was not because it could not have been managed more effectively: "Unlike most heavy industry… Trepca had good mining assets and low cost access to energy, so on the face of things there were no structural reasons for its inability to trade profitably." (From European Stability Initiative)

Further insight may be gained into the economic underpinnings of the UN intervention from a report by the International Crisis Group. The report is interesting in that it provides further evidence that the breakup of the former Yugoslavia was in large part motivated by conflicting economic interests. The various regions of the Federal Republic had fallen out over how their assets and liabilities were to be divided and allocated. The differences were long standing and could not be resolved peacefully. In other words it was a fight among competing capitalists interests. One of these interests lay in Kosovo - the supposed "heartland of Serb identity."

"Trepca is a sprawling conglomerate of some 40 mines and factories, located mostly in Kosovo ... Its great mineral wealth is the basis of the economy of Kosovo, but the complex is badly run-down as a result of under-investment and over-exploitation by governments in Belgrade." (From Trepca: Making Sense of the Labyrinth ICG Europe Report N°82, 26 November 1999)

In 1974 Tito's new constitution accorded the province near-republic status, with its own parliament and courts, Kosovo elites enjoyed a period of greatly increased control over their own resources. They used their enhanced authority to build factories in Kosovo that capitalised on their mineral production, created thousands of jobs, and brought some income into the province.

After Tito's death, pressure grew for more rights and greater political and economic autonomy, but with little success. Belgrade reasserted control of the mines. Kosovo Albanian workers were accused of having stolen vast quantities of gold and silver and many engineers and technicians were fired.

"From 1981-89, Belgrade monopolised the export of Trepca's minerals to Russia and elsewhere, reaping the profits in hard currency and oil, while compensating the Kosovars only with electricity and other non-fungible forms of payment.…

"Trepca's Kosovar management attempted to sell its products on the European market and to modernise the facilities' modes of production, only to be foiled time and again by the Serbian government, which was in the process of "integrating" Serbia's economy - that is, of tethering all economic sectors even more closely to Belgrade.

"By the late 1980s, with the final integration into the Serbian system of the power generating system, Kosovars had lost virtually all control over their economy, as they would over their politics and civic freedoms." (Trepca: Making Sense of the Labyrinth (ICG))

In 1996 Trepca had exported $100 million of products, making it the largest exporting company in the Federal Republic of Yugoslavia and an invaluable foreign exchange earner at a time when the country was experiencing grave economic difficulties.

Throughout the 1990s the ownership of Trepca conglomerate was never entirely clear. In November 1997 Trepca was under consideration for privatisation by the federal government in Belgrade. This process stalled when the 'red business man' Zoran Todorovic, was murdered by a gunman in Belgrade. Todorovic had been a close confidant of Slobodan Milosevic and was one of the richest men in Yugoslavia. He was one of a group of state capitalists who had been able to use their political connections to purchase state assets at bargain prices. (He was also director of Beopetrol, another state firm in the process of being privatized.) This was in effect a conversion of state owned assets into de facto privately owned ones by the ruling capitalist class.

Officials of the UN Interim Mission in Kosovo (UNMIK), who took over governing Kosovo in 1999 after the withdrawal of Serbian troops, concluded that the complex was overall public property and therefore came under their authority in accordance with its mandate. The then head of UNMIK, Bernard Kouchner (now French Foreign Minister), confirmed that an international consortium had been appointed to run the plant. A $16m (£10.7m) investment package was also announced, funded by Britain, France, Spain, Germany, and the EU. The money was to be spent on a full-scale refurbishment of the plant prior to it being sold off. "We have no intention of closing any part of the Trepca mining complex. On the contrary, we're going to make it safe and profitable." he said. (From The Guardian, 15 August 2000)

But it was not only the mines that capitalist interests had their eyes on. In July 2000 it was announced that a fund run by the billionaire George Soros was to invest $150 million (most backed by U.S. guarantees) in companies in the Balkans. Soros Fund Management would invest $50 million of it own equity in new businesses, expansions or privatization in the region and would have full autonomy to choose the investments in a whole swathe of South East Europe. Soros had invested millions of dollars in philanthropic endeavors in the region, but said this fund would practice "tough love," and be driven purely by profit.

The U.S. Overseas Private Investment Corporation had agreed to provide a loan guarantee for another $100 million of investments. OPIC describes itself as a self-sustaining federal agency that sells investment services to American businesses expanding into emerging markets around the world. It provides a level playing field for U.S. businesses in emerging economies.

"Since 1971, OPIC has supported nearly $130 billion worth of investments that will generate over $61 billion in U.S. exports." (From here.)

The Soros investment was conceived at a "donor" conference in Sarajevo in 1999. It was one of a series of efforts to take advantage of emerging investment opportunities in the Balkans. "A year ago, after NATO won the war in Kosovo, more than 40 leaders came together in Sarajevo determined to win the peace with economic investments", according to National Security Advisor Samuel M. Berger.

George Munoz President and CEO of OPIC said he was pleased that they were making the region safe for international capital. It was a demonstration that

"Southeast Europe is an important region on which we should focus our efforts, to enable it to rebuild and enter the global marketplace as a full partner. The Southeast Europe Equity Fund is an ideal vehicle to connect American institutional capital with European entrepreneurs eager to help Americans tap their growing markets."

The Soros Private Funds Management, he said, was sending "a strong, positive signal that Southeast Europe is open for business."

Gwynn Thomas