Wednesday, April 30, 2008

Mayday 2008

From the World Socialist Party of the United States website

We’re celebrating the 122nd anniversary of a General Strike held to win the 8 hour work day. That General Strike of May 1, 1886 was called by the forerunner of the American Federation of Labor and organized throughout the Canada and the US.

On that day 300,000 to half a million workers set down their tools and marched in the largest industrial cities in North America. 80,000 in Chicago, 10,000 in Detroit, New York, St. Louis, etc. In an action of this size happened today, 4 to 6 million would be on strike and 100s of thousands in the streets.

In Milwaukee 7 strikers and witnesses were killed by State Militia and 4 more by Police in Chicago.

On May 4th a rally was held to protest the shootings itself turned violent when police waded into a peaceful crowd and someone threw a bomb into the police line. Shooting broke out and 7 police and at least 4 workers were dead. According to contemporary newspaper reports, most of the police dead were caused by other police fire.

In the aftermath, 7 labor leaders who organized the rally, were arrested for murder of the police. Because of the men’s anarchist politics 6 were sentenced to hang and 4 were executed, including one who had been at home with his children at the time of the rally. This Haymarket Affair and subsequent trial was followed throughout the world. It is widely held as one of the worst cases of judicial injustice in American history.

In 1890, Sam Gompers, President of the American Federation of Labor (AFL) requested that the Socialist International call an international day of action agitating for an 8 hour work day. The International agreed and call for international rallies to be held on May First to commemorate the strike of 1886. This is the origin of Mayday as International Labor Day.

Which Labor Day?

Many incorrectly claim that Mayday is the original Labor Day as opposed to the one held on the first Monday of September in Canada and the US. The September Labor Day had been celebrated for at least 4 years previous to the General Strike of 1886. It was developed by US rank and file unionists from the inspiration from a strike for the 8 hour day held in Toronto in the 1870s (see section on Canada).

So both have much in common and both should be considered as legitimate since both were motivated by a desire to have “8 hours of work, 8 hours of rest and 8 hours for what we will” (from a labor song “Eight Hours“).

The beasts that graze the hillside,
And the birds that wander free,
In the life that God has meted,
Have a better life than we.
Oh, hands and hearts are weary,
And homes are heavy with dole;
If our life’s to be filled with drudg’ry,
What need of a human soul.
Shout, shout the lusty rally,
From shipyard, shop, and mill.

Eight hours for work, eight hours for rest
Eight hours for what we will;
Eight hours for work, eight hours for rest
Eight hours for what we will.

In other words, both Mayday and Labor Day should be reminders of the need of working people to try and capture the good things in life.

What happened?

The strike of 1886 was a flop. While hours dropped to 40 hours a week in some skilled trades where unions could control job conditions easily, the increase in unskilled factory work kept working hours at 50-60 per week until the 1930s. It took the desire for post-World War 2 industrial peace to establish the 40 hour week for some years in the 1950-60s.

Today the average workweek in the US is 46 hours and there is an increase in poorer workers working multiple jobs just to get by. This explains which nearly a third of Americans work more than 50 hours a week. Compare this to the legal maximum of 45 hours the British Empire established for Plantation slaves.

Read it and weep

  • On average, modern Americans work longer than plantation slaves in the 1800s.
  • Families need close to 2 wage workers to survive vs. 1.3 in the 1880s. So the total amount of work needed to maintain a household has risen.
  • It’s taken us 128 years to lower the working week from 60 hours to 46. That means it will take us another 54 years to reach the 8 hour day.
  • Using the “Unskilled Wage Index” the $175 a year factory workers earned in 1886 Chicago would be equivalent of $22,180 today or slightly more than what American Axle Company is offering it’s workers currently on strike.
  • Conclusions?

    Why is it, that despite all the struggles, the marches, the organizing, we are more or less in the similar place as in 1886?

    The WSP argues it is because we haven’t learned the lessons of the first Mayday and Labor Day. We cannot get the ‘life’ our class wanted in the 1880s by confronting the bosses with petition, pickets, pistols or pipe bombs. Each of those strategies assumes we need bosses and they can be intimidated into lessening our poverty.

    As Marx first showed, and we have argued since our inception as a political movement, in capitalism, the rich grow richer and all workers can do within capitalism is slow that process down. It is capitalism as a whole system - wages, profits, markets - which needs abolishing. The murder or intimidation of one ruthless boss won’t help. Nor will the formal change of the social structure at a particular workplace into a collective, etc. We need to see the enemy as entirety, only then can we make decisions to free ourselves and the world.

    Mayday 2008

    In 1886 strikers carried banners which stated a simple truth:

    “Labor creates all wealth, All wealth belongs to labor”

    Working people need to learn and understand that truth. The capitalists need us, capitalism needs us, we do not need it.

    The rich will continue to get richer and we will continue to march on Mayday until a majority of us decide that enough is enough. Sure, let’s support those who try and defend or increase their wages, but let’s face facts, in the long term they aren’t going to be any more than what it takes for us to merely survive.

    Capitalism is killing us and it is killing the world.

    There is enough for all and a decent life can be had only when socialism is established.

    Abolish the Wage System!

    FN Brill

    Weekly Bulletin of The Socialist Party of Great Britain (44)

    Dear Friends,

    Welcome to the 44th of our weekly bulletins to keep you informed of changes at Socialist Party of Great Britain @ MySpace.

    We now have 1240 friends!

    Recent blogs:

  • Why vote for politicians?
  • Who are "we"?
  • Why just land?
  • This week's top quote:

    "The first of May is the symbol of a new era in the life and struggle of the toilers, an era that each year offers the toilers fresh, increasingly tough and decisive battles against the bourgeoisie, for the freedom and independence wrested from them, for their social ideal." Nestor Mahkno, The First of May, 1928.

    Continuing luck with your MySpace adventures!

    Robert and Piers

    Socialist Party of Great Britain

    Monday, April 28, 2008

    International Workers' Memorial Day

    From its Wiki page:

    "International Commemoration Day (ICD) for Dead and Injured takes place annually around the world on April 28, an international memorial day and action for workers killed, disabled, injured or made unwell by their work. In some anglophone countries it is known as Workers' Memorial Day."

    The following article was cut and pasted from the British blog, Random Pottins, and relates to events in Britain but the same story could be told many times over across the world.

    Remember the dead, Fight for the living!

    NOT JUST A STATISTIC. Patrick O'Sullivan's son John and widow Mary at unveiling of memorial, Wembley stadium.

    Remember the dead, fight for the living!

    That's the slogan of International Workers' Memorial Day, which is April 28. It's a time to remember those like Patrick O'Sullivan, who went to his work as a carpenter on the Wembley stadium site one morning, 15 January, 2004 and was killed under a platform that fell 300ft. after it was hit by the load swinging from a crane.

    Or Simon Jones, 24, decapitated by a crane grab in his first hour working at Shoreham docks, ten years ago.

    Or the Chinese cockle pickers drowned in Morecambe Bay.

    Or the many men and women who have suffered and died from mesothelioma and other asbestos-related diseases, before they could even see a penny of the compensation they had to fight for.

    We might have thought things were changing from the days when dangerous work conditions and work-related illnesses and death were almost accepted. Certainly families, friends and campaigners are insisting their loved ones are not just statistics.

    But while the media and, to their shame, some social commentators and academics, have gone on about the "nanny state", "compensation culture" , and "obsession with safety", facts assembled by the London Hazards campaign, Construction Safety Campaign and unions present a less comfortable picture.

    The number of people killed at work rose 11 per cent to 241 in 2006/7, with a 28 per cent increase to 78 in construction, and a 16 per cent increase to 85 in service industries.

    There has been a 10 per cent increase in work-related illness, affecting 2.2 million people.

    There have been six major incidents involving cranes in the last eighteen months, with three people killed. Monitoring of cranes for safety is still left to the owners.

    Asbestos deaths have increased to 4-5,000 per year, and not only is it more difficult for workers with asbestos-related illnesses to prove which former employer is liable, but the government has ruled that the non-fatal condition pleural plaques does not entitle the sufferer to compensation.

    The government has cut the budget for the Health and Safety Executive(HSE), thus reducing workplace inspections, enforcement and prosecutions. Some 9 out of 10 major injuries now are not investigated.

    Thus April 28 is more than ever a time to also fight for the living, for those who might be tomorrow's victims, and for the right of working people to organise, elect their own safety reps - without those chosen having to fear victimisation - and if necessary, strike over safety and conditions. It is a time to demand the government reverses its cuts in safety provisions, and that its promises of "tough on crime, tough on the causes of crime" are applied to bosses whose negligence or cutting corners for profit can lead to the death of workers.

    April 28 is a day when we should not only remember the colleagues we have lost, or seen suffering illness from work, but also think about what kind of conditions we are leaving for the next generation.

    There are Workers Memorial Day events in many places. Two I know about are:

    LIVERPOOL -Monday, April 28, 2008

    12:00pm - 1:00pm

    South Piazza Georges Dock Building
    Corner Mann Island and The Strand


    LONDON - gather 10.30 am. Holland Street, SE1, beside Tate Modern.

    march to HSE, Southwark Street, for rally outside.

    march then to City Hall, SE1 for rally with speakers.

    Also in London: Monday evening, April 28, 6-8pm, meeting at Congress House, Great Russel Street, WC1 (nearest tube Tottenham Court Rd) with Paul Mason, author of 'Live Working or Die Fighting', Tom Jones, from Thompson Solicitors, and film: Mesothelioma: the human face of an asbestos epidemic.

    Food and wine buffet.


    Further Reading:

  • Article commenting on Patrick O'Sullivan's death
  • Speech by Patrick's daughter at Workers Memorial Day 2004
  • Report on inquest
  • Simon Jones Memorial Campaign
  • Charlie Pottins

    Friday, April 25, 2008

    Thursday, April 24, 2008

    A Witness At Ludlow (1965)

    From the World Socialist Party of the United States website
    Edit. Note: In The Western Socialist, No. 3-1965 there appeared an article entitled, The Ludlow Massacre (1913) - fifth in a series entitled, Gems From American History. The Ludlow article evoked the following letter from an old-timer member of the World Socialist Party who was a witness to some of the events described in his capacity as a soap-box propagandist for the Industrial Workers of the World at the time.
    Our soap-boxing began in Albany, New York. Passenger trains furnished the transportation, provided we kept to the “decks” of the dining cars, rode the “blinds” or the water tank behind the coal cab. At likely towns we dropped off to hold open-air meetings.

    West of Chicago, where trains did not take water on the fly, we took to the freights. Occasionally we rode the rods on the crack limiteds.

    Salida, 7000 feet high in the Colorado Rockies, looked good, despite its thin mountain air made open-air speaking difficult. It was a division point on the old Denver and Rio Grande R.R. The railroad work shops, the cow camps and mining settlements would furnish the audiences.

    We had placed the soap box in front of the well-lit, crowded corner saloon. Not long after we got started, the saloon doors opened and spewed forth a band of hard-looking ruffians, who immediately decided to wreck the meeting and to forever end our speaking careers. This was our Initial encounter with the Infamous Baldwin-Felts thugs These professional scabs and killers of union men and their families were In the employ of John D. Rockefeller to break the strike In his nearby Colorado Fuel and Mine Company properties in Trinidad and Ludlow.

    (These same murderers were, at a later period, Included in the acclaim given by President Charles W. Eliot of Harvard to strikebreakers as the “nation’s heroes.”) At the same time, working men throughout the West were singing:

    “Down with the Baldwins,
    Up with the Union,
    And we will rally Colorado,
    We will rally once again,
    Shouting the battle cry of Union.”
    The saloon doors opened again soon after and out came a group of powerful-looking men: striking C.F. & I. strikers. They grasped the situation quickly and went promptly into action. Swinging fists routed the thugs. We were urged to proceed by our rescuers. We finished with a good literature sale and a fine collection. After some liquid refreshments with our new friends, we accepted their invitation to visit their camp in the hills.

    * * * *

    In addition to these thugs, the Colorado governor furnished the state militia’s services to pious J.D.R. Their objective was to destroy the tent colony established by the union, the United Mine Workers, after they had been dispossessed from the company-owned shacks.

    Louis Tikas had left his native Greece to make a new home in what he thought was the land of freedom, par excellence. He soon found out the facts of life after he found employment in the nonunion mines of Ludlow. He helped organize and struck with his fellow miners against their unbearable working conditions.

    After a day-long battle, he volunteered to carry a white flag to request a truce to remove their dead and wounded and to plead for some drinking water far the women and children. He was met halfway by the lieutenant in command of the militia (and of the Baldwin thugs). The brave lieutenant quickly pulled his revolver and shot down the unarmed miner, under a flag of truce.

    Indignation swept through the country. Mass meetings, from coast to coast, addressed by liberals, clergymen, and other protesters against such callousness, demanded that the lieutenant be brought to trial. He was promptly court martialled by his superior officers and severely punished: a reduction of nine points in rank!

    One dark night, the B-F thugs crept down on the camp, poured some of the Rockefeller kerosene over the tents and set them on fire. Forty-three of the sleeping miners and their families were severely burned. Thirteen, mostly children and women, were burned to a crisp. The capitalist Moloch needed its victims. Sanctimonious old J.D.R. made his peace with his God, shortly thereafter, by donating twenty million dollars to erect the Riverside Baptist Church on Riverside Avenue, New York City.
    Two of our new-found friends had discovered the home where the leader of the thugs boarded. They induced a miner’s son to tell this “hero” that some young lady wished to see him on the outside. Munching a chicken bone, he stepped out. Two of the miners were flattened against the wall on either side of the doorway. As he stepped out, they took revenge for the death of their incinerated babies.
    We stayed about a week. We had our first lessons in the use of a gun. The moaning and crying of our hostess, the mother of a baby killed in the fire, was heartrending. The family were concerned for our safety but they, themselves, were too “hot” for our safety. They did not want us involved if they were apprehended. We parted company with same of the bravest people we ever met. We left and went on to the Mormon capital, Salt Lake City, in time to get involved with the struggle to save Joe Hill. But that is another story.

    * * * *

    A year later, Congress authorized the Industrial Relations Committee to probe the wave of strikes and, in particular, bloody Ludlow. Under the chairmanship of that rare politician, fearless Frank Walsh, their objective findings have become a classic study of those times. Under the grueling cross examination of Walsh, John D. Rockefeller, under oath, testified that he had never been in Colorado. and had never seen his blood-soaked mines. Here was but another proof how necessary the owners are in the production of commodities.

    My speaking partner, Harry Krietzer, who later became the advertising manager of the alleged “socialist” daily, “The Jewish Forward,” stepped up to John D., as he left the proceedings in Washington, surrounded by his body guards and that famous founder of the noble profession of public relations, Ivy Lee. Harry showed John D. a copy of the “Masses” and asked him to subscribe to see the workers’ side. He had to borrow a dollar from Ivy Lee.
    Sam Orner

    St. George and the Coloured Rag

    From the Vaux Populi blog:

    Things have moved a long way since Enoch Powell's rivers of blood speech 40 years ago. Today, all the mainstream parties are against immigration, as long as it's illegal of course. A border police force has even been set up to keep them out. St. George's Day was once celebrated only by fascists. Now the red-and-white coloured rag is even flown on public buildings. The gentlemen of the League of Saint George (see must be happy.

    Yes, unfortunately, St George's Day is upon us again, but what is this mythical saint supposed to have done?

    We all know that, according to legend, he slew a dragon but in The History of the Seven Champions of Christendom we are told that, among his many feats of valour, he did away with two.

    He was, so the story goes, born in Coventry, son of Lord Albert, High Steward of England. Having been abducted as a baby and held captive by the witch Calyb for 14 years, he tricked her into revealing her magic whereupon he split a rock and imprisoned her in it. This freed not only St George but also St Denis, patron saint of France, St James (Spain), St Patrick (Ireland) and St David (Wales), after which they went their separate ways on great adventures and acts of valour. These included sorcery, battling against incredible odds and rescuing princesses.

    George, the legend continues, fought and won many battles, apparently single-handed. In the course of one he also freed St Denis who had carelessly allowed himself to be captured. And, of course, he slaved that dragon.

    On his return to England he wanted to turn to a contemplative life but the king asked him to slay one more dragon which was terrorising the people of Dunsmore. This time, although he killed the beast, he also died from the poison spewed on him by it. He was, we are told, buried in the chapel at Windsor Castle and his sons - no mention of a wife - were given high office by the king.

    If you believe all this you'll believe anything, including that St George's Day is anything more than an excuse for xenophobia - and for pubs to sell more beer.

    We shan't be celebrating today but will continue distributing our leaflets in favour of world-wide socialism where the planet and its resources will have become the common heritage of all humans and the world won't be criss-crossed by frontiers.


    Wednesday, April 23, 2008

    Weekly Bulletin of The Socialist Party of Great Britain (43)

    Dear Friends,

    Welcome to the 43rd of our weekly bulletins to keep you informed of changes at Socialist Party of Great Britain @ MySpace.

    We now have 1238 friends!

    Recent blogs:

  • Reply to the BNP
  • Who Cares? (U.S. elections and the treatment of armed services personnel)
  • Home Is Where The Heart Attack Is...
  • This week's top quote:

    "Patriotism . . . for rulers is nothing else than a tool for achieving their power-hungry and money-hungry goals, and for the ruled it means renouncing their human dignity, reason, conscience, and slavish submission to those in power. . . . Patriotism is slavery." Leo Tolstoy, Christianity and Patriotism, 1894.

    Continuing luck with your MySpace adventures!

    Robert and Piers

    Socialist Party of Great Britain

    Tuesday, April 22, 2008

    Kicking Against The Pricks

    Socialist Party Public Meeting

    “If you prick me...”: a survey on racism

    Speaker: Bill Martin

    Central London
    Friday 25 April. 7.30pm

    The Lucas Arms, (first floor)
    245A Grays Inn Road,
    London WC1
    (nearest tube: King’s Cross St.Pancras)

    Heathrow Homeless

    From the Socialist Courier blog

    "Each night, scores of London's homeless men and women take advantage of modern travel delays by posing as stranded passengers in order to sleep in a warm, safe place. ... Those contacted included a man sleeping under his coat, another conspicuously hiding behind an open newspaper, and a woman clutching a duty free bag, who insisted she was waiting for a flight, only to whisper when police were out of earshot, "I can't afford electricity. It's warm here. Please let me stay." (Time, 21 April) RD

    Paul Mattick's review of Kropotkin's 'Mutual Aid' (1956)

    MUTUAL AID. By Peter Kropotkin, with Foreword by Ashley Montague, and including “The Struggle for Existence” by T. H. Huxley. Extending Horizons Press, Boston, 1955, pp. 362, $3.00
    Originally published in the January-February 1956 issue of the Western Socialist, Boston, USA

    This new issue of Kropotkin’s work on Mutual Aid, first published at the turn of the century, not only satisfies the need for its continued availability but — in some measure — also helps to combat the current neo-Malthusianism and the renewed, though futile, attempts to present capitalist competition as a “law of nature.” Provoked by Huxley’s belief that in nature and society the struggle for existence is one of all against all, Kropotkin demonstrated that both in the animal world and human society it is rather mutual aid which secures existence and makes for progress.

    What Huxley proclaimed passes under the name of Social Darwinism — “the survival of the fittest.” The successful in society are such by way of “natural selection.” Nothing can be done about it, and no apology is needed, as nature is neither “moral” nor “immoral,” but “non-moral.” Of course, attempts are made to defy “natural law” through the establishment of social order designed to mitigate the struggle of all against all. Yet this promises little for the future because population tends to outrun the means of subsistence, and thus the struggle for survival continues to destroy the weak.

    Kropotkin did not answer Huxley’s Malthusian argument, even though it is the only one Huxley advanced in support of his views. Instead, he described forms of mutual aid observed in the animal world and various types of social collaboration throughout man’s history. This he did excellently, so that the book — quite apart from its special intent — is an important study of animal behavior and of the evolution of human sociality. Himself under the spell of Darwinism, Kropotkin wished to correct its capitalistically-determined one-sided interpretation, which saw only competition and not the far more important factor of mutual aid as the instrument of survival. He did not take up the Malthusian argument because he thought that existing “natural checks to over-multiplication” made it irrelevant.

    This plays into the hands of the “social Darwinists,” who do not distinguish between society and nature, and see in all social misery manifestations of “natural laws.” They would insist that, even though the struggle for existence may not be characterized by the ever-present bitter struggle for the means of subsistence, nevertheless pauperism and starvation, as also famine and pestilence, must be regarded as “natural checks to over-population.” In their views, the alleviation of human suffering, caused by whatever reason, opposes the necessary “natural checks to over-population.”

    Kropotkin did not answer the Malthusian argument because he, too, did not clearly enough distinguish between society and nature. Just as to the social Darwinists competition is instinctive to both men and beast, so to Kropotkin mutual aid is a “moral instinct” of “prehuman origin” and a “law of nature.” This did not hinder him, however, from making the “watchword, mutual aid,” which comes to us “from the bush, the forest, the river, the ocean,” into the foundation of our “ethical conceptions” so as to secure “a still loftier evolution of our race.” It seems, then, that “natural laws” to be really effective require the support or neglect of men.

    Observation reveals that there is both competition and mutual aid within and between the different species. Mutual aid is, of course, the best way for survival for those species whose survival depends on mutual aid, as competition. For a long time, however, survival in the animal world has not depended upon the practice of either mutual aid or competition but has been determined by the decision of men as to which species should live and thrive and which should be exterminated. Whatever “natural law” may mean with regard to animal behavior, it is overruled by man-made “laws” that shape “nature” to their own needs or whims. “Nature in the raw,” so to speak, where “natural laws” could rule is now in need of preservation and protection by national and international law. Wherever man rules, the “laws of nature” with respect to animal life cease to exist.

    If this is true for the animal world, how much more must this be true for man himself. Although also a great admirer of Darwin, Marx drew attention to the fact that “nature” is continuously changed by the activities of men, and (against Malthusianism specifically) that no “natural law” governs the growth of population. The changing social structure, not “natural law,” determines whether there is “over-population” or not, and whether in consequence thereof, or independently of it, mutual aid or competition characterizes social relationships. “Over-population” and the hunger and misery associated with it, are not products of nature but products of men, or rather of social relationships which preclude such a social organization of production and of life generally as would abolish with the problem of hunger that of “over-population.” The “over-population” of which Huxley spoke was not one relative to the means of subsistence, but relative to the needs of capital accumulation; it was a product of the capitalist mode of production not of “natural law.”

    To be sure, “over-population” seems to exist in large parts of the world where people are subjected to famines, floods and backward methods o production. While this condition may not be man-made, it is at any rate maintained by men, so as to secure privileged positions within existing social relations, or international power relations, or both simultaneously. “Over-population” is not the cause but the result of these attempts to arrest social development, as may be seen by the fact that wherever hunger is eliminated population tends to decline. But even if it would not do so, there exist for a very long time ample opportunities for an increased production able to feed a world population many times its present size.

    It is not really “over-population” which worries the ruling classes. Rather the opposite is true; as is made clear by frantic efforts to increase population at the first sign of its tendential decline, by the fact that birth-control is made a crime, and by the maintenance of conditions that foster a vast increase of the impoverished masses. Conditions of misery for the masses are a prerequisite to the wealth and special social position of the ruling classes.

    Although it is good to know that there is just as much, or more, mutual aid as competition in nature and society, this is not enough to make men change their ways and to alter social relationships. For those who profit by conditions it does not matter whether it is “natural” or “unnatural,” the “best” or the “worst” method for survival of the species. Mankind s none of their concern. For those who create the profits it may be nice to know that the mutual aid practised in their own circles attests to their high ethical concepts and natural behavior, but it does not stop their exploitation. The whole controversy between Huxley and Kropotkin is somewhat beside the point — it does not touch upon the relevant issues of society, namely that “mutual aid” in human society presupposes the abolition of class relations.
    Paul Mattick

    Friday, April 18, 2008

    Food Security

    From the Socialism Or Your Money Back blog:

    The United Nations warned recently of a "new face of hunger" - it no longer has enough money to keep global malnutrition at bay. Is this due to drought, pestilence or civil war? No, it would appear that there is now a fifth apocalyptic horseman stalking the planet - a hike in the price of food.

    Annual food price increases around the world of up to 40 percent accompanied by dramatic rises in fuel costs have stretched the already flimsy safety net of global capitalism to breaking point. Josette Sheeran, head of the UN's World Food Programme (WFP) earned his crust by identifying what might just turn out to be the problem: "There is food on shelves but people are priced out of the market". Not for the first time, capitalism appears to have made history of recent attempts to reform it.

    It’s no longer just the countryside that is suffering: famine is coming to the cities of the third world. There is vulnerability in urban areas never seen before. Food riots have sparked recently even in countries with no history of such events, from Morocco to Mexico, Senegal to Uzbekistan. An increasingly globalised society appears to be presenting the same problems worldwide.

    The cause of the price rises is complex but is in part due to increased demand for animal feed from increasingly prosperous populations in India and China, who have rising expectations of a "western" lifestyle. Climate change has also had a direct impact due to increased extreme weather events affecting productivity. Indirect climate change impacts include the use of more land and agricultural produce for biofuels rather than for food. Is a starving child factored into your carbon footprint calculation? No sooner does the market system start to try and solve one problem - making production of supposedly renewable biofuels profitable in order to address global warming - than it appears to create another problem.

    Of course the hungry and malnourished have never actually been away. Famines are just the tip of the iceberg: even between the droughts and civil wars, fellow members of our species die needless deaths (usually before their 5th birthday) and in their thousands everyday. The exact figures are not known or recorded: the Tomb of the Unknown Famine Victim grows bigger by the minute.

    It is clear now however that, for every death from hunger, there is no genuine technical cause. For every child's life that hangs in the balance, sufficient food has always been available within a matter of hours' - if not in some cases minutes' - distance. It’s not a logistical problem or a matter of distribution. Neither is it an error in the market: the system is operating as it is meant to.

    But isn't the market meant to send signals between consumers and producers ? That's its claim to fame surely, that it efficiently lubricates supply and demand, matching the two. In reality the signal which the market often responds to is not one regarding supply and demand but the one identifying profitability. The entire edifice of the money system is not geared to satisfying the needs of the majority for even the simplest means of living, such as food. Instead the objective is nothing more or less than profit, and it is an objective shared by the small minority who own and control the means of producing wealth to the exclusion of the rest of us.

    If you are an individual capitalist, why sell your entire warehouse of grain for a small profit per unit ? And just to watch the market price drop? Far better to make just as much profit by restricting the amount you sell, and keeping the price high, and make just as much profit, while keeping your stock levels up for making a killing during the next famine. The invisible hand of the market can send all the signals it wants, but there is often an invisible hand picking up a telephone to tell fellow capitalists to keep stuff back, restrict sales and keep prices up. This society offers little security - food or otherwise - except the security to make profit.

    Thursday, April 17, 2008

    Who Cares? (2008)

    From the April 2008 issue of the Socialist Standard

    As the US presidential election circus passes, people continue to suffer even in the US

    It’s the US presidential election year. Populations of the world take notice. The media circus is in full flow and the season is a long one. The mainstream media love a good fight and will pounce on any juicy morsel, wringing it to death in the cause of democracy – Clinton’s moment with tears in her eyes or the decision or non-decision to show some cleavage; Obama’s plagiarizing or agreed borrowing of phrases from a third party’s speech – grist to the mill of information for the masses, essential in the common voter’s decision making process. Who do we think will make the toughest Commander in Chief and be able to make the ‘hard’ decisions? It appears the aim is to keep the public’s eyes as far away from reality and the real issues as possible. Deflect their attention whilst hypnotising them into believing their vote will actually make a difference in any significant area of their lives.

    Even the more serious ‘liberal’ or ‘progressive’ US media are spending an inordinate amount of time and space debating and dissecting which sections of the population will vote for (1) a black, or (2) a woman. The fact that they are from the same party and broadly back the same agenda – and may ultimately stand on the same ticket – is less important than speculating about in which direction the various sections of the electorate are likely to be swayed either by popular appeal and endorsement of celebrities or by muck-raking and negative campaign advertisements.

    Seemingly disconnected from the multi-million dollar, multi-media frenzy of the race for the presidency can be found other articles given over to topics not covered in the mainstream media but which ought to be in the forefront for the presidential candidates, the whole electorate and the rest of the world. Writers of several articles recently have investigated the care of physically injured or mentally scarred US troops returning from Iraq, and have revealed some chilling truths. Last year conditions at the Walter Reed Medical Centre, a military hospital, became so bad that it entered the realm of international coverage for a short time. Equipment was in short supply, specialists were leaving, the unit was seriously underfunded leading to lack of appropriate care for seriously wounded patients and a Pentagon Mental Health Task Force deemed its staffing level “woefully inadequate”. Bush made promises that it would be sorted and the hue and cry died away. Fairly early on in the conflict in Iraq some doctors, psychiatrists, psychologists and counsellors recognised that significant numbers of military personnel were suffering from post traumatic stress disorder (PTSD), especially if they had had to undergo a second or third term of duty. Many were simply given a course of drug therapy, a pep-talk and sent back to their unit or, whilst in the US between tours, some of them, with impeccable records and commendations for heroic action, developed problems with drugs, alcohol, gambling, writing bad cheques and ended up in military jail, some losing rank and others being discharged dishonourably.

    In the early days counsellors and psychiatrists were pressed not to accept PTSD, certainly not to register it on record, rather to rebrand the affliction as ‘Personality Disorder’ and to suggest that those so afflicted were obviously unstable before they entered the military and were consequently kicked out of the service. Eventually after pressure from certain quarters thousands, rather than the original few dozen, were accepted as bona fide sufferers of PTSD and were put on a list to await treatment. But still denial of PTSD persists, especially in the Marine Corps which has “a deeply macho culture”. It is 93% male, 66% of whom are 25 or younger and 13% are teenagers. One civilian psychiatrist who treats Iraq and Afghanistan veterans tells of young veterans being ridiculed by their chain of command if they asked for help.

    The Pentagon’s Mental Health Task Force reported last June that 31% of marines serving in Iraq and Afghanistan are suffering from traumatic stress and that marine suicide rates have been above average since the invasion of Afghanistan. (32 active duty suicides in the Marine Corps in 2004, no mention of the number among veterans). There are severe shortcomings in providing care for those who do qualify. A year after the Marine Corps’ review of less-than-honourable discharges recommended screening all marines and sailors who commit ‘particularly uncharacteristic misconduct’ following deployment the programme has not yet started because they lack the manpower.

    Before the severely wounded or traumatised arrive back in the US they are transported to the Landstuhl Regional Medical Centre in Germany. The Air Force colonel who was chief of medical operations in the Europe headquarters for 2 years, 2004-6 said “politics infused every aspect of care” and that the funding was the worst she had seen in 20 years in the military. They weren’t allowed to increase staffing because it would give the wrong message, that it would look like they were expecting more casualties. They weren’t allowed to send the visibly wounded home on commercial planes because it might upset US citizens to see them and the military planes were so cold that charity appeals were made in order to provide hats, scarves and mittens for the wounded. Mittens, because they fit wounded hands better than gloves.

    Here’s the rub – this huge military set-up with an annual budget of billions, desperately recruiting from all quarters, promising college educations for free and later reneging, promising full US citizenship to non-citizens and then reneging and promising full support to veterans and reneging wherever possible. The reason PTSD is a contentious diagnosis is because it means that sufferers are entitled to full support, free drugs and veterans’ benefits for life (i.e. expensive). If it can be reduced to ‘personality disorder’ they can be thrown out and denied entitlement. If they can be recommended for an ‘other-than-honourable’ discharge (for drug use whilst recovering or other misdemeanours) notwithstanding an exemplary service record, veterans’ benefits would be denied, including healthcare, for life.

    The bottom line, soldiers, sailors, airmen and marines, don’t kid yourselves about patriotism or fighting terrorists or protecting your country. When was war any different? It’s just the workers protecting the interests of their masters. It’s the same for you as it is for the rest of us. You’re simply there to be used, abused and paid as little as they can get away with. These are the issues that should be engaging the media circus, placing them squarely in front of the electorate and the presidential candidates. But they aren’t and they won’t be because the mass media supports the status quo. Will the workers ever learn?
    Janet Surman

    Whats the Matter with Pennsylvania?

    From the Marx and Coca-Cola blog

    Recently at a campaign event Barack Obama made the following comment about the dying Rust Belt towns in Pennsylvania:

    "You go into these small towns in Pennsylvania and, like a lot of small towns in the Midwest, the jobs have been gone now for 25 years and nothing's replaced them...And they fell through the Clinton administration, and the Bush administration, and each successive administration has said that somehow these communities are gonna regenerate and they have not.

    And it's not surprising then they get bitter, they cling to guns or religion or antipathy to people who aren't like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations."

    I couldn't agree more (except for the gun part. People like guns, because like cigarettes, they're cool). The goal of this blog is to channel working class bitterness away from religion and xenophobia into actual constructive action (I admit it's a long term project). According to a McCain spokesman that makes me a latte-drinking, New York Times reading, Volvo drinking liberal freak show:
    "It shows an elitism and condescension towards hardworking Americans that is nothing short of breathtaking," [Steve] Schmidt said. "It is hard to imagine someone running for president who is more out of touch with average Americans."

    This from a candidate that thinks everything is going great in Iraq.

    Hillary, who's made 109 million dollars since leaving the White House, also disagrees:
    "Well, that is not my experience," she said. "As I travel around Pennsylvania I meet people who are resilient, optimistic, positive, who are rolling up their sleeves. They are working hard every day for a better future for themselves and their children"

    Move along. Nothing to see here. Everything is fine. People are working harder, but for a lot less then they used to. Not for a better future, but just to keep their heads above water. Obama with his typical silver tongue, fired back in Indiana:
    "When I go around and I talk to people there is frustration and there is anger and there is bitterness. And what's worse is when people are expressing their anger then politicians try to say what are you angry about? This just happened - I want to make a point here today.

    "I was in San Francisco talking to a group at a fundraiser and somebody asked how're you going to get votes in Pennsylvania? What's going on there? We hear that's its hard for some working class people to get behind you're campaign. I said, "Well look, they're frustrated and for good reason. Because for the last 25 years they've seen jobs shipped overseas. They've seen their economies collapse. They have lost their jobs. They have lost their pensions. They have lost their healthcare.

    "And for 25, 30 years Democrats and Republicans have come before them and said we're going to make your community better. We're going to make it right and nothing ever happens. And of course they're bitter. Of course they're frustrated. You would be too. In fact many of you are. Because the same thing has happened here in Indiana. The same thing happened across the border in Decatur. The same thing has happened all across the country. Nobody is looking out for you. Nobody is thinking about you. And so people end up- they don't vote on economic issues because they don't expect anybody's going to help them. So people end up, you know, voting on issues like guns, and are they going to have the right to bear arms. They vote on issues like gay marriage. And they take refuge in their faith and their community and their families and things they can count on. But they don't believe they can count on Washington. So I made this statement-- so, here's what's rich. Senator Clinton says 'No, I don't think that people are bitter in Pennsylvania. You know, I think Barack's being condescending.' John McCain says, 'Oh, how could he say that? How could he say people are bitter? You know, he's obviously out of touch with people.'

    "Out of touch? Out of touch? I mean, John McCain--it took him three tries to finally figure out that the home foreclosure crisis was a problem and to come up with a plan for it, and he's saying I'm out of touch? Senator Clinton voted for a credit card-sponsored bankruptcy bill that made it harder for people to get out of debt after taking money from the financial services companies, and she says I'm out of touch? No, I'm in touch. I know exactly what's going on. I know what's going on in Pennsylvania. I know what's going on in Indiana. I know what's going on in Illinois. People are fed-up. They're angry and they're frustrated and they're bitter. And they want to see a change in Washington and that's why I'm running for President of the United States of America."

    As I've said before I like Obama's populist rhetoric. It will probably carry him to the White House. His actual policies, however, aren't much of a change from the liberal consensus. So when he says "And so people end up- they don't vote on economic issues because they don't expect anybody's going to help them." he's not quite right. The working class can't vote their economic interest, because even Democrats, like Obama, believe that the market is a force of nature. You may be able to cover people's head, but you can't stop the rain from falling. Us working folk shouldn't expect the government (or religion, or nationalism) to save us. So we'll have to find another way.


    Wednesday, April 16, 2008

    The Sick Society

    Manchester Branch Day School

    Saturday 19 April, 1pm to 5pm

    Capitalism on The Couch

    Speaker: Peter Rigg

    Can Socialism Cure our Ills?

    Speaker: Ed Blewitt

    Friends Meeting House,

    Mount Street,

    City Centre

    (next to Central Library and Manchester Town Hall)

    Weekly Bulletin of The Socialist Party of Great Britain (42)

    Dear Friends,

    Welcome to the 42nd of our weekly bulletins to keep you informed of changes at Socialist Party of Great Britain @ MySpace.

    We now have 1230 friends!

    Recent blogs:

  • Intellectual Property: a further restriction on personal freedom
  • Mary Gray and Eleanor Marx
  • Labour and the unions: back to square one
  • This week's top quote:

    "So long as the system of competition in the production and exchange of the means of life goes on, the degradation of the arts will go on; and if that system is to last for ever, then art is doomed, and will surely die; that is to say, civilization will die." [William Morris, Art Under Plutocracy, 1883.]

    Continuing luck with your MySpace adventures!

    Robert and Piers

    Socialist Party of Great Britain

    Sunday, April 13, 2008

    Breaking News: SEIU invades Labor Notes

    News that was broken by the World Socialist Party of the United States website

    10:30 PM Saturday April 13

    The Service Employees Industrial Union (SEIU) has sent in several bus loads of members to disrupt the annual meeting of Labor Notes in Detroit. The Labor Notes conference is one of the most important gatherings of rank and file labor activists in Canada and the US.

    Friends of the WSP at the conference report that an SEIU activist bloodied a 70+ year old female member of Labor Notes.

    This is an episode in a conflict between the California Nurses Association (Labor Notes version) and SEIU (SEIU version) as well as Labor note’s support of a dissident leader within SEIU. The leader of the CNA and the dissident SEIU leader had been scheduled to be at the Labor Notes annual meeting.

    Whatever the dispute, this is a disgraceful return to the labor thuggery of the mid-20th Century labor movement.

    We’ll update this post as more information is learned.

    Update 1 (11:30 PM Pacific)

    Discussion on the conflict between SEIU and CNA available here.

    Update 2 (8:45 AM Pacific)

    From Labor Notes website:

    SEIU International Backs Away From Debate, Disrupts 2008 Labor Notes Conference

    seiu ln protest at conference

    SEIU protesters attempt to storm the banquet at the 2008 Labor Notes Conference. Photo: Jim West.

    When you are trying to put the movement back into the labor movement, you’re going to meet resistance. Labor Notes supporters are no strangers to heated debate—and the SEIU International is not the first union to protest at our conference. During the 1980s, for example, we saw opponents of the New Directions Movement inside the United Auto Workers put up picket lines outside our conference hotel and had BLAST—the Brotherhood of Loyal Americans and Strong Teamsters—try to intimidate Teamster reformers attending our events.

    People are going to disagree and that is fine. There is no idea that can’t be discussed at a Labor Notes conference. We welcome debate on any and all issues facing the labor movement, including the heated dispute between the California Nurses Association/National Nurses Organizing Committee (CNA/NNOC) and the leaders of the Service Employees International Union (SEIU) over the best way to build power for health care workers. But that debate must take place with respect and free from intimidation. Despite being welcomed to the conference earlier in the day—and given space to debate supporters of the CNA/NNOC about neutrality organizing agreements—SEIU staff and members shouted down speakers at workshops and panels throughout the event.

    At our Saturday night banquet hundreds of SEIU protesters stormed into our conference and confronted our volunteers and supporters. In 29 years we have never had a group of protesters attack our conference or the brothers and sisters who attend it. Violence has no place within our labor movement, and we call on the national leadership of SEIU, including President Andy Stern, to repudiate it.

    Thursday, April 10, 2008

    Pieces Together - "War is stupid." (2008)

    From the April 2008 issue of the Socialist Standard

    Land of the Free?

    "For the first time in U.S. history, more than one of every 100 adults is in jail or prison, according to a new report documenting America's rank as the world's No. 1 incarcerator. It urges states to curtail corrections spending by placing fewer low-risk offenders behind bars. Using state-by-state data, the report says 2,319,258 Americans were in jail or prison at the start of 2008 — one out of every 99.1 adults. Whether per capita or in raw numbers, it's more than any other nation. The report, released Thursday by the Pew Center on the States, said the 50 states spent more than $49 billion on corrections last year, up from less than $11 billion 20 years earlier. The rate of increase for prison costs was six times greater than for higher education spending, the report said." (Yahoo News, 29 February)

    This is Freedom?

    "As if the Government doesn't know enough about us already, it is now using lie-detector equipment (or ‘voice-risk analysis’, as it is euphemistically known) to signal whether people claiming benefit are telling the truth. If you receive a phone call from a town hall official asking about your circumstances, it seems that your answers - or rather, the tone of voice in which you give them - could well be scrutinised by a computer for telltale signs of ‘stress‘. ... In the Government's book, apparently, stress in the voice is a pretty good indication of flagrant dishonesty. You will be investigated further. Big Brother is most certainly watching you." (Times, 27 February)

    War is Stupid

    "The last French veteran of World War I, an Italian immigrant who lied about his age to join the Foreign Legion and fight in the trenches, died Wednesday aged 110, President Nicolas Sarkozy said. Lazare Ponticelli, the last of more than eight million men who fought under French colours in the 1914-18 war that tore Europe apart, died at the home he shared with his daughter in Kremlin-BicĂȘtre, a Paris suburb. Reflecting on his wartime experiences, he once said: "You shoot at men who are fathers: war is completely stupid." (Yahoo News, 12 March)

    The American Dream?

    "More American homeowners are mired in negative equity than at any time since the Great Depression of the Thirties ... Close to 9 million Americans, or 10.3 per cent of homeowners in the US, now owe more on their mortgages than their house is worth, according to the latest figures from Moody's, the ratings agency, as inventories of unsold homes continue to pile up in an already over-supplied market." (Observer, 24 February) "House prices in America are now falling at their fastest rate since records began in 1964, while repossessions and new houses for sale are at levels not seen since the Depression in 1929." (Observer, 2 March)

    Democracy in Action?

    "President Bush has vetoed a law preventing the CIA using interrogation techniques condemned by many as torture, because it ‘would take away one of the most valuable tools in the War on Terror’ ...The veto throws the spotlight back on to America's use of so-called coercive interrogation methods like waterboarding, the simulated drowning technique invented by Spanish inquisitors and adopted by regimes such as the Khmer Rouge." (Times, 10 March)

    Wednesday, April 9, 2008

    Weekly Bulletin of The Socialist Party of Great Britain (41)

    Dear Friends,

    Welcome to the 41st of our weekly bulletins to keep you informed of changes at Socialist Party of Great Britain @ MySpace.

    We now have 1217 friends!

    Recent blogs:

  • Marxism and Darwinism
  • ’Manufacturing Britishness’
  • Foreign takeovers: a non-issue
  • This week's top quote:

    ". . . There is something in human history like retribution: and it is a rule of historical retribution that its instrument be forged not by the offended, but by the offender himself.

    The first blow dealt to the French monarchy proceeded from the nobility, not from the peasants. The Indian revolt does not commence with the Ryots, tortured, dishonored and stripped naked by the British, but with the Sepoys, clad, fed, petted, fatted and pampered by them." Marx, The Indian Revolt, New-York Daily Tribune, September 16, 1857.

    Continuing luck with your MySpace adventures!

    Robert and Piers

    Socialist Party of Great Britain

    If I Were A Rich Man . . . (2008)

    From the April 2008 issue of the Socialist Standard
    ‘There’s class warfare all right, but it’s my class, the rich class, that’s making war, and we’re winning’. New York Times, 26th Nov 2006
    So said, with more than a hint of shame, the person revealed by Forbes magazine last month to be the world’s richest man – Warren Buffett. With a fortune estimated to be in the region of 62 billion dollars, Buffett is now a couple of billion ahead of the Mexican telecoms tycoon Carlos Slim, and four billion or so ahead of his friend and bridge partner, Bill Gates. Britain’s richest man, Labour Party donor Lakshmi Mittal, is fourth, one of 49 billionaires living in the UK.
    Buffett, dubbed the ‘Sage of Omaha’ because of his homespun wit and wisdom, is something of an enigma, a compulsive accumulator of wealth that he is in some respects embarrassed about. He may be the richest man in the world, but lives in the same house he bought for $31,000 when he was 28, exists on a diet of hamburgers, candy bars and Cherry Coke, and refuses to have more than one car (an old one, at that). In a world obsessed by conspicuous consumption, he is hardly a man given to ostentatious displays of wealth.

    From a very early age Buffett was fascinated by numbers, mathematical calculations and money, and was obsessed with becoming rich, to such an extent that according to Mary Buffett, as a child in 1938, ‘in the sweltering summer heat of Nebraska, he walked miles to the racetrack where he spent hours on his hands and knees scouring the sawdust-covered floors for discarded racing stubs, hoping to find a winning ticket’ (The New Buffettology). The son of a Nebraska stockbroker, he made his first stock market investment when he was eleven (three shares in a firm called Cities Service) and by the time he was old enough to go to college he had made $6,000.

    Harvard reject
    After his degree, Buffett applied to study at the prestigious Harvard Business School and was rejected. But this was a blessing in disguise for him, because he ended up going to Columbia University instead where he studied under Benjamin Graham, considered by many at the time (and plenty since) to have been the greatest investment analyst of the twentieth century. Graham wrote two seminal works: Security Analysis (co-authored with David Dodd) in 1934, and The Intelligent Investor, the original edition of which was published in 1949. The teachings of Graham, and these two books in particular, had a profound impact on Buffett, to such an extent that he eventually persuaded Graham to take him on at his own Wall Street investment firm (at one stage he even offered to work for free).

    When Graham retired in the 1950s, a homesick Warren Buffett returned to Nebraska to set up his own investment partnership. This was the real beginnings of his fortune, where he began to turn an initial investment of $105,000 collected from friends and family (only $100 of which was his own) into the $62,000,000,000 it is now. Buffett’s fund management fees were performance-related and by 1969, when he decided to close down the partnership, assets under management had grown to around $104 million, in which Buffett’s personal stake was over $20 million. By this time Buffett was convinced that a bear market was around the corner, where sustained downward pressure would be put on share prices after the end of the 1950s and 60s economic boom.

    But it was also in this period that Buffett laid the foundations for his greatest leap in wealth, taking over the company with which he has been synonymous ever since: Berkshire Hathaway. This ailing textile company was steadily bought up by Buffett and his partners typically for around seven to eight dollars a share and in 1965 they seized control of it. When Buffett dissolved his investment partnership he offered his partners a choice of either cash or a stake in Berkshire Hathaway. Those who took the shares instead of cash have seen them rise in price in the period since to the extent they currently trade in excess of $140,000 each on the New York Stock Exchange.

    Woodstock for capitalists
    So, how did Buffett really become so rich and help other Berkshire Hathaway shareholders to be the same? By being, in Buffett’s own words, in the right place, at the right time, but also by being the perfect capitalist. As Buffett would be the first to admit, he has never invented or made anything; indeed, he is very far from being the great all-American entrepreneur of popular mythology – he’s happy to let Bill Gates take that sobriquet. Instead, he is the most famous example of a phenomenon Friedrich Engels wrote about in the nineteenth century, where Engels identified that the key technical role that entrepreneurs played in the growth of capitalism was on the wane:
    ‘All the social functions of the capitalist are now performed by salaried employees. The capitalist now has no other social function than that of pocketing dividends, tearing off coupons, and gambling on the stock exchange, where different capitalists despoil one another of their capital.’ (Socialism: Utopian and Scientific).
    In this sense, the capitalist class, as owners of capital who no longer have to work and whose key technical function in the rise of capitalism has been largely taken away, become functionaries of capital – and interestingly, Buffett has defined himself as being an ‘allocator of capital’ above all else. In this respect, Buffett is a very modern capitalist – an investor in companies and markets rather than an inventor of things. Every year, Berkshire Hathaway shareholders arrive in Nebraska for their annual shareholders’ meeting to pay homage to Buffett and his side-kick Charlie Munger in an event they call ‘Woodstock for capitalists’; there is little entrepreneurial spirit to be seen, for there is no need.

    Meet ‘Mr Market’
    Buffett used Berkshire Hathaway as an investment vehicle, using it to take over insurance companies and other firms that generated steady cash flow. In owning firms outright, he was able to mitigate his exposure to the stock market when he felt it necessary. Over time, though, Buffett used Berkshire’s excess cash to selectively buy back into stocks.

    In doing so, he abided by the investing principles handed down to him by his mentor, Ben Graham, often referred to as ‘value investing’. In essence, this meant investing in companies based on their real value and assets (and their ability to grow them) rather than what was likely to happen to their short or medium-term share price. Graham and Buffet both took the view that value and price were not identical, even if they gravitated in the same direction over the long-term (leading Graham to famously comment that ‘in the short run the stock market is a voting machine but in the long run it’s a weighing machine’).

    In particular, Graham and Buffett took issue with the academic theory known as ‘Efficient Markets Hypothesis’. This theory states that stock market prices (allegedly like all other prices) are efficient, in that all known information is reflected in them so that it is impossible for significant market inefficiencies to occur, and impossible for any investor to ‘beat the market’ in the long run through anything other than pure luck.

    Ben Graham had attacked this view with his parable of ‘Mr Market’, an agreeable potential business partner who is always ready on any given day to do a deal over a business or share of a business so long as he can name the price. One Graham and Buffett acolyte has explained the concept this way:
    ‘Mr Market is bipolar. Our partner goes through gigantic mood swings from the highest euphoria to the lowest depression. Most of the time Mr Market is taking his meds, and on most days he’s pretty lucid about the prices he sells and buys at. That means most of the time the price of a business is pretty close to its value. But sometimes he can get so insanely optimistic that he prices everything insanely high. On other days Mr Market can get so depressed that, unlike Annie, he’s convinced the sun will not come up tomorrow . . .
    It’s kind of a shame to take advantage of someone who’s emotionally unbalanced, but then again, he doesn’t seem to mind. He’s been bipolar for so long he just thinks it’s normal. He doesn’t honestly think that he’s mispricing anything, even if one day the price is $100 a share and just a few months later it’s $10. And if you ask the professors who study Mr Market, they’ll tell you the guy is fine.’
    (Phil Town, Rule 1.)
    In essence, this is how Buffett has made most of his money – by realising that the market economy isn’t intrinsically an efficient allocator of resources and is driven by wild swings of sentiment that often belie underlying reality. In the great bear market of 1973-4, when stocks in the US more than halved in price measured by the S & P 500 index, and fell by nearly three-quarters in the UK, Buffett said he felt ‘like an over-sexed guy in a whorehouse’. He invested massive amounts and saw share prices recover within a year or so, despite no significant change in the performance of the underlying economy or the companies within it.

    Buffett is no lover of the free-market and has made much of his money through exploiting the fact that capitalism isn’t nearly the competitive ideal that many of its fiercest advocates assume. Illustrative of Buffett’s approach is the type of company he has used Berkshire Hathaway to buy into: those he identifies as having an economic ‘moat’, a durable competitive advantage or quasi-monopoly position that their competitors (if they have any) cannot easily breach. Buffett hates, and steers clear of, companies that operate in price-competitive markets, as they are the most vulnerable to the vicissitudes of the capitalist economy and those whose growth is least assured and steady over time. Instead, he typically invests in companies that have very different characteristics – for example, firms:
    1. that achieve dominance through having strong brands that involve repeat buying (Buffett has been a major shareholder in both Coca-Cola and Gillette),
    2. that can exercise control over a service through which they allow access by charging others for the privilege (such as some utility network companies),
    3. that secure massive forward orders based on major long-term contracts, typically with the state sector, for outsourcing, regeneration, etc.,
    4. that have a product that becomes so all-pervasive that switching to a competitor isn’t worth the trouble (Microsoft),
    5. that have a company secret such as a patent that acts as a barrier to entry for other firms (e.g. Intel, GlaxoSmithKline),
    6. that have such economies of scale they can undercut their competitors and achieve market dominance (e.g. Wal-Mart in the US and a recent Buffett buy in the UK, Tesco).
    When these type of firms are mispriced in the stock market because of negative sentiment – giving what Graham called a ‘margin of safety’ to the buyer – then Buffett starts accumulating shares. Companies with an economic moat typically grow their profits well in excess of 10 per cent per annum on average; indeed, Buffett usually looks for firms that can grow their ‘book value’ and profits at 15 per cent, potentially giving him a huge compounded return over the years, especially if he has already bought them well below their real value. And he has declared his favourite holding period for such companies to be ‘forever’ (Buffett rarely involves himself in short-term speculation and when he does it tends to be through taking advantage of arbitrage opportunities, again based on market mispricing).

    In many respects, Buffett probably has a better understanding of how capitalism works than most other supporters of it. While, for instance, he understands the need of workers to organise themselves in trade unions so as to defend their interests, he is apparently wary about investing in highly unionised companies:
    ‘The inherent financial weakness of the price-competitive business has given organized labor enormous power to demand a higher cut of a company’s profits . . . in situations like these, unions become demanding semi-owners with whom shareholders must constantly share their wealth or risk a strike that could lead to the financial destruction of their business. Warren doesn’t like to own businesses that have organized labour.’ (Mary Buffett, The New Buffettology).
    This quote illustrates that Buffet knows perfectly well what is going on in the struggle between capital and labour (and which side he necessarily sits on).

    One of the many ironies of Buffett’s life is that he has accumulated capital for the sake of it, very much as the system demands, yet has never really known what to do with his vast personal wealth; he spends very little of it and doesn’t believe in inherited wealth either. So in 2006 he declared he was going to give away at least $30 billion of his fortune to the Bill Gates Foundation, so that it could be spent improving healthcare across the world.

    In many ways this was a noble gesture, and a more generous act than anything from most of the world’s other rich men, yet it is the very system in which he is a proud ‘allocator of capital’ that leads to world poverty and lack of decent healthcare in the first place. Buffett has recently attacked the Republican administration in the US on the grounds that it is obscene that he pays less of a proportion of his income in tax than someone on the minimum wage. Yet, above anyone else, Buffett should know that in capitalism, capital accumulates to those who have it and invest it. And it expands because those who are relatively poor (the working class) create value greater than they ever receive back in wages and salaries, with this ‘surplus value’ created by those who have to work for a living sustaining those who don’t, generating rent, interest and profit for the system as a whole than can be reinvested in the capitalist treadmill. In the market economy, the rich are rich because the poor are poor. Indeed, companies grow because the rich are rich and exploit the poor, and it can’t work any other way.

    Mr Buffett may be a highly intelligent man and a great philanthropist, but the bipolar extremes characteristic of Mr Market are no way to run a sane society, but are characteristic instead of a system where only a minority can be winners and they depend for their position on the vast majority being losers. And no amount of well-intentioned philanthropy is ever likely to change it.
    Dave Perrin

    Tuesday, April 8, 2008

    That's Capitalism (2008)

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

    In the February Socialist Standard, in an article on the price of bread, we commented on the fact that under capitalism a basic foodstuff such as wheat was “a world commodity traded on world markets and so subject to international speculators betting on its future price going up or down”.

    At the end of the month the news broke that a “rogue trader” called Dooley working for a firm called MF Global had lost his employers $141.5 million. Rather foolishly, it might be thought, he bet that the price of wheat would go down. But it went up:
    “He had bet on the price of wheat declining by entering into about 4,000 futures contracts, which would require him to deliver about 20 million bushels of wheat at an agreed time and price. The greater the decline in the price between agreeing the contract and delivering the wheat, the cheaper the cost of satisfying the delivery and the larger the profit Mr Dooley stood to make. But instead, the price of wheat kept on rising . . .”      (London Times, 29 February)
    It should not be thought that MF Global is in the business of delivering wheat. It doesn’t run a fleet of ships or trucks. It is a financial institution specialising in speculating on how the price of wheat – and anything else – moves. When the delivery date of, in this case, wheat comes near they pass the contract on to a shipping or delivery firm.

    As Marx once pointed out, the capitalist is not interested in any particular product. All they are interested in is profit and they don’t care whether they make it from producing and selling bibles or producing and selling whisky. Firms like MF Global, with no connection with actual production, illustrate this point well.

    Wheat is not sold to individual consumers. It is sold to capitalist firms with money invested in milling it into flour, who, in turn, sell this on the other capitalist firms with money invested in baking it into bread. These intermediary firms are not happy with the rise in the price of wheat which has doubled over the past year. The head of one of them, Sir Michael Darrington, lashed out at wheat speculators on the occasion of his retirement as managing director of Greggs, the high street bakers:
    “There are stocks of wheat and grain in the world, and crops are growing at the moment but funds are being set up as speculators see an opportunity to make some short-term money and someone has to pay for it. It’s really sad for people in the developing world where food can account for 70 per cent of the family budget. Wheat is predominantly grown in America, Australia, Europe – the wealthier areas – and people in under-developed countries are hurting the most”.
    The (London) Times (12 March), reporting this, said he added:
    “I suppose that’s just capitalism but it’s jolly disappointing. If society looked down on these funds then perhaps it would make a difference”.
    It is indeed a powerful indictment of capitalism that firms like MF Global speculate on the price of wheat while at the same time millions throughout the world are suffering from a lack of food. Proof, as if any more were required, that capitalism is a system geared to profit-making not the satisfaction of human needs.

    But would it make any difference if MF Global and other speculative funds were “looked down on”? It is probably true that most people in the world do already look down on them, including a decent-minded capitalist like Sir Michael. But they can’t do anything about it. After all, investing money to make more money is what capitalism is all about. MF Global and the other funds are just applying the profit motive.

    Monday, April 7, 2008

    Howard Zinn's 'Je Ne Suis Pas Marxiste'

    The following is from The Zinn Reader (1997, Seven Stories Press, pp 574-578) and is reprinted with the permission of the author. It has been posted on the blog on two previous occasions.
    For a long time I thought that there were important and useful ideas in Marxist philosophy and political economy that should be protected from the self-righteous cries on the right that "Marxism is dead,” as well as from the arrogant assumptions of the commissars of various dictatorships that their monstrous regimes represented “Marxism.” This piece was written for Z Magazine, and reprinted in my book Failure To Quit (Common Courage Press, 1993).
    Not long ago, someone referred to me publicly as a "Marxist professor.” In fact, two people did. One was a spokesman for “Accuracy in Academia,” worried that there were “five thousand Marxist faculty members” in the United States (which diminished my importance, but also my loneliness). The other was a former student I encountered on a shuttle to New York, a fellow traveller. I felt a bit honoured. A “Marxist” means a tough guy (making up for the pillowy connotation of the “professor”), a person of formidable politics, someone not to be trifled with, someone who knows the difference between absolute and relative surplus value, and what is commodity fetishism, and refuses to buy it.
    I was also a bit taken aback (a position which yoga practitioners understand well, and which is good for you about once a day). Did “Marxist” suggest that I kept a tiny stature of Lenin in my drawer and rubbed his head to discover what policy to follow to intensify the contradictions o the imperialist camp, or what songs to sing if we were sent away to such a camp?
    Also, I remembered that famous statement of Marx: “Je ne suis pas Marxiste.” I always wondered why Marx, an English-speaking German who had studied Greek for his doctoral dissertation, would make such an important statement in French. But I am confident that he did make it, and I think I know what brought it on. After Marx and his wife Jenny had moved to London, where they lost three of their six children to illness and lived in squalor for many years, they were often visited by a young German refugee named Pieper. This guy was a total “noodnik” (there are “noodniks” all along the political spectrum stationed ten feet apart, but there is a special Left Noodnik, hired by the police, to drive revolutionaries batty). Pieper (I swear, I did not make him up) hovered around Marx gasping with admiration, once offered to translate Das Kapital into English, which he could barely speak, and kept organising Karl Marx Clubs, exasperating Marx more and more by insisting that every word Marx uttered was holy. And one day Marx caused Pieper to have a severe abdominal cramp when he said to him: “Thanks for inviting me to speak at your Karl Marx Club. But I can’t. I’m not a Marxist.”
    That was a high point in Marx’s life, and also a good starting point for considering Marx’s ideas seriously without becoming a Pieper (or a Stalin, or Kim Il Sung, or any born-again Marxist who argues that every word in Volume One, Two and Three, and especially in the Grundrisse, is unquestionably true). Because it seems to me (risking that this may lead to my inclusion in the second edition of Norman Podhoretz’s Register of Marxists, Living or Dead), Marx had some very useful thoughts.
    For instance, we find in Marx’s short but powerful Theses on Feuerbach the idea that philosophers, who always considered their job was to interpret the world, should now set about changing it, in their writings, and in their lives.
    Marx set a good example himself. While history has treated him as a secondary scholar, spending all his time in the library of the British Museum, Marx was a tireless activist all his life. He was expelled from Germany, from Belgium, from France, was arrested and put on trial in Cologne.
    Exiled to London, he kept his ties with revolutionary movements all over the world. The poverty-ridden flats that he and Jenny Marx and their children occupied became busy centres of political activity, gathering places for political refugees from the continent.
    True, many of his writings were impossibly abstract (especially those on political economy; my poor head at the age of nineteen swam, or rather drowned, with ground rent and differential rent, the falling rate of profit and the organic composition of capital). But he departed from that constantly to confront the events of 1848, the Paris Commune, rebellion in India, the Civil War in the United States.
    The manuscripts he wrote at the age of twenty-five while an exile in Paris (where he hung out in cafes with Engels, Proudhon, Bakunin, Heine, Stirner), often dismissed by hard-line fundamentalists as “immature”, contain some of the most profound ideas. His critique of capitalism in those Economic and Philosophical Manuscripts did not need any mathematical proofs of “surplus value.” It simply stated (but did not state it simply) that the capitalist system violates whatever it means to be a human. The industrial system Marx saw developing in Europe not only robbed them of the products of their work, it estranged working people from their own creative responsibilities, from one another as human beings, from the beauties of nature, from their own true selves. They lived out their lives not according to their own inner needs, but according to the necessities of survival.
    This estrangement from self and others, this alienation from all that was human, could not be overcome by an intellectual effort, by something in the mind. What was needed was a fundamental, revolutionary change in society, to create the conditions – a short workday, a rational use of the earth’s natural wealth and people’s natural talents, a just distribution of the fruits of human labour, a new social consciousness – for the flowering of human potential, for a leap into freedom as it had never been experienced in history.
    Marx understood how difficult it was to achieve this, because, no matter how “revolutionary” we are, the weight of tradition, habit, the accumulated mis-education of generations, “weighs like a nightmare on the brain of the living.”
    Marx understood politics. He saw that behind political conflicts were questions of class: who gets what. Behind benign bubbles of togetherness (We the people…our country…national security), the powerful and the wealthy would legislate on their own behalf. He noted (in The Eighteenth Brumaire, a biting, brilliant, analysis of the Napoleonic seizure of power after the 1848 Revolution in France) how a modern constitution could proclaim absolute rights, which were then limited by marginal notes (he might have been predicting the tortured constructions of the First Amendment in our own Constitution), reflecting the reality of domination by one class over another regardless of the written word.
    He saw religion, not just negatively as “the opium of the people,” but positively as the “sigh of the oppressed creature, the heart of a heartless world, the soul of soulless conditions.” This helps us understand the mass appeal of the religious charlatans of the television screen, as well as the work of Liberation Theology in joining the soulfulness of religion to the energy of revolutionary movements in miserably poor countries.
    Marx was often wrong, often dogmatic, often a “Marxist.” He was sometimes too accepting of imperial domination as “progressive,” a way of bringing capitalism faster to the third world, and therefore hastening, he thought, the road to socialism. (But he staunchly supported the rebellions of the Irish, the Poles, the Indians, the Chinese, against colonial control.)
    He was too insistent that the industrial working class must be the agent of revolution, and that this must happen first in the advanced capitalist countries. He was unnecessarily dense in his economic analysis (too much education in German universities, maybe) when his clear, simple insight into exploitation was enough: that no matter how valuable were the things workers produced, those who controlled the economy could pay them as little as they liked, and enrich themselves with the difference.
    Personally, Marx was sometimes charming, generous, self-sacrificing; at other times arrogant, obnoxious, abusive. He loved his wife and children, and they clearly adored him, but he also may have fathered the son of their German housekeeper, Lenchen.
    The anarchist, Bakunin, his rival in the International Workingmen’s Association, said of Marx: “I very much admired him for his knowledge and for his passionate and earnest devotion to the cause of the proletariat. But…our temperaments did not harmonize. He called me a sentimental idealist, and he was right. I called him vain, treacherous, and morose, and I was right.” Marx’s daughter Eleanor, on the other hand, called her father “…the cheeriest, gayest soul that ever breathed, a man brimming over with humour".
    He epitomised his own warning, that people, however advanced in their thinking, were weighted down by the limitations of their time. Still, Marx gave us acute insights, inspiring visions. I can’t imagine Marx being pleased with the “socialism” of the Soviet Union. He would have been a dissident in Moscow, I like to think. His idea of the “dictatorship of the proletariat” was the Paris Commune of 1871, where endless arguments in the streets and halls of the city gave it the vitality of a grass roots democracy, where overbearing officials could be immediately booted out of office by popular vote, where the wages of government leaders could not exceed that of ordinary workers, where the guillotine was destroyed as a symbol of capital punishment. Marx once wrote in the New York Times that he did not see how capital punishment could be justified “in a society glorifying in its civilisation.”
    Perhaps the most precious heritage of Marx’s thought is his internationalism, his hostility to the nation state, his insistence that ordinary people have no nation they must obey and give their lives for in war, that we are all linked to one another across the globe as human beings. This is not only a direct challenge to modern capitalist nationalism, with its ugly evocations of hatred for “the enemy” abroad, and its false creation of a common interest for all within certain artificial borders. It is also a rejection of the narrow nationalism of contemporary “Marxist” states, whether the Soviet Union, or China, or any of the others.
    Marx had something important to say not only as a critic of capitalism, but as a warning to revolutionaries, who, he wrote in The German Ideology, had better revolutionise themselves if they intend to do that to society. He offered an antidote to the dogmatists, the hard-liners, the Piepers, the Stalins, the commissars, the “Marxists.” He said: “Nothing human is alien to me.”
    That seems a good beginning for changing the world.
    Howard Zinn