Monday, November 3, 2008

Professor of Dismal Science

From the Socialism Or Your Money Back blog

Everyone wants to know is Barack Obama a socialist? Well, one might be forgiven for thinking so judging by the two million seven hundred and ninety thousand Google results to this question! Whatever, let us suppose you really do want to know - who ya gonna call? Ask whoever you want, and keep asking but be prepared for some confusing and contradictory answers. Perhaps if you are lucky or persistent, you will come across the Crapbusters. They are attracted like flies to anything with a high BS value. A Professor of Economics answering this question about BO in the Christian Science Monitor (sic), is likely to have a Bogus Socialism value that's off the scale. Until the end of last month we were spared such an abortion of socialst understanding.

Professor Boudreaux of George Mason University considers that BO is 'not exactly' a socialist, which is rather like saying that the DPRK isn't exactly democratic. The Professor's next mistake is to say "in the classic sense of the term "Socialism" originally meant government ownership of the major means of production and finance, such as land, coal mines, steel mills, automobile factories, and banks." BS! Actually, the term ‘socialist’ is found for the first time in the Owenite Co-operative Magazine of November 1827, where it stands for a society of common ownership. Marx and Engels used the words ‘socialism’ and ‘communism’ interchangeably to refer to a society of common ownership.

The Professor's goes on to state that a "principal promise of socialism was to replace the alleged uncertainty of markets with the comforting certainty of a central economic plan. No more guessing what consumers will buy next year and how suppliers and rival firms will behave: everyone will be led by government's visible hand to play his and her role in an all-encompassing central plan. The "wastes" of competition, cycles of booms and busts, and the "unfairness" of unequal incomes would be tossed into history's dustbin." Buy? Rival firms? Government? Central plan? None of these are features of Socialism, which the Professor says has utterly failed. By this he must mean efforts taken by the state to control capitalism's boom & bust business cycles, which is true enough.

Invoking the ghosts of Heilbroner and Hayek does not do the Professor any favours, as their understanding of Socialism is no better than his. Similiary, by saying that the collapse of the Iron Curtain has anything to do with Socialism Bourdreaux is digging himself an even deeper hole. Some countries today, as well as the Iron Curtain dictatorships of the past, have a form of state capitalism. The main features of this system are

  • · State ownership of the principal means of production.
  • · Generalised wage labour.
  • · Generalised use of money and money calculation.
  • · A relatively free market for consumer goods in the form of agricultural products and light industrial products.
  • · A market for means of production which is closely monitored by the state.
  • · Wide-scale planning activity, allocating supplies and directing products within the sphere of heavy industry, setting production targets, fixing prices and directing the flows of capital.
  • · A sizeable black-market.
  • Later Boudreaux produces another howler: "socialism's requirement that each person behave in ways prescribed by government planners is a recipe for tyranny." We in the World Socialist Movement stick to our principles and the original meaning of socialism: common ownership, democratic control and production solely for use. What place tyranny? More BS! Wealth we are told results chiefly from risk taking and explains how Michael Dell (you might be using one of 'his' computers) became a capitalist. BS! Wealth is, by definition, a product of human labour, acting upon nature-given materials, that is capable of satisfying needs. This identifies wealth with use-value. But capitalism is a society where wealth becomes a commodity having exchange value also, and sometimes only a socially-bounded use-value that is peculiar to this society – as with nuclear weapons.

    So, the really important question is not whether we have Tweedledee or Tweedledum with his finger on the nuclear button, or even if BO is full of BS, but rather if you want to side with the Professor of Dismal Science and his capitalist masters in supporting a global system in which war, waste and want are endemic or strive for its replacement with real Socialism?

    THE WAR BUSINESS: Why do capitalist states prepare for and wage war?

    The Material World column from the November 2008 issue of the Socialist Standard

    As we socialists never tire of pointing out, the primary function of military power in capitalism is to protect and expand control over resources, markets and transport routes on behalf of the capitalist class of the country concerned. However, the costs and risks that wars and armaments entail for the capitalists themselves often outweigh the benefits to them.

    For example, while the U.S. did have real interests at stake in Vietnam in the 1960s and 1970s, those interests were hardly commensurate with the enormous costs of the war it was waging there. Growing awareness of this fact within the capitalist class eventually led to withdrawal.
    In other words, states have a tendency to act in ways that appear to be irrational even in terms of the capitalist interests that they are supposed to represent.

    War – a capitalist enterprise
    There are various reasons for this apparent irrationality. But the main reason is this. War is not only a service that the state provides to the national capitalist class as a whole. War is also – and increasingly – a massive capitalist enterprise in its own right, a “war business” that wields considerable political clout and has special interests of its own.

    The core of the war business, of course, is the so-called military-industrial complex. Arms manufacturers, like other capitalist firms, seek to maximise their profits. It does not concern them whether the weapons they sell have a cogent strategic rationale.

    The military-industrial complex has a direct interest not only in the build-up of armaments but in war itself. War is the only way of testing weaponry under battlefield conditions. It uses up and destroys old stocks that then have to be replaced – rearmament is now, for instance, the top priority of the Georgian government – and stimulates demand in general.

    But nowadays arms firms are not the only large-scale “merchants of death.” Companies like Blackwater sell combat capability directly as the labour of hired mercenaries. Other companies, such as Halliburton, sell logistics and other war support services.

    Resource wars, “strategic” wars
    The argument is not that all armed conflicts are irrational in terms of the costs and benefits accruing to national capital. Some undoubtedly make good sense in these terms, as when valuable resources can be acquired at moderate expense. One example might be the “cod wars” of the 1970s between Britain and Iceland over fishing rights in the North Atlantic. Another, perhaps, is the ongoing conflict over the Spratly Islands in the South China Sea, whose oil and gas deposits are coveted by China, Taiwan, Vietnam, the Philippines and Malaysia.

    At the other extreme, some wars have no discernible connection with the control of markets and resources. The recent war in Georgia was in this category (see October “Material World”). Although important oil and gas pipelines run through the south of the country, Russia did not contest control over them. Russia’s rationale for war was “strategic” – that is, getting into a better position to fight future wars.

    Again, Israel’s wars are senseless from the point of view of the Israeli capitalist class as a whole, which has a clear interest in a peace settlement that will give it full access to the markets and cheap labour of the Middle East. This interest, however, seems unable to prevail against the political stranglehold of Israel’s military-industrial complex.

    The nature of the wars that the US and its allies are currently fighting in Iraq, Afghanistan and Pakistan is less clear-cut. Control of resources, markets and transport routes is certainly an important factor, especially in Iraq, but the likely outcome is hardly such as to justify the enormous costs involved. While the ultimate motive for war may be to arrest the decline in the competitive position of the US in the world economy, the actual effect is to accelerate that decline (see May “Material World”).

    Capitalism and war: two models
    So we end up with two contrasting models of the relationship between capitalism and war. In the first model, war appears as an instrument in the hands of the state, which acts as the “executive committee of the (national) capitalist class as a whole” (Marx). The second model, unlike the first, takes into account the fact that war is evolving from an instrument at the service of the national capitalist class as a whole into a capitalist enterprise in its own right -- what we might call the war business. The war business has special capitalist interests of its own, so it cannot function simply as an instrument of more general capitalist interests.

    Does the first model represent capitalism in its “normal” form, while the second model represents an “abnormal” ultra-militaristic mutation of the capitalist system? Is the first model rational, in capitalist if not in human terms, while the second model is irrational? At first sight that seems reasonable.

    But is there in fact any good reason to regard one model as any more irrational than the other? Each model represents a possible variant of capitalism and a possible form of capitalist rationality. The difference is that the first model assumes the existence of such a thing as “national capital as a whole,” while the second model envisions only separate capitalist enterprises. Some firms sell sausages, some sell computers – and some sell war.
    Stephen Shenfield