How would you like your capitalism served? (2010)

From the April 2010 issue of the Socialist Standard

That’s the “choice” the main and minor parties are offering at the general election.

The basic global political, social and economic problems, such as inequality, poverty, homelessness, hunger, wars, and pollution have, as their root cause, capitalism. This system is founded upon production for profit to benefit only a very small, rich minority of the planet’s population, at the expense of the majority.

In order to solve these problems, in the interests of the majority and in fact, ultimately in those of all the people, we need collectively and democratically to abolish capitalism and to replace it with the positive alternative of genuine socialism. That is to say, production for human need, with ownership and democratic control of the productive forces in the hands of the whole community.

At the General Election, the electorate will be confronted by a large number of political organisations seeking votes. Almost all of them will be the parties of capitalism’s centre, right and left wings. These include the following: Labour, Conservative, Liberal Democrat, UKIP, the Greens, BNP, Plaid Cymru, Scottish Nationalists, the Trade Union & so-called “Socialist“ Coalition (TUSC).

Many other organisations will be fielding candidates, but this sample is large enough for our purposes here. The range of views of these parties is wide, but although they mostly do not realise it, more unites them than separates them. They all support the capitalist system. Some openly admit this while others, on the Left, usually deny this reality. Upon closer inspection, we see that all their policies amount to is a list of reforms, generally in a vain attempt to make the existing system function “more efficiently” and in a more socially responsible way.


Labour: At its inception, many of its members believed that they were working for a quite different type of society which some would have described as being “socialist”. Even now, despite the experience of past Labour governments and, especially this present one, there are still members who advocate what they describe as “socialism”, but which, in reality amounts to a form of nationalisation, government intervention, in other words, state capitalism. The people who matter within the Labour Party, the leadership, want nothing to do with this. Their desire is to continue to run capitalism, under the utterly false notion that it can be controlled and made to work in the interests of the majority. The experiences of the recent Credit Crunch and recession are the latest in a long list of examples of the falseness of Labour’s position.

What is Labour now offering? It proposes: "investing now so we are best placed to take advantage of the upturn." This overlooks the deficit problem which the government faces. Private investment will only take place if a significant profit can be made. Like many apologists for the status quo, Labour talks of the “upturn”. What they never mention is the next downturn. The reality of the market system is a natural trade cycle of booms and slumps, which cannot be effectively controlled by governments of any political colour.

As regards the military, Labour wishes to “ensure that forces personnel receive state of the art medical care when they are injured on operations” and to “proceed with the construction of two new aircraft carriers”. Not surprisingly, Labour wishes to continue with its war mongering policies. Nearly a century ago, the Coalition government (mainly composed of Tories and Liberals) in Britain during the first World War, erroneously claimed that the war would be a “war to end all wars”. Now, in the 21st century, Labour which sometimes pretends to be “radical” to its own supporters, can offer nothing more than capitalism’s familiar cycle of warfare.



Liberal “Democrats”:The Liberal “Democrats” are rival warmongers to Labour and the Tories since they wish at least to “maintain the size of the UK's armed forces”. They claim that they would "put British values of decency and the rule of law back at the heart of our foreign policy". Where were the British values of “decency” during the days of the British Empire and its slave trade, the bombing of thousands of civilians in Hamburg and Dresden in the second World War and, where was the “decency” in numerous other wars in which the U.K. has been involved, such as Suez, the Falklands, the Gulf War, as well as Afghanistan and Iraq? Such is the naivety of the Liberal “Democrats” that they do not recognise that “decency” on the one hand and “maintaining armed forces” (inevitably involving preparedness for war), on the other, are incompatibles.



Conservative Party:The Conservatives have never made any secret of their support for the market system. More recently, they have been adopting slogans emphasising “change”, such as “vote for change” and “year for change”. The fact that being conservative and wanting change is a contradiction in terms, appears lost on them. That is until you realise that the only significant change that they really want is the opportunity to take over the running of capitalism, to their own advantage and that of their business friends. They advocate familiar policies of cutbacks in social expenditure, which will inevitably hit the working class hardest. All in the cause of reducing the economic deficit, much of which was caused by bailing out the banks, which will continue to profiteer out the demand for credit, fuelled by the relative poverty of the working class.



The Left: The TUSC has the following policy: “Bringing privatised public services and utilities back into public ownership under democratic control.”.


This is a typical illusion of the left-wing of capitalism that services or industries owned and run by the government or local councils are supposedly “owned by the public”. The reality is that this is state and municipal capitalism. Pricing policies in order to raise revenue, and expenditure cutbacks, restrict access to these services, particularly for the poor. The people do not own these services, as they find out when they have not got enough money to pay for them. They also discover this when the employees in them, face reductions in the real value of their wages/salaries, a deterioration in their employment conditions and/or are made redundant, just as in private industry.


“Affordable housing” is a familiar slogan of the Left. However, it does not appear to realise that housing, just like other products under the market system, is produced for profit. Since demand for housing is high in many parts of the U.K., the idea of low priced housing on any significant scale is a pipe dream. For example, in a fairly ordinary London suburb, like Palmers Green, the average price of a modest two bedroom property is now around £273,000, nearly ten times the average annual wage/salary in outer London of about £29,000, (bearing in mind the fact that many people, who are employed, receive a lot less). Incidentally, by way of comparison, in the early 1960’s, a similar type of property would have cost £3,250, with an average annual wage/salary of around £1,000. Capitalism has brought people even further away from “affordable housing” than 50 years ago.


The TUSC defines “socialism” in the following way: “A society run in the interests of the people not the millionaires. For democratic public ownership of the major companies and banks that dominate the economy”.


For them apparently, there would still be millionaires and banks in their so-called “socialist” society. This is not socialism at all, it is state capitalism, which has been tried on many occasions before by governments of differing political colours, and adopted on a larger scale in the former Soviet Union. In the end, it failed. Thus, the re-emergence of widespread privatisation.


The Left should remind themselves of the thousands of workers in the past, in the nationalised coal, steel and railway industries who had to go on strike in an attempt to protect their living standards, and indeed of the thousands of these workers who were eventually sacked, just as would have happened under private ownership. That is the way capitalism works, whether it is run privately or by the state.



UKIP: UKIP stands on the right wing of capitalism and advocates a form of British nationalism. Like all the nationalist parties, such as the BNP, Plaid Cymru, the Scottish Nationalists, Ulster Unionists and Sinn Féin, it is out of touch with the trends in modern, globalised capitalism, which has spread way beyond the boundaries of nation states into much larger political and economic power blocs.


According to UKIP, Britishness can be defined by “belief in fair play, as well as traits such as politeness.” So, if we are to believe these clowns, “fair play and politeness” begin at Dover and end in Calais. What nonsense! UKIP asserts that it believes in democracy and yet goes on to say that also supports the monarchy. The reality is that any type of genuine democracy is totally incompatible with monarchy.



Green Party: As regards the Green Party, it supports a market economy and would continue with the military, if the Greens ever participated in government. Their naivety is exposed by advocacy of a British military “only to be used in self defence”, and by their support of “binding global agreements against all weapons of mass destruction, particularly nuclear weapons.” This cannot be achieved under the present system which engenders political, economic and military rivalries.


The Greens fail to recognise that since the economy is based primarily on profit making, then the needs of the environment, just as those of the majority of people, always come in a very poor second place.



Abolish Capitalism
Capitalism, with its anti-environmental and anti-social policies, is what needs to be replaced. None of the mainstream parties is aware of this very basic fact. Limited sections of the Left have a partial awareness of it but are thoroughly committed to the idea of reforming the system and not to creating a genuine alternative. All the Left can offer are the old failed policies of state capitalism.


There are the three options facing the people at all political elections.


1). To continue to vote for one of the numerous parties whose policies are limited by the narrow parameters of capitalism, the very system responsible for the vast majority of society’s problems.


2). Not to vote at all and to become politically apathetic, which contributes to the continuation of capitalism.


3). In complete contrast to the above two, to support the World Socialist Movement which proposes the genuine, democratic sharing of resources amongst all the people, with production of goods and services for human need. In such a society, each individual would be of equal value and status, and would be able to make their own contribution, voluntarily towards producing the wealth of the new society. The people would then have free access to goods and services. In real socialism, since profit making and money will be abolished, it is all the people and the environment which will come first.

Vincent Otter

The Big Issue

Cross-Posted from the Vaux Populi blog

Bought a copy of The Big Issue outside Sainsbury's in Clapham High Street and found that it contained an article by David Harvey (in fact an extract from his new book The Enigma of Capital) which says some things we have long said:

Can capitalism survive the present trauma? Yes, of course. But at what cost? This question masks another. Can the capitalist class reproduce its power in the face of the raft of economic, social, political and geopolitical and environmental difficulties? Again, the answer is a resounding 'Yes it can'.
This will, however, require the mass of the people to give generously of the fruits of their labour to those in power, to surrender many of their rights and their hard-won asset values (in everything from housing to pension rights) and to suffer environmental degradations galore, to say nothing of serial reductions in their living standards which will mean starvation for many of those already struggling to survive at rock bottom.

and

Capitalism will never fall on its own. It will have to be pushed. The accumulation of capital will never cease. It will have to be stopped. The capitalist class will never willingly surrender its power. It will have to be dispossessed.

That's why we're contesting this election -- to urge people to organise politically to dispossess the capitalist class and establish a world society of common ownership, democratic control and production solely not profit.

It's not too late to buy this week's Big Issue. But, remember, the real big issue is whether capitalism should be allowed to continue or whether it should be replaced by socialism (not which political non-entity would make the best managing director of UKCapitalism plc).

Adam Buick

Weekly Bulletin of The Socialist Party of Great Britain 143

Dear Friends,

Welcome to the 143rd of our weekly bulletins to keep you informed of changes at Socialist Party of Great Britain @ MySpace.

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Living without money

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Imagine

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Robert and Piers

Socialist Party of Great Britain

SPGB Election Forum: 'Can politicians save the planet?'

No Way To Save An Economy (2010)

Book Review from the April 2010 issue of the Socialist Standard

No Way To Run An Economy. By Graham Turner, Pluto Press, 2009
This is the sequel to Turner’s The Credit Crunch reviewed in last April’s Socialist Standard. The book is essentially a Keynesian tome advocating quantitative easing, low interest rates and nationalisation of the banks as a way of dealing with the onset of financial crises like the most recent one.

Much that was both positive and negative about The Credit Crunch applies here too: there are some very useful graphs and statistics presented even though the general case for Keynesianism is necessarily weak. What is more interesting is that now there appears to be a partial and belated recognition of this that creeps into the analysis as the book develops. The chapter entitled ‘Structural Causes of the Recession’ in particular illustrates something of a shift in thinking to the effect that there may be something about capitalism that is fundamentally flawed in the way Marx had argued. Some of the discussion presented at this stage isn’t bad; if there is a problem it is that too much emphasis is placed on the recent decline in the share of the national product going to labour in countries like the US, meaning that allegedly consumption and profits can only be maintained in these circumstances through the extension of credit. He hedges his bets somewhat but ultimately argues that in pursuit of profits:

‘Companies are engaged in a competitive struggle, but the compression of wages will undermine the ability of consumers to buy and absorb the goods and services being produced. The contradictions with capitalism will eventually be exposed when consumers can no longer buy all the goods being produced’ (p114).

This neglects the fact that, as Marx pointed out, it is more typical for the share of wages relative to profits to rise as the boom nears its peak and that the inability of the working class to buy back all that is produced is not the cause of economic crises (if that was the case capitalism would be in permanent crisis). Ironically, Turner reproduces a key passage from Volume II of Marx’s Capital to this effect in the Notes at the end of the book, but clearly hasn’t applied or understood this point when formulating his own analysis.

Indeed, a fair part of his discussion of Marxian theories of economic crises seems to have been adapted from writers like the late Chris Harman of the SWP. This is not entirely surprising given the SWP’s own attempts to integrate aspects of Keynesian ideas within a Marxist framework, such as with the permanent arms economy argument as an explanation of the post-war boom, one which Turner seems appreciative of.

In fairness, Turner is at least starting to ask the right sort of questions in this book, though a realisation that crises within capitalism are caused by the drive to accumulate profits in a competitive environment where there is no planning between enterprises but an anarchy of production instead, would lead him to a clearer and different conclusion. This is that no amount of Keynesian intervention, monetary reform or redistribution of income can prevent the market economy’s periodic slide into chaos.

DAP

The poverty of economics (2010)

From the April 2010 issue of the Socialist Standard

The market system failed long before the present crash.

It wasn't that long ago when the academic discipline of economics bestrode the world. Trying to grasp Adam Smith's invisible hand and understanding the workings of the market system was a respected profession. Economists moved even beyond markets, extending their empires laying claim to large parts of social science, as complex disciplines such as human psychology and sociology were reduced to little more than a matter of competing agents and game theory. There was a reason the recent bestseller Freakonomics was sub-titled the “hidden side of everything”.
But like the cobbler's children, running around barefoot, recent events have exposed the poverty of the economists' understanding of their very own intellectual backyard, the capitalist economy. Their advice on human nature or politics carries somewhat less authority now that appear incapable of explaining the credit crunch or why none of them saw it coming.
The assembled might of the London School of Economics – one of the intellectual powerhouses of capitalist ideology – was recently challenged on why the credit crunch occurred and why they weren't able to foresee it. Which intellectual giant issued the challenge? Who is it that so has their finger on the pulse of everyday concerns of working people?
During a visit to the LSE recently, Her Royal Highness the Queen (for it was she) took time out from her busy schedule to wade into the debate. The fact that she might not be the best guide to the money system (given her reluctance to dirty her hands carrying money round with her), and is probably an unlikely candidate for repossession order (at least until we get a socialist majority) was not considered relevant.
Of course she does have her head on every coin, which demands some respect, so on that basis the response to the Queen's query of the LSE's “high policy forum of 22 economic heavyweights” appeared to involve them (metaphorically) lowering their collective heavyweight heads in shame and muttering under their breath “there are no simple answers” (m'am). The blame for missing the credit crunch was placed on “a failure of the collective imagination of many bright people” – the wording of which suggests that with the usual modesty. they still consider themselves members of that group.
No longer permitted to demand their heads on a sharp stick, as many of her loyal subjects would wish, the Queen instead settled for asking what they would recommend to prevent the financial crisis happening again. Doubtless she was not impressed with the World Socialist Movement's advice in this respect, (abolition of the wages system, your Majesty), unless of course this was accompanied by a full return to feudalism, in which case she might presumably be swayed.
It should be said that we claim no greater ability to predict economic crashes, than the self-proclaimed “bright minds” of capitalism. (Those of you who remember that Enron executives used to call themselves “the smartest guys in the room”, and the whole banking sector seemed to consider themselves “masters of the universe” may see a pattern emerging in how capitalists have grossly inflated views of themselves, not just their investments). Our view is that crashes are inherent to the system and are inherently unpredictable. If they were predictable, investors would act accordingly and make it unpredictable again.
There is nothing wrong with trying to understand capitalism, as long as the intent is to get rid of it. If you want to study the economy to try and make it work, you might as well read tea-leaves, or – better still perhaps – the scattered intestines of sacrificed investment bankers.
So what was the recommendation of the economic intellectuals to this royal command? In a squirming, obsequious response they said they saw no merit in using existing policy mechanisms which had all clearly failed to contain the market (a revolutionary view world socialists would share). More disappointingly they instead made a tentative modest proposal of her royal highness: that it would help everyone if she were to ask her ministers for a monthly update.
They go on: “ There is a need to develop a culture of questioning, in which no assumption is accepted without scepticism and a sufficiently broad array of outcomes is considered”. This is a pretty good summary of the scientific method. Economics has always resented the “dismal science” tag thrown its way. With the admission above from its highest priests, it could be argued that economics is some way from even laying claim to being a science, dismal or otherwise.
We would agree with the economists where they warn the Queen that “it is a dangerous conceit to believe that economic cycles can be eliminated”. But the wording suggests that this is some sort of human failing rather than the inherent flaw of a system that is – it should not be forgotten – just one option available to help humanity make its most critical decisions (that is production of things humanity needs). Indeed the economists continue “if you have a series of relatively buoyant years...not only do humans get flabby, also the feeling 'we've cracked that' is all too easy to spread. It is human nature”.
So there you have it. All of you who thought over the last 10 or 20 years that “you'd cracked it”, are to blame for getting “flabby”. And besides, it’s all conveniently in your genes anyway, didn’t you know? In future we can rest assured however – the Queen is on the case now.
Over the next few years of promised increased austerity – as hospitals close, schools fall apart and houses get repossessed – let us not forget that these hucksters, chancers and charlatans are the people who claim to be in charge of capitalism. But the market failed long before it crashed. Leave decision-making to others, we are told. Leave it to the bankers and the “bright minds”. Leave it to the economists and the politicians. Leave it to the capitalists and even our own royal relic of feudalism. They all still expect you to let them make the decisions. Fortunately, year by year, fewer of us remain quite so willing.

Brian Gardner

Weekly Bulletin of The Socialist Party of Great Britain 142

Dear Friends,

Welcome to the 142nd of our weekly bulletins to keep you informed of changes at Socialist Party of Great Britain @ MySpace.

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Robert and Piers

Socialist Party of Great Britain

Q & A: What is common ownership?

From the April 2010 issue of the Socialist Standard

What is Common Ownership?

Quite simply, the common ownership of the world’s resources and productive capacity is the basis for a reorganisation of society that would ensure plenty of the necessities of life for everyone on the planet – no more starving, malnourished people, no wandering homeless, no senseless deaths for the want of easily affordable medical care and medicine, no more poverty, unemployment, or inequality. How can this be so? Surely, if it were possible to eliminate these scourges we would have done it long ago. Aren’t we working on these problems anyway?

At present we live in a world where the resources of the Earth and the products made from them, the processes needed to make them, and the transportation systems to get them to you, are all owned by private individuals. A company proposes to extract resources or manufacture commodities. It needs money in order to do this. Wealthy people loan the company the necessary capital, but they don’t do it for nothing. They will expect a healthy return on their money every year of say, 10 percent, or £100 000 on every million pounds loaned. If this return is below expectations, then the lenders will withdraw their funds and look somewhere else to invest.

This puts every enterprise in a competition for capital to fund their operations and for expansion. Thus all companies must compete and strive to do whatever is necessary to create profit to pay dividends to lenders. If a company fails in this, capital will dry up and production will stop, rendering its physical assets as junk or sold at a fraction of their value, and its employees will be out of work. In other words, commodities are only produced for the purpose of profit or they are not produced at all.

The profits go to a tiny minority of big investors of capital to enhance their already vast fortunes that allow them to live in luxury while contributing no work whatsoever.

We believe that the Earth’s resources are the common heritage of all mankind and should be managed for the benefit of all. Those resources are easily abundant enough to feed, clothe, and house everyone on earth and provide medical care, education and everything else necessary to ensure a full and happy life for every one.

The establishment of common ownership would eliminate the competition for resources and for capital. It would eliminate production for profit. It would eliminate the need for states and their central governments that exist to serve today’s competitive system. It would even eliminate the need for money and trading as goods and services would be produced solely to meet the needs of humans who would have free access to those goods and services, taking them as needed. Competition would be replaced by cooperation, eliminating conflict and war and because everybody and therefore no one person or group would own the means of producing wealth, everyone would stand equal to the powers of production – no owners and non-owners, no exploiters and exploited, no employers and employed, and therefore, no classes.

Today, this is quite obviously not the case. We have constant conflict and war, vast inequality, poverty, malnutrition, starvation and deprivation amid wealth and plenty. Workers produce all the wealth in the world and perform all the work, yet are only allowed to take home a small share of that wealth to enable them to exist so they can show up at work the next day to produce more profit that goes to the already wealthy. And they are only allowed to do so at the whim of that tiny minority of owners.

Today, nobody starves or goes hungry because we lack food. Nobody is homeless because we lack building materials or builders, nobody lives in poverty because we lack wealth. People suffer theses scourges because they are unable to pay and thus realize a profit for some enterprise or other. In one fell swoop, in one simple action, production for profit could be replaced with production to satisfy the needs of all.

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A Nobel Prize for Marx? (2010)

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

“If Karl Marx and V. I. Lenin were alive today, they would be leading contenders for the Nobel Prize in economics”, wrote Paul Craig Roberts, former editor of the Wall Street Journal and an Assistant Secretary of the Treasury under Reagan, in an article on Counterpunch last year.

“Marx”, he added in explanation, “predicted the growing misery of working people, and Lenin foresaw the subordination of the production of goods to financial capital's accumulation of profits based on the purchase and sale of paper instruments.”

Lenin first. He didn’t write much on economics but the two books he published on the subject are not too bad. Both rejected “underconsumptionism”. The first, The Development of Capitalism in Russia (1899) was a refutation of the Narodnik view that capitalism could not develop in Russia because of a lack of markets. The second, Imperialism, the Highest Stage of Capitalism (1916), argued that the imperialism that characterised the thirty or so years till the WWI was caused by profits in colonies being higher than at home. (The nonsense about some workers in the imperialist countries sharing in the exploitation of the colonies was only added in the introduction to the 1920 French and German editions). It was heavily based on a work, Finance Capital, A Study in the Latest Phase of Capitalist Development (1910), by the Austrian Social Democrat Rudolf Hilferding. So, if anyone deserves a Nobel Prize for analysing financial capital (at least in continental Europe) it would be Hilferding rather than Lenin.

As to Marx, he did write of the “increasing immiseration” of the working class as capitalism developed, but he did not intend this to be understood as the whole class necessarily becoming worse off materially. “Misery” included the quality of life and work and social factors such as the gap between rich and poor and not just the quantity of goods consumed. So misery could increase along with increased consumption. If Marx had meant “increasing pauperisation” (a view long supported by the old Communist Party) then he would have been proved wrong and so be out of the running for a Nobel Prize.

Even so, Roberts wrote that the working class in America is now materially worse off than it was twenty years ago:

“In this first decade of the 21st century there has been no increase in the real incomes of working Americans. There has been a sharp decline in their wealth. In the 21st century Americans have suffered two major stock market crashes and the destruction of their real estate wealth. Some studies have concluded that the real incomes of Americans, except for the financial oligarchy of the super rich, are less today than in the 1980s and even the 1970s. I have not examined these studies of family income to determine whether they are biased by the rise in divorce and percentage of single parent households. However, for the last decade it is clear that real take-home pay has declined.”

The explanation he offers is “financial capital’s power to force the relocation of production for domestic markets to foreign shores. Wall Street’s pressures, including pressures from takeovers, forced American manufacturing firms to ‘increase shareholders’ earnings.’ This was done by substituting cheap foreign labor for American labor.”

There could be something in this but there’s no way of reversing it. Capital will always flow where the profits are highest. That’s its nature.

Who are ‘we’? (2010)

Editorial from the April 2010 issue of the Socialist Standard

Listen to almost anyone talking on the radio or television and when pontificating on the troubles and problems of the world, they all, without exception seem to default to the ‘we’ word.

Recently Gordon Brown, although frankly it could have been any of the party leaders, explaining how ‘we’ must make sacrifices and enter a new era of austerity if 'we' are to resolve the current economic crisis. On another programme, probably Sunday Worship or a similar few minutes of escapist ministry, it appeared again as the minister chastised his congregation saying how ‘we’ must not be selfish and how ‘we’ must think of others. It is astonishingly conveniently how the term ‘we’ can be substituted for the word that seems to have escaped all those who turn the ills of the world inward on themselves or their fellow men or women. The correct word is, of course, society; or probably, to be more precise, the existing society.

We human beings are not inherently selfish; we are not inherently warlike; we would not in a natural state of affairs allow children to starve, even singly, let alone in their thousands. We would not pollute and damage our oceans in the full knowledge that within the next 30-40 years they would be almost devoid of edible fish. We would not cut down vast tracts of primary rain forests knowing that the loss of this forest will detrimentally affect the very planet we live on. We would not expend vast amounts of material and energy on the manufacture of devices whose sole purpose is to kill and maim other human beings, other ‘we's’. It is so convenient to ascribe the hard-to-face, awful and terrifying things that are perpetrated throughout the world to an abstract ‘we’. ‘We’ are not, as individuals, responsible for these ills and the sooner, when referring to what is wrong with this system, the word 'we' is dropped and replaced with ‘this society’ then perhaps all those poor people who after slogging hard at work all day and who are made to feel wretched and guilty and who are accused of contributing. through their avarice, greed and selfishness, to almost every shortcoming of this obsolete and dangerous society, the better.

If 'we' can be used to good effect it will be when 'we' realise the wonderful and great future humanity could achieve if ‘we’ united and stopped voting for left or right politics and voted for a new politics, straight ahead politics – true world socialism.