Cooking the Books: The First Lost Decade Since the 1860s (2017)

The Cooking the Books column from the January 2017 issue of the Socialist Standard

In a speech in Liverpool on 5 December Mark Carney, the Governor of the Bank of England, described the current decade as ‘the first lost decade since the 1860s’ (See here). At that time, he stated, ‘Karl Marx was scribbling in the British Library, warning of a spectre haunting Europe: the spectre of communism.’ Not quite, as Marx wrote about that much earlier, in 1848, when he was living in Brussels. But he would have been in the British Museum taking notes for his major work, Capital, that was to be published in 1867.

Before that, in 1864, Marx drafted the Inaugural Address of the International Working Men’s Association that had been set in September of that year. In it, he noted a statement Gladstone had made in his budget speech to the House of Commons in April 1863:

‘Dazzled by the “Progress of the Nation” statistics dancing before his eyes, the Chancellor of the Exchequer exclaims in wild ecstasy: “From 1842 to 1852, the taxable income of the country increased by 6 per cent; in the eight years from 1853 to 1861, it has increased from the basis taken in 1853, 20 per cent! The fact is so astonishing to be almost incredible! ... This intoxicating augmentation of wealth and power,” adds Mr. Gladstone, “is entirely confined to classes of property!”’

Later, critics were to accuse Marx of distorting what Gladstone had said. The controversy is described by Engels in his Preface to the fourth German edition of Capital in 1890.  Basically what happened was that Gladstone had exercised the right of MPs to alter Hansard if they had said something they didn’t mean and had deleted the part about the increase in wealth and power being ‘entirely confined to classes of property’, even though this is what the newspapers the following day had reported him as having said.

Carney’s speech was accompanied by a graph (chart 6 on page 5) which showed that in the ten years up to 1864 real wages fell. So Gladstone’s initial statement had been correct. The increase in wealth during that period was ‘entirely confined to classes of property’. Just as it has been during the current ‘lost decade.’ Carney quoted some figures which showed that, as then, the richer got richer:

‘In recent decades, as global inequality has fallen markedly, it has edged ever higher in most advanced economies. In Anglo-Saxon countries, the income share of the top 1% has risen notably since 1980. Today, in the US, the richest 1% of households receive  20% of all income. Such high income inequalities are dwarfed by staggering wealth inequalities. The proportion of the wealth held by the richest 1% of Americans increased from 25% in 1990 to 40% in 2012. Globally, the share of wealth held by the richest 1% in the world rose from one-third in 2000 to one-half in 2010.The picture in the UK is complex but in general suggests relatively stable but high levels of overall inequality, with sharper disparities emerging in recent times for the top 1%.’

Plus ça change.

Editorial: Russia Never Was Socialist (2017)

Editorial from the January 2017 issue of the Socialist Standard

This year marks the centenary of the Russian Revolution where the focus will be on the Bolshevik seizure of power in November 1917. The historic rivalry between the Western Powers and the world's first so-called "Communist" state has been presented as a struggle between Western ‘liberal democracy’ versus Soviet ‘totalitarian Communism’. Many believed that the fall of ‘Communism’ would usher in an era of global peace. However, despite the arrival of Western-style representative democracy in Russia, relations between Russia and the West appear to be descending into a new ‘Cold War’.

In spite of what its leaders claimed, the Soviet Union was never a ‘Communist’ state, as real communism (or socialism) involves the abolition of the state and the establishment of a global classless, moneyless society where the means of production are held in common. This was clearly not the case here, where the state owned the means of living and employed a class of wage workers. At the time of the revolution, social and economic conditions in Russia were not ripe for socialism, as it was predominantly an agrarian economy based on peasant labour. Also the working class in Russia and elsewhere did not have the political consciousness required for establishing socialism. So, in these conditions, only a form of capitalism could emerge.

Like other capitalist countries, the Soviet Union needed to compete in global markets, secure trade routes and sources of raw materials. This inevitably led to rivalry with major capitalist powers, like France and Britain. Many in the Western ruling classes were horrified by Bolshevism and feared that their ideas would spread among their workers, especially in the context of the social and political unrest that erupted in the aftermath of the First World War. They also feared that Bolshevism could inspire the growing independence movements in their overseas colonies. Nonetheless, nation states do not go to war to uphold a belief system, they do so to advance their material interests. British and French support for the White Army during the Russian Civil War was as much about preventing the Bolsheviks from defaulting on Russia's foreign loans.

After the Second World War, the United States and the Soviet Union emerged as the main powers, competing to control resources and trade routes. This led them into a military rivalry, which became known as the Cold War, and resulted in standoffs like the Cuban Missile Crisis. When the Soviet Union collapsed in the early nineties, many believed that the Cold War had ended. In the new Russia, former state bureaucrats enriched themselves by coveting former state enterprises. However, Russia has since grown stronger and is attempting to reassert itself globally and reclaim its influence in Eastern Europe and the Middle East. This has led it to fight a war against Georgia and more recently to annex the Crimea and support the government forces in the Syrian Civil War. By expanding its influence, Russia is challenging the dominance of the Western Powers, and the latter have responded by enlarging the Nato alliance and surrounding Russia with military bases. This time, however, the pretence that the struggle is ideological has been dropped. It can now be seen for what it always was: economic and geopolitical.