Between the Lines: Charlie's Arm and Lenin's Brain (1990)

The Between the Lines column from the August 1990 issue of the Socialist Standard

Charlie's Arm and Lenin's Brain

Maybe it’s the hot weather: or perhaps capitalism is just driving its supporters barmier than ever. July was an odd month on the box.

It started with headline news on both BBC and ITV. The Prince of Wales has fallen off his horse while playing polo. Second item on the news concerned a soldier being killed in Ireland. Forget that, it was more important to cross over to the reporter outside the hospital where Charlie lay surrounded by doctors and nurses. It was a broken arm — important enough for his wife to go and see him after she had finished watching the opera. First item on the news — all channels — the next day were pictures of the Princess going to see Charlie.

Second item was a report about record waiting lists in NHS hospitals. The newsreader turned from A to B without even a hint of embarrassment. Then, a week later, came another first-item news story: THE QUEEN MOTHER IS NINETY. This was a major scoop, apparently discovered by researchers who realised that after a year of the Queen mother being 89 something like this was bound to happen sooner or later.

BBC1 carried live coverage of moronic crowds gathering outside Clarence House waving Union Jacks and looking dopey. The band played Happy Birthday and then it was time for a documentary on Channel Four about the plight of the homeless. A large part of their plight is that they have not inherited Clarence House: it seems that some people — the overwhelming majority, in fact — can only ever dream of living in the kind of comfort which the parasitic Royals take for granted.

Live BBC coverage of old queens waving at old fools is higher on the media agenda than live coverage of old dossers sleeping in their own piss a mile away from Clarence House.

The nightly coverage of the Communist Party Congress in Russia was done reasonably well on BBC2's Newsnight programme. It is amusing to think that pretty soon all of those detestable academic Kremlin-watchers will be out of a job. There was an item on 8 July which revived the hot-weather theory of July's TV.

In Moscow there is an institute for the study of brains. It is, by all accounts, the most advanced brain research centre in the world. Newsnight's Jeremy Paxman interviewed a professor from the institute who had been occupied on research examining Lenin's brain He said that Lenin had an abnormal brain Its central cortex was bigger than other brains. This, said the straight-faced professor, may well have accounted for Lenin's supreme greatness This, we must presume, was the original mad scientist.

Perhaps he would care to investigate a slither of the Queen Mum's grey matter: or perhaps even a slice of Charlie's broken bone. It would be useful to be told just why the great appear great. We always thought that it is because the people who think their rulers are great are on their knees.


The Two Smiths

The summer madness continued as the bicentenary of the death of Adam Smith was celebrated by a variety of market-worshipping lunatics, some of whom are dangerously close to the reins of state power

Smith wrote The Wealth of Nations in which he contended humans have economic natures which lead them to always act on the basis of self-interest within the market. This was unhistorical nonsense, of course. Humans are not innately self-interested, but are social animals who live through co-operation.

Smith was quite evidently an ideologist for capitalism. Although those who read Smith (particularly his lesser-known tract, The Theory of Moral Sentiments) will discover that his view of human nature was not half as crude as that of the intellectual thugs who try to convince us that the rat-race of capitalism is a reflection of the rat-nature of humans; it is clear that Smith was a political economist whose blinkers enabled him to see no further than the institutions and relationships of buying and selling. As such, socialists are happy to leave Adam Smith to his Tory idolisers. Not so the Labour Party

It seems that they want to claim him as one of their own. Newsnight (8BC2. 16 July. 10.30pm) staged a debate between the Tory Scottish Secretary, Malcolm Rifkind, and Labour's Shadow Chancellor, John Smith. Rifkind argued that Smith A. was the man who understood that humans can only live happily when they are exploiting each other. His was the true party of Adam Smith .Smith J. was having none of this. The Labour Party agreed with Smith A. that the market is necessary, explained Smith J. He also agreed that humans are better off living in a society where there are profits to be gained. But, said Smith J., the market needs to be regulated every so often, and this was the view of old Adam Smith. Rifkind sulkily accused Smith J. of trying to steal Smith A. from the party that had done so much to promote his outlook.

Now, there has been much speculation as to who the real brains were behind the recent market-loving Labour Party Policy Review Was it all Kinnock's work? Surely not, for it only runs to a mere hundred thousand words, and most of them are not adjectives. Was it the product of Peter Mandelson's opinion poll of a thought process? No it was clearly the work of Smith — Adam Smith, the arch-ideologist of the profit system.

Steve Coleman

Tolpuddle and today (1990)

From the September 1990 issue of the Socialist Standard

The annual Tolpuddle Martyrs Rally is held every July to remember six Dorset farm labourers who in 1834 were sentenced to seven years transportation to Australia for the crime of organising a combination of workers to protect and attempt to improve their wages and conditions. In the past few years Socialist Party members and supporters in and around Dorset have attended this event, organised a stall offering a wide variety of socialist literature, and generally argued the case for world socialism and against capitalism in all its forms.

The Tolpuddle Rally, in common no doubt with many other trade union and working class events, shows the positive and negative aspects of working class organisation in the 1990s. On the more positive side, there is the anger of many workers at the problems, frustrations and limitations imposed upon us by a social system based upon minority class ownership of the means of life, production for profit and the exploitation of the useful majority; our ability to struggle and organise against such conditions is also clear. The problem is that workers seem too content to endlessly struggle against particular problems, attempting to treat them in isolation from the social system which creates them.

The events that the Tolpuddle Rally commemorates took place well over 150 years ago but despite the gap in time many similar problems remain today. One such example is trade union organisation. Workers at GCHQ are still involved in the basic struggle for the right to combine to protect and attempt to improve their wages and conditions of employment, following the ban on trade union organisation in that establishment in 1984. Trade unionists as a whole have in the last few years seen the introduction of legislation designed to weaken their ability to engage in effective industrial action. These events in themselves say much about the concept of freedom and democracy in capitalist society.

The struggle for trade union rights is of course a vital one so long as society is divided into two classes: those who produce but do not possess and those who possess but do not produce. For the former, trade union organisation is the only means of protection from the encroachments of capital. However, trade union organisation needs to be more about working class self-organisation and democratic control from bottom to top and less about letting leaders make decisions on our behalf. Secondly, trade unions which attach themselves to political parties which support capitalism, such as the Labour Party in Britain, risk having their effectiveness reduced when that particular party is in government. Also, the effectiveness of trade unions is very much dependent on economic conditions. Finally, whilst trade union organisation is vital for working class industrial self-defense, it is not an end in itself; workers also need to organise consciously and politically to abolish the system which is the root cause of the need to engage in this endless day-to-day struggle.

Fruitless diversions
Workers have been distracted from engaging in all-out struggle against the root cause of their problems by becoming involved in fruitless diversions and worthless causes. The two distractions that were most evident at Tolpuddle this year were the Poll Tax and state capitalism.

The collapse of state capitalist dictatorships in much of Eastern Europe has not deterred small groups of extreme dogmatists from putting forward the obscene idea that state capitalism equals socialism. The group next to the Socialist Party stall, the Revolutionary Communist Party (Marxist-Leninist), were putting forward the outrageous claim that Albania is a socialist country where people live in peace, harmony and prosperity. "Hands Off Albania!" their headline screamed. The one interest socialists have in Albania is in looking forward to the day when workers in that country follow the example of other workers suffering under the heel of state capitalist dictatorships and organise to bring down that system, not as an end in itself but as a prelude to co-operating with workers in the rest of the world to establish genuine freedom and democracy.

There are hopeful signs that the end of the detestable regime in Albania might not be that far off. Whilst most workers have quite rightly rejected the idea that systems similar to the one in Albania can in any way serve the interests of the working class, groups such as the RCP(ML) have succeeded in distorting the idea of socialism in the eyes of millions of workers across the world. The fact that any person, group or party should still put forward such undiluted crap is a testimony to their inability to understand the world they live in.

As for the Anti-Poll Tax Campaign, whilst this might be seen as less dangerous than the nonsense put forward by the Albania Supporters Club, in many ways it is just as damaging if only because more workers are attracted to it. Whatever the rights and wrongs of their actual campaign. what stands out is how such reformist demands direct workers' energies towards single issue campaigns and distract their attention away from analysing and acting on the real cause of their problems. Thousands and maybe millions of workers may be drawn to this campaign but. even if it is successful in abolishing the poll tax and replacing it with something else, workers would still be left facing a hundred-and-one problems. The poll tax is not the cause of workers’ problems, which existed in abundance before it was even thought of. Policies such as non-payment could well leave workers facing action by the state which will result in them becoming more impoverished than would have been the case had paid their poll-tax bill, and the failure of such campaigns will lead to political disillusionment.

Opposition to one specific policy such as the poll tax will not create conscious socialists as this can only be achieved by a movement whose one aim is the abolition of capitalism through education, organisation and democratic and conscious political action. This is not to deny that it is the experience of capitalism that causes workers to ask fundamental questions about the society they live in and to seek explanations and alternatives. The point is that more often than not reform movements lead only to dead-ends and disillusionment.

Socialist presence

What then can be achieved by attending events such as the Topluddle Rally? Whenever workers gather, and particularly at events where ideas are being discussed and exchanged, socialists have to be involved in putting forward the basic fact that capitalism cannot be reformed to work in our interests and that alternatives such as state capitalism are no alternative at all. Unclear ideas cannot be defeated by ignoring them.

What was achieved at Tolpuddle this year on 15 July was that the socialist movement was seen as being alive and active and putting forward a clear alternative. Participation was very encouraging. Apart from members and supporters from the Bournemouth area, support came from socialists in London, Brighton, Bristol, Surrey, Kent, Wiltshire and Devon. All in all about 20 members and supporters were engaged in selling literature, distributing leaflets and engaging in political debate.

To the workers we came into contact with at Tolpuddle and to all workers throughout the world, the socialist message is loud and clear. Don't waste any more time or effort attempting to reform capitalism or in the delusion that in some part of the world state ownership has proved itself to be a more effective or humane system than the private variety of capitalism.

Instead of campaigning for this or that reform join the movement which has as its sole aim ending a social system which cannot satisfy the needs of human beings and replacing it with one that could—one based on common ownership and democratic control of the means of producing and distributing the things we need to live, production directly for use. and free access to all goods and services on the basis of self-determined need: in short, a world-wide system run by human beings for human beings.

Ray Carr

Leninists Oppose Democracy (1990)

Book Review from the October 1990 issue of the Socialist Standard

The Case for Socialism by Paul Foot (Socialist Workers Party, London, July 1990) 

Now that the idea of a vanguard leading a revolution and then ruling "on behalf of the working class" has become so thoroughly discredited might not seem the best time to issue a manifesto re-affirming this Leninist dogma. This, however, is precisely what the SWP have just done. They have commissioned their best writer, the Daily Mirror journalist Paul Foot who normally specialises in exposing capitalism for not living up to its own standards of "justice", to write a short book called The Case for Socialism.

Socialism is in fact only mentioned in the vaguest of terms—as the rule of the working class "from below" (even this is mistaken since socialism will mean the disappearance of the working class together with all other classes)—and it is the case for anti-socialist Leninism that is presented.

Bolshevik coup model
The seizure of power in Russia in November 1917 by Lenin's Bolshevik Party is described in absurdly glowing terms:

The October revolution in Russia, in which the soviets, under the leadership of the Bolshevik Party, asserted their power over the parliament, sacked the government and established what Lenin called 'the socialist order', is the greatest event in all human history.

This ridiculous claim is advanced on behalf of a coup which installed in power a group of anti-democrats who eventually evolved into a fully-fledged ruling class that ruthlessly exploited and oppressed the workers and peasants of Russia and Eastern Europe. Foot tries to argue that this outcome was all a terrible mistake: if only Trotsky had succeeded Lenin as dictator of Russia in 1924 things would have turned out differently.

This won't do. It's too easy to blame everything on Stalin while exonerating Lenin. The historical record shows that it was Lenin who paved the way for Stalin. It was Lenin who, bowing to the economic facts, stated that state capitalism was the only way forward for Russia. All Stalin did was to continue this but to lyingly call it "socialism". It was under Lenin that Russia became a one-party state and that factions (that is, opposition to the leadership) were banned within the only party allowed to exist. Stalin merely extended and perfected these dictatorial practices, and Trotsky only protested when he found himself on the receiving end.

Whatever Lenin may have written about democracy from below in State and Revolution before the Bolshevik coup, after it he adopted a different tone time and again defending the dictatorship of a revolutionary minority as a political principle. In a pamphlet written in May 1918 called The Immediate Tasks of the Soviet Government, he defined dictatorship as “iron rule, government that is revolutionarily bold, swift and ruthless in suppressing exploiters as well as hooligans" (Foreign Languages Publishing House. Moscow. 1951. p. 50). By "hooligans" he meant those who did not obey the edicts of the Bolshevik government. Such "hooligans" were treated “ruthlessly" enough, being "swiftly" rounded up and sent to populate the first gulags.

Lenin went on:

There is absolutely no contradiction in principle between Soviet (that is, socialist) democracy and the exercise of dictatorial powers by individuals, (p. 55. Lenin's emphasis)

and to advocate:

. . . iron discipline . . .  unquestioning obedience to the will of a single person, the Soviet leader, while at work.(p. 61. Lenin's emphasis)

Stalin was thus, quite justifiably, able to claim to be as good a Leninist as Trotsky.

Minority action
Lenin scoffed at the idea of there needing to be a majority in favour of socialism before attempting to overthrow capitalism. John Reed recorded him as telling a meeting in Moscow on 27 November 1917 that:

The socialist political party—this is the vanguard of the working class . . . must not allow itself to be halted by the lack of education of the mass average. (Ten Days That Shook the World. Modern Library edition. 1960. p.15).

The SWP display a similar contempt for the “mass average" and for the possibility of us coming to understand the need for socialism. After denouncing the Labour Party for believing that socialism could be introduced on behalf of the working class from above by “an educated élite in Parliament”. Foot goes on to advocate not majority action but a different kind of élite action:

  Socialists . . . should organise themselves, their activity and their propaganda to sharpen the weapons against the old society and to build the confidence and strength of the minority who are prepared to fight.
  Minority. There is the word which causes the most heated opposition. Surely, it is argued, socialism is about majorities being in charge of society. Surely the exploited billions are the majority in society—by far. How then can socialists argue that they should concern themselves with a minority rather than seek to get the support of majorities?
  The answer is that the minority among whom socialists should organise is active, while the majority whose votes are canvassed at election times is passive. The passive majority is prey all the time to the machinations of class society, especially to its mass media. The active minority, because it is active, is capable of resisting those pressures, of responding to new ideas and creating their own. The passive majority accept most of the time what they are told, what they read in the papers and see on television.

So, the SWP criticism of the Labour Party is not that socialism could not be introduced by an "enlightened few". It is that this “educated élite" should employ different methods from those advocated by Labour. Instead of seeking to attract the votes of the “mass average" of non-socialist workers to get into parliament and then to legislate socialism into being (indeed a futile tactic), the few should set themselves up as a vanguard party to try to lead the mass of non-socialist workers in an assault on the capitalist state (a suicidal as well as a futile tactic).

Both these alternative forms of minority action have failed. The Labour Party's tactic has led not to capitalism being gradually transformed into socialism but to the Labour Party being gradually transformed into an open party of capitalist government. The Leninist tactic favoured by the SWP has not led to socialism either but to the self-appointed élite in the vanguard party emerging as a new privileged class ruling on the basis of state capitalism. The SWP not only resolutely refuses to learn this lesson of the outcome of the Russian revolution but wants to put the working class in Britain through the same terrible experience.

The socialist alternative
Socialism, by its very nature as a classless society of common ownership and democratic control, can only be established democratically, in both sense of the term: with majority support and participation, and by democratic means.

It is not a question of a choice of two ways for getting to socialism: the democratic action of a conscious socialist majority or the action of some enlightened minority. It is a question of the end determining the means. Minority action cannot lead to socialism, even if it were to be that of a "fighting minority" of workers who really wanted socialism. Only majority action can.

Minority action leads at best to a few minor reforms of capitalism, but at worst to the sort of state capitalist dictatorships that have just collapsed in Eastern Europe. Socialism can only be established by majority action, not indeed that of a passive majority of voters but of an active majority of workers who have come to reject capitalism and are determined to establish socialism.

To end capitalism and achieve socialism such an active majority must first win political control, and in a country like Britain the obvious means are to hand in elections and parliament. Going into parliament, not to run capitalism but to end it. is not a betrayal of socialist principles. It is merely taking advantage of the easiest way for a majority to gain control of political power.

The SWP objection to using parliament (except to elect Labour MPs) is not that there is some more appropriate method for a active majority to democratically express and carry out its desire for socialism. It is that they don't think that their vanguard party could win an electoral majority. As Leninists they believe that a majority of workers are too thick to understand anything beyond the need to form trade unions and voting Labour ("The working class, exclusively by its own efforts, is able to develop only trade union consciousness”—Lenin, What Is To Be Done?). Only they, the "educated élite”, "the enlightened few", “the fighting minority" are capable of understanding the need for socialism.

Actually, the SWP are probably right about the inherent inability of a Leninist vanguard party like them to win an electoral majority. After all, why would we. why should we, vote for a party that tells us we are their intellectual inferiors?

Adam Buick

Letters: Anti-War Meeting (1990)

Letters to the Editors from the November 1990 issue of the Socialist Standard


Anti-War Meeting

Dear Editors

I attended the meeting at Conway Hall on Tuesday 11th September when the subject discussed was 'the Gulf Crisis’. The speakers put the Socialist case very powerfully which clearly illustrated the true and fundamental nature of the crisis—oil; and the one who had lived in Kuwait gave valuable information on the history of the State and the existing circumstances of the people.

I had to leave early and it maybe that the debate with the audience livened up and took a more serious turn after I had gone, but I left feeling disappointed and with a general impression that the sound arguments of the Socialist Party had been delivered in a manner inclined to beget antagonism from the general public. I felt that a degree of recognition of the dilemma of the Western Powers and the act of aggression by Saddam Hussein would not have been out of place. No thinking person will disagree with the diagnosis of the Party and their assertion that international war is inherent in the capitalist system, but given the circumstances of our obscene capitalist world what other outcome could we expect?

Would you not agree that some glimmer of hope arises from the fact that the United Nations, whatever their motives, have shown unification in their condemnation of aggression by a militarily powerful State over a small and militarily weak one? This surely cannot be a bad thing! It is a move, however inadequate we may regard it, towards a semblance of co-operation, which I would have thought would give some encouragement to Socialists, who by the nature of their philosophy advocate co-operation and not competition. Who knows—the co-operation idea could catch on and develop in other spheres! Similarly, I think Socialists can be encouraged by the Green Party which, though not fully understanding the nature of commodity production, has come to understand that in order to solve the ecological problems facing us we must take a serious look at the mode and manner of the production process.

Like members of the Socialist Party I want the Socialist case to become widely known and to be properly understood. This is no easy task for the Socialist Party—our rotten system is deeply ingrained into the minds and manners of men and it is going to take a lot to remove it. Maybe sometimes a softer approach rather than a bullheaded all-out condemnation of the efforts of those who try to bring about some improvement within existing conditions is required. I put it to you.

George Pearson

London SW20

REPLY:
You are quite mistaken about the United Nations. Like the old League of Nations this is a "league of bandits" bringing together the political representatives of all the ruling classes in the world. It can only act with the agreement and acquiescence of the dominant capitalist States— America, Russia, Britain, France and China—and is being used on this occasion as a flag of convenience under which the Western powers are mustering to prepare any military action that might be necessary to protect the security of their oil supplies. We see nothing hopeful in such military co-operation to defend the commercial interests of the capitalists of the West.

We can and do recognise hopeful developments within capitalism but this does not extend to preparations for war.

Editors.

Holier than thou?

The following report of the same meeting appeared in the October 1990 issue of "World Revolution".

On 11 September the Socialist Party of Great Britain held a public meeting on the Gulf crisis. This meeting was called on a working class terrain, since the SP denounces both sides in the conflict as equally obnoxious from the standpoint of the workers.

The ICC comrades present at this meeting affirmed our agreement with this basic class position. Or rather, attempted to affirm it, because our efforts to do so were drowned in a cascade of objections from the praesidium. Normally at SPGB meetings we are not obstructed from putting forward our positions. We can only assume that this sea-change occurred because this was a big meeting with the ‘gentlemen of the press' present, and the SPGB wanted to present itself nationally as the only force in British (parliamentary) politics to be taking a stand against the war. The SPGB was clearly embarrassed that the 'Leninists' of the ICC, who they like to lump in with leftist groups like the SWP, were taking an even more intransigent stand than they were. This sectarian attitude, which is based on the idea that the SP alone in the entire world defends the interests of the working class, is moreover rooted at the very heart of the SP's politics.

However, all the provisions made by the praesidium to run a tight ship at the meeting did not prevent them from clashing against the rocks when the simple and obvious question was posed to them by a member of the audience: what should workers do about the situation?’

The point is not that this is an easy question to answer in a detailed fashion, but that the SP cannot answer it even in principle. They had no answer in the First World War, nor in the Second, and they still don't have an answer today.

This is because they have no conception of the working class as an active force in history. They are completely lost in a fantasy in which the working class comes to power through the mechanisms of bourgeois democracy, through elections and such-like. Therefore, they cannot answer the question of how the mass of the working class can act to avert war.

And the only ’answer' they could give to the questioner was to tell her, essentially, to join the SP—and hope that this would be as individually fulfilling for her as it was for them!

REPLY:
We are heartened that we are not alone in taking up the position that the threatening war in the Middle East is a capitalist conflict over oil and trade, routes-and that no issue is at stake, on either side, justifying the sacrifice of the life of a single member of the working class.

What to do? When war threatens or breaks out, all that Socialists can do is to denounce this as yet another manifestation of the barbarity of capitalism and to reaffirm that the workers of the world have a common interest in uniting to end capitalism and establish socialism as a world community without frontiers based on the common ownership and democratic control of the world's natural and industrial resources.

Readers interested in (if they have not already guessed) our views on the ICC and their admiration for Lenin are referred to an article in the August 1980 issue of the Socialist Standard (available from our Head Office for the price of a stamped addressed envelope). Those who want to verify that the meeting was conducted in our habitual democratic manner can purchase the tape-recording of the meeting—as, indeed, we urge all those interested in the socialist position on the Gulf crisis to do.

Editors.

Capitalism Moves Into Recession. (1990)

From the December 1990 issue of the Socialist Standard

What the media call the "recession" in Britain today provides a classic example of a capitalist crisis. The City yuppies have been surprised by a supply that is exceeding demand to the point that it is provoking a decline in orders and cutbacks in production. The sales slump is giving the economic crisis an unstoppable momentum: reductions in production, investment and employment.

This should be no surprise. Crises of overproduction and a reserve army of the unemployed are integral to the capitalist system. They are not only the consequences but also the necessary conditions of capitalism's existence.

Think back to the early 1980s. An increased intensity of labour and new technology were easily imposed on workers severely weakened by the high unemployment levels of the previous crisis of 1980-82. We are well aware of what this meant for workers in the years of Thatcher's so-called "economic miracle". There was a general frenzy of activity for people in work as the rate of exploitation increased. This went hand-in-hand with the introduction of computers into the office and robotics into manufacturing industry.

The result of this frenzy was a marked increase in the average productivity of workers. A general rise in productivity means a fall in the unit value of all commodities: more of them can be produced in the same period of time so each is worth less. This is disguised by inflation, but a price calculation in hours of labour-time soon reveals the real fall in value.

The sharp economic downturn that we are now facing is the point of overproduction, the sudden failure in the balance of supply and demand that triggers the process in which prices are brought into line with values. In other words, the crisis is imposing the new, lower values that have resulted from rises in productivity on those commodities, particularly fixed capital, produced under previous conditions. The result is losses for the capitalists and unemployment for the workers.

Falling values and the tendency to capital losses are manifested in the unprecedented levels of bankruptcy for small and over-borrowed businesses. “More than 16,500 companies collapsed between January and the end of September 1990", a third more than the previous year (Guardian, 28 September).

Credit boom
The economists in the service of capitalism examine only the surface phenomena of economic activity in the search for explanations of the crisis. The financial pages of the press blame individuals: Nigel Lawson, for one. They blame the banks and building societies for their high levels of lending. They blame workers for pushing for higher wages. But all these things are effects not causes.

The underlying cause, the imbalance between supply and demand, came first. The current crisis, like every crisis of capitalism, is one of overproduction with regard to markets. But until recently it has been concealed by credit. As Marx put it, capitalism

  permits an actual free development only up to a certain point, so that in fact it constitutes an immanent barrier and fetter to production, which are constantly broken through by the credit system. (Capital, Vol III, chapter 27).

Despite all the talk about "tight monetary policy", the crisis has been delayed by neo-Keynsian recovery techniques: that is. by the Bank of England printing money for the clearing banks to lend. And the price of applying this technique is now, as it always was when overtly Keynsian, rising inflation.

For a while the Thatcher government managed to put off the inevitable, allowing inflation to rise. But the crunch had to come because high inflation cannot be sustained forever. For a start, when domestic demand is inflated by credit, imports rise as well, causing a trade deficit. This deficit puts downward pressure on the currency, necessitating high interest rates to hold off its complete collapse. But, on the other hand, a fall in consumer spending cannot be tolerated by industry because of its already high debt burden.

Exchange rate mechanism

Entry into the European Exchange Rate Mechanism (ERM) is an attempt to break out of this vicious circle. Thatcher hopes to give flagging businesses a quick fix before the general election without triggering a fall in the value of sterling. At the time of writing there has already been an interest rate cut.

Meanwhile, workers will pay the price of this quick fix. The ERM means that exports can no longer be protected from foreign competition by a devalued pound. John Major has already told workers to shoulder capitalism's problems by taking wage cuts if they want to keep their jobs. The President of the Bundesbank, Karl Otto Pohl, has given an ominous warning:

  A country with an inflation rate three times as high as Germany's cannot link its currency to the Deutschmark without mass unemployment and enormous payments problems . . .  It is very important, and not always understood, that monetary union means doing away with the exchange rate as a corrective to divergent economic developments. (Observer, 23 September).

Entry into the ERM is the policy of both the Tory and Labour parties. It marks a cynical attempt to squeeze more productivity out of workers. It will achieve this by throwing thousands of workers on to the dole queue. Employers will again impose an increased intensity of labour on the remaining workforce weakened by the threat of unemployment. And here we go again!

Are we going to suffer another ten year's frenzy of activity only to find that cut-backs and unemployment are the reward for higher productivity? Do we have to go through the whole predictable cycle again?

Socialists say emphatically no. Socialism offers the means of escape from the tyranny of the market. It offers a society in which all work according to our abilities for the common good. We will all take according to our needs. Goods and services will be produced solely for use, not profit. The capitalist barrier and fetter need never stand in our way again.

John Dunn

Archetypal Fat Cats (2004)

Book Review from the September 2004 issue of the Socialist Standard

Bad Company: The Strange Cult of the CEO by Gideon Haigh. Aurum £6.99

They used to be called something like ‘general manager’, but nowadays the main term for the head of a big capitalist company is ‘chief executive officer’. While they are nominally salaried employees, their pay as archetypal fat cats is so high that they are in fact clearly members of the capitalist class.

It was the growth of limited liability from the early nineteenth century that gave rise to the modern capitalist corporation and hence to the CEO Firms were originally run by their founders (or their heirs), but the owners faced the debtors’ prison if they went bankrupt. So few would buy shares in a company unless they could be personally involved in supervising how it was run. Limited liability meant that shareholders were no longer personally liable for any misdeeds or bankruptcies, so owners could delegate day-to-day control to a salaried manager, with a board of directors overseeing the whole thing.

As the title of this short volume suggests, the CEO has become a kind of cult figure, with in many cases a celebrity status and a pay packet to match (averaging over $30 million a year in large US companies in 2002, for instance). Many CEOs work long hours, apparently, though of course a lot of this time is spent in luxury hotels and swanky restaurants, and they are seemingly surprised when their employees fail to share their taste for sixty-hour weeks. Their income is reinforced by the curious idea of a ‘guaranteed bonus’, and of a ‘golden parachute’, paid to them if they are sacked by the board of directors.

And what does a CEO do in return for this generous remuneration? It’s clear that they do not in any real sense run the company, since big corporations are far too complicated to be managed by individuals. Rather, they concern themselves with the company as a business, often having little detailed idea about what it actually produces, and give orders that others have to implement. The impression gained from Haigh’s book is that if the share price keeps rising, irrespective of any medium- or long-term benefits to the company, then shareholders and directors are happy. Reducing costs by cutting staff is a favourite, and none too sophisticated, approach.

With golden parachute in pocket, a number of CEOs go into politics - President Bush’s cabinet, for instance, is full of them, from Dick Cheney to Donald Rumsfeld. As Haigh quips, “the Bush administration is more a CEOcracy than a theocracy.” The extent of this cosying-up is fairly new, but governments do not have to be full of ex-businessmen in order to serve capitalist interests.

Haigh makes the useful point that, while workers are urged to keep wage demands in check so that they can compete with other workers (especially those in other countries), CEOs instead always want to be paid more so as to be in line with their counterparts overseas — the idea of ‘internationally competitive’ has different meanings for bosses than for workers. While he is well aware of the absurdities of CEO pay, he has some odd ideas about the way capitalism works. For instance, he claims that “Companies do not exist to make profits; they make profits in order to exist” He seems to think this is an important correction to a common myth, but in whichever version it just means that companies are motivated by profit-making. Nevertheless, his book does give a useful picture of what CEOs do and don’t do, and of why we have no need of them and their fellow-exploiters.

Paul Bennett

Anarchism (2004)

Book Review from the September 2004 issue of the Socialist Standard

Anarchism by Seán M. Sheehan. (Reaktion Books, 192 pp. £12.95)

The term “anarchism” covers a multitude of sins. From the egoism of Stirner, through the free market for small producers advocated by Proudhon, the revolutionary romanticism and posturings of Bakunin, Kroptotkin’s anarcho-communism, revolutionary syndicalism, to various avant-garde artists and writers.

Sheehan’s book was prompted by what he sees as the unconscious re-emergence of anarchist ideas and tactics in the “anti-globalisation” protests that began in Seattle in 1999. His aim is to present anarchism to such activists, even though not an anarchist himself. The result is a readable run-through of anarchist ideas.

Marx also comes into it Sheehan realises that there is a world of difference between Marx’s ideas and what in the 20th century came to be widely regarded as “Marxism”, i.e., the official doctrine of the Russian State, but which is more properly called Leninism and which, in its various forms, stands for state capitalism rather than socialism as understood by Marx.

Sheehan in fact pleads for a rapprochement between Marxism and anarchism. Certainly, those in the Marxist tradition and a minority of anarchists — the anarcho-communists and the class-struggle anarchists — share a common analysis of capitalism as a society based on the exploitation of the working class and want to see it replaced by a classless, stateless, moneyless, wageless society. But most anarchists today are into “direct action”, as an alternative to reformist electoral action, to try to get changes within capitalism and are not interested in longer-term, global change. When it comes down to it, they are just as reformist as any Labourite (or Liberal-Democrat) or Trotskyist, differing from them only in completely ruling out elections as a way to get reforms.

Marx, on the other hand, always insisted (as we do) on the need for the working class to win control of state power before attempting to change the basis of society from class ownership to common ownership. He also saw elections as one possible way of doing this. For anarchists, political action in this sense is anathema. The state must not be captured, it must be confronted. Anti-capitalists should not contest elections, they should boycott them. Confronting the state — as some of Sheehan's “anti-capitalists” tried in Genoa — is a senseless policy, especially when it’s a question of a minority confronting a state supported, even if only passively, by a majority. The state will always win in such confrontations since it has much more force at its disposable.

As to the time when there will be many, many more anti-capitalists (socialists), then boycotting elections — agreed there’s not much point in voting today, where all the candidates stand for the continuance of capitalism in one form or another — would also be senseless since this would be to leave state power in the hands of the pro-capitalists. Much more sensible would be to organise to take this power from them. That’s the difference between Marxian socialists and anarchism, a gap which, despite Sheehan, could only be bridged by anarchists dropping their dogmatic opposition to elections and political action. Hopefully, they will.

Adam Buick