"The Powers of Parliament" (1950)

From the November 1950 issue of the Socialist Standard

It has been bandied about by irresponsible people that Parliament is a gas-house and a talking-shop, and no good whatever to the working class to achieve their emancipation and to establish Socialism. What is needed, they assert, is direct action.

Such ideas are not only foolish but very dangerous. Direct action, namely, the General Strike, and “ Heavy Civil War,” as advocated by certain people in the early 20’s, would leave the powers of State, the Armed Forces, still in the hands of the ruling class. Having still control of the machinery of government, they could still crush the General Strike, and any attempt to seize the factories and the means of production and distribution.

That is why we claim, as laid down in our Declaration of Principles, in Section 6, that the working class must organise consciously and politically to obtain control of this machinery of government, to dispossess the ruling class of their ownership of the land and means of wealth production and distribution.

Socialism cannot be established by violence, whether by war or heavy civil war. Neither can it be established by a minority group trying to impose it upon the working class against their will and understanding.

A few examples of events in the last thirty years will prove the powers of Parliament. In April, 1924, the Lotts Road Power Station workers came out on strike, which also involved the London Underground Railway workers. The Government of that day, a Labour Government, brought in a large number of naval ratings, and quite easily crushed the strike.

In the so-called General Strike of 1926, the ruling class were prepared to mobilise the Armed Forces. If any attempt had been made to seize (he factories, railways, etc., the ruling class would have made short work of such attempts. Again, in the fateful week-end of September, 1939, before and when war was declared, Parliament, in continual session, passed over 100 emergency regulations and about a dozen short Acts of Parliament. Among them was a fresh military conscription Act, a food rationing Act, and an Act relating to identity cards.

Socialism cannot be established by violence. It can only be established when the working class, not only of Great Britain, but throughout the world, understanding what Socialism is, are willing to co-operate to establish it. It is much easier to vote and work for Socialism than to die uselessly on some stricken barricade or battlefield.

Nat Posner

Misreading fascism (2018)

Book Review from the April 2018 issue of the Socialist Standard

‘Fighting Fascism’. By Clara Zetkin, (edited by Mike Taber and John Riddell. Haymarket, £10.99)

This booklet reproduces two main writings of Zetkin on fascism: her report and resolution presented at the Third Enlarged Plenum of the Communist International’s Executive Committee in June 1923, and her speech to the German Reichstag in 1932.

Clara Zetkin was an iconic left-wing German Marxist and close friend of Rosa Luxemburg who opted for the political line taken by Lenin and the Bolsheviks, becoming a champion of the Third International. She stayed on the side of the Third International although not without some regrets, even during the rise and ‘splendour’ of Stalinism.

In order to appreciate the historical and political relevance of Zetkin’s analysis, the reader should consider that this came less than one year after the report (Rapporto sul Fascismo) presented by the then leader of the Communist Party of Italy (PCd’I) Amadeo Bordiga. His report at the Fourth Congress of the Communist International came a few days after Mussolini had come to power. The fascists’ Marcia su Roma had taken placed while the Italian delegates were away at that congress. This is not a negligible detail if we consider that eight days after Bordiga’s Report on Fascism the Central Committee of the Russian Communist Party sent a letter to the Italian delegation, signed by Lenin, Trotsky, Zinoviev, Radek and Bukharin to impose the fusion between the PCd’I and the Italian Socialist Party (PSI), from which the PCd’I had split only a little less than two years earlier. Bordiga was a tenacious opponent of the reunification imposed by the International in the name of the ‘united front’. This tactic and the interpretation and attitude toward fascism were very much interlinked. So in June 1923, while Bordiga was in jail, and the change of guard at the leadership of the Italian Party – its Bolshevisation – was coming about, an adjusted interpretation of fascism would strengthen and justify the new direction. This re-interpretation was in fact Zetkin’s report and resolution.

To be fair, Zetkin’s interpretation of fascism, and Italian fascism in particular, is in many respects truthful and in line with Bordiga’s report. However, her version is studded with assumptions and convictions that served the political plan of discrediting Bordiga’s ‘infantile’ position (e.g. of no compromises with social-democrats and Massimalists), and winning the new leadership under Antonio Gramsci over to the united front story. For Zetkin ‘Fascism arrives . . . as punishment because the proletariat has not carried and driven forward the revolution’ and that ‘Fascism [is] an expression of decay and disintegration of the capitalist economy . . . bourgeois state’s dissolution’. ‘The weaknesses of the Communist Party [of Italy] also played a role here . . . policy error in viewing fascism solely as a military phenomenon and overlooking its ideological and political side’.  According to Zetkin’s view, the violent struggle against fascism would allow the proletariat to ‘grow conscious, stronger, and more purposeful’. Thus, ‘To the masses! . . . but maintaining Communist Ideology . . .  Meet violence with violence’.

Fascism did not arrive as a punishment because the workers and their leaders shied away from revolution. As already pointed out by Bordiga in his report, fascism was adopted by the industrial and agrarian bourgeoisie to violently physically repress the workers who occupied factories and fields in the turmoil following WWI. Looking a bit closer, one can see that fascism was in fact generated by the bourgeoisie itself. Money for Mussolini’s journal and the creation of his pseudo-anti-parliamentary-pro-worker patriotic movement (Fasci Italiani di Combattimento) came mainly from the Italian bourgeoisie.

Nor was fascism an expression of capitalist economic disintegration. Italy was thrown into the First World War completely unprepared, by a secret pact involving the king, Vittorio Emanuele III, the Minister of Foreign Affairs Sidney Sonnino and Prime Minister Antonio Salandra, representing the interest of industrial bourgeoisie hoping for easy spoils. By 1922 the country had already covered 79 billion lira of war costs without borrowing anything from other countries. 

When reading Bordiga’s report it is also clear that the Italian Party did not see fascism as a mere military phenomenon.

1919 was in fact a bad year for fascism still stuck with patriotic demagogy. At the end of the war the liberals had some difficulty in keeping control over the army generals. This was evident when the poet Gabriele D’Annunzio, from whom Mussolini later stole completely his style and propaganda, managed to get several generals on his side to occupy the Italian-speaking city of Fiume (now Rijeka, Croatia), which according to the secret negotiations between Sonnino and the Entente was to go to Yugoslavia.

The old fox Giovanni Giolitti also thought he could use Mussolini’s fascists to get rid of the D’Annunzio movement, which was destabilising the army’s hierarchy, and to reduce the spread of working class organisations in particular in rural areas. He was looking for a political entity to go into coalition with. At the end of 1920, with government backing, the fascist ‘punitive expeditions’ started to terrorise the rural north of Italy. At the election of 1921 the fascists finally entered into parliament. They were not enough to serve Giolitti’s plans, who now had PSI and Popolari (Catholics) against him.

Thus, Mussolini’s fascists gained strength when the agrarian bourgeoisie, mainly of Emilia, Lombardy and Tuscany first, and the industrial bourgeoisie of big industrial cities such as Turin and Milan, saw in the fascists’ aversion towards working class organisations a viable anti-working-class weapon, even more effective than the Guardia Regia that up to then had violently repressed any insurrection. The advantage of using para-military fascist squadrons was that they could physically eliminate the leaders of the working class institutions, like the Mafia was doing in Sicily. The demobilisation of the army helped the fascists to recruit veterans who no longer fitted into society. Nevertheless, as we just mentioned, the fascist violence in the country as well as in the urban areas had always been tolerated if not facilitated by the police forces.

When Mussolini took power in 1922, against Giolitti’s calculations, the king did not enforce the state of siege ordered by the then Prime Minister, and permitted this. Hardly a coup d’etat when the Head of State gives his blessing.

Contrary to Zetkin’s, Zinoviev’s and other Third Internationalists’ expectations, Italy was not ready to conduct a successful working class revolution, ‘like in Russia’. This was acknowledged in Bordiga’s report. Instead of being an ‘expression of decay and disintegration of the capitalist economy’ fascism was an authoritarian adaptation of the political representation of capital’s interests.

The risk in adopting Zetkin’s view is to accept the false notion that fighting exclusively against fascism would automatically result in an emancipation of the working class. The danger today is that the ‘fight against fascism’ becomes a fight only against Trumpism, just because his bombastic ego may resemble Mussolini’s. Or that the victory against ISIS (a typical paramilitary ideological movement) is seen as a liberation of the working class in the Middle East from capitalism. The fight against fascism must not become a ‘moral question’. It is a class struggle question just as much as a fight against any other form of representation of capital’s interest is a class struggle question.

Cesco

Materialism & Religion (1967)

Book Review from the October 1967 issue of the Socialist Standard

The Survival of God in the Scientific Age by Alan Isaacs, Pelican, 5s.

Socialists are materialists. We see no reason for concluding that a supernatural agency, popularly called “god”, has operated or is operating in the universe. The origin and evolution of the physical world, of life, of the mind, of man and of the idea of god itself can be explained adequately without recourse to the concept of a supernatural agency. As for the so-called ultimate origin of the universe, in seeking this we may well be begging the question by assuming that it has an origin.

Religion claims to be able to prove the existence of an eternal, all-powerful, all-knowing being both from logic and from experience. The arguments from pure logic have long since been discredited Indeed, we might add, though Isaacs does not, that the atheist—who tries to prove the logical impossibility of god’s existence—always seems to fare better, his trump being “Why did a perfect being produce an imperfect world?” Interesting as these arguments may be they really get us nowhere. What we want is evidence. There have been people who have claimed that god or some other supernatural being like the so-called virgin Mary has revealed itself to them. However, their claims cannot be checked and such people are generally either mentally abnormal or ill (psychopaths) or have worked themselves by chanting, self-flagellation or starvation into an abnormal state of mind.

Nobody with the least knowledge of scientific method, would accept such testimony as evidence for the existence of a supernatural agency. Yet millions upon millions of people put faith in such revelations as set down in such books as the Bible, and they do so even if, as in the case of the alleged Christ, there is some doubt that he lived at all.

Why? Why do people not see the so-called religious experiences for what they are, the ravings of psychopaths? Clearly there must be other factors, psychological or social, disposing people to this blind faith. Isaacs concentrates, perhaps too much, on the psychological—the fear of death, infertility and loneliness. We, as historical materialists, would look rather to the social: the function of religion as “the heart of a heartless world” and later as a prop for class societies.

Isaacs covers all this very well and we can recommend this book to all seeking to understand the problem of religion, especially as Isaacs, as Humanists are wont these days, leans over backwards to be fair to religion.

However, for a man so competent at sweeping away religious superstitions in the physical and mental worlds, Isaacs has some odd prejudices about man in society. He holds that leadership, and credulous followers, are necessary for any community to survive; and that no civilised society can exist without coercion and punishment. He is also committed to the views that wars arise from human nature.

Certainly Isaacs does speak of a coming “rational civilisation” and holds out the prospect of a time when mankind will

Be able to settle down to the massive task of planning its food production, its families, and its resources so that the benefits of human endeavour can be shared equitably amongst its members.

But he suggests that this could only come if the leaders of society change their ways and he’s sceptical about this:

. . . in the event one knows that there is about as much chance of homo sapiens learning to live in peace and prosperity, as there was of homo habilis producing the quantum theory.

So a world of peace and plenty is not possible with homo sapiens. For this we must await the evolution of, quite literally, a new man. This is what comes of reading too much of Julian Huxley! Seriously, though, this is just a sophisticated version of the “human nature” objection to Socialism.

It is possible for human beings, as they are now, to create a world of peace and prosperity. What is required is not a further evolution of the mind, but a change in the basis of society. Clearly the people of the world cannot use the resources of the world to satisfy their needs unless they own and control them. It is only on the basis of the common ownership and democratic control of the means of wealth production that a world of peace and prosperity can be created. For this, men need only apply their existing capacity to reason to the problem and then act to change society.

Isaacs suggests that no society could exist today without coercion and punishment to maintain order. So means are needed, he argues, for “the suppression of greed in the common good.” Ironically, this low view of man has a religious origin. It is a secularised version of the theory of original sin, of the doctrine that man is born evil and so must be tamed to live in society. This argument used as a defence of all authoritarian religion, all government and all class rule. Socialists reject it as a slander on mankind. Man acts from a great variety of motives, conscious and unconscious, but are we justified in arguing that his psychology is a barrier to a free society? Socialists say no. Quite apart from the fact that a man’s psychology cannot be separated from his social background, how man acts depends to a very large extent on the social environment in which he is brought up and lives.

For instance, Isaacs lists three types of defectors which he thinks would have to be dealt with in any society: the instinctive (mentally abnormal people); the emotional (people whose judgement is temporarily blurred by emotion); and the rational (“the professional criminals who I are confident of their ability to outwit the system”). The first two types would exist, in any society, including Socialism, but to deal with them why would there be need of “an elaborate judicial system and an effective police force”? Instinctive defectors are clearly in need of medical treatment or supervision. The best way to deal with emotional defectors would be, as William Morris suggested, to let them be and their “punishment” (if it can be called such) would be their own remorse. But what about the rational defectors, the professional criminals? Yes, what about them? Why in a world in which every member of society has free access to the things needed to live and enjoy life should anyone set about trying to outwit the system?

Thus in a classless world of peace and prosperity the case for a social organ of coercion breaks down. In such a society it would be unnecessary.

Adam Buick

The Review Column: Peace (1967)

The News in Review column from the August 1967 issue of the Socialist Standard

Peace

This, let us remind ourselves, is peacetime. At the time of writing no two countries are at war, in the sense of a formal declaration of hostilities.

Yet these are some of the events reported in just one day’s newspaper last month:

• Riots in Hong Kong; four people killed. Gurkha troops take up position on the frontier with China.
• Israel and Egypt exchange accusations over which side started the last bout of fighting in the Suez Canal area.
• Rebellion in the Congo. Three United States transport: aircraft sent to give long range support for the government: forces.
• Civil War in Nigeria. Government troops reported advancing rapidly southwards through secessionist Biafra.
• American Defence Secretary McNamara admits that United States Marines suffered heavy losses in recent fighting along the southern edge of the demilitarised zone in Vietnam.
• Mr. Kosygin, Russia’s Prime Minister, describes the world situation as “very grave.”

If some of these conflicts are complicated, this is only a symptom of the fact that capitalism is a mass of tortuous interests, treachery and coercion.

If they are persistent, this is an indication that capitalism continually produces unrest and insecurity, that it is a society which cannot be at peace.

And if there are statesmen whose only contribution is to tell us the obvious—that reveals the impotence of the men who say they can control capitalism, can tame its terrors.

There is, of course, a lesson in all this, about the future of the world and the welfare of the human race. But it will not be found in the morning newspapers.

Promises

Two of the most persistent of working class dreams are better and more plentiful housing and lower prices. It follows from this that these two issues are the subject of many promises, from politicians and others, and that much nonsense is talked about them.

Take housing. Tory Shadow Minister Sir Keith Joseph recently said that, provided everyone accepted a few brilliant ideas he had just happened to think up, the housing shortage in England and Wales could be over in five years.

This probably sounded quite plausible to anyone in need of a house, or to anyone who had forgotten that politicians are in the habit of promising to solve the housing problem, and that for a very long time they have been telling us that the solution to it was only a few years away.

Perhaps those same people have forgotten that Joseph was himself Minister of Housing when the Tories were in power; that he failed to abolish the housing shortage and failed even to produce any clear or original ideas about how it was to be tackled.

Now take prices. Take an article written in the Lloyds Bank Review last month, in which Sir Ronald Edwards, chairman of the Electricity Council, thought that “the average price per unit of electricity should be significantly lower at the end of 1977 than at the end of 1967 ”

This sounds as though the Electricity Council has found a secret denied to all other industries. But Edwards would be more convincing if he had not written his article at the very time when electricity prices are about to go up all over the country by about ten per cent. He would carry more conviction if his promise were not hedged about with all sorts of risky assumptions on future economic trends, which Edwards must know could easily upset his calculations.

He himself destroyed the whole thing with the obvious comment: “Only a fool or a prophet would stake his reputation on a firm forecast of electricity prices a decade from now.”

Capitalism is full of problems, and of smooth-talkers who say they can solve them. The tragedy is that so many people believe the promises, and fail to see the nonsense for what it is.

Zilliacus

Konni Zilliacus, who died last month, was the Left winger to end all Left wingers. The only man who was in step; the persistent thorn in his leaders’ sides; Labour’s unsleeping conscience. So they said.

Zilliacus had many disagreements with his party, especially on its foreign policy. He was one of those Labour M.P.s who found to their astonishment after the victory in 1945 that Bevin handled foreign affairs very much as they had expected a Tory Foreign Secretary to.

He was in almost all the rebel movements and eventually he paid for this, with expulsion. What Wilson has called “dog licences” were as necessary then as they are now; Zilliacus could not get back into Parliament until he had given the Labour leadership the necessary assurances about his future conduct, and they had accepted him into the fold once more.

Zilliacus was a prime example of what are called honest politicians. Perhaps we can accept this—although he never took his disagreements with Labour to the extent of resigning, nor did he come back on his own terms—but the fact is that such men are dangerous.

The so-called Left wingers encourage the idea that there is nothing fundamentally wrong with the Labour Party, that its only fault is a temporary deviation from the straight and narrow path, that a change of leadership is all that is needed to put everything right again.

No one will ever know how many futile votes this idea has won for Labour. No one will ever know the extent of the confusion and the cynicism it has caused.

What we do know is that the problems of capitalism are as acute as ever and that the political ignorance and apathy which supports the system is still there, encouraged by the Labour Party, by its members honest and dishonest, its leaders and its rebels.

Toying with Soldiers (1967)

From the August 1967 issue of the Socialist Standard

In the days when she was a member of the Opposition, Barbara Castle made something of a name for herself by launching a crusade for the abolition of the penny charge for ladies' lavatories. In the 1945/50 Parliament, Jimmy Hudson was famous for his passion for temperance reform. More lately, Leo Abse has become well known as an advocate of easier divorce. Thus do Labour Members, who call themselves Socialists, busy themselves with trivial, although newsworthy, adjustments to the capitalist system.

The latest in this undistinguished line is Mrs. Anne Kerr, the Member for Rochester and Chatham, who on July 4 last moved in the House that “. . . the sale, manufacture, import, export and advertisement of war toys in the press and magazines and on television should be banned.”

Now there was once a theory, well favoured among the Left Wing, that the cause of war was to be found in the conspiracies of the great armaments kings. Mrs. Kerr, of course, was only blaming the firms who make toy armaments. Perhaps it was safer that way; she was not, after all, pressing for the abolition of war itself, nor even of the weapons of war—only of plastic toys that go pop and sparkle and rat tat tat.

Predictably, the motion had the Parliamentary correspondents dipping their pens in laughing gas, and provided a golden chance for every amateur psychologist in the Commons. A thinly attended House heard some novel theories on the cause of war and of social violence. Then they threw out the motion and got down to more serious business.

The whole episode was fatuous enough and only deserves any attention because so many of the false ideas MPs proudly paraded are widely held also by the people who vote for them:

Destruction to many people is fun. At a church fete, for example, they will pay sixpence or a shilling to break crockery. (Mr. Tilney).
. . .  a dangerous motion because it opens a door to legislation to control the right of individuals and their children to think. (Mr. Onslow).

The best thing to do here is to begin at the beginning. It seems too obvious, but so many arguments about armaments ignore the fact that they exist only because war is an accepted way of settling society’s disputes. There has been a steady progression of the destructive power and efficiency of weapons; Mrs. Kerr complained about toy “guns, bombs, flame-throwers and booby traps” but these are among the gentler instruments at the disposal of the war makers.

Let us go on and ask why society tolerates the persistence of war. Here we can find a clue in the reply Mrs. Kerr received from Mr. Darling, Minister of State of the Board of Trade, who said that

. . . the United Kingdom toy industry was one of our most flourishing industries and last year exported £16 million worth of toys.
. . . Generally speaking, the Government wanted United Kingdom toys to be sold increasingly overseas . . .  (Daily Telegraph 4/7/67)

Now this does not apply only to toys, of course; there are all sorts of British industries which are exporting their products, and which the government would like to see increase their overseas trade. But the British government is not the only one with this idea, and British industry is not the only one engaged in an export trade. The capitalist world is, in fact, a mass of competing firms, states, combinations of states, all struggling for what in the end they hope will be some sort of economic supremacy. Sometimes this rivalry can be settled by a trade agreement or some other kind of pact. Sometimes it can be settled only by war.

Under capitalism, then, wars are unavoidable — which means that armed forces and weapons are necessary. But if it is all inevitable and necessary to capitalism, it is also extremely unpleasant — terrifying, dirty, obscene, brutalising. What is more natural, then, than that governments should try to hide the truth by embellishing the military man's life with false glamour?

Soldiers, sailors and airmen who do their grisly job efficiently are not simply successful men—capitalist society regards them as heroes. This line is pushed hard by the Services when they are advertising for recruits:

Don’t talk to Peter Cobb about hotted-up Minis. He drives this nuclear submarine. Wouldn’t you like to?

The glamour propaganda is aimed at young people and of course it has its effect on children. A child's life is full of dreams and expectations, most of them modelled on the adult world. If his parents regard a killer in uniform as a hero, the child will do the same-even more so. When a kid is playing soldiers, perhaps with the toys Mrs. Kerr thinks so odious, he is acting out what he hopes will be his heroic future.

But this is not the only aspect of life in which the kids imitate their elders and in which they prepare themselves for growing up under capitalism. The same shops which sell plastic machine guns probably also sell toy Post Offices and shops, Monopoly sets and so on. These games teach children some of the commercial facts of capitalism — that goods are made to be bought and sold, that survival is a matter of making money, that success goes to the man who can pull off the clever deal.

War toys teach children that organised killing and violence is an accepted part of society today. And since this has its roots in the economic basis of capitalism, there are as many objections to the sale of, say, toy money as there can be to the sale of toy flame throwers. Indeed, the fact that a child spends some happy hours picking off his mates with a plastic machine gun does not place him irretrievably on the path of being a military murderer, any more than winning at Monopoly will make him a future property tycoon.

As long as its people are content that it should be so, it is capitalism which maps out their future. The adults of capitalism fight its wars, and support the whole system which gives rise to them. They do this not because when they were children they played with toy soldiers, but because they are misled into believing that capitalism, with its property rights, its economic rivalries, its wars, is the best of all possible human societies.

No capitalist party—certainly not the Labour Party—ever does anything to end this massive and fundamental deception. Let us be kind to Mrs. Kerr and say that she is muddle-headed. But not every M.P. was so blind; the Member for St. Marylebone, for example, was almost caught out in approaching the heart of the problem:

You will not end wars by stopping children playing at soldiers, although you probably would stop children playing at soldiers if you prevented wars.

It is a rather unnerving experience, to be agreeing with Quintin Hogg. It probably won’t happen ever again — but strange things can go on, when fishes fly and forests walk, when there is blood on the moon or the House of Commons tries to put capitalism to rights.

Ivan

Gaspers: Patriotic Fervour (1967)

From the August 1967 issue of the Socialist Standard

A boom in the sale of American flags was reported today by the Wall Street Journal. This is attributed to the fighting in Vietnam and the normal wartime increase in patriotic fervour . . .  (Daily Telegraph, 4/7/67.)

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I was almost stunned by the Foreign Secretary’s statement. Once or twice I thought I was listening to myself.” (Duncan Sandys in the debate on Aden. House of Commons, 19/6/67.)

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‘‘We thought just because we’d passed the Education Act and the National Health Service Act we’d ended poverty but we hadn’t done anything of the kind.” (Professor Richard Titmuss, Sunday Times, 9/7/67.)

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“. . . the Ministry regards it as important that every working man should have a living wage, but the difficulty is defining a living wage.” (Roy Hattersley, Parliamentary Secretary, Ministry of Labour, House of Commons, (10/7/67.)

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“All these arguments, remember, were based on the Bible. Thank God, in most of those issues wiser counsels have prevailed.” (The Rev. W. Grahame Bailey, at the general assembly of the Church of Scotland. The Times, 24/5/67.)

The Leftovers (1967)

Pamphlet Review from the July 1967 issue of the Socialist Standard

Words are cheap. Any organisation can label itself socialist. What is more difficult is to develop a body of socialist theory and to stick to it. Over sixty years we have seen many left-wing movements, from the Labour party onwards, group themselves around different political programmes. Superficially some of them seemed to differ only in tiny details from the Socialist Party of Great Britain. But these ‘details’ were always sufficient to confirm our opposition to all other political parties. Without exception our hostility has been justified. There is not one of them which has not ended up supporting capitalism. The first and second world wars especially were acid tests which separated the revolutionary Socialist party from the rest.

In other words, the old cliché about the ‘unity of theory and practice’ holds true. A party is only as good as its theoretical platform. It Is because of this that the Socialist party was able to correctly analyse the prospects of both Labour and Communist parties years before either had established themselves as the undisputed government in any country. From the start we attacked these movements for their capitalist policies and predicted that they would administer capitalism in the only way possible—against the interests of the working class.

So when we examine the New Left May Day Manifesto it is not just a case of abstract intellectual analysis. The answer to whether the New Left is socialist—or capitalist-orientated will be in this pamphlet. If they are socialists, we will unite with them; if not, it is our job to expose them. How do they measure up?

The first thing to point out is that it has taken most of the people who signed the manifesto many years to see through the Labour party. And even now they cannot really grasp why Labour has failed so monotonously. Their bewilderment comes through on every line:

We are faced with something alien and thwarting: a manipulative politics, often openly aggressive and cynical, which has taken our meanings and changed them, taken our causes and used them; which seems our creation, yet now stands against us, as the agent of the priorities of money and power.

For all that, they have at least now reached the stage of identifying Labour with what they call the new or managed capitalism. They are also moaning about some of the harsher injustices arising from private property—hitting cut at the chronic poverty which haunts the working class and at the vast concentrations of wealth in the hands of a tiny minority. Scattered throughout the text are odd sentences which show that they have got some inkling of what the problem facing working men and women is. For example,

At the centre of capitalism is the power of a minority, through ownership and control, to direct the energies of all other members of the society.

There is, of course, nothing very novel about all this. Generations of reformers have voiced similar complaints about capitalism and have dignified their futile efforts to humanise it by dubbing them ‘socialism’. The New Left is no exception; in fact, they claim that this manifesto is the work of “a group of socialist workers, writers and teachers” and they even chance their arm at defining socialism. The result is ludicrous—a useless definition, painstakingly obscure and obviously designed so that it can mean all things to all the various quaint brands of Leftists:

We define socialism as a humanism: a recognition of the social reality of man in all his activities, and of the consequent struggle for the direction of this reality by and for ordinary men and women. ,

As the pamphlet progresses a few more facts about this ‘socialism’ are carelessly let slip. On pages 3 and 4, for example, it becomes clear that wages and profits will be just as concrete “social realities” as will “man in all his activities” in this ‘new’ social system. Also they think in strictly national terms: “It would make an important difference, in the balance of power in the world, if we could make a socialist Britain . . .” But it is only after ploughing through twenty seven pages of close print that we finally discover just what form this humanistic socialism takes—Russia, we find, is a “socialist state”.

Just like the Labour party, then, the New Left has not even begun to understand what a system of social ownership and democratic control entails. Yet it might still be argued that it represents a step forward from Labour—or rather a step back, to the pioneer days when Labour leaders were supposed to have their honest, if hopelessly confused, principles. But, if the people who signed the manifesto are anything to go by, the New Left’s talent for compromise is every bit as polished as Harold Wilson’s. Their attitude to wars makes this clear enough.

During what passes for peace under capitalism both socialists and reformers agitate against war but, as we mentioned before, the outbreak of hostilities inevitably sees the Socialist party standing alone in its call for international working class solidarity. Predictably enough, the New Left has some brave slogans:

Socialists have traditionally seen war, in the twentieth century, as the conflict of rival imperialisms; for colonies, for trade, for spheres of influence.

It also has some blindingly original solutions for exorcising armed conflicts from capitalism:

In Europe we must press for disengagement between East and West in the political sphere (whether in the form of nuclear-free zones and a European Security Pact, or in piecemeal initiatives by individual nations), and for active association in economic, cultural, social and educational spheres. Negotiations to enter the European Economic Community should be judged by their relation to this more important objective.

New Left May Day Manifesto signatories.

But obviously this is for the shop window. When the shooting starts, there is no nonsense about socialist principles or proletarian brotherhood. To give a few examples, Arnold Wesker—who signed the manifesto—was fervently campaigning for Israel last month during the Middle East conflict. (To be fair to him we should, perhaps, point out that he advocated the peculiar combination of “Israel and peace”.) Another signatory, Anthony Arblaster, was writing about “how Nasser helped Egypt”, while Michael Barratt Brown (“I am not particularly pro-Arab”) gave “every support to a United Nations cordon around Israel”. Clearly, as with its definition of socialism, the New Left caters for all shades of opinion—bar the socialist.

Finally, the New Left is hooked on reforms. The manifesto refers to “the separate campaigns in which we have all been active” and, under a mysterious heading of "Successes and Failures of the Left”, lists some of the recent ones:

In 1951, against massive rearmament and cuts in social services: in 1956, against aggression at Suez; in 1961 and again in 1966. against the wage freeze; since 1965, against British support for the United States’ war in Vietnam.

Perhaps they could point out which of these were its "successes”.

How do socialists look at the New Left, then? “None of this is surprising. It is exactly what one would expect new capitalist politics to be — changes of techniques to maintain older priorities.” This passage, taken from the manifesto, neatly sums up this rag-bag of discredited ideas. The ‘‘group of socialist workers, writers and teachers” turns out to be nothing but a collection of bewildered, Labour party dissidents. Illusions wrecked and hopes shattered, they now want to build another platform of reforms from which they can operate in the traditional Leftist manner—as the uneasy conscience of the capitalist class.

John Crump

Gaspers: Capitalists (1967)

From the June 1967 issue of the Socialist Standard

. . . we felt that if there was any trouble with capitalism it was that there weren’t enough people who identified themselves as capitalists . . . (W. G. Keith Finston, President of the New York Stock Exchange. Guardian 14.1.67)

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“The primary object of the new National Steel Corporation will be to make a profit, said its Chairman, Lord Melchett, last night”. (Guardian 4.5.67)

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Employee-executives, in the £3,000—£8,000 range with the average family responsibilities, are not left with sufficient net income to lead private lives free of money worries. (Letter to Financial Times 9.5.67)

Keynes and the Russian Revolution (1967)

From the May 1967 issue of the Socialist Standard

In the popular view two economists are accepted as having had outstanding influence on events of the last half century—Marx and Keynes. Marx is supposed to have guided the aims and policies of the Russian government since the Communist Party came to power in 1917 and Keynes’ preaching of full employment and the way to achieve it has been more or less closely followed by most of the political parties of the Western world, including all the Tory and Labour governments in Britain since the end of the war.

Here, of course, is one of the issues on which Marx and Keynes came into conflict. Marx held that unemployment is a necessary feature of capitalism, while Keynes held that it should and could be reduced almost to the point of disappearance. It is not our purpose to deal with that aspect here except to say that there is nothing in the post-war rises and falls of employment to justify the claims of Keynes’ admirers, which does not deter them from claiming that his discoveries have revolutionised economics and politics.

There is, however, a striking difference between the relationship of Marxism to Russia and that of Keynesism to Britain and other countries. It is that British politicians and their advisers have indeed been trying to apply Keynes’ theories in their conduct of affairs, but Russian governments have been acting in complete disregard of Marx’s theories.

Marx saw that the overthrow of the Tsarist autocracy would clear the way for the development of capitalism. This has indeed happened, but while the Communist Party rulers in Russia have presided over the building up of a great capitalist power they have chosen to pretend that it is Socialism.

What did Keynes make of all this? It happens that he set out what he thought in a series of articles in the New Statesman republished in a booklet A Short View of Russia published by Hogarth Press in 1925. This was some years earlier than Keynes’ book The General Theory of Employment, Interest and Money but after he had made a name for himself with his Economic Consequences of the Peace and his Tract on Monetary Reform. He was already regarded as a major figure in the world of economics.

Keynes had nothing but contempt for Marx but we can now compare the maturity and accuracy of Marx’s views of developments in Russia with the superficiality of Keynes’ judgements.

For Keynes the Russian revolution was not a stage in the development of capitalism, but the emergence of a new world religion; not based on changes in the real world but engendered in the minds of the leaders, Lenin and his associates. Keynes had something in common with the Russian leaders; he shared their belief that progress comes from the “intellectual minority“. Here are two typical passages:

Like other new religions, Leninism derives its power not from the multitude but from a small minority of enthusiastic converts, whose zeal and intolerance make each one the equal in strength of a hundred indifferentists.

But quite apart from other factors, it was the indifferent multitude—indifferent, that is, to Socialism—who, as the Socialist Party of Great Britain said at the time, made nonsense of the Utopian dreams of introducing Socialism in Russia in 1917.

The second quotation is an attack on Marx’s Capital chiefly revealing for what it tells us about the smug intellectual superiority of Keynes:

How can I accept a doctrine which sets up as its bible, above and beyond criticism, an obsolete text-book which I know to be not only scientifically erroneous but without interest or application for the modern world? How can I adopt a creed which, preferring the mud to the fish, exalts the boorish proletariat above bourgeois and the intelligentsia who, whatever their faults, are the quality in life and surely carry the seeds of all human advancement? Even if we need a religion, how can we find it in the turbid rubbish of the red bookshop? It is hard for an educated, decent, intelligent son of Western Europe to find his ideals here, unless he has first suffered some strange and horrid process of conversion which has changed all his values.

Keynes had no sense of the historical development of society and showed little appreciation of the problem which faced Russia, as it does all countries in the early stages of capitalism, of accumulating capital to build up large-scale industry. His advice to the Russian government was to lower the wages of town workers, and “get itself into a sufficiently strong financial position to be able to pay the peasant more nearly the real value of his produce. ” As the town workers were a small minority and the peasants the vast majority of the population, it certainly wouldn’t have solved the problem. It was about as useful as telling a starving man that what he ought to do is to get hold of a large sum of money without telling him how.

Although, for Keynes, Leninism was a religion he did not wholly approve of it, but he did believe that it would create a society in which money making and love of money would lose their hold, especially among the new generation—though not to the extent of making “Jews less avaricious or Russians less extravagant”.

But although this might be alright for the Russians it was not congenial to “an educated, decent, intelligent son of Western Europe” (who, incidentally, made a fortune by financial speculations). He disliked the “mood of oppression” in Russia, for which he had a simple explanation:

In part, no doubt, it is the fruit of Red Revolution.  . . . In part, perhaps, it is the fruit of some beastliness in the Russian nature— or in the Russian and Jewish natures when, as now, they are allied together.

What can one say of such a shallow interpretation of history except that if Keynes had troubled to understand Marx he might have known what was really taking place in Russia.

Edgar Hardcastle

Marxist Economics (1967)

Book Review from the April 1967 issue of the Socialist Standard

Marxist Economics in the Modern World. (Traité d'Economie Marxiste) by Ernest Mandel, René Julliard (Paris). 2 Vols. 516 & 550 pages. 46.25 Fr.

Ernest Mandel put an enormous amount of work into the writing of this two volume study of Marxian economics in its application to the modern world, published in 1962. With its nearly 1,000 pages of text, innumerable footnotes and quotations (the sources take up 65 pages, with another 50 pages of quoted works) it makes an invaluable book for students.

Mandel deplores, and offers an explanation for, the neglect and contempt of Marxian economics displayed in academic circles.

Starting with Marx's division of economists into the classical, in the period of the rise of capitalism and ending with Ricardo; then the post-Ricardian economists in the period when the capitalists were not yet finished with the elimination of the old ruling class but were becoming pre-occupied with their struggle with the working class; then the "vulgar" economists, after capitalism had consolidated its position. 

So far, says Mandel, the capitalist economists had still been concerned with economic theory even if in the later phase it was nothing more than the invention of shoddy theories to justify the position and actions of the capitalists.

But then came a fourth period, marked by the "Keynesian revolution", in which the economists have had little or no interest in theory and have been concerned solely with devising practical expedients to save capitalism.

But at the same time Marxian economics suffered a vulgarisation. Just when it was becoming obvious in the depression years that capitalist economic theory was bankrupt, Marxism was vulgarised by the apologists for Russia who turned it into a propaganda instrument for defending the political and economic policies of the Russian government; for bolstering up the fiction of Socialism in Russia; and for hiding from the workers in Russia that their standard of living was in fact below that of the industrially developed countries.

As well as going over the ground covered by Marx, Mandel examines a number of questions in detail, including the idea that Marx foretold necessarily increasing working-class poverty; Marxian and other theories about crises ; and the question whether the twentieth century has disproved Marx's conception on historical development.

While it would be too much to expect that Mandel would see everything from a standpoint identical with that of the Socialist Party of Gt. Britain, the present writer knows no other work which, from a Marxist standpoint, covers modern capitalism anything like so fully and so well. It is to be hoped that some publisher will get out an English translation.

Edgar Hardcastle

Gaspers: Dresden (1967)

From the March 1967 issue of the Socialist Standard

“Twenty-two years ago last night . . .  135,000 people died in an Anglo-American raid on Dresden. It was probably the biggest and quickest single massacre in history . . . The Hiroshima atom bomb killed only 71,000.” (Guardian article 14.2.67.)

That Yellow Metal again (1967)

From the February 1967 issue of the Socialist Standard

The yellow metal which, over the ages has been passionately hunted, coveted and murdered for is much in the news. Gold, Shakespeare's "Yellow slave" which "will make black white, foul, fair; wrong right, base, noble; old, young; coward, valiant"; "Will knit and break religions . . .  place thieves and give them title, knee and approbation, with Senators on the bench . . ."

Millions of words about it, mostly of denunciation but still it holds its place. Everyone wants it, including those who say its desirability is based on myth, and including Russia in spite of Lenin's jibe (borrowed, with modification, from Sir Thomas More) that it would come to be used for building public lavatories.

Of course there are exceptions to the mainstream of thought. In South Africa where gold production is the chief industry gold is worshipped as if it were the mainspring of civilisation and life itself.

Mr. Anthony Bambridge, business editor of the Observer (8.1.67) has had a go at putting it in its place under the title "The Mad Magic of Gold". He writes: "Gold is yellow and heavy. It is useful for filling teeth and not much else . . . 'It is a fetish', declared the Americans in 1933, the year before they once more pegged the dollar to gold. 'Dug up in South Africa, only to be buried in Fort Knox', said Keynes".

The implication of what he wrote is that the world would be better off without gold, though his immediate purpose was to attack Jacques Rueff, the "high priest of gold", adviser to General de Gaulle, who advocates that all countries should get back to the gold standard as it was operated in Britain and some other countries in the nineteenth century, the results of which, says Mr. Bambridge, "are likely to be too hideous to contemplate".

The controversy has blown up because a number of the monetary experts say the world is in danger of running into a trade decline and depression because of "lack of liquidity". Rueff and others of the experts deny this.

One aspect of the controversy has a very simple explanation. The American authorities have, for over thirty years, bought and sold gold at $35 an ounce. But because of recent trends of American trade and overseas spending gold has been flowing out of formerly huge American gold reserves and the idea has gathered strength that it may be possible to persuade or force the American Government to alter the gold price to, say $70 an ounce or even $100 an ounce. If the price were doubled to $70, every central bank and every hoarder in the rest of the world holding gold would find the dollar value of it doubled. So the authorities in France, Italy and some other countries have been acquiring all the gold they can in the hope that this will happen — they buy at $35 an ounce and hope to end up with holdings worth $70 an ounce. South Africa and Russia would also be among the jackpot winners. The private hoarders have been so busy that almost all of the gold mined in the past two years outside the Russian sphere has disappeared into private hoards.

Naturally the governments which have not much gold or which for other reasons, line up with the American unwillingness to raise the dollar price of gold, accuse the gold-rich governments of not playing the game — as if capitalists ever did anything else than pursue their own interests. The Financial Times, for example, (29.12.66) indignantly attacked the Italian Government for having piled up more gold than it could reasonably need for normal trading purposes; and Mr. Bambridge was equally scathing about de Gaulle's Government. The Financial Times argued that a country's legitimate liquidity needs are a reserve of gold and foreign currency no more than sufficient to meet any temporary excess of imports which cannot be balanced by exports and therefore has to be paid in cash; but Italy we are told was "acquiring far more than her proper share".

The same writer, however, proceeded to claim that the American and British governments are a special case: they are entitled to hold more than the amount prescribed for Italy (and France) because they are international bankers. To which, of course, the French and Italian governments can retort that as far as they are concerned the American and British international banker activities cannot end too soon.

Coming back to the view Mr. Bambridge quotes (and apparently shares) that gold is a fetish with little use, this is an old notion and one Marx had something to say about. He showed (in Capital, Vol. I chapter II) that the money commodity, whether gold or silver, is able to function as such because it is, in the first place, a commodity having value like other commodities. Without this it would not have come to be the commodity in which all other commodities express their value.

Marx mentioned John Locke, who thought that "the universal consent of mankind gave to silver . . . an imaginary value", and he quoted the pointed reply given by Jean Law, who asked. "How could different nations give an imaginary value to any single thing . . . or how could this imaginary value have maintained itself?"

But though the value of the money commodity silver, or, as in the modern world for the most part, gold, is as real as the value of other commodities, and capitalism needs the money commodity, that is not to say that there is any way in which its functioning can be made smooth and stable as so many economists have supposed it could. Capitalism works by alternative expansion and contraction, booming trade, crisis and stagnation. And in these phases the capitalist attitude to money goes through corresponding violent fluctuations. When trade booms the capitalist is anxious to turn his money into commodities to reap the harvest of expected profit. But when trade turns sour, it is money alone he wants to hold. As Marx put it:

"On the eve of the crisis, the bourgeois, with the self sufficiency that springs from intoxicating prosperity, declares money to be a vain imagination, commodities alone are money. But now the cry is everywhere : money alone is a commodity! As the heart pants after the fresh water, so pants his soul after money, the only wealth."(Capital, Vol. I, Kerr edition, p. 155).

So sometimes there appears to be too much money and at other times too little and there is no way of avoiding this.

Of course there is one method by which the world can rid itself of dependence on gold but not one of the monetary experts mentions it — by establishing Socialism. Production and distribution will then be directly and solely to meet human need, without trade, internal or international, without profit, payment or money.

Edgar Hardcastle

Gaspers: Bricks (1967)

Gaspers from the February 1967 issue of the Socialist Standard

“Bricks lying idle in factory yards all over the country represent well over 50,000 homes unbuilt at a time when the social need for better and more readily available housing is greater than ever before.” (M. G. K. Timperley, National Federation of Clay Industries director, 23.12.66.)

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“We should flatten Hanoi if necessary and let world public opinion go fly a kite.” (L. Mendel Rivers, U.S. Senate Armed Services Committee Chairman 30.12.66.)

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“. . . the reason for the tally trade’s existence. The gap between needing and affording. Our affluence has never been as copper-bottomed as some people would like to think” (Shirley Lewis, on “Tally Woman”, Guardian 30.12.66.)

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“Chairman Mao not only belongs to you, but also to us and to the people of the whole world. You ought to be proud of him. He is the greatest man today." (Dr. Mohammed Kashif Al-Ghita, Chairman of Iraqi delegation to Peking. Reported in China Reconstructs, October 1966.)

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“People do get swept overboard, but they often get swept back again.” (M. Lionel Cox, Secretary of Hull Fishing Vessel owners’ Association—Sunday Times 8.1.67.)

Austria (1967)

Party News from the February 1967 issue of the Socialist Standard

After consultations among all the Socialist parties the Bund Demokratischer Sozialisten is now officially one of the companion parties. As explained in the December Socialist Standard the League's official journal Das Wiener Freie Wort, has carried the same Declaration of Principles as the other parties since March last year. The third issue of their journal is now available from 52 Clapham High Street, London. SW4. Price 1s.

Russian Prisons (1967)

From the February 1967 issue of the Socialist Standard

One of the more abhorrent features of capitalism is its need for a penal system. Workers who through one reason or another prefer a life of crime to one of so called honesty, when caught, are subjected to varying periods of preventive detention in the name of law and order.

It is interesting however to see that this system not only applies to countries which are avowedly capitalist, but is also a feature of Soviet Russia. Rather embarrassing for those who would have us believe that Russia is busy building the new socialist society.

In an attempt to outdo what is described as “western decadence’’ the Russian penal system has recently been streamlined in the interest of efficiency. According to Sir Leslie Scarman, chairman of the Law Commission and leader of a recent legal delegation to the Soviet Union, “Russia’s imaginative use of prisoners in labour camps was something Britain could incorporate into its legal system.”

This report, which was summarised in a recent edition of the Guardian, quoted Sir Leslie as saying that the labour camps, which he preferred to call colonies, “Were making a positive contribution to Russia’s productivity plan” and that the “Emphasis was on training them for a job.”

Gone apparently are the repressive dogmas of uncle Joe Stalin, famous for his treatment of political opponents most of whom ended up in one or other of Sir Leslie’s “colonies”. A new era of professionalism has been adopted. Why allow perfectly fit units of production to rot in the cells of labour camps, when according to Sir Leslie they could be making a “positive contribution to Russia’s productivity”?

In all capitalist countries, including Russia, the efficient use of labour is essential to survival in the competitive nature of World capitalism. Sound economics, not sentiment, demand that Russia’s prison population be allowed to play a “positive” role in the Russian productivity effort.

It has been estimated that 75 per cent of all crime has an economic basis. Prisons are the end result of private property. How often is heard the legal platitude that “This court must protect private property” or, “Private property — no trespassing”. What is required is a fundamental change in the structure of society. The conversion of private property into common ownership would make crime redundant. In a society of free access to the means of life food, clothing, shelter, etc., the need to steal these things would be removed, for why should anyone take the time and trouble to steal what can be freely obtained?

R. J.

50 Years Ago: Unconquerable Print (1967)

The 50 Years Ago column from the January 1967 issue of the Socialist Standard

A little while ago in the affairs of the Continent of Europe, lived an emperor called Frederick the Great. The only unquestionably great thing he did was to kill himself with uncommon vices. He departed a little from the usual insipidence of royal life by taking an interest in literature and entertaining Voltaire at his court. It would seem that this same hospitable reception of the satirist is the principal act of his life which entitles him to the epithet of ‘The Great’ . . .  one other action in the life of Carlyle's hero entitles him to remembrance if not to a fool’s immortal pillory. While driving through one of the cities of Prussia on a sunny day, he saw on a wall a placard in which he himself was denounced as an idle intemperate atheist. It had been posted in the dark and was loo high to be easily read. The emperor stopped his carriage and commanded that a similar bill should be glued at a more readable height. ‘For' he said, ‘My subjects may print what they like so long as I do what I like’.

It is difficult to say what thoughts were dancing in the Prussian’s skull. Did the old blockhead think that Print remained no more than print; this fierce placard, ‘posted after dark,’ no more than paper and letterpress? Did he not think that his own coronation and the docility of the masses, depended on advisory placards far different in spirit from this nocturnal one; that a word of this fresh sheet might stop those gilt wheels of his; that a thought of it might be as a whirlwind to knock his golden palace down and blow him and his better-half over the seas out of disgusted Prussia; that this sheet of letter-press might fire a country to destroy an Emperor?

From the Socialist Standard January 1917.

Gaspers: 'a basinful of bombs' (1967)

From the January 1967 issue of the Socialist Standard

In Auckland, a heckler shouted "What about the children?” when New Zealand’s Defence Minister, Mr. Dean Eyre, said he would like to drop 'a basinful of bombs' on North Vietnam. Mr. Eyre told the heckler: “We are dealing with Oriental people. They are different from ourselves.”

Post-modern guru (2009)

Book Review from the January 2009 issue of the Socialist Standard

Goodbye Mr Socialism. Radical Politics in the 21st Century. Antonio Negri with Raf Scelsi. Serpents Tail Press, London, 2008

The Italian intellectual, Toni Negri, who was once sentenced to jail in Italy for giving a theoretical defence of urban terrorism, is highly regarded in some circles. The blurb on the back of this book describes him as “one of the world’s leading experts on Marxism” and as “a guru of the post-modern Left”. He may well be the latter but is certainly not the former.

The opening chapter is a surprisingly indulgent justification of some of the things that happened in Stalin’s Russia, even if this is part of the “Mr Socialism” to which he is saying good bye in this transcript of a question and answer session with another Italian intellectual. The other part is the whole idea of the factory proletariat, organised in trade unions and left wing political parties, as the agent of social change:

“the epoch of wages is finished and that the struggle has moved from the level of a fight between capital and labour regarding the wage, to a fight between the multitude and the State around the income of citizenship.”

The “income of citizenship” is a clumsy translation of what is more usually called a “Basic Income” or, by the Green Party, a “Citizen’s Income”, defined in a lexicon at the end of the book as:

“a monetary payment distributed at regular intervals to all those who enjoy citizenship and residency for a certain period of time, which allows a minumum dignity of life . . . It is paid to those of working age, for the period that goes from the end of obligatory schooling to pension age or death.”

Negri supports this as he sees the demand for it as “a refusal of work and of the wage relationship”. If introduced other than as some tinkering with the tax and benefits system it would indeed undermine the economic compulsion to go out and work for an employer; which of course (apart from its cost) is why it is never going to happen under capitalism. In any event, as a goal, it is a poor substitute for “from each according to their ability, to each according to their needs”.

Negri does, however, have a point when he criticises those who look only to the factory proletariat as the agent of social change. This is only a section of the working class properly so-called and, in the developed capitalist parts of the world, is now less than 50 percent of the workforce. But, in placing his hopes in those with knowledge skills involved in non-material work (the “cognitariat” as he calls them) he would seem to be making the same mistake of wanting to rely on a section only of the working class.

Surely the point is that social change has to be up to the class of wage and salary workers as a whole, not just one section. Or perhaps this is what Negri means by the “multitude”, which, if it is, comes across in English as a rather derogatory term to describe all those forced by economic necessity to sell their mental and physical energies for a wage or salary.

Adam Buick

Casino Capitalism: Inefficient and Irrational (2011)

From the November 2011 issue of the Socialist Standard

Even supporters of capitalism can see this – at least some of the time.

One of the trends of political reporting in recent years has been to announce the odds being given by bookies of a particular outcome of an election.  On the face of it, this makes a lot of sense.  Punters will use the information they have to hand to gauge the mood of the electorate and risk their money.  The fact that many of them do so separately should draw out the “wisdom of the crowd” and provide the best analysis short of the actual vote itself.  Of course, this face value isn’t the whole story:  candidates may try boosting themselves by encouraging supporters to bet on them; large-scale betting syndicates may skew the odds through their betting patterns; punters may follow the crowd and bet on the short odds, hoping for a win; some people may just place a flutter without caring if they win or lose. Which is why we don’t decide elections based on the bookies odds alone, and wait till the actual vote.

Some people, though, think that that is a good way to organise producing and distributing what we need.  There was an idea, with considerable traction in academic and official circles, called the Efficient Markets Hypothesis, which held, as a recent UN report puts it, ‘that all publicly available information is immediately reflected in prices. In its strong form, the EMH contends that even private information – available only to individual market participants – is reflected in the price through the effects of the transactions of the persons in possession of the information.’ (Link.). In short, it holds that market prices (particularly stock market prices) are always right, and we shouldn’t try and second guess the market.  Almost no-one, in the aftermath of the financial crisis, seriously puts this case forward any more – although a few bitter-enders maintain it was the state failing to leave it to markets that caused the crisis; and doubtless a new version will appear if the economy returns to steady growth.

The UN report, Price formation in financialized commodity markets: the role of information, delivers an academic coup de grace to that idea.  It analyses recent trends in food markets, with a view to explaining their apparent volatility.  It finds ‘market participants also make trading decisions based on factors that are totally unrelated to the respective commodity, such as portfolio considerations, or they may be following a trend.’  It explains this by identifying a difference between commodity markets (trying to profitably get goods to where they are needed) and financial investment (which is about maintaining a portfolio of investments and following a pattern of earnings, irrespective of the goods/outcomes involved).  When this latter predominates, then, they note, rational use of information goes out of the window:

‘In an environment of herd behaviour there are limits to arbitrage. Acting against the majority, even if justified by fundamentals, may result in large losses, often of borrowed money. It may therefore be rational for market participants to ignore their own information and follow the trend. This is what many financial players do by default, basing their trading decisions purely on the behaviour of price series (algorithmic trading), which can lead to a commodity price bubble.’  

That is, it becomes harmful to act on good information against the flow of the market.  A “weight of money” effect can come into play.  If, for example, an investor commits a large sum of money relative to the market, and then faces liquidity constraints. This may push market prices in the wrong direction. In particular, since many investors rely on computer programs to organise their trades, there is a risk of re-enforcing herd behaviour due to the fact that the software is following the same set of algorithms and programmed responses: like an evolutionary ecology lacking diversity, it may work well for a while, but a small change in the environment could see everyone killed off.  

A recent report by the UK Government Office for Science, entitled "The Future of Computer Trading in Financial Markets” identifies:

‘three main mechanisms that may lead to instability when financial markets involve significant proportions of CBT [Computer Based Trading]: nonlinear sensitivities to change (where small changes can have very big effects), incomplete information (where some agents in the market have more, or more accurate, knowledge than others), and internal “endogenous” risks based on feedback loops within the system.’ (Link.)  

They also, though, find that computer-based trading is more efficient than human trading.  That may be, as another study has shown, that human traders do not behave in a rational manner at all.  According to Der Spiegel a study at the University of St. Gallen has found traders behave in a reckless manner:  

‘the bankers weren’t aiming for higher winnings than their comparison group. Instead they were more interested in achieving a competitive advantage. Instead of taking a sober and businesslike approach to reaching the highest profit, “it was most important to the traders to get more than their opponents.(…) And they spent a lot of energy trying to damage their opponents.’ (Link.)

Rather than behaving like parts of a rational algorithm, they behave like primates in a status competition. In either case, whether it is computer or primate driven, the financial markets, according to the UN report, have expanded massively into the food production process.  Its authors speculate that this may be attributable to the 2000 financial crisis (the collapse of the dot.com bubble after the Asian Tigers wobble) as investors sought to find a new safer profitable place to put their money.  In other words, the real world need of human beings to eat became subsumed to a (virtual) game of profit making ever more divorced from reality.

The important thing about all these reports is the emphasis they put on the flow of information in the production process.  As the UN report notes:

‘There is ample information on physical commodity markets, but it is not easy to obtain in a systematic way. A number of sources provide the same information, but in different formats. It therefore takes time and expertise to find out which are the most useful, relevant and reliable sources of information required for a specific commodity. Even from a single source the multiplicity of information products can make it rather cumbersome to access the targeted information. The various sources of information include official sources, such as international organizations and study groups, organizations specializing in specific commodities or groups of commodities, and governments of countries which are key players in the commodity markets, such as Australia and the United States, as well as private sources. In many cases, even from official sources, the information is not publicly available and can be accessed only against payment.’

This, in part, illustrates what a simple idea socialism is: that that information about production and stocks will be opened up and consciously shared.  It doesn’t require complex mathematics, or the invention of the new way of doing things, but a framework allowing the opening up and provision of information currently hidden behind and distorted by the operations of the financial market and indeed of the whole market system.  The brains of mathematicians currently behind the computer trading programs could be put to use finding creative and useful ways of enabling the free information to find its way to the hands of those who need to organise producing and distributing what we need.  Socialism will not be the result of advances in computing, but it could certainly benefit.  Even aggressive bankers will see that they would benefit: after all, many of their jobs are now being mechanised away.  We can see to it that getting food for everyone isn’t a gamble. It’s what might be called the Efficient Non-Market Hypothesis.

Pik Smeet