Sunday, May 6, 2018

Blame Game (2018)

Book Review from the April 2018 issue of the Socialist Standard

'Poverty Safari: Understanding the Anger of Britain’s Underclass'. By Darren McGarvey. (Luath Press. £7.99)

McGarvey was brought up in the Pollok area of Glasgow. His mother (who had been raped when young) drank heavily, was violent and ran up a massive drug debt, so he had a dysfunctional home life. One consequence was that he felt a deep sense of grievance against anyone he considered well-off and he blamed the ‘middle class’ (the capitalists don’t feature here at all). 

A large part of his book attacks the ‘poverty industry’, where people make a good living from dealing with problems; not solving everything but leaving some sort of ‘legacy’, with enough problems still remaining for the industry to continue growing. Outside organisations that address poverty encourage dependency rather then self-sufficiency, and if you are poor it is best not to offend such organisations and those who work for them. In Scotland, ‘the poverty industry is dominated by a left-leaning, liberal, middle class’. In contrast, the poor, McGarvey says, need to become ‘more active, engaged and resilient’. Identity politics has supposedly replaced class issues, but again is just another means for the socially mobile (which often is equivalent in these pages to middle class) to dominate public discussion. But, considering how unclear his own views on class are, this is not very convincing.

It is odd that he emphasises the importance of taking personal responsibility and not just blaming others while at the same time writing eloquently on the lifelong consequences of childhood poverty and the crucial role played by emotional stress in influencing people’s health and social mobility. Many of those who end up in prison have experienced violence or other forms of abuse while children. Child abuse itself is driven by social deprivation.

As may have been gathered by now, McGarvey’s own views are not at all well explained. He sees Socialism in completely anodyne terms, as ‘about providing a decent quality of life for everyone in society’. He is now the father of a young son and as such is frightened by the thought of a revolution: but he does not say why, or what such a revolution would involve. Moreover, there is nothing at all here on what the underlying causes of poverty might be. So, if his book has an overall message, it is left very unclear. 
Paul Bennett

Cooking the Books: Yes, Read Marx (2018)

The Cooking the Books column from the May 2018 issue of the Socialist Standard

In an interview with the online magazine 'Truthout' (24 March) the historian Immanuel Wallerstein urged young people to ‘Read Karl Marx!’ He is one of the leading advocates of the theory that capitalism is a single ‘world-system’. His books describe the history of capitalism, as in effect the world market, from its origins in the sixteenth century to today. This theory has an important implication: that capitalism is not a collection of separate, national capitalist economies but a single world system and that there is therefore no national way out of it:
‘The capitalist system is composed of owners who sell for profit. The fact that an owner is a group of individuals rather than a single person makes no essential difference. This has long been recognized for joint-stock companies. It must now be recognized for sovereign states. A state which collectively owns all the means of production is merely a collective capitalist firm as long as it remains—as all such states are, in fact, presently compelled to remain—a participant in the market of the capitalist world-economy’ (The Capitalist World-Economy, pages 68-69).
Good point. When, however, it comes to explaining basic Marxian economics Wallerstein is not so sound. In an interview with the Belgian newspaper Le Soir in 1998 (20 March) he argued:
‘You easily imagine that if one respected the presuppositions of economic textbooks -- an infinity of sellers and an infinity of buyers, all perfectly informed -- capitalists would be incapable of making the least profit: consumers would immediately find the lowest price which would not be a centime above the cost of production!’
The main feature of the textbooks’ ‘perfect competition’ is that, because there are so many of each, buyers and sellers cannot influence the price at which goods sell. This is fixed by the market. But at what level?

Adam Smith called the price that the market would establish in the long run a good’s ‘natural price’. This would be the cost of producing it in terms of the labour expended on it from start to finish. He accepted that this would include an element of profit. Marx developed this theory and explained profit as ‘unpaid labour’, i.e., the labour expended by workers above what they received as their wages.

Wallerstein’s statement implies that profit could only arise if there is not ‘perfect competition,’ if capitalist firms are in a position to influence the price of what they sell due to having a partial monopoly. In other words, profit would be a form of rent. True, some firms are in this position and so do command a higher than normal profit. But this explains only the extra, monopoly profit, not normal profit. It fails as a theory of profit because it does not, and cannot, explain why firms not in this position still make a profit, as under capitalism they must otherwise nobody would invest in them.

The impasse Wallerstein’s statement leads to shows that the origin of profit cannot be explained as arising from the circulation (the buying and selling) of goods. It has to be sought elsewhere. Marx set out to explain it on the basis of goods selling at the price established under competitive conditions and showed that profits originated in the process of production where workers produced goods worth more than what they were paid as wages.

So, to understand profits, read Karl Marx, especially the section of his 1865 talk to English trade unionists, Value, Price and Profit, entitled 'Profit is Made by Selling a Commodity at its Value'.

The Fallacy of Empire Free Trade. (1930)

From the March 1930 issue of the Socialist Standard

Lords Rothermere and Beaverbrook, who six months ago were waging a fierce ‘‘circulation war” in their rival group of newspapers, have buried the hatchet in order to launch the United Empire Party—the “Party of Prosperity.” The idea underlying the programme of the new party is simple enough. The British Empire is to become one unit for trade purposes against the rest of the world. Any article which can be grown or manufactured inside one or other of the Empire countries is to be grown there and freely imported into other Empire countries. Foreign productions are to be kept out by means of protective tariffs. America is to be the model, and prosperity is to be the result. Viscount Rothermere writing in the Sunday Despatch on February 23rd, tells us that five years after the achievement of Empire Free Trade “Great Britain will be as prosperous as the United States.” The party is described as “not political, but economic. It will include men and women of all political (views. Conservatives, Liberals, and Labourites alike will be welcome to it.” (Viscount Rothermere, in the Daily Mail, 19th February). This “non-political” party is, however, going to run a large number of candidates for Parliament, to secure the application of its programme. Lord Beaverbrook is the leader of the new party, and Viscount Rothermere his right hand man.

“All Sensible Persons.”
The U.E.P. has met with a heavy fire of criticism from the older parties, but almost all of the critics agree in endorsing the notion that “prosperity” would result from improved trade. They condemn the scheme only because they believe it. to be impracticable for the purpose it has in view. As the New Statesman puts it, “all sensible persons wish to see an expansion of trade between Empire countries.” A glance at the last general election programmes of the political parties will show that they all believe in improved trade. Mr. Baldwin backed “safeguarding” as the means of doing this. Mr. Lloyd George preferred the Trade Facilities Act, which gives “the support of the national credit to industrial enterprises.” The Labour Party shared Lloyd George’s view; “A Labour Government will set to work at once by using Export Credits and Trade Facilities Guarantees, to stimulate the depressed export trades.” Finally the Communists urged the development of trade with Russia. Only the Socialist Party dissents from the view of the New Statesman's “all sensible persons.” We do not want “free trade” or “protection” but Socialism, which means “no trade.” Trade, whether local trade, Empire trade or International trade, means the buying and selling of goods which are privately owned by the owners of the means of production. Socialism, which means the production of goods for use and not for sale, will end buying and selling.

That is a question of the organisation of production and distribution on a Socialist basis, and it may be asked what is our attitude to the problem of trade as it exists under capitalism. Our attitude on this too, is essentially different from that of the parties mentioned.

“Prosperity” For Whom?
We deny that improved trade offers any solution for the problems of the working class. Each of the parties of capitalism accepts the view that greater efficiency in British industry would enable British manufacturers to produce more cheaply and thus beat their foreign competitors. The argument is based on a childish fallacy which every elementary student of logic has met in the following little poser. In an examination set to a class of 30 boys, no boy was more than 5 marks from the boy above him on the list. Any boy would therefore be raised one place higher if he had 10 more marks. Is it then true to say that all the boys would be one place higher if they all had 10 more marks? The “improved trade” argument is just as silly. It is doubtless true that if “John Bull’s” manufactures were reduced in price he would capture some markets from “Uncle Sam” or "Old Fritz”—provided that “Uncle Sam” and “Old Fritz” and the rest of the capitalist world consent to stand still. But they don’t consent to stand still. In a competitive world an increase in the efficiency of each competitor leaves all the competitors where they were. A ten per cent. reduction in prices all over the world through the application of similar methods of rationalisation, leaves the least efficient capitalist nation still at the bottom of the class and still desperately trying to outstrip the others.

Viscount Rothermere tells us to copy America and then in five years we shall be “as prosperous” as America is. But how prosperous are the American workers? Has poverty been abolished in the U.S.A.? Viscount Rothermere’s newspaper, the Evening News, told us as recently as December 17th, 1929. that “the world has never been without poverty and that in the U.S.A. to-day, the richest nation in material wealth that the world has ever known, there is plenty of it—not relative poverty merely, but want and destitution.”

The Cause of “Bad Trade.”
Before joining the party of “want and destitution,” stop and consider why “bad trade” and unemployment exist; The newspaper Lords are looking for the cause at the furthest end of the Empire; Mr. J. H. Thomas recently went seeking it in Canada; the Labour Party and the Communists fancy they have found it (or part of it) in the failure to be on good trade relations with Moscow. The real cause lies nearer home, in the organisation of capitalism itself. In the U.S.A. there are over 33,000 people with incomes of 50,000 dollars or more, say upwards of £200 a week. In this country there are more than 9,000 people in the same happy position. They represent the wealthiest section of the capitalist class, but between them and the average worker with his wage of £2 or £3 per week (when he is in work), there are a few million wealthy people who between them get nearly half the total national income. Many of them have so much more than they need that they cannot and do not spend it. It must be as difficult to get through £200 a week as it was for the proverbial rich man in the Bible story to get into heaven, or the camel to get through the eye of a needle. The constant relative over-production of goods, the inability to find buyers, is due to the inequality of wealth which is part and parcel of Capitalism. So great is the wealth of the rich minority that all the stupendous and alluring advertising campaigns fail to induce them to spend up to the limit of their income or anything approaching the limit. The cost of building useless battleships, donations to charity, taxation to provide relief for the destitute, and pensions for the aged, all these forms of voluntary or obligatory expenditure leave the problem hardly touched. The wealth of the rich, their ownership and control of our means of life, this is the cause of poverty and unemployment. None of the “improved trade” parties can solve the problem. Workers who desert the Liberal, Tory, Labour and Communist Parties to join the new party are merely exchanging one illusory hope for another. Socialism will solve the problem of the poverty of the many by abolishing a system of society based upon the ownership of the means of production by the wealthy few; it will solve the problem of unemployment by abolishing the classes of employers and employed; it will solve the problems of competitive trade by abolishing trade.
Edgar Hardcastle