Thursday, December 13, 2018

The Computer, Karl Marx and the Battery Hens (1969)

From the January 1969 issue of the Socialist Standard

Here in the computer room there was some relief. On the other side of the door the clerks and typists grew steadily moister as the temperature in the vast office, trapped and intensified by great areas of glass, climbed into the nineties. Clerks and typists were only human beings; not too expensive to employ, able and willing to adapt themselves to discomfort. The computer was different. It was excessively expensive to hire and it could not adapt to great changes in temperature.

“The air conditioning in here's perfect,” said the guide. “It has to be or the box would simply pack up. When we put it in we even analysed the supervisor's pipe smoke to make sure we got everything rights temperature wise. Now if you'll just come this way we’ll show you an exercise in updating our product structure file. Very important; we're putting the entire material control and production planning onto computer and updating the file’s a part of it.”

Around the computer, flashing and pulsing, two young men worked fast, changing magnetic discs and tapes. Another went to a console and punched at a keyboard. After a time the concertinaed sheets of paper began to leap through their guides, printing faster than the eye could follow.
The paper zipped through the machine until suddenly:
The man at the console frowned, tapped out a question on his keyboard and read off the computer’s answer. Then another.

“It’s a hard wait,” he said to the guide. “A hard wait,” he explained to the visitors, “means the box has stopped and right now we don't know why. It may be something wrong with the hardware—with the computer itself. More likely the software’s up the pole—someone’s fed it some rubbish. We don't like a hard wait because of the expense. This machine works in micro seconds and there are as many micro seconds in one second as there are seconds in three hundred hours.”

The guide's face did not lose its smile.

“That’s a real pity,” he said, “But I guess it’s life computer-wise. Never mind, there’s still lots we can see. The card punch room, now. Everything in this computer starts life as a punched card—a card with holes in it. We’ve got a special department through here where girls punch the holes on machines. Some of them—the girls I mean, not the machines—are pretty attractive. This way.”

The visitors left the computer room, with its three operators trying desperately to save as many micro seconds as they could, and filed into a large, windowless area. Here, under harsh lighting, sat row upon row of young girls, heads bent over clacking machines.

“This girl”, the guide stopped at one of the machines, “is punching cards which will feed an order for spare parts into the computer where it will be processed—credit checked, stocks adjusted, delivery sheets made out.”

There was no response from the girl. Her fingers blurred across the keyboard.

‘They’re on an incentive scheme,” said the guide, “They get paid a bonus for every depression of the keys above their daily quota. If they make mistakes they lose that number of depressions to the verifiers—the girls who check every hole that’s punched. The verifiers get a bonus for every mistake they find. This is a good system. It works."

One of the visitors asked the question which was running through most of their minds.

“How do the girls react to these conditions? They seem to be working at a hell of a pace—faster than anything I’ve ever seen anywhere else.”

“Well, there’s the bonus scheme,” smiled the guide, “And they’ve got all these indoor plants around to brighten up the place and they’re allowed to stop work completely for ten minutes every morning and afternoon for coffee or tea from the machines. In fact, when the computer really gets cracking we'll have most of the office staff in this place organised like this. These girls don’t seem to mind; they can think of something else while they work and really they don’t want very much else. Just look at their bags beside their machines; every one's reading the Mirror or Woman’s Own or Weekend.

“Oh—I nearly forgot. Every fifteen minutes we switch on some piped music. That had an effect on them. We vary the style and tempo with the time of day and the supervisor can also alter it according to how fast the work’s coming out. This is a nice, clean office and the girls like it. This way.”

As the visitors left the temple of the card punch room, where for every head bent in prayer for accuracy there was another praying for error, the music washed over and over them, smooth and sickly sweet. It was mid morning. The song was I’ve Got My Love to Keep Me Warm.

That was probably an unlucky day for the computer; some of its work must go right because so far there have been no riots on the factory floor after some men have been paid twenty thousand pounds and others one and threepence. Perhaps, too, it is unfair to criticise the computer men for being so enthusiastic about their machines. Computers are capable of feats undreamt of only a short time ago and it is no new thing for workers to make a virtue out of the necessity of their inferior social standing and become dedicated to the particular job in which they are exploited.

The entire system of employment is one huge confidence trick in which, like all confidence tricks, the victim is deceived by promises of big gains in the future. How many times, for example, have we heard the promises about the benefits we are to get from intensified industry, advanced productive techniques, new scientific discoveries? Usually, the promises amount to little more than a recital of the abilities of a machine, leaving the listener to infer that these will automatically benefit him. For example, this was how Harold Wilson worked the computer confidence trick in his famous speech in the science debate at the Labour Party Conference in 1963:
  A modern computer in a fraction of a second can make calculations and can make decisions of judgement which all the mathematicians in Britain and America combined could not make by ordinary methods in the space of a year. You have computers at work now controlling a planned productive system of machine tools which have an impulse cycle of three millionths of a second. They do their calculations and take their decisions in a period of three millionths of a second. Yet already those machines are out of date. New mass controllers are in production now with a speed one thousand times as fast.
Wilson's audience, all over the country, duly inferred that under a Labour government there would be a golden age of science and technology in which the computer would be mother to us all. They now know the truth.

At the time, of course, they were so bemused by the speech that they overlooked certain facts. There is no evidence that they are any readier now to accept these facts, but it is always a good idea to spell them out. To begin with, computers are not installed because they are marvellous machines which can make light of a worker’s load. A firm will only get a computer if it is convinced that there is profit in doing so. This means that only the larger companies can afford to have their own machine—and that, having got it they must work it flat out, twenty four hours a day for every micro second possible. This does not make work any less monotonous or arduous—more often it has the opposite effect.

The reason so many firms have recently been convinced that computers are an economical proposition (and having once installed one a company is virtually compelled to keep in the game and to progress into each of its refinements) is to be found in the shortage of labour which has persistently affected British industry since the war. Apart from anything else, this shortage has often given the workers the edge in some important wage battle and has provoked the irritation of, for example, The Economist which is always advising the government of the day to ignore the economic facts and stand up to the unions.

That is one way in which the capitalist class might have approached their problem. Another was the way of Bank of England chief Leslie O'Brien, who thinks that higher unemployment is the answer. Another is the Labour government's way—an attempt at putting legal restraints upon wages. And yet another way is to increase mechanisation, by automating production lines, installing computers and so on.

This last course—a classic way out for the capitalist class—has one great snag. Stepping up investment in constant capital tends to lower the rate of profit and unless there is some compensating return on the investment this can be a disastrous business. (A lot of the political history of Britain since 1945 can be explained in these terms—but that is another story). This means a more intense exploitation of the workers affected by the investment, a faster and more constant working of the machines, a pressure on production costs and a ruthless search for redundant workers.

So a firm which takes on a computer does not stop there. It must also build up a comprehensive Organisation and Methods department, whose job is to organise production and administration into a whole to fit in with the computer. The O & M workers will do the dirty work which was once done by managers; they reorganise, cut back, fire, and increase the work load of the people who are left on the payroll. And as they do this work they surround it with their own mystique—their own language, their own obeisance to the flashing god in the precisely controlled temperature, their own hard-skinned indifference to the fate of their fellow workers.

Karl Marx, who has been much criticised for pointing out that capitalism always increases the misery of the working class, once wrote that ". . .  if capital grows more rapidly, competition among the workers grows incomparably more rapidly.” And that, in a society which is incapable of usefully employing human abilities, is what the computers are all about. When it comes down to it, it means the scurrying operators trying to save the micro seconds. It means the clerks and the typists outside, waiting for the axe to fall. It means those girls in the punch card room, who sit through their days like battery hens—except that even the battery hens aren’t encouraged to fight each other for bonus rations.

Money for Socialism (1969)

Party News from the January 1969 issue of the Socialist Standard

Once again, we ask you, our readers and supporters, to help us expand our Socialist activities by contributing what you can to our funds. The money you give us will be spent on bringing out this journal (which is heavily subsidized front Party funds), on hiring halls and and advertising meetings, on press publicity, on publishing pamphlets (we have two or three such as reprints of "Questions of the Day” and "The Socialist Party and War” in the pipeline) and leaflets on important events as they happen, on contesting elections and on the general expenses of running our party. This is a way in which, if you can do nothing else, you can play your part in the struggle for Socialism.

Please send your donation to Anne Waite, Treasurer, The Socialist Party, 52 Clapham High Street, London, S.W.4 All moneys will of course be gratefully acknowledged.

50 Years Ago: The Promised Peace (1969)

The 50 Years Ago column from the January 1969 issue of the Socialist Standard

Now it must be obvious that if Britain is to retain her gigantic navy other countries are going to provide themselves with instruments of defence. The American Naval Secretary soon showed this when he declared that “It was his firm conviction that if the Versailles Conference did not result in a general agreement to put an end to the naval construction the United States must bend its energies to the creation of incomparably the greatest Navy in the world. (Star 31.12.18.)

"If Germany had waited a single generation she would have had a commercial empire of the world.” Thus spoke President Wilson in Rome, January 3rd.

Strange, is it not, how our opponents and apologists for the war prove the correctness of our statements regarding the root cause of the conflict and belie their own beatitudes concerning the high ideals which have actuated the Allies.

Can it possibly be that they find, when the bill is finally presented, and shows ten million naval and military deaths alone, to say nothing of the millions of other deaths for which the war is responsible, that the old shallow bunkum of honour and the like is really too absurdly inadequate, and that it had better rely on the truth—that it was an economic war?
(From an unsigned Editorial "What will he do with it? in the Socialist Standard, January 1919).

Aid for the Starving Biafrans (1969)

From the January 1969 issue of the Socialist Standard
  "The Ivory Coast is systematically destroying 100,000 tons of 1967-68 season coffee, according to official sources. This is to conform with the International Coffee Agreement and to ease financing of stocks that have become considerable, the sources say". —The Times, 30 November 1968.

The Truth About Bogey Men (1953)

From the December 1953 issue of the Socialist Standard

German Capitalism Revives
“If you don't go to bed like a good boy” said the nurse, “Boney will come and get you.” The threat was enough and the little boy went dutifully to his slumbers. “Boney”—the contemptuous English abbreviation of the name of Napoleon Bonaparte—was, in the opinion of the nurse, the embodiment of all the world’s evil. But, as she could prove, he had his uses, particularly at bedtime.

A hundred years later the little boy’s great grandson was being persuaded into his bath and his bed by the threatened prospect of a visit from the Kaiser, and 25 years after that his offspring obeyed the orders of parent and nurse backed by the lurking spectre of Adolf Hitler.

And so through the years the shadow of “evil men” has hung over the world, and our troubles and tribulations have during their lifetime been laid at their doors. The honest nurse was a reflection of the attitude of her age, and the palpitations of the little boy in his bed were the tremblings of a generation in turmoil. For people have ever held that the existence of war, with all the attendant unhappiness and bestiality, is the responsibility of—at the most—a few men of base intent who are intractable in their design to conquer and suppress. This is a convenient conception of the world’s affairs which requires a minimum of thought and application and lends itself readily to exploitation by subtle pens and swift tongues. A Lloyd George will thunder his purity against the vice of a Kaiser and his cry will be echoed in a million other throats. Newspapers will devote much space to the iniquities of a Hitler, and songsters will wax fat upon the profits of derisory ditties like “When That Man is Dead and Gone.” The impression to be given is that to remove the man is to remove the problem—to depose or to kill a Hitler is to depose the possibility of war and to secure peace for the world. Thus arises an edifice of propaganda—but it is an edifice built upon falsity; and there is no better example of this than that to be drawn from recent events in Germany.

The Rise of Hitler
In the late nineteen-thirties German Capitalism was labouring under an intense expansionist pressure. Its industry, ever virile, had largely recovered from the reverses of the 1914-18 war, and was casting about itself for colonial sources of raw materials, and markets upon which it could sell the products pouring from the factories. The eyes of the German capitalists were upon the industrial strength of the Saar, upon the oil of the Balkans and the Middle East, and upon the African Colonies of which they had been deprived in 1919. At every turn Germany stood thwarted by Great Britain, France and Russia. And all the time the pressure from the great industries, gathering their strength day by day. The situation was explosive and it threw up an explosive character. Adolf Hitler, with his brainstorms, his Gestapo and his concentration camps, was a peculiarly approximate expression of German capitalism and so was supremely suited to play the role of the Bad Man of Europe: the pens of Fleet Street ran warm in the depicting of this newest bedtime threat. But Hitler was only the expression of the desperate ambitions of the German capitalists; and Chamberlain and Daladier—his opposite numbers in Great Britain and France—were representative of the fears and determinations of the ruling classes in their countries. The 1939 war arose from Germany’s struggle for a place in the European economic sun, opposed by the need of her opponents to keep her in the shade.

It is worthwhile noting the appeal which Hitler made to the German working class in order to arouse them to the acceptance of an inevitable war. He spoke of oppressed minorities of German nationals in the Sudetenland. He demanded the return of Germany’s lost territories in Eastern Europe. He sketched the plight of the inhabitants of East Prussia, cut off by the Polish Corridor from overland communication with the rest of Germany. The phrase “the right of self- determination’’ flew thick in the air. It was effective matter and the German workers accepted it. They went willingly to a war in which Hitler himself lost his life. But did the ambitions which Hitler voiced die with him? We shall see.

The Same Again
Western Germany today is in a position remarkably similar to that which Germany as a whole held between the wars. Once again she is recovering (greatly assisted by her erstwhile conquerors) from the effects of a staggering defeat, and her industry is getting under way for the seas of expansion and enterprise. The Manchester Guardian tells us (22/6/53) that “An economic institute in Munich has recently reported that the industrial structure of the Federal Republic (of Germany) was now similar to that of the whole Reich in 1939.’’ The same view was expressed last month in the report of the Federation of German Industry. The Guardian's correspondent in Bonn reported (20/5/53) that “German officials in the Federal Ministry of Economics declare that. . . the Federal Republic intends to recapture its former fruitful trade with Eastern Europe.’’ British industry is now finding that “Western Germany is Britain’s chief competitor in Europe” (Observer 3/5/53) and that “capital goods will meet with growing competition . . . from Germany” (Manchester Guardian 7/9/53). In fact, Europe is approaching a situation similar to that of 1939, with its battle of economic pressure and counter-pressure. German industry is gathering as a potential boil on the neck of French and British interests.

And this condition has thrown up another man. Not a rug-chewing maniac with a bodyguard of stormtroopers. Not an architect of a system of concentration camps. A quiet, scholarly man. A shrewd man. But personifying the interests and the mood of German capitalism as surely as, in his day, did Adolf Hitler The recent electoral victory of the German Christian Democratic Union and the installation of its leader— Dr. Konrad Adenauer—firmly into the position of Chancellor of the Federal Republic marks a significant phase in post-war European history. For German capitalism is resurgent and is re-asserting itself in the affairs of Europe. The election of a strong government —the most stable on that part of the Continent of Europe controlled by the Western Powers—is symptomatic of this re-awakening confidence. Says The Economist of 12/9/53 “Dr. Adenauer is established as the most powerful statesman on the Continent . . . All the portents suggest that for some time to come Western Europe will be led by the German nation.”

The Pace Quickens
Revived German capitalism is staring with covetous eyes upon the possessions and markets of its European neighbours .and as of old, its. aspirations are turned towards the lands in Eastern Europe, which it formerly held, and toward the richness of the Saar . . . “German experts have worked out draft proposals for replacing the Saar's one-sided economic union with France by a more balanced relationship with the French and German economy . . . ” (Observer 13/9/53). The current topic of German politicians is no longer the rights of self-determination. They now speak of “German reunification.” From Bonn again comes the news (Manchester Guardian 14/9/53) that “German pressure on the Western Powers to reunify the whole of Germany may be expected to grow in the immediate future.” And had not the Federal Government Minister for All-German Affairs (Herr Jakob Kaiser) already declared that “The reunification of Germany means not only the return of the Soviet zone but also of the former German territories in the East now under Czech and Polish administration.” (Manchester Guardian 7/5/53). All this has a familiar ring. It transports one’s imagination back to the dusty summer of 1939, with the newspapers and the radio reporting the speeches from the beer-cellars.

It has been said that the future of Germany decides the future of Europe. An expanding Germany in 1953 would prove as much of a nuisance to the British and French capitalist class as in 1939. We may well have not yet seen the end of Germany as the Bad Boy of Europe.

The lesson to be drawn from all this is that wars are not the work of wicked, aggressive men. In 1939 Europe went to war because of the pressure of German economic expansion—Europe could well go to war again for the same reason, with roughly the same line-up as before—although Hitler the evil is dead, and Adenauer the mild and ruminative is in his place.

One day the people of the world must grasp this fact—that wars flow from the competitive nature of capitalist society—that they are but one of a number of unpleasant by-products of the system of the manufacture of wealth for sale. When that fact has been assimilated and the conflicts of the world are no more ascribed to the malefactions of a handful of rulers, then there will be no more bedtime threats of bogey men for our little boys. Such stratagems will be pointless. The little boys of the world will have grown up.

Cooking the Books: Money for nothing (2006)

The Cooking the Books column from the May 2006 issue of the Socialist Standard

Towards the end of last year Roger Bootle, one of the “wise men” who advised Tory Chancellor Nigel Lawson , launched a new edition of his book with this title. According to an interview by Heather Stewart,
   “The painful lesson he encourages the reader to learn is that it’s an illusion to think we can have ‘money for nothing’ simply by buying and selling shares – or houses – from each other. Day-trading in equities, or dashing up the property ladder, has winners and losers – it doesn’t make society, or the world, richer ‘any more than taking in each other’s washing’” (October, 9 October).
A perhaps unintended admission that nothing that goes on in the City or in estate agents’ offices results in any increase in wealth, but is rather a drain on resources.

Wealth is something that satisfies some human want, real or imaginary. Some wealth is provided free by nature such as the air we breathe or the rays of the sun, but new wealth can only be produced in one way: by human beings applying their mental and physical energies to materials that originally came from nature, these days using machinery and equipment that had themselves been previously fashioned by human labour from materials from nature.

That new wealth can only result from the application of human labour was once so obvious that nobody challenged it until less than 150 years ago. It was only when the anti-capitalist implications of this obvious fact were realised by the ideological defenders of capitalism that they began to concoct another theory as to how wealth was produced.

One of the first to attack the labour theory of wealth production was the English academic, W. H. Mallock (1849-1923). He introduced a new “factor of production” in addition to the traditional three of Land (a gift of Nature), Labour and Capital (the product of Land and Labour): Entrepreneurship. According to him, without this fourth factor nothing would get produced as it was the entrepreneur who alone could bring the other three together; without entrepreneurs no wealth would be produced. So, it was they would were entitled to be called “the wealth producers”.

Naturally, entrepreneurs were delighted at this new advance in economic “understanding” and today that there are four “factors of production” is incorporated in all economics textbooks. For instance, a typical such book (in the occurrence, Economics by Ralph T. Byrns and Gerald W, Stone) states that “economists conventionally refer to four broad categories of resources: land, labour, capital and entrepreneurship” explaining:
  Entrepreneurs provide a special type of human resource; they combine labour, natural resources and capital to produce goods and services while incurring risk in their quest for profits. After paying wages, rent and interest for the use of other resources, entrepreneurs keep any money left over from their sales revenue. An entrepreneur’s profit is a reward for organizing production, bearing business risks, and introducing innovations that improve the quality of life.
Even a GCSE level economics student should be able to see the fallacy in this (though they would be ill-advised to point it out if they want to pass their exam). Organising production, and introducing innovations, is clearly Labour, the exercise of mainly mental energy, and these days is largely done by hired, if highly trained and highly paid, wage workers no different in principle from the other workers hired by the capitalist enterprise concerned.

Profit is not a “reward” for anything. It is a claim on wealth arising from the fact that the means and instruments of production used to produce new wealth are private property. In other words, it’s a non-work, property income and as such a prime example of “money for nothing” that Roger Booth seems to have overlooked.

There’s no such thing as an ethical foreign policy (1999)

From the November 1999 issue of the Socialist Standard

Ethical foreign policy? What a joke! How, in a capitalist world where each state is competing against every other state for a share of profits, can a government base its foreign policy on anything except economic self-interest—the economic self-interest, that is, of its capitalists?

“Obtain profits or die”, that is the economic law governing the conduct of states under global capitalism. And it cannot be otherwise for as long as global capitalism lasts.

Everybody knows that the reason for the Gulf War nearly ten years ago can be summed up in three letters O-I-L. Iraq, a virtually land-locked country wanted secure access to the sea for its exports and imports, so it invaded Kuwait. This represented a threat to the oil supplies of the capitalist West, so they went to war—and are still bombing and killing and starving ordinary people in Iraq to remove this threat. This has nothing to do with the fact that Saddam Hussein is a brutal dictator who couldn’t care a damn about human rights. There are plenty of other dictators in the area—beginning with the King of Saudi Arabia and the other hereditary Gulf despots—who are left alone because they are on the side of the capitalist West.

It was the same earlier this year in Kosovo. Serbia wasn’t attacked because it was a dictatorship under Slobodan Milosevic but because it was a state with a powerful army that had been causing problems for Western capitalist interests in the area and had overstepped the mark. Neighbouring dictator and fellow ethnic-cleanser, Tunjman of Croatia, was left alone because he was “our bastard”.

East Timor? Who had heard of East Timor before last month? When Indonesian troops marched into this former Portuguese colony in 1975 the UN passed a resolution saying Indonesia had broken international law and left it at that. In the following years the Western capitalist powers competed amongst themselves for lucrative contracts from the Indonesian military. The ruling generals were invited to arms shows to buy guns, tanks, warplanes, ships, any military hardware they needed to maintain their grip on the country they were exploiting for their own ends.

“Please don’t use these weapons against your own people,” requested an ethically-minded diplomat. “Wouldn’t dream of it,” replied the generals. “That’s all right then,” replied the diplomat. When confronted with evidence that the generals were using British weapons for internal repression, a British Minister replied, “if we didn’t sell them arms, then the French would.” Questioned in the AssemblĂ©e Nationale on the same point, a French Minister replied, “if we didn’t sell them arms then the British would.”

When oil was discovered in the sea between East Timor and Australia, the Australian government decided that the Indonesian invasion of East Timor was not so contrary to international law after all. In order to get a share of the oil they signed an agreement recognising East Timor as part of Indonesia. Now they are leading the forces sent in to take East Timor from Indonesia. No wonder their erstwhile friends, the Indonesian rulers, regard them as two-faced double-dealers.

And of course a place like East Timor can never survive on its own. It’s obviously going to end up as an Australian dependency, no doubt giving Australia an even better oil deal.

That’s the way of the world—the capitalist world. And it’s no good just protesting about this and appealing to governments to base their foreign policy on ethical considerations. They can’t (except in words) even if they wanted to, since this would hamper them in the struggle for profits—and the trade routes, and investment outlets, and raw material sources, and strategic areas, to secure them.

The only way out is to get rid of global capitalism and replace it by a world socialist system in which all that is in and on the Earth becomes the common heritage of all humanity so that it can be used for the benefit of every man, woman and child on the planet irrespective of where they live, a small island or the industrialised heartlands.
Adam Buick

Towards one Europe? (1993)

From the February 1993 issue of the Socialist Standard

If, as socialists contend, “unity is strength”, then the capitalist class would appear to be making a bid to strengthen their position in Europe. The Maastricht Treaty, signed by the twelve heads of state of the member countries of the European Community and currently undergoing the process of examination and ratification by the British House of Commons, is without doubt intended to be a declaration of European capitalist unity. Indeed, it grandly proclaims itself to be “A Treaty on European Union”.

You may not actually have read it, and if so, you are fortunate. 61,351 words of legalistically-precise, diplomatic-speak is not everyone’s idea of bedtime reading, insomniacs excepted. However, because of its clearly-stated objectives and the various claims made on its behalf by its supporters in all the main political parties, it is a document worthy of examination. This is not least because its supporters on the left of capitalism's political spectrum in particular claim that Maastricht represents a great leap forward for the European working class and provides the opportunity for a sustained European-wide peace.

The Treaty itself largely takes the form of a scries of amendments to the original Treaty of Rome which established the basis for the EEC in 1957. Its goals, set out in the Common Provisions in a preamble to the main text, notably include the following:
  The creation of an area without internal frontiers, through the strengthening of economic and social cohesion and through the establishment of economic and monetary union, ultimately including a single currency . . . [and] . . . the implementation of a common foreign and security policy including the eventual framing of a common defence policy, which might in time lead to a common defence.
About half of the Maastricht Treaty is taken up by the steps deemed necessary to achieve the level of economic and social cohesion vital for the achievement of these, and other goals. The economic harmonization provisions call for an “irrevocable fixing of exchange rates leading to a single currency, the ecu, and the definition and conduct of a single monetary policy and exchange rate policy".

The task of implementing such policies lies in large measure with a European System of Central Banks (ESCB), whose governors shall form a council presiding over a European Central Bank with “the exclusive right to authorize the issue of bank notes within the Community”.

The initial step towards the "irrevocable fixing of exchange rates” has, of course, been the already tarnished European Exchange Rate Mechanism (ERM). According to the Treaty, a European Monetary Institute will be set up in 1994 to oversee the general moves towards monetary union and sometime in 1996 a meeting of European heads of state will decide whether a majority of the member states fulfil the necessary conditions for it. The British government, though committed to the rest of the Treaty, has secured an opt-out clause on the final stage of monetary union and also on the agreement on social policy (the Social Chapter)—which simply means that the government will have less to renege on when it continues the time-honoured practice of governments everywhere of trampling on the working class whenever the capitalists deem it imperative.

There are sound reasons why some capitalists and politicians in Europe wish to proceed along the lines of political and economic union. The failure of governments across the world to successfully tackle the many problems which have beset the capitalist economy since its inception have led many to the conclusion that action to reform and mould capitalism cannot be successfully undertaken within the borders of any one single nation state. The growing inter-connectedness of the capitalist economy has been seen—with a degree of justification—as a force which no longer gives automatic recognition to the individual nation.This was recognized by Marx in the nineteenth century and is a process which has accelerated rapidly in the latter half of the twentieth:
  The bourgeoisie has through its exploitation of the world market given a cosmopolitan character to production and consumption in every country. To the great chagrin of reactionists, it has drawn from under the feet of industry the national ground on which it stood. (Manifesto of the Communist Party).
Black Wednesday
Capital is now a truly world force, and its rapid movements make the nation state seem like an economically powerless institution. It is here that occurs one of capitalism’s many contradictions—one which is in no small part responsible for the recent difficulties encountered by the European nation states set on Union. This is the contradiction between the inter-connectedness of capital on the one hand, and the firmly national and imperialist basis on which the capitalist class organizes itself on the other.

The competitive drive to accumulate capital which pervades capitalist production and exchange ensures that sections of the capitalist class with divergent economic and strategic interests are forever in antagonism with one another over trading arrangements. sources of raw materials and spheres of influence.

At one level such antagonisms were clearly demonstrated last September with the departure of Britain from the ERM on “Black Wednesday" and the devaluations of the Italian and Spanish currencies. Though the ERM ensured relatively cheap and stable import prices it was opposed by a significant section of the British capitalists who contended that an exchange rate pegged at around £1:2.95DM made British exports uncompetitive and necessitated high interest rates to support the pound at what was an otherwise unsustainable level.They considered that the ERM produced unfavourable trading conditions and are now lobbying the government never to return to it in its old form.

European unity among the capitalist class is made even more unlikely because national antagonisms over trading conditions and the like are exacerbated by divergent economic performances between nation states. This is part of the explanation for the slide of the pound against the deutschmark. Britain’s economy was weaker and entered into slump much earlier than Germany’s, and the monetary conditions required in Britain were rather different from those appertaining in Germany, producing further antagonisms.

If by some miracle a single currency, with one central bank and one minimum lending rate, was established in Europe, it could not end these antagonisms. A single interest rate, for instance, would have to reflect the market conditions affecting money capital throughout Europe. In order for it to work effectively all of Europe would have to be at the same stage of the trade cycle at more or less the same time. Interest rates tend to be highest at the end of a boom and then at the onset of economic crisis and slump. If one country entered recession before the others—as is normally the case—it would even more quickly than normally drag the other countries down with it by pushing interest rates up in those countries where rates would otherwise still be falling.

It is highly unlikely, however, that it will come to this. For it is not only at the purely economic level that nation states tend to march to a different tune. The more longterm political, military and strategic concerns of Europe's nation states invariably lead them to pull in different directions. The interests of Britain and Germany are, for example, hugely at odds. Britain's position is largely determined by its relatively privileged status with regard to the world’s largest capitalist power, the United States.

While the US initially used its considerable influence in Western Europe to try and bind the various nation states closer together as a strong buffer to the former state capitalist Eastern bloc, its main priority since the collapse of the USSR has been to prevent Germany emerging at the head of a strong new imperialist bloc. In this it is being ably assisted by Britain. Germany, determined to challenge US hegemony, has been able to rely on support against the US from France, but future French support will only be forthcoming to the extent that France itself can ensure German military and strategic containment across the European continent.

In the light of the collapse of the Eastern bloc and with German re-unification, the inherent imperialistic tensions between the European nation states are, if anything, intensifying. This was recently acknowledged by Iain Vallance, chairman of British Telecom:
  In Western Europe the Community is less stable than it has been for more than 40 years. There is a risk that we could return to . . . the pointless struggle for political dominance by individual states or rival groups. (Sunday Times 11 October)
The sharp disagreements over the latest GATT "settlement” are just one example of why Mr Vallance’s worries are well-founded. The history of capitalist Europe has periodically been one of imperialist adventurism, invasion and annexation.

So far, capitalism has shown itself to be incapable of overcoming the national divisions that it has engendered over two centuries and more. Maastricht will not change this. It is a capitalist utopia, already—and not surprisingly—coming apart at the seams.
Dave Perrin

Cooking the Books: Back to the 1930s? (2012)

The Cooking the Books Column from the March 2012 issue of the Socialist Standard

During the spat last December between Britain and France about which government most deserved to lose its triple-A credit rating (It was the French rating that was eventually lost.) Christine Lagarde, the head of the IMF, urged Europe’s leaders to solve the Eurozone crisis, commenting: “If that doesn’t happen the risk is that of retraction, rising protectionism, isolation. This is exactly what happened in the Thirties and what followed was not something we are all looking forward to (Times, 16 December).

Writing later in the Times (27 December) Stephan King, the HSBC’s group chief economist made a similar point: “The global economy has plenty of faults but increased isolationism will only make things worse. We don’t want to sleepwalk back to the 1930s.”

So, what did happen in the 1930s? Here are some quotes from “Background of the War 1939-1945”, a chapter taken from our 1950 pamphlet, The Socialist Party and War.
  The Times (22 January 1936) reported on a speech to the Japanese parliament by the Foreign Minister Hirota: “After referring to restrictive measures of various kinds on world trade, Mr. Hirota continued :– ‘To a modern nation, particularly such as our own, with a vast population but meagre natural resources, the assurance of a source of raw materials and of a market for finished products is a condition of prime necessity to its economic existence.’”
   The Economist (5 November 1938), in an article entitled “Germany’s Trade Offensive”, wrote: “The probability must, therefore, be faced that Germany’s efforts to expand her trade will affect British trade more in the future than in the past … Britain’s need of imports is greater than that of any other first-class Power, and our earnings are already barely enough to pay for our imports. Any substantial encroachment on our markets would directly limit our access to the raw materials and foodstuffs we need.”
   The Economist was objecting to Germany’s policy of export subsidies, dumping, currency controls and bulk buying and commended the British government’s retaliation of buying up the whole Rumanian wheat crop. To which a German economic periodical Wirtschaftsring replied by accusing Britain of “attempting to throttle Germany’s trade with Eastern Europe and of encircling her in economic fields” (Daily Telegraph, 13 September 1938).
    In a speech in Warsaw on 21 March 1939 Robert Hudson, Britain’s Secretary of Overseas Trade, declared:
    “We are not going to give up any markets to anyone … Great Britain is strong enough to fight for markets abroad. Britain is definitely going to take a greater interest in Eastern Europe” (News Chronicle March 1939).
When in September of that year Germany invaded Poland, so expanding its control in Eastern Europe, Britain together with France declared war on Germany and the second world war in a generation was on.

We don’t suppose that another world war starting in Europe is what Lagarde had in mind; more probably she was thinking of a break-up of the EU and a return to national protectionist measures. We are now four years into a depression which some are speculating could last for another ten. If that happens we could well see movements supporting nationalist, isolationist and protectionist measures move out from the margins and into the mainstream, as in the 1930s. Hopefully – and alternatively – it would lead to a growth of a movement for a world community without frontiers based on the world’s resources being the common heritage of all.

Death of a Dictator (2012)

From the February 2012 issue of the Socialist Standard

In the Second World War Russia (or the U.S.S.R. as it was then), which had been fighting Germany since the Nazi invasion of 1941, only got round to declaring war on Japan on 8 August 1945. That was three days after the first atomic bomb landed on Hiroshima and one day before the second landed on Nagasaki. The Japanese empire was now squeezed between the vast armed forces of Russia and America, and it disintegrated. Japan had forcibly annexed Korea in 1910, but the Japanese were now driven out. The U.S.S.R occupied the northern half of Korea with its capital at Pyongyang, and the U.S.A. occupied the southern half with its capital at Seoul.

Russia’s ruling clique then favoured state capitalism, while America’s rulers favoured private capitalism. In the south, under American occupation, Syngman Rhee (a Korean who had studied at American universities, had spent the previous twenty years in the U.S.A., and had westernised his name) became the ruler, and private capitalism took over the economy. In the north, Kim Il-sung (a Korean brought up in Manchuria, who had been an officer in the Chinese armies and then in the Russian armies) was hastily tutored in the Korean language, which he had largely forgotten, and was installed in power; the economy was state capitalist. In the south Syngman Rhee instituted a repressive and corrupt regime, jailing and killing any who protested until he was forced to resign by a popular uprising in 1960. In the north Kim Il-sung instituted a repressive and corrupt regime, jailing and killing any who protested, but he was able to rule till his death in 1994.

The two Koreas were very much simply proxies for the great countries that had set them up and supported them. From the first there were many raids and skirmishes between the north and the south, and from 1950 to 1953 there was open warfare, with the Americans (and British) supporting the south and the Chinese supporting the north. The battles swept over the whole country: the front line was at first pushed to the extreme south, then back to the extreme north, and then south again. Korea experienced all the delights of modern war: air raids, great battles, trench warfare, death and destruction, all ranged over the whole peninsula. As in many wars since, no one actually counted the corpses, but one estimate is that there were two million or more Korean civilian deaths, plus of course many Korean, and American, and Chinese, and British soldiers. (One of the writer’s classmates at school, an enthusiastic member of the “cadet corps”, joined the army when he left school and was killed in Korea.)

Kim Il-sung was set up by the state propaganda machine as being virtually divine, a being that, it was pretty strongly hinted, had created the world. A new calendar was inaugurated, in which 1912, when Kim Il-sung was born, was year one. When Kim Il-sung died in year eighty-three – or 1994 – his son Kim Jong-il was put into his place and ruled in the same way as his father had done

North Korea saw itself as part of the state-capitalist bloc, which included Russia and China. It was and is harshly authoritarian. Dissent is met by torture, and North Korea is third in the list of the world’s countries carrying out executions – those condemned are killed publicly by firing squads. In 2004 a Human Rights Watch report said that North Korea was “among the world’s most repressive governments”: there were up to 200,000 political prisoners. It was dubbed the world’s most corrupt country in a “Corruption Index”. North Korea is the thirty-ninth largest country by population, but it has the world’s fourth largest army: in a population of twenty-four million, 1.1 million are military personnel, and 8.2 million active reservists. It has been called “the most militarized country in the world today”; it has the world’s third-largest chemical weapons stockpile, and it possesses its own nuclear warheads.

At the end of last century the state-capitalist bloc had begun to fall apart. In the 1990s Russia dismantled state capitalism in favour of private capitalism, and China took steps along the same road. More and more, North Korea found itself isolated. This was bad news, since capitalism (of whichever variety) operates most profitably by disregarding state boundaries. On top of that, 1995 and 1996 saw disastrous floods in North Korea, and there was a calamitous drought in 1997. The ordinary people suffered grievously. Although detailed figures are hard to obtain in the kind of xenophobic dictatorship that North Korea had become, some reports say that a million North Koreans, or perhaps two million, died of famine. North Koreans have an official salary of £1 or £2 per week, but lucky ones can make more by trading in tolerated private markets.

The twenty-first century saw some steps towards the modification of the system, with private capitalism being allowed a larger share of the economy. 2002 saw the introduction of what North Korea’s rulers called “landmark socialist-type market economic practices”. It is hardly necessary to say that this change had nothing to do with socialism; it was a dilution of the previously prevailing state capitalism with some admixture of the private variety. (And it may be significant that when the North Korean constitution was re-written in 2009, any reference to “communism” was dropped; perhaps a very belated concession to honesty.) The changes of the early twenty-first century allowed foreign firms into the country to operate “manufacturing facilities”. For example, the “Kaesong Industrial Park” was created just north of the demilitarised zone which separates the two Koreas; here South Korean companies were allowed to operate, and by 2010 they employed over 40,000 North Korean workers.

It will not surprise anyone to hear that Kim Jong-il (the “Dear Leader” and “Our Father”) who had succeeded his father Kim Il-sung (the “Great Leader” and “Eternal President”) in 1994 was able to protect his own living standards during these tragic times. He had seventeen different palatial residences scattered across North Korea. He was fond of burgundy and bordeaux, and in some years he was the world’s biggest buyer of Hennessy cognac – up to half a million pounds worth of it. His chef went round the world to secure foreign delicacies. When he visited China and Russia (in a special train – he was afraid of flying) fresh lobster was flown to his train every day. Several of his staff were employed to check that the grains of rice served to him were absolutely identical in size and colour. He liked watching films and had a collection of 20,000 videotapes and DVDs. A song glorifying him – “No motherland without you” – was regularly piped from public loudspeakers in Pyongyang. No dictator exists without the support of an upper class, and in North Korea there is a small group at the top who are apparently doing very well, and defying the world’s embargoes and sanctions by importing luxury items through China.

It is very difficult to be sure what was happening in North Korea and what was being said in North Korea because the whole power of the North Korean state was brought to bear to create insuperable barriers between the North Koreans and the rest of the world. But so far as one can work it out the state media of North Korea – and there was no other kind – was endlessly asserting that Kim Jong-il was a most remarkable person. Apparently you might have known that someone special had appeared when he was born because according to the official sources of information his birth (which was foretold by a swallow – I’m not sure how) was marked by the appearance of a double rainbow and a new star in the sky. He began walking at three weeks, and he began talking at eight weeks. (Why did he take so long?)

When he went to university (at Kim Il-sung University, Pyongyang), he wrote 1,500 books over the three years – that’s ten books a week, or about a book and a half every day. Book-writing was not his only achievement. He was also able to compose no fewer than six operas, which, said his official biography, turned out to be “better than any in the history of music”. He also staged a number of elaborate musicals. Sport was no problem. Some reports had him winning gold at every event in the Seoul Olympics of 1988, which was quite an achievement, but it was the more remarkable since – having been born in 1941 – he was then forty-seven years old. So there’s hope for us all. Hostile press reports from foreign countries alleging that North Korea had actually boycotted the Games because they were still officially at war with South Korea can safely be ignored.

Never having played golf before, he strolled on to a golf course one day, picking up some clubs for the first time, and on his first eighteen holes he returned a score of thirty-eight under par – a world record by some considerable distance – having been expert enough to shoot eleven of the holes in one. This cannot be doubted since he had seventeen bodyguards with him, all of whom verified the feat. Perhaps they all stood round each hole that Kim aimed at, willing the golf ball to follow the correct political line. (As politicians and journalists vied with each other to eulogize their leader, the stories improved: some earlier versions of the golfing triumph gave him only a measly five holes-in-one.)

In his spare time he invented the hamburger; and his distinctive style of clothing “led world-wide fashion trends”. Some state media gave the strong impression that he could control the weather. One doesn’t know how he found time for all these activities in addition to supervising the whole government of North Korea, but then one finds that he never had to go to the lavatory, so that must have given him a bit more time. When Kim Jong-il died last December, the reader will not be surprised to hear that “a fierce snowstorm paused” and the sky glowed red above the sacred North Korean Mount Paektu, while the ice on a lake nearby cracked so loud that “it seemed to shake the heavens and the earth”. At the moment of his death a crane was observed to circle a statue of his father Kim Il-sung, before landing on a nearby tree, “its head bowed in sorrow”.

People who have listened to this kind of garbage all their lives (and have never even heard, as it were, any counter-garbage) might well feel desperately sad when such an outstanding figure dies, and that may help to account for the pictures of mass wailing and weeping which emerged from North Korea recently. Even those who have retained enough common sense (which is, of course, very uncommon) to disbelieve the unbelievable might well realize that if they were not sobbing loudly enough, the omnipresent military and security forces might well be tempted to give them something to make them lament in real earnest.

Nonsense knows no national or temporal boundaries, and when Kim Jong-il died on 17 December, the Western world was all geared up for its annual celebrations of another great man whose birth was also marked by the appearance of an extra star in the sky and at whose death a great darkness overwhelmed the earth (Matthew 2-2 and 27-45).

Strangely, when Kim Jong-il died, the man who immediately stepped into his shoes as North Korea’s dictator was his son, Kim Jong-un. He does not appear to have done anything in particular up to now except choose his parents carefully, although his appearance suggests that so far he has successfully fended off famine. However, no doubt the Pyongyang publicity boys will soon come up with something wonderful, so we wait with bated breath.

Before we all split our sides laughing, perhaps we should remember that we ourselves (like the Koreans) live in a system where a small group of people own everything worth owning and live luxuriously on the proceeds, while the great majority (who own very little) spend their lives desperately working so that great amounts of rent, interest and profit can be paid to this small group. Furthermore, the media continually tell us that this system is the best that ever has been, or ever could be, devised. Now, no one would ever believe that, would they?
Alwyn Edgar