Opportunity Knocks (1992)

From the July 1992 issue of the Socialist Standard

Crowds don't often come much bigger than those they expect to get in St Peters Square in the Vatican but even at that it was an impressively large gathering, a couple of months ago. which witnessed the beatification of Josemaria Escriva de Balaguer. The occasion was not without controversy because de Balaguer was a bit of a fascist in his time, a keen supporter of Franco and not averse to the Nazis either. None of this seemed to affect the Pope, who has the job of announcing these things to the crowd from the balcony. “A joyful celebration”, he called it, “an auspicious occasion”. Meanwhile in the dense, weeping, hysterical crowd others were interpreting the words “joyful" and "auspicious" in their own way; pickpockets trawled through the delirious worshippers, stealing hundreds of wallets and purses.

This was a prime example of how vulnerable people make themselves, while they give their attention to a mythical heaven above, to being robbed on the real material world on Earth. The pickpockets, consciously or not, were working on the assumption that this is a social system in which success goes to those who take their chances—and, until someone else got the beatification treatment, there were unlikely to be many better chances on offer than that.

This has its relevance to John Major—who is not in the same class as a crowd puller as the Pope—and his classless society. It is not entirely clear where Major got his idea from nor what he means, but it is safe to assume that by “classless” he doesn’t actually mean a society without classes but one in which anyone can rise from a lower class to the higher. So "classless society” means that anyone with ability can succeed—they can make a lot of money, live in bigger and bigger houses and travel in bigger and bigger cars and be more and more powerful. Like Robert Maxwell. But of course for anyone to get on in that way they must not only have ability. They must also seize their chances when they see them and be willing to take risks to do so. Like those thieves in St Peters Square.

Romantic delusion
In essential Majors dream society sounds very simple. You work hard and save some money. Then you invest it, starting your own business. Of course there is the problem that you may find your business in competition with some gigantic concern which has the resources to crush you overnight, but with a lot of hard work you can make your business grow. As the profits roll in you begin to expand. Then again and again until you are a multi-millionaire, with the power to crush up-and-coming businesses like yours used to be. You are rich and famous, with a country estate or two, your own private jet and your yacht in the Mediterranean. You are a living example of taking your chance in the classless society.

This romantic delusion seduces millions of people into supporting this supposed society of opportunity where the social and intellectual cream rises to the top—which proves that anyone who does not get to the top must thereby be of inferior quality. However reality is a lot less romantic; there are failures as well as successes, poverty as well as riches, despair as well as fulfillment.

As anyone who reads anything other than the Sun and the Daily Mail will know, we live now in a time of recession. One effect of the recession is to cause a lot of misery to a lot of people whose big mistake was to take what they thought was their big chance when they thought the time was right. In fact it was not a mistake because by capitalism’s standards the chance was there and the time was right. Impressed by the Thatcher government’s assurances that the economy was under tight control and had been steered into perpetual boom by the disdainful brilliance of Nigel Lawson, they committed themselves to a massive debt in order to buy somewhere to live. They were confident that the market would continue to rise so their home would increase in price. They simply couldn't lose, they told each other over their gin and tonics.

We all know what happened next. The economic situation which Lawson claimed to have designed and constructed to work to the eternal benefit of everyone ready to take their chance, and which would last for ever, abruptly changed. Lawson at first called the change a “blip” but blips are momentary diversions; this one went on for years. Interest rates rose to the point at which many mortgage repayments which had once been manageable became cruelly impossible. In many cases things were made worse by redundancies among the mortgagees or their family, whose wages were needed to pay the mortgage. The banks and building societies took action to “repossess” properties which had never been out of their ownership anyway; “repossess" is a polite way of talking about evicting people from homes they had been persuaded to call their own.

Among the evicted John Major’s classless society was celebrated in bitterness. Some dropped the keys of their home through the building society’s letterbox and ran away. One man stripped his home of everything possible—doors, shelves, light fittings, radiators, the bath, sinks—leaving just a shell. Another set fire to the place, killing his baby daughter.

The financial tomorrow
Desperate at this situation is, it is not the whole story for it is not only individual workers, struggling to get themselves somewhere to live, who have seen what looked like a golden opportunity turn to disaster. This recession has reaped a rich harvest of big combines whose collapse has discredited some of capitalism’s current heroes. After the crash of Polly Peck, the fate of Asil Nadir is awaited with interest, in expectation that it holds something extremely unpleasant for him. In Australia Alan Bond is not only bankrupt but with time to reflect on it in his prison cell. Robert Maxwell has been exposed as one of the most unpleasant scoundrels ever to have harried and abused his employees on his way to riches; not content with the legal theft on which capitalism is based he was greedy enough to try the illegal sort as well. The latest in the line of Titanic-like commercial disasters has been Olympia and York, whose Canary Wharf stands as an embarrassing memorial to the anarchy of capitalism.

Illustration by George Meddemmen.

There is now no shortage of experts to tell us what went wrong for the likes of Maxwell and Nadir. They borrowed too much money. They ran their affairs like there was no financial tomorrow. Maxwell borrowed money to expand into American publishing. Nadir to buy up concerns like Del Monte. This presented few problems as long as the boom lasted, as long as sales went up taking profits with them. But when the slump began to bite, the big borrowers had difficulty in just paying the interest on their massive debts. They borrowed to seize what looked like a great opportunity; in the event it turned out to be a trap.

So what of the lenders, the banks who stood for such huge sums at risk? Polly Peck were said to owe something like £1.3 billion; Maxwells empire had debts of over £1.5 billion. With hindsight—and that has recently become one of the well-used phrases in the world of finance—they agree that what they did was unwise, in the sense that it cost them a lot of money when they should have been concerned with making profit. Last February the deputy governor of the Bank of England, Eddie George (how did a man with so demotic a name ever get past the doorman at the Bank, let alone become a governor?) slated the banks about this but in the process he revealed how they had little choice:

  [Borrowers and lenders] now tend to blame the authorities for allowing, or even encouraging, the party to get out of hand—though I seem to remember they rather enjoyed it at the time . . . Had we been more successful in keeping “animal spirits” on a shorter leash at the time, the subsequent damage to bank capital and the subsequent economic and social trauma would, of course, have been less.

Another way of saying that is that when the banks were lending so freely it was boom time; had it continued like that, as it was from 1986 to 1988, there would have been a different story. Pressure of competition pushed the banks into lending; if one backed off there were plenty of others only too willing to exploit what they saw as an unending source of profit.

The banks have now been brought face to face with the realities of capitalism— that it is a system of unpredictable swings, falls and rises, not to be controlled by financial experts or economists or politicians. At times it seems to offer the opportunity to some individuals or some firms to get rich fast. If they missed the opportunity they would not be working the system as they should. With luck it comes out right for them; in other circumstances there is disaster. And none of them, from Robin Leigh-Pemberton to the manager of your local branch shows that they understand how the system works and that it cannot be controlled.

Ivan

Canary Wharf: monument to capitalism’s priorities (1992)

From the July 1992 issue of the Socialist Standard

It used to be said that at the first sign of trouble or danger, canaries were the first to turn up their toes. The aptly-named Canary Wharf in east London’s docklands is at present proving this old aphorism true. The future of this prestige office development site in the Isle of Dogs is currently in jeopardy. Its owners, the Olympia & York international property company controlled by Canadian brothers Paul and Albert Reichman, are in serious financial difficulties and have called in the receivers. Olympia & York itself owes about £7 billion, with Canary Wharf accounting for about £1.1 billion of this debt. It is extremely doubtful to say the least whether all the planned phases of the project will now be completed.

Work on the Canary Wharf site was started in 1987 and was expected to take up to 10 years to complete. Its centrepiece, the fifty-storey Canary Wharf Tower, has now been finished and is Britain’s tallest building at 800 feet. A monument to free- market capitalism, it was meant to encapsulate the brash enterprise culture of the 1980s. breathing life into a degenerated and depressed area of the capital. Now over half-empty with 500,000 square feet of vacant office space, it has become Britain’s biggest white elephant. Indeed, the Canary Wharf development as a whole has over 2.3 million square feet of vacant office spare out of a total capacity of 4 million.

Though Canary Wharf is the biggest folly of them all, it is far from being the only one. There is currently 40 million square feet of unused office space in London alone, much of it developed by now insolvent companies like Speyhawk which in its last trading year amassed losses of more than £300 million. It has been estimated that 20 percent of London’s office space is now vacant, almost twice as much as in the last major commercial property slump in 1973-4.

The source of this predicament is not hard to find. The Daily Telegraph (16 May) explained Olympia & York's particular problems well enough:

  Canary Wharf was planned in the mid-1980s boom when the Big Bang meant that expanding City firms were competing for the limited space in the Square Mile. Office rents soared and firms were forced to take space outside the City core. By the time Canary Wharf was almost complete sufficient new space had been built in the Square Mile to satisfy demand. The surplus caused rents to collapse.

It has been much the same story for the dozen or so other property companies who have lost out spectacularly in the present slump. A massive extension in the supply of property has not been matched by a commensurate expansion of effective demand for it:

  The prospect of the stock markets Big Bang in 1986 and the booming service economy in the south-east created a feeling that demand for London office space was almost insatiable. Developers went on a building spree the like of which the country has never seen. At the start of the 1980s £1 billion-worth of offices, in todays prices, was built each year. By 1990 that figure has risen to £5.6 billion . . . Entrepreneurial developers did not bother to secure tenants before ploughing hundreds of millions into their schemes. They assumed that in the four years or so it took them to put up a building, the demand would materialize . . . In retrospect. Black Monday, in October 1987, was the first sign that the dream was about to go sour. But the holes in the ground had been dug and there was little alternative but to keep pouring money into them. Only now, when the buildings are being finished, is the full horror of the oversupply becoming apparent. (Sunday Times, 5 April).

Without a doubt, the over-expansion of the commercial property industry has been a key factor in the present slump, with the downturn in its fortunes being transmitted to other sectors of the company.

As companies like Olympia & York and Mountleigh become insolvent there could be even more difficulties ahead. The four major British clearing banks have in excess of £12 billion loaned out to British property companies, with Barclays alone having lent £5.4 billion. With banks often lending up to 70 percent of the development costs of commercial property, once property prices start falling by more than 30 percent the security of the banks starts disappearing. The potential loss to the major UK banks—already having to cut back sharply—could be colossal. Capital values in London have already fallen 40 percent in this slump, without, as yet, having reached the bottom.

All sides will try to minimize their losses, but the real losers probably won't even rate a mention. While millions of square feet of prime office space lies empty and while thousands of building workers are thrown on to the dole because of the slump, thousands of Londoners go homeless with tens of thousands more on ever-expanding council house waiting lists. There is certainly no shortage of demand for accommodation in London—only a shortage of effective demand, that is, demand backed up by ability to pay, the only kind of demand capitalism recognizes. And while the homeless roam the streets the capitalist class build ridiculous monuments to their system in the endless pursuit of the next swift buck. It is enough to remind somebody of an old socialist aphorism—if capitalism is the answer, then it must have been a bloody stupid question.

Dave Perrin

“Uneconomic” hospitals to close (1992)

From the July 1992 issue of the Socialist Standard

Less than a week after winning the general election the new Conservative Secretary of State for Health, Virginia Bottomley, indicated that “uneconomic” National Health Service hospitals will be closed. It is believed that a special commission, under the chairmanship of Sir Bernard Tomlinson, will recommend the closure of one of London's 14 teaching hospitals. Speaking about this possibility Virginia Bottomley stated:

  Hospitals have always closed. At the end of the war there were 300,000 TB beds in this country. Now there are about 300. So there must be change (Independent, 17 April).

This is a blatantly dishonest comparison. TB hospitals have closed because tuberculosis has been practically eradicated due to improved living standards since the end of the Second World War, greater natural resistance to the disease, and immunisation. To close beds because they are expensive to maintain in spite of the need for them is an entirely different proposition.

Bottomley added:

  It is too early to say what the recommendation of Tomlinson will be, but I will not hesitate to take whatever decisions arc necessary to ensure that further generations of Londoners can have the best possible health service.

This example of Orwellian “doublespeak” claims that health care can be improved by reducing its provision. Already the closure of small hospitals, with loss of beds, and the concentration of most of the remainder into large district general hospitals, has led to many people in rural districts living considerable distances from the nearest hospital.

The reduction of hospital beds over the last 25 years led to record waiting lists of over a million people needing treatment by 1991. Political expediency prompted by an impending general election this year has led to patients waiting for treatment for more than two years being attended to. But there have been claims that this attempt to clear the back-log of politically embarrassing long-term problems has sometimes been at the expense of patients with more serious problems of a shorter duration.

Waiting lists
Some health authorities have reduced their waiting lists by the simple expedient of not carrying out certain categories of operations unless the patient opts for private treatment.

The closure of beds in psychiatric hospitals has led to long-term mentally ill people swelling the number of the homeless in Britain's major towns and cities. And Lord Justice Mustill has attacked the lack of provision for mentally ill offenders who move between prison and the community without anyone taking proper responsibility for their care (Guardian, 21 March).

The pressure on hospital beds has led to hospitals having to be “closed" to acute admissions on occasions because there are no beds available. Family doctors and medical staff in casualty departments are obliged to waste valuable time in telephoning other hospitals to find out if there is a vacant bed. This involves considerable delay in getting an ill patient admitted for treatment; can remove patients considerable distances from their families; and taxes the resources of the over-stretched ambulance service because of having to make longer journeys.

The ambulance service is already struggling because of the effects of the government’s economies without these added problems: in Greater Manchester there has been a reduction of 40 posts since August 1991 and further redundancies announced recently (Manchester Evening News, 28 April).

A consequence of the shortage of hospital beds and the need to be seen to be “economic" leads to the premature discharge of patients from hospital to convalescence at home. This has led to higher rates of re-admission in the last few years. But as turnover of patients is seen to be the barometer of efficiency irrespective of whether death or discharge is the reason for leaving hospital, the reduction of hospital beds can only aggravate matters.

There have been attacks on health care provisions in other ways: prescription charges have been increased several times more than the rate of inflation, and the charge for sight-testing have deterred some workers from having their eyesight tested as frequently as they should. Dental charges have increased considerably and in some areas it is difficult to find a dentist prepared to undertake NHS work.

It is expected that most health authorities will become self-governing trusts within the next two years and more family doctors will become budget holders to buy treatment for their patients.

Buying treatment
But an internal market does not provide more money for the NHS; it merely shuffles existing money between hospitals at greatly increased administrative costs. And with doctors being obliged to keep costs down, because of the risk of being labelled "uneconomic”, there is the likelihood that patients will get the cheapest rather than the most appropriate treatment. Because doctors can incur financial penalties for over-prescribing but may use money that they save on treatments to improve their practices some people in high-risk groups (diabetics, the elderly and the long-term mentally ill) have greater difficulty in registering with a doctor.

The debates over the numbers of patients treated and on the waiting list misses the point that poverty is the main cause of ill health. Unskilled workers are four times more likely to die from ulcers than the wealthy and are also more prone to develop heart disease. The Health Education Council’s 1987 report The Health Divide found that there was a difference in life expectancy of more than eight years for men in the most affluent parts of Sheffield compared with the poorest areas.

The large number of patients requiring medical treatment under capitalism (rather than being a matter for congratulation) is an indication of how poor the workers’ health is. Capitalism with its poverty, stress, alienation and pollution is unable to remedy this.

Nevertheless, the NHS, despite its shortcomings, does ameliorate some of the misery of illness caused by capitalism. But because health care “free at the point of use" represents a cost against production it is vulnerable to attack in a recession when there are a larger number of workers than are needed to meet the capitalists' requirements.

But poverty is not an inevitable part of the human condition. A socialist society producing goods for human needs and not for the market; a society of co-operation instead of the competitiveness, hostility and suspiciousness of capitalism could make the high levels of ill health and the long waiting lists for treatment a thing of the past.

Carl Pinel

Letters: Socialists and Majority Action (1992)

Letters to the Editors from the July 1992 issue of the Socialist Standard

Dear Editors.

I read with interest the letter from David Pepper, and your reply, in the May issue. A few questions and comments occurred to me when reading them, so I would like to throw them into the debate if I may.

1. On the question about an attempted reactionary coup, history lends weight to your reply, I think. During the Spanish Civil War of 1936- 1939, many ordinary regular soldiers, and some of their junior officers, chose to defend the elected Republican government, despite the fact that the majority of their most senior commanders were either involved in organizing the coup, or quickly declared for the rebels. And that was despite the lack of a coherent exposition of socialist policies or principles by the motley collection of opportunists who made up the pro-Government coalition—just think what could be achieved with a concerted socialist propaganda effort!

Having said that, the Government was defeated in that conflict. It would be wrong to underestimate the power of the capitalists—they would not need a majority outside of Parliament to create an effective armed force to be used to suppress the socialist movement. Less than 20 percent of the electorate might well suffice.

2. On the subject of the MP/electorate relationship, how would you anticipate making that work? Would you foresee regular constituency conferences, mandating each MP?

3. At present, a party—as we have seen—can form a government which has actually only received a minority of the vote. In that case, the SPGB could quite possibly find itself in the invidious position of holding office having not convinced the majority of the electorate of the need for socialism. Might this not compromise the Party’s efforts to move towards a socialist society, (particularly if the scenario referred to at 1. above arose)? Would the Party use its constitutional powers to alter the electoral system even though that might mean, in the short term, relinquishing office?

4. Equally, under the present system—which the Party would not be in a position to alter until it actually had a majority of MPs in the Commons—each MP is responsible to a constituency. How soon can we say that we could move to a situation where the MP was directed by the members of that constituency rather than by the Party conference, given that many of those electors may not be socialists themselves?

5. Finally, supposing that the SPGB had just won a majority in Parliament (yes, 1 do realize that this is. at present, speculation—verging on fantasy—but I do not think it idle!) and was therefore the only Party capable of forming a government—one particularly knotty problem must be how far can the Party go given that the rest of the world is by no means in the same position? Socialism can only be, as you have rightly said, a worldwide system. I know that you have said before that it is inconceivable that the World Socialist Movement could be so far advanced in one country without some developments having taken place elsewhere. This may be so—but the fact remains that many countries do not currently have a Socialist Party (or indeed any democracy); and even if they did, different electoral practices might well preclude anything like a simultaneous transition. What could the SPGB do in these circumstances?

Paul Burroughs 

Batley, W. Yorks

Reply:

One point must be cleared up right away: we repudiate any idea of a socialist party "holding office" or "forming a government".

The establishment of socialism will not be like a change of government, with the socialist party winning an election, forming a government and using its parliamentary majority to legislate socialism into being.

We do not say to workers "vote for us and we’ll introduce socialism for you". What we say is: "If you want socialism, this is something you will have to do for yourselves; only you can establish socialism, not some party on your behalf".

What we are talking about is not a change of government nor a change to be achieved by a government, but a change in the basis of society—a social revolution, to be carried out by the actions of the immense majority.

Certainly, we advocate that this social revolution should be accomplished by democratic political means; so contesting elections, going into parliaments, etc will be involved, but the mechanics of electoral systems in particular countries are mere technical details. The important element is the socialist consciousness and democratic self-organisation of the working class who, as those excluded from ownership and control of the means of production, are the immense majority.

When the socialist movement has reached the stage your questions presuppose—when it is near to winning control of political power—the socialist political party really will be the majority working class organised politically for socialism. This means that it will be up to the socialist-minded majority itself to decide how to handle the sort of tactical issues you raise as hypothetical problems.

All we can say now is that whatever is decided will be decided democratically, in the light of the fact that socialism cannot be established unless and until a majority want it, and in accordance with the socialist principle that under no circumstances should socialists take on any responsibility for running capitalism.

The change-over to the situation you mention where a person elected for a locality would be the mandated delegate of the people of that locality won’t be able to take place until a classless society has been established. This, along with the procedures and practices it implies—report-back meetings, mandating conferences, referendums, right of recall, rotation of posts, etc— will in fact be the basis of the democratic decision-making structure of the new society.

Editors

Dear Editors,

I once considered joining the SPGB but having read your post “election” coverage I’m very glad I didn’t.

First and most obvious, about 37 percent of the possible electors in Holborn & St Pancras saw fit not to bother to vote. In fact more people didn’t vote than voted for the winner, so your 0.4 percent is reduced to 0.2 percent. Your £500 deposit plus expenses would possibly have been better spent on building “socialism" in those areas where people are so disaffected with the system that they don't bother to vote.

Secondly, I appreciate you will rebuff my first point because you are so totally sold on a “parliamentary road” for socialism. I imagine this is because you take literally what Marx said about capitalism creating the means to its own downfall. You seem to think that parliament was made to do away with capitalism, which would be a laughable slogan if you didn't take it so seriously. If the ruling classes thought that parliament was the means by which their wealth would be confiscated they’d abolish it. They are after all busy reducing the effectiveness of trade unions so workers can’t make “unreasonable” demands on their wealth.

Thirdly, even if it was possible to elect a majority of SPGB MPs into parliament that wouldn’t mean a majority in the country as anybody who knows anything about electoral reform will know. I also find it hard to see the socialist majority telling the MPs “this is what we want” and then the MPs passing some law telling us to do it.

Fourthly, your naivety concerning parliament. If you only got a minority of SPGB MPs I fear it would be nigh on impossible for them not to sell-out. The logic of parliament demands it. No matter how well-meaning they are, they will end up as “good parliamentarians”.

Fifthly, I was somewhat shocked by the apparent tone of your “Socialists and Parliament” letter reply when you talk of “material forces and events”. Do I take it you rub your hands with glee at the prospect of nuclear war or an ecological disaster so you can ride into Parliament on the back of the discontent? Perhaps we shouldn’t be so keen to close nuclear power stations. Imagine the benefits of one blowing up.

The Natural Law Party may appear to be the work of a “crank cult” but the organisation that backs it, the Transcendental Meditation movement, has all the makings of a mind control cult. In fact advertisements for the “teachings” of the cult are banned from many newspapers because of this, doubtless explaining their keenness to expend money on a national election/advertising campaign.

Also, if you so oppose the “nationalism” of Labour’s “the only strings attached to our politics’’ poster, why do you persist in calling yourselves the Socialist Party of Great Britain. To what do you attribute this “greatness”? Even the fascist BNP doesn’t call itself the “Nationalist Party of Great Britain”.

Lastly, in your open letter to the director general of the BBC (they don’t call themselves great either) you say “we leave it to the good sense of the workers whose ancestors fought for the vote . . . ”. Were not those workers listening to the voice of pointless reformism instead of a “socialist" message?

I didn’t join your party. I became an Anarchist.

Tristan Hillman

Huddersfield.

Reply:
There was no need to say you became an anarchist since only an anarchist could dismiss the Chartists’ demand for an extension of the vote to workers as a pointless reform. And hadn't you noticed that we contested the election under the shortened version of our name? Your misconceptions about the Socialist Party riding into power, passing laws telling people what to do, etc are dealt with in our reply to the previous letter.

We don’t want power; we want the majority to take power into their own hands. This in fact is the aim of the socialist revolution: to bring the means of production under the democratic control of all the people. But if this is the case why not organise just to take over the means of production? Why bother to also organise to win control of parliament and the state? This has been the main difference between us and those anarchists (by no means a majority, by a long way) who agree that common ownership can only come about through the majority organising themselves consciously and democratically.

We favour the socialist majority taking electoral action, as well as organising at their places of work, because we see this as the best way for them to ensure that the socialist revolution proceeds as smoothly and peaceably as possible. To try to ignore the state, whose role today is to uphold and protect capitalist property rights, would be a completely irresponsible policy as this would be to increase rather than minimise the risk of violence.

Given the existence of a socialist majority, the sensible way to proceed would be to use the vote to take the control of parliament out of the hands of the supporters of capitalism, so neutralising the state while at the same time giving the socialist revolution an unchallengeable democratic legitimacy.

You say that if the socialist majority sent mandated delegates into parliament these would inevitably sell out. But why? Unless you subscribe to the so-called “iron law of oligarchy" which says that elected representatives will always sell out, you have to explain why the socialist majority would be able to control the delegates it might send to some such extra-parliamentary body as a congress of workplace committees or a conference of neighbourhood councils (or whatever else it is you see as the alternative to parliament) but not those it sent into parliament. We say that, if they can do it in the one case, they can do it in the other too.

Editors

Election Fund (1992)

Party News from the July 1992 issue of the Socialist Standard

As promised, we give below details of the amount finally collected in our election fund and how it was spent.

A total of £4122 was collected. £3600 from the appeal in the Socialist Standard and £522 by the local Camden Branch. Of this £500 was spent on the election deposit, £900 on the hire of election rooms, £768 on the printing of manifestoes, posters and leaflets, £200 on follow-up press advertisements and £335 on incidental expenses (telephone, heating, stationery, etc), making a total of £2703.

This means that £1419 is left in the fund—for the next election campaign, the elections to the European Parliament in June 1994.

Between the Lines: And Now For Our Younger Viewers . . . (1992)

The Between the Lines column from the July 1992 issue of the Socialist Standard

And Now For Our Younger Viewers . . . 

During the Earth Summit last month it was hard to switch on the telly without encountering some green reformist or another uttering tales of woe about "our" planet. They even gave Jonathan Porritt his own series, modestly titled How To Save The World. Salvation via Porritt’s greenery involves leaving the profit system intact and picking off the scabs which it inevitably breeds. It was salvation for the simple-minded, a sort of secular, modernist Jesus Is Coming message. Switch on BBC's Going Live on a Saturday morning and you will be highly likely to bump into Jason Donovan or Jonathan Porritt; the former can’t sing and the latter can’t offer solutions, only pathetic reforms. The destruction of the environment has assumed the proportions of a children's issue; those talking about it are free to indulge in the sugary platitudes of reformers for whom caring renders unnecessary the requirement for being logical. Saving the rain forests in the late 1990’s is getting to be like collecting pennies to ’save black babies’ which Catholic schools did recently as the 1960’s. One of the most urgent problems of our time, which is the global destruction of the social environment, is reduced to nursery rhyme reasoning and Porritesque posturing.

News Mystification

The ecological crisis is no joke; it could be capitalism's literally most foul attack upon us. but it is reported in terms which mystify rather than illuminate. So, instead of talking about how whole species are being wiped out for the sake of profit, the talk is of "biodiversity". Instead of getting to grips with the industrial poisoning of the atmosphere we are told of "CFC emission levels". In short, the simple and the comprehensible is converted into scientifically grandiose terms to frighten us away from thinking that it is ours to solve. No, such convoluting problems had better be left to statesman and state scientists. Economists have long performed the same task in relation to production, turning starving millions into "the underdeveloped South" and food mountains into "regional agro-over-production". What sounds like an explanation becomes mystification, the result of which is to distance the viewer of TV from a sense of power in questioning or rejecting the self-appointed experts.

The Pushers

First Tuesday (2 June, 10.30pm, ITV) was about drug pushing on a grand scale. These were not gangs making a few million in an illegal market. Here were multi-million dollar companies going into Asian countries and promoting their addiction. In Malaysia packets of of the drug are given free to people in shopping centres. In Taiwan, where it is illegal to advertise drugs, the companies ignore the law by using the drug logo to advertise holidays, even though the companies are not in business to sell holidays. The expansion of this drug pushing into Asia has led to a corresponding increase in fatal diseases there, far outstripping those caused by heroin addiction. A US Congressman from Kentucky, the main state where the drug is grown, defended the pushing campaign into Asia on the grounds that, although it can ruin people's health and will certainly kill many, it is important that Asian consumers have the freedom to choose what they buy. We did not hear the Kentucky Congressman’s views on the right of Kentucky courts to imprison people for choosing to smoke cannabis. Oh, the drug in question was not dope, but tobacco.

Steve Coleman

50 Years Ago: Human Nature, the Black Market and Socialism (1992)

The 50 Years Ago column from the July 1992 issue of the Socialist Standard

When the war began we were told by those who claimed to know that there would be no “profiteering" in this war. Socialists smiled and were disbelieving, knowing that a system built on a foundation of private ownership and profit-making will go on producing evil results whether in peace or war. We smiled again when the News-Chronicle, nearly two years after the war began, said "the days of the profiteers in clothing and other necessities are numbered" (July 25th, 1941). We were not impressed with the story that the capitalist thistle would suddenly produce a crop of social figs because of the appointment of “34 Board of Trade inspectors" who were going to track down the “profiteers". Nor were we mistaken. (. . .)

But, retorts the reformer, make the penalties more severe, copy Russia and Germany and introduce the death penalty, then it will cease. How little they know of that “human nature” they so often talk about. The history of capitalism has demonstrated beyond refutation that given the opportunity (the ownership of goods for sale and a ready market) and given the motive (big and quick profits) nothing will stop illicit deals in one form or another, from robbery and smuggling to black marketeering, and to the numerous operations that can be conducted just on the borderline of legality.

(From the editorial in the Socialist Standard, July 1942.)

They Said It . . . (1992)

From the July 1992 issue of the Socialist Standard

• I've never known her pay for anything— Friend of Jimmy Goldsmith’s daughter Isabel.
• A child dies every 2.4 seconds for one simple reason: poverty—Oxfam Appeal.
• What this summit is all about is money— ITN report on the Earth Summit in Rio de Janeiro.
• When I first met him, he gave me a big kiss and told me I had a job for life—Ivy Needham, redundant ex-employee of one of Robert Maxwell’s firms, on Maxwell.
• No-one likes seeing details of their private life brought into the open— Andrew Neil, editor of the Sunday Times.

Automation in Perspective (1965)

From the January 1965 issue of the Socialist Standard

Ever since automation, some ten years ago, became a popular topic for newspaper writers in this country an enormous amount has been printed and spoken about its nature and likely consequences — most of it totally uninformed and misleading. Nine out of ten of the busy journalists have no time to find out for themselves all they can do is to ask the so-called experts, and write up the appropriate sensational stories that their editors suppose the readers want. Few of the “experts” are any better placed when it comes to understanding what effects automation can have on the social system.

They may know a lot about the technical side of the computers and other equipment they manufacture or operate but little or nothing about the economic laws of the world in which they are going to be used — the world of capitalism.

It is only necessary to look at the wildly different forecasts that are made to know that something must be seriously lacking in the sources of information. On one side are the prophets of abundance, prosperity and leisure on the automation road; on the other those who tell us that soon most of the working class will be out of work, displaced by automated, worker-less factories.

A couple of samples. A writer in Sunday Citizen (6 Dec. 1964), Mr. Stanley Baron, after he had talked “to the top brains in Britain; made the forecast that before the end of the century,” in every industrial country, certainly in the West, most of the essential work will be performed by about 20 per cent of the people — chiefly the most intelligent. The rest of us will work only as much as we wish – or as much as society requires.” This would, he wrote, call for new attitudes to work and leisure, new cities, new forms of education — but not a word about the need for a new social system in place of capitalism.

On the same day Mr. Arthur Helliwell, writing in the People after a visit to America, quoted trade union officials who foretell that by 1970 — no need to wait until the end of the century — American unemployment will be up to 15 million, with “the American economy grinding to a complete standstill.” It is not difficult to show that there is something wrong with Mr. Helliwell’s facts, his reasoning, or his arithmetic. He tells of experts who “estimate that robots are gobbling up jobs at the rate of 40,000 to 70,000 a week,” and that between 2 and 2½ million men “are being thrown out of work every year.” Mr. Helliwell believes that automation, which has been going ahead fast in America for many years, destroys jobs wholesale and swells unemployment wholesale, and he quoted current unemployment there is “already 5,000,000.” If he had inquired a little further he would have discovered that American unemployment is not a couple of million more than it was a year ago, but actually rather less, and that the peak of unemployment occurred about thirty years ago when it was variously estimated at between eleven and fourteen millions, long before automation had been heard of. Also that the number of workers actually in employment in manufacturing industries is higher than it was a year ago; that is in precisely the field in which automation has had relatively big impact.

In Britain, where automation has so far been adopted much less than in America, the picture as regards unemployment is much the same, unemployment is lower than it was a year or two years ago, and the number of people actually in employment is at a record level. So, with much automation in U.S.A. and little automation in Britain, the trends of employment and unemployment have been much the same.

What then is the kind of impact automation makes in the field of employment? The answer is that it is the same kind as that resulting from all the mechanical and other labour-displacing developments of the past two hundred years. So while there might be something in favour of the arguments of those who want the name automation to be kept separate from other technical developments, there is no need to differentiate when we are considering the effect on the workers’ jobs.

The fundamental cause for the introduction of machinery in the 19th century or for the introduction of automation now is that the firm which is spending money on it hopes to make more profit with it than without it, either because it reduces the cost of production, or, as sometimes happens, because it enables the manufacturer to get his products on the market ahead of his rivals even though the cost is not reduced.

These developments have almost always had the consequence of destroying traditional jobs and putting the workers out of work, often with tragic consequences for the victims, who see their acquired skills rendered useless, and who are forced to take lower-paid jobs or find they can’t get work at all.

But here is it necessary to distinguish between the disappearance of certain kinds of work and the reduction in the total number of jobs available. Mechanisation, automation, and the displacement of whole industries all have the former consequences, but do they have the latter? Those who shudder about the monster automation are sure that it does. They are sure that automation will progressively and speedily reduce the total amount of employment for the working class. One group in U.S.A., “The Labor Committee for Full Employment,” at a Conference in December 1963, heard an address from Dr. Arthur Carsters in which he declared that it will be possible within the next decade, “to produce all the goods we need in the U.S.A. with two per cent of the working population.”

The object of the Conference was “to create more jobs”: if they fail, the result, according to their way of looking at things, will be that by about 1974, 98 of every 100 workers in USA will be unemployed.

Of course it isn’t true. It is based on a common misunderstanding of the relationship of technical change to increased productivity, a misunderstanding which leads those concerned into an absurd exaggeration of productivity and the extent to which it is increased by mechanical and other developments.

The corrective for this misunderstanding it to recognise, as Marx pointed out, that the amount of labour required to produce a given article is not merely the labour of the worker engaged in the concluding manufacturing or assembly processes but also the labour embodied in the materials and in the necessary transport, the fuel and the wear and tear of machinery etc. If we make the error of looking at only one part of the process, for example the work of the telephone operator, we get a wholly distorted picture. The introduction of an automatic system which reduces or eliminates telephone operators, will seem to mark a very great increase of productivity and reduction in employment; but in relation to the whole labour process in the telephone service, including the increased labour cost for the equipment itself, it will represent a very moderate reduction.

It is astonishing that Sir Leon Bagrit, Chairman of Elliott-Automation and the leading spokesman on automation problems, suffers from this kind of blindness to what ought to be an elementary aspect of his subject matter. In the first of his Reith Lectures on The Age of Automation he led up to his theme about the increase of productivity we can expect in future through automation by telling his audience that “in the United States . . . one man on the land produces more than enough food to feed fifteen men in the cities, and in fact is a surplus of food grown even by this small proportion of American labour force.”

The statement is in fact wildly inaccurate and misleading. Food, whether in U.S.A. or Britain, is not “produced” by men on the land: it is produced through a series of operations involving also the labour of the transport workers, the makers of farm implements and fertilisers, the producers of petrol etc. etc. (Sir Leon is equally in error when he supposes that the existence of a “surplus” in relation to the market is evidence of there being an actual surplus in relation to needs.)

If the rest of Sir Leon Bagrit’s estimates and forecasts have no sounder foundation than his opinions on agricultural productivity they don’t invite much confidence.

Growth of productivity has been and is still quite slow. In Britain, measured by the estimates of total annual production, it was rising at about one per cent a year before 1914, one and a half per cent between the wars and about-two per cent since. The plan to raise it to 4 per cent has so far not succeeded and the figure for the current year is expected to be two per cent again.

It remains to link up unemployment and employment with the effects of increased productivity due to mechanisation and automation. If total production of all kinds remained unchanged year by year, then in ten years 20 per cent of the workers would be unemployed and unemployment would increase year by year beyond that level.

But total output under capitalism does not remain unchanged year after year. Over the long term the general experience of all countries is for total production to go on rising, not merely in line with population but beyond it, but equally it is normal for the growth to be interrupted from time to time by periods of “depression” when production falls or stagnates and when unemployment rises. This would happen even without changes in technical methods of production, new machines, automation and so on, though they can aggravate what would happen anyway. It would therefore be possible for capitalism to produce another depression like that before the war, not because of automation but because production under capitalism is to make profit by selling what is produced in the world’s markets. The remedy is to abolish capitalism, but people like Sir Leon Bagrit have hardly begun to understand what capitalism is (though presumably he and his firm have a clear idea of the necessity to persuade British and other firms to buy their products). One of his foolish notions is that the world is divided into “capitalist” and “communist or socialist” countries and that automation may make it possible to put human values first and thus supersede both systems.

Let us enlighten him by reminding him that on both sides of the supposed dividing line between Russian State capitalism and Western capitalism, machinery and automated equipment is bought for precisely the same means — to reduce costs of production and capture markets. Not two worlds but one capitalist world.

Let us also emphasise that automation will not solve the basic problem of the working class. The automated equipment of the future will, like that of the present, become instruments for the exploitation of the working class in the interest of the owning class. Automation will neither destroy capitalism nor change its nature into something beneficial to humanity.

Edgar Hardcastle

Workers’ Control (1965)

From the January 1965 issue of the Socialist Standard

The phrase “workers’ control” is today frequently used as if it were some sort of definition of socialism. In fact it is nothing of the kind, implying as it does the continued existence of a working class and control of the productive system by units less than society.

The origin of the idea can be found in the 19th century divisions between socialists and anarchists. These saw society from two completely opposed points of view. Socialists saw society and the individual as reciprocal terms; the one couldn’t exist without the other. The anarchists, on the other hand, as a caricature of bourgeois individualism, saw the individual as the important unit, as an isolated being. For them society was a restriction on the freedom of the individual. While socialists recognised the need for an organisation to arrange the affairs of society as a whole, the anarchists were for a free federation of local communities and as much decentralisation as possible.

Socialists did distinguish between society and the state. In their view the State, as a coercive instrument, only flourished in class societies and was the instrument whereby a ruling class controlled society. In the classless society of the future there would be no coercive government machine, central control would be purely administrative. Unfortunately many people, including some who called themselves socialists, overlooked this distinction between society and the state.

In Germany, for example, this was the period of the “cult of the state.” The state was Truth, Freedom and so on; its mission was to free mankind; to do this it must be made democratic. The anarchists, understandably, rejected this view though their view of the state was equally inadequate: for them it was the enemy and root of all evil, Kropotkin correctly labelled the views of the German Social Democrats of this period as state capitalism.

In opposition, Kropotkin put forward the idea that the basic unit of the future society should be the free commune; where necessary, as for running things like the railways, these communes should be linked in a loose federation. This is the doctrine of Anarcho-Communism; it should be contrasted with the socialist view, that the basic unit of future society can only be society itself.

The real origin of the idea of workers’ control comes from another anarchist trend, anarcho-syndicalism. The commune, of course, is a geographical unit. For the anarcho-syndicalists the basic unit was not to be geographical, but industrial, with industrial unions as the basis of the new society. The workers in a particular industry would own and control that industry through their union. Once again, the various unions were to be linked together in a federation. More elaborate plans envisaged an Industrial Republic, a world Federation of Labour. The syndicalists, who were particularly strong in France (whence their name, from the French word for trade union, syndicat), advocated that the workers should directly own and control the means of production. This was opposed to the socialist view, that under socialism the free producers would own and control the means of production as a whole through society. The slogans Workers’ Control, The Mines for the Miners, The Factories to the Workers, are all syndicalist in origin.

At the turn of the century the idea was taken up by the American Daniel De Leon. He put forward the idea of what he called Socialist Industrial Unionism. Under this scheme the means of production were to be collectively owned, but administered by the workers through Industrial Unions. De Leon, the leader of the Socialist Labor Party, was also one of the founders of the I.W.W., the Industrial Workers of the World.

De Leon’s conception of the future society was criticised because it didn’t recognise that society would be the unit, and because it allowed for conflicts of interest between the producers in different industries. Under Socialism, there could be no permanent conflict groups; society as a whole would exercise democratic control over the means of production.

The Russian Revolution was a further source of theories of workers’ control. It often happens that when the capitalist class temporarily lose control through the breakdown of the government machine and general anarchy is threatened, the workers do the obvious: they take over the factories and try to run them themselves. This happened in Russia in 1917-18, in Italy in 1921, in Spain in 1936 and in Hungary in 1956. In Italy and in Spain the experiments rapidly came to an end as soon as the capitalists had regained control. In Hungary the Red Army performed this task. In Russia the Bolsheviks were faced with a fait accompli: the workers had themselves seized the factories. All the Bolsheviks could do was to pass decrees recognising this.

These experiments in workers’ control failed, not least because of the inexperience of the workers, which was not surprising considering the backwardness of Russia at that time. In order to keep production, going the Bolsheviks had to institute one-man management. The idea of workers’ control and workers’ councils still lived on in the minds of dissident Bolsheviks, and some of these developed a coherent theory. These theories received more support in the general reaction against Stalinism after the second world war, when the bureaucratic State Capitalism of Russia was said to have its origins in the decision to end workers’ control in 1918. This was hardly an adequate explanation, of the excesses of Stalin’s rule, but, it did provide some sort of an answer for disillusioned ex-Stalinists.

Ideas of workers’ control became more popular in periods of disorder of the sort described above. The experiences of these periods have provided the basis for many theories’ of workers’ control and of spontaneous revolution without understanding or organisation. They have become part of a general mythology fostered by loose-thinking and an inadequate understanding of the nature of present-day society. These episodes in Russia, Italy and elsewhere have very little relevance for socialism; they were not socialist in character and could not have led to socialism, even if they hadn’t been suppressed.

A little thought shows them to be exceptional and isolated incidents occurring when the control of the capitalist class had been weakened. But workers imbued with capitalist prejudices before the collapse can be expected to keep them during and after it. Without socialist understanding there was bound to be a rapid return to normal capitalism as soon as order was restored. Unfortunately, clear thinking is uncommon on this whole question of workers’ control. It seems to be a slogan full of meaning. A closer examination discloses its inadequacy.

Basically it reflects the anarchist hostility to society and social control as such; it also reflects their naive insistence that everything should be done through voluntary associations rather than permanent machinery. Basically the demand for workers’ control is a demand that the workers on the shop-floor should control production through a workshop organisation rather than through society. Quite apart from the fact that there won’t be any “workers” under Socialism, this demand is unrealistic and Utopian. The productive system of today is incredibly complicated in its world-wide organisation. It could only be controlled by society as a whole through a fairly complex and permanent administrative apparatus. To suggest otherwise is to ignore the nature of the modern world with its large-scale industry.

Adam Buick

Libermanism: A New Russian Policy (1965)

From the January 1965 issue of the Socialist Standard

It has always been an effrontery that the Russian “Communists” should have joined the name of Lenin to those of Marx and Engels in the Marx-Engels-Lenin Institute, and that the opportunist theories of Lenin, claimed to be an extension of Marxist thought, should have been perpetuated by such a connection. For the purpose of emphasizing the drift of the Russian Revolution from alleged Socialism (which the Communist Party once claimed was the preliminary transitional period before the coming of Communism) to avowed Capitalism, we have no hesitation in de-Leninising Lenin and substituting the name of Professor Y. G. Liberman, a Kharkov economist.

Some months ago Mr. Khrushchev announced that arbitrarily planned production should give way to control by means of self regulating economic leaders, by which he meant the forces of supply and demand.

According to The Times, the new Soviet leadership has approved implementation of these “economic reforms” which means “a victory for the supply and demand system advocated by Professor Y. G. Liberman.” The report goes on to say that the Soviet Government is considering a major decree to introduce the “Liberman System” in a large part of the consumer goods sector and that factory directors will have much greater freedom of action to plan output according to orders received and to fix retail prices. They will also have greater autonomy in raising money by way of bank loans for the purpose of improving or reconstructing their factories.

Wages will be determined by the factory managers instead of by remote planning agencies and “factory performance, instead of being measured in terms of fulfilment of gross output in roubles, will be gauged in terms of volume of goods actually sold in the stores, and in terms of profits.”

It is said that this decree is being drafted at the end of a four month experiment in two clothing factories, as a result of which more clothing and shoe factories are to be converted to the “New System.”

If factory performance is to be gauged in terms of profits arising from the volume of goods sold may we ask, without appearing too naive, what is “new” about that?

There is, of course, nothing new about it — what is new is that the Soviet Government is openly recognising that Capitalism exists in Russia and that the motive for production in the Capitalist System of Society is the realisation of profit on the sale of goods.

Also, what is new is the decentralisation of the point at which the profits are garnered.

The greatest antagonism which the Soviet Government has had to face has come from the agricultural interests. After the persecution of the Kulaks (peasant proprietors) in the earlier days of the Soviet administration, and the conversion of their smaller holdings into collective farms, the profit motive was still there, to such an extent that the apologetic booklet Soviet Millionaires had to be written!

Now, apparently, the realisation of profit in manufacture is to be the prime motive force for production in the smaller units of production. Soviet Millionaires dealt with the growth of personal fortunes among the Russian agriculturalists — is the time far distant when we can envisage a pamphlet being published to apologise for the growth of personal fortunes among the industrialists of Russia?

In the 1920s Lenin wrote that “State Capitalism would be a great step forward . . . that our enemy is the small capitalist, the small owner . . . the small bourgeoisie, with its economic customs, habits and position.” He also wrote that “To bring about State Capitalism at the present time means to establish the control and order formerly achieved by the propertied classes.” Then after (mistakenly) referring to the existence of State Capitalism in Germany he transforms the words “State Capitalism” to “State Socialism” and says that, “If we possessed it in Russia the transition to complete Socialism would be easy, because State Socialism is centralisation control, Socialisation — in fact, everything that we lack. The greatest menace to us is the small bourgeoisie, which, owing to the history and economics of Russia, is the best organised class and which prevents us from taking the step on which depends the success of Socialism.”

The fact which this completely ignores is that in 1917 the population of Russia did not understand, or want, Socialism. As this understanding and desire is a pre-requisite to the establishment of Socialism, nothing could proceed in Russia except the consolidation of Capitalism.

The Russian Revolution is the equivalent, allowing for the social and historical differences in the centuries of the English Revolution, the French Revolution, the German Amalgamation of Principalities, and the more recent Chinese Accession of the “Red Star Over China.” In short, it is the breaking away of the nascent capitalist class from the feudal bonds which previously bound it.

The cry for “Liberty, Equality and Fraternity” of the French Revolution is today echoed, in a way, by the factory managers of the clothing and shoe industries in Russia. They want liberty to fix the wages of their employees, something akin to the freedom of contract now operative in the Western World: they require equality to compete with their commercial brothers in the same industries, and fraternity which, in the capitalist world, means peace to produce goods for sale on home and export markets at a profit.

Never has there been a greater bamboozling of the World Working Class than that perpetrated by the Russian Communist Party. A whole generation of workers have been distracted by the chimera of Socialism in Russia from their true task of seeking their emancipation from the slavery of Capitalism.

Communists in all countries have completely mistaken the nature and social significance of the Russian Revolution and their propaganda, supporting every twist and turn of Russian politics, has deluded the working class for over 40 years. Labourites once generally accepted that the economic system in Russia was an advance over “private” or laissez-faire capitalism, although in more recent years they have deplored the dictatorial administration. Conservatives have easily been deluded into accepting that Communism was established in Russia, although their delusion is manifested in opposition, because they are automatically opposed to any organisation paying lip service to Marxism, Socialism or Communism.

Socialism did not exist and could not be established by the Bolsheviks in Russia. Perhaps the theories of Professor Liberman will help to finally bring about acceptance of the fact that Capitalism exists there.

Such acceptance will probably make easier our task of explaining the true nature of World capitalist society, it will clarify working class understanding of Marxist theory and convince the workers of the necessity to establish Socialism in five-fifths of the World.

N.S.