50 Years Ago: City & Labour Party (2014)

The 50 Years Ago column from the May 2014 issue of the Socialist Standard

It is a popular misconception that a Labour victory in the Autumn will be bad for the capitalist class; that production, investment, and so on, will be less profitable and that business will, therefore, be in the doldrums.

It is true that the City generally prefers a Conservative government, but this is not to say that their professed fear of a Labour government is sensible. Business men, after all, are as capable of misjudgement as anyone else. And, anyway, there are plenty of industrial and commercial tycoons who support the Labour Party.

Robert Heller, the Business Editor of The Observer, has polled what he calls ‘influential City men’ on their reactions to a possible Labour government. He reported the comments of seven of them on April 12th last.

Two of them thought that a Labour victory would be bad for business; two thought that it would have little or no effect. The other three thought that the policies of a future Labour administration would depend upon the conditions under which it took power—in particular, on the size of its majority.

Three said that investment was being held back by the prospect of a Labour government. The other four said that this prospect was having no real effect on investment.

(…)

But, as Robert Heller comments: —

   With certain extremely forthright exceptions, they don’t regard the prospect as very dreadful. . . . Some top boardroom names not only hope but expect to carry on business as usual. (Under a Labour government).

A Wilson administration may bring some superficial differences in the overall pattern of commercial, industrial and investment affairs.

But the City still expects to be able to carry on and to show some nice profits for the shareholders.

And the City is right.

Because under a Labour government capitalism will still be there.

(Socialist Standard, May 1964)

Capitalism Kills Again: Another Mining Disaster (2014)

From the June 2014 issue of the Socialist Standard

It is only a little over a year since the Rana Plaza garment factory collapse in Bangladesh killed over 1,000 workers. In May this year there was an explosion at a mine near Izmir in Turkey where  the death toll was 301 miners killed. It is believed a power distribution unit exploded in the mine which blew power supplies to lifts and conveyors, and started a fire. Most of the dead miners were killed by carbon monoxide poisoning. Nearly 800 miners had been in the pit at the time of the explosion due to a shift change.

It is Turkey’s worst mining accident, worse than the 1992 gas explosion that killed 263 workers near the Black Sea port of Zonguldak. Mining accidents are common in Turkey because of poor health and safety conditions. The Turkish Prime Minister Recep Tayyep Erdogan exhibited the contempt of the capitalist class for the working class when he said that ‘these accidents were part of coal mining’ and cited 19th-century incidents in Britain as examples.

A miners’ union leader Tayfun Görgün said that mining accidents would increase due to privatisations, the increasing employment of subcontractors and a lack of strong unions, all of which led to massive pressure on workers to produce as much as possible for as little cost as possible. A goldminer who has joined the rescue operation said that work safety and production pressure was a big problem in Turkey: ‘It’s all about how much you can get out in one day. Work safety just stays behind with such an attitude.’ Another worker confirmed this by saying ‘Production pressure has massively increased, it’s all about the output. If all they worry about is how fast the lines run and how much coal they can bring up and how much profit to make, the people who do this work become unimportant. And what happens to them becomes unimportant’ (Guardian 14 May). Murat Ali, a paramedic with the Izmir fire department wore a sticker on his uniform which read ‘Not an accident, but murder.’

The disaster has triggered protests across Turkey, and the Confederation of Turkish Trade Unions backed a one day general strike. A joint statement from Turkey’s four main labour unions said: ‘Hundreds of our worker brothers in Soma have been left to die from the very start by being forced to work in brutal production processes in order to achieve maximum profits. We call on the working class, labourers and friends of labourers to stand up for our brothers in Soma.’

The authoritarian Turkish state responded in its usual way with water cannon, tear gas, and truncheons. Security forces deployed tear gas and water canon against around 20,000 protesters in İzmir. Kani Beko, general secretary of the Confederation of Revolutionary Trade Unions of Turkey, was injured in İzmir after police ‘intervened.’ In Istanbul the streets became heavy with tear gas, the police and water cannon trucks chased protesters, and protesters carried a banner which read ‘It’s not an accident, it’s murder.’ In Soma protesters chanted ‘Soma’s coal will burn the government’ and ‘Tayyep the murderer.’

Gulizar Donmez, the daughter and wife of Soma miners said ‘the wives of the miners kiss their husbands in the morning. When they come back, even if they are five minutes late, everyone starts calling. You never know what is going to happen’ (Guardian 15 May). Every day throughout the world members of the working class are being killed because of the global economic system that we live in. Capitalism is injurious to the health of the working class, it kills the working class of this world in its pursuit of profit through commodity production. The working class in Turkey and in the whole world need to transform human society into a socialist world where production would be for human needs and not for profit.

Steve Clayton

Cooking the Books: Towards a Cashless Society? (2014)

The Cooking the Books column from the June 2014 issue of the Socialist Standard

‘Cash was king, but debit cards rule now’ the Times (30 April) reported:

   Notes and coins now account for less than £1 in every £5 spent by British consumers, according to a new survey (…) Halifax found that cash is now used in 17 per cent of all transactions, while debit cards, the most popular way of paying, are used in more than half (…) Cash has also been overtaken by direct debit, which is used for just under 20 per cent of transactions.

The following week Patrick Hosking speculated (Times, 6 May) in an article on ‘contactless cards’ (cards you simply swipe without having to key in a PIN and can use for payments up to £20) that this trend might go even further:

  For future historians looking back at social trends, it may just be the moment when the slow trudge towards a cashless society took a leap forward – a turning point when people chose to use plastic for even the tiniest purchases, whether a coffee, bus fare or newspaper.

A cashless society? That’s quite possible. The paper notes and metallic coins that are ‘cash’ are not money but only tokens for it and there is no reason in principle why they could not be replaced by plastic cards to fulfil money’s role as a means of payment. In practical terms of course this assumes a highly-developed IT infrastructure. And cash does have the advantage of being anonymous so that transactions using it cannot be traced, which is why some people will always prefer to use it, though Bitcoins and the like are an attempt to reproduce this electronically.

A cashless society would not be a moneyless society as serving as a means of payment is only one of money’s functions. ‘Money’ is also a standard of price, a store of value and a unit of account. As an expression of price and a unit of account, money reflects in however a roundabout and indirect way the labour-time value of goods and services produced for sale (‘commodities’ in Marxian terminology). These days it is not a stable standard of price as it is official government policy to increase the general price level by around 2 percent a year. Money, even electronic money, is still a store of value, even though in insecure times people prefer to transform their wealth into something that it intrinsically valuable (such as gold or jewellery) or that will keep or increase its price (such as works of art).

It could be that the concept of a cashless society makes that of a moneyless society more plausible, but the replacement of cash by electronic transactions has given rise to all sorts of wild ideas of what money is and where it comes from. Despite the illusion that money is created by banks by a keyboard stroke, purchasing power arises in the first place out of production, either as the wages and salaries of the workers or as the realisable profits of the investors, together corresponding to the total value of what has been produced.

Unlike a cashless society, a moneyless society would be one in which goods and services would not be priced but would be freely available to take and use and in which the calculations involved in the production and distribution of useful goods and services would not be done in a single, general unit of account but simply in units measuring specific amounts of goods (weight, number, etc).

Mixed Media: Ghosts (2014)

The Mixed Media Column from the June 2014 issue of the Socialist Standard

Ghosts by Henrik Ibsen

Director Stephen Unwin’s final production at the Rose Theatre in Kingston-upon-Thames, Surrey was Ghosts by Henrik Ibsen. Ghosts was written in Danish in 1881, the Danish title Gengangere translates as ‘revenants: the ones who return.’

Ibsen’s play concerns the unearthing of family secrets, confronting the unhappy spectres of the past which Ibsen described as ‘a family story as sad and grey as this rainy day.’ Mrs Alving (Kelly Hunter) says, ‘It’s not just what we inherit from our mothers and fathers that haunts us. It’s all kinds of old defunct theories, all sorts of old defunct beliefs.’ And of course Marx identified that ‘the tradition of all dead generations weighs like a alp on the brains of the living.’

Ibsen’s theme is ‘how to be true to yourself’, personal authenticity, which is constrained by ‘the meanness and deliberate hypocrisy of our public life and society.’ Ghosts is an attack on the hypocrisy in the moyenne (middle) bourgeoisie. Mrs Alving is reading books but her spiritual and business adviser, the Lutheran Pastor Manders is not impressed with ‘these books, that sort of thing.’ We can only guess that they could be works by Marx, Darwin or Nietzsche. Manders represents Protestant, capitalist ethics, the hypocrisy, narrow-mindedness, conventional values, conservative attitudes of petty bourgeois gentility. Manders proclaims ‘to pursue happiness in this world is to be governed by the spirit of rebellion. What right do we have to happiness? No, we must do our duty.’ It is not surprising that Nietzsche revolted against this upbringing by his Lutheran Pastor father.

Mrs Alving’s artist son Oswald (Mark Quarterley) returns from the bohemian life in Paris, defends free love, the ‘joy of life’ as opposed to the ‘vale of tears’ of Christian ideology. He represents the ‘élan vital’, the ‘life force’ of Bergson’s philosophy.

Ibsen was concerned how ‘women of the modern age were mistreated as daughters, as sisters, as wives’, and Marx felt that with man and woman ‘it is possible to judge from this relationship the entire level of development of mankind.’

Steve Clayton

Gold Bores (2014)

Book Review from the June 2014 issue of the Socialist Standard

Gold Wars: The Battle for the Global Economy by Kelly Mitchell (Clarity Press, 2013)

The number of writers that are currently churning out books about ‘debt-enslavement’ and advocating currency-crank ideas seems to be rising faster than the price of the average derivative. One particular group of theorists are the ‘gold bugs’ who advocate gold as a safe-haven investment and tend to argue that only a gold-backed currency and international trading system is likely to stabilise the global market economy. Some hark back to the days when paper currency was ‘as good as gold’ and could be converted into the precious metal at a fixed rate.

Business analyst Kelly Mitchell, author of Gold Wars: The Battle for the Global Economy (Clarity Press, 2013) seems to be part of this group. In fairness, to those who are interested, there is a lot of fascinating (if sometimes technical) detail in his book about the operation of the precious metals markets in gold and silver. Part of Mitchell’s case is that the powers-that-be are frightened that physical gold and silver will emerge as real money again now that the currency in use across the world is fiat (token) money not backed by anything of real value like precious metals. He contends that economies using fiat money are prone to asset price bubbles stimulated by credit expansion from the central banks and wider banking system.

Mitchell repeats some of the myths about the power of the banks to create massive multiples of credit out of nothing that have been resurgent in recent years, and also trots out some of the highly questionable quotes often used to justify these views (see Socialist Standard October 2012 on these). He claims the financial crisis has now laid bare the mountains of debt and worthless paper being pumped out by banks and governments and that in order to stop a flight towards precious metals banks and governments have been manipulating the gold price downwards for years. This is to make it look less attractive and credible as an alternative to paper money and credit.

Market manipulation
It is certainly true that there appears to have been short-term market manipulation taking place periodically in the gold and silver markets, and this is where Mitchell clearly has accumulated much knowledge and evidence. Indeed, although Mitchell doesn’t describe it in detail here, the way the gold price for physical bullion is fixed in London each day – long the centre of the world gold market – is itself a gift to the conspiracy theorists. The five leading members of the London Bullion Market Association meet at 10.30am and 3pm each day to ‘fix’ in their words, the international ‘spot’ gold price. Until recent years this used to be done at the offices of NM Rothschild in the City of London (enough, of itself, to get the conspiracy theorists’ pulses racing) though these days it is done by Barclays, HSBC, Deutsche Bank, the Bank of Nova Scotia, and Société Générale. Private tele-conferences between these banks communicate information about demand and supply for physical gold until an average price emerges. When representatives of the five banks concerned are happy with the price, they each lower a miniature Union Jack flag on their desks – when all five flags are down the price is then fixed and relayed to other markets (including those for gold futures, options, etc).

Naturally, it is in this sort of environment that conspiracy theories flourish and there are a fair few in this book concerning precious metals and the power struggles around them. These include a bizarre historical one linking the JFK assassination with an apparent attempt by Kennedy to get the US Treasury to issue currency backed by precious metal (in that particular case, silver). A more plausible contemporary theory is that because there are now mountains of paper derivatives of gold, including Exchange Traded-Funds which are investments intended to mimic fluctuations in the gold price, there may not be appropriate levels of physical gold held by banks to satisfy the potential claims on it. In other words, investment banks have been busy creating financial products to sell derived from gold but which are not really backed by gold. Indeed, Mitchell and others have claimed that it is likely that the same gold is used several times over to ‘back’ derivatives – and that if the owners of these financial products demanded physical gold bullion in return for their paper certificates there would be nowhere near enough gold held in the vaults of the major banks and central banks to satisfy the demand, leading to financial panic.

Fort Knox
Compounding this is the mystery about how much gold banks actually have in their vaults, and about the quality of this gold. In 2009, the Chinese government received a shipment of gold from the US only to find that when the bullion bars were drilled they were partly tungsten, and it is thought that an increasing proportion of gold held in bank vaults is adulterated and of poor quality. Most major governments are very reluctant to have the gold held in their vaults audited for volume and quality – the US government has resisted for years an audit of the 4,600 tons of bullion it claims is held in Fort Knox.

What is for certain – and partly accounts for the title of Mitchell’s book – is that a significant shift has been taking place in recent years in the ownership of gold bullion. China and Russia have been significant buyers and so have some Middle Eastern states. This in turn seems to be part of a concerted attempt to undermine the US dollar and the American political and economic hegemony underpinning it, by establishing alternative trading mechanisms to the US currency. An example is that oil has been priced and traded in dollars for decades (the so-called ‘petro-dollar’), but many states are now showing signs of moving away from this system, including both Russia and China who have recently signed a deal to trade oil in the Chinese Yuan. This is indicative of the US losing its place as the dominant global capitalist power as happened to Britain after the end of the First World War. The dollar is seen as a far weaker currency than it has been in living memory and Mitchell claims that the lack of real gold backing it has been part of the cause.

Interesting though it is, there are nevertheless a number of problems with this book. One is that it is not especially well written and many of the charts and figures included are not properly explained or even reproduced in an intelligible way. The analytical faults, however, are even more serious. Like many in this field, Mitchell is prone to exaggeration and overlooks evidence which contradicts his case. For instance, if suppression of the gold price is part of a concerted attempt by major central banks and private banks to prevent gold emerging as an alternative to fiat currency as a representative of wealth, this is hardly consistent with the 800 percent increase in the price of gold seen in recent years, even if it is down on the highs it achieved in the immediate wake of the financial crisis.

Gold standard
More seriously still, Mitchell holds totally untenable views about monetary and trading systems based on gold (both in terms of national currencies and earlier international trading systems like the Gold Standard). Referring to the US Federal Reserve, he says ‘Since the Fed’s inception, the dollar has declined over 95%, the economy has seen a series of booms, busts, crashes, asset bubbles, and bank runs, that almost never happened under a gold standard, and unemployment has been far greater’ (p.110-111). But apart from the decline in the value of the dollar caused by inflation, none of this is true.

The idea that slumps, asset bubbles and bank runs didn’t happen under the Gold Standard of international trading payments and when currencies like the pound sterling and the dollar were convertible into gold on demand, is frankly ludicrous. They actually happened on a regular basis including the major 1907 financial crisis in the US when JP Morgan organised a bail-out of several major US banks that were about to fail, and of course the 1929 Wall Street crash and subsequent Great Depression. As well as banking crises and equity bubbles and crashes, there were also asset price bubbles in housing, land, commodities and a range of other assets. Asset bubbles, runs on banks and financial panics were commonplace throughout the period, and in all major countries. For example, the UK has experienced 12 banking crises since 1800, with only four of these since it came off the Gold Standard, while in the US the figures are 13 and two respectively (see This Time is Different: Eight Centuries of Financial Folly by Reinhart and Rogoff).

Mitchell has failed to understand that the expansion and contraction of the credit system that he is fixated on, and its attendant asset bubbles, is a reflection of the underlying trade cycle of the market economy and is not its cause. This instead is the drive by firms to sell commodities at a profit as if the demand for them is unlimited, leading to over-expansion of the booming sectors of the economy. This overproduction leads to cut-backs, hoarding and lay-offs and the monetary and credit systems are what transmits these effects throughout the economy more widely. An example was the over-expansion of the property sector in relation to paying demand in the US, UK, Spain and other countries which triggered the most recent financial crisis when credit lines and derivatives related to this turned sour. And as Marx pointed out in Capital in relation to the many crises that have taken place when monetary systems were based on gold, convertibility was no solution but just another means for transmitting financial chaos:

  ‘[A]s soon as credit is shaken, and this is a regular and necessary phase in the cycle of modern industry, all real wealth is supposed to be actually and suddenly transformed into money, into gold and silver – a crazy demand, but one that necessarily grows out of the system itself. And the gold and silver that is supposed to satisfy these immense claims amounts in all to a few millions in the vaults of the bank . . . with the development of the credit system, capitalist production constantly strives to overcome this metallic barrier, which is both a material and an imaginary barrier to wealth and its movement, while time and again breaking its head on it’ (Volume 3, p.708).

Indeed, whether the market economy operates with a monetary system tied to gold or not is effectively irrelevant so far as its underlying trade cycle is concerned as this cycle occurs irrespective of the precise monetary conditions, which influence the surface froth and bubble but little else. It therefore follows that tinkering with the monetary system is illusory as a solution to this problem of periodic booms, crises and slumps. In fact, it is partly because the international Gold Standard and also convertibility of notes did not solve these very problems (and in the minds of many economists even exacerbated them) that they were abandoned.

The only change of significance since token money (paper notes, etc) has not been convertible any more into gold at a fixed price has been that this has allowed a massive expansion of the note issue to take place. Over time, gold as a real store of wealth and a product of human labour became the means by which all other commodities and services produced by labour could be measured – in this sense it was ‘real money’. If paper tokens were introduced to circulate on behalf of gold, representing it in fixed quantities, these paper tokens acted as money (as ‘good as gold’) and so were representative of the social wealth embodied in commodities more generally in the economy.

But when convertibility was suspended this allowed paper money to be issued far in excess of the amount of gold that was representative of the wealth being produced by society – and this phenomenon has been the source of the massive currency inflation that has occurred across the world market economy since the 1930s, massively eroding the purchasing power of the dollar, pound and other currencies. It means notes and coins in circulation are no longer tied in any way to levels of production and trade in the economy. In this respect, any move to tie paper money back to gold would in all likelihood halt inflation – but it would do nothing whatsoever to halt the market economy’s periodic crises and slumps, like the recent one, that have caused so much misery across the world. Only the abolition of prices, credit and money itself can do that, enabling social regulation of production and free access to wealth. In such circumstances, gold will no longer be stored in bank vaults (as these will not exist) and can instead be used productively and creatively rather than as an object of financial speculation and power-broking. And that situation will represent a golden opportunity for us all.

Dave Perrin

Proper Gander: Ballads And Beards (2014)

Austria's Conchita Wurst

The Proper Gander Column from the June 2014 issue of the Socialist Standard

Across Europe, spangly strapless dresses and snazzy tailored waistcoats are being packed away again until the next Eurovision Song Contest. This year’s competition, accompanied by Graham Norton’s sardonic commentary, was watched on BBC1 by over ten million people, with hundreds of millions more tuning in overseas.

The latest crop of pop showed how homogenous music has become, being mostly either migraine-inducing jaunty dance numbers or ballads which start out dreary and end up overblown. Nearly all the countries’ songs had English lyrics, as this traditionally attracts more votes. France’s song was sung in French and came last, although it would have been merde in any language. Reassuringly, the performances included lots of kitschy stunts like a giant hamster wheel, trampolines and a circular piano keyboard. However, Austria’s decision that their song would be performed by a bearded drag artist, Conchita Wurst, turned out to be more than just another gimmick. There were petitions in Russia and Belarus for their TV stations to edit out footage of Wurst, claiming that her performance would turn the contest into a ‘hotbed of sodomy’.

Wurst’s song was voted as the best, not because her power ballad was much better than any of the other power ballads, but because she came to represent, in her words, ‘respect and tolerance’. This nice enough message seems directed towards Russia, who received boos whenever points were awarded to its entry (sung by two blameless seventeen year olds). Apart from Austria’s win, and the usual trend for neighbours to vote for each other, it might be hard to discern much political significance in the scoring. Russia gave five points to Austria, suggesting that objections to Wurst weren’t particularly strong after all. And it’s anyone’s guess whether the situation between Russia and Ukraine is reflected by Russia ending up in seventh place, with four of its points coming from Ukraine, who received seven back.

The UK finished towards the bottom of the ranking, as has been the norm since the Iraq War. The scores each country awards are only partly made up by the number of viewers phoning in to vote, with panels of never-seen judges making the final decision. So at least the contest reflects the lack of real democracy in capitalism, only with more sequins.

Mike Foster

Voice From The Back: The Profit Motive (2014)

The  Voice From The Back column from the June 2014 issue of the Socialist Standard

The Profit Motive
The insanity of capitalism with its profits before people motivation is everywhere apparent. Millions spent on armaments while people die from lack of basic medical treatment, immense wealth accumulated by a tiny minority of parasites while millions die from lack of clean water and food, but the following news item probably sums up the madness best. ‘In a wide-ranging interview with the India-based Economic Times, Cargill CEO David MacLennan talks about how the globe-spanning agribusiness giant managed to turn the 2008 economic crisis into a “record year of profits” a remarkable performance, given that that year’s food-price spikes pushed 115 million people into hunger, as the UN’s Food and Agriculture Organization estimated’ (Mother Jones, 2 April).


The Rich Get Richer
In last month’s Socialist Standard we dealt with the French economist Thomas Piketty’s book Capital in the Twenty-First Century and its many short-comings, but its publication and the many reviews it has produced in the mass media has thrown up some interesting aspects of modern capitalism. Here for instances is the journalist Philip Collins in his review of the book. ‘Between 1977 and 2007 the richest 1 per cent of Americans took an astonishing 60 per cent of the growth in national income. Sixty per cent. The wealth of the richest 85 people in the world is greater than that of the 3.5 billion people who make up the bottom half of the world’s population’ (Times, 2 May). Such statistics must give even the staunchest defenders of capitalism cause for concern.


Not For The Likes Of Us
Professor Karol Sikora a former director of cancer services at Hammersmith Hospital and ex-chief of the World Health Organisation has expressed his views about treatment of the disease. ‘One of Britain’s top cancer doctors has called for expensive cancer drugs to be rationed for the frail elderly in favour of being given to younger patients’ (Sunday Times, 4 May). What the doctor really means of course is the elderly and poor patients being untreated. There would be a public outcry if he meant millionaires or even members of the royal family being denied the best possible treatment. As some of the treatments cost £50,000 per year it is obviously not for the likes of us workers.


Growing Old Disgracefully
After a lifetime of hard work many thousands of workers because of ill-health and ageing find themselves reduced to living in a so-called Care Home. ‘The Care Quality Commission, which carries out inspections of homes, this week confirmed that in the past three years warnings were issued to 1,200 homes, of which 158 were forced to close. …….. A request to 150 councils revealed officials examined a total of 16,405 cases in the past 12 months, up from 13,880 in the previous year. The number of elderly residents who claim they were abused by care home staff also rose last year to 30,785, or 600 a week’ (Daily Express, 4 May). All sorts of proposals are put forward to deal with the situation but the reality is that the Care Homes are under-staffed and under-funded and are unlikely to be improved inside capitalism.


The Gap Widens
The legal dispute over a divorce settlement between Silvio Berlusconi and his second wife shows the enormous gap between the millions who are trying to survive on $2 a day and the obscene wealth of the owning class. ‘Her demand for a one-off payment of 540 million euros (£440 million) caused talks to break down. Berlusconi, who is worth an estimated 6.5 billion euros, is said to be willing to offer her 200 million euros’ (Times, 10 May).


Some Consolation
At one time Britain was the wealthiest and most powerful nation in the world but these days are long gone. There is one economic category though where Britain still leads the world. ‘The number of billionaires living in the UK has risen to more than 100 for the first time, according to the 2014 Sunday Times Rich List. There are now 104 billionaires based in the UK with a combined wealth of more than £301bn, the list says. That means the UK has more billionaires per head of population than any other country’ (BBC News, 11 May). This must be a wonderful boost to Britain’s unemployed and homeless!

Letters: Bargain basement nationalism (2014)

Letters to the Editors from the June 2014 issue of the Socialist Standard

Bargain basement nationalism

Dear Editors

The UK Independence Party is clearly being sold to ordinary voters as a movement to liberate us all. And sadly many workers will back it. Yet as the article ‘People Not Profits’ mentions, UKIP is no alternative at all (Editorial, May Socialist Standard).

UKIP sells a kind of bargain-basement nationalism that seeks to blame workers outside the UK for our problems. It wants to close the borders, and substitute ‘patriotism’ for compassion. And its policies are designed to transfer even more wealth and income into the pockets of the rich.

It’s the economic system that oppresses people, not those who move to the U.K. We need to reject the false ideology of nationalism UKIP promotes, as well as its economic ideas.

Graeme Kemp, 

Wellington, Shropshire.

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Blatant contrast

Dear Editors
Regarding the article on 15 Central Park West (‘Voice from the Back’, April Socialist Standard), some years ago I took a stroll of some of the streets where the buildings look out on to Central Park. The buildings, a mixture of mansions, hotels and apartment blocks, were beautiful and were obviously occupied by the wealthy. The streets which intersected with the prosperous-looking avenue contained some atrocious slums, many of which were right next to the above buildings. Here one saw a blatant and obvious contrast between wealth and poverty. It should have been enough to have the least perceptive onlooker wonder if perhaps there wasn’t something wrong in a society that could create such extremes.

Steve Shannon, 

Mississauga, Canada.

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Compelling Case

Dear Editors

I just wanted to write and say I really enjoyed reading the three election manifestos and supporting article carried on pages 10 to 12 of the May Socialist Standard.

In clear, modern and accessible language, they all set out a powerful and compelling case for a world socialist society, and certainly inspired me to do something positive to bring this about!

Andrew Northall (by email)

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Middle Eastern Marxists?

Dear Editors

Perhaps the most striking part of the International Workers’ Day demonstration on May Day 2014 was the large contingents of Turkish and Iranian ‘communists’ in London. Tens of attendees turned up parading plain red flags in co-ordinated outfits from organisations such as Alevi Federation, Day-Mer (ostensibly, the Turkish community centre in North London) , RedHack, Worker Communist Parties of Iraq and Iran. Perhaps the most prominent figure inspiring some of these groups is the late Mansoor Hekmat (who died in 2002), who rejected both ‘Stalinism’ and Islamism and urged communists to ‘go back to Marx’. Not in itself sufficient for a socialist, but if ‘Marxist-Hekmatism’ is popular enough for a ‘Marx-Hekmat’ society in London or in the large populations of Turkey or Iran, then perhaps it is worthy of further critique by the true socialists in London.

DJW (by email)

Socialist Euro-election Campaign (2014)

Party News from the June 2014 issue of the Socialist Standard

In last month’s festival of xenophobia that the European elections were the Socialist Party mounted its biggest election campaign yet, emphasising by contrast the world nature of any solution by putting ‘World Socialist Movement’ on the ballot paper alongside our name . We contested two regions, South East England and Wales. Contesting Wales entitled us to our first ever Party Election Broadcast. This can be viewed on Youtube here:



The South East Region is the largest in the country with an electorate of over 6 million in 4 million households. Royal Mail delivered election leaflets to 984,000 households in 20 selected constituencies such as Oxford, Brighton, Southampton, Reading, Canterbury, and Dover. A further 16,000 were distributed by members and sympathisers. In Wales Royal Mail delivered our manifesto to 342,000 households in 9 constituencies with a further 8,000 being distributed by us. In all, a total of 1.35 million, the biggest ever campaign to publicise the case for a classless, stateless, moneyless world community without frontiers.

There was some good media coverage, especially from local TV and radio stations in both regions.  One fall-out from our standing was that one of our candidates was interviewed on BBC2’s Daily Politics Show, which would have had a much wider audience than our election broadcast in Wales. It can be seen at



Press coverage was more patchy but a number of local papers did give us a chance to present our case in more than a sound-bite. A couple of examples can be read here:

Canterbury Times

www.carmarthenjournal.co.uk/gets-Euro-vote/story-21065363-detail/story.html

We got 5454 votes in the South East and 1384 in Wales.

Not with a bang, but a whimper (2014)

The Halo Halo! Column from the June 2014 issue of the Socialist Standard

The International Textile, Garment and Leather Workers Federation (ITGLWF) is, no doubt, a perfectly sensible, level-headed organisation, and unlikely to be involved with, or to have any connection with half-baked, bible thumping, doomsday merchants.

Unfortunately for them though, if you happen to be looking for information on a slightly less rational organisation which abbreviates its name to ITGWF, and which invites you to ‘Get Your Tickets For the End of the World Spectacular’, when you Google this, it is the International Textile, Garment and Leather Workers Federation’s website that comes up at the top of the list. In fact, it takes a while to find the loony ITGWF (which, in this case, stands for ‘Invitation to God’s Wedding Feast’).

It is also important to note here that when they talk about ‘God’s wedding feast’, what they actually mean is Armageddon, the final, catastrophic battle between the forces of good and evil, in which (it has already been decided, apparently) the good guys are going to win. And it seems this is going to be one hell of a party – for God at least. The website includes numerous details of what slaughter, carnage and destruction is planned, helpful bible references to the horror, and exciting, in-depth revelations of what to expect as the Resurrection, Armageddon, the Final Battle of all Time and the Final Judgement are all played out, and much, much more. ‘His eyes were as a flame of fire, and on his head were many crowns; and he had a name written that no man knew but he himself, And he was clothed with a vesture dipped in blood: and his name is called the Word of God’, for example.

It’s not often that God lays on a party so it ought to be a good one. There will be fireworks, balloons and a barbeque no doubt. Music will perhaps be provided by a heavenly choir, and hopefully there will be a display of riding skills by the four horsemen of the apocalypse. The evening will then be rounded off with Satan being chained up for 1,000 years. So if you want to be there, book your tickets now.

Hopefully, in case of rain it can all be transferred indoors, but to be honest it doesn’t sound like fun-filled family entertainment. We hate to put a damper on things, but for an Armageddon do we were hoping for a bit more. It’s certainly not what the Socialist Party would put on if we were planning an event for the end of the world.

And another thing, until all this was announced getting in to heaven at the end of time was going to be much simpler. Even for those of us who don’t qualify for a proper invitation. Until this lot came on the scene, all you had to do was to state that you believe that Jesus is your Lord and saviour, repent of your sins, and at the very most, be born again.

Apart from being born again it was easy. You simply had to tell the guy at the pearly gates, God, or Saint Peter, or whoever, that you believed and repented, and that was it. You could be the most devious, lecherous, foul mouthed old humbug ever to have slithered through the turnpike, but as long as you repented, you were in. And if they’ve changed the rules for that, then it is obviously a matter of concern, for some of us, at least.

So all in all, this organisation’s ‘End of the World Spectacular’ may not be everyone’s cup of tea. I wonder if the International Textile, Garment and Leather Workers have any better plans for the event?

NW

Film Review: The Selfish Giant (2014)

Film Review from the June 2014 issue of the Socialist Standard

The Selfish Giant directed by Clio Barnard is a poetic social-realist film, unsentimental, politically angry in the tradition of Ken Loach’s Kes. Barnard’s aim was ‘to make a film in the realist tradition of fables about children’ like De Sica’s Bicycle Thieves, Truffaut’s Les Quatre Cent Coups, and Samira Makhmalbaf’s The Apple. She has created a damning portrait of capitalist society where a ADD-afflicted teen called Arbor (Conner Chapman) and his best friend Swifty (Shaun Thomas) engage in ‘scrapping’: collecting scrap metal or the detritus of capitalism with a horse and cart in the post-industrial landscape of Bradford with its cooling towers and electricity pylons.

It is inspired by the Oscar Wilde story The Selfish Giant whose message is that private property is evil; a permanent winter descends caused by his determination to stop children playing in the grounds of his castle. Barnard uses the metaphor for the deleterious effect on communities when society as a whole fails children. Wilde himself wrote in The Soul of Man Under Socialism: ‘With the abolition of private property, then, we shall have true, beautiful, healthy Individualism. Nobody will waste his life in accumulating things, and the symbols for things. One will live.’

Barnard said ‘The selfish giant of my film is a selfish ideology. I liked Glenda Jackson’s speech in the House of Commons after the death of Thatcher when she said that under Thatcher selfishness and greed had become virtues. The film is about what got lost.’ The Selfish Giant is about capitalism and consumerism fuelling greed, selfishness as an ideology, children marginalised and the general lack of concern about society in capitalism.

Steve Clayton

Obituary: Syd Wilcox (2014)

Obituary from the June 2014 issue of the Socialist Standard

Syd, a long-standing member, died in April. He was born in Pimlico in west central London in 1925 and joined the old Paddington branch in December 1943 while still a teenager. After the war (in which he was a conscientious objector) he was active in the Fulham branch. Latterly he was a member and regular attender of West London branch and had only just been re-elected as one of the Party’s trustees. He had worked in various jobs, including as a professional  jazz musician, but ended running a successful antiques business in Fulham. When the ‘Ban the Bomb’ movement started in 1958 with the first Aldermaston March Syd took a minority position within the Party. While most members criticised CND for implicitly supporting ‘conventional’ weapons of war, Syd saw banning nuclear weapons as a step (of sorts) in the right direction. He was also moved by the plight of the Palestinians at the hands of the Israeli state.  A staunch socialist to the end, it was Syd who came up with ’everything free’ as a definition of socialism in as few words as possible. We extend our condolences to his family.

50 Years Ago: Mandela Speaks (2014)

The 50 Years Ago Column from the June 2014 issue of the Socialist Standard

In Pretoria Nelson Mandela has stood trial, with eight others, on charges of attempting revolution by violence. If he is found guilty—and he does not deny that he helped to organise acts of sabotage—Mandela could be sentenced to death.

It is inevitable, in the prevailing conditions and atmosphere in South Africa, that Mandela’s case should arouse considerable sympathy. To many of those who resent the repressions and indignities which the coloured people of South Africa are subjected to, Mandela’s admitted activities are anything but crimes. They are his people’s cries for help.

It is a truism that violent repressions are bound to provoke violent resistance. Because of this, a man in Mandela’s predicament can often come to be thought of as almost a saint. But history has shown how a saint under duress at one time, can be a devil in command at another. The past is crowded with men who have been imprisoned—and even sentenced to death—for their opposition to a repressive power and who, when they eventually themselves took over their country, proved to be no better than the power they had deposed. De Valera, Nkrumah, Ben Bella are only three like this who spring to mind.

What of Mandela?

During his trial he set out his views in a four and a half hour speech. It is instructive to examine this speech, especially some of the more revealing passages in it.

  “We all (Ghandi, Nehru, Nkrumah, Nasser) accept the need for some form of Socialism to enable our people to catch up with the advanced countries of the world . . .”

It is common for the leaders of rising nationalist movements to tag the name of Socialism onto the measures of state control they would like to impose to try to advance their country’s economy. The correct description for these measures is state capitalism, which in large doses has often led to the imposition of a dictatorship, and which in any case never offers a country’s workers a future any better than private enterprise capitalism.

(Socialist Standard, June 1964)

Not ‘Sound Money’ but ‘No Money’ (2014)

Letter to the Editors from the July 2014 issue of the Socialist Standard

  The author of Gold Wars reviewed in last month’s issue replies and we discuss capitalism, banking, economic crises and money with him and come to similar conclusions.

Kelly Mitchell: DAP’s review in the Socialist Standard of my book Gold Wars is much appreciated. The review quite rightly pointed out a few errors in the book, especially regarding the phrasing I chose. First, it’s correct that negative economic cycles occur under a loosely defined ‘gold standard’. I should have written that they tend to be more muted because sound money has a negative feedback effect on speculative frenzies. However, under a strict gold-backed system, a bank run is not possible, because any currency issued would have proper backing. When such crises happened (and I cover several in the book) the banks were not practicing a true gold standard. They were practicing a fractional reserve gold standard. In other words, there has been no genuine gold standard of fully-backed money for hundreds of years.

My fundamental concern is that socialists and others who sincerely want a better world can do nothing if they fail to properly understand the world we are in. The banking system is needlessly and deliberately opaque. This ‘fog of war’ exists to confuse and bore people. The creation of money is an essential topic for those who object to the capitalist system. You must know how it favours the powers that be. Those who control the supply of money have tilted the deck to assure the increase of elite power. Democracy has become a mere facade, with powerless voting placating the masses while monetary creation dictates all government action. Anyone who considers this a false ‘conspiracy theory’ is woefully ignorant of the nature and manifestation of power in the current capital dominated world.

Socialist Standard: The real issue is whether reforming the monetary system in some way will solve the problems of the market. We’ve seen nothing (and certainly no evidence) to suggest this is the case. In fact, world capitalism throughout its history has produced a long list of monetary reformers of various sorts: advocates of both inflation and deflation, those who support a gold standard, the followers of Major Douglas and Social Credit, those who believe in abolishing interest payments – yet none of these have ever succeeded in removing the problems of the market economy, including its periodic crises and slumps.

This is because the problem with capitalism is not its financial superstructure. That’s a bit like saying the problem with smallpox is only the scabs it produces – the problem is production for profit itself, the market economy, not particular features of it. Crises and slumps with their attendant unemployment and poverty are entirely normal for capitalism. They are not an aberration but the way the system rids itself of inefficient units of production so it can expand further in future.

KM: The review says ‘Mitchell repeats some of the myths about the power of the banks to create massive multiples of credit out of nothing’. This comment is quite puzzling to me. The author fails to specify which ‘myths’ he means. Is it possible for the Central Bank to create as much money as they wish or not? If not, what possible real world constraint exists? There are technical restrictions on fractional reserve lending, but as I detail in the book, these do not apply in all countries, nor do they apply to the shadow banking system.

Socialist Standard: Hopefully you will forgive us if we do not again go into the issue here of why commercial banks can’t create near endless amounts of credit from a given deposit base. We have spent much time on this in recent years already – we refer him to the issue of the Socialist Standard in October 2012 as an example of where this was dealt with in several articles and in quite some depth.

KM: I do take some objection to the phrase ‘conspiracy theory’ regarding the ideas in the book. The phrasing is not used in the book, nor do I consider it a valid description. The term is used pejoratively by most analysts to deride theories they find objectionable without having to resort to deeper analysis. The review does, in fact, provide a certain degree of analysis – more than most of my critics, but still falls short in certain areas. Most notably, the review fails to see that I never advocate a gold standard. And if it is a conspiracy theory to point out that manipulation has occurred, then we should sharply question the regulators who have fined most commercial banks for secretly manipulating the LIBOR and Barclays for manipulating the gold market. In fact, they have ended the London gold fix on that basis – a fact that the review neglects to mention. To be fair, the writer probably didn’t hear about this recent official confirmation of the gold suppression. (They did, however, blame it on a lone gunman, as usual, a theory that is absurd considering the scale and variety of manipulation.)

Most gold suppression theorists are fiercely capitalist, with a bizarre faith in something called the free market. I hold that such an animal is like a griffin – it does not exist, nor can it because of a fundamental contradiction. In a completely free market, the government (and regulations) would be simply another commodity to be purchased by those with money. Regulations would arise to punish smaller competitors, destroying any free market. Contrariwise, to prevent that situation would require stopping companies from purchasing desired regulations – but that would be an interference in the free market, as well. Hence, no free market is possible.

Socialist Standard: You are right that your book didn’t explicitly advocate a gold standard, but it is certainly implicit throughout, hence the reason we said Mitchell ‘seems to be part of this group’ of theorists. It also emerges that your definition of a gold standard is rather different to the conventional one, though our point about booms and busts happening when currency is convertible into gold still stands. The idea of capitalism being able to generate sufficient capital flows and liquidity in a system where all currency is either gold itself or 100 percent backed by gold at all times is truly fantastical – indeed, it has never happened. It is no more likely than capitalism without bank deposits, credit and interest, as these all help propel the mass circulation of commodities in world markets, the levels of labour productivity associated with this, and necessary flows of capital investment. You rightly point out that the pure free-market beloved of the Austrian school of economists is a myth but so is capitalism without conventional banking and the paraphernalia that goes with it.

For the record, the article was written about a fortnight before it emerged Barclays had been fined for the part played by an alleged ‘rogue trader’ of gold in their dealing rooms. It has also recently come to light that under pressure from the financial authorities in Germany, Deutsche Bank has now left the gold fix syndicate completely. So the ‘fix’ is set to change dramatically under pressure from governments. If there has been a conspiracy (or collusion) to manipulate the price of gold, it is comparatively peripheral to the operation and survival of capitalism and something governments can and will deal with when necessary. In many ways this is just as they periodically deal with the effects of other cartels that get in the way of the wider interests of the owning class.

KM: The review continues ‘Mitchell has failed to understand that the expansion and contraction of the credit system that he is fixated on, and its attendant asset bubbles, is a reflection of the underlying trade cycle of the market economy and is not its cause. This instead is the drive by firms to sell commodities at a profit as if the demand for them is unlimited, leading to over-expansion of the booming sectors of the economy. This overproduction leads to cut-backs, hoarding and lay-offs and the monetary and credit systems are what transmits these effects throughout the economy more widely.’ The author makes a common analytical mistake. He believes such cycles have only a single possible cause. He also ignores the positive feedback mechanism wherein the effect and the cause reinforce each other. He is correct that expansion and contraction are normal parts of the business cycle – I never claimed otherwise. I contend that gross expansion of the money supply leads to ‘sloshing liquidity’ and out of control mal-investment. The over-expansion of certain sectors is hugely exacerbated by excess money printing and so-called ‘hot money’ flows. The impossibly high valuations of the real estate market would never have occurred under a gold standard. They happened because banks were lending Other People’s Money and cheaply created money to anyone with a pulse. As evidence, the only group pointing out the crisis beforehand (and they were correct) were the Austrian school – most of whom agree with my fundamental thesis of gold market manipulation with the intent of maintaining the currency monopoly.

Socialist Standard: True enough, the cause of each particular crisis will naturally vary. In recent decades we have seen at different times the over-investment in – and over-expansion of – the housing market, the commercial property market, the car industry, the steel industry and micro-electronics to name just a few. But the fundamental point is that it is the competitive drive to accumulate capital by firms operating in a ‘dog-eat-dog’ economy with no social regulation of production that leads to these. The most recent crisis and slump was not caused by a malfunction of the banking system – that was an early product of it, albeit one that then severely exacerbated the situation. Without the profit-driven over-expansion and then collapse of the housing market, which then turned the credit and derivatives that were based on it bad, the banking crisis wouldn’t have happened as it did. And we might add it was some of the opponents of capitalism who saw it coming:

  ‘[A]s the US housing market falters, more sub-prime loans are going bad . . . The bursting of America’s housing bubble could have widespread impacts on US financial institutions and others who have exposure there . . . the entire housing bubble phenomenon is wider than commonly supposed – while the US and UK economies have a particular problem with their housing markets, so do many other countries where identifiable bubbles also exist, from Ireland and Spain to New Zealand . . . When the crash comes, it will return markets to more realistic levels that are more in line with real incomes and values, and this is what has happened on every other previous occasion’. (‘Forever Blowing Bubbles’, Socialist Standard, May 2007).

This was published several months before the crisis broke and a full 18 months before the Lehman Brothers implosion. It was an analysis using Marxian economics as a tool for understanding how capitalism works – one that leads socialists to recognise the inherent dynamic of the market economy as being the problem not part of the solution (unlike the ‘laissez-faire’ Austrian school of economics whose advocates want even more market madness, red in tooth and claw).

KM: I quite agree with the review that all monetary systems, whether gold backed or fiat, lead to concentration of power in the hands of the few at the expense of the many. My book is solely descriptive of the shape that concentration has taken since the abolition of any gold convertibility in 1971. My fondest desire is for the abolition of money altogether and for completely shared resources by all humanity. You can call it socialism, communism, the gift economy, or whatever you like – the name is irrelevant. It would vastly increase the lifestyle for everyone (even the rich) and lower the drain on earth’s resources because most goods would not sit idle – they would be common property. Further, it would end the odious cycle of converting genuine resources into wilfully obsolete garbage for profit. Goods would be durable and engineers would take pride in that. The most common crime – property theft – would no longer exist. It would be a better world. In fact, the original book concluded with a lengthy critique of capitalism and a prescription – the Resource Based Economy – for a fully equitable system.

Socialist Standard: A book, of course, can only be reviewed on the basis of what it says. It is genuinely pleasing to see you agree that the only real solution to the problems caused by capitalism is the establishment of a society of common ownership and production for use where the market has been abolished. The trouble is that you would never know this from reading your book. In its 256 pages there is not a single reference to any of this. If there had been the book would have received a rather different review from us. Instead we have a book which ends by saying that in the ‘gold wars’ to come ‘the best ammunition is gold’. Not much of an option for the wage and salary earners who make up the working class majority in society.

We feel you have a choice to make. Either you continue to advocate the case for gold (whatever precisely that may be) or you advocate the case for socialism. We suspect that you now realise you wrote a book making the case for the former (possibly encouraged by your publishers), while coming to the conclusion that the latter is the real and lasting solution to the chaos of the market. Not ‘sound money’ but ‘no money’ if you will. We invite you to think seriously about this and join us in spreading the idea of a sustainable, human-centered alternative to capitalism. That is, one where markets and prices have been replaced by production directly geared to satisfying people’s needs and desires.

A Resource Based Economy (2014)

From the July 2014 issue of the Socialist Standard

This is the chapter by Kelly Mitchell omitted from his book Gold Wars, and we publish it here alongside his letter to us.

‘Economy means efficiency – a lack of waste’ Peter Joseph

Imagine a world without telemarketers, without advertising, without someone trying to sell you something constantly, without a propaganda industry trying to convince everyone their empty lives will be filled by the latest gadget/fragrance/object, without logos, and without soulless consumption. Imagine a world without money. Money is useful as a medium of exchange, but a world where all human needs (and most reasonable desires) are readily fulfilled is only possible without money. We are the sole species that pays to live on this planet. This society would simply terminate private property as an arcane, useless and even wasteful fixation. The age of ownership would recede into memory – a necessary, but immature phase in our societal growth. Sounds insane, right? But if all human needs can be met, if most non-harmful and physically possible desires can be universally met, then property would be pointless – merely a pathetic, failed means to bolster the self-worth of adult children. Such a world moves through purpose, not paper. It is sustainable. It’s called a Resource Based Economy (RBE). The ethic of the resource based economy is to align with natural law. We cannot consume past the earth’s ability to provide. An RBE catalogs and utilizes planetary resources in the most efficient method we can create for the good of all humanity. Money is not necessary and everyone has access to all goods and services. Planetary resources cannot be claimed by individuals, but are publicly owned. Many proponents of the system now exist, most notably the Zeitgeist Movement.

Conceptual cities have been detailed with full energy independence, complete food self-sufficiency, and awesomely convenient public transportation. Designed cities can have immensely higher efficiencies than the ad hoc ones currently in use. They can maximize human satisfaction through good planning, clean air, water, and organic food. This would not restrict anyone living in the country and fully utilizing technology, either. All choices are voluntary – there is no coercion. If someone is using property, it is not available for others, of course. But no one could own immense tracts of land, letting them lie fallow with no public access.

Certain mandatory measures toward a more sustainable direction must be met – the economy must change from a growth to a steady state economy. 1) The monetary system must be eliminated – it creates scarcity. 2) We must move from a competitive to a collaborative model. This will eliminate redundant products, just for monetary competition. It will also eliminate inferior products because all players have full knowledge access and there is no financial incentive to build junk. In a collaborative world, every innovation can draw on all knowledge – nothing is proprietary or withheld. 3) Total open source knowledge. Centralization of knowledge requires distribution of production, but in a coordinated manner. Locally produced goods would be available for all needs. Earth could be catalogued and inventoried as per resources and energy supplies. Action could be taken well ahead of time to avert crisis. A simple form of this is feasible right now, but knowledge is proprietary and resources are owned by elites. Open-source knowledge would eliminate duplication of efforts and mass resource wasting. It would allow for the best understanding and processes to emerge without the current artificial constraints. Global collaboration would overcome the barriers of competition and proprietary knowledge. Humanity would experience an explosion of progress in knowledge, ideas, ideologies, and technology. Eliminating the monetary system would remove the need to suppress competitive technologies like alternative energy (which threatens big oil). Without the need to create energy scarcity for oil profits, those technologies would no longer be restricted.

4) Deliberate automation. The economy is headed to automation already. Artificial means of creating jobs exist (largely as public sector workers), just because the capitalist system demands work for pay. Virtually all factory workers could be replaced in a few years. All jobs with no social benefit (Wall street, finance, and so many public sector jobs) would be pointless. 65% of all jobs could be eliminated with current knowledge right now. Productivity is inverse to employment. The higher the productivity, the lower the employment. It’s a marketplace function – people are much more expensive than machines. They need a house, food, car, etc. Machines only need their raw energy inputs and maintenance. Some machines can even repair themselves.

5) Eliminate property rights in favor of universal access for all goods and services. If all goods and services are freely available, multiple problems are instantly eliminated. Shared resources create abundance – nothing is ‘owned’ by individuals without ever being used. Nothing sits idle, so all that idle time is now useful time, requiring only a tiny percentage of current material goods to fully satisfy all human needs. Hoarding uses an enormous amount of resources. A car in constant use takes care of 20 people instead of 1. The problem of theft is entirely eliminated – if no one owns anything (or everyone owns everything) theft is pointless. 98% of all crime would disappear overnight. We can provide an excellent quality of life for all humans many times over, while eliminating war, crime, poverty, destitution and displacement. There is no need for any of that.

Many people have the feeling that the idea of a resource based economy is actually quite good, but it could never work. Obviously, an unlimited list of tedious procedural ‘problems’ can be drafted – what about people wanting land to homestead, for example? Rural versus urban vehicle use? Vandalism? But such a list are merely wrinkles to iron out through human ingenuity. The most common significant objections are some variation of the following: 1) This is communism. 2) It’s utopian. 3) It’s dystopian – a machine governed, totalitarian prone society/ technocracy. 4) Owning private property is fundamental to human life and society. 5) People will not be motivated to do unpleasant and dangerous jobs. 6) It’s overwhelming. 7) The powers will never let it happen.

Some of these are valid concerns; some are merely philosophical dislikes. It’s difficult to give complete answers because we are talking about a total restructure of society on a global level. Let’s take the objections one at a time.

1) This is Communism! An RBE is not communism. First, capitalism and communism are not mutually exclusive systems – they work in tandem within a society. If we call any socialized project a shade of communism (as some do), then the military is a perfect example. It performs, in theory, a societal benefit – it defends the country. All the people pay for it through taxes. The military is the ultimate socialist institution. Roads, schools, hospitals, courts, police – many of the things we take for granted are socialized – paid for by the public and there (ostensibly) for the public good. Most people drive, want clean air, land and water in their town, need to feel safe, and believe in education as a right. These are socialist values, and they can exist right alongside of capitalist values of earning a living, owning property, and engaging in the marketplace economy. In fact, every family is communist – do children pay rent? Do they work? No – in a family, the unspoken rule is ‘from each according to his abilities, to each according to his needs.’ One parent makes the money, the other takes care of the house, and the kids eat and live for free and go to school. Capitalism simply makes no sense for the internal operating structure of a family.

More to the point of the resource based economy, however – it is not Communism because the labor supply side is totally missing. The labor is supplied primarily by machines. Certainly, some workers will be needed for planning and maintenance, but many, many people simply enjoy these activities. They will volunteer. People like work and they love to feel meaning in their work. Moreover, it’s not ‘to each according to his needs.’ Each person has full access to anything they currently have – and a whole lot more. Because goods are well-made and communally owned, they are always available and far more durable.

2) It’s utopian. This criticism stems from the fact that people do not have to work and have all needs provided. While true, there is far more needed for a ‘utopian’ society. People will still have to deal with innate meaning, relationships, personal development and other social concerns. An RBE could never hope to solve such issues, but it can create far better opportunities for us to work on them, rather than being imprisoned in an increasingly senseless monetary system.

3) It’s dystopian. This comes from the notion that it will be a centrally planned system, subject to political tyranny by controllers. While the need for central administration is obvious in terms of resource logistics, distribution and manufacturing, it need not translate into a political control. In any system, preventing dictators from seizing political control is incumbent on the population itself. People must remain aware. No economic system is immune. In fact, the monetary system of control allows for far easier dictatorial control because it creates an impossibly disproportionate distribution of wealth. A few people who control trillions of dollars and even the creation of currency exert so much control that the citizenry is rendered powerless. That is the current situation and it is a definition of oligarchical dictatorship. The people have no true voice, only the illusion.

4) Owning property is fundamental to humans. This is completely false. Ownership is largely an illusion – all you have is temporary possession and use. Even pre-historical societies were completely egalitarian – all possessions were commonly owned. Societies exist now without individual property rights – all resources are communally owned. They function on a tribal scale, so the challenge is to scale up. It is a formidable challenge, no doubt, but it is doable, if we all see the virtue and strive toward it. People do not need property or possessions, they need and desire the benefits of these things. If you always have access to a home and privacy within that, or to a sailboat, why would you want the individual expense of owning it? Even property taxes would cease – no one would complain about that. A limited ‘ownership’ would still exist – mainly the right to use something as long as needed. What other point is there to ownership?

5) Motivation. The basic problem is conceiving of an RBE through the lens of current reward system programming. As Dan Pink’s book Drive showed, monetary incentives create a detrimental effect in terms of motivation and creativity. True motivators are autonomy, mastery and purpose. In an RBE, a sense of civic duty toward humanity would be easy to cultivate. Many people have such a desire already – it’s why we have philanthropy and volunteerism. Most difficult, dangerous and unpleasant jobs would be machine-doable anyway. All we would need is the technological push, which would come readily through complete open-source knowledge.

6) It’s overwhelming. Very true – the project is inconceivably massive. Most people drop it initially but if they come across the ideas again, it seems more appealing. The concept is so alien to our current social programming that it feels a bit repugnant, strange, incomprehensible, or absurd. All I can do is encourage you to take an open mind and just ponder it – dream a bit about the profound human potential. Any large task can seem overwhelming, but with many people, it becomes possible. And with enough people, it becomes inevitable. Even a total restructure of society can be done if we all wish it.

Now is the time for a change. As Barack Obama told the banking CEO’s, “My administration is the only thing between you and the pitchforks.” People are angry. The system is teetering. Power is shifting. The world is almost ready for a major change. If a determined global movement pushes, a simple move of capitalist power from West to East can be diverted to a more fundamental paradigm shift.

7) The powers will prevent it. This assumes they can prevent it. They can certainly hinder it, but powerful ideas, when they take hold, live longer than people. The current ‘leaders’ will die and be replaced. Eventually a more conciliatory group will emerge, subject to a nascent ideology. From that perspective, we make a better world not for ourselves, but our children. We will never see it, but it is worth all the more for that. On a more immediate frame – leaders cannot resist a truly determined, awakened populace. Our leaders have ruled by some assumption that they (or a person’s chosen subset) have better insights into managing society. That illusion is failing fast. Politicians are almost universally despised and seen as corrupt. No one trusts them to make decisions that honestly benefit society. They are no better than the average person and often they are far, far worse. All it will take is the people to unify under a greater vision – and that’s the real challenge of a resource based economy. People have enormous resistance based on previous societal conditioning. However, in a very immediate sense (the next few years), a paradigm shift is happening. Political power is being drained from the corrupted West and headed to an East anxious to prove its integrity – to gain the world’s trust so that it can take the mantle of leadership by popular approval. In such a power shift, ideological doctrines have a way of inserting themselves and gaining serious traction. At a deeper level, capitalism may be unsustainable for the reasons listed above, especially on a planet with a ballooning population. From that perspective, all that is needed is to wait for the real collapse, educating as many people as we can in the meantime.

It may sound too good to be possible, but that is just a thought. It may be the only rational solution to our current predicament – for all its power, the monetary system has become open failure, detrimental to humanity. We may be forced to develop an RBE just to maintain a decent standard of life. We have based our society on ‘enlightened self-interest,’ only to find that is a chimera – a totally self-interested society devolves into narcissism and vulgar consumption. Our choice may boil down to global abundance or global destruction. In the end, all that limits us is our ability to transcend our social programming. If we can see a better world, one where basic goodness is known to live in every being, one where global abundance exists by the simple generosity of sharing – like we teach children to do, one where ‘conservative’ means to not waste resources and destroy the place, one where we do not own the Earth because you cannot own your mother, one where hubris becomes humility and greed becomes gratitude – if we can visualize such a world, we can make it real.


Socialist Standard Comment:
Much of this of course, we can agree with. Except we would point out that the type of society described here has always accurately been referred to as socialism or communism, as they mean the same thing – the social or common ownership of the means of living. That so-called ‘Communist’ countries (really systems of state-run capitalism) like the former USSR, China, East Germany, etc abused the term is not in our view a reason to disassociate ourselves from it. After all, these states called themselves ‘democratic’ too!

Regarding, the Zeitgeist Movement, we agree there are a number of positive features of this loosely structured organization, but there are sadly many problems with it too. Not the least of which is its lack of democratic internal attitudes and structures, as well as the fact a great many TZM members – arguably the majority – have views  more focused on attempts to reform capitalism (and its banking system, etc) than on the only solution to the social and economic problems of our time – real socialism.

Editors

Spoiling Egyptians: British Capitalism and Egyptian Nationalism. (1929)

Book Review from the March 1929 issue of the Socialist Standard

British Imperialism in Egypt. By Elinor Burns.
 No. 5, Colonial Series. Published by the Labour Research Department. 72 pp. Price 6d.

This book is a very succinct and useful account of British control in Egypt from about 1850 to the present day.

From 1517 to 1914, Egypt was nominally under Turkish rule, and was required to pay an annual tribute, fixed in 1873 at £675,000, but during the 19th century a new overlord entered Egypt—the foreign financier—who demanded tribute on an immensely larger and ever-increasing scale.

Foreign capital was given its first opportunity by the construction of the Suez Canal during the reign of the Khedive Ismail, who was the first Egyptian ruler to foresee prospects of wealth and power by developing the country’s resources on West European lines. The first twelve years of Ismail’s reign call to mind the famous tribute to the “ bourgeoisie ” in the Communist Manifesto for, during this period, the following, among many other works, were completed: The construction of the Suez Canal and 8,400 miles of irrigation canals; over 900 miles of railways and 5,000 miles of telegraph ; the building of 430 bridges and numerous houses in Cairo; the Alexandria harbour and the Suez Docks; the construction of roads, including a special road to the Pyramids; and the completion of 15 lighthouses and 64 sugar mills. Irrigation increased the area of arable land from four million to nearly five-and-a-half million acres. Most of these works were carried out by British capitalists who lent the money at immense interest and obtained enormous profits on their contracts. In a short space of time these capitalists were owed by the Egyptian State more than a half of the money lent, and the bulk of revenue was required for debt redemption. More and more loans were contracted to pay off other loans, and the finances of the country became in such a hopeless condition that excuse was afforded for the British Government to “step in” in the interest of its “nationals”—the bondholders and financiers. The Khedive in 1875 was compelled by the creditors to sell his shares in the Suez Canal to the British Government for £4,000,000, and a financial mission was sent to Egypt “to assist in remedying the confusion.’’ Following this decision, Goschen, the representative of the bondholders, and the financial mission, forced upon the Khedive a scheme which included the appointment of two Controllers-General (one British, one French), and the consolidation of the debt at 7 per cent. interest (except on the loans of Goschen’s firm on which the old rates of 10 and 12 per cent. were to be paid!) Ruthless pressure was put upon the peasants to keep the State finances solvent. Crops were forestalled, and customs dues and railway rates were increased. Despite the occurrence of a cattle plague and a failure of crops, which led to a holocaust of deaths from starvation and disease, the British Government would not allow even postponement of interest payments. Repercussions followed elsewhere; salaries of soldiers and Civil Servants were unpaid and their numbers seriously reduced. The Egyptian Finance Minister who protested against foreign control, was “put out of the way.” At last, in 1879, a revolt in the Army and widespread discontent, compelled the Khedive to dismiss the foreign ministers and to institute, through an elected assembly of Sheiks and others, a native government. This gave birth to a National Party, whose slogan was “Egypt for the Egyptians.”

However, High Finance was not prepared to take this blow “lying down.” The British Government induced the Sultan of Turkey to depose the Khedive Ismail and to appoint Tewfik, a tool of the foreign interests, as his successor. A few weeks later the foreign Controllers General were re-installed in office, and agitation for Egyptian Independence received a further stimulus.

The Army, now the only native institution within the State machine, was the leading force in this movement, and an officer named Arabi, a former “ranker” of peasant origin, became its storm centre. The movement received support also from |he landlords, who objected to foreign exploitation of Egypt’s new resources, and the peasants, who were being bled white by taxes for debt service. A programme was drawn up, which included the dismissal of all ministers, the granting of a constitution, and an increase in the strength of the Army. To stifle the agitation, the Khedive ordered Arabi and his regiment to the provinces, but Arabi refused to go, and instead marched his troops to the Palace and compelled the Khedive to appoint a new Anti-Imperialist Ministry.

Shortly after the events recorded above a massacre of Christians by a hired band of Bedouins took place at Alexandria. Whether the massacre was instigated by the British or the Turks is obscure, but the effect was harmful from a British point of view, for the European residents demanded the recognition of Arabi and the setting up of a joint conference of the six Powers having interests in Egypt—France, England, Italy, Germany, Austria and Russia.

The conference met at Constantinople in June, 1882, and a protocol was signed on behalf of the respective governments renouncing exclusive territorial and commercial privileges, and agreeing that none of the Powers should take isolated action in Egypt except in case of special emergency. As exclusive British control was impossible under this arrangement, it was imperative that a “special emergency," should arise and a pretext was soon found to justify a British occupation of Egypt. The repairing of some forts at Alexandria by the Egyptians was seized upon by the British Government as an excuse to bombard Alexandria by warships on July 11th, 1882, troops were landed to “restore order" on the Nile, and Arabi and his followers, who showed resistance, were finally routed at Tel-el-Kebir. Thus the British occupation became an accomplished fact, and the other Powers were not at the time in a position to assert their own “rights" under the protocol. The dual control was abolished, and the Egyptian constitution and Assembly were replaced by councils whose powers were merely advisory. Egypt for the next 25 years was treated to the “humane" administration of the British Consul-General, Sir Evelyn Baring, a London financier, who was afterwards made Lord Cromer for “services rendered."

The Baring regime introduced a new era of economic development. It was seen that the continued impoverishment of the peasants would lead to loss of revenue through land going out of cultivation. Accordingly the production of cotton on a greater scale for export was encouraged. This, in turn, created a demand for products of British heavy industry, for vast irrigation works and light railways, and, strangely enough, for foodstuffs, which were not now a paying proposition for the Egyptian peasant. In 1907 the exports of cotton were worth £30,000,000 as against £8,000,000 in 1892; and in 1908 foodstuffs to the value of £5,000,000 were imported, though a few years previously Egypt was a self-supporting country. It would be impossible in this article to trace the rapid industrialisation of Egypt to the present day, but some idea may be obtained from the estimate of the amount of British capital invested in Egypt, which is stated in this book to be about £200,000,000, on which the sum taken by British capitalists in interest and profits is given as £20,000,000.

Under the Baring administration the “key” positions in the Civil Service, Local Administration and the Army were held by Britishers, but as time went on it was found necessary to placate the class of rising Egyptian capitalists and large landowners which capitalist development had brought into being, and concessions had to be made continually to these sections. Saad Zaghlul Pasha, for example, was made Minister of Public Instruction in 1906. Nevertheless, control of the Egyptian State machine has never been relaxed by the British capitalist interests, and a persistent struggle between the Egyptian native capitalists and the British capitalists has been going on up to the present day. The political history of Egypt since 1906 has been a record of demonstrations, strikes, assassinations, riots and armed revolts on the one hand and of bloody repression, judicial atrocities, bombings, imprisonments, martial law, deportations; interspersed with attempts at compromise, on the other. Prior to the European War, Mustapha Kernel had been largely instrumental in organising the students, and by street demonstrations and the publication of newspapers, which had large circulations, the question of Egyptian "independence” was kept to the fore. By 1914 the movement had become so menacing that in November of that year Egypt was put under martial law. A rigorous press censorship was instituted; in December a British Protectorate was declared, and the pro-Turkish Khedive Abbas was deposed in favour of Hussein, who was given the title of Sultan. Although the British Government declared publicly that Egyptians would not be required for war service, yet within a year tens of thousands of peasants and workers were “rounded up" and compelled to join the Labour Corps and the Camel Transport Corps. The total number computed to have been enlisted in this manner in the various forces was about 1,000,000. Such measures as these induced violent hatred of British rule and popular support of the Nationalist movement. Further, the hypocritical talk in Allied journals about “self-determination” and the rights of “small nationalities” was seized upon by the Nationalists as imflammable propaganda and in order to harass the Government. Soon after the Armistice an Egyptian delegation (Wafd) was formed under Zaghlul Pasha to proceed to London in order to discuss the question of Egyptian “independence” with the British Government, but passports were refused and Zaghlul and three members of the Wafd were subsequently arrested and deported to Malta on March 8th, 1919. Open revolt followed this act, but was crushed with barbarous severity by brand, bomb and bullet. Attempts to break up the Wafd organisation failed, and as the country continued to be in a state of unrest and turmoil, the British Government at last conceded a constitution to the Egyptians. The first elections (January, 1924) gave an overwhelming majority to the Zaghlulists.

In recent years the dominating question at issue between the Egyptian native capitalists and the British Government is the control of the Sudan. This huge area of over a million square miles lying south of Egypt, bordering Uganda on the south and Abyssinia on the east, was annexed by the British Government in 1898. Since that date a similar story of capitalistic penetration to that of Egypt has to be recorded. Now Egypt is entirely dependent upon the Nile, and the Sudan controls the Upper Nile. A hostile power in the Sudan, therefore, could easily render Egypt impotent by changing the course of the Nile. Further, the sheep and cattle of the Sudan supply Egypt with much of its food, and the development of cotton production must inevitably react on Egyptian conditions. In addition, future Egyptian industrial progress is dependent upon electricity supplied from Sudanese water power, for Egypt has no coal, and poor oil resources. It will be seen, therefore, that, economically, Egypt and the Sudan are inseparable, and Egyptian capitalist interests are endangered by British control of the Sudan. But the Sudan is of equal importance to British capitalist interests apart from internal economic exploitation, for its coastline along the Red Sea forms an important link in Empire communication.

When Zaghlul took office in 1924 he thought that the British Labour Government, then in office, would help the movement for Egyptian Independence, but he was soon to learn that lip opposition to imperialist principles did not imply action along those lines. MacDonald, in fact, told the British High Commissioner in Egypt in a despatch that they (the British Government) “regard their responsibilities as a trust for the Sudan people; there can be no question of their abandoning the Sudan until their work is done”; and in the interview with Zaghlul in London he was very sympathetic with the “sufferings ” of the holders of the Turkish Government’s bonds, payment on which had been stopped since the War by the Turkish Government. The first British Labour Government also showed its “Labour” principles by condoning domestic slavery in the Sudan. So much for Labour professions!

But if the British Labour Government proved an “eye-opener” to the Egyptian Nationalists, the actions of the latter when in power proved their utter worthlessness so far as the peasants and workers in Egypt were concerned. The whole of the legislation put through by the Zaghlul ministry was favourable to the Egyptian capitalists, and one of its first actions was the replacement of the Militant Trade Unions, which had grown up after the 1919 rising, by organisations controlled by the Wafd, whose members held all the important positions. Strikes were frequent, but these were suppressed by the usual capitalist methods of imprisonment and deportation. It is deserving of notice that at the present time more than one-half of the persons engaged in agriculture are wage workers, and tobacco, silk, railway, constructional and transport workers are organised in Trade Unions.

Recent events in Egypt will doubtless be familiar to our readers. The struggle between the native and British capitalist interests becomes ever more acute. “Crisis” has succeeded “crisis,” and on July 19th, 1928, the Egyptian Parliament was suspended for three years and a complete dictatorship has been established, which has prohibited meetings of the Wafd, and exercises a rigid censorship over their press.

Apart from some little glorification of  Communist “leaders," the book is free from the expression of personal opinions. There is much statistical data, and the diction is clear and devoid of literary “frillings.” It concludes with the following passage:—

  It is evident that no solution of the Egyptian problem has been reached. For imperialism there can be no solution, because the satisfaction of its own needs inevitably fosters the growth of native capitalism, brings into being the working class, robs the Egyptian peasantry of the very means of existence, and thus strengthens the forces which are drawn into the anti-imperialist struggle.

If, after their previous experiences, the Egyptian workers and peasants are again drawn into this struggle between two sections of their exploiters, they will have themselves to blame, and it should be clear that the workers here have nothing to gain by lending their support to capitalist national movements in any land.

W. J.