Cooking the Books: Lies, damned lies, and statistics (2005)

The Cooking The Books column from the March 2005 issue of the Socialist Standard

Marx argued that by his day economics had declined from a genuine attempt to understand the workings of capitalism as, for instance, with Adam Smith and David Ricardo, into a thinly disguised apology for capitalism. Just look at any modern textbook – with their claim that scarcity is eternal because human wants are infinite and their introduction of “entrepreneurship” as being as essential to production as natural resources, labour and machinery – and you can see how right he was.

In one field of economics, however, there has been some progress since Marx’s day: in measuring national income and output. Since the 1940s governments have published figures for these. Everybody has heard of “GDP” (Gross Domestic Product) and “growth” (which is the increase of GDP from one year to the next) and Marx would surely have loved to have had such figures. But there are shortcomings here too.

In particular how to treat government spending has been a problem, as was again highlighted by a report published at the end of January by Sir Tony Atkinson (who as plain A. B. Atkinson used to usefully concern himself with statistics on the unequal distribution of wealth ownership) for the Office of National Statistics on “The Measurement of Government Output and Productivity for the National Accounts”.

Government Output? What output — surely the government as such produces nothing, just consumes the output of the sector of the economy where labour-power is applied to materials that originally came from nature to produce commodities for sale? Yes, that’s just the point. But the figure for GDP (which is supposed to be a measure of total output) is obtained by counting spending by individuals on consumer goods and services, by firms on new equipment, and by the government, and adding them together. Including government spending in this involves double-counting. This is recognised to some extent in the official figures in that the payment of pensions, the dole, income support and the like as well as the payment of interest on the National Debt are excluded from government spending as being “transfer payments”. But, logically, so too are the wages and salaries of government employees, yet these are not excluded. Similarly, other government spending (as on purchasing computers and bombers) is already included via the amount for indirect taxes that enters into the prices of what individuals and firms buy.

The artifice that the government statisticians found to get out of this has been to treat government spending as productive, as resulting in a “product” (education, health care, administration, law and order, “defence”, though not “social security”). As a result, national output is inflated by as much as 20 percent. The former state capitalist countries of Russia and Eastern Europe did not count such government spending as productive, i.e. did not double count it as part of output, and when they adopted the same national  accounting system as in the rest of the capitalist world their GDPs jumped by 18-24 percent depending on the country.

Why did statisticians in the West go down the road of pretending that all government activity is productive? Probably because national accounting developed at the same time as Keynesian economic policies were first applied (and could even be said to have been developed to underpin them), and Keynes attributed a key role to government spending. Keynesian economics is now rejected, but not the counting of government spending as an addition to output. Instead of getting itself out of this hole by abandoning this statistical practice,  the government decided to keep on digging and appointed Sir Tony to come up with ways of measuring government “output” in such a way as to be able to take into account increasing “productivity” (the politicians’ “value for money”).

If the Atkinson report’s recommendations are accepted this will inflate GDP even more by artificially (and arbitrarily) increasing yet further government “output”. Talk about cooking the books.

Meat, Money and Malnutrition (2005)

From the March 2005 issue of the Socialist Standard 

Vegetarians International Voice for Animals (VIVA) make the claim that meat causes famine. Is this really the case, or does the real problem lie in the profit system? Rob Stafford investigates.

The Bristol-based charity Viva! in a recent pamphlet Join Viva! Join the Fight for Life claim that “millions of children in the developing world die from hunger alongside fields of high quality food, destined for the West’s farmed animals. The startling truth is that meat causes starvation.” Despite claiming that they monitor “the latest research from all over the world in the environment and development issues and argues for change with hard science” Viva provide absolutely no supporting evidence for their contention. Furthermore, a request for such material has yet to be answered.

Viva’s position is accepted as a common truth by other campaigning groups and individuals including Animal Aid, George Monbiot, Peter Singer, and repeated in some sections of the press, such as the Guardian and New Internationalist. While there is no doubt that growing crops as a source of food for the production of meat rather than feeding humans directly is less efficient in terms of land and energy, is there a direct relationship between meat and starvation? Consider a field of corn standing next to a group of starving children. The corn is destined for export as animal feed. Hence meat causes starvation. But if the corn was not grown for use as animal feed would the children be free to eat it? Indeed, would it even be grown in the first place? Simply because two effects (corn, starving children) are found side by side does not imply that one caused the other. Perhaps, however, the supporters of this position consider we have reached the limit of agriculture on this planet and therefore because some people eat meat fed on grain others, as a direct result of this practice, starve.

Over twenty years ago WHO stated that the technology existed to feed a global population twelve times its (then) size. The American Association for the Advancement of Science reported in 1997 that 78 percent of all malnourished children under the age of five in the developing world live in countries with a food surplus. Just over five years ago the United Nations reported that Africa could easily feed a population five times its current size if western technology were introduced. (And what of future technology?)

There is, in fact, a wealth of evidence to support the view that “famine exists largely because the hungry cannot afford to buy food, not because there is insufficient food produced” (New Scientist, 3 September 1994). Agricultural economist M. S. Swaminathan stated earlier this year that the “problem of undernutrition . . . is a lack of purchasing power” (Newsweek, 31 January). Even an establishment figure such as Sir Jonathan Porritt in his introduction to Compassion in World Farming’s report entitled The Global Benefits of Eating Less Meat (2004) is not blind to such facts. He quotes approvingly from Colin Tudge’s recent book, So Shall We Reap, and states that the author “develops an eloquent argument demonstrating that contemporary food and farming policy has very little to do with meeting human needs, guaranteeing food security, providing high and consistent levels of nutrition and food safety…Much more simply, it’s all about profit: squeezing the maximum financial yield out of every link in the food chain to benefit a tiny number of an already inconceivably rich minority of citizens” .

And those inconceivably rich do not just live in the West as Porritt states. For example, at the peak of the 1984 famine in Ethiopia such people enjoyed the benefits of exporting crops to the UK and taking delivery of Scottish malt whisky. This was just business as usual. Thus it should come as no surprise to learn that although the value of food exported by Ethiopia and other countries in the Horn of Africa during 1983 exceeded imports by $1 billion, hunger in this region increased (World Hunger: Twelve Myths. Frances Moore Lappe et al, Earthscan, 1998).

 

For some – but certainly not the 840 million malnourished (or the more than a billion existing in a state described by the UN as absolute poverty) – the ‘problem’ is an inconceivable embarrass de richesses. Try and imagine yourself as one of the 225 individuals owning wealth equivalent to that of 47 percent of the world’s population. Consider that the wealth of just three of these individuals exceeds the Gross National Product of the world’s 47 poorest nations. And that for four percent of the combined income of the three wealthiest people we could provide universal access to basic education, health care, adequate food as well as safe water and sanitation for all.

 

OK, so is it perhaps not meat on its own that causes starvation, but that it is one of a number of possible factors including problems relating to distribution, drought and natural disaster as well as war and poverty caused by unfair trade, third world debt, insufficient aid, etc? Well, the US recently was able within a few months to send 130,000 people (with supplies) half way across the world. Alas, their mission was one of death and destruction rather than to rescue, provide food, shelter and deliver other essentials to the suffering multitudes. War and poverty even after hundreds of years of social activism are still, patently, with us. But why? Oscar Wilde, writing over a hundred years ago about charity, provides some clues. “[T]heir remedies do not cure the disease; they merely prolong it. Indeed, their remedies are part of the disease. They try to solve the problem of poverty for instance, by keeping the poor alive; or, in the case of a very advanced school, by amusing the poor. But this is not a solution: it is an aggravation of the difficulty. The proper aim is to try and reconstruct society on such a basis that poverty will be impossible” (The Soul of Man under Socialism).

It is to be hoped that historians living today will in the not distant future look at present day society and recognize that by failing to see starvation as one of many symptomatic problems that no amount of ‘band aids’ could cure, Viva and other well intentioned but misguided groups delayed the use of effective treatment. The activities of such groups will however probably be seen as benign in comparison with the likes of the Animal Liberation Front and PETA – who have more in common with companies such as Monsanto than either would like to admit – and other Malthusian-inspired misanthropes. All will be on record as failing to see the economic law which transcends government and companies however large or powerful: no profit, no production: can’t pay can’t have.

These future historians will indeed be deeply saddened that we took so long to see the link between this law and a myriad of contradictions (clues) in plain view today: people starving while food rots; brick mountains and empty homes existing alongside unemployed builders and the homeless; millions dying of curable diseases. On this last point, pharmaceutical chemist Dr Victoria Hale has made the telling observation that  “parasites and poverty are inextricably linked”. Referring to conditions such as leishmaniasis and Chagas disease, found almost exclusively in areas of the world where grinding poverty for the vast majority is the normal way of life (and death), she went on to say: “People with these diseases are not in sight as they cannot pay” (New Scientist, 25 September 2004).

Revealingly, Tudge is on record as proposing that if food production were designed to feed people rather than make a profit, then there would be no problem. Eureka! Imagine that: a world in which everything is produced for need, not profit! However, in asking “why we, humanity, allow the world to be run by people who have long since lost the plot?” (New Scientist, 13 March 2004) Tudge implies a change in leadership might suffice. But, two hundred years earlier, the Marquis De Sade saw through leadership and in doing so glimpsed the answer to securing “a saner sustainable future”: “You can only govern men by deceiving them; one must be hypocritical to deceive them; the enlightened man will never let himself be led, therefore it is necessary to deprive him of enlightenment to lead him as we want”.

Rob Stafford

Socialist Party 101st Conference 2005 (2005)

Party News from the March 2005 issue of the Socialist Standard 

The Socialist Party is a democratic party run by its members without leaders of any sort, and the way we make decisions is open for all to see at our twice yearly general meetings. This Easter weekend we will be discussing a variety of issues including the following:

• Far from being all of the same mind on every topic, members are very diverse in their opinions and interests, so would it be a good idea to set up a special discussion journal so we can debate controversial ideas among ourselves?
• The Declaration of Principles was written in 1904, over a hundred years ago. Some members think the language is antiquated and could do with modernising. For instance, while we oppose reformist movements the use of the word 'hostile' might give the wrong impression. Alternatively, others feel that it is a historical document that should be left as written.
• Should we oblige ourselves to pay dues, or could we get rid of a whole lot of unnecessary bureaucracy if we dumped the dues rule and adopted a system of voluntary contribution?
• Other items: why we keep overspending, colour-coded politics, a press letter network, the word 'ordinary' as a class descriptor, reports from departments, challenging the government ban on political advertising, putting more speculation into the Standard, wrecking amendments and ideas for more adventurous publicity.

101st Annual Conference of The Socialist Party at Head Office, 52 Clapham High St. London SW4 on Friday 25th March 2005, 10.30 to 6.30 pm and Saturday 26th March 2005, 11 to 6 pm. All visitors welcome, admission and refreshments free. Social on Friday evening at Bread & Roses, Clapham (TBC).

Changing the System (2005)

From the March 2005 issue of the Socialist Standard 

If you have no freedom to change your life you may as well be in prison. Workers in capitalism get more porridge than empowerment.

In the comedy show Porridge the drama takes place in Slade prison. There are prisoners and warders; the warders have varying personalities, from the ‘hard but fair’ MacKay, to the liberal Barraclough, and a selection of lesser unsavoury screws. The prisoners also have their various characteristics, all of them in their varying ways trying to make the best of their lot.

Here, then, we have the prison system. As a prisoner you would, by and large, prefer to have Barraclough to MacKay, and MacKay to the more sadistic screws, especially when trying to obtain some kind of favour, or minor change to prison routine such as a film showing every week. Barraclough might do it, MacKay might not. But on the subject of imprisonment itself, all of the screws are united in upholding the prison system, the idea of prison, and the wider social idea of just imprisonment. There is no negotiation that can take place for the prisoners to release themselves, convert the prison to an open one, or otherwise interfere with the prison’s core function of imprisonment.

Imprisonment is a social fact, harder than the walls and bars that are erected on its foundation (though of course mutually reinforced by them). Without a system of imprisonment, there can be no prisons. In the same way capitalism’s own prison has its own rules, its areas of compromise, and its areas that are non-negotiable. The leaders of capitalism can change how capitalism works, within limits, but cannot change the fact of capitalism.

Capitalism as a social fact is written into every one of our lives, every moment of the day, and we reinforce it every time we work for a wage and pay for our own goods with those wages. Even if a leader were to want to change matters they would be trapped by our own resistance to change. If there is to be change it must come from us.

It is sometimes thought that socialists have a conspiracy theory regarding the state and leaders – that they are all plotting to do us in, regardless of political colour. In fact, all we have to say is this: that they are bound to observe the system which they find themselves in. Some, of course, are corrupt bastards. Others can cut various deals with each other, and specifically can join in the fight between capitalists over whether finance or manufacturing capital is to do better from the current administration, or decide whether to maximise profit in the short, medium or longer term, but all must maintain the production of profits from us, the subject class, and defend those profits against all comers, whether it be us (by using the police) or capitalists of other states (with the armed forces).

So, appeals to leaders are not the answer, on a matter so integral to capitalism as the defence of profits. You may as well ask for more liberal laws on shoplifting. There is, however, the possibility yet to be considered of a popular ‘political’ movement without an attack on the economics of capitalism. Again, this falls as flat on its face. Let’s return to our prison example. The prisoners decide to bypass the screws and hold a meeting in the prison yard about how bad prisons are. If the meeting is about entertainment, for example, the screws may be intimidated into providing something, even unasked for, such as a prison library; but discussion of liberty will bring out the truncheons. Prison riots don’t provoke early release: they provoke savage repression, beatings and subsequent lockdown. Imprisonment is non-negotiable, because it is fundamental to the prison itself, and you would have to attack the social structure of prisons and imprisonment to make any change. In the same way, any movement to change a fundamental feature of capitalism, as with disarmament, must address the basis of the system itself rather than engaging in wishful thinking.

Thinking about it, the very word ‘Defence’ should be sufficient clue as to how much input we are meant to have with the issue. We are not even allowed to call it what it is. Not ‘attack’, not ‘bands of hired killers’, not ‘death factory’, not ‘organised murder’, but defence, something which we are to be forced to accept as an integral part of our lives. In the same way, we are expected to be glad of a job rather than resentful of our exploitation, and happy to be protected by the police rather than disturbed by the presence of blue-clad armed thugs defending their masters’ ill-gotten profits from us at the bank and at the supermarket.

So, while there is leeway in capitalism for change on minor issues, there is little or none for its basics of profitmaking and defence of those profits – the extraction of wealth from us and the defence of this wealth against all comers. Bodies of armed thugs and killers are basic to private property itself, even in previous epochs, not just its latest manifestation in capitalism. Any appeal to the goodwill of our masters, or the leniency of their foremen, is futile.

In short, the making of profits out of us, the subject class, and defending these against us, their rightful owners, and fighting over these profits between themselves – all these things are non-negotiable, social facts as solid as iron bars and prison walls, and cannot be changed by appeal to leaders or by political action that does not address the fundamental problem from which warfare springs – class society, where social wealth is a private thing, spoils to be fought over rather than shared. Whilst wealth is private property, to be fought over, it will be fought over, and preparations for these conflicts will continue apace.

What, then, as they say, is to be done? As mentioned, the basis of the system in which we live and are currently trapped is the making of profits from us, the working class. Our time at work not spent reproducing our own existence – building modest houses, growing food, producing light and power to keep our machines and computers humming into the night – is a social surplus, appropriated by the capitalists through their waving deeds of ownership, stocks and shares, pieces of paper and the like. Everything that we make, over and above that required to keep us coming back through the factory gates or the office door on a Monday morning for another week of drudgery, is appropriated and turned to the following purposes: reproducing the factories and offices in which we work; reproducing the class structure of police, prisons, cash tills and banks, to keep us in our places; defending their ill-gotten gains against other capitalists at home and abroad, with government and warfare; and only then can what remains be spent on gin-palaces, cocaine and, soon, day trips to outer space.

The way to stop these expenditures should be obvious: take back the surplus! We produced it, after all, if anyone is feeling legalistic. Put the wealth in our hands! Whilst there is a structural reason for capitalists to prepare for and go to war against each other, we have no reason to fight each other – maybe individually over some resentment, but to put a million men a side into trenches drenched in poison gas or drop fire on children from the sky takes capitalism. Every fraction of social wealth that is returned to our hands is wealth not put to slaughter or to extravagant capitalist consumption.

We in the Socialist Party stand for such a position. We address the problem of disarmament, along with other unpleasant effects of capitalism, by looking to their root, in a class-divided society, which divisions create the institutional misery of war and arms production, as well as overwork, alienation and suicide, and the starvation of millions around the globe who in any sane society would be given the resources to realise their potential, not as an act of charity but from a simple sense of solidarity and a self-interest in every member of society being able to fully contribute.

All you will get with an appeal to the rich and supposedly powerful, to end arms production and spend money on the poor, is empty promises, disdain, and probably a sense of relief that once more the slaves are not yet powerful enough to rebel against their masters and must still beg for crumbs for themselves and their fellows.

If you think that the appeal to these leaders is rational, the answer will come back, perhaps sotto voce: “This is rational!” War is the logic of the capitalist state, just as policing is the logic of the class struggle at home, and the starvation and physical deprivation of more than a billion is likewise part of the logic of capitalism where if you do not produce a profit you cannot enter the economy and thus must starve.

No, we must work for ourselves, and we must address the problem at its root. The problem lies with capitalism, not with one of its features, and can only be resolved by grasping this root and tearing it from the ground.

SJW