Cooking the Books: Accumulate, accumulate! (2021)

The Cooking the Books column from the September 2021 issue of the Socialist Standard

In an article in the Times (14 July) David Smith, Economics Editor of the Sunday Times, mentions that he is revising a book of his which has a chapter on Marx:

‘Marx, you may recall, thought he had pinned down what drives capitalists. As he put it: “Accumulate, accumulate! That is Moses and the prophets . . . Accumulate for accumulation’s sake, production for production’s sake.” By accumulation, Marx meant investment and that the tendency of capitalists to over-invest condemned them to a future of declining profits and, ultimately, the fundamental crisis of capitalism.’

This is accurate enough until the word ‘investment’. After that it’s wrong.

Marx certainly thought that investment to make profits (most re-invested in expanding productive capacity, hence ‘the accumulation of capital’) was the driving force of capitalism. In a boom, capitalists in some key industry tend to ‘over-invest’, resulting in overproduction in relation to its market; this has a knock-on effect on other industries, causing a general slump in production. But this is not the end of the road for capitalism. It is a phase of the boom/slump cycle that is part of the way the capitalist system works. Slump conditions, by eventually restoring profitability (as by the clearance of stock, depreciation of capital, low interest rates, lower real wages), pave the way for a recovery leading to a boom, and the cycle repeats itself.

What is ironic about Smith’s criticism is that Marx would have agreed with the article’s heading ‘Without investment the recovery we’re seeing is built on sand’ precisely because he saw investment (for profit) as the driving force of capitalism.

In writing ‘the tendency of capitalists to over-invest condemned them to a future of declining profits’, Smith is presumably referring to what Marx called, in chapter 13 of Volume 3 of Capital, ‘the law of the tendency of the rate of profit to fall’ (often miscalled, by opponents and some supporters of Marx, ‘the law of the falling rate of profit’).

Marx’s point here was that as capital accumulation proceeded there was a tendency for a greater and greater proportion of new capital to be invested in plant and machinery relative to labour power, whose application in production was the only source of surplus value and so of profits.

Marx called the ratio of surplus value to labour power purchased (the amount of profit produced per worker) ‘the rate of exploitation’. The rate of profit was the ratio of profit to total capital. If the rate of exploitation remains constant, it follows mathematically that, when production becomes more and more ‘capital intensive’, then the rate of profit will fall – because the amount of profit comes to be related to a larger and larger amount of capital.

In practice, however, the rate of exploitation does not remain constant but increases; in which case the rate of profit does not necessarily fall. It depends on how the rate of exploitation moves. It was because there was no way of predicting this that Marx spoke of the fall in the rate of profit being a tendency rather than an iron law.

Smith is confusing the rate of profit with the amount of profit. Marx pointed out that it was possible for the amount of profits to increase even if the rate fell. In fact this is what he expected to happen as capital accumulation meant that more workers were employed and so more profits were produced. He even called this a ’law’, writing ‘this double-edged law of a decrease in the rate of profit and a simultaneous increase in the absolute mass of profit arising from the same causes’ (his emphasis).

Smith is mistaken, then, in saying Marx expected capitalism to end in a ‘fundamental crisis’ due to fewer and fewer profits being made.

Between The Lines (2021)

The Proper Gander column from the September 2021 issue of the Socialist Standard

Michaella McCollum, when aged 19, left her home in rural Northern Ireland for the flashy bars and clubs of Ibiza. She soon found that its clubbing culture was fuelled not only by booze, but also by drugs, especially cocaine, traded openly but illegally. Michaella met ‘a really easy going’ man and, while at a party on an LSD trip, agreed to pick up a package for him which she realised contained drugs. The following morning she was sent off to Barcelona on the Spanish mainland, where she was surprised to find that she and another woman, Melissa Reid, would be travelling on to Lima under the guise of being tourists. Text messages from one of the gang she was now involved with aimed to reassure her and distract her from how much she had lost control. The two women collected the package from their contact, which turned out to be 11 kilos of cocaine disguised as sachets of porridge. As Michaella said, ‘if you think taking coke is a rush, try walking a million quid’s worth of the stuff into an international airport’. Nervously lugging heavy suitcases across the concourse drew the attention of the security guards, and the two were caught.

BBC Three’s documentary series High: Confessions Of An Ibiza Drug Mule told Michaella’s story, with a caption at the start of each episode describing it as ‘based on the testimony of a convicted drug smuggler’. Alongside Michaella detailing what happened, the series included dramatisations and interviews with lawyers, journalists and people involved in drug trafficking, although Melissa presumably chose not to take part.

The police didn’t believe the women’s story that they had been coerced into smuggling the drugs, and they were locked in a grim cell to await their trial. The media latched on to the story, dubbing the women the ‘Peru Two’, and reporters flew out to South America, one even posing as Michaella’s boyfriend to get to see her in jail. At their trial they admitted they were complicit in order to get a lighter sentence, which was set at six years and eight months imprisonment after a plea bargain. A reporter from the Belfast Telegraph, Patricia Devlin, said that the ‘public mood’ changed after the women confessed they knew what they were doing. The ‘Peru Two’ then became a silly season story, jokey memes, and a target for criticism.

They were sent to Ancón 2, a crowded, oppressive maximum-security prison north of Lima; ‘everything about it was toxic’ said Michaella. To try and make her time there more bearable, she learnt some Spanish, worked in the jail’s salon and was voted in as her block’s representative. She made enough money from prison work to afford the bribes to bring her parole court date forward and get the necessary proofs towards it. Her release was granted after almost three years behind bars, and Melissa was able to leave soon afterwards. Michaella says that her story is a lesson for others, and the documentary ends on an uplifting note about learning and growing, with appropriately rousing music.

In framing what happened as a personal journey, the documentary tries to turn the wider issues into incidental details along the way. Money is really a main player of the story. Michaella herself said she was motivated by financial gain, although what she was promised was much, much less than what the higher-up dealers make. According to lawyer Alexandro Tirelli, the cocaine business in Ibiza alone involves up to half a million Euros each day. This is why the cartel wouldn’t have been too concerned at losing even the 11kg the ‘Peru Two’ were found with, as to them, this was only a small amount. That the women were easily captured suggests that it was expected, acting as a useful distraction while larger amounts of drugs were smuggled through. The women were manipulated by the cartel throughout, after being identified as impressionable and groomed in a calculated, well-rehearsed way, still under implied threats when in prison. They were used as a means to make money, which happens in mainstream employment, of course, the difference being that here, the methods used are more extreme due to the high financial stakes and the drugs industry’s illegality. So the other main player in this story is the legal system which the industry has to work around, embodied by the judges, lawyers and police, and with Ancón 2 as its squalid end-point for those convicted.

The law is also shaped by money, especially in how a case’s outcome can depend on how much the defendant can pay out. The legal framework is there to protect the state’s interests, and limit the wealth and power of cartels competing with the elite. Drug laws aren’t officially presented to us like that, though, being instead supposedly there to protect the public against the risks of drugs, dangers which are amplified by their being manufactured in secret, and likely diluted with other substances to reduce costs. Even if drugs were made legal, as they have been to varying extents elsewhere, their production would still be driven by maximising profits for whoever owns the means to make them in bulk, and capitalism’s pressures would still push some people into problematic use. Both the money system and the legal system, as integral parts of capitalism, have shaped the drug industry and drug culture into the dark, seedy scene which Michaella and Melissa fell victim to.

Mike Foster

A Novel Workplace (2021)

Book Review from the September 2021 issue of the Socialist Standard

The Employees: a Workplace Novel of the 22nd Century. By Olga Raven. Lolli £12.99. (Translated from Danish by Martin Aitken)

The workplace in question is a spaceship, with a crew of humans and humanoids, which has travelled far from Earth and is orbiting the planet New Discovery. Some peculiar objects from the planet have been taken onboard, objects with strange fragrances and which are given unofficial names, such as ‘the Gift’ and ‘the Half-Naked Bean’.

The novel begins with a statement by a committee that interviewed the employees, which is full of management-speak, such as how the impact of the mysterious objects ‘might be said to precipitate reduction or enhancement of performance’, so ‘illuminating their specific consequences for production’.

Gradually the reader discovers why the committee exists and what the reactions of the workers have been. This applies to both humans and humanoids, and it is not always obvious to which category an individual belongs (‘Does it say in your files what I am?’, asks one interviewee). One humanoid says they were ‘made for work’, and cannot understand how a human could be more than their work, yet a human says their job means everything to them. One human misses shopping back on Earth, while another wants to hold a child in their arms again, and a third is grateful for being able to spend time with a hologram of their son. One humanoid feels sad, and one human prefers to spend time with the humanoids. Another interviewee (human? humanoid?) begins to feel disloyal towards the organisation behind the voyage: ‘it pains me because there’s no place for me other than inside the organisation’.

A central theme of the book, then, is the role and importance of work in a person’s life, in a setting where it seems there is little else to do other than work. Humans and humanoids become harder to distinguish, even though they stop talking to each other. One worker notes that it takes twenty years to produce a capable human employee, and a lot can ‘go wrong’ in that time, whereas it takes just two years to produce a humanoid worker. Humanoid bodies are more valuable than human ones, being more durable and open to software updates.

The organisation’s board of directors is primarily concerned to preserve the ship and its cargo, especially the weird objects, and it turns out that the directors are themselves humanoid, though this was not conveyed to the human crew, as they would be likely to react more positively to fellow humans.

All in all, an interesting if difficult reflection on such topics as the role of work, what makes someone human, what activities other than work are needed. Not a socialist science fiction novel, but one with noteworthy comments on some aspects of capitalism (even though that word is not used).

Paul Bennett

What use are politicians? (2021)

From the September 2021 issue of the Socialist Standard

We are lucky in the West, there’s no denying it. We don’t have a war to face, we’re not slaves, we’re not starving, our kids get an education, public health, a choice of food, a measure of security and comfort.

But are we having a good time? Are any of us? Many of us don’t have jobs, or careers, or prospects. Those of us who do work are forced into the regimentation of the workplace, of bosses, of time-sheets and production quotas, reports, key performance indicators, the nine to five, the bills, the mortgage, the stress. Our kids are now being made to work harder and from a younger age to become skilled and employable. Kids of five are now being given homework.

We live in the world of capitalism, and everybody knows that capitalism is not perfect, that it has problems. Everybody knows that what we have to try to do is fix the problems That’s why we vote for politicians. They’re supposed to be fixing it for us.

Capitalism is like a car that’s permanently on blocks, with some politician underneath it and another one in the bonnet, shaking his head saying ‘Oh dear oh dear, that looks bad, that does.’ But what can you do? Capitalism may not be perfect but it’s the only thing we have and after all it does work, sort of.

‘Sort of’? We have the most technologically advanced society that’s ever existed. But when it comes to doing something useful like feeding the people in it, or limiting pollution and global warming, we can only manage ‘sort of.’

Politicians talk about this problem or that issue – within capitalism. The real reason why politicians all sound the same, and why people find it so hard to be interested in politics, is that they all have this same frame of reference. If you question capitalism itself you automatically put yourself outside that frame of reference, and that’s when the politics of capitalism suddenly becomes meaningless to you.

The experts in charge of decision-making are not ‘expert’ at all. No more than you are. You keep paying the bills but the car never gets fixed.

Summer School Report (2021)

Party News from the September 2021 issue of the Socialist Standard

The Socialist Party’s Summer Schools have been held at Fircroft College in Birmingham for many years, although last year the pandemic shifted the event online. So it was with both relief and eagerness that we were able to return to Fircroft in August for a weekend around the theme ‘After The Revolution: Life In A Socialist World’. Just over thirty of us made the journey to Brum, both regulars and new faces, party members and others interested in socialism.

The event included five sessions, starting on the Friday evening with Richard Field, who in his thought-provoking talk ‘Socialist Recipes’, considered some of the freedoms which will come in a socialist society where everyone has equal access to goods and services. The following morning, Glenn Morris discussed William Morris’ novel set in a post-capitalist society, News From Nowhere, ending his talk with a well-received update he had written, a conversation looking back on the struggles of living in capitalism. The topic of utopias and science fiction was continued by Leon Rozanov, who asked what ideas about a socialist future can be found in works such as Ursula Le Guin’s The Dispossessed, Walden Two by B F Skinner, Marge Piercy’s Woman on the Edge of Time, and the series set in the ‘Noon Universe’ by Boris and Arkady Strugatsky. For Saturday evening’s session, Carla Dee ran a fun workshop where we could use our imaginations to design the kind of socialist town or high street we would like to see, with features such as free 3D printer booths and communal allotments. Paddy Shannon rounded off the weekend by asking us to consider an alternative model of democratic decision-making, based not on elected representatives but opting-in to decide on whatever issues we can relate to. Each of the talks was followed by plenty of lively and thoughtful discussion. As the first ‘hybrid meeting’ for the Socialist Party, the talks were broadcast live through the Discord platform, allowing those who couldn’t make it to Birmingham (some in other countries and continents) to take part. Recordings of the talks are now available on our website.

Between the sessions, there was plenty of time to explore the venue’s gardens, browse the bookstall, read the event’s publication and look at the exhibition on what the Party has said about a future socialist society over the decades. In particular, the weekend was also a great opportunity to catch up with friends and comrades who we haven’t been able to see in person for much too long. After other meetings, we have to make the journey back home or, more recently, just switch off our computers. Being a residential event, Summer School lets us chat over a meal or while sitting in the lounge until the small hours, with only a short amble to our rooms afterwards. And Fircroft College is an ideal setting, with excellent facilities and catering, and a timely ethos of reducing its impact on the environment. When the event came to a close on Sunday, we left with happy memories of an enjoyable weekend in good company. Plans have already begun for next year’s Summer School, with Fircroft booked for 19th – 21st August.

Summer School 2021 recordings are here.

50 Years Ago: China and America (2021)

The 50 Years Ago column from the September 2021 issue of the Socialist Standard

After more than twenty years of waging a propaganda war against each other and working up suspicions and hatred among their respective working classes, the American and Chinese mobster politicians are to seek some kind of reconciliation.

To those numbered in their millions all over the world, who mouthed and continue to mouth the slogans of Chinese capitalism denouncing ‘American imperialism’, and equally to all those who mouthed the phrases of American capitalism denouncing ‘Chinese expansionism’, it must seem as bewildering as were the Catholic church to suddenly get together with the League of Militant Atheists. After mountains of vitriolic propaganda, oceans of hate and the widespread belief that a real and unbridgeable ideological chasm separates the two sides, what explanation can there be for such a momentous reversal of attitudes?

Such about-faces are far from unheard of in the double-dealing world of lies and hypocrisy which is capitalism. Stalin and the Bolshevik heads of Soviet capitalism got together with Nazi Germany and, after denouncing the war as imperialist, wound up on the side of British and American imperialism against their former Nazi friends.

Conversely, Churchill who had spent twenty-five years denouncing the Soviet regime as a ‘cancerous growth’, wound up as head of British capitalism, supporting Soviet state-capitalism against Hitler and Mussolini (whom he had formerly admired).

Russia and China are capitalist countries, whose foreign policies, quests for world markets, world investments and military power only make sense when seen as part of the world-wide rivalry that characterises capitalism everywhere. (….)

Regardless of the public face they show, Russia, China and America will watch each other very closely. They are each in the same game for what they can get. The fact that friendly relations may exist for a time between each of them, should delude nobody. Trade does not mean trust. They will continue to spy on each other. Investments do not receive peace. They will each maintain their nuclear and other weapons.

Only the working class can get rid of this system of mutual suspicion, rivalry and war. This will involve establishing a world community where trade and investments and military force will have no place. Neither will the cynicism and hypocrisy of politicians.

(Socialist Standard, September 1971)

Editorial: Divide and Rule (2021)

Editorial from the September 2021 issue of the Socialist Standard

No one can deny that many young workers are having a tougher time of it. Many see their future prospects fading and find themselves in low-paid positions or on zero-hours contracts. With the relentless rise in property prices, even relatively well-paid young workers are priced out of the property market and have to make do with paying extortionate rents. Those who have been through the higher education system are facing crippling debts. In the current pandemic, many have lost their jobs in the hospitality sector.

It is no wonder that young workers feel that the economic system is rigged against them. This has given some capitalist media commentators the opportunity to pit the younger generation against the older one. While ‘Generation Rent’ struggles to pay their rents, the baby boomers, who own property, bask in their rising values. The older generations benefited from free further education which was taken away by a Labour government run by baby boomers in the 1990s. The Conservative/ LibDem Coalition government of 2010-2015 tripled student tuition fees while also introducing a triple lock on old age pensions, where the state pension would rise each year either by the inflation rate, average wage growth, or 2.5 percent, whichever was the highest. To top it all, in 2016, the vote to leave the European Union, supported disproportionately by older voters, deprived younger workers of access to job opportunities in the EU job market and the Erasmus Programme, an EU student exchange programme.

Simon Heffer in the Sunday Telegraph (‘Natural Justice demands an end to the triple lock’, 1 August) states that due to the pandemic, earnings could rise by 8 percent next year and that this would create an increase of £3 billion in the annual tax bill to pay for the rise in the state pension necessitated by the triple lock, He then argues that it would be young people, with their own financial struggles, who would have to shoulder this burden. So, for the sake of fairness, the triple lock should be scrapped. In fact, the tax burden falls not on the working class, (whether old or young), but on the capitalist class. The suspicion here is that this is where Heffer’s concern really lies. Polly Toynbee in the Guardian (‘The pension triple-lock is an insult to the UK’s young people’, 1 July) makes similar arguments for abolishing the triple lock on pensions, but, unlike Heffer, acknowledges there are poor pensioners, who, she believes, should receive higher pension credits.

These divide and rule tactics draw attention away from the real cause of young peoples’ woes, which is not the selfishness of older people hogging society’s wealth, but from their position as workers in the capitalist system itself. The children and grandchildren of capitalists, such as Jeff Bezos or Warren Buffet, do not face the same problems as mentioned above. Capitalism is based on the exploitation of the working class who produce the wealth of the privileged minority owning class, which leaves them in relative or absolute poverty. It also generates economic crises, such as the 2008-2009 downturn, which disproportionately affects younger workers, especially those who have just left school or university. Workers of all ages have an interest in abolishing capitalism and establishing socialism.