Voice From The Back: Lies, Damned Lies And Diplomacy (2006)

The Voice From The Back Column from the February 2006 issue of the Socialist Standard

Lies, Damned Lies And Diplomacy

The misuse of language is an essential part of capitalist politics. Every country in the world has a Ministry of Defence, none has a Ministry of Offence. Lies are described as being “economical with the truth”. The bombing of civilians is known as “collateral damage”. The US Secretary of State Condoleeza Rice has recently come up with a new one, “extraordinary rendition”. According to the Times (4 December) “. . . it will anger many in Europe.” “Extraordinary rendition” means transfer for torture and “enhanced interrogation techniques” means stripped, chained and made to stand up for 40 hours in a dark, cold cell. It is enough to make socialists “involuntarily eject the contents of their stomachs”. If you can accept another euphemism.

So Much For Human Nature

The journalist and author Francis Wheen in his best selling How Mumbo Jumbo Conquered the World came up with a great quote from George Orwell: “We are selfish in economic matters because we all live in terror of poverty. But when a commodity is not scarce, no one tries to grab more than his fair share of it. No one tries to make a corner in air, for instance. The millionaire as well as the beggar is content with just so much air as he can breathe. .. So also for other goods. If they were made plentiful, as they might easily be, there is no reason to think that the supposed acquisitive instincts of the human being could not be bred out in a couple of generations.” Nice one, George – but of course we want socialism now! To hell with the notion of generations to change.

The Primitive Accumulation Of Capital

In Capital, Karl Marx has a very revealing section devoted to the primitive accumulation of capital. He deals with the expropriation of the agricultural population in England and the Highland clearances in Scotland. A recent news item in the Times (3 January) shows that this process is still going on in India. “Indian police shot and killed nine tribesmen yesterday in the eastern state of Orissa after they were attacked with arrows and stones, killing a constable, an official said. About a thousand tribespeople, some armed with bows and arrows, who oppose a move by the government to acquire land to set up a steel plant in Jaipur, turned on the police assigned to protect officials demarcating the land for Tata Steel Ltd, India’s largest private steel producer.” As Honore de Balzac, the French novelist wrote way back in the 19th century, “Behind every great fortune lies a great theft.”

For Those Who Have Accumulated

A new magazine has been launched entitled Spear’s Wealth Management Survey. It deals with how to buy your own private jet or acquire a vineyard. You are unlikely to have run across a copy though. “Spear Media, publisher of SWMS, hopes to attract a circulation of 25,000 in the UK, with a further 5,000 going to the wealthiest individuals or families across Europe.” ….According to the publisher, “Although we are targeting people who have assets of £5m, the majority will have £10m-plus.” (Observer 8 January) Like we said, you are unlikely to come across a copy.

God’s Will

“At least 345 pilgrims were killed yesterday when one of the holiest rituals of haj in Saudi Arabia turned to tragedy. White-robed believers rushing to stone the devil in a symbolic ceremony were caught up in a stampede and crushed. Many who escaped were seriously hurt, with 289 people reported injured.” (Times, 13 January) God, Allah, Jehovah or whatever he’s called is supposed to be all powerful so we suppose it is all part of the divine plan. In recent years God seems to have been particularly deadly during haj. In 2004 244 killed, 2001 36 killed and in 1998 180 trampled to death. Truly the ways of God are mysterious but that is small consolation to the victims or their families.

A Changing World?

Away back on the seventh of April 1775 an old conservative gentleman, disgusted by the job-seeking antics of politicians  recorded a worthwhile notion. “Patriotism is the last refuge of a scoundrel,” said Dr. Johnson. Now in your newspapers you can read “Gordon Brown is today calling for a ‘British Day’ on which the country can unite and celebrate its values, setting out the fullest version of his agenda for government.” (Times, 14 January) Dr Johnson was an old tory lick-spittle but today he looks distinctly principled.

Editorial: The future capitalism offers (2006)

Editorial from the February 2006 issue of the Socialist Standard

The last century saw two world wars and a prolonged cold war as up-and-coming capitalist states tried to challenge the domination of the world by the powers that had got there first – Britain and France with their colonial empires. Each time the top dogs beat off the challenge. In the end, America reduced Britain and France to second-rate status too. Now a new challenger is emerging: China.

The rulers of China have set themselves the task of building up their state as an industrial and military super-power to rival America and have begun investing in Africa and Latin America with a view to securing supplies of raw materials such as iron ore, copper, nickel, cobalt and, of course, oil. And the world’s currently-dominant power – America – and its satellites like Britain are worried. “Insatiable Beijing scours the world for power and profit” was the shrill headline in the Times of London on 12 January. Already their defence (the Orwellian word for war) strategists are planning to build up their military might yet further to counter the challenge from China. So much for the so-called “peace dividend” of which there was briefly talk after the challenge from Russia was seen off.

Access to oil has already caused many wars in the Middle East and was a factor in the last world war. Hitler’s apparently mad decision to invade Russia was prompted by a desire to gain control of the oil resources of the Caspian area. One of Japan’s aims, too, was access to oil in British-controlled Burma and Dutch-controlled Indonesia.

China today is in the same position as Japan before the last world war. That is the analysis of the Washington-based Worldwatch Institute in its annual State of the World report, for 2006, published last month. According to the summary in the Times, the report “draws the parallel between Japan in the 1930s and China today. It recalls that it was Japan’s inability to secure its oil supplies from South-East Asia that prompted its entry into the Second World War. Today Beijing is strengthening its Navy to protect its energy supplies, shipped at great distances from the Middle East, Africa and Latin America”.

The report risked an understatement:

“The prospect of countries ranging from the United States and China to Japan and Saudi Arabia – together with the world’s terrorists – vying for physical control of the world’s oil does not sound like a prescription for global security.”

After adding that India too would be involved in the scramble for oil and other resources, Worldwatch President, Chris Flavin, concluded: “We therefore face a choice: rethink almost everything, or risk a downward spiral of political competition and economic collapse”.

Yes, that’s the choice we really do face. The Worldwatch Institute was set up by the advocate of world government, Lester Brown, in 1974. Treating the world as one unit, so that issues such as resource allocation and protection of the global environment could be tackled on the only scale they can be, is certainly rethinking on the right lines. But world government in the context of continuing capitalist production for profit would not work. What is required – as the only way to avoid the risk of the 21st century being a repeat of the 20th – is world socialism as a world community without frontiers where the natural and industrial resources of the Earth have become the common heritage of all Humanity.

Letters: Education? Education? Education? (2006)

Letters to the Editors from the February 2006 issue of the Socialist Standard

Education? Education? Education?

Dear Editors,

Rarely does a newscast pass without mention of education. New initiatives are released like frantic hounds hunting down a headline. Examinations are or are not more stringent than ever they were. Primary school leavers enter secondary functionally illiterate and/or innumerate. Eight years on from being elected promising to solve all educational conundrums, the Labour government flounders on. Recently its education ministers turned on their own enforcers OFSTED for giving good reports on schools that subsequently appeared in the relegation zone of the league tables. If ever there was a paradigm of capitalism it is education.

 

When state education was established towards the end of the 19th century rote learning, lots of copying and well marshalled callisthenics was the rule. This reflected industrial processes for which those children were being prepared. Today the direct influence of capitalism is to be seen in the managerial approach; the setting and measuring of targets, a tightly controlled and prescriptive national curriculum, all inspected by the pedagogic commissars of OFSTED.

What is not considered, despite much rhetoric to the contrary, is that each child is an individual, ironic for a system that lauds individualism. In truth there is a continuum of ability in any area, not some crass equality that can be state imposed. Socialists have no difficulty with the concept of from each according to ability, an obvious recognition of difference, to each according to need, a guarantee no one can suffer or prosper due to congenital factors. Of course capitalism cannot act on this basis. The absolute need to produce for profit requires a trained workforce, why else make school attendance a legal requirement, pupils being the only members of our society forced by law into an institution without being convicted in court. Education becomes associated with a punitive regime rather than a wide variety of ways everyone, whatever their innate abilities, could enhance their lives.

At the end of the 19th century school boards were concerned about levels of truancy and poor achievement. Their answer? Industrial schools where a more vocational approach could appeal to those who were not so academic. Little changes really and cannot, until people accept that education will only be transformed along with society in general. Abolish capitalism and promote the co-operative, moneyless and worldwide common ownership that is socialism. And only then will the economic and social deprivation that is such a negative influence on so many children’s lives be done away with. Only then will education be determined by those who want to be educated, instead of it being subjected to the pet nostrums and egos of politicians.

Dave Alton, 

Newcastle-upon-Tyne.

Defeatist?

Dear Editors,

I agree with most of what Adam Buick writes in “Capitalism and the quality of life” (January Socialist Standard). Just a couple of supplementary points. He mentions Lefebvre’s A Critique of Everyday Life and Debord’s Society of the Spectacle as good on criticising commodity culture. I think socialists will find any of Andre Gorz’s books better value on that subject.

The other point is what, if anything, we can do about the spread of money-commodity relations into all aspects of life. The article says “There’s nothing that can be done to stop this within the context of capitalism …” Unduly pessimistic and defeatist, I think. We can protest at every manifestation of capitalist culture we come across.

 

I remember about 30 years ago being invited to a teachers’ union meeting in California. Just before the interval the chairperson introduced a guy who promptly started to sell insurance. I was amazed and voiced my displeasure. They all looked sheepish, but nobody said anything. I’m not saying the revolution took a step forward that day. But if a few hundred, then a few thousand, then a million of us publicly declare our opposition to capitalism…

Stan Parker (by-email)

Totalitarian

Dear Editors,

In assessing Bukharin (December Socialist Standard) we must be aware he belonged to the totalitarian Bolshevik Party. He supported the Bolsheviks’ forcible dissolution of the Constituent Assembly when electors placed them in a minority. Bukharin supported the erosion of workers’ rights and use of terror against political opponents, whether right or left, including the bloody suppression by Trotsky of the Kronstadt Rebellion which was not led by right wing people, but by Socialists. The workers in Russia enjoyed less rights and freedom than the capitalist West. Bukharin was in this so-called Marxist government. The SPGB rightly calls it state capitalist. The Socialist Party existed in Britain whereas in Russia people of similar views were in labour camps or executed.

Andrew Harvey,

 Carlisle

Russia and capitalism

Dear Editors,

In the article on the First Russian Revolution of 1905 (Socialist Standard, December) you conclude that one of the many lessons to be learnt from that event is that “any worthwhile progress in human society must come, and can only come, from the working class”, and “relying on our rulers to initiate worthwhile change is as useless as the Russian peasants’ reliance on the Tsar.”

This is an unusual argument for a Marxist to make because all Russian (and other) Marxists regarded capitalism as a progressive force notwithstanding the fact that capitalism was introduced into Russia as a direct result of state policy, on the initiative of rulers – from Alexander II’s reforms in the 1860s, to Witte’s industrialisation program in the 1890s and Stolypin’s agrarian reform of 1906.

More surprising is the fact that you fail to mention the one institution in 1905 which was wholly and spontaneously a creation of the Russian working class.  This was the soviet or workers’ council.  Despite its relatively brief life, the Petersburg Soviet in 1905 assumed the character of an organised revolutionary authority and a rival power of government.  From that experience Lenin drew the conclusion that the dynamic power of the soviets, under the direction of a group of professional revolutionaries, could be harnessed to bring about a revolution which would change society from top to bottom and ultimately lead to socialism (subject to the victory of socialist revolutions elsewhere in Europe). 

In October 1917 Lenin’s political tactics succeeded when he wrested power from the Provisional Government and, ultimately, from the soviets themselves.  The voluntaristic strain in Marxism represented by Lenin and the Bolsheviks triumphed over the deterministic (and orthodox) strain represented by Martov and the Mensheviks.

Yet you suggest that the main lesson of 1905 is that “no force can cut short the natural development of society until it is ready for change”.  Do you believe that the Bolsheviks were not such a force?  And if not, what sort of “natural development” are you talking about?

Peter Bryant, 

Sydney, Australia

Reply: 

We were alluding to the development of capitalism in Russia, which the Bolsheviks were unable to avoid. In fact, they became its agents – Editors.

Questioning everything

Dear Editors,

Your reaction to my letter in the December issue when I said that I restrict my buying to essentials, was very guarded. That was a correct view to take for as I point out in my booklet Question Everything, (available without charge from me at 51 Newton Road, Bath BA2 1RW), one should accept nothing without asking what are its implications and whose interests are involved.

You point out that if it caught on employers would be able to pay us less, but they always do so anyway in order to cut costs. What they never see is that if workers have less they can only buy less. Employers see things from their own short term point of view, condemning the unemployed as layabouts and a drain on public funds until they want government support, when one reason they give for having it is to alleviate the suffering of those same unemployed.

The simple fact remains that capitalism needs that we keep buying and when I heard that  the economy was slowing I thought that socialists would want to help it to do so further so that capitalism can give way to one that was more efficient.

No system based on the competitive greed, selfishness, aggression and conflicting interests of money can be more than marginally efficient, and in this scientific and technological age in which we can produce anything that we want and send it anywhere in the world without being impeded, distracted and negated by increasing multitudes of financial complexities, the money system has become superfluous, an impediment to everything that we try to do.

Only a moneyless society could be fully efficient .

We need to differentiate between people and societies, between capitalists and capitalism,  to stop defeating our objectives by making enemies. We all are humans conditioned by and conforming to our genetic and environmental inheritance so that no one, whether fat cat or beggar can be criticised or blamed for what they are or do. We can advance that inheritance only by developing intellect and reason.

Melvin Chapman, 

Bath

Labour, the state and the market (2006)

From the February 2006 issue of the Socialist Standard

Tony Blair has announced he intends to cling onto power for most of his current term before handing over to a successor, because he wants to see through his major visionary reforms of the “public sector” in the United Kingdom. He has been very good, over the past nine years, at talking about his desire for “reform” and “modernisation” but has generally not sought to describe in detail what he means by those two bland words.

Look back over his time in office, the main theme that emerges seems to be his attitude to the state sector and the welfare state. The difference between, say, Ramsay McDonald’s government of the 1930s and Blair’s of the 21st century has been the existence of a massive state sector in the economy. When Blair took office the British state accounted for around 35 percent of economic activity. Some critics take glee in observing that in some parts of the country – such as the North East –  the state accounts for a higher proportion of economic activity than it did in some of the collapsed state capitalist economies in Eastern Europe (above 60 percent). The European Union’s Growth and Stability Pact obliges the British government to keep its borrowing under 3 percent of GDP, and the British government has a policy of trying to keep it to under 4 percent. Over Christmas, Private Eye suggested that it may have broken this self-imposed rule because some borrowing on certain Public Finance Initiative (PFI) deals really should be classified as government borrowing.

McDonaldisation

The existence of a large state sector worries the private representatives of capital. The encroachment of state bureaucrats could put them out of a job, and threatens to soak up money and resources that could have been used to make profits and grow more capital for themselves. Their paid apologists – often referred to as economists – fret over something called ‘moral hazard’, the idea that economic actors spending other people’s money are not as careful with it as if it were their own. Obviously, this is a major concern for people who invest in companies run by professional managers, and also for people examining the state where there will always be more tax money next year. These economists take capital’s myths of competition to heart and believe that without competition and the threat of bankruptcy, you cannot have economic efficiency.

It is worth noting that when these people talk of efficiency all they are referring to is the bottom line. All they are concerned with is costing as little as possible. For example, the sociologists who devised the ‘McDonaldisation of Society’ concept noted that the fast food and supermarket service industries, in the name of choice, reduced the amount of service you’d find in a traditional shop or cafe. People are expected to help themselves, and thus save staff time and the firms’ costs. This is much more efficient from the point of view of the financier and the accountant, possibly less so for the person stuck in yet another bloody supermarket queue.

In essence, New Labour has been about the McDonaldisation of the state. It has been about promoting competition and building fake markets in order to try and get civil servants to behave more like the ideal businessperson. Time and again, this is what reform and modernisation has meant. The main form this takes is to change the role of the state itself, from being the provider of a service to being the buyer of a service on behalf of the public. A simple example would be from the time when the Tories introduced Compulsory Competitive Tendering for local authorities. Instead of the local council collecting the bins, a firm collected bins on behalf of the council.

This has been intended to promote competition between companies who can provide such services, and drive down costs and improve efficiency. In theory, these firms can be sacked and can lose money if they fail to provides the service required. The problem is that it costs so much to run the bidding and contract writing process, and the services are so essential, that rather than sack firms most authorities are prepared to pay the existing firm more to help them meet their contract. Much the same problem emerges with PFI deals – where firms even get paid just to put in a bid.

Pseudo-markets

At the beginning of 2006 a new rule was introduced into the NHS requiring GPs when recommending elective surgery to provide at least four choices of hospital, one of which must be a private institution (with the operation to be paid for out of NHS funds). GPs themselves are supposed to operate as semi-independent companies, with competition within the NHS being provided by the Primary Care Trusts (PCT). The need to control their budget and to meet their targets is meant to promote a pseudo-market within the NHS and improve efficiency. The effect of that has been seen in Oxfordshire recently where the NHS PCT suspended performing corrective surgery for irregular heartbeats as inessential. It is only one of many trusts with large budgetary deficits.

A similar process can be seen in the provision of council housing. Despite committing itself to repairing dilapidated council homes, the government is refusing to release funds for residents in Camden because they have voted to reject moving their council homes from council ownership to a charitable housing association. Residents in many areas are also being asked to engage in this empty sham of democracy. The effect of this would be to dramatically reduce the capital value of council (and thus state) owned assets, and also to mean that borrowing for renovation would not be state borrowing, but the private borrowing of these charitable associations. A great deal of time, effort and money is being spent on what is essentially a way of getting round accounting technicalities and of removing council housing from political control and handing it over more directly to managerial teams of business folk.

In schools much hullabaloo is being made about proposed reforms which would release them from Local Education Authority (LEA) control. They would essentially be self – contained business units, with their own budgets, competing – via exam results – to attract pupils and therefore funding. The clear concern is that schools that can select bright pupils will therefore guarantee themselves better results. Further, private sector partners are being asked to help set up City Academies – where they can have an input to the curriculum and ethos of the school.

The net effect of all this is to remove such activities from democratic and political control and place them in the hands of professional managerial people shipped in from the private sector. Specifically, since these contracts are subject to commercial confidentiality, accountability and control is considerably lessened. This, though, isn’t a million miles away from the ideas of how to run society advocated by the likes of the Fabian Society founders of Labour – dedicated to using a controlled market to improve society as they found it at the close of the 19th century. They even advocated direct competition between state providers and private providers to see who could be the most efficient. They, however, at least advocated some form of minimum condition of work to ensure protection of labour and to limit its exploitation by this competition.

Although PFI and Contracting Out deals are protected by a deal with the unions called TUPE which means existing workers retain their current wages and benefits, it’s clear that introducing these private firms means new workers are much lower paid, and are without union protection. This is largely because Thatcherite union laws make solidarity striking difficult and many of the workers involved – most commonly cleaners – are in difficult-to-unionise industries anyway. Indeed, there is a good prospect that much of this marketisation of the state is about breaking away from national union pay bargaining.

This brings us to the reality of the situation. As Karl Marx showed in Volume III of Capital, capitalism is not driven by the competition between the commodities at the market place. The biggest profits go to the capitalist with the most capital – or at least, who can most effectively deploy it in production. The real competition of capitalism is between the workers and the capitalists – the struggle to lessen the cost of labour compared to the length of the working day. This is at the heart of what the private sector’s much vaunted efficiency does.

What the government is doing in creating these vast pseudo-markets is wasting time, effort and resources in maintaining the illusion that capital presents of itself as a group of industrious shopkeepers haggling in the town square. Building these pseudo-markets only serves to support the existence of the capitalist market generally, and, more specifically, the labour market. If we assume for one moment that the reforming zeal of Blair et al is actually genuine (despite his every effort to give the contrary impression) then all we socialists can say is that the mere existence of the wages system means that they will spend their time treacle-grinding rather than getting to the real roots of society’s problems and needs.

Pik Smeet

Free Trade, Fair Trade or No Trade? (2006)

From the February 2006 issue of the Socialist Standard

The World Trade Organisation negotiations in Hong Kong in December didn’t get very far. There had been talk of a deal to further “liberalise” world trade, under which the developed capitalist countries would drop restrictions on agricultural products from the “developing” countries in return for these reducing their tariffs on industrial imports. The most that emerged was a promise by the EU to stop subsidising agricultural exports by 2013 – provided that in the meantime there was an agreement on the other points. Not enough, said EU Trade Commissioner Peter Mandelson, to make the meeting a true success, but enough to save it from failure.

Maybe in time – April is the next deadline – some agreement, even along the lines envisaged, will be reached. But, given the nature of capitalism, it is not surprising that agreement is proving difficult. The WTO has 149 member states – 149 capitalist states, each with its own economic interests to defend and promote.

Under capitalism goods are produced for sale with a view to profit. Profits originate from the surplus value created by the workers who actually produce the goods that are put on sale, but are realised – i.e., converted into money – only when the goods are sold. Built in to capitalism, therefore, is an intense and relentless competition between capitalist firms to sell their goods, not only between firms in the same country but on the world market between firms from different countries. The role of states in this competition is to defend and promote the economic interests of the capitalist firms within their frontiers, by, for instance, protecting them from foreign competition on the home market or helping them to conquer foreign markets, which are of course the home markets of other countries.

A range of measures are open to states to do this. They can impose tariffs and quotas on imports (protectionism) and they can offer insurance and other financial aid for exports. They can pay subsidies on exports (dumping), but this is politically controversial since these subsidies have to come from taxes on non-exporting capitalist firms within the state.

If these policies – protectionism and dumping – get out of hand, they turn into “beggar-my-neighbour” and no state gains. This can lead to wars, and was in fact one of the causes of the Second World War when Germany and Japan felt they had no alternative to go to war to break through the restrictions on their trade resulting from the policies pursued by Britain, France and America. So there is room for promoting capitalist interests all round  by negotiations such as those at Hong Kong aimed at what is in effect tariff disarmament.

The jockeying for competitive position that went on in Hong Kong wasn’t just between the industrially developed “West” (including Japan and Australia) on the one hand and the poor states of Africa, Asia, Latin America and the Caribbean on the other. There were also arguments among the developed capitalist states themselves. The US wanted access to EU markets for its agricultural products, while the EU accused the US of hidden dumping since its “food aid” involved giving food (for which US farmers are paid) rather than money. Then there were the “emerging” capitalist states – China, India, Brazil, Russia – which also want access to EU (and US) markets, but are precisely the countries to which the West wants easier access for its industrial goods. The really poor states – the so-called “Least Developed Countries” – have no clout at all, and are only defended by Non-Governmental Organisations such as Oxfam and the World Development Movement (which also have no clout). In fact, they are not likely to gain anything out of any deal, which will be a carve-up between the developed and the emerging capitalist states.

Free Trade v Fair Trade

Alongside the clash of economic interests there was an ideological battle between the partisans of “free trade” and those of “fair trade”.

The ideology of “free trade” (no restrictions on imports or exports) has been part of conventional economics since David Ricardo propounded his theory of “comparative advantage” in 1817. Ricardo took as an example Portugal as a producer of wine and England as a producer of “cloth and hardware”. While Portugal could produce cloth and hardware and England wine, neither could do so as cheaply as the other; if they did this there would be a waste of resources compared with what would happen if Portugal specialised in wine and England in cloth and hardware. This was because, said Ricardo, the cheaper wine produced in Portugal and the cheaper cloth and hardware produced in England could then be exchanged for more of each other. Both sides would be better off.

This is the theory, but it doesn’t allow for change. It was obviously attractive to English capitalists as it meant that they would have a world monopoly in manufactured goods. But it was not so attractive to the up-and-coming capitalists of other countries who wanted to produce industrial goods too, nor to the rulers of these countries who wanted to built up their industrial and military strength to better compete for a place in the sun. So they, the US and Germany in particular, embraced protective tariffs for “infant industries”, as propounded by the German economist Friedrich List.

By the end of the 19th century the manufacturing industries of these two countries were strong enough to compete with British industry and even to outcompete British products. A section of the British capitalist class began to have second thoughts about free trade; they demanded protection for British industry through tariffs imposed on foreign imports. They called this “fair trade”. An hundred years ago “free trade” versus “protection” was in fact the main bone of contention between the free-trade Liberals and the protectionist Tories.

Today, the main ideological defenders of “fair trade” (protectionism) are the “development NGOs”. Thus, Benedict Southworth, Director of the World Development Movement issued a press release on 13 December declaring:

“More free trade is not the answer to Africa’s problems. Trade Justice means poor countries getting access to our markets to sell their goods without being forced to open their own economies to our multinationals and losing their ability to protect poor farmers, infant industries and basic services.”

While Barbara Stocking, Director of Oxfam, wrote to the Times (19 December):

“South Korea and Tokyo industrialised using state intervention such as high tariffs to protect infant industries and credit for strategic sectors. The EU and US are pressing to force developing countries to lower their industrial tariffs even though these policies helped South Korea, Taiwan and others to trade their way out of poverty. If Korea had stuck to its supposed ‘comparative advantage’, it would still be exporting rice and wigs instead of cars and computers”.

In an article in the Times (14 December) journalist Carl Mortished admitted that free trade wouldn’t benefit the poorest states, but rather the emerging capitalist states:

“Free trade is fair and just, contrary to what Oxfam will tell you. However, because it is just, it cannot be kind. Trade works in favour of those with comparative commercial advantages and the poorest nations have few. If an agriculture deal is done in Hong Kong, the winners will be powerful developing nations with agribusiness potential, such as Brazil and India. The farmers of Mozambique will gain little. The reason emerges in a report by the UN’s Food and Agriculture Organisation. The State of Food and Agriculture 2005 concludes that liberalising farm trade would benefit consumers in protected markets, such as the EU, with lower-priced food. It will also benefit efficient producers, such as Brazil, but the poorest countries will suffer.”

So was he, then, in favour of “fair trade” for the poorest states? Not at all, as the title of his article “Why ‘fair trade’ is bad for poor nations it seeks to help” proclaimed. Preaching being cruel to be kind, he argued that farmers in these countries “don’t need favours, but fertiliser and equipment. In short, they need investment, and that means more open markets … Poor countries must reform if they are to compete. If we stopped throwing favours at them, the reforms might begin”.

He’s right about one thing: “they are to compete”. They have to. All states have to. And that’s the problem. Built in to capitalism is competition, and where there is competition there are losers as well as winners. Oxfam, the WDM and the others are on completely the wrong track in imaging that there can be no losers or that the winners will help the losers out to their own disadvantage.

One World

We are living in a world that has the productive potential to turn out enough to adequately feed, clothe, house, educate and care for the health of every single person on the planet, irrespective of where they live. That this isn’t done today is due to the fact that the production and distribution of wealth is organised on the basis of buying and selling, of trade.

The Earth’s natural resources and separate parts of the world-wide industrial network are owned separately, by corporations, states or rich individuals. These owners compete amongst each other to sell what those they employ produce and so realise as profit the surplus value contained in them. This has a number of effects. Production stops, not when enough to satisfy people’s needs has been produced, but well before this, when what people can afford (the market) has been catered for. At the same time there is a huge waste of resources on the process of selling itself, on things that have nothing to do with production as such, but only with the buying and selling of the products that constitutes trade (on fixing prices, making and receiving payments, transferring money, changing currencies, etc.) And there is also a huge waste in the armed forces and arms that all states are forced to equip themselves with in order to be in a position to protect and promote the interests of the capitalist groups within them.

So inherent to capitalism – the world trading system – is both artificial scarcity and organised waste. And as long as the system is allowed to continue there’s nothing that can be done to prevent this. But “another world is possible”, and it has to be another world, since there are no national solutions to world problems like world poverty, hunger and disease.

The alternative is a world in which all the Earth’s natural and industrial resources become the common heritage of all humanity. This means that the production and distribution of the things that people need can be organised on the basis of the world being a single unit. The oil resources won’t belong to filthy rich sheiks in the Middle East – or even just to the people living in the Middle East – but to all humanity, to be used for their benefit. The same goes for all the world’s other natural resources. They won’t be traded. They will simply be transferred from one part of the world to another as required to meet needs. This wouldn’t be trade since there would be no question of payment or of any transfer of something of equal value from the part of the world where they went to the part they came from.

Under these circumstances, if people in one part of the word needed food – as is undoubtedly the case at the moment – it would be transferred there, as for instance from the wheatlands of North America. This wouldn’t affect local agriculture since there would be no competition between the two; there’d be no local markets to undermine since local production wouldn’t be for a market either. In fact, local agriculture could be given the fertilizer and equipment that they need – without demanding any counterpart – so that it can contribute increasingly to satisfying local food needs.

This – no trade, but production for use – is the alternative to both the free trade favoured by capitalist corporations and their agency, the WTO, and the fair trade favoured by the equally capitalism-accepting development NGOs.

Adam Buick

The Rise and Fall of Money (2006)

From the February 2006 issue of the Socialist Standard

Many people think that money has always existed and therefore it always will. Wrong.

Human beings have lived on this planet for hundreds of thousands of years without using money. When they were hungry, they ate. When they were thirsty, they drank. Whatever was available to anyone was available to everyone.

It wasn’t paradise, because food was scarce, and growing communities were eventually forced by this scarcity into a competitive struggle for life.

First came the invention of agriculture, and the consequent need to defend the land, or property, on which crops were grown.

Although this gave communities more stability and growth, agriculture and animal husbandry could not by themselves supply everything which they needed to develop as cultures. For this they needed to associate with other communities and pool their resources. But in the new culture of property there was never again to be such freedom to take whatever was available.

And so began the exchange of products known as trade. And although some quite advanced bronze age societies managed to trade very well by using barter (e.g. the Egyptians), it was a supremely awkward way to conduct transactions. With the advent of the Iron Age, cheap metal was for the first time plentiful, and coinage was slowly introduced to facilitate the trading process.

Civilisation has since grown up on the back of this trade, whose sophistication was made possible by the invention of money. To the modem mind therefore, civilisation relies on money. This is a misunderstanding. In fact, it is only trade which relies on money. Civilisation relies on distribution of material goods certainly, but distribution is not the same thing as trade, just as give is not the same thing as sell. Modern industrial society has given us the means to free ourselves forever from that scarcity which has always dogged our forebears. Money is no longer a necessary or logical feature of society, and only a tiny minority benefit from its presence.

In history, many things become out of date, like the steam engine or quill pens. Money is about to join them.

Money is indispensable to the capitalist system, but this system is not indispensable to human society. Money as a universal means of exchange represents capital. The possessing of money enables the buyer to acquire goods and services (commodities) and the seller to dispose of goods and services. The key resource that is bought and solo is human labour power – the ability to transform initial wealth (resources, raw material, etc.) into more wealth.

We live in a society where almost everything is bought and sold. That which you need to live is a commodity, you must buy it from someone who will make (or at least expect) a profit out of selling to you. It is our passport to existence in capitalism. Not only does the movement of products from producer to consumer come to be mediated by money, but the value of a product comes to be judged not in human terms but in terms of a sum of money.

The key to the rise of continuation of the capitalist system is the ability of members of the capitalist class (owners of means of wealth production and distribution) to buy the working abilities of members of working class. They combine that labour with .capital resulting in commodities that can be sold for more it costs in total to produce them.

A high proportion of employment in capitalism consists of handling money in some way. There are hundreds of occupations that would not exist in a society that had no need for money. They range from accountants, bank and insurance staff, salespeople, wages clerks to name only some of the more numerous occupations. Tangible products needed only in a money system include bank notes and coins, account books and invoices, meters, safes and many others.

Capitalism as a market system means that the normal method of getting what you need is to pay for it. The normal way for members of the capitalist class to get money is invest their capital to produce rent, interest, dividends or profits The normal way for workers to get money is to sell their labour-power for wages, salaries, commission or fees. If they are unable to find employment they depend on state or other handouts. The result is poverty in the midst of potential plenty – actual plenty only for the privileged minority .

Socialism means a world society based on production solely for use, not profit. It will be a classless society, in which everyone will be able to participate democratically in decisions about the use of the world’s resources, each producing according to their ability and each taking from the common store according to their needs.

In such a society there can be no money – or, more precisely, no need for money. Money is only needed when people possess and most do not.

Imagine that all the things you need are owned and held in common. There is no need to buy food from anyone – it is common property. There are no rent or mortgages to pay because land and buildings belongs to all of us. There is no need to buy anything from any other person because society has done away with the absurd division between the owning minority (the capitalists) and the non owning majority (the workers).

In a socialist world monetary calculation won’t be necessary. The alternative to monetary calculation based on exchange-value is calculation based on use values. Decisions apart from purely personal ones of preference or interest will be made after weighing the real advantages and disadvantages and real costs of alternatives in particular circumstances.

The ending of the money system will mean at the same time the ending of war, economic crises, unemployment, poverty and persecution, – all of which are consequences of that system.

The revolutionary change that is needed is not possible unless a majority of people understand and want it. We do not imagine all humankind’s problems can be solved at a stroke.

Reforms of the present system fail because the problems multiply and recur. It will take time to eliminate hunger, malnutrition, disease and ignorance from the world.

But the enormous liberation of mental and physical energies from the shackles of the money system will ensure that real human progress is made.

Cooking the Books: Calculating the Rate of Profit (2006)

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

Every quarter, the government’s Office for National Statistics (ONS) publishes figures for “corporate profitability”. The latest, those for the third quarter of 2005, were released on 5 January (see www.statistics.gov.uk). They show that the profitability of gas and extraction companies rose from 34.4 percent in the previous quarter to 36.3 percent, while that of service companies stayed more or less the same at 16.6 percent and that of manufacturing companies fell from 7.1 to 6.2 percent. Overall profitability of private non-financial corporations as a whole fell from 13.8 to 13.4 percent.

But what do they mean by profitability? The ONS explains:

“Profitability compares the profits made by companies with the value of the buildings, plant, machinery and vehicles held as capital assets by these companies. Expressed as a ‘rate of return’ on assets held, these can be compared between sectors to judge whether the returns on investment are worthwhile”.

Marx divided capital into two parts: “constant capital” (which was, as above, the value of the buildings, machinery, unprocessed materials, unsold goods, etc), which he designated by the symbol C, and “variable capital” (basically the money-capital required to pay wages), called variable (V) because it was the only part of total capital that varied in the process of production – through the labour of the workers creating a surplus value (S).

For Marx, the rate of profit was calculated as S divided by C + V, expressed as a percentage. The ONS’s profitability is not the same, but is more like S divided by C.

Marx expected, as he explained in the opening chapters of Volume III of  Capital, the rate of profit to tend to be the same in whatever line of business money capital was invested. But, going by the figures released by the ONS, this does not appear to be the case, with profitability in services currently at around 16 percent, higher than in manufacturing where it is around 6-7 percent? The ONS offers an explanation:

“Generally, service sector profitability is higher than that of the manufacturing sector, reflecting the more capital-intense nature of the manufacturing sector”.

This is reasonable enough. In the service sector the proportion of C to V is less than in manufacturing, i.e. a higher proportion of their money capital has to be invested in employing workers than in acquiring plant, equipment, machinery, materials, etc. This being the case, if you are calculating the “rate of return” only as S/C rather than as S/(C + V), i.e. ignoring V, profitability in the service sector will come out higher than in manufacturing. On Marx’s definition, which takes into account V, – for which statistics are not produced – it would tend to be more equal.

What about the extremely high profitability – over 30 per cent – of oil and gas companies? Oil and gas extraction is similar to land used for agriculture where the price of the product is fixed by costs on the least fertile land in use. Those whose costs are lower than on this land reap an extra monopoly profit – or “ground rent” as Marx, following the tradition of Classical Political Economy, called it.

The high profits in the UK oil and gas extraction business are to be explained by the fact that the costs of extraction in the North Sea are much lower than in those oilfields, elsewhere in the world, whose production costs set the price. Their profits, in other words, contain an element – a large element in fact – of “ground rent” rather than profit in the strict sense of a return on capital invested, a fact allowed for by Marx in his analysis of landed property later on in Volume III.

A Plan, A Canal, … (2006)

From the February 2006 issue of the Socialist Standard

The first proposal to build a canal across some part of the Central American isthmus to link the Atlantic and Pacific dates back to 1529. The Spanish rulers saw it as a way of shortening the time taken to transport gold and other booty from their South American empire to Spain. But nothing concrete was done until the late 19th century, when a French company carried out a great deal of excavation but failed to complete the project.

Then the American government got in on the act. Unfortunately for them, the site of the unfinished canal was within Colombia, which was ruled by ‘a government of irresponsible bandits’, in the words of US President Teddy Roosevelt. But a revolt in the province of Panama, aided by a US battleship and a load of marines, soon produced a new country, with a government prepared to let the Americans in (for a price, of course). The US Army re-started work in 1904 but the canal was not completed till ten years later. It was a tremendous engineering feat, marked among other things by special attention to avoiding the malaria and yellow fever that had contributed to bringing down the French effort (it’s estimated that in all over 30,000 people died in building the 50-mile canal).

Having spent millions of dollars and established Panama as a new nation, the US rulers naturally wanted to gain maximum profit from their canal. Apart from its role in increasing American exports and shortening journey times between New York and California, tolls for using it were paid to the US operators rather than to Panama. American troops have been sent to Panama on a number of occasions (e.g. in 1925 to put down a strike and in 1958 to counter demonstrations). A 1903 treaty granted the Canal Zone to the US ‘in perpetuity’, but from the 1970s, formal control was gradually handed over to Panama, with this being complete by 1999.

The canal has, however, declined in importance to some degree. An oil pipeline across the isthmus has cut the number of oil tankers using it, but above all the new super-size ships are just too big for it. In 1982, a commission was set up, consisting of Panama and the two main users of the canal, the US and Japan, to consider improvements. One proposal was to widen the narrowest part of the canal and so increase capacity to fifty ships a day.

Nothing was done then, but there is currently a proposal to widen and deepen the canal, to be financed by the Panamanian government, provided a national referendum gives the go-ahead. The US are again exerting pressure, in none too gentle a way. ‘It’s in our nation’s interest that this canal be modernized,’ said President Bush on a recent visit to Latin America. Capitalism’s need for reliable routes to transport raw materials and manufactured products remains as pressing as it was when the Panama Canal was first built.

Paul Bennett

Open Prison (2006)

From the February 2006 issue of the Socialist Standard

On January 1st, police in Britain were given sweeping new powers. Police are now allowed, if they think it “necessary”, to hold anyone they suspect of any offence – motorists who are not wearing seat belts, for instance, or who commit the felony of driving in a bus lane, or even your young ne’er-do-well who throws his fish supper wrapper away in the street. Moreover, the police will be allowed to store a digital photograph of you on a database even if you have been found not guilty of the charge you were originally arrested for.

The Home Office is changing the law because current legislation on what is an arrestable offence is, they argue, “bewildering”.  So on the one hand you have the Home Office suggesting your average cop is too daft to make his/her mind up as to what is a criminal offence, while at the same time asking the police to make an on-the-spot decision on whether or not it is “necessary” to arrest your average lawbreaker for gobbing his wad of chewing gum onto the pavement.

It’s already bad enough that Britain has more CCTVs spying on us than any other country on the planet (an estimated 300 cameras will have watched me when I get back home after a day’s bargain-hunting in Newcastle), that the British police have the biggest DNA database in the world, that your location can be tracked to within 6 feet when you use your mobile phone. But from this March, almost every car journey made in this country will be logged by CCTV and satellite cameras, and stored away for future reference on a police database.

Terrestrial and space-based cameras make it possible for the state to recognise your car number-plates anywhere you go and, we are told, quite soon they will be able to recognise human faces as well.

With 77 percent of MPs now favouring the introduction of a national identity card and the Identity Cards Bill due another vote in the House of Commons, now that the Lords have made their minor amendments, it looks as if the State – 2008 is when Labour seeks to introduce them – will soon have another means of collecting and collating information about us.

It is anticipated that eventually, as well as carrying our photos, biometric ID cards will hold iris scans and fingerprints. Moreover, the database holding all the information on our ID cards would not only be accessible by the police, but open to the immigration service and numerous public and private organisations.

Forgive me for being alarmist, but I’m betting that in a few years every single adult in Britain will have their mug-shot and their entire personal history on a police database; that the day will come when your movements will be logged the moment you leave your home in the morning.

No doubt people, like me, concerned about increased police powers and increasing state intrusion into our daily affairs will be met with the imbecilic line: “If you’re not doing anything wrong, then you have nothing to worry about.” This cop-out totally misses the point. In truth this has nothing to do with our innocence. It’s all about mistrust; about the state saying we can not trust a single one of you as far as we could kick you. The state is saying you have a brain and are capable of thought, so you are therefore a potential threat to very powerful interests and consequently need to be tracked 24/7. This is the state saying they want to know everything about us from the moment we’re born until the second our heart stops beating.

When you consider the state has access to the NHS database, to info transmitted each time we use credit cards (the spy in your wallet), to info that will be contained on the coming national id cards, the info gleaned at GCHQ in Cheltenham, at the NSA base at Menwith Hill that scrutinises our phone conversations and scans our email, the info amassed by Echelon, perhaps the most powerful intelligence gathering organization in the world and sponsored by the USA and the UK, then it’s time to sit up and start worrying.

Think not? Consider also the introduction of radio-frequency identification tagging (RFID) which started in stock control and on motorway tollgates in the USA. Supermarkets are now using this technology – electronic chips that send out a code when exited – with companies like M&S and Tescos investing millions in this new spy hardware. It is anticipated that soon the chips will be small enough to be undetectable in products such as clothing, the carrier being detectable from space.

Our civil liberties are not only being eroded by the day, but the state is intruding deeper and deeper into our personal lives. You can sit back and accept it all as inevitable in this post-9/11 world and reconcile yourself to a lifetime of mind-numbing conformity, inside of your new open prison – for this is what Britain and many other countries are turning into – never daring to think an out-of-the-place thought about the system that exploits you, afraid you may accidentally commit a “crime” on your way to the shops (some security camera catching you walking on the grass or expectorating a lump of phlegm). Or you can organise with others in an attempt to wrest state control from those who use it as a means of utter oppression on behalf of the master class. But don’t take too long to think about it – your thoughts may one day not be your own.

John Bissett

At the Bottom of the Heap (2006)

From the February 2006 issue of the Socialist Standard

The chairman of the Bench had wanted to send Chu Hua to prison, so she had been let out of the dock to speak to the duty solicitor in case he could persuade the magistrates to a less vengeful sentence. Now she sat squirming downwards and backwards into her chair, her dull eyes flickering in fear, clutching her threadbare jacket against the chill of the interview room. She did not look like a criminal who threatened to undermine what all right-thinking people – like magistrates – uphold as the basis of civilised society. It was not that she had cloned credit cards, nor dealt in controlled drugs. She had not sexually abused any children, nor deceived impoverished young women in Eastern Europe into coming here only to find that the well paid jobs they had been promised were really as enslaved prostitutes. She had not murdered anyone, nor robbed a bank at the point of a gun. “So why did you” asked the solicitor, “try to sell those counterfeit DVDs?”

It was sad story, eked out with the help of the interpreter. Chu Hua was born in a remote village in North China; the interpreter knew of the area, that it was deeply impoverished, obviously not borne up by the flood of supposed prosperity of supposed “socialist” China. Chu Hua’s parents tried to provide for their family from what little they produced in their vegetable garden. They could not afford to send the children to school so Chu Hua was scantily educated and illiterate, with no prospects of improving in that village. In 2001 she came to England as an asylum seeker, on the grounds that she was a member of the Fa Lung Kung cult. Her application was refused and now she has to report each month to the Home Office Immigration Service, and she is not allowed to take employment or apply for benefit. Sometimes she gets cash-in-hand work as a cleaner but this lasts for only a week or so because she is scared of being reported for benefit fraud. She is reduced to relying on friends and other contacts for food and somewhere to live, sleeping on floors in a roomful of other people. But bad as this is she thinks it is better than her former life in China.

Cult

On the face of it, the Fa Lung Kung seems to do little more than practise slow, hypnotic, Tai-Chi like meditation exercises – like those hardy early morning groups in many an English park. The problem in China was that it developed into a hugely popular movement with a membership large enough, and ardent enough, for the government to outlaw it as a destabilising influence. At some point it wandered beyond meditation, claiming that its followers can see through a “third eye” which protects them and can cure them of diseases. Such preoccupations, on a large scale, can be addictive enough to affect workers’ disciplined acceptance of their role as wage slaves. A ruling class will not be happy to allow too much brainwashing which does not promote their own power and influence over society. At times Fa Lung Kung has been tolerated in China (although it was banned under Mao Zedong’s regime as unhealthy and superstitious) but in recent years there has been a fierce crackdown in which the cult’s followers lost their jobs or were sent to prison where they were beaten or even killed. As might be expected, the movement spawned a considerable media industry and not a few con artists to exploit anyone vulnerable to claims about mystical powers of mental adjustment to social stress. Even so the mere fact of membership of the cult was accepted in the United States as justification for asylum; as Chu Hua soon found out, that did not apply in this country.

So she spends most of her days wandering along the local High Street and it was there, in an indoor market, that a man who must have noticed her vulnerability suggested that she could earn a little money by helping him sell some DVDs. It was not long before the police saw her – and recognised her as someone who had been arrested twice before for the same offence. Her two previous appearances in Court had resulted in her being ordered to do Community Service, which she had completed happily as it was better than the High Street and kept her occupied, scrubbing off graffiti or cleaning school playgrounds. She must have wondered why she was not allowed to do the same kind of work for a wage. But now this was her third such offence in a short period and the Court was running out of patience with her.

Pirates

The recent explosion in the production and sale of pirated DVDs has alarmed the industry, which sees it as a threat to its profits. The biggest operator in this field is HMV, which also trades in CDs and owns the Waterstones booksellers. During the last complete year, HMV recorded a pre-tax profit of ú136.2 million – up by 9.9 percent on the previous year. Not all of this, of course, came from the sale of DVDs; Waterstones is notorious for its ruthless cost cutting war against independent booksellers and makes huge profits from best-sellers like the Harry Potter books. But DVDs are extremely important to HMV’s profits; while the group’s underlying sales were down by 4 percent during the last year the sale of DVDs went up, and with it HMV’s share of the market for them, of which the group claims to have “the lion’s share”. So they are bound to take any threat to their pre-eminent position seriously – and that does not mean they worry about a few school-age computer wizards downloading and writing their own, illegal, copies of DVDs to share with their mates.

The copyright laws, with their harsh penalties, are there to aid HMV in their war against the pirates. One local authority recently decided that pirated DVDs and CDs represented so urgent a threat to their community that they formed an alliance with the local police to hunt down the pirates and close down their factories. On one gloriously successful day for the partnership the local plods and council penpushers seized £30,000 worth of illegal DVDs and CDs from one business, then a few days later went to the place again and took possession of another £20,000 worth. During the past year they have “visited” more than 90 premises, seized over 150,000 items, closed down one DVD factory and launched several prosecutions. These achievements are publicised by the council with such pride that some of their citizens may overlook the fact that they do not have an exactly successful record when it comes to their other responsibilities. Not long ago this council was assessed, in terms of the services it supplies to vulnerable people such as the homeless, the elderly or children in need, as one of the worst in London, to the extent that they were under threat of being taken over by a Whitehall hit squad.

Priorities

But of course that council was utterly correct in its priorities because the realisation of a profit through the orderly, legally controlled process of production for sale must take precedence over any human need. It is the priority of capitalism and when all is said and done it is what people like councillors and MPs are elected for – at least as things are for the present. If we had a society with a different priority wealth would be turned out to meet human needs, so that all people would have unfettered access to it, which would be enough to give any self-respecting councillor a seizure. It would be the end of the social arrangements which made it imperative for Chu Hua to come all that way across the world although when she got here it was made plain to her that she was not welcome. And now she is a threat to a mighty corporation like HMV.

In any event Chu Hua’s fears overcame her; she took her chance to leave the Court and did not come back. Huffing and puffing, the chairman was openly pleased to have his opinion of her so quickly vindicated and readily agreed to the prosecutor’s request for a warrant for her arrest. If she comes up in Court again she will have yet another charge – Failing to Surrender – against her. She is out there somewhere, scraping along somehow, vulnerable to a host of predators. We can only hope she survives.

Ivan