Cooking the Books: Unfair Shares (2022)

The Cooking the Books Column from the February 2022 issue of the Socialist Standard

‘The world’s 10 richest people added $402 billion to their fortunes in 2021’, CNBC reported on 30 December. ‘They were led by Tesla CEO Elon Musk, who this year became the world’s richest man and briefly saw his net worth top $300 billion. He added $121 billion to his net worth in 2021 — just shy of the $140 billion he added in 2020’ (tinyurl.com/2p9fctc5).

This way of putting it is misleading, though not as bad as saying that these multibillionaires ‘earned’ it. Musk did nothing to add to his ‘net worth’. It just got added as the market price of the shares he owns in Tesla and other companies happened to increase by the end of 2021 compared to what it had been at the beginning. The increase doesn’t necessarily even represent any increase in real wealth as it does not correspond to an increase in anything useful made from materials that originally came from nature.

The Independent (13 October), carried an article, ‘How much does Jeff Bezos make per minute?’ It distinguished between his income and his ‘net worth’ and calculated his total income as $1,691,840 a year, or $3.20 a minute. This is the money Bezos, then the richest man in the world, had in 2020 to spend on his personal luxuries such as a space trip or to invest. The increase in his net worth, however, was calculated as $75 billion, or $142,667 a minute, over 44 times as much (tinyurl.com/a3caa726). Musk’s income in 2020, at $595 million, was rather more but still only a fraction of the $140 billion his net worth increased by that year.

As an individual’s net worth is calculated by multiplying the number of shares they hold by their current market price, what we are talking about here is an increase in the price of the shares these multibillionaires own. A share is principally a claim on the future profits on the capital invested by the business concerned, or, as Marx put it, ‘merely a title of ownership to a corresponding portion of the surplus value realised by it.’

The market price of a share is the income as profit that it is expected to bring, converted into a capital sum. This is brought about by the play of supply and demand on the stock exchange, with demand influenced by possible future profits and so includes a large element of speculation. Marx called the capital sum resulting from converting future profits in this way ‘fictitious capital’, fictitious in the sense that it did not simply represent actual capital invested in exploiting wage-labour for surplus value. It principally represented claims on future wealth; in other words, on wealth that does not exist as yet:

‘Even when the promissory note — the security — does not represent a purely fictitious capital, as it does in the case of state debts, the capital-value of such paper is nevertheless wholly illusory’ (Capital, Vol. 3, ch. 29).

What is ‘illusory’ is not the legal title to a future income stream from surplus value nor its worth, but that the market price of shares represents real wealth in addition to the net value of the capital in the enterprise; even more illusory is the idea that an increase in the market price of these legal titles represents an increase in wealth.

If all stocks, shares and bonds were to disappear the amount of wealth in the world, that is, wealth that can be consumed or used to produce more wealth, would be quite unchanged. Which is what will happen in socialism where the commonly owned means and instruments of production will be used to directly satisfy people’s needs rather than as today to yield a profit.

Material World: Was Money Abolished in Cambodia? (2022)

The Material World column from the February 2022 issue of the Socialist Standard

The Khmer Rouge governed Cambodia from 1975 to 1979. It was an authoritarian regime, possibly responsible for as many as two million deaths, the result of famine and executions. One of its policies still sometimes remembered today is its supposed abolition of money. As self-proclaimed ‘Communists’, the Khmer Rouge leaders allegedly wanted a society with no wages or means of exchange, hence no money.

Some writers claim that this abolition of money had, and still has, negative consequences for Cambodian society. For instance, an article by Sheridan Prasso (eastwestcenter.org, January 2001) claimed that, although money had by then been in use again in Cambodia for over twenty years, its former abolition had made people there distrustful of money, hence their preference for US dollars or gold and the ineffectiveness of the Cambodian financial system. More recently, Anirudh Bhati (mekongresearch.org, 19 June 2018) has argued that Cambodia under the Khmer Rouge had no money, private property or trade, and states that ‘without money — and therefore without effective trade — there is no possible freedom.’ As can be seen, supporters of capitalism have sometimes seen the abolition of money in Cambodia as an argument against socialism, against the very idea of a moneyless society based on free access.

But it simply is not true: the Khmer Rouge did not do away with money in Cambodia. This was pointed out by an article in the October 1978 Socialist Standard, citing contemporary reports of various kinds. There was still exchange of some goods, and rice, fish and rubber were exported in order to acquire foreign currency. Most Cambodians lived on little more than rice, and that probably was distributed without using money, but the Khmer Rouge and their soldiers were better fed and clothed than the rest of the population: privilege need not imply having greater access to money. Ieng Sary, a Khmer Rouge leader, had accepted in 1976 that a monetary system might be set up later, but in fact such a system already existed, even if ordinary Cambodians had few or no dealings with it. As Prasso says, Khmer Rouge leader Pol Pot ‘apparently concluded that money was fine for the state but not for its people’.

This whole issue was recently raised again by James Tyner in an article ‘“Currency is a Most Poisonous Tool”: State Capitalism, Nonmarket Socialism, and the Elimination of Money during the Cambodian Genocide’ in the open-access on-line journal Genocide Studies and Prevention Volume 14, 2020. He notes correctly that, ‘Marx’s vision of a stateless, moneyless and classless society aimed to encourage the fullest development of human consciousness and creativity’, and then investigates to what extent the Khmer Rouge approached this goal.

Before seizing power, Khmer Rouge leaders had discussed abolishing money, and they announced its supposed elimination in September 1975, just five months after taking control. Workers received food rations, with more for those who performed the heaviest manual labour. Rations were fixed but the working day was expanded, resulting in an increase in what Marx termed absolute surplus value (see Capital Vol 1, chs 12 and 16). But the rulers still needed to ‘raise investment capital for a moribund industrial sector’, and this was done by exporting rice and other goods for sale. Tyner writes that ‘On the one hand, party leaders participated in the monetary-based global economy as state capitalists while, on the other hand, they instituted a non-monetary, non-market domestic economy’ and ‘the resultant economic order of Democratic Kampuchea resembled more so a hybrid form of state capitalism and non-market socialism than it did either a barter economy or an economy of associated producers as envisioned by Marx.’ But there simply cannot be a mixture of state capitalism (or any form of capitalism) and socialism: the former has money, wages, profits, the latter has none of these. The vast majority of Cambodians certainly did not live in a society of free access and democratic control: they were extremely poor and subject to brutal exploitation and oppression.

One noteworthy aspect of his article is the fact that the idea of state capitalism is almost seen as commonplace, not something that needs to be described or explained at length. A footnote defines it as ‘a political-economic system of governance whereby a ruling party controls the state apparatus and in turn manages the means of production in order to appropriate surplus value’, and refers to writers such as Tony Cliff and Richard Wolff.

Marx certainly advocated a society without money (see the Socialist Standard for April 1980), but he saw money’s disappearance as part and parcel of the establishment of common ownership and production for use by workers who supported this and were prepared to make it work. It was not something that could be done by itself, with few or no other changes in society, and certainly not after a military takeover of the state, as happened in Cambodia.

Paul Bennett

The Power of Words (2022)

Book Review from the February 2022 issue of the Socialist Standard

Burning the Books: a History of Knowledge Under Attack. By Richard Ovenden. John Murray £10.99.

Probably the best-known case of book-burning was on 10 May 1933, in Berlin and other German cities. The Nazi authorities consigned many books, by Marx and Freud among others, to the flames. This was, however, only the first step in the Nazi attack on learning and scholarship, which led to over 100 million books being destroyed. Jewish culture was a specific target, of course.

This is one of many examples discussed in Richard Ovenden’s wide-ranging study, which also deals with efforts to rescue or replace destroyed works. For instance, the YIVO archives in Vilnius, and later in New York, were able to preserve many Jewish books and documents. In many other instances, too, people have risked their lives to rescue books and other documents.

Loss has sometimes been a matter just of neglect, and the removal (theft) of texts has on occasion been an unintended consequence of war. The German Peasant War of 1525 was a rare example of documents being destroyed by those who lacked power: feudal charters and tax rolls that kept peasants in servitude. But in most cases the destruction of works has been a deliberate policy by power-holders, as a means of controlling the past and hence the present and future. The sixteenth-century Reformation, for instance, ‘was in many ways one of the worst periods in the history of knowledge’. In England, tens of thousands of books were burned or broken up, especially in monasteries and other religious communities, and an Act of 1549 provided state sponsorship for this. It was all part of Henry VIII’s declaration of independence from the rule of Rome. As another example, the destruction of Bosnian archives by Serb forces in the 1990s was in particular aimed at removing records of the presence of Muslims.

Oppressive regimes tend to keep massive amounts of information on their ‘subjects’. In South Africa, officials in the apartheid regime destroyed large numbers of documents, making it difficult for subsequent inquiries into the oppressive system. Around the time Malaysia became independent in 1957, British colonial officials destroyed countless archives and documents, in order to conceal their racist and prejudiced behaviour. In East Germany, many files held by the Stasi were disposed of, though many citizens were still able later to view the files and see what information the state held on them. In 2019, the Turkish government began to destroy books associated with one of its opponents.

The web has resulted in a major change to how knowledge is recorded and preserved, but that does not mean written texts are redundant. Websites often disappear or change their address, and web archiving is a challenging task. Ovenden’s book shows clearly the importance of recording information, how the powerful have often tried to manipulate this in their own interests, and how some people have managed to resist this.

Paul Bennett

Death of a Sociobiologist (2022)

From the February 2022 issue of the Socialist Standard

E. O. Wilson, the inventor of the theory of genetic determinism he called ‘sociobiology’, died on 26 December at the age of 92. He was an avowed opponent of socialism, writing in his 1978 book On Human Nature:

‘The perception of history as an inevitable class struggle proceeding to the emergence of a lightly governed egalitarian society with production in control of the workers… is based on an inaccurate interpretation of human nature’ (Penguin edition, 1995, p. 190).

Later research and findings in the field of genetics discredited the view that there were specific genes for specific behaviour patterns such as aggression or territoriality. Genes govern a person’s physical characteristics including certain cognitive facilities, and susceptibility to certain health conditions.

In her obituary in the Guardian (6 January) Georgina Ferry made the mistake of attributing to Wilson the view that his ‘sociobiology’ set out to refute. Referring to his book on human nature, she wrote:

‘Today most scientists accept, as Wilson argued, that genetically determined “human nature” includes the capacity to develop extremely flexible patterns of social behaviour under the influence of culture’.

Most scientists do indeed accept this, and did before it was challenged in the 1960s and 1970s by the likes of Konrad Lorenz and Robert Ardrey… and E.O. Wilson. Here, for instance, is what the anthropologist Alexander Allard wrote in 1972:

‘Culture is learned and shared. It is rooted in biology. But although this is true (the capacity for culture is part of a normal human’s brain structure), culture frees man to an unprecedented degree from strictly biological controls over the development and maintenance of behavioural systems. Culture is biologically adaptive. That is, human populations imbedded, like all animal populations, in specific environments adjust to these environments largely through culture’ (The Human Imperative, Columbia University Press, 1972, pp. 21-22).

The fact that a science writer like Ferry should make such an elementary mistake shows the extent that ‘sociobiology’ has been forgotten by scientists, though it may also reflect the fact that in later years Wilson redeemed himself to a certain extent by becoming a champion of biodiversity.

However, Wilson’s anti-socialism, as opposition to ‘a lightly governed egalitarian society with production in control of the workers’, still survives among pro-capitalist ideologues. In a eulogy of Wilson in The Times (5 January) Lord Finkelstein, the Tory peer, wrote:

‘Humans are animals too, after all, so our social organisation, our behaviour, our hierarchies, our urges will, to some extent at least, be the product of our biology.’

Our urges no doubt, but not our particular ‘social organisation’ beyond the fact that we are social animals and certainly not our ‘hierarchies’. These are only influenced by our biology insofar as our biology ‘includes the capacity to develop extremely flexible patterns of social behaviour’.

This does not mean that, as Finkelstein claims, that humans are a ‘blank slate’ or that all individuals are the same. As Allard put it:

‘Individuals are born different. The outcome of heredity and experience will lead to differences in temperament and ability which make it possible for the human group to function as a social entity.’

Socialists have always recognised this, as in the long-standing slogan of ‘from each according to their ability, to each according to their needs’. The equality socialism will bring is not through ‘social engineering’ somehow making everyone have the same abilities, but a society in which everyone, whatever their ability, has the same access to what they need to live and enjoy life.

Finkelstein is right on one point: that it is unfair to say, as some have done, that Wilson was a ‘racist’. He wasn’t. He was just an anti-socialist and a biological determinist.

Later in his eulogy, Finkelstein abandons ‘to some extent at least’ and boldly declares:

‘…Wilson was achingly, obviously right. How likely is it that human beings are the one species whose capacities and behaviour aren’t largely influenced by biology?’

It might perhaps have been unlikely that an animal would evolve whose behaviour was overwhelmingly influenced by the non-biological culture they created to survive, but this is precisely what did happen. It is one of the features that distinguishes humans from other animals. This is not Marxist or ‘left-wing’. It is simply the truth. To be convinced of this, Finkelstein just needs to consult any textbook on anthropology. He will find Ferry’s statement confirmed that ‘most scientists accept …. that genetically determined “human nature” includes the capacity to develop extremely flexible patterns of social behaviour under the influence of culture’.

Adam Buick

See also:

Violent genes (1979)

Fighting Human Nature (2014)

Are We Prisoners of Our Genes? (2004)