The Way to Peace. (1940)

From the February 1940 issue of the Socialist Standard

The “Phoney” War

The war to-day presents many puzzling features. The absence of big offensives on the front, an unexpected freedom from aerial attacks on big cities, these are factors which must have taken many by surprise. To complete the confusion one need only recall the diplomatic and political manoeuvres during the two or three years prior to the outbreak of the conflict, the pact signed at Munich between Chamberlain and Hitler, the “Anti-Fascist” policy of Stalin and his Yes-men, the Communists. Yet the position is by no means contradictory when a careful analysis on Socialist lines is applied.

We must bear in mind, however, that a complex stage has been reached in the development of World Capitalism, a complexity which is both quantitative and qualitative. History does not repeat itself and 1939 is not 1914; twenty-five years have changed the world, economically and politically, and a similar alignment of forces are yet facing different problems.

Where is this change most clearly marked ? Undoubtedly in the sphere of economics. The productive factors, the means for churning out goods of all kinds, have developed to an extent which can only be realised by those who can grasp the significance of that fundamental antagonism within the present world economic order, the clash between the private or Class ownership of the productive forces and Social production.

What Capitalism Means

The Class nature of ownership is most apparent in the highly-developed parts of the world. In Britain, the U.S.A., France, Germany, Japan, and other smaller countries, the economic cleavage of the population into property-owners and property-less is brought into bold relief by the giant stature of the productive machine. The combines and trusts with their millionaire oligarchies tower unmistakably over the mass of working people, while so-called “middle class” elements are made to look pathetically ridiculous in their attempts to pose as a balance within this vicious social inequality.

In .the more backward countries (particularly those not subjugated by one or the other of the above-mentioned powers) the economic line-up is not so distinct, or assumes a different form. But again there is the contrast between wealth and poverty, and whilst, for example, a country like Russia cannot as yet boast of its millionaires, it hides a poverty perhaps more abject than that of many other European lands. In any case, the more highly-developed countries are a faithful vision of what is yet to come elsewhere.

So here is a world of teeming fertility, of tremendous productivity, of ever greater potentialities, but little of it belongs to those who work on it; the coolie and the peasant, the miner and the clerk, the mechanic and the bricklayer, whatever the colour of their skin or the expression of their tongues, theirs is to work and obey lest even their meagre existence is taken from them. And the grasping hand of a tiny minority holds the colossus of world-production in its possessive clutches.

People who want to understand the modern world and why it erupts periodically into wars must forget the Hitlers and Stalins, the Chamberlains and their ilk, they must tear away the political coverings with their smoke-screens of propaganda. Then they will see the process of production, the only basis of life, the making and growing of food, the milling and the mining, yes, and the moulding of guns. For the class that owns the world does not want to lose it, they quarrel with each other for bigger slices of it, and, finally, they are afraid of having to give it up altogether.

The Empires

It is in this social setting that we have to consider the position of powers in conflict.

Shorn of their political trappings, Britain, France, Germany, Russia, etc., are merely the geographical incarnations of national capitalist enterprises competing with each other for commercial supremacy.

Poland, Czechoslovakia, Finland, the Colonies, and other parts of the European continent, represent so many means to the one end of capitalist production—profits.

What are the essentials required by capitalists in their hunt for profits ?

Firstly, they must have access to raw materials (minerals, oil, etc.).

Secondly, a working class willing to labour for them, and

Thirdly, an entry to markets where they can unload their goods at a profit.

In all three essentials the British and French Empires are a good first and second, whilst Germany is a bad third.

The reasons for this are historical and need not concern us here. Nor need we explain why Russia has been left behind in economic development and is now forced to combine a brutal imperialism with a belated spurt to bring her productive forces in line with capitalist needs.

The purpose of this article is to expose the mercenary nature of this war, which the Allied governments and their supporters claim is being fought for “principles of international justice,” “rights of small nations,” “freedom,” etc., but which Hitler argues is aimed at the “destruction of the German nation,” the “existence of the German people,” or “British self-aggrandisement.”

All of which may be good propaganda with which to get factory-fodder to become cannon-fodder—but what are the facts ?

The expansion of German capitalism on the Continent threatens the nerve-centre of the British Empire—the British Isles.

For centuries it has been British policy to prevent any power or group of powers on the Continent becoming so strong as to dominate Europe, threaten England and her sea routes. Hence the old British policy of the “Balance of Power.”

France, too weak to maintain her position on her own and offering little, if any, commercial rivalry to Britain (for the present, at any rate!) forms Britain’s link with the Continent.

It was German capitalism that menaced British supremacy in 1914, as it does to-day. Because a weak Germany cannot survive in the centre of Europe—it would split into a dozen provincial fragments—German big business welcomed the militaristic nationalism of Adolf Hitler, whose verbal hysteria and brutal excesses against opponents, including Jewish capitalists, fooled the unthinking millions into the belief that here was a heaven-sent saviour who would put an end to the system that meant poverty for them.

As Hermann Rauschnmg shows in his brilliant work, “Germany’s Revolution of Destruction,” the sadist psychology of Nazi-ism, appealing to the worst elements in Germany, the “lumpen-petit-bourgeoisie,” unfortunately only too numerous, was actually acclaimed as “revolutionary.”

The working class everywhere have still to learn that violence in language and method are often used by movements that are most reactionary.

The British capitalists at first welcomed Hitler. Quite a few of “Our Betters” became his open admirers. The growing rapprochement between pre-Hitler Germany and Russia had not pleased our rulers, and they expected that Adolf Hitler, Bolshevik hater No. 1, would put an end to that. For a time it seemed as if they were not to be disappointed. German Communists went to jails or were shot, together with many Jews, Social Democrats and trade unionists.

But a growing section of the British ruling class had come to doubt Hitler’s policy as outlined in his last will and testament, “Mein Kampf.” Supported by the Labour Party and the Communists, they began to shout about the danger to the British Empire. None of them shouted louder than the Communists, who, when it comes to making a noise, always give their pay-masters at Moscow good value for their money.

But the majority of British capitalists still held back, hoping to divert or limit German expansion.

It was the seizure of Czechoslovakia in March, 1939, that finally converted our rulers to the view that German expansion must be stopped by force of arms.

Here is no record of a growing indignation at brutal excesses, or the crushing of small nations, but a policy based purely on the self-interests of British and French world-power, a power acquired by the same forcible aggression practised to-day by Nazi Germany, Soviet Russia and Japan.

Two main arguments are presented in order to obtain working-class support for this war : —

(1) That the workers’ standard of living is bound up with the maintenance or increase of the national boundaries of their respective countries.

(2) That this war is a struggle against a particularly obnoxious and reactionary regime, whose removal would mean the release and triumph of progressive and democratic ideas.

The obvious reply to the first argument is to point to a number of smaller countries, such as Denmark, Norway or Sweden, whose economic and social level of working-class life compares favourably with that of any other European country, including Britain.

Wages are determined by social and economic factors mainly independent of a country’s size

The French workers did not get higher wages when their masters collared Alsace-Lorraine, nor the Germans less.

The second argument is just as fallacious as the first. But its appeal to the more alert section of the working class makes it more dangerous. We share their hatred for dictators and the cruelties of their oppression.

But the removal of reactionary governments by means of a war does not ensure progress or democracy. For it ignores the mass-mentality that alone can help them to power. Let Hitler be overthrown to-morrow and you are still left with millions of Germans whose minds cannot as yet grasp the advantages of free expression of political views. Bombs and bayonets can never be the means of enlightenment. War does not make Democrats out of Fascists.

Can the War be Stopped?

For all these reasons, the Socialist Party opposes this war, as it opposed the last war, for its butchery, its bestiality and the added hardships it brings to working men and their families, whose struggles for existence are already a crying indictment of a world where the powers of production are only equalled by the powers- of destruction.

The overwhelming majority of the working class do not see things our way, however little enthusiasm they may have for the war. True, there are a number of small movements, who, for various reasons, are opposed to the war. The Fascists, through their kinship with Hitlerism, the Communists, because of their allegiance to Moscow, both proclaim their love for peace to a credulous population. There are pacifists, whose genuine opposition springs from religious or humanitarian grounds, and the I.L.P., who now claim, despite recent overtures to the Labour Party, to be making a Socialist appeal.

There is not the space here to deal with them in detail.

None of them take the stand of the Socialisl Party of Great Britain, whose case is based on an understanding of the social system that causes wars.

Nor can there be any comparison for consistency.

If Hitler or the Allied Powers finally decide on the initiative and turn their war machines on to full blast, it may well be that the masses, goaded into desperation by the horrors and chaos, will revolt and so bring to an end the conflict.

In this country, at any rate, such an event seems very unlikely.

A well-established and experienced ruling class such as ours knows only too well how far they can go without breaking completely the main pillar supporting their social and political structure, the British working class.

Such a revolt is more probable in Germany, where the regime is less stable and may become unpopular with the German capitalists themselves. One thing is certain. Revolt against war itself can have no lasting achievement. The Bolsheviks came to power out of the chaos and discontent caused by the last war and we have lived to see this very Party lead the Russian masses into a new era of aggression and invasion, which may well end in Russia herself being involved in a world conflagration.

The time is past for any half-measures. Capitalism has reached a desperate pass. Since 1918, not a year has gone without bringing to the world further travail in the shape of wars, persecution, mass unemployment, and an economic crisis whose magnitude brought governments toppling from their seats of power.

When in 1931 the world’s Press blared forth that humanity’s dilemma was “over-production”—a crisis of “Too much of everything”—they let the capitalist cat out of the bag.

For here is the clue to the social riddle. The productive forces are the titans whose struggles to free themselves from the chains of capitalist ownership are convulsing society. Social harmony is impossible within the framework of this economic discord.

That is why the attack on War and the War-Makers must be aimed at World Capitalism itself.

The Socialist Movement alone can point the Way to Peace.

Sid Rubin

How can Hitlerism be destroyed? (1940)

From the February 1940 issue of the Socialist Standard

That the Nazi Government, or what has come to be known as Hitlerism, is a menace to the peace of the world, is a fact as much recognised by Socialists as by all those who support the war. No Socialist will deny that all the Hitler regime stands for is repugnant and revolting to every ideal which he strives to establish.

The suppression of free expression of opinion, the concentration camp, the racial persecution and exiling of all people arbitrarily deemed out of sympathy with Nazi-ism, the public and private burning of a vast literature on Socialist and scientific subjects, the untold number of outrages committed by the Gestapo, are things indicative of a form of social life (pardon the phrase) which must befoul the finer feelings of all those worthy to be classed as really human.

Intellectual development cannot be where such conditions are prevalent. And where intellectual forces are stifled, real social material well-being is impossible of attainment. There must be no mistake that Socialists hate Hitlerism in a manner beyond question. It stands out to us calling aloud for destruction. But when we have said all this we have but touched the fringe of the problem presented by the existence of the present German Government. That Government, like that of any other throughout the world, owes its origin and maintenance to definite historical and social causes, in which we include such mass ideology as that upon which all governments largely depend for their existence.

Let us begin at the beginning.

The basic condition for the rivalry between modern states is the quest for profit on the part of those who own the means of living, the land, mines, railways and all such resources of the earth as the whole of mankind needs in order to live. The people who own these vital forces of human life are, in broad outline, represented by those who are in control of the machinery of government. Whether such government be democratic or dictatorship in form, the above statement applies with equal force. It cannot be too often stated that the method of government in all capitalist countries is a sort of  by-product of the same general mode of wealth production and distribution. We leave aside for the moment whether the democratic or dictatorship form of the state in capitalist countries is more favourable for working-class expression and development. One point here is, that in democratic Britain, France and America, as in dictatorship Germany and Italy, wealth is produced primarily for profit. Therein is to be found the secret of the world situation in modern times. Profit represents–is in fact–the unpaid labour of the workers. Every worker must realise that after he has spent his energy in producing things for the capitalist, and after all materials and other items have been provided for, there is a surplus above the amount he gets in wages. When this surplus fails to materialise, capitalist production normally ceases. We describe the surplus wealth taken by the capitalist as surplus-value. The worker labours for the capitalist (when he is permitted to do so) for wages, and the capitalist puts him to work to realise the difference between the wages paid and the value of the worker’s product of labour. “It is this sort of exchange”, says Marx, “between capital and labour upon which capitalistic production, or the wages system, is founded, and which must constantly result in reproducing the working man as working man and the capitalist as capitalist.”

The perpetuation and expansion of the capitalist’s pursuit of surplus-value gave rise to the imperialism underlying modern war. For capital to grow to maturity it must break down national boundaries and seek the world for its sphere of activity and gratification. Hence the conflicts between national groups of capitalists represented by their respective governments backed by armed force.

The phrase, “the workshop of the world”, at one time so aptly applied to this country, indicates an ideological landmark, not merely in the economic history and development of England, but also in that of the other leading capitalist powers. Those who were once the customers of “the world’s workshop” became, in the very nature of the capitalist process, its competitors for markets, trade routes, spheres of influence, and the occupation of strategic positions, or the acquisition of raw materials.

Thus arose the intense rivalry of Britain and Germany, which culminated in the war of 1914-1918. The defeat of Germany in that conflict and the imposing of  the Treaty of Versailles upon her paved the way for the war in which we are once more engaged.

One of the chief architects of the Versailles Treaty, Mr Lloyd George, has said of his own part-handiwork:-

I am one of the four upon whom devolved the onerous task of drafting the treaties of 1919 . . . The conditions that were imposed upon Germany were ruthlessly applied to the limit of her endurance. She paid £2,000,000,000 in reparations. We experienced insuperable difficulties in paying £1,000,000,000 to America–and we are a much richer country than Germany.

We stripped her of all her colonies, confiscating her equipment in those vast territories.

We deprived her of part of her home provinces, some of which she had possessed for over 200 years.

We took her great fleet away from her.

We reduced her army of millions to 100,000 men.

We dismantled her fortresses and we deprived her of artillery, tanks, airplays, broke up all the machinery she possessed for re-equipping herself

It is no part of our Socialist work to shed tears over the demilitarising of Germany or any other capitalist state. But as we look back from the time of the termination of the last war, up to date, we are forced to observe the economic and political consequences which called forth the author of Mein Kampf and his gang as the heads of a great state. Hardly had the Versailles Treaty been signed than the then German Government began to plot and scheme to defeat it. Hemmed in as Germany was by strong powers like England and France, there is little cause for surprise that, to quote Mr Lloyd George again:-

“When communities are deprived of the protection of law by selfish and unscrupulous interests they generally find refuge in taking the law into their own hands.”

That the thrusting of the Versailles Treaty upon Germany was in principle no worse than the German or Prussian Treaty imposed upon France in 1871, than that imposed upon Roumania at Bucharest, or that on Russia at Brest-Litovsk, is but begging the question. The real point is that capitalist treaty-making is not only no safeguard against wars, but as a sort of storehouse for their recurrence. And so is Europe, perhaps the whole world, once more on the verge of a gigantic slaughter, blinding and maiming; the approximate end to the whole butchery and destruction being beyond reasonable forecast.

The British Government again drags the workers of this country and its colonies into the battlefields on the plea of resisting aggression, as it did in the last “war to end war”. This time we are to smash Hitlerism, as we were in 1914 incited to destroy the Kaiser and his military caste.

But it is not the Nazi form of government as such that the British ruling class seeks to end, but the policy of Hitler’s regime in aiming at the interests of those who own and control the British Empire. Hitler and his murderous thugs might have raped and persecuted, imprisoned and tortured indefinitely, without as much as a stir from the “Mother of Parliaments”. The sacking and slaughter of Abyssinia, the overrunning of Austria and Czechoslovakia, were as much undisputed acts of aggression as that of Poland, but they evoked the British Government to acts of accommodation rather than conflict. Not until it was certain that  Hitler had designs on the dismemberment of the British Empire were the forces of slaughter released by Great Britain and her ally, France.

If the present war is allowed to run its course until one or other of the combatants is crushed, are we likely to witness, if we are still alive, the downfall of the Nazi form of government in Germany, the restoration of some form of democratic social life in Germany, and the maintenance of what democratic means of expression remain in Europe today? If Chamberlain, Daladier and Company are the spokesmen in setting the seal of defeat on Germany, will they invite the “leaders” of the working-class movement to secure that the German workers be permitted to voice their political and social views, whatever they may be? We know from experience they will do nothing of the kind; it is not a matter in which they are the least bit interested. Therefore, the backing of the “Labour Movement” given to the British and French governments is preposterous.

The working-class movement of Europe, even that part of it which claims the war to be one of Democracy versus Nazi Dictatorship, is no more likely to be consulted at the “funeral” of Hitler than they will be granted their emancipation from wage-slavery by the international capitalist class. The real issue before the working class of the world is one of ending its exploitation and all that such entails.

The present war is most likely to bring in its trail, unless it is stopped by working-class action meanwhile, greater misery than the last war, greater and more intensified exploitation, less freedom to achieve our purpose than we now possess, whichever side is triumphant in the struggle.

The German workers must, it seems, be the means of effecting the downfall of the Nazi system of government.

For ourselves we, as Socialists, would render them any service which would assist in their accomplishing the overthrow of their despotic ruling gang, if only to gain for them the immediate means of being able to give expression to their social and political aspirations without fear of being murdered or placed in a concentration camp.

Until the working-class movement in Germany or anywhere else can gain the means of emerging from underground into the daylight, their chances of finally freeing themselves from capitalism through Socialism are well-nigh hopeless. To assist in the war against Germany is not the way by which this can be accomplished, we should be slaughtering the very people we desire to liberate from the Nazi yoke. Moreover, our action then would assist Hitler and Co. to bury still deeper the opposition to his rule. He would point to the unanimity of feeling here to secure it in Germany. We find no valid reason for the support of this war, as we found none for the last war, which left us, of the Socialist Party, more isolated in our opposition than we are today.

When the war of 1914-1918 was at its worst, when the blood-bath was full to overflowing, we said then:

“Every Socialist must, therefore, wish to see peace established at once to save further maiming and slaughter of our fellow-workers. All those who, on any pretext, or for any supposed reason, wish the war to continue, at once stamp themselves as anti-Socialist, anti-working class, and pro-capitalist.” (Socialist Standard, July 1917.)

Quite frankly, facing the matter realistically, we see no immediate prospect of the workers becoming Socialists in sufficient numbers to come to real grips with the capitalist class in a challenge to the latter’s political power. The talk of a Socialist peace, although supremely desirable and necessary, would therefore seem to be Utopian at the moment. If the working class becomes alive to the realities of  the war issue they will see that their first task is to stop the blood-letting, and finally to gain political power for themselves and establish Socialism throughout the world and thus end all wars.

Robertus.

A Tribunal Judge Clears the Air. (1940)

From the February 1940 issue of the Socialist Standard

It is interesting to learn that the point of view expressed in the January issue of the Socialist Standard, that one’s conscientious convictions, although of a definitely political character, are of equal importance with any other aspect of thought, finds a stout supporter in Judge Davis, of the Southwark Tribunal. He has declared his view to be as follows : —

“Our duty is to judge the sincerity of the conscientious objection.” Such objection may be reached by many roads—religious, humanitarian, or political. It is not our duty to discriminate and, subject to any directions from the Appellate Tribunal, we shall grant exemptions to all types of objectors who convince us that they are conscientious.”

This statement of the position is identical with the case we submitted to the Appellate Court when appearing there on behalf of one of our members. There is, however, one doubtful point in Judge Davis’s statement with which we do not find comfort. We refer to that part of it which runs—”subject to any directions from the Appellate Tribunal.”

We hope that Judge Davis will maintain his present standpoint, whatever the Appellate body may direct to the contrary. To oppose the above accurate and perfectly legal interpretation of “conscientious objection” is to dive into the realms of nonsense, political prejudice, or hard-baked conventional thought.

Robertus.

Editorial: The Coming Struggle for Trade. (1940)

Editorial from the February 1940 issue of the Socialist Standard

Nobody expects a capitalist diplomat or politician to be strictly truthful, any more than that virtue is expected of the manufacturer boosting the sale of his goods with advertising puffs.

Probably, therefore, a considerable proportion of the population, in warring and neutral nations alike, are inclined to be sceptical about promises of a better world after the war; but that scepticism, where it exists, is too often directed only to the untrustworthiness of the men, and not to the utter bankruptcy of the case on which their promises rest. People are still disposed to believe that if the leaders of the nations were better men, “men of goodwill” is the frequent- description, the world of private ownership, profit-making, and competition, could be made to work well in a slightly modified framework of international organisation.

Consider the recent statements of some of the world’s leading figures. Lord Halifax, the Foreign Secretary, speaking at Leeds on January 20th, first showed how worthless are Hitler’s pledges, and then—though he did not use the phrase “balance of power”—set the war in historical perspective with the following : —

“I think it. is certainly true that the instinct of our people has always throughout their history driven them, to resist attempts by any one nation to make itself master of Europe. They have always seen in any such attempt a threat both to their own existence and to the general cause of liberty in Europe. 

Therefore, I say without hesitation that if the British people have been right, as they have been before, in resisting domination by any one Power in Europe, they are doubly so right to-day.” — (DailyTelegraph, January 22nd, 1940.)

Lord Halifax believes, of course, that war for such an object is worth while. He would, he said, “sooner be dead than alive in a world under the heel of Nazi dominance”; but what a prospect for humanity! The kind of situation which calls for war against some Continental would-be master of Europe happened with the Dutch, with the Spaniards, with “that man Napoleon,” with Kaiser Wilhelm, and now once more with the new rulers of Germany. Apart from a few arid phrases, neither Halifax nor any other of the Allied spokesmen has anything to offer which shows how the situation will be prevented from recurring in another ten or twenty years.

Then there is Signor Gayda, spokesman of the allegedly young, virile, Fascist Italy— “neither Capitalist nor Socialist.” In an article in the Sunday Dispatch (January 21st) we find this mouthpiece of Mussolini putting forward an explanation of the war even more superficial and hopeless than the version of Lord Halifax. Gayda—who puts his hand on his heart and pleads for a better, juster Europe—also has a balance of power theory, but a substantially different one. He sees in a “healthy balance of power” the only “real guarantee of peace”; but far from agreeing with Lord Halifax, that Germany upset the healthy balance, he maintains that France and Britain are the disturbing element.

They were, he says, already too powerful before 1914, and the Versailles Treaty “increased instead of diminished the disparity of resources between European nations.” So he sees the present war not as a German challenge to European equilibrium, but as being an inevitable consequence of Versailles. Italy, he says, “is against all systems which give obvious or hidden supremacy to one nation or nations.” She wants, however, to possess “free and fertile space for expansion of the Italian population” and “freedom of life and movement for the Italian nation.” “Movement,” of course, covers the annexation of Abyssinia and Albania, and already Italy, having become “the greatest Balkan Power of Europe,” is threatening war against Russia should the rulers of that country decide that they have rights of expansion in the Balkans after finishing with Finland.

So Signor Gayda, too, has new wars for the world when the present one is over—or before.

From Gayda to his neighbour the Pope is but a short step, even in the realm of political ideas, for the Pope, too, has expressed his views on rebuilding Europe, and the Vatican gave authoritative statements to Mr. Ward Price (Daily Mail, January 22nd). The Pope, in his Christmas speech to the College of Cardinals, denned the requisites of a just and honourable peace as follows :

“1. The right of all nations, great and small, to independence ;

2. The reparation of infringements of this right ;

3. Disarmament, material and spiritual ;

4. Guarantees for the respect of conventions ;

5. Just revision of treaties.”

Here again we see thought moving within the confines of the prison called capitalism, and placing the entire emphasis on good intentions between nations and a recarving of the territories of Europe.

From these men, whose ideas are typical of those of the capitalist statesmen of every country, it is refreshing to go to the matter-of-fact view of the capitalist world held by a Times correspondent who wrote on the subject “Export or Die—(Times, January 17th, 1940). Without wasting time on fine sentiments, he gets down to the proper business of a capitalist gentleman, that of capturing trade. He says that now the Allied fleets are keeping German goods out of South America, this business “will not fall into the lap of British exporters. With every possible encouragement from the U.S. Government, United States firms are keenly competing for the trade.” That is the keynote of his whole warning, the warning that with Germany disposed of, the world scramble for markets will be fiercer than ever.

Brazil, he says, is developing her export industries and supplying textiles, footwear, weighing machines arid cutlery to her South American neighbours. Argentina’s exports of textiles were half as much again in 1938 as in 1937. Chile is trying to sell to U.S.A. goods formerly obtained from Europe.

“Other competition has to be faced in many markets, notably from the factory industries which have been developed in the Empire. Many of them were started in the last war, and have grown in number and variety ever since. . . If oversea imports of finished goods are interrupted further expansion will doubtless take place to the permanent detriment of the export trade of the United Kingdom. Intensification of Italian and Japanese competition, particularly in textiles, is expected.”

His warning is that “if Great Britain is to reap the harvest, or indeed to retain her commercial position, it is essential for the manufacturers, merchants, and Government to unite in a great export effort.”

Here is recognition of one aspect of the brutal truth about the world to-day, democratic or totalitarian, inside the Empire as well as outside. Capitalism is based on private ownership of the means of production and distribution, and on cutthroat competition to sell the goods and realise the profit. The war will make the competition of the industrial nations more intense than ever, and not all the schemes and hopes of the statesmen will turn that savage scramble into a better Europe.

Material World: Dedicated to serving the rich: the reality of aid (2010)

The Material World column from the March 2010 issue of the Socialist Standard

“CARE: Dedicated to serving the poorest of the poor.” So reads a wall poster at the Haiti offices of the “humanitarian” agency CARE International. The offices are housed in a mansion in a wealthy district up in the hills above Port-au-Prince, at a hygienic distance from the poor people they are “dedicated to serve”.

Well, you can’t expect the respectable ladies and gentlemen who administer aid to live and work down in the filth and stench of the shantytowns. Of course, you can’t blame the poor for the lack of sewers, but still…

The aid administrators realise that they need the assistance of people who do know something about the poor and are capable of interacting with them. So they hire specialists called anthropologists, who acquire the requisite knowledge and skill as trainees by living for a time among poor people (formally in order to gather material for their Ph.D. theses).

But some trainees “go native”. They come to sympathise with their temporary neighbours and feel the urge to talk about inconvenient realities that they have discovered. This annoys the administrators, who label them “idealists” and say they have “a negative attitude”. It would be quite unsuitable to appoint them to responsible positions in aid agencies.

An eye-opening book has just appeared, written by just such a chatterbox: Timothy T. Schwartz, Travesty in Haiti. No publisher would touch it, so he published it himself.

Charity for the rich

Very little aid ever reaches the poor, let alone the poorest of the poor. This is partly due to the practical difficulty that the poorest areas also have the poorest infrastructure (roads, storage facilities, etc.). But mainly it is because those who are supposed to distribute the aid sell most of it and pocket the proceeds.

In some cases, aid goes directly to the rich. Schwartz describes an “orphanage” run by an American reverend where the “orphans” have parents who could easily afford to provide for them. The place is really an elite boarding school. Meanwhile, naïve churchgoers back in the States, most of them ordinary working people, fork out to support the “poor orphans” they have “adopted”, send them gifts, and even pay for their college education. The poor in rich countries give charity to the rich in poor countries.

The more aid, the more misery

Schwartz’ most important finding is this. When the flow of food aid into Haiti increases, the overall result is that malnutrition becomes more widespread, not less. Why? The great majority of Haitians are small farmers, dependent on selling food to meet their non-food needs. Typically, natural disaster prompts the decision to send food aid, but by the time it arrives the emergency is over and the country may well be right in the middle of a bumper harvest. The effect is to drive prices down further, causing enormous misery throughout the rural areas.

It seems commonsense. If you see hungry people on TV, so you give money to buy and send them food. But capitalism has a perverse logic of its own that has nothing to do with commonsense. Reactions that ignore that logic are liable to do more harm than good.

Some experts and charities – notably, Oxfam – advocate aid in the form of cash transfers. Then food for distribution can be bought locally instead of imported, strengthening rather than undermining the local peasant economy. Local supply would also be quicker and easier to organise.

Nevertheless, most aid agencies, and especially those like CARE that are dependent on Western governments, keep on shipping in food. They even require their national affiliates to cover operating expenses by selling part of the food received locally (“monetised food”).

Expanding export markets

US overseas food aid began in 1954. Until recently it was openly justified as a foreign policy tool and means of promoting American business interests. In particular, it has expanded export markets for US agriculture. Dumping surpluses abroad has helped the US and the EU maintain prices and profits on their domestic markets.

According to the website of the US Agency for International Development, aid was used to transform Egypt from a food exporter in competition with the US into a net importer of food with a low-wage industrial sector. Since the 1980s Western governments and financial institutions pursued the same strategy in Haiti. The country was turned from an exporter into an importer of rice, sugar, and other crops, while 100,000 peasants abandoned the land to work for $2 a day in assembly plants, mostly US-owned, making T-shirts, jeans, and the like for the American market. This new industrial sector has now also largely collapsed, leaving Haiti to depend increasingly on the Columbian drugs trade.

A striking illustration of the commercial interests underlying aid is the fate of the Haitian pig. Farmers used to rely on a small black pig well adapted to conditions in rural Haiti. USAID had these pigs exterminated under the pretext of fighting a swine fever epidemic. The Haitian pig was replaced with a large white pig from Iowa that had to be fed large quantities of imported US corn.

Do they know?

Do the aid administrators understand what they are doing? It is clear from Schwartz that they understand very well. When he “reveals” his sensational findings, they do not argue that he is wrong. They just advise him that if he wants a job he should stop saying things that the US government does not want to hear. They know who they really serve.

Stefan.

In Material World February issue we didn’t mean to write that the poll showed that people with high incomes were more likely to be favourable to the word “socialism” than those with low but the opposite, so:

“Women are slightly more likely than men to prefer ‘socialism’; people with low incomes (under $40,000 per year) more than twice as likely as people with high incomes (over $75,000); and blacks almost twice as likely as whites, with equal proportions favouring ‘capitalism’ and ‘socialism’ (31 percent each).”

Letter: Inflation and Quantitative Easing (2010)

Letter to the Editors from the March 2010 issue of the Socialist Standard

Inflation and Quantitative Easing

Dear Editors

I have read many of your economics publications and note that your explanation of inflation may be summarised as – the excess issue of an inconvertible paper currency. Now, I thought that this is exactly what is being done (21st century style) with quantitative easing. However, in the Socialist Standard January 2010 in the article ‘Financial Alchemy’ you appear to be saying that this is not happening and that quantitative easing will not result in inflation. Please could you clarify this point for me and for other readers.

Graham Wildridge

(by email)

Reply: 

We do indeed argue that the cause of inflation is the excess issue of an inconvertible paper currency,  that is, currency that is freely printed and not convertible into an underlying commodity like gold. Currency can be said to be issued in excess when it is above and beyond the amount needed to carry out production and trade, injecting purchasing power into the economy that is not related to real wealth  generation. This effectively means a bloating of monetary demand in the economy not sufficiently matched by increased production, which then serves to pull up prices as a whole. Wherever currency has been issued in excess this way, prices have risen and this has been far and away the main reason why the price level now is well over thirty times what it was before the start of the Second World War. The amount of currency in issue has risen far faster than has been warranted by increases in  production and trade, with the amount of currency in circulation being £450m in 1938 whereas it is now around £54,000m and still rising.

Quantitative easing (QE) is an interesting phenomenon in that when it was first mooted no-one seemed to be clear on what, precisely, would be involved. Our view has been that if it exacerbates the ongoing excess note issue then it would be inflationary. The way QE has worked in practice, with the Bank of England setting up a separate Asset Purchase Facility (APF), means this does not seem to have happened. Notes and coins are still increasing at the same sort of annual rate they have been the last few years, and there has been no noticeable change to this. What has happened instead is more unusual.

In practice, a massive loan has been granted by the central bank. This has been loaned by the Bank of England to the Asset Purchase Facility and it has been used to buy financial assets. The vast majority of the APF’s purchases appear to have been government gilts with a smaller amount of corporate bonds being bought – in buying these up, their prices have risen, their interest payments (yields) have fallen for investors and so in turn equities have become a more attractive investment (which is what has largely fuelled the recent stock-market recovery).

The effect of all this on the overall price level has been minimal at most though, as it has been a process concentrated specifically on these types of financial assets. In some ways it is a massive,  debt-fuelled version of what used to be called ‘open-market operations’ by the central bank.

As Charles Bean, the Deputy Governor for Monetary Policy at the Bank of England has stated with regard to QE and its effect on financial assets: ‘not only does the price of gilts rise as a consequence of the Asset Purchase Facility’s initial purchases, but also the prices of a whole spectrum of other assets… Also the rise in asset prices increases wealth and improves balance sheets. In this way, Quantitative Easing helps to work around the blockage created by a banking system that is still undergoing a process of balance sheet repair.’ It can be added that when the prices of gilts rise and  their yields fall, this helps to keep interest rates low too as there is a close connection between  government gilt yields and the interest rates charged by the commercial banks.

To make all this happen the initial loan to the APF has been generated by a metaphoric flick of an electronic switch in the only way this can ever occur – through the actions of the central bank itself, the lender of last resort. As we have explained previously private banks are completely unable to expand their balance sheets with a stroke of the pen or flick of a switch, only the central bank can initially do this, just as it can inflate the currency it issues.

The key point is that this loan by the Bank of England to the APF, effectively a massive IOU or series of IOUs, has to be paid back. When the APF sells these assets back into the markets it will have precisely the opposite effect to when it was buying them up, draining away the temporary additional purchasing power that had been created and pumped into the financial system.

So, all in all, this is a central bank financial stimulus aimed at lowering interest rates, increasing economic activity and pushing up the price of financial assets. But it has to be temporary because if the Treasury is not to create another big financial black hole for itself it will at some point have to sell back the assets it has bought through the APF (ideally at the prices it bought them at, or higher), as otherwise it will just have lumbered itself with tens of billions of pounds worth of gilts it had issued earlier to finance its own government debt! So while it is a transitory financial alchemy of a sort, with any profits that accrue from this buying and selling process going to HM Treasury, so the Treasury also has to indemnify any losses incurred.

QE is not inflationary in the traditional sense in that while it can fuel asset price bubbles in certain sectors of the economy it does not cause general price rises and is only temporary. Currency inflation causes more general price rises across the economy as the excess currency circulates throughout it, and of course can – and indeed will – continue for decades if not deliberately halted.– Editors.

The Ire Of The Irate Itinerant (2010)

From the March 2010 issue of the Socialist Standard

Capitalism and Michael Moore (2010)

Film Review from the March 2010 issue of the Socialist Standard

Like Michael Moore’s other films, Capitalism: A Love Story is brilliant in its way, hard-hitting and funny. He strips away the lies and hypocrisy of “public relations” propaganda to expose the ruthless predators who dominate our society and profit from the misery of working people.

And at the same time he makes us laugh. So far so good. It’s fairly clear what Michael Moore is against. But what he is for? He doesn’t seem to know himself, as he admits in a recent newspaper interview:

“What I’m asking for is a new economic order. I don’t know how to construct that. I’m not an economist. All I ask is that it have two organising principles. Number one, that the economy is run democratically. In other words, the people have a say in how its run, not just the [wealthiest] 1 percent. And number two, that it has an ethical and moral core to it. That nothing is done without considering the ethical nature, no business decision is made without first asking the question, is this for the common good?” (Guardian, 30 January).

We too want democracy to extend to all spheres of social life. For us that’s what socialism is – the common ownership and democratic control of the means of life by the whole community. But genuine democracy will not be achieved by relying on economists or other supposed experts to design it.

By its very nature, democracy must be created by a conscious majority. Michael Moore seems to be saying that in his “new economic order” the wealthiest 1 percent will still exist, even though they will no longer have all the say. He also assumes that there are still going to be “business decisions”. But business decisions are about making money, not serving the common good. Any firm run by managers who care too much about ethics and morality will soon go bust – unless the managers get sacked first!

On one key point, he is right. If the situation he exposes so well is to change, it really does require a “new economic order”. An end to production for profit. The alternative is a society in which the means for producing what we need are owned in common and run democratically. A society in which productive activity is no longer “business” but simply cooperation to satisfy human needs.

This is much more than he offers on his website (www.michaelmoore.com). He says nothing there about any kind of “new order”. It’s all about campaigning for various reforms. These may well be of benefit to working people in the short term, but as they still leave capitalism in place there would always be pressure to reverse any gains made. Worst of all, and despite Michael Moore’s evident disillusionment with Obama, he urges readers to work for change through the Democratic Party – a recipe for endless failure and frustration.

One last point. Michael Moore talks only about changing things in the United States. This national focus makes it impossible even to conceive of a fundamentally new society. That’s because nowadays capitalism is a highly integrated world system and can only be replaced at the global level. It is clear to us that society urgently needs a worldwide system upgrade… from capitalism to socialism!

- leaflet for handing out to those going to see the film.

Obituary: Cyril Evans (2010)

Obituary from the March 2010 issue of the Socialist Standard

We are sad to report the death after a long illness of Comrade Cyril Evans of South London Branch.

Cyril was born in Plumstead, South East London, in 1926. In 1944 while serving as an apprentice he came in contact with the Party which during the Second World War held outdoor meetings in Beresford Square, Woolwich. Struck by the practical nature of the Party case for socialism he joined almost immediately and was active for the following decade in the Woolwich and Dartford area.

As is often the case his Party activity was interrupted by periods of economic hardship and by the need to raise a family and in 1954 he gave up his membership. Although no longer active Cyril never lost his desire to make socialists. While employed in the engineering trades and later as a teacher and later still as an osteopath he seldom lost an opportunity to argue the case for a world based on co-operation rather than competition. Several members and sympathisers have recalled his quiet, patient, and resolute presentation of the sane alternative to the madhouse of capitalism.

In the early nineties he rejoined the Party and again became active in efforts to form a branch of the Party in South East London. Cyril was an inveterate writer of letters to the press. He also wrote on a range of topics for the Socialist Standard and addressed Party meetings. His contributions to political discussions invariably contained refreshing insights and his political optimism was infectious. His enthusiasm and commitment stayed with him to the end. Just prior to his last illness he was contemplating a further article on the necessity for Socialism.

Our sincere condolences go out to his widow Pat and their family.

This writer will miss a good friend and the Party will lose an inspiring comrade who was in the opinion of those who met him a really nice guy.

Gwynn Thomas

Tiny Tips (2010)

The Tiny Tips column from the March 2010 issue of the Socialist Standard

Paris police say the mayor of Kiev’s daughter was robbed of euro4 million ($5.5 million) worth of jewelry as she travelled to Paris’ Charles de Gaulle Airport. An official with the Paris police says a man broke into the luxury car that Kristina Chernovetska was in as it stopped on a highway north of Paris and then stole her purse:

[Dead Link.]

As trade in the region grows more lucrative, China has been developing port facilities in Pakistan, Bangladesh and Myanmar, and it is planning to build railroad lines in Nepal. These projects, analysts say, are part of a concerted effort by Chinese leaders and companies to open and expand markets for their goods and services in a part of Asia that has lagged behind the rest of the continent in trade and economic development.

But these initiatives are irking India, whose government worries that China is expanding its sphere of regional influence by surrounding India with a “string of pearls” that could eventually undermine India’s pre-eminence and potentially rise to an economic and security threat:

[Link.]

Dear Comrade Kim Jong Il,

This meeting, organised by the Friends of Korea in Britain, would like to convey to you our warmest congratulations on the important occasion of the 68th anniversary of your birth on February 16, and wish you all good health and a long, long life. We send you our very best wishes for the continued success of your great work…We stand shoulder to shoulder with you and the Korean people under your great leadership,and express our common conviction that humanity will achieve a better world where the people are the masters of their own destiny…

Signed by participating organisations:

* Communist Party of Great Britain (Marxist-Leninist)

* European Regional Society for the Study of the Juche Idea

* UK Korean Friendship Association

* New Communist Party of Britain

* Revolutionary Communist Party of Britain (Marxist-Leninist)

* Socialist Labour Party

[Link.]

50 Years Ago: Intermingling (2010)

The 50 Years Ago column from the March 2010 issue of the Socialist Standard 

You may not be interested in boxing, but it could hardly have escaped your attention last summer that a certain Ingemar Johansson had taken the world’s heavyweight title from the previous holder, Floyd Patterson. The South African government believes, however, that such knowledge as this would be seditious for all except the white population of South Africa. As it was reported in the Johannesburg Star (14/7/59):

“Non-whites are not allowed to see any film containing ‘scenes of intermingling of Europeans and non-Europeans.’ That is why non-whites have been banned from seeing the film now circulating of the recent Johannson-Patterson world heavy-weight title fight. Johannson is white, but Patterson is a negro. So the film cannot be screened at all in non-white cinemas. And in those where non-whites may sit in the gallery and whites in the stalls, the non-whites have to wait outside until this newsreel ends before taking their seats.”

If the South African government really thinks that this will keep the coloured population ignorant of the fact that a black man and a white man fought for the title, they must be well out of touch with reality.

(from African Passing show by Alwyn Edgar, Socialist Standard, March 1960)