Masters of War (2010)

From the January 2010 issue of the Socialist Standard

‘You can fool all of the people some of the time … and some of the people all of the time … but …

The US occupation forces in Afghanistan have learned a particular lesson from the disaster that is Iraq, and they have learned it big time. In the first, largely contracted out war in history, US and other foreign civilians were brought in to carry out just about every task, from the mundane to those viewed as ‘front-line’. A direct consequence of this strategy was millions of unemployed and very disgruntled Iraqis, a large percentage of whom became active or passive supporters of the forces of insurgency/resistance against the perceived injustices of the occupation. In the corporate boardrooms of US War Machine Inc. the alarm bells were ringing; costs (dead bodies and bodies with bits missing) were eating into public opinion and support for the corporations’ products (perpetual war and war materials/services) was declining and, potentially, could severely impact their bottom lines. A slight shift in strategy was called for.

Afghanistan, in recent times, has never really been a nation state; it is an area of the world that is a patch-work of tribal fiefdoms that shift in and out of local alliances at the whim of chieftains or as balances of power dictate. In order for US and NATO forces to function, in what they like to call the ‘Battlespace’, they have to factor these tribal leaders and their shifting alliances into their planning. The logistics for any invader/occupier of this land are daunting in the extreme. It is a wild, unforgiving place peopled by proud, largely unconquered tribes with very long memories who do not take kindly to uninvited foreigners trying to lord it over them. Ameliorating some of that hostility would enable more focus on the ‘flagged-up’ enemy, al-Qa’ida and their Taliban associates.

As the conflict dragged on and soon to be president of US War Machine Inc. Senator Obama announced that, in his opinion, it was a ‘war of necessity’, the strategic planners came up with an ingenious ploy that would give gainful employment to Afghans, put money into their pockets and just might persuade them to view the occupiers of their lands in a sufficiently different light that they would stop shooting at or blowing up corporate assets and personnel. The name of this new strategy – ‘Host Nation Trucking’, and it works something like this . .

Take a gaggle of well connected, powerful and non-too-scrupulous ‘business men’ and award them six trucking contracts currently worth $2.2 billion. People like the Popal brothers, owners of the huge Watan Group, both convicted whilst in the US of dealing in heroin and cousins of Afghan president Hamid Karzai. Or Hamed Wardek, owner of NCL Holdings and son of current Afghan defence minister, General Abdul Wardek. NCL includes such luminaries as ‘legendary former CIA case officer and clear-headed thinker and writer’ (says Senator John Kerry, Senate Foreign Relations Committee, October 2009) Milton Beardon on its advisory board. Or Asia Security Group, owned by Hashmat Karzai, another relative of the president. (Aram Roston, ‘How the US Funds the Taliban’, The Nation, 30 November) These companies already have a well oiled model for doing business along the ancient trading routes and in the minefield that is present day Afghanistan – each has an armed ‘private security division’ and field agents who buy-off attacks by fractious warlords along any route. In this way US and NATO troops should get everything from ammunition to toilet paper supplied to even the their furthest-flung outposts with fewer inconvenient disruptions.

That was the theory behind the plan and in reality it mostly works pretty well. The US Defense Dept. throws huge quantities of dollars to the contractors, who in turn buy off the warlords who control those routes that pass through their territories. Many of these warlords are associated with the Taliban or are the local Taliban commanders, so extensive funding finds its way into Taliban coffers. Even the Taliban, who are the supreme warlords in control of the south of the country, are not immune from getting in on the action directly. Pay the premiums for their ‘insurance’ and it is sufficient for just two of their escorting ‘technicals’ to ensure the safe passage of any convoy through any stretch of hostile territory, which in reality is everywhere. Fail to pay up and the consequences are guaranteed to be devastating and deadly. Drivers can be picked off by snipers and rocket propelled grenades will blow the vehicles to pieces. One US owned firm, Four Horsemen International, has so far refused to pay and has tried to take on the Taliban with its own security teams; their convoys are attacked on almost every mission and the price in lives has been high. At some stage, no doubt, they will have to follow other security firms and do what they must in order to survive. An indication of premium rates can be gleaned from the following: per truck, per section of territory under a particular warlord = approx. $800, although it depends on what is being carried. Highway 1 from Kabul to Kandahar is about 300 kms, the local warlord, Commander Ruhullah, levies around $1,500 per truck and for military supplies this is the only route to the south, to Helmand and the Taliban heartland. The NCL company alone is billed $500,000 per month for ‘services’ rendered en-route through Ruhullah’s turf, an indication of the scale of business.

Throwing money at a problem to make it go away has been elevated to the level of a doctrine within the US military, which goes under the title of ‘Money as a Weapons System’. To give some perspective, the $2.2 billion, two-year effort to hire Afghani trucks and truckers represents around 10 percent of that country’s GDP and although firm figures are hard to come by it is estimated that between 10-20 percent is finding its way to the Taliban. The regime in Kabul has recently increased the wages of its police and army by $45 to around $125 per month, far less than the Taliban pays its fighters, so why work for that lot when the ‘firm’ down the road is offering a better deal? No surprise then that the effective strength of these two organisations is around half of the claimed 90,000 for the police and 95,000 for the army, or that the power and influence of the Taliban continues to grow. They have their very own milch cow with a seeming never-ending stream of greenbacks. US spin would have us believe that it is drugs money that funds the Taliban in direct opposition to their actions when in power. Under Taliban rule poppy/opium production was almost eliminated; by contrast, since the US invasion and the re-establishment of the warlords, production is at an historic high. None the less, this is the lie fed to the US public rather than revealing the truth which could well swing public opinion so strongly as to imperil the very profitable merry-go-round that is the conflict in Afghanistan. Better to keep the mushrooms in the dark than let them see the light of truth!

Step back for a moment and look at it this way; the US military, possibly the world’s ultimate ‘service provider’, is a gigantic consumer of goods and services. Its top people are highly paid executives who are guaranteed lucrative positions in supplying corporations when the time comes to move on. Working with their associates in government they benefit from continuing conflicts/wars that use up existing stockpiles/services which then need re-stocking from their appreciative suppliers. Prolonging the production run of any particular product or model is a well-proven policy for squeezing the last drop of profit from any venture. So it follows that in the context of modern, contracted-out warfare any strategy that strings out a conflict will mean more profits in the pockets of those corporations, organisations and their stock-holders who agree to play it by the rules of the capitalist system, and that includes Messrs. Taliban Associates Inc. In this lethal capitalist game, it is mostly the workers, the cannon-fodder on each side of any conflict who pay the supreme price; the elite, whether they wear the pin-stripped suits of corporate boardrooms or the black turbans of a Taliban leader, largely escape the extreme consequences of these policies.

The average US citizen thinks that it is ‘their’ money that’s paying for ‘their’ military to fight a war in Afghanistan that will protect ‘their’ homeland from another 9/11 or some crazed mullah with a suicide atomic bomb under his jacket. Fight them over there so we don’t have to fight them over here. The media has convinced them that it is a price worth paying, and anyway, aren’t there tens of thousands of good US households that, directly or indirectly, depend on defence company salaries to pay the mortgage? If they ever wake up to the fact that it is also ‘their’ money that is paying for the munitions that kill their sons and daughters and is providing the Taliban with much of what it needs to carry on its campaign indefinitely, to the benefit and enrichment of all the stakeholders in the business of war and conflict, might they not get very angry? Might they not rise up against the Masters of War and their corrupt system? Don’t hold your breath!

‘You can fool some of the people . . .’ Was this saying concocted by some US president or other to convince his people that they are really too smart to have the wool pulled over their eyes by a system devised to enrich the few whilst keeping the majority in bondage? How else to explain the predatory economic ways of the world and the widespread apathy towards them in the so-called ‘world’s only superpower’ and its war-mongering allies?

'… you can’t fool all of the people all of the time.’

Oh, yeah!

Alan Fenn

Cab-ride to Capitalism: Servitude For the Majority (2010)

From the January 2010 issue of the Soci

alist Standard

It only takes a cab ride in a city to see which class has the most power and influence in capitalist society

Everyday taxicab rides may appear to be lacklustre experiences that are quickly forgotten. However, this might not always be the case. Sometimes our views of events may become clouded and we cannot see things for what they really are. However, after taking many cab-rides in an urban city, I began to see things in a different way. On one of my jaunts in a taxicab I decided to investigate what it is that made people come to developed capitalist countries from less developed parts of the world.

In speaking to a cab driver, who left Ethiopia to come to Canada, I found my answer. I asked, “do people tend to be more happy in Western societies than in Ethiopia?” He answered that, “Ethiopia was a poor country.” In his words I could see the influence capitalism now had on his life: he equated how much money one has to how happy they are in life. This is reminiscent of one of the trademark idioms of capitalism that money can buy happiness. This is now disputed even by some who are otherwise supporters of capitalism, but if it were wholly refuted then this could undermine the entire capitalist system. Unfortunately, many people do believe that money can buy happiness in the owning class and force those who do not make as much money into the service industry, which in its very nature seeks to serve the owning class.

Your life is influenced by where you are born

Your life is partly determined by where you are born. For example, if you are born in Ethiopia then your life will be determined by Ethiopian standards and culture. In the United States, Canada or the UK your life is determined by a more developed capitalist system. Someone may come from Ethiopia to experience the “freedoms” countries like these employ, but there is another factor at work here: class. It is easy to show that the system boasts of false promises: Sally wishes to go to university, but Sally’s parents cannot afford to pay for it because in the capitalist system one must pay for everything. Sally’s life path has now been influenced by what class she was born into. Therefore, what the Ethiopian will notice is that “freedoms” have a price and are largely determined by what class one is born into.

Along the same lines, immigrants often receive low paying work in the service industry once they enter the developed capitalist system and they can never afford the education to gain higher paying jobs. As a result they stay in the service industry their entire lives, being some of the most lowly-paid members of the working class of wage and salary earners. It is education and money that allows one to move up in a capitalist society but even if one is to move up the ‘social ladder’, it is only usually to a less badly paid section of the same subservient class.

Finding and maintaining a job is difficult enough for people in poor countries and therefore receiving an education is but a luxury. In fact, the cab driver I spoke to said that he was working to make sure that his daughter would be able to go to university. He has to spend his years driving a car all day long so that his daughter will not have to do the same job and will have a better future. If someone cannot improve their station in life because they have no money to begin with, they also cannot afford to improve their station through higher education. This means that they are left work for the class that owns and controls society. This is because capitalism is not really based on merit, but on how much money one has. This is irrational as merit should never have a price, it should be free and depend on nothing but itself.

The capitalist system is marketed on its promises of equality and freedoms through purchasing power. Prospective immigrants are given rhetoric about how capitalism makes anything possible – if one has money. However, nothing appears possible, let alone free and equal about the owning class being served daily by an exploited working class, who are actually the majority and whose freedom is rationed and limited by their pay packets and salary cheques.

Moreover, how successful you will be in life is largely determined by what class you are born into, and is out of your control. The cab driver from Ethiopia realised that he, or his daughter, would not be able to influence society in a poor country because all of the rich capitalist countries such as those in the G8 are the most influential and have the highest standards of living. However, even though he came to one of these developed capitalist countries, he will almost inevitably remain in the service industry for the rest of his life. This is because capitalism is not based on talent or merit like a truly equal system would be such as socialism where everyone would have an equal opportunity to pursue their true interests in life. In capitalism, your success typically still depends on how rich a family or area you are born into and what kind of a reputation it has. If you are unlucky and are born into the majority, the working class, it is likely that you will remain there to serve the upper class for the duration of your life.

Capitalism Promises Freedoms, But for Who?

It is taught in school that capitalist countries are mosaic countries, small units of various cultures existing within a larger schema or government. This view is marketed so that potential immigrants will not have to leave their customs behind and still be able to reap the so-called rewards of capitalist society. In reality, what exists is a melting pot where these cultures are eventually assimilated. The opposite of a mosaic, melting pot, a term with a negative connotation, is often used to describe societies experiencing large-scale immigration from many different countries that seem to “melt” into the existing society. For example, Muslims are being assimilated into Western culture by way of developed capitalism. Only those who assimilate into the capitalist system are able to experience the “freedoms” it promises, but at often cost to their culture. It follows that people who come to developed capitalist countries work to serve the needs of the majority, who are of a different culture, often by forgoing their own so that they might fit in the prevailing market-driven norms.

Two of the most prominent examples of the melting-pot theory are the African Americans who were enslaved by white people through trade and the Native Americans who were wiped out, enslaved or displaced during European colonization. Though these cultures, mainly the African Americans, regained somewhat of their dignity many years later, they still lost the connection to their homeland, lost their culture and were forced to “melt” into the capitalist system.

The natives of North America are an example of not only assimilation to benefit the capitalist class but of the deception of such a system. The natives did not have money or a use for money until the European settlers arrived. These initiated trade and the natives would work hard to gather furs. They would sell their furs, specifically beaver pelts, which were very expensive items in European society at the time. In return they would receive trinkets such as forks as well detrimental items like firearms and liquor. Further, the economy that was run during colonization was one that the Europeans implemented and operated themselves, i.e. capitalism. Also, when the natives finally became wary of the situation, they lost their land. Treaties for land exchange were deceitfully created in a language foreign to them so that they could not have possibly known that they were signing away their land. They were taken advantage of and most importantly, lost their autonomy and freedom. Additionally, the native clans that do remain in North America are being assimilated, or waiting to be assimilated, into society. One way where this can be seen is through the media impact on younger generations who are lured into Western society with its market-driven imperatives and away from their cultural heritage.

Servitude

It seems almost unbelievable to think that servitude exists today in a society that is supposed to be ‘meritocratic’. This is because it is unnecessary that there should even be a servant class in society at all, even if the modern form of slavery is wage slavery.

There is no doubt that if one were to ask the Ethiopian cab driver if he would drive a cab all day if he didn’t have to, he would say no. The majority of people work unsatisfying and unchallenging jobs in the service industry and this is not necessary. It is socially demeaning and it is servitude, plain and simple. Capitalism has wrought its negative influences on the African Americans and North American natives. These people were exploited and subordinate classes until they melted into the capitalist society causing social alienation and loss of cultural identity. Further, those that work in the service industry today are not far off from these fates. Their lives may be better now that they can purchase “freedom” but it is at a great cost to their dignity as they spend their lives in servitude based on the amount of money they (do not) have instead of what talents they possess. Moreover, it only takes a cab ride in a city to see which class has the most power and influence in a capitalist society and chances are it isn’t the class of the Ethiopian behind the wheel.

Jessica Fordham 

(Socialist Party of Canada)

The Ire Of The Irate Itinerant (2010)

From the January 2010 issue of the Socialist Standard

Pieces Together: Another Labour failure (2010)

The Pieces Together column from the January 2010 issue of the Socialist Standard

Another Labour failure

“Labour’s strategy for tackling poverty has reached the end of the road and Britain risks a return to Victorian levels of inequality, according to a major two-year study seen by The Independent. With 20 per cent of the population still stuck in poverty, the report calls for sweeping reform of the tax and welfare systems under which higher earners would finance more generous, universal benefits. The £43,888-a-year ceiling on national insurance contributions (NICs) would be abolished, so people earning more would pay NICs at 11 per cent on all their income above that level, instead of the current 1 per cent. The study, by the Labour-affiliated Fabian Society and Webb Memorial Trust, argues that Gordon Brown’s ‘quiet redistribution’ of wealth now lacks public support – and declares that one of the reasons is Labour’s tough language about benefit fraud and claimants.” (Independent, 30 November)

Ten wasted years

“Poverty has been rising in the UK since 2004 and is now at the same level as the start of the decade, a report by the Joseph Rowntree Foundation says. The group said that issues of unemployment and the repossession of homes had become more acute before the recession started. … The report, produced by the New Policy Institute, found that two million children lived in low-income, working households. This was the highest figure since the Foundation started collecting records. ” (BBC News, 3 December)

The other 1 percent

“According to consultants AT Kearney, the richest 1pc in the UK hold some 70pc of the country’s wealth. That there is this divide between rich and poor is not exactly new – but the scale of it, and the likelihood that it is not being narrowed by the financial crisis, is a big worry. Indeed, according to the report, in the US the amount of financial assets owned by the richest 1pc in the US is far, far lower at 48pc, and only 34pc in Australia. This must, to a large degree, be due to the fact that the UK set itself up in recent years as a haven for the super-rich, with its relatively generous rules on capital gains tax, because the income tax system itself is rather more redistributive than in the US. But the Kearney report is interesting because, unlike the traditional measure of inequality, the gini coefficient, it focuses not on income (the flow of money) but on actual substantive wealth (the stack of it that sits beneath us).” (Daily Telegraph, 25 November)

Letter: Debt (2010)

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

Dear Editors,

The prophetic words that capitalism would create its own gravediggers can be interpreted in many ways. It may be understood to mean that, as a result of exclusion from the enjoyment of the fruits of their labour, a growing number of the population will rise up, enlightened and intellectualised, and revolutionise its dynamics to alter our direction, aims and desires; we hope towards socialism.

It could also be interpreted to mean that through its failings, inefficiencies and uneconomical ways, that it may self-destruct, that it becomes apparent to all, impossibly illogical even, that it must without doubt be surpassed in face of any remnant of opposition that may linger in the nooks and crannies of its many alleyways.

It may be bits of both of these. It is probable that it is bits drawn from the many other facets of life within capitalism. No doubt.

What is becoming increasingly apparent is that its very ‘rules’ if we may call them that, are losing the ability to defend and provide justification for its continuance. One such that has been discussed at great length, possibly more so than at any other time, is that of debt. We are told that our nation’s debt is of such magnitude that we should all prepare for many hard years ahead. That we will prevail over this debt but only by taking hard choices, there will be no easy option and many may suffer, but together we will defeat debt.

Now, if we can just for the moment try not to conjure up the image and inevitable analysis of ‘debt’ becoming an outside ‘alien’ thing, out of our sphere of control – rather absurdly in much the same way that wars or terrorists are often spoke of – and consider their grand solution to it by seeking to increase its availability, we may welcome its arrival and the simple opportunity that it provides.

We can now talk of debt as a bad thing – as a sign of failure. All of us wish we had less of it. Yet it remains of central importance to us; we are told the system cannot do without it, and it cannot. We can explore the idea that as it fails, inevitably and repeatedly, that debt can no longer provide a means to progress. We could say that its day has come and it has had its day. It would appear an easy argument to win: debt is bad therefore do not enter into it. Would this argument be entered into it would surely prove difficult to disprove. If debt, as it surely does, represents in their language a ‘fault’ of capitalism then let us explore it further. In no time at all it would lead into a cul de sac for it seems in their own words as far as debt is concerned ‘There Is No Alternative’. So what – we might then ask – is on offer?

Damian  McCarthy (by email)

Reply:

It is true that defenders of capitalism get themselves into a glaring contradiction over debt, blaming the crisis on too much debt and then advocating creating more debt to try to get out of it. But a distinction needs to be drawn between the “National Debt” and the personal debts of individual workers. The so-called “national” debt is what the capitalist state owes its creditors, who are mainly other capitalist institutions of one kind or another. As you point out, its size is now being bandied about as an excuse to justify even more austerity for the working class. But this is only an excuse for what they always want to do anyway. If it didn’t exist, they’d find some other excuse. Its size is their problem, not ours. We can, however, use it, as you suggest, to bring out the contradictions of capitalism. If all capitalism has to offer is more austerity in a world of potential plenty, let’s get rid of it.

Editors.

Letter: State Capitalism (2010)

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

Dear Editors,

I read with interest your commentary on the socio-economic system that evolved in the former USSR in the November issue of  the Socialist Standard (“Workers State – Pull the Other One”). Absent was the discussion developed by the Socialist Labor Party of America that for me offers the clearest explanation (albeit of a muddled situation) of what happened, taking into account the Trotskyist, Maoist, (not mentioned in your commentary) and that of vanguardist apologentsia. The SLP study rejects the “state capitalist” appellation and concludes that the most accurate description is “bureaucratic state despotism”. As the pamphlet concludes:

“The mode of production Marx analyzed has a different mode of formation, different laws of operation and a different structure than the one in the Soviet Union. The effort to describe the U.S.S.R in terms of capitalist seems to be a substitute for making the same kind of thorough analysis of this new mode of production that Marx made of the dominant one of his day.” (page 46) 

This commentary can be found on line where the entire pamphlet can be read or downloaded.

Bernard Bortnick (by email from the US).

Reply:

As the article was a review of a book about the Trotskyist Ernest Mandel it is reasonable that it mentioned neither Maoist nor SLP theories of the nature of the former USSR. Russia could be described as having been a “bureaucratic state despotism” but that’s a political description that tells us nothing about the “mode of production” that existed there. The 1978 SLP pamphlet The Nature of Soviet Society you mention does go into this in more detail, arguing that what existed there was neither socialism nor capitalism nor a “workers state” but “a new class society based on state property”. But it did concede that “it is possible to attempt a Marxist analysis of the USSR and similar systems as state capitalist” and that “the most coherent state capitalist theories” hold that Russia can be termed capitalist “because the basic elements of the capitalist mode of production survive, though in modified form” and that these theories “point to the existence in the Soviet Union of wage labor, commodity production (i.e., production for exchange in a market), the extraction of surplus and its control by the state owners of productive property, the perpetuation of class divisions and state oppression”. Yes, precisely.

In theory Russia might have evolved into some new exploitative class society. The basic reason we described it as still being capitalist was the continued existence there of the wages system, the basis of capitalist exploitation, not to say of capitalism.

Editors.

Tiny Tips (2010)

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

While the world has been devouring reality television shows, many Argentines have been opting this Christmas for reality board games, such as Eternal Debt, involving the International Monetary Fund.

[Paywalled Link.]

For seven years, Jennipher was forced to breastfeed the puppies of her husband’s hunting dogs. After drinking and smoking heavily, Nathan Alowoi would appear at the marital bed, bind his young wife’s legs and hands together and force the mewling animals to her nipple. He had handed over two cows to his father-in-law as part of the “bride price” for his new wife. So, he reasoned, if the cows were no longer around to provide milk then his new purchase would have to provide for the pups. “I had to feed them all through the night; then in the morning he would untie me,” his wife, now 26, explains matter-of-factly.

[Link.]

Israel will begin distributing its entire population with gas masks in two months, though no reason has officially been given by the Israeli government.

[Dead Link.]

Most Britons have little confidence in official statistics and believe that they are distorted by politicians, according to a survey for the Financial Times. Only about 10 per cent of adults believe that official figures are accurate, while a similar proportion think that figures are produced without political interference, according to the survey conducted by Harris.

[Paywalled Link.]

That isn’t stopping some restaurants from putting together the usual intricate New Year’s dinner — and in some cases, charging astronomical prices. At New York’s Aureole, for example, diners will be getting a five-course meal including big-eye tuna sashimi, chestnut ravioli, Canadian lobster, and N.Y. strip loin. The price: a mind-boggling $650.

[Link.]

Real Life Monopoly (2010)

From the January 2010 issue of the Socialist Standard

When we were children around about the time that we were tiring of Ludo and Snakes and Ladders we discovered the board game Monopoly. I can’t remember the details or the rules – something about cards that said such things as “Pass Go, collect £200”, “Go to jail”, “Get out of jail”. In real life it is usually found that going to jail meant the only people to collect money were the lawyers, but whatever the rules were it was good fun building hotels in Park Lane while your opponent was stuck in a hovel in the East End somewhere or off to jail and not collecting £200.

When we grew up of course we quickly learned that the Grosvenor Hotel and a mansion in Park Lane were not for “the likes of us”. Our fate was to be members of the working class who had to work for a wage or a salary and lead an anxious life between weekly or monthly pay cheques. However there are people who wheel and deal in such properties and a recent newspaper article gave some details of these deals.

Two separate properties in Park Lane valued at £5m-£6m, one in Grosvenor Street for £10m and one in Reeves Mews at £25m. The astonishing thing about these desirable residences is that they have been vacant for between five and ten years. According to the empty properties officer for Westminster council Paul Palmer the owners intend to keep them empty for the present.

“There are an estimated 1m empty homes in the UK, and as empty properties officer for Westminster council, Palmer is responsible for about 3,000 of them. Every day he visits some of the ritziest addresses in the capital and does his best to get them lived in again. What makes his job unique is the staggering value of the properties on his books; some of his Mayfair mansions are worth as much as £50m, even in their dilapidated state. … The properties usually aren’t abandoned for reasons which might prompt sympathy. Palmer believes many elusive owners don’t have the slightest intention of bringing them back to life. ‘So often offshore owners have little or no interest in the property as a building it is merely an asset to be traded as they see fit,” he says adding that offshore firms are tricky to track down.’ (Guardian, 17 October)

The article points out that in some cases where property is owned by offshore companies, no UK capital gains tax is payable, and there are cases where the wheeler dealers sell a £1m property after a year for £2m and avoid the 18 percent tax. These traders do not look upon these properties as places to live but as chips in their grown-up game of Monopoly. All of this financial skulduggery goes on against a background of millions of workers living in sub-standard housing, thousands homeless and hundreds even sleeping in the streets around about these empty luxurious mansions.

Compared to the complexities of capitalism socialism is a simple social system. Houses will be built for people to live in, not counters in a horror version of the kids’ board game like we have today. At 21 Upper Grosvenor Street there is a house valued at £25m, it has been empty for more than ten years. Once we establish world socialism it will be occupied immediately by a family at presently homeless. A simple socialist solution to a problem that capitalism finds insoluble.

Richard Donnelly

Global finance (2010)

Book Review from the January 2010 issue of the Socialist Standard

The No-Nonsense Guide to Global Finance. By Peter Stalker. New Internationalist.. 150 pages. £7.99.

By and large this book, one of a series published by the New Internationalist, is what its title says. But not quite. Stalker, himself a former co-editor of the magazine, writes correctly that commercial banks “make most of their money by charging borrowers a higher rate of interest than they give to the depositors” and that “without businesses prepared to put money to work, banks would be unable to offer interest on loans”, but then:

“Suppose, for example, 20 people have each deposited one hundred pounds of silver in the bank’s vaults. The total amount of money is thus two thousand pounds of silver. Then the 21st person comes along. He or she wants to borrow one hundred pounds. Certainly, sir or madam, please step this way. We can open an account for you and write into it one hundred pounds of silver. Now 21 people think they have 100 pounds and can spend it. The total amount of money has magically increased to 2,100 pounds of silver.”

No it hasn’t. How could it? If a bank could turn 2000 lbs of silver into 2100 lbs by a mere stroke of the pen that really would be magic, alchemy even. What it actually means is that one of the 100 lbs deposited has been lent to someone else to spend. There are still only 2000 lbs in existence, 100 in the hands of the borrower and 1900 in the vaults of the bank. The same would apply whether the original deposits were made in token money or by electronic transfer, but using metallic commodity money to illustrate the claim that banks “magically” create money is a good way to show it up as nonsense.

There follow chapters (most of the book) where Stalker explains in easy-to-understand terms, shares, hedge funds, derivates, deficit swaps and the like as well as international currency transactions and loans. It is only in the final chapter where he outlines the reforms he’d like to see that he goes off the rails again.

In a subsection entitled “Revoke licenses to print money” he says that 95 percent of money “materialises as if by magic, when commercial banks make loans to their customers”. He doesn’t seem to realise that this is because, confusingly, he along with most modern economists includes bank loans in the definition of ‘money’. On this definition, revoking the banks’ supposed “license to print money” ought, logically, to mean not allowing them to make loans. Yet on the next page:

“Banks would continue to offer loans, but they would do so in a much simpler fashion. Anything they lend would have to come from money deposited with them by savers, or borrowed from other banks, or from their tills, or from their own accounts held at the central bank.”

But this, essentially, is what happens today! Also, he is tacitly accepting here that bank loans don’t increase the ‘money supply’ and so are not really part of it.  Banks today no more have the power “to cream off extra profits by creating money” than they would have in his reformed capitalism.

Adam Buick

Basic concepts (2010)

Book Review from the January 2010 issue of the Socialist Standard 

Unravelling Capitalism. A Guide to Marxist Political Economy. By Joseph Choonara. Bookmarks. 2009. 150 pages. £6.99

Zombie Capitalism. Global Crisis and the Relevance of Marx.  By Chris Harman. Bookmarks. 400 pages. £16.99

Choonara’s short book is a good simple-to-follow introduction to the basic concepts of Marxian economics – from commodity, value, labour, labour power, and surplus value to rate of profit, organic composition of capital and price of production.

There’s the occasional reference to Trotsky and to the Russian revolution (Bolshevik coup) as a good thing but, after all, the author is a member of the SWP and the discerning reader will be able to discount these. Even so, it is surprising to see Mike Kidron’s “permanent arms economy” (that capitalism boomed after WW2 because wasteful expenditure on arms prevented the rate of profit from falling by slowing down the rate of capital accumulation) given another airing since it was so decisively refuted by the facts (those countries that spent less on arms boomed more). But this only takes up a few pages of an otherwise useful book.

Apart from the opening two chapters which cover the same ground as Choonara’s book and in the same easy-to-follow way, Harman’s book (published only a few months before he died in November) is by contrast dominated by Kidron’s theory. In fact, Harman (the No 2 in the SWP under Tony Cliff) applies the theory much more widely than Kidron ever did, using it to attempt to explain the course of capitalist development since Marx’s day. Thus the Great Depression of the 1880s only ended because of the naval arms race that began towards the end of the 1890s; the slump that followed the 1929 Wall Street Crash was due to the fact that there was not enough wasteful arms spending in the 1920s to slow down the rate of accumulation; WW2 ended this slump and post-war arms spending avoided another one till the 1970s. Then? Well, the permanent arms economy proved to be neither permanent nor enough: “The permanent arms economy had to be supplemented by the debt economy” (p. 289).

Despite this unsatisfactory analysis Harman does make some valid points. For instance, to those who blame the banks and bankers: “Finance is a parasite on the back of a parasite, not a problem that can be dealt with in isolation from capitalism as a whole”.

Adam Buick

Indian railways (2010)

Book Review from the January 2010 issue of the Socialist Standard

Engines of Change. Ian J Kerr, Praeger Publishers

Although carried out in a rather annoying academic style, Engines of Change is nonetheless an excellent overview of the history of the railways of India from an economic and social perspective. One of the themes running through the book is the increasing state involvement in the running of the railways in India – partial government ownership beginning as early as 1870, less than twenty years after the opening of the first line. Marx gets a passing mention for his comment that the construction of railways under British rule would hasten industrialisation. By the end of British rule in India, up to 95 percent of the railway system was already nationalised. By the Raj – another nail in the coffin of the ‘Nationalisation = Socialism’ equation! On the same theme, it is interesting to note that ticketless travel, previously viewed as a nationalist anti-British protest, surged after independence – after all now ‘the people’ owned the trains. Currently some 6 million fare-dodgers every year find out just how far their ownership of Indian Railways extends.

Kaz.

50 Years Ago: Labour’s Lost Chord (2010)

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

Against all the precedents, and to the surprise of many Labour supporters, the Tories have won their third election in succession; and have even managed to increase their majority. The most interesting aspect of this was not Supermac’s victory, but the changed attitudes and moods of the electorate, that were revealed more clearly than before. These changes affect the Labour Party far more than the Tories, and in some ways appear to be a major disaster for Labour, causing much heart-searching and what John Foster Dulles called “agonising re-appraisals.”

In spite of high polls and a fairly steady Labour vote, something has gone from British politics, and gone for ever. This “something” might loosely be called “left-wing idealism.” Where is the enthusiasm of Labour’s early years; where the desire to make the world a place of dignity, free from slavery and oppression; where the striving to make man master of the machine instead of its mere adjunct Labour in the past expressed, however incoherently, all these aspirations of a working class just out of its infancy, crying out, not for charity and mercy, but for political power with which to change the world.

The Labour Party was formed in 1906, yet despite its recent emergence (as compared with Liberal or Tory) its appeal is already fading, its policies old-hat, its ideals threadbare and increasingly lost in vague verbiage. Fifty-three years have seen the rise and decline of that sincere idealism that sent hundreds of thousands of workers onto the streets campaigning, not for “we can make ‘ You have never had it so good’ even better,” but to build a society worthy of Man’s sense of his own dignity. Left-wing idealism has died, and all the trumpeting of Bevan, Barbara Castle, Mikardo and “Tribune” cannot bring it to life again. Labour today can only mimic its former styles; and the result, with even the rebels supporting H-bombs, rearmament and the trade struggle with foreign powers, sounds as hollow as an old biscuit-tin.

[From article by F.R.I, Socialist Standard, January 1960.]

Greasy Pole: The Thick of It (2010)

The Greasy Pole column from the January 2010 issue of the Socialist Standard

Abundant evidence of how a grateful nation unstintingly cares for its military heroes as they return, too often less than complete, from the battlefields has been supplied by Defence Minister Kevan Jones. Anyone who in combat in Afghanistan is unlucky enough to lose their penis – shot off, blown to pieces, burnt away – can put in a claim for compensation which might amount to £9,000. As expected of a properly prudent minister of the crown, Jones made it clear that such generosity applies only when the entire organ is lost; in cases of lesser damage, when “partial use” remains, the payment will be something under £3,000. Naturally such claims will have to originate with the appropriate form, signed and witnessed by a suitably qualified person. No doubt supporting evidence will be required. Then the claim will be processed through an appointed panel of specialists in the regular stream of applications for council tax relief, job seekers allowance, home carers…

Cenotaphs

We have, in fact, been here before. After the guns had fallen silent in 1918 the then government did their best to live up to the infamous Lloyd George promise about post-war Britain being a Place Fit For Heroes To Live In by making payments to survivors of the horrors who had left bits of themselves out on the battlefields. Perhaps Kevan Jones learned something from this for the 1918 compensation was carefully calculated with an appropriate scale of payments – so much for a missing hand, a bit more for an arm above the elbow, more again for above the elbow and the same kind of arrangement applying to missing legs. It was thought prudent to make an exception for anyone with a mangled head or face – nothing would be paid for any damage above the neck. This was done in accordance with regulations made in the safety of the Commons to be implemented by bureaucrats in their offices; in neither place was anybody likely to lose any limbs. It conformed to sound actuarial principles, taking into account that a lot of injuries “above the neck” would effectively deprive a potential claimant of any lasting interest in compensation, or of the need for any recognition of their plight other than a place on the local war memorials which were already being designed up and down the country (Edwin Lutyens had quickly drawn on the back of an envelope a rough sketch for a temporary Cenotaph, made of wood and plaster, for London). But never mind – it was, after all, the thought that mattered.

Chilcott

A natural response would be, in bewildered rage, to consign the episode to a file marked Madness. Except that this does nothing towards unravelling the matter. We are compelled to deal with a social system which does not just tolerate the insanity of war but actually nurtures it as the most rational available way of purging itself of certain problems. As the Chilcot enquiry into the Iraq war – there have already been two others, both of them predictably unrewarding and dishonest – is already informing us, capitalism needs to be a society of conflicts, driven by a momentum of its own which is lubricated by a disregard of inconvenient facts. Infuriatingly, we need to accept that the mass of capitalism’s people – who fight in the wars, willing to be maimed and killed – readily comply with and justify the entire disreputable chaos. It is almost as if nothing more is expected of a system which shows itself capable of massive human progress were it not hampered by the priorities of property; all that is demanded is that the dead are disposed of with due ceremony and the wounded are compensated according to an official scale.

Government

And for all of this there is always the essential machinery of government – that organ which millions of its subjects vote for under the impression that thereby they are ensuring a benevolent eye will watch over their welfare. Supposedly fulfilling this function are the ministers and secretaries of state on one level after another down to the achingly ambitious bag carriers and beyond, whose function persuades them to be in love with the protection of their protocol, its systemic committees and pressure groups where back-stabbing is an essential way of life. One who was until recently employed in the service of this odious machinery – so devotedly that when he retired he was rewarded with a gleaming medal to hang on his chest from a dazzling ribbon – needs very little encouragement to lift a corner of the shrouded mysteries of what is called democratic government. A minister’s special adviser by trade, he recalls that if his boss was being harassed by too persistent a straggle of complainants his confidential advice would be to surprise them with an offer of a personal hearing when he could make any needful promises, to be ignored once the other side had gone trustingly on their way. This kind of tactic is possible because a government has a more enduring energy than the most stubborn of protesters, whose pre-occupation must be with getting their living.

Tucker 

Some flavour of this nauseous brew was the theme of the recent TV series The Thick Of It – the conflicting ambitions, the manipulation, the treachery…We should not be unduly influenced in our response to the series by it being too flagrantly a caricature, particularly in the odious spin-doctor Malcolm Tucker (who will probably end up in the House of Lords).Tucker had to learn to communicate through unrelenting abuse to defend and assert himself and his career; it was just that he was more determined, more colourful, than the others. The affairs of capitalism must be conducted to meet its nature as a society – as abrasively as demanded by the privileges of class monopoly. It is in this process that predators such as Malcolm Tucker come to the surface.. And a lot more – the wars, the contemptuous treatment of the victims, the deception and cynicism with which it is all defended. Nothing can compensate us for this.

Ivan