Voice From The Back: No prize this time (2002)

The Voice From The Back Column from the August 2002 issue of the Socialist Standard

No prize this time 

The Nobel prize-winning economist Amartya Sen writing in the Observer (16 June) starts by asking an intriguing question. “Q: Why, in the twenty-first century, are 800 million people living in the shadow of hunger? A: Widespread hunger in the world is primarily related to poverty. It is not principally connected with food production at all. Indeed, over the course of the last quarter of a century, the price of the principal staple foods (such as rice, wheat etc) have fallen by much more than half in ‘real’ terms.” So far, so good, but what about his answer to the question “What is the solution?” The usual reformist claptrap “It also requires visionary economic policies which both encourage (especially allowing exports from poorer countries into the markets of the rich) but also reforms (involving patent laws, technology transfer etc.) to dramatically reduce deprivation in the poorer countries.” Nothing about how capitalism must have trading blocs and patent laws in order to exist.

Heartbreak hotel

Amongst the Labour Party’s more sweeping boasts about dealing with “social exclusion” was reducing the plight of the homeless, but once again capitalism has shown that good intentions are no substitute for clear thinking. “Despite repeated government promises to end the problem, 81,000 families are living in temporary accommodation, which includes bed and breakfast hotels and hostels, a rise of 9 percent on last year. More than 11,000 children are being brought up in bed and breakfast hotels . . . the figures will cause dismay for ministers, who promised this year that no homeless family with children would be forced to live in bed and breakfast accommodation by 2004.” Times (18 June).

Grapes of wrath

In any sane society a bumper grape harvest would be greeted with joy, but this is capitalism, a mad society, where wine, like everything else, isn’t produced to be enjoyed but to make profit. “Faced with a worldwide glut of wine and a tidal wave of competing New World tipples, the producers’ union of the Beaujolais region has finally succumbed – 100,000 hecto-litres of unsold wine is to be destroyed. The equivalent of 13 million bottles of wine, certified of Beaujolais appellation, is to be made into vinegar, distilled into ethyl alcohol for use as road fuel or just poured down the plughole.” Times (25 June).

White House hypocrisy

Capitalism is a nasty, competitive social system, so politicians should be very careful about striking high moral poses. They are so often exposed for the hypocrites that they are. Take the case of George W. Bush fulminating about the wrong-doing of corporate America, and promising to clean up any crooked inside dealing or phoney accounting. “Mr Bush had failed to disclose stock sales promptly, as required by law, on four occasions in the 1980s. In the most serious incident, he disclosed a 1990 sale of $848,560 (£558,263) of Harken Energy Corp stock 34 weeks later than was required by federal law. Mr Bush was a director in the Texas-based oil and gas exploration company at the time. Two months after Mr Bush had sold the stock, the company announced losses and the stock fell 20 percent.” Times (4 July) In his defence Mr Bush has come up with a feeble excuse. “In the corporate world sometimes things aren’t exactly black and white when it comes to accounting practices.” Newsweek (22 July)

A dog’s life

If you have ever been in New York City you will probably have noticed the number of homeless people eking out an existence on next to no money. According to the following news items they would probably have fared better in the capitalist jungle if they had been a rich woman’s pet dog. “The former Mayor of New York, Rudolph Giuliani, got out of subsiding costs for his pet in the divorce courts. His estranged wife wanted him to pay £850 a month to cover the care of their golden labrador. The dog lives in Manhattan’s Upper Eastside, which boasts pet-gyms, swimming lessons for dogs, and exotic pet suites that cost £200 a night . . . Mariah Carey sends her dog to a dog psychiatrist for $300 (£200) per hour.” Independent Review (5 July).

Spoiled for choice?

Apologists for capitalism are always telling us about the wonderful choices that this competitive system presents to the working class. Take beer, they argue; look at the wonderful varieties of brands made by scores of brewers that you lucky workers have to choose from. Stella Artois, Boddingtons, Bass, Rolling Rock, Becks, Hoegaarden, Leffe, Sol, Dos Equis, Tennents, Oranjeboom and Staropramen. The list looks like a formidable example of competition until you realise that all of these brands are owned by the one company; the Belgian based multi-national Interbrew.

Figure it out for yourself

Socialists are constantly hammering on about how capitalism is a mad house, where a mere handful live in obscene grandeur while the majority scrape by as best they can. But don’t believe us; here are some figures from the owning class’s own sources – Observer (14 July): “… 2.8 billion of the world’s 6 billion people live on less than $2 a day; 1.2 billion on less than $1 a day. Between 30-35,000 children under five die every day of preventable diseases . . . with the assets of the world’s top three billionaires exceeding the GNP of all the 48 least developed countries (population 600 million).”

Poverty and famines (2007)

From the October 2007 issue of the Socialist Standard

Why do famines occur? Because there’s not enough food or because people haven’t enough money to buy it?

To many people famines are caused by not enough food being available. This seems reasonable enough: why would people have to starve if there was enough food to feed them? It’s a good question, but it assumes that today food is produced to feed people whereas in fact this is not the case. It should be, but it isn’t. And it isn’t, because we are living in a capitalist society where food is not produced simply to satisfy people’s need for it but – like everything else – to be sold on a market with a view to making a profit. Food is a commodity which, like all commodities, can only be acquired if you have money (or something else) to exchange for it. If you don’t, then you starve. It’s as simple as that.

In 1981 the International Labour Organisation in Geneva published a study on famines by Amartya Sen, an Indian academic working in England, entitled Poverty and Famines. An Essay in Entitlement and Deprivation. Sen studied five famines: the Great Bengal famine of 1943, the Ethiopian famines of 1973 and 1974, the Bangladesh famine of 1974, and the Sahel famines of the 1970s.

His conclusion was that the widespread “food availability decline” theory of famines was mistaken. In its stead he proposed that they should be explained on the basis of a failure or a decline in some people’s “entitlement” to food, i.e., in the end, on their not being able to acquire enough money to buy it or enough of it:

“Starvation is the characteristic of some people not having enough food to eat. It is not the characteristic of there being not enough food to eat”. (p. 1, his emphasis).

“Starvation . . . is a function of entitlements and not of food availability as such” (p. 7).

Sen went on to win the so-called 1998  Nobel Prize for Economics (actually a prize awarded by the Bank of Sweden, not the Nobel Prize Committee) for  his work on famines, welfare economics and political liberalism.

Socialists recognised that Sen, in saying that famines were not caused by there not being enough food or by there being too many people, was saying something very near to what we had always said. Modern-day famines arose in the  context of the capitalist profit system under which people had to buy what they needed to live and to do this they had to have first acquired money, either by selling their ability to work for a wage or a salary or by growing and selling some cash crop. When, for whatever reason, some people find themselves unable to acquire money, they would not be able to acquire food. If this was widespread, as periodically happened in different parts of the world, then there would be a “famine”, irrespective not only of the capacity to produce enough food but even in the presence of adequate supplies of food.

Sen, however, was not a socialist, but a left liberal supporter of the capitalist market economy. Hence his solution was not to abolish a system where people’s “entitlement” to food (and everything else) depended on their having money; it was to increase such entitlements by arranging for them to have more money or at least a regular supply of money. He wanted to reform the money system not abolish it.

Socialists have no quarrel with Sen’s definition of famine, but they do challenge his definition of “poverty”. Sen defines poverty in terms of lack of access to means of consumption, to not having enough to live at some minimum level of nutrition or comfort or decency. This means that he and others who think like him have to try to fix what this minimum level is. Inevitably, the result is a more or less arbitrary definition that only applies to a minority of the population; most people not being considered poor because their income is above this low level. The “poor”, in other words, are defined in such a way that they will only ever be a minority of the population. The Christian bible may say that “the poor ye shall always have with you” – but, according to Sen and other economists, this will be only as a minority.

Marxists define poverty in terms of lack of access to means of production.  Anybody in this position is obliged to obtain their living by selling the only thing they do possess – their ability to work – to some employer. They are poor in terms of not owning means of production. Some, indeed most, may be able to obtain a monetary income above the “poverty line” defined by economists such as Sen but, being deprived of means of production, they still suffer from poverty.

It is true that, under capitalism, where “entitlement” to food, clothing, housing, etc depends on having money, there will always be some people who (through, illness, incapacity, old age, etc) can’t sell their ability to work or, because of its low quality, can’t sell it for a high enough price to cover their basic needs and so, without hand-outs from the State, would be destitute. This – destitution – is the proper term to describe their situation, not “poverty”. In the Victorian England of Marx’s day it was called “pauperism”. It is true that only a minority of the working class find themselves in this situation. But this does not mean that the rest — those in regular work — cannot be described as suffering from poverty, deprivation. In the wider, Marxian sense, if you don’t own sufficient means of production to live without having to work to obtain money then you are deprived, or poor. Which is the situation of the vast majority of people under capitalism.

As to solutions, as a self-confessed left-wing Keynesian and “welfare economist”, Sen sees the solution to “poverty and famines” as lying in increasing the “entitlement” of “the poor” by giving them or allowing them to acquire more money. It is not difficult show why, on theoretical grounds, this would not and could not work as it goes against the whole logic of the capitalist system.

Capitalism operates by extracting surplus value — which the employing capitalist hopes to turn into money — from the working class. The monetary expression of surplus value — profit — is the lifeblood of capitalism and any attempt to tax it away risks clogging up the whole economic mechanism, thereby provoking an economic slump. Attempts to transfer money from the rich to the poor by various left-wing governments (whether Labour, Social Democratic or “Communist”) have always failed, with the leftwing government either being voted out of office or accommodating itself to having to give priority to profit-making over meeting people’s needs. The capitalist system simply cannot be made to work in the interest of the majority class of wage and salary workers. It runs on profits – extracted from the working class – and can only ever work in the interest of the profit-taking, capitalist class. The sort of reformism advocated by Sen is futile.

Under capitalism, the working class are not entitled to – have no “right” to – anything. They are only allowed to work if some employer thinks they can make a profit out of selling what they produce and, if unable to work, are only maintained by the State (out of the surplus value produced by the working class) at a level sufficient to stop them rioting or turning to crime. The solution lies not in trying to transfer money from the rich to the poor but in abolishing the money system altogether on the basis of the common ownership by the whole people of the means of production.

This would end the poverty of the working class as well as the destitution of the minority dependent, if lucky, on State hand-outs or charity. “Entitlement” to food and all the rest would not then depend on having a source of money, but simply on being human, a member of society. Everybody, not matter how little they might be able to contribute, would still be entitled to live and live as well as society can afford. In other words, “from each according to their ability, to each according to their needs”. Common ownership not class ownership. Production solely for use not production for profit. That is the only way to abolish “poverty and famines” from the face of the Earth for ever.

Adam Buick

Voice From The Back: Don’t tell it like it is (1999)

The Voice From The Back Column from the January 1999 issue of the Socialist Standard

Don’t tell it like it is

Freedom of the press is regularly made a mockery of in Turkey, with the connivance of the authorities, states the journalists’ defence organisation, Reporters Sans Frontières (RSF), in a report made public Thursday October 22. “Between January and August 1998 two journalists have been killed as a result of police operations, five have been tortured, fifty-eight attacked, menaced or harassed, and forty-five others have been interrogated” states the report, which adds: “At least six journalists were in prison for press offences at the end of September 1998.” Le Monde, 24 October.

Onward Christian brokers

Christian workers have always felt out of step reconciling their beliefs with the “hard sell” and “bonus envy” culture of the City. But now, according to the Centre for Marketplace Theology, an independent Christian initiative to bring the principles of God to the Square Mile, more Christian and non-Christian traders, bankers accountants and lawyers are looking for an alternative to the City’s prevailing ethos of greed . . . Malcolm Matson, an entrepreneur . . . says, “It only takes a couple of institutions to fail for people to start to take stock . . .” But Matson is well aware of the City’s resistance to a Christian message. In 1993 he was elected as a City alderman on a platform of Christian reform but was “blackballed” by the Corporation of London. “I ended up in the courts where I won a judgement to show they were acting illegally.” Independent on Sunday, 1 November.

Give that man a prize

“If food were distributed equally, the aggregate food availability would indeed determine how much food each person could get. But obviously this does not happen in any actual society. To decide whether a person will in fact be able to acquire enough food, we have to see what he owns, what he can produce with what he owns, what he can get in exchange, and so on. Starvation will result if a person is not able to establish ownership through these means. Starvation is a social outcome reflecting an entitlement failure. Availability of food is only one influence among many affecting that outcome.” So stated Amartya Sen in a BBC Radio 3 broadcast on 21 March 1989, expressing a view that famines are not caused by a collapse in food production but by a collapse in (some) people’s legal access to food, whether through money to buy it or through direct access to land to grow it, which he had already expressed in his 1982 book Poverty and Deprivation: An Essay in Economic Entitlement and Deprivation. Sen has just been awarded this year’s Nobel Prize for Economics. So, for once, the prize has gone to someone who has had something relevant—and—true—to say.

EU-phemism

It’s official! We no longer have any unemployed people in the EU. This, at least, appeared to be the conclusion of a commission report on employment rates published last week. According to the document, the Union’s 18 million jobless are not out of work, unemployed or even on the dole. They are merely “Unused labour stock”. So now you know. European Voice, 22-28 October 1998. Marx had a more expressive phrase: “industrial reserve army”.

Body snatchers

Kidnap is the big concern for large companies, says Paul Slaughter, managing director of London-based Task International, which provides bodyguards for big businesses. “Ransom demands worth millions of pounds go through Lloyd’s insurance market every year,” he says, “but it is not common knowledge because companies and insurers do not want to admit there is kidnap and extortion.” During the last two years there have been more than 12,500 known kidnaps. The average ransom demand is about $1 million (£600,000). Financial Mail on Sunday, 1 November 1998.

What a gas!

"The controversial police use of CS gas spray has come under fresh attack after a detective had a heart attack in training . . . The detective constable, who is in his early forties and has not been named was last night in a critical but stable condition in hospital after the incident on Thursday. He had voluntarily walked through a cloud of CS gas to experience its effects as part of a one-day training programme which all police are require to take". Mail on Sunday, 25 October 1998.

Fin de capitalisme?

Pre-millennial tension is not, as is commonly thought, a fear of the unknown. Instead, it’s a fear of the known—the dreadful, sinking suspicion that the alien invasion won’t come. This idea—that nothing will change—is as potent and horrendous as any fin de siècle fantasy of cultural implosion. It means we’ll be marooned in the nineties. Imagine that! An eternity of pointless, non-committal cultural air-kissing . . . We long for something to happen so badly that we don’t care what it is. Guardian, 19 November 1998.

What Causes Famines? (1985)

From the February 1985 issue of the Socialist Standard

Recent events in Ethiopia have brought the question of famine back into the news. But what are famines? And what causes them? The obvious answer seems to be a situation where people are dying through lack of food in a particular region.

Were we living in a world where everyone had an automatic right to the amount of food they needed to stay alive this simple explanation might be plausible. The only way, in such circumstances, that a famine could arise would be if the total amount of food available to the people of a particular region fell below that needed to feed them all. The trouble with this simplistic explanation is that it is contradicted by the facts. First, there is the fact that during famines some starve while others have no problem obtaining food, whereas if the above explanation were true all people would suffer equally. Secondly, in a number of famines not only has the amount of food available in the region not fallen, or not fallen substantially, but food has even been exported.

These two examples show that a famine is not just a question of the total amount of food available in relation to the total number of people in a particular region; it is more complicated than this. People's access to food (as to other goods) is not free, but depends on a number of economic, social and legal factors defining their position in society.

In a developed capitalist country like Britain access to food depends almost exclusively on having money. People get this money in a number of ways: from owning property (as a non-work income such as rent, interest and profit), from trading or from selling some service, from selling their mental and physical energies (for a wage or salary), and from the state (as pensions and other allowances). So people get money which then gives them a claim on food, of a quantity and quality related to the amount of money they have. This claim is basically a property claim in that the exchange of money for food is a property-transaction involving an exchange of equivalent values.

In undeveloped countries like Ethiopia or Bangladesh the situation is basically the same, except that a category that has virtually disappeared in the developed countries has a much greater weight, namely, those who directly work the land. Such people can have access to food without money as they can consume part of what they grow, but here again this is an individual entitlement arising out of a property situation. They are entitled to the food because they own (or have rented) the land on which it is grown. There are also more people in the undeveloped countries whose entitlement arises out of money obtained from petty trading or selling some service rather than from the sale of their labour power.

This, then, is the framework in which famines occur. It enables us to see why the amount of food available in a region is not the determining factor in a famine. The determining factor is the pattern of people's legal entitlement to acquire food and it is changes in this rather than in food availability that provoke famines.

This point, which is fairly obvious when you reflect a little on the nature of the private property world in which we live, has been well developed in a study undertaken by Amartya Sen for the ILO, published in 1981 under the title Poverty and Famines: An Essay on Entitlement and Deprivation. Sen's basic point is that "starvation . . . is a function of entitlements and not of food availability as such":

 It is the totality of entitlement relations that governs whether a person will have the ability to acquire enough food to avoid starvation, and food supply is only one influence among many affecting his entitlement relations.

To test the validity of this "entitlement" approach, as opposed to the "food availability decline" approach, Sen examines four famines — the Great Bengal famine of 1943, the Ethiopian famines of 1973 and 1974, the Sahel famines of the 1970s and the 1974 Bangladesh famines. The statistics he produces show that these are better explained in terms of a collapse of entitlements to acquire food legally, through exchange or through direct consumption, among certain sectors of the population rather than in terms of a fall in the amount of food available.

Thus he concludes with regard to the Ethiopian famine of 1973:

  The Ethiopian famine took place with no abnormal reduction in food output, and consumption of food per head at the height of the famine in 1973 was fairly normal for Ethiopia as a whole. While the food output in Wollo was substantially reduced in 1973. the inability of Wollo to command food from outside was the result of the low purchasing power in that province. A remarkable feature of the Wollo famine is that food prices in general rose very little, and people were dying of starvation even when food was selling at prices not very different from pre-drought levels. The phenomenon can be understood in terms of extensive entitlement failures of various sections of the Wollo population.

About the Bangladesh famine he says:

  The food availability approach offers very little in the way of explanation The total output, as well as availability figures for Bangladesh as a whole, point precisely in the opposite direction. as do the inter-district figures of production as well as availability. Whatever the Bangladesh famine of 1974 might have been, it wasn't a Food Availability Decline famine.

What Sen calls the "entitlement" approach also provides an explanation for the export of food from famine regions:

  Viewed from the entitlement angle, there is nothing extraordinary in the market mechanism taking food away from famine-stricken areas to elsewhere. Market demands are not reflections of biological needs or psychological desires, but choices based on exchange entitlement relations. If one doesn't have much to exchange, one can't demand very much, and may thus lose out in competition with others whose needs may be a good deal less acute, but whose entitlements are stronger. In fact, in a slump famine such a tendency will be quite common, unless other regions have a more severe depression. Thus, food being exported from famine-stricken areas may be a “natural" characteristic of the market which respects entitlement rather than needs.

In other words, people starve because in private property society they have come to have no legal access to the food they need to stay alive. As Sen puts it in the closing paragraph of his book:

  The focus on entitlement has the effect of emphasizing legal rights. Other relevant factors, for example market forces, can be seen as operating through a system of legal relations (ownership rights, contractual obligations, legal exchanges etc). The law stands between food availability and food entitlement. Starvation deaths can reflect legality with a vengeance.

What is the solution? Sen himself seems to think that famines could be avoided if some sort of social security system was introduced in the undeveloped countries which would ensure people a minimum (even if only a bare minimum) state income when their other "entitlements" fail. Something along these lines may well be tried sometime (where are these poor states going to get the money from?) but manifestly this would only be a palliative. To solve the problem a much more fundamental change is required: the abolition of private property.

All that is on and in the Earth must become the common property of all the people of the Earth. Once the world has been organised on such a communist (in the original sense of the term) basis, access to food, and all other goods, would no longer be dependent on establishing a legal right through owning property, selling one's labour power, and so on. but would be something that every human being would have in application of the principle "from each according to their ability, to each according to their needs". Given that a more intensive and extensive use of already-applied agricultural techniques could provide enough food adequately to feed every single man, woman and child on the planet, famine and starvation would be impossible. Indeed, people living in socialism will look back at the twentieth century as a Dark Age of continual wars and famines and will wonder why such things were allowed to happen.

Adam Buick

What causes famine? (1989)

From the December 1989 issue of the Socialist Standard

One popular explanation of the cause of famines sees them as being due simply to not enough food being available. People starve because there's no food for them. What could be more simple? And if there's no food available that's because of some natural disaster—some so-called Act of God which we can’t do anything about— like flooding in Bangladesh or a drought in Ethiopia.

This simplistic view has been challenged and effectively refuted by Professor Amartya Sen in his book Poverty and Famines: An Essay on Entitlement and Deprivation that appeared in 1982. Sen showed that in most recent famines the food was available: what wasn’t available were "access rights" to it, whether money or the ability to directly grow food, on the part of those who starved.

Professor Sen returned to this theme in a radio broadcast on BBC3 on 21 March. After referring to his early experience when a schoolboy of the Bengal famine of 1943, one of the worst famines that has taken place in recent times, which he showed to have been falsely attributed by the authorities to not enough food being available. Professor Sen stated his basic case:

In every society the amount of food a person can own and consume depends on a set of rules governing his legal entitlement given by ownership, and possibilities of production and exchange. If food were to be distributed equally, the aggregate food availability would indeed determine how much food each person could get. But obviously this does not happen in any actual society. To decide whether a person will m fact be able to acquire enough food, we have to see what he owns, what he can produce with what he owns, what he can get in exchange. and so on. Starvation will result if a person is not able to establish ownership over an adequate amount of food through these means. Starvation is a social outcome reflecting an entitlement failure. Availability of food is only one influence among many affecting that outcome.

Turning to the 1974 famine in Bangladesh, he explained that what happened was that a flood destroyed the jobs of many millions of rural labourers who would normally have earned money planting and transplanting rice. With no jobs they had no income and so no money to buy food, despite 1974 being a record year for food availability over the period 1971- 75. As Sen put it, "what killed the Bangladeshi rural labourers was not any physical lack of food, but the failure of the social system to give them adequate entitlement to the food that was there”.

A similar situation had occurred in Ethiopia in 1973 except that it affected peasant farmers working their own land rather than rural wage workers. Here there was indeed a drought that did adversely affect crop production, but it wasn't this that caused people to starve, at least not directly as in the popular “not enough food" explanation for famines.

Because they had less of their particular food crop to sell, the peasants in the Wollo province, which was the centre of the famine, suffered a reduction in their income and were therefore unable to buy food to replace that which they were unable to grow themselves. It was this collapse of their income, not the failure of their crop as such, that led to the famine. Professor Sen again: “Had there been only a fall in food output in Wollo, without a simultaneous decline in the local population's economic fortune, food would certainly have moved into Wollo under the pull of the market”.

Nor could the famine be attributed to a lack of transport facilities, another reason sometimes advanced as a cause of famines, since the main North-South road from Addis Abba to Asmara runs through the worst hit area of Wollo. There was a movement of food along this road—out of Wollo. This happened, as it did in the notorious Irish famines of the 1840's, because purchasing power in the area had fallen more than output, so that market forces led to the "surplus” (to market requirements) being exported to areas where people did have the money to pay for it.

So, famines are features of a society in which entitlement to food is not direct but by means of money. Professor Sen sees the solution as lying in establishing mechanisms which would ensure that every person has enough money to always be in a position to buy enough food to stop them starving. He thereby ignores the obvious solution: establish a society in which people would have free and direct access to food as of right, a moneyless, socialist society based on the common ownership and democratic control of the world's resources. In such a society nobody would ever starve because food would be being produced for its natural purpose of feeding people.

Adam Buick

Cooking the Books: Capitalism, but not as they know it (2009)

The Cooking the Books column from the May 2009 issue of the Socialist Standard

Eric Hobsbawn and Amartya Sen have both written interesting stuff. Hobsbawm on the history of capitalism in Britain and Sen on how famines are not caused by a shortage of food but by the collapse of some people’s legal entitlement to it. But their comments on the current crisis are confused.

In an article in the New York Review of Books, reprinted in the Guardian (14 March), entitled “Capitalism Beyond the Crisis”, Sen questions “whether capitalism is a term that is of particular use today”, arguing:

“It seems to be generally assumed that relying on markets for economic transactions is a necessary condition for an economy to be identified as capitalist. In a similar way, dependence on the profit motive and on individual rewards based on private ownership are seen as archetypal features of capitalism. However, if these are necessary requirements, are the economic systems we currently have, for example, in Europe and America, genuinely capitalist?”

Citing increased state funding over the years of the armed forces, the police, health and education as examples of non-market, non-profit economic activities, he concludes: “the idea of capitalism did in fact have an important role historically, but by now that usefulness may well be fairly exhausted”.

The market and profits certainly are central to capitalism, and state spending certainly has increased compared with some past periods, but is state spending really non-capitalist or is it not rather part of the necessary overheads of running capitalism? Capitalism and the state have always co-existed. In fact the state helped capitalism come into existence and expand and is needed to maintain it today. State spending on armed and police forces is patently aimed at serving capitalist interests at home and abroad. State spending on education and health is essentially aimed at providing employers with a fit and trained workforce and so too is pro-capitalist.

Hobsbawn also thinks we should be looking towards a society that is neither capitalist nor socialist, as in the title – “Socialism has failed. Now capitalism is bankrupt. So what comes next?” – of a recent article of his in the Guardian (10 April) brings out. But his definition of capitalism is as wrong as his definition of socialism. He contrasts “the centrally state-planned economics of the Soviet type and the totally unrestricted and uncontrolled free-market capitalist economy”.

Arguments can go on about whether Russia was some form of capitalism or some new exploitative class society, but it was clearly not a classless society based on the common ownership and democratic control of productive resources with production directly to meet human needs and not for sale on a market, i.e. not socialism.

The case for saying that it was still a form of capitalism – best described as state capitalism – is that wealth there still took the form of “an immense accumulation of commodities” as articles for sale, produced by a class of people obliged to sell their working skills for a wage or a salary on whose unpaid labour a privileged class lived.

As an historian of capitalism Hobsbawn must know that, if defined as a “totally unrestricted and uncontrolled free-market” economy, “capitalism” has never existed because there never has been a time when market forces alone have exclusively determined how an economy has worked. States have always intervened to try to distort the market in favour of particular capitalist groups as well as to engage in the activities Sen mentions.

As class ownership, production for sale with a view to a profit, wage labour and surplus value still exist – as they patently do, whatever the degree of state activity – “capitalism” is the best term for describing the existing economic and social system.

Marx and the BBC (2008)

Book Review from the March 2008 issue of the Socialist Standard

A Socialist Critique of the BBC, Albert Einstein, Amartya Sen and Muhammed Yunus. By Binay Sarkar, Avenel Press, 2007

Don't be put off by the title; when you read it – as you should – it all makes sense. In 1999 Karl Marx was voted the “Greatest Thinker of the Millennium” in a BBC online poll. Then in 2005 he was voted the “Greatest Philosopher” in a BBC poll. And yet the BBC has always had a problem in dealing with such a great thinker and philosopher, perhaps because he didn't win a Nobel Prize. In the philosopher contest they invited Francis Wheen on to a BBC radio programme to explain Marx's theories but he said they were a form of economic determinism, in that economic relations determined all other features of society, including ideas.

It's a popular misinterpretation, one which Albert Einstein didn't repeat when he declared to the world that he was a socialist in an article entitled Why Socialism? in 1949. Einstein's analysis of capitalism is still broadly acceptable today even if his conception of socialism is not, being essentially a form of state capitalism. Amartya Sen, a professional economist, also has a state capitalist view of socialism but his understanding of present-day capitalism looks muddled when compared with the analysis of the Nobel Prize-winning physicist Einstein.

Sen won the 1998 “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel” (not to be confused with the Nobel Prize, which is awarded by the Nobel Foundation) for his contribution to “welfare economics.” Sen correctly saw that famines were caused by poverty and not an inability to feed starving people. However, he put forward a set of “market entitlements” which were meant to combat poverty; but as this left the class monopoly of the means of life untouched it should not be surprising that this could not reduce poverty or famines.

Binay Sarkar exposes these and other reformist illusions, along with Muhammed Yunus's plans for “Banking for Peace.” Yunus was awarded the 2006 “Nobel Peace Prize” (given by the Norwegian parliament, not the Nobel Foundation) for his “commitment to the Grameen cause.” This envisaged fighting poverty by lending money, mainly to women, to facilitate self-employment projects and promote women empowerment. But as Adam Buick points out in his Introduction to this book, banking “is an integral part of the capitalist system of production for profit which is the cause of modern wars.” Despite the excessive use of quotations, this book deserves to be in every socialist's collection.

Lew Higgins