Cooking the Books: Human capital (2026)

The Cooking The Books column from the July 2026 issue of the Socialist Standard

Announcing plans to cut nearly 8,000 jobs by using AI instead, Bill Winters, the CEO of Standard Bank, told reporters:

‘It’s not cost-cutting. It’s replacing in some cases lower-value human capital with the financial capital and the investment capital we’re putting in’.

He seemed to have forgotten that he was not addressing a board meeting but the general public. The resulting outrage at him calling his employees ‘lower-value human capital’ forced him to apologise. But he was actually accurately describing a fact.

What a capitalist firm has to set aside to pay its workers is part of its capital. You could call it ‘human’ capital as opposed to the capital invested in plant, equipment, machines, materials and power.  Or, expressed another way, it is the difference between ‘living’ labour and ‘dead’ labour, useful as it brings out that the other factors that capital is invested in have been produced by people working.

The terms Marx used to make this distinction were ‘variable’ capital and ‘constant’ capital, as set out in chapter 8 of Volume I of Capital:

‘The means of production on the one hand, labour-power on the other, are merely the different modes of existence which the value of the original capital assumed when from being money it was transformed into the various factors of the labour-process. That part of capital then, which is represented by the means of production, by the raw material, auxiliary material and the instruments of labour does not, in the process of production, undergo any quantitative alteration of value. I therefore call it the constant part of capital, or, more shortly, constant capital. On the other hand, that part of capital, represented by labour-power, does, in the process of production, undergo an alteration of value. It both reproduces the equivalent of its own value, and also produces an excess, a surplus-value, which may itself vary, may be more or less according to circumstances. This part of capital is continually being transformed from a constant into a variable magnitude. I therefore call it the variable part of capital, or, shortly, variable capital’.

So the money invested in buying the ability to work of employees is indeed a part of capital. Economically speaking, that’s what workers are and that’s what they are treated as.

Winters claimed that it wasn’t about cost-cutting. Of course it was. What would be the point of investing in AI if it wasn’t cheaper than having the work done by humans? What he was probably trying to say was that the board had decided to use a larger proportion of its capital as non-human capital than as human capital and that some of the latter was of ‘lower value’ to his business because it was costing more and so reducing profits.

He would be really ignorant if he thought that human capital in general was of ‘lower value’ to a capitalist business than non-human capital. The source of profits is precisely the extra value over and above its own value that living labour produces, the amount by which such capital ‘varies’ compared to its original value. But perhaps he was misled because he is running a bank and banks don’t actually produce anything but siphon off a part of the surplus value produced in industry.

The indignation of workers at being called ‘human capital’ brings out a key difference between the two types of capital. Humans can think and act and so can get together to end their economic status as a part of a capitalist business’s capital — by ending the whole economic system where production is in the hands of money-investing, profit-seeking businesses.

Assassinations or class struggle? (2025)

Street art in San Francisco

From the February 2025 issue of the Socialist Standard

Luigi Mangione allegedly assassinated the capitalist Brian Thompson, CEO of a health insurance company, after seeing his own mother’s prolonged suffering after being denied health insurance coverage in North America, where healthcare is unsocialised by design. The shot was heard around the world and ignited the long dormant class consciousness of North America. The outpouring of support for Mangione’s alleged act has been politically surprising for many of the lapdogs of capital. The media especially has been caught on the back foot, seeing political pundits booed by their own audience as the public celebrate the alleged act.

Capitalism and political violence go hand in hand. As Malcolm X said, ‘violence is American as cherry pie.’ It’s just not usually cutting in this direction. We will see this same political opera play out again and again as capitalism tumbles from one crisis to the next, economic and environmental, and as society becomes more individualistic and fragmented from both wings of the political spectrum, as well as an increase in violence inspired by conspiracy theorists. Examples abound from ‘pizzagate’ or the ‘MAGA bomber’ Cesar Sayoc.

Western society’s morals advocate for people to only use peaceful means of achieving social change, but capitalism is anything but peaceful. The inherent tensions between classes in a capitalist society lead to situations where violence is inevitable when the oppressed are spoken to everyday in the language of violence by capital.

The state, as argued by Max Weber, is defined by its monopoly on the legitimate use of physical force. In this regard, the 1 percent wields power through the apparatus of the state, enforcing laws and maintaining order to protect its property. So, when the working class resorts to violence, it is typically a reaction to an unyielding system that allows no channels and permits no voice.

Consider the words of Marxist revolutionary Rosa Luxemburg, who once stated, ‘Freedom is always and exclusively freedom for the one who thinks differently.’ Where the state fails to provide avenues for dissent, the working class feels compelled to take matters into their own hands, an act not of frivolity but of desperation. To condemn such an act will serve the oppressive structure of the status quo that continues to render peaceful protests ineffectual.

The job of a socialist party in this context is not to support the wild actions of rugged individualists but to provide paths of mass action with a coherent philosophy, uniting disparate efforts into a collective strategy. Antonio Gramsci emphasised the importance of a ‘war of position’ in establishing hegemony, advocating for a broad ideological struggle that counters individualistic acts of defiance with systemic solutions. The party must provide structure to the movement, demonstrating that the fight against oppression is not one of isolated and ultimately futile gestures but part of a large revolutionary struggle.

The late historian Eric Hobsbawm pointed out the ‘social bursts’ of violence that erupt during times of severe inequity. The working class mobilisation amidst such strife, far from being vilified, should be understood within the broader narrative of class conflict.

The state’s response to dissent is a reflection of its inherent class interests. The role of a socialist party is not only to channel individual acts into a collective aim but also to recognise and respond to the realities of revolutionary action, acknowledging that, while peaceful revolution is its aim, understanding the circumstances that lead to violence is crucial in the pursuit of a free society. It is through this synthesis of theory and practice that the socialist movement can articulate its vision for the future, one where productive resources are held in common, and where the state, and its monopoly of violence, will be a thing of the past.

A. T.

Voice From The Back: Californian Nightmare (2007)

The Voice From The Back Column from the December 2007 issue of the Socialist Standard

Californian Nightmare

The dreadful fires in California that led to death and destruction were well reported in the British press, but what was hardly covered was the plight of the immigrant workers. “Out of the burning brush, from behind canyon rocks, several immigrants bolted toward a group of firefighters, chased not by the border police but by the onrush of flames from one of the biggest wildfires this week. … Immigrants from south of the border, many illegal, provide the backbone of menial labor in San Diego, picking fruit, cleaning hotel rooms, sweeping walks and mowing lawns. The wildfires, one of the biggest disasters to strike the county, exposed their often-invisible existence in ways that were sometimes deadly. The four bodies were found in a burned area in southeastern San Diego County, a region known for intense illegal immigration. …Terri Trujillo, who helps the immigrants, checked on those in the canyons, urging them to leave, too, when she left her house in Rancho Peñasquitos ahead of the fires. Ms. Trujillo and others who help the immigrants said they saw several out in the fields as the fires approached and ash fell on them. She said many were afraid to lose their jobs. ‘There were Mercedeses and Jaguars pulling out, people evacuating, and the migrants were still working,’ said Enrique Morones, who takes food and blankets to the immigrants’ camps. ‘It’s outrageous.’ Some of the illegal workers who sought help from the authorities were arrested and deported.” (New York Times, 27 October) What a comment on capitalism, some workers live in such poverty and insecurity they give up their lives in an attempt to keep a menial weekly wage.

Wall Street Shuffle

We are always being told that capitalism is a competitive system that rewards success and punishes failure, but what are we to make of the following? “Merrill Lynch’s directors may be weighing E. Stanley O’Neal’s future, but one thing is already guaranteed: a payday of at least $159 million if he steps down. Mr. O’Neal, the company’s chairman and chief executive, is entitled to $30 million in retirement benefits as well as $129 million in stock and option holdings, according to an analysis by James F. Reda & Associates using yesterday’s share price of $66.09. That would be on top of the roughly $160 million he took home in his nearly five years on the job. Under Mr. O’Neal, Merrill moved aggressively into lucrative businesses like the packaging of subprime mortgages and other complex debt securities. …But those big bets appeared to go bust this week. Merrill announced an $8.4 billion write-down, raising questions about whether Mr. O’Neal will keep his job. One thing that he surely will hold onto, though, are the giant paychecks he has collected. ‘I lay the blame at the foot of the board,” Frederick E. Rowe Jr., a money manager and president of Investors for Director Accountability. “He was paid a tremendous amount of money to create a loss that is mind-boggling, and he obviously took risks that should never have been taken.’” (New York Times, 27 October) He managed to lose $8.4 billion for the company and can claim $159 million for his efforts. Who says capitalism isn’t crazy?

This Is Communism?

“The United States has more billionaires than any other country: 415 by the last count of Forbes magazine. No. 2, and closing fast? China. A year ago, there were 15 billionaires in China. Now, there are more than 100, according to the widely watched Hurun Report. Forbes has documented 66. ..As much as the bounty of billionaires is a source of pride, it is also a potential cause for concern in a nominally Communist country. Per capita income in China is less than $1,000 a year.” (New York Times, 7 November) China is a fast developing capitalist country and just like any other capitalist economy the gap between the rich and the poor is immense.

Chinese Statistics

One of the effects of the rapid expansion of Chinese capitalism is the pollution of the atmosphere and drinking water. This has led to these horrendous statistics. “40% – Percentage by which birth defects among Chinese infants have risen since 2001, according to a government report, which linked the rise to environmental pollution. 460,000 – Number of Chinese who die prematurely every year from exposure to pollution and dirty water.” (Time, 12 November) This expansion may be leading to the creation of more billionaires, but it is also producing more corpses.

The Passing Show: Is He Really So Greene? (1966)

The Passing Show Column from the March 1966 issue of the Socialist Standard

Is He Really So Greene?

At the time of writing rail union secretary S. F. Greene has a lot on his mind. Even though the rail strike was called off at the last moment, there is still plenty for Mr. Greene and his lads to do round the negotiating table.

Which perhaps explains the very terse letter one of our members received from him at the beginning of February. You may know that it is the practice for the Socialist Party to send speakers to put our case to other organisations where possible, particularly trade unions. No strings attached, incidentally, except perhaps payment of the speaker’s fares. So one of our branch organisers wrote to the N.U.R. headquarters asking for a list of their branch addresses, intending to write to some of them direct.

Nothing very difficult about that, you might think? Well, you’d be wrong. “Dear Sir,” came back Mr. Greene’s reply of February 3rd. “1 have received your letter ... but regret 1 am unable to supply you with the information you require.” That was all, leaving us to draw whatever conclusions we liked. For example, was it that he just did not have the information? Is it possible that the N.U.R. is a union whose general secretary doesn’t know where its branches are? How on earth did he let them know whether or not to strike?

Maybe Mr. Greene is just not allowed by his executive to tell us what we asked, which seems pretty daft when you think that any railway porter could probably tell you the address of his union branch without a second thought. No, we can only think that perhaps he doesn't want us to speak to his branches, and that maybe the word has got around that the Labour Party doesn't like us very much (it’s mutual, by the way). After all, the N.U.R. is affiliated to that body. Let us then suggest a rewrite of Mr. Greene’s reply for hint: -

I have received your letter, and have the information you require, hut if you thing l'm sending it to you you're jolly well mistaken. I'm not having any incitement to disaffection—we've supported the Labour Party for more years than I care to remember (and a lot of them I don't care to remember), and we’re going on doing it, never mind their anti-working class actions and the stand-up fight we’re having with them over pay and conditions.

Which, when you think of it, seems to typify the sort of logic behind the thinking of most Labour supporters.

The ''Mirror" Again

And while we're talking about railwaymen, I suppose it was inevitable that they would get precious little support from the rubbish mongers of the capitalist press in general, and that the Daily Mirror would wade into them with two-inch headlines. ‘‘Chaos — Or Commonsense?” yelled the front page on February 10th, while the centre pages of the same issue carried on the attack with an article by that very rich friend of the workers, Labour M.P. Woodrow Wyatt.

The Mirror has always prided itself on its plain speaking and down-to-earth attitude, but this does not make it really a very original newspaper. It says mainly what the others are saying but in a brasher and coarser manner, and, of course, it specialises in large headlines and meagre reading content. In the past it has made a practice of picking out certain strikes and condemning them because they were small and petty. Now the N.U.R. gets it in the neck for precisely the opposite reason.

Because of the Mirror’s deliberately cultivated COR-BLIMBYness, many people think it has working class interests at heart, but nothing could be further from the truth. It is, as ever, firmly on the side of British capitalism, even though it may niggle some capitalist politicians and at times land itself with a libel action. It deals always with superficialities, never scratching under the surface of any social problem. This is not surprising—all newspapers distort facts and pander to ignorance and prejudice to a greater or lesser extent. But the Mirror must truly be the envy of Fleet Street in having developed the technique to the nth degree and built a circulation of many millions on a veritable mountain of bewilderment and bigotry. Therein perhaps lies its only claim to originality. It ran true to form over the railmen's strike.

How Much Are You Worth?

"What sort of—um—salary were you thinking of, Mister—um—?" I was asked by the lean, sharp featured, fussy little personnel man. I was a fresh-faced school leaver, determined to start to start as I meant to go on, and really get somewhere in the world. I swallowed hard.

‘Two pounds a week?” I suggested in a squeaky voice which belied my attempts to sound bold and confident. He wrote it on his pad, ringing the figure round slowly and heavily with his pencil, simultaneously shaking his head and drawing in a long slow breath through rounded lips. “Frankly, you’ve gone down in my estimation,” he confided. “I was hoping that you would be different from the usual run of money-grabbing youngsters we have coming to us for jobs. We can offer you (pause for effect) twenty-five shillings a week (this slowly and deliberately, savouring every word). You must be prepared to work hard, plenty of opportunities here for advancement . . . show what you’re worth . . . etc., etc.”

Obviously his idea of “getting on” was a bit different from mine. I bid him a polite goodday and got a job elsewhere —at two pounds a week. When I look back on that first encounter (there have been a few since then) I’m inclined to wonder if  the mincing little man is still with his firm, so diligently guarding his boss’s interests. Certainly he was only putting a line which is as old as the hills and which is trotted out just as much today as ever it was. Many workers do believe it, however, and spend their lives trying to show their boss what they are worth; only the boss’s assessment invariably falls short of theirs. Which is a big snag and shows that the strength of your bargaining position is what matters, not the strength of your moral arguments.

But now look at the other side of the coin. William Davis, Guardian financial editor and a man prone to moralising lectures in his column, on how much harder we must all work, has been asking “How much is a company chairman worth?” On February 5th he gave a table showing the average payment to directors of various big firms, the figures ranging from £9,800 to £38,500 a year. But the thing to notice was the absence of any moralising sentiment in answering his own question, thus:

Business men should he made to feel proud of high salaries. The ambition of lower-paid people should be to equal them, not to show jealousy. 

I never really understood why there was so much fuss about the £24,000 a year paid to Dr. Beeching ... on simple business grounds alone, it was a good price.

To which every capitalist politician will say Amen. I don't think they will be saying quite the same thing, though, in the next few weeks when some of those "lower-paid people." like bus and railway workers, push for higher wages. That's not quite the sort of equalising ambition Mr. Davis has in mind.

Up, Up, Up It Goes

I have before me some cuttings taken at random from newspapers over about one week in January. They are all about the same problem—crime in its various forms, crime major or petty, but crime nevertheless Over two thousand London telephone boxes wrecked by vandals, gang attacks on transport lorries, drug peddling, robbery with violence. The list is as long as your arm. and very depressing.

“We are determined to stamp this out,” says a magistrate to a phone box wrecker. “You may expect long prison sentences," says the Lord Chief Justice Lord Parker, in a blanket warning to dope peddlers. How many times have we heard this sort of remark? And still the crime situation worsens. Home Secretaries have come and gone, but crime, it seems, goes on for ever. Mr. Roy Jenkins is the latest to try his hand. “I intend to mount a sustained and effective attack on crime," he is reported as saying at Hull on January 17th.

He proposes to "give the police every support, best equipment." etc, which may make them more efficient at crime detection, but will never solve the problem itself. And what of the criminals themselves? They will be modernising their methods, just like the police, using the means which current science puts at their disposal, so that in a few years time yet another Home Secretary will be saying he is going to wipe out crime.

Why is it so persistent, and defiant of efforts to end or even check it? Basically it is a fight over property of some kind. Even the apparent senseless hooliganism of ripped train seats has behind it a blind resentment towards property owned by someone else. And since no Home Secretary ever aims to remove private property society, crime stays stubbornly with us.

Gaspers

“Before independence we ensured that our army, civil service and judiciary were insulated from politics." (President Azikiwe of Nigeria. 16.1.66—just after seizure of power by Major-General Ironsi.)

Eddie Critchfield

Material World: Shareholder capitalism (2024)

The Material World column from the January 2024 issue of the Socialist Standard

In the last few decades the growth of institutional investors, in particular, in the guise of various kinds of funds – such as mutual funds, pension funds and, more recently, hedge funds – has been a powerful force in shaping the development of financialisation. Their large size has afforded them the leverage to impose a particular kind of financial logic on corporations with the focus very much on maximising ‘shareholder value’.

The CEOs – Chief Executive Officers – of big corporations have emerged as key agents in this trend, their commitment to the interests of shareholders having been firmly cemented and assured by means of such devices as stock options. This has had the effect of more closely aligning the interests of CEOs with those shareholders and is reflected in the astronomical rise in payouts to the former, an increasing proportion of which is, in effect, unearned income. Thus, whereas in the 1960s, America’s CEOs took home roughly 20 times what the average shop-floor worker made, today the figure is about 400 times or more.

Under increasing pressure to prioritise short-term results, managers are more inclined to make decisions that promote increased share value, such as mergers, acquisitions, and stock buybacks, rather than investment in physical production. Compliance is enforced by the threat of shareholders revolts, takeover bids by rivals or leveraged buy-outs by equity funds. The figures speak for themselves; more in the way of shareholder payouts means fewer funds available for investment, relatively speaking. According to Sam Pizzigati:

‘Between 1947 and 1999, non-financial U.S. companies shelled out an average 19.6 percent of their operating cashflow to shareholders, notes economist Andrew Smithers. The second half of that half-century saw stock options become an ever more dominant source of corporate CEO compensation. The 21st-century result? Between 2000 and 2017, the Smithers research finds, the average corporate cashflow to shareholders more than doubled to 40.7 percent’ (Sam Pizzigati, Aug 10, 2023 ‘Have Our Corporate Chieftains Become Expendable?’, Counterpunch).

Investment in physical production often involves certain immediate cost outlays and delayed benefits. That might require the board of directors to approve a request from the executive team to suspend dividend payouts (to the chagrin of shareholders) for the time being in order to finance this investment. Their reluctance to do this is a function of the shrinking time horizons (‘short-termism’) that businesses are subject to in an increasingly competitive world. All this has been aided and abetted by computerisation and the use of algorithms that have greatly speeded up decision making and made it imperative to adopt decisions that benefit a business in the short term with little thought of the long-term consequences.

Investing in the ‘real economy’ has the risk that in building up productive capacity one might exceed what the market is capable of absorbing – not least when your rivals might be wanting to expand output as well. Thus, it may sometimes be more prudent to simply buy up existing production capacity via mergers or acquisitions than increase that capacity yourself.

It is developments such as these that call into question the traditional image of the modern corporation as classically set out in Adolph Berle and Gardiner Means´s 1932 book, The Modern Corporation and Private Property. This seminal work helped to fix the image of the modern corporation in popular consciousness as an entity in which ownership is dispersed among numerous (and relatively inactive or powerless) and often small investors (thanks to the institutionalisation of laws such as those pertaining to limited liability that supposedly encouraged wider investment among the population by mitigating potential losses) with corporate control being decisively wielded in the hands of non-owning managerial elites.

Recent developments closely aligning the interests of CEOs with those of shareholders via the use of stock options and profit-based performance bonuses – major components in the compensation packages of modern-day corporate CEOs – have put the matter beyond doubt. Moreover, some of these compensation packages are on a scale that would certainly place their recipients in the ranks of the capital-owning class, even if only the lower rungs of that class, taking into account that a sizeable and growing chunk of that income is unquestionably ‘unearned’.

CEOs may ‘work’ but the mere fact that one works does not, of course, make one working class – any more than the possession of small amounts of capital makes one a capitalist. There is a certain point at which a change in quantity (in this instance, with respect to how much capital one possesses) translates into a change in quality or kind (from worker to capitalist).

In other words, and contrary to what the managerialist paradigm asserts, what we are seeing here is a convergence, not a divergence, of ownership and control. The top echelons of corporate management are, in effect, being steadily absorbed into the capitalist class. Alternatively, you could also see this as a case of members of that class taking on a more (pro)active managerial role in their companies for various reasons.

An extreme example of this would be someone like Elon Musk who, as well as having a personal fortune of $190 billion to his name, is said to have enjoyed a ‘compensation package’ involving performance-based stock options from the electric vehicle manufacturer Tesla, (of which Musk is the CEO), exceeding US$10bn in 2021. Clearly, this individual has no need to work whatsoever given the size of his personal fortune. It’s just that he chooses to do so for reasons we can only speculate on but are not, in themselves, important.

In short, then, capitalism has morphed from something like the kind of managerial capitalism that commentators like Berle and Means had in mind back in the early 20th century to today’s full-on ‘shareholder capitalism’.

Robin Cox

Voice From The Back: Our unelected bosses (2003)

The Voice From The Back Column from the December 2003 issue of the Socialist Standard

Our unelected bosses

We are often told that we live in an egalitarian, democratic society, where we can tell our leaders what to do, and if they don’t do it, sack them. In a political sense there is some truth to that, but, when it comes to wealth and control, capitalism leaves us all powerless. A good example of this was recently supplied by a survey conducted by the Times (15 October). They analysed the personnel of the FTSE 100 boardrooms and showed the immense power that these unelected men and women have over our lives.

“None of the people included in the Power 100 is a household name. Few are all that well known among close followers of business and stock market affairs. The most powerful man, Sir Robert Wilson, is more likely to elicit a response of ‘who he?’ than sage nods of familiarity.”

Here are some of the entities under his control (with his salaries in brackets). Chairman of Rio Tinto (£1,410,000), non-executive director Diageo (£68,000), BG Group (£35,000). Such people decide where factories and offices are built and where they are closed. They decide whether you work or not and inside capitalism you are powerless to do anything about it. Some democracy. Some equality.

The killer system

In 2000 the UN pledged to cut the death rate for the under five year olds by two-thirds and halve the number of people suffering from hunger, but now concede that these targets are unlikely to be realised because of the import of subsidised Western food with the consequent ruin of under-developed countries’ farmers and cuts in aid programmes. In the most scientific survey held to date Unicef have revealed a heart breaking picture.

“More than one billion young people in the developing world are now living in conditions of severe deprivation, according to a report for the United Nations Children’s Fund (Unicef). Tens of millions of children in developing countries still do not have access to basic human needs such as food, water and sanitation, the study found. …. Professor Dave Gordon from the University of Bristol (one of the repor’ts authors) said: ‘Many of the children surveyed who were living in absolute poverty will have died or had their health profoundly damaged by the time this report is published, as a direct consequence of their appalling living conditions’” (Independent, 22 October).

One billion reasons for getting rid of capitalism. One billion reasons for organising for socialism.

Market in misery

The misery that is capitalism is summed up by the desperate plight of workers in Moldovia selling their kidney in order to survive.

“’Every month someone walks into my office begging to sell an organ,’ says Dr Adrian Tanase, of the Renal Transplant Section in the City Hospital of Chisinau. ‘This has not been done for a long time in developed countries but here you buy or sell everything.’ …. The demand for kidneys is as strong as ever and the poverty in this virtually lawless main donor country is deepening” (Times, 25 October).

A rotten system

Capitalism is a system based on exploitation so it is hardly surprising that those respectable men in suits on Wall Street are up to their elbows in fraud and deception; but don’t take our word for it here is one of their top dogs on the subject.

“Mutual-fund managers have suddenly joined the long parade of suits in handcuffs that began with Enron two years ago and has led to monster fines, complex trials and a video of at least one multimillion-dollar toga party. It was bad enough when mutual-fund returns were pummeled by a two-year-long bear market that started to thaw only this spring. Then, in September, a few funds came under fire from New York State attorney general Eliot Spitzer for allowing big, sophisticated investors to game the system. The abuses are turning out to be so prevalent that regulatory officials predict a big shake-out. ‘There are going to be criminal cases brought in considerable number down the road’, Spitzer told Time. ‘It’s not one or two bad apples. The whole crate seems to have gone rotten’”(Time, 17 November).

High anxiety

We all have to face the problems of mortgage payments, credit card debt, fear of redundancy and just the day to day grind of working inside capitalism; so the following is probably no great surprise.

“Britain is becoming a nation kept artificially happy by pills, with doctors handing out eight million more prescriptions for depression, anxiety and stress than five years ago. About two million people are estimated to be taking anti-depressants every year, costing the NHS more than £380 million, according to government figures” (Times, 20 October).

Capitalism seems to be driving an awful lot of us round the bend.

Voice From The Back: All Things To All Men (2007)

The Voice From The Back Column from the November 2007 issue of the Socialist Standard

All Things To All Men

It is the nature of capitalist politics that you must pander to your audience. Thus in one week the late President Kennedy could declare to a German audience “I am a Berlinner”, to an Irish audience boast of his Irish descent and finish off in the USA extolling his American patriotism. Mitt Romney who is contesting the Republican primaries is using a similar ploy. “Whereas he once took on the powerful gun lobby, he more recently joined the National Rifle Association as a life member. Elected in Massachusetts as a strong supporter of gay rights, he now proclaims himself as a fierce opponent of same sex marriage.” (Times, 20 September) Obviously a man of principles. The main principle being “do anything to get elected”.

       

A Living Wage?

“The adult rate for the statutory minimum wage will go up from £5.35 to £5.52 and from £4.44 to £4.60 for 18-21-year-olds. The rate for 16 and 17-year-olds will increase from £3.30 to £3.40 an hour. Meanwhile, annual leave entitlement will increase from 20 to 24 days a year for full-time workers and will increase again to 28 days from April 2009. Employment Relations Minister, Pat McFadden, said: “These changes will improve the lives of millions of British workers, giving them more time with their families and ensuring our lowest paid workers continue to be able to earn a living wage.” (Guardian, 1 October) McFaddens “living wage” must seem laughable to politicians and big earners in the City. 17p an hour increase? Let the good times roll!

 

Now That’s Living

“The bonanza in boardroom pay has become even more spectacular, according to the latest figures from the accountancy firm KPMG. The typical chief executive of a FTSE 100 company has seen their total remuneration rise by 12 per cent in the past year, to reach over £2.6m. That’s four times the rate of increase in average earnings, leaving the business elite on pay over 100 times what most of their employees earn. In the case of those chief executives still in post, their income went up by 16 per cent, accelerating last year’s 9 per cent rise. The chief executive of one of the smaller FTSE 250 companies would expect to see a total package of just over £1m, up from £878,000 in 2006. Britain’s top corporate earner is probably still Bob Diamond of Barclays Capital, who took home £22.9m last year, including a performance-related bonus of £10.4m.” (Independent, 1 October)

 

We Hope It Is True

It is sad but true that it is almost impossible to lift up a newspaper without being informed about bad news. War, poverty and world hunger – it is the media’s daily ration of social problems. How welcome to read of this ray of sunshine in an otherwise gloomy press. “Outrage in cyberspace as the US Navy describes the MySpace generation as “alien life forces”. They spend their lives in front of screens meeting foreigners and are therefore less willing to sign up and kill them, a Navy study reports.” (Times, 2 October)

 

Not So Patriotic

At the Labour and Conservative Party conferences the drum was banged for patriotism. “British jobs for British people”, “this great country of ours”, “our proud British heritage”, and so on ad nauseam. In fact the British capitalists don’t care where they make their profits, if they can exploit workers abroad more profitably then that is what they will do, despite the cant spoken at political conferences. “Unite, the manufacturing trade union, yesterday accused Cadbury Schweppes of behaving like an “asset-stripping private equity firm” following the company’s announcement that it would shed 700 jobs by outsourcing chocolate production to Poland. Cadbury said it planned to shut its factory in Keynsham, near Bristol, by 2010, with the loss of 500 jobs, while 200 further posts would go in Bournville, in the Midlands, at the plant where it has been producing chocolate for almost 130 years. Much of the work done at the Keynsham and Bournville plants will be switched to the Polish company Wedel, which it acquired in 1998, Cadbury said, because labour and manufacturing costs would be much lower”. (Independent, 4 October)

 

The New Imperialists

It used to be that supporters of Chinese and Russian state capitalism decried the imperialism of the British Empire,. Today though it is a case of the kettle calling the pot black. “Today, emerging-market giants are fighting for oil, gas and metal ore in Africa as energetically as 19th-century European colonialists grabbed land on the continent. Recently, the Chinese have been the most aggressive, with more than 700 companies active in 50 countries, according to Standard Bank of South Africa. China is now Africa’s second largest aid donor and trading partner, behind the United States, with trade up fourfold to $40 billion since 2000. But Russia, the second most active emerging-market power in the area, is gaining. While trade with Africa is only $3 billion a year (up threefold since 2000), Russian companies flush with cash have sunk over $5 billion into buying up African assets since 2000— and that’s not counting $3.5 billion of oil exploration deals that will come online before the end of the decade.” (Newsweek, 15 October)

Tiny Tips (2023)

The Tiny Tips column from the November 2023 issue of the Socialist Standard 

Princess Diana’s sweater featuring a black sheep among rows of white ones has sold for $1.14 million (£920,000) at an auction by Sotheby’s in New York. (tinyurl.com/398cssps)

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Over 330 million children worldwide living in extreme poverty. (tinyurl.com/5xxyysyr)

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Iranian women face 10 years in jail for inappropriate dress after ‘hijab bill’ approved. (tinyurl.com/bdhy6c52)

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Six out of 10 young South Africans are jobless and more than half of the country’s 60 million residents live in poverty, according to the World Bank. Furthermore, South Africa’s murder rate is one of the highest in the world, with around 25,000 victims per year. Since Apartheid, more than half a million people have met a violent death…’We live in the most unequal society in the world, and the divides are growing wider and wider’ says Notywala. ’It has become even more unequal since the ANC has been in power. Liberators? Don’t make me laugh!’ . (tinyurl.com/mr2mbff8)

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A Kurdish-dominated militia moved to solidify its control over resource-rich parts of eastern Syria on Thursday after suppressing an Arab tribal insurgency with US support. Fighting in the area has diminished after the Syrian Democratic Forces on Wednesday entered the Diban stronghold of a tribal leader who had challenged Kurdish control of the east without resistance. The centre of Syria’s oil and wheat production lie in the region. (tinyurl.com/ra2jxv37)

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Almost nine out of every ten Ukrainian draftees who enlisted in the army a year ago have either been killed or injured in combat, Ukrainian media reported on Friday citing a senior conscription officer in the Poltava Region. (tinyurl.com/yc3zbhyw)

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Zelensky also said in the interview, published on September 10, that anyone who is not supporting Ukraine is with Russia. ‘If you are not with Ukraine, you are with Russia, and if you are not with Russia, you are with Ukraine. And if partners do not help us, it means they will help Russia to win. That is it,’ he said. (tinyurl.com/5cr9yven)

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The TUC, writes Fred Leplat, has voted overwhelmingly to back Ukraine’s right to self-defence against Russia’s invasion…’No peace deal should be imposed on Ukraine. As long as the Ukrainians are prepared to fight, we should be in solidarity with them’. (tinyurl.com/ydcrtkap)

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Equality of opportunity is a phrase commonly used by our politicians, even for those too scared to talk about equality more generally. Yet for decades we’ve been moving in the wrong direction. A recent report by the Institute for Fiscal Studies (IFS) found that where you are born in the UK, and the income and wealth of your family, now matter more than ever in defining life outcomes, with social mobility at its worst in more than 50 years. (tinyurl.com/4vjrtkct)

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Last year, the CEOs of the Big Three automakers received staggering pay packages, fuelling workers’ ongoing push for better wages and benefits. Ford’s Jim Farley took home around $21 million, Stellantis’ Carlos Tavares pocketed nearly $25 million and General Motors’ Mary Barra — the highest-paid of the group—brought in roughly $29 million. (tinyurl.com/y6s4fhup)

Tiny Tips (2011)

The Tiny Tips column from the August 2011 issue of the Socialist Standard

Thousands of British schoolgirls as young as eight face being taken abroad this summer to have their genitals mutilated and stitched up to preserve “purity”. A campaign by the Metropolitan Police and Foreign Office will suggest that more than 22,000 girls under the age of 15 risk being taken abroad by their family for “cutting”, based on data from The International Centre for Reproductive Health. Girls may have their outer genitals removed and stitched up to preserve their virginity, with an opening as small as a matchstick head, meaning it can take up to 20 minutes to urinate:

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Anyone who thinks slavery ended with the 13th Amendment is not paying attention. According to the latest State Department statistics, as many as 100,000 people in the United States are in bondage and perhaps 27 million people worldwide. The numbers are staggering:

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Just counting work that’s on the books (never mind those 11 p.m. emails), Americans now put in an average of 122 more hours per year than Brits, and 378 hours (nearly 10 weeks!) more than Germans. The differential isn’t solely accounted for by longer hours, of course—worldwide, almost everyone except us [in the USA] has, at least on paper, a right to weekends off, paid vacation time (PDF), and paid maternity leave. (The only other countries that don’t mandate paid time off for new moms are Papua New Guinea, Sierra Leone, Liberia, Samoa, and Swaziland.)

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Every hour, more than 1,300 severed pork heads go sliding along the belt. Workers slice off the ears, clip the snouts, chisel the cheek meat. They scoop out the eyes, carve out the tongue, and scrape the palate meat from the roofs of mouths. A woman next to Garcia would carve meat off the  back of each head before letting the denuded skull slide down the conveyor and through an opening in a plexiglass shield.

On the other side, Garcia inserted the metal nozzle of a 90-pounds-per-square-inch compressed-air hose and blasted the pigs’ brains into a pink slurry. One head every three seconds. A high-pressure burst, a fine rosy mist, and the slosh of brains slipping through a drain hole into a catch bucket. (Some workers say the goo looked like Pepto-Bismol; others describe it as more like a lumpy strawberry milkshake.) When the 10-pound barrel was filled, another worker would come to take the brains for shipping to Asia, where they are used as a thickener in stir-fry. Most days that fall, production was so fast that the air never cleared between blasts, and the mist would slick workers at the head table in a grisly mix of brains and blood and grease:

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Here’s one financial figure some big U.S. companies would rather keep secret: how much more their chief executive makes than the typical worker. Now a group backed by 81 major companies — including McDonald’s, Lowe’s, General Dynamics, American Airlines, IBM and General Mills — is lobbying against new rules that would force disclosure of that comparison. In 1970, average executive pay at the nation’s top companies was 28 times the average worker income. By 2005, executive pay had jumped to 158 times that of the average worker

[Link.]

Sting in the Tail: Attila’s fan club (1994)

The Sting in the Tail column from the July 1994 issue of the Socialist Standard

Attila’s fan club

"I’m depraved because I’m deprived" runs one line in a song from the musical West Side Story, but the Police Federation doesn’t agree.

At their annual conference in Brighton delegates rejected by three-to-one a motion stating that "crime is inevitably linked to deprivation".

Speakers in the debate queued up to rubbish this and echo the Tory view that crime is down to the "wickedness and greed" of criminals who deliberately choose to break the law.

But they were accused by one of the motion’s supporters of sounding like the "Attila the Hun fan club".

It was a delegate from the Metropolitan Police who made the most profound contribution when he insisted:

"We‘re not playing politics. We’d be no good at politics — we’re much too honest" (Guardian, 20 May).

Since this came from a member of what is widely regarded at the most corrupt police force in Britain then it is surely the unkindest thing yet said about politicians.

It gets everywhere

That inevitable struggle between employees and employers crops up in the strangest places.

Buddhist monks in a Japanese temple have formed the Heartful Labour Union because one of them was abused, assaulted and then sacked by the head monk (Guardian, 11 June).

This head monk refuses to negotiate, thinks Buddhism is going to the dogs because the monks are "only in it for the money", and claims there is no employment relation between the monks and the temple, only one of mutual "trust".

Now a court case will decide if the monks are paid workers or owe allegiance to a "Higher Authority".

Meanwhile, the sacked monk worries about his mortgage and his children’s future and says "money is a key problem. I have to keep my family".

Dressed in his saffron robe, this monk may not have the appearance of your average worker, but he obviously has just the same problems.

Master race again

"Think of it as master race studies. Some Florida schools have introduced a new curriculum which teaches that Americans are ’unquestionably superior ’ to any other nation now, or at any time in history" (Guardian, 16 May).

This policy has been imposed by Christian fundamentalists who control the local school board. Teachers have been told by the board’s chairwoman that they can only discuss other countries if they first tell their pupils that America is "the best of the best". She has never been outside America but said "I don’t need to visit other countries to know that America is the best."

Is this policy crazy? That depends on your standpoint. For instance, another board member explained that they think an American-first policy is necessary for the children because "if they felt our land was inferior or equal to others, they would have no motive to go to war and defend our country"

For anyone who looks at it from that angle, that policy isn’t so crazy, is it?

Hogan’s heroes

Professor Robert Hogan, a psychologist at the University of Tulsa in Oklahoma, claims that most bosses are incompetents who command little respect from their subordinates and only got their jobs because they are good at interviews which he derides as "beauty contests":

"There is a type who is particularly good in these contests . . . These people are arrogant, conceited, believe they are God's gift and won't take blame for mistakes, only the credit for everyone else’s successes. Once they get on the job they drive everyone nuts" (The Herald, 25 April).

Hogan’s claims "are supported by research which shows that among the top 500 US companies 60 percent of chief executives are fired every three years".

And these are the people who call themselves "the wealth creators", demand a monopoly of decision-making, and award themselves huge salaries and pensions. They are also the people whom most workers insist "we cannot do without".

Nothing sacred

Yet another old British institution is under threat. No, not the Royals or even the Tory Party, but the building societies. There were over 700 societies in 1960 but now there are only 84 with more casualties to come.

The fact is that there are too many societies competing for mortgage business. They have been losing market share to the banks while current low interest rates have caused savers to withdraw funds from the societies to invest in National Savings and shares.

All this explains why the Cheltenham and Gloucester society wanted to merge with Lloyd’s Bank. If this eventually happens then their combined strength will give them the edge over their competitors, so the other societies and banks will be under pressure to follow their example.

In socialist society homes will be built without the need for building societies, banks or mortgages. All that will be required is labour, materials and land, and these exist in abundance.

Painful truth

"Days of boom and bust are over, Clarke promises" read the front page headline in the Independent reporting the Chancellor of the Exchequer’s 15 June Mansion House speech.

This was just another politicians’ promise of course. Pure hot air, since years of experience have shown that governments just can’t control the way the capitalist economy works.

But Clarke is a Tory "wet". Which means he shares the Labour Party (and LibDem, for that matter) illusion that, with a bit of good will and determination, the rough edges can be smoothed off capitalism, as in this case by getting rid of the boom-slump cycle.

Two of his recent predecessors as Chancellor, however, both realise the true situation.

Nigel Lawson told a meeting the following week of the Social Market Foundation (by the sound of it, an institution which believes that circles can be squared) at the London School of Economics that governments have no power to abolish the boom-slump cycle. "The plain fact is that the economic cycle is endemic", he said (Independent, 21 June).

Norman Lamont has said the same thing in his 1991 budget speech when he declared "recessions are always painful, but they are an inescapable feature of market economies" (Independent, 20 March 1991).

Maybe after a little more experience like them of trying unsuccessfully to control the way the capitalist economy works Kenneth Clarke, too, will come to realise that regularly-occurring slumps are an inescapable, endemic painful feature of capitalism.

Archetypal Fat Cats (2004)

Book Review from the September 2004 issue of the Socialist Standard

Bad Company: The Strange Cult of the CEO by Gideon Haigh. Aurum £6.99

They used to be called something like ‘general manager’, but nowadays the main term for the head of a big capitalist company is ‘chief executive officer’. While they are nominally salaried employees, their pay as archetypal fat cats is so high that they are in fact clearly members of the capitalist class.

It was the growth of limited liability from the early nineteenth century that gave rise to the modern capitalist corporation and hence to the CEO Firms were originally run by their founders (or their heirs), but the owners faced the debtors’ prison if they went bankrupt. So few would buy shares in a company unless they could be personally involved in supervising how it was run. Limited liability meant that shareholders were no longer personally liable for any misdeeds or bankruptcies, so owners could delegate day-to-day control to a salaried manager, with a board of directors overseeing the whole thing.

As the title of this short volume suggests, the CEO has become a kind of cult figure, with in many cases a celebrity status and a pay packet to match (averaging over $30 million a year in large US companies in 2002, for instance). Many CEOs work long hours, apparently, though of course a lot of this time is spent in luxury hotels and swanky restaurants, and they are seemingly surprised when their employees fail to share their taste for sixty-hour weeks. Their income is reinforced by the curious idea of a ‘guaranteed bonus’, and of a ‘golden parachute’, paid to them if they are sacked by the board of directors.

And what does a CEO do in return for this generous remuneration? It’s clear that they do not in any real sense run the company, since big corporations are far too complicated to be managed by individuals. Rather, they concern themselves with the company as a business, often having little detailed idea about what it actually produces, and give orders that others have to implement. The impression gained from Haigh’s book is that if the share price keeps rising, irrespective of any medium- or long-term benefits to the company, then shareholders and directors are happy. Reducing costs by cutting staff is a favourite, and none too sophisticated, approach.

With golden parachute in pocket, a number of CEOs go into politics - President Bush’s cabinet, for instance, is full of them, from Dick Cheney to Donald Rumsfeld. As Haigh quips, “the Bush administration is more a CEOcracy than a theocracy.” The extent of this cosying-up is fairly new, but governments do not have to be full of ex-businessmen in order to serve capitalist interests.

Haigh makes the useful point that, while workers are urged to keep wage demands in check so that they can compete with other workers (especially those in other countries), CEOs instead always want to be paid more so as to be in line with their counterparts overseas — the idea of ‘internationally competitive’ has different meanings for bosses than for workers. While he is well aware of the absurdities of CEO pay, he has some odd ideas about the way capitalism works. For instance, he claims that “Companies do not exist to make profits; they make profits in order to exist” He seems to think this is an important correction to a common myth, but in whichever version it just means that companies are motivated by profit-making. Nevertheless, his book does give a useful picture of what CEOs do and don’t do, and of why we have no need of them and their fellow-exploiters.

Paul Bennett