The dotcom bubble (2003)

From the July 2003 issue of the Socialist Standard

In the 1990s, with the world’s economy and stock markets driven largely by the dotcom internet telecommunication advances, it was claimed by capitalist spokesmen that this would result in ever-increasing productivity along with rising prosperity. This was the view propagated by Greenspan in the United States and by Gordon Brown in the UK.

House prices soared, along with internet stocks, to record levels. Borrowers already highly in debt borrowed even more against their assets in what has become known as the feel-good factor.

In spite of the optimistic forecasts by Greenspan and Gordon Brown the boom ended, in a slump as socialists had forecast. Capitalist politicians struggled to adopt measures to halt the economic deterioration by juggling with interest rates and money supply, attempting to avoid the inevitable downturn. The fact of the matter is that we are in an environment which is now inevitably accompanied by rising business failures and unemployment. Hardly a week passes without the announcement of some pension scheme being unable to meet its obligations, Marconi and Equitable Life to mention only two.

It is not uncommon for workers to lose not only their jobs but a large part of their pensions as well. Due to the greater life expectancy it is doubtful whether pensions as we know them will survive. How the funding of pensions conflicts with adequate pensions schemes was explained in the August 2002 Socialist Standard (“Pensions, pay and poverty”). Members of Parliament will have no worries, however, as they regularly vote for generous increases in salaries and pensions.

In France recently there have been large demonstrations against the extension of the contribution period to 41 years in order to qualify for a full pension as a government employee. Pension funding problems in Italy and Germany greatly exceed those of the UK. Why has this happened? Why did the dotcom internet “revolution” fail to produce the lasting upsurge in production, profits and prosperity that the official spokesman promised?

To claim, as do present-day economists, that new inventions in production based on faster communications increasing turnover are novel developments of capitalism is fallacious. Marx and Engels were well aware of this but, unlike the present-day politicians, were aware of its consequences.

In chapter 4 of Volume III of Capital, Marx (in fact Engels from Marx’s notes) describes how in his day the introduction of wireless telegraphy, the Suez Canal, and the resultant reduction in shipping time led to a reduction in the time of circulation of capital and refers to “the entire globe being girdled by telegraph wires”. Marx was aware of the effect of improved communications on circulation of capital and its period of turnover and the resultant effect on profits. But in no sense did he see it as producing a permanent social change for the better in the form of steadily rising prosperity. He pointed out that the resultant decrease in the period of turnover leads to a rise in the rate of profit. The dotcom “revolution” had this same effect, which led to capitalists investing in the new technology attracted by the prospect of bigger profits. As usual, there was too much investment leading to what is commonly called a “bubble” which inevitably burst.

The claims of orthodox economics to be a science is dubious. To be so it would have to have measurable units just as chemistry, for instance, has atomic and molecular weights. Having no precise units of measurements, they resort to terms such as “confidence”, “market outlook”, and “aggregate supply and demand factors”. Central to their theories is the belief that the capitalist economy can be managed without periodic economic crises. Clearly, history shows that this does not happen.

We are now in a situation where rival capitalist powers cut their respective interest rates in order to lower currency values against their rivals. One of the main factors in determining a currency value is real interest rates (nominal rate minus the rate of price increases). Nominal rates rise with inflation but this does not mean that real interest rates do. However, if inflation falls and nominal rates remain the same then real interest rates rise. This effect can currently be seen in Germany with a soaring euro reflecting high real interest rates.

Nominal interest rates in the UK today are at their lowest for fifty years. As prices fall consumers do not automatically increase spending if they feel the goods will be cheaper in the near future. If goods are sold more cheaply to clear stock, this will result in a fall in profits. The result of this pushes the economy towards recession, the opposite of the brave new world we were promised as the result of the internet dotcom “revolution”.

At the same time the economy sees the unwinding of debt. As businesses are liquidated so the money goes out of the system. Those economic historians who base their opinions of the view that economic history commenced in 1945 have seen steadily rising prices as a permanent feature of capitalism. Many are now saying it cannot go much lower than it is now.

Because a downward pressure on prices, other things being equal, is an inevitable corollary of depressions, Greenspan has made if clear that he is prepared to buy US government bonds in order to maintain liquidity although interest rates are already 1.25 percent in the United States.

Gordon Brown, the King Canute of Economics, has even stated that, by balancing public expenditure and taxation, the economy could be managed without economic crises. GDP has failed to achieve the levels he forecast. When he and other world leaders congregate at their G7 and G8 meetings, as they did last month in Evian, their ruminations fail to come up with any measures to remedy capitalism’s problems. Its problems are inherent as are its inbuilt contradictions which cannot be managed away.

Terry Lawlor

The internet and capitalism (1) (2000)

From the January 2000 issue of the Socialist Standard

Just over 30 years ago in October 1969 the first email was sent, and the world took no notice. Even in 1990, in Megatrends 2000, the authors Naisbitt and Aburdene failed to mention the Internet. After ten more years, the world is still largely unprepared for the scale of the communications revolution overtaking it. According to Andy Grove of Intel: “The Internet is like a 20-foot tidal wave coming, and we are in kayaks.”

The Global Internet Project (GIP) (http://www.gip.org), a collective including AT&T, Sun, Visa, Fujitsu, BT, IBM and Deutsche Bank, believes that the Internet explosion will be good for capitalism, a “cause for unambiguous celebration” as they put it in a recent report. The figures they have supplied illustrate the explosive colonisation of cyberspace.

In 1980 there were just 100 Internet host computers. The World Wide Web did not exist in 1991. In 1992 there were just 100 web sites. In 1996 there were 10 million host computers. Today there are 120 million hosts, 250 million users in hundreds of countries, there are uncountable millions of web sites, and the Web is growing by 300,000 new pages every seven days. The amount of information on the Internet has reached a level almost beyond human comprehension, and it doubles every year.

Gold fever has been evident at the stock exchange, with Internet company values being grotesquely over-inflated and largely responsible for the share price bubble. Start-up companies with no assets and no profits have been valued at millions. Oddly, there exists an uncanny parallel with the overvaluation of RCA shares in the, then, new technology of radio prior to the Wall Street Crash in 1929 (Money Programme, BBC2, 24 October). As then, Internet company valuations are also likely to be wiped out, but this won’t stop them in the long run. The speed of growth is breathtaking, and contributes to the speculative hysteria. The accountants just can’t keep up. Mobile phone sales were not even included in GDP figures until 1998, while there is still no reliable estimate for Internet sales, although GIP puts it at about $6.6 billion for this year.

In October of last year, Tony Blair announced to a startled population that 100,000 computers would be made available to poor families, at just £5 a month. The significance of a move to put even the poorest online should not be underestimated. Meanwhile, huge pressure is being brought to bear on BT to make Internet calls free, as they are in the USA. If they don’t, somebody else will. Callnet UK announced the first such, free and no strings, service in late October. A rash of similar services is expected to follow. The expense of being online is rapidly heading downwards, to almost zero, as capitalism anticipates a cyber-bonanza of sales that will make free calls, even free computers, more than worthwhile.

Falling costs

Capitalism is rushing with orgiastic zeal headlong into cyberspace. The prospect of global reach for free is the Holy Grail of any business, and the “technology of the ether” can make transaction costs so small as to amount to their elimination. “What market can ignore transaction costs, when there is one that has none?” says Michael Vlahos of the Progress and Freedom Foundation. The potential savings are enormous in other areas too. The cyber-based company of the future may need far fewer staff, no premises, little capital expenditure, tiny running costs, no stock or warehousing, and have no distribution overheads. Yet they will be more efficient than any business has ever been before.

“By putting everyone on the Web accessing information in both directions internally and externally,” says Barry Demak of Cadence, “we suddenly had a cohesive view of our markets, customers, and technologies—it all started coming into focus for us. And if you compare the cost and time to train the sales force, and factor in the difference in time to market, the returns are awesome” (Quoted in GIP).

There is a revolution in advertising and marketing theory too, as technology makes possible the placement of tailored advertising on the screens of specific customers. XTV, the new wave smart video, not only records the TV programmes it knows you’ll like, it gives you bespoke personalised commercial breaks too (Observer Business, 7 November). Every user’s every movement on the Internet is a piece of valuable marketing information. Now the talk is of “infinite stratification” of demand and “micro-niches”, of industrial mass-based society being remoulded by an individualistic assortment of micro-demands and micro-viewpoints, with customised low-volume production replacing the conveyor belt. Already the biggest engine of growth in the US, so-called Mom and Pop stores, will proliferate in cyberspace, the one place they can really compete with the big players. Here they can use “knowledge robots” or “knowbots” to roam the Web, create customised reports and newspapers, find specific products at the best prices, and even negotiate on behalf of the trader and customer.

As the expense of being online plummets to near zero, the speed of connection is soaring. The slow modem is obsolete as fibre-optic lines no thicker than a human hair with a trillion bit per second transfer rate are being installed in the US at the rate of 4000 miles per day, while in Britain BT is promising nationwide permanent ADSL links (50 times faster than modems) within two years. Project Oxygen plans to lay ocean-floor optical cables across the Atlantic, while satellite data broadcasting offers wireless Internet connection. Bandwidth (the bottleneck of the data exchange process) doubles every year. Bill Gates in 1994 predicted “we’ll have infinite bandwidth in a decade’s time”. Information will before long be able to travel at almost literally the speed of light.

In consequence of all this, there is an orgy of buyouts and alliances as capitalism races to reconfigure its entire business system, including everything from Hollywood to hard drives:

The business of computing (hardware, software, and services), communications (telephony, cable, satellite), and content (publishing, entertainment, advertising) are . . . collapsing to create a new industry sector. This new media industry is the engine of the new economy and will be critical to leading a successful transition. The rise of this new sector and the transformation of corresponding markets is forcing every company to rethink its very existence . . . (Don Tapscott, author and chair of Alliance for Converging Technologies).

One can easily envisage the telecommunications companies becoming the new giants, eclipsing all others as one box does everything and all bills are paid through one tele-account. Yet talk of “boxes” is itself an obsolescent concept, as Xerox have perfected “e-paper” (Observer, 22 August) and research continues towards wristwatch computers and even brain implants, giving rise to talk of “synthetic telepathy” in the more distant future. And as science revolutionises the Internet, so the Internet is revolutionising science. With the spatial decoupling of the scientist from the task, the so-called “collaboratory” is born, enabling multiple users to share a single physical resource, enhanced productivity with no travel time, and participation by experimenters in multiple, geographically-distributed projects. Remote science not only levels the playing field for researchers, it also offers more rigorous standards of specification, note-taking and reproducibility of results. Capitalism’s R&D department is as excited as the Accounts department and the Board of Directors.

Yet despite all this breathless enthusiasm there may be serious problems for capitalism inherent in this revolution. That the marriage of the state and the capitalists is fraught with mutual suspicion is evident from their attempts to reach a solution to the problem of devising a code to keep details secret (see GIP report on House of Lords Encryption Summit, 1997). The capitalists want a system which is unbreakable, for customers will not expose their bank details in an unsafe medium, and corporate secrecy remains essential in a competitive market. However, the state cannot afford to allow it, citing terrorism as its pretext, and demands a master key for every code. The capitalists respond that they don’t trust governments not to use these keys for their own unsavoury purposes, such as interfering in business, and back and forth it goes. At present it seems unlikely that the state will get its way. It could probably happily do without the Internet altogether, but conversely, capitalism needs the Internet, possibly as much as it needs the state, given that local lawmakers are anyway creating a global maze of parochial laws and regulations that offer nothing but obstructions and impediments to the progress of capital. The cry of “free the market” is heard everywhere from boardroom to newsgroup to government office, and legislators do not seem to be winning.

Price-less information 

There is a worse problem. Information, as a buy and sell commodity, carries a curse unknown to any other type of commodity. In the words of an old computer hacker slogan, “information wants to be free”. When one disgruntled ex-employee of a software firm recently posted the company’s products on a free website, the site was closed down in two hours. Yet twenty minutes would have been enough to start mirror sites containing the free software, at a stroke wiping out the firm’s profits. It is worth recalling what really makes a commodity—it is restriction of access. Air is just about the only use-value in existence which is not yet a commodity, in other words it has no exchange value. If access cannot be restricted to a good, money cannot be charged for it. The unique property of information is that you can make infinite exact copies, you can “steal” it without removing the original, or leaving any trace of the “theft”. Just as the music industry had to learn to live with music piracy (which of us does not have pirate tapes on our shelves?) so the information industry must live, not only with piracy, but an extremely short shelf-life. The price of any information commodity will tend towards zero more rapidly than any other commodity. The traditional product-cycle will contract to a single, sharp peak and steep descent. Whereas capitalists now salivate over a presumed bonanza this short-term pay-out will give way to a cut-throat and dog-eat-dog business world characterised by a falling rate of profit and a desperate race to stand still.

Impossible though it seems, it gets worse for capitalism. The goose could be laying a golden bomb. Unlike any other sector of production, the knowledge-producing sector which produced the Internet has always incorporated a strong ethical tendency towards free distribution—the gift economy. In a far-sighted study of Internet sociology, Richard Barbrook’s essay on Cyber-communism (Link) argues powerfully that a knowledge-rich society will increasingly tend to share rather than sell, just as socialist common ownership is a logical adaptation to material abundance. In an ethical reversal, it is selling, not piracy, which will be seen as anti-social. All in all, capitalism would appear to be staking its future on a commodity it can never control:

  The scarcity of copyright cannot compete against the abundance of gifts . . . At the cutting edge of modernity, the exchange of commodities now plays a secondary role to the circulation of gifts. The enclosure of intellectual labour is challenged by a more efficient method of working: disclosure.

Barbrook foresees the collapse of production and market relations in the same way as other business observers have been worrying for years about the “technology paradox” of “zero cost production” in industry (Business Week, 6 March 1995). As the computer world gapes at the meteoric rise of a new operating system called Linux, designed by a student as an antidote to the “bloatware” of Microsoft and, more to the point, given away free as “Open Source”, there does indeed seem to be some basis for the optimism of the gift economists. The implications for the future of capitalist market relations are huge and contentious. There are no guarantees that capitalism will drown in its own Third Wave, but equally there are no guarantees that it won’t. But as if this wasn’t enough, there arises a new problem which has no precedent and for which no avoidance strategies have yet been devised. In the knowledge explosion, what happens when we know too much?

Paddy Shannon

(In Part Two of this three-part series, Paddy Shannon explores the consequences of the information revolution for the ideological foundations of capitalism.)

Link to Part 2

Voice From The Back: When Margaret Beckett (2000)

The Voice From The Back column from the September 2000 issue of the Socialist Standard

When Margaret Beckett . . .

. . . took on responsibility for science as trade and industry secretary after the 1997 general election, there were hints that the government’s priorities for science would change. Beckett suggested that improving the quality of life was just as important a goal for science as creating wealth. But over the last four years, the potential financial benefits of science—and in particular the creation of high tech spin-off companies based on new scientific discoveries—have dominated government science policy . . . The £1bn unveiled last month for science facilities by chancellor Gordon Brown signals his continuing interest in the financial benefits of science. Guardian Science, 20 July.

The inadequacies of the NHS are well known. 

How awful the position has become is illustrated by the journalist Katie Grant. In praise of private medical care she inadvertently blows the whistle on capitalism: “Thirty percent of all hip replacements and 20 percent of all heart surgery is done privately. A million people are treated in private hospitals each year . . . Private insurance does not make you a parasite. Quite simply, it offers you the best hope of staying alive” (Times, 15 July). And if you can’t afford private insurance?

It is criminal!

The annual cost of crime in Britain is £60 billion—more than £1,000 a year for every man, woman and child in the country . . . The figure . . . is the result of a four-year study by the leading American economist David Anderson, whose paper “The Aggregate Burden of Crime” was recently published in the Journal of Law and Economics . . . “Society will never rid itself of crime,” says Anderson, “but when you take into consideration the resources that could be conserved or reallocated in a crime-free society, the costs are absolutely staggering.” Observer, 23 April. Quite so! But socialist society will be free of property crime because we shall all own the wealth and have free access to it. The basic cause of such crimes will have gone.

Shafted

We’ve been sacked, fired, made redundant, become supernumerary, down-sized and terminated. As members of the working class we are used to the various terms for being unemployed. But the recent demise of the internet company Boo.com revealed yet another euphemism to disguise our wage slavery: “What is certain, however, is that after the world’s biggest on-line fashion retailer went bust, 300 young people who had previously thought of themselves as role models for a generation of dot.com entrepreneurs were out of work. In the lingo of the New Economy, they were not so much unemployed as unplugged” (Times, 14 June)

Star letter

It is not often that Socialists come across a letter that they can completely agree with, so have pleasure in the following published in Radio Times (29 July-4 August):

  “Money makes the world go round, according to Polly Toynbee. Before money, she asserts, human life scarcely rose above the animal level, with no scope for thought or creativity. Are we to take it that she has never seen any native American or Australian aboriginal art, wonderful cultural creations form societies without money? 

  As to the future, she tells us that human nature is just too fallible for us to match our production to human need without money to mediate the process. Even in today’s capitalist society, moist people feel that certain things are too important, too personal, to be bought and sold—sexual relations, for instance, and human organs for transport. 

  In future, people may come to feel that selling our time, skill and effort to an employer for a wage or salary is an unacceptable loss of our freedom and humanity.”

Gates’s billions

Bill Gates is reported to be worth $65 billion. As befits a man of such tremendous wealth he has a house that cost $50 million: “As a rich man’s folly it equals William Randolph Hearst’s San Simeon Castle in California, for which the press baron ransacked Europe for antiques. His Shangri-La is all high tech, stuffed with electronic gadgetry. It is mostly buried beneath landscaping, with a 60ft pool, dining for 100, an underground garage for 20 cars, 45 rooms, and electronically controlled music and lighting in guest rooms directed by a pin in the visitor’s clothing. Lights come on automatically as a person moves around, but can be switched on and off manually (so it can be done). It is so massive that neighbours call it Gates convention hall” Herald, (15 July). What future generations in a socialist society will make of such ostentatious wealth contrasted, as it is, with the plight of thousands of homeless in the USA, can only be wondered at.

Freedom of choice

Freedom of choice is everyone’s right. Use it wisely! . . . We invite you to test-drive a Seville at your nearest Cadillac Retailer . . . On the road price £39,925.00.

Pathfinders: The next bubble (2011)

The Pathfinders Column from the June 2011 issue of the Socialist Standard

The next bubble

Investors are bulging at the wallets with hype over the recent stock market flotation of LinkedIn.com, the business executive’s Facebook, although the initial price offer (IPO) of $45 per share was widely considered too high, given that it was a valuation around 17 times the company’s estimated 2010 income and given LinkedIn’s own prediction that it won’t make any profit this year. The IPO peaked on the first trading day at $122, but this was no great surprise since so far this is the only social media business you can buy shares in. LinkedIn is at the time of writing trading at 25 times earnings compared to Google’s modest six, and what goes up can come down. After the recent flotation of China’s version of Facebook, Renren, the share price initially rocketed but soon dropped to below the IPO. And all of this is nothing compared to the hysteria likely when the expected flotation of Facebook takes place, and analysts are already worrying that this could be the start of the next big bubble http://www.bbc.co.uk/news/technology-13436866

Eyebrows might descend to new heights at the idea of a huge internet bubble so soon after the devastation of the housing bubble. But in fact conditions are right for it. The banks are not taking any chances after their recent drubbing, but investors are sitting on huge piles of cash while rising inflation nibbles away like mice at their wads. Now is not the time to be holding paper money, and with the housing market still in free-fall and consumer spending screwed down there’s not a lot apart from the odd stray Rembrandt for the money rich to sink their loot into. So what to spend money on when there’s nothing to spend money on? Well, those social media johnnies are showing pretty strong market growth, so worth a punt surely? Doubly so if everyone else is at it too.

Well, that’s what they thought about web growth back in 2000, when dollar signs rolled down the punters’ eyeballs faster than the hit-counters on the hot websites. But the dollars turned to tears then as panicky shouts set off a share price avalanche. And they probably will this time too. The trouble is that it’s hard to put a real value on new and unproven social and commercial structures, but investors by nature are addicted to optimism. With the cool objectivity of those with no real money to throw at such ventures we might ask what do these social media really amount to? Whereas Ebay has been a success because people can actually make real savings on purchases, social media exist simply because they can, not necessarily because we need them. A combination of inane (and sometimes damaging) gossip and online narcissism can be amusing for a time, sure enough, but isn’t it just a phase most people will tire of eventually? In a Me-world where everyone is a celebrity, the problem is that nobody listens to anyone but themselves, and how boring does that become? What do people really get out of it, in concrete terms? A bunch of ‘friends’ they’ve mostly never heard of or haven’t got anything to say to, and business contacts they’ve no real use for. More is not better. We may not even be evolved for this sort of connectivity. ‘Dunbar’s Number’ is the theoretical limit  – roughly 150 – of social relationships the human brain can feasibly cope with, a number derived from anthropological research. Still, who’s to say what limit there is on ‘virtual’ relationships?  You don’t even know your neighbour’s name but so long as you’ve got a who’s who in your smart phone then you’re a functioning member of society, Jack. Just keep up the subscription payments and don’t worry about it.

But surely all this sub-light-speed handshaking has facilitated social protest and anti-establishment thought? Well, that’s what one would hope, but as fast as radical ideas sweep into the cyber-synaptic networks they seem to sweep out again, creating a series of political Mexican waves that leave the mass unmoved and the air only slightly disturbed above their heads. Should we be glad of the new mass attention, or bewail its lack of attention span? Maybe both. At any rate, socialists unlike capitalist investors have seen enough novelty not to expect too much from novelty.

Of course the owners of LinkedIn, Facebook and Twitter have made millions, but then so do crooks who start pyramid schemes. It doesn’t mean there’s anything of value there. There’s no real labour, for one thing, or any real product, just a frenzy of connections, sound and fury, signifying nothing. Can someone reinvent Friends Unplugged please?

________________________________

Better luck next time…

If you’re reading this, then the globally promoted May 21st doomsday predictions of one Harold Camping have not come to pass, earthquakes and cataclysms have not riven and rent the firmament, and 200 million people have not been ‘raptured’ to heaven by the merciful beardie in the sky. But 250 of them will have got a double disappointment, as one (atheist) entrepreneur has succeeded in charging them up to $135 each for looking after their ‘Eternal Earthbound’ pets, and he gleefully adds that he doesn’t do refunds (‘‘Rapture’ apocalypse prediction sparks atheist reaction’, BBC Online, 20 May). Meanwhile atheists in North Carolina have been organising parties, presumably to fiddle while Earth burns, and another group in Washington have called their celebration ‘Countdown to back-pedalling’. Whether Camping renounces all his beliefs in the sober light of May 22nd remains to be seen, however he did make a similar prediction in 1994. But that one, say his followers (he has followers!) didn’t count for some reason.

________________________________

Throwing away the keys

Technology news has lately been dominated by news of security leaks. Google’s Android operating system for smart phones has been haemorrhaging personal data that unscrupulous data-miners can collect and use. Sony’s Playstation network had a security breach through which a cyber attack stole account details of 100 million people. Meanwhile the smug smiles were wiped off the faces of Mac users convinced they lived a charmed life as hundreds have been hit by a ‘scareware’ attack, and an anti-piracy firm has itself been hacked and now made to walk the plank by the French government that employed it. It may be a trivial observation, but in a common-ownership society that is not fundamentally at war with itself like capitalism, there would be no more incentive to hack or create viruses than there would be to vandalise buildings or burgle houses. And then we could dispense with all these firewalls, speed-dragging virus-guards, and those endless, endless, endless bloody passwords.

Paddy Shannon

In the News (2001)

From the April 2001 issue of the Socialist Standard

Economic crisis

Tumbles across the world’s financial markets have sent shockwaves through the media and the owning class. The “dotcom” revolution is under threat as new technology corporations report stalled sales, faltering profits and now share prices in freefall. One of the greatest success stories of the 1990s was computer company Cisco which was the best-performing stock of the decade with its share price soaring 100,000 per cent at one point to make it the world’s most valuable company; Now it has announced that it is axing thousands of workers, just like its competitor Compaq and many other high-tech companies.

This has confirmed that even the largest firms are now being hit by the US slowdown, undermining confidence in the entire cconomy. The impact on the world stock-market bubble has already been considerable. Here in the UK the FTSE 100 is down 20 per per cent already on last year and it is likely there may be some way to go. In the US the Nasdaq index of technology stocks has plunged as depressing business results pour in. In Japan. the situation is worse still: the economy refuses to kick in to life despite the best efforts of successive governments and its financial system has lust been described by a government minister there as “on the verge of collapse”.

So much then for the perpetual boom capitalism had allegedly entered and the associated “paradigm shift” in the world economy that was supposed to have taken place. Day by day capitalism is again showing itself red in tooth and claw — and lust as prone as ever to the economic crises and slumps that have beset it throughout its history. Socialists have never been fooled into thinking the system can act in any other way, of course—which is rather more than can be said for Gordon Brown, Eddie George or Alan Greenspan who now seem to be on a learning curve as steep as the Nasdaqs plunge.

Xenophobia

“Patriotism is the last refuge ot a scoundrel”, wrote Dr. Johnson. “In a half-hour speech in which he used the words Britain or Britishness 25 times, Mr. Hague insisted that he, his party and Conservative voters were not racist, bigoted or little Englanders.” (The Times, 5 March)

We can expect a beleaguered politician like the Tory leader who is facing political extinction, to appeal to the worst elements of Xenophobia in a deperate attempt at survival. His depiction of the possibility of an other Labour government as a “journey to a foreign land” and his promise to toughen up restrictions on refugees is to be expected.

But what of the Labour Party? A chance to champion the plight of the refugees? No chance, because the same newspaper reports, “Labour refused last night to criticize Mr. Hague’s remarks on asylum and Europe—areas which party officials believe they are vulnerable— and attacked the Tory economic record.” The awful fate of some refugees being sent home to be imprisoned, tortured or killed can only be wondered at, but it is worth noting what one unknown visitor to the Hololocaust Exhibition at the Imperial War Museum has recently recorded in the visitor’s book.

  “It is 2.15pm. I came into this exhibition at 10.15 this morning I feel very overwhelmed. I am Jewish— on my mother’s side and some of her family perished in the Holocaust. Some survived because they escaped. It would have been interesting to reflect on the debates which must have gone on in thousands of families as the 30s unfolded. To escape? To what? To lose all and face a life of uncertainty and exile. Or to stay because “it’ll all blow over” or “we’ll manage” or some other reason. I have never seen this written about and I think it is especially relevant today when asylum-seekers are so reviled and suspected.”

Environmental disasters ahead

At election times it often suits politicians to make sympathetic noises about environmental issues, but after the elections are over the same politicians can usually find “practical considerations” that make them have “re-appraisals” of previous “policy statements”. This cynical manipulation is rife throughout the capitalist world, but it is doubtful if any of the political con-men could beat President Bush for the rapidity of his volte-face on the environment.

In a letter to Republican Senators, Bush reversed his election campaign promise to limit CO2 emissions from coal-fired plants, saying a new study shows it would be too expensive. He also reiterated his opposition to the Kyoto protocol, a 1997 agreement which aims to reduce greenhouse gases in the industalised countries by 5.2 per cent by 2012 (New Scientist, 15 March).

This is of course, the crux of the matter—cost. We live in a capitalist world based on commodity production with the aim of obtaining a profit. In competing with other capitalists, both nationally and globally, it is necessary to drive down costs in order to grab a bigger share of the market.In such a cut-throat society environment considerations count for little, except perhaps a little electioneering rhetoric. With the USA putting the interests of their capitalist class before the needs of the planet the future looks grim indeed.

The reversal was a blow to Kyoto supporters, since limits on power plants are probably necessary for the US to reach the goals. Christopher Flavin, President of the Worldwatch Institute says: ‘It is essential since those plants are one of the main reasons for the recent sharp increase in US CO2 emissions. In the last two years, the US has passed China to be the world’s number one coal burner'” (New Scientist, 15 March)