Change everything (2015)

Book Review from the February 2015 issue of the Socialist Standard

‘This Changes Everything: Capitalism vs the Climate’, by Naomi Klein, Allen Lane, 2014, £20

Oh what a bittersweet day: a book that makes you want to jump for joy about a topic which occasions floods of tears. Naomi Klein’s latest work should be widely read. She is bang on the money: the climate change argument is about capitalism. In short, free markets and sustainability are mutually exclusive, and either capitalism or the ecosystem has had its day. The slew of evidence on display is impressive – Klein is nothing if not a thorough case builder – and the whole book can be seen as a superb illustration of the class system at work.  She catalogues examples of the narratives being bent to suit vested interests and the dominant ideology: many parts of this we could not have written better ourselves. Talk about capitalism bearing the seeds of its own destruction.

It has always struck me as odd that so many of the rich and powerful behaved as if they had another planet to escape to, or that somehow they could end up breathing their own wealth if the atmosphere became problematic. Why on earth were they funding climate change denial movements if they themselves would also suffer when the stuff hits the fan – as 97 percent of those who know have agreed is going to happen? Klein solves this one: the climate challenge is such a threat to their ideology that they simply cannot tolerate it: the measures necessary to forestall disaster require such concerted effort that it would be essential to curtail the very market freedoms so dear to them and their position. Much like the dictators of yore, they’d rather bring all down with them than give up power; or maybe more like Magda Goebbels, the world was not worth living in for her or her family without the primacy of their Weltanschaung. Having spent the last 30 years unleashing the tiger of the neoliberal agenda, they were not going to let some bunch of green eggheads spoil the party.  This would be intolerably bad for business and thereby very bad for their interests.

As someone concerned about the environment since my teens (don’t ask…), I ended up in the Green Party.  However I left a while back as I was unconvinced about their attitude to power: how they would force vested interests to toe the line.  I came to the same general conclusion as Klein – capitalism has to go – and realised that without this step, all else on the environmental agenda is playing for time.  However here is where she and I might part company: the way forward and the alternative political landscape offered in her book is too hazy.  It is as if she pulls her punches in the last round for fear of scaring off the readers – the book is after all aimed at the mainstream  – or perhaps she really has not thought it through properly.

Her suggestion that protests and actions will emerge which must be exploited to promote the agenda is too haphazard and hazy. What is the over-arching political philosophy which will give such emergent forces any direction apart from the environment and opposition to capitalism?  The peg on which to hang the clothing of serious change is lacking in this book. Come on Naomi, at heart you’re one of us, if only you’d realise it – you can’t offer a solution without socialism.  Ducking the real question seems a bit odd after what you have written and what you plainly believe.  But  I still welcome this book like few others. In the current climate anyone who starts asking the right questions has to be congratulated.

Howard Pilott

Mixed Media: Heresy (2015)

The Mixed Media column from the February 2015 issue of the Socialist Standard

Heresy by Tilo Ulbricht, performed at the Tabard theatre in Chiswick, London, last year, is based on The Grand Inquisitor chapter in the Dostoyevsky novel The Brothers Karamazov. Ulbricht’s play is set in sixteenth century Spain ‘during the most terrible time of the Inquisition, when fires were lighted every day throughout the land to the glory of God and in the splendid autos-da-fé wicked heretics were burnt by the Cardinal, the Grand Inquisitor’ (Dostoyevsky).

Catholic philosophy pondered such questions as ‘whether angels have navels?’ or ‘ how many angels can dance on the head of a pin?’ Thomas Aquinas’s position on heresy provided the doctrinal basis for the Inquisition: ‘in God’s tribunal, those who return are always received, because God is a searcher of hearts, and knows those who return in sincerity. But the Church cannot imitate God in this, for she presumes that those who relapse after being once received, are not sincere in their return; hence she does not debar them from the way of salvation, but neither does she protect them from the sentence of death’ (Summa Theologica).

Catholic philosophy did not allow the questioning of doctrine. As Bertrand Russell pointed out, Aquinas ‘does not, like the Platonic Socrates, set out to follow wherever the argument may lead. He is not engaged in an inquiry… before he begins to philosophize, he already knows the truth; it is declared in the Catholic faith. If he can find apparently rational arguments for some parts of the faith, so much the better; if he cannot, he need only fall back on revelation’ (A History of Western Philosophy).

The major theme of Heresy is ‘what is Truth?’ but Catholic philosophy can never ascertain what Truth is as there is no such thing as Absolute Truth. Marx identified that ‘the criticism of religion is the premise of all criticism… the criticism of Heaven turns into the criticism of Earth, the criticism of religion into the criticism of law, and the criticism of theology into the criticism of politics  . . it is, therefore, the task of history, once the other-world of truth has vanished, to establish the truth of this world’ (Introduction to A Critique of Hegel’s Philosophy of Right).

Dostoyevsky in The Grand Inquisitor identified the danger of socialism for religion: ‘humanity will proclaim by the lips of their sages that there is no crime, and therefore no sin; but there are only hungry people. Feed them first, and then demand virtue of them! – that is what they will inscribe on their banner, which they will raise against you, and which will destroy your temple . . . you promised them the bread of Heaven, but, I repeat again, can it compare with earthly bread?’ Dostoyevsky later commented ‘by the stones and the loaves of bread, I meant our present social problems. Present-day socialism in Europe sets Christ aside and is first of all concerned about bread. It appeals to science and maintains that the cause of all human misfortune is poverty, the struggle for existence and the wrong kind of environment’ (Philosophy in Literature). In Heresy, Jesus is arrested by ‘the Cardinal himself, the Grand Inquisitor, an old man of nearly ninety, tall and erect, with a shrivelled face and sunken eyes, from which, though, a light like a fiery spark still gleams’ (Dostoyevsky). Peter Saracen delivers a commanding central performance as the Grand Inquisitor in Tilo Ulbricht’s play.

Ludwig Feuerbach argued in his 1841 work, The Essence of Christianity, that it is important for religion that its object should be radically distinct from humanity; and that it was equally necessary that it come down to Earth if it is to be religiously relevant. For this reason, Christianity teaches the Incarnation where God suffers the indignity of birth, the pain of suffering, and the emptiness of death out of love for humankind. With Incarnation, Feuerbach finds the ultimate expression of human self-love and the surest indication that religion is a human projection: in religion humanity has relation only to its own nature, only to itself, the clearest proof of this is ‘the love of God’, i.e. of projected humanity, for humanity, as before, the basis and central point of religion. With Incarnation, Feuerbach argues humans receive back all that they have surrendered to God. By worshipping God, people unconsciously worship themselves as in Spinoza’s ‘homo homini deus’ (Man is a God to Man).

Marx wrote to Feuerbach that he had intentionally or not ‘given Socialism a philosophical foundation’ (Gesammelte Werke, W. Schuffenhauer, Ed.), by exposing the mystified nature of religion, the alienated subject-object relation can be reversed, God brought down to Earth, and humanity made whole, putting social humanity in its rightful place at the centre of things. In 1870 Feuerbach read Marx’s Capital and joined the German Social Democratic Workers’ Party. Engels concluded that the ‘working class movement is the heir to classical German philosophy’ (Ludwig Feuerbach and the End of Classical German Philosophy).

Steve Clayton

Cooking the Books: The Onward March of Globalisation (2015)

The Cooking the Books column from the February 2015 issue of the Socialist Standard

For years the World Trade Organisation has been trying to change the rules of global trade in the interests of global investors. The US in particular wants to ease the out-sourcing and off-shoring of jobs, permitting employers to seek the lowest wages and weakest government oversight protections around the world; and to incorporate patent and intellectual ownership rules that will further restrict access to medicines for millions and could be expanded to include even surgical procedures and not just drug treatments.

Overall, it is a bid to implement a globalisation policy of trade harmony at the lowest common denominator that will further the interests of global investors by relaxing various standards to weaker levels of consumer and public protection. It would represent a further reduction in the ‘sovereignty’ of national governments and their already weak power to resist the dictates of the world market. But these negotiations have not yet reached a conclusion because some countries do not want to open their doors too much to multinational corporations.

At the same time the EU and the US are negotiating a ‘Transatlantic Trade and Investment Partnership’. One of the points under discussion is a mechanism known as ‘Investor-State Dispute Settlement’ (ISDS), which would give corporations the right to challenge a country’s laws. Clearly, this is something more than a mere ‘free-trade’ deal.

Even if a new reform or policy applies equally to domestic and foreign investors, ISDS proposes to allow corporations to receive compensation for the absence of a ‘predictable regulatory environment.’  Already under existing WTO ‘free-trade’ rules this type of argument has been used to attack clean energy, mining, land use, health, labour, and other policies. More than $14 billion in the 16 claims are now under litigation in the US; all relate to environmental, energy, financial regulation, public health, land use and transportation policies, which are not traditional trade issues. EU investors have attacked Egypt’s minimum-wage increase, and a US corporation has attacked the Peruvian government’s decision to regulate toxic waste and close a dangerously polluting smelter. In one of the most notorious cases, US tobacco giant Philip Morris launched investor-state cases challenging anti-smoking laws in Uruguay and Australia after failing to undermine the health laws in domestic courts.

Another proposal in TTIP is for ‘regulatory cooperation’ which would give big business lobby groups wide opportunities to influence decision-making, outside the normal democratic decision-making processes on both sides of the Atlantic. The clear intention is to allow business to in effect ‘co-write’ international regulations, as already happens at national level.

All new relevant US or EU proposals for legislation or regulation would have to be screened first for their impacts on trade. A report has to be made to that effect, to make sure legislators don’t adopt anything that would be detrimental to business. Even before a proposal is launched, say by the European Commission, the US has to be notified, and vice versa. This opens the door to intense lobbying and also to all sorts of pre-emptive pressure – for example a threat of litigation under the ISDS mechanism.

The socialist attitude is that, at the end of it all, the arguments within the WTO which have so far prevented agreement are a dispute between vying capitalist factions, free-trader versus protectionist, foreign versus native capitalist – competitors, fighting to defend or create conditions that offer them the best return. Even so, among the casualties are working people the world over, who will end up as collateral damage, more powerless and more vulnerable than ever in the face of global capitalism.

ALJO

Party News: Marx’s London Walk (2015)

Dean Street, London.

Party News from the February 2015 issue of the Socialist Standard

On 7 January, a short walk was made by socialists around Soho and Fitzrovia. Despite the midday, mid-week timing, necessary to coincide with the visit of visitors from Sweden, there was a good turnout. We viewed the old Red Lion pub, where the iconic Communist Manifesto was presented to the Communist Workers’ Education Society, Marx’s house in Dean Street, scene of the dire poverty which killed off three of his children, and the home of the First International in Greek Street, which, as one comrade reminded us, was the venue for the first reading of the socialist classic Value, Price and Profit. We then proceeded across Soho Square and Oxford Street to the vicinity of Fitzroy Square, for nigh forty years around the turn of the last century, stomping ground of the Communist Club. The latter, the guide explained, was the successor to the Communist Worker’s Education Society, habituated by friends of Marx, as well as other late nineteenth century notables, such as William Morris. The club was also the first headquarters of our own Party, thus forming a neat link between past and present.

How the Ruling Class Rule in Britain (2015)

From the February 2015 issue of the Socialist Standard

Critics of the Socialist Party often ask why we would want to bother standing for election, when the real power is in the hands of the Establishment, and if an election went against their wishes, they’d just suspend democracy. Our answer has always been simple: the capitalist class is not united, but competing one against the other. They cannot trust each other with state power, because the temptations of cheating and corruption are too great. They need the political democracy and its openness in order to have a reliable machine to protect their general interests of property and contract. They need the army of workers who run the state to work for them.

Recent research by the University College London Constitution Unit shows how integral the elected parts of the state are. Their reports The Policy Impact of House of Commons Select Committees and The Policy Impact of Parliament on Legislation use a combination of empirical and interview research to assess how much influence parliament has on the policy over the executive and on the laws as finally produced by the state.

They found ‘Committees are highly prolific, and producing increasing numbers of reports. Between 1997 and 2010 select committees probably produced almost 1,500 inquiry reports (or 110 a year) and almost 40,000 recommendations and conclusions, of which 19,000 (or 1450 a year) were aimed at central government.’ Further, according to their examination of that work ‘around 40% of recommendations are accepted by government, and a similar proportion go on to be implemented. Calls for small policy change are more likely to be accepted and implemented, but around a third of recommendations calling for significant policy changes succeed.’

Further, their interviews with civil servants found that the question of ‘How could this policy be defended in front of a select committee’ loomed large in their minds at the policy formulation level. Indeed, the Constitution Unit’s work ‘identifies seven additional types of influence: contribution to wider debate, drawing together evidence, spotlighting issues and changing ministerial priorities, brokering (improving transparency within and between departments), accountability, exposure, and generating fear’(LINK). These layers of influence are important, as Select Committees have no formal (i.e. legal) means of enforcing their findings, their power is informal and political.

Detailed research on the Parliamentary process also illustrates how much power parliamentarians possess. Between 1999 and 2012 the House of Lords voted against the government 506 times, with around 130 (about 40 percent) of those defeats being upheld. Some of these issues were core government matters, such as jury trials, ID cards and detention without trial. In many ways, this demonstrates the important power of this unelected chamber, but, again, its power was informal, as the Commons could have overruled it. The number of defeats for the coalition government is lower, as they have greater representation in the unelected house (LINK).

In fact, as the Constitution unit found, government Ministers would often try to negotiate with peers and Commons back-benchers, because ‘the last thing they want is a vote’. Indeed, the executive operates a sophisticated parliamentary management policy to try and ensure that it is not defeated, making sure that it doesn’t propose anything that parliamentarians will not wear. The appearance of an almighty executive holding sway over parliament is very much that, appearance, and it is one that an executive must work hard to maintain. The first job of government is to look like it is in charge.

The academics found that around 60 percent of amendments to acts of parliament originated with non-government parliamentarians, despite being officially government proposed amendments to its own legislation.

Claiming legitimacy

This is the detailed impact of Parliament on the running of the country. Of course, the executive constitutionally can only be formed based on holding onto a majority in the House of Commons, which in turn means retaining the support of the largest section of the population at large (and usually a majority). Whatever the detail and objective effects of government policy, they can legitimately claim to have the support of the population, albeit with a sophisticated electorate management strategy as well.

The influence of parliament as a body stretches deep into the civil service and the daily operations of government. Its influence lies not in observable command control, but in the minds and imaginations of state actors, who are habituated to at least showing deference to their elected masters. This cannot simply be turned off at the flick of a switch: political democracy is well entrenched within the British state, and a great many politicians and civil servants (as well as their respective hangers-on) have a great deal of interest in maintaining political democracy. To put it bluntly, a lot of people have too much to lose to simply end democracy overnight.

Of course, parliament itself is limited in what it can do. It cannot act in such a way as to destroy its popular support. At the minimum, the politicians would lose elections and lose their jobs. In more extreme circumstances there would be riots and strikes or capital flight. They also have to act, ultimately, in line with the reified reality of the markets. The reliance on state borrowing means they have to placate the owners of debt and property.

To the extent that the executive retains immense patronage, able to buy off cronies with jobs, titles and entry into the revolving door of corporate boardrooms and consultancy work, it retains secretive, unaccountable power. A movement to promote democracy, to throw open the operations of government and to convert them from being government of people into the democratic administration of things will be able to cut off such chains of patronage.

Indeed, the relatively recent innovation on parliamentary votes on war (again, this has an informal status that has been elevated into what constitutional experts call a convention, since state actors behave as if they have to abide by it even if it isn’t enforceable), shows this power, with the defeat over military action in Syria. That is a massive inroad into the peremptory rights of the executive.

None of this is to fetishise parliament  nor its procedures, but instead to show how political democracy is central to the operation of the British state, despite occasional appearances to the contrary. It shows how human relations lie behind the surface machinery of state. Currently the majority continue to support capitalist politicians and parties, but if they were to turn into a movement for socialism, the democratic process is no barrier to them getting their way.

Pik Smeet

What about Chile?

Often, opponents of democratic socialist revolution cite the example of Chile, but that doesn’t bear up to scrutiny. In 1970 Salvador Allende was elected with 36.6 percent of the vote. According to the Constitution, if no candidate achieved more than 50 percent of the vote, the Chilean Legislature had to choose a President (usually the one with the most votes), and in Allende’s case, the Christian Democrats eventually backed him. At that point, the coalition of parties that backed Allende, the Unidad Popular, did not have a majority in neither the Senate nor the Chamber of Deputies.

In 1973, a parliamentary election saw the Unidad Popular defeated, and the Christian Democrats joined the Confederation of Democracy. The right were then able to use their parliamentary majority to harass Allende, and to claim legitimacy. Prior to the coup that ousted Allende, both the legislature and the courts accused him of acting unconstitutionally and undemocratically.

Nonetheless, before Pinochet could launch his coup, he had to assassinate his way through the military chain of command, so committed were the top generals to the constitutional process.

Allende was defeated by a conspiratorial coup, backed by the United States, but this was only possible with widespread popular support. At no point did Allende have an outright majority, not even a preponderant plurality.

50 Years Ago: Away With Hanging (2015)

The 50 Years Ago column from the February 2015 issue of the Socialist Standard

‘They pull the lever and away he goes,’ Mr. Albert Pierrepoint, public hangman, in evidence to the Royal Commission on Capital Punishment.

One of the conclusions of the last Royal Commission on Capital Punishment was that, in the words of one of its witnesses, hanging is ‘… certain, painless, simple and expeditious’.

Whatever the truth of this (and there are some horrible rumours which contradict it) the fact is that hanging was not originally designed as a quick and humane method of dispatching a criminal. The poor man was often dead before they hung him up. The idea was to display him in as humiliating a way as possible, strung up in public for the mob to spit and jeer at – and to take warning from.

Thus hanging was regarded as a particularly abject and dishonourable form of execution. Beheading used to be considered more dignified and soldiers, immersed in the fatuities of military chivalry, still prefer the firing squad.

(…)

The end of public hanging still left a lot of gruesome ritual, which has been slowly dismantled. No longer is a black flag hoisted and a bell tolled, or a notice posted, at a prison after an execution. No longer does the executed person suffer the last indignity of being left hanging for an hour after his death.

These reforms left the execution a cleaner, more clinical affair, but still a ritual. The condemned prisoner had to be weighed and measured, and secretly observed by the hangman, before the length of his drop could be calculated. (There is an official table on which this calculation was done). The execution had to be rehearsed with a bag of sand as a stand-in. Finally, amid unbearable tension within the prison, the execution itself.

Now, it seems, the whole thing is finished. After about 150 years of battle, the abolitionists appear to have won. Unless something unexpected – and, let us be clear, unplanned for – happens in the House of Lords, Mr Sydney Silverman’s private member’s Bill will soon become law. The hangman’s noose has rattled and jerked in this country for the last time.

(Socialist Standard, Feb 1965)

Never mind the ballots (2015)

Book Review from the February 2015 issue of the Socialist Standard

'Sex, Lies and the Ballot Box'. Edited by Philip Cowley and Robert Ford. Biteback Publishing. £14.99

With the General Election fast approaching, expect a slew of books on this theme. Subtitled ‘50 Things You Need to Know About British Elections’, this is one of the first. The chapters are short (typically four or five pages) and are written in an accessible style by a variety of UK political scientists and polling gurus. Many of the familiar names are there: Rallings and Thrasher, John Curtice, David Denver et al.

Chapters range from analyzing tactical voting, identifying who really votes UKIP, the influence of social class on voting, and why ethnic minorities still tend to vote Labour. There is lots of interest here, though it is a shame the publishers decided they had to try to spice things up further by including some embarrassingly weak chapters by staff at YouGov about sex and politics (eg the alleged sexual preferences and fantasies of different party supporters).

Many of the arguments put forward build on previous research projects like the British Election Study that have uncovered an increasingly complex range of voting behaviour in the UK. This includes large numbers of people voting for split tickets, ie voting for different parties on the same election day, such as when a General Election and local elections coincide. It also involves a decline in voting based on class factors as defined by the sociologists, though with a noticeable rise in recent decades of geographical alignment behind parties – most obviously Labour in Wales, Scotland and the North of England, and the Tories in the South and East. This geographical ‘flocking together’ occurs even when social class, housing and other factors have been accounted for. Interestingly, it would also appear that the prevailing underpinning values of voters in Wales and Scotland, for instance, are not that different on most issues to those of people in parts of the UK that tend to vote Conservative.

In sociological terms, the voters with the most traditional ‘working class’ profiles tend now to disproportionately vote UKIP when they vote at all (with a particular concentration of UKIP support among elderly white men who are – or were – blue-collar workers who had left school at 16 or younger). By contrast, Labour now gets almost as much support in percentage terms from the top fifth of income earners in society as it does from the bottom fifth. Indeed, this finding was reflected in surveys at the last couple of general elections where it was found that Labour attracted noticeably more support from readers of the Financial Times than it did of the Express, with the Labour percentage of FT readers being not too far below those of the Sun.

In many ways it appears that considerable numbers of voters are now shopping in the proverbial postmodern supermarket where parties appear like clothes brands that are either trusted or tarnished. What perhaps doesn’t come out as strongly here as it might though is that this is not just a reflection of voters clustering towards the political centre, but of parties doing this too. Indeed, arguably the most noticeable change in politics in recent decades is that managerialism has replaced political ideology or argument – parties now make little attempt to convince people of a distinctive view. Instead, like a good salesman who can build rapport with clients by ‘mirroring’ their body language and speech patterns, parties compete on broadly the same ideological ground but try to convince electors that they are personally more trustworthy, effective and professional than their competition.

If this is all rather depressing, there are actually glimpses of hope here too. Political attitudes can often change in generational waves and the chapter on changing attitudes to race in the UK is a case in point. Here Danny Dorling discusses ‘when racism stopped being normal, but no-one noticed’. He shows that the percentage of electors who would be opposed to someone in their family marrying a person from another ethic group has declined from around 55 per cent in the 1980s to about 25 per cent today as the older generations where these views were most prevalent have now died off, and with very few of the younger generation now holding these types of beliefs. This trend has been mirrored in other countries like the US and is one indicator among many that people in the main Western democracies may still be economically conservative, but are more socially liberal – and in some ways enlightened – than they have ever been before.

DAP

Where Leadership Leads (2015)

From the February 2015 issue of the Socialist Standard

Well-known for its stunts, street stalls and student activism, the SWP suffered a setback a couple of years ago which led to an exodus of members. One of them was Ian Birchall, the biographer of the group's founder Tony Cliff and himself a one-time member of the party's leadership. He had been a member of the SWP and its predecessor, the International Socialism group, for over 50 years. Last December he offered some views on his blog as to what went wrong (http://grimanddim.org/political-writings/2014-so-sad/)

When it was formed in the 1950s as a Trotskyist group which recognised that the so-called USSR was state capitalist (as we'd known all along) it was organised on the same lines as many other left-wing groups in this country. Its members were in the Labour Party and portrayed themselves as left-wing Labourites. Then in the 1960s things began to change, they moved out of the Labour Party and in 1968 Cliff decided that it was time to re-organise the group on stricter Leninist lines.

What prompted this was the general strike in France earlier that year. Typically, as a good Trotskyist, Cliff attributed its failure to result in a socialist revolution to the absence of a revolutionary party to lead the striking workers (not that socialist revolution was the real aim of the strike though it was in fact a success from a trade unionist point of view). He concluded that what 'revolutionaries' should do in the light of this was to openly organise themselves along the same lines as Lenin's Bolshevik party which, according to him and Trotskyist legend, had led to a successful socialist revolution (even if in his view it later degenerated into state capitalism).

Lenin had set out his view on how a revolutionary party should be organised in his notorious 1903 pamphlet What is to be Done? In it he proposed a party of full-time professional revolutionaries which should seek to lead the workers and peasants by formulating populist slogans reflecting the level of understanding that 'the masses' were considered capable of reaching.

This might have made some sense as a strategy for overthrowing a backward, autocratic regime like Tsarism. As it happened, the Tsarist regime collapsed of its own accord under the pressures of the First World War but Lenin's organisational form did help the Bolsheviks seize political control once Tsarism had collapsed. This success led Lenin to proclaim that this was the way revolutionaries should organise too in developed capitalist countries, even those where political democracy existed.

So, in 1968 the members of IS changed the name of their paper from Labour Worker to Socialist Worker and, more importantly, abandoned its previous organisational structure under which policy was decided by a conference of branch delegates voting on motions proposed by branches and where the members of the executive committee were elected as individuals. This was all swept aside and the 'slate' system that the Bolshevik party had used was adopted and which had also been inherited by the CPSU in Russia (yes, Leninism did lead to Stalinism too).

Under this system the 'leadership' (politburo, central committee or whatever it is called) is elected en bloc at the party's conference. Delegates don't vote for individual candidates, but for a list, or slate, containing as many names as there are vacancies. In theory there can be more than one list but in practice there never is or has been. In the SWP (as in the USSR), there was just one – proposed by the outgoing leadership. Rather than trying to put forward a rival list, the leadership's opponents preferred to leave and form another group organised on the same lines (one explanation for the proliferation of Trotskyist groups).

It can easily be seen that this is a recipe for the emergence of a self-perpetuating leadership. Which is precisely what happened, as Birchall noted:

'recent events have shown the limitations of the slate system. It has become a means whereby the CC can indefinitely propose itself for re-election, co-opting approved individuals as it goes.'

There was another consequence in the SWP too:

'Moreover, a career path has now clearly emerged – comrades, generally former students, become full-timers, and if they are successful, they rise in the apparatus and become CC members. Thus we get a CC almost entirely composed of people who have spent most of their political life as full-timers and have very limited experience of work or trade unionism.'

The slate system was also applied to elect the branch delegates to conference:

'Back in the eighties, when strong branch committees existed, the branch committee would nominate a slate of conference delegates. While it was obviously possible for members to nominate an alternative slate, this was frowned on, and in practice was relatively rare. I recall a chairperson telling us the agenda for a branch meeting and saying “and then the conference delegates will be announced”. In practice he was right – this was what usually happened.'

So the SWP ended up a top-down organisation run by a self-perpetuating clique.

Perhaps surprisingly, Birchall does not draw the conclusion that this is where the slate system, a central tenet of the Leninist vanguard party concept, was bound to lead. He still thinks in terms of a vanguard party of professional revolutionaries organised on Leninist lines. His beef is not with the theory but with the way it was applied in the SWP – bureaucratically rather than democratically. But for him 'democracy' is not a decision-making procedure but merely a means of providing information to the leadership so that it can formulate the best policy to pursue and the best slogans to put before workers for them to follow:

'... a revolutionary leadership needs to know what is going on in the working class. It cannot do this by reading the Financial Times, it has to listen to comrades who have roots in different sections of the class and who can report on what is happening on the ground. As Cliff argued: “… they have to learn from their fellow workers as much as – or more than – they have to teach. To repeat, the job is to lead, and to lead you have to thoroughly understand those you are leading.”'

This is not democracy in any meaningful sense. It's still saying that the wage and salary working class is incapable of freeing itself on its own but needs to be led by a self-appointed vanguard. It is still rejecting the view that socialism, as a fully democratic society, can only be established democratically, both in the sense of being what a majority want and in the sense of employing democratic methods.

To establish socialism the wage and salary working class does need to organise itself to win political control, i.e. as a political party, but in a democratic party, not to follow a vanguard party or any other would-be leaders.

There is, however, one thing that Birchall seems to have learnt after more than 50 years as a Trotskyist/Leninist:

'The important thing at present is the battle of ideas; as William Morris put it, “it should be our special aim to make Socialists”.'

This is a quote from the Statement of Principles of the Hammersmith Socialist Society, drawn up in 1890. It's what we've been saying for over 100 years.

Adam Buick

Voice From The Back: Inequality (2015)

The Voice From The Back Column from the February 2015 issue of the Socialist Standard

Inequality

The Scottish National Party claims that Scotland is a more equitable society than the rest of Britain but it too has a completely unequal society. 'Holyrood's health and sport committee has completed an inquiry into health inequalities which mean that a boy born today in some affluent areas can expect to live 28 years longer than if he had been born eight miles away' (Times, 5 January). Not only do the rich live more rewarding lives they even live longer.

A Depressing Society

Capitalism with its threat of unemployment, rent arrears or mortgage payments is a depressing society. Quite how depressing is shown by the latest figures from the Health and Social Care Information Society about the use of antidepressants. 'Almost one in ten people in Britain is taking antidepressants with GP prescriptions for them almost doubling in ten years. Doctors last year issued 55 million prescriptions for pills such as Prozac,up from 50 million the year before and nearly twice the 2004 amount' (Times, 6 January). Last year £280 million was spent on the drugs.

An Eleven Hour Wait

The volume of misery for NHS patients continues, but the suffering in some cases is difficult to comprehend: 'a frail 81-year-old woman lay on the floor for 11 hours overnight before an ambulance arrived. Her son David Cunningham said his sister called 999 at 9.07pm on Monday, then rang back several times for updates. He said the family were told it was going to be two hours, then four hours, then six hours. Mr Cunningham, 56, said he heard that ambulances carrying patients were "stacked up" at the hospital' (Daily Express, 5 January). A spokesman for South Central ambulance service apologised and blamed ‘the sheer volume of calls’.

2000 Avoidable Deaths

Air pollution in Scotland's towns and cities has created a public health crisis, according to environmental campaigners. The claim by Friends of the Earth Scotland came after an analysis of official data for two toxic pollutants. The group said the figures showed pollution levels were continuing to break Scottish and European limits. 'Air pollution in Scotland's towns and cities is creating a public health crisis, according to environmental campaigners. High levels of NO2 [nitrogen oxide] are linked to asthma and other respiratory problems . . . Last April, Health Protection Scotland said air pollution may have been responsible for 2,000 deaths in Scotland in a single year' (BBC News, 11 January). Inside capitalism business is much more important than curbing pollution.

Cancelled Operations

The sharp rise in the number of procedures hospitals are at present postponing has prompted the leader of Britain's surgeons to warn that patients affected will suffer ‘considerable distress’. 'Unprecedented demand has led to a third more elective (planned) operations being cancelled in England this winter than last year, latest figures show. A total of 12,345 were called off at short notice between 3 November and 4 January, a rise of 32% on the 9,320 seen in the same period in the winter of 2013-14' (Observer, 11 January). Cancellations included some 3,771 procedures such as hernia repairs and hip or knee replacements in the three weeks before and during the festive season.

Cuts In Cancer Treatment

Health chiefs have announced that twenty-five different cancer treatments will no longer be funded by the NHS in England. 'NHS England announced the step after it emerged the £280m Cancer Drugs Fund - for drugs not routinely available –was to go £100m over budget in 2014/15. Some drugs will be removed and others restricted –a move charities say could leave some without crucial treatments' (BBC News, 12 January). Another example of government cuts coming before essential treatment for the working class.

Class Room Crisis

Council leaders warn that the cost of creating places for the 880,000 extra pupils expected in England by 2023 could push schools to breaking point. 'The Local Government Association fears the demand for school places could soon reach a tipping point with no more space or money to extend schools. The LGA wants the government to fully fund the cost of all the extra places, calculated to run to £12bn' (BBC News, 13 January). Official government figures, published last year, project that by 2023 there will be a total of 8,022,000 pupils in England's schools – up from 7,143,000 in the current academic year. This increase has no budget to deal with the problem.

Who’s Afraid of Charlie Hebdo? (2015)

The Halo Halo! Column from the February 2015 issue of the Socialist Standard

As this is being typed out the dust is just beginning to settle on the events following the slaughter of the ‘Charlie Hebdo’ staff, the killing of the Jewish supermarket hostages and their attackers. The newspaper and TV reporters covering the atrocity - carried out apparently to avenge a long dead ‘prophet’ who has become prone to the gags of mickey-takers and critics due to the absurdities of his followers - all emphasise the point that the right to free speech is not negotiable, and is the very essence of democracy.

And they are right of course. Ridiculous people and ridiculous ideas inevitably attract ridicule. And the most absurd idea still being bandied about in the 21^st century as an answer to modern day capitalism and its problems is religion. Despite the claims from its various apologists of their moral superiority, and the insistence that they should be accepted, unchallenged and unquestioned, as examples of how we are to live our lives, they are, in fact, the socially useless remnants of a long-gone world, a world of ancient social conditions and ideas, mass ignorance and superstition. And far from providing answers to today’s problems they have nothing say, other than to tell us to put our faith in the imaginary gods and their magical powers, of an ancient era.

The fact that believers in such gods obviously consider their deities to be so weak and helpless, however, as to need their critics to be silenced by Kalashnikovs says as much about the god’s impotence as does any Charlie Hebdo cartoon.

And, while it seems clear that the intention of the attackers was to silence the critics, this has backfired. Already gatherings of outraged people protesting at the barbarity are taking place all over Europe. More moderate Muslims too, this time more than ever before, are expressing their outrage.   

‘Everyone should be offended three times a week’ someone once said, ‘and twice on Sundays’. And that seems about right. There’s nothing like a bit straight talking, and a bit of offence to remind us that not everyone shares the same views. And while believers in ancient myths have every right to feel offended that their ideas are sometimes ridiculed, the rest of us reserve the right to be equally offended at religious stupidity and barbarity.

Socialists, too, feel quite offended at the way in which the working class are recruited, hoodwinked and persuaded to fight the wars of others in which they have no personal interests. ‘We’ve been sent from al-Qaida in Yemen’ claimed the Charlie Hebdo killers (who were born and raised in a poor neighbourhood of Paris).

But while the killer’s intention to stifle criticism and free speech will come to nothing, there is a different threat to our freedom. On the day after the massacre at Charlie Hebdo’s office, despite the fact that the killers were already known to the French intelligence agencies, and the Woolwich killers were already known to MI5, Andrew Parker, the head of MI5 wasted no time in asking for more surveillance powers for the intelligence agencies. Because terrorists used the internet, email and social messaging, he said, so intelligence agencies ‘have to have the power to intercept, particularly, international communications’. George Osborne readily agreed saying MI5, MI6 and GCHQ would receive the resources they need. (Guardian 10 January 2015).

Let’s hope that makes you feel more secure.

NW

How the Rich Become Richer (2015)

From the February 2015 issue of the Socialist Standard

On most accounts Bill Gates is the richest person in the world but, according to Bloomberg Markets, it is a rather less well-known individual who saw the biggest increase in his wealth in 2014. This was Jack Ma, founder and Chief Executive Officer of Alibaba, a Chinese e-commerce business. His fortune is just short of $26bn, up over $22bn in a year. You might wonder how anyone could earn that much in just twelve months through their own labour, but of course Ma did not make this money through his own abilities; he cannot even write computer programs.

In September, Alibaba Group Holding sold shares to outsiders for the first time in its initial public offering (IPO) on the New York Stock Exchange, raising a record $25bn. Ma owns a good chunk of the shares, and it was this that led to his fabulous increase in wealth, making him the richest person in China. The company is attractive to other members of the mega-rich super-elite too, and Alisher Usmanov, the richest man in Russia, has a substantial stake in it. Usmanov (who also owns a large part of Arsenal Football Club) is pretty secretive about his financial affairs and does not disclose how many shares he owns, but he has apparently sold his stake in Facebook in order to invest in technology companies, especially in India and China.

Now, Alibaba Group Holding is not quite the same as Alibaba in China. Ma and another executive, Simon Xie, own most of the Chinese assets, and Alibaba Group Holding is a Cayman Islands shell which has contractual rights to the profits of the Chinese company. It is what is called a variable interest entity structure (VIE), a way to get around restrictions in China on foreign investment in certain industries (dealbook.nytimes.com/2014/05/06/i-p-o-revives-debate-over-a-chinese-structure/). There are arguments as to whether such arrangements are strictly legal under Chinese law, and anyone buying at the IPO is taking a fair amount of risk. Yahoo, which owns around a fifth of Alibaba's shares, complained previously that the VIE was a way of moving assets to put them under Ma's control.

So what does Alibaba actually do? It is a striking example of the extent of globalisation, since its customers are not just in China, and in a sense it combines the functions of eBay, Amazon and PayPal, as it incorporates a number of businesses that do slightly different things. Tmail.com is a platform for businesses to sell to the public, while Alibaba.com is for business-to-business sales (described on its website as ‘the leading platform for global wholesale trade’). There are financial subsidiaries that deal with lending and other financial services, and a telecom company too. The company has also bought a sizeable chunk of other firms, including the Chinese equivalents of Twitter and YouTube, and the Guangzhou Evergrande Football Club.

It has even managed to market its own version of Black Friday, known as Singles Day, on 11 November. On this day in 2014 it sold well over $9bn worth of discounted goods to online shoppers in China and abroad (an increase of over a half compared to 2013). It has copyrighted the term ‘Double 11’, though many think this is unlikely to become a major shopping day in Europe as it coincides with Armistice Day. But who can really be sure that commercial considerations will not outweigh commemoration of the war dead?  

Alibaba has around 26,000 employees at its ‘campus’ in Hangzhou. But in addition China has a number of ‘Taobao Villages’ (Taobao.com being the customer-to-customer part of Alibaba). People in these have set up online shops to buy and sell almost anything via Taobao. This is related to the fact that, outside the big cities, most people in China live a very long way from a major retail centre and so are less able to shop in person. Many such online shops now have a split between owners and employees too, so are not purely for sales between individuals.

In a recent letter to his workers, Ma wrote of ‘unparalleled ruthlessness and pressure ahead’ (Beijing Review  9 October). No doubt the ruthlessness will be his and the pressure will be on those who labour to produce his profits. 

Paul Bennett

Pathfinders: Yo-Yos a-Go-Go (2015)

The Pathfinders Column from the February 2015 issue of the Socialist Standard

What on earth is going on with the price of oil? For the past five years it’s been stable at somewhere north of $115 a barrel, but since last June it’s fallen by 40 percent to below $70.

The fall in price has caused pandemonium in energy boardrooms just as companies have been sinking unprecedented amounts into R&D looking for new sources of the increasingly hard-to-get black gold and other fossil fuels – an estimated $670 billion last year alone. Samsung are just in the process of launching Prelude, the biggest ship ever built, with a water displacement equal to the world’s six largest aircraft carriers combined (BBC Online, 16 December 2014). Its purpose? To act as a giant floating platform to exploit deep-ocean natural gas fields and liquefy the gas on the spot instead of pumping it through expensive pipelines to existing facilities on shore. Prelude is supposed to be the prelude to an entire fleet of LNG monsters, but now that the rug has been pulled from under it, it may turn out to be the world’s largest floating white elephant instead.

Environmentalists will be delighted that new drilling projects in the Arctic are likely to be shelved, ditto further exploitation of the super-dirty Canadian tar sands. Meanwhile anti-fracking campaigners in the north of England will be ecstatic that Lancashire County Council have vetoed Cuadrilla’s plans to drill for shale gas at two sites near Blackpool, and even more so at the fact that fracking companies who have sunk millions into new drilling sites across the world have been left high and dry with ‘stranded assets’ as the oil price crash has wiped out the value of ‘alternative’ shale and left their operations uneconomic.

Motorists too will be able to celebrate by flooring it in their gas-guzzlers, while shrinking gas bills are expected to lead to a warm glow among household consumers. Providing of course that the energy companies heed the government’s urgent demands to lower their tariffs in line with the price fall. But energy companies won’t be too keen to respond, and not just for the obvious reason that they make more money out of customers that way, but also because, as they are fond of pleading, oil prices can go up as well as down, and they don’t want to catch themselves flat-footed with a price cut just as Brent crude decides to go stratospheric.

So, good news all round then? Well not exactly. Low oil prices will encourage consumption, which will wipe the smile of the faces of those environmentalists, considering that 14 out of the last 15 years have been the warmest on record (BBC Online, 16 January) and that sea level rise is now estimated to be 25 percent steeper than previously thought (BBC Online, 14 January). Still,New Scientist finds reasons to be cheerful, with an optimistic guess that the price-crash might spell the beginning of the end of the world’s oil dependency (‘Over a barrel’, 17 January).

Wholesale gas prices have also dropped 20 percent since November, and may drop further. China is moving away from coal and towards gas, which will stiffen the price, but then on the other hand, Japan is moving away from gas and back towards nuclear, which will weaken it.

Worse news is to follow for the benighted energy corporations, bless ‘em, with a new paper (Nature, 8 January) which could be seen as kicking them when they’re down. Building on estimates by the International Panel on Climate Change (IPCC) that, in order to keep within the target global temperature increase of 2^oC, total carbon emissions from now until 2050 cannot exceed 1,240 gigatonnes, the report authors quietly went about their sums, totting up the actual potential gigatonnage that’s left in the ground. Their conclusion was that with remaining reserves (defined as recoverable under present economic conditions) equating to nearly 2,900 gigatonnes, and total recoverable resources around 11,000 gigatonnes ‘the disparity between what resources and reserves exist and what can be emitted while avoiding a temperature rise greater than the agreed 2^o C limit is therefore stark.’ In other words, about a third of oil reserves, 50 percent of gas and 80 percent of coal must be left in the ground. To the industry’s argument of mitigation through proposed Carbon Capture and Sequestration schemes (CCS) the authors give short shrift. CCS is too little, too expensive, too uncertain and too late anyway. The damage has already been done. There’s no more wiggle room.

Worried, the Bank of England is conducting an enquiry into the risk of a global economic crash if governments are reckless enough to pay attention to climate scientists and start tightening the climate change rules, rendering fossil assets essentially worthless. However Shell and other firms are more sanguine, seeing no great risk to their business model because they don’t believe that politicians, for all their bluster, will stick to their promises on carbon limits (BBC Online, 7 January). Which sounds about right.

So why did the price drop? Partly because, with global warming, northern winters are getting milder. Partly because the recession has led to low economic activity and therefore low oil consumption. Partly because America got carried away with its fracking bonanza and stopped importing oil, unintentionally creating a world glut. And partly because Saudi Arabia, OPEC’s leading producer, is refusing to curb output because it’s having a price war with Iran and Russia. With $900 billion in cash reserves Saudi Arabia can easily afford to sell low (their extraction costs are around $6 a barrel) thus murdering the opposition, as well as all those Yankee frackers who thought they were riding the gravy train (Economist, 8 December 2014).

In other words, the price drop is due to a number of contingent factors which may or may not apply at any given point in the future. Now that quantitative easing has been applied in Europe, the oil price has seen a 2 percent uptick. If OPEC decides to curb output, the oil price will rocket and with it the value of shale assets. The plan to turn the Arctic into an oil well will be back on the table, and the Canadian tar pits will start to look inviting again.

What’s so weird about capitalism, and not in a good way, is how a global fall in the price of one key commodity can reverse global policy overnight. It’s even worse with ‘long latency’ commodities where changes at industrial source take years to feed through to the market, by which time they may have precisely the wrong effect and start a panic.

How is humanity supposed to plan for the future, given this yo-yo economics? How are we supposed to make our civilisation sustainable, and guarantee a planet in good health for our descendants? We can’t, basically. For that we would need a steady-state economy, with patterns of production and consumption that didn’t keep yo-yoing up and down unpredictably and didn’t depend on thousands of fast-buck investors who at any moment might either blow it into a giant gas bubble or drain every last gasp out of it. Gambling in a casino might be fun, if you can afford to flutter. But it’s no way to run a planet.

PJS

‘Abenomics’: Japan Retests a Failed Experiment (2015)

From the February 2015 issue of the Socialist Standard

Japan’s prime minister is so confident in his economic policy that he has named it after himself. But will his ‘Abenomics’ cure what ails Japanese capitalism?

Increased stimulus or austerity? This has been the key choice for policymakers seeking to lift their national economies out of the crisis that has dragged on since the collapse of Lehman Brothers in late 2008. It’s the question of whether government should try to cushion the blow of a crisis or rather let it run its course.

But Japan’s Prime Minister Shinzo Abe has put forward an economic strategy, dubbed ‘Abenomics’, that seems to adopt the belief that there is no need to choose. The basic idea is that, first, government should aggressively introduce fiscal and monetary policies to stimulate demand, and that, once the ball is moving, the government can back off and let the free market work its wonders.

More specifically, the prime minister says he has three ‘arrows’ in his quiver to slay economic recession and prod the economic growth that has eluded Japan and the rest of the world. Those three key policies are: monetary policy centred on quantitative easing, fiscal policy aimed at stimulating demand, and structural reforms to deregulate the economy.

For Abe and his government, the root of Japan’s economic problems is thought to lie in deflation. Following a simplistic Keynesian logic, Abe is convinced that the expectation of continued deflation has discouraged investment and led consumers to defer purchases. If Japan were in an inflationary period instead, the argument goes, this would stimulate economic activity and raise consumption.

The ‘first arrow’ of Abenomics in particular aims to reverse the deflationary trend. This has involved the Bank of Japan, under Abe’s yes-man Haruhiko Kuroda, implementing an ultra-loose monetary policy. Kuroda announced in April 2013 that the BOJ would double the ‘monetary base’, aiming to deliver 2 percent inflation within the next two years. This involves purchasing around 7 trillion yen worth of Japanese government bonds and other assets every month, rivalling the amount the Federal Reserve has been pouring into its own ‘quantitative easing’ policy. The BOJ has also left interest rates for commercial banks at around 0 percent in the hope that this will encourage lending.

Abe’s second arrow is fiscal stimulus; the building of more ‘bridges to nowhere’ and other lavish spending on infrastructure. In early 2013, just a few weeks into office, Prime Minister Abe introduced a 10.3 trillion yen stimulus package. And, in January of this year, he announced a supplementary budget of 3.12 trillion yen to fund further stimulus spending.

Given the Keynesian dimensions of the first two arrows, it’s not too surprising that a right-wing reactionary like Abe could win praise from a number of liberal economists, most notably Paul Krugman. In a May 2013 column for The New York Times titled ‘Japan the Model’, Krugman wondered why the ‘Western world’ was ‘overtaken by economic defeatism’, instead of taking a ‘sharp turn toward monetary and fiscal stimulus’ as Japan was doing. ‘A short-term boost to growth won’t cure all of Japan’s ills’, Krugman wrote, ‘but, if it can be achieved, it can be the first step toward a much brighter future’.

In short, for Krugman and other Keynesian economists, Abenomics has been seen as an alternative to the austerity policies that they believe are at the root of the current economic stagnation.

The long-awaited ‘third arrow’

But Abe has had quite a few fans among conservatives and free-marketeers as well. They are looking to the prime minister to follow through on his pledge to carry out structural reforms that will free capital from its chains. This is the aim of the ‘third arrow’ of Abenomics. The non-Keynesian fans of Abe have hoped (although their hope is fading) that the benefits resulting from the structural reforms would make up for the debt incurred from the lavish fiscal and monetary policies.

In June 2014, Abe finally unveiled some of the third-arrow policies he hopes to introduce, including cutting corporate income tax to below 30 percent, creating special economic zones with fewer regulations and lower tax rates, and lifting the ban on online sales of drugs. The list of specific proposals was fairly long, but the combined effect was underwhelming, at least in the eyes of the foreign business press, which had been looking forward to the third arrow with great expectation.

‘Misfire’ was the title of an article in the Economist that described Abe’s structural reforms as ‘timid’. In particular, the magazine’s editors were disappointed that Abe did not promise more measures to reform the labour market and the agricultural sector.

The prime minister’s ‘timidity’ is not surprising, however, since the potential third-arrow reforms concern issues of keen political importance to influential lobby groups within the ruling party itself as well as issues that could divide the public. The LDP is far from agreement on matters related to free trade and agriculture, and cutting taxes for corporations while raising the consumption tax is not likely to win over the public. If the political headwinds are strong enough, Abe could easily end up the target of his own third arrow.

Roundabout solutions

The idea (or hope, really) behind Abenomics is that each arrow hitting its bull’s-eye will have a combined ‘synergistic’ effect capable of lifting the crisis-laden economy out of its rut. The optimistic charts presented to explain how this might all happen tend to look something like the diagram of a Rube Goldberg machine; a chain reaction where the initial steps bring improvements that in turn generate other improvements.

For instance, a chart created by the investment bank Nomura Holdings plots out how the aggressive monetary policy will drive up stock prices; this in turn will boost corporate profitability, which will expand capital expenditures and increase wages; while the lower yen will drive up exports, thereby also boosting capital expenditures. And while this is going on, the fiscal stimulus is expected public investment, thus also raising consumption, wages, and capital expenditures. On top of this, the structural reforms are expected to boost all of the drivers of growth. All of this combining to allegedly raise the level of effective demand and break away from deflation.

It is incredibly convoluted, but then again capitalism itself is an incredibly convoluted system of social production; a system where hardly any problem lends itself to a straightforward solution. The reason in most cases is that all of the production decisions are made by the capitalists who own or manage the means of production; each of these actors making decisions on the basis of their own profit calculations. Any effort to influence how capitalists choose to behave can only be attempted in a roundabout way, since private ownership and the rights stemming from it are sacrosanct under capitalism.

Those capitalists are in charge of production; certainly not society as a whole, or even the government, despite its pretentions to leadership. What the government can do, in attempting to coordinate the private (and fundamentally selfish) activities of capitalists, is to introduce this or that incentive or regulation to encourage behaviour thought to benefit capitalism as a whole. The problem, though, is that capitalists will not budge, no matter how strongly cajoled, if they do not see the point (=profit) for themselves of such behaviour. This fundamental reality leaves a ‘leader’ like Abe with few options except to throw money at the problem in the form of fiscal and monetary stimulus in the hope that it will spur productive activities.

How different the situation would be in a socialist world, where no minority has a stranglehold on the means of production, which are instead held in common. There the questions related to production are transparent; no longer economic problems at all, actually, but mere ‘technical’ issues related to how to go about producing whatever the members of society have determined democratically to be necessary. No need for the domino or billiard-ball approach where every problem is only dealt with indirectly or at an angle.

Dominos still standing

So what has been the effect of Abenomics so far? Initially, the outlook was pretty rosy. Not surprisingly, the aggressive quantitative easing and 0 percent interest rate policy quickly sparked a stock exchange boom. By mid-November 2014 the Nikkei average had risen to 17,490 points, a 70 percent increase compared to the time Abe took office. The fall of the yen was equally dramatic, with the currency losing around 40 percent of its value against the dollar since Abe took office in December 2012. GDP growth also looked promising (at first), increasing in the first three quarters of 2013.

But the first flaw in the mechanistic logic of Abenomics became increasingly clear as the year 2014 progressed. The stock-market boom has done little to lift the real economy. In fact, the boom itself reflects the fact that most of the money pumped into the economy is ending up in speculative (rather than productive) activities. This reality is seen in the figures for Japan’s GDP which shrank in the second and third quarters of 2014 by 7.3 and 6 percent respectively.

Even the dramatic fall in the Japanese yen has not ended up lifting the country out of its trade deficit, as Japan recorded an excess of imports over exports of 893 billion yen in November, marking the its 29th consecutive month for trade to be in the red.

Wages also have not risen much either, despite Abe’s appeals to corporate leaders. In August 2014, real wages (adjusted for inflation) fell by 2.6 percent year-on-year, the 14th straight month of declines. The bottom-line of profit has again proved to be a weightier concern to capitalists than the opinions of politicians or the public.

On top of all these setbacks to the plan, the Bank of Japan is even having difficulty reaching its 2 percent inflation target. This is particularly troublesome for Captain Abe and his obsessive crew, since deflation has been their White Whale that had to be slayed at all cost. Rather than admit defeat in this quest, the BOJ has decided to  increase the monetary stimulus by enlarging to 80 trillion yen the annual target for expanding the monetary base, as compared to the previous 60 to 70 trillion yen range.

In short, although the first two arrows may have hit the mark insofar as their immediate goals, few of the expected knock-on effects have materialized. This should not be too terribly surprising to anyone, especially to the members of the LDP, since for well over two decades Japanese governments have experimented with similar monetary and fiscal policies in the hope of economic recovery.

It goes without saying that the experiment failed (again and again). Slashing interest rates to zero was not the answer; nor did previous stimulus packages provide much incentive to the real economy. Japan introduced no fewer than 15 stimulus packages between 1992 and 2008, averaging around 2.3 percent of the country’s overall GDP.

What grew as a result of these efforts was not the economy but government debt; to the point where it is now 780 trillion yen, which is roughly 240 percent of Japan’s GDP, forcing the government to channel around 40 percent of its revenue to the servicing of this debt.

Abe himself seems to be well aware that ‘Abenomics’ will hit the wall sooner or later, if it hasn’t made contact already. His decision to call a snap general election in December, even though he had two years left in his current term, was widely recognized as stemming from his expectation that things are likely to get worse, economically. Better to call an election now, he reasoned, while the opposition is in disarray, than to wait another year or two.

The ploy worked, as the LDP and its coalition partner Komeito preserved their two-thirds parliamentary majority, while around half the population abstained from voting at all. But Abe may have been too clever by half; in making Abenomics the centrepiece of his campaign, he has laid further claim to his responsibility for the performance of the Japanese economy. The prime minister is free to remain in office another four years, but with his 'three arrows' looking more like damp squibs he may not last that long.

Michael Schauerte

Our General Election Campaign (2015)

From the February 2015 issue of the Socialist Standard

The Socialist Party will be standing ten candidates in the coming general election, more than we have ever put up before. Half a million leaflets will be distributed in total in the chosen constituencies, which are:

Brighton Kemptown: Jacqueline Shodeke

Brighton Pavilion: Howard Pilott

Canterbury: Robert Cox

Easington: Steve Colborn

Folkestone & Hythe: Andy Thomas

Islington North: Bill Martin

Oxford East: Kevin Parkin

Oxford West & Abingdon: Mike Foster

Swansea West: Brian Johnson

Vauxhall: Danny Lambert

If you wish to help out in the campaign email us at spgb@worldsocialism.org or phone 02076223811 or text (only) 07732831192. We will put you in touch with the local branch election committee.

If you wish to help financially please make any cheque out to “The Socialist Party of Great Britain” and send to 52 Clapham High Street, London SW4 7UN. Alternatively, you can use paypal (go to our website http://www.worldsocialism.org/spgb/ and scroll down to the bottom).  Electoral law compels us to check and record any donations of over £50 but not for those of £50 or less.