The Politicians and the crisis: Part 2 (1977)

From the September 1977 issue of the Socialist Standard

Link to Part 1.

These are the times when unthinking workers look for scapegoats, as they did in Germany in the latter period of the Weimar Republic. There the once proud and powerful Social Democratic Party (SPD) were in government; they unwittingly paved the way for the Nazis. Hence, the concern of the political leaders of Western Europe, North America and Japan. They reason as follows.

The slump of the early ’thirties undermined the established regimes in places like Germany and Japan and many other less powerful countries too. Imitative fascist-type parties sprang up all over Europe (some holding power), gaining support from disenchanted workers. In the case of Germany the Nazis gained power through the ballot box in 1933. In Japan the militarists managed to mobilize popular support against the existing Liberal administration because of the economic situation—unemployment and deflation—not, as now, inflation. The new regime began reflation in 1932 and before the bottom of the world slump had been reached Japanese industry began to recover being propelled along by an aggressive drive in export markets.

This was bad news for capitalist interests whose markets were being successfully penetrated by Japan, e.g. the colonial possessions of the Western industrial states were taking an increasing volume of textiles. This was one of the reasons for “protectionism” of the 1930s, which the governments now wish to avoid. This encouraged Japanese capitalism, with militarists firmly in the saddle, to possess colonies of their own. In 1937 they attacked China, having as early as 1932 driven the Chinese out of Manchuria without any formal declaration of war.

War economy

Germany from 1933 onwards pursued a twin policy of re-armament and so-called "economic self-sufficiency”. Unemployment decreased (although it was still above 1 million in 1936) and the armaments industry and its adjuncts, like the new autobahns and airfields, increased. Many workers were employed on the work connected with numerous Nazi rallies; the 1936 Nuremberg Rally alone cost £2,000,000 to stage. To limit imports, license schemes were introduced and synthetic materials developed, partly to deal with Germany’s balance of trade problem and also geared to their “war economy”.

Germany entered into trade arrangements with countries in South-East Europe and Latin America. These countries agreed to take more exports from Germany in exchange for imports from them, but their volume was only 69 per cent. above 1929; whereas Britain’s exports were then 83 per cent. above that year. Britain had achieved this advantage by bi-lateral arrangements with various countries. The Commonwealth and Empire countries increased their import preferences for each others’ goods and as mentioned above placed restrictive quotas on textiles from Japan.

In spite of all this, unemployment in Britain was still over 1.3 million in 1937. In the June 1939 issue of the Socialist Standard was the following:

When Hitler for the German capitalists says that Germany must expand or explode, find markets or perish, he meets his opposite in Mr. Hudson. British Secretary for Overseas Trade who said in Warsaw on March 21st [1939] that “we are not going to give up any markets to anyone . . . Great Britain is strong enough to fight for markets abroad. Britain is now definitely going to take a greater interest in Eastern Europe”. (From News Chronicle, March 22, 1939). Fighting that at present takes the form of words, trade agreements, loans, guarantees against aggression etc. may. as in 1914 turn into an armed conflict, and that armed conflict will be yet another war produced by capitalist rivalries.

This area of Eastern Europe was Germany’s existing and expanding sphere of influence, for recovering territory lost in the previous imperial conflict—the Sudetenland from Czechoslovakia, Danzig and the Polish Corridor, and Memeland from Lithuania. Germany also had eyes on the Rumanian oilfields (hence the British guarantee to that country in spite of the fascist regime there), and the wheat-growing areas of the Ukraine, in Russia and Poland.

These brief references are to the seeds which helped produce the second world war, and the politicians at the recent London summit conference said so quite openly. By any sense of logic working-class ears should be pricking up at these statements, questions should be asked and conclusions drawn. The Socialist Party does its best to help draw these conclusions and to develop a Socialist awareness.

It was noteworthy that Mr. Fukuda was particularly alive to the dangers of the present slump. He was a young diplomat in London in 1933 at the time of the World Economic Conference which broke up solving nothing, to be followed by “beggar thy neighbour” policies which were already under way prior to the conference. One of the major factors preventing even formal agreement was America’s refusal to stabilize the dollar; Roosevelt having taken them off the Gold Standard with a view to raising US commodity prices as an inducement for investment by the industrialists. This caused the US dollar to fluctuate wildly in the foreign exchanges. The delegates from the other countries at the conference wanted America to stabilize back on the Gold Standard: this Roosevelt refused to do, being pre-occupied with the domestic effects of the Depression.

Crisis capitalism

This was and is crisis capitalism. Predicament—the conflict between national economic interests and the stability of the international trading and monetary systems. This was recognized well enough in 1933. 

The journal The Round Table declared, some months before the Conference at the time of the Imperial Economic Conference at Ottawa, that "within a few months, conclusions must be reached in the financial and economic field, the effect of which will probably be decisive for or against the happiness of at least one generation of human beings all over the world.”

In September 1933, two months after the conference broke up, the same journal commented: ‘‘The great international conferences have come to little. The pulse of the Disarmament Conference is beating feebly (which began in June 1932) . . . The World Economic Conference has failed to reduce the obstructions to international trade, or even to make a tentative approach to agreement upon a solution of the world’s monetary problems”.

In the Daily Telegraph of May 9th, 1977, the day after this year’s conference, in an Economic Commentary article ‘‘Best view of the summit in few months” the author, Rodney Lord, stated: ‘‘It is idle to expect any great progress on persuading countries to regulate their economies for the general benefit of international stability. Politicians look first to the interests of the people who elected them.” The latter part of that quotation cannot go unchallenged of course—but we know what he means.

Politicians are the custodians of nation-states in a competitive world—that is, custodians for the capitalist class of their particular countries. At the same time they depend on the working class to go along with the arrangement, and have to try to placate them when it is necessary.

Conflicts of ‘national interest’

This conflict of national interest and international stability, with its inherent dangers, was demonstrated in Tokyo only four days after the end of the Economic Summit.

There were reports of a fire in an oilfield in Saudi Arabia which supplies over 30 per cent. of Japan’s crude oil imports. Prices fell on the Tokyo stock market and the Ministry of International Trade and Industry assured the Press that the fire would probably not have a serious effect on Japan’s supplies in the long run.

At the same time Mr. Fukuda, the Prime Minister, told a meeting of business leaders that the government is to press the case for Japan to reprocess spent nuclear fuel. He said that at London he had the ‘‘strong impression” that it will be difficult to get America’s approval because of President Carter’s “deep-rooted opposition”. However, Mr. Fukuda assured the businessmen that he was “most determined” to negotiate the issue with the US independently of other countries. The Japanese, apparently, have been shocked by the American President’s nuclear energy policy (from a report in the Daily Telegraph, May 13th).

An indication of Japan’s problems—even though being currently the world’s most successful economy— is the news that from the end of 1971 to the end of 1976, 30,000 shipyard workers lost their jobs. It is estimated that another 25,000 will go before the end of 1978, which is nearly the total workforce in British yards. (From the AUEW journal for May 1977.)

On May 9th the Daily Telegraph reported that British TV manufacturers were protesting to the Government that Japanese TV manufacturers were “bent on destroying” the British industry. This was in response to the plans of the Hitachi Company to build a factory at Tyne and Wear.

Commercial ‘aggrandisement’

The British businessmen said that there was already over-capacity in the industry. 1,751,000 sets were made in 1976 as against 3,000,000 in 1973, and Hitachi’s arrival would increase to 400,000 the number of Japanese colour sets made in Britain. Two other Japanese companies are already established here. Many more jobs would be lost—up to 6,000—than would be created, it was claimed. Hitachi had already a 20 per cent. interest in a Finnish company which is expected to export to Britain for assembly a substantial part of 800,000 total output of colour tubes. It is part of a policy of “commercial aggrandisement” in Europe, say the British capitalists.

No wonder Mr. Fukuda and the other statesmen are worried.

Frank Simkins

To be concluded

Food as a weapon (1992)

From the August 1992 issue of the Socialist Standard

With the ending of the Cold War. American military power is no longer sufficient to hold its real economic rivals— Europe and Japan—in check, and the three power blocs are squaring up for the battle for world economic domination in the 21st century.

The current battlefield is a scries of talks on world trade, the General Agreement on Tariffs and Trade (GATT), which have now been stalled for nearly two years, with the European and US governments hurling abuse at each other over the emotive issue of farm subsidies.

So what is GATT, and why does an apparently minor dispute over handouts to farmers threaten to bring the world trading system to the point of all-out economic war?

The GATT process is aimed at promoting “free trade" amongst the competing states of the world, tearing down barriers to imports and allowing consumers to choose the most efficient supplier of anything from banking services to hairdryers.

In reality, of course, there is never any such thing as free trade among equal players— no ‘‘level playing field". US-based multinational corporations. with the economic battering ram of vast scales of production behind them, and the military and political power of the US state in the not too distant background, are clearly going to make easy meat of the struggling young industries throughout the “Third World”, currently protected by their own governments’ trade barriers.

Trade wars

Now all this is fine with European governments as well. They too have multinationals based on their soil, only too eager to participate in the turkey shoot. In the coming months you will doubtless hear ministers extolling the virtues of Free Trade for the health of the world economy.

But when we come to agriculture. there is a slight fly in the milk churn. European farms tend to be small and “inefficient" (unprofitable), whereas their US competitors tend to be large and “efficient"—fully industrialised and reaping the advantages of economics of scale.

This, of course, would give them a significant advantage in a genuinely free market, almost certainly devastating the European farm industry, and scoring round one of the battle for 21st century economic domination to America.

And American farmers have never been more desperate for markets for grain, which regularly gluts the American market. (Of course, this does not mean that there are no hungry people in America, simply that they can’t afford to buy what lies rotting in warehouses).

In fact this is another bizarre consequence of the ending of the Cold War. since in those good old days the Soviet empire bought all Americas surplus grain and paid on the nose with hard currency.

Europe’s governments, then, urged on by the powerful farming lobby, are determined not to give up their agricultural subsidies, while the US is desperate to prise the European market open.

A few months ago. a high- level EC delegation led by Portuguese Prime Minister Cavaco Silva and Commission head Jacques Delors, visited President Hush in Washington for crisis talks, with Cavaco Silva making it quite clear how deep the rift had become. “Sometimes there is a discrepancy between the apparent political goodwill and the technical proposals put on the table by the US”, he told the European (9 April).

And that’s just about as close as a diplomat comes to calling the other side a dirty cheating liar.

Both sides only entrenched their positions at the G7 economic summit in Munich last month, with John Major suffering a major rebuff to his attempts to break the deadlock, and vowing to continue to “bully, badger and cajole" fellow leaders into living up to the undertakings to conclude a deal by the end of the year.

In fact, although the European side has offered a 30 percent reduction in protection and support for agriculture, this would be on the basis of levels operating in 1986—a real cut of little more than 15 percent (The Grocer, 23 November 1991).

In the EC’s last review of support prices in June 1991. ministers cut a modest 1.5 percent from levels of support for oilseed, and at the EC Lisbon summit price support for cereals was cut 29 per cent. "Still not enough" said Hush.

Agri-business

The Daily Telegraph issued a dire warning following the failure of the Munich summit that the world is edging closer to a menacing era of protectionism. “There is a real danger that the Uruguay round of GATT could breakdown altogether, taking us back to the unstable trade bloc structures of the 1930s” (9 July).

The point is that food production is governed by the laws of competitive production for profit. Manufactures of food only survive by selling at a reduced price against their competitors, and with a glut of unsaleable food on the world market, pressure to subsidise unprofitable, mainly small-scale European producers against their industrialised US rivals is immense.

So the EC’s subsidies pile up yet more unsellable food, and US farming corporations are forced to watch their own surplus production rot in warehouses because it can’t be sold anywhere. The GATT negotiations are therefore a trial of political and economic strength between US and European agri-business, with their respective governments fighting their corners round the negotiating table.

What insanity! Capitalism— the competitive production of goods for sale at a profit—yet again proves itself to be completely unable to cope with a world in which we could provide an abundance of food for each citizen of this planet. It is the only system that actually manages to find adequate food production a major crisis. Surely its time to establish a system where this is an opportunity. through free access to all food production, to abolish hunger once and for all.

Andy Thomas

The Politicians and the crisis: Part 1 (1977)

From the July 1977 issue of the Socialist Standard

On Sunday May 8th, in London the seven-nation conference of heads of state ended. Present with their aides were the Prime Ministers of Canada, Italy, Japan, UK, the Presidents of USA and France, and the Chancellor of West Germany; and on the final day Roy Jenkins in his capacity as President of the EEC.

The Conference was the latest of a series of similar conferences to appraise and look for solutions to the very real and increasingly dangerous problems facing the West European industrial countries, North America and Japan, and the rest of the avowedly capitalist world, i.e. Australasia. Latin America and so on, plus and by no means least the primary producing countries of the “Third World”, who are themselves at various stages of industrialization.

The problems discussed were primarily the world trade recession, with its unemployment. particularly amongst the young, inflation, energy, imbalance in international payments, the expected $45,000 million surplus of the oil-producing countries grouped in OPEC, the debts of the developing (non-oil producing) states, the “necessary” increase in nuclear energy (and its attendant dangers, political and military), “aid” to developing countries in which the Eastern (Soviet) bloc trade organization Comecon was urged to follow suit.

Carter, the US President, also raised the question of illegalities which had hitherto been condoned in certain banking, multi-national business and political circles. (The former Japanese Prime Minister, Mr. Tanaka, in relation to bribes from the Lockheed Aircraft Corporation was very involved.) This latter matter was not mentioned in the final declaration of “7 Pledges” to revitalize capitalism’s ailing economies, possibly because although not unimportant, it was regarded as peripheral to the major problems. To raise it officially would have also meant an explicit reference to companies and individuals. But does the conference have any significance for the working class of the world?

It can be safely said that modern society rarely appears to have stability for more than about two consecutive fortnights at a time, and that countless conferences and meetings have come and gone. Like many things it is all relative . . . and yet the newspaper headlines must at least have indicated something of magnitude — e.g. “7 Pledges to stop chaos” (Daily Telegraph, 9th May) and the politicians’ view on what could happen if these problems are not solved, must mean something. Put it this way: Carter, Callaghan and the rest wish to present as good a face as possible on the existing system whether they choose to call it capitalism, the “mixed economy”, a “free market”, a “social market” economy, the “free world” (i.e. capitalism with some sort of parliamentary democracy), partly because they are obliged to continue with it and also perhaps because they like the trappings of political power. As Carter said at the end of the conference: “We have to remember that making decisions, even unanimously, is not a guarantee that our decisions will be consummated. In many ways our own reputations are at stake.” As an article in the Daily Telegraph on Friday 6th May (the day before the beginning of the heads-of-state meeting) under the heading “Outlook for the World Summit — Hidden Threats to the World Economy” stated in its opening paragraph:

Chancellor Schmidt probably expressed the inner thoughts of all the European leaders when he said on Wednesday that he was looking to the London summit this weekend, mainly to bolster confidence. By this he meant the leaders' self-confidence and their electorates’ confidence in them, both of which are indeed at a low ebb.

Why this dual lack of confidence then? Because the politicians always aim to convince themselves and in turn the electorate that the capitalist system has found a way of stabilizing itself, and that despite its many imperfections it could at least avoid a catastrophe of the 1930s’ slump dimensions. They imagined that with their versions of Keynesian economics they had eradicated the deeper troughs of the business cycle.

However, from the mid-sixties onwards their policies have been demonstrated to be futile and unsound. It has been a gradual process, this dawning on the part of capitalism’s politicians.

Perhaps more to the point, among their advisors in the corridors of power, the higher echelons of the Civil Service, this bewilderment was exemplified in an article entitled “Whitehall at its wits’ end” (Sunday Telegraph, 24th April):

‘Everyone is baffled’ confesses one Permanent Secretary. “The old levers just don’t do the trick any more. We’re living in a world we didn’t make and don’t understand’. The Treasury has according to one senior Labour Minister (unnamed) ‘a very marked loss of confidence’, which reveals itself ‘to the discerning eye’ by the presence of competing economic ideologies. Before the Treasury served up only the pure milk of Keynesianism; now Keynes and Friedman are both on offer.

Graham Turner, the author of the article, states that “Whitehall is at its wits’ end . . . like the rest of us — they have not the faintest idea where Britain is going”.

The British politicians, their advisors and their counterparts in other countries may not know where the British and world economies are heading, but they do know, from personal experience and from the reading of history, where the 1930s’ crisis led.

The fact that they spoke at the Summit conference as candidly as they did demonstrates the seriousness of capitalism’s present difficulties.

The Japanese Prime Minister said “the world economic situation was now as serious as that of the early 1930s when leading industrial nations failed to act in time to prevent a slide into the 1939-45 war. History should not be allowed to repeat itself. Western nations had to co-operate more energetically in tackling economic problems” (Sunday Telegraph, 8th May).

He also recalled the fiasco of the 1933 London Economic Conference when no agreement was reached and a communique not even issued. “The difficulties today are greater and are compounded by new problems”.

The French President, Giscard d’Estaing. recalled that the ending of the 1977 conference coincided with the anniversary of the end of the 1939-45 war! “Sombre and pessimistic pictures were sometimes drawn of the present state of the world, but the cooperation at such conferences make it possible to avoid the mistakes [!] that helped to bring on that war.”

Helmut Schmidt of West Germany spoke on similar lines and “thought that they had avoided the results of complete selfishness” — by avoiding the “traps of the 1930’s.” President Carter like the other heads of state was concerned that decisions reached should not be merely pious, but recognized that making decisions and implementing them was not one and the same thing. "Sometimes heads of State tend to over-emphasize their own importance,” he said.

Callaghan considered that continuing unemployment carried political risks, not merely by the replacement of one party by another (naturally he does not want to lose his job) in Parliament — but that political democracy could be threatened. He is obviously concerned regarding the growth of the National Front, with racialism as the main plank of its support, and it is obvious there is a parallel here with the Nazis’ anti-semitism, which was copied in this country by the pre-war British Union of Fascists (although in recent years Sir Oswald Mosley has tried to obscure his organization’s former position on this subject).

It would seem inconceivable that the British working class could en masse support an organization tainted with fascism. Some of NF’s leaders were given to dressing up in Nazi-style uniforms before the organization was formed, and their arguments for economic nationalism — “self-sufficiency” — were advocated by the Nazis. However, it seemed improbable at the time that the Nazis would make much headway.

It can be justifiably argued that Britain in the 1970s, even with inflation and high unemployment is not the same as Germany in the early 1930s at the height of the depression with 6 million unemployed and the dire poverty it meant. However, in spite of the lower percentage of unemployed compared with that period and the lesser relative hardship of today’s unemployed, there is apathy and cynicism to politics and politicians generally, which though understandable is far from healthy — and also a good deal of resentment on the part of some of the young. This is why the established politicians are concerned wondering whether, if the crisis continues irrespective of the party in power, some of the youngsters might transfer their violent support from football teams to organizations like National Front. After all most of the workers of today know little of the 1930s; they make comparisons within this period, and as to whether the politicians’ promises and policies ring true. Over 400,000 of the present unemployed in Britain are in the 16-to-25 age group. In the rest of Western Europe the percentage is a little lower, and in the USA it is higher than in this country.

The major parties of British capitalism are discredited and the growth of the National Front directly arises from this. It is a particular indictment of Labour-style reformism and its inability to deal with capitalism’s problems, heightened as they are in times of crises.

Frank Simkins

(To be continued)

Sting in the Tail: Summits of impotence (1995)

The Sting in the Tail column from the August 1995 issue of the Socialist Standard

Summits of impotence

Here, John, did you see that the G7 leaders had another Summit up in Nova Scotia? They tackled some very big international problems like how to increase world trade, save the environment, tilings like that.

Well, OK, it’s true that they fell-out a lot because they all put their own economic and political interests first, but be fair, John, the Americans couldn’t let Japan import all its luxury cars into the States without opening up its own home market, could they? And Helmut Kohl had to give John Major a bollocking for agreeing that Shell could dump Brent Spar in the Atlantic, because that was very unpopular in Germany.

But the good news is that they’ll all be putting their heads together again next year at a Summit on unemployment! No, John, must admit I didn't know they’ve already had two Summits on that last year and came up with Sweet Fanny Adams, but d’you really think that the only result of them putting their heads together will be an exchange of dandruff?

Asking for it

"How they distrusted and for the most part disliked him, yet clung to him. lie was the only possible leader . . . It was true, of course, that [he] was an electioneering asset. In the constituencies his appearance was much admired. Women especially found him impressive."

This could be a summary of what many Labour Party members feel about Tony Blair, but the leader in question was Ramsay MacDonald in 1930 and the quotation is from Malcolm Muggcridge’s book The Thirties.

No doubt many in the Labour Party distrust and dislike Blair, They know he can treat them how he likes and this was painfully obvious when, having won the vote to change Clause Four at the special conference in April. He said “Now, about the party’s name,” and when they gasped in horrified anticipation, added “it stays as it is.”

How they must have squirmed at being so openly toyed with, but those who need a leader must accept being led, even when it is by the nose.

Relative surplus value

A letter in the Guardian (12 June) aired a familiar complaint. The writer cited a prediction made by an American scientist many years ago that computers would eventually do much of humanity’s work and also reduce working hours. He then contrasted this with today’s “long working hours culture” plus the growth of unemployment and asked “what went wrong?”

That American scientist was not alone in making ill-founded predictions about what technology’s advance would bring. There were, for example, TV programmes like Tomorrow's World which had robots doing everything, even the housework, and leaving us all to lead lives of leisure.

None of these crystal-gazers understood that capitalism isn’t concerned with reducing work but only with reducing COSTS in order to boost profits, and it does this, not through idealistic work-sharing, but by simply dumping as many workers as possible and screwing more work out of those who remain.

It stands to reason

One of the daftest economic theories around is that the economy can be “talked into” recession. Only a few years ago the Director General of the Institute of Directors blamed the “Jeremiah voices” who he claimed were guilty of this.

Now the Institute of Chartered Surveyors has criticised Professor Doug Wood for his recent prediction that house prices would stay low for the next twenty years. The ICS branded this as “a self-fulfilling prophesy” which, they said, had caused house prices to fall even further.

How, then, do they explain the fact that for years building societies and estate agents have been talking-up house prices without this having the slightest effect? If it were so easy for “Jeremiah voices” to talk the economy or any market into recession then it should be just as easy for the super-optimists to talk it back out again.

The exploitation party

All rent, interest and profit is derived from the surplus value that the working class produce. The difference between the wealth the worker produces and what she or he receives in the form of a wage or salary' constitutes this surplus value.

This is true throughout the world. It is true whatever political party is currently running the capitalist system. So it is with some interest that socialists look at what the British labour Party plan to do if they form the next government.

Under the headline “Labour Unveils Its Economic Blueprint” the Labour Shadow Chancellor let us know what is in store for us in the event of Labour forming the next government.

"Mr Brown said the strategy would aim to increase savings and investment. Wages would have to rise by less than productivity" (Independent, 28 June).

So there you have it, fellow' workers. The Labour Party wants to increase the surplus value wrung from our hides.

Bon voyage!

Did you know that the aircraft on which we travel may well contain inferior parts which could cause them to crash? Such crashes have already occurred and Panorama (BBC1, 12 June) revealed that there is an extremely lucrative, world-wide trade in counterfeit and even scrapped parts.

The airlines and the civil aviation authorities deny this, but Panorama proved that counterfeit parts backed by false documents are rife in the airline industry, and one American counterfeiter described US government inspection as “a joke”.

All of this is hardly new because a similar TV programme a few years ago showed that not only fake parts are available but so are major assemblies such as entire undercarriages made from inferior materials.

Why does this happen? Well, the genuine parts are expensive because of the high specifications involved, and capitalism will always provide both motive and opportunity for money to be made no matter the consequences. Flying to the Med or Florida for your hols this year? Safe journey!

Cloudy View From the Summit (2008)

From the August 2008 issue of the Socialist Standard

Last month’s G8 Summit in the far north of Japan was typical of meetings of the heads of state these days. Held in a remote location, well out of sight and sound of protest marches, and protected by an army of police, the meeting was carefully choreographed to convey an impression of competence and confidence—but in the end only exposed the impotence of government leaders in the face of grave problems arising from their beloved social system.

The two problems that were the focus of attention at this year’s summit were climate change and price rises. Newspaper headlines quoted the vow of the heads of state to tackle both of these problems, yet the articles underneath admitted that this is much easier said than done.

One obvious reason why the various leaders are finding it difficult to solve such problems is that there is no clear consensus among them regarding the actions to take, which reflects the different and often directly opposed interests and standpoints of their respective nations.

For instance, not only are there differences between “rich” and “poor” nations regarding how to counter global warming, and the role that each nation must play, there are stark differences in the standpoints of the G8 nations regarding this issue, not to mention the political divisions within each nation.

Those same sorts of national and domestic differences came to the surface with regards to the rising food and fuel prices. Not surprisingly, each government has sought to frame the problem in a manner that lays the maximum blame on others. The root cause of the price rise has thus been identified, respectively, as the result of rising consumption in China and India, insufficient production by OPEC nations, or the flood of speculation on the commodities markets and declining dollar.

That is not to suggest, however, that such problems could be solved if only there was a clear consensus among the leaders and sufficient political will. The deeper issue is that the heads of state (with the backing, however tepid, of their electorate) have set out to solve problems that stem directly from the social system (= capitalism) that they are paid to serve and protect. (And it is worth emphasizing that their role is indeed as servants, rather than masters, of this system.) In other words, the reason that our self-styled “leaders” are unable to arrive at solutions is not that they are shortsighted, selfish and stupid—although more than a few fit that description—but that they are naturally reluctant to pursue the root causes of problems if it calls into question the capitalist system.

It does not take much digging, incidentally, to unearth the direct relation between a system of production for profit and a whole range of problems. This is particularly clear in the case of environmental problems. Capitalism is all about capital accumulation and the insatiable pursuit of profit is naturally accompanied by tremendous waste and destruction. If there are profits to be gained, capitalists are not too bothered by the long-term, or even short-term, consequences for other people or future generations. Political leaders lecture about the need to address environmental problems, while turning a blind eye to the role played by this rapacious system of profit chasing.

In the case of rising prices as well, it is rather absurd for politicians to bemoan the problem without fundamentally calling into question a system that revolves around prices and money. Granted, as long as the prices are “reasonable,” many people find this social system unobjectionable, or even natural. But a quick look at economic history reveals that inflation is a not uncommon side-effect of the money-centred capitalist system and that governments have had little success in bringing inflation under control once it picks up speed.

It is not surprising that inflation can be impossible to control, because commodity prices are not under our conscious human control to begin with. Simply put, prices are determined by the market. It is true that a business can set prices at whatever level it wants, but if that level is too far above or below that of their competitors the business runs the risk of losing sales or profit. Ultimately, therefore, businesses will tend to set the prices of their products according to the cost of production plus the average rate of profit. And, on a more essential level, these “production prices” are themselves ultimately determined by the amount of labour (or “socially necessary abstract human labour”) expended to produce the commodities.

In short, the very existence of prices reflects the fact, pointed out by Marx, that we live in “a state of society, in which the process of production has the mastery over man, instead of being controlled by him” (Capital vol. 1). When prices are high, the absurdity of this anarchic social system comes into clearer view, but even in “normal” times our lives remain prey to forces outside of our control. The “solution” to the problem, at least as far as workers are concerned, is not to bring prices back to some acceptable level (assuming that were indeed possible), but to progress beyond this social system where production is just a means of generating profit and distribution is mediated by money.

If the businesses that carry out production are not free to ignore “market forces” and arbitrarily set prices, then it is foolish to imagine that national governments somehow possess the magical power to bring prices under control. To remain in power, heads of state need to convince the public that they are in control of the economic situation, or can at least curb the worst excesses of capitalism. In fact, their “control” over the direction of the capitalist economy resembles that exercised by a rodeo rider over an angry bull during those four seconds before he is tossed from the saddle into the dirt.

The powerlessness of world leaders was highlighted by a comment made during the G8 Summit by a Japanese government source who told Reuters that “there is a limit to what governments can do now” to stem the rising prices. The fact that this bland and exceedingly obvious statement was made on “condition of anonymity” speaks to the insecurity of world leaders who are desperate to pass themselves off as superheroes.

Michael Schauerte

Cooking the Books: Energy wars (2022)

The Cooking the Books column from the October 2022 issue of the Socialist Standard

In September the G7, the group of the world’s leading Western capitalist economies (US, Canada, France, Germany, Italy, Japan and Britain), agreed to try to impose a cap on the price of Russian oil. The level has not yet been fixed but is likely to be somewhere near to the cost of production plus a mark-up for profits. Russia would still have an incentive to export oil but would only make a ‘normal’ profit rather than the super-profits that they and others (such as Saudi Arabia and the Gulf States) get because the cost of extracting oil there is less than the cost in the other parts of the world whose higher cost of production sets the world price.

What the West seems to want is to impose as the price of Russian oil is what Marx in Volume III of Capital called its ‘production price’, ie, its cost of production plus the average profit on the capital invested in its production. Over a fifth of Volume III is devoted to a discussion of this in relation to ground-rent, the money paid to a landlord for the use of their land to grow crops or raise livestock but also to extract materials.

David Ricardo is credited with being the first to explain why different areas of land yielded a different rent. The price of what it was used to produce was fixed by what Marx later called the production price on the least fertile land producing it. Those farming more fertile land, where the cost of production was correspondingly less, still sold their produce at the higher price and so made super-profits but which, unless they owned the land themselves, were taken by the landowner as ground-rent.

Marx accepted this theory. Ricardo explained how it applied to mines:

“[T]here are mines of various qualities, affording very different results, with equal quantities of labour. The metal produced from the poorest mine that is worked, must at least have an exchangeable value, not only sufficient to procure all the clothes, food, and other necessaries consumed by those employed in working it, and bringing the produce to market, but also to afford the common and ordinary profits to him who advances the stock necessary to carry on the undertaking. The return for capital from the poorest mine paying no rent, would regulate the rent of all the other more productive mines. This mine is supposed to yield the usual profits of stock. All that the other mines produce more than this, will necessarily be paid to the owners for rent” (Principles of Political Economy and Taxation, ch. 3).

This applies today to the extraction of oil, its price being fixed by the production price in the least productive oilfield in use.

What the G7 are trying to do is to prevent Russia from benefitting from having a lower cost of production than in the oilfields that set the price of oil and so reaping a super-profit. This is to be done by forcing Russia to sell its oil at a price nearer to its price of production. It’s a clever scheme – to be enforced by refusing to insure tankers carrying Russian oil bought above this price – but it may be too clever. Russia has already announced that it will refuse to sell oil to any country that goes along with the G7 plan. And it can’t be a coincidence that the day after the plan was announced Russia suspended the direct supply of gas to Germany.

While the capitalist West and capitalist Russia battle it out, economically and militarily, as to whose sphere of influence Ukraine should be in, workers everywhere are suffering the consequences in terms of higher and higher energy bills reducing their standard of living. But it’s a pain both sides have no qualms about inflicting.

Sting in the Tail: Institute of Dementia (1994)

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

Institute of dementia

One of the influences on the thinking of Downing Street is the Adam Smith Institute. This organization is the so-called “think-tank" of the Tory Party. Their latest foray into the brave new world we can all expect under a Tory government is typical of the Tory Utopia they have in mind for all of us.

Britain, which at present is covered by five percent of forest, will have a forest covering 65 percent of the total land mass. Mines, factories and farmland will be given over to forests with wolves and bears.

Presumably these creatures will be shot, trapped and maimed by champagne-swilling landlords assisted by forelock-tugging peasantry.

"Private security firms will patrol villages and housing estates and surveillance cameras will cover the bulk of Britain. " (Guardian, 5 April)

In the Tory Utopia there will be major breakthroughs, in a privately-run Health Maintenance Organization, in dealing with dementia, cancer and AIDS.

We can only hope that scientists, seeking a cure for dementia, start their research in that dementia-ridden pocket of human stupidity called the Adam Smith Institute.

Land of hope and tory

A Tory Party Conference is a festival of unreality. The stirring chords of Land of Hope and Glory are struck as the leader emerges to thunderous applause.

The themes are loyalty, nationalism, toughness and realism . . . but most of all loyalty. The leader is everything. Mindless devotion . . . and loyalty are pledged. In reality it is all an empty sham. John Major is now finding out just how empty.

Take the case of Sir Nicholas Fairbairn, the former Solicitor General for Scotland, bon viveur and wearer of tartan trews, tartan waistcoats and for all we know tartan boxer shorts.

Speaking on BBC Scotland (4 April) he called his leader a "ventriloquist’s dummy" and a "softie".

Not that Major’s rivals fared much better. "I don’t like Clarke and I don’t trust Heseltine — I   think he’s a spiv and Clarke’s a bounder."

In the nasty world of capitalist politics, loyalty is a conference illusion. These horrible job-hunters are all falling out as they try to get their snouts deeper into the Westminster trough of power and wealth.

Another ego trip

The Detroit summit involving the seven leading industrial nations (G7) set about the impossible task of solving capitalism’s unemployment problem.

Needless to say, the attending finance ministers were less than unanimous about what should be done. America wanted Germany to relax its monetary policy in the hope that this would get economic growth moving again, but this was angrily rejected: Britain was all for a free-market approach but Japan warned of the social consequences of this, and so on.

However, numerous "Think-tanks" were not slow to offer their solution. These included the inevitable work-sharing, the spread of "wise taxes" and one which really boiled down to the jobless taking in one another’s washing.

But the summit did succeed in achieving its primary aim — to provide the opportunity for some political peacocks to strut their stuff on the world stage, and they enjoyed it so much that they agreed — and here they were unanimous to do it all over again in July in sunny Italee!

Go for the big one

 

"Paying For Our Crimes" was the title of an article by Joan Bakewell (Guardian, 21 March) in which she highlighted various groups throughout the world who want restitution for the wrongs they have suffered.

There are those British prisoners of the Japanese during World War Two who want compensation for their ordeal; American indians and Australian aborigines who demand the return of lands stolen by white settlers, and an African organization which wants an apology for slavery along with the cancellation of all Third World debt on the grounds that "We don’t owe them anything. They owe us"!

All of these claimants, or at least their ancestors, have been treated abominably, but so has the world’s working class. They have been robbed, murdered and degraded by capitalism for two hundred years but socialists do not encourage them to ask for compensation. Instead, we urge them to forget about crumbs from the table of their masters’ banquets and to take the whole feast for themselves.

Benn’s glad tidings

That big lead over the Tories in the opinion polls may seem to point to a rosy future for the Labour Party, but an article by Tony Benn in Tribune (8 April) paints a different picture.He says that the party is in an alarming" position in the constituencies:

"Party membership is down . . . young people seem uninterested in joining . . . and our historic link with the unions has been weakened. "

If this last bit means that trade unions are at last putting the interests of their members before those of Labour politicians then it is good news. Even better is that any youngsters who dislike capitalism are less likely to have an entanglement with Labour standing between them and a consideration of the case for socialism.

Levelling-up

"Socialists believe in levelling down while Conservatives believe in levelling-up" has been the oft-repeated claim of trie Tories down the years.

Of course, by "socialists" they mean the Labour Party, but how valid is that claim? One feature of the past 13 years of Tory rule has been the huge pay-outs that top business people award one another. The latest example is the £1.4 million Barclay’s Bank paid to the head of its broking business while offering staff in its branches a two percent pay rise. Is this levelling-up?

Then there is the Tories’ insistence that if British capitalism is to be competitive workers here will have to accept the low level of wages and conditions prevalent in Asia and eastern Europe, and they actually boast to prospective overseas investors about how this is already happening.

If “levelling-up" means bringing the wages and conditions of workers here more into line with those of the world’s sweatshops then the Tories are living up to their claim.

An old tradition

A Glasgow Tory councillor has predicted that Tommy Sheridan, leader of the council’s Militant group will be in the House of Lords thirty years from now: 

"There was nervous laughter from the Labour benches when Councillor Young reminded them: "We've seen it all before and we will see it again". Presumably, the Militant leader would be re-absorbed into the mainstream of Labour ranks on his journey to the right. And respectability. ’ (The Glaswegian, 7 March)

Well, perhaps, but that Tory councillor does have history on his side. Bigger rebels than Sheridan, "Red Clydesiders" such as Manny Shinwell and Davie Kirkwood, ended up in ermine, so maybe some of that nervous laughter was coming from Sheridan and his Militant cohorts.

What a nerve!

Several orthodox Jews jeered the Dalai Lama during a visit to the Wailing Wall in Jerusalem yesterday, calling the Tibetan spiritual leader crazy. "You look like an intelligent man, but you're stupid, fleeing from reality," shouted one worshipper.

No, this wasn’t one of the media’s April Fool jokes because it appeared in the press ten days earlier, but shouldn’t religious people be the last ones to accuse anyone else of ‘fleeing from reality"?

Letters: Extreme views (2005)

Letters to the Editors from the September 2005 issue of the Socialist Standard

Extreme views

Dear Editors

I was not impressed with your card handed to me on the march in Edinburgh last month [July].  Your connection Make Poverty History with Capitalism was in very bad taste and I consider it a disgrace. I am aware of the shortcomings of the present trading system and will continue to campaign for the aims of the Trade Justice Movement of which I am a member locally. However I do not want to be associated with your extreme views or the way you carry out your activities.

Phil Barlow, 

Nottingham

World problems

Dear Editors,

Many problems are faced today most especially in economical and political spheres of life. For instance, wars, workers’ strikes, corruption, riots, and many others. These most happen in developing countries and some few developed countries and the influence comes direct from world powers.

The selfish ideas of the world powers, being hidden by these powers, are the root cause of the world atrocities in pretext that they are fighting terrorism, ending colonialism, fighting dictatorship among other decisive, political and economic selfish ideas.

It is a great challenge for all socialists to pronounce and advocate for socialist principles without fear or frustration from selfish politicians so that we come to save the world from the ongoing atrocities escalating from selfishness of those who only look for ways of getting richer and richer at the expense of the majority.

Joseph Balikuddembe, 

Kampala, Uganda.

Canned laughter

Dear Editors,

Some people, including some socialists, used to get quite irritated about the way that recorded laughter was inserted into, first radio, then television, shows that went under the generic heading of comedy. But we have slowly got used to this feature of modern life in capitalist society. It is almost universal now. It is applied to quality comedy and poor comedy; those with real audiences and those with no possibility of an audience at all in the location of the action. Like antidepressant drugs, canned laughter is prescribed for nearly everybody. Because, let’s face it, much of the time, if you didn’t laugh, you’d cry.

Many aspects of living in this increasingly dysfunctional world society are moving in the same direction. In Japan, as well as North America and Europe shopping has become the diversionary avenue of seeking feel-good factors. Clothes, to make us feel good about our appearance; various types of car, to make us comfortable about our status among our neighbours; health foods, to make us feel healthy; exotic foods to make us feel opulent; gyms, to make us feel confident or even superior about our physical fitness and sexual attractiveness. Houses, gardens, kitchens, etc., etc. Our electronic gadgetry, from mobile phones and digital cameras to MP3 recorders and players, offer us more power to do things we hadn’t even thought of and probably will never try.

The planet is being pillaged, plundered and polluted to make commodities for us to buy, partly because we need them and capital must have the flow of profit, but increasingly in the effort to obliterate our basic hunger for freedom, the one thing we cannot have. Like canned laughter, the temporary lift we get from commodity gratification is artificial, false. It hides a bad joke.

Ron Cook, 

West Bromwich

Socialism, scientific and humanistic

Dear Editors

Since January the Pathfinders page has been a valuable addition to the Socialist Standard.  In discussing socialism it recognises that we need to be consciously working for something, not simply against something. In July I argued against the idea that voting and democracy would be significantly advanced by means of new technology.  After reading the August Pathfinders I realise that my questioning of new technology developed within capitalism goes deeper than that.  It is a matter of some interpretations of scientific socialism focusing on things and humanistic socialism (as I see it) focusing on people.  Don’t get me wrong – I’m not against scientific socialism.  I just think that Pathfinders puts too much emphasis on things and not enough on people.

“If capitalism fed, clothed and looked after its people in peace and without coercion, socialism would not be disproved but it would be unnecessary.” There is no evidence that capitalism can be changed to adequately feed and clothe all the world’s population without coercion.   So the idea that it can do these things remains a doubtful hypothesis.  But even if capitalism could change its spots in the ways outlined, would that be the end of the socialist campaign for system change?  I think not.  Socialism is not about changes to capitalism – it is about replacing capitalism with another system.  It is about a world society based on giving and taking, not on buying and selling.

“. . . the ability to micro-produce with minimal waste and distribution costs remains one of the most exciting innovations socialist society could possibly inherit.” Pathfinders’ fire is obviously lit by socialist methods of producing and distributing things.  My fire is lit by the prospect of socialist relations between people (which will, of course, lead to changes in production, distribution, and much else).

Stan Parker,

London N3

Making poverty history or helping capitalists exploit Africa? (2005)

From the July 2005 issue of the Socialist Standard

Who is the G8? In a nutshell, it is a clique of the 8 leading industrial States who have appointed themselves rulers of the world. The G8 leaders are actually the executive of the capitalist class of their respective countries and are the staunchest defenders of neoliberal corporate globalisation, the custodians of privilege and corporate power and the guardians of world capitalism. They help rule the world and maintain the playing field for profit-hungry western corporations. Together they have the power to dictate who eats and who starves, who lives and who dies, to declare war regardless of the wishes of the people who elected them. Their policies have resulted in global poverty and environmental destruction. They are meeting in Edinburgh this July to decide on which international strategies they can commonly pursue, allegedly in the interests of the people of the word and the natural environment.

Lined up against the G8 leaders this July in Edinburgh is the campaign group Make Poverty History, a loose coalition of  some 450 NGOs, unions and charitable organisations, united in the demand for fairer trading conditions for developing States, debt cancellation and increased and improved aid.

Oxfam’s role

By far the biggest development organisation within Make Poverty History is Oxfam, which has been widely accused of pandering to the whims of New Labour and propagating objectives which are identical to those of a Blair government frantic, in the face of the Iraq fiasco, to implement a foreign policy that campaign movements can stomach. Indeed, there are individuals and groups associated with Make Poverty History who identify with the objectives of Messrs Blair and Brown. The celebrity Bono, for instance, referred to the smiling duo at the last Labour Party conference as the “Lennon and McCartney” of poverty reduction.

Loud-mouthed celebrity Bob Geldof, a week after Bono’s remark, revealed he was backing Tony Blair and Gordon Brown’s attempts to deliver development to Africa because of their Christian values. Geldof can well support New Labour and obsessively promote the agenda of the MPH campaign, but you have to begin asking questions when even Blair has been spotted wearing a white Make Poverty History wristband.

The praise is of course reciprocal. On 3 June, Gordon Brown expressed his support for Sir Bob the Gob’s Live8 concerts and encouraged demonstrations at the G8 summit, as long as they take the form of a “peaceful march”. Any other government would have feared a march by one million demonstrators, but not New Labour. Blair and Brown are so happy with the convergence of their own overseas agenda and the demands of the Make Poverty History campaign that they rather see a million person march as being a rally in support of Labour Party policies.

Chancellor Gordon Brown is nowadays advised on international development by former Oxfam trustee and former director at the US bank UBS Warburg, Shriti Vandera, and Blair has the backing of Justin Forsyth – one time Director of Policy and Campaigns at Oxfam – on the Downing Street Policy Unit. Said the latter back in 2002: “When you speak to Tony Blair and Gordon Brown, they really understand [the] issues. They are easily some of the best leaders when it comes to talking about development and dismantling subsidy, and they are making the right arguments time and again.”

Of course there are some within Making Poverty History that see through the scam. War on Want is dismayed at the way New Labour’s overseas policies are winning widespread acceptance and undermining their own campaigning efforts. And neither is Christian Aid happy at Oxfam’s over-cosy, less critical relationship with the government. Friends of the Earth likewise believe there are disadvantages to the privileged position Oxfam enjoys with the government, believing the demands of campaign movements are becoming diluted and generalised.

They have a point. Blair sees himself as somewhat spearheading the MPH campaign at Gleneagles and queries why the MPH are heading for Edinburgh when he speaks their jargon. In Dundee, in March of this year, he commented: “It would be very odd if people came to protest against this G8, as we’re focusing on poverty in Africa and climate change. I don’t quite know what they’ll be protesting against.” 

Making Poverty History has been so linked to the government as to be rendered toothless. When the main players in the coalition demanded a meeting with the government, Whitehall couldn’t accede fast enough. So closely have Blair and Brown been identified with the objectives of the coalition that they have been criticised by other EU member states for softening their pro-liberalisation stance.

And who is it that rallied to the defence of the government to counter the claims of Blair’s cynics in Europe? None other that Oxfam who issued a statement criticising Blair’s detractors for trying to hamper Britain’s attempt to help the world’s poor. It is no secret that Oxfam has informed other developmental groups linked to Make Poverty History that it is important not to be perceived as being confrontational with the government now that Blair and Brown are singing from the same hymn sheet as them.

Opening up Africa

Meanwhile, John Hilary, Director of Campaigns and Policy at War on Want, says that the British contingent at the WTO told him to “get real. The development agenda does not go very far. We have to be pro-business and pro-trade” (New Statesman, 30 May).

Hilary appears to have been well-informed when one considers the agenda emerging from the much praised Commission for Africa Report. This report, which was published on 11 March is the showpiece of the Blair government’s strategy for the G8. responding to its launch, the BBC, (http://news.bbc.co.uk/1/hi/world/africa/4337239.stm) listed eight areas necessitating action by the West, inclusive of doubling or trebling aid, cancelling debt, spending more on HIV/AIDS, financing African universities and the removal of trade barriers to African exports in the West. (The report can be downloaded in full or in sections at the following link.)

There is much in the report to whet the appetite of the anti-poverty campaigner. But, you need only read the precis of the various chapters to suss out what is in fact the real schema.  In chapter 7, for instance, objectives for fiscal growth in Africa are alleged to be possible “only if the obstacles of+ a discouraging investment climate are overcome”. And it proposes the “public and private sector working together to identify the obstacles to a favourable investment climate”. How else can this be interpreted other than in suggesting more liberalisation and privatisation and more opportunities for western corporations to exploit African resources and labour?

The summary of Chapter 8 says: “Investments in infrastructure and the enabling climate for the private sector are at the top of the agenda.” Is this not the government spearheading neoliberal reform in Africa on behalf of big business?

Business Action for Africa has been in cahoots with the Commission for Africa. This coalition of 250 business representatives met with the Commission in February following formal dialogue between the Commission and the private sector on the continents of Africa, North America and Europe – a meeting arranged via the Business Contact Group, itself set up to provide private sector input to the Commission for Africa, and the result of a meeting co-chaired chaired by Gordon Brown and Reuter’s chairman, Niall Fitzgerald.

Referring to the Business Contact Group, Corporate Watch observed:

  “Its 16 or so corporate members read like a roll call of the most exploitative and despised companies currently operating on the continent including Anglo American, Shell, De Beers, Rio Tinto and…Diageo, who also own the Gleneagles hotel where the G8 Summit will take place. Its programme was managed by Shell International’s Senior Business Development Advisor for Africa. Also managing the Contact Group is the Commonwealth Business Council (CBC). The Corporate Council on Africa and the Canadian Council on Africa also gave input, thus allowing oil corporations, ExxonMobil and ChevronTexaco, a say.” (http://www.corporatewatch.org.uk/?lid=1535)

Dave Miller, writing for Znet in an article entitled Spinning the G8, commented:

  “The corporations involved can barely contain their excitement. The ‘outlook’ of the business community is a ‘positive one’ says one of the CFA commissioners.  ‘It believes Africa is the next frontier for investment’. James Smith, the UK chair of Shell, which co-hosted the meeting, noted that progress ‘requires that the private sector has a bigger role’. The chair of the Commonwealth Business Council, the business lobby group co-hosting the meeting, read out the concluding statement. Dr Mohan Kaul affirmed that ‘getting the conditions right for doing business in Africa is the biggest single investment for the future well-being of its citizens’. A ‘vibrant and successful private sector+ is required’ he noted. (http://www.zmag.org/content/showarticle.cfm?ItemID=7852)

EU states may well be critical of Britain’s new pro-Africa stance as being influenced by celebrities and NGOs, but the truth is that affiliates to Make Poverty History, in applauding Brown and Blair,  are the unwitting accomplices  of a government which forms the vanguard of the latest corporate drive to open up markets throughout the developing world.

World-wide reaction

Increasingly, in the last decade, there has been a worldwide reaction against neoliberal globalisation, corporate power and the injustices associated with modern-day capitalism. Everywhere where the world’s ruling elite have assembled to decide their next step they have been met with protests and demonstrations that have attracted hundreds of thousands. Demonstrations at Seattle, Gothenburg, Cologne, Evian, Birmingham, Prague, Genoa and Quebec, have stimulated debate on the nature of modern day capitalism. Thousands of articles have been written on the subject and hundreds of books have been published that explore the aims, objectives and the alternatives offered by the anti-globalisation movement.

What is now clear is that the anti-globalisation/pro-development movement, however well-meaning, does not seek to replace capitalism with any real alternative social system. At best it attracts a myriad of groups, all pursuing their own reformist agenda. Some call for greater corporate responsibility. Some demand the restructuring of international institutions like the IMF, World Bank and the WTO. Others call for the expansion of democracy and fairer trading conditions, debt cancellation and more aid. All, however, fail to address the root cause of the problems of capitalism and promote the damnable system they are critical of by applauding any meagre reform.

One thing is certain: no amount of high table reform is going to legislate poverty out of existence as the MHP coalition believes. Capitalism cannot be reformed in the interests of the world’s suffering billions, because reform does not address the basic contradiction between profit and need. Moreover, reform can be so packaged and camouflaged as to be acceptable to protestors whilst leaving their real grievances unaddressed. The world’s leaders simply cannot be depended upon to implement real change because they can only ever act as the executive of corporate capitalism.

The protesters at the G8 might think they are united in common cause, but in truth they are only united in supporting capitalism and in their mistaken belief that poverty can be legislated out of existence, They have no blueprint for change other than the three demands put forward by the Make Poverty History campaign – Fair trade, more aid and debt cancellation. – and this is about as radical as it gets. In mirroring in their objectives the overseas goals of Blair and Brown they are anything but the modern day revolutionaries they claim to be.

It is now no utopian fantasy – but a practical, revolutionary proposition – to suggest we can live in a world without waste or want or war, in which each person has free access to the benefits of civilisation. That much is assured. We certainly have the science, the technology and the know-how. All that is missing is the will – the global desire for change that can make that next great historical advance possible; a belief in ourselves as masters of our own destiny; a belief that it is possible to free production from the artificial constraints of profit and to fashion a world in our own interests. And how soon this happens depends upon us all – each and every one of us.

John Bissett

Open letter to some anti-capitalists (2005)

From the July 2005 issue of the Socialist Standard

MAKEYOURMARK are part of the Dissent! Network of resistance against the G8.  The group adheres to the Hallmarks of Peoples’ Global Action which call for a rejection of capitalism through civil disobedience and non-violent direct action.

Dear Friends,

I attended your meeting in Carlisle last night.  It was good that so many people had turned out.  I have sympathy with your organisation’s objectives, but a few comments about your strategy.

I thought much of your analysis of capitalism as a system that can only put profit before people was correct, as well as the relation of capitalism to the issues of AIDS, water availability and poverty in Africa and South America.  However, I have problems with the idea of nations as victims of capitalism.  Less developed nations are the losers in competition against large industrialised nations and the majority of people in those countries suffer because of it, but the state in either type of nation represents the dominant economic interests.  Indigenous capitalists in the less developed nations are fighting for themselves, for domination of local resources against multinational corporations – both of which wish to continue the exploitation of people and natural resources.  The corollary is that you are supporting small nations against big nations, small capitalists against big capitalists, Robert Mugabe or King Mswati III against George Bush or Silvio Berlusconi for example – and in that I fail to see a rejection of capitalism. 

You made an excellent point in your presentation about the man-made laws of capitalism being assumed to be natural laws and therefore unchangeable.  I believe that this point also applies to the nation and inseparably the state which are also man-made constructs that have arisen to their present form with the need to manage the conflicting interests within capitalism.  In short, the state is part of capitalism not separate from it.  Which leads to another point in your presentation where you considered that state-owned industries are worth defending.  The experience of state-run industries in this country and elsewhere is no utopia, in fact in some cases it has been a disaster.  State-owned industries mostly don’t have much difference in character to private industries, they consist of capital put forward by the state which wage or salary workers operate and the goods or services they produce are either sold or rationed out by bureaucrats.  Neither for the consumer, as goods or services are still allocated according to ability-to-pay or by handout, or the producer, still embroiled in the labour-capital conflict, is the state ownership of capital a rejection of capitalism.

In one of your slides you asked whether the G8 should be reformed or abolished, I don’t think either will ‘make poverty history’ or allow people to come before profit, nor will ‘dropping the debt’ or rearranging trade rules.  Capitalism existed before the G8 and it would exist without the G8.  You’ve recognised that asking for reforms won’t work, but I don’t really see how making your own reforms through civil disobedience and direct action will change the fundamental social relations of capitalism.  It is capitalism – the system of minority ownership of the means of producing and distributing goods and services and allocation according to ability to pay – that causes poverty and war, breeds racism and alienation, and hampers social organisation.  If you were to abolish the G8 then another organisation could take its place or they could meet in secret – back to square one.  I feel what is important is not challenging aspects of capitalism and trying to change them, but challenging the system as whole.  

One of the slogans you displayed in the meeting room was about a small number of committed people making a difference.  However well intentioned, I don’t believe a minority of society can run society in the interests of the majority.  The goal of those who reject capitalism should be to break the consensus that supports capitalism and organize politically – democratically – to a replace private ownership of the means of producing goods and services with common ownership, production for profit with production for need and ‘can’t pay, can’t have’ with free access – that is to replace capitalism with socialism.   I think that a society run for the majority must be made by the majority and the shortest distance between capitalism and an alternative society is a straight line.  Let’s campaign for the abolition of capitalism and not misdirect our energies in trying to humanise capitalism, which can only – as you recognise – put profit before people.

I’m hoping to get to Edinburgh for the G8 protest but not to beg for, or batter, a nicer kind of capitalism out of the G8 leaders. I’ll be trying to get socialist ideas across to all those there who recognise that the world is in a mess and are willing to do something about it.  I hope I’ll see you there, maybe I’ll give you a leaflet or a copy of the Socialist Standard.

Yours for world socialism

Piers Hobson

Letters: Work within capitalism? (2006)

Letters to the Editors from the April 2006 issue of the Socialist Standard

Work within capitalism?

Dear Editors

The article about Fair Trade (Socialist Standard, February) was certainly very interesting and the author puts forward a strong case, I haven’t got the time to outline counter-arguments to all the points but I can give an overview of what we are calling for. As a development charity we are working to improve people’s lives. You may disagree with the present socio-economic system but there is no current alternative, therefore, we think it is better to try and work within this system rather then just point out the difficulties and decide that nothing can be done. It also doesn’t take in to account that not all benefits for developed nations are so overtly determined by economics. For instance, what about the problems caused by mass-migration due to poverty? Surely rich nations have a vested interest in helping poorer nations to try and stem this flow. Our position is quite clear. We want developed nations to stop putting tariffs on imports from developing nations, stop using protectionism that leads to dumping and allow developing nations to protect their fledgling industries. I disagree with the article, as this would make a difference to the lives of some of the poorest. They would be able to sell their produce domestically and eventually be able to export it. To read about our ideas on Fair Trade please follow this link: http://www.oxfam.org.uk/what_we_do/fairtrade/index.htm

I think 2005 was a landmark year in the struggle against poverty. Firstly, there was the agreement to write off debt at the G8, something that the author can’t account for using his/her premises, Gordon Brown also reconfirmed the pledge to raise aid levels to 0.7 percent GDP. Added to this is the fact that due to the Global Call to Action against Poverty Campaign (GCAP) more people all over the world protested to end poverty then has ever been seen before. If we can keep the pressure on in this way we can force our governments to change their actions. Governments aren’t just led by economic determinism, they are also led by public pressure. Therefore, while there is still a lot to be done we think that there have already been successes and that we need to keep up the pressure.

Ian Sullivan, 

Supporter Relations, Oxfam

Reply:

We have never denied that campaigning charities like Oxfam can, and do, help a limited number of people. Our case is that they will never solve the problem they have chosen to concentrate on. We note that you confirm that Oxfam does have a reformist approach, as you claim that there is no current alternative to “the present socio-economic system” (capitalism) and so pursue a policy of working within that system to try to reform it. We, on the other hand, think in terms of action to replace capitalism by a system in which begging bowls can be assigned to the museum of antiquities because, with common ownership and production for use, people’s basic needs would be able to be met as a matter of course. – Editors.

Feeling Lucky

Dear Editors

My thanks for pointing out that www.worldmapper.org is worth a look (March Socialist Standard) .

Readers of the Socialist Standard may think they know a lot of the answers and even more of the problems, but look worldwide and inequalities are somewhat more stark than between the two social classes you refer to.  Are you feeling lucky? Then here’s an old thought game. You are having a child and you are concerned that your child might not to live to see the end of its first year of life. You can choose when and where you give birth and your class. You have three options:

Your husband is a very rich factory owner living a hundred years ago in England, you have servants, a huge home and gardens (in say 1906).  You are a middle class women in Pakistan living in Islamabad in 2006.  You are a working class woman living in Yorkshire in England in 2006. The respective chances of your child dying before their first birthday would be roughly: 1 in 10, 1 in 30 and 1 in 100. You could improve those chances further to 1 in 300 and almost 1 in 1000 by being middle class now in Yorkshire, or being that and moving to Iceland.

What I’m trying to point out is that the importance of class is contingent on both history and geography – and a woman giving birth in the world today cannot choose her history, or geography or class. You claim that “So, if ‘where you are born’ determines how your life will pan out, that has to be seen as a matter of class, not of geography”. I think that if it was quite as easy as that then there would no longer be a problem. It is a matter of class and geography and history (and sex, race and more) as to how you are treated, what your chances are and how your life will pan out or whether you will live through your first year to have a life at all. None of these are circumstances of your own making. In Britain – increasingly, geography is helping make class – but that is another story altogether. 

Danny Dorling, 

Sheffield.

Reply: 
We have no quarrel with the idea that a person’s date and place of birth affects their chances in life. And we assume you wouldn’t deny that class enters into the picture too. Our article dealt not with infant mortality but with the kind of job people are likely to have. There is no middle class (they’re part of the working class). And it’s the class people are born into (working class or capitalist) that determines whether they will need to worry about working for a living. We appeal to workers on the basis of their class interests, not the question of being from Yorkshire or Iceland. Not everyone can move to Iceland, but we can get rid of class divisions. — Editors.