The Bilderberg Group (2002)

From the July 2002 issue of the Socialist Standard

At the beginning of June the Bilderberg Group met for its 2002 conference in Chantilly, Virginia, USA. They met in secret, as always – but are they really ‘the secret rulers of the world’, as many contend?

The activities and meetings of the Bilderberg Group, or Bilderbergers as they have been called, are shrouded in mystery, not unlike the rituals of Masonic lodges. The lengths to which the organisers have gone to keep the press and public away, and their deliberations secret, are even by capitalist standards astounding. Very little has been reported even in the so-called quality newspapers. The political left has shown little real interest; indeed, about the only people interested in the Bilderbergers have been the “conspiracy theorists” of the far right, including the magazine The Spotlight in the United States and the journal of the Freedom Association Freedom Today in this country.

Who, then, are the Bilderberg Group, and do they really rule the world as the conspiracists assert?

Hôtel de Bilderberg

The Bilderberg Group takes its name from the Hôtel de Bilderberg in the small Dutch town of Oosterbeekat near Arnhem, owned by Prince Bernhard of the Netherlands, where in May 1954, the first formal meeting or conference was held. while the name has persisted, its meetings are held in different locations and countries.

The initiative for the first meeting came from Jozef Ritinger, a Polish émigré said to be “a compulsive intriguer and behind-the-scenes political wheeler-dealer”, Prince Bernhard and Paul Rijkens, President of the giant Anglo-Dutch corporation, Unilever, following a visit by Prince Bernhard to his friend, Bedell Smith, in America in 1952. Smith put the organisation in the US into the hands of Charles D Jackson, who was President of the Committee for a Free Europe. The first meeting was, however, a European initiative. Young Labour MP Denis Healey was invited to that meeting as convenor of the British delegation, which also included Hugh Gaitskell, Robert Boothy and Sir Colin Gubbins, whose expenses were covered by the British Foreign Office. Prince Bernhard was appointed chairman, a position he held until 1976, when he was forced to resign because of his involvement in the Lockheed bribery scandal. Representing France were Guy Mollet, the “socialist” leader, and Antoine Pinay the right-wing Prime Minister. The Americans included George Ball of Lehman Brothers, David Rockefeller and Dean Rusk, President of the Rockefeller Foundation and, later, US Secretary of State.

The participants at Bilderberg meetings are not elected by governments, corporations or, in fact, anyone. They are selected by a small core of administrators, constituted as a Steering Committee consisting of a permanent chair, European and North American secretaries and a treasurer. Invitations are only sent to “important and generally respected” businessmen, politicians and others, “through their special knowledge or experience”, and their personal contacts and influence in national and international circles.

Essentially, discussion and the names of participants are kept out of the public sphere. In 1967, for example, Cecil King, the then chair of the International Publishing Corporation, and also chair of the Newspaper Proprietors Association, formally requested fellow newspaper proprietors to see that “on no account should any report or even speculation about the content of the (Bilderberg) conferences be printed”. And on both sides of the Atlantic, for many years, they weren’t.

One journalists, Gordon Tether, the “Lombard” columnist of the Financial Times, wrote on 6 May 1975, “If the Bilderberg Group is not a conspiracy of some sort, it is conducted in such a way as to give a remarkably good imitation of one.” In an article he wrote for the paper on 3 March 1976 he returned to the subject of Bilderberg secrecy. It never appeared, and Tether was dismissed from the “Lombard” column August of that year.

In the last year or two, following stories about the Bilderbergers on the internet, the Group has been just a shade less secretive. In late 1999, for the first time in its existence, the minutes of that year’s meeting were leaked (presumably by someone within the Group), and extracts were published in the Big Issue and the whole document was posted on the Internet.

Participants

One of the participants at Bilderberg meetings who has attempted to conceal his attendances is the former Prime Minister, Edward Heath. Asked if he had attended any he replied vaguely that he may have “about 20 years ago”. In fact, US Congressional records reveal that he had attended meetings in 1963, 1964 and 1967 at least.

Asked in 1998 by the Conservative MP, Christopher Gill which members of the Labour government had attended meetings of the Bilderberg Group, Tony Blair replied in a written answer on 16 March 1998, “none”. In fact, Blair, Gordon Brown, George Robertson, Peter Mandelson and the late John Smith had all attended meetings at some time. Indeed, John Smith was said to have been on the Bilderberg Steering Group from 1989 to 1992. Another well-known figure to have attended a Bilderberg meeting, this time in Canada in 1996, and reported in the Toronto Star, was the General Secretary of the British TUC, John Monks.

Most participants, however, for instance at the 45th meeting held near Atlanta, Georgia, in the US in June 1997, appear to have been directors of large companies, corporations and international banks. They included: Conrad Black, the media tycoon, John Brown, chief executive of BP, Maarten A van der Bergh, managing director of Royal Dutch/Shell Group of Companies, Her Majesty the Queen of the Netherlands, William J McDonough, President of the Federal Reserve Bank of New York, Henry Kissinger, David Rockefeller and Colin Powell. Will Hutton, editor of the Observer was also in attendance.

Rulers of the world?

Are the Bilderbergers the rulers of the world? No, not at least in the way the conspiracy theorists of the far right claim. The Bilderberg Group is not an all-embracing totalitarian organisation, imposing a World Order on all of its citizens. But many of its participants are, or may become, powerful nationally and/or internationally and they represent powerful interests even if some, like Peter Mandelson, may have fallen by the wayside.

The Bilderberg Group emerged, in the view of author Stephen Dorrill:

“In an effort to cement western co-operation in the midst of the Cold War . . . It was seen as an opportunity for shapers of opinion among elite groups in Europe to speak with one voice to their counterparts in the United States, who feared that differences over European integration and eastern Europe would create misunderstandings” (MI6: Fifty Years of Special Operations, p508).

The objective was to prevent divergences among the participants of the meetings “by working through consensus rather than any formal procedure”. Yet during the first conference “sparks flew” between the two main groups over the possible threat of “communist infiltration”. Again, during the Suez crisis, in 1956, “sparks flew” between the Europeans and the Americans, when the British and the French almost “came to blows” with the US participants.

Of the Bilderbergers, Mike Peters comments:

“. . . the membership comprises those individuals who would, on most definitions, be regarded as members of the ‘ruling class’ in Western Europe and North America. In particular, the conferences brought together important figures in most of the largest international corporations with leading politicians and prominent intellectuals” (“The Bilderberg Group and the project of European unifications”, Lobster, December 1996).

He adds that virtually all the European institutions we take for granted today were conceived, designed and brought into existence through the agency of people involved in Bilderberg.

Nevertheless, because of the anarchic, competitive and contradictory nature of capitalism in Europe, the United States and worldwide, and the fact that many capitalists and opinion-shapers in such countries as Japan and Russia have not participated in Bilderberg activities, a conflict-free “New World Order”, ruled by the Bilderbergers is practically impossible.

Peter E. Newell

Labour’s futile policy (1991)

From the June 1991 issue of the Socialist Standard

Now that the British economy is in recession, capitalism's economic gurus are busying themselves trying to find a cure. The Labour Party, ever free with its opinions on how governments can run capitalism efficiently and painlessly, has hit on a policy which, they hope, can stimulate investment and growth. Like so many of the cures for capitalism's ills it is not in fact a new policy, and amounts to saying that the present economic downturn has been caused by government policies, primarily with regard to high interest rates.

The Shadow Chancellor, John Smith, argues that investment in manufacturing industry has dipped because firms cannot borrow at an acceptable rate of interest. The government, he says, should cut interest rates as a way of encouraging investment and halting the recession.

This idea has been receiving support from some unexpected quarters. For instance, Sir Alan Walters, formerly chief economic adviser to Thatcher, recently wrote:

Interest rates should have been brought down long ago from the 15 per cent year-long high to 11 per cent or less. And, if we bring interest rates down within a few weeks, I suspect that we can still avoid a savage slump. (London Evening Standard, 22 February).

This view that banks have been charging a rate of interest that is not “acceptable" was put by the Labour Party during the slump which started in 1929. Similarly, a major reason why Labour nationalised the Bank of England in 1946 was to ensure that governments could intervene to bring down interest rates in a bid to avoid any threatening recession. The argument that governments can smooth out capitalism’s booms and slumps via manipulation of interest rates is as erroneous now as it was then.

The anarchy of production inherent to the capitalist system ensures that periods of prosperity and boom are not everlasting and that a slump is always somewhere around the corner. In any period of boom some industries will inevitably over-expand their production in relation to market demand and have to curtail output and lay off workers as a consequence. This has a knock-on effect for other sectors of industry, resulting in falling output and increasing unemployment for the economy as a whole.

Supply and demand

It is not the ease that high interest rates come along and turn a booming economy into a stagnant one by discouraging investment when further growth and expansion is still possible. Rather it is the other way round: high interest rates are not the cause of a capitalist crisis of over-expansion and overproduction (in relation to the market), but arc a symptom of its initial stages.

The rate of interest charged by banks is determined by competition between buyers of capital (the borrowers) and sellers of capital (the lenders). When faced with the onset of an economic crisis many capitalist enterprises will be prepared to borrow money capital at higher rates of interest just so that they can meet their obligations and stay in business, so pushing the rate up. At other times the situation is different, as Marx explained in Capital:

If we consider the turnover cycles in which modern industry moves—inactivity, growing animation, prosperity, overproduction. crash, stagnation, inactivity, etc . . . —we find that a low rate of interest corresponds to periods of prosperity or high profit, a rise in interest comes between prosperity and its collapse, while maximum interest up to extreme usury corresponds to a period of crisis. (Vol 3. Penguin edition, page 482).

Interest rates are not arbitrarily fixed on the whim of governments: they reflect the market conditions affecting money capital

A complicating factor today which was absent in Marx's time is that interest rates are now permanently higher than they would otherwise be because of the continuing government policy of printing an excess issue of inconvertible (that is. not backed by gold) paper currency. This inflationary policy leads to constantly rising prices. With interest rates being the price of borrowing money capital, these too are affected. High interest rates are needed by lenders to protect their assets, which would otherwise be eroded year after year by inflation. Lenders have to be concerned with the return they get after rising prices are taken into account: the so-called “real" rate of interest (the actual rate charged less the rate of price increases).

Clutching at straws

Banks, like other capitalist enterprises, are in the business of making a profit. They do this by paying depositors a rate of interest to attract capital in, and then by lending it out again to borrowers at a higher rate of interest. A major cut in interest rates would mean a fall in deposits as lenders and savers were discouraged by lower returns on their investments—so restricting the amount that banks can lend out to industry and others (banks can only lend out what has been deposited with them and cannot “create credit with the stroke of a pen" as many of capitalism's economists seem to think). Such a cut in interest rates at the present time would be likely to adversely effect the already reduced profitability of the banking sector. Lloyds Bank has already cut 5,000 jobs in the last 18 months, with the other three major British banks in a similar situation. The Guardian (26 February) has reported that Lloyds expects 50,000 jobs to be lost soon in the financial services sector as a whole.

In any case, any attempt to finance industrial capital at the expense of the banks overlooks one crucially important factor. If cheaper loans are provided for industry this doesn't automatically mean they will be invested in order to expand production. The rationale behind capitalist production is the expectation of profit, and if market conditions dictate that commodities cannot be sold at a profit, then firms will not employ more workers and expand production The whole idea that large-scale cuts in interest rates can, as if by magic, turn a stagnant economy into a booming one is a myth. It is another example of reformist politicians clutching at straws.

The present high interest rates are a product of both the continuing process of inflation. and of the onset of the recession, and will eventually fall of their own accord as the recession continues. Any attempt to manipulate interest rates (or other prices) so as to control the operation of the capitalist economy is entirely futile and can only represent another doomed policy initiative to ameliorate a social system that fails to match the high hopes of its politicians with monotonous regularity.

Dave Perrin

Only sheep need leaders (1993)

From the April 1993 issue of the Socialist Standard

Cartoon by the regular Socialist Standard cartoonist, George Meddemmen.

Caught In The Act: Breakdown (1989)

The Caught In The Act Column from the December 1989 issue of the Socialist Standard

Breakdown
When he was a Labour MP Leo Abse was one of the more —how shall we put it — colourful legislators in the — how do they put it — Most Exclusive Club in The World. He was recently shown that he can still make the news by writing a book which purports to give a psycho-analytical explanation for the style in which Margaret Thatcher runs the government of British capitalism.

According to Abse, if we are to understand Thatcher’s abrasive, overbearing and unyielding personality we must refer to her attitude towards her parents. She has fond memories of her father, a dourly religious grocer and council alderman in Grantham, which is reputed to be among the most boring towns in England. The late Alderman Roberts stood for the small shopkeeper's morality of Value for Money, Hard Work and Thrift, and Know Your Place and Keep To It. He had no ambitions to excite anyone; no Leo Abse was he. However he made a deep impression on Thatcher, who is liable to claim that she runs Britain like a corner shop where, if all goes well, we shall eventually be enjoying the finest English cheese, best butter and broken biscuits. In the meantime she has had a tendency to treat her ministers — Francis Pym, Geoffrey Howe, Douglas Hurd, Nigel Lawson — rather like indolent shop assistants or errand boys in a H.G. Wells novel.

Immaculate Conception
But Thatcher shows a different estimation of her mother, who is so pale a shadow in her life that it is almost as if she never existed. Amateur mind benders and shrinks — not to mention those humiliated ministers — may find some amusement in raking over Thatcher's hangups about her ancestry and, such is the situation today, they may like to consider another explanation. It has been obvious for some time that Thatcher thinks herself as a sort of queen. In the aftermath of Lawson's resignation she defended herself with a defiant quote from the Bible: “I am what I am", which could mean that she has risen above royalty into a deity. At this time of year we hear a lot about a child who was supposed to have been born a long time ago and who had a mother but no biological father; his mother was a virgin. The offspring of that unusual and inexplicable event was — so runs the myth — destined to save the world, although from what, how or when have never been made clear. Thatcher likes to behave as if she too is a saviour, at present of Britain and much of Europe but perhaps soon of the entire world. Perhaps the attempted elimination of her mother from her life springs from a desire to be the outcome of a twentieth-century immaculate conception, biologically even more difficult than the one in the Bible, as a prelude to her saving the world from her version of socialism, Neil Kinnock, state controlled industry and the European Monetary System.

That does not seem so far-fetched when we bear in mind other aspects of Thatcher's behaviour. She is known to detest holidays, to need hardly any sleep and recently dismissed the engineering workers' claim for a 35-hour week with the sneer that she often works that many hours over a two day period and then, if need be, does it again over the next two days. Her relaxation seems to be in harassing her ministers and intruding in the details of the work she has delegated to them; she needs to be prime minister, foreign secretary, chancellor of the exchequer and home secretary, as well as queen and god, combined in one frenzied, immaculately conceived person. So there is some restlessness now among the Tory faithful. Some questions about what was once unthinkable — is it the most promising way of assuring the Conservative Party of victory at the next election — which, in the view of all good Tories, amounts to the same thing?

Electric Treatment
The prime minister’s standing has not been improved by the news that she is kept going by taking electrified baths, a therapy administered by a woman in, of all places, Shepherds Bush. Her sycophants, so long buoyed up in arrogant strength, must be wondering what will be revealed next. Will it be furtive visits to a fortune teller, to map out the course of the economy over the next couple of years by spinning out playing cards? On reflection that may not be such a bad idea, for the fact that a “brilliant, brilliant" chancellor like Lawson is unable to prevent economic crises shows how chaotic capitalism is and how unwise it is to rely on the economists and the “experts”, in the Treasury or elsewhere.

And that may be an explanation for what a growing number of people are beginning to see as mental imbalance in the prime minister. Perhaps she really did convince herself that with a mixture of stubbornness. belligerence and browbeating she could personally reshape capitalism on some misconceived principles learned from a blinkered small shopkeeper. The frustration of failing against the inexorable chaos of this social system may have unhinged her, for failure does not become success by pouring ever more energy into the frustration.

Alcoholic Problem
Any anxiety about the nation's affairs being in the hands of an overwrought leader whose judgement becomes increasingly warped through a masochism of effort should be tempered by the fact that Thatcher is not the first politician to show symptoms of instability. There are many, many other examples but for the moment let us consider the late Lord George Brown, who was also famous for his energy and his unmanageable personality. As consolation for his defeat by Harold Wilson in the contest for the Labour leadership, Brown was later put in charge of the Department of Economic Affairs. He would have preferred to be prime minister but his new job was very important because it involved snatching the British economy from the stagnating grip of the Treasury soothsayers and placing it with the DEA, where the crystal balls were specially designed to block off all images other than those of expansion, growth and prosperity. With manic power Brown laboured to set up the new ministry which was to change the face of British capitalism. But the prophets of the DEA could no more do the impossible than could those at the Treasury and the whole idea was quietly abandoned soon after Brown had been reshuffled into Foreign Secretary.

Brown found some release from the frustrations of his job in an industrious consumption of alcohol (what fun Abse would have, musing on the possibilities of an oral fixation and the quest for a mother substitute in the bottle) and when in his cups he was liable to be, well, indiscreet. Apart from his persistent offences against the niceties of protocol at many a ruling class gala event, he was liable to surges of temper and sulks in which he would resign from office on the assumption that nobody would take any notice. But the day came (actually it was at night, when Labour ministers were in panic session, grappling with yet another financial crisis) when, as Wilson had foretold, one of these resignations stuck and Brown awoke to find himself not only hung over but a back bencher again. At which point he forgot his reputation as a right wing defender of all that is normal to capitalism’s property motivated operation and declared that the left had at fast found a leader. Apart from the embarrassment this caused to left wingers, nobody took him seriously and Brown set into decline, ending his days as a less-than-rapturously-welcomed recruit to the SDP.

Sanity?
Any discussion of the apparent madness of some politicians, whatever form it takes, is useful only in so far as it exposes the fact that the “sane" ones are no more effective. If the Labour Party succeed in their efforts to persuade large numbers of workers that the present crises of British capitalism are largely caused by Thatcher’s rampant character a valuable lesson will be missed. The two men who would probably be in charge of the Treasury and economic affairs if there is another Labour government — John Smith and Gordon Brown — have made it quite clear that they offer no policies which are in any significant way alternative to those of Lawson and Major. Another way of saying this is that Smith and Brown are admitting, even before they are in power over British capitalism, that they will fail to control this social system, just as the Tories have failed and as all governments must fail. As these are two "sane" leaders, it is abundantly clear that the only way out of the mess is to summon the electoral equivalent of the men in the white coats.

Ivan

“The Mail on Sunday” on socialism (1993)

From the April 1993 issue of the Socialist Standard

The 3 January issue of the Mail on Sunday contained an article by John Junor in which he referred to John Smith as "the leader of the Socialist Party”. Quite apart from the fact that we have no leader, we complained to the paper's ombudsman. Mr Chris Rees. We publish below his reply, together with our response:

I think it is fair to say that few, if any, members of the Labour Party would object to being called Socialists and many staunchly uphold the values and aims of Socialism.

There are. obviously, different interpretations of the word “Socialist” but in general terms the Labour Party is seen to be Socialist and of course John Smith is leader of that party.

It was good of you to point out the old Press Council ruling which stated that readers of the (Evening Standard) article would clearly understand the organisation referred to and I think the same logic must apply to the article by Sir John Junor.

Copies of this correspondence will be passed to Sir John and the Managing Editor, Mr Forgham. so that they are aware of your complaint and comments, but beyond that I do not think I can usefully take the matter any further forward.

Yours sincerely

Chris Rees, Ombudsman

Dear Mr Rees.

Having considered your response, as an allegedly independent Ombudsman, the Executive Committee of the Socialist Party is astonished by its political reasoning.

Firstly, we are told that few members of the Labour Party would object to being called Socialists. It is surely the job of a newspaper to describe people as they are, not as they choose to be described. For many decades the only nation in Europe which had a title describing itself as being democratic was the tyrannical, state-capitalist police state, the German Democratic Republic. If your newspaper chose to describe the dictators of the ex-GDR as being democratic on the grounds that most of them would not object to being so called it would be a rather perverse way of defining truth.

Secondly, it is stated that "the Labour Party is seen to be Socialist”. By whom is it so seen? Its leaders rarely describe it as standing for socialism and refuse to use the term in their publicity. Most of its active members criticise it for not being seen to be socialist. So, on what grounds do you maintain your view that it is accurate to describe it in such a way?

Thirdly, and most astonishingly, you state that not only is the Labour Party seen as being socialist, and not only is its membership willing to be so described, but "many staunchly uphold the values and aims of Socialism". This is an independent conclusion of your own which presumes some knowledge of what Socialism means.

Socialists stand for the establishment of a social system in which all goods and services are produced solely for use. not profit. Do "many” Labour members “staunchly uphold” such an aim? If so, when have they ever upheld it? When, for example, have they ever argued the case for moneyless free access to goods and services instead of the existence of the market standing between people and the satisfaction of their needs? Please supply us with a single speech, manifesto (local, national or European) or press release which upholds, “staunchly" or otherwise, that basic socialist aim. We suspect that all that you, or any writers or researchers on your newspaper, will be able to come up with are Labour plans for administering, regulating or reforming the capitalist market. After all, the famous Clause Four of their Constitution commits them to support for the market exchange of commodities.

We shall publish your response to us, and this response to you, in our official journal, The Socialist Standard (which was itself established two years before the Labour Party). We commit ourselves, as democrats, to publishing any response you can give to our questions and. in particular, to letting our readers know what evidence you arc able to cite in support of your contention that many members of the Labour Party do staunchly uphold the aim of Socialism. If you wish to retract the latter contention, on the grounds that there is absolutely no evidence to justify it, we shall be pleased to allow you to set the record straight.

Between the Lines: Charlie's Arm and Lenin's Brain (1990)

The Between the Lines column from the August 1990 issue of the Socialist Standard

Charlie's Arm and Lenin's Brain

Maybe it’s the hot weather: or perhaps capitalism is just driving its supporters barmier than ever. July was an odd month on the box.

It started with headline news on both BBC and ITV. The Prince of Wales has fallen off his horse while playing polo. Second item on the news concerned a soldier being killed in Ireland. Forget that, it was more important to cross over to the reporter outside the hospital where Charlie lay surrounded by doctors and nurses. It was a broken arm — important enough for his wife to go and see him after she had finished watching the opera. First item on the news — all channels — the next day were pictures of the Princess going to see Charlie.

Second item was a report about record waiting lists in NHS hospitals. The newsreader turned from A to B without even a hint of embarrassment. Then, a week later, came another first-item news story: THE QUEEN MOTHER IS NINETY. This was a major scoop, apparently discovered by researchers who realised that after a year of the Queen mother being 89 something like this was bound to happen sooner or later.

BBC1 carried live coverage of moronic crowds gathering outside Clarence House waving Union Jacks and looking dopey. The band played Happy Birthday and then it was time for a documentary on Channel Four about the plight of the homeless. A large part of their plight is that they have not inherited Clarence House: it seems that some people — the overwhelming majority, in fact — can only ever dream of living in the kind of comfort which the parasitic Royals take for granted.

Live BBC coverage of old queens waving at old fools is higher on the media agenda than live coverage of old dossers sleeping in their own piss a mile away from Clarence House.

The nightly coverage of the Communist Party Congress in Russia was done reasonably well on BBC2's Newsnight programme. It is amusing to think that pretty soon all of those detestable academic Kremlin-watchers will be out of a job. There was an item on 8 July which revived the hot-weather theory of July's TV.

In Moscow there is an institute for the study of brains. It is, by all accounts, the most advanced brain research centre in the world. Newsnight's Jeremy Paxman interviewed a professor from the institute who had been occupied on research examining Lenin's brain He said that Lenin had an abnormal brain Its central cortex was bigger than other brains. This, said the straight-faced professor, may well have accounted for Lenin's supreme greatness This, we must presume, was the original mad scientist.

Perhaps he would care to investigate a slither of the Queen Mum's grey matter: or perhaps even a slice of Charlie's broken bone. It would be useful to be told just why the great appear great. We always thought that it is because the people who think their rulers are great are on their knees.


The Two Smiths

The summer madness continued as the bicentenary of the death of Adam Smith was celebrated by a variety of market-worshipping lunatics, some of whom are dangerously close to the reins of state power

Smith wrote The Wealth of Nations in which he contended humans have economic natures which lead them to always act on the basis of self-interest within the market. This was unhistorical nonsense, of course. Humans are not innately self-interested, but are social animals who live through co-operation.

Smith was quite evidently an ideologist for capitalism. Although those who read Smith (particularly his lesser-known tract, The Theory of Moral Sentiments) will discover that his view of human nature was not half as crude as that of the intellectual thugs who try to convince us that the rat-race of capitalism is a reflection of the rat-nature of humans; it is clear that Smith was a political economist whose blinkers enabled him to see no further than the institutions and relationships of buying and selling. As such, socialists are happy to leave Adam Smith to his Tory idolisers. Not so the Labour Party

It seems that they want to claim him as one of their own. Newsnight (8BC2. 16 July. 10.30pm) staged a debate between the Tory Scottish Secretary, Malcolm Rifkind, and Labour's Shadow Chancellor, John Smith. Rifkind argued that Smith A. was the man who understood that humans can only live happily when they are exploiting each other. His was the true party of Adam Smith .Smith J. was having none of this. The Labour Party agreed with Smith A. that the market is necessary, explained Smith J. He also agreed that humans are better off living in a society where there are profits to be gained. But, said Smith J., the market needs to be regulated every so often, and this was the view of old Adam Smith. Rifkind sulkily accused Smith J. of trying to steal Smith A. from the party that had done so much to promote his outlook.

Now, there has been much speculation as to who the real brains were behind the recent market-loving Labour Party Policy Review Was it all Kinnock's work? Surely not, for it only runs to a mere hundred thousand words, and most of them are not adjectives. Was it the product of Peter Mandelson's opinion poll of a thought process? No it was clearly the work of Smith — Adam Smith, the arch-ideologist of the profit system.

Steve Coleman

What the paper said (1990)

From the May 1990 issue of the Socialist Standard

Why on earth aren't there more socialists about? It surely can't be because the daily newspapers (at least, those that are referred to as the quality papers since they are supposed to provide news rather than gossip) don't reveal all about the society we live in, namely capitalism, a class-divided society with the rich and privileged on the one side and the deprived and struggling on the other. This writer happened to have had a little extra time to go thoroughly through a recent issue of The Times.

You can choose any issue you like and you'll nearly always find something along the lines of the following. Casually turn over a page and there's a picture . . .  47, Grosvenor Sq. in Mayfair described as “having a discreet facade" harbouring “an opulent interior. . . hiding one of the most expensive homes in London". In case of visitors or a large family "there are 10 bedrooms, 10 bathrooms, six reception rooms, swimming pool, gym and sauna, all decorated in the style of an Arabian palace, including tented ceilings, huge chandeliers and ornate mouldings picked out in gold." Not bad, eh? and we're told “it's a snip at £15 million".

Well, we heard that the East Germans had a fit of apoplexy when they learnt of the high-style living and larks of Honecker & Co. but dear Erich, even if he could have monopolised half his comrades' privileges, could not have matched this, so how are the East German workers going to react now that they have the blessings of the free market bestowed upon them, and with those in the upper spheres above them enjoying the aforementioned trappings?

Leaving this for the future to work out, one would have thought that the Editor would have been careful about where to place the above item, but no! Right underneath, as if to lend point and contrast, we find a report which tells us that the National Audit Office (a money-saving watchdog committee acting conscientiously on behalf of the capitalist class) is deploring the fact that £11 million is spent "needlessly" because doctors are too liberal in giving out sick notes to workers for benefit claims. That means that if you're not feeling quite yourself one morning and not inclined to join the scrum to get to work and then having to face those dreary hours till knocking off time, and then the bustle of the return journey, think twice before rushing off to the doctor. We're told that even a 1 per cent drop in these untaxed (shame!) benefits would save £11 million but, just think, even this sum wouldn't be enough to buy that two by two in Grosvenor Sq. We're also told that the basic rate of Invalidity Benefit is £43.60 a week although (heaven be praised for the generosity of the capitalist class) in certain cases this can rise to £60 or (wonders will never cease) to £100 per week. One small point, though: these sums would not be sufficient for the upkeep of the premises mentioned above.

Tarred with same brush

Not to labour the point (does it need labouring?) let's turn to another page. Now, we've heard recently, over and over again from all directions, about the end and demise of Communism or, as one BBC programme had it, "The flight from Communism". It so happens that this programme was dealing with the events in Poland, and it also happens that in this issue of The Times a correspondent in Poland informed us that a lot of former secret police of the Interior Ministry are turning to making an honest living by acting as private tecs, but who and what for? “It is to protect rich businessmen who feel nervous in the classless(!) society". Amongst other things their brief:

is to protect private villas, private shops and warehouses, transport valuables, etc. Crime is rising quickly everywhere. A particular target for thieves are houses with expensive satellite dishes—in Poland a sign of substance and wealth. Millionaires abound . . . there are jewellers, perfumers, cake wholesalers, sunglass manufacturers, computer importers and money changers who have become de facto private bankers. One detective agency assured us that 'when the Western capitalist comes here we can provide the finest bodyguards' (Times. 12 January).

Turning to another page we find the story of John Smith, the Shadow Labour Chancellor being piqued by the suggestion that Labour's policies would impose huge burdens on business and spending "huge amounts of time in boardrooms and at City dining tables explaining how a Labour government would get manufacturing industry on its feet again". Now did you think these industries were flat on their faces? You wouldn't think so looking at some of their profit and loss accounts in the financial pages.

On another page, there's Maggie going on something awful about the workers asking for more money in their wage packets . . .“very disturbing”, "jobs at risk”, “Britain's wage costs higher than main competitors”. "wage costs must be kept down", but at the same time “it was essential to keep higher interest rates going for the foreseeable future".

As we socialists say, they're all tarred with the same brush and, as Mercutio put it in his last moments (and we hope fervently that the working class will not wait until such an eventuality), "A plague on both your houses".

Max Judd

Smith or Gould—who cares? (1992)

From the July 1992 issue of the Socialist Standard

No doubt it will be John Smith—the John Major clone—who will emerge this month as the new Leader of the Labour Party. Whether his rival Bryan Gould will get the deputy leadership as a consolation prize is by no means certain, but Gould has at least shown himself capable of discussing political ideas in a way that is rare in the top echelons of the Labour Party these days.

In a book published in 1985 entitled Socialism and Freedom he discussed what would have to be the features of a socialist society. The specific institutions of such a society, he argued, were not ends in themselves; they were means to achieve a situation where every individual human being would have the maximum freedom to shape their life. This, he went on, could only be achieved by spreading decision-making power as widely as possible. The “overriding aim" of socialists, therefore, must be:

to maximise the power (and therefore the freedom) exercised by each and every citizen. This can be done only by diffusing power as widely as possible—in other words, by sharing it equally.

On this definition, a socialist society was a “society in which power is equally shared by all".

At this level of abstraction, we can agree with Gould. We don't want common ownership and democratic control for their own sakes but because we think that these provide the only basis on which all humans can live the best life that is now possible. We can also agree that the way to ensure this is by diffusing decision-making power equally amongst all the members of society. However we wouldn't leave the argument there as Gould does.

This equal decision-making power must apply, in fact must especially apply, to the control and use of the means for providing for the material needs of the members of society. Every member of society must be in a position to have an equal say in deciding how the means of wealth-production—the productive resources, natural and human-made, at the disposal of society—are to be used.

What we are talking about here is a classless society in which the means of production belong to no-one in the sense that there is no group within society that has an exclusive, or even a more than equal, say in the way they are used. This is the same as saying that they belong to everyone—that they are “commonly owned”.

Needless to say, Gould doesn’t go this far. In fact he doesn't regard common ownership in this sense as being a necessary feature of a socialist society. Which must mean either that he is a sloppy thinker or that he doesn’t think that it is possible to diffuse power that widely.

Gould is, however, fully aware that we are living in a society in which decision-making power is far, very far, from being equally distributed. After giving some examples of progress made this century away from inequality (the main one being the achievement of equal voting rights in political matters for all men and women), Gould gives the following accurate picture of the situation today:

   The owners of capital—whether private or public, individual or corporate—still own, control and enjoy the fruits of the wealth-producing process and buy and sell working lives as though they were commodities. Economic power is still concentrated in their hands, with the necessary correlative that it is removed from the hands of the bulk of ordinary people for whom the wage relation bargain remains unequal and demeaning.
    The law still underpins the whole concept of succession and inheritance, so that private property—essentially an artificial, social concept which needs the backing of the law to protect it—can be accumulated to an extent well beyond that needed to satisfy even the most outrageous appetites for personal consumption.
    The welfare state, though valuable and important in itself, remains a palliative for dealing with the casualties of a system which necessarily produces major and self-reinforcing inequalities and injustices. The search for private profit remains the major motivation for economic activity.

Faced with this capitalist reality Gould rejects a policy of “total abolition and replacement" of capitalism in favour of one of “control and reform". This of course is the gradualist and reformist policy that the Labour Party has always pursued. At the turn of the century a genuine argument could go on between what appeared to be two alternative ways to socialism, but the experience of the last 90 or so years has settled the issue. The policy of the “control and reform" of capitalism is not a road to socialism at all. There have been five periods of Labour government, during which Labour was in office for a total of 20 years, yet the situation today is as described by Gould above.

In fact the failure has been even greater as instead of the Labour Party gradually changing capitalism it has been the other way round: capitalism has gradually changed the Labour Party. At one time Labour theoreticians like Gould would have argued that the long-term aim was to actually establish a socialist society in which power, including the power to control the use of the means of production, would be equally shared. Now, however, Gould is reduced to arguing that a socialist society is an impossibility and that the most "socialists" can achieve is some precarious progress towards less inequality:

Socialism is not a destination at which we shall arrive one day. There are no final victories in politics. Socialism is a constant struggle against the forces in society which naturally tend towards the concentration of power.

To a politician whose party has tried and failed to reverse the capitalist tendency towards increasing inequality, it must indeed seem that this tendency is “natural", and given the maintenance of the basis of capitalism—class ownership and production for profit—it does act as if it were a natural law in that there is nothing that can be done to stop it operating.

In using the word "natural" in this context Gould is admitting that all the Labour Party is now trying to do is not to make progress towards a socialist society, however confusingly defined, but merely to slow down and delay capitalism’s tendency to increased inequality. "Socialism" has become not a new form of society but merely the empty dream of a less unequal capitalist society.

But even this watered down version of Labour's original programme is too radical for the likes of Smith for whom a penny on or a penny off the standard rate of income tax is all that politics is about.

Adam Buick

Return of Labour? (1990)

Editorial from the May 1990 issue of the Socialist Standard

Are memories so short? Or is that Thatcher has become so unsupportable that people will vote for anything just to get rid of her? Whatever the reason, the opinion polls confirmed by recent Labour electoral victories seem to be suggesting that another Labour government is a real possibility. 

As those who remember the Wilson and Callaghan prime ministerships of the 1960s and 1970s can testify, Labour governments have always ended up administering capitalism according to its rules. Attacks on workers as greedy wreckers for going on strike, anti-union laws, troops as strike-breakers, benefit cuts, hospital closures, unemployment, poverty and homelessness are not just features of recent Tory rule. They were features of Labour rule too—because, in the end, the capitalist profit economy forces governments to dance to its tune, by putting profits before people's needs. Capitalism controls governments, not the other way round.

Capitalism can only work as a profit system against the interests of the wage and salary earning majority. Any party which takes on responsibility for governing capitalism has sooner or later to recognise this. The Tory party always has, even when not in power. In the past Labour politicians have generally learned the hard way: by experiencing the failure of their reformist attempts, when in office, to make capitalism work other than as a system where profits come, and must come, first. Today's Labour Party, however, is no different from the Tories in recognising, even when not in office, that capitalism is a profit-driven, market-oriented economy that must be allowed to operate as such.

Just before last year's Labour Conference, John Smith, the shadow Chancellor, gave a remarkably frank television interview in which he made it absolutely plain that if Labour came to power again it would impose tough spending controls: priority would be given to restoring the profitability and competitiveness of capitalist industry. "If that means we have to postpone some of our social ambitions, then we may have to do so . . . We're all agreed that we cannot spend what we have not earned and we intend to earn it before we spend it. That will be the guiding light of the next Labour government" (BBC “On the Record”, 1 October 1989).

Since then Smith, in a bid to convince the capitalists that their interests will be safe in Labour hands, has taken this message directly to the City. Labour, he told one meeting of investment bankers, was determined to "maintain a responsible fiscal policy with prudent control over public finances, spending only as resources allow and as the economy can afford”. If resources were not available, "we have to scale down our spending” (Independent, 23 February).

So nobody should entertain the illusion that Labour will restore the cuts in spending on social and public services made under the Tories. We are being told that that will have to wait till profit levels have been restored. In the meantime, it's to be austerity as usual. Jam tomorrow, as it always is under capitalism, but never today.

Smith even said that there would be "no dashes for growth" under another Labour government. “Chancellors should be more concerned to avoid mistakes than engineer the miraculous. Economic management is largely about avoiding unnecessary shocks”. In other words, a future Labour government will aspire merely to hold the ring while capitalist businesses get on with making profits. No wonder the bankers were reported to have been impressed. This is what they were used to hearing from Tory politicians.

Smith is not just expressing a personal opinion, but official Labour policy summed up by Kinnock as "making the market economy work better than the Tories”. The “market economy" is a euphemism for capitalism, and capitalism can only work as a profit system. Making capitalism work means ensuring that priority is given to profit-making. The Tories have always understood this. Now Labour has too. Their policies have become indistinguishable from those of the Tory wets. In fact Kinnock, Smith, Hattersley and the others are Tory wets in all but name. Which means that the return of a Labour government would have even less significance than in the past. This time it would represent a mere palace revolution amongst open supporters of capitalism. Like Heseltine replacing Thatcher. Tweedledum taking over from Tweedledee.

Caught in the act: Who's afraid of Labour? (1990)

The Caught In The Act Column from the June 1990 issue of the Socialist Standard

There are few more repulsive sights than local Tory activists exulting in an election victory, especially when this happens in the small hours of the morning when everyone else wants to go home to bed. Thus it was in Ealing, a local election result which the Labour Party could not explain in any way other than their own unpopularity. It seems that, in spite of everything that has happened since to give the Labour council confidence that they would be re-elected, the voters in Ealing had not forgotten the steep increases in rates which Labour imposed. Their misguided outrage at this was titillated by bloodcurdling stories about lavish council expenditure on bizarre lame-duck minorities and the creation of a lot of lucrative non-jobs for the boys and girls in the party. Nevertheless the Labour Party did not expect to lose Ealing; as Bryan Gould said in the stunned aftermath of the Tory victory, they thought they did not deserve to lose there.

If that means anything it is that in Ealing the Labour council had industriously applied itself to shedding the loony-left tag which it acquired in 1986 and had become a model of Kinnockist moderation—appropriately enough since it is the borough where the Labour leader lives in surprisingly modest style for someone who sees himself as a future prime minister. Labour's transformation did not please everyone and there were some well-publicised rows over the economies which the council imposed just before the election, involving councillors who were under the delusion that Labour administrations should act differently from those run by Tories. If the Labour Party did not "deserve" to lose Ealing it could only have been because they had done such a good job of disguising themselves as Tories. After all that effort to obliterate the differences between the two parties how could the voters be so ungrateful as to choose between them?

Lunching in the City

The Ealing result was ominous for the Labour Party because the council there had done what the party nationally is doing. Ever since their defeat in 1987 Labour has been trying to make itself as similar to the Tories as it reasonably can. At its conferences Kinnock still addresses the delegates as "comrades" but his preoccupation is to persuade the voters that Labour is a party whose claim to their support is based on their promise to run capitalism more efficiently than the Tories have managed to.

In the forefront of this tendency is the man who hopes to be Labour's Chancellor of the Exchequer and who, to prepare himself for this, has been industriously lunching his way around the City of London. John Smith is a very caricature of sober restraint; even his voice, with its austere Scottish rasp, promises a hard-headed prudence. He gives no hope to the most naive of Labour supporters that his visits to the City are to give notice, over the claret, to the bankers and stockbrokers that with a Labour government and its policies of common ownership their days are numbered. What he is actually doing is reassuring them that when he is installed at the Treasury their interests will be his first concern; “The first and overriding priority of a Labour government will be to put the economy right, so we may have to ask for patience from people" was how he put it on TV recently.

The "people" he had in mind were not the investors who infest the City but those on a rather lower income, who misguidedly think that a Labour government's priority will be to spend money on their welfare. They have no excuse for this, for Smith has held consistently to his line. Last October he warned that as Chancellor he may need . . . to postpone some of our social ambitions ." In April in New York he was soothing Wall Street with the assurance that “. . .  there will be no dash for growth under the next Labour government" and last month he was repeating the same doleful message given out by every Labour Chancellor, that if the unions press for "excessive" wage rises they will be causing unemployment.

And how does the City react to the presence in their midst of this dangerous radical from across the border, eating their food, drinking their wine and talking their language that profits come first? Well, they are by no means alarmed or even uncomfortable. The Economist reported that City analysts are widely reassured that a Labour government would be no worse (for them, that is) than the Tories. The Investors Chronicle, which does not exist to promote the cause of social revolution, concluded that Labour's economic policy ". . . contains nothing to which the City objects violently on principle .

Undeserved reputation

In fact it is difficult to understand the belief that a Labour government will always include a reckless and incompetent Chancellor, especially when we remember that recent Conservative holders of that office have included Anthony Barber. Derek Heathcoat Amory, Selwyn Lloyd, Reginald Maudling and Nigel Lawson. When we compare these with Labour Chancellors like Stafford Cripps, Hugh Gaitskell, James Callaghan, Roy Jenkins and Denis Healey and consider how their anti-working class policies protected the interests of the capitalists we can only wonder why the City does not immediately and unreservedly welcome a Labour government. Can it be that the Square Mile is populated by people so exceedingly ungrateful that they would not recognise a profit-protective Chancellor if one was served up on—well, on their lunch plates?

Consider too what has happened in the past—the efforts of Labour ministers to convince the British capitalist class that they had nothing to fear from a Labour government and how this message was received. In 1965 George Brown said in the Director, the magazine of the Institute of Directors, that "businessmen have more hope of making progress and money under a Labour government than they had before” In 1969 Frank Kearton. who was then chairman of Courtaulds. told the Institute of Public Relations that "some of the (Labour] government s measures will stand industry in good stead in the seventies'. More recently, in 1987 Lord Donaghue. head of research at stockbrokers Kleinwort Benson, had this to say about the result of the general election which was expected that year: " . . . the

reality is that all parties in this country support a mixed economy and none has policies so radical as to be damaging to long-term investment prospects". The noble lord's research had obviously not unearthed the presence of the Socialist Party and its policies, but let that pass.

New faces

So there is nothing new in Labour s present reshaping of its policies and its image, trying to smooth out those inconvenient doctrinaire lumps of nationalisation and "soak the rich" hysteria which were meaningless but which upset the City when all the Labour leaders wanted was to have friendly lunches with them while they got down to the serious business of organising the maximum exploitation of the working class. What is new is the faces; a new generation of Labour leaders has risen since Thatcher first marched triumphantly into Number Ten and they are letting it be known on which side of the class barricade they stand. On those terms John Smith is a comforting figure and workers who are nervous about how rich, how competitive and how secure are the class who exploit them may vote for him to compose the budget of British capitalism while he tells the workers how their greed and indolence are ruining the profitability of the British economy.

Smith now promises to do the kind of balancing act which former Labour Chancellors found impossible, in spite of their promises before they got into power. He says he will energise British industry into prosperity, encouraging steady expansion while controlling any tendency to a boom in which pay claims may become too powerful. At the same time he will prudently invest in education, health care, social services and our general welfare. He makes it sound very easy and reassuring, except to those who remember what happened to the same promises made by other Labour Chancellors.

History gives no support to John Smith nor to those who are dazzled into supporting him. It is not a matter of incompetence; many of the abject, discredited failures competently tried to do the impossible—to make capitalism behave as if it were a benign and controllable social system. John Smith will not be pondering these facts as he chews his way through his lunches, for they would not stimulate the appetite of an office-hungry politician.

Ivan

Editorial: Break the Link With Labour (1993)

Editorial from the September 1993 issue of the Socialist Standard

Should Labour cut its links with the unions? The Labour Party can do what it likes, but if the question is put the other way round -  should the unions cut their links with the Labour Party -  the answer is yes, they should have done this years ago. In fact they should never have set up and financed the Labour Party in the first place.

Unions and the Labour Party have different aims which in the end are incompatible and antagonistic. The unions seek to get the best deal they can for the sale of their members' labour power to employers. But wages, working conditions and terms of employment can only be improved at the expense of profits.

The Labour Party, on the other hand, now more openly and obviously than ever, seeks power to run the capitalist system. But running the system -  the profit system - inevitably involves giving priority to profit-making over everything else. This is why the Labour Party, when in government, has always opposed strikes, imposed wage restraint and clashed with the unions.

The mystery is why the unions haven't broken with Labour years ago. Why didn't they break with Labour in 1924 when the first Labour Government threatened to use the Emergency Powers Act against striking tramworkers? Or in 1931 when the second Labour Government cut unemployment benefit? Or in 1950 when the post-war Labour Government prosecuted gasworkers for going on strike? Or in 1966 when Harold Wilson imposed a wage freeze? Or in 1979 when Callaghan urged workers to cross picket lines?

Despite this appalling anti-working-class record, the pressure today to weaken the link between the unions and Labour is coming not from trade unionists but from the Labour politicians. For crude vote-catching reasons, John Smith wants to reduce the way the unions have in selecting Labour Party candidates and in formulating Labour Party policy. But he doesn't want to go all the way - he still wants the unions to finance him and the rest of his gang of political careerists.

The way this is done is a scandal in itself. Unions are voluntary organisations maintained by the contributions of their members. But unless union members go out of their way to sign a declaration that they don't want any of their contributions to go to the Labour Party, a part of their money is diverted to financing the Labour politicians' vote-catching machine. As a result many workers who have nothing but contempt for the gang of Labour fakers at Westminster end up paying money to them without being aware that they are.

Since Labour politicians opened the question of union links, trade unionists should seize the opportunity to break all organizational and financial links with the pro-capitalist Labour Party. These have served no useful purpose in the past and certainly will not in the future.

It is not the concept of the working class taking political action that is wrong. On its own, trade union activity, though essential, is a never-ending battle which at best can only mitigate but never end our exploitation for profit. It does need to be supplemented by political action but of a quite different kind to electing Labour MPs.

We need to organize ourselves, democratically without leaders, into a political party dedicated solely to replacing capitalism by a system based on the common ownership and democratic control of productive resources. In other words, into a real Socialist Party. Not the fake socialist party Labour once claimed to be, nor the openly pro-capitalist party is now so obviously is.

Doctor Smith operates (1993)

Editorial from the March 1993 issue of the Socialist Standard

As Leaders go John Smith is something of a novelty. He did not campaign for the leadership as the darling of the left and then outrage his supporters by revealing himself as a man of the right.

His appeal was of a different kind. He studiously avoided any ideological commitment apart from vague phrases about a juster and more caring society. His promise was to be a shrewd and prudent managing director for British Capitalism plc. The implication was clear. This is a man you can trust. He will look after you like your family doctor. After the hysterical abrasive raving of Neil Kinnock some Labour supporters might have found relief in John Smith's more comforting message.

It was all of a piece, that Smith's election to the Labour leadership should be so blatantly and determinedly stage-managed. There was in fact no contest worth the name. It was a fix-up. Punch-drunk though they were over their fourth consecutive election defeat, some Labour Party members still had enough energy to have doubts about Smith's leadership and about how he got the job.

So it should have surprised nobody, when Smith declared that nothing would be exempt from his desire to revise Labour's policies. What Labour used to regard as its principles no longer exist. Everything they say and do must conform to two standards of judgement: Os it in the interest of British capitalism? Does it win or lose votes?

If this means disregarding everything the party has stood for, so be it. If it means an open admission that Labour is the Tory Party with a different emblem and different coloured rosettes, that is a price worth paying. If it means losing a few voters who believed however half-heartedly that Labour stood for a different social system—well, what party aiming at power over British capitalism needs such thorns in its electoral side anyway?

What Smith is doing is but the latest episode in Labour's drive to become a natural party of government whose only principle is to get into power. At times they have justified this on the grounds that they will run capitalism more efficiently and more humanely than the Tories. Smith has made it clear that even that excuse can no longer be used.

So what about all those people who want to contribute to the establishment of a new and better society and who have worked and voted for the Labour Party in the belief that this would bring it nearer? Many of them must be in despair, bitter and angry at what they see as the betrayal of their party.

But it need not be all loss. A society of common ownership, democratic control and production for need not profit remains worths struggling for. To do this people need to organise politically—not in the Labour Party. Labour has never been a socialist organisation and now more than ever is unworthy of anything other than working class hostility and contempt.

What is needed is a party that stands for socialism and which sticks to its socialist principles. We consider our record over the years shows us to be such a party. If you want socialism your place is in the Socialist Party.