Dyson discovers that the profit system sucks (2002)

From the March 2002 issue of the Socialist Standard

It’s official – Dyson “bagless” vacuum cleaners suck, but capitalism sucks harder.

On 5 February 800 workers in Wiltshire found they would soon be jobless when the vacuum cleaner manufacturer Dyson announced that it intended to switch production to Malaysia. Few were surprised by the decision, which was motivated by economic considerations, primarily the high cost of labour in Britain compared to that in Malaysia. According to BBC Radio 4, the average cost of labour in Malaysia is just £1.50 an hour, compared to £11.50 in Britain. By transferring production, Dyson will be able to cut production costs by 30 percent.

A difficult decision?

If the newspapers are to be believed, this decision was not taken lightly. James Dyson, the millionaire inventor who owns the company which bears his name, is a self-appointed ‘champion of British industry.’ He claims to have a deep commitment to the cause of manufacturing in Britain, and insists that he fought hard to make remaining in the country a viable option. But staying in the country was not a viable option. If Dyson had not been prepared to cut costs he would soon have found himself forced out of the market by other companies which were prepared to take that step. Dyson would not be able to match the prices of his competitors without sacrificing his profit margin. It was not Dyson who decided that his firm must move to the Far East – it was the crazy economic system under which we live.

Profit comes first

As Dyson and the workers in his factory have discovered, under capitalism it is profit which must come first. In the whole affair there has been no mention of what anybody wants – not the workers, not the consumers and not even Dyson himself. The only consideration which matters is the need to make a profit.

Dyson: decision made

The whole Dyson affair highlights the fact that, in many ways, the profit system imprisons bosses and workers alike. The owners of companies, factories, services etc. can amass enormous amounts of wealth, but they cannot go against the demands of profit. They must do its bidding, whether they like it or not, as James Dyson has demonstrated. Capitalism does not run, and cannot run, on the basis of what people want. Dyson may want to stay in Britain, he may want not to have to lay off workers, but what he has to do is make a profit.

What about quality?

Another factor has been noticeably absent from discussion of the Dyson affair. There has been no question at all of how to make the best or most effective vacuum cleaner. Capitalism doesn’t care what you make or how you make it – as long as you sell it at a profit. On top of which, it must be admitted that vacuum cleaners ought to be a pretty low priority anyway in a world where most people don’t even have the necessities of life. That never enters into it, however, because the world is not run on the basis of what people want, it is run on the basis of making profit.

What about the workers?

Eight-hundred workers will find themselves jobless as a result of Dyson’s transfer to Malaysia. In this instance, many will probably find new jobs relatively quickly, since Wiltshire has fairly low unemployment.

The point, however, is that will only find work if someone can make a profit from their labour. The fact that there are hundreds of thousands of useful things that people could be doing makes no difference. They could, for example, manufacture basic medical supplies which could save the lives of millions in developing countries. That activity would be a major priority in any system based on meeting human needs. It isn’t going to happen under capitalism though, because it would not make a profit.

As long as we allow the resources of the world to remain in private hands, profit will continue to reign supreme. However, there is an alternative. The world’s resources could be owned and controlled by everyone, and run in the interests of society, not in the interests of profit. This is common ownership and democratic control, the object of the Socialist Party.

Dave Templar

British capital in Malaysia - Part 1 (1966)

From the October 1966 issue of the Socialist Standard

Up till a few months ago British and Indonesian soldiers were butchering each other in the jungles of North Borneo. With the ending of “confrontation” Tunku Abdul Rahman, Prime Minister of Malaysia, said that it was a “victory of the forces of good against the forces of evil”. But, when it is known that this relatively small area provides over one-third of the world’s natural rubber, is a leading producer of tin— and that nearby Brunei has the largest oilfield in the Commonwealth, it becomes clear that the war in Malaysia had very little to do with a struggle between “good” and “evil”. The prizes at stake were large enough for the British government, representing the general interest of British capital, to consider it worth spending £255 millions each year to maintain its armed forces in the country. 

The original cause of British intervention in Malaya was trade. For this reason the island of Penang was rented on perpetual lease in 1786, the island of Singapore was bought in 1819 and the decayed port of Malacca was obtained from the Dutch in 1824. From these bases British “protection” was extended—so that between 1874 and 1909 the nine Malay states were brought under control. The sultan of each state signed a treaty by which he agreed to accept a resident adviser and to follow the “advice” in all matters except those that concerned the Moslem religion and Malay custom.. This arrangement still persists in the oil state of Brunei; the Sultan remains the nominal ruler but it is the British government, through its High Commissioner, which is responsible for all external affairs and defence.

Malaya in the 1880's has been described as a museum piece of Asian feudalism, roughly similar to 12th century France or Germany. But with the rapid development of the tin and rubber industries this feudal backwater found itself hurled into the modern, capitalist world. The state of the country was suddenly determined by the prices of these two commodities and no longer by civil wars between rival claimants to the throne. By 1914 the value of foreign, chiefly British; capital in Malaya had already reached $.US 194,000,000. When the Second World War broke out this figure had been dwarfed and there was something like $.US 260,000,000 of British capital alone invested in the tin mines, rubber plantations, etc. In addition there was a further $.US 82,500,000 invested in government loans, which were often floated in London. French, Dutch, Chinese, Japanese and American capitalists had all staked their claims in the rush to exploit Malayan workers, but it was British imperialism which held the whip hand. In recent years there has been some reticence about revealing the total amount of British capital invested in Malaya but some idea of its enormity can be gauged from the fact that in 1961 remitted profits on direct, foreign investment from the Malayan Federation were $.M 321,000,000. In the same year a further $.M 137,000,000 flowed into the country as private, direct, long-term investment. It would be inaccurate to picture this as a one-way process. For example, the native capitalist class in Malaya—through its government—declared its official overseas assets to be $.M 825 millions at the end of 1960. These consisted mainly of British government securities, including local authority mortgages. A clear example that the exploitation of the world’s workers by the international capitalist class is a process that cuts across all national boundaries.

Although Malaya yields approximately one-third of the total world output of tin, it is interesting to note that only some two per cent of it is now produced by the traditional dulong washers. These are individual collectors who concentrate the ore by hand, using a pan in the beds of streams. There are upwards of a hundred mines owned by British capitalists and this represents about three-fifths of the total industry. Its contribution to the profits remitted out of Malaya, taking good years with bad, is a reasonably close rival to that of rubber.

The history of the tin industry is one of desperately trying to impose some sort of order on to the chaos of capitalist production. During the inter-war period an International Tin Committee was formed whose object was “the adjustment of production to consumption and the reduction of surplus stocks by the restriction of output”. This was set up largely as a result of the slump of 1930 when tin prices fell disastrously. The verdict of economists on this attempt at enforcing price stability is that “it was unable to prevent violent short-term fluctuations in the world price”. (L. A. Mills—University of Minnesota). After the Second World War it was confidently suggested that these “short-term fluctuations” could be ironed out by means of a world buffer stock of tin. This was the method adopted when international control of production was again established in the nineteen-fifties. Just how successful this has been is demonstrated by the table below.

As can be seen, after 1958 there was a run-away increase in prices and once again the professional economists were forced to admit that capitalism reduces the most carefully-laid plans to a shambles. Thus, the Economist ruefully made the point:

The tin agreement, which is based on the manipulation of a buffer stock, and was intended to cope mainly with price declines, has been faced with unmanageable rises. The buffer stock manager has had no tin to sell since October, 1963. But, despite the long list of unsuccessful agreements, primary producers go on trying to find the ideal formula. What else can they do?  (10th July, 1965)

Any socialist could supply the answer: nothing at all, within the framework of capitalism. Only the ordered production of a socialist society provides a solution. The economists, yearning for an “ideal formula”, resemble nothing so much as the alchemists who searched in vain for the Philosopher’s Stone. (Incidentally, it has since proved just as hopeless to deal with price declines. Since January of this year, tin has fallen nearly £180 a ton on the London Metal Exchange).

John Crump

(To be concluded)

British capital in Malaysia - Part 2 (1966)

From the November 1966 issue of the Socialist Standard

Link to Part 1.

The situation in the rubber industry is somewhat different from the others because the small capitalists and peasant producers have not yet been eliminated. Of the 3½ million acres under rubber in Malaya, only about two million are controlled by the large estates (which are nearly all over the 1,000 acre mark). The other 1½ million acres are comprised of small plots whose owners have been in a relatively strong competitive position because of their much lower costs of production. This was especially so after the Japanese occupation in World War II when, because of the inexpensive methods of manufacture on the smallholdings, they were able to resume production at once—unlike the plantations, many of which were damaged. Where the large estates have the advantage is that they have had the resources to embark on costly replanting schemes with high-yielding trees. As these trees mature the systematised production on the plantations is likely to pay off and it is thought that the present trend against the smallholdings will strengthen.

Despite this, the nagging problems thrown up by the capitalist system remain to haunt the shareholders. In addition to the political uncertainty enveloping the whole of South-East Asia and the growing threat from synthetic rubber, the market has proved even more temperamental than that for tin. The rubber industry, too, can boast of a long list of futile attempts to maintain price levels. These started in 1922 when it was decided that the forced restriction of exports would keep prices hovering around the 30 cents per pound mark. After this step had been taken the price rose to $M1/b. in 1925, stood at 20 cents/lb. in 1928 and finally, between 1931-33, it sunk to 6 cents/lb. and less. Following this outstandingly successful first attempt many other schemes, including an International Rubber Regulation Committee, have been implemented; each was guaranteed in turn to be the elusive “ideal formula”. The table below makes any comment superfluous

The British capitalist class has other vital interests at stake in this part of the world. The Singapore military base provides the only major dockyard east of Suez and is the heart of a network of 300 military aircraft, including V-bombers. This base also contains major stockpile facilities and its strategic value in the defence of British capital is thus obvious. To take another example, the tiny state of Brunei measures only 2,000 square miles in area but it is graced the title “British protected state” because of the important Shell oilfield at Seria. Malaysia also represents an important market for British manufacturers, although there is sharp competition with other capitalist rivals. 

Again it is interesting to note that each of these capitalist countries listed above has resorted to war, to protect its interests in South-East Asia, during the past few decades. It is against this sort of background that Harold Wilson's statement—“If we had only ourselves to think of, we would be glad to leave there as quickly as possible”—has to be measured. .

That section of the British capitalist class with investments in Malaysia senses that it is in a precarious position. T. H. Silcock (Emeritus Professor of Economics of the University of Malaya) has summed up the outlook for the two major industries: “Even though the tin market recovered in 1961 and 1962, the long-term market prospect is . . . not hopeful, though the threat is probably not as great as for rubber.” Apart from this, the risk of losing capital is high in an area  which has been repeatedly fought over by those countries with conflicting economic interests in the region. As a result there has been a great deal of discussions in the press about “our” defence policy east of Suez and about “maintaining stability” in this part of the world. Some of the rising capitalist powers, like China and Indonesia, have called upon the working class in South-East Asia to support them in their attempts to extend their spheres of influence at the expense of their rivals. But, clearly, in these struggles among different sections of the capitalist class, working men and women have nothing at stake; whichever side wins, for the workers victory means continued poverty under the renewed threat of war.

John Crump

Halo Halo! (2024)

The Halo Halo! column from the December 2024 issue of the Socialist Standard

Shakespeare used the idiom ‘He who sups with the Devil should have a long spoon’. The ‘Devil’ is a character in a fairy story, similar to the one wherein this month millions still ‘celebrate’ the birth of a made-up ‘messiah’.

As a writer in a previous Socialist Standard wrote, ‘religion is intensely anti-working-class… the whole panoply of belief, ritual, salvation and miracle stands against the interests of all working people.’ The Catholic Church and totalitarian states have much in common.

Proponents of mumbo jumbo, the Catholic Church, should have used a longer spoon. A United States Commission on International Religious Freedom report noted that ‘the Vatican entered into an undisclosed agreement with the Chinese Communist Party (sic) in 2018 that established cooperation between Church authorities and Chinese officials in appointing bishops. But “the government has unilaterally installed CCP-aligned bishops without the Vatican’s consultation and approval” despite that agreement’.

‘Chinese officials have ordered the removal of crosses from churches and have replaced images of Christ and the Virgin Mary with images of President Xi Jinping. They have also censored religious texts, forced members of the clergy to preach CCP ideology, and mandated the display of CCP slogans within churches. “Ultimately, the Chinese government is solely interested in instilling unwavering obedience and devotion to the CCP, its political agenda, and its vision for religion, not protecting the religious freedom rights of Catholics”’ (Ncresister.com).

#    #    #    #

In Malaysia, where almost two thirds of the populace practise Islam, the state’s official religion, the government is seeking to enact a Mufti Bill which would grant ‘greater authority to religious courts, potentially eroding the rights of non-Muslims’. ‘The Mufti bill is not just about religious matters. It’s about power and control. If this bill passes, it could lead to a situation where religious authorities have the final say on a wide range of issues, from personal relationships to public policy. Supporters of the bill contend that it is necessary to strengthen the role of Islamic law to uphold traditional values. They argue that the bill would not infringe upon the rights of non-Muslims.’ Flying pigs come to mind. Oh, not halal. Flying gibbons or crocodiles?

#    #    #    #

Christmas, and hopefully all other religious festivals, may be on its way to extinction. The UK now has more atheists than people who believe in the existence of God.

‘Queen’s University Belfast, in a global project Explaining Atheism (nearly 25,000 people from six countries surveyed) to find out why people become atheists and agnostics. found that the common notion of the “purposeless unbeliever”, lacking a sense of ultimate meaning in life, objective morality, and strong values is not accurate, challenging the stereotype that atheists lead lives devoid of meaning, morality, and purpose. Dr Lee said: “The UK is entering its first atheist age. Whilst atheism has been prominent in our culture for some time, be it through Karl Marx, George Eliot, or Ricky Gervais, it is only now that atheists have begun to outnumber theists for the first time in our history”’.

DC

Merdeka in Malaya (1957)

From the October 1957 issue of the Socialist Standard

On August 31st Malaya attained Merdeka (independence), after over a century of British colonial rule. The day is a memorable one for the people there, who celebrated amid scenes of wild rejoicing and shouts of “Merdeka.” In the capital, on the stroke of midnight, the new Prime Minister told the people:

“A new star rises in the eastern sky—a star of freedom for yet another Asian people. This is the greatest moment in the life of the Malayan people, for a new nation is born —a nation that will stand forth free and independent." 

Incidentally, this little speech recalls our article in last December's issue of the Socialist Standard entitled Happenings in Hungary, where it was pointed out that the battle cry of “Freedom ” was used to rally support to a budding capitalist class trying to seize power in Hungary. The last sentence in that article will probably prove as relevant to Malaya as to Hungary: “In other countries whenever the new ruling group is firmly in the saddle of government they lose no time in turning on the workers.” 

Miss Nancy Simmons, a Colonial Office was also present She had been invited as a representative of the British working-class by the Malayan Prime Minister. This point illustrates the usual procedure of the rising ruling-class when taking over governmental power, of attempting to give their cause a working-class flavour.

What Malaya is worth

The transfer of power has taken place with the blessing and co-operation of the British Government, who had despatched the Duke of Gloucester there to represent the Crown, and, as part of the ceremony, hand over the instrument of transfer. A glance at recent events may indicate the reason for this support, which, at first sight, might seem against their interests.

Foreign investment (mostly British) in Malaya was nearly £100 million in 1937, chiefly invested in rubber plantations and tin mines. Imports into Malaya amounted to £484.5 million in 1956, of which U.K. was one of the largest suppliers.

But for several years past profits have been reduced by internal strife—Chinese "communists” attempting to gain power by force. The Chinese population is important, being as numerous as the Malays. These Chinese miners and agricultural workers find that developing capitalism is no panacea for their problems, and so they give their support to the Communist Party under the mistaken impression that their policy will radically alter society. This Party is influenced to an extent by the regime in China, to whom it looks for moral support. British interests in Malaya, seeing that there is a real threat to their investments, called in the British Army. Many members of the British working-class have already lost their limbs, their health and some their lives, fighting for their masters’ interests in the steaming jungles of Malaya.

Besides the antagonism that all this may arouse in Britain how much better to let the native rulers take over the thankless task of tying to make exploitation popular in Malaya. Merdeka in Malaya is the answer.

Trade Union Movement

The beginnings of a working-class (in the present-day meaning of the term) occurred with the rapid development of that country at the turn of the century when rubber and tin became useful to industry and the development of the steamship and the Suez Canal made bulk cargoes from the East a proposition for industrial Europe. Tamil workers were imported into Malaya from India to work on the rubber plantations. There are 400,000 such workers now employed. Chinese were imported for the tin mines. As an indication of the growing trade union movement, in 1947 696,036 days were lost in strikes on rubber plantations. In Singapore in 1945 173,000 workers came out in a general strike.

In the first elections held in 1955 the union of the various nationalistic political parties won 51 of the 52 seats. The only opposition seat was won by the Islamic party. Many of tbs workers in Malaya believed that their troubles were due to the country being ruled by foreigners and, therefore, they supported their native capitalist class. Presumably these workers will find out that a change of administrative personnel will not alter their class position.

Women and Merdeka

One feature in the capitalist development in Malaya is the lack of status of the Malay woman, despite her influence in favour of Merdeka. At the elections the newspapers expressed astonishment at the voters. Some of them had trudged miles carrying babies to get to the booths. By tradition, Malays are allowed to divorce their wives with only three months' sustenance as alimony, and it is estimated that 60 per cent of Malay marriages end in divorce. As a result of all this there is widespread prostitution. Very little other employment is open to women, and destitution is the only alternative.

One thing of which we can be confident is that a modem capitalist welfare state will not stand for the expense of directly keeping large numbers of unproductive discarded women and their children. For the women of Malaya capitalism will no doubt in due course bring them an up-to-date capitalist marriage system. It is a useful spur to productivity for a worker to be burdened with the worry of providing for a wife and family. But it will be economic causes, the need for a larger labour supply educated to some degree, that will change the way of life and their bondage for many of Malay women. The “independence” of their country will play but a little part. 

What are the prospects?

Malaya is a heaven for big business. The two chief industries, rubber and tin, require vast capital outlay for efficient exploitation. The price of labour is comparatively low, but the demand for these raw materials is tremendous and constantly expanding. What more can a capitalist wish for—low wages and an expanding market. Furthermore, the development plan for the period 1956-60 envisages a capital expenditure of over £1,000 million. Merdeka will, they hope, mean a rich harvest to the foreign capitalists (who own much of the wealth of Malaya) without the headache of repressing a working- class continually growing more aggressive.

The following tip (straight from the horse’s mouth) sums up the position for the capitalist in Malaya, and, incidentally, for the worker too. This is an advert by the Malayan Government in Eastern World (August 1957): “INVEST IN MALAYA, THE LAND OF GOLDEN OPPORTUNITY. BIGGEST RETURNS ON INVESTMENT, LOWEST TAX ON PROFITS. SECURITY ASSURED BY STABLE GOVERNMENT.” But riches at one end of the scale presupposes poverty at the other, and it will be poverty that will continue to be the lot of the workers in their promised land of Merdeka in Malaya.

Frank Offord

Editorial: Who Are Responsible for Defence Weaknesses? (1942)

Editorial from the January 1942 issue of the Socialist Standard

In war as in peace the blind greed of capitalists persist even to the extent of endangering the continued existence of their sources of gain. We are prompted to make the statement by a report from a Special Correspondent which appeared in the Sunday Express for January 4th. This correspondent, writing from Sydney, Australia, reports an interview he had with Senator Foll on Malayan defences, and this is what the Senator told him: —

“The British War Office sadly neglected the Malayan defences. The civil and defence authorities told me this frankly and most decidedly during my visit to Malaya last August.

I was so alarmed at the information that I reported it to Mr. Menzies and other Cabinet Ministers on my return to Australia.

Mr. Menzies told me that he had repeatedly demanded stronger Malayan defences while he was in England.

From the time of Munich, Australia’s military strategy has been based on the likelihood of an attack by Japan. We were alarmed at the slight preparation provided against this in Malaya and Singapore. That was the main reason for Sir Earle Page’s visit to London via Singapore.

I think, frankly, that people holding large interests in Malaya were themselves principally responsible. They were engrossed in the big profits the war was bringing them and they resented even trivial taxation for the defence of their holdings.”

The last paragraph is the illuminating one. Government officials and military strategists are freely blamed for weaknesses and failures in Malaya and elsewhere, but how much of this blame should really rest on the shoulders of seekers after profit who were the power behind the various governments or whose actions thwarted the policies of those governments? Why, for instance, was Germany able to become strong again after 1918 and able to embark on a policy of conquest? One reason was because Germany became a profitable field for investors and these investors were prepared to risk a good deal rather than have their profitable investments disturbed.

It is customary to blame Balfour and Macdonald for failing to keep up to date in rearmament during the period preceding the present war, but the major responsibility rests with the wealthy interests who found the high cost of re-arming cut into their profits. Profits were their main objects, and so they made hay while the sun shone, hoping to wriggle out of trouble somehow later on. A fair example of the intelligence or blind lust of the capitalists as a class.

Another instance of the blind and unprincipled lust bred by a system under which goods are produced for the sole purpose of making a profit for capitalist investors is provided by the black market that figures so largely in the news these days, and the numerous cases where people are prepared to jeopardise the successful prosecution of the war (their war) in order to make profit out of it. The following quotations are only two examples that illustrate the point: —

“Barham and Marriage, Ltd., of Leadenhall Street, E.C., grocerer, were fined £10 with 10 guineas costs at Kensington to-day for selling milk powder substitute grossly deficient in fat proteins and milk sugar at their shop at Church Street, Kensington.

Mr. Barry Evans, prosecuting, said the powder when analysed was shown to be essentially flour and salt and was in no sense a composition resembling milk powder.

The substitute was sold at 3s. a lb., but could be produced at 2½d. a lb.

Dr. James Fenton, medical officer of health of Kensington, said that if infants were fed on the powder they would suffer from anaemia and a lowered resistance to infection.

If a mother fed her child on the powder believing she was giving the infant a complete food, the child would starve under her eyes.

Mr. R. Seaton, defending, said the firm was supplied with a powder called “Milkona” by the manufacturers, with a warranty at 2s. 3d. a pound.

They innocently purchased it for retail to the public. They were not unscrupulous and not a breath of complaint had hitherto been made against them.—( Evening Standard,” 31st October, 1941.)

Pal Food Products, Ldt., of South Audley Street, London, W.I, were fined £10 and five guineas costs at Stratford to-day for selling a mixture called Pal-lem with a misleading label.

It was stated that the mixture was described on the label as containing vitamin C, and as the perfect substitute for fresh lemons.

Dr. Hammance, public analyst, said the bottle, which was bought for 1s. 3d., could have been manufactured for ¾d. There was no vitamin C in the contents, nor was there any citric acid, the only acid being tartaric”.—(“Evening Standard,” December 31st, 1941.)

These facts are simply further support for our contention that capitalism, owing to its private property basis and profit-making object, is incapable of solving the major problems with which it is afflicted. These problems can only be solved when the profit motive is obliterated by the introduction of Socialism.

Paper Money, Paper Tigers (1998)

From the June 1998 issue of the Socialist Standard

A Malaysian student posted this question recently on the Internet:

“Forgive me being stupid but can somebody tell me why is our economics suddenly become like this? I thought all the while we are having very good economics growth but why within such a short period everything crash?”

The suddenness with which the “Tiger Economies” became “paper tigers” has left many people baffled and bemused. One minute the Asian economy was being talked up as a “new economic miracle”, the next minute it has fallen in like a house of cards. What on earth is going on?

Global capitalism, in two words. For years Western banks, looking for good returns, have pumped tens of billions into Thailand, Korea, Malaysia and Indonesia, creating a huge boom in the area. Investment in the region had always been encouraged by the US, as evidenced by their tactic during the Cold War:

“The notorious Domino theory was invented specifically for South-East Asia. To shore up the line of teetering dominoes, Washington made every effort to create loyal, capitalistically prosperous, authoritarian and anti-communist regimes . . .” (Benedict Anderson, London Review of Books.)

Powerplays aside, investors have been attracted for years by low-wage costs and poor unionisation in the area—to name two features nowadays more typical of Britain than South-East Asia. Naturally the Asian economy expanded, and its currencies looked solid as gold—a tropical paradise of capitalism, in fact. The credit boom inflated itself like a giant balloon.

Balloons burst, sooner or alter. All you need to burst a credit balloon is a needle of scepticism. If you continually lent money to a friend on the assurance of a fat profit, but you didn’t see any profit, eventually you’d wonder whether you were going to get any of your money back, profit or no profit. If you then discovered that he was maintaining his flat and fancy car with yet more borrowings from elsewhere, and all his supposed “assets” wee borrowed on credit too, you’d start panicking. When it looked like all his other creditors were panicking too, and somebody wasn’t going to get refunded, you’d probably steam in without further delay. Your friend would be in big trouble, and you wouldn’t be interested in accepting his IOUs, that is, his currency, because that would be pretty worthless too.

Something like this process has been going on in recent years in the Far East. When Thai finance houses started to look overstretched last year, alarm bells rang from Tokyo to New York, and bailout talks hurriedly began, but not before banks and investment companies had pulled out, foreign capital flows had reversed, and half-a-dozen local Asian currencies, which speculators had been gleefully trading at a high value, went into a nosedive. Paper money, as it turned out, wasn’t worth the paper it was written on. Speculators dumped the now toilet paper money as fast as they could, in one stroke wiping a fortune off the value of the Asian economy. Share prices collapsed swiftly as the “smart money” headed for the airports, and economic recession rapidly left the surprised working population facing unemployment, poverty and an unpleasant future.

During all this there were furious recriminations all round. At the IMF-World Bank meetings in Hong Kong in December 1997, the Malaysian Prime Minister, Mahathir Mohamed, blamed powerful Western interests for engineering the crisis. The US blamed Japan for not going enough, while the Koreans reacted angrily to US and IMF efforts to squeeze concessions out of them in return for rescue, in other words kicking them when they were down. Certainly there has been a tendency not to rush to aid the Asians, as the crisis presents the West with the opportunity to get the Asians just where they want them, and muzzle the tigers’ teeth. But conspiracy theories against the West don’t take into account that an Asian currency collapse is terrible news for Western banks who have so much cash tied up there, and bad news too for Western economies in that it makes Asian exports cheaper while at the same time Asians are buying fewer Western products of any sort. In fact, the realisation is slowly dawning on the chortling politicians and media of the West that the Asian crisis may well trigger a global crisis. Smiles are slowly being wiped off faces, as the sinking figures come in.

The British owning class is tetchy anyway at present because it is having trouble selling anything abroad, thanks to the strong pound. Worse is coming. This strong pound is making Britain unattractive to foreign companies who were until recently rather keen to take advantage of Britain’s proud status as the worst and cheapest employer in Europe. Hyundai and Samsung have delayed plans to open large electronics factories in Britain which would have given Tony Blair the golden gift of 7,000 new jobs to brag about. Mitsubishi have closed a television factory, laying off 500 workers. Other Japanese and South Korean companies have decided not to proceed with investments. The Bank of Yokohama has sold off Guinness Mahon, a merchant bank, while the collapse of the investment bank Yamaichi has cost 300 jobs in London.

More “Titanic” than “Tiger”

While Blair loses his cool and desperately offers subsidies to the South Koreans, who have 2.6 billion pounds invested already, British exports to South Korea have halved in a few months while imports have risen by a quarter. The Asians may have gone broke, but now the British economy is bleeding from open arteries.

Everything the UK can presently sell to the Asians is taking a hammering. Tourism is falling off, as the number of spending visitors from the Far East drops by an estimated five percent and airlines have to reduce flights while London stores brace themselves for slashed profits. The British education business is also suffering. When it discovered that only its elite universities were attracting Asian students, it went in for a spot of “rebranding” and relabelled all its polytechnics as universities. Blair would call this “more choice”. Cynics would call it “selling mutton dressed as lamb”. The UK higher education system is kept going by foreign students, a quarter of whom come from the Asian area now in recession, and the Honours Degree business stands to lose around £130 million, despite the commercial rebranding exercise.

It would all be very funny indeed if it were just politicians being made to look stupid. But as usual it is the working class that suffers the cutbacks, the reduced standard of living, and the vicious and right-wing reform programmes that every such crisis engenders. Politicians won’t admit that they can’t predict how the economy will go, because they would be admitting they can’t control it. And to admit that is to beg the question: why bother voting for them, and why bother having capitalism at all? Why indeed?

The socialist view of capitalism is that it is essentially a half-way house in production relations on the road to post-scarcity society. when the world has developed its productive abilities to the point of abundance—which it did decades ago—capitalism fulfils its historical role and is of no further use. But to describe capitalism as merely “obsolete” scarcely conveys its sheer destructive power or the tragic effects on individuals of its continued existence. As capitalism consolidates itself all the way round the globe, its frequent booms and slumps—one of its unavoidable features—also become global. The disasters get bigger, and nastier.

Whether the world succumbs this time to an economic seizure, or endures this crisis in order to face the next one, there is no comfort for workers in capitalism’s discomfort. What’s bad for the rich is worse for the poor. That capitalism is chaotic is evident. That the poor had better abolish it before it kills them is a point we need to stress with all possible urgency.

Paddy Shannon

Voluntary service oversold (1989)

From the February 1989 issue of the Socialist Standard

Every year VSO recruits and sends several thousand volunteers to work in countries economically less developed than Western nations. This has arisen for a variety of historical reasons, largely to do with the exploitation of people and resources during the colonial era.

I am nearly half-way through my VSO posting with the Malaysian education department, and something I have suspected for some time has become very clear: "volunteering" is in fact another name for cheap wage slavery. In a social system where men and women are forced to sell their labour power in order to gain access to goods and services, VSO is able to provide the less successful capitalist nations with highly skilled workers from the West at a low price — they call it “low cost technological assistance". The word "volunteer" misleadingly suggests that we work for nothing. In fact, we are paid a wage which is supposed to be roughly equivalent to what a local worker with similar qualifications, doing a similar job. would receive. How this works in practice varies from country to country. The wage is paid by the employer in the country to which we are posted, although VSO does negotiate our salary, terms and conditions.

Most volunteers here earn a good deal less than Malaysian colleagues with similar qualifications. Furthermore, those of us working in East Malaysia, a very expensive part of South East Asia, with a shortage of qualified workers, find ourselves alongside teachers, doctors and engineers from other parts of the country who receive large allowances to encourage them to come and work here. Many of us have also found that our terms and conditions of work are far from clear. Only some volunteers know exactly what their working hours are, what sickness benefits they are entitled to and how much leave they can take. The only written agreement VSO have with the Malaysian Economic Planning Unit, which approves and administers postings. concerns pay. Yet like our unfortunate local colleagues we are expected, for instance, to apply for leave in triplicate months in advance and clock in and out punctually. Because we are foreign workers our behaviour is carefully noted and any signs of "irresponsibility" or disrespect can be held against us.

And so we are encouraged to believe that "development" is about redressing social, economic and technological inequalities in the world and, where VSO is concerned, particularly at the grass roots level. In other words, it is about using our skills and expertise to help some of the world’s poorest workers achieve greater self-reliance. The VSO logo states that “VSO sends men and women overseas to share their skills with the people of the third world" and one of the VSO objectives is that ‘‘Emphasis should be given to work which benefits poor and disadvantaged people and to enhancing the status of women" (VSO Volunteers Handbook). It is claimed that by volunteering we are doing more than just sharing our skills; we are also helping to undo some of the racist myths and stereotypes about people from Africa and Asia, to repair some of the economic damage inflicted on them during the colonial period. We are, according to VSO, helping to promote greater understanding between workers in different parts of the world and educating the people in Britain about the causes of third world poverty and inequality

In fact, this is all a VSO confidence trick. These vague, idealistic visions of development obscure the fact that organisations like VSO, along with the governments of countries who request volunteers, are firmly committed to capitalism — the kind of economic Development which will not bring about a world in which everyone has equal access to resources and technology and where there is mutual co-operation between people. The governments of third world countries are committed to perpetuating and developing a system where most of the world's wealth is owned and controlled by a minority. Its driving force is profit and even basic human needs will not be met unless it pays.

Organisations like VSO are committed to try and reform the system in order to bring about a more equal distribution of the world s wealth, but their effect is to improve the prospects of a rising capitalist class in the world scramble for profits. They also promote cultural and technological institutions which accompany the development of capitalism. In Malaysia, for example, VSO has provided a large number of volunteers to work in government social service departments, in the belief that this will help to bring about some improvement in the lives of Malaysia’s poorest — the mentally ill, handicapped, schoolchildren. What is overlooked is that workers only have access to social, welfare and health provisions for as long as it is profitable or in the interests of the owning class. For instance, although many diseases could be prevented by providing communities with safe drinking water, children still die because it is not profitable to do so. In Singapore, a rapidly developing capitalist state, workers are noticeably healthier than those in the neighbouring countries of Malaysia and Indonesia. Singapore water can be drunk straight from the tap and need not be boiled before drinking; there is no malaria and the medical facilities are probably better than in many Western countries. But then, as Singapore is extremely short of labour, it cannot afford to have a sickly workforce.

Capitalism, then, only provides workers with what is profitable: children who do not have a nourishing diet are still able to buy Coca Cola! They may lack adequate hospital facilities but are taught how to operate a submachine gun. Low paid volunteers are recruited from the West to develop a country’s health services, while millions are spent on arms and foreign experts to train the military in their use.

Another aspect of development is the emergence of an increasingly sophisticated education system. A developing nation needs workers whose minds are trained in new ways, and VSO provides many teachers for schools and training programmes. We do not usually teach young workers skills to enable them to articulate grievances and improve conditions, although this may sometimes be a side effect.

The process of urbanisation, the breakdown of communities into family units and the increasingly alienated lives of working men and women are all part of the development of an industrial capitalist nation. Mental illness, drug abuse, crime and child-battering become increasingly regular features of daily life and expertise is needed to deal with these problems. A VSO staff member suggested that the level of development attained by a country could be measured by the kind of volunteer workers it requests. A less developed country would ask for agricultural experts and primary health care workers; a more developed country like Malaysia will request social workers, mental health workers, probation officers and teachers. This is an interesting indication of what VSO understands by development. It certainly does not seem to be something in the interests of the people at grass root level.

But at least we do not suffer high-flown statements about promoting international understanding and racial harmony! It is made quite clear that we are here to assist Malaysia's social and economic development by filling gaps in expertise, until such time as qualified Malaysian workers take over. There are constant reminders from the VSO and the Economic Planning Unit that we must be sensitive to, and accept, the Malaysian way of doing things. This means that we should not question the racially divisive policies pursued by the Malaysian government, to keep workers separate and subjugated. If we are seen to be taking too close an interest in politics we will be deported very quickly. VSO, despite all that is said in their literature, is working closely with a government which locks up workers who attempt to take industrial action to better their lot.

At best, VSO volunteers are foreign workers filling expertise gaps at the same rate of pay as local workers. This can be a rewarding and educational experience for both the volunteers and the local people with whom they work. At worst, volunteers are directly supporting the anti-working class policies of oppressive governments Occasionally, volunteers are recruited for posts when qualified and experienced Malaysian workers are available but rejected because of their ethnic origins. This, of course, is in direct contradiction to the VSO's declared anti-racist position. . .

As volunteers we are learning another lesson in exploitation — our own and that of follow workers in other parts of the world. We are not putting an end to exploitation by promoting the development of a global community based on co-operation. That will only come about when a majority of politically conscious workers across the world challenge minority ownership and control resources. Socialists work to that end; we cannot leave it to organisations like VSO, who are in the "development business" merely to promote and perpetuate the profit system.

K.

Blogger's Note:

Understandably, because of the critical nature of the article, this article was signed off as the anonymous 'K'. I understand that 'K'. was the SPGB Bristol Branch member, George Marcelo. He wrote further articles in the Socialist Standard whilst based in South-East Asia which have yet to appear on the blog. They will do eventually.

Also worthy of note, another member of the Bristol Branch of the SPGB during the same period, Naomi Roberts, also undertook VSO work and wrote about her experiences in Ghana in the pages of the Socialist Standard:

• Letter from Ghana (1988)

Scam Exposed (2019)

Book Review from the February 2019 issue of the Socialist Standard

‘The Sarawak Report: the Inside Story of the 1MDB Exposé’, by Clare Rewcastle Brown (Lost World. £14.99)

In May last year there was a general election in Malaysia in which the Prime Minister, Najib Razak, was voted out of office. This was the culmination of events dating back to 2009 and involving a massive scam in which billions of dollars were allegedly siphoned from the country’s finances into shell companies and the pockets of Najib himself and others. How all this was exposed is chronicled in considerable detail here by Rewcastle Brown, an investigative journalist whose blog Sarawak Report played a major role in bringing things out into the open.

The book and the exposé can be quite hard to follow for those not familiar with Malaysian politics; a glossary would have been very helpful in keeping track of the individuals and institutions involved. So we will focus on some of the more general issues which emerge.

One is the rarefied lives lived by a tiny number of elite people. Najib – who was also the Malaysian finance minister – used some of his wealth to buy votes in elections, while his wife had a liking for jewellery and expensive handbags. The ‘businessman’ Jho Low owned a mega-yacht and enjoyed throwing fabulously expensive parties. The Saudi royal family were involved too, and a company called PetroSaudi was used as a front for 1MDB (1 Malaysia Development Berhad, which is the equivalent of ‘plc’).

Stealing vast sums of money is all very well, but the funds need to be transferred into the global economy in order to be used. Ways of doing this include use of private banks, shell companies and tax havens, but also buying works of art (such as a Picasso painting for $179m). Large auction houses, Rewcastle Brown argues, need reform just as much as dodgy banks do.

There is also the issue of the ways in which the ultra-rich defend themselves. Lawyers write letters to those investigating their clients, demanding apologies or threatening to sue. PR firms are paid to produce vitriolic personal attacks on bloggers and journalists and, in this case, run a website Sarawak Reports (with the extra ‘s’). Fake accounts are set up on social media, and Facebook and Twitter are useless in combating what the author calls ‘a professional defamation industry’.

Sarawak is a state of Malaysia on the island of Borneo. Rewcastle Brown was born there, and she tells the story here of how many indigenous people have suffered under the corruption and profiteering of Malaysia’s elites: ‘Tribes that had survived for centuries by their own skills, living in the jungle off abundant fish, vegetation and meat, were now stranded and starving in the face of “progress”.’ The whole book shows how a few people can attempt to fix things in their own interests, even if in this case they were in the end not successful.

Paul Bennett

These Foolish Things: New Colonialism (1997)

The Scavenger column from the August 1997 issue of the Socialist Standard

New colonialism

Since 1982, the level of debt in sub-Saharan Africa has doubled to more than 100 percent of GDP. The economic injustice represented by the debt mountain is a subject to which the Archbishop of Capetown, The Most Reverend Njongonkulu Ndungane, will refer with particular force today. He will berate the countries of the First World for saddling poorer regions with crippling debt, punitive tariffs against exports and a restrictive macroeconomic stance. As a result, he will argue, that those bearing the debt burden are swamped by malnourishment. famine and disease and. in some cases, war. (Guardian, 24 April.)


Wasting brain power

Many banks have sophisticated operations in derivatives products, which were pioneered in the early Eighties. Derivatives are so called because they are contracts relating to underlying assets such as commodities, currencies or interest rates—they derive from those assets, such as dollars for delivery in three months’ time, or an option to buy or sell gilt-edged stock. As these contracts can often be combined with one another to create complex structures designed to meet the needs of client companies, they attract computer-literate people, preferably with mathematics-based degrees. (Financial Mail on Sunday. 15 June.)


The capitalist view

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Expediency rules

The prime minister of Malaysia, Mahathir Mohamad, will be visiting South Africa next month. Nelson Mandela is familiar with the system of government in Malaysia . . .  its detention without trial, censorship and hostility towards trade unions. But, although the South African president has dedicated his life to freedom, he will reportedly be bestowing on Dr Mahathir one of the highest civilian awards in his gift, the Order of Good Hope. The explanation is not difficult to find. There were the contributions to the African National Congress’s war chest in the 1994 elections—estimated to be 33 million rand (£4.6 million); a recent RI.9 billion investment by the Malaysian state oil company; and Malaysian involvement in a $4 billion scheme to rejuvenate Johannesburg. Malaysia’s expected purchase of Rooivalk helicopters could boost the struggling South African arms industry. Malaysia wants these ’’attack" craft only for "defence”. Mr Mandela assured critics recently. (Guardian, 24 April.)


Feelbad factor

Poverty is rising faster in Britain than in any other major industrialised country, an authoritative new United Nations report reveals. The report also shows that the poor are poorer here than in any other western country for which figures have been collected and that a higher proportion of old people live in poverty than anywhere else in the West. Britain’s child poverty rate, moreover, is second only to the United States. This devastating indictment—which Clare Short, Secretary of State for International Development, describes as “worrying”—contrasts sharply with progress in the fight against poverty in much of the rest of the world. (Independent on Sunday, 16 June.)


Vested interest

Last year the Government scooped £610.2 million from the Lottery in taxes; 12 percent of every pound spent by the public. (Mail on Sunday, 1 June.)

The Scavenger