Rear View: A frightful hobgoblin is stalking US colleges and universities (2016)

The Rear View Column from the March 2016 issue of the Socialist Standard

A frightful hobgoblin is stalking US colleges and universities

‘The Communist Manifesto is ranked among the top three most popular assigned readings in American college and university classes, according to the Open Syllabus Project (OSP). Karl Marx himself is the most assigned economist in higher education courses … One of the reasons Marx and Engels’s pamphlet may be so popular nearly 170 years after its publication is that it can be used to study a wide variety of subjects, including history, economics, social theory, and politics. It is also arguably the most influential work of the twentieth century, inspiring several uprisings, a number of communist revolutions, and the formation of both the Soviet Union and the People’s Republic of China among other governments’ (inquistr.com, 1 February). Supporters of the status quo can relax: the spectre haunting colleges is not that of communism but, at worst, social democracy, as espoused by Bernie Sanders. Marx and Engels, by contrast, wanted something rather different: ‘in place of the old bourgeois society, with its classes and class antagonisms, we shall have an association in which the free development of each is the condition for the free development of all’ (Communist Manifesto, 1848). Nothing like this exists, or has existed. The old lie about Russia being socialist or communist (Marx and Engels used the terms interchangeably) – and later, China, Cuba, Venezuela, etc – was identified remarkably early: in the August 1918 edition of this very journal.

Workers of the word wake up!

1865: ‘Instead of the conservative motto, A fair day’s wage for a fair day’s work, we must inscribe on our banner the revolutionary watchword, Abolition of the wage system’ (Marx, Value, Price, and Profit).

1928: ‘Earning a wage is a prison occupation’ (Wages, DH Lawrence).

1965: Workers still ‘don’t realise that they can abolish the wages system’ (Socialist Standard).

2016: ‘Gov. Andrew Cuomo’s proposal to gradually increase the state’s minimum wage to $15 an hour is supported by two-thirds of New Yorkers, according to a new Siena College poll’ (syracuse.com, 1 February).

Vice-president Marx?

‘Some Americans seem to be disconnected with historical reality, as a number of Hillary Clinton supporters signed a mock petition to approve 19th century socialist philosopher Karl Marx as her choice for vice-president if she’s elected president’ (rt.com, 2 February). Socialists do not agree with everything Marx said, even less actions carried out in his name or that of socialism/communism by groups or states –which would have him repeating in his grave the declaration ‘one thing’s for sure – I’m not a Marxist! – but starting with a clean slate, without misconceptions, can be viewed in a positive light. Emancipation à la Marx is ‘the self-conscious, independent movement of the immense majority in the interest of the immense majority’, without leaders, presidents –vice or otherwise.

Danger! Capitalism at work

Residents of Flint, a city in the US state of Michigan, have suffered greatly of late: cost-cutting has resulted in drinking water containing toxic levels of lead whilst clean water goes to Nestle. Legionnaires’ Disease is on the rise as is poverty. Flint also has a per capita violent crime rate seven times higher than the national average. Investigations are underway, but some members of our class, in a refreshing display of unity and concern, have already taken action: ‘more than 300 union plumbers from all over Michigan flooded Flint to install free filters for residents … Local plumbers with United Association Local 370 in Flint have been going door-to-door making sure that faucets are filter-ready since October … And last weekend, they got a boost from hundreds of union volunteers’ (huffingtonpost.com, 2 February). Sadly, local action is not enough as across America 535,000 children ages 1 through 5 suffer lead poisoning, by Centers for Disease Control and Prevention estimates, and, of course, this ‘problem’ exists worldwide.

Cultural poison

Lead poisoning such as that of water in Flint or from paint and petrol is an old ‘problem’ of modern capitalism which will end along with many others when a worldwide majority of us act to bring about socialism. The end of pre-history will also see the yoke of many barbaric cultural practices lifted, such as that of female genital mutilation which, according to a new study, ‘at least 200 million people in 30 countries have experienced ‘ (time.com, 5 February). This particular tradition of long dead generations is a nightmare for its living victims. Other poisonous cultural relics include forced marriage, child brides, non-evidence based medicine, cock and dog fighting.

Dublin, Easter 1916: What We Said At The Time (2016)

From the March 2016 issue of the Socialist Standard

A grave armed revolt in Dublin against English rule is raging at the time of writing. It is a revolt doomed from the outset, both because of the futility of its narrow nationalist aims, and the utter hopelessness of such a revolt against the mighty organised force of the political State. It is, apart from the fact that Socialism alone is worth fighting for, yet another illustration (if such were needed) that the organised Socialist conquest of the political power of the State is the only way, and that mere mob violence plays into the hands of the oppressor and strengthens the gyves that fetter us. Such a revolt, however, is the natural result of centuries of alien oppression, which has forced the ideas of Irishmen into nationalist channels and blinded them to its futility. And it is at the same time a fitting commentary on the pervid declarations of the British champions of “honour” and “righteousness” that “they” are fighting, above all, for the “rights of small nationalities”. (Editorial, May 1916)

The capitalist class – national and international – being in possession of the wealth stolen from the workers, compete with each other for the control of the world’s markets. This capitalist class, split into warring factions, are continually embroiled in trouble over the disposal of the wealth on the markets, but they present a solid front to the workers whenever the latter get out of hand in the endeavour to better their conditions of life. We have just witnessed in Ireland an example, where, as a result of an incorrect conception of their position in society, thousands of working men and women flocked into the Sinn Fein movement, only to be butchered by their oppressors in control of the armed forces of the State.
It is true that the Irish workers have a fearful struggle to live, like the rest of their class the world over. But an anti-social movement like theirs, with “Ireland for Irishmen” for its slogan, was doomed to failure from the start. We, the working men and women who form the Socialist Party of Great Britain, sympathise with our fellow workers in Ireland in their struggle against the hideously squalid conditions that prevail among them, but must record our hostility to any movement that is not based upon the class struggle. (The Prize-Fighter’s Evidence, July 1916)

We have heard much in times past on the subject of German atrocities, but the revelations vouchsafed to us in connection with the Dublin revolution leaves the question, a very debatable one as to whether the ruling class here are any better than elsewhere. The shooting of Sheehy Skeffington and two other journalists affords an illustration of the point. The details are rather significant, particularly the second shooting of Skeffington, when it is borne in mind that the officer who gave the order is declared insane. The reports of the court-martial to be found in the columns of the “Daily Chronicle” for June 7th and 8th are highly interesting. (By the Way, July 1916)

The latest blunder of the Irish working class is in the support given to the Sinn Fein movement, which seeks to establish a republic, with the examples of France and the United States before them proving conclusively the futility of such an experiment to abate their ever-growing poverty. The form of government makes no difference to the workers. Government implies subjects and under the capitalist system of society the actual government machinery, Parliament, councils and judiciary, etc., are representative of the capitalist class – the necessary machinery for ruling a subject class composed of wage-slaves. (….)
It is a false notion of the Sinn Feiners and Nationalists that the Irish workers must struggle for national independence before they can tackle the problem of poverty. But the working class everywhere is under one capitalist government or another. To split territories, set up new governments, or to re-establish old ones will not help them nor even simplify the problem. Their only hope lies in the speedy establishment of Socialism. They must join hands with the workers of the world, and make common cause against the ruling class. They must make ready use of the last war – the war of the classes, in which classes will be abolished and a real equality established on the basis of “common ownership and democratic control of all the means of life.” (The Irish Question in History, August 1916.)

The difficulties already existing in Ireland, coupled with the feelings engendered by the ruthless use of the military both during and since the futile “rebellion” would seem to make the game [of imposing conscription on Ireland] scarcely worth the candle (…)
Not until the working class in Ireland clearly grip the essential fact that they are slaves to the master class no matter what nationality these latter may be; fully realise that such slavery is confined within no national boundary but is world wide; throw off the mental shackles of either “nationalism” or “religion,” and join hands with their fellow workers the world over to abolish capitalism –the cause of modern wars –not until then will they be free from oppression and tyranny and be able to enjoy the results of their efforts applied to Nature’s resources. (Conscription Continued, November 1916)

50 Years Ago: The Election – What is at Stake? (2016)

The 50 Years Ago column from the March 2016 issue of the Socialist Standard

On March 31st the electorate will once again go to the polls and perform the act which Socialists consider is of crucial importance to the way in which society is organised ― they will vote. Like other elections in the past, this one will generate its own groundless optimism. Once again, the illusion will be fostered that here is a fresh opportunity at last to solve the problems which have been a burden for so long. In spite of the enduring failure of all varieties of political parties to overcome such problems as war, poverty and the general chaos that is a constant feature of Capitalism, the Labour and Tory parties will go blandly into this election as if the experiences of the past had never occurred.

Once again, there will be the cheap traffic in promises. Once again, there will be the contrived differences between parties who are united in their defence of Capitalism. Once again, there will be the complete failure to face up to the realities of life in 1966. Once again, the politics of personalities, gimmickry and opportunism will take precedence over a serious understanding of the difficulties besetting society.

The records of both the Labour and Tory parties make a mockery of their claim to be the instruments of social improvement. The past policies of both these parties are an indictment which no amount of hollow phrase-mongering can overcome. For all their talk of progress and modernisation, their ideas and actions are imprisoned by the limitations of the status quo ― that is ― Capitalist society.

What is at stake in this election? What is it that the electorate by voting Labour, Tory or Liberal will endorse?

Whatever spurious disagreements will engage the Heaths and the Wilsons during this election, in fact they have a great deal in common. Socialists talk about the means of production and by this we mean all the instruments and technical know-how that man has developed for the purpose of producing wealth, from hand tools to nuclear power stations. All reformist politicians agree that these means of production should continue to be monopolised by a small privileged section of the population.

(From Socialist Standard, March 1966)

Founding myths (2016)

Book Review from the March 2016 issue of the Socialist Standard

'Who’s Afraid of the Easter Rising? 1916-2016'. By James Heartfield and Kevin Rooney. Zero Books, 2015, £11.99.

Socialists will not like this book, because of its relentless pro-Irish Republican stance.  Those who took part in the  armed uprising in Dublin at Easter in 1916 were, we are told, ‘heroes’ and ‘freedom fighters’ who fought for a ‘noble cause’. Certainly, those prepared to die for their beliefs deserve some respect, but what was the ‘noble’ cause? What was the ‘freedom’ they died for?

The rebels proclaimed an ‘Irish Republic’ from the steps of the GPO. The proclamation was a typical bourgeois-revolutionary text. The freedom and equality it invoked were merely the same as those of the bourgeois-revolutionaries who set up the first French Republic in 1793 – freedom from hereditary and alien rulers and equality before the law and in the marketplace. The aim was set up an independent, capitalist Irish state. It had nothing to do with socialism despite the participation of the one-time revolutionary socialist James Connolly; in fact, in participating in it he could be said to have betrayed the cause of the working class and socialism.

The authors make another extravagant, though less implausible, claim for the uprising: that it was anti-war and anti-imperialist, ‘the first open revolt against Europe’s warlords’, a key event in bringing the First World War to an end. Hardly, as it occurred relatively early on in the war which continued for a further two-and-a-half years. It is true that, later, nationalists seeking independence from the British Empire did look back to it as an anti-imperialist action to emulate. For the participants, though, it was a simple pro-Irish revolt.

In describing it as ‘the founding act of the Irish State', Heartfield and Rooney are going along with the Irish State’s myth of its own origin. A much more historically accurate candidate for this would be the decision of the Sinn Fein MPs elected to the House of Commons in the 1918 UK general election not to take up their seats but to meet on their own in January 1919 as the parliament of an independent state.

In any event, both were insurrectionary acts, and Heartfield and Rooney derive much fun from pointing to the embarrassment of the present ruling class in Ireland who are clearly ashamed of the insurrectionary origin of their state. A large part of the book is taken up with arguing against the views of the ‘revisionist’ school of modern Irish history which says that the uprising  was unnecessary and even harmful as, after the War, Home Rule and eventually an independent Irish state would have come about peacefully, harmful because it enshrined the gun into Irish politics.

We can agree with the revisionist historians that the myth of the Easter Rising needs debunking. The Irish Republican tradition has been harmful and anti-working class but then so has Unionism. However,  those who argue that a peaceful transition to Home Rule and an independent state was likely had it not been for the Easter Rising are assuming that the Unionists in the North would have accepted this without resorting to violence (as they had done before the war, introducing more guns into politics than the Nationalists). After all, Ireland was then of strategic importance to the British Empire, and the established industrial capitalists of the North had a vital economic interest in not being cut off from their fellow British capitalists behind the tariffs walls of an economically backward Irish state.

In any event, irrespective of how it came into being, an independent Irish state was of no interest or benefit to the working class there.

There are a couple of mistakes about names. The Randolph Churchill who played the ‘Orange card’ in 1886 was not a Sir but a Lord (the son of a duke, and Winston’s father). The Con Lyhane mentioned as helping Tom Jackson’s anti-war activity in Leeds is surely Con Lehane; both incidentally founder members of the SPGB who later went off the rails.

Adam Buick

Exhibition Review: 'Broken Lives' (2016)

Exhibition Review from the March 2016 issue of the Socialist Standard

The International Slavery Museum in Liverpool (housed in the Maritime Museum) is hosting a display on slavery in modern India. Most of the enslaved are Dalits, which means ‘broken, crushed, oppressed’; the former term ‘untouchables’ is objectionable. The exhibition, which mainly consists of factual information plus extremely moving case studies and interviews, is produced in partnership with the Dalit Freedom Network (www.dfn.org.uk).

There are perhaps fourteen million people in ‘modern slavery’ in India, which means one person in a hundred and constitutes 40 percent of the world’s slaves. Indian slavery often applies to children, and can mean everything from bonded labour (paying off their parents’ debts) to sex trafficking and domestic servitude. Boys and girls as young as five may be forced into child beggar gangs, or set to work in brick kilns. Under the Sumangali scheme, girls work in textile factories, in dreadful conditions and with little leisure time; some of the clothes they produce are for big Western corporations.

Perhaps the most appalling is ritual sex slavery, by which girls are ‘dedicated to a goddess’ as a Jogini, serving in a temple and then raped by a local power-holder when they reach puberty. After that they are available for sexual purposes to any man. Up to 80,000 women and children are enslaved as Jogini. Like child labour, this is illegal, but it still continues.

Behind all this of course are the poverty and despair of so many Indian families, the profit demands of big companies, and the ignorance and hypocrisy of religion.

Paul Bennett

Letters: Jimmy Hill (2016)

Letters to the Editors from the March 2016 issue of the Socialist Standard

Jimmy Hill

Dear Editors

The obituary on Jimmy Hill (February Socialist Standard) failed to mention his role as consultant and mediator of a ‘rebel tour’ to apartheid South Africa to play football in 1982. There was also omission of his defence of football manager Ron Atkinson’s use of the word ‘nigger’ in an off-air  2004 television transmission for football.

I am also very surprised that we devoted so much space to the death of David Bowie.

Joel Thompson

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David Bowie

Dear Editors

I was surprised as a socialist to read the rather effusive article on David Bowie in the February Socialist Standard, (‘David Bowie: Ground-Breaking Artist’) when many readers would, I believe, regard him as the hyped-up product of that epitome of brash capitalism; the pop music industry.

Rather than being a genius as the article tends to imply, I would venture to suggest that a more realistic reading of the situation would be that his greatest talent was in recognising his limited ability and boosting his career by wearing outrageous clothes, adopting weird personas and making controversial statements to appeal both to the young and those who see profundity where none exists.

An example of the latter was his claim to be gay/bi-sexual at a time when later admitted that this claim was a lie and not unconnected with the promotion of Ziggy Stardust, the androgynous character he was then adopting for his stage shows.

It's difficult, therefore, not to reach the conclusion that, rather than being concerned with the plight of the LBGT community, his greater concern, as with other similar statements and stunts, was for self-publicity, his image and greater record sales.

Richard Layton

Reply: 

This might be what some are saying down at the pub but it’s surely simplistic and unfair to assume that all pop artists are mere talentless self-publicists. Bowie at least wrote his own music which the writer, a musician himself, judged had merit. In view of the large number who liked him he must have said something that echoed how they felt under capitalism?  – Editors

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Myriam Namazie

Dear Editors

The article 'From No Platform to Safe Spaces' (February) concluded that suppressing free expression at universities 'must be opposed and exposed just as much as the Leninist ‘no-platformers’'. It is probably worth then pointing out to readers that the militant atheist and ex-Muslim Maryam Namazie works for the Central Committee of the Worker-Communist Party of Iran (WPI) as editor of its journal. While critical of the Soviet Union the WPI nevertheless operates as a vanguard with a cadre and 'rank-and-file' reprinting works by Lenin.

Their figurehead Mansoor Hekmat wrote 'If it is a question of a real assessment of Lenin, of the truth of his views and his practice from the viewpoint of Marxism, of his contribution to the revolutionary thought and practice of the working class, and so on, of course I am a Leninist. In my view Lenin was a genuine Marxist with an essentially correct understanding of this outlook, and a worthy leader of the socialist movement of the world working class.' (http://wpiran.org/english/?p=299)

On 'safe spaces' policies, definitions might vary. While it might be undesirable for applying too broadly, a space free from prejudice, discrimination or harassment voluntarily agreed to by freely assembling workers might be achieved (even inadvertently) by the Socialist Party practice of meeting with chairpersons and having editors publish the Socialist Standard.

Jon D. White

Reply: 

We are not aware that, even though it regards itself as a Leninist vanguard, the Worker-Communist Party of Iran advocates ‘no platform’. Not all Leninists do, to their credit. If it does then Namazie would be a hypocrite, but even if she were she should be free to express that view. Even no-platformers should be allowed a platform. That’s the point. – Editors

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Paul Mattick

Dear Editors

Stefan's review of Gary Roth's book on Paul Mattick (February Socialist Standard) is interesting and thought-provoking. There is, however, one otherwise minor point I think it would be useful to bring out. The World Socialist Party of the U.S. did not 'originate' from the Socialist Party of Michigan, as stated in the review.

The Workers' Socialist Party was the direct result of collaboration between disaffected Detroit members of the SP of A and SPGB 'slackers' Adolph Kohn and Moses Baritz, on the run from the British wartime authorities. These members, drawing on Kohn's input, resigned as a body from the SP of A, which would not allow the breakaways to use its registered trademark as the Socialist Party of the United States. So they dodged the issue by adding the qualifier 'Workers' to the name.

The emergence of the Proletarian Party, on the other hand, was the outcome of mounting conflicts within the SP of A's Michigan affiliate: between the faction grouped around John Keracher, who promoted a radical policy of no reforms of capitalism, and members who had no trouble selling the national office on Keracher's heretical radicalism. The national organization finally 'expelled' the Michigan troublemakers by excluding them from its reorganized state affiliate.

The new Proletarian Party, under Keracher's leadership, held views that were generally regarded by the WSP as nearly identical to its own  – except for the PP's passionate endorsement of the Bolshevik Revolution. It is true there was a longstanding relationship between the Proletarian Party and the Workers' Socialist Party/Socialist Education Society. But it was a debating interest centered mainly around the latter's infatuation with 'the Russian bug,' as WSP members referred to it. The PP often derisively referred to the WSP as 'revolutionary tea drinkers.'

It is in any event somewhat misleading to describe both organizations unqualifiedly as having a common origin in the Socialist Party of Michigan.

Ron Elbert, 

Boston, USA

Party News: Election Activity (2016)

Party News from the March 2016 issue of the Socialist Standard

The Socialist Party will be standing in the 5 May elections to the Welsh Assembly and the Greater London Assembly. In London we will be contesting 3 of the 14 super-constituencies and in Wales Swansea West.

In all, over a million electors will have the chance to vote for a socialist society based on the common ownership and democratic control of the means of production with distribution on the basis of ‘from each according to ability, to each according to need’, and against present-day, capitalist society of minority class ownership and production for profit which all the other candidates will be standing for in one form or another.

The election campaigns are being organised locally. If you want to help out at street stalls and/or in distributing leaflets door-to-door or at stations  contact the local branch (see page 8 for details).

London North East: North London branch.

London South West: West London branch.

Lambeth & Southwark: Head Office.

Swansea West: Swansea branch.

Proper Gander: The Golden Swill Bucket Awards (2016)

The Proper Gander column from the March 2016 issue of the Socialist Standard

‘Advertising is the rattling of a stick inside a swill bucket’ wrote George Orwell in Keep The Aspidistra Flying. In the seventy years since then, advertisers have found ever-more sophisticated sticks and swill buckets to grab our attention. The slogans which Orwell satirised look twee compared with today’s barrage of commercials jumping out at us from websites, billboards, newspapers, magazines, and at fifteen minute intervals during the dross we watch on telly. From the girl in the Flake advert to the Go Compare opera singer, TV commercials remain the most striking, even in our world of targeted online ads. However annoying, manipulative or offensive the rattling is, what’s important is how much it gets noticed and talked about. They say there’s no such thing as bad publicity, so even a mention in the Socialist Standard might count as a small win for the ad agencies. In honour of this, Proper Gander presents the Golden Swill Bucket Awards for excellence in TV advertising.

The award for Most Rose-Tinted Depiction Of Driving is a tie between the ads for the Peugeot 208, the Infiniti Q30, the Mercedes Benz A-Class, and no doubt a load of other top-end cars. They glide silently through empty, shiny city streets, driven by the kind of attractive, confident businessperson we’re supposed to aspire to be. But if you fork out the £20,000+ for one, you’ll still end up stressed out in the same motorway traffic jams and suburban rat-runs as anyone in a clapped-out second-hand Ford KA.

Bisto Best gravy granules win the award for the Most Brazen Attempt To Manipulate Good Intentions. Their ‘Together Project’ campaign is an appeal for us to invite a lonely elderly neighbour round for a Sunday roast dinner (as long as it involves gravy). Yes, that’s a nice thing to do, but we could have a beef with Bisto’s implied emotional blackmail. Why should we put any stock into what a gravy company tells us?

The award for Most Crass Celebrity Endorsement goes to John Cleese for lowering himself to collaborate with Specsavers. For years, their adverts’ myopia-based misunderstandings have been desperately trying to make the phrase ‘should’ve gone to Specsavers’ part of the national lexicon. Having apparently run out of their own ideas, they’ve now turned to regurgitating other people’s. So they’ve decided to taint the memory of that scene in Fawlty Towers when Basil attacks his car with a branch by remaking it with Cleese as a short-sighted older version mistakenly whacking a police car instead of his own. The policemen inside are surprisingly nonchalant, whereas in real life Basil would have been tasered and restrained before falling down the stairs on his way to the cells.

The award for Most Depressing Visual Metaphor goes to Experian credit checking. A pretend-couple falling onto a settee laughing isn’t the most original scene to include in an advert, but the Experian couple’s laughter seems a bit deranged considering that they’re cuddling an upholstered number representing their credit rating. Having your life’s worth reduced to some digits isn’t made more palatable by making them out of stripy fabric.

The award for Most Blatant Use Of Spin goes to the government, who paint themselves as saviours of the working class in their commercial for the National Living Wage. Parliament doesn’t usually promote its law-changes on the gogglebox. We didn’t see their decision to bomb Syria advertised with a glossy campaign showing Tornado jets zooming towards their targets, apart from the latest RAF recruitment drive. The National Living Wage advert’s ‘step up’ slogan is illustrated by cleaners and waitresses walking up stairs, telling us that from April, the minimum wage rises by 50p to £7.20 an hour for workers aged over 25. Rebranding the minimum wage as the ‘living wage’ is presumably intended to side-step claims by the Living Wage Foundation that £7.85 an hour is the lowest for an ‘acceptable standard of living’. And cuts to child and working tax credits will undo some of the increase in income for many of those paid at the new minimum. However the minimum wage is calculated and advertised, it still just represents a rate at which we get exploited. It’s more like getting stepped on than a step up.

Our final award goes to First Direct bank for the Most Self-Consciously Wacky Campaign. Banking has suffered an image problem since sky-high bonuses and bail-outs hit the headlines. So what better way to rebrand a bank than with a monochrome CGI duck-billed platypus with a northern accent? This platypus – apparently called ‘Barry’ – hangs out with beat-boxing sparrows and shops in second-hand record stores while he’s eulogising First Direct bank. Barry likes ‘things a bit off-beat’, although considering how hard he’s trying to be hip, he could have thought of something more outré to promote than financial services.

Mike Foster

The Stickies and the Provos (2016)

From the March 2016 issue of the Socialist Standard

We examine a key division within Irish nationalism which reflected tensions between those who asserted the primacy of ‘nation’ and those who ended up seeking to prioritise ‘class’.

A significant feature of those who situate themselves in the anti-establishment tradition of any country is their attitude to nationalism and imperialism. While reformist politicians of the Labour and Social Democrat varieties tend to identify with their own ruling class and seek to work with them to ameliorate the worst aspects of capitalism, those further to the left often seek alliances (even if just at a conceptual, ideological level) with the ruling classes of other countries. This is often done on the basis that an enemy of an enemy must be a friend. It is the reason why much of the left in Britain has been sympathetic to Irish nationalism and why Irish nationalists have repeatedly sought support from almost anyone hostile to the British state.

Behind this viewpoint often lies the concept of imperialism. This comes in various guises, though the most common conception is the idea that big powerful countries exploit smaller, weaker ones and that this is a fundamental feature of the way capitalism works. Some, such as Lenin, took this concept to its logical conclusion by arguing that sections of the working class in the stronger countries have shared in the fruits of the exploitation of all those in the weaker countries (creating a so-called ‘aristocracy of labour’).

One of the key divisions among people calling themselves revolutionaries has been around this issue. And in the countries deemed to be small, weaker and under the subjugation of a power like the British Empire, this has influenced the thinking and methods of those who wished to create a different type of society. Some have taken the view that the priority must be to fight a battle against the ruling class of the dominant country as they are construed as being the main enemy. Others have been more mindful that in attempting to overthrow the ruling class of a ‘foreign’ empire it is possible to merely install a domestic ruling class instead, leaving capitalism and its attendant problems intact.

This has been one of the most significant, historic divisions in the Irish republican movement for decades, though these days it receives relatively little attention (including from left-wing organisations and commentators in Britain).

The Troubles

In the late 1960s, when much of the developed world was impacted by waves of radical protest, and impelled by the events of May 1968 in Paris, a split developed among Irish republicans. It reflected a division between those who thought nationhood was more important than class interest, and vice versa. It was expressed very clearly at the time in this statement by the youth wing of Sinn Fein (Na Fianna Eireann):

‘The doctrine of Karl Marx is contrary to the Fianna teaching. It is contrary to the Fianna declaration which states – I pledge my allegiance to God and the Irish Republic. Marx also stated that the workingman has no country. We of the Fianna for the most part are the sons of workers but we have a country and we love it very dearly. We can in no way be associated with International Socialism’ (Irish News, 24^th December, 1970).

Exactly what part of the country these young republicans owned (in truth, little if anything) was part of the problem identified by those on the other side of the debate. Whether republicans in Northern Ireland or the Southern Republic, these were people who took the contrary view that they had more in common with their fellow workers in the pro-British loyalist community than they did with the owners and controllers of capital on either side of the Irish border. In some ways, the ideas of this group were ill-formed and sometimes even contradictory but they were struggling towards a position where in answer to the question ‘which is more important – nation or class?’ they answered ‘class’.

During the so-called ‘Troubles’ in Northern Ireland from 1969, the division between these two groups of republicans was to become almost as poisonous as the division between Protestants and Catholics (or more accurately UK nationalists and Irish nationalists). It was so severe that it led to a fundamental split in both Sinn Fein and its paramilitary wing, the Irish Republican Army (IRA). This division was between the ‘pro-communist’ group that held many of the leadership positions in these organizations at the time, around Cathal Goulding, Chief of Staff of the IRA, and Tomos Mac Giolla, President of Sinn Fein – and those who opposed them. Though mainly Dublin-based, the leadership had considerable support in parts of the Republic and pockets of support in the North too, including republican strongholds in Belfast such as the Lower Falls and the Markets, some of the border counties and parts of Derry including the Bogside. Because of their leadership positions within the movement they became known in the press as the ‘Official’ IRA.

Those who criticised  their ‘communism’ and irreligion, placing emphasis on the nationalist, sectarian struggle against the British state and their loyalist ‘stooges’ instead, emerged  as a new, Provisional IRA – the ‘Provos’. Cathal Goulding labelled them blackshirts in balaclavas. Indeed, many of the Officials believed the Provos had been funded by elements in the then Irish government around Minster of Finance – and later Taoiseach – Charles Haughey, who wanted to see ‘communists’ removed from the IRA leadership (even if a later court case failed to prove this conclusively).

Sectarianism

Over time, the Provos (who set up their own political party, Provisional Sinn Fein) became the majority within the movement – and the main reason for this was a very practical one. In a period when many Northern Irish Catholics felt themselves to be not only discriminated against but also terrorized by the British state and the Protestant mobs whipped up by demagogues such as Ian Paisley, the traditional IRA was seen to have failed. The epithet ‘I Ran Away’ was levelled at the Officials, and the Provos were often seen as being more proactive defenders of Catholic communities, while taunting the ‘Marxist’ Officials with the nickname ‘the Stickies’ after the new, adhesive lily they adopted when commemorating the Easter Rising.

In reality, the situation was more complicated than the stereotyping might suggest – some young Provos, attracted by romantic notions of the armed struggle, also had pronounced left-wing sympathies (including both Gerry Adams and Martin McGuinness). Meanwhile the Officials were often involved in bloody battles against the security services, loyalist paramilitaries and the Provos.

What was clear, though, over time, was the trajectory of the Officials away from traditional, Irish nationalist politics and the armed struggle to achieve a united Ireland. Indeed, in 1972 they became the first paramilitary organisation to declare a ceasefire. Catholic priests in Derry declared that as representatives of international communism the Officials were not welcome there, while ‘better dead than red’ graffiti was painted on walls in the Bogside by the Provos. For their part, the Officials declared that they were not a Catholic organisation and emphasized the need to win over loyalist workers to the cause of socialism (even if what they meant by this usually amounted to vague aspirations common on the radical left towards what would effectively be state-run capitalism, and a penchant for left-wing icons of the time such as Che Guevara).

Other elements emerged that became hostile to the Provos and Officials alike, adopting a mix of hardline Irish nationalism with Leninism. Most notably, this led to the foundation of the Irish Republican Socialist Party (IRSP) and its paramilitary wing, the Irish National Liberation Army (INLA). This was effectively another breakaway from the Officials by those unhappy with their lack of proactive military engagement. It became an especially violent and sectarian organisation under the leadership of Seamus Costello and infamously blew up Tory politician Airey Neave. The INLA initially attracted tacit support from independent MP Bernadette Devlin who was to claim ‘the Provos are concentrating on getting rid of the British in a military campaign without any policy on the class war, and the Officials now have no policy on the national question . . . We will agitate on both the national and class issues’ (Irish Times, 14 December, 1974). But the INLA was prone to feuds – both internal and external – and while Costello had at one time been Director of Operations for the Official IRA under Cathal Goulding, he was almost certainly murdered by them in 1977.

Of more lasting significance was that the differing positions of the Provos and Officials was reflected in their attitudes when incarcerated in prison, typically at the time in Long Kesh and the Crumlin Road jail. The Provos refused to mix with Protestant prisoners and demanded political segregation – the Officials saw the opportunity to speak politically to fellow workers who had come from the other side of the religious divide, including in Open University seminars. It was here that contact was made with loyalist paramilitary leaders such as Gusty Spence of the Ulster Volunteer Force (UVF). A secret meeting in Dublin between the Official IRA and UVF paramilitary leaderships followed in 1974 and while obvious differences remained, it was clear that a certain strand of Ulster Loyalism had some sympathy with positions taken by the Officials and their general approach to politics. In 1981 Gusty Spence publicly announced his conversion to what he called ‘socialism’ and – perhaps bizarrely – his nephew was arrested for membership of the Official IRA. This type of shift within a particular current of Protestant politics was later to be reflected in the emergence of the political wing of the UVF, the Progressive Unionist Party under David Ervine. This developed a political position that appeared in some respects to be non-sectarian and with an economic programme that was unashamedly leftist.

Workers’ Party

In 1977 the Official’s political organisation renamed itself Sinn Fein – the Workers’ Party, later to become just the Workers’ Party. Once again in distinction to the traditional IRA/Sinn Fein nationalist position, they were prepared to not only stand in elections either side of the border, but to take their seats too. This meant abandoning the policy of so-called ‘abstentionism’ which refused to recognise the legitimacy of either the British state in the six county Northern Ireland, or the ‘incomplete’ 26 county Republic in the South.

Thus began a long march towards a form of political respectability, and long before Provisional Sinn Fein began to make a similar journey. It was a journey though that wasn’t without trauma and led to a familiar leftist split in the 1990s when a ‘reformist’ faction around Workers’ Party Irish MP and MEP Proinsias De Rossa ended up forming the Democratic Left. This then drifted into the Irish Labour Party in 1998, though only after having formed a ‘Rainbow Coalition’ government with Fine Gael and the Labour Party first. 

This left the hardline rump of the Workers’ Party to soldier on around veterans Mac Giolla, Sean Garland and Seamus Lynch  – ‘soldier on’ being the operative phrase. For while the Official IRA had gone on conditional ceasefire in 1972, it had never entirely gone away or ceased activity. Though officially denied, overwhelming evidence suggests that this particular strand of republicanism had long organised itself into ‘Group A’, which was the political wing called the Workers’ Party, and ‘Group B’ which was the remnants of the Official IRA. The latter was mainly charged with protection of members and fundraising activities that were somewhat unorthodox. These notably included bank robberies, as their leftist politics was not to the liking of traditional republican fundraisers in the US who had helped bankroll the Provos.

Perhaps most bizarrely of all, in 2009 WP leader Sean Garland was arrested in Dublin by the Garda with subsequent (unsuccessful) attempts to extradite him to the US that made him an ageing cause célèbre for leftists and celebrities alike. The charge from the US Secretary of State Condoleezza Rice was that he had – through contacts in North Korea –helped create vast quantities of high-quality counterfeit US dollars. This was allegedly an attempt to both fundraise for the cause and undermine capitalism from within at the same time. Coincidentally, it was at this point that the Independent International Commission on Decommissioning of weapons in Northern Ireland confirmed that ‘Group B’ armaments, including weapons used forty years previously, had finally been put beyond use.

So effectively ended a story partly tragic and partly comic. The WP does still exist (standing candidates in the 2015 UK General Election in Belfast) but is a shadow of its former self. It is a fascinating case study of the tensions between nationalism and class-based politics, and which nevertheless had a major, if partly hidden, wider influence including on its old adversaries the Provos. For they – under the leadership of Adams and McGuinness – ended up adopting many of its political positions (and allegedly even one or two high profile bank robberies) when decades before the Provos had all but attempted to wipe them out as traitors to their cause.

Books such as Inside the IRA by Andrew Sanders are worth reading for those interested in learning more about their political tradition and position within Irish republican politics, though The Lost Revolution: The Story of the Official IRA and the Workers’ Party by Brian Hanley and Scott Millar is indispensable – a veritable tour de force about this historical political curio. Partly hard-headed pragmatists who realised they had more in common with their fellow workers than with their bosses, and partly romantic rebels with naïve attitudes towards the rebellions and revolutions of the past, their history is one from which many lessons can be drawn – and not all of them in the way they intended.

Dave Perrin

Pathfinders: (Pr x Media) = Funding2 (2016)

The Pathfinders Column from the March 2016 issue of the Socialist Standard

Last month the world woke up to the strange headline that a) gravitational waves had almost certainly probably been detected and that therefore… b) wait for it… c) Einstein was a bit clever and… d) his theory of relativity was almost certainly probably right.

Of course the scientists were ecstatic. They had been trying to find these waves for years, and now that they had, they also potentially had a new way of looking at the universe. Maybe.

So, good job and pats on the back all round, but front-page splash material, really? It was like the Higgs all over again, with journalists and readers alike gamely talking it all up while trying not to look too baffled.

On the face of it, not much had really changed. Einstein's theory of relativity had already been corroborated as far back as 1919, and every scrap of observational data since had only served to confirm it, making it one of the most successful theories in the history of science.

In a sense, this was the least desirable outcome, from the point of view of new physics. And new physics is sorely needed, because at the moment the Standard model doesn't make sense. Relativity and quantum mechanics are like the unstoppable force and the immovable object, and the Standard model has them worryingly in collision. The new discovery does nothing to change that.

Still, it is pretty clever to be able to detect a movement just a thousandth of the width of a proton (though some newspapers mistakenly printed 'atom' instead, which is like confusing a football with a football stadium). And, to add spice, it was one of those cases of serendipitous luck that make science a lot more fun to read about.

But how interested are the public by all this? It's not as if relativity is a subject you often hear discussed down the boozer, although maybe it depends on the boozer. And the booze (how can nothing be made of something, how can you bend time, how can you pack 30 suns into a space the size of a city, how do they even know any of this, why am I seeing two of you...?).

To many people, physics is just an advanced form of trainspotting (they might say the same about radical politics). Why should anyone care about it, when surviving in capitalism is already a full-time job? Trouble is, people feel that they ought to care because the media is making a big song and dance about it (unlike radical politics). And likewise, the media make a fuss because the scientists are making a fuss.

It comes down to a simple equation: PR x Media = Funding. Gone are the days when science was done by balding boffins in potting sheds. Instead it's 'Big Science' using 'Big Data' collected by Big Tools with Bloody Big Budgets. Detectors like the LIGO gravity wave sensors are hooked up in a patchwork process known as interferometry, across continents and sometimes across the world or even across space. That's not cheap. Then there are large colliders like the LHC at CERN, or the International Space Station (the most expensive tool ever built by anybody) or the ITER fusion reactor at Cadarache in France. In these cases the budgets are so big that only governments can afford them, and even then, only if they club together. And governments, as everyone knows, are peculiarly sensitive to the prevailing climate of popularity, not only among the voting populace who think they're paying for all this but also, and more importantly, among the capitalist class who are actually footing the bill.

So science, to get its funding, has become something of a beauty contest, which is why savvy scientists now engage PR firms after, and sometimes before, getting their research peer-reviewed, and why the pressure is on to announce results even before there are any results to announce. Physics, in particular that ethereal branch known as cosmology, scores surprisingly well in this beauty contest, not because it's in any way relevant or accessible to most of us, but because it's full of famous and charismatic stars (no pun intended), it sports some preposterously untestable ideas, and it's swathed in an aura of mysticism that, in the post-religion era, seems satisfyingly profound. Geneticists and chemists just don't have that kind of glamour. Though they tend to produce far more useful science, they are the unlovely infantry grunts doing essentially icky and sticky things with test tubes. Physicists are the dashing flyboys, the Brylcreem theorists who will make the human race race faster and faster, and maybe loop the loop. It's still based in fact, but quasi-fetishised, made to mean more than it seems, and to seem more than it means - science goes to Hollywood.

Still, and as a quid pro quo, new Hollywood sci-fi movies are increasingly expected to be 'scientifically correct'.  Nobody ever expected Flash Gordon to flash a PhD, but the product of a more scientifically-engaged public is a more scientifically-critical audience, so now film-makers simply can't get away with putting sound effects into space battles because everybody knows (yawn) that sound doesn't travel in space. Instead, and in a development few would have predicted, recent films like Gravity, Interstellar or The Martian are promoted, despite the varying silliness of their plots, precisely on the grounds of their devotion to the laws of physics, and criticised precisely where that devotion falls short.

And why not indeed? If only film-makers would apply the same rigorous standards to their history films, perhaps today's voting public would be a bit better informed about the world they live in, how it got that way, and what they should really be angry about. We've had politically correct, and now we've got scientifically correct. Maybe next cinema-goers should be demanding historically correct. And who knows? Unlike the detection of gravitational waves, that could well be a development that ends up rocking everybody's boat.

PJS

Education questions (2016)

Book Review from the March 2016 issue of the Socialist Standard

'Slavoj Zizek. A Zizekian Gaze at Education'. By Tony Wall and David Perrin. Springer. 2015.

A recent review in the Socialist Standard of a book on the nature of democracy in advanced capitalist society pointed out the hollowness of the voting process, used as it is to confirm and consolidate the status quo, compared to the much more varied and meaningful use it could be put to in a society organised differently. The same can surely be said of the education system under capitalism whose main purpose is not to spread knowledge and understanding for its own sake but to impart to its ‘consumers’ the ‘skills’ necessary to carry out functions in the market system when their formal education is over and at the same time to habituate them to the ‘normality’ of that system, making it unlikely they will look beyond it for alternatives forms of social organisation.

This is something clearly articulated by Wall and Perrin in their book on the Slovenian left-wing social commentator and philosopher, Slavoj Zizek. In the last 20-odd years Zizek has produced numerous works in which he seeks to analyse the workings of modern capitalism and in particular how it shapes the psyche of all those who live under it. As this book points out, some have seen Zizek as an intellectual charlatan, ‘an empty vessel making much philosophical noise’, but Wall and Perrin, while making it clear that Zizek ‘rarely speaks about education directly’, find his broader insights into capitalist society sufficiently stimulating to apply them to the education system they themselves work in. In doing so, they go on a discursive tour that takes in situationism, the autodidactic educational tradition, and attempts at alternative education like A S Neill’s Summerhill School.

They point out how the ‘familiarity breeds consent’ processes Zizek emphasises are, in the area of education as in others, both subtle and all-encompassing so that ‘we carry on regardless, even if we have been trained to question our own assumptions and engage in critical reflection – we are readily duped and tricked and “being critical” can even lead to the concepts we are seeking to dismantle taking an even tighter grip on us’. Here we have an excellent description of how acceptance of the increasingly rigid processes of capitalist education envelop both teachers and students. Some of course do see through it, but attempts to pursue a different path within that system are most likely to result in estrangement, in weary resignation or, as the authors put it, ‘acting as if’ (e.g. as if ‘dumbing-down were not taking place or Ofsted inspections in schools or research assessment exercises in universities really were crucially important), because of our need to fit in, or even because our job may depend on it. 

The final chapter of this book, the first attempt to apply Zizek’s ideas to education, is entitled ‘Now What Might We Do’. But the writers seem to recognise that the amount that can be done within the framework in which they operate as educators is extremely limited. They quote approvingly Zizek’s statements that ‘one should analyse the capitalist system as a totality of interdependent links’ and that ‘you can think beyond capitalism and liberal democracy as the ultimate framework of our lives’. They recognise that the subject they are dealing with ‘goes beyond education departments and their policies, and it even goes beyond nation states’. But just as it is difficult to find in Zizek’s writings a clearly articulated view of what we might replace the current social set-up with and how that can be done, so Wall and Perrin too, perhaps inevitably given the subject of their study, limit themselves to offering what they call ‘glimpses into navigating differently’ and conclude by stating that ‘while Zizek may have been asking the questions, it is up to us both to provide the answers and act on them’.

Howard Moss

Ireland Under Capitalism (2016)

From the March 2016 issue of the Socialist Standard

The CIA World Fact Book is a useful resource for looking at how our masters view the world. Ireland, it says, ‘is a small, modern, trade-dependent economy’. It notes that between 1995 and 2007 the Irish economy grew at an average of 6 percent a year, which, compared to the trend rate for the UK of about 2.5 percent is very healthy indeed. It took Ireland from being one of the poorest countries in Europe to one of the wealthiest.

This was part of what was known as ‘the Celtic Tiger’, a moniker that linked the growth there to that being achieved by the Asian Tiger economies, such as Malaysia. The link was more than just symbolic, there were structural similarities. The growth was achieved through state-driven social partnership, low corporate taxes and inviting foreign investment (chiefly American, taking advantage of the shared language and the membership of the European single market to turn Ireland into a corporate base for American firms in Europe). Also, the European Union has transferred vast amounts of money in structural fund payments to develop Ireland’s economy.

Further, as an article in the Spring 2004 Quarterly Bulletin of the Central Bank of Ireland noted ‘While the level of Irish GDP per worker [was] second only to Luxembourg in the European Union, GNP per worker is roughly equal to the EU average. However, this means that productivity levels, measured as GNP per hour worked, are still somewhat below the EU average because of the higher average hours worked per employee in Ireland.’

All of this reflects the relatively low level of development in Ireland previously, and that it was part of a worldwide spread of industrialised production. This meant Ireland could not escape the worldwide trends, and while GDP growth was over 9 percent up to 2000, after that it fell to 5.9 percent up to 2007.

When the Great Crash came in 2008, Ireland was particularly vulnerable due to internal factors (such as the very large housing and mortgage debt market) and also exposure to foreign markets. Further, due to the over-expansion of the property sector, Ireland like countries such as Spain ended up with a property bubble, and ghost estates full of habitable houses that no-one could buy. As the CIA Factbook notes: ‘economic activity dropped sharply during the world financial crisis and the subsequent collapse of its domestic property market and construction industry. Faced with sharply reduced revenues and a burgeoning budget deficit from efforts to stabilize its fragile banking sector, the Irish Government introduced the first in a series of draconian budgets in 2009. These measures were not sufficient to stabilize Ireland’s public finances. In 2010, the budget deficit reached 32.4 per cent of GDP - the world's largest deficit.’

Ireland since has successfully imposed harsh austerity measures, as part of an international bail-out, to eliminate that deficit, and it has largely succeeded, and has managed to successfully balance its budget, but at considerable price. It has not yet returned to the productivity rates it had at the height of the Celtic Tiger period. This was falling even before 2008, as the real economy began to dry up; and even now, the profitability of Ireland has not returned to 2005 rates.

At the height of the crisis, Ireland had an unemployment rate of 14 percent. This however, whilst being lower than, say, Spain’s horrific unemployment rate, is slightly distorted. Ireland has historically been able to export population in times of crisis: to nearby Britain, or the United States, Canada or Australia (due to historic connections), as well as the wider EU.

The chart below, released by the Irish Statistical Office last April, shows net emigration in Ireland over the past ten years. The advent of the crisis clearly shows the switch away from net immigration to emigration, and around 45 percent of those leaving the country are Irish nationals. It represents an average rate of about 70,000 leaving per year.

As unemployment falls to 8.8 percent today, people are returning. This rate of unemployment, though, remains relatively high, and is the rate at what could well be the top of the current economic cycle (for example, the unemployment rate in the UK is about 5 percent).

Further, there may be distortions in the official figures: ‘an additional 22.8% of the working age population are ‘inactive’, arising from disability or illness, care duties, full-time education, full-time parenting or early retirement. In order to sign on to the Live Register, a person has to be available for full-time employment, an eligibility criterion that discriminates against those who cannot be available full-time, particularly women.' That’s about 120,000 people who might want to work but aren’t counted. (www.tasc.ie/download/pdf/tasc_cherishing_all_equally_web.pdf).

Even those who are working aren’t benefitting. As the Irish Times noted last year (16 February), ‘a third of all income [is] concentrated in the hands of the top 10 percent of earners. When taxes and benefits are taken into account, though, this is just about the European average. Further, ‘Estimates of wealth distribution give the Top 10% between 42% and 58% of all wealth, and the Top 1% between 10% and 27% of all wealth.’

As demonstrated by the below graph (from the same website):

So, for the vast majority of the Irish, they do not own Ireland, nor Ireland’s wealth. They are not invited to share in growth in good times, and they are politely shown the door in bad times. That is what independence has meant for the workers of Ireland.

What it means for the top dogs in the country is that they have been able to shop around for patronage. No longer tied to the capital of John Bull next door, they can become the clients of European and American capital instead. The Tiger economies were known for their crony capitalism, and Ireland has had its fair share of that. Charles Haughey was legendarily corrupt when in office in the 1980s, Bertie Ahern (who was Taoiseach throughout most of the Celtic Tiger years) eventually fell due to revelations of brown-paper enveloped ‘dig out’ funds. The Mahon Tribunal found that he was not alone, and numerous public officials and councillors had been engaging in corrupt practices.

Legitimate business people are largely benefitting from foreign capital inflows. As Paul Sweeney noted in the Irish Times (16 January): ‘[The Irish] State is highly interventionist and spends between €4.7 billion and €6.2 billion a year supporting enterprise (half to agribusiness and farmers under the European Union). The equivalent of 5,200 full-time public servants supports such firms. Foreign firms play a key role in all small, open economies, but here their role is disproportionate because we do not have enough successful indigenous firms of scale.’

It’s worth noting that, according to the CIA World Fact book, agriculture in Ireland makes up about 1.6 percent of economic activity, so its share of state aid represents a hang-over of the status of farm and land owning in the Irish Republic.

Independence has not benefitted the working class of Ireland. It has not freed them from wage slavery. It has not freed them from exploitation and inequality. The Irish economy is not run on behalf of the people who live in Ireland, but on behalf of the owners of capital. For all the state intervention, it is still subject to the anarchy of production and the vagaries of the market.

In the good times Ireland’s wealth grows based on the work of its citizens, most of which is stolen from them. When the market turns sour, they are shown the door, or robbed some more to balance the books.

Ireland is enmeshed in a worldwide capitalist system, and only by joining a general struggle to emancipate the working class of the whole world, and turn the planet into the common property of humanity will people in Ireland liberate themselves.

Pik Smeet

Cooking the Books: Swizz Banking? (2016)

The Cooking the Books column from the March 2016 issue of the Socialist Standard

Swiss banking reformers have obtained the 100,000 signatures needed to initiate a referendum to restrict bank lending or, as they put it, to stop banks benefiting from being able to create electronic money out of nothing.

Explaining the apparent logic behind the proposal in the Financial Times (5/6 December), Martin Sandhu wrote:

‘The bank decides whether it wants to make you a loan. If it does, then it simply adds the loan to its balance sheet as an asset and increases the balance in your deposit account by the same amount (that’s a liability for them). Voilà; new electronic money has been created.’

This is indeed what happens from an accounting point of view. Double-entry book-keeping requires every new asset or liability to be balanced by a corresponding liability or asset. In this case, in making the loan, the bank acquires a liability. This has to be balanced, in the accounts, by a corresponding asset, recorded as an IOU from the borrower. That a new asset has been created out of nothing is only an illusion arising from an accounting convention.

Outside the accounts department all that has happened is that the bank has committed itself to making a loan to a customer. It ought to be obvious that, to be able to meet the obligation (liability) to pay this, the bank will have to be able to fund it, but currency cranks (and, surprisingly, some financial journalists) overlook this and believe that banks really can ‘simply’ create out of thin air what they lend. Sandhu even used the word ‘scam’.

This is not to say that loans have to be funded entirely from what people have deposited with the bank (a view sometimes attributed to critics of the thin air school of banking) since other sources of funding are available, from the money market (i.e. other financial institutions) or the central bank, some of which can even be done after a loan has been made.

The Swiss banking reformers subscribe to the mistaken, monetarist view that an over-expansion of bank lending causes (rather than merely reflects) booms and busts and they want to control and restrict it to try to prevent this. It won’t work but that’s the theory.

The proposal is that banks should not be able to re-lend money deposited in current accounts. When it receives such a deposit the bank will be required to re-deposit it with the state’s central bank in return for what Sandhu calls ‘State e-money’. All banks would be able to do with this is transfer it between current accounts.

This would certainly restrict bank lending but it wouldn’t (and is not intended to) stop it altogether. As the Swiss banking reformers explain (tinyurl.com/hnemzep), after the enactment of their reform:

 ‘The banks can only work with money they have from savers, other banks or (if necessary) funds the central bank has lent them, or else money that they own themselves.’

But this is already, now, the case! Money deposited in a current account is just as much a loan to the bank as is money deposited in a savings account. Banks can, and do, re-lend most of it too, except that, unlike with a savings account, it keeps all the interest.

But if money re-lent from a current account is money created from thin air, why is money re-lent from a savings account not? Don’t ask us. Ask the currency cranks.

Summer School 2016 - Money Talks (2016)

From the March 2016 issue of the Socialist Standard

Summer School
 
22nd - 24th July 2016
 
Fircroft College, Birmingham
 
Money flows through every aspect of society, and therefore affects every aspect of our lives. What possessions we have, the efficiency of the services we use, and how we are supposed to value ourselves are all shaped by the money system.


We’re encouraged to think of the economy in much the same way as we think about the weather – something changeable, but always there. When the climate is ‘good’, life feels brighter. When the climate is ‘bad’, we huddle down until we can ride out the storm. Although we’ll always have the weather, the economy doesn’t have to be permanent.


Our weekend of talks and discussion looks at the role of money in our society. In what ways does money affect how we think and behave? How does the economy really function? How did money come to be such a dominant force? We also look forward to a moneyless socialist society, which will be – in more than one sense of the word – free.
 
Full residential cost (including accommodation and meals Friday evening to Sunday afternoon) is £100. The concessionary rate is £50. Day visitors are welcome, but please book in advance.
 
To book a place, send a cheque (payable to the Socialist Party of Great Britain) to Summer School, Sutton Farm, Aldborough, Boroughbridge, York, YO51 9ER, or book online through the QR code or at http://spgb.net/summerschool2016. E-mail enquiries tospgbschool@yahoo.co.uk