Voice From The Back: The Class Divide (2011)

The Voice From The Back column from the may 2011 issue of the Socialist Standard

The Class Divide                                            

In a recent issue of the Guardian newspaper there was an inserted leaflet from the charity WaterAid. It was appealing for £52 million in a campaign to change the lives of 884 million people who still lack clean water and the 2.6 billion who have nowhere safe to go to the toilet. According to the leaflet “It’s a fact that around 4,000 children die every day from diarrhoea because they lack clean water and sanitation.” If  £52 million seems like a lot of money it should be noted in that same newspaper there was an  article that reported the sale of super luxurious flats in London. “The property tycoons behind London’s most lavish residential development are £62 million better off after fresh details emerged of sales at One Hyde Park. The Candy brothers, Nick and Christian, and their backers have pocketed the sum after selling one sixth floor property for £22m, and one on the second floor for £21.6m …. A penthouse flat in the development is understood to have been sold for £135m, but Land Registry documents have yet to be filed.” (Guardian, 16 March) WaterAid’s appeal for £52 million seems modest compared with these sums, but that is how capitalism works. The poor die young and the rich live in luxury based on the misery of the poor. 4,000 kids are dying every day, are you going to do anything about it?

Comic Book Capitalism                                     

Capitalism is an insane society that values things much more than human beings. The following news item should be read with the knowledge that millions of people are trying to exist on the equivalent of $1.25 a day. “A comic collector has been caught in Spider-Man’s web, paying $1.1 million for a near-mint copy of “Amazing Fantasy” No. 15 that features the wall-crawler’s debut. The issue, first published in 1962, was sold Monday by a private seller to a private buyer, ComicConnect.com chief executive Stephen Fishler told The Associated Press on Tuesday. It’s not the highest price ever paid for a comic book, an honor that goes to “Action Comics” No. 1 with Superman on the cover, which went for $1.5 million.” (Yahoo News, 9 March) Millions of dollars spent on nonsense while real human beings die of hunger. It is not funny, it is not comic. It is disgraceful.

Another Day, Another Disaster
                    

Newspapers are quick to cover a story like the miners rescued from the cave-in in Chile, but mining disasters are so common that they hardly register in the media compared to important events like a Royal wedding. So it should come as no surprise to learn of the following event only being covered by a few lines in the national press. “At least six workers were killed and 46 trapped by a methane explosion in a coal mine in southwestern Pakistan. An official said that the mine was declared dangerous two weeks ago, but the warning was ignored.” (Times, 21 March) The reality inside a capitalist society is that coal and the profits that can accrue from it is much more important that human lives.

Rich and Poor in the USA                                    

In a recent newspaper debate about the growing inequalities of wealth in the USA  entitled “Rising Wealth Inequality: Should We Care? Why do Americans seem unperturbed about the growing gap between the rich and the poor?”, Michael I. Norton an associate professor at the Harvard Business School, who is  currently co-writing a book on money and happiness, made some interesting observations. “In a recent survey of Americans, my colleague Dan Ariely and I found that Americans drastically underestimated the level of wealth inequality in the United States. While recent data indicates that the richest 20 percent of Americans own 84 percent of all wealth, people estimated that this group owned just 59 percent believing that total wealth in this country is far more evenly divided among poorer Americans.” (New York Times, 22 March) It may have escaped the professors’ notice, but all the media is owned by the rich and it is in their interest to spread the false notion that capitalism is a fair and equitable society.  

Those Lazy Workers Again                                 

“Almost every NHS nurse works more than their contracted hours and one in five does so every shift, a new poll shows. Some 95% of nurses say they work longer hours than they are paid for, according to ICM research for the Royal  College of Nursing. . .Many nurses say they have to skip meals and rarely or never get the breaks at work to which they are entitled…” (Observer, 10 April)

Family Values

“British families are facing the biggest peacetime squeeze on their finances since 1921, according to a leading economic consultancy. Soaring inflation and weak earning growth will leave the average family £910 worse off than two years ago, according to analysis by the Centre for Economics and Business Research (CEBR).” (Sunday Times, 10 April).

Pathfinders: Round in circles (2011)

The Pathfinders Column from the May 2011 issue of the Socialist Standard

Round in circles

Ever since a gaggle of mushroom-intoxicated neolithics first got the idea of piling a big flat stone on top of two uprights people have been having creative ideas about the living spaces of the future. Over the length of social history living spaces have evolved, from medieval all-purpose pens containing bed, hearth, toilet, animals, humans, rats and plague, to the Victorian taxonomic mania for cataloguing and categorising, putting every human function from snoring to shitting to snooker in its own walled chamber. Now things are changing again as central heating and double glazing, as well as a pressure of space and cost, drive a return to more open-plan knock-throughs and multipurpose domestic environments (‘The Story of Our Rooms’, BBC Online, 12 April).

With the high priority now being placed on low-carbon living and low-impact building methods and materials, science is increasingly being designed into planning models. As old structures age and have to be replaced anyway, what if – say the scientists – whole cities could be redesigned to factor in all the known elements necessary to make them virtually self-sustainable?

If one were really to rebuild whole cities from scratch, imagine the energy savings. A city like Los Angeles, a chaotic urban mega-sprawl, is a huge energy sink which forces most people to drive miles to their nearest supermarket, and even more miles to work. Rational planning might have optimised all utilities and transport networks into the very crown joules of ergonomic design. And big cities have their own form of economy of scale, with smaller environmental footprints and higher standard of living per capita than small ones. If one were to pull them down and start again, one could build modular urban centres that were carbon-efficient, pedestrian-friendly, accessible and navigable.

Some planners promote designs for just this (New Scientist, 26 March). Zeitgeist’s Venus Project is another, 3D rendered attempt. The trouble is, even on the page these symmetrical designs look soul-destroying, like laboratory mazes for lobotomised rats. It’s no wonder many Zeitgeist supporters are reportedly in two minds about the idea of self-sufficient circular cities. Somewhere in the debate about efficiency the human element gets left out. What is beautiful about old cities is their riotous and labyrinthine irregularity, forced on them by the constraints of city walls and overbuilding, as well as their elaborate and artistic but ‘inefficient’ construction. The more planned a cityscape is, the more dreary it tends to look and the worse it is to live in. Well-meaning but paternalistic experiments in 1950s urban planning gave rise in the UK to the horrors of high-rises and disaffected concrete council estates, with all their attendant social problems, as Lynsey Hanley documents in her entertaining book Estates: An Intimate History (Granta, 2007).

Could planners ever plan efficiency to look like Venice or Rouen or York? Does the future always have to look like a plastic Thunderbirds set? Nowadays there is the potential of wiki-citizenry to offer collective input so as to avoid planners imposing antiseptic structures on our aesthetic sensibilities. But this just might mean a committee-designed camel instead of a geek-planned horse. Sometimes there is something human and endearing about organic inefficiency. In socialism there will no doubt be plenty of people calling for large-scale ‘social engineering’ projects. Let this be the first salvo fired in opposition to such notions.

A Poor Motivator

Interestingly, given all the hoo-ha about ‘obscene’ bankers’ bonuses, not many ever question the apparently self-evident truism that money is a great motivator. Socialists have always gone against the commonly received wisdom by claiming that, conversely, money is actually a poor motivator and in many cases no motivator at all. As evidence we cite the voluntary sector, so large that it is known as the ‘third sector’ of the economy, but then we might be biased given that we propose a social system composed entirely of volunteers. Support however comes from studies which suggest that not only are external motivators like money decoupled from internal ones like interest, commitment or curiosity, they may indeed be inversely related, so that an excess of one can lead to a deficiency in the other (New Scientist, 9 April). It is perhaps surprising and counter-intuitive to learn that financial rewards actually reduce the incentive to work hard, but “the facts are absolutely clear”, says one long-time researcher. “In virtually all circumstances in which people are doing things in order to get rewards, extrinsic tangible rewards undermine intrinsic motivation”. Next time you hear some know-nothing blather on about how money drives progress, you might point out that the science says otherwise. People are not spurred on by money, they are simply whipped on by fear of poverty.

Capitalist Priorities 

‘Owing to unfavourable economic conditions the search for the ultimate explanation of life, the universe and everything has been suspended.’ Perhaps this is pitching it a bit strong, but with the Large Hadron Collider due to close for a year for extensive repairs you would have thought that this was precisely not the time to be shutting down its nearest and dearest rival, the Fermilab Tevatron. The Tevatron, named because it can accelerate protons up to energies approaching a trillion electron volts or 1 TeV, is supposedly obsolete now because the LHC can manage energies up to 7 TeV. Of course that’s in theory. In reality the LHC has only once reached half this energy, has already broken down twice and now is due for another extended pit-stop. Most notably, of course, it hasn’t found anything, unlike the Tevatron which last month announced the discovery, to within 3 orders of certainty, of a new particle that may be evidence of a ‘fifth force’ of nature (‘Tevatron accelerator yields hints of new particle’, BBC Online, 7 April). Meanwhile the famous Higgs, as well as mythical dark matter ‘neutralinos’ could be lurking out there in any eV range, so even with two colliders operating it would be like two explorerers searching for penguins, one in the northern hemisphere and one in the south. Keeping the Tevatron going would cost a measly $35m – peanuts by their standards – and there’s no engineering problem, but the beancounters have given it the thumbs down. Any socialist comment on capitalist priorities at this point would be as redundant as a Chicago physicist.

Paddy Shannon

Material World: Rare Earth Metals and the Not-So-Clean Energy Economy (2011)

The Material World Column from the May 2011 issue of the Socialist Standard

The extraction, transport and burning of fossil fuels – oil, gas and coal – are directly responsible for widespread environmental devastation. The struggle over control of these resources has also long been a major cause of international conflict.

But let’s look to the future. The shift to a “clean energy economy” based on solar, wind and other renewable power sources has finally begun. True, it is too slow and too late to avert some disasters arising from climate change. All the same, surely there is reason to hope that renewable energy will eventually bring us relief from war and pollution?      

Not necessarily. Sun, wind and tides are hardly in short supply, but there are certain areas where conditions are best for harnessing their power. It is conceivable that conflict will arise over control of these areas.

Rare earths

A more immediate issue concerns some of the material resources required to generate renewable energy and produce machines that run on such energy. In particular, our masters are currently very worried about ensuring adequate and stable supplies of the 17 elements known as “rare earth metals”. Due to their special properties, these metals have numerous crucial uses in high-tech industrial, medical, scientific, military and computer equipment. Their “clean energy” applications include the manufacture of magnets for wind turbines, energy-efficient fluorescent lamps, and batteries for hybrid and electric cars.

The metallic elements themselves are not all that rare in the planet’s crust, but they are highly dispersed. It is the soils (earths) containing concentrated mineral ores that are relatively rare, though they have been found in several parts of the world, such as South Africa, India, Vietnam, Australia and North America. Currently, however, China has a near-monopoly on the extraction of rare earth metals, controlling about 95 percent of global supply – and for certain elements over 99 percent.

Potential for conflict

In September 2010, China suspended exports of rare earth metals to Japan after a Chinese trawler fishing in disputed waters in the East China Sea collided with Japanese Coast Guard vessels and its captain was detained. He was soon released and exports resumed. The incident prompted hack Paul Krugman to castigate China as a dangerous and irresponsible “rogue economic superpower” (New York Times, Oct. 17).

More significant is the long-term trend for China to place increasingly strict limits on exports of rare earth metals to all countries. In 2009 it became known that the Chinese government was planning to ban exports of five especially rare elements altogether. Under strong pressure from Western governments and corporations, the ban was replaced by annual quotas.

Despite the accusations that China is exploiting its near-monopoly to bully other countries, its main reason for restricting exports is probably a desire to give priority to satisfying rapidly rising domestic demand, fuelled by China’s own technological development. The US and other countries have responded to the situation by urgently exploring and developing alternative sources of supply. Nevertheless, there is clearly a growing potential here for international conflict (whether involving China or not), especially as the shift to the “clean energy economy” gathers pace.

Toxic sludge

The mining and processing of rare earths is an extremely dirty process. Refining them to extract pure metals requires the use of toxic acids. Ores are often radioactive due to the presence of uranium and thorium. The disposal of toxic waste is an enormous problem.  

Almost half (45 percent) of the current world output of rare earth metals comes from a mine in the town of Baotou Obo, part of the larger mining district of Baotou in Inner Mongolia. Baotou is right on the Yellow River, on which much of North China depends for water. The Baotou section of the river is already contaminated with copper, lead, zinc and cadmium (Fan Qingyun et al., Chemical Speciation and Bioavailability, June 2008).

The waste from the rare earth metal mine in Baotou Obo – a radioactive sludge laced with toxic compounds – is pumped into a reservoir (10 square kilometers in area) surrounded by an earthen embankment. If (when?) there is an accident similar to what happened in October 2010 in Hungary, where another reservoir of toxic sludge burst its banks, this mass of poisonous goo will engulf local residents and pour into the Yellow River, further enriching its chemical composition.

Not so clean

On close examination, therefore, the “clean energy economy” turns out to be not so clean after all. Renewable energy may still be a big improvement on fossil fuels, but in itself it will solve neither the problem of war nor that of environmental devastation.

What will be the policy of socialist society regarding the use of rare earth metals? What will be done with the waste? Or will people somehow manage without these substances?

Socialism will mitigate the problem in a number of ways. Less material will be required because there will be no built-in obsolescence: equipment will be made to last for very long periods. And, of course, there will be no production of military equipment. Without the imperative to maximise profits, much higher priority can be given to protecting the environment.

Yet mitigating a problem is not the same as solving it. What if the supply of a certain material is essential to the satisfaction of human needs, but no technical means can be found of extracting it without serious harm to the environment? Even the people of socialist society are likely to find themselves facing hard choices.

Stefan

Profiting from ill-health (2011)

From the May 2011 issue of the Socialist Standard

The coalition government’s plan to allow more profit-seeking enterprises to provide health care has stirred up controversy and opposition. But despite the NHS huge profits have long been made out of health provision.

In 2002 it was estimated that the joint profits of $35.9 billion amassed by the ten pharmaceutical companies that featured in the Fortune 500 were $2.2 billion more than the profits of all the other 490 businesses put together. So there’s plenty of money in drug-dealing. Here’s what some of the top dealers pocketed in earnings in 2007 (source FiercePharma):

1. Miles White – Abbott – $33.4m
2. Fred Hassan – Schering-Plough – $30.1m
3. Bill Weldon – Johnson & Johnson – $25.1m
4. Bob Essner – Wyeth – $24.1m
5. Robert Parkinson – Baxter – $17.6m

The sale of drugs has a relatively short history when it’s compared to our own history. For tens of thousands of years we experimented with the raw materials that are freely found in nature and form the basis of the modern day pharmaceutical industry. It is recorded that pharmacists in Baghdad opened the first pharmacy in 754. This spread throughout the Islamic world and into feudal Europe. As capitalism developed out of feudalism so too did the health business. By the early 20th century the strong had been gradually eradicating the weak leaving the nucleus of today’s most powerful pharmaceutical companies.

The mass production of drugs arose from the discovery of insulin in the 1920s and later of penicillin. Wealth, through surplus value, was accumulating in to the hands of the capitalists who owned and controlled these companies. Trade was well on its way to becoming global, and capitalists in Europe and North America must have realised that they had found their own gold mines.

The minor companies that entered the market were continuously swallowed by the major ones via mutually beneficial partnerships, corporate buyouts, mergers and takeovers. The City as ever eased the way, greasing its own palm in the process, so that the global manufacture of drugs is now dominated by a handful of cartels.

IMS Health (7 September 2009) estimates that the value of the global pharmaceutical market in 2010 is expected to exceed $825 billion, and is expected to expand to $975+ billion by 2013. Capitalism’s drug dealers will salivate in anticipation. Only the naive and the ideologically handicapped believe that trade under capitalism is not synonymous with corruption. Once money enters into any transaction, principles, no matter how well-meaning, get undermined. And the drug trade is no exception.

Theft: Israeli bio-technology company Nogdan Immunochemicals Ltd patented a technology that can almost immediately detect any current disease and forecast the probability of disease in the future. The sharks circled Nogdan in September 1995, through the agency of Biosite and Epimmune. And, with the active complicity of an Israeli attorney and two leading academics, conspired to steal the patent. They went on to sign deals with the top drug cartels such as Monsanto, Novartis, Merck and Co., Searle GD, Elan, Pharmacia, Human Genome Sciences, IDM, and others, for the use of the patent. Billions of dollars in profits have already been generated by these companies. And it has been estimated that over the next ten years hundreds of billions of dollars more will be added to their balance sheets (chemeurope.com/news).

Bribery: Remember the scare stories that flooded the media in 2008/09 about H1N1; a global flu influenza. A report published by the British Medical Journal, reveals the hidden links that made the World Health Organisation [WHO] declare H1N1 a pandemic. The result was billions of dollars in profits for vaccine manufacturers. “Several key advisors who urged the WHO to declare a pandemic received direct financial compensation from the very same vaccine manufacturers who received a windfall of profits from the pandemic announcement… All the kickbacks were swept under the table” …the “ WHO somehow didn’t think it was important to let the world know that it was receiving policy advice from individuals who stood to make millions of dollars when a pandemic was declared” (jmbblog.com/2010/06/h1n1-and-who-scandal).

Murder: “During the meningitis epidemic in Niger in 1995, over 50,000 people were inoculated with fake vaccines, received as a gift from a country which thought they were safe. The exercise resulted in 2,500 deaths. Of the one million deaths that occur from malaria annually, as many as 200,000 would be avoidable if the medicines available were effective, of good quality and used correctly” (WHO, 2003 FS 275).

On 9 March 1983, a Peter Lumley, spokesman for the Association of the British Pharmaceutical Industry (ABPI), was pleased to inform Guardian readers “that drug companies now average a 22 per cent rate of return from the NHS”. Twenty plus years later that figure has hardly fluctuated. Between 1988 and 2008 according to; Prescriptions Dispensed in the Community, England: Statistics for 1998 to 2008. Prescription items increased by almost two thirds. In 1998, the net ingredient cost of all prescriptions dispensed was £4,701.5 million. In 2008 The net ingredient cost of all prescriptions dispensed was £8,325.5 million.

Unsurprisingly, Daily Telegraph readers discovered in 2004 that “The Royal College of General Practitioners has accused drug companies of ‘disease-mongering’ in order to boost sales… says the pharmaceutical industry is taking the National Health Service to the brink of collapse by encouraging unnecessary prescribing of costly drugs  . . . The college lists hypertension, high cholesterol, osteoporosis, anxiety and depression as examples of common conditions that, in mild forms, are often inappropriately treated with drugs” (29 August 2004).

Conflicts emerged when Richard Ley, a spokesman for the ABPI, said: “It seems odd for this criticism to come from the Royal College of all organisations, because a decision on when and how to treat a patient is the doctor’s.” And the conflict continues according to the same article: “Some observers are also worried about “hard-sell” methods applied to general practice. Last year, a survey of 1,000 GPs published in the British Medical Journal found that those who saw drugs-company representatives at least once a week were more likely to prescribe drugs that were not needed.”

Then there’s the Observer (29 June 2003) quoting Glasgow GP Des Spence who “had started an advisory post, which meant he influenced prescribing practices for half a dozen local practices, when he started receiving invitations to meetings abroad, ‘endless’ lunches and dinners and offers of substantial fees for lectures and chairmanships – and felt he was finally getting the recognition he deserved. That is until his wife made him realise that he was ‘just being used and manipulated by big pharma, that it was the patients they were interested in, not me’.” He underlined this by claiming that “GPs who see drug reps at least once a week are more likely to prescribe drugs for conditions that will probably clear up on their own”.

Even if your GP has the best of intentions and closes the surgery door to the drug rep (pusher) the drug cartels still influence events, the Observer reported, because: “around half of postgraduate education for doctors is funded by industry. And around two-thirds of clinical trials in Britain are funded by the pharmaceutical Industry. A new study shows that such research is four times more likely to be biased in favour of the product belonging to the sponsors than independent studies . . . Equally worrying, medical experts featured in press coverage of the latest pharmaceutical breakthrough or disaster could well have been ‘recruited and trained as opinion leaders to speak on behalf of the sponsoring company.’ says the BMJ.”

The state has devised new roles for doctors in line with their ideological aims. In March last year Yvette Cooper, then Work and Pensions Secretary under the Labour government, notified us that more than 500 doctors are to be mobilised to assess whether the 2.6 million people on incapacity benefit are capable of work. That’s 500 doctors removed from the work that they swore by the Hippocratic oath to undertake. And later in the year that the Coalition’s Health and Social Care Bill will allow doctors to take control of a huge slice of the NHS health budget in England, which for 2010-11 is forecast to be just under £110bn. A bait that will have the drug cartels smiling confidently. Or perhaps it is being too cynical to ask a couple of pertinent questions as Michele Bohan did in evidence to a parliamentary committee in February 2011:

  “Why is £80 billion pounds of public money to be handed over to GPs with no experience of commissioning health services and why are GP’s to be awarded cash bonuses for running the consortia?”

and

  “How are we to prevent unscrupulous companies like United Healthcare (an American firm bidding to run services here) – which has been fined millions of pounds over a number of years for defrauding the American healthcare system doing the same thing here in the UK? Their offences involved ‘cheating patients out of money‘, ‘denying treatment’ and ‘overcharging’”. (LINK)

Good questions Michele, but don’t expect a lucid answer.

Here’s a tip for survival under capitalism borne out of experience: don’t get ill. Unemployment is one quick way to penury. But getting ill compounds that situation. In 1989 Dr Iona Heath, a North London GP drew attention to capitalism’s ultimate answer to the problem of ill-health: “How can we escape the logical conclusion of the market-place that for the elderly and the chronically sick the most economic solution is death.” (quoted Socialist Standard, January 1990).

So would healthcare be any different if socialism were established? Yes it would. Why? Because from day one money would disappear. And that means the market would cease to exist. Take one or two minutes out and just think how the non-existence of wages, profits and budgets would change the present situation. Then think about the end of the hierarchies that dominate healthcare at present. No more capitalist ponces, and no more layers of useless bureaucrats skimming their share of the kitty.     
Instead healthcare would be conceived and administered, democratically by us, the people who brought socialism about. Globally, doctors, nurses, scientists and everyone at present involved in healthcare at the human level would act as guides. Informing people as to where healthcare is capable of going once the artificial barriers of money had been eliminated. It’s up to you. Use your imagination and join us. Or sit back on your sofa and hope that you don’t get ill.

Andy Matthews

Production Values: the laptop (2011)

The Production Values Column from the May 2011 issue of the Socialist Standard

A sideways glance at capitalism through some of its products.  This month: the laptop. 

One of the more vociferous cheerleaders for capitalism and the wonders of the market system (though he seems to have been a bit quieter on that score in recent years) is Thomas L Friedman. Most famously he is the author of the spurious Golden Arches Theory of Conflict Prevention. This is the theory that no countries which both have a branch of McDonalds have been at war. (That this unlikely theory has – on numerous occasions – in fact been found to be false does not seem to have caused him to review the theory).

In his book The Lexus and the Olive Tree, Friedman exalted in the very piece of equipment he was typing his book on. His laptop then, was held up as the epitome of all that is wonderful about capitalism. After all, it comprised hundreds of different parts and sub-components – themselves the product of highly complex production processes and resources from five continents – all magically transported around the world and assembled together in a dozen countries before finally pitching up at his local store when he went to buy it to write his latest masterpiece.

The laptop I am writing on however is no less amazing. While opposed to capitalism, we socialists shouldn’t be afraid of acknowledging how massively complex, sophisticated and impressive is global production and distribution inside capitalism. Indeed it is thanks to the increase in the productive forces of capitalism that we can even consider socialism and production for use to be a practicable next step is human social organisation.

Many ideological defenders of capitalism (and not just Friedman) extol the wonders of the market system as it (apparently) enables all the right bits and pieces to be brought together with just the right timing, to be assembled and placed onto the store shelves. Indeed many members of the working class – who otherwise may have no real enthusiasm for capitalism itself – can feel daunted by the argument of socialists that we should do away with the market system as a means for matching supply with demand.

Of course this fear is to a large part a consequence of the great big convenient untruth that has underpinned debates about capitalism and socialism for almost a century now: specifically that the centralised planning of the Soviet Union is the only alternative to the market system, and somehow has something to do with socialism.

In fact, World Socialists have no time for central committees or 5-year plans. We are opposed to the market system whether it is supposedly “free” or restricted, and whether it is regulated or not. In many ways socialism will be far more responsive to real human needs and genuine preferences. Production decision-making inside socialism – both qualitative (ie how will this be produced?) and quantitative (how much?) – will be far less centralised than the soviet version of capitalism and arguably even “western” capitalism.

We would argue that we can retain much of the (apparently) chaotic, networked decentralised production decisions that are present within capitalism. We should not be daunted by the complexities of industrial production. We can do away with the overarching profit logic of the market, and at the same time have confidence that individual human beings will still express their self-defined needs by going to the local store and taking what they want without the rationing system of money and price. And thereby they – not some planning committee – will enable the dauntingly complex production arrangements that end up in the laptop I am writing this on. Rather than a tribute to the mysterious work of some “invisible hand”, the laptop – like so many products – is a testament to the ingenuity of real, co-operative human hands.

Next month: we shine a light on the crazy world of diamonds

Putting the Heart into a Heartless World (2011)

The Halo Halo! column from the May 2011 issue of the Socialist Standard

Socialists understand why people accept religious ideas. What can be hard to understand though is the irrationality of some of the beliefs, or what they will do to back them up.

The idea of sin for example. As far as Christianity is concerned we are all sinners. By design. We’re born with it, whether we want it or not. We were created, apparently, by a god who wants us to be good, yet programmes us with ‘original sin’ at birth.  It’s all to do with Adam and Eve eating that apple in the Garden of Eden.

(But if god is all-knowing he must have known that Eve was going to eat the bloody apple – even before he created her. Why didn’t he create her with a bit more will-power?)

When it comes to wacky irrationality though, few are more irrational than Terry Jones in Florida. Jones is the Christian pastor, you remember, who put a Koran on trial in his church. After an eight minute hearing he found it guilty of crimes against humanity and sentenced to be executed – by being burnt. He has announced his plans to put the prophet Mohammed (who died in 632 AD) on trial next.

The outcome of this (at the time of writing) was that after 2 days of rioting in Afghanistan by Moslems who, in protest of Jones antics, decided to take revenge on Westerners, more than 20 innocent people have been killed (2 by beheading) and numerous more injured. Hopefully the Christian and the Islamic gods will be satisfied with the blood sacrifices made to them so far.

On a happier note it’s recently been announced that a thorn from Jesus Christ’s crown held at Stoneyhurst College (a Jesuit Boarding school in Lancashire) whose previous owners include King Louis IX of France and Mary Queen of Scots is to be displayed at the British Museum.

We know it’s a genuine thorn because according to the Catholic Encyclopaedia “two holy thorns are at present venerated, the one at St. Michaels Church in Ghent, the other at Stonyhurst College both professing, upon what seems quite satisfactory evidence, to be the thorn given by Mary Queen of Scots to Thomas Percy Earl of Northumberland”.

“Quite satisfactory evidence” you see. You can’t argue with that.

The thorn from Stoneyhurst College, which is displayed in its own casket, comes complete with a string of pearls (also once owned by Mary Queen of Scots) entwined around it – well you understand, it’s not just any old thorn –  will be on display at the British Museum from 23 June until 9 October.

If you are unable to get there you may like to console yourself by taking advantage of The Socialist Party’s special offer.  Anyone taking out a subscription to the Socialist Standard this month will be entitled to a free whisker from Karl Marx’s beard. Like the Catholics and their thorn, we “profess upon what seems quite satisfactory evidence” that our supply of Charlie’s whiskers are genuine.

NW

Crisis? What crisis? (2011)

From the May 2011 issue of the Socialist Standard

There is no crisis. That deserves to be said twice. There is no crisis. What happened in Japan was a crisis. Haiti was a crisis. What we have is a failure of mathematics – the mathematics of greed.

We as a society have never been so productive, and we have never had such wealth available to us, as we have today. Our ability to produce has grown faster even than is needed to provide for longer and happier lives.

Think what has supposedly caused this crisis. Too much was produced. In particular, too many houses were produced for poor Americans. We had not yet produced enough for our whole community, but we were doing well – all too well.

What happened? Building workers were stopped from building. People living in good houses were thrown out of them, and the houses left to become derelict. Across the world, workers who were producing wealth for their communities were stopped from doing so, by being thrown out of work; and then we were all forced to live on less.

Why would something so crazy happen? Because production is not for use, it is for a profit. No work is allowed to take place, no houses can be lived in, no food and drink can be consumed, before first one person makes a profit out of another person’s work. The basic matter of producing wealth and consuming it is interrupted until first those who claim to own what we all have made in the past, can profit from what we all make now. We are bought and sold: but whereas once we were bought and sold for a lifetime, now it is by the hour.

As workers we all, if we are lucky, have enough to live on, to tide us over when we are ill or unemployed, and to provide some care for when we can no longer work. That is all. Some are more comfortable; some live on far less, or are crushed by debt. And this brings us to the point: indebtedness. What we produce as a community is taken from us and held by a few. Since we do not own the means to support ourselves, we have to work for these people, in effect paying off the loan of the very things that we and our forebears made. We are like indentured workers, who contract a large debt and are left paying it off for years, decades, except in our case it is our entire lives.

As for students – students are getting indentured servitude for real. Many will retire before ever paying off their debts incurred before even starting work. Slave-owners across the ages would applaud such an ingenious scheme.

The answer to this is twofold. Firstly, as trade unionists, we must resist any attempt to make their problem, our problem. We are able to produce quite handily for ourselves; if the equations of capitalism – the trade in our lives – no longer make sense, then that is a matter for the economists. Our demand here remains a fair day’s pay for a fair day’s work – that means at the very minimum the maintenance of pensions as they stand and yearly increases in wages at a minimum in line with RPI – along with compensation for the years of restraint that we have had. At all levels, the workplace, the national negotiating bodies, even government, we should turn round and say that we are producing very well, thank you very much, there is no real crisis, and they should put their house in order at their own expense, not ours.

Secondly, we should take this as an object lesson. There is no fairness here, only the war of a small group of people against the entire community to control all of its wealth and keep us poor unless we do as we are told and hand over the large part of what we produce to them for their own entertainment and to keep us further indebted in the future. It is not a government that needs to be overthrown; it is a new and refined system of slavery, where we are bought and sold by the hour because of the fact that we do not own the things we produce.

All of this will happen again, and again, and again: debt is to us what shackles are to the slave. Capitalism must be abolished, in order for us to do the simplest of things which is to produce and consume in our communities, free from fear and free from exploitation. The equations that hold us in thrall must be overthrown in our minds, and then we must overthrow those who keep us in those mental chains. That doesn’t just mean a new capitalist government, no matter how well-intentioned: it’s not ‘a fair day’s pay for a fair day’s work’. It’s the abolition of the wages system, not in the future, but now; we already produce more than the capitalists can handle, and we can do far more for ourselves. They need us. We don’t need them.

SJW

What is capitalism? (2011)

From the May 2011 issue of the Socialist Standard

Some people associate capitalism just with the sort of financial wheeling and dealing that goes on in places like Wall Street and the City of London. Others – supporters as well as critics – see it as private enterprise and a so-called free market as markets free from state interference and regulation. In fact, this is probably the most widespread definition of capitalism.

The trouble with this definition is that it means that capitalism has never existed or has only existed as a policy or policy objective (ironically, to be implemented by the state). But markets have never existed without state intervention.  Capitalism finally triumphed only through state intervention and is maintained by this. Capitalism and the state go together, they are not opposites.

Capitalism is more than financial dealings, a government policy or private enterprise or legal private ownership or private enterprise. It’s a way of producing and distributing wealth which has two key, defining features.

First, that the actual production of wealth is carried out by people hired to do this for a wage or a salary. Capitalism is production by wage-labour. (Which already presupposes a division of society into those who own and control the means of production and the rest of us who don’t.) Another name for capitalism is that it’s the wages system.

Second, capitalism is not just a system of production for sale on a market. It is a system of sale on a market with a view to profit. It’s the profit system.

Capitalism is the wages-and-profits system.

It’s the pursuit of profits by separate competing enterprises that drives the capitalist economy, but this is not just to provide the owning class with a privileged lifestyle. Not even mainly. The economic forces unleashed by the competitive struggle for profits mean that, if they are to stay in the race for profits, capitalist enterprises must invest most of their profits in new, more up-to-date and modern productive equipment so as to try to keep their costs equal to or below those of their rivals.

So, most profits have to be accumulated as more capital. This is why capitalism was originally called capitalism. It’s a system of capital accumulation out of profits made by exploiting wage-labour, an impersonal economic mechanism that in the end is not controlled by anyone (not even capitalists) and is in fact uncontrollable.

Greasy Pole: Re-Inventing the Losers (2011)

That Celine Dion song . . .  that one.

The Greasy Pole column from the May 2011 issue of the Socialist Standard

One year after That Election, the wretched group who are no longer entitled to be known as Honourable Members Of The Most Exclusive Club In The Land have had time to adjust to their new, cruel reality. Time to accept that they are no longer waved through a doorway by a smiling policeman. To bravely suffer an unaccustomed lack of interest in them by the media. To contemplate a life made unbearable without the weekly session of verbal hooliganism called Prime Minister’s Questions. To manage their homes, gardens and the like without support from a self-designed, self-regulated expenses system. To re-invent themselves in a new, bitterly unforeseen image reminding them of those other, unexciting people who voted for them to manipulate their lives in the name of democracy, justice, equity…

Widdecombe
Some of these victims of the voters’ verdict will have clearly had difficulty in rebuilding their self-esteem but this has not been so for Ann Widdecombe, because she slipped away from Westminster without waiting for an election. Which is not to say that her re-invention has been any less grotesque. Widdecombe sat for Maidstone, later Maidstone and The Weald; before that she had tried for the candidature in Burnley and Plymouth Devenport. During the Thatcher governments she was, famously, Minister of State for Prisons under Home Secretary Michael Howard. She quickly assured herself of a welcome from the more apoplectic of the Tory rank and file by calling for zero tolerance for cannabis users, opposition to equal rights for gays and defending the policy of shackling pregnant women prisoners when they were in hospital. More controversially, in the Tory leadership election of 1997 she denounced Michael Howard as having “something of the night” about him. Her meaning was not entirely clear but she provided a lot of material for cartoonists eager to depict Howard as a sort of vampire – which may have helped towards him coming last in the contest.

Leadership 
In fact Widdecombe herself had something of a bumpy relationship with the post of Party Leader; having failed in 2001 to raise enough support among MPs for her own bid she switched her support to a succession of other failures – Michael Ancram (Michael Who?), Ken Clarke, Liam Fox, David Davis. When David Cameron, as the new Leader, was keen to prove his credentials as a new broom or breath of fresh air or whatever, announced a more equal “A List” of parliamentary candidates she opposed this as “an insult to women”. Having at first declared, in October 2007, that she would leave the Commons at the next election she soon experienced so dramatic a change of mind that she allowed herself to stand for Speaker of the House in the vote to replace the serially unpopular and questionable Michael Martin. Eventually, to widespread relief, she did retire at the 2010 election, selling her homes in London and Kent and moving to a house on Dartmoor.

Media
So – after all the strident hard-lines, diversions, backtracking…there was clearly some need for Widdecombe to demonstrate that there was another person, a reinvention of the MP, within her. Much of that person has, disconcertingly for those who admired her for being above earning any money in such a way, sprouted in the media – where they obviously can recognise a good profitable thing when they see it. She has been an agony aunt in the Guardian (which must have caused some hiccups at many a suburban breakfast table) and for both BBC television (Ann Widdecombe to the Rescue) and ITV. She took part in Celebrity Fit Club as both a competitor and a judge and she is a columnist in the Daily Express. But the height – or should it be the depth – of all this, in terms of her exposure and the public response, was on the hugely popular Strictly Come Dancing. The news that she was to be a contestant in this programme provoked much ribaldry in many a saloon bar, on the theme of speculating about which male partner would be patient and strong enough to twirl someone of her build around the dance floor. To prolong the amusement there were enough viewers, perhaps of the same cussedness as Widdecombe herself had relied on to get her through her career, to repeatedly vote against the judges to keep her dancing. Until December that is, when matters got rather serious and, shrinking from the prospect of voting her into the final, they ended it all.

Agency
But it does not follow that her re-invention is at an end; that she will sink quietly from sight. She can be engaged for some kind of public appearance through the Gordon Poole Agency and Talent Bureau – who will gladly let you know how available she is for whatever exposure you have in mind and what it will cost you. For the right sort of money she may even tell you what she thinks of it all now, of her devoted preparations for a political career, her change from being an agnostic to a Roman catholic, her hopes of becoming leader of her party and then of the House of Commons itself. It does not make a pretty story.

But the capitalist system with its contradictions its anarchy its impoverishment and diseases is not pretty. The spectacle of cynical politicians presenting themselves in what they hope will be the most effectively deceptive way is stunningly ugly. And if Widdecombe ever gets to reflect on her political career, driven as it was by her abrasive eccentricity and dogged ambition, she might devote a word or two on how it all says as depressingly much about those who were captivated by her as about herself.

Ivan

Letter: Socialists and War (2011)

Letter to the Editors from the May 2011 issue of the Socialist Standard

Socialists and War

Dear Editors

The SPGB has opposed all wars. To date my view is that every war the UK has been involved in since WW2 has been unjust. With hindsight do you still stand by your position in the knowledge of what the Nazis did in the holocaust? I’m not trying to catch you out as I find the party interesting but I would just like to know your views on this and whether you think it is ever right to intervene if it is to prevent genocide. Or does it not prevent it?

Simon O’Connor, (by email)

Reply: 

Our policy regarding the wars that capitalism inevitably generates is one of opposition on the grounds that in the modern world wars are fought to defend “vital” capitalist interests – access to sources of raw materials and markets; and to defend strategic points and trade routes. Because we are propertyless members of society we workers have no such interests. It’s not a question of “justice” (and what a weasel word that can be!); it’s not a question of “democracy”; it’s a question of class interest.

We recognise that Marx and Engels had during their lifetime advocated the use of war as a defensive measure against autocratic and reactionary regimes. Their somewhat romantic view of war ignored the technical developments taking place in the field of armaments. By the turn of the century war had become immensely more destructive. It had ceased to be something remote – it had become “total war” waged on civilians because every worker engaged on the production of mechanised war was now in the front line and everything had to serve war. The destruction of life and property in modern war means that war has become an essentially different thing.

It was in the light of these changes that we adopted the view that war is not an instrument that can be used by socialists or supported by socialists and that democracy could not be defended by fighting. This was the position we adopted in WW2 just as we had done in WW1.Whatever the outcome of wars world capitalism would remain essentially unchanged. It would still be riven by international rivalries in which national, racial and religious hatreds could be stoked up when the need arose.

In any case democracy in itself cannot solve a single problem of the working class. Democracy for the working class can only be consolidated and extended to the extent that the working class adopts a socialist standpoint. To renounce socialism so that democracy may be defended, means ultimately the renunciation of both socialism and democracy.

Whether we would have decided differently in possible pre-knowledge of the mass murder of European Jews is too speculative a question to be answered definitively—the “ifs” of history are as fascinating as they are futile. That war had its roots in international rivalry. In particular the struggle by two “late arrivals” on the world stage—Germany and Japan—to obtain political and economic position and influence more in line with their economic power and to replace the existing world order with one more advantageous to their national interests. Which would have justified continued opposition to the war.

The full extent of Nazi persecution did not become clear until the war was well under way and the information was not available to the general public at the time. In any case, there is an ongoing debate as to whether the mass murder of the Jews of Europe had been intended all along or whether it was in a great part brought on by wartime circumstances and was a by-product of war rather than a settled war aim. The question is not as clear cut as is often believed. In any case Nazi race hate in Europe does not explain the outbreak of war in the Pacific in 1941.

What is clear then is that World War Two was not fought to save Jews from the massacre as this did not get fully under way until some time in 1942. Even when it was clear that something unprecedented was happening to Jews, the Allies failed to mount any significant rescue operations when these became possible. Their political and military calculation was that not to help the Jews was to help defeat Hitler; killing the Jews meant Germany diverting troops and resources from the front line, thus contributing to an Allied victory. According to Paul Johnson in his 1988 A History of the Jews,  “. . . the Holocaust was one of the factors which were losing Hitler the war. The British and American led governments knew this.” – Editors.

Tiny Tips (2011)

The Tiny Tips column from the May 2011 issue of the Socialist Standard

Ever wonder what $60,000 jeans feel like? You’ll never know. Because you didn’t buy that $60,000 pair of Levis 501s from 1890 — the most paid for a pair of jeans, ever. Here are the most expensive items ever sold — the record-setting car, baseball card, toy, and even tooth:

(Dead Link)

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UK Uncut doesn’t have leaders, hierarchy, a PR firm or funders, yet in six months it has changed the face of British politics:

(Dead Link)

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"The state that infamously hosted the Scopes Monkey Trial more than 85 years ago is at it again. Yesterday Tennessee’s General Assembly overwhelmingly passed a bill that would make it easier for public schools to teach creationism. The bill would require educators to “assist teachers to find effective ways to present the science curriculum as it addresses scientific controversies.”

It lists four “controversies” ripe for pedagogical tinkering: biological evolution, the chemical origins of life, global warming, and human cloning. “This is part of a long held creationist strategy,” says Steven Newton, policy director for the National Center for Science Education. “By doing everything except mention the Bible, they are attacking evolution without the theology.”

(Link)

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In a PPP poll released Thursday, a 46% plurality of registered Republican voters said they thought interracial marriage was not just wrong, but that it should be illegal. 40% said interracial marriage should be legal:

(Link)

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A 14-year-old Bangladeshi girl, Hena, allegedly was ambushed when she went to an outdoor toilet, gagged, beaten and raped by an older man in her village (who was actually her cousin). They were caught by the wife of the alleged rapist, and the wife then beat Hena up. An imam at a local mosque issued a fatwa saying that Hena was guilty of adultery and must be punished, and a village makeshift court sentenced Hena to 100  lashes in a public whipping:

Her last words were protestations of innocence. An excellent CNN blog post, based on interviews with family members, says that the parents “had no choice but to mind the imam’s order. They watched as the whip broke the skin of their youngest child and she fell unconscious to the ground.” Hena collapsed after 70 lashes and was taken to the hospital. She died a week later, by some accounts because of internal bleeding and a general loss of blood. The doctors recorded her death as a suicide. (Women and girls who are raped are typically expected to commit suicide, to spare everyone the embarrassment of an honor crime)

(Dead Link)

Alternative vote or alternative society? (2011)

From the May 2011 issue of the Socialist Standard

When a magician offers you a choice of cards, it doesn’t matter how you decide to pick one, you’ll always get the card they want you to.

It’s the same with any joker who thinks that capitalism can be made to serve us all. Government is there to make sure that the unequal relations of capitalism are maintained.

Not because of some conspiracy but because any party in power finds itself confronted by the might of the people who own our society. It ends up ruling in their interests, rather than the vast majority who work for a living.

That’s why in the financial crisis we’re being made to pay with lost jobs and wages.

You’re being asked to choose a new way of electing those governments that attack you. It’s something that matters a lot to politicians, because it decides how many of them and their mates get the good jobs.

What matters more is what we use our votes for. If we vote for more rulers and the ownership of the world by a handful of people then it doesn’t really matter how politicians share the spoils. But if workers use the vote to reject the false choices that are framed within the context of an owning class dominating another class, we will be further on the road towards a truly democratic society.

If we vote to make the wealth of the world common property in which we all have an equal say, then we can finally have what we call Socialism. We can put an end to minority rule, and we can organise our affairs in our own interest.

That’s why the real choice before you this May isn’t AV or First Past the Post, but choosing to reject class based society. The best choice you can make this May is to join us in campaigning for common ownership.

Proper Gander: The Stepford Geezers (2011)

The Proper Gander Column from the May 2011 issue of the Socialist Standard

The term ‘reality television’ has become even more of an oxymoron with the latest mutation of the genre. The Only Way is Essex (ITV2) lets us in to the lives of a bronzed breed of Essex geezers and girls. For these walking hairstyles, life is just a permanent loop of nightclubs, boobjobs, salons and boy/ girlfriend difficulties. Somehow they manage to spend more time talking about relationships than actually having them.

Whether or not the viewers can relate to this lifestyle is beside the point. Where the programme detaches from reality is in its staged set-ups. What the group of friends do is directed by the puppeteers at ITV2, who were no doubt cackling maniacally throughout. it’s not clear how much of the show is fake, though. The producers say that most of it is real, despite everything appearing structured, filmed and edited like a cheap soap opera. So, the participants perform as themselves in scenarios which have been guided to some extent. Usually, this pans out as something like ‘hunk x chucks blonde y then flirts with blonde y’s friend, brunette z’.

The Only Way is Essex’s bizarre mix of fact and fiction is less disorientating if you think of it as improvisational theatre. The difference, of course, is that this show is lived for real. Who would have such a flimsy grasp on their lives to hand them over to a film crew? Presumably, the participants enjoy the exposure, even if it means being portrayed with less depth than a puddle. For people so self-obsessed, they don’t seem to care how much they’re being manipulated.

Previous reality TV shows have had the discretion to be set in their own little world, such as a mini-recreation of the past or Big Brother’s bunker. But The Only Way is Essex has been let loose in suburbia. So it’s more like The Truman Show, but where everyone’s in on it. Or maybe the final episode will reveal that it’s all been an extended remake of The Stepford Wives?

Mike Foster

50 Years Ago: Kicked Upstairs (2011)

The 50 Years Ago column from the May 2011 issue of the Socialist Standard

Mr. Anthony Wedgwood Benn has fought a furious fight against his transfer to the House of Lords. Despite his struggles, the government showed that they were determined to have him kicked upstairs.

Some lobby correspondents whispered that Mr. Macmillan personally gave the thumbs-down to Mr. Benn’s efforts to renounce his peerage. The P.M., said the rumour, is at odds with Lord Hailsham, and doesn’t want to set a precedent which might bring him back to the commons.

Mr. Benn’s predicament is not free of irony. The Labour Party, of course, once stood for the abolition of the House of Lords. And Mr. Benn’s constituency used to elect Sir Stafford Cripps, who was at one time an ardent opponent of royalty, titles and the rest.

By the time Labour achieved power in 1945, they had dropped their old pledge about the Lords. Now, in fact, they do their bit towards helping the Upper House alive by supplying their share of life peerages.

It is Mr. Benn’s bad luck to have been born the son of a peer. His membership of the Labour Party is a different matter. He may not be able to resign his title: but he can always leave the party which has supported the system of pomp and privilege.

(“News in Review”, Socialist Standard, May 1961)

Action Replay: Circuit Training (2011)

A fascinating 'sport'.

The Action Replay column from the May 2011 issue of the Socialist Standard

Ah for the old days of motor racing, the days of Stirling Moss and co, when the driver’s skill was what really counted and overtaking was central. Drivers still need to be skilled and fit and have quick reactions, but their central role is sidelined in favour of large organisation and behind-the-scenes work. As overtaking has become harder and technology has taken over, spectator interest has declined. At the Barcelona track, the last ten grand prix winners have started in pole position on the grid and stayed there, so it’s become particularly boring.

With Formula One races becoming essentially processions, some weird ideas to retain public interest have emerged, such as random watering of the track to make things more exciting. Tyres are being developed that will degrade more quickly, thus potentially leading to more unpredictable racing and an increase in the number of pit stops. This season the cars have a movable flap in their rear wing, which the driver can use in specific circumstances, again to give more opportunity for overtaking (but there are worries that it may make overtaking too easy and so undervalued).

From the late 1990s, private teams such as Ligier and Jordan ceased to operate in F1 as the emphasis switched to the big car manufacturers such as Ferrari and Renault. The telecom capitalist, Carlos Slim (the world’s richest man, according to some) is now backing one of the newer drivers. This is appropriate since, of course, it’s money that guides the F1 world.  Melbourne has lost £147m over fourteen years of staging the Australian Grand Prix, but the track in Shanghai was built at a cost of £280m, in the hope of attracting big crowds and TV money. And for some, F1 really is a cash cow: Bernie Ecclestone, the boss of the whole business, is the twenty-fourth richest person in the UK, with a tidy bank balance of nearly £1.5billion.

Paul Bennett

Crisis: the stories so far (2011)

Book Review from the May 2011 issue of the Socialist Standard

Business As Usual: The Economic Crisis And The Failure Of Capitalism by Paul Mattick. Reaktion Books: 2011. £12.95

Just yesterday, we were all supposed to believe that the globalisation of capitalism and free markets was the route to freedom, peace and prosperity for all. Then, with barely an explanation, and somewhat out of the blue, the story changed. Now we are to believe that, due to circumstances beyond anyone’s control, prosperity will have to give way to austerity. The good times are over.

It is characteristic of crises that the stories we are expected to believe suddenly change. But how can we understand the change? And might there not be better stories than the rather grim and gloomy one we’ve been ordered to swallow? Paul Mattick Jnr’s short book is just such an alternative. For him the crisis signals the complete bankruptcy and destruction of mainstream economics.

Why crisis is impossible 

Why did the crisis appear as a bolt out of the blue? Why was it not expected or anticipated by any economist or mainstream commentator? In short, because there is no place in the standard economic story for crisis, any more than there’s a place for wizards and interstellar travel in a 19th-century realist novel. The old story goes something like this:

  “Capitalism is a system for producing wealth to satisfy consumer needs. Individuals set up in business looking out only for their own interest, but in doing so produce for society. Only what can be sold will be produced; money will be borrowed, land rented and labour hired only because the resulting production meets a need. The money earned by selling one’s product will then be spent either on consumption or further production. The economy therefore tends naturally to a balanced state, in which all products find buyers. There may be momentary imbalances between supply and demand, but rising and falling prices soon take care of those. In this way, capitalism creates the wealth of nations, and all is well in the best of all possible worlds.”

No doubt the story sounds reasonable – it is, after all, part of our cultural inheritance, as familiar as Noah and his ark, Jesus and the wise men, Little Red Riding Hood and her granny. But there’s no room in this picture for the kind of crisis we’re currently living through. The crisis appears as a shock and is regarded as a mystery simply because there’s no framework within which it makes sense. We can understand that a very small scale ‘crisis’ will result if a business fails to meet consumer need: it may go bust, and this will be a crisis for those relying on that business for their living. But there’s no reason why this should cause much of a problem for the system as a whole – and economists never expect it to. Within the framework outlined above, there is no room for the sort of crises we actually see in the real world – society-wide and global crises where vast amounts of real wealth and the means of producing it (factories, mines, offices and so on) exist side by side with grinding poverty and unemployment. This kind of insanity makes no sense in terms of the story. Surely, great masses of wealth would just go to satisfy consumer demand? And if wealth outstripped consumer demand, then, well, great! The age of leisure and abundance, long promised by capitalism, would finally be upon us, and we could collectively lay back and enjoy it.

Unable to find a satisfying explanation from within the story, the storytellers are obliged to smuggle in some bogeymen from the wings. The balance we expect from the story is then upset by one of various villains, which one depending on the predilections of the storyteller: state interference or largesse, insufficient (or too much) regulation, greed, and so on. Quite why these things sometimes cause a crisis and sometimes not when they’re always lurking in the wings is left unexplained.

Why crisis is inevitable

However, there are some thinkers, Mattick among them, who were not at all surprised by the crisis. This is not, as Mattick says at the start of his book, because they are cleverer than the mainstream storytellers. Nor have they access to more or better information – in fact, for the most part, rather the opposite. Instead it is a matter “of knowing how to think about what is going on”. Or, in the terms we’ve introduced in this article, of having access to better stories – stories that capture what’s actually going on in the real world. Here’s Mattick’s story:

 “Capitalism is not primarily a system for producing wealth to meet consumer demand, but for making money. This is what business is all about: using money to make more money. The capitalist (or, increasingly, a capitalist institution subsidised and backed by the state) starts off with a sum of money, which he throws into circulation in the expectation that it will return to him as a greater sum than he started with. To this end, the capitalist buys means of production and labour power on the market, then puts these to work to produce goods, which he then takes to market in the expectation not just of sales, but of profits. If he is successful in his aim, and if he is to remain a capitalist and keep up with the competition, he must reinvest at least a portion of that profit in yet more production, buying yet more labour power and means of production, to produce yet more wealth and, potentially, money profits. And then the cycle begins again, on an ever-expanding scale.” 

The motive here is not the satisfaction of consumer need – a relatively straightforward matter – but the production and appropriation of profits on an ever-expanding scale – a much more tricky thing to achieve. And as the production of social wealth increasingly takes on this capitalist character, the production of the things we need increasingly relies not on our need for them, nor on our ability to produce them, but on the ability of capitalists to make profits from the whole process. When they cannot make or do not expect to make a profit from production, or when they produce too much to sell profitably, they will not invest in production, but in speculation, or will not invest at all, and hoard money. This can affect not just their own line of business, but the whole system of wealth production. Crisis, in this view, is not caused by any bogeyman in the wings, but is a necessary result of the process itself.

What’s the answer?

Once we’ve understood this story, our expectations are turned on their head. We are no longer shocked by capitalism’s periodic crises, but expect them. The question then is, do we really need to forever make our lives hostage to capitalist profit; or might we be able to do things in a different way? In the mainstream, the debate over how to resolve the crisis is between two alternatives. The first is to just let things collapse so the economy undergoes the necessary correction, restoring profitability and eventually returning the system to business as usual. The second is that the central banks should continue to print money and the state bail-out bankrupt banks and countries and so on, so that ‘business as usual’ is not disrupted by potentially catastrophic upheavals (as was the case in the Great Depression of the 1930s). The debate is between the needs of business, on the one hand, and the need to preserve social cohesion (for the needs of business) on the other. Businessmen and policy-makers are damned if they do, and damned if they don’t. But what are usually thought of as ‘socialist’ alternatives are unlikely to work either – history has shown that reformist social democracy and ‘communist’ central planning have been no better at controlling capitalism’s crises than anything else. It’s no good, says Mattick, demanding jobs from a system that would happily give us the jobs if it could.

If there’s hope, it’s in the belief that human beings will eventually tire of walking into brick walls and begin to look for a door. If you have a concern that produces socially necessary goods or services, on the one hand, and poor and unemployed people on the other, and there is no way of putting the two together in a way that produces profits for owners, then that’s what capitalism calls a crisis. The solution – bringing workers, the unemployed, the poor and the means of producing wealth together, not in order to make profits, but to provide for need – is called socialism.

The story has a name

We’ve left the name of this alternative story till the end because it is liable to scare unwary readers. That’s because, in the standard story, it’s portrayed as one of those bogeymen waiting in the wings. The name is Marxian socialism. Mattick’s is the second major book from a Marxist thinker to appear since the onset of the crisis (the first was David Harvey’s Enigma Of Capital, favourably reviewed in the June 2010 Socialist Standard). And we highly recommend it – it’s a brilliantly comprehensive and yet miraculously short history and analysis of capitalist crisis. The Marxists associated with this journal will have their differences with the details of Mattick’s account. In particular, we would say he puts too much emphasis on Marx’s law of the tendency of the rate of profit to fall, and throws the baby out with the bathwater when he rightly rejects the old left but places his faith seemingly more in the spontaneous appearance of mutual aid and communist formations than in working-class political organisation. But what’s more important than the minor disagreements is the framework that Marxism provides for understanding what’s going on in the real world, and for that, Mattick’s book is an essential guide.

Stuart Watkins