Finance and Industry: Who goes bust? (1966)

The Finance and Industry Column from the November 1966 issue of the Socialist Standard

Who goes bust?

Many workers refuse to accept the hard fact that they have been condemned for life to work for a wage or salary for those who own the means of wealth production. Spurred on by stories of how ordinary workers have risen to be wealthy capitalists, they imagine that they, too, can do this. Such people long for their own shop or snack-bar or garage to escape from wage-slavery, Unfortunately for them they often find they have to work harder for themselves (or their creditors) than they had to when working for wages. For some it’s even worse—they go under and are cast back into the working class, less their savings.

The latest annual report of the Board of Trade on bankruptcy gives as the top lines among the 3,404 who went bust in 1965:

The list continues with hardware and electrical goods retailers, confectioners, tobacconists and newsagents, meat retailers, plumbers, fruit and vegetable retailers, general stores, electrical contractors, commercial travellers and so on. In other words the small shopkeepers and businessmen that workers often wish to be.

Next time you hear the story about how good capitalism must be because so-and-so rose to be a capitalist, remember the other side of the story: for every one who succeeds hundreds fail completely and thousands more are condemned to a life of drudgery and worry not unlike the rest of us. Besides capitalism can’t work without a working class, which means that most of us don't even get a chance of becoming a petty capitalist.

World Capitalism

Socialism can only be world-wide because capitalism, the system it will replace, is already so. Modern industry has a world-wide character which ignores frontiers. But although millions co-operate to produce wealth this wealth does not belong to society as a whole; it belongs to just a part of society. Today wealth is produced socially but owned privately. This is the basic contradiction of capitalism. Private ownership of the means of wealth production in fact conflicts with modern technology. One aspect of this is the division of the world into competing, and often warring, states.

Many people don’t realise that the typical firm today is not the small builder or motor repair man mentioned in the previous section. Production, in many lines, is dominated by a few giant, international firms such as Shell, ICI, Unilever and Philips. Sir Paul Chambers, head of ICI, made an interesting speech at the International Management Congress in Rotterdam on September 20. He doubted whether the creation of a Western European economic bloc could be more than a short-term solution to the problems created by the vast size and international character of some modern industries. Modern technology, he said, could be a source of “strife" if its international character were not taken into account. Chambers went on:

I have pointed to the aircraft industry and the inevitability of the growing integration of aircraft firms on an international basis. Almost every emergent country wants its own airline, but it has to rely upon the major makers—mainly British and American—for its needs. A similar trend can be seen in computers and in photographic materials and equipment. In car manufacture the integration of firms is beginning to take on a similar international character. The complete sovereign independence of small states is becoming inconsistent with the growing economic dependence upon large international industrial groups domiciled elsewhere. (Financial Times Sept. 21, 1966).

Men like Sir Paul Chambers do not think in national terms. They know that capitalism is international and act on it. The workers, those who run these industries from top to bottom , in all countries, might well learn from this.

The right to be lazy

Are you tired even before you start work? Do you dislike having to work hard for eight or more hours a day?

Peter Lennon, in the Guardian of September 22, wrote up some of the views put forward on these and other questions at a recent international conference on psychosomatic medicine in Paris:

Many citizens manage to reach a condition of distressed exhaustion before doing anything at all. They wake up tired, grouse through the day, and at night mourn departed sleep. A scrabble and tangle of humanity, they stew in bad air and petty psychological turmoil, buffeted by noise and needled by a multiplicity of unrewarding duties. In eternal competition with shadowy colleagues and goaded by social obligations beyond their capabilities they experience a feeling of impotence and inadaptability. Neurotic fatigue is the result.

Professor Chombart de Lauwe claims that fatigue, other than muscular fatigue, has its origins in the discrepancy between our means and our needs: between aspirations and social pressures—the eternal discrepancy between a possible life and the life we are forced to live.

At least one concrete conclusion to rejoice the civilised emerged from the conference: laziness, far from being the shameful attribute of the social renegade is the man of sensibility’s criticism of an unnatural activity: hard work. It is also his defence against a barbaric way of life.

A hard look at the conclusions of these eminent specialists leaves us with these convictions: the prestige attached to daily strenuous toil is a myth and a shabby modern one, and it is seriously probable that, in spite of generations of domesticity, intense, sustained daily work is incompatible with the realities of human physiology.

Lennon writes in an amusing way. But, when you come to think of it, it is a serious matter that most of us should be condemned to a lifetime of boring, toil. The least we should do is ask: Does this have to be?

Work, of course, is necessary in any human society. But it does not have to take the form of “intensive, sustained daily work”. If such boring, unsatisfying toil is “incompatible with the realities of human physiology” (as most of us must suspect anyway) then socialist society can abolish it. Indeed it should abolish it. Work itself cannot be abolished. However it is up to the defenders of capitalism to show that wealth can only be produced by people, working under unhealthy conditions, doing jobs they find dull and uninteresting.

Adam Buick

Famine in Africa (1984)

From the December 1984 issue of the Socialist Standard

Toyin Falola, writing about the impact of colonialism in Africa, has this to say:

The situation then turned from one of mere trading partners to one of unmitigated exploitation. Colonial rule was so successful that although nearly all African countries have now achieved political independence they remain economically dependent on Europe. This unequal partnership is a major obstacle to the socio-economic development of Africa. [1]

The problem with the theory of “neo-colonialism" is that, like all theories developed within the narrow perspective of nationalism, it tends to overlook the boundaries of class. Where it acknowledges the dynamics of class struggle, more often than not it absorbs it into the conflict between countries — between the rich industrialised North and the impoverished providers of raw materials in the South. Thus Susan George:

The present world political and economic order might be compared to that which reigned over social-class relations in individual countries in nineteenth century Europe with the Third World now playing the role of the working class. [2]

To be fair to George, she does draw attention to the existence of “local elites" in the Third World. Yet all too often with those who subscribe to this neo-colonial model of the world, it is not that such an elite exists that matters but that it should so unashamedly ally itself with its erstwhile colonial masters.

Who is this elite in Africa? According to Greg Lanning:

At independence the new rulers in Africa lacked an economic base in society and used the patronage and power of government to consolidate their own position. Partly because of this and partly because of the nature of an underdeveloped economy, “the state plays a major role in economic activity and development". The importance of the state in post-colonial Africa means that those who staff and run the state apparatus form the basis of the emergent ruling class in Africa. [3]

The dominant ideas in society being those that best serve the interests of its ruling class, it is perhaps not surprising that contemporary politics in Africa should be so receptive to Leninist ideology with its statist prescription for the management of an emergent capitalism. On the other hand, as Lanning suggests, in trying to consolidate their economic position Africa's rulers depend heavily on the revenue accruing to their national treasuries from foreign companies operating within their territories. Such a situation demands a degree of pragmatism. For a ruthless pragmatist like President Mobutu of Zaire this has proved most rewarding. With a personal fortune of about £100 million, Mobutu is one of the richest men in the world, while the average wage of a Zairean worker amounts to just over ten dollars a month. Clearly, if Africa’s ruling class chafes against the constraints of “neo-colonialism", it is also very much a beneficiary of it. While it has neither the inclination nor the option to withdraw from the interlocking relationships characteristic of an integrated world economy. Dinham and Hines point out to what extent it has been able to modify these relationships to its own advantage:

Could a politically independent state wrest economic power from the foreign companies which continued to control their export crops? The strategies open to governments were limited and experience soon showed that measures to acquire immediate control by nationalisation led to retaliation from the companies involved. Most countries opted for more modest legal and financial controls. These measures did not drive the companies out — nor were they particularly intended to do so, for the companies were by now crucial to many African economies. [4]

More recently, however, the trend has been for these multinational firms to opt out of plantation agriculture in which many of them have their roots and to move towards an arrangement known as “contract farming”. What this means is that local producers are contracted by a firm to produce a certain output which the firm then purchases at a fixed price. This has the advantage for the firm concerned in that it eliminates the risks attached to growing crops.

But while multinational firms invest less in direct landownership than they did in the past, in other respects their dominance has become more entrenched and pervasive. These latter activities include the marketing, processing and transport of agricultural products as well as the provision of agricultural inputs such as fertilisers, machinery and management or technical services. Such "vertical integration" is the hallmark of modern agribusiness corporations. In other words they are able to exercise wide ranging control over the many links that make up the food chain, from the supply of seeds to the packaging of the final product.

For the proponents of economic nationalism, this is a highly regrettable state of affairs. Not only are African countries denied greater "vertical" control over their products but are economically restricted in a “horizontal” sense as well. This is to say their structure of production is relatively undiversified. being closely aligned in most cases to a fairly narrow spectrum of external markets which absorb the bulk of Africa’s trade. According to Dinham and Hines

Twelve countries are dependent on just one main crop for over 70 per cent of their income. and a further eleven countries depend on only two crops for well over half their income. [4]

Such a highly concentrated pattern of production has a number of disadvantages built into it. In the first place, it greatly increases the risk of loss due to environmental factors. It also makes these countries extremely vulnerable to fluctuations in the price of their export crops. Just as a mining community in Britain, for example, could be devastated by the closure of a mine on which it heavily depends, so a drastic fall in the price of a single agricultural product can wreak havoc with whole regions given over to the production of this crop. In Africa’s case, probably the most extreme example of “over-concentration” is that of Gambia, where groundnuts are grown on 73 per cent of the arable land and account for 90 per cent of its export revenue.

The market economy is, of course, an inherently unstable system and within it the price of agricultural products tends to be more volatile than most. It is this very instability which adds yet another dimension to Africa’s plight in that a high proportion of its export crops happen to be slow maturing and so not readily adaptable to the vagaries of the market.

Take, for example, coffee. In at least eight African countries coffee is an important export crop grown largely by smallholders. High current prices will induce farmers to plant or expand their acreage of coffee trees. Once planted they have to wait for roughly five years for the coffee trees to mature but as Moore-Lappe and Collins point out:

By the time your first harvest of such crops is ready you might find the bottom has dropped out of the market. And it probably will have since producers in your country and others will have planted to meet the demand at the same time you did The likely result is overproduction once the new trees begin to bear more than the consumers are willing to buy even with a drop in price. [5]

In the economically advanced areas of world capitalism, governments have usually sought to cushion agriculture from the erratic workings of market forces. But this in turn has created yet another problem: periodic crises of “over-production” and chronic food surpluses. In fact so huge are these surpluses that in America alone it costs £700 million a year just to stockpile them. [6] But such stocks are by no means surplus to human requirements; they are surplus to the capacity of the market system which restricts workers’ consumption to the size of their wallet. Once again, Susan George:

As long as food is regarded as a commodity . . . you will have this scandalous situation of surpluses on the one hand and famine on the other. Because people who can’t pay. who cannot become consumers with a Capital C are not interesting to this world system. [7]

In the Third World, however, there is far less scope for governments to intervene and protect their agricultural sector in the way that the EEC or the American government can. The reason is that the subsidies paid to farmers in the richer countries represent a tax burden on other sectors of industry. But in the developing countries this is hardly a practicable course of action:

Developing countries are so called because their other industries are not developed: generally speaking, agriculture is their one main industry. Agriculture has, in their case, to support the government. Only in developed countries with prosperous industries able to give revenue to the government can the government, in its turn, support agriculture. [8]

In addition to the problems affecting African countries arising from fluctuations in the prices of their agricultural exports, there has been in the post war era a longterm tendency for these prices to drift downwards against those of imported manufactures and oil. For example, "in 1969 a coffee producing country had to sell 66 bags of coffee to buy one 16 tonne truck but by 1979 it had to sell 123 bags of coffee to buy the same truck" [4] Don Casey, in a paper prepared for the UN Development Programme, estimated that the total loss of foreign exchange earnings to Africa due to this relative fall in the price of agricultural exports in the two decades after World War Two, "exceeded all foreign funds invested, loaned or granted during that period". [5]

This "deterioration in the terms of trade" has prompted African and other Third World governments to try to secure commodity agreements through bodies like the UN Conference on Trade and Development (UNCTAD) in order to stabilise prices or else to form producer cartels along the lines of OPEC. To date such attempts have been largely unsuccessful. Partly this is because "producer countries" are themselves no more a monolithic bloc than their customers but are deeply divided by competition over markets. When, for example, a conference was held some years ago to try to reach an International Tea Agreement, several African countries objected to the idea of fixing prices or quotas. The reason was that Africa’s share of world output was projected to grow substantially in the near future.

Faced with these increasingly stringent economic pressures, African governments have little choice but to move even further down the road that has led to the predicament in which they find themselves. To boost their revenue they must encourage commercial agriculture. In so doing they have had to turn more and more to multinational agribusiness for the necessary imports and to private banks or aid agencies for loans to finance this expansion. This of course only further reinforces the need to promote commercial agriculture. It is after all mainly from this source (apart from the mining sector in some cases) that governments can hope to raise the necessary amounts of foreign exchange that can go towards repaying the debts incurred.

For peasant farmers throughout Africa such developments translate into a mounting burden of misery. As peasant farmers they are of course mainly “self provisioning" — they produce food primarily for their own consumption — production for the market being a secondary consideration. But today this social arrangement is coming under increasing attack.

After “independence”

Julius Nyerere in his famous 1967 Arusha Declaration, remarked that

The basic difference between Tanzanian rural life now and in the past stems from the widespread introduction of cash crop farming. Over large areas of the country peasants spend at least part of their time — and sometimes the larger part of it — on the cultivation of crops for sale — crops like cotton, coffee, sisal, pyrethum and so on. But in the process the old traditions of living together, working together and sharing the proceeds have often been abandoned.

The Arusha Declaration itself was an attempt to transform peasant agriculture by reducing the influence of market forces. It sought to build a self reliant economy by raising agricultural productivity through the mass mobilisation of peasants within a framework known as the Ujamaa (meaning “familyhood”) programme. Among other things this entailed the enforced resettlement of scattered peasants into some 8000 planned villages, ostensibly to extend essential services to the rural population as a means to greater productivity.

The Ujamaa experiment is interesting because of its ideological commitment to the idea of peasant self-reliance. Its failure to live up to this commitment — for it came increasingly under the control of a burgeoning state bureaucracy — highlights all the more starkly the inherent conflict of interests between African governments generally and the peasant populations in the countries which they govern. The fact of the matter is that these governments need to further extend the influence of market forces, not to reduce it; to transform, as Marx put it. “a society in which one definite mode of production dominates even though not all productive relations have been subordinated to it" into one based more and more on purely capitalistic relations of production. In short, what the Ujamaa programme foundered on was not an ideological betrayal but the economic exigencies of Tanzanian capitalism and its heavy dependence on foreign imports and aid resulting in the need to generate foreign exchange.

How is the capitalist imperative to extract marketable surpluses from cash crop production transmitted to, and impressed on, the African peasant? In colonial times a favoured method to induce peasants to grow cash crops was by levying taxes. This remained the case after political independence. Indeed, in some cases the burden of taxation has substantially risen:

In Mali in 1929 the French levied a tax that required each adult over fifteen to grow between five and ten kilos of cotton to pay for it. By 1960, the last year of French rule, the tax had risen to the equivalent of forty kilos. By 1970. during the drought, the successor government forced each adult peasant to grow at least forty eight kilos of cotton just to pay for taxes. [5]

Generally speaking, crops that peasants produce for export are purchased by marketing boards — usually government-run and almost all monopolies — and then sold to foreign buyers for processing. The price that peasants are paid is often far less than that charged by the marketing board which in turn reflects the state of the world market. It may be deduced that the lot of the peasant might improve with an improvement in the world market. But this is not necessarily so:

A slight increase in income that peasant farmers in underdeveloped countries might acquire from a rising world price for their commodity has to be weighted against the increased threat of displacement by land-grabbing commercial farmers or corporations that see higher prices as new grounds for profit. [5]

In the post war era most countries in Africa experienced a surge in cash crop production though more recently in the 1970s output has tended to level off (partly due to the world recession). Significantly, this growth was achieved primarily not by raising yields but by expanding the area under cash crop production. Inevitably, this was at the expense of subsistence agriculture which was progressively pushed onto less productive marginal land. Since subsistence agriculture is a major local source of food, this development goes a long way towards explaining the steady fall in per capita food production in Africa over the last twenty years or so.

In the past the availability of relatively abundant land, coupled with communal forms of land tenure, tended to cushion subsistence agriculture and ensure a modicum of food security. Indeed, it was this that mainly inhibited the development of a strong indigenous landowning class. But today this picture is rapidly changing as a recent survey from the Cornell University Centre for International Studies suggests:

The study found a trend across Africa towards increasing privatisation of communal lands, growing concentration of landownership and the fragmentation of holdings, all factors further aggravating rural poverty. In some countries lands traditionally available to all tribal members are being appropriated by government officials or foreign firms, usually with the acquiescence of chiefs.[4]

It has been estimated that three quarters of Africa's population now have access to less than 4 per cent of the land [2] while in many parts of Africa “small farmers do not own enough land to occupy themselves for at least 6 months of the year”. [9] And most importantly, with the question of famine in mind, “8-10 per cent of the rural labour force in Africa is now landless and these numbers and proportions are growing rapidly". [4]

The consequences have been catastrophic for millions of peasants caught between the hammer blows of the market economy and the anvil of diminishing returns from subsistence agriculture. And as rural deprivation worsens, so the tide of migration to the cities has gathered pace. Africa may be the least urbanised continent. with less than a quarter of its people living in cities, but its rate of urbanisation is roughly twice that of its population growth. This means on current trends that the population of African cities can be expected to double every 14 years. But how can this growing population be fed when domestic food production mainly in the form of peasant farming is in the throes of decline?

The answer as far as governments are concerned is to import food, particularly cereals, from abroad. This first began on a significant scale in the 1960s when the price of cereals was low as a result of the accumulation of huge surpluses in North America and Europe. But. as Sir Fred Catherwood explained, this was by no means an unmixed blessing:

These surpluses from Europe and from America depress Third World prices; they put Third World farmers out of business, they drive them off the land and into the shanty towns and they reduce rather than increase production in the Third World. [7]

Without doubt. African governments are fully aware of this, but whether they are in a position to do anything about it is quite another matter. They have to take into account for example the likely response of town dwellers to any increase in the price of basic foodstuffs that might benefit local producers. Furthermore, as new tastes become entrenched in the urban areas it is even more difficult to break away from dependence on a particular cereal (like wheat) which for climatic or other reasons cannot be grown in much of Africa. The population of Africa may be mainly rural but political power is overwhelmingly urban-based, with consequences graphically spelt out by Basil Davidson:

So it was increasingly the towns, after independence, that dictated the priorities of economic policy; and the new demands of the towns, pushing aside the needs of the countryside, increasingly called the tune. More and more exports had to go in paying for the imports demanded by the towns . . . the towns and cities, in short, became the tail that wagged the economic dog. and the rural populations, still in most cases the great majority of all the people, had to suffer for it. [10]

When in fact big increases in food prices have been pushed through against the wishes of the urban population, this has in many countries been the prelude to serious riots and, in some cases, a successful coup d'etat. Little wonder, as Rene Dumont put it. "governments fear urban unrest far more than the dispersed and unorganised peasant farmers”. [11] Prompted by this threat—not to mention the military aspirations of rival African states — they have sought to massively arm themselves with the paraphernalia of repression: “At present governments spend an average of between 4 and 7 per cent of their budgets on agriculture — while spending 20 per cent on defence". [12]

More recently in the 1970s the cost of food imports rose substantially. For African countries this was an ominous development. particularly when seen against the background of a relative fall in the value of agriculture exports. Many governments in response to this crisis have initiated large scale (often state run) agricultural schemes in a bid to boost domestic food production by attracting foreign investment and expertise.

At first sight this might seem an unlikely area for foreign firms to invest in, for the reason so candidly explained by the Chairman of General Foods: "It is virtually impossible for a private business establishment to develop, distribute and sell enough of the kinds of food poor people need and still break even, much less look for any profit". But the role of aid has been a crucial factor in enticing agribusiness. Firms find it sufficiently lucrative to participate in large scale agricultural projects as these "attract funding on concessional terms by aid agencies" and with payments effectively guaranteed by the aid agencies concerned this eliminates financial risks to the firms themselves. In short, with the prospect of large scale schemes coming to dominate domestic food production in the 1980s this will "ensure agribusiness an increased role in Africa’s food production, thus complementing its historic control of Africa's cash crop production". [4]

Should this happen it will further erode subsistence farming, displacing peasants or driving them more and more into the market place of hunger where the economic risks are as great as the physical margins of survival are small. For increasing numbers of them throughout Africa a way of life is dying by degrees; slowly strangled, as though by a python whose length spans the circumference of the globe.

Robin Cox

References

(1) African History and Culture, edited by R Olaniyan, 1982

(2) How the Other Half Dies. S.George, 1979

(3) Africa Undermined. G.Fanning with M. Mueller. 1979

(4) Agribusiness in Africa. B.Dinham & C. Mines. 1983

(5) Food First, F.Moore Lappe & J.Collins. 1982

(6) The Observer, 1 April 1984

(7) Utopia Limited, programme notes, 1984

(8) Agriculture The Triumph and the Shame. R Body. 1982

(9) The growth of Hunger. R.Dumont & N Cohen. 1980

(10)  The Story of Africa, B.Davidson. 1984

(11)  The Guardian. 25 June 1982

(12) Newsweek. 6 August 1984

Vodka-cola (1979)

Book Review from the November 1979 issue of the Socialist Standard

Co-production deals between Western enterprises and East European governments are becoming big business and attract a lot of notice in the press. These deals now represent 10 per cent of East-West trade and are rapidly growing in number and importance.

Co-production is distinct from normal East-West trade, which is handicapped by the fact that it doesn’t allow the Eastern bloc to buy all it needs. The West doesn’t want payment for exports in roubles or other Eastern currencies as these are practically worthless. Russia has been paying for much of its imports with large amounts of gold but as this tends to reduce its price then Russia’s trading position simply worsens, while other Eastern countries have little or no gold anyway.

Barter deals are hopelessly inadequate as Western exporters rarely want the commodities being offered in exchange. Even so, barter does exist. Pepsi-Cola, long reviled by communist propagandists as a “monopolist”, has built a plant in Russia capable of producing 74 million bottles a year for Russian consumption. Since Pepsi wouldn’t take roubles and Russia needed its gold for American wheat, payment is made in Vodka and Pepsi were given the monopoly for selling Russian wines in the USA.

Despite Kruschev’s boast that Russia would surpass the West economically within 15 years, she has fallen further behind and the gap is widening all the time. To catch up, Russia and her satellites need Western technology but cannot acquire enough of it for the reasons given. Also, they already owe the West such a staggering debt (at least 80 billion dollars) that they cannot count on extended credit forever.

However, steps are being taken to rescue the Eastern bloc from its predicament, for a price, by none other than Western big business —the very “multinationals” who are supposed to be the mortal enemies of “international communism”. Just how and why this is being done is explained in a new book, Vodka Cola, by Charles Levinson. (Gordon and Cremonesi, £7.90.)

In the book Levinson lays bare the reasons for the current “detente” between the West and the Eastern bloc. This has nothing to do with either side learning to love the other but is dictated by their respective economic needs. The East must modernise its industry in order to keep its population passive. After all, expectations of a better life must be met someday. For Western big business there is the glittering prospect of a potential new market of 400 million people, plus the opportunity to switch its production away from a unionised, high-wage, strike-prone labour force to one which is state regimented, low-wage and forbidden to strike.

So the last thing the multinationals want to do is disturb the status quo behind the Iron Curtain. Any growth of political freedom there would produce genuine trade unions and the inevitable inroads into profit margins. Hence their enthusiasm for detente. Levinson also points out that the agreements signed by Eastern and Western politicians are only political window dressing. It was the businessmen of both sides who made the real breakthrough and all the politicians have done is merely help smooth the way for future deals. When it comes down to it, ideological differences are demolished by economic realities.

These co-production deals enable the West to sell the East what it needs and get paid, not in dud currencies or shoddy, inferior products, but in cheap Eastern made goods manufactured to Western standards which can be sold on the world market at a fat profit.

Co-production takes a variety of forms:

LICENCING: until the early 1960s only a few licences to use Western technology were purchased in the East. Now there are several thousand. These were previously paid for in scarce hard currency but now payment is likely to be in the products being made under licence. For example, Fiat, Volkswagen and British Leyland have been paid for their licences in vehicles and parts.

BUY-BACK: this means that industrial giants like Renault of France and Montedison of Italy will supply—in this case Russia—with an entire car factory and chemical plant and be paid in cars and chemicals for sale throughout the world. The Eastern partner is also helped to market its share of production through distribution companies specially set up for the purpose. In this way much needed hard currency flows back to the East to enable it to buy more of what it requires.

LEASING: the Eastern bloc also uses equipment rented from Western companies. So far this has not happened within Russia itself, but its merchant fleet has leased thousands of cargo containers and other equipment from the West, so privately owned means of production and distribution exist in part of the Russian economy. Levinson’s view is that leasing will increase because of the advantages it offers the East, among which is the acquiring of modem technology without spending huge amounts of hard currency. He predicts that it is only a matter of time until leasing will be allowed within Russia.

The list of “monopolists” involved in co-production deals makes fascinating reading: General Motors, Exxon (Esso), Ford, Unilever, IBM, Krupp, ITT (played a leading part in setting up Pinochet’s regime in Chile), Coca-Cola, Du Pont, Westinghouse, ICI, Union Carbide, Fiat . . . Many of them are bitter opponents of trade unionism in their own plants and all of them, needless to say, collect their share of the surplus value created by the Eastern workers employed in the various projects.

Cyrus Eaton, the American multimillionaire, revealed how it is done when he explained his 40 million dollar 50/50 deal for building a tyre factory in the East in 1970. The communist state partner would own and operate the plant. Eaton’s half would be in tax-haven Switzerland and would market the tyres in the West. Eaton says

“This enabled the Eastern country to earn hard currency and because of lower labour costs the venture can sell tyres cheaper than Western countries can. The plant in the East sells the tyres to the marketing subsidiary at cost —thus leaving profits to the joint marketing subsidiary.” (p. 87.)

Nice one, Cyrus.

All of this must have its effect on Western jobs. Naturally, the co-production partners deny this and claim that the increased trade will provide the West with 2 million new jobs. But the Eastern products, because they are made by low-wage labour, consistently undercut similar Western products. Indeed Western manufacturers and trade unions are forever protesting about “dumping” on Western markets. In Britain the footwear, textile, tailoring, motor car and TV tube industries, to name a few, have been badly hit by cheap imports from many countries and thousands of jobs have been lost. So while the British Communist Party demands action to “fight unemployment” their Eastern counterparts are busily contribute: it.

Unfortunately for the Eastern bloc the present type of co-production deal cannot fully solve their problem. The technology they are buying tends to be second rate and outmoded by Western standards. The West will not hand over the latest developments because it feels it does not have sufficient safeguards as things stand. For example, equipment and know-how supplied under one deal can easily be pirated and used by the East for other projects of its own, so Western companies are increasingly demanding a 50/50 share in the ownership of the plants as well as the products and profits. Because the Russians have refused to allow this they have failed to clinch several important deals. The Russian government’s refusal stems from an unwillingness to lose face: how would it be able to explain away such a blatant example of private, as opposed to state, ownership of part of “socialist industry?

Hungary and Rumania have gone some way towards meeting this problem. Although not allowing Western-owned plants, they do permit Western companies to own a large share of the profits of the joint venture (payable of course in hard currency). Volvo of Sweden has an agreement with Hungary for the assembly of Volvo cars with 48 per cent of the profits going to Volvo shareholders. This represents legal ownership of part of Hungary’s means of production. In Poland the government has gone all the way; foreign companies can legally own the entire project and if the deal is terminated then company can take out its original investment plus its share of capital gains.

The pressure on Russia to come some sort of compromise is enormous. Russia apparently needs the latest in mini computers but IBM and other suppliers are refusing to provide them. They want to protect their technology by retaining control over its use and means joint ownership of the project where it is being used. Only in this way can the company prevent its technology being applied outside of the contract.

Levinson frequently refers to the theories of Karl Marx and seems to have understood these better than most writers. For example, he says

“The end result of co-production operations is profits for the capitalists, and this means that the socialist enterprises are involved in creating the surplus value which Marxism regards as the basis of the capitalist class’s exploitation of the worker.” (p. 261.)

If the words “Eastern state capitalist” had been substituted for “socialist” then we couldn’t have put it better. He mistakenly attributes the failure of Russian nationalisation to “Marxist ideas” but continues

“Nobody (in Russia), unfortunately, had raised the minor question, ‘Whether the business be private or nationalised, how does it profit the worker who is subjected to the same authoritarian labour methods in either case?’ ” (p. 224.)

Although the book contains several other mistakes regarding Marx’s views, these cannot obscure the value of Levinson’s work as an aid to understanding how business, East and West, operates and what its priorities are. And we cannot help noticing that the analysis of modern society by Levinson, and many others outside our ranks, is very similar to our own. Nowadays, you don’t have to be a socialist to be struck by capitalism’s glaring contradictions and antisocial nature.

Vic Vanni

Blogger's Notes:

Charles Levinson replied to this review in the March 1980 issue of the Socialist Standard.

In connection to Levinson's book, the following might be of interest to some readers. In 1981, there was a fictional adaptation of the book entitled Beloved Enemy. Directed by Alan Clarke (who also directed Scum, The Firm and Elephant) and adapted for television by David Leland, it was transmitted on the BBC as part of the Play for Today series of dramas.

Beloved Enemy is available to watch on YouTube:

Into Battle! The War over Soap Substitutes (1950)

From the July 1950 issue of the Socialist Standard

According to all reports, the first salvoes are now being fired in what promises to be one of the biggest trade-wars we have seen in this country for many a long year. The contestants in the struggle are the manufacturers of detergents, or soap-substitutes.

The set-to in Britain is actually the second round of a contest which has only just come to an uneasy (and probably temporary) end in the United States. Here, Proctor and Gamble an American firm, and Lever Bros., the Anglo-Dutch combine, fought out a bitter struggle for many months before Lever Bros, were defeated and forced to content themselves, for the time being at any rate, with only a minor share of the American soap-substitute market.

Now the scene has changed to this country, though the chief contenders are the same. On the one hand is Thomas Hedley & Co., the British subsidiary of Proctor and Gamble; on the other. Lever Bros, once more, fighting this time on their own ground. In addition there are a host of smaller fry, all trying hard to keep a foothold in a very precarious and uncertain market.

All of them, big and small, are spending large sums on advertising (Hedley’s and Lever Bros, are employing two of the biggest firms in the business). Hedley’s are reported to have already spent £72,000 on Press advertising for “Dreft,” besides about £100,000 on film publicity. Now they are busy launching “Tide” on the public, with what seems like lavishness of advertising even greater than that devoted to “Dreft.” Lever Bros, in their turn have already spent £73,000 on “Wisk,” and £22,000 on their liquid product “Quix.” Both seem ready to spend a lot more besides. These two big firms, it will be noticed, are playing the game of running two products, so giving themselves an opportunity of pitting one against the other, as well as against the products of their rivals. When one product really begins to outstrip the other, then they will probably drop the poorly-selling one and concentrate on the one that is selling well. One of them, perhaps both, may even now be working out plans to launch a third, so getting the additional advantage of newness—an important factor when each new product is launched with lavish publicity.

Just recently, the situation has been further complicated by a new big rival, the American Colgate-Palmolive-Peet combine, which plans to put its own product “Fab” on the market in a big way. The smaller fry are, of course, now some way behind, but they are all struggling hard for their own little place in the trade. Domestos Ltd., for example, have already spent £39,000 on advertising “ Stergene,” and the Brobat Mfg. Co. £33,000 on “Brobat.” Boots with “D.10,” and the Co-op with “Cascade,” are of course at some advantage in that they can distribute their products in their own shops, but their trade will in effect be confined to their own distribution system. They will not stand a chance on the open market unless they are prepared to risk a great deal of money in pushing their products. Having taken a look at the jungle outside, they have no doubt already decided to stay at home!

This high-pressure advertising is, of course, only the prelude to the fight. The first real blow was struck by Lever Bros, when they offered, temporarily, to let housewives have two packets of “Wisk” for the price of one. Hedley’s replied by covering large areas of London with vouchers offering a 1s. 7d. packet of “Tide” for 6d. Apart from stunts, prices generally are already on the way down. “Fab” recently dropped from 1s. 9d. to 1s. 7d.; “Dreft ” from 1s. 7d. to 1s. 4d.; and “Cascade ” from 8d. to 6d. (Price differences are largely accounted for by differences in the sizes of the packets). All of them are probably working frantically to think of other bright ideas which will enable them to gain an advantage.

Even when soap-rationing is abolished, all the manufacturers seem convinced that there is a future for detergents. If they did not think so, they obviously would not be doing what they are doing. Reinforcing them in their belief is their determination to bring down the price of detergents below the price of soap. One of the main ways in which this can be done is by reducing the price of the raw materials from which detergents are made.

Detergents, as is well known, are derived from petrol, and just as competition is now rife among the detergent manufacturers so is competition among the oil-producers. At least four companies are already producing raw materials for soap-substitutes, and others are thinking of doing so. Shell are the biggest producers at present with “Teepol.” After them come I.C.I. with “Lissapol,” Anglo-Iranian with “Comprox,” and Monsanto Chemicals with “ Santomerse ”— all struggling hard to get hold of as much of the rapidly growing market as they can. For detergents to really compete with soap, the oil-producers will have to cut their prices. That they can do so was shown when the soap ration was last increased—prices immediately dropped. They will probably find means of doing so again when rationing is fully lifted and their products have to compete on equal terms with soap.

Whatever form the struggle takes, it should be interesting to watch. The contestants may fight to the limit, as they did in the United States. They may try to reach a compromise, which will certainly be an uneasy and temporary one. Perhaps the abolition of soap-rationing will prick the whole bubble. We do not know, nor do we wish to speculate.

What is worthy of comment is the stupidity of a system in which huge sums of money are being spent in selling, one against the other, products between which there is probably not a scrap of difference worth troubling about; the stupidity of a system in which adults in complete possession of their senses spend their working hours thinking up new and better stunts to help sell these products; the stupidity of a system where other fully mature men and women worry themselves sick wondering whether “this” is a better name than “ that,” or “that” is a better name than “this” (we have it on no less an authority than the Financial Times that enormous care and market research is expended on choosing just the right brand name). The example of soap-substitutes can be multiplied a thousandfold, and the wastefulness in terms of wealth and human effort is correspondingly greater.

Capitalism has introduced a substitute for soap. When are you workers going to introduce the substitute for capitalism—socialism?

Stan Hampson

A Chemical Octopus (1950)

From the July 1950 issue of the Socialist Standard

The Imperial Chemical Industries Ltd. have issued their Annual Report for 1949. The Report contains some interesting information.

The capital, issued and converted into stock is £84 millions; the Reserves are £39 million, making a total of £123 millions. There is also a Central Obsolescence and Depreciation Provision of £35 millions. The Company has 93 subsidiaries covering Europe, S. & E. Africa, N. America, S. America, Australasia, Far East, Near East and Indian Sub-Continent. Its products include Chemicals, Metals, Paper Goods, Lime, Leather Cloth, Dyestuffs, Explosives, Glass, Paints, Plastics, Salt, Petrol and Cement.

There is a common idea that nationalisation is the last word in combination but what nationalised industry can compare with this gigantic concern which produces such a variety of different products and whose tentacles stretch all over the earth? The direct exports alone amounted to £38 million.

There is, however, an ominous statement in the early part of the report:

“German and Japanese competition has been limited, partly owing to restrictions imposed by the occupying powers, but there are now clear signs that this competition will become a problem in the near future.” (page 4)

There are, however, brighter statements further on. For instance:

“The production of the Dyestuffs Division has shown a remarkable increase during recent years. On the outbreak of war in 1939 responsibility for meeting the demands for dyestuffs throughout Great Britain and the Commonwealth fell largely on the Dyestuffs Division. Production had therefore to be increased by modifying plants and improving and shortening the chemical processes involved' and the measures were so successful that in 1949 production was about three times as great as in pre-war years, although substantially the same plants were in use.” (page 6)

And further:

“African Explosives and Chemical Industries, Ltd., in which the Company and De Beers Industrial Corporation Ltd. are the principal shareholders, achieved new records in the sales of both explosives and fertilizers. Devaluation has increased the profitability and length of life of African gold mines.” (page 12)

And still further:

“The prospects of future trading in China remain obscure. It appears to be the intention of the new Government to use Government trading agencies for all exports and imports but it is likely that they will continue to do business with the local representatives of foreign manufacturing companies, if it is in their interest to do so.” (page 13)

We have been reading for some time news of the disturbances in Malaya, of the bandit menace and of the bodies of troops drafted there to root out the bandits. We have even seen a newsreel of Mr. Strachey handling a gun on one of the expeditions against the bandits. These matters make the following extract from the report topical and interesting:

“Imperial Chemicals (Malaya) Ltd. was able to exceed by 20 per cent its record turnover of the previous year, mainly because of increased supplies, and its profits were again very satisfactory.” (page 13)

We have often been urged in the past to admire the philanthropy and disinterestedness of individuals and companies that make large donations to universities. Being of a suspicious turn of mind we have—suspected. In their earnest desire to impress shareholders with their efficiency and foresight the directors of the company have thrown some light on the subject. This is what they say:

“If a large research organisation, such as the Company's, is to justify its existence over a prolonged period, it is essential that it should be able to secure the services of numbers of able and well-trained scientists, and also to have available a continuous flow of new fundamental knowledge which it can use in solving the practical problems of industry. For this reason it is in the interests of the Company to assist, wherever it can, the universities and other educational bodies, which are responsible for the training of scientists and are engaged in the production of new basic knowledge. For many years, therefore, the Company has made a practice of assisting educational establishments with financial grants. . . .” (page 15)

Then follows a list of some of these grants which include: Post graduate research fellowships about £55,000 a year, and in addition over £4,000 a year on scholarships; Special donations about £20,000 a year; special researches about £8,000 a year; Grants for apparatus and chemicals about £25,000. This makes a total of about £112,000 a year. After the list of donations we find this naive paragraph:

“Except in the cases of the special researches, which are on subjects of direct interest to the company, no attempt is made to influence in any way the choice of the research projects, and the company’s practice of making these grants without attaching conditions is regarded by the University authorities as one of their most valuable features.” (page 15)

How very altruistic. The innocence of them! As if the grateful universities won’t give them “most favoured nations” treatment in order to get further donations. As a matter of interest we get a line on this a few pages later in the Report:

“The Company has found difficulty in recruiting in satisfactory numbers the high grade technical staff which is required, not only for design and construction, but also for all aspects of research and production. Energetic action if needed to increase the number of scientific and technical graduates coming from universities and technical colleges, and to improve and extend its teaching of science in the schools where there is generally a regrettable shortage-of science masters. The Company is maintaining particularly close contact with the Appointments Boards of the Universities and as a result it has been possible to recruit during the year 265 chemists, physicists; engineers and other scientists, of whom 200 came direct from the Universities. This will help the Company to carry out its extensive and varied research programme and to maintain its high standard of technical management.” (page 20)

So they get what they pay for!

There is a great deal more of interest in this Report but we cannot take up more space recording it. However we must not conclude without recording the following tribute to those upon whose work the Company owes its prosperity.

“The Company’s progress was sustained last year, as it has always been in the past, by the loyalty and zeal which was shown, in this country and overseas, by factory managers, foremen and workpeople, commercial, technical and clerical staff, and all other grades of employees. The Directors would like to record their sincere appreciation of such conscientious service and cooperation and wish to mention in particular the support which has been given to schemes for increasing the manufacturing efficiency of the Company.” (page 21)

Now that is real decent of them. It is true that words are cheap, it is also true that those who lack zeal get the sack; still, it is very sporting of them— three cheers for the Company!

Gilmac

Early days of globalisation (2006)

Book Review from the December 2006 issue of the Socialist Standard

The Corporation that Changed the World: How the East India Company Shaped the Modern Multinational by Nick Robins (Pluto Press)

I often gauge how much I have enjoyed a book by the amount of highlighting and marginal notes I make in pencil. This book, like many on my shelves, will horrify those who prize pristine, unmarked first editions.

On 31 December 1600 a precursor of the modern transnational corporation came into existence. Its pioneering techniques in the field of trade and commerce, and downright murder and corruption, preceded by centuries the noxious business practices that we associate with today’s all-powerful corporations, many of whom have a higher turn over than small countries.

This book presents as a meticulous account of perhaps the most powerful corporation that ever lived, tracing how it came into existence, how it operated, its inner structure, the role of its own armies in its rise to supremacy, its part in the Bengal Famine when 10 million died as a result of the Company’s market manipulation, its militaristic role in the Opium Wars, its part in the Indian Mutiny and the Boston Tea Party and how, for the last twenty years of its existence, it ruled India as an agent of the British Empire. When it comes to downright exploitation, corruption, slaughter and sheer negligence and indifference to the suffering of others, perhaps no company that ever existed comes near the East India Company in its ruthless pursuit of profit, whilst refashioning the world commercial order in the interests of privilege and power for hundreds of years to come.

In its time the company had many critics, most notably Edmund Burke, “the real champion of India’s identity”, Adam Smith and Karl Marx. Burke fought long and hard to impeach the Company’s Governor General Warren Hastings for the devastation wrought on India in its endless search for profit.

Commencing his opening speech at Westminster Hall in February 1788, Burke said:

“I impeach him in the name of the people of India, whose laws, rights and liberties, he has subverted, whose properties he has destroyed, whose country he has laid waste and desolate . . . I impeach him in the name of human nature itself, which he has cruelly outraged, injured and oppressed, in both sexes, in very age, rank, situation and conditions of life.”

Despite Burke’s opening four day tirade against Hastings – one of the longest opening speeches in history – during which women were carried out fainting, at which the Speaker was “rendered speechless” and at which spectators were willing to pay ú50 for a seat, despite an ensuing trial that lasted from February 1787 to April 1795, Hastings was acquitted.

Considering the Company’s operations for the New York Daily Tribune in the summer of 1853, Marx noted five characteristics: 

“ . . . a permanent financial deficit, a regular over-supply of wars, and no supply at all of public works, an abominable system of taxation, and a no less abominable system, of justice and law..”

Satirising the Company’s administrative system, he commented how there existed “no government by which so much is written and so little done.” Marx furthermore viewed the company as a tool of British capitalism plc in India, observing how “the aristocracy wanted to conquer it, the moneyocracy wanted to plunder it and the millocracy to undersell it”.

The Second Opium War was, in Marx’s view, attributable to the Company’s operations in the East and its insistence that it had the right to swamp China with drugs in the name of profit, regardless of the addiction-induced misery its trade created or how the Chinese authorities felt. He wrote:

“While openly preaching free trade in poison, it secretly defends the monopoly of its manufacture. Whenever we look closely into the nature of British free trade, monopoly is pretty generally found to, lie at the bottom of its ’freedom’”.

In eight carefully researched chapters, Robins traces the Company’s operations from its inception as a trader in spices to its role in running the Indian sub-continent on behalf of the British crown, withholding, one imagines, very little regardless how gruesome, and there indeed are some stomach-churning passages.

In the final chapter, his analysis masterly done, Robins, contemplating the state of corporate play today, reflects how the Company’s legacy reveals the importance of taking on the mega-corporations who presently rampage across the planet unhindered, and this, for socialists, is the book’s one failing.

Robins’ remedy for curbing corporate power is simple:

“First of all, its market power and political influence must be limited . . Next, stringent rules are needed to ensure that management and investors do not use the corporation as a tool for their short-term interests . . And, finally, clear and forcible systems of justice have to be in place to hold the corporation to account for damage to society and the environment.”

Thus, a brilliant attack on unchecked power in the pursuit of profit is marred by the simple request that the capitalist class behaves and shows a little more respect when carrying out its obscene business, and that the executive arm of capitalism – government – hurries to the rescue of society and the natural environment. Smiley-faced capitalism is, for Robins, the only remedy. Warren Hastings laughs in his grave.

All said, if you’re into the study of corporate power gone mad, read this.

John Bissett

Anti-imperialism is not anti-capitalism (2020)

From the October 2020 issue of the Socialist Standard

We continue our series on the origins of the mistaken view that workers in the advanced capitalist countries share in the exploitation of those in the so-called ‘underdeveloped’ countries.

Link to Part 2 

In his 1920 Preface to Imperialism, The Highest Stage of Capitalism Lenin comments:

‘Capitalism has grown into a world system of colonial oppression and of the financial strangulation of the overwhelming majority of the population of the world by a handful of “advanced” countries’.

 Colonialism is not quite the same thing as imperialism. It entails the annexation of, and direct political control over, other territories by a state which is not necessarily true of imperialism. For Lenin, political independence was indeed achievable ‘within the bounds of world imperialist relationships (A Caricature of Marxism and Imperialist Economism, 1916).The classical Marxist diffusionist view held that, with capitalism’s development and the increasing internationalisation of capital, nationalism would decline as a social force. Unfortunately that hasn’t yet happened. However, here we are focussing on what ought to be the attitude of socialists towards nationalism.

Early twentieth century Marxists, like Rosa Luxemburg, were already arguing that nationalism had become reactionary. Capitalism had outlived its usefulness to progress, having prepared the ground for socialism by raising society’s productive potential to an unparalleled degree. While that potential continues to expand with technological innovation it is increasingly being squandered in all sorts of ways.

Nationalist struggles

Lenin’s take on nationalism was different. The rise of monopoly capitalism associated with imperialism entailed the ‘super-exploitation’ by a few oppressor (imperialist) nations of the oppressed (colonised) nations on the capitalist periphery. Nationalist movements in the latter, were – allegedly – qualitatively different from those in nineteenth century Europe in an era of ascendant capitalism. As Jim Blaut summarises:

 ‘The nationalism of colonies and semi-colonies is called into being by the intensification of exploitation and oppression. In an important way, this is a new phenomenon…, it cannot be assimilated to the theory of national movements which emerge during the rise of capitalism and have as their purpose or goal the simple creation of a bourgeois state. The nature of colonialism is such that producing classes suffer along with whatever young or incipient bourgeoisie may exist. Therefore the national liberation movements in colonies and semi-colonies are profoundly different from the national movements of earlier oppressed nations such as those in non-colonial portions of the Tsarist Empire. It is not innately a bourgeois struggle against feudal forces for the creation of a classical bourgeois state. It is a multi-class struggle directed primarily against imperialism’ (The National Question: Decolonising the Theory of Nationalism, 1987).

Since imperialism and monopoly capitalism were linked, this suggested that ‘national liberation struggles’ could serve as the harbinger of ‘global proletarian revolution’ which would likely erupt first where the impact of imperialist exploitation was harshest – namely, those economically backward countries still transitioning to capitalism. That required workers there to take the lead in this struggle, so it ‘could be turned onto a socialist trajectory or a non-capitalist trajectory which would result in socialism’. National struggle was thus clothed in the rhetorical language of class struggle. Trotsky similarly opined: 

‘The sectarian simply ignores the fact that the national struggle, one of the most labyrinthine and complex but at the same time extremely important forms of the class struggle, cannot be suspended by bare references to the future world revolution’ (Independence of the Ukraine and Sectarian Muddleheads, 1939).

For all Trotsky’s labyrinthine attempt to assimilate class struggle to national struggle, he was attempting to square the circle. ‘National struggle’ can only be advanced by watering down, and compromising, the class struggle. It is an attempt to impose from above a fake commonality of interests between classes whose own interests are diametrically opposed.

Though Lenin himself rhetorically committed himself to the concept of ‘proletarian internationalism’ and the repudiation of ‘national chauvinism’, it is difficult to see how one could ever successfully prosecute any ‘national liberation struggle’ without also fostering national chauvinism as its motivating ethos.

In any event, subsequent global developments exposed the fundamental flaws in his thinking. Particularly after the Second World War, vast swathes of the ‘developing world’ were granted political independence from their erstwhile colonial masters. Indeed, since then there have been further – successful – attempts at achieving political independence though these have tended to follow a somewhat different trajectory, resulting in the formation, along mainly ethnic lines, of new breakaway states as the product of civil war within existing states – for example, Southern Sudan. These latter developments do not fit well within the Leninist framework and its simplistic division of the world into ‘oppressor countries’ and ‘oppressed countries’.

In any case, history has emphatically vindicated Luxemburg’s repudiation of Lenin’s argument that socialists should support national liberation struggles to expedite a ‘global proletarian revolution’. Nothing could be further from the truth.

Instead, capitalist relations of production along with an accompanying capitalist mind-set has become firmly entrenched in the countries concerned. Hence the unedifying spectacle of erstwhile ‘Marxist’ guerrilla fighters transmogrified into well-heeled business people or corrupt politicians, hobnobbing with multi-nationals in a bid to pimp out the nation’s cheap labour force to overseas investors while cracking down on dissent and spiriting away a sizeable chunk of the nation’s revenue into some private offshore account. If you are going to ride the capitalist tiger don’t be surprised where it takes you.

World revolution

Yet ignorant Marx critics still routinely trot out the ridiculous refrain that Marx ‘got it all wrong’ in that the revolutions he hoped for occurred first, not in the advanced countries, but on the capitalist periphery. What these critics overlook is that these were not the revolutions Marx had in mind. Rather, they were capitalist revolutions enabling the transition to capitalism.

In the German Ideology Marx suggested the coming communist (socialist) revolution would likely be spearheaded by the advanced countries precisely because communism presupposed the advanced development of the productive forces: 

‘Empirically, communism is only possible as the act of the dominant peoples “all at once” and simultaneously, which presupposes the universal development of the productive forces and world intercourse bound up with them’.

We don’t need to take the idea of instantaneous global revolution too literally. Obviously, there will be some time lags involved in the spatial transformation from global capitalism to global socialism. However, Marx insisted on the absolute necessity of majoritarian socialist consciousness before that could happen. The logic of his diffusionist model suggested that if one part of the world had a socialist majority, other parts would not be far behind.

For Lenin, the ‘law of uneven development in capitalism’ meant it was impossible to achieve socialism simultaneously across the world. But, this was a reference to the objective preconditions for socialism – not the subjective preconditions – and, if anything, it would support Marx’s contention that a socialist revolution would likely occur first in the advanced countries where the productive forces were most developed. But Lenin’s ‘law’ has long been completely irrelevant to the socialist objective, anyway. Socialism can only be a global alternative to capitalism and it is the productive potential of the world as a whole that crucially matters, not any one part of it.

Why then his obsessive preoccupation with this ‘law’? A clue can be found in his article On the Slogan for a United States of Europe (1915):

‘The victory of socialism is possible first in several or even in one capitalist country alone. After expropriating the capitalists and organising their own socialist production, the victorious proletariat of that country will arise against the rest of the world—the capitalist world—attracting to its cause the oppressed classes of other countries.’

This implies not only the uneven development of the productive forces but the uneven growth of socialist consciousness itself. Lenin’s view was that workers in the advanced countries, by benefitting from imperialism, would be much more resistant to socialist thinking compared with their counterparts in the backward countries where national liberation struggle would more readily translate into ‘proletarian revolution’.

So when he spoke of organising ‘socialist production’ within a single country initially, the logic of his argument about how he saw a global proletarian revolution unfolding suggested he had in mind an economically backward country. However, it is precisely in such a country that material conditions would be least propitious for socialism. Furthermore, insofar as socialism and capitalism can no more coexist than one can mix oil and water, this would imply severing links with global capitalist supply chains exacerbating the hardships experienced there.

Lenin’s attempt to argue his way out of this impasse was disingenuous. Instead of the ‘victorious proletariat of that country’ literally ‘organising their own socialist production’ what he really had in mind was a process of ‘building socialism’ involving the implementation of state capitalism which he saw as being organically linked to socialism.

Ironically, far from advocating autarky, Lenin favoured closer integration with global capitalism and imperialist investment in the Soviet economy under his New Economic Policy his government was forced to adopt in 1921:

‘Get down to business, all of you! You will have capitalists beside you, including foreign capitalists, concessionaires and leaseholders. They will squeeze profits out of you amounting to hundreds per cent; they will enrich themselves, operating alongside of you. Let them. Meanwhile you will learn from them the business of running the economy’ (The New Economic Policy, 1921).

This partnership with Western capitalists continued under Stalin, the former providing much of the capital and expertise to finance Soviet industrialisation. Prominent among these was Henry Ford to whom Stalin expressed his gratitude, calling him one of the world’s greatest industrialists and obsequiously adding, ‘May God preserve him’ (history.com/this-day-in-history/ ford-signs-agreement-with-soviet-union).

Who is ‘imperialist’?

This was not just a one-way street, however. Just like the ‘Monroe doctrine’ enunciated by the American president James Monroe in the early nineteenth century, opposing further colonisation in the Americas by European powers only in order to hypocritically assert US imperialistic hegemony over the region, so the same can be said of Soviet imperialism.

The realisation that workers in the West were not going to rise up to support the Soviet regime prompted a strategic shift by that regime towards supporting nationalist struggles in developing countries as a means of undermining its Western rivals. For all its paper commitment to the principle of ‘national self-determination’, this did not stop the Soviet Union exercising its own political (and economic) muscle when it came to those countries falling within its own sphere of influence, installing puppet regimes and threatening or carrying out military intervention in countries like Hungary (1956) and Czechoslovakia (1968).

All this prompts the question – what exactly is meant by ‘imperialism’ – and, by extension, ‘anti-imperialism’ – today? Lenin developed his theory of imperialism in opposition to Kautsky’s ‘ultra-imperialism’ which envisaged the major imperialist powers forming a federation which would make military conflict largely redundant or irrational – a pious hope, indeed.

But Lenin’s own theory was shaped by the then existing reality of colonialism which in the post-war era has largely disappeared. At the same time we have witnessed the rise of giant multinational corporations, some with a larger revenue base than most states. If imperialism is about the conflict between nation-states how does this hold up in an era of ‘neo-liberal’ governance?

Concerning Lenin’s distinction between ‘imperialist countries’ and ‘oppressed countries’, Michael Roberts and Guglielmo Carchedi, have identified ‘10 countries at the most that fit the bill as imperialist’-– essentially the G7 countries plus one or two small states – by analysing cross-border flows of profit, interest and rent. As Roberts notes, little has changed in the century since Lenin wrote on the subject: ‘it’s still the same countries’ (bit.ly/35j9Y98).

But if being an ‘imperialist country’ means being a net ‘recipient of cross-border income flows’, then it seems improbable you will ever get rid of imperialism while capitalism (and its ‘cross-border income flows’) exists since what we are talking about here is essentially a zero sum game. Eliminating one imperialist power simply creates a vacuum into which another will inevitably step.

Thus, nationalistic ‘anti-imperialism’ has proved to be not only a fundamental distraction from the class struggle for socialism but also fundamentally futile on its terms.

Robin Cox

Uranium mining exposed (1992)

Book Review from the June 1992 issue of the Socialist Standard

Past Exposure. By Greg Dropkin and David Clark. Namibia Support Committee in association with People Against Rio Tinto Zinc, 37-39 Great Guildford St, London SE1 OES. £8.90 (post paid).

Inspired and encouraged by the Mineworkers’ Union of Namibia, Past Exposure is a highly technical yet eminently accessible expose of the deadly health and environmental hazards associated with the world’s largest opencast uranium mine, Rossing Uranium in Namibia which is largely owned by Rio Tinto Zinc.

Rossing’s manager of corporate affairs has dismissed the book as “a collection of distortions and half-truths cunningly woven together into a plausible text”. But the authors, Greg Dropkin and David Clark, use highly confidential internal company documents, personal testimonies made by mineworkers, and up-to-date environmental and medical research into the effects of uranium mining, to show that it is in fact Rossing Uranium which has been economical with the truth over a period of many years.

Dropkin and Clark demonstrate that, despite the company’s claims to operate within recognised international standards of health and safety, workers have been continually exposed to excessively high levels of silica dust and of uranium dust and radiation which cause, amongst other things, diseases of the chest and lungs, kidney failure, and cancer and hinder the mental and physical development of unborn babies.

In the case of radioactive radiation the authors show that there is no such thing as a safe level of exposure and that, even if there was, the company has not, despite its claims to the contrary, been properly measuring and monitoring the levels of radiation doses received by workers. The workers most exposed to silica dust and other health hazards tend to be black. The specialist in charge of monitoring chest complaints ascribes these to smoking and “ethnic" differences!

The detailed discussion of water pollution caused by uranium mining completely demolishes any company statement that it has not polluted any groundwater systems or the Khan river. Radioactive waste from uranium mills is stored in tailings dams. It leaks into the surrounding air and water and develops a serious long-term environmental problem. It seeps into the soil and enters food chains as well as poisoning the water. Rossing’s water management data is a well-kept secret but Dropkin and Clark estimate that

780 million gallons of tailings liquid seeped out in a twelve-month period . . . the contamination may be anywhere from the ground-water system to the Khan and/or Swakop rivers reaching the sea at Swakopmund.

Past Exposure has two main objectives. Its first is to empower the workers at Rossing Uranium in their efforts to negotiate a health and safety agreement with RTZ in line with agreements at other uranium mines, mostly notably Rio Algom, RTZ’s Canadian uranium mine. At this mine, as the authors point out in some detail, far superior though by no means perfect standards of health and safety prevail as a result of sustained and informed pressure put on the mining company by the Canadian mineworkers.

The publication of the book has already caused a stir in Namibia. Extracts were published in The Namibian newspaper which has as a result faced threats of legal action from the mining company. Since the publication of the book the Namibian government has requested the International Atomic Energy Agency in conjunction with the World Health Organisation to investigate issues of health, radiation exposure and waste disposal at the mine.

The book’s second main objective is to raise awareness about the hazards of the nuclear industry of which uranium mining is a primary feature. In the present economic recession miners are not only fighting for better health and safety agreements but also for their jobs in the face of savage redundancies. Like many workers around the world they are caught in that cruel contradiction of having to fight for a job that is useless or dangerous producing a commodity that is useless or dangerous, or face the prospect of unemployment.

This is a contradiction which the authors, as long-standing opponents of the nuclear power industry, acknowledge; and while they themselves would wish to see the end of the nuclear industry they point out that it is “most important that the workers employed at Rossing and elsewhere in the nuclear industry' should be engaged in a real debate about its future”.

It is difficult to see how the Namibia Support Committee who co-publishcd this book can square their anti-nuclear position and their obviously sincere support for the mineworkers of Namibia with their long history of support for SWAPO, the government of the Namibian state which gained its independence in 1990.

SWAPO does not appear to be interested in engaging in any serious debate over the future of the Namibian workers without a uranium mine. Nor would it be in its interests to do so. The nuclear industry is highly profitable and controlled on a global scale by a few multinational conglomerates. The Namibian economy is heavily dependent on uranium mining. If any Namibian government is to successfully ensure its position then it does so by working closely with those multinationals who control uranium mining.

As early as 1975 SWAPO was in negotiation with RTZ when they asked the company to issue a statement recognising SWAPO as the prospective Namibian government. In 1985, despite calling on all multinational companies to quit Namibia forthwith because they “fuel Pretoria’s war machine”, SWAPO made the following statement:

When Namibia is free we will certainly reach an agreement with [the multinationals] which will be beneficial to all of us. (Quoted in Plunder by R. Moody).

Beneficial to all but the workers in the Uranium mines and ordinary people around the world who in growing numbers watch with dismay as the world’s resources are plundered to fill the pockets of'a few leaving a trail of human and environmental devastation, the effects of which will be felt for generations to come.

Kerima Mohideen

"The company keeps saying that the uranium we work with is harmless but I never had a skin ailment until I started working in this area. Because they have never taken interest I conclude that Rossing are concerned about profits and not the health of workers. We desperately need outside expertise to tell us about the short-term and long-term effects of working with uranium. For this we need international help, especially from the international trade union movement'’.

—statement made by worker at Rossing Uranium mine in Namibia.

Looking Forward. The conflict in Perspective (1941)

From the June 1941 issue of the Socialist Standard

What will be the outcome of the present war, is a question often asked, but seldom answered.

If we are to take a long view of the present conflict, several factors have to be borne in mind. These are—the capitalist nature of present-day society, the geographic factor, industrial power, the new factor, air power, and past developments viewed in perspective.

The capitalist nature of present-day society is a fact. No thinking person nowadays denies that we live in a capitalist era, where goods are produced for profit, where the worker is a mere instrument of production, a seller of labour-power, receiving in return for the expenditure of his energies a wage or salary which, with any allowances he may receive in the shape of free milk, allotments, free holidays, etc., is just about enough to keep him in that state of efficiency which will enable him to perform his work satisfactorily. Practically the whole mechanism of production is carried through by large combines, and these in turn are owned and controlled by often anonymous shareholders. The combine is brought into being as a rule in order to eliminate competition, thus London Transport, the monopolist London traffic combine, and United Dairies, which has now bought out most of the smaller dairies and occupies the dominant position in London and the outlying area. In passing, it should be noted, that it is the introduction of petrol and the development of road transport which has enabled the combine owners of huge petrol-driven milk wagons to obtain their monopolistic hold upon the market and to dictate their terms to the farmer-producers. After the last war there was a fierce struggle between the Shell, the B.P., Standard Oil, and others for the British petroleum market, but finally the smaller companies were forced into the combine, while Russian Oil Products was forced into surrendering a large portion of the market. Finally, B.P. and Shell amalgamated, and thus became the principal competitors of Standard Oil. Then the expensive competition between these two was eased by agreements on quotas, advertising, etc. These are given as examples of the evolutionary development inherent in capitalism to greater and still greater combines.

The mainspring of the economic basis of the modern State is, however, the heavy industry. In this country this is centred in Birmingham, where the ownership of many of the factories is vested in one family, and in the iron and steel mills of South Wales, where again the real ownership and control appears to be vested in very few hands. It is the countries of heavy industry which occupy the dominant place in the world struggle for markets and spheres of influence, as witness Germany, Great Britain and the U.S.A. Russia and Japan are latecomers on the scene, hardly developed as yet, while Japan is mainly a country of light industry—the material factors of heavy industry are wanting. France and Belgium are also heavy industry countries, but on a smaller scale.

Some time before the war, to obviate the intense competition between the two principal European competitors, an arrangement was come to between the iron and steel interests—an arrangement which all good capitalists make from time to time, in order to save the expense of competition and the limitation of profits thereby caused. Such arrangements, in general capitalist procedure, are often the prelude to a combine or amalgamation.

Occupying a slightly different field is the international combine known as Sofina, owning coal, gas, electricity and tramway undertakings in Europe (France, Spain, Belgium and Germany) and in North and South America. The chairman of the standing committee is an American, Dannie Heineman, while the other directors are of French, Belgian, British and Italian nationality. Of these, the Rt. Hon. Reginald McKenna is also a director of the Canadian Pacific, the Midland Bank, etc.; Count Volpi, of Venice, is a director of the International Sleeping Car Co. and the Lincolnshire and Central Electric Supply Co., Ltd.; General Sir Hugh Elles is a director of the Pressed Steel Co., Ltd., while Sir Bernard Docker brings the story back to Birmingham with directorships of the Birmingham Railway Carriage and Wagon Co., Ltd., and the Birmingham Small Arms Co., Ltd. ; he is also a director of Guardian Assurance Co., Ltd., the Midland Bank, and Thos. Cook & Son, Ltd. The Guardian Assurance Co., Ltd., has a family relationship with the Times Publishing Co., Ltd., by means of the common directorship of the two companies of Mr. John Walter. Another director of Sofina, Lord Wigram, is also a director of the London, Midland and Scottish Railway and of the Midland Bank. Of the Midland Bank’s directors, Lord Stamp is also a director of Imperial Chemical Industries, L.M.S. Railway, Abbey Road Building Society and the Bank of England. To come back to Sofina—the alliance between gas and electricity is worth noting—in many cases, both originate from coal. Also, when Belgium was invaded, the headquarters of the company was transferred, not to Germany, but to Great Britain.

The ownership of combines appears to be vested in thousands of private shareholders, but as anyone knows, who has inspected the share books of capitalist concerns, while large numbers of private investors hold five and ten shares each, the great bulk of the shares is often held by holding companies, insurance companies and bank nominees, so that the real owners and controllers, in the background can remain more or less anonymous. The Inland Revenue returns, however, disclose the real position. With the passing of each year the private incomes of the wealthy become greater, while the number of people of great wealth becomes smaller. One can almost visualise the eventual passing of the entire productive wealth of a country and its dependencies into the hands of one family or even one man.

Now taking a long look backwards, we find that Great Britain was at one time a country of warring tribes (not warring all the time, of course, the production of food, clothing and shelter was necessarily the principal preoccupation), and each tribe had its strong local patriotism. Such a thing as a United England, with a united English patriotism, could not have been conceived by the people of those times. But eventually—as it happened, by foreign invasion—England was united. Eventually Wales and Scotland were added to the unit. The same process had taken place upon the Continent. The feudal states of Italy were welded into the Italian state. The feudal states of Germany eventually recognised Prussian overlordship. Generally speaking, the principal European states which had now evolved were separated from one another by mountain ranges or sea or river barriers. The fact that within the areas thus enclosed, communication—roads and railways—was relatively easy, was one of the factors which brought about their cohesion as states. Is there any reason why this process of development should stop? We see none. And we see a new factor—the development of air transport and air power. The world has become relatively smaller. A country like Belgium can be traversed in about twenty minutes by air. In these circumstances, small land area units become a hindrance to development. Is it not logical that they should pass under the sway of and become merged in an adjoining land area unit of greater power by virtue of its greater heavy industry ?

For several centuries British policy has been based on the balance of power theory—never allow any power to become predominant on the Continent. Air power, however, has brought a new factor into the picture, and air power is still in the process of Development.

What in all this welter can be the interests of the U.S.A.? It is well known that a large amount of capital is invested by the U.S.A. in Great Britain and on the Continent. Read any speech by any American Government spokesman at, the present time, and .you will almost invariably find a reference to South America. Competition iri South America between British, German and U.S.A. interests is a well-known fact, but the, U.S.A. have been increasing their hold. The lease to them of British naval bases off the eastern, coast strengthens their position. Take a look at your map of the world, and it will be obvious that the greatest competitor which the U.S.A. could have to face in the near future would be a United States of Europe. This, and their capital investments in Europe, dictate their policy.

What of Russia, the land of bureaucratic state capitalism? Ideologically, there is very little difference between Russian “Communism” and German “National Socialism”—many of the German Nazis were recruited from the “Communists.” Were Germany to control Europe, it would not be long before she controlled Russia too. The distances which annihilated Napoleon will have small effect upon modern means of transport. Hence, despite the risk and the probable unwillingness of Stalin to go to war, it is likely that she will, before long, enter the arena. To be dangerously prophetic, one might visualise Europe split into two new land area units, with the line of demarcation at the Rhine—north of the Rhine, Russian Europe, south of the Rhine, British Europe.

How do all the local patriotisms fit into this picture? We have seen that tribal patriotism has given way to State patriotism. As the worker tends to confuse his interests with those of his master, we see no reason why there should not develop a new continental patriotism, after a short period of cohesion and propaganda. Such ideological slogans as “Communism,” “Fascism,” or “Democracy” already provide the groundwork of the new Continental patriotism.

To stretch the vision still further, but in line with the factors we have already mentioned, one can visualise the eventual combination of Europe and Asia (including India and Japan) into one vast Continental State—a similar process in the Americas—thus bringing about the final alignment of forces—the new world versus the old. And just as the industry of the national state is vested in very few hands, and as the tendency is for it to become vested in fewer hands, is it so fantastic to visualise the eventual ownership of the whole world by one family ? Even if capitalism were to develop to this point, there would still exist some workers who would say : “Ah well, you’ve got to have somebody in control—to tell us what to do.” It is safe to assume, however, that long before that time, capitalism will have demonstrated its oppressive nature to such an extent, that the great majority of the workers will be ripe and ready for Socialism.

To the worker these speculations are, of course, only a matter of academic interest. However capitalism settles, temporarily, its differences, the slave position of the worker can only be accentuated with the further development of capitalism. Whether in capitalist national State or capitalist Continent, he will still be a slave to the class which exploits him, he will still suffer from the poverty and its consequences which goes with that condition. The worker must concentrate his attention on the cause of his poverty, the capitalist nature of the world in which we live. Cause and cure go hand in hand—capitalism the cause, Socialism—-in the real meaning of the term—the remedy.

Ramo.

[The above article was written prior to the death of Lord Stamp.]