Voice From The Back: Suicides rise as yen falls (1998)

The Voice From The Back Column from the August 1998 issue of the Socialist Standard

Suicides rise as yen falls

As the Japanese economy enters recession with record unemployment since the war, the Japanese National Police Agency reports that suicides related to economic failure leaped by 18 percent last year. “Among the 3,556 who took their lives were three business partners who committed suicide together in a Tokyo hotel because of debt” Guardian, 13 June.

Controlling lives

Workfare, and welfare reform in general, offer a way to “break the culture of poverty and dependence” as Bill Clinton said during the 1992 presidential campaign. The idea is not merely to give those on welfare the dignity of earning their way. The hope is that once work is required, those not on welfare will avoid making the decisions – like having children out of wedlock – that might put them on welfare. New York Times, 5 May.

The alchemists

A fortnight ago, consultants acting for Monsanto, the biotechnology company whose recent merger will make it one of the largest corporations on earth, wrote to some of Africa’s most prominent academics and politicians, inviting them to sign a stirring public statement called “Let the Harvest Begin” . . . 

Monsanto’s suggestion that the continent’s freedom from famine depends upon its technologies would be hilarious if it were not so sinister. For Monsanto’s operations can now be numbered among the hungry continent’s greatest threats. The leading edge of Monsanto’s new work is not the production of food, but the production of feed; crops, in other words, grown not for humans but for animals. Last month the company announced a joint venture with the gigantic multinational grain merchant Cargill, to produce and market the seeds of genetically engineered fodder plants, particularly maize . . . Feed production is a growing component of Third World agriculture, supplying the ever-increasing consumption of meat, eggs and dairy produce in the First World. It is also one of the engines of African Famine, as land previously devoted to meeting local people’s necessities has been expropriated to supply the rich worlds luxuries … But this is the least of the ways in which Monsanto threatens Africa. Three months ago, American Delta and Pine Land Company patented a remarkable technology. Its “Terminator” gene ensures that the plants which contain it produce only sterile seeds: farmers planting these crops, in other words, will be forced to buy new stock every year. The new technology’s “primary targets” are, according to the original patent holders, “Second and Third World” countries. Four weeks ago, Monsanto bought the company… Monsanto, in other words, threatens to become the hunger merchant of the third millennium. Guardian, 4 June.

We all agree—don’t we

SAN DIEGO—A high-school sophomore who objects to reciting the Pledge of Allegiance is fighting for the right to sit quietly during the daily exercise in patriotism. “Until a few months ago, I stood and faced the flag with my hands over my heart and mechanically said the Pledge of Allegiance” Mary Kait Durkee said Friday. “But I thought about what the pledge actually meant and I disagreed with its message,” She said she doesn’t believe in God, thinks the US government is corrupt and that American society is too violent, so she shouldn’t have to show respect for a country that has so many problems. For the ensuing three weeks, Durkee sat silently in her seat during the pledge. On April 25, she was notified she had to serve four hours of detention and stand during the salute. Seattle Times, 3 I May.

With a whimper

With only 562 days to go until the millennium, fearful Americans are heading for the hills armed with the four Gs of survival – God, guns, gold and groceries . . Gary North, a Christian economist [!] and Y2K preacher, predicts martial law will be declared by 15 january 2000. “I think there will be a collapse of Western civilisation if the power grid goes down.” Observer, l4 june.

What took you so long?

Early this summer, I enjoyed a weekend at the Long Island home of a college friend – a highly intelligent and levelheaded Englishman whose career has taken him (by way of the upper echelons of the British Civil Service and a financial firm in the City of London) to a big Wall Street investment bank. There he has spent the last few years organizing stock issues and helping his firm milk the strongest market in living memory. Between dips in his pool, we discussed the economy and speculated about how long the current financial boom would last.To my surprise, he brought up Karl Marx. “The longer I spend on Wall Street, the more I am convinced that Marx was right” he said. I assumed he was joking. “There is a Nobel Prize waiting for the economist who resurrects Marx and puts it all together in a coherent model” he continued quite seriously. “I am absolutely convinced that Marx’s approach is the best way to look at capitalism.” New Yorker, October 1997.

These Foolish Things: Progress (1996)

The Scavenger column from the December 1996 issue of the Socialist Standard

Progress

In 1886, the bottom 10 percent of manual workers earned 69 percent of the median manual wage, while the top 10 percent earned 143 percent. Despite the huge shifts in manufacturing over the next 90 years—the growth of new' industries, the rise of trade unionism, the impact of two world wars—the relative position remained virtually unchanged. But since 1977 the relative position has worsened for the bottom 10 percent of manual workers who now get just 61 percent of the median against 161 percent for the top 10 percent. 

Guardian, 10 October.

Oh God!

The Reverend Stanley Mast, of the LaGrave Avenue Christian Reform Church, offered an invocation that should become the official fund-raising prayer of both parties. “O God. as we gather together tonight to honour important people in our country', we pause to acknowledge that you are master of the universe and Lord of the nations.” the Reverend prayed. “As we focus on finances and politics, we give you thanks for the gift of wealth, we thank you for the privilege of living in America, this great land of freedom, a land that not only allows but even encourages the individual pursuit of wealth. We thank you, O God, for the success so many of us have had in that pursuit. . . . Bless our guests of honour. May their generosity and faith inspire us all. Bless these upcoming elections. May the right people be elected. And God bless America. Amen.” 

New Yorker, 5 August.

The City Editor says . . .

Much more hot air, and some acute cases of handwringing have been prompted by a United Nations report that the combined wealth of the world’s 358 billionaires equals the combined incomes of the world population’s poorest 45 percent, or 2.3 billion. Leaving aside the mismatch between wealth and income in that comparison, so what? It is not ownership that is important so much as what the owners or controllers of wealth do with it.

William Kay, Financial Mail on Sunday, 28 July.

Twice kicked

A Midland care assistant was unceremoniously sacked by health chiefs after being injured in an attack at work, it was claimed today. Jenny Jennings, of Solihull Lodge, said she was so badly kicked in the knee by a resident at a Chemsley Wood home that she was unable to do her job . . . Mrs Jennings said it was the second time a member of staff had been badly injured by the resident but the trust management had not acted to prevent it happening again . . .  Solihull’s Healthcare’s director of personnel Mr Nick Gillard said the resident’s care would have been addressed following the first attack. “Having gone through channels and followed policy to the letter Mrs Jennings’ employment was terminated due to ill health,” he said. 

Evening Mail, 16 August.

Now you see it . . .

The Saudi government has tightened its controls on satellite TV, forcing viewers to dismantle dishes and subscribe to its own TV network. On offer is a mixture of Arabic and international programming selected by the Ministry of Information. A five-minute delay has been introduced on foreign channels so that “unsuitable material” can be censored.

           What Satellite TV, 13 October.

      The Scavenger

Goodbye to the "Middle Class" (1996)

From the August 1996 issue of the Socialist Standard

Socialists are more than familiar with the old nonsense concerning a "middle class". Such people have always been nothing more than relatively better-paid wage slaves, just as susceptible to the vagaries of capitalism's boom and slump economics

A spectre is haunting America— the spectre of the middle class. Ever since Alexis de Tocqueville proclaimed the US to be a “middle-class country”, North Americans have anxiously sought to moralise and ennoble their notion of class struggle:

  “Most were regular employees of major corporations like McDonnell Douglas, Grumman and Hughes Aircraft. If they didn't go to work, they risked losing their livelihoods, their houses and their cars. They were, in fact, not middle-class at all in the Marxian sense of the word. They were working-class, but, unlike similar people in Britain or Germany, they called themselves middle- class” (‘Who Killed the Middle Class?’ John Cassidy, The New Yorker, 16 October 1995).

But by some evil design of fate, this middle class seems to have died at the hands of the Reaganauts and the Bushmen according to Cassidy: “Living standards have fallen or stagnated for the majority of Americans, while a small minority have enjoyed a bonanza. These trends appear to be intensifying regardless of which political party is in office.” The rich have of course got richer (the top one percent of families were worth 78 percent more in 1989 than they had been ten years earlier, according to the Census Bureau). No guesses out of whose hides it came: “Twenty years ago, the typical chief executive officer of a large American company earned about 40 times as much as a typical worker did. Now he cams 190 times as much, according to Graef Crystal, an expert on executive compensation.” The not-so-invisible hand of the economic system may have put on a velvet glove for college graduates but has shown a mailed fist to those who have gotten no further than high school, while it has, with a typical capitalist sense of fairness, ruthlessly put the squeeze on dropouts and recent immigrants.

Naturally, not everyone is wringing their hands over this development:

   “Many experts argue that this is just what the doctor ordered . . .  if companies are using their new-found profits to fuel a capital spending boom rather than pay artificially high wages to a workforce that views itself as entitled, what better way to keep the US competitive in a cutthroat global economy? . . . Corporate America is once again in fighting trim, able to compete with the best of the world’s producers” (‘The Wage Squeeze’, Aaron Bernstein, Business World Week, 17 July 1995).

All of this “good behaviour”, as Business World Week calls it, derives partly from capital’s shedding of assets to promote a recovery and partly from a self-serving capitalist belief that “re-engineering” promotes productivity, which in turn will (someday) push wages up:

  “Already, shareholders are enjoying a juicy stream of dividend payments and capital gains. Historically, efficiency improvements have led to real wage and income gains for the average employee. ‘In the long run, labor productivity will rise, and eventually, this will put upward pressure on wages, ’says former Federal Reserve Board Governor Wayne D. Angell. ”

Only if workers regard a given rate of profit as “natural” can they swallow the assertion that their wages are “artificially high”. “The rise of global competition may have encouraged managers to break unions and invest in computer technology,” argues John Cassidy in The New Yorker. “Similarly, the threat of corporate relocation and the growth of cheap immigrant labor may have contributed to the weakness of labor unions.” Given such interactions, however, who is kidding whom about wages following productivity up? If “cheap immigrant labor” and corporate relocation to low-wage countries are themselves all about the desirability of reducing capital’s “wages bill” for the sake of profit margins, why should managers overlook the other obvious opportunity of breaking unions that promote “artificially high” wage levels? Wages are simply supposed to stay low no matter what any sweet-talking economist may say about them.

Strangely enough, this doctrine that wages follow productivity up (like the expectation that it should have started happening already) does not seem to include anything about the “plummeting” of wages (New Yorker, 16 October 1995). Unless the elementary rules of mathematics have been revised, ordinary addition and subtraction ought to show that wages which have gone down (as they have) and then are supposed to rise again can hardly show a significant net gain (if any). Or is it that only the wages of productive workers are supposed to follow increases in productivity up the scale? In that case, the declining numbers of production workers in the United States would tend to inhibit any overall net increase in wages for workers in all sectors.

Falling wages
But when all is said and done, the concept itself is really nothing more than a propaganda device to prove that workers don’t need unions. The whole productivity-wages relation argument in effect rigorously excludes the need for the action of any “external” agencies like trade unions. Embarrassment over the failure of wages and salaries to rise as predicted seems nevertheless to have made no dent in the thinking of corporate execs. To the capitalist class it is all just a matter of “corporate restructuring” for the sake of “economic efficiency” in securing an “open economy” and “free trade”. As a spokesman for Mobil Oil acidly put it: “There’s a very intense determination in executive suites across America not to give away hard-fought improvements. It may be a long time before this shakes through and wages rise” (Business World Week, 17 July 1995). Meanwhile, “in the past three years, wages have continued to fall while productivity, profits, and stock prices have all soared”.

With inimitable Yankee aplomb, the writer of the Business World Week article assures us that “longer term, of course, the argument is that as economies grow overseas, they will buy more US-made goods, creating more jobs and demand here. Over a truly extended time frame, overseas wages will rise to meet ours”. But overseas wages will, only “rise to meet ours” if overseas workers can impose some much-needed restraint on their employers’ appetite for profits by organising effective trade unions. Businessmen can accept this during the boom phase of the business cycle; but to the extent they ultimately succeed in busting unions (as they do when the “longer-term” rate of profit threatens to sink), they will be quite happy to settle for that, too.

Historically, the changing patterns of capital investment follow an international curve, and the fortunes of the working class change with them. From Latin America to Asia new working-class populations have been integrated into a multi-nationalising world economy. ‘This is not an aberration, it’s a permanent trend,” says Dean Witter’s [Joseph G.] Carson, who believes global competition and technological change will keep the pressure on wages” (Business World Week, 17 July 1995).

Describing all this as “an unprecedented redistribution of income toward the rich” (New Yorker, 16 October 1995) shows only how narrowly—if not how nationalistically—some writers like to have their history. Capitalism is by its very nature a system for “redistributing income toward the rich”. Profit (surplus value) is the economic translation of the unpaid labour of which the working class is robbed at the point of production. What has been happening since the 70s is unprecedented only in its scale; it has been a reality since the very beginning. The early economists, speaking for their colleagues in the capitalist class, certainly understood it.

During and after the Second World War’s flood of artificially high profits, real unions turned into company unions that talked down to their own members and limited themselves to conveying management’s wishes to them. A new breed of leaders stifled whatever there was of the grassroots or the democratic in organised labour.

Management got this opportunity to expand the market only at the price of “artificially high" wages: but once the competition got tougher internationally, the Uncle Tom outfits that unions had become started looking like too much of a luxury, so capital set about “busting" them (although they were already spontaneously decaying on their own). Wages had no place to float to but back to where they had come from originally. Thus it is not so much that income is being “redistributed" as that capital is seeking to return wages and salaries to pre-Depression levels (in current values) to shore up a sagging long-term rate of profit. In this sad little world made by capital, it would appear the period of mid-century prosperity was really only a fluke after all. 

Ron Elbert

(World Socialist Party of the US)

The New Yorker discovers Marx (1998)

From the January 1998 issue of the Socialist Standard

One hundred and fifty years after the publication of the Communist Manifesto, the New Yorker has discovered that "Marx's version of free enterprise also chimes with the views of many contemporary businessmen, who would rather be flogged than labelled Marxist".

John Cassidy's 5,000-word essay "The Return of Karl Marx" in the October 27 issue of this magazine from the bastion of American capitalism does not include Marx's view of a future world based on common ownership. Nor does it support his labour theory of value. It is however amazingly laudatory when dealing with Marx's analysis of how capitalist accumulation operates. Cassidy quotes one Wall Street organiser of stock issues as saying: "The longer I spend on Wall Street, the more convinced I am that Marx was right . . . I am absolutely convinced that Marx's approach is the best way to look at capitalism."

At first Cassidy was astonished at that claim and recalled that he had studied economics with his financial friend at Oxford in the early eighties when their teacher had taught them to agree with Keynes that Marx's economic theories were "complicated hocus pocus". He decided to re-examine Marx's writings and found himself agreeing with his Wall Street friend.

After sneering at Marx's writing style he goes on to heap praise on his analysis of capitalism:

"When he wasn't driving the reader to distraction, he wrote rivetting passages about globalizaion, inequality, political corruption, monopolization, technical progress, the decline of high culture, and the enervating nature of modern existence--issues that economists are now confronting anew, sometimes without realising that they are walking in Marx's footsteps."

Cassidy is unstinting in his praise for Marx's materialist conception of history:

"Indeed, as Sir John Hicks, a Nobel Prize-winning British economist, noted in 1969, when it comes to theories of history Karl Marx still has the field pretty much to himself. It is, Hicks wrote; 'extraordinary that one hundred years after Das Kapital . . . so little else should have emerged'."

Globalisation

On the growth of global markets Cassidy again praises Marx. "Globalization is the buzzword of the late twentieth century, on the lips of everybody from Jiang Zemin to Tony Blair, but Marx predicted most of its ramifications a hundred and fifty years ago. Capitalism is now well on its way to transforming the world into a single market, with the nations of Europe, Asia, and the Americas evolving into three rival trading blocs within that market."

While criticising Marx's view of the struggle between worker and capitalist as "too rigid", Cassidy provides some startling figures about ownership in the USA in modern times. "Between 1980 and 1996, the share of total household income going to the richest five percent of the families in the country increased from 15.3 percent to 20.3 percent, while the share of the income going to the poorest sixty percent of families fell from 34.2 percent to 30 percent." Even more to the point he writes: "According to Edward Wolff, a professor of economics at New York University, half of all financial assets in the country are owned by the richest one percent of the population, and more than three-quarters of them are owned by the richest ten percent."

In discussing the role of the unemployed in keeping down wages, Cassidy is in no doubt that Marx got that right too. "Marx believed that wages were held down by the presence of a 'reserve army' of unemployed workers who attempt to underbid the employed. Reduce the ranks of this army, he said, and wages would rise--just as they have started to do in the last year."

The role of the state

This remarkable essay ends with the writer discussing the relationship of politics to ownership. "Perhaps the most enduring elements of Marx's work is his discussion of where power lies in a capitalist society . . . Marx, of course delighted in declaring that politicians merely carry water for their corporate paymasters. 'The executive of the modern state is but a committee for managing the common affairs of the bourgeoisie,' he wrote in the 'Manifesto', and he later singled out American politicians saying they had been 'subordinated' to 'bourgeois production' since the days of George Washington. The sight of a President granting shady businessmen access to the White House in return for campaign contributions would have shocked him not at all."

For socialists reading any praise for the works of Karl Marx in such a supporter of American capitalism as the New Yorker magazine is astonishing. It shows that once an enquirer frees himself of the prejudices of orthodox thinking the only way to understand how world capitalism is developing is from the standpoint of Marx's materialist conception of history.

With a little more application Cassidy may even rid himself of the orthodox nonsense that he at present embraces; namely "supply and demand curves, production functions and game theory", and realise that Marx's labour theory of value is the view that best explains production, exploitation and surplus value.

But let's not look for too much. We still relish his conclusion that "despite his errors, he was a man for whom our economic system held few surprises. His books will be worth reading as long as capitalism endures."

Richard Donnelly