Sting in the Tail: Perm x from No. 11 (1989)

The Sting in the Tail column from the June 1989 issue of the Socialist Standard

Perm x from No. 11

It has recently been reported that the Chancellor of the Exchequer is a keen football pools investor.

We can only hope that he is a little bit more gifted in his pools forecasting efforts than in his budget forecasts.

For example in his budget of 1988 he confidently forecast that the inflation rate over the coming year would be 4 per cent and that the balance of payments deficit would be £4 billion.

In fact the inflation rate has turned out to be double his forecast and the balance of payments was more than treble his forecast.

Mr. Lawson received a terrible drubbing from his critics so his latest forecast is a little less confident. According to The Independent (11 April):

But Mr. Lawson was less certain of his predictions that the current account deficit would remain at £14.5 billion. The forecast, he said was "a genuine best guess" but "we Just simply don't know" whether It would be achieved.

In Mr. Lawson's defence it can be argued that the vagaries of form of Fulham or Partick Thistle are models of consistency compared to the unpredictability of the capitalist market place.

Libertarian?

Here's an interesting little publication from the Libertarian Alliance: Brian Micklethwait on Why I Support The Contras.

When it comes to fighting Communism, the most important rule is: win . . . it may well, for example, be unwise for the Contras to get caught torturing people, on the grounds that this hurts their support In Congress. But the answer is not for the Contras to surrender: It is for them to fight smarter and not get caught torturing people. If they can fight successfully without torturing people at all, then they should do that as well.

In Sickness and Health

In an attempt to generate funds the Mid-Glamorgan Health Authority has come up with a nice little earner.

According to a report in The Independent 11 April:

After shopping mails and one-armed bandits, contraception machines and the sale of puzzles and games to placate patients during the long wait in casualty, the NHS Is about to add another wheeze to the ranks of Its schemes for generating extra income — the car salesman.

Health is just another commodity Inside capitalism. If you have the money you can afford the £1,000 per night London Clinic, If not you can take your chance In the queue at some under-funded public hospital.

Red Sales in the Smart Set

Andrei Fyodorov lives in Moscow and his ambition is to become an old fashioned capitalist. He is all for the freedom of market forces, and is a real Russian Thatcherite. 

At present he is merely the manager of Moscow's first co-operative restaurant but he is about to branch into sales of computers and imported liquor. He also has a joint venture with Spanish businessmen to open a Spanish restaurant in Moscow and a Russian one in Barcelona.

His answer to complaints that his prices are too high is that he is in a monopoly situation and, like a good free marketeer, will charge whatever he can get away with.

Yet he is not a happy man, for although his workers have some shares in the business they don't work any harder than the ones he knew when he managed a state-controlled hotel.

But Fyodorov is no fool. He recognises that Russia is a long way from becoming a western-style economy because the workers cannot throw off overnight the anti free market history of the last 70 years.

He explains in The Guardian:

Millions of people in this country are against the market. They're afraid of prices going up. They fear inflation. They're against private enterprise because it’s a violation of socialism. Yet we don’t know what socialism is. It certainly doesn't exist here.

As we said, Andrei Is no fool.

Fyodorov and his like are as yet an insignificant force in Russia, but unless the die-hard central planners within Russia's ruling class manage to topple the dominant Gorbachev faction then these would-be capitalists will surely grow in wealth and seek a share in political power.

Holiday Planning

Last year the package holiday operators drew up their brochures for 1989. Thomson's, the biggest operator with 40 per cent of the market, estimated that the market would grow by 10 per cent but now find that It has SHRUNK by 10 per cent.

So Thomson's and its subsidiaries have cancelled around one million of their advertised holidays and some trade estimates put the number of cancellations by all the operators at two million, about 16 per cent of the total market.

Why did this happen? Well, the mild winter means that people don't have the same determination to "get some sun” when the holidays come round, and the big increase in interest rates for mortgages and personal borrowing ensures that many people will simply be unable to afford a holiday.

What it adds up to is that the anarchy of the market has triumphed once again. When the brochures were drawn up interest rates were much lower and the consumer spending spree was in full swing. Also, no one could forecast with any certainty what kind of winter we would be getting. True, the operators have their "experts" who try to take these and other factors into account but really, all they can do is make a guess and then hope.

But now that they've cancelled all those bedrooms in Spain, Yugoslavia, Greece, etc., what if we get a cold wet June or people make a late decision to get away after all? They will be clamouring for a holiday in the sun but the operators will be unable to supply them.

What was that about the perfectability of the market?

The trade war hots up (1971)

From the October 1971 issue of the Socialist Standard 

One of the myths in the economic textbooks is that the purpose of trade is to provide everyone amicably with the things he wants at the lowest possible prices, and that as restrictions on trade, whether in the form of protective tariffs and quotas on imports, or subsidies on exports, or of unstable currencies, prevent goods from being produced where and by whom they can be turned out most cheaply it is the duty of all ‘good governments’ to favour freedom of trade.

The myth was given official approval some thirty years ago with the establishment under United Nations auspices of the International Monetary Fund and the General Agreement on Tariffs and Trade (G.A.T.T.), through which the nations were to co-operate to their mutual advantage in securing currency stability, promoting trade and employment and working towards the removal of all trade barriers.

The reality is nothing like this. Trade is a war in which capitalists, alone or associated groups, try to turn their products into cash at maximum profit, and to this end seek to capture markets from rivals by any means that will serve, including government action to protect home markets, subsidised exports and putting pressure on rival governments.

Outside the Russian and Chinese blocs (which have their own systems of trade imperialism) nearly all governments pay lip-service to free trade, but it is a principle they support or reject in practice just as their changing needs require.

Marx was pointing out more than a century ago that the free-traders of one generation become the protectionists of the next. The classic example was the mid-nineteenth century English manufacturers to whom free trade was a religion. They had been protectionist in the eighteenth century, against the free-trade landed interests, but when developed British industry had the world at its feet their slogan was free-trade, with its accompaniment of cheap imported food which meant lower wages and higher profits. It was the landed interest which then became protectionist.

Later on, when British industry was successfully challenged by foreign rivals, the manufacturers reverted to protection.

After World War II it was American exports which were penetrating into world markets, and the dominant sections of American industry and food production wanted to impose free trade on the rest of the world. But, following the re-emergence of powerful industries in Europe and the spectacular expansion of Japan with its cheap ship building and steel production and the flooding of the American and other markets with cheap textiles, motor cycles, cars, cameras, TV sets etc., the protectionist interests in USA increased their influence on American trade and currency policy. Hence the Nixon move of imposing a ten per cent surcharge on imports, to be used as a means of putting pressure on other countries, particularly Japan, into up-valuing their currency in terms of dollars. This enabled America to get the results flowing from a dollar devaluation while technically avoiding direct devaluation (but also with suspension of the already much restricted convertibility of dollars into gold at $35 an ounce).

Simply as an arithmetic calculation, if the Japanese Yen is up-valued by say ten per cent, this would enable Japanese importers of American goods to get them nine per cent cheaper and would force American importers of Japanese goods to pay ten per cent more for them, thus stimulating American exports and discouraging imports. In practice the effect is likely to be modified by both buyers and sellers being willing to adjust their prices, even at the cost of lowered profit margins. The same applies to the ten per cent surcharge on American imports which in any event is likely to be a temporary measure.

The Nixon move was received with cries of rage from the affected capitalist groups, with charges and counter charges of ‘selfishness’, ‘bad faith’, ‘callous disregard of world interests’ and so on.

There are seventy seven countries which are members of G.A.T.T. but they found that when it came to vital question of American interests their numbers did not count for much. A typical bitter comment was published in the Evening Standard (20 August): -

Now G.A.T.T. finds who calls the tune. Today it is the turn of G.A.T.T. to find that when the pinching starts to hurt the boss, suddenly all the rules are changed. These last few days very eminent economic set-ups like the International Monetary Fund and the Common Market Commission have been waking up to the fact that it is the U.S. government and not they who call the tune when world monetary problems get too close to home.

Doubtless very true, but it is only a repetition of what every government has tried to do from time to time. A case in point was the sudden decision of the Wilson government in November 1964 to slam a fifteen per cent surcharge on all manufactured and semi-manufactured imports. (Later reduced to ten per cent and abolished in 1966). This was received with similar howls of rage. It was strongly denounced in G.A.T.T., in the European Free Trade Association, the Council of Europe, and the Common Market. The British government was condemned for lack of consultation, even with its E.F.T.A. partners, charged with breaking G.A.T.T. rules and with action contrary to the spirit of international co-operation. A Swiss spokesman at E.F.T.A. asked what was the use of making international agreements when the British government could so flagrantly violate them.

As usual the economic ‘experts’ are all at sixes and sevens in their efforts to assess the Nixon move and its consequences. At one extreme was Joe Rogaly in the Financial Times (1 September) and at the other Nigel Lawson in The Times of the same date. Rogaly sees hope that the road will be open ‘to a long term future’ in which there were no balance of payments crises and in which each nation produced the goods that it was best at producing, thus increasing the efficiency of the world as a whole and raising the general prosperity of us all’.

Nigel Lawson regards it as a disaster.

in the course of an essentially domestic economic initiative designed to secure his re-election next year . . . the President gratuitously, and almost as an aside, gave the world a bloody nose — and the commentators, nearly to a man, squealed with delight. At one blow Mr. Nixon has destroyed the international monetary order on which the post-war prosperity of the West has been based and created the biggest threat to world trade since the thirties and everyone marvels at his sagacity.

Lawson is wrong in thinking that if things get worse it will simply be the fault of the American government. Nixon was responding to a hotting up of the trade war which was already taking place and was affecting in greater or less degree all the capitalist world. While capitalism lasts there is no contracting out of its evil effects.

Edgar Hardcastle

Caught In The Act: No, No, Nigel. (1989)

The Caught In The Act Column from the August 1989 issue of the Socialist Standard

No, No, Nigel.

Nigel Lawson did not get where he is today through being bashful or at all reticent about his own talents so he does not take kindly to any criticism about the way he handles the financial affairs of British capitalism. That is why, some time ago, he dismissed the analysis of a large group of economists with the inadequate—and untrue—sneer that they were a bunch of teenage scribblers. That is why he is locked in an apparently unbreakable conflict with Thatcher and her toadies and why, as it is rumoured, he may take his talents and his touchiness off to some well-paid job in the City, where they are prepared to pay a lot to know all about the impotence of Chancellors of the Exchequer straight from the horse's mouth.

For Nigel is no longer a success. Against a rising tide of criticism and in face of all the evidence he can only insist that he is in complete control of the situation, working to an effective plan which is moving smoothly into operation. Of course there are some doubters, as financial observers consider what is happening to prices and the balance of payments but Lawson's response to these is that his remedies are taking rather longer to be effective than he at first thought. We only have to wait a little longer, be patient and trustful of the Law- son talents and all will come out well.

What worries Lawson's enemies—and many of his admirers—is how long this argument of postponement can hold good. As the Chancellor has to revise, again and again, his forecast of how much prices will rise by and how high interest rates will go in the near future, he begins to look like anything but a man in control. Perhaps he is hanging on in the hope that there is still time for the cyclical nature of capitalist trade to come to his aid so that he will be able to publish some statistics which make it seem as if his measures are indeed working. If that happens it will probably add quite a bit to the wage he can expect from his job in the City; he will retire from office in all the glory of a prophet fulfilled; what he assured us was only a "blip” was indeed that.

The success of that will be greater as more people forget how often, and how spectacularly, the forecasts of Lawson and his experts have been discredited in the past. The Tories came to power ten years ago on the promise that their priority would be to eradicate inflation, by which they meant that they would stabilise prices. For a while, as the rise in prices began to flatten out, they were able to claim that their policies were successful (in fact the two are not connected). But as the trend in prices has changed Lawson has been forced to revise again and again his forecasts about the rate at which prices will go up. Almost as soon as it was out of his mouth, each of his forecasts was outstripped by what actually happened. How long will this go on? How long can Lawson keep it up? How long before the voters begin to wonder whether the economy is under anyone’s control?

Teaching us a lesson.

The background to these events is that it is not so long ago that Lawson was making the claim to have conjured up an "economic miracle" for British capitalism; only just over a year that Thatcher was describing his budget as "brilliant". Some of this euphoria was based on the lowering of income tax rates, which so many workers mistakenly believe to be a sort of barometric scale of their prosperity. And some of it was based on the steady lowering of interest rates which, as more and more workers are forced to commit themselves to a lifetime of mortgage repayments, have assumed the same kind of false reputation as income tax rates. Part of the Lawson coda was that low interest rates not only bring us all prosperity but also contribute to its growth, so that the rates would move in a downward spiral while our living standards spiralled upwards. Now all that has changed and those working class dreams have, in many cases, turned into nightmares. The present orthodoxy is that low interest rates are not a form of prosperity but a symptom of a malignant economic disease. They must be forced upwards, to teach us all the evils of living beyond our means.

The popular explanation for all this confusion is that Lawson and his experts are having a little temporary difficulty in sorting out some passing, unpredictable problems. Anyone who believes that will believe anything. It does not require any great feat of memory to recall that every Chancellor has had to face similar problems and that they have all responded in the same way (if not with the same lack of modesty) as Lawson—with the promise that they are only postponing success for a while. Clearly, there must be an explanation more in tune with the facts.

However consummate their expertise, however seductive their promises, the people who claim to be able to control the economy of capitalism are really floundering about in impotence. Lawson's changes of policy and his ever-lengthening string of broken promises are not the result of his notoriously arrogant and pompous conceits. It would be no different if he were the most modest and retiring of men for his job is one of trying to do the impossible.

Not in front of the voters.

Perhaps it was people like Lawson Honourable Members had in mind, when they were so uneasy about allowing the TV cameras into the House of Commons. It is one thing to be seen by millions reading a carefully constructed harangue of the working class for not working hard enough, expecting too high wages or for wanting too much of life's little (very little, in their case) luxuries. It is quite another to be shown up by the camera's merciless eye as a spluttering buffoon. For many Labour Members it is one thing to allow themselves to be filmed addressing ecstatic crowds about building the new Jerusalem in England's green and pleasant land. It is quite another to be exposed, in a classier kind of soap opera, as the Percy Sugden or the Jack Duckworth of the Commons.

Some of the arguments used against letting in the cameras, such as that it would provoke even more irritating behaviour from the louder MPs and stimulate the rise of media favourites (like Percy and Jack) were deployed a long time ago in the rearguard action against allowing reporters to record parliamentary debates for the press. The question must be asked, now as then, whether Honourable Members are ashamed of their behaviour, whether they feel they have something to hide from the viewing voters.

If they were aware of what actually goes on in the world—and much of what they say and do leaves that open to doubt— MPs would realise that the exposure they have to fear most is of the uniformity of their impotence to affect the problems of capitalism. This is not only a matter of being shown up as ineffective but also of the viewers having it rammed home to them that the clashes in the Commons are sham affairs, at most over trivialities and not worth serious attention or of influencing how people vote at elections.

Television has already allowed us to sit at home while we watch our leaders, represented as all-knowing, all-caring, all-powerful (there is no point in having leaders unless they come up to these exacting standards) are shown up as blundering helplessly from one crisis to another sustained only by their own self-esteem. This is an encouragement to workers to develop their own consciousness, take their own decisions, run society in their own common interests. What is more likely to happen, if TV is allowed freely into the House, is that Members will mend their ways. No more dropping off during debates; no more yobbish heckling and jostling; only established eccentrics licensed to sport strange clothes and wild hair styles. It is important, to our legislators, that they keep up the pretence of representing our interests. And even more important to us that we see through the pretence.

Ivan

House price blues (1989)

From the February 1989 issue of the Socialist Standard

In the first few months of this year millions of workers will have to cut their personal spending in order to pay more interest on their mortgages. In other words, their standard of living will fall. All will have to cut back on food and holidays, some will even lose their homes. This, however, doesn't worry Nigel Lawson. As Chancellor he has not only welcomed this situation but claimed responsibility for it. While this is merely empty boasting (governments can't control interest rates at will), the fact that he should want to cut back on consumption illustrates that capitalism is not a system geared to meeting people's needs.

Lawson says he has raised interest rates (the price paid for borrowing money) in order to combat inflation. In fact it is the other way around: he has raised interest rates because of rising inflation. The capitalist institutions that lend money to the government are interested in what is accurately called the "real" rate of interest — the return they get after rising prices have been taken into account. So, if the general price level is rising, the government has to offer a higher nominal rate of interest to those lending it money, at least if it wants to maintain its level of borrowing.

The price level has been rising in Britain over the past year, partly due to the government continuing to inflate the currency by printing too much money but also because of the increased level of activity as the economy moves slowly out of the stagnation phase of the capitalist business cycle. Hence the repeated rises in the minimum lending rate (what used to called the Bank Rate) over the past year, culminating at 13 per cent last November.

Building societies are financial institutions which, like banks, survive by borrowing money at one rate of interest and then re-lending it at a higher rate. This means that when the general rate of interest goes up building societies, being no more able to “create credit" than the banks, are obliged to raise the rate of interest they pay those who lend them money (their depositors) and the rate they charge those who borrow from them. As their name suggests, building societies specialise in long-term loans — of twenty, twenty-five years — to house buyers. They operate by lending people the money to buy a house and then requiring them to mortgage it to them as security against repayment of the loan. In law this means that they become the owner of the house, although the person taking out the mortgage retains full occupation rights as long as he or she continues to repay the loan.

So, when we are told in a recent government publication, Britain: An Official Handbook, that at the end of 1986 there were more than 14 million owner-occupied dwellings in Britain, this is not strictly true. Those still paying off their mortgage — some 7.5 million — are only occupiers, not owner-occupiers; they don't become owners until they have repaid in full and with interest their debt to the building society. It is only after a lifetime of being in debt and occupying a house belonging to a building society that they finally attain the lofty status of "property owner", fit citizens of Thatcher's “property-owning democracy". In the meantime their position remains insecure. If ever they fail to keep up their payments the building society will evict them from its house and sell it to recover the amount of the loan, a fate suffered by tens of thousands of people each year and which can now be expected to increase. They also remain at the mercy of rises in the rate of interest, which the government can cynically welcome as a way of making them cut back on their personal consumption.

Since coming to power in 1979 Thatcher has pursued a policy of encouraging people to become homeowners, as part of her plan to eliminate Labour party-type reformism ("destroying socialism", as she misleadingly puts it). She hopes that people who own their own homes will believe they have sufficient a stake in the country to abandon traditional working class demands for higher wages and salaries and better state provision for health and welfare; that in fact they will oppose such demands and vote for the Tories for ever. For her, capitalist property will be more secure if surrounded by a mass of small house owners.

While a few social climbers may have swallowed Tory ideology, Thatcher's policy has been popular for quite other reasons. Many people want to own their own home simply because it gives them some control over part of their lives. They don't like to have to ask permission of a landlord, whenever they wish to modify or improve their home; they want to be able freely to exercise the creativity denied them at work.

Even if all workers owned their own homes, capitalist society would remain class-divided: the majority forced to live by selling their ability to work for a wage or salary and a minority of owners of the means of production living off unearned income in the form of rent, interest or profit. When socialists talk about inequality of property ownership being the basis of capitalist society in Britain we mean ownership of the means of production, of land, raw materials, factories, machines and other instruments for producing wealth. Owner-occupied houses are not means of production; they are not, and cannot, be used to produce more wealth. In this sense they fall into the same category as cars, washing machines and other household goods; they are consumer goods, means of consumption — workers have to consume accommodation, be it owned, mortgaged or rented, in order to keep themselves fit to work. Homeowners, therefore, are not capitalists and neither do they have any interests in common with capitalists.

This important distinction between property in means of consumption (houses, cars, household goods) and property in means of production, or capitalist property, is lost in the statistics of property ownership published from time to time. Even so, these figures show a considerable inequality: in Britain the top 1 per cent own 23 per cent of "accumulated wealth". This means that if property in means of consumption is taken out of the figures the level of inequality is far greater. Figures for West Germany in 1969. for instance, showed that while 1.7 per cent of private households owned about 35 per cent of "total private wealth", they owned 70 per cent of "private wealth invested in production". The proportions in Britain will be similar. Owners of capitalist property are, quite literally, in a different class from owners of means of consumption. To gain entry into this class you need to own a lot more than your home.

Besides, owning your own home in no way frees you from having to go out and sell your ability to work for a wage or salary in order to live. Workers who own, or who have mortgaged, their home have to sell themselves on the labour market just as much as workers who live in council houses or private rented accommodation. Nor, as the recent rises in mortgage rates shows, does it free you from the financial problems inextricably associated with being a wage and salary earner in capitalist society. “MORTGAGE BURDEN TURNS YOUNG INTO NEW PAUPERS" read the headline of a recent article in The Times (31 December) which featured a young couple in Hertford who had bought and mortgaged a home (a one-bedroomed maisonette, or sort of glorified Portakabin) in July. Their first monthly payment had been £360. From January they were going to have to pay £460 a month, leaving them just £55 a week between them for personal spending (food, car, gas. electricity, telephone).

Homeowners remain non-owners of the means of production and so remain members of the working class, with the same interests as wage and salary earners have always had under capitalism: to establish a system based on the common ownership and democratic control of the means of production and to press, while capitalism lasts, for higher wages and salaries. Thatcher has got it wrong. Home ownership does not give workers an interest in the continuation of capitalism.

Greasy Pole: An Ex-Prime Minister is Missing (1997)

The Greasy Pole column from the 1997 issue of the Socialist Standard

Has anyone seen John Major? We are referring to the man who, until a couple of months ago, was leader of the Conservative Party, Prime Minister of Great Britain, Her Majesty's First Lord of the Treasury and much else besides but who seems to have disappeared without trace. This is especially peculiar because the said John Major was also a staunchly courageous man who always stood up for what he thought was right, who never ran away from a fight, who thrived when the odds were stacked against him.

We know all this because John Major often told us so himself. He told us when he defiantly said that Britain would stay in the ERM because he knew, as Prime Minister, that it was in all our interests that this should be so—and again when, shortly after, he bravely left his Chancellor Norman Lamont to inform us that it was important to us that Britain immediately left the ERM. He told us as one after another of his ministers and supporters in Parliament were revealed as venal and devious, when he steadfastly denied that they had broken the rules only to abandon them to their fate when their exposure became too obvious. And finally when, with breathtaking bravado, all through those long days up to 1 May, he assured us that he would be leading the Tory Party to another stunning electoral victory and a fifth term in office—until, when he saw the size of the Labour majority, he abruptly resigned the leadership to leave what was left of his cabinet to scrabble over the succession.

Bastards 
And since then we have neither seen nor heard anything from the man. None of the contenders in the struggle for the Conservative leadership seemed to think it worthwhile to ask for his opinion or for his endorsement (did they, it is reasonable to ask, fear that Major’s support would be the kiss of death only much more rapid?). Perhaps more to the point, Major himself did not intervene in the contest, although he was once so certain that some of the candidates stood for policies which would be seriously damaging to the standing of British capitalism.

Remember, for example, the time when he memorably described the likes of Peter Lilley and John Redwood as “bastards”. When he sneered that whenever he got close to colleagues like these he could hear the flapping of white coats. At the time, this was supposed to be John Major being brave and scathingly witty. But if he thought like that why did he not speak out during the fight for the leadership, to warn the Tory MPs of the perils of voting for someone who was mad enough to stand for policies which Major considered insanely damaging to British capitalism?

Of course one explanation is that Major is concreted into a prolonged sulk, bitterly angry with his party for making his life as Prime Minister so miserable and then catapulting his government into so historically huge a defeat. There are one or two comments to be made on this possibility. First of all, what kind of parliamentary leader is it, who can react in this petulant way to the give and take of political life? Would he, in one of his more misanthropic withdrawals, have sulkily decided to press the button to start World War Three? Or sullenly decide one day to go down to the House to own up to the facts about what capitalism does to its people and about the impotence of all its political parties to control the system?

Fed up 
Secondly, if Major were so enraged in his dissatisfaction, what was he doing leading the Tory Party into the election, trying to persuade us to vote them back for a fifth term and obstinately declaring, until the votes had been counted and the enormity of their defeat was undeniable, that they would win and he would be back in Number Ten? He wasn't sulking when he wrote in the Conservative manifesto that the Tory government since 1979 were ". . . among the most successful in British peacetime history"—forgetting that some of the ministers in those governments were "bastards" who should have been carted off to psychiatric hospitals. He wasn’t sulking when he signed his name under the slogan “You can only be sure with the Conservatives”—although he did not elaborate on what we could be sure of.

Perhaps Major is simply fed up with politics, with the bump and grind of it all and of recurrent, insoluble problems. Perhaps now he fancies offering himself for one of those posh jobs in the City or those part-time directorships which pay a lot more than what a minister gets. (Of course one problem in this is that what with all those suddenly unemployed Tory ex-MPs the competition is a lot sharper than it used to be.) He would not be the first.

Exposed 
Norman Fowler, for example, resigned in order, as he famously put it. to spend more time with his family—or should he have said "while the going is good”? As it turned out Fowler spent more time in various boardrooms and is still to be seen doing his bit to influence the running of the Tory Party. Nigel Lawson, after his "boom" had been exposed in the anger and despair of thousands of people who had been seduced by the false dream of capitalism in endless prosperity, symbolically lost a lot of weight and audaciously cashed in by writing a book on dieting—which some of those workers who had had to tighten their belts may have found grimly amusing. It is difficult to imagine what Major would do. Could he go back to the bank? That might work provided his job did not involve any economic forecasting. Try again to be a bus conductor? What with cuts in funding and in wages there aren’t many of them left. Go back to the obscurity of Brixton? Perhaps—if they'll have so spectacular a failure.

And that really is what it is all about—politicians who talk to us so confidentially about their ability, their unique schemes, to control capitalism but who are found wanting when their facile assurances are exposed. John Major is a historical example of this. Has anyone seen him? Has anyone seen one of the more wretchedly exposed politicians of recent times?

Ivan

Whitewash at the Maltings (1983)

From the June 1983 issue of the Socialist Standard

The Sizewell Public Inquiry which opened at Snape, Suffolk, on 11 January, and is expected to last well into the Autumn, is considering the proposed siting of the first Pressurised Water Reactor (PWR) nuclear power station in Britain. The energy problem needs to be seen in the context of the workings of the capitalist system as a whole. Under capitalism, it makes no difference whether power stations are privately owned or state run, as is the case with most power stations around the world. The interests of most capitalists obviously lie in obtaining electricity as cheaply as possible. Most Industry today is electric-powered and the proposed PWR at Sizewell Site B will, of course, supply electricity. Obviously the minority of capitalists with a stake in the actual production of electricity, such as the contractors who supply materials and labour towards the building of power stations, don't see things like that; they naturally want as high a price as possible for their “services”. It is the job of governments, in this case through the Central Electricity Generating Board (CEGB), to see that the best deal is obtained for the ruling class as a whole. This is by no means as easy as it sounds, particularly in these days of large multinational companies and the ever increasing diversity of their interests.

At the moment, leaving aside hydro-electricity which is of somewhat limited value outside certain geographically favoured areas, there are three main methods of generating electricity. All are based on raising steam to drive turbines: burning coal, burning oil (or natural gas) and nuclear fission, the splitting of heavy elements. For the workers in these industries, all three mean unpleasant and dangerous working conditions with a high risk of premature death. All three are unsatisfactory from the ecological point of view. Sulphur dioxide is produced when oil and coal are burned, and a more rational use for these fuels would be as raw materials for plastics. However, the dangers to health and the environment from continued use of nuclear fission are all pervading. Despite this, ecological considerations have so far entered only marginally into the decisions and only a really serious environmental disaster would alter this.

Many interesting alternative power sources are available which are either ecologically benign or present in abundance, or both. These will be mentioned on numerous occasions during the Sizewell Inquiry but none will be sufficiently developed in time for British capitalism to consider them as options. And so the prime considerations remain cheapness, competition and profit. The Inquiry thus appears to have only three options to consider, as it is reasonable to assume that some kind of power station will be built on the Sizewell site. These are: a power station using coal or oil; a different type of nuclear installation; or building a PWR as at present proposed.

It does appear from the available evidence that the government has, through the CEGB, already made up its mind that it wants the PWR, so that the Inquiry appears to have only a rubber-stamping role. The New Statesman reports (7 January 1983) that the pressure vessel has already been ordered from the French company Creusot Loire, and cancellation now would invoke penalty clauses. As early as April 1980 the CEGB issued a letter of intent to the National Nuclear Corporation (NNC) which, in effect, placed a manufacturing order for the nuclear core. Site clearance for the PWR commenced last summer, while Sir Frank Layfield, chairman of the Sizewell Inquiry, was holding preliminary hearings a few miles away. Sir Frank said he had no power to stop it! Further evidence in the same issue of the New Statesman confirms that the government wants a biased, white-washing “investigation” in the hope that its supporters will be appeased and the various objecting groups become dispirited. The journal quotes from leaked minutes of the critical 1979 Cabinet meeting at which the decision to hold an inquiry was taken. Apparently the government saw “a danger that a broad-ranging inquiry would arouse prolonged technical debate between different representatives of scientific opinion”. After reading this prize piece of cynicism we are left wondering why they bothered to hold an inquiry at all, thereby giving at least some opportunity for the expression of informed opposing opinions. After all, without any debate the go ahead has been given for two new advanced gas cooled reactors (AGR) at Heysham in Lancashire and Torness in Scotland. The Windscale inquiry chaired by Lord Justice Parker in 1977 neither increased confidence in judicial impartiality in these matters, nor led to any lowering of the protesting voices. A similar predetermined effort on Sizewell seems likely only to intensify the effect.

The deliberate bias built into this Inquiry shows itself in a very large imbalance of resources between the applicants and the objectors. The CEGB has produced a massive amount of documentation which will require about eight weeks to read into the records. At the time of writing the proceedings have gone “underground" while this task is performed. The boredom induced by this monumental effort of social irrelevance will assist in putting the objectors off their stroke. “Without sufficient funds to employ lawyers and specialist scientists, the objectors will find it hard to sustain an effective presence”, comments the New Statesman (ibid). Since then the chairman has ruled that the applicants can both initiate and wind up discussions on a particular issue, but that the objectors can only do one or the other.

We can now briefly examine the credentials of the two sides. For the applicants, the CEGB lead the way. British Nuclear Fuels Ltd. (BNFL) is responsible for the supply and removal of enriched uranium fuel rods. The Nuclear Installation Inspectorate (NII) will issue a site and operating licence. The National Radiological Protection Board (NRPB) will give “evidence'’ on the hazards of accidental radioactive release (no facts please, must be their motto.). It is planned that the National Nuclear Corporation (NNC) will construct the reactor. The Department of Energy will be supporting the CEGB, even though Sir Frank Layficld will be presenting his final report to the Energy Secretary, Nigel Lawson. Other government departments will be chipping in with supporting views. Also listed among the applicants but not actually present, are two USA nuclear corporations, Westinghouse and Bechtel, who have designed respectively the steam raising core and the associated power plant of the PWR. It will be noted that these applicants, despite their number, are a pretty united bunch. All will be playing their part in trying to convince the British ruling class that they are doing their job.

How convincing is the applicants' case? The CEGB’s main claim throughout has been that nuclear power would be cheaper. In pursuance of this aim the AGR, which is considered to be somewhat “safer" has been abandoned in favour of the allegedly cheaper PWR. However on 14 February last the Electricity Consumers Council, which might have been expected to give its support, published a critical report which, according to The Guardian of that date, said that the economic benefit case had not yet been fully made and suggested a closer look at other methods. Then, on 1 March, the CEGB itself published a pamphlet, reported in The Guardian the same day, admitting that the PWR is not, after all, the cheapest available prospect but still arguing that it represents the best overall prospect. While a blow, this could still be considered acceptable as nuclear power is strategically more secure than oil. However, the cornerstone of the nuclear power strategy has been the plan to move eventually to a series of “fast breeder" reactors (FBR) but this has now been shelved, apparently indefinitely. The USA had earlier held back from further FBR development. The FBR throws off as a radioactive waste product Plutonium 239, one of the deadliest substances known, with a half life of 22,400 years. Undoubtedly the American decision to halt has been taken because the environmental hazards of the FBR are unacceptable. even by capitalist criteria. The Sizewell applicants clearly have their work cut out to justify themselves and would appear to need all the coddling that the Inquiry seems certain to provide for them.

In contrast to the applicants, the objectors are a motley lot, presenting a variety of viewpoints, which by no means complement each other. This disunity will make it easier for the court to brush the opposition aside. One common factor will be that all will be propounding alternative capitalist strategies. Working class interests are not considered in such arguments. Bodies like the Suffolk Preservation Society would probably be satisfied by a decision to site the PWR elsewhere. Arguments that nuclear fission is environmentally unacceptable even to capitalism highlight the criminal social irresponsibility of the capitalist class in suppressing this evidence over a period of nearly 40 years. The Greater London Council will present interesting evidence on the risk to Londoners from the transport of nuclear waste through the metropolis, while pressing the case for falsely labelled ‘employment creating alternatives' such as conservation or combined heat and power stations. The Friends of the Earth, the National Union of Mineworkers and the Anti-Nuclear Campaign will argue against the PWR, trying to present evidence that the government does not wish to have a fair hearing.

A body calling itself Ecoropa recently published a leaflet entitled Nuclear Power, The Facts They Don't Want You to Know. This leaflet has sufficiently worried the United Kingdom Atomic Energy Authority (UKAEA) for them to publish a counterblast pamphlet entitled Nuclear Power, the Real Facts. In a preamble to their leaflet Ecoropa make clear their concern for capitalism’s welfare, so they cannot be accused of anti-capitalist bias in presenting their arguments. This they do in question and answer form. The UKAEA reply repeats these questions and answers and then gives a reply of their own. Ecoropa embarrass the nuclear lobby by drawing attention to the way nuclear power has failed to live up to its early promise and recall the days when we were told that electricity from this source would be “too cheap to meter”.

The track history of the PWR is not a good one. We need only recall the emergency of Three Mile Island, Pennsylvania where, on 28 March 1979, the cooling system of the No.2 reactor malfunctioned, and a catastrophic melt-down of the reactor core was only narrowly avoided. A partial evacuation of the area's pregnant women and pre-school children, lasting eight days, was ordered by the State Governor. Since then the same type of valve failed in another PWR at Crystal River. Florida. The British nuclear industry categorically refuses to publish its safety statistics. Ecoropa point out that since 1977 only one nuclear reactor has been ordered in the United States. In their reply UKAEA acknowledge this but say that “this is due to economic conditions" in the hope of blaming the slump for this inconvenient fact. Yet the same economic necessity is being advanced in this and other countries as a reason for pressing ahead with the self-same design. The real reason for the United States slow-down is a re-think by the ruling class on their nuclear strategy in the light of their disappointing experience to date. This leaves Westinghouse and Betchel with the problem of reducing their losses by selling their wares elsewhere: hence their involvement with British and other European authorities. Suppression of important facts has to be a big feature of such a sales drive.

Ecoropa has also asked: “Has an evacuation due to accidentally released radiation ever happened”. The answer given is “Yes, apart from Three Mile Island. In 1958 an accident at a nuclear waste dump devastated a huge area of the Urals in Russia: the names of 30 communities have been removed from the maps. In spite of conclusive evidence from US satellites, the nuclear industry here and abroad managed to keep the news concealed for 21 years!” This is confirmed in the Britannica Book of the Year 1980: "The US CIA released previously secret documents in 1977 which confirmed that a massive nuclear explosion did take place at that time near the town of Kyshtym. . ." (p.366). If the answer were not so screamingly obvious, we could have asked why the CIA waited so long before releasing such good anti-Russian propaganda. The UKAEA attempted reply begins with “The news was not concealed in this country: an accident involving radioactivity in the Urals was reported in the London Evening News, 18 March 1959”.

The Sizewell Inquiry will in due course complete the job for which it was set up and rubber-stamp the Thatcher government’s plan. Yet doubts over the future of nuclear fission even in the capitalist environment persist, particularly in view of the virtual halt to development in the United States. The British authorities have, in effect, pleaded guilty to knowing the ecological facts and deliberately acting against them. But lies, distortion, bias, half-truths, innuendoes, white-washing, have long been part of the capitalist stock-in-trade. The facts are against us — suppress the facts has to be their cry. Total ecological benignity is of course an impossible dream, but in socialism full discussion on all aspects will democratically take place before decisions on such matters as fuel and power, which have such all pervading implications, are taken. With the competitive drive for profits removed, there will no longer be any incentive to produce untried products, such as PWRs, whose long-term or even short-term effects are lethal.

E. C. Edge

Crises, booms and slumps (1991)

From the March 1991 issue of the Socialist Standard

  Since its evolution out of feudalism, the capitalist system of society has ensured that there has been a long-term expansion in the productive capacity of the world. TVs, computers, weapons capable of mass wreckage at one stroke—all these things that were once unthinkable have become basic features of life, at least in the more developed areas of the planet where capitalism has been dominant for many decades, and in some instances, hundreds of years.  

  Although capitalism broke through the fetters placed upon production by the feudal system and has expanded the forces of production to an unprecedented degree in the years since, the expansion of productive capacity and output under capitalism has never proceeded in a straight line. Notions of steady growth and constantly increasing well-being owe more to the rhetoric of politicians than the actual reality of capitalist development.

As a system, capitalism grossly underuses the technology and potential for production that it has helped develop. On one level, this can be seen by the growth in employment of people who are not engaged in intrinsically useful activity—bankers, accountants, insurance workers, armed forces personnel and so on. But even when capitalism can be said to be working at “full capacity”, with expanding output, growing productivity and booming sales, a period of “under-use” is always around the corner.

Falling output
Capitalism in Britain has reached just such a turning point. The last few years have seen fairly steady growth, with rising productivity and increased investment in those expanding sectors of industry that were making the headlines in Thatcher’s last years in office—particularly microelectronics and information technology. Much of that growth and expansion has now been halted.

This has not, of course, prevented the present government from arguing that the downturn in economic performance is just a "blip”. Only in November 1990 was John Major (when Chancellor) prepared to admit tentatively that Britain is in recession. The government currently defines a recession as being a situation when there is a negative growth rate for two successive quarters, but this “official" definition hardly matters to the thousands being thrown on to the dole queue or the thousands of others forced into bankruptcy.

Britain, in common with a number of other countries, is now in a situation where industrial production is falling and unemployment is rising. Although the official unemployment statistics have been doctored to the extent that they have become virtually meaningless as a measure of the actual level of unemployment in Britain, they do at least indicate trends—and the current trend is up. Manufacturing production has been falling since April last year and in the three months to November fell by 2.7 percent compared with the previous three-month period (Independent on Sunday, 27 January).

So far as governments and politicians are concerned, falling rates of growth and high levels of unemployment are signs that something has “gone wrong". When things start to go wrong for capitalist governments they often look for a scapegoat— like some hapless (ex-)Minister whose irresponsibility and recklessness is blamed for having brought the period of growth to an end. In Britain this role has been allocated to former Chancellor Nigel Lawson, a man previously described as "quite brilliant" by Thatcher and Major. But governments taking the credit when output is expanding and unemployment is low, and finding a scapegoat when things get rough is based on the mistaken assumption that the capitalist business cycle results from the policies they pursue. They may like to think that they are in control of the economy and that when things go wrong they can put them right again with the correct policies, but this is a fantasy.

George Meddemmen

Over—expansion
What governments fail to realise is that an economic recession is not an example of capitalism “going wrong" because of some dreadful ministerial error. Economic recessions with stagnating production, growing unemployment and a further slide into poverty are entirely normal—and necessary—features of capitalist development. This is because of the inner logic of the capitalist system's drive towards expansion.

The conditions for the development of an economic recession are present even when the capitalist system is in a period of boom, or relative prosperity. One thing that is immediately noticeable is that the operations of capitalism are not planned at the level of the whole economy. Decisions about investment are made by thousands of competing enterprises operating independently without social control or regulation. This means that when business is booming and when profits and growth rates are high "over-investment" by some enterprises will inevitably occur. In pursuit of future profits they expand their productive capacity beyond what the market which they are producing for can absorb.

A particular industry over-investing and expanding its productive capacity beyond the limits of market demand in this way is the usual cause of an economic crisis and subsequent depression. If capitalist growth was to be achieved in a controlled manner, eliminating booms and slumps, then growth would have to be balanced in each sector of industry. But the growth of an industry is not linked to the demands of other industries—its growth is determined by the expectation of profit, and this inevitably leads to a disproportion in investment and a disproportionate expansion between the various branches of production.

When an industry has over-produced for its particular market, this will have a knock-on effect for firms operating in other sectors of the economy. For instance, if an enterprise is no longer able to sell the commodities it has produced on the market at a profit, production will be cut back thereby slowing output. This will provoke a chain reaction as the enterprises' suppliers will no longer be able to sell all their products either, which will in turn affect their suppliers and then their suppliers' suppliers, and so on. Such an overproduction for selective markets therefore only has to appear in a few key industries for a crisis to break out and spread—reducing overall growth rates and increasing unemployment. And it all arises out of the general anarchy of production inherent in the capitalist system.

Boom—slump cycle
After a period of generalised stagnation and high unemployment, capitalism will be able to move out of the slump phase of its trade cycle. Although a recession has devastating consequences for the working class, no slump is permanent and once many of the weaker capitals have gone to the wall—with their assets being sold off cheaply to their competitors—the prospects for investment and expansion improve again. Capital depreciation, coupled with reduced interest rates caused by reduced demand for money capital, and lower real wage rates in a recession, mean that the prospect for making profits improves and industries begin to expand once more, taking on more workers. The cycle then begins all over again. As Marx pointed out in the last century:

The factory system's tremendous capacity for expanding with sudden immense leaps, and its dependence on the world market, necessarily gives rise to the following cycle: feverish production, a consequent glut on the market, then a contraction of the market, which causes production to be crippled. The life of industry becomes a series of periods of moderate activity, prosperity, over-production, crisis and stagnation. (Capital. Volume I. page 580, Penguin edition).

Now that capitalism has become a world system the "sudden leaps" of production referred to by Marx are not nearly as immense as they were in the capitalist system's historical ascent when whole continents of the Earth still had to be brought into the "factory system" with its wage-labour and capital relationship. Indeed capitalism, having raised the forces of production to a level where a society of abundance is feasible, has outlived its usefulness for humankind, and its cycles of boom and slump are a testament to its inherent inability to utilise resources efficiently. Capitalism can only advance so long as there are periods of regression when workers are made redundant in increasing numbers. when growth stagnates and when poverty spreads—not merely in the "developed" areas of the world but in the weaker capitalist states also, where the effects of the capitalist trade cycle are often felt hardest.

Most importantly of all, there is nothing that politicians can do to eliminate the boom-slump cycle—it will be around as long as capitalism itself. Capitalism cannot be efficiently planned as anarchy of production and uneven development are at the very heart of the system. All attempts at planning capitalism have ended in disaster—most notably in state capitalist countries like Russia and China where production seems to be in an almost chronic state of stagnation and where unemployment has. at least until recently, been masked by overstaffing.

The only way to take the abundant resources of the Earth and use them in an efficient manner is to establish a system of society based on common ownership and democratic control, where articles of wealth will be produced solely for use and not for exchange on a market with a view to the profit of a minority. Only then will crises, booms and slumps be a thing of the past and only then can production be geared to satisfying the needs of the inhabitants of the Earth.

Dave Perrin

A quote from Gavyn Davies which accompanied the article:

  “Around July, companies began to complain in private that demand had suddenly fallen away without much warning . . . What we are now observing is the flip side of the boom in confidence which led to so much borrowing and investment from 1985 to 1989. In those years, output growth was persistently stronger than anyone expected, initially because consumers were so willing to dip into their savings . . . As consumers threw caution to the winds companies decided it was time to invest, and the level of capital formation rose to heights which had never been seen before, relative to GDP. Companies continued to press ahead with expansion long after consumers had started to rebuild their savings and for quite a while that kept employment rising, and the economy afloat.
  It was not until the middle of 1990 that companies suddenly realised their expansion plans were not supported by the prospects for demand . . . Companies are now in the full throes of a major adjustment which is designed to correct their over-borrowed condition. And the main casualty over several years is likely to be capital spending, since productive capacity has run ahead of demand."
—Gavyn Davies, currently chief UK economist at Goldman Sachs International, writing in the Sunday Telegraph, 27 January 1991.

That was the annus that was (1993)

Illustration by George Meddemmen.

From the January 1993 issue of the Socialist Standard

We haven’t been reading papers like the Mail and the Telegraph all these years without getting to know that the Queen is a historically brilliant woman but, even so, it came as a bit of a shock to learn that, with all her other talents, she can speak Latin. Or at least she can make a rather feeble joke in Latin, complaining that for her 1992 was the Annus Horribilis (when it might have been the usual sort of Annus Mirabilis with lots of money being made for her, lots of sumptuous living and lots and lots of crazily adoring subjects cheering her).

Of course she still had all these things in 1992: what she was regretting was the exposure of her children's activities and relationships in a way which would not once have happened. But this is not 1936, with the press muzzling itself over Edward VIII dallying with Mrs Simpson; nowadays a fierce circulation war among the tabloids practically guarantees the quickest and most glaring exposure of any royal misbehaviour. And then a small bit of Windsor Castle caught fire which did not leave the Queen and the other Windsors exactly homeless but which might have been a public relations triumph until some rather nasty questions were asked about how much money the Queen has, and how many homes and whether she should pay to repair the Castle. But more about the royals later; at the moment we want to consider 1992 and just how horribilis or mirabilis it was and why and what about 1993 and the year after that and so on.

We should remember, first of all. that 1992 was supposed to be the Big One, the year "we" went into Europe, the year "we” joined the ERM as a start to solving "our” economic problems, the year “we" found a new prosperity by moving towards a single European currency. It was also the year when trifling difficulties like the recession, unemployment, bankruptcies, homelessness and increasing numbers of people losing "their" house because they can’t keep paying the mortgage would be solved at a stroke by a Tory election victory. In particular a Conservative win would be such a boost to business confidence that there would be a rush to invest huge amounts of money in industry, which would trigger off a stupendous boom and stimulate everlasting popularity for John Major and his government especially his Chancellor Norman Lamont.

Victory
During the election Major was quite clear about this. For example, at the beginning of April—just before votes were cast—he told fawning Jimmy Young (who else?) that economic recovery was already under way:

  We will not see the statistics to prove it until after the event but there is clear anecdotal evidence, clear survey evidence. that it has started.

Well, enough of the voters believed that to put Major and Lamont back in their homes in Downing Street and what is the situation now? Another kind of anecdotal evidence was provided by the Confederation of British Industry conference last November. This gathering was once a congratulatory jamboree for Tory ministers but this was 1992, the Annus Mirabilis turned Horribilis. One speaker after another blamed the government for the slump (which shows that ignorance about how capitalism works, and why, is not confined to the working class) and complained bitterly about falling profits and investment and mounting bankruptcies. One speaker thought it a criminal matter:

  If the (Conservatives) election manifesto had been a company manifesto it would have landed the entire Cabinet in jail.

The government’s response to this kind of assault is as predictable as it is feeble. Last September on Sky News, Major had some explaining to do about the financial crisis which threw the government into such desperate chaos, putting interest rates up and down several times in the same day and then abruptly taking sterling out of the ERM after they had been telling us for so long that keeping it in the ERM was the only way to save it as an international currency. Major said that the government had been “overwhelmed by circumstances that neither Mr Lamont nor anybody else foresaw or could have dealt with”. This is hardly good enough since Lamont, when it suits him. claims to be able to foresee circumstances—famously he once told us all about noticing the "first green shoots of recovery" and he has by now pretty well exhausted his stock of metaphors in making the same claim. Nor is it good enough for Major to tell as that “what actually happened was an irrational market movement of a size we have not seen before" because the Tories won power in 1979 on a programme based on the assumption that the market is the rational force in society which, left to itself, will sort out all economic problems. In fact the Tories never seriously adopted that policy; the latest proof of this is their intention to intrude in the labour market by trying to hold pay rises in public sector employment below 1.5 percent.

Rainbow
On the matter of economic forecasts and a Chancellor’s ability to control events, Norman Lamont has recently revealed the true limits of his talents to some obviously sceptical journalists:

  What you seem to be asking me is “Why don’t I press some button and the world will change overnight and we will look up and see a rainbow in the sky". I’m afraid that it just isn’t like that and there aren’t these buttons to press.

Well rainbows make a nice change from green shoots as metaphorical portents of economic boom but the message is the same: the experts who say they can control capitalism can’t do it. If their luck is in and they are in office during a boom they may take the credit for it and so become famously popular. If things go the other way they have a rather different attitude; they don’t accept any blame but pass it on to unforeseeable difficulties, or the underhand machinations of foreigners or intractably greedy workers . . . One whose luck seemed to be in, and for a long time, was Nigel Lawson but even he has little cheer to offer Lamont. even he thinks now that Chancellors can’t make any promises:

  I misjudged the strength of the boom. The official forecasts were all over the place . . .  there was this enormous climate of optimism . . .  on the whole a good thing, much better than pessimism, much better than gloom. But again things went too far. (To Terry Coleman. Guardian, 7 November).

So Lamont is the Chancellor for whom the bad things have gone too far and Lawson was the Chancellor for whom the good things went too far. This makes sense only when we realize that capitalism makes impotent all the experts, the economists, the politicians. It works—as it worked in 1992—to its own laws and to satisfy its own needs regardless of what Chancellors do or plan to do, regardless of whether they see green shoots or rainbows or other mirages.

Royal misbehaviour
At times of crisis—if it is appropriate to use such a word about capitalism's never-ending upheavals—the system’s figureheads come into their own, reassuring everyone that, no matter what evidence is before their eyes, all is well. In Britain at such times the royal family are expected to be more prominent, to make even more meaningless speeches, to force their company onto even more distressed people. The message is that, no matter how severe their suffering as loyal, patriotic British workers they will pull through. At least that is the ideal. Our difficulty now is that unemployed people, struggling along on state benefit, are not taking too kindly to hearing this sort of cant from a woman whose personal wealth amounts to anything between £50 million and £6 billion. No-one is exactly sure about the true figure. And then there is the embarrassing fact that recently the royals have been neglecting a most important part of their job—setting an example to the rest of us in the lower orders of society.

As their marriages collapse one after the other under the spotlight of some triumphantly scurrilous press coverage, it is blindingly apparent that this family’s supposed position as guardians of the repressions of Christian marriage—which is bad enough as it is—is pure humbug. After all, the royals are paid a lot of money to do the job of telling the rest of us to be docile, unquestioning subjects of capitalism, by not being sexual adventurers, by not having unstable marriages and by not getting divorced. To some extent the royal conditions of employment can be breached and the media bludgeoned into ignoring it. But the 1990s' Windsors have simply overwhelmed the customary official concealment of their misbehaviour. So they have had a very bad press; even the fire at Windsor didn’t help, raising more inconvenient questions about the extent of royal wealth and how it contrasts to working class hardship. If 1992 was a horrible year for the Queen it was because so many of the delusions on which her position depends became under such intense and hostile questioning.

Poverty
It is ironic that so many of those delusions fester so powerfully among the class whose suffering should compel them to deal only in reality. Unlike Lamont's forecasts, one which is well on the way to being realized is Shelter's estimate in December 1991 that over the next five years more than a million families would become homeless. At that time Shelter said there were nearly 3,000 people sleeping rough and 55,300 households in temporary accommodation. By June 1992 the figure for Greater London alone was nearly 43,000 representing over 100,000 people—an increase of 12 percent over the year. Shelter's director recently described what this means:

  . . . families in bed and breakfast are forced to live in often overcrowded, usually depressing and sometimes downright dangerous hotels for anything up to two years. Imagine what it must be like to have no privacy, for your children to have nowhere to run and play, to have to share a bathroom with an average of 16 other people and a cooker with 21.

It is not just the homeless who are destitute. In 1989—the last year for which official figures are available—12 million people were living below a poverty line of half the average income; by now. as unemployment gets worse, that figure will be much higher. And what does this do to human relationships, so often fragile anyway in capitalist society? The NSPCC lists unemployment and family debt as key causes of child abuse; Relate, the marriage counselling service, calls it all “devastating". Especially poignant is the fact that unemployment is now hitting those areas in which one seemed relatively safe from it, while Tory MPs sat on Gibraltar-like majorities. Among the leafy towns of the South-East and the Home Counties a bitter lesson is being taught—that economic booms are not everlasting, that workers who experience a brief, relative prosperity do not do so through their own ingenuity but because capitalism is then operating in such a way as to allow it.

The hopes that 1992 was to be an Annus Mirabilis were based on misconceptions encouraged by deliberate deceit. It has turned out to be a typical year, in which a huge burden of misery and fear has fallen on an enormous number of people. For those who understand capitalism, as a year it came up to expectations. So what about the New Year? It could see the start of serious work for a society free of delusions—a society without classes and their representatives whether royal or political. We don't need aristocrats and political confidence tricksters to run the world; we can do it ourselves for ourselves. And. yes, we can do it now. In 1993.

Ivan

Caught In The Act: Breakdown (1989)

The Caught In The Act Column from the December 1989 issue of the Socialist Standard

Breakdown
When he was a Labour MP Leo Abse was one of the more —how shall we put it — colourful legislators in the — how do they put it — Most Exclusive Club in The World. He was recently shown that he can still make the news by writing a book which purports to give a psycho-analytical explanation for the style in which Margaret Thatcher runs the government of British capitalism.

According to Abse, if we are to understand Thatcher’s abrasive, overbearing and unyielding personality we must refer to her attitude towards her parents. She has fond memories of her father, a dourly religious grocer and council alderman in Grantham, which is reputed to be among the most boring towns in England. The late Alderman Roberts stood for the small shopkeeper's morality of Value for Money, Hard Work and Thrift, and Know Your Place and Keep To It. He had no ambitions to excite anyone; no Leo Abse was he. However he made a deep impression on Thatcher, who is liable to claim that she runs Britain like a corner shop where, if all goes well, we shall eventually be enjoying the finest English cheese, best butter and broken biscuits. In the meantime she has had a tendency to treat her ministers — Francis Pym, Geoffrey Howe, Douglas Hurd, Nigel Lawson — rather like indolent shop assistants or errand boys in a H.G. Wells novel.

Immaculate Conception
But Thatcher shows a different estimation of her mother, who is so pale a shadow in her life that it is almost as if she never existed. Amateur mind benders and shrinks — not to mention those humiliated ministers — may find some amusement in raking over Thatcher's hangups about her ancestry and, such is the situation today, they may like to consider another explanation. It has been obvious for some time that Thatcher thinks herself as a sort of queen. In the aftermath of Lawson's resignation she defended herself with a defiant quote from the Bible: “I am what I am", which could mean that she has risen above royalty into a deity. At this time of year we hear a lot about a child who was supposed to have been born a long time ago and who had a mother but no biological father; his mother was a virgin. The offspring of that unusual and inexplicable event was — so runs the myth — destined to save the world, although from what, how or when have never been made clear. Thatcher likes to behave as if she too is a saviour, at present of Britain and much of Europe but perhaps soon of the entire world. Perhaps the attempted elimination of her mother from her life springs from a desire to be the outcome of a twentieth-century immaculate conception, biologically even more difficult than the one in the Bible, as a prelude to her saving the world from her version of socialism, Neil Kinnock, state controlled industry and the European Monetary System.

That does not seem so far-fetched when we bear in mind other aspects of Thatcher's behaviour. She is known to detest holidays, to need hardly any sleep and recently dismissed the engineering workers' claim for a 35-hour week with the sneer that she often works that many hours over a two day period and then, if need be, does it again over the next two days. Her relaxation seems to be in harassing her ministers and intruding in the details of the work she has delegated to them; she needs to be prime minister, foreign secretary, chancellor of the exchequer and home secretary, as well as queen and god, combined in one frenzied, immaculately conceived person. So there is some restlessness now among the Tory faithful. Some questions about what was once unthinkable — is it the most promising way of assuring the Conservative Party of victory at the next election — which, in the view of all good Tories, amounts to the same thing?

Electric Treatment
The prime minister’s standing has not been improved by the news that she is kept going by taking electrified baths, a therapy administered by a woman in, of all places, Shepherds Bush. Her sycophants, so long buoyed up in arrogant strength, must be wondering what will be revealed next. Will it be furtive visits to a fortune teller, to map out the course of the economy over the next couple of years by spinning out playing cards? On reflection that may not be such a bad idea, for the fact that a “brilliant, brilliant" chancellor like Lawson is unable to prevent economic crises shows how chaotic capitalism is and how unwise it is to rely on the economists and the “experts”, in the Treasury or elsewhere.

And that may be an explanation for what a growing number of people are beginning to see as mental imbalance in the prime minister. Perhaps she really did convince herself that with a mixture of stubbornness. belligerence and browbeating she could personally reshape capitalism on some misconceived principles learned from a blinkered small shopkeeper. The frustration of failing against the inexorable chaos of this social system may have unhinged her, for failure does not become success by pouring ever more energy into the frustration.

Alcoholic Problem
Any anxiety about the nation's affairs being in the hands of an overwrought leader whose judgement becomes increasingly warped through a masochism of effort should be tempered by the fact that Thatcher is not the first politician to show symptoms of instability. There are many, many other examples but for the moment let us consider the late Lord George Brown, who was also famous for his energy and his unmanageable personality. As consolation for his defeat by Harold Wilson in the contest for the Labour leadership, Brown was later put in charge of the Department of Economic Affairs. He would have preferred to be prime minister but his new job was very important because it involved snatching the British economy from the stagnating grip of the Treasury soothsayers and placing it with the DEA, where the crystal balls were specially designed to block off all images other than those of expansion, growth and prosperity. With manic power Brown laboured to set up the new ministry which was to change the face of British capitalism. But the prophets of the DEA could no more do the impossible than could those at the Treasury and the whole idea was quietly abandoned soon after Brown had been reshuffled into Foreign Secretary.

Brown found some release from the frustrations of his job in an industrious consumption of alcohol (what fun Abse would have, musing on the possibilities of an oral fixation and the quest for a mother substitute in the bottle) and when in his cups he was liable to be, well, indiscreet. Apart from his persistent offences against the niceties of protocol at many a ruling class gala event, he was liable to surges of temper and sulks in which he would resign from office on the assumption that nobody would take any notice. But the day came (actually it was at night, when Labour ministers were in panic session, grappling with yet another financial crisis) when, as Wilson had foretold, one of these resignations stuck and Brown awoke to find himself not only hung over but a back bencher again. At which point he forgot his reputation as a right wing defender of all that is normal to capitalism’s property motivated operation and declared that the left had at fast found a leader. Apart from the embarrassment this caused to left wingers, nobody took him seriously and Brown set into decline, ending his days as a less-than-rapturously-welcomed recruit to the SDP.

Sanity?
Any discussion of the apparent madness of some politicians, whatever form it takes, is useful only in so far as it exposes the fact that the “sane" ones are no more effective. If the Labour Party succeed in their efforts to persuade large numbers of workers that the present crises of British capitalism are largely caused by Thatcher’s rampant character a valuable lesson will be missed. The two men who would probably be in charge of the Treasury and economic affairs if there is another Labour government — John Smith and Gordon Brown — have made it quite clear that they offer no policies which are in any significant way alternative to those of Lawson and Major. Another way of saying this is that Smith and Brown are admitting, even before they are in power over British capitalism, that they will fail to control this social system, just as the Tories have failed and as all governments must fail. As these are two "sane" leaders, it is abundantly clear that the only way out of the mess is to summon the electoral equivalent of the men in the white coats.

Ivan

Sting in the Tail: Recipe for Profit (1990)

The Sting in the Tail column from the May 1990 issue of the Socialist Standard

Recipe for Profit

Marks and Spencer, Britain's biggest retailer, have given 24,000 sales staff a whopping pay rise of 26%!

They already pay at least 30% more on average than other stores, so what lies behind this seeming capitalist generosity?

M & S pay more because this keeps staff turnover down to 20% yearly while the figure for other stores is around double that.

The reason for the 26% pay rise is that M & S must compete for staff with other employers in a situation where fewer school-leavers are coming onto the labour market. Sainbury's had just offered its junior staff rises of between 8.5 and 15% so M & S had to top that.

There is an old recipe for baking a rabbit pie which begins "First catch your rabbit". M & S know that before they can declare their usual big fat profit they must first catch their workers.


Theory v. Practice

"Competition good, monopoly bad", has been the constant refrain of this government.

They are all for competition because, they say, it promotes efficiency, gives consumers choice and keeps prices down while monopoly does the opposite.

Yet the government have been turning a blind eye to many takeovers which reduce competition. For example, British Airways' swallowing of British Caledonian and GEC's purchase of Ferranti's radar business.

The government has simply recognised that the likes of BA and GEC have to compete worldwide with rivals which are even bigger than they are, so they must increase market share by eliminating competition or risk being swallowed up themselves.

So competition may be the government's theory but the relentless trend towards monopoly is the practice.


Midlands Miracle

Ever-ready to supply its readers with spiritual insights The Independent has a Religious Affairs Correspondent and he has recently been reporting on miraculous events in the Midlands.

It would seem that there have been three reports of God's name appearing in Arabic inside aubergines!

  Tasleem Moulvi, of Kingnewton Street, Leicester, told The Independent yesterday that her mother found two significant aubergines on Friday night when she sliced them open after visiting another one, exposed in Bakewell Street. One, sliced twice, shows the Arabic characters for Allah repeated three times; the other, she said, appeared to contain a verse from the Koran, though this had not yet been deciphered.

Cynics may be tempted to think that it was merely a "sell by" date that had leaked through but Ms Moulvis has no such doubts.

  "It’s quite clear," she said. "You don't even have to have a magnifier. Everyone who has been round to see it and pay their respects has said it's a message that it's going to be the end of the world or whatever. It is a message to tell all the Muslims, and all the other faiths, that this is the true faith. No other religions have had this happen to them."

Well come on all you devout Christians in the Leicester area. Are you going to take this lying down? Get out there and search through the greengrocer's shelves. There is sure to be the odd banana or two that contains the Lord's Prayer or the Sermon on the Mount.


Speak Out, Nigel

When Nigel Lawson was the Chancellor of the Exchequer he was fond of attacking "inflationary wage rises".

Now that he has quit that role and is safely seated on the board at Barclays he can forget all that nonsense. Just as well really, for it would be embarrassing if he kept on espousing the myth that pay rises cause inflation.

You see, the Chairman of Barclays, Sir John Quinton's salary has jumped to £332,920 — an increase of 25%; and that of an unnamed highest-paid director to £470,283 — an increase of 47%!

We await with interest Mr. Lawson's next outburst on inflationary wage rises!


A Horror Story

In February this page dealt with the plight of Brazil's Yanomami Indians whose lands have been invaded, with government approval, by hordes of gold miners who spread death and disease.

Now the miners are in retreat but not because of new-found government compassion for the Indians. This is due to the collapse of the price of gold following the anti-inflation programme of Brazil's new government.

This fall in price — from 900 cruzeiros a gramme to 200 — means that "hundreds of thousands" of miners have been abandoned to their fate in the rain-forest.

The Guardian (31 March) reports that the flights which brought the miners' food, medicine and supplies have been cut from 130 a day to 20, and 50,000 miners, many suffering from malaria, hepatitis and hunger, are trying to reach safety by any means they can.

This episode at least proves that Brazil's government cannot now be accused of favouring the miners against the Indians: it regards them all with the same callous indifference.


Forthright Talk

Are you sick of politicians who lie, flannel and give "coded messages"? Then be grateful for Eric Forth, Industry Minister and ardent free-marketeer.

Forth told a CBI conference on Japanese investment in Britain:

Britain has one of the lowest labour costs in the European Community — one half of the costs in Germany and one third of the costs in France or Italy. Only Greece, Portugal and Spain are cheaper. The workforce is also skilled and flexible, since it is not limited by rigid labour laws.

The Guardian 1 March

So low wages and poor health and safety laws for workers are something to brag about, a tribute to Thatcher's "economic miracle" of the last 11 years!

We should hail Eric Forth as something unique — a politician who spoke the truth in plain language even if it was due more to sheer arrogance than honesty.


Too Much Nonsense

The spurt in inflation has got the "experts" airing their pet theories again. On TV recently, such economic gurus as Peter Jay and Sir Keith Joseph have blamed inflation on "too much money chasing too few goods". So competition between consumers for scarce goods is what causes prices to rise!

Anyone can test this absurd notion by walking into Dixons, Woolworths, Burtons etc., any day of the week. Will they see very few goods on display with harassed sales staff besieged by throngs of customers waving wads of money and clamouring to buy?

Of course not. What they will see is an abundance of goods with customers often outnumbered by sales staff; so the spectacle of "too much money chasing too few goods" simply doesn't exist and we can reveal to the likes of Peter Jay and Sir Keith Joseph that it is deliberate depreciation of the currency by governments which causes inflation.

Scorpion