Letter: Debt slaves or wage slaves? (2012)

Letter to the Editors from the October 2012 issue of the Socialist Standard

Debt slaves or wage slaves?

David Graeber replies to our review of his book on Debt in August’s issue

Dear editors:

You may be surprised to know I have read Capital, and am familiar with the concept of primitive/original accumulation. I might suggest it is the reviewer, rather, who might wish to expand his reading list, since he is evidently unfamiliar with that strain of the Marxian tradition that has most informed my analysis of such matters: the “autonomist” or “post-workerist” strain that runs through Tronti to Cleaver to the Midnight Notes collective, Federici, Caffentzis, and de Angelis (a very different one from the more familiar Negri strain). In that tradition, “primitive accumulation”  is not treated as a one-time thing that somehow teleologically prepared the way for capitalism, but rather as part of an ongoing process of the enclosure of different sorts of commons (and the creation of various forms of capitalist commons, like, currently, the US military) that has marked capitalism’s history from beginning to – hopefully its rapidly approaching – end. I actually cite my sources here in a footnote the reviewer seems to have missed. In fact he doesn’t seem to notice that my entire analysis of post-war economic cycles is based in this tradition.

What I was mainly trying to address in the section on capitalism is a question that to my knowledge no Marxist analysis has really been able to resolve: why, if capitalism is a system based on factories and free wage labor, did most of the financial institutions that we associate with it – stocks, bonds, futures trading, semi-private central banking systems, and so on – actually arise in the 17th century, long before either factories or (any significant amount of) free wage labor made an appearance. The whole idea of “merchant capitalism” which is supposed to characterize the period from roughly 1500 to 1750 (or even 1800 in most of Europe) has always been a puzzle. If capitalism is a system based on wage labor, then it wasn’t capitalism at all. But if so most bourgeois revolutions happened before capitalism had even appeared! If merchant capitalism is capitalism, then capitalism does not have to be based on wage labor, and certainly not free wage labor, at all. Claiming that merchant capitalism was capitalism because European elites were somehow trying to create a system that didn’t exist and there is no evidence they were even capable of imagining, seems absurd. The obvious answer is that capitalism is not in fact necessarily based on free wage labor contracts. Marx was, as I note in the book, effectively saying “well, let’s take a best case scenario, and imagine workers are in no sense constrained; I can show the system would still lead to impoverishment and self-destruction.” He wasn’t saying that the assumptions of the political economists were empirically true. He was just allowing them for the sake of argument. As I note many seem to have forgotten the “as if” quality of his analysis.

I find it genuinely odd that I get so many reviews that accuse me of ignorance of even the basic ABCs of Marxism, while at the same time, systematically ignore everything I actually say about Marx! Granted, the book is meant for a wide audience, and therefore avoids scholarly debates of all sorts, Marxist or otherwise. But it’s all there in the footnotes. And I do talk about Marx in the text.

As for the reviewer’s final claims that we are primarily wage slaves not debt peons: how does he know this? Because the secret to our 21st century situation lies in the correct interpretation of 19th century texts? That’s silly. Systems change. I mean, it might be true, but it’s a matter to be empirically established. A far larger percentage of Wall Street’s profits is now derived from the financial sector than from industry or commerce – that is, from the exploitation of wage laborers. Where does that profit really come from? It would be very interesting to know what percent of the average (say) American’s income is now directly expropriated by the FIRE [Finance, Insurance, Real Estate] sector, compared to what might be said to be extracted indirectly, through the wage. But the research simply hasn’t been done. Nor will it be if we can’t open up our minds a little and treat Marx’s legacy as a living tradition. It’s possible that the system is already starting to turn into something else. Or maybe it isn’t. Let’s figure it out rather than just shouting doctrine at one another.

 

Reply:

1. As capitalism continues, money-commodity relations are certainly spreading into yet further fields of human activity. However, whether this can be usefully seen as a continuation of the primitive accumulation of capital is another matter. Marx introduced the concept of original (generally translated as “primitive”) accumulation to answer the question of how and from where was the capital to launch the industrial revolution accumulated. Once started, as it had been by the end of the 18th century, capital accumulation became self-generating, out of the surplus value extracted from wage workers. This said, although capitalism in the form of the world market dominates the whole world, the capital/wage-labour relationship is by no means universal. It is still spreading (being spread by the state) in such places as China and India as peasants are driven off the land and obliged to work for wages in factories. So, in this respect, one of the features of Marx’s primitive accumulation is still continuing.

2. We can’t see how anyone can deny that central to Marx’s analysis of capitalism (“the capitalist mode of production”) is the capital/wage-labour relationship, whether or not they agree with this. But this is not the only feature of capitalism; it is also a market economy where goods are produced to be sold. In fact, capitalism can be defined as a system where all the elements of production, including in particular the human ability to work (labour power), are bought and sold, which only becomes general once the direct producers have been separated from the means of production, whether land or machines. This didn’t come about suddenly in one go; it developed over time. Historically, the world market – as an inter-national market – first came into being in the 16th century and then market relations spread internally within countries producing for it as there were put change the more they got involved in it. Those in control of political power in these countries faced a choice: either to try to resist the changes or to encourage them. The “European elites” were divided over the issue. Those in favour of change wanted to remove all the barriers to property ownership and production for the market inherited from feudalism. They were, or represented, the up-and-coming bourgeoisie. In the end, they got their way, especially after they won control of political power in the English Revolution in the 17th century and the American and French Revolutions in the 18th century. Whether or not they envisaged a system of production based on wage-labour eventually emerging, they were consciously aiming at the spread of market relations and of the concept of the individual free to enter into market relations with other individuals. See, for instance, C. P. Macpherson’s The Theory of Possessive Individualism, Karl Polyani’s The Great Transformation and John Gray’s more recent False Dawn. Adam Smith, the father of “Political Economy”, writing in 1776, held a labour theory of value and already recognised landless and machine-less wage workers as one of the three economic classes, alongside landowners and profit-seeking tenant farmers, involved in the market economy which it advocated should be extended.

3. Are we still “wage slaves” or are we becoming “debt peons”? This is the basic disagreement between David Graeber and us. A “debt peon” would be somebody forced to work to repay a debt, normally to their employer or landlord. This has existed historically under non-industrial conditions and still survives in some parts of the world though declining. Modern advocates of this view see people in the industrialised and urbanised parts of the world as being essentially in the same situation as they have to work to repay loans with interest to the banks who have lent them money. In other words, that they are being exploited by the banks and bankers. Is this an accurate, empirical analysis? We don’t think so.

For a start, even if you are in debt (and not everybody is, by any means) you are still obliged unless you are a rich investor (which most people aren’t) to work for a living by selling your ability to work for a wage or salary. This is still the basic situation for most people, including those in debt. The disposable income of those in debt may be reduced by having to repay a bank debt with interest, but the main source of that income is still wages.

David Graeber says that “a far larger percentage of Wall Street’s profits is now derived from the financial sector than from industry or commerce” and asks “where does that profit really come from?” Good question. It won’t be from the interest paid by workers on money they have borrowed. Some firms in the FIRE sector will be making a profit out of this, but most of the profits of this sector will have come from elsewhere. Since profits are a claim on wealth, and since wealth can only be produced by humans applying their physical and mental energies to materials that originally came from nature, this source can only be the labour of those working in the productive sector of the economy. In other words, out of the surplus value produced by wage-labour. (In fact even the interest paid by workers out of their wages will come out of their share of newly-produced wealth). So, the extraction of surplus value from productive wage-labour is still the basis of capitalism and the ultimate source of all profits. – Editors.

Voice From the Back: A Suicidal System (2012)

The Voice From the Back column from the October 2012 issue of the Socialist Standard

A Suicidal System
A growing number of global and European health bodies are warning that the introduction and intensification of austerity measures has led to a sharp rise in mental health problems with suicide rates, alcohol abuse and requests for anti-depressants increasing as people struggle with the psychological cost of living through a European-wide recession. “No one should be surprised that factors such as unemployment, debt and relationship breakdowns can cause bouts of mental illness and may push people who are already vulnerable to take their own lives,” Richard Colwill, of the British mental health charity Sane, told CNBC. “There does appear to be a connection between unemployment rates and suicide for example,” he said, referring to a recent study in the British Medical Journal that stated that more than 1,000 people in the U.K. may have killed themselves because of the impacts of the recession.” (CNBC, 4 September) Capitalism not only exploits and degrades members of the working class it can often lead them to suicide.


The Profit Motive In Action
It is now two years since  the horrific explosion that led to the deaths of 11 oil rig workers in the Gulf of Mexico and the largest oil spill in US history but it is still being fought over in US courts. “The Department of Justice filed a sharply worded brief with a court in New Orleans yesterday that accused BP of systematic management failures and a “corporate-driven, profit over safety” culture.” (Times, 6 September) There is a lot at stake in this legal battle. If the events of the oil spill are judged to be an accident BP could be fined £4.5 billion but if its employees are found guilty of gross negligence BP could be fined £21 billion, followed by almost unlimited punitive damages. Behind the niceties of the legal struggle one thing should be apparent though. Every company inside capitalism has a “corporate-driven, profit over safety” culture.


Double Standards
One of the constant themes pursued by the owning class is that workers should be proud of “their” country and if necessary from time to time take part in wars to protect it. However a recent example of this patriotism not necessarily extending to the owning class was recently revealed. France’s richest man Bernard Arnault (reputed to be worth £32 billion) has applied for Belgian citizenship. “He says the switch is for personal reasons. But few doubt that the ‘personal reasons’ amount to a desire to insulate his wealth from the punitive taxes being threatened by Francois Hollande, France’s new Socialist president. These taxes include a promised 75 per cent super-levy on annual incomes over 1 million euros.” (Times, 11 September) When it comes to protecting their immense wealth the owning class have little time for patriotism.


This Sporting Life
Sport according to most dictionaries is usually defined as “to amuse, recreate, to take one’s pleasure”, but we live in capitalism and it should probably be more accurately defined as a “business opportunity”. When Andy Murray, the tennis player won a tournament in New York the press and TV speculated on how much it was worth. “Scott Barclay, a lecturer in sport business and management at the University of the West of Scotland, predicted that Murray will enter the Forbes rich list next year and that the win moved him “away from the celebrity clutter”.  … “Without a doubt, next year he’ll appear in the Forbes rich list, among the likes of [Roger] Federer, [Maria] Sharapova, [Cristiano] Ronaldo, [Lionel] Messi, [Rafael] Nadal.” (Daily Telegraph, 12 September) Murray, 25, who already has lucrative contracts with Adidas, Royal Bank of Scotland and Jaguar, may also sign deals with other companies. His five-year contract with Adidas, signed three years ago, was worth as much as $5 million (£3.2 million), pushing his earnings last year both on and off the court to $12 million (£7.4 million), according to Forbes. Capitalism distorts everything and it should come as no surprise that a university has a subject entitled “Sport business and management”.


Upper Class Arrogance
Gina Rineheart, the Australian billionaire said to be worth A$29 bn. is not shy about boasting about her wealth. She is said to make nearly A$600 (£393) a second and blames Australian workers poverty on too much drinking and smoking. “Australian mining magnate Gina Rineheart has criticised her country’s economic performance and said Africans willing to work for $2 a day should be an inspiration.” (BBC News, 5 September) The news that a useless parasite such as Rineheart has an income of £393 a second should inspire workers throughout the world to get rid of the capitalist system.

Fractional Reserve Banking Refuted (2012)

From the October 2012 issue of the Socialist Standard

Since the financial crisis first erupted in the summer of 2007, there has been a renewed interest in what is now commonly called ‘fractional reserve banking’. This is mainly from those who contend that it is the root cause of the problems besetting the world economy. But is this idea really plausible? Both logic and the available evidence would indicate not.

Fractional reserve banking (the idea that the banking system can lend out vast multiples of what has been deposited with it) is not a new theory. It is also – and perhaps more accurately – sometimes called ‘credit creationism’ as it assumes banks can create almost endless amounts of credit from what has been deposited with them by savers. Ever since the MacMillan Report into Finance and Industry in the UK in 1931 gave it credence, variants of this theory have been taught to students in universities and colleges across much of the world.

In truth, there are two versions of the theory –the initial crude one, and a more sophisticated version which on some readings isn’t really credit creationism at all, even if it uses some of the same terminology. We will examine both versions, starting with the original, crude one.

Magic money?
This version of the theory was the one put forward in the MacMillan Report itself and is based on a simplified ‘one bank’ model of the banking system. The MacMillan Committee assumed that this bank would hold a cash reserve of 10 per cent of their deposits to meet any likely withdrawals from customers (today the cash reserve held by banks is a lot less, usually 2-3 per cent). Into this bank a customer places a deposit of £1,000 in cash. Operating with the 10 per cent cash reserve, the bank would then be able to lend out £900 to another customer which is withdrawn by cheque before being returned to the bank as a new deposit. So in this way the initial £1,000 had grown to £1,900 (the initial £1,000 cash plus the cheque that had been deposited for £900 from the loan granted). This is a process the MacMillan Committee argued could then be repeated nine more times assuming the 10 per cent cash reserve, with the bank therefore lending out £900 to each of ten customers in total. It would lead to a situation after all these transactions had been completed whereby £10,000 in deposits was balanced by £1,000 in cash plus £9,000 in loans owed by borrowers. So, as if by magic, an initial £1,000 deposit had become £10,000.

This type of credit creation theory has been put forward by many modern critics of capitalism (including Zeitgeist and some in and around the Occupy movement) who claim society is being enslaved by bankers and the ‘debt-money’they create. It is used to illustrate the view that banks have special powers to create wealth and that the banking system is inherently fraudulent and corrupt. This outlook also has its echoes on the political right, such as in the views of Representative Ron Paul in the US. Shorn of its overtly political implications, it gets an airing in some standard economics textbooks too. For instance, a typical textbook aimed at undergraduate university students like An Introduction to Modern Economics by Hardwick, Langmead and Khan describes a similar, crude credit creation process as if it were fact. Imagining a one-bank economy where the bank operates a 10 per cent cash reserve, with £10,000 in deposits and £1,000 of this in cash, they say:

  ‘suppose now a customer deposits an extra £2,000 in cash . . . Notice now that the ratio of cash to deposits is no longer 10%, but is now as high as 25% [i.e. £3,000 out of £12,000]. Given that the bank’s desired cash ratio is 10% and that the bank wishes to maximize its profits [by making  loans at interest], it will increase its total deposits to £30,000 so as to restore the desired ratio. The bank does this by granting new loans amounting to £18,000 . . . the cash deposit of £2,000 has led to an increase in loans and investments of £18,000 so that total deposits have risen by £20,000 –that is, by ten times the amount of the cash deposit’. (5th edition, pp.439-440).

In this way banks are allegedly able to magic up money they don’t really have, by either the stroke of a pen or push of a button.

Logic deficit

There are a number of reasons why this one-bank model of credit creation is flawed, both theoretically and empirically. The main ones are these:

• Just because a theory is explained or advocated in some economics textbook doesn’t mean it carries any weight. Economists famously cannot agree amongst themselves and economics isn’t called ‘the dismal science’ without reason. Conventional economics has consistently failed to explain all sorts of contemporary phenomena within the market economy (unemployment, recessions, inflation, etc) and there is no reason to suppose it has it right about banks and credit. Furthermore, as we shall see, most modern economics textbooks have moved away from the crude credit creationist views outlined above as they know they are intellectually indefensible. Why might this be so . . . ?
• The model assumes a certain cash reserve (10 per cent in the examples quoted, though a lower cash reserve makes the potential for banks to ‘create credit’ even greater). But is also assumes something else. It assumes that this cash reserve is never actually accessed by anyone in the entire series of transactions, and so is totally unrealistic. In other words, taking the example used by the MacMillan Committee, the initial £1,000 cash is completely untouched throughout. This is interesting, because if credit creation can multiply £1,000 into £10,000 at a stroke of a pen, the equal but opposite effect would come into play if anyone actually withdrew any cash! It would only need one of the borrowers to access their new deposit by demanding cash rather than a cheque to blow the model apart. So the model is not only unrealistic but logically flawed.
•  The model also confuses the apparent ‘creation’ of credit or money with what is merely standard double-entry book-keeping. If someone withdrew £10,000 from their bank and lent it to a business associate with an account at the same bank, the total amount of deposits held by the bank would be unaffected –£10,000 would merely go out of one account and into another. However, if the bank, when acting as an intermediary, did the same thing (i.e. the person concerned left the £10,000 on deposit and then the bank took £10,000 from its deposits to lend to the businessman) then in this instance the bank deposits and loans recorded by the bank would have increased by £10,000. Yet the only difference is that the bank has lent the same amount of money itself. Nothing else has materially altered and the bank hasn’t ‘created’ anything –the apparent difference is merely the product of the way balance-sheet records are kept.
• If banks really could create multiples of credit from a given deposit base then no bank would ever go bust. If a borrower failed to repay a loan, they could merely write this off and create more credit from their deposit base to make another one. Or, more directly still, the credit ‘created’ in this way could be used to buy additional assets. Lehman Brothers, Bear Stearns, Northern Rock, HBOS, Landsbanki and all the other banking disasters testify in a very practical way that this just doesn’t happen in the real world.
•  If banks could create vast multiples of credit from their deposit base in the way supposed, they would never have any financing issues and a need to seek any other sources of capital aside from the deposits they have from savers. Yet this is not the case. When Northern Rock imploded it had £113 billion of loans outstanding, but only £24 billion of this was backed by deposits i.e. less than a quarter. Did this mean the difference in these two figures was due to their ability to create credit over and above the £24 billion of deposits? No. The rest was financed from the money markets, where banks, building societies, companies, governments, local authorities and other organisations buy and sell short-term loans to finance their economic activities. When interest rates rose this put Northern Rock under pressure because the interest payments it was receiving on the loans and mortgages it had granted was barely covering what it had to pay in interest on the money markets to get the capital to lend out in the first place. And when the money markets started to seize up in late 2007, Northern Rock was doomed, having no more access to capital. Similarly, HBOS’s deposits covered only 44 per cent of the loans on its books before the crisis, the rest being financed from the money markets –and with most of this being short-term finance, it had a similarly disastrous result. Indeed, until the financial crisis broke the tendency within the banking sector had been for an ever greater proportion of banking capital to come from the money markets rather than deposits. This was because of a competitive drive to expand their capital so they could lend more and hence increase their revenue and profit. Until recent decades this was only ever done at the periphery of banking practice as to ‘borrow short’(via short-term loans on the money markets) while ‘lending long’(granting long-term loans and mortgages) was considered too risky.
• If banks really were able to increase purchasing power in the economy at the stroke of a pen or push of a button, there would be clear and observable consequences of this. For instance, many credit creation theorists have expected prices to rise alongside the expansion of bank credit, yet there is no observable correlation between the two. Prime Minister Margaret Thatcher gave up on this view in the mid 1980s when she realized the theory didn’t match the facts. Furthermore, while so-called ‘credit creationism’ is as old as banking itself, persistently rising prices (that have been left unchecked) have only been an economic phenomenon since the Second World War.
•  If banks were able to flood the markets with credit it would, other things being equal, drive interest rates down, and this is the opposite of what banks want to happen. If this phenomenon were a reality, banks would be caught in a ‘Catch 22’ situation where near endless credit creation would push interest rates down towards zero. But the rates banks charge have invariably been very healthy (for them), even during the crisis.
•  If banks can create vast multiples of credit from the savings that have been deposited with them, then so could other financial intermediaries. Building societies and even credit unions could do it, as the same principles would apply.  But nobody seriously suggests they can –if a credit union lent out more than had been deposited with it, it would go bankrupt (as, in reality, would a bank, the only difference being that a bank can also normally access the money markets for capital).
• The bankers themselves have explicitly stated that they cannot magically create credit in the way the theory supposes. For instance, Walter Leaf , Chairman of the Westminster Bank in the years leading up to the publication of the MacMillan Report was one of many who said so explicitly:    ‘The banks can lend no more than they can borrow –in fact not nearly so much. If anyone in the deposit banking system can be called a ‘creator of credit’ it is the depositors; for the banks are strictly limited in their lending operations by the amount which the depositors think fit to leave with them’. (Banking, 1926, p.102)

Indeed, many of the signatories of the MacMillan Report in 1931 (mainly the bankers and economists) later repudiated the theory they helped popularize. These included Reginald McKenna, Chairman of the Midland Bank, and most significantly of all John Maynard Keynes, who was the main author of the Report. In his seminal General Theory in 1936 Keynes stated:

  ‘The notion that the creation of credit by the banking system allows investment to take place to which ‘no genuine saving’ corresponds can only be the result of isolating one of the consequences of the increased bank-credit to the exclusion of others’(p.82)

In recent years the 2011 Vickers Report (the Independent Commission on Banking) has explicitly stated that banks are ‘financial intermediaries’that ‘bring together savers and borrowers’, without giving any indication that banks can create vast quantities of credit out of what is deposited with them.

• Many who are critical of capitalism as an economic system take inspiration from Marx’s ideas and his analysis of the market economy, but Marx took the view that banks are financial intermediaries between savers and borrowers who don’t create purchasing power: ‘A bank represents on the one hand the centralization of money capital, of the lenders, and on the other hand the centralization of the borrowers. It makes its profit in general by borrowing at lower rates than those at which it lends’(Capital, Volume 3, p. 528). For Marx, wealth and purchasing power arise through production, not the sphere of circulation and exchange. Banking profit does not, in Marx’s view, arise mystically out of financial conjuring, but as a portion of the surplus value created when the working class of wage and salary earners is exploited. This surplus value is then turned into industrial profit, ground rent, and banking interest.

In the light of all these arguments and the empirical evidence, it seems reasonable to conclude that the crude credit creationist viewpoint has little if anything going for it.

Second theory
A recognition of this has led to the popularization of the second, and more sophisticated, version of the theory. This is the version that argues that even if the one-bank model of credit creation isn’t plausible, the banking system when considered as a whole can effectively do the same thing. This was the view for years elaborated in standard economics textbooks by the well-known American academic Paul Samuelson and is perhaps the version that is most common today.

Samuelson dismissed the argument that an individual bank could lend more than had been deposited with it as ‘false’ and went on:

  ‘According to these false explanations, the managers of an ordinary bank are able, by some use of their fountain pens, to lend several dollars for each dollar deposited with them. No wonder practical bankers see red when such power is attributed to them. They only wish they could do so. As every banker knows, he cannot invest money that he does not have; and money that he invests in buying a security or making a loan soon leaves his bank.’ (Economics, 5th edition, 1961, p.331)

The argument he put forward is that when someone deposits £1,000 into a bank when there is a 10 per cent cash reserve ratio, the bank keeps £100 cash and lends out the other £900. This will then be spent by the borrower and will find its way back into the banking system more widely, which will then keep £90 of the £900 as a cash reserve and lend out the remaining £810, and so on.  Eventually, after these deposit and loan circuits have been completed, this leads to a situation whereby the initial £1,000 deposit in a particular bank has multiplied to £10,000 across the banking system as a whole.

Although it is an obvious oversimplification, in some respects this theory is sound. The key issue though is that it is not an example of ‘credit creation’at all. All this theory demonstrates is that money circulates and that for every loan that has been created, a deposit (that is greater than the subsequent loan) has also been made. In some ways it is little different to the concept underpinning the circulation of a bank note, whereby a £20 note can be used many times over a given period to facilitate transactions that, when aggregated, are many times the face value of the individual note.

No special powers
Given this, socialists say that ‘fractional reserve banking’ or ‘credit creation’ are myths. The crude version of the theory is illogical and at variance with any serious knowledge of banking practice, while the watered-down version most commonly found in modern economics textbooks isn’t really a credit-creation theory at all and proves nothing beyond the accepted fact that accepted means of payment circulate within the economy. In reality, banks can only lend out what they have received in deposits (or borrowed on the money markets), making their profits by levying higher interest rates on the loans they grant than they pay depositors (or pay to the money markets).

There really is no mystery to this, and the idea that banks have special powers and can hold the rest of society to ransom is consequently unfounded and movements for banking reform misplaced. The real problem in society stems not from what banks do specifically, but from the way society is organized as a whole. In particular, from the fact that the vast majority of people do not own and control the planet’s resources and have to work at the behest of those who do –some of whom are indeed bankers . . . but most of whom are not.

Dave Perrin

Letter: Billy Bragg (2012)

Letter to the Editors from the October 2012 issue of the Socialist Standard

Billy Bragg

Dear Editors,

I greatly enjoyed the article on Billy Bragg in the September Socialist Standard. By anyone’s standards, Billy is a great songwriter (if not a great singer!), but it is true to say that he has always been much clearer about what he is “against” than what he is “for.”

Being of a certain age, I was greatly enamoured of much of the post-punk scene of the early ’80s, of which the Gang of Four (also mentioned in the article) were a part. I’m not sure if they quite merit the label “Marxist”, though, at least not as we would understand it. Also, although they certainly had their moments, their po-faced brand of “feminism” could be a little tiresome, if not patronising – when the previously all-male band appointed a female bass-player they then announced to the world that they were now “one woman and three token men!”

Post-punk had pretty much run its course by the time of the miners’ strike, but the article did recall to mind a time when the Radio 1 playlist was occasionally troubled by SWP agit-poppers the Redskins (yes, really!), and also possibly one of the most subversive hit singles ever, the Style Council’s “Walls Come Tumbling Down.” From its initial scream of “You don’t have to take this crap” to it’s breathy female chorus of “Governments crack and systems fall/ ‘Cos unity is powerful”, Bragg’s fellow Red Wedgers brought something close to a genuine socialist message into the Top 10.

Those were the days!

Shane Roberts, 

Bristol.

The Miracle of the Loaves and the Fishes (2012)

A Short Story from the October 2012 issue of the Socialist Standard

Socialists are not above resorting to any source in support of an argument – including the Bible

V17. And it came to pass at the sixth hour, when Jesus had spoken at length of the Edomites, and the Ephraimites, and the Hasmonites, and the Plasmonites, and the Sonderbites, and the Summenites, and the Malachites, and the Ammonites, and the Bakelites, and of many other wondrous things, that a question arose among the faithful: “Lord, what are we going to have for our tea?”

V18. The Lord replied thus: “Bring unto me your loaves and your fishes for safekeeping, that a repast may be prepared wherein all may share even unto the lowest of the flock.” And the people did so, rendering to Him all that was in their possession and sparing nothing unto themselves. And the Lord looked down upon the host of bread they had collected, which numbered not more than five loaves, and the fishes, which were in number but two, and He spoke in wonder saying “That’s not much is it?”

V19. Then He did address the gathering, bidding them form an orderly assembly. Thereupon turning first to one Jacob the Canaanite, who was at the head of the queue, He spake thus: “Take thee freely of my bread and my fishes, as though they were my very flesh,  that thou may eat and be content, O Jacob of Canaan.” And Jacob said “Thanks a lot, Lord.”

V20. But as Jacob knelt to take up a portion whereof to dine, Jesus held aloft his arm saying “But wait, O Jacob, for see ye not that  the sun is yet high, and that the hour of tea is not yet upon us? Wilt thou not tarry a while, that we may all partake communally as one people in God’s mercy?” And Jacob said “Alright, Lord, I will. If you say so.” Then Jesus said: “And wilt thou not also vouchsafe to me thy portion for keeping until the appointed hour? For I see by thy simple robe that thou hast no folds wherein it may dwell, whereas mine comes with pockets.” And Jacob replied, saying: “Hollowed be thy pockets, Lord. I shall place my faith and dinner therein.”

V21. Then did Jesus approach the next one in line, one Ezekiel of Zin, and first he did give him of the loaves and the fishes whereof he had heretofore been furnished, and that he had just lent, and that he had then embraced once again back into his keeping. Then did he also address Ezekiel in these words, saying “O Ezekiel, mark you that it is not yet of the dinner hour, and yet I perceive that you are also lacking pockets. Therefore surrender unto me for safekeeping that which I bestow upon you, and I’ll look after it for you as I did with Jacob.”

V22. And Ezekiel did. And thus did Mary of Edom also follow the same wise counsel, and Rachel of Modom, and Simeon of Simeon, and Gladius of Nubia, and Chief Running Deer of the far shores, until the whole multitude had done likewise.

V23. And Jesus spake to the multitude saying “Lo, this is a device I learned from the moneylenders at the temple, wherein by ineffable means known only to God the Father, loaves and fishes are created from the very air.

V24. “And I have this day performed this miracle before your very eyes. For yea, though my starting capital was but slender, have not each one of you received loaves and fishes by my hand, though ye be a great multitude?”

V25. And the people fell down in wonder, though they be sore famished by this time, and agreed that it was a miracle. Then on further consideration did they press upon the Lord to receive back what they had loaned on deposit, so that they may truly eat, thus creating an Almighty squeeze. But Jesus withdrew and implored them to desist, saying “Lord, forgive them, for they know not how finance works”. Then were fists raised in ire, and the first credit crunch smote the Lord upon the eye, followed by several others, for verily did the multitude twig that they had been diddled.

V26. At the eleventh hour under cover of darkness, and most belaboured upon the body by the faithful, did Jesus hasten back to the temple moneylenders, and there did He kick over their tables in full wroth, saying “Don’t even think you’re getting a bonus.”

Pater Patricius

The Guardian: Haven for Cranks (2012)

From the October 2012 issue of the Socialist Standard

One way in which the notion that banks can create credit out of thin air has got into circulation has been through the Guardian.

“Money from thin air” was the heading of an article by James Robertson published in 20 March 2008 in which he claimed that

  “commercial banks are allowed to create almost all the money we use. They create it out of thin air and put it into circulation in the form of profit-making loans. They credit those to their customers’ accounts by a simple accounting procedure, and their customers spend the money into circulation.”

That banks give loans cannot be denied –that’s one of their functions –nor that those given a loan spend the money. That’s not the point at issue, which is: Do the banks create this money out of thin air by a simple accounting procedure? Or are they transferring previously existing purchasing power? In other words, are they creating purchasing power that did not exist before? In asserting that they do, Robertson has some other questions to answer. Why do banks compete with each other to attract people’s savings (i.e., money people don’t want to spend for the time being)? What is the difference between a bank and a moneylender? Do moneylenders, pawnbrokers and loan sharks also create money out of thin air when they make a loan? If not, why not?

In an article by Richard Werner and Green Party MP (and then Party Leader) Caroline Lucas on 12 February this year the two asserted that:

  “banks simply pretend that borrowers have deposited the money they lend them, and thus create it out of nothing, when they credit their deposit accounts, adding to the money supply.”

When they make a loan, banks generally do open an account for the borrower to which the amount of the loan is credited, but it does not follow that this has been created “out of nothing”. In fact, it has to come from what the bank has, either from outside depositors or from what they themselves borrow. Banks are essentially financial intermediaries which borrow money (depositing money in a bank is in effect lending it the money) from savers and lend it to investors (those who want money for some project). Their income comes from the rate of interest (if any) they pay those who lend them the money and the higher rate they charge those who borrow it from them. Bank profits are what is left after their expenses (buildings, computers, staff costs, etc) have been paid out of this income.

In the build-up to the present crisis, according to an article to an article by Deborah Orr (14 July):

  “The big international banks manufactured money, using very simple raw materials. All they needed were computers and borrowers. Every time they made a loan, the banks simply typed the amount they were lending into their computer system, transferred it to their victim’s account, and charged interest for the privilege.”

The fact that she herself described this as “the closest thing to alchemy that humanity ever contrived” ought to have alerted her that there was something wrong with this account.

If the banks she referred to only needed computers and borrowers, how come some of them got into serious difficulty when the rate of interest at which they had been borrowing money on a short-term basis rose, squeezing their income since they were unable to raise the rate they charged borrowers? Clearly, they did need the money to lend as well as their computers.

Orr went on to give her support to a bank reform under which banks would be “lending from their capital, not ‘lending’ money they had conjured up from thin air of cyberspace.” She didn’t seem to realise that this is what banks already do today.

Only a woolly-minded reader of the Guardian would believe the tosh that banks can conjure up the money they lend from “the thin air of cyberspace."

Adam Buick

The Banking System (2012)

From the October 2012 issue of the Socialist Standard

The origin of the banking system was the practice of depositing money for safe keeping with the goldsmiths and paying them for this service. The goldsmiths subsequently adopted the practice of paying interest to the depositor, and they re-lent the money at a higher rate of interest to a borrower. This was only an indirect way of the depositor himself lending his money at interest to the borrower. Whether the goldsmith acted as intermediary or whether the lending was done directly the general effect was the same, i.e., the owner of the money (representing a command over goods) was lending it to a borrower, who would thus, for a specified time, have at his disposal the means of buying goods. It was not an act of “creating” goods or values, but only of lending them, the banks being intermediaries between lenders and borrowers.

Fundamentally, the same process underlies the modern banking and credit system. People who deposit cash and cheques in the banks are, in effect, placing at the disposal of the banks a command over goods, expressed as a certain sum of money. The banks pay to the depositor a fluctuating rate of interest on most of the deposits, and place the deposits at the disposal of other persons and companies who wish to borrow. Again, it is, in effect, a process of transferring the command over goods from the saving section to the borrowing section. As the banks need security for their loans to industry the borrower in fact (or in effect) pledges his factory, his stock-in-trade, etc. The bank is just like a pawnbroker, except that the bank largely works on borrowed money. The banks are intermediaries between one set of property owners and another set. The borrowers pay interest to the banks, who pay a smaller or no interest to the lenders. The whole of the interest comes ultimately out of the productive process.

(Socialist Standard, May 1933)

Fabrications (2012)

From the October 2012 issue of the Socialist Standard

Some of the quotes used by credit creationists to support their view are not genuine but have been fabricated at some point by some dishonest currency crank and then naively accepted and spread by others. Two in particular are all over the internet. One is from Josiah Stamp, who was a director of the Bank of England from 1928 till his death in 1940, the other from Reginald McKenna, who was Chancellor of the Exchequer from 1915-1916 and chairman of Midland Bank (now HSBC) from 1919 till his death in 1943. We present the evidence that these quotes are fakes.

Josiah Stamp

  “Banking was conceived in iniquity and was born in sin. The Bankers own the Earth. Take it away from them, but leave them the power to create deposits, and with the flick of a pen they will create enough deposits to buy it back again. However, take it away from them, and all the fortunes like mine will disappear, and they ought to disappear, for this world would be a happier and better world to live in. But if you wish to remain slaves of the Bankers and pay for the cost of your own slavery, let them continue to create deposits.” Sir Josiah Stamp, President of the Bank of England in the 1920s, the second richest man in Britain.” (LINK)

In his book Debt, The First 5000 Years David Graeber says (p. 344) that “it seems extremely unlikely that Lord Stamp ever really said this, but the passage has been cited endlessly—in fact, it’s probably the single most often-quoted passage by critics of the modern banking system,” In a footnote (pp. 448-9) he goes into more detail: “Said to have been given at a talk at the University of Texas in 1927, but in fact, while the passage is endlessly cited in recent books and especially on the internet, it cannot be attested to before roughly 1975. The first two lines appear to actually derive from a British investment advisor named L.L.B. Angas in 1937: ‘The modern Banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented. Banks can in fact inflate, mint and unmint the modern ledger-entry currency’ (Angas, Slump Ahead in Bonds, New York, 1937: 20-21). The other parts of the quote are probably later inventions—and Lord Stamp never suggested anything like this in his published writings.”

Reginald McKenna

  “I am afraid the ordinary citizen will not like to be told that the banks can and do create money. And they who control the credit of the nation direct the policy of Governments and hold in the hollow of their hand the destiny of the people.” Reginald McKenna, as Chairman of the Midland Bank, addressing stockholders in 1924. (same source)

The first sentence is from McKenna’s report to Midland Bank shareholders but in 1925, not 1924. It can be found in Postwar Banking Policy, a collection of his reports to the Annual Meeting of Midland Bank shareholders between 1921 and 1928, published in 1928. The last sentence does not appear anywhere in the book. So, where did it come from?

The earliest reference to it on the internet seems to be a facsimile of a page from an Australian newspaper reporting a speech by Alexander Amess who was standing on a Social Credit ticket in the Australian Federal elections of September 1940. He is reported as quoting the passage and saying that McKenna said it in 1937 (see http://trove.nla.gov.au/ndp/del/article/75036747). This identifies the currency crank group that fabricated the quote and indicates the probable time it was done. If someone was prepared to plough through Social Credit literature of the time no doubt they would find the original source.

Another indication that the passage is a fabrication is that in a lecture on ‘Banking’ he gave on 11 December 1927, McKenna expressed the opposite view: that the government controlled what banks could do, not the other way round. He spoke of ….“the total volume of money, the ultimate control of which lay with the central bank of issue, not with the ordinary trading banks”and went on to say that “the Bank of England was, in fact, controlled by the Treasury, which was, in fact, controlled by the House of Commons as representative of the people of this country.”

Although he advanced the controversial view that banks “create”money, he did not think that they did so out of thin air. The accurate version of what he told Midland Bank shareholders in 1925 (not 1924) is:

  “I am afraid the ordinary citizen will not like to be told that the banks and the Bank of England can create or destroy money. We are in the habit of thinking of money as wealth, as indeed it is in the hands of the individual who owns it, wealth in the most liquid form, and we don’t like to hear that some private institution can create it at pleasure. It conjures up a picture of an autocratic and irresponsible body which by some black art of its own contriving can increase or diminish wealth, and presumably make a great deal of profit in the process. But I need hardly say nothing of the sort happens.”

Money Bugs (2012)

From the October 2012 issue of the Socialist Standard

William Jennings Bryan was what we call today a “money bug.” He believed that a certain change in the monetary system would be enough to bring prosperity to the vast majority and, at least, security to all. But, since money is merely a measure of value, we know full well that a mere change in its form would not add more value to that which it measures, any more than the shortening or lengthening of a yardstick would add length or quality to the cloth it measures.

This is the stumbling block of the majority of money reformers; they believe that a change in the measuring of value, a change in the money system, will bring about an alteration in the wealth it measures and changes in the possession of wealth.

…[N]o mere change in the means of measuring or medium of exchanging values will create new values or cause existing values to circulate more freely.

(John Keracher, Economics for Beginners, 1935 )

After Iraq, Iran? (2012)

From the October 2012 issue of the Socialist Standard

CND is deluding itself if it thinks that a capitalism free from nuclear weapons is possible.

CND are in support of a Nuclear Weapons-Free Middle East and the future UN conference on this matter. On 13 October they will be holding a special International Conference – ‘Building towards a Nuclear Weapons-Free Middle East: Civil Society input for a new Helsinki Process’. At which Professor Abbas Edalat of the Campaign Against Sanctions and Military Intervention in Iran (CASMII) has been invited.

Professor Edalat was the main speaker at a CND  public meeting at Conway Hall in Central London in July on the question; ‘Iran – Why is the West preparing it’s public for a new war in the Middle East?’ His organisation, CASMII, is said to support the Iranian Reform Movement which was in power in Tehran 1997-2005 and has a bourgeois ‘middle class’ base. But where do Professor Edalat and CND stand in relation to capitalism and war?

Edalat began with the quote “the road to Tehran goes via Baghdad” which is that regime change is the goal of the West, that oil resources are the reason but the pretext is that Iran’s nuclear programme is a threat. He identified the USA and Israel as the real threat in the region. It appears Edalat understands that wars in capitalism are about competition over sources of energy. Even capitalist economist Keynes recognised that “the competitive struggle for markets” was the major factor in “the economic causes of war”.

Edalat spoke of the economic sanctions against Iran which he said hit the “pro-western middle classes” whereas the “poor and lower classes” are looked after by handouts and subsidies from the state. It is understandable that the leftist exile group Hands Off the People of Iran criticise CASMII for being opposed to the interests of “workers, progressives and democrats”. It is interesting that Hands Off were excluded from the Stop the War Coalition, and that Stop the War have adopted CASMII’s resolution on Iran.lat pointed out that Iran’s breach of the Non-Proliferation Treaty was “minor” in that it was a failure to disclose a single receipt of low emission uranium purchased from China. He concluded that military intervention in Iran would mean that the Iranian people would lose out, there would be an oil price rise, disastrous effects for the world economy, and that there was an urgent need to debunk the western media discourse about Iran.

CND are developing a campaign against the threat of war against Iran. CND opposed UK involvement in the nuclear-armed NATO wars of ‘liberal interventionism’ such as Yugoslavia, Afghanistan, Iraq, and Libya. This attitude raises the question: do CND support some wars within capitalism? What about UK intervention in the civil war in Sierra Leone? Kate Hudson at CND identifies that US intervention in the Middle East is a “brazen pursuit of national interests”. In fact these are western capitalist interests.

Can international co-operation take place within capitalism? The 1946 Baruch Plan initiated by the US for all nuclear fuel production to be under the control of an international agency was not realised because of USSR opposition. CND have identified that the “preventative military intervention” against Iran for not meeting NPT obligations is a smokescreen for US desires for regime change in Iran. They see the parallels with the build-up to the Iraq War. Kate Hudson at CND believes that “concerted, transparent and productive diplomatic negotiations” will lead to a solution. Within capitalism this really seems quite unlikely. Western capitalist interests want regime change in Iran in order to open the country up to free market capitalism. Edalat would like a liberal bourgeois capitalist Iran in the western mould.

In the pursuit of the interests of the capitalist class, the state will in Brecht’s note to Mother Courage, “make war as a continuation of business by other means” which is a variation on Clausewitz’s “War is the continuation of politics by other means”. Interestingly Sun Tzu 6th century BC book The Art of War is used today in western capitalism as a handbook for corporate strategy in achieving profits.

War existed in the class societies before capitalism where they were caused by absolute shortages and scarcities. In capitalism there are artificial scarcities, and overproduction which cause competitive accumulation and leads to war. War in capitalism is an inevitable result of the quest for profit and competition between capitalist interests for markets, raw materials, energy supplies, trade routes, and exploitable peoples. The cause of wars in the Middle East has been the oil-importing countries’ need to have dependable oil supplies.

Recently the International Campaign to Abolish Nuclear Weapons (ICAN) published a study which shows the link between capitalism and war by identifying 322 banks and financial institutions that are funding nuclear weapons development and manufacture such as Barclays, Lloyd’s, HSBC, and RBS.

CND, Stop the War, ICAN, and CASMII do not identify capitalism as the cause of war but believe certain types of wars and weapons should be opposed and that reforms to capitalism by abolishing nuclear weapons will make the world a nicer place in which to do business and make profits. It is ironic that CND used footage from the film The War Game in its recruitment campaign when the footage was of the Allied ‘conventional’ bombing of Dresden which was more destructive in terms of fatalities than the atom bomb at Nagasaki.

All wars in capitalism are in the interests of the capitalist class and the working class are the victims and cannon fodder of capitalist war. The abolition of global capitalism and the transformation to world socialism will remove the causes of war.

Steve Clayton

Che and Violence (2012)

Theatre Review from the October 2012 issue of the Socialist Standard

Dirty Market are a theatre collective based in South-east London who have adopted bricolage techniques for their productions, and their most recent Be Good Revolutionaries took place at the Oval House Theatre in Kennington, London. The sources for Be Good Revolutionaries are the last letter of Che Guevara to his children, Crime on Goat Island by Ugo Betti, and  Brecht’s Mother Courage and Her Children.

Be Good Revolutionaries is set in the claustrophobic world of a jungle hideaway in Latin America in 1967 where a rebel leader's wife Anna (a formidable performance by Juliet Prague), and her two daughters and one son live. Into this world comes a stranger who appears to know the long-lost leader. The stranger is a ‘Martin Guerre’ character who intrudes like in the Betti novel, but his presence is disastrous like in a Roman Polanski film.

Be Good Revolutionaries is reminiscent of Brecht’s Mother Courage where the devastating effects of war are portrayed, and Brecht points out the utter blindness and futility of those hoping to profit by it. Dirty Market have adopted Brechtian techniques for this production, demonstrating the ‘estrangement’ effect by using singing and music to interrupt or comment on the action. This is memorably performed by musician-singer Rebecca Thorn.

The production is noteworthy for the design by Susan Sowerby of the Mexican ‘los dias de los muertos’ artwork, ‘ofrenda’ shrines, skeletons and ‘calavera catrinas’ which give the performance the necessary ‘latin’ American ambience. This is augmented by the choreographed movements of the children, a soundtrack of flutes, Rebecca Thorn’s accordion, gunfire and helicopter rotors which bring to mind Coppola’s Apocalypse Now and Christopher Bruce’s modern ballet Ghost Dances which featured the Chilean folk of Inti Illimani. Be Good Revolutionaries is evocative of the music of songs like the Cuban ‘Guantanamera’ and Victor Jara’s Chilean anthem ‘Venceremos’.

Che Guevara’s last letter to his children contained fatherly advice in the shape of “Grow up into good revolutionaries”, “Remember that it is the Revolution which is important” and a reminder that he was “a man who acted as he thought best and who has been absolutely faithful to his convictions”. Since the 1960’s, the famous Che image has been thoroughly ‘marketed’ and exploited by western capitalism. Che was captured and executed in 1967 in Bolivia where he was attempting to export the Cuban revolution, and conduct a Maoist “protracted peoples war”. This play includes the line “People have to die for change” and a glorification of “revolution”. Such romanticising of violent insurrection, and armed struggle is fundamental to Trotskyists and Leninists but all minority violent revolutions devour their own children.

Although Cuba is very popular with the Left, it is a one-party state, there are political prisoners, no freedom of the press,  no right to strike, price controls, goods rationing, a constitution based on the USSR,  a planned economy in the USSR ‘state capitalist’ mode, and essentially there  is ‘commodity nature of production’, and therefore is not a socialist society.

Steve Clayton

Greasy Pole: Who Wants To Pick This Bone? (2012)

The Greasy Pole column from the October 2012 issue of the Socialist Standard

Grateful as we are to our guardians in Westminster who labour mightily to protect and nurture us we should not overlook that they also have human needs. Like a flexibly regulated system of claiming for incurred expenses. Like meeting the demands of flamboyant media producers to expose themselves to the nation’s reverential scrutiny. Like their need to relax the tensions of relentlessly legislating by giving way to laughter in the Chamber where their talents are displayed- laughter as a kind of therapy for them, side to side erupting in a booming, orgasmic release. Luckily there are in that august setting some who have a reputation for their skills in stimulating such pleasure. When any of these rise to their feet with the words “Thank you, Mister Speaker” they are not expressing gratitude for the opportunity to mouth yet another gabble of platitudes and evasions but are giving notice of the release to follow from their words. This is considered to be a useful, constructive way for Members of Parliament to spend their time.

Pleasing the Wife

The constituency of Wellingborough, Rushden and Higham Ferrers in Northamptonshire is represented in the House of Commons by the Conservative Peter Bone, who can be relied on to entertain the Commons in the style to which they are accustomed by opening his contributions to their proceedings with mention of his wife: “This morning at the breakfast table Mrs. Bone was saying . . .” or perhaps “It would be a great help to my wife and the Bone household if . . .” Mysteriously, this reduces the MPs to frantic laughter, as Bone asks David Cameron to rule out any more contributions to a Eurozone bail-out or to agree that it is necessary to maintain the laws against blasphemy and blasphemous libel or to denounce gay marriage as “completely nuts” (a particular preoccupation of his; last month he strongly objected to Nick Clegg naming those with such views as “bigots”). Amid the hilarity David Cameron, perhaps wriggling on the hook in Prime Minister’s Questions, is able to get his share of laughter by a smoothly suggestive reply: “A very big part of my life is spent trying to give pleasure to Mrs. Bone” or “I wish my wife was easy to please as Mrs. Bone”.

From behind this screen of sickening drivel it may be difficult for Mrs. Bone to get herself noticed. She works as Mr. Bone’s Executive Secretary (at a top-end £40,000 a year) in which she rates herself “a one-woman focus group” who “listens to people on the ground” (which seems to include only those who agree with her). Mrs. Bone has political ambitions of her own, which were disappointed when her application to stand as the Conservative candidate for election as the local Police Commissioner was rejected on the emphatic terms that she “did not display a sufficiently developed understanding of what the job would entail and did not have a sufficiently clear vision of what she might do if elected” (requirements which might rule out her husband as well as a whole clutch of MPs). But the disappointed candidate was not put off; this, she sulked, was “bully-boy behaviour . . .  the party grandees wanted to get at Peter through me”. It might have been expected that the next step for her would be to resign from this collection of bullying exponents of the tactical underhand were it not that capitalist politics, with its competing ambitions and need to deny reality, does not operate with such consistent honesty.

Speeches

And “consistent” Is not a word to be readily associated with this pair of wedded Tories.  Peter Bone’s first experience of trying to be an MP was encouraging for him when, standing in Islwyn against the hapless Labour leader Neil Kinnock, he recorded the highest ever Tory vote there. However he did not come up to this promise in subsequent elections in Pudsey and Wellingborough because he lost to swings notably worse, for his party, than the national trend. In fact when, in 2005, he eventually won at Wellingborough it was by 687 votes – a swing of only 2.9 per cent when the national swing was 3.1 per cent. Perhaps there was a message in this about him personally and his voter- averse style (in 1995 the Daily Mirror condemned him as “the meanest boss in Britain” in response to him paying a 17 year-old trainee 87 pence an hour). In action in the Commons, he was rated as a prolific speaker but in case this gave the wrong impression he was one of three who, according to The Times, “boost their ratings on the internet by saying very little, very often” with an example of one contribution of only three short sentences which was about the postmaster of the tiny Northamptonshire civic parish of Little Irchester. He is on record as describing the NHS as something which “would not be out of place in Stalin’s Russia” and for opposing regulations designed to give equal rights in goods and services to gay people. He could not have been surprised when, earlier this year, Tory MPs ejected him from the Executive of their mouthpiece, the 1922 Committee.

Trafficking 

In February he opened a Commons debate on human trafficking – among the cruellest, most ruthless of crimes estimated to generate $82 billion a year, almost as much as arms dealing and drug smuggling. It is, in other words, typical of the capitalist system – savage and inhuman as it is driven by the all-dominant motive for profit and the abuse and waste of human life. It was inconsistent with this reality for Bone to offer the argument that an independent National Rapporteur – such as there is in Holland – would be more effective in keeping a check on the problem than the present slapdash system. Significantly he also supported his case on financial grounds: “ . . . it would do all the things we want at a fraction of the cost”. Peter Bone is one among many who claim an ability to manipulate a significant change in this horror. But in fact he is only likely to find a place in history as a feeble joker.

Ivan

50 Years Ago: Betting Becomes Respectable (2012)

The 50 Years Ago column from the October 2012 issue of the Socialist Standard

Now that the new legalised betting shops are off to a good start and working class punters adorned with the dubious honour of a mantle of bourgeois respectability wherever they can lose their fair day’s pay in a more dignified way; it may be timely to compare the old back street hole-in-the-corner betting dens of Manchester with some of the present chromium plated outfits blossoming forth under the new regulations.

No longer is there any need to slip surreptitiously down a back alley or dodge P.C. 49 and the Black Maria in a frantic effort to play up one’s pension or the rent on the elusive 2.30 winner; one awaits the result, jammed tight in a sweating mass of the unfortunate class of society, who never seem to tire of trying to gamble their way out of poverty, merely because they do not yet realise the cause of it.

Those repulsive conditions of working class punters, in grim contrast to the environment and atmosphere of Ascot lawns, etc., have given way, despite the hypocritical opposition of the men of God, to armchair betting in the main street betting shops, with loudspeaker commentaries, official receipts for all commissions, and rapid payment after results and the weigh in.

(…) [W]e point to the cause of all this gambling activity—the crazy profit system of production which divorces the producers from their products, leads them up the garden to chase shadows in State-organised lotteries, Football Pools and Bingo rackets, and the rest. This is typical of capitalism in 1962: but in a cooperative world of production for use, a money-less, class-less, trade-less community, gambling will cease simply because profits and losses, poverty, privilege and luxury will give way to the social equilibrium of production for use.

(from article by G. R. Russell, Socialist Standard, October 1962)

The Fear of God (2012)

The Halo Halo! column from the October 2012 issue of the Socialist Standard

Communicating with, and tending to the whims of the gods has always been a specialised business. From the earliest religious beliefs any human behaviour that might offend the deities and bring down their wrath on the whole community had to be guarded against. The task of interpreting the god’s words and satisfying their needs has always been entrusted to an elite caste of priests, oracles or holy men who jealously guarded their power and mysterious rites. And as gods have come and gone over the last few thousand years nothing much has changed in this respect.

The hierarchy of the Catholic Church still try to maintain an air of mystery with their absurd rituals, robes, mitres and use of incense etc. Until recently the widespread use of Latin, too, helped to bamboozle their followers. Until the 1960’s it was used for all documents published by the Vatican.

“The language of the Roman Church is Latin. It is therefore forbidden to sing anything whatever in the vernacular in solemn liturgical functions” said Pope Pius X in 1903. And Pius XII declared “The use of the Latin language affords at once an imposing sign of unity and an effective safeguard against the corruption of true doctrine”. Now the current Pope, worried about the decline of religious humbug and mumbo-jumbo amongst the clergy wants to bring it back.

This is just a harmless pantomime though compared to the bizarre and rigorously enforced blasphemy laws that are used to preserve religious authority in Islam, particularly in Pakistan. Can you imagine what would happen if a TV series like ‘Father Ted’ were to be made about a group of bumbling mullahs? Unfortunately the Islamic equivalents of Fathers Ted, Dougal and Jack have never been very funny, and can be terrifyingly dangerous.

As this article is being prepared Rimsha Masih, the 14-year old girl who suffers from Down’s syndrome and was beaten up and imprisoned after being falsely accused by a local mullah of burning pages from the Koran, has finally been released after bail of one million rupees (about £6,200) was raised.

A Christian couple were sentenced to 25 years imprisonment after being accused of touching a Koran with unwashed hands. And a doctor in Hyderabad who threw away the visiting card of a pharmaceutical salesman found himself in serious trouble. The word Muhammad, part of the salesman’s name, was printed on the card. (Guardian online 19 August and 6 September).

But it’s not just the courts and mullahs who are terrified of blasphemers. In two separate incidents in Pakistan in 2011 Salman Taseer and Shahbaz Bhatti were gunned down in the streets because they spoke out in favour of reforming the blasphemy laws. And between 1990 and 2010 in Pakistan, in addition to formal convictions, there were at least 34 extrajudicial killings of people accused of blasphemy. (Guardian 5 September).

And it’s not only in Pakistan where Allah strikes fear in the hearts of his followers. Here, Channel 4 has cited security concerns as the reason for having to cancel a rescreening of its documentary ‘Islam: The Untold Story’ which claimed there was little written contemporary evidence about the origin of the religion, and attracted over 1,000 complaints from outraged believers.

Why do the followers of such powerful gods feel so insecure?

NW

Proper Gander: Giggly Walking CCTV Cameras (2012)

The Proper Gander column from the October 2012 issue of the Socialist Standard

Making a hasty, ill-informed judgement about someone you don’t know is easy, thanks to the internet. You can post it on their forum thread or Facebook update, laugh, then hide behind your username and the ‘log off’ option. It’s not quite as straightforward as that in real life, as those taking part in The Audience (Channel 4) find out. In this show, a volunteer has opened up their life to the scrutiny of fifty strangers and a film crew. The volunteer has “a life-changing decision to make”, and will seek the advice of the others who literally follow him around for a week.

The first episode’s lamb-to-the-slaughter is Ian Wainwright who, being a farmer, has probably slaughtered a few lambs himself. Nice guy Ian slaves away on the farm owned by his two septuagenarian uncles, who can’t do much other than bark from their farmhouse chairs. Imposed guilt and family loyalty tie Ian to the long hours and little money. He knows he’s trapped, and that he’s not spending enough time with his girlfriend. So, should he find a new life with her, as this means leaving his uncles to an uncertain future?

The crowd of fifty start out like giggly walking CCTV cameras. They follow Ian to the milking shed, then the fields, then they meet the rest of his family, firing questions and discussing him along the way. Their initial snap judgements on his situation give way to a realisation that it involves conflicting viewpoints, and then there are tears as the decision looms. Obviously, the programme-makers milk all this for its emotional capital, much like Ian milks his cows. He takes the advice to leave the farm, and the producers must have been rubbing their hands with glee when he rounds off the programme by proposing to his girlfriend.

Maybe some choices benefit from having other people patiently look into all the pros and cons to come up with some reasoned advice. But it’s less likely that a situation will be improved by the manipulation and selective editing of a film crew. The Audience feeds on the fashionably alienated belief that if you have a problem, then the best way to get help is through a TV show.

Mike Foster

Brief Reports (2012)

The Brief Reports Column from the October 2012 issue of the Socialist Standard

Housing action groups have criticised the new law against squatting this week, saying that it would lead to more homeless people living on the street. But Justice Minister Crispin Blunt defended the law, pointing out that homelessness was at the lowest level for 28 years: ‘Two harsh winters have seen to that. Another big freeze this winter and there won’t be any park bench wino dossers left alive at all.’ He added that the government was spending £164m to bring 10,000 empty homes back into use: ‘Put bars on the windows and one-way locks on the doors and bingo, prison overcrowding also solved. Ker-ching.’

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South African prosecutors have provisionally dropped murder charges against 270 miners whose colleagues were shot dead by police. The State Prosecutor admitted in a statement that it was patently absurd to shoot people and then charge their friends with causing their murder: ‘We’ll prosecute the dead miners for committing suicide instead. They don’t have a leg to stand on as they’re dead.’

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Gottfrid Warg, one of the founders of the file-sharing website Pirate Bay, has been arrested in Phnom Penh after an international warrant was issued against him. The website immediately issued a press statement saying that this would not affect operations as there were already proxy copies of Warg on 78 mirror sites in six continents.

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Hollywood actors, directors and scriptwriters went on the rampage last week, burning down a number of cinemas, phone booths and magazine stands in protest at the anti-Islamic film ‘Innocence of Muslims’. Speaking on behalf of the film industry, Steven Spielberg said: ‘Hollywood is united in deep disgust at this film, with its shoddy production values, acting, dubbing, backgrounds, plot and script. This is not the American way. If we decide to piss Muslims off we’ll do it with a hundred million budget and Mel Gibson.’

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British newspapers rushed to condemn the publication by a French magazine of topless images of Kate Middleton as being a ‘grotesque and outrageous invasion of privacy’. The Daily Mail fulminated in a front page editorial: ‘We were offered those pictures too, but honesty, integrity and a profound respect for our wonderful Royals made us turn them down.’ A spokesman for the French magazine Closer retorted: ‘Bolleaux to the Anglais Press. They do not care about privacy and decency, they are merely shitting les briques a cause du Leveson Enquiry and are furieux that nous avons le scoop instead.’

Capturing the Smoke (2012)

Beat Girl with Kitten 1960

Exhibition Review from the October 2012 issue of the Socialist Standard

Another London – International Photographers Capture City Life 1930-1980 – Tate Britain

The 180 photographs in the Another London exhibition are selected from the collection of 1,400 photographs of the Eric and Louise Franck London Collection. The 41 photographers in the exhibition were all from abroad, visiting London as tourists, or as part of their employment, or were refugees from Nazism and eventually settled permanently in Britain. The photographs are evidence of a rich tapestry of life in ‘The Smoke’ during the twentieth century.

‘Class’ is a significant factor portrayed in these photographs from Brandt’s Housewife – Bethnal Green 1937 and Suschitzky’s East End Street 1934 to the series of photographs of the working class in Brick Lane, Spitalfields 1976-78 by Luskacova.  People in the Knave of Clubs Pub, Club Row 1976 is revealing in its depiction of East Enders sense of camaraderie although at first glance the photograph could be from the 1930s. The various changes in capitalism in Britain in the intervening 40 years had done little to change the economic status of working class in the East End.

Photographers also captured the ruling class at work and play in Hoppe’s 1937 London Stock Exchange – Typical Young Businessman to the military in The Queen’s Guards 1960 by Erwitt. The photograph of the 1959 Queen Charlotte’s Ball by Cartier-Bresson is of the Débutante’s Ball where daughters of the Aristocracy ‘came out’ at the end of the ‘Season’. ‘Debs’ were presented to the Queen at Buckingham Palace right up to 1958 when it was deemed an archaic social practice. The ‘Debs Ball’ ended in 1997 but since 2009 has been re-established for the daughters of wealthy capitalists as well as the Aristocracy.

Brandt’s Housewife – Bethnal Green 1937

Erwitt’s photographs of British Railways Logo on Train and Male Passengers in 1st Class Compartment (1950’s) highlight the fact that although the railway was nationalised in 1948 BR still operated a ‘class system’ of compartments for first, second and third class passengers. Third Class was abolished in 1956, and second class was only re-designated as Standard Class in 1985.

There is an evocative photograph by Willy Ronis of Gaston Berlemont’s Pub, The French House, Soho 1955 which reeks of tobacco smoke, booze and bohemianism (well-known poets/artists and drinkers Dylan Thomas, Brendan Behan, Francis Bacon, and Malcolm Lowry frequented the hostelry). The iconic photograph of the Beat Girl with Kitten 1960 by Bruce Davidson conjures up the mysteries and delights of youth on the cusp of adventure at the beginning of the ‘swinging sixties’.

Neil Kenlock’s photographs of the Afro-Caribbean community illuminate a radical political side to the black British experience: Demo Brixton Library 1972 shows placards stating ‘All Police are Pigs’ and ‘Off the Pigs’ while the 1970 Black Panther School Bags portrays just that.

Davidson’s Conductress 1960 epitomises the period covered in the exhibition. This world of the sounds of ‘slam door’ trains, Solari departure boards at rail stations, Routemaster buses, and Gibson ticket machines is gone forever.

Steve Clayton