Cooking the Books: Who’s to blame for carbon emissions? (2007)

The Cooking the Books column from the January 2007 issue of the Socialist Standard

In 2004 the Office for National Statistics published a report on “The impact of UK households on the environment through direct and indirect generation of greenhouse gases”. It concluded that of the 718.5 million tonnes of carbon dioxide equivalent emitted in the UK in 2001 “households were directly or indirectly responsible for 612.4 million”. That’s 85 percent. Can this be right? Is it possible that industry is only responsible for at the very most 15 percent? How can this be?

To arrive at this figure, the government’s statisticians first calculated how much households directly emitted through burning gas, oil, petrol and coal to heat their homes, cook their food, drive their cars, etc and reached a figure of 155.8 million tonnes. To this a further 2.4 million was added to take account of the emission of other greenhouse gases from households’ using aerosols, fridges and air conditioning equipment, giving a total of 158.2 million, or only 21.6 percent of the total.

But the statisticians didn’t stop there. They then proceeded to calculate how much households were responsible for “indirectly”, explaining:

“Indirect greenhouse gas emissions are those arising through household demand for electricity, public transportation and demand for goods and services. Indirect emissions are considered to be embedded in the product purchased. Electricity contains the embedded emissions from the combustion of coal, gas, oil, etc used in its generation. Similarly, food products contain indirect emissions from the use of pesticides and fertilisers as well as enteric emissions from livestock”.

Some might consider it reasonable to include the emissions resulting from the generation of the electricity used by households for lighting, heating, cooking, TV, computer, music centres, etc, but one consequence of this is that responsibility for the emissions is thereby shifted from the power station companies to households. Still, at least the power stations will be held responsible for the emissions resulting from the generation of the electricity supplied to industry, won’t they? No. Read the passage above again: “indirect emissions are considered to be embedded in the product purchased”. What this means is that the electricity consumed in the production of some product purchased by a household is not attributed to the industry that produced it, but to the household that purchased it.

It’s the same with transport. The emissions caused by bus companies, train companies and airlines are not attributed to them, but to their passengers. And, as the above quote specifically says, the emissions from food production – and agriculture contributes quite a bit to greenhouse gas emissions as methane – are to be attributed to us who buy the food.

When all these dubious calculations are done, the government statisticians saddle households with responsibility for a further 456.6 million tonnes of emissions.

But what, on this logic, is left as industry’s responsibility? 15 percent perhaps. No, again. The government is also a final consumer of electricity and products and, on the report’s logic, is to be blamed for the emissions resulting from their production. Though the report does not calculate this, from other statistics it will be more than half of the remaining 15 percent. In the end, industry and agriculture are going to be held responsible only for the emissions generated by what they accumulate as new capital, or about 7 percent. Which is ridiculous.

There is another way of looking at the matter. From the point of view of Marxian economics, wage and salary workers are not final consumers. What we spend on heating, lighting, cooking, travelling, food, recreation, entertainment, etc is expenditure on what we must consume to reproduce our labour power; which we sell to our employer, who in using it is the real final consumer.

So, it’s the other way round. Instead of the emissions caused by capitalist industry being attributed to us, even that from our direct heating, cooking, driving, etc should be “indirectly” attributed to them. They rather than us are responsible for the great bulk of carbon emissions, even if this is in response to the pressure of the competitive struggle for profits that is built into capitalism. So, in the end, it’s the whole capitalist system that’s to blame.

Cooking the Books: The really big slump (2020)

The Cooking the Books column from the November 2020 issue of the Socialist Standard

We know that capitalist production moves in ever-repeating cycles of boom and slump and that governments can do nothing to prevent this. But they can produce a slump, either unintentionally through a mistaken policy or deliberately. The present slump is an example in that it has been largely government-induced rather than resulting from the normal workings of capitalism.

The lockdown imposed by the government at the end of March and maintained for the next three months led, according to the Office for National Statistics (ONS) at the end of September, to a fall in GDP during those three months of 19.8 percent, which they described as ‘the largest quarterly contraction in the UK economy since quarterly records began in 1955’.

This was a much higher fall than in many other countries:

‘Revised figures yesterday from Germany showed that its GDP fell by 9.7 per cent, less than half the UK’s decline, while the eurozone and European Union falls were 12.1 per cent and 11.9 per cent respectively … The United States recorded a similar drop to Germany, just under 10 per cent’ (David Smith, Times, 26 August).

Why this difference? Was the government-induced slump in Britain really twice as deep as in Germany and the US? If so, why? It turns out that it was mainly due to the different way that the ONS statisticians calculated the fall compared with those in other countries.

GDP is measured in various ways, one of which is to add up what persons spend, what businesses invest and what the government spends. With only key workers, as in the health service and food distribution, allowed to go to work during the period and the income of some 9.4 million reduced to 80 percent of their previous earnings, private consumption fell by 23.1 percent, manufacturing production by 16.9 percent and business investment by 31.4 percent. Government spending, on the other hand, went up by 14.1 percent. Calculating GDP in this way gave a fall of 14.5 percent.

This way of calculating the fall didn’t satisfy the ONS as, while the government spent more, it did not provide the same level of ‘service’. In calculating GDP, the government is regarded as providing various services – education, health care, ‘defence’, ‘justice’, administration,etc – which have to be priced.

Normally this is simply the amount of money the government spends on them. During the lockout, however, although the government spent the same amount on education, because schools were closed it didn’t provide the same level of ‘service’; similarly with normal NHS services.

Taking this into account, the ONS reduced government ‘output’, so increasing the fall in GDP from 14.5 to 19.8 percent. Other countries didn’t do this.

We don’t want to get involved in the arguments amongst statisticians as to the best way to calculate GDP except to point out that the concept of government ‘output’ is rather dubious. Governments as such produce nothing; everything they spend derives ultimately from surplus value produced in the profit-making sector of the economy and is obtained by them either through taxation or by borrowing.

So all its spending is as much a ‘transfer payment’ as are benefits and pensions.

In any event, whether the fall – the plunge, in fact – in GDP over the three months was 19.8 or 14.5 percent it was much more than in any slump caused by

the normal workings of capitalism. In the previous biggest slump since accurate records began, the one that followed the Crash of 2008, GDP fell by only 4.6 percent and that over a period of 16 months.

Cooking the Books: Calculating the Rate of Profit (2006)

The Cooking the Books column from the February 2006 issue of the Socialist Standard

Every quarter, the government’s Office for National Statistics (ONS) publishes figures for “corporate profitability”. The latest, those for the third quarter of 2005, were released on 5 January (see www.statistics.gov.uk). They show that the profitability of gas and extraction companies rose from 34.4 percent in the previous quarter to 36.3 percent, while that of service companies stayed more or less the same at 16.6 percent and that of manufacturing companies fell from 7.1 to 6.2 percent. Overall profitability of private non-financial corporations as a whole fell from 13.8 to 13.4 percent.

But what do they mean by profitability? The ONS explains:

“Profitability compares the profits made by companies with the value of the buildings, plant, machinery and vehicles held as capital assets by these companies. Expressed as a ‘rate of return’ on assets held, these can be compared between sectors to judge whether the returns on investment are worthwhile”.

Marx divided capital into two parts: “constant capital” (which was, as above, the value of the buildings, machinery, unprocessed materials, unsold goods, etc), which he designated by the symbol C, and “variable capital” (basically the money-capital required to pay wages), called variable (V) because it was the only part of total capital that varied in the process of production – through the labour of the workers creating a surplus value (S).

For Marx, the rate of profit was calculated as S divided by C + V, expressed as a percentage. The ONS’s profitability is not the same, but is more like S divided by C.

Marx expected, as he explained in the opening chapters of Volume III of  Capital, the rate of profit to tend to be the same in whatever line of business money capital was invested. But, going by the figures released by the ONS, this does not appear to be the case, with profitability in services currently at around 16 percent, higher than in manufacturing where it is around 6-7 percent? The ONS offers an explanation:

“Generally, service sector profitability is higher than that of the manufacturing sector, reflecting the more capital-intense nature of the manufacturing sector”.

This is reasonable enough. In the service sector the proportion of C to V is less than in manufacturing, i.e. a higher proportion of their money capital has to be invested in employing workers than in acquiring plant, equipment, machinery, materials, etc. This being the case, if you are calculating the “rate of return” only as S/C rather than as S/(C + V), i.e. ignoring V, profitability in the service sector will come out higher than in manufacturing. On Marx’s definition, which takes into account V, – for which statistics are not produced – it would tend to be more equal.

What about the extremely high profitability – over 30 per cent – of oil and gas companies? Oil and gas extraction is similar to land used for agriculture where the price of the product is fixed by costs on the least fertile land in use. Those whose costs are lower than on this land reap an extra monopoly profit – or “ground rent” as Marx, following the tradition of Classical Political Economy, called it.

The high profits in the UK oil and gas extraction business are to be explained by the fact that the costs of extraction in the North Sea are much lower than in those oilfields, elsewhere in the world, whose production costs set the price. Their profits, in other words, contain an element – a large element in fact – of “ground rent” rather than profit in the strict sense of a return on capital invested, a fact allowed for by Marx in his analysis of landed property later on in Volume III.

Who are the real litter louts? (2009)

From the July 2009 issue of the Socialist Standard

Official statistics from the Home Office’s Office of National Statistics show that there is a high level of concern about the problem of litter. Indeed, of all crime and anti-social behaviour litter has the second highest source of concern (33 percent of those surveyed felt “a high level of worry”). Vandalism comes top of the list (34 percent), both much higher than racial harassment (8 percent) and fear of burglary (14 percent). Hardly a week goes by without a letter sent to local papers on the subject. Now common or garden street litter is hardly one of the world’s major problems, but most people are primarily concerned with things that affect them – it is simply a human response to something right before the eyes. People clearly want and indeed should expect a decent local environment. What can be done about this problem? We examine a few solutions . . .

Solution no. 1: More bins. It might be suggested that more rubbish bins would solve the problem. Certainly this could have some effect. However my local area has plenty of bins (empty ones) and plenty of litter. Putting the rubbish in the bins is clearly something different from putting the bins up in the first place.

Solution no. 2: The strong arm of the law. A crackdown on ‘litter louts’– fines or imprisonment – can be a short term solution particularly in areas with a traditional respect of authority. Such a policy has been carried out very successfully, for example in Singapore. However, whether large and disparate societies have the resources to deal with what is basically a minor infraction of the law in such a heavy-handed manner is doubtful.

Solution no. 3: Education. A rather cheaper method than a policeman on every corner would be a concerted campaign in the schools: “Naughty children: don’t throw things on the street.” However education (or what passes for it in these sad times) seems to be part of the problem. It is almost certainly the case that the majority of street litter is thrown by children or adolescents.

Solution no. 4: ‘Alternative’ education. If it really is the case that littering is a product of alienation in the schools it might be advisable to change the system of schooling to one more child-friendly. At the risk of us being deluged with letters from irate ‘alt-ed’ enthusiasts, the idea of ‘nice’ schooling is ridiculous in a world that is most definitely not nice. The modern system of education generally fits the bill required – that of producing (and reproducing) the ideal modern worker. Also again we hit the problem of resources – who will pay for this intensive, alternative approach?

Solution no. 5: A ‘green’ idea. Very popular in Germany, the Green ‘Law of Return’ means that councils are entitled to ship product wrappings back to the factory of origin. A ton of crisp packets dumped on the doorstep is a powerful argument for making biodegradable or recyclable packaging. This comes close to the problem and all credit here for identifying the real litter louts. But recycling uses resources – surely better, as far as is possible, not to produce potential litter in the first place; however, this cannot be expected from those whose business is to produce.

Solution no. 6: Socialism. Litter, like most other problems of the world, is a product of the current phase of capitalism. Consumption to the nth power (including snack foods, the main cause of street litter), within a background of built-in obsolescence determined chiefly by the great corporations, is the order of the day, all driven by the relentless quest for profit.  Compounding the issue within capitalism is the sense of alienation, especially among young people, the result of the class ownership of society and the commodifying of everyday life – all of which helps produce the carelessness of littering. Powerless and voiceless – why should the ‘litter lout’ care? The streets really are not our own, nor can they be under capitalism.

Kaz.

Cooking the Books: A stroke of the pen (2007)

The Cooking the Books column from the April 2007 issue of the Socialist Standard

The Office for National Statistics (ONS) is to revise the way Britain’s Gross Domestic Product (GDP) is calculated. According to the Times (26 February) “from 2008 the ONS will also add into GDP an estimate of the output generated by banks related to the higher rates of interest they charge on loans compared with deposits”. Output generated by banks? What are they talking about? Banks don’t produce anything.

It is just that, given the way a country’s output is calculated, banks have to be assumed to produce something. The value of the new national output produced in a year has theoretically to equal the total annual income of the country’s inhabitants as wages, profits, rent, interest, fees, etc in that year (national income). One way new national output is calculated is to add up the monetary value of the goods and services on which the national income is spent (final consumption). To do this it is assumed that whatever a sum of moneyfor this purpose is spent on is an “output”.

Thus, interest paid to banks is assumed to be a payment for the bank’s “output” (the service of lending the money). Similarly, taxes are assumed to be a payment for the government’s output (the “service” of providing “defence” and “law and order” as well as health and education).

This is all right for statistical purposes, but wrong if this statistical device is taken for reality. In reality neither banks nor governments produce anything. They – or rather, the workers employed by them – do of course do something, but the activity of banks and governments is in the end paid for out of the surplus value produced in productive industry which transforms materials that originally came from nature. In the case of the government this is obtained through taxes. For banks, it’s through interest.

An ONS paper explains how banks work, better in fact that most economics textbooks: “In essence, financial institutions provide services in two ways; by direct charging (overdraft fees, mortgage arrangement fee), and by an interest differential; that is paying depositors less than they charge borrowers . . . For example, current accounts are usually maintained free by financial institutions,

and the associated costs are met by the difference between the low interest payments awarded on credit balances maintained in such accounts whilst the bank lends funds from such accounts at a higher rate to borrowers”.

In other words, no nonsense about banks “creating” credit or deposits, but a recognition that they make their money by lending out money deposited with them at a higher rate of interest than that paid (if at all) to those who deposit money with them. Even so, this description is still tied to the concept that banks provide a service, i.e., that they are selling something. But what?

Because of the theoretical and practical problems involved in the idea of banks selling something, the national income statisticians have till now not included in GDP any value for the “output” of banks for the services they are regarded as providing – banking facilities for depositors – and for which they don’t charge. The solution they have come up with, and which will be applied in Britain as from 2008, is to regard the income of banks from “paying depositors less than interest than they charge borrowers” as a notional payment for these notional services.

It’s a bit of an artificial solution and it will increase GDP by a one-off 1.9 percent or so – which is more than normal growth in some years – by a mere stroke of the pen. But one held by statisticians rather than the bankers of currency crank myth.

Wage-labour versus Capital (2006)

From the May 2006 issue of the Socialist Standard

In the Communist Manifesto Marx and Engels wrote of the nub of the class struggle:

“[wage labour] creates capital, i.e., that kind of property which exploits wage-labour, and which cannot increase except upon condition of begetting a new supply of wage-labour for fresh exploitation.”

The basic fact is that there is no way within the system of producing goods for sale by employing waged labour – i.e. capitalism – for the system to be run for the benefit of those who must work for a living. Their labour makes more chains of capital for themselves, and capital is always ever hungrier for more and more labour to be sacrificed to it. As Marx and Engels put it:

“Capital is a collective product, and only by . . . the united action of all members of society, can it be set in motion. Capital is therefore not only personal; it is a social power.”

To feed capital means to extend the number of people under its sway. As capital grows so too does the number of people who must sell their ability to work, i.e. the working class.

In a recently published document, the UK’s Office of National Statistics (ONS) projects that by 2020 there will be something like 32.1 million people working in the UK. That is a growth of around 6.7 percent from 2005. That is, a growth of 6.7 percent for the social power of capital over the next fifteen years. A 6.7 percent rise in the absolute size of the working class – if their figures are actually correct. This figure includes the unemployed, since the International Labour Organisation (ILO) defines the workforce as anyone either employed or actively seeking and available for work. This last qualification is important.

The latest figures for the UK from the ONS state that there are 28.8 million people in employment. This includes not only the 3.7 million self-employed people but also the 24.9 million employees (among whom will be listed such people as Executive Directors of companies and Premiership footballers). The distinction between employee and self-employed is more fluid these days, since some people work as contractors and are nominally self-employed for tax purposes only. Likewise others whose self-employment means servicing another larger business on a regular basis. That is an employment rate of 74.5 percent of the available work age population. The overall UK population is 60 million. 20.2 percent of that employment is in the public sector, working for the state.

What this means, in detail, is a total of 926 million hours worked per week. This is part of a rising trend which sees the average worker in employment (full-time or part-time) spending 32.2 hours a week at their duties, not including the journey to work, thinking about work and recovering from work. So, not only are more people working – absolutely – but the people in work are working longer. The state of the class war in Britain is an increase in exploitation.

The main tool driving this exploitation onwards is the permanent pool of unemployment that has been a feature of the economy for the past thirty years. Currently there are around 1.5 million unemployed – i.e. people available for and looking for work – in the UK. Beyond that there are, as we have covered in this journal many times, people who want to work and who are not classified as unemployed but who are also a part of this mechanism.

Across the world a similar picture can be seen. As we reported in the March Socialist Standard, the ILO estimates that currently there are around 2.85 billion people in work (either employed, self-employed or an unpaid family member). In 2005 there were more people in work than in the previous year, up 1.5 percent – and up 16.5 percent since 1995.

And there are currently something like 192 million human beings who are unemployed. That is a global unemployment rate of 6.3 percent – a vast reserve army of labour – meaning that the global workforce available to capital encompasses more than half the human race. Between 1995 and 2005 this global workforce grew by 16.8 percent. Taken as a figure, it represents an incredible waste of the potential skills and talents available to our species.

The situation is worse though, since being in work is little guarantee of having a decent income. 1.4 billion of that 2.8 billion workers do not earn more than the equivalent of $2 a day for their family members. 520 million of them are taking in less than $1 a day. Obviously, the value of a dollar varies from country to country; but the real picture is that for over one sixth of the human race work offers no prospect of reward or opportunity for themselves or their family. Grinding, pitiless, toil is their lot – a lot demanded by capital.

These toiling billions helped produce an estimated growth in world wealth of 4.3 percent in 2005. Productivity per worker has increased by an average of 2 percent per year over recent years. The average total increase in wealth (productivity plus employment) has been 3.8 percent. Most of the growth in wealth, therefore, comes from increasing efficiency in productivity – that is more effective procedures and machinery being used, i.e. more capital being invested. However a substantial part of that increase in wealth has come from an increasing size of the working class. Much of this can be seen in the fact that 40 percent of the global workforce works in agriculture, an arduous and labour intensive branch of industry.

A simple whistle stop tour of the statistics shows clearly how little the working class is benefiting from capitalism and from the increasing wealth that we are producing. That so many hours, of so many lives are given over to capital is a testimony to the social power it exerts in the world.

The increasing growth, however, of the numbers brought under the sway of capital should give us hope – we who acknowledge ourselves as part of the working class are proclaiming our membership in the majority of the human race. As our numbers grow, as our knowledge of ourselves grows, then the prospect of building a union of that working class to emancipate itself grows also.

The total size of the workforce already exceeds 3 billion – and given that we can add in children and other dependents, we can safely affirm that over half the world shares a common experience of toil and exploitation under the direct control of capital. A clear majority who could benefit from a revolutionary change to the system and in whom the capacity to make such a change rests.

Mayday belongs to the three billion. It belongs to the workers – we have a world to win, and we can win it.

Pik Smeet

Measuring general wellbeing – how and why? (2011)

From the January 2011 issue of the Socialist Standard

Capitalism sells GNP and some of its supporters now want to measure GWB. Socialism will promote only GWB.

Studies of happiness have a long history. Aristotle wrote about happiness as human flourishing and purpose to life, as opposed to the modern concept of hedonism as the simple pursuit of pleasure.

Prime minister Cameron is trying to get the concept of general wellbeing up and running even in the midst of public service cuts and soaring living costs. He is sticking to a policy commitment he made while still in opposition in 2006: ‘It’s time we admitted that there is more to life than money and it’s time we focused not just on GDP but in GWB – general wellbeing’, adding ‘Wellbeing can’t be measured by money or traded in markets. It’s about the beauty of our surroundings, the quality of our culture and, above all, the strength of our relationships. Improving our society’s sense of wellbeing is, I believe, the central political challenge of our times’ (Times, 22 May 2006).

The Office for National Statistics will decide on the wording of the questions to be put in the General Household Survey starting in April. Its head, Lil Matheson, said in a BBC Radio 4 interview that she preferred the wider concept of wellbeing to that of happiness. Writing in the Guardian (15 November), Allegra Stratton thought that, in addition to questions on happiness, the survey is likely to include ‘How much purpose does your life have?’ and ‘Are men and women treated fairly in the workplace and home?’

We have good reason to be suspicious about why the government should put money into measuring people’s wellbeing in circumstances that are far from improving their actual wellbeing. We may recall the line of crucified men in Monty Python’s Life of Brian happily singing ‘Always Look on the Bright Side of Life!’

It would be no surprise to find many members of the general public expressing fairly high levels of wellbeing. But any such survey results would need to be interpreted with care. Studies of job satisfaction have found that up to 80 percent of workers say they are very or fairly satisfied with their job. But their ‘satisfaction’ is often based on a belief that their chances of finding something better are small or nil, so it’s a good idea to make the best of the job they’ve got.

In socialism there may well be surveys of public opinion, including questions on wellbeing. Such research would be part of organising production and distribution of goods and services only for need, not profit. Questions on wellbeing would emphasise making things better for people, not making people feel better about things.

Stan Parker

Proper Gander: ‘All I Can Think About Is The Housing’ (2020)

The Proper Gander Column from the January 2020 issue of the Socialist Standard

A recent edition of Dispatches (Channel 4) highlighted the difficulties faced by women facing homelessness while being pregnant. Born Homeless followed three expectant mothers living in London, and was narrated by one of these, Sam. She is about to be evicted from her room in a shared house because the property isn’t set up for households with children. She approached Lambeth council for assistance months before, but didn’t get much help, presumably because it has been swamped with homeless applications and there aren’t enough affordable properties for people to move to. The day before her eviction is due, Sam returns to the council but can’t see her case officer and so has to wait three hours to be seen by duty staff. A blunt, unhelpful housing officer arranges a placement in temporary accommodation, which turns out to be a dull, unhygienic room in a house shared with seven others. 

Councils have a legal duty under the Housing Act 1996 to place homeless pregnant women or families with children in temporary accommodation. Sam is luckier than many others. Her placement is in the same area as she lived in before, whereas she could have been placed miles away from her support network or in a hotel room without cooking or laundry facilities. On moving day, Sam says ‘what makes me emotional with it all is… if it’s gonna affect the baby… You just don’t want anything to interfere with the development… I do not want to put the baby in there, I myself don’t even wanna go in there’. Her concerns aren’t just with the poor physical condition of the accommodation, but also the strain of her situation. As Clare Livingstone, Professional Policy Advisor at The Royal College of Midwives says, ‘we know that homelessness leads to stress and ill health in pregnancy and that there are potentially adverse effects for the babies of these vulnerable mothers’ (LINK).

Sam complains to the council about the shared house and gets moved to a more suitable self-contained (but still temporary) flat, acknowledging that having a camera crew with her probably helped make this happen. Guidelines say that homeless households containing children or pregnant women should only be in a shared house or hotel for up to six weeks before being transferred to self-contained temporary accommodation. Sam says that when she was training to be a social worker, she was supposed to put the welfare of children first, but finds out first-hand that the practicalities of what the system can provide go against this.

The programme also follows Temi, who has been living in hostels and ‘sofa surfing’ with friends or relatives in London for three years. She says ‘to be honest I haven’t really felt the full joy that I’m actually gonna be a mum again, you know. I’m excited and all that but I’m just worried with the space… I’m supposed to be resting and it’s just all I can think about is the housing’. Temi and her two children are staying in sub-standard temporary accommodation with water dripping from the ceiling. She goes to Hackney council to ask about another placement, and is told that they won’t be moved until after her baby is born. When she gives birth she refuses to leave the hospital to go back to the temporary accommodation which will now be even more overcrowded. The council places her somewhere larger, and again, would this have happened without her being with a camera crew?

There are no figures on how many women are pregnant and homeless. An indication of the extent of the problem comes from a survey of 300 midwives across the country carried out by the programme makers and the Royal College of Midwives. Virtually all the survey respondents said that they had seen a pregnant woman who was homeless or at risk of homelessness in the previous six months. Even more worrying, 81 percent had seen at least one pregnant woman who was sleeping rough. (ibid)

There are figures for the number of homeless households which include children. According to the Office of National Statistics, the number of families with children in temporary accommodation in England has rocketed from 37,190 in 2012 to 61,610 in 2018, with a reduction in numbers in Wales (1,250 to 798) and Scotland (3,487 to 3,349). Families with children comprise around 70 percent of the total number of households in temporary accommodation, 93,705 in 2018 (LINK). But these figures only represent a fraction of those with housing difficulties, as they don’t include single people in hostels or sleeping rough, nor those ‘sofa surfing’ or threatened with homelessness after receiving an eviction notice.

The third family appearing in the documentary is Kady and her two children, who are living in a cramped one bedroom flat provided as temporary accommodation. They have been there for 18 months, competing with 10,000 others on the council’s waiting list for rehousing. Larger families requiring a three or four bedroom property are likely to be waiting particularly long to get social housing, probably years. There is less of a shortage of bigger houses in the private sector, but many of these are owned by landlords who have realised they can make more money by renting rooms individually to students or through councils as temporary accommodation. Most remaining private sector properties are likely to be too expensive or refused to households reliant on benefits.

The families featured in Born Homeless need somewhere secure and comfortable to live even more than other people do, but whether they get this depends on what they can afford. On a low income and with a shortage of cheaper houses, they will face a long struggle to get out of temporary accommodation into somewhere better. The root of the problem is how housing is a commodity, and it can’t be anything else under capitalism. The value of a property, whether in the private or social housing sector, is measured in pounds rather than by how well it satisfies people’s needs.

Mike Foster

Cooking the Books: Cash Mountains (2019)

The Cooking the Books column from the June 2019 issue of the Socialist Standard

On the basis of figures released by the Office for National Statistics, the Times (9 April) reported:

  ‘Private companies, excluding financial institutions, have tucked away £173 billion since March 2016, the last full quarter before the referendum, and are sitting on £747 billion of cash, a level not seen before. At 35.3 per cent of GDP, the size of their pile of cash as a proportion of national output is at a historic high (…) In 2017, before the financial crisis, cash balances as a share of GDP were only 25 per cent. In 2000 they had been 20 per cent. They started to climb in 2012.’

This brings out how capitalist firms operate. A firm is an independent unit of capital seeking, through the actions of its top managers, to expand itself by making a profit and re-investing this in more productive capacity and production.

Cash mountains arise when the money profit acquired from selling the product is not immediately re-invested. This happens when the market for the product becomes saturated through overproduction, so that it is no longer profitable to produce them. In the particular case highlighted by the ONS figures, however, the reason seems to have been different.

Since the referendum, which went the wrong way as far as most of them are concerned, firms have been waiting to see what the post-Brexit profit-making conditions are likely to be. But the Brexit negotiations have dragged on and on. Profits are still being made from maintaining production at current levels but, in view of the uncertainty, they are not being re-invested in expanding production. Firms seem to have been marking time and as a result, have accumulated profits as cash.

The Times described this as ‘cash hoarding’ but this is not an entirely accurate description. It is not as if the cash is being stored in some safe. It is used to bring in an income as interest through buying stocks and shares and government bills and bonds, in effect by being lent.

Some critics of the present economic system describe it as a ‘debt-based economy’. This suggests that capitalism is driven by the pursuit of interest. Some have even absurdly suggested that capitalism has been kept going by loans to workers to buy things. Actually, capitalism is based on the pursuit of profits, of which interest is a sub-division. Some firms borrow money to invest in production for profit and, when they make a profit, share a part of this with the banks or other financial institutions that put up the money.

Those who talk of a ‘debt-based economy’ tend to think that banks create the money they lend by a few keyboard strokes. In fact, they can only lend what they have. The present ‘cash mountain’ is a reminder of where some of the what-banks-lend comes from – those who have lent them money either directly, or indirectly via the money market, including from firms that for one reason or another have built up cash mountains from uninvested profit.

Cooking the Books: Profitability (2012)

The Cooking the Books Column from the February 2012 issue of the Socialist Standard

Every quarter the Office for National Statistics (ONS) publishes figures for the ‘profitability’ of UK non-financial companies. The latest are for the third quarter of 2011. They showed that the “net return on capital employed” for all companies was 12.9 percent. For manufacturing it was 5 percent, for services, 15.9 percent and for North Sea oil and gas companies, 60.5 percent.

Over the last ten years the annual average has been around 16 percent for services and 9 percent for manufacturing.

Why the difference between these two sectors? Surely, according to the way that the competitive profit system that is capitalism works, capital should flow out of manufacturing and into services until the rate of profit is the same for both, as Marx explained in the section of Volume III of Capital on the averaging of the rate of profit.

The explanation lies in the fact that the rate of profit used by the ONS is not the same as in Marx.

There is no problem with the definition of ‘profits’ which are defined as “that part of a company’s income which arises from trading activities” less depreciation but “before payments of dividends, interest and tax”. It’s “capital” that is the problem. Here’s how the ONS calculates ‘profitability’:

 “Profitability is defined as the net rate of return on capital employed. That is, it is the value of profits (allowing for depreciation) divided by the value of fixed assets (allowing for depreciation) and inventories.”

In other words, “capital” is defined as fixed assets, i.e. buildings, machinery, office equipment and the like, or “fixed capital”. But this is not the only part of capital as it excludes “circulating capital”, i.e. the capital invested in what is entirely used up in the course of production (material, power, labour).

Marx divided capital in another way. That part whose value was only transferred, whether wholly or gradually, to the product (which he called “constant capital”) and that invested in employing productive labour (which he called ‘variable capital’ because, besides transferring its own value, it added new value).

So, the rate of profit in Marx is the ratio between profits and total capital while the ONS’s rate is the ratio of profits to fixed capital only. This is not even how companies calculate their rate of profit and its only usefulness would seem to be to record short-term variations in profits.

The different rates that the ONS formula results in for service and manufacturing companies does, however, neatly illustrate another point Marx made.

Marx argued that because the tendency under capitalism was for constant capital (mainly fixed capital) to increase more than variable capital (productive labour) – in economic textbooks, ‘capital intensity’ – and because variable capital alone generated profits, there was a tendency for the rate of profit to fall. This could be shown mathematically but wouldn’t necessarily happen in practice since there were counter-acting tendencies, notably an increase in the exploitation of labour and the cheapening of fixed capital.

Since manufacturing is more ‘capital intensive’ than services, if you compare profits to fixed capital you would expect this ratio to be less in manufacturing. Which is precisely what the ONS figures show.

How explain, then, the huge ‘rate of return’ on fixed capital in North Sea oil and gas which is a more capital intensive industry than most? It’s that most of their ‘trading profits’ are ground rent rather than profits proper.

Oil and gas have the same price on the world market wherever they are extracted but the difficulty and so the cost of extraction varies depending on geological conditions. The price is set by the most costly oil and gas fields, which means that the less costly ones get an extra, windfall profit that is actually ground rent. In Saudi Arabia and the Gulf States it goes to enrich the despots there. In Russia, it has created oligarchs. In Britain, it is largely taxed away by the government.

Support for All (2017)

From the April 2017 issue of the Socialist Standard

A look at how capitalism treats people with disabilities.

There are various forms of disability, and plenty of room for arguments about definition. Under the Equality Act of 2010, an impairment has to be long-term (twelve months or more) and ‘substantial’ (so not trivial). The Act lays down certain ‘rights’ covering areas such as education and employment. It is all very well saying that ‘As a disabled person, you have rights to protect you from discrimination’ (gov.uk), but rights under capitalism mean very little and it is the reality of people’s situations that matters.

There are two basic approaches to characterising disability. The standard medical model sees it as something intrinsic to an individual’s condition, while the alternative social model ‘identifies systemic barriers, negative attitudes and exclusion by society (purposely or inadvertently) that mean society is the main contributory factor in disabling people’ (Wikipedia). Under the social model, an individual’s condition only leads to them being disabled under certain societally-determined circumstances, a claim which should be borne in mind in reading what follows.

There is no doubt that, in practice, people with disabilities encounter all sorts of problems and difficulties, from accommodation to work and travel. A Guardian article (8 January) gave a number of examples relating to people in their twenties and thirties. For instance, two brothers with Duchenne muscular dystrophy live with their parents and younger sisters. Under pressure from a charity, the local council is paying for personal assistants for them, but this arrangement is shared between them both, making it very difficult for them to live separate lives. One of them would like to go to university, but cannot do so, as the financial situation means his brother would have to go with him. Another woman has Ehlers-Danlos syndrome and autism, and was housed for a while in a cold and damp fifth-floor flat, where the lift hardly ever worked.

It is common to hear of those who have a choice between eating and heating, but disabled people face this even more starkly because of high heating costs. According to the charity Scope (13 January), one in four has struggled to pay their energy bills, and many are forced to use expensive pre-payment meters. People turn off their heating even though it is cold, they wear a coat indoors, they wrap themselves in a blanket, they go to bed early, and they can spend up to twice as much on energy as the average household. As the charity’s chief executive has stated, ‘Life costs more if you are disabled. Scope research shows that these costs add up to on average £550 a month, and higher energy bills play a significant part.’ Vicious cuts to benefits and arbitrary decisions to withdraw support make things even worse.

Around one-third of adults with disabilities live in low-income households, which is twice the rate for those without disabilities. This is because they are less likely to be working, with only forty percent of people who are disabled but are not lone parents being in work. Almost half the unemployed are disabled. Three and a half million adults ‘report a longstanding illness or disability which limits their activity’ (poverty.org.uk), while other sources give seven million with a disability in the UK. Such longstanding impairments are more common the less well-off people are, with poverty probably being both caused by and a cause of the disability. Globally, about one person in ten has a disability: they are disproportionately likely to be illiterate and subjected to violence.

Over the years governments have proposed various schemes to increase the number of disabled people who have jobs, but the proportion in paid work has changed very little. Furthermore, having a job does not in itself solve the problems. A blind teacher has written (Guardian, 13 February) of how he enjoyed and was good at his job, even though things like marking and keeping student records took him longer than sighted colleagues. But as the paperwork increased, he was less able to cope and became a support coordinator for disabled students. But even here the emphasis on numbers and speed and ‘efficiency’ made him appear less competent, and the workplace became ‘racked by rumour and rivalry’.

Under the law, employers have to make ‘reasonable adjustments’ to ensure that workers with disabilities are not seriously disadvantaged when doing their jobs. This can cover everything from installing ramps or letting people work on the ground floor to providing a special computer keyboard. But, as noted earlier, people with disabilities are less likely to be employed. Further, there is evidence that when in work they are more likely to suffer various kinds of ill-treatment, such as being subject to intimidating behaviour, having their opinions ignored or being treated unfairly.

Internet access is also much harder for people with disabilities. ‘According to the Office for National Statistics, in May 2015, 27% of disabled adults had never used the internet, compared to 11% of non-disabled adults’ (Guardian 29/06/15). Assistive computing can help disabled people use computers, and many do find the internet a great help, such as doing their weekly shop online rather than struggling round a supermarket. But the fact remains that a crucial part of communicating with government or local councils or support organisations is effectively barred to many people with a disability.

People with disabilities are not just workers but also consumers: their spending power is often referred to as the purple pound (compare the grey pound and the pink pound), and is supposedly worth well over two hundred billion pounds. Companies that ignore the needs of disabled customers may miss out on sales: ‘Three quarters of disabled people and their families have left a shop or business because of poor customer service or a lack of disability awareness’ (Business Disability Forum 03/05/16). M&S are one example of a company with a range of clothes for disabled children (not available in their shops, though).

While there have definitely been improvements in recent years, travel can still be a major problem too, especially, though not only, for people who use wheelchairs. The BBC’s Frank Gardner, who was paralysed in the legs when shot while reporting, has commented that he sometimes gets left on a plane for a while when an airbridge is not used (using one costs the airline money). In a well-publicised recent case, a woman was forced to wet herself on a train journey as there was no disabled toilet available.

If we look at things from the standpoint of the social model of disability, it would be reasonable to aim for a world where as few people as possible are disabled, or at least where as few as possible are disadvantaged because of any disability. This would be a world where production is keyed to fitting work to humans rather than the other way round, where those with special needs get the support they require, where goods and services truly meet human need. Despite the best efforts of many well-meaning people, a society based on the profit motive cannot be transformed into such a world.

Paul Bennett

Material World: Dying Younger (2018)

The Material World Column from the March 2018 issue of the Socialist Standard

Life expectancy is usually calculated from birth, the average number of years a new-born baby can expect to live if the mortality rates pertaining at the time of their birth apply throughout their life. After decades of progress, there has been a turnaround.

In England and Wales, 1991 saw women living to 79 years and men to 73.  By 2011, women were living to 83 years and men to 79 years. Since then little improvement has occurred. Figures for the period 2014 to 2016 were published in September 2017. Women can now expect to live to 83.06 and men to 79.40.

Looking ahead, one million earlier deaths are now projected to happen across the UK in the next 40 years by 2058.  To calculate the figure of a million lives lost you have to subtract all the future deaths now predicted in the 2017 report, which was based on data from 2016, from those projected two years ago, based on a 2014 projection. By 2041, women will live to 86.2 years and men 83.4 years, projections by the Office for National Statistics showed. In both cases, that’s almost a whole year less than had been projected just two years earlier.

If you are in your forties or fifties and live in the UK this is mostly about you, the 411,000 women and 404,000 men aged between 40 and 60.  Already in the 12 months between July 2016 and June 2017, it is calculated that 39,307 more people have died than were expected to die under the previous projections. The ONS project that there will be more than an extra 25,000 deaths between July 2017 and June 2018. Then an extra 27,000 deaths in the 12 months after that, more than an extra 28,000 deaths the year after that, and on and on and on

The projection of these extra deaths by 2058 is not due to the fact that there will simply be more people living in the UK in the future. The ONS projects less inward migration, nor will the extra early deaths be due to more expected births: the ONS projects lower birth rates. The extra million early deaths are simply the result of mortality rates either having risen or stalled in recent years. The UK’s lowly position compared to other European nations means that the stalling in life expectancy improvements has nothing to do with a limit being reached. As yet, nowhere has reached a limit, and many countries are now far ahead of the UK. There is no biological reason why life expectancy should be so low in the UK.

The usual culprits to an earlier death, obesity, alcohol, and smoking can largely be ruled out as contributory factors, according to Danny Dorling, professor of human geography at the University of Oxford.  Rates of smoking and drinking alcohol have fallen in recent years so that cannot be blamed. Between 2009 and 2017 there has been no serious influenza outbreak. Whatever has happened it is not a sudden deterioration in the healthy behaviour of people in the UK.

Experts are pointing to austerity cuts to welfare services. In November 2017, an article in the British Medical Journal Open found that severe public spending cuts in the UK were associated with 120,000 deaths between 2010 and 2017. Last summer, Michael Marmot’s Institute of Health Equity was linking health services cuts to the rise in dementia deaths and the faltering national life expectancy. Marmot said it was ‘entirely possible’ austerity was affecting how long people live.

For capitalism, there is often a silver lining in bad news. During recent years, the issue of raising the retirement age as far as 70 gained ground as people were living longer than they once did but with the average age of death now levelling off at 79 for men and 83 for women, actuaries say it will bring a welcome respite for businesses. An updated financial assessment to reflect the diminishing life prospects of retired UK employees would cut the aggregate liabilities of FTSE 350 companies by about £10bn.

TUC general secretary Frances O’Grady has highlighted that ‘In large parts of the country, the state pension age will be higher than healthy life expectancy.’

A radical change in society is needed if we really want people to live long and prosper.

ALJO

Cooking the Books: Unpaid Work (2018)

The Cooking the Books column from the November 2018 issue of the Socialist Standard

‘British people do more than £1tn of housework each year – unpaid’, read the headline in the Guardian (3 October) reporting on a study by the Office for National Statistics, and went on: ‘Unpaid household work, such as looking after children, doing laundry and cooking, is worth £1.24tn per year.’

Many, including socialists, have pointed out that, in only measuring paid work, GDP omits whole swathes of work as the exercise of mental and physical energy. Not all work is employment.

The ONS arrived at its figure by calculating what people would have to pay if they got someone to do the work, not just of looking after the children, cooking and doing the laundry, but also of cleaning, repairing and maintaining the home (and garden), caring for an adult at home, and driving to and from work, the supermarket and school. Also included was voluntary activity outside the home.

To make the figures more understandable to the general public, the ONS divided the total figure of £1.24 trillion by the total UK population of some 65.7 million, to arrive at the figure of £18,932 literally per every person including children. This can be broken down by activity. Perhaps surprisingly the largest is transport at £5459 (29 percent). Next is child care at £5358 (28 percent). housing services (cleaning, etc) is £3037 (16 percent); food preparation £2400 (13 percent), laundering £1355 (7 percent), adult care £898 and voluntary activity £365.

The Times reported the survey under the headline ‘Washing Up? That’ll be £12,000, darling’, with this as what a ‘stay-at-home spouse’ could claim for household chores. But it is not just women who do this unpaid work as is obvious in the case of people living on their own; all the work will be done by them, whether a man or a woman.

Apart from adult care and voluntary activity outside the home, the work covered by the ONS survey is work in connection with recreating the mental and physical energies people sell to their employer and with bringing up a future generation of wage workers. This means that, strictly speaking, it is not really unpaid. The work itself is unpaid, but not what the person doing the work has to consume to be in a position to do it. This has to be paid for, and is out of wages or state payments such as child benefit and carer’s allowance. This is most obvious in the case of the stay-at-home partner; the food, clothes, etc they consume has to be paid for out of the wage of the working partner. The same applies to everyone carrying out the unpaid work, including those in paid work. Provision for them to create the mental and physical energy to carry out the unpaid work is included in wages.

This brings out the fallacy of the ‘Wages for Housework’ campaign. If the Times’ £12,000 were paid to the stay-at-home partner then the working partner’s wage would come to be reduced by the same amount. In fact if all this work were paid then wages would tend towards 16.2 percent of their current level as the percentage of consumer spending that the ONS says ‘was spent on direct costs for providing unpaid work services, mainly spent on fuel, renting and food.’ This means that in the ONS’s figure there’s double-counting with the greater part of people’s income from work and state payments. This does not make the statistics invalid or useless. They are interesting in revealing what goes into recreating labour-power – which when used by capitalist employers provides them with the unpaid labour that is the source of their profits.

Cooking the Books: The Price of Everything (2018)

The Cooking the Books column from the October 2018 issue of the Socialist Standard

At the end of August the Office for National Statistics published its annual ‘UK national balance sheet’ which it says is a measure of ‘the nation’s wealth’. More accurately it later explains that it’s an ‘estimate of the total value of land, housing, machinery and financial assets held in the UK by individuals and companies.’ What is being measured is the price that the assets held would fetch if notionally sold. The tables can be found here: [Link.]

The figure the ONS arrives at for the end of the year 2017 is £10.2 trillion (a million million, what used to be called a billion), adding that this is ‘an average of £155,000 per person.’ Relevant for comparison with other countries, this latter is completely misleading if taken to mean that every individual in Britain has net assets of that amount, if only because it doesn’t take into account how the £10.2 trillion is divided. As we know from other ONS statistics, it is very unevenly divided.

Wealth is something, either provided free by nature or fashioned from it by human work, that is useful to human life in a particular society. By this standard, financial assets are not wealth; they are merely claims on wealth. Counting them as wealth as well as the wealth they have claims on – for instance, the mortgage as well as the house – is double-counting.

Ignoring, then, financial assets, what’s left are two forms of real wealth, which the ONS calls ‘produced non-financial assets’ (buildings, structures, machinery, equipment, inventories) and ‘non-produced non-financial assets’ (land). The ONS emphasises just how much of their total figure for 2017 is represented by land:

‘UK net worth more than trebled between 1995 and 2017, but much of this was from growth in the value of land. Land accounts for 51% of the UK’s net worth, higher than in any other measured G7 country.’

In Germany in 2017 it was 26 percent. In the UK in 1995 it was 33.7 percent.

The Times (30 August) commented that this showed ‘that the economy is floating on a house price bubble.’ Actually, it’s a land price bubble as it is not the price of houses that has gone up (if anything this tends to go down) but that of the land on which they stand. The ONS statistics illustrate this very well. The total notional price of ‘dwellings’ owned by ‘households’ amounted at the end of 2017 to £1.57 trillion while the total notional price of the land on which they stood amounted to £4.1 trillion, over two-and-a half times as much.

The price of land, however, is as irrational as financial assets in that an increase in its total amount never represents an increase in total wealth. In both Marxian and pre-Marxian economics, land, being what the ONS itself describes as ‘non-produced’, i.e., not the product of human work, has no ‘value’ separate from its price. This is the capitalisation of the income the land is expected to bring as rent over a period of years. This is speculative in both senses of the term; that the rent will be the same for the period is a speculation and that it won’t be can be a subject for financial speculation.

It is not land price bubbles that drive the capitalist economy; that’s the pursuit of profits by ‘non-financial corporations’. Land price bubbles only make the system more unstable, more unequal – and more irrational.

Cooking the Books: What classless society? (2005)

The Cooking the Books column from the April 2005 issue of the Socialist Standard

At one time, a long time ago now, when the Labour Party still retained some sort of vague commitment to being opposed to the workings of capitalism it used to say that it favoured the redistribution of wealth from the rich to the poor. They were going (they said) to establish a more equal society by taxing the rich and using the money to provide better public services for the rest of us.

Actually, in the last century there was a long-term trend towards a less uneven distribution  of wealth ownership. But this did not result from any deliberate policy on the part of governments (the wealthy soon found ways of minimising or avoiding taxes on their existing wealth and on their accumulation of more wealth), but rather from a majority of people coming to own more consumer goods, etc. resulting in the total amount of wealth owned by the non-rich sections of society rising faster than the total amount owned by the wealthy.

The rich still got richer – and, in absolute terms, each one of them got more than each of the rest of us – but, proportionately, together they got less than the rest of us as a group. There was no redistribution from them to us; which would have gone against the logic of capitalism involving as it does the accumulation of more and more capital in the hands of a capitalist class.

In the 1990s this long-term trend (which continued even under Thatcher) was reversed. Since 1991 the rich have been getting richer faster than the rest of us – despite a Labour government. In December the Office for National Statistics published the figures for the latest available year, 2002. Two sets of figures are published, one for all marketable wealth and the other for ““marketable wealth less value of dwellings”. Since capitalism is based on the concentration of the ownership of the means of wealth-production  in the hands of a tiny minority, and since houses are not means of production, it is the second set of figures that are the more relevant (even if they still include other items of wealth such as cars and hi-fi equipment that are also not means of production),

These figures (published on the ONS website at  http://www.statistics.gov.uk/cci/nugget_print.asp?ID=2  show how things have changed since 1996, as the situation inherited by the present Labour government when it came into office:

                                     1996  1999 2000 2001 2002

Top 1% owned               26      34     33     34     35

Top 5%                           49      59     59     58     62

Bottom 95%                    51      41     41     42     38

Bottom 50%                      6       3        2       2       2

As can be seen, whereas in 1996 the top 5 percent owned as much as the bottom 95 per cent - or one out of every 19 persons owned as much as the other 19 (of whom half owned virtually nothing) taken together - by 2002 the top 5 percent owned nearly 40 percent than the rest of us.

Who says that we’re living in a classless society? Who says that the capitalist class have died out? Who says that the Labour Party can deliver a more equal society or is even trying to?

Calculating Capitalism (1981)

Book Review from the December 1981 issue of the Socialist Standard

Demystifying Social Statistics, edited by Irvine. Miles and Evans, Pluto Press, 1979.

Wouldn’t it be nice if the census forms that we completed this year contained questions like: are you a member of the capitalist or working class; give an account of all the property you posses and state the income derived from it; if an employer, state the rate of exploitation operating in your firm? So that we could refer directly to one set of official facts to support our contention that social problems arise because ownership of the means of living is private and profit-dominated, while production is public and necessarily co-operative. But official statistics are commodities tailored to meet the demands of capitalist society. One effect of this is that they mask the existence of the capitalist class and are silent on the source of all wealth; all of which is well-described in that piece of this book called The Poverty of Wealth Statistics.

If you pick and choose you should find something of interest in these twenty-two chapters. For instance, the piece on how official statistics are produced is fascinating and informative It leaves an impression of a bunch of moles boring from within the government statistical service in a way designed to make a Daily Telegraph leader writer see red and sensitive people weep over the stultifying boredom imposed upon statistical producers by rambling bureaucratic procedures.

It’s pleasant to record that though most of the authors are academics they do not shrink from drawing socialist conclusions:

We would replace accountancy in terms of money and profit by accountancy in terms of social needs. We would replace the definition of social goals by those at the top of the bureaucratic pyramids, by democratic self-control over all collective activities. We would then require new ways of measuring our needs and goals, which expressed their great variety rather than reduce them to money values or standards imposed from above. (ibid p.36.)

The question is - how do we get a society like that? By political action allied to knowledge and understanding say the authors. Statistics can play a part here, for they are not just commodities produced in government departments, but aids to knowledge (and to damned lies of course). Just what you can construct with statistics does not depend solely upon your politics, for a major theme of this book is that statistics bear the mark of the social conditions of their production. The Registrar-General’s definition of class is tied to dimensions of social stratification by income, but does not provide any explanation, nor much data, on how class inequality is maintained. While the official lumping together of shareholding wealth by capitalists with workers’ possessions, like cars, mortgages and household effects, ignores the obvious difference that workers in general cannot use their meagre possessions to generate more wealth, while capitalists use their wealth to employ workers who create profits.

These then are some of the marks that statistics bear. A good deal of this book is concerned with re-writing statistical information for radical re-use, so that it may bear interpretations other than those dear to the hearts of government departments. The problems involved in doing so are somewhat overblown by the authors and this takes us to the heart of the matter. Can there be a socialist statistical science? Only to a limited extent until society has been revolutionised, as there is a conflict over reforming the statistical practice of government departments and trying to bring about a socialist revolution. The most effective way of ensuring that socialism never comes about would be for socialists to strive to reform the civil service and fall into the bottomless pit of fabianism. So, as far as socialists are concerned, over facts and figures we “simply have to make do with what is available” (ibid, p. 371). Not a startlingly new conclusion for a book of four hundred pages.

Though much of the argument in this volume goes with the grain of the socialist ease, yet a flaw runs throughout, coming out most clearly in the contributions by John Krige, where he says, in effect, that socialism can never become a science:

In contrast to the natural world, social reality is constructed in and by people’s more or less conscious beliefs and practices. Criticism of a natural scientific theory in the light of facts or a rival theory, while directed at the beliefs of those who hold it. leaves the object of the theory (the natural world) as it is. On the other hand, the object of the social sciences is the same as that which is being criticised, namely, people's beliefs and practices. Thus in criticising those beliefs and practices one aims to change both them and the social order which they reflect and reproduce, (ibid. P-60.)

A feature of twentieth century capitalism has been the amount of criticism it can absorb and the amount of reforming zeal it can incorporate, while remaining unchanged in its essentials. Contrary to the last part of the above quotation it is only criticism of workers’ beliefs that aims to stimulate the practice of democratic revolution, which aims to change the social order. Movements like women’s liberation, societies for social responsibility in science and radical statistics groups could well get much of what they want, yet see the current social relations corrupt female and male equality in sordid legislation and contracts; bewilder responsible science with Windscale farces; and obfuscate the best wealth and poverty statistics imaginable.

The only movement that would be proof against this corruption is a world majority of workers determined to get socialism. Once such a body comes into being, then the world changes, capitalism will be viewed as socialists have viewed it all along. But if the socialist majority never is achieved, then what capitalism is remains an open question, to be fought over by Milton Friedman, the Archbishop of Canterbury and all the rest.

The search for finality, for the perfect case about the physical or social world, using only completely demystified statistical data is a vain quest. Consider - would any such truth ever stop scientists from devising questioning experiments? Consider too the possibility that, when socialism is established, historian of capitalism will still wrangle among themselves over things like - 'was the post-war inflation caused by an excess issue of incontrovertible paper currency and could the various governments have ended inflation whenever they liked, or were they prisoners of their own spending policies? The details of what capitalism was are not all to be decided by a socialist revolution. So what? For years now socialists have possessed the information, the arguments and the strategy for bringing capitalism down. All we lack are numbers. This book suggests reasons why we haven’t got the numbers but they aren’t the right ones.’

B. K. McNeeney

Cooking the Books: The Decline of Manufacturing - Good or Bad? (2013)

The Cooking the Books column from the August 2013 issue of the Socialist Standard

In June the Office for National Statistics published an analysis, entitled 170 Years of Industrial Change across England and Wales, of how people’s occupations have changed between the 1841 census and the latest one in 2011. One of the key points it drew attention to was: 

‘Manufacturing was the most dominant industry in 1841 accounting for 36% of the workforce, followed closely by services at 33%. The expansion of services and decline in manufacturing meant that in 2011, 9% worked in manufacturing and 81% in services.’

The remaining 10 per cent was made up of agriculture 1 per cent (down from 22 per cent in 1841), energy and water (including mining) 1 per cent, and construction 8 per cent.

Services had already overtaken manufacturing as far back as 1881 but it was only from 1961 that the gap between the two began to widen. Until then each accounted for more or less 40 per cent.

Marx pointed to the results of the 1861 census to back up his statement in Capital (chapter 15, section 6) that:

‘the extraordinary productiveness of modern industry, accompanied as it is by both a more extensive and a more intense exploitation of labour-power in all other spheres of production, allows of the unproductive employment of a larger and larger part of the working-class.’

After deducting the young, the old, the sick, housewives, rentiers and those he called ‘the ‘ideological’ classes, such as government officials, priests, lawyers, soldiers, &c.’, out of a total England and Wales population of 20 million he arrived at a figure of 8 million in work, of which he listed:

• Agriculture - 1,098,261
• Textiles - 642,607
• Mining - 565,835
• Metalworking - 396,998
• ‘The servant class’ - 1, 208,648

And he commented:

‘All the persons employed in textile factories and in mines, taken together, number 1,208,442; those employed in textile factories and metal industries, taken together, number 1,039,605; in both cases less than the number of modern domestic slaves. What a splendid result of the capitalist exploitation of machinery!’

The ONS analysis confirms that ‘in 1841, almost one in five working people (18%) were employed in domestic offices and personal services, roughly half of everyone working in service industries.’

Since Marx’s day ‘the extraordinary productiveness of modern industry’ has still made possible an increasing proportion of the workforce in services, though more in those Marx called ‘the ‘ideological’ classes’, especially people working in national and local government rather than in ‘the servant class.’ Perhaps surprisingly, the largest service group today is ‘wholesale and retail trade, repair of motor vehicles and motor cycles, with 4.2 million people, 16% of the working population and about one fifth of everyone working in service industries.’

What exactly Marx meant by ‘unproductive employment’ has been widely debated. The ONS defines a ‘service industry’ as ‘where services are provided rather than a good being produced’, which implies that production involves turning out some tangible, material product. Marx himself didn’t go that far as he regarded the work of transporting and storing goods as productive.

We could argue over how much of the ONS service ‘industries’ amount to ‘unproductive employment’ in Marx’s sense, but the overall situation is clear. Increasing productivity has meant that, just as fewer and fewer people are needed to produce the food we eat so fewer and fewer people are needed to produce the material things society needs. It makes the case for production directly for use (to ‘serve’ people’s needs), which socialism will allow, even more relevant.