Rationalising the Petrol Industry. (1931)

From the December 1931 issue of the Socialist Standard

Miners complain that petrol has helped to deprive them of their jobs. The developments of the petrol industry are at the same time reducing the number of workers required there. Many improvements in the distribution of petrol have been made since the War.

The substitution of the old horse-drawn wagons by motor-lorries has enabled the petrol companies to close down a large number of depots, involving the dismissal of drivers and vanguards in each case, as the motors can cover a larger area. Where depots have not been closed, a thorough revision of the vehicle routes has enabled lorries, drivers, and vanguards, to be dispensed with at nearly all depots.

The replacement of the petrol can by the petrol pump has resulted in the displacement of still more workers. Petrol can be run into a tank-wagon and out again into the retailer’s underground storage much more quickly than when it was necessary to load the cans on to a lorry and then to unload at the retailer’s, and then to load what empty cans had to be returned to the depot for unloading there. Then, of course, there was the filling of the empty cans at the depots, all of which took a considerable time. Vanguards were generally employed to assist in loading cans, but now they have largely been dispensed with, and the larger number of retailers who can be supplied by one tank-wagon has resulted in the elimination of further vehicles and drivers on this score. The large amount of labour involved in the manufacture and the periodical cleaning and painting of cans is no longer necessary. Motorists were induced to change over to pumps by quoting a lower price ex the pump.

Chiefly as a result of these changes in the method of delivery, in one firm alone 2,000 workers have been sacked during the past two years, and for the whole industry in the United Kingdom the number would probably be round about 6,000.

A casual inquirer might ask why, instead of dismissing so many workers, the hours could not have been shortened all round, or more holidays given, or, seeing that there is a like facility of production in the manufacture of cars and motor-cycles, why society could not have provided them with motor-cycles or cars in order to use up the surplus petrol.

The capitalist form of society, however, knows of no such solution. Goods are not produced primarily for use, but in order to make a profit, and when competing capitalists bring down prices in order to undersell a competitor or to force their entry into a price combine, the others are bound to follow suit, in order to retain their profits, cut down the number of their workers to the absolute minimum, and if that is not sufficient, reduce wages.

Hence we see that, all round, increasing facility of production of foods and commodities of all kinds only means an increase in the poverty of the workers.

No modification of capitalism can alter this condition of affairs. The solution is to abolish capitalism. Capitalism is only one of the many forms of society which have evolved, and Socialism is its only logical successor. Only by the establishment of Socialism can the poverty of the workers be abolished. Read our Declaration of Principles and see how this can be brought about.

RAMO.

Voice From The Back: Capitalism in action (2010)

The Voice From The Back Column from the October 2010 issue of the Socialist Standard

Capitalism in action

Capitalism is a very wasteful society. When fruit growers have a more than bumper crop it is common to let some of it rot unpicked. When charities ask for the surplus they are told that to give it away would lower the price. These charities at present pay for the crop that is picked. Here is a recent example of this madness in the retail clothing trade. “High Street retailer Primark has been criticised by charities for its policy of shredding damaged and unwanted clothes. Aid organisations have described the practice as “worrying” and “a shame” – saying items could be used to raise vital funds. Primark said the practice was common and was to protect consumers.” (BBC News, 13 September) Overlooking the hypocrisy of Primark’s “to protect consumers” remark, the purpose of all production inside capitalism is to sell goods in order to realise a profit. Capitalism isn’t interested in protecting consumers or aiding charities. Fruit can rot while people go hungry and clothing can be destroyed while people go about ill-clad. That is how the capitalist system operates.

Modernity, but at an awful cost

The advance of capitalism has led to many improvements in technology. None of us would like to imagine a world without mobile phones, computers or digital cameras, but this being capitalism such advances have led to social disaster for some. A major source of the essential ingredients for such technology is the Democratic Republic of Congo. It is from here that gold, tin, tungsten and tantalum originate. It is also from here that we have had the deadliest conflict since the Second World War with an estimated death rate of 5.4 million people. “International agencies have described how paramilitary groups in the region control many of the mine producing gold and the “3Ts” where locals including children are forced to work for as little as $1 a day. The same groups then help to smuggle the minerals out of the country, where they eventually end up in laptops, mobile phones and video game consoles.” (Times,18 August) When The Times investigators queried the supply of such materials with industrial giants such as Apple, Sony, Noika, Dell, HP and Nintendo they were very evasive, best summed up by Microsoft’s reply “It’s very hard to reliably trace metals to mine of origin.” It is of course even harder for them to let their rivals have exclusive access to these cheap sources.

Business is booming

It is common nowadays to read of growing unemployment, businesses folding and widespread bankruptcy ,but there is one trade that is booming . “Pawnbrokers will soon be as common on the high street as coffee shops and banks, according to the chief executive of Britain’s biggest operator. John Nichols, of H&T, said eventually there would be pawnbrokers in every town centre.” (Times, 25 August) His forecast was made as his firm announced a 71 per cent leap in its profits over the last six months. It is worthwhile noting what the source of this high street boom is put down to. “Slightly more than half of pawnshop customers use the cash to pay for daily essentials, such as food and groceries, while about six out of ten are not in work, according to Bristol University research released yesterday.” (Times, 25 August) Some of us are forced to pawn our sweetheart’s engagement ring in order to get some groceries. Isn’t capitalism wonderful?

The Price of Oil

We are often told by social commentators that capitalism with its wonderful technology and scientific endeavours has made the modern world a vast improvement on the past, but the human cost in injury and death is always soft-pedalled by capitalism’s supporters. Almost unnoticed in the paeans of praise for the profit system is this short news item. “Employers in the offshore oil and gas industry were urged yesterday to improve their safety record after a big increase in the number of workers killed or seriously injured. The Health and Safety Executive said that 17 workers died in off-shore-related incidents and there were 50 severe injuries in the past year, a “stark reminder” of the hazards. The combined fatal and severe injury rate almost doubled, coupled with a “marked rise” in the number of hydrocarbon releases – regarded as potential precursors to a major incident.” (Times, 25 August) When it comes to profit making human life is not a major factor.

A Nice Little Run-around

From time to time that old banger that you called the family car needs renewal. Here is an idea. “Lotus has unveiled the ultimate track-day car – a Formula One-inspired racer called the Type 125. The British sports car company will show its consumer-focused F1 clone at this weekend’s annual Pebble Beach Concourse d’Elegance in the United States, with plans to build only 25 examples from next April. The 125 will cost much less than a real Formula One car but the price tag is still expected to be about $1.1 million.” (Drive, 11 August) C’mon what is holding you back?

The Australian Scene (1964)

From the June 1964 issue of the Socialist Standard

Sweet Sugar . . . .

Capital investment in the Australian sugar industry complex is either high or low, according to the higher or lower profit margins to be gained. As with other industries, sugar has known both these aspects of the trade cycle. At the time of writing, however, it is a booming industry for the cane grower.

Queensland is the sugar state of Australia, and in reviewing the past decade of the industry there, Frank Devine says that the average value of the crop has been in the region of £60 millions a year. It’s an ill wind that blows no capitalist any good, so in 1962, following the United Stales’ decision to stop trading with Cuba, the Australian sugar growers enjoyed a season of almost perfect conditions. The result, according to Mr. Devine, was a record production of 1.8 million tons of raw sugar (500,000 tons better than 1961) and a rake off for the year of £85 millions.

But the sugar men were just flexing their muscles. The income from the 1963 crop (120,000 tons less than 1962) is expected to be at least £105 millions. . . . By 1970 it is estimated, sugar growing in Australia will be close to a £200 millions a year operation. . . . The North Queensland sugar country has almost the atmosphere of gold rush days. (The Advertiser, South Australia, 5/4/64.) 

Not all the growers there are happy about the prevailing conditions, however. “Will the boom go bust?” is a question on the lips of some of the older and more established gentry, who have experienced the leaner and more difficult times of a few years back. They balk at the idea of throwing everything madly into the current boom and have expressed fears about the dangers of over-expansion.

Yet despite themselves, they are hurried along by the tide of frantic boom conditions. To do less would mean falling out of the race altogether and leaving the field to the younger men “. . . full of optimism and busy with plans for mechanisation to make even more competitively efficient one of the most efficient industries in Australia.” An idea of just what this means can be glimpsed from the Commonwealth of Australia Yearbook for 1963, which tells us that about ninety-two per cent of raw sugar is now handled in bulk, with no bagging at any stage.

As we might gather, not all cane growers are rich. Some of them (“battlers” they are called) do their own cane cutting, working terribly hard, but whose return can only be described as meagre after meeting mortgage and hire-purchase payments on plant and equipment. However much they may strive, theirs is a hopeless struggle against the growing efficiency of the big men. They are doomed in the main to bankruptcy, with little else left but their labour power.

Doomed also to extinction (after the manner of the English hand loom weaver of the eighteenth century) is the Queensland cane cutter. During the course of his comparatively short existence, he has become one of the symbols of the tough, cheerful, self-reliant rural battler, resistant alike to smugness, oppressive authority and religious cant. But the rapid growth of mechanisation, as Devine points out, will mean the end of the seasonal worker in the sugar country. ” . . . But it will bring to Ingham and Innisfail and other sugar centres a small army, of new permanent citizens who will sell, maintain and operate the machines.”

So it is the same old picture of emerging industry demanding a specialised labourer, and then casting him into oblivion as further development renders his acquired skills obsolete. Indeed, as though from afar, we hear again the voice of Marx:—

This change may possibly not take place without friction, but take place it must. (Capital, Vol. I.)

. . . . And Sour Grapes.

Grapes grown and harvested for the wineries, for fresh eating, or for dried fruit purposes, are among the most succulent of fruits. Yet because of their commodity status in the modern world, and because of the complications which arise from this, grapes can, and do. acquire a sourness of which perhaps only the grower is aware.

We are beginning to sec the grower viewing his commodity with concern as it becomes evident that demand is not keeping pace with his increasing supply unlike the present position of his fellow grower in the sugar industry. Reading again from The Advertiser of March 5th, Mr. Retalic, secretary of the Primary Producers’ Union of South Australia, airs a dispute between the grape growers and the wine makers. The growers complain that the wineries are refusing to buy much of this season’s harvest. The obvious solution, thinks Mr. Retalic, is to increase the price of sultanas by another £2 a ton. ,

This is clearly a case of man (Retalic) proposing and capitalism disposing, for it is the very uncertainty of the export market for dried fruit that has driven the growers to compete fiercely with each other for sales to the wineries. Just where the buyers are to be found who will agree to pay an extra £2 per ton in a falling market, Mr. Retalic does not say. However, he does seem to know enough about the basic conditions of the market when he admits that:—

The grower could not be blamed for trying to ensure the sale of his grapes, nor could the wine maker be blamed for trying to purchase his requirements at the best price.

So it is simply astonishing then, to hear him round off with a bout of moralising over something which is equally a fact of capitalist life, thus:—-“ What was blameworthy was the complete indifference of each party for the business of the other."

Competition is often lauded by our bosses as something desirable in itself and for its own sake. That sort of philosophy may be alright, when you’re on the winning side, but not when (like Retalic) you start to take some of the knocks. It is then that you begin to deplore “indifference” and want to get together against the other fellow, because he is now bigger than you.

Cold Water on Troubled Oil.

With commendable detachment, The Commonwealth of Australia Yearbook for 1962 informs us on a burning topic of the day. 

The discovery of oil in commercial quantities in Australia has been the object of oil exploration companies for many years. Recent discoveries in Queensland could indicate that this country is on the verge of proving commercial oilfields.

But less detached than the sober appraisal in the Yearbook, and understandably so, is the concern felt and voiced by Senator Maher, when dealing with the results of these expensive oil-seeking ventures. The senator has claimed that “. . . the search for oil in Australia would collapse unless provision was made for the purchase and distribution of the whole of the Moonie (well) production at a fair price.” Investors would lose heart, he said, if all the oil already produced could not find “an immediate market at equitable prices in Australia.” The senator is, of course, after the government to see that this does not happen.

To find and produce the oil is one thing; to sell it in a buyer’s market is another, and apparently more than one capitalist has got the jitters over the prospect of heavy financial loss. It seems that the oil-producing geological processes of the past few million years have played a lousy trick on the companies drilling for a paying flow in this continent, for there are suggestions that the quality of the product is not up to the standard of competitors. Apart from this, however, the adverse factor bugging Australian oil is the meagre flow by average world standards. The local flow rate may prove profitable next century when other wells are drying up, but this is cold comfort to the capitalists who want "a reasonable return” quickly on die millions they have spent. This “reasonable return” apparently carries Australian oil above current world prices to a degree noticeable and discouraging to buyers, so naturally they remain indifferent to the business problems of the sellers.

National Development Minister Sir William Spooner has denied that the question of price has bogged down negotiations between the government and the companies, yet this did not prevent him from saying that:—

If the oil companies remained adamant on the matter of a just price and also failed to lift the whole of the Moonie production, the situation would certainly provoke a head-on collision between some Australian governments and the oil companies.

Oil has had a troubled history wherever it has appeared in the world of capitalism. Australia is no exception. It will be interesting to watch the outcome of the struggle, although it will be of academic importance only as far as workers arc concerned. They had nothing before the oil was discovered. They will be in the same position long after the Moonie well has yielded its last drop.

Peter Furey

50 Years Ago: The Age of Oil (1963)

The 50 Years Ago column from the February 1963 issue of the Socialist Standard

The oil age is coming. Year books, financial journals, the sharks of Throgmorton Street, together with the rest of the interested, “far seeing" exploiters and worshippers of the golden calf, are eagerly discussing the possibilities of oil as a motive force, and how much more profit they can grab by its use.

It behoves the working class to consider the question also, because it is they who are going to suffer, as usual, from what would be a boon and a blessing to all were the toilers sufficiently enlightened and determined to make it such.

The Diesel engine has already proved itself capable of propelling ocean-going steamers, and will doubtless be in general use in the near future. Look at this: “ The engine room staff of the Selandia consists of eight men and two boys. No firemen required. No boilers needed. No loading with bunker coal for the voyage”.

How our masters must rub their hands with delight when they think of the saving of wages, extra cargo space, cheaper ships, and many other advantages. How the thoughtful fireman must curse when his job disappears, and the boilermaker when he reads: “No boilers required”. How joyous the coal-porter must feel when, instead of fifty men employed in coaling a ship, he sees the engineer turn on the oil cock and fill his tanks in a few hours! Oh! the unspeakable happiness of the lightermen and railwaymen at the thought of not having to transport any more dirty coal to the docks! What joy dwells in the heart of the miner as he thinks of the near future when oil competes fiercely with coal, and thousands of him are saved the trouble of squabbling over the “abnormal places”, having gained the displaced wage-slave's normal place—the gutter.

From the Socialist Standard
, February 1913

Which Arabs; Whose oil ? (1977)

From the April 1977 issue of the Socialist Standard 

A little snapshot can show more than a whole picture. In December London had its coldest day for quite a few years. Snow, sleet, a biting wind, all most unpleasant even to a well-wrapped-up northerner. In a shop doorway, huddling out of the snow and looking very miserable, was one of the numerous Arabs now seen in London. He was dressed suitably for the desert sands — thin cotton galabieh, ditto keffiah on his head, and almost bare brown feet in open sandals. That same day an article by Anthony McDermott (one of the Guardian Middle East experts) said that Abu Dhabi has the highest per capita income in the world yet most of its families are miserably poor. The poor creep was puzzled. Simple answer: A few Arab brothers own the oil. The bulk of the Arab brothers own the sand (perhaps not even that). No prizes which lot the poor devil in Baker St. belonged to. His chief was doubtless in a warm bed in the Dorchester (which belongs to Arabs). Could there be a lesson here for the Scottish working-class fools who are voting Scots Nats to secure “our oil”?

L. E. Weidberg

The Change of Rulers in Iran (1979)

From the March 1979 issue of the Socialist Standard

There is a story said to have circulated in Tehran recently about a meeting between the Shah and the Ayatollah Khomeini in 1963 after the riots which Khomeini had played a prominent part in stirring up. “I’ll pay you $25 million if you leave the country”, said the Shah. To which Khomeini is supposed to have replied, “I’ll give you $50 million if you leave”. In the event Khomeini was forced into exile for nothing. This time it’s the Shah who has left, though no doubt with a lot more than $50 million in his pockets. Of course no such conversation ever took place but the story does neatly illustrate that the social conflict in Iran was essentially between two sections of the propertied class there.

The Shah is the son of a jumped-up army officer who seized power in 1921 and had himself proclaimed Shah, or Emperor, a few years later. He came to the throne in 1941 when his father was deposed by the Allies for his pro-Axis sympathies but only acquired dictatorial powers in 1953 in a coup d’Etat which overthrew the nationalist Prime Minister, Mossadek, who in his day was the bugbear of the British press for having dared to nationalise the British-owned Persian oil industry.

Oil is of course the source of the immense wealth of the Shah and the section of the propertied class he represented. The payments which oil companies pay to the States where oil is produced are a form of ground-rent. The Iranian State receives this rent purely and simply because it happens to monopolise a part of the globe where oil is found. The Shah used this windfall, first, to build up the Iranian armed forces and, secondly, to introduce industrial capitalism into Iran. In doing so brought into being a new class of rich entrepreneurs independent on his State for the capital they invest.

But there already existed in Iran a class of wealthy people, the bazari, the merchants and traders of the bazaars which exist in all the big towns. The bazari existed long before oil was discovered and long before industrial capitalism was introduced. Their economic role in pre-capitalist Persia was to keep the towns supplied with food and other essentials, and this role still survives to a certain extent today although it has been severely reduced by the alternative commercial and banking network that has accompanied the coming of industrial capitalism.

The bazari have always been closely linked to the mullahs and ayatollahs, the priests of the Shi’ite sect of Islam to which most Persians formally belong. The mosque is generally situated in the bazaar area but, more important, the Shi’ite priests are financed by the various payments the merchants are required to make to them under Islamic law:

“The Shi’ite hierarchy, from the simple mullah to the ayatollah also collects a substantial tax, the khoms or ‘fifth’ which consists of taking one fifth of all commercial profits and, generally, on any capital gain as well as on the sale of lands belonging to Muslims to a person of  another religion . . . The amount of the ‘fifth’ is in principle divided in two, one part is normally reserved for the destitute, on condition that they are sayyeds, that is descendants of the prophet. The other part is distributed amongst the mullahs and ayatollahs. These also have the right to a hidden tax, the zahat, which consists in asking every believer to dispose of any ‘wheat, barley, dates, raisins’ but also of any ‘gold, silver, camels, sheep and cattle’ which he does not really need. This zahat is what now permits the church to help a large number of strikers.

“But the Iranian Shi’ite hierarchy has access above all to the immense wealth of the bazari of all the main towns of the country. For centuries, it has forged close links with this little business world, has given the blessing of Allah to certain transactions and has thrown all its weight against the secular power. When this latter became too demanding or when its desire to modernise the country became too restricting, the bazari knew that Shi’itism was behind them and were prepared to do anything for it” (Républicain Lorrain, 14/1/79).

Two Iranian economists writing in the December issue of the monthly Le Monde Diplomatique describe how the Shah’s policy of developing an industrial capitalism in Iran adversely affected the bazari:

“After the 1953 coup d’etat, the re-integration of the Iranian oil economy into the world market and the ‘open doors’ policy led to a change in the pattern of trade, exceeding more and more widely the organisational capabilities of the bazaar. The beginnings of an import-substitution industry afterwards aggravated the difficulties of the bazaar, which was excluded from the new circuit of exchange set up to serve the needs of the new industries. The traditional importing of consumer goods gave way to the importing of capital goods, and the quotas or duties adopted to protect the nascent industries heavily penalised the traditional activities of the bazaar.”

They go on to note how this also hit the finances of the Shi’ite priesthood:

“This economic marginalisation of the bazaar is directly connected with the simultaneous weakening of the network for financing the ‘clerical funds’; these, under the control of the religious leaders known for their moral integrity, receive and distribute various forms of Islamic taxes and alms . . . Today, the inflow of money into these funds controlled by the progressive or combative ayatollahs bears witness to the extent of the struggle of the traditional bourgeoisie against a new class linked to the interest of the multi-national firms. But, in the first phase of industrialisation, the weakening of the bazaar which has historically lived in symbiosis with the religious institutions (financing of clerical funds, legal-religious framework for contracts) considerably reduced the socio-economic effects of the redistribution which the latter assured.”

The Ayatollah Khomeini first came into prominence in 1963 as the instigator of riots centred on the bazaars in Tehran and some other cities, riots which were ruthlessly crushed by the Shah’s armed forces.

It can thus be seen that the conflict in Iran is not, as it is often pictured, between a Westernising ruler and a reactionary priesthood defending old-fashioned values. That particular conflict is only an ideological reflection of the more basic conflict of sectional interest within the Iranian propertied class, between the bazari and the new bourgeoisie brought into being by the Shah. Behind the condemnations on religious grounds of beer and mini-skirts (indeed of any kind of skirts) lies an earthly material interest.

For the time being, against the logic of history, the bazari seem to have come out on top. Through their links with the mullahs and ayatollahs they have been able to control the urban poor, including large sections of the working class, and to use their discontent as a battering ram to overthrow the Shah and his regime. The urban poor of course had plenty to be discontented about. Frequently recent migrants from the countryside, they have been forced to live in disgusting housing conditions, only finding employment, if at all, at starvation wages. Independent trade union activity has been banned and strikes crushed sometimes with loss of life. The notorious secret police, the SAVAK, with its omnipresent system of spies and its torture chambers, has been there to root out all opposition to the Shah’s dictatorship.

It is sad that this discontent should have been directed by the mullahs to defend the sectional class interest of the bazari and towards the chimera of an “Islamic Republic”. But there is a reason for this. The only opposition to the Shah that was able to survive the onslaughts of SAVAK was the bazaar, with its independent economic base, and the Shi’ite priesthood it financed. The mosques thus became the focus of opposition to the Shah, especially as the bulk of the urban poor are first-generation migrants from the countryside where religious sentiments are always stronger.

It now looks as if the people of Iran are to have an “Islamic Republic” inflicted on them. But whatever happens industrial capitalism has come to stay in Iran, whether or not the mullahs like it or what comes with it (consumption of alcohol, a certain freedom for women). The Koran, which originated in a pre-capitalist agricultural and trading society, may lay down rules as to how such a society should work – indeed its rules are merely the reflection of the way such a society did work—but capitalism cannot be run according to them.

What will probably happen is that after an initial attempt to put the clock back for the benefit of the bazari, religious thinkers will be found within the “Islamic Republic” to declare that industrial capitalism is not after all contrary to the Koran. This happened in Tunisia a few years after it got its independence from France, as reported by the old News Chronicle at the time (5/3/1960):

“Up to now, as in the rest of the Moslem world, Tunisia’s life came almost to a standstill during Ramadan because of the dawn to dusk fast. In some cases production dropped 70 per cent. 

Bourguiba has not banned the fast outright. But he has stated firmly that fasting will not be accepted as an excuse for less work” (quoted in the Socialist Standard, April 1960)

As for the workers and peasants of Iran, they will rapidly find that they have just changed one set of rulers for another.

Adam Buick

Pathfinders: Sorry, Page Cannot Be Displayed (2006)

The Pathfinders Column from the March 2006 issue of the Socialist Standard

Sorry, Page Cannot Be Displayed

“Your abhorrent actions in China are a disgrace. I simply don’t understand how your corporate leadership sleeps at night.” Tom Lantos of the US House International Relations subcommittee was pulling no punches when upbraiding representatives of Yahoo, Microsoft, Cisco Systems and Google for their supine acquiescence to the Chinese government’s insistence on strict censorship in their search engines. He further told them that they had accumulated great wealth and power, “but apparently very little social responsibility” (BBC Online, Feb 15). Google recently agreed to block politically ‘sensitive’ sites and even words, including the word ‘democracy’, while Yahoo has recently been accused by the media watchdog Reporters Without Borders of handing over information to the Chinese authorities that resulted in an 8 year prison sentence for the writer Li Zhi in 2003 and a 10 year stretch for another writer, Shi Tao, in April 2005.

But with an internet population of 111 million, the largest outside the US, China is hard to resist, and service providers who resist its charismatic charms, or who debate political ethics, are likely to end up in history as footnotes. This is globalisation, after all, and arguably it’s not all as bad as it sounds. Accusations that these companies are assisting China to suppress rebellion in return for market share is not entirely fair, since the world saw graphically how well China was able to suppress open rebellion entirely by its own efforts. Chinese capitalism is moving towards liberalisation because liberal capitalism is cheaper and easier to run than state repressive capitalism, and the entry of western IT into China is the thin end of the liberal wedge, bound even though it presently is by guards and restrictions. And unlike Yahoo, Google shows on its search results page which sites have been blocked, so that users in China do at least know that they are being censored. Wouldn’t it be interesting if we knew what information was being denied to us in the West?

PVI PDQ?

Hold the front page! Sex is good for you, says study! Acute stress is relieved by sex, according to new research from the University of Paisley, UK (New Scientist, Jan 28). If this sounds like one of those studies scientists frequently conduct simply to prove the galloping obvious, here’s the twist – it has to be penetrative vaginal sex, because other forms including masturbation don’t work as well, and abstinence doesn’t work at all. Of those studied when put in a high stress situation, those who had had exclusively penile-vaginal intercourse (PVI) recovered fastest, followed by those who had had non-coital sex or simply masturbated. Abstainers had the highest blood pressure and took longest to recover. The researcher, Stuart Brody, speculated that the result might be caused by a ‘pair-bonding’ hormone called oxytocin, released during penetrative sex.

What the study doesn’t show, of course, is the states of mind of those involved. It seems logical to Pathfinders at least that those having PVI are also most likely to be those enjoying another, more unquantifiable, phenomenon: love. So could it be love that takes the stress away, rather than the sex?

At any event, capitalism has done the same antisocial thing to sex that it has done to food, clothes, shelter, and all those other little needs of ours – it has commodified it, which means in practice that a very large proportion of the population have no access to it. It will be very interesting, once the brutal and human-hating engine of capitalist market culture has been switched off, to rerun these studies. Pathfinders suspects that there will be a lot more sex, and a lot less stress, all round.

Life Sentence

Further to our enquiry (Socialist Standard, Feb 2006) concerning the dubious benefit of living longer in capitalism, apparently we can already look forward to the even more dubious appeal of 75 year mortgages and a retirement age of 85 (BBC Online, Feb 17).

Shripad Tuljapurkar, a biologist from Stanford University, told the American Association for the Advancement of Science annual meeting in St Louis that anti-ageing advances could raise life expectancy by a year each year over the next two decades. This was, he thought, going to put a strain on social security and medical care, unless the retirement age was raised. Translated, what this means is that the capitalist class is damned if it’s going to pay for workers to have a long holiday from hard labour when they could be nose to the grindstone for another twenty years, or until they drop dead.

The biologist did add that the trend towards longevity would create a “permanent underclass” in poor countries that didn’t have the same resources. Sadly, this underclass already exists, and living to the age of 45 would be an achievement for many members of it.

‘Fiasco’ in Chad.

Imagine giving a mugger your wallet on condition that he only used the money to look after homeless kittens. This is pretty much what the World Bank did when, in collaboration with Exxon Mobil, it invested $4.2 bn to develop oilfields in southern Chad and then build a pipeline to pump all this lovely oil through neighbouring Cameroon to the coast.

Now as everyone knows, Chad is a corrupt dictatorship with no record of respecting human rights or giving two hoots about its own poverty-stricken population, but the government was surprisingly keen to agree to use the profits from all this oil development to invest in social healthcare programmes, a condition the pious World Bank insisted on. Now that the work has been done and the pipeline in place, the Chad government has – shock, horror! – reneged on the deal and used the first profits for what it euphemistically calls ‘internal security’, ie. suppress poverty-inspired revolts and also, probably, start another war with Sudan (New Scientist, Feb 11).

Pathfinders would like to offer its services to the World Bank as consultant (at appropriate fees) the next time it plans to make a deal with a despotic bunch of crooks. Predicting this cock-up would have been easy money. But the suspicion is that the World Bank is not really as naïve as it looks, and that in among the hand-wringing a satisfactory deal has been done. Exxon Mobil, for one, must be crying all the way to the bank.

Paddy Shannon

Voice From The Back: Business ethics (2000)

The Voice From The Back Column from the April 2000 issue of the Socialist Standard  

Business ethics 1 

Hundreds of Western firms are courting Saddam Hussein’s regime in the hope of contracts if the embargo imposed after Iraq’s invasion of Kuwait in 1990 is lifted soon. Scores of deals have been struck, aiming to take advantage of possible waivers of sanctions on certain goods . . . The courting of Baghdad, which has the second largest oil reserves in the world, surprises few experts. “Iraq is the big prize,” said Lowell Feld, of the US Department of Energy, who wrote a recent report on Iraq’s oil industry. “There are dozens of firms out there salivating, ready to move in as soon as the UN gives the go-ahead.” Observer, 26 December.

Business ethics 2 

A United Nations embargo on all diamond exports from Liberia, a high level commission of enquiry into the links between organised crime and the Belgian diamond industry, and a new International Diamond Standards Commission under the UN are urged in a new report on the disintegrating society of Sierra Leone. The report, released in Canada and launched by a former foreign minister, Flora MacDonald yesterday, is critical of De Beers, the dominant player in the world’s diamond industry. It set a challenge to the UN to take decisive action on one of the motors of war across a swath of west and central Africa. The diamond trade, most of it illegal, plays a major part in the wars or shaky peace in Sierra Leone, Liberia, Angola and Congo, but the actors reach far beyond west Africa. Guardian, 13 January.

For our safety 

The United States stored 12,000 nuclear weapons and components in at least 23 countries and five American territories during the cold war—including Morocco, Japan, Iceland, Puerto Rico and Cuba—according to an article based on a recently declassified document. The document, a secret study written by the Defense Department and titled “History of the Custody and Deployment of Nuclear Weapons: July 1945 through September 1977”, is described in the November/December issue of The Bulletin of the Atomic Scientists. New York Times, 20 October.

Competition—great! 

The relentless factory-like drive to produce the perfect 40mph racing machine results in the mass slaughter of 20-30,000 greyhounds each year. These make way for the next 20-30,000 which are bred each year in the UK and Ireland. Only a small number of them make it to the betting tracks. The rest is “wastage”. Despite attempts by the industry to prevent the slaughter, some trainers and owners prefer the cheaper option of killing dogs to paying between £20-30 for them to be humanely put down by a vet. Unwanted greyhounds have been found starved, clubbed, electrocuted and injected with petrol. Some are flung from speeding cars, sold to vivisection labs or hung from trees. Corpses have been dragged up from the sea with rocks tied to their legs. Big Issue, 12-23 January.

Care in the community 

The government is to net a £4 million windfall after the West Midlands NHS Executive sold off a slice of the former Rubery Hill [mental] Hospital site for a new pub and lodge. Evening Mail, 13 January.

The rule of law 

“If there is indeed a ‘war on drugs’ it is not being won; drugs are demonstrably cheaper and more easily available than ever before. The same picture can be seen in the USA and elsewhere . . . If a significantly large, and apparently growing, part of the population chooses to ignore the law for whatever reason, then that law becomes unenforceable. A modern western democracy, based on policing by consent and the rule of law may find itself powerless to prevent illegal activity—in this case the importation and use of controlled drugs . . . The best example of this is cannabis—the UK has the highest rate of cannabis use in Europe, higher even than in the Netherlands which has a tolerance policy . . . If prohibition does not work, then either the consequences of this have to be accepted, or an alternative approach must be found. The most obvious alternative approach is the legalisation and subsequent regulation of some or all drugs.” Richard Brundstrom, former Assistant Chief Constable, from a report published by Cleveland Police.

The causes of war are . . . 

Three days after raising its flag in Grozny’s last rebel stronghold, Russia is claiming the richest prize of the war: Chechnya’s potential as a conduit for the vast oil reserves of the Caspian basin . . . As one export put it yesterday: “Access to the Caspian has historically been the reason for Chechnya’s importance. Why else did Hitler try so hard to conquer it?” Times, 10 February.

It all depends . . . 

Death in Britain is not an equitable business. Nor is health. People in Springburn, Glasgow, suffer a rate of chronic illness of 155 per 1,000. In Wokingham, Berkshire, the rate is 36. There are 67.9 deaths per 10,000 live births in Springburn but only 53.2 in Wokingham. Our environment can kill, in other words. But not at the same rate. Observer, 13 February.

Suckers for punishment in Venezuela (2000)

From the September 2000 issue of the Socialist Standard

On Sunday, 30 July, Hugo Chavez, former army colonel, leader of a failed coup in 1992, and President of Venezuela since February 1999, was re-elected in what Richard Gott described in a letter to the Guardian (2 August) as “a stunning victory that surprised the pollsters”. Actually, the opinion polls the previous week gave him a lead of 20 percent over his main challenger, Francisco Arias. More than 80 percent of those who voted for Chavez were said to be living below the official poverty line.

In 1996, unemployment in Venezuela stood at 17 percent, inflation rose during the year by approximately 100 percent, and per capita oil income, on which the country relied, and still relies, for more than 80 percent of its foreign exchange, declined by three-quarters between 1980 and 1995. Nevertheless, Venezuela was, and is, the world’s third largest oil-producing country, and has the largest oil reserves in the Western Hemisphere.

In July last year, Chavez’s “leftist” coalition won an overwhelming majority of seats in the 131-seat assembly, despite a sharp economic downturn and the loss of at least 600,000 jobs since Chavez took office in February. He blamed the corruption and poverty of the workers on previous administrations, and promised to create a “true democracy”, free of corruption and poverty for the masses, despite appointing many of his former fellow army plotters to top posts in the state. Such was Chavez’s “Peaceful Revolution”!

Then, in December, after torrential rain for more than a week, Venezuela suffered devastating floods which caused landslides, inundated the capital, Caracas, swept away roads and shanty towns, and cascaded down the steep valleys to the Caribbean coast, and into the sea. Large tracts of Vargas state, the worst affected, were flooded. In the words of a Guardian headline (24 December 1999), “Venezuela pays the price for ecological carelessness”, caused we should add by the quest for profit at all costs by the Venezuelan, and multi-national capitalist class.

In January this year, in the wake of the floods and the destruction of thousands of homes, it has been reported by the newspaper, El Nacional and a number of human rights groups, that at least 60 people (the government’s figure) had been killed by the military between 17 and 30 December, allegedly to stop looting. Chavez insisted that “nothing can be considered proof” of the military’s involvement in the murders; but El Nacional said that President Chavez had “expelled three soldiers from the National Guard on charges that they had participated, not in the executions, but in looting”.

Meanwhile, since January 1999, the Venezuelan economy has declined by seven percent, foreign investors have withdrawn more than £5bn, and unemployment is still more than 600,000 more than it was when Hugo Chavez became President in February. The “acute economy slump” continues; and the voters, over 80 percent of whom are employed or unemployed workers, have given Chavez another six years of power. And capitalism in Venezuela, as elsewhere, staggers on.

 Peter E. Newell

Cooking the Books: Negative prices: how come? (2020)

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

‘US oil prices turn negative as demand dries up’, the BBC reported on 12 April. A ‘negative price’? How can that be? Why would a seller want to pay a buyer to buy their goods? Actually, something similar, though described differently, frequently occurs when supply exceeds market demand; in that case, if they want to sell their goods, sellers have to cut their price, sometimes even below the cost of production. This is what happened with oil when, as a result of governments shutting down productive activity to combat the spread of the virus, the supply came to exceed the market demand for it for delivery on certain dates. This presented the oil producers with the problem of where to store the excess oil. This (e.g. hiring oil tankers) can be expensive and explains why the oil producers were prepared to sell their oil at a lower price to someone else to buy and store; cutting their losses by in effect paying someone else to store it. It is only described as a ‘negative price’ because of the way oil is traded and its price determined on futures markets where delivery is for a fixed future date.

Marx employed a similar concept, though not the terminology, to explain the source of the profits of capitalist businesses engaged in merely buying and selling commodities (he called it ‘merchants’ capital’ but today ‘dealers’ capital’ might be better). According to the labour theory of value, only the labour employed in activities connected with the actual transformation of materials that originally came from nature into something useful to humans created value and so surplus value, the source of profits. Where, then, did the profits of capitalists whose business didn’t do this come from?

At first sight, the profits of dealers seem to come from simply increasing the price of what they buy; hence their unpopularity especially amongst small-scale producers as unproductive middlemen exploiting them. Under developed capitalism, Marx explained (in chapter 17 of Volume 3 of Capital on ‘Commercial Profit’), this is just an appearance. The ‘producers’ that the dealers would be ‘exploiting’ would then be productive capitalists (whether engaged in agriculture, mining or manufacturing), but why would these latter allow this? Why wouldn’t they avoid it by themselves selling their commodities directly to the final consumer?

Marx’s answer was that this would tie up some of their capital and not be the most profitable use of it. So what evolved, as capitalism developed, was a situation in which they in effect pay dealers to sell their commodities to the final consumer by selling them to the dealer at a price below what they could get if they did this themselves, allowing the dealers to pocket the difference. Which explains how dealers share in the surplus value produced in the productive sector of the economy without their capital being invested in any value-producing activity.

Thus dealers make their profits, not by selling a commodity above what Marx called its ‘price of production’ (cost of production plus the average rate of profit), but at it, having bought from the productive capitalists below that price. As Marx put it:

‘The merchant’s sale price is higher than his purchase price not because it is above the total value, but rather because his purchase price is below this total value’.

The price at which the productive capitalists sell their commodities to a dealer could be described as a ‘negative price’ but this is not a passing effect of the operation of the law of supply and demand when supply comes to temporarily exceed market demand as it did with oil in April. Rather it is a permanent feature of the circulation of commodities that has evolved as it has proved more profitable for there to be a division of capital between productive capital and dealers’ capital.

Oil: the greasy politics (1983)

From the June 1983 issue of the Socialist Standard

Oil has been used for a very long time. More than 5000 years ago, Sumerians, Assyrians and Babylonians took advantage of large seepages at Hit on the Euphrates. In the early centuries AD Arabs and Persians developed an interest in crude petroleum and its distillation into illuminants and it may be that this technique was carried to Western Europe from the 12th century onwards through the Arab influence in Spain. In North America the Indians used oil as a medicine and the early explorers found seepages in what are now the states of New York and Pennsylvania. Up to the start of the 19th century illumination in the United States and other industrially advanced countries was little better than that of the ancient Greeks and Romans. The increasing development of capitalist industry brought new needs for additional sources of oil. By the middle of the century kerosene or coal oil. derived by distillation of coal, was in common use and the need for yet cheaper and more convenient sources of lubricants and light grew more pressing. In 1859 in western Pennsylvania the first well specifically for oil was drilled. Before 1900 oil field discoveries in the United States covered 14 states and there were finds also in Europe and the Middle and Far East.

At the outset of the 20th century the use of refined petroleum and lubricants ceased to be of primary importance and the industry became a major supplier of energy. In 1980 oil and natural gas together supplied two-thirds of the world demand, with the use of approximately 80 million barrels a day. This does not mean that oil is a satisfactory fuel from an ecological viewpoint: it is a heavy pollutant and when it is burned many valuable chemicals are wasted. Such bad effects have to be really serious to figure in capitalist calculations, when cheapness, availability to the consumer and profitability to the producing interests are always the main considerations.

Reliable estimates about oil reserves and new resources are difficult to obtain because the relevant information is in the hands of the oil companies themselves. Where these firms are government owned, as is the general rule in so-called communist countries, such estimates can be state secrets. OAPEC have stated [1] that about half the known reserves in the Arab states have now been extracted. However, excluding unavailable figures for China, it was estimated in 1974 [2] that about 850,000 million barrels of oil remain to be found, 40 per cent behind the Iron Curtain. In the Soviet Union, Middle East, Canadian Arctic Islands as well as the unknown Chinese contribution these discoveries can be expected mainly on land; elsewhere the great majority will be offshore. There is still a lot of oil over which to fight.

It is because oil is such a vital source of energy that it poses considerable problems for capitalist administrators. The interests of those who profit from its production are clearly to obtain as high a price as possible, just as those who are users of petroleum products strive to keep their costs as low as they can. In such circumstances the state usually has to intervene to regulate the conflict in the interests of the ruling class as a whole, as happens with other important industries. In general, capitalist governments have found oil interests very hard to handle. The industry is vastly profitable, it very soon took on a multinational character, and its products can now be carried quite easily all over the globe. To try and straightjacket the industry might lead to an interruption of supplies which, even temporarily, could have serious repercussions. Also in many states, particularly in the Middle East, it is the producers who are the dominant, indeed virtually the only, capitalist interest.

This apparent lack of interest has led observers such as Anthony Sampson to state [3] that capitalist governments have evaded the problem of the control of the oil companies. It is true, and not particularly surprising, that at certain times oil lobbies have by corrupt means gained undue influence over capitalist governments. Such was the case in the United States in the 1920s when the Teapot Dome Scandal rocked Washington and probably contributed to President Harding's death in office. However, capitalist politicians all over the world are nowadays at their wits end to find a way to regulate the situation. To take a cricketing analogy, Sampson's insinuation is rather like accusing bowlers of not trying to get Geoffrey Boycott out because statistics show that he is rarely dismissed. Sampson deserves credit for the diligence of his research, but unfortunately suffers from the reformist delusion that capitalism can be made to work in the interests of the whole population. He does however state that “any agreement over oil implies a first step towards some form of world government". We shall return to this later.

The first big manifestation of oil politics occurred in the United States in the closing years of the last century. Many of its features are still to be seen today world wide. John D. Rockefeller, using mainly borrowed money, established himself in the refinery business and by 1870 had brought Standard Oil into being. He then combined with some of his competitors to fund a Central Association with himself as president. Such a combination of capitalist concerns to pursue a joint interest is known as a cartel. This provoked the producing interests to try to form a cartel of their own. Rockefeller's cartel was boycotted, and an agreement was reached to stop new drilling and sell as a fixed price. However the temptation to undercut each other proved too much, the bottom fell out of the market and Rockefeller had won. He was contemptuous of the efforts of the producers, explaining [4]: "The dear people, if they had produced less oil, they would have got their full price”. This success led to a number of refiners selling out to Rockefeller, giving his trust a monopoly. His success and that of other trust barons, however, alarmed other capitalist interests and eventually led Theodore Roosevelt's administration to use anti-trust legislation against him. Standard took the fight to the Supreme Court who ruled in May 1911 that it must divest itself of all its subsidiaries.

This exposed the difficulties cartels have in sticking together in face of competition between individual members. If these capitalist interests cannot maintain such limited agreements, how can we expect joint action on a global scale to take steps towards world government? Yet Sampson sees this as a necessary condition to control the oil industry. The Rockefeller example shows the cartels and trusts in turn provoking counter attacks by the state in the interests of the majority of the ruling class, although this took longer to come about than would probably be the case today. The crushing defeat suffered by the producers at Rockefeller's hands is less typical.

The United States were fortunate at that time in having their own native oil supply. Underwater exploration had yet to materialise. Britain and other West European countries had no supply of oil and, as World War I approached, were only too well aware of their vulnerability. Where, for example, was the Royal Navy to obtain oil? Attention was directed towards the underdeveloped parts of the world where the vital fluid was to be found. Burmah Oil, formed to exploit discoveries in Burma, produced an offshoot, Anglo-Persian, based on newly acquired concessions in Iran (then called Persia). Only three months before war broke out the British government, prompted by Winston Churchill, acquired a 51 per cent stake in this company, later renamed British Petroleum (BP). Eventually the American firms, unable to meet increasing demand from home supplies, were also forced to look overseas. Saudi Arabia was to become an American sphere of influence with an organisation called Aramco, jointly owned by four oil companies, to run the concessions. These new relationships, so similar to those between imperialist nations and their colonies, contained the seeds of future trouble. As native ruling classes developed in these territories, leading eventually to the formation of their own governments, so complaints began about the profits which the oil companies were making at "their expense”. These nationalists looked for ways to obtain a larger slice of the cake. Attempts by Mexico in 1938 and by Iran under Dr. Mossadeq in 1951 to nationalise “their” oil industries were eventually defeated because competing customers were able to combine and enforce boycotts. However, nationalist feeling in the oil producing countries continued to gather momentum and the stage was set for the formation in 1960 of the Organisation of Petroleum Exporting Countries (OPEC)

OPEC would probably have formed itself in any case, but the act was triggered by price cutting by Exxon (ESSO), one of the giant companies popularly known as the “seven sisters". They reduced their posted price by 10 cents a barrel in August 1960. The other six “sisters", although none too happy, eventually felt compelled to follow suit. There was an oil glut at the time and, as happens periodically, Russia was threatening to flood the market at discount prices. This cut helped to unite the producing nations. One month later, on September 9, representatives of five of them, who were at that time collectively responsible for 80 per cent of the world’s oil exports, met in Baghdad and OPEC was formed. Eventually membership grew' to 13 — Algeria, Ecuador. Gabon, Indonesia. Iran, Iraq. Kuwait. Libya. Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela. From the start OPEC made it clear that they were, in the words of one delegate, "a cartel to confront a cartel”. [3] Their main object was to raise their revenues. The reaction of the oil companies was to encourage production outside OPEC, a situation which accelerated the coming of North Sea Oil.

OPEC's fortunes have fluctuated with the current state of the oil market, contrary to ideas that the industry is a "special case" somehow exempt from the normal operation of the forces of supply and demand. The oil glut persisted during the 1960s and OPEC was relatively ineffective. After an attempt by the Arab nations to impose an embargo following the Arab-Israel six-day war in 1967 had failed because the non-Arabs did not give their support, the Organisation of Arabian Petroleum Exporting Countries (OAPEC) was formed by the Arab states who nevertheless remained within OPEC. By the 1970s however things had changed. Demand for oil was running considerably ahead of previous forecasts, and the glut was subsiding. The Libyan crisis of 1970 was the first sign of this. Following the deposition of King Idris, Colonel Gadaffi's regime threatened 21 companies which held Libyan concessions that unless they raised the price paid to Libya he would sell oil to Moscow. There were now so many competitors in the field that the oilmen could no longer enforce the type of boycott which had toppled Mossadeq in 1951, and eventually they had to agree to a price increase of 76 cents a barrel.

In this situation many OPEC members negotiated “participation" agreements allowing them part ownership of the companies' concessions. By September 1973 the price of oil on the spot market rose above the posted price for the first time since the formation of OPEC. The following month the Yom Kippur war broke out between Israel and the Arab nations. In Kuwait later that month OPEC decided to raise prices by 70 per cent and simultaneously OAPEC announced an oil embargo involving a 5 per cent cut in production each month until Israel withdrew from the territories it had occupied in June 1967. By the time the dust had settled the price had quadrupled in just over two months. The general political uncertainty in the Middle East helped to keep prices up and during 1979-1980 the Khomeini take-over in Iran and the Iran-Iraq war caused some panic among the oil companies; prices nearly trebled during this period. In an attempt to form an effective counter cartel to confront OPEC, members of 21 oil importing nations agreed to form the International Energy Agency (IEA).

The current slump has meant that such price rises could not he maintained. Demand for oil inevitably fell off. Sales of smaller cars picked up appreciably in the United States. The development of sources outside OPEC meant that the latter’s share of the market was declining. OPEC’s combined oil revenues [5], which were $275 billion in 1980, had declined to an estimated $205 billion in 1982. In April 1980 Japanese oil industry executives refused to pay the National Iranian Oil Company $35 a barrel. Iran was now only exporting 1.5 million barrels a day as opposed to 4 million under the Shah. Differences which had always existed within OPEC came to the fore. The main one was between those nations led by Iran, which have large populations and need money quickly, and smaller nations who can take a more relaxed, long term view. The latter are led by Saudi Arabia, with estimated reserves twice those of Iran. The Saudi oil minister and spokesman — Sheik Yamani, suave and Harvard educated — became a world figure in the 1970s and for many typifies OPEC.

The Saudi group need to retain trade into the next century. They were moderates on price in 1979-80 for fear that by going too high they might stimulate alternative energy projects which could drastically reduce their business. Now, while sharing the OPEC desire to avoid a price slump, they are restless about the restrictions on production required to underpin the price. In contrast the Iran-led group have claimed that the high price is good medicine for the importers because it forces them to practice conservation and look for other sources of energy [6]. Equally hypocritical is the claim by OAPEC [7] to be acting in the interests of non-oil Third World countries. The lie to this is given by figures showing [5] that OPEC’s current account surplus rose to around $110 billion in 1980. A fraction of this surplus was invested in less developed countries, but a large slice was added to bank deposits. The Saudi led group at OAPEC has always found difficulty in finding profitable investment channels for its massive oil income. Despite the trappings of wealth Saudi Arabia remains a backward area which still punishes petty "theft" by cutting off a hand, in a ceremony largely unchanged since the days of Mahomet.

The term “price war" has been used almost exclusively for periods of price cutting such as the present. The current round started in February, when posted prices in the United States were marked down by about $2.50 a barrel, and non-OPEC Russia and Egypt reduced export prices. The British National Oil Corporation, a government owned body set up to deal with British North Sea Oil. then cut its price by $3 to $30.50 a barrel. An OPEC meeting in January having failed to agree. Nigeria unilaterally reduced its price by $5.50 to $30 a barrel. This was the background to the London meeting of OPEC in March which eventually produced a fragile looking deal under which prices were cut by $5 a barrel and a production ceiling of 17.5 million barrels a day was set. The immediate outlook for OPEC is far from rosy. Its fortunes will clearly continue to follow market fluctuations and serious splits, perhaps withdrawals, are likely.

Many workers foolishly believed that the discoveries in the North Sea heralded a cheap oil bonanza for everyone in Britain. In fact there was no chance of the working class gaining any benefit. Even if prices did go down sharply, this would have effectively reduced the price of labour power and thus led to a corresponding reduction in wages. Only the owning capitalist class can benefit from North Sea Oil, and their reaction has been mixed. British industry’s need for cheap energy remains but the ruling class are now also in the oil exporting business. Rising oil prices were held responsible for an upward surge by sterling on the exchange markets, hitting other British exporters. This prompted the famous comment by British Leyland's Michael Edwardes that if North Sea oil caused such problems it might be better to "leave the bloody stuff where it is". On the other hand there are obvious benefits for the capitalist class in being self supporting in oil, even if only temporarily. At the moment 26 fields are operational in the North Sea [8]. Another 30 are discovered but future developments are uncertain owing to high operational costs and low recoverable resources. The general fall in oil prices is a further disincentive. It is expected that North Sea oil production will tailback after 1986.

Gross exchequer revenue from North Sea oil is about $7 billion. 6.4 per cent of total central government taxes. Capital intensive projects such as oil exploration and the development of alternative energy sources are based on certain assumptions about future prices and a slump can destroy their commercial viability. However, BNOC is under some pressure from customers who have not yet finally accepted their new price, hoping for further reduction. There are renewed reports [9-10] of Russian oil being dumped on the market. It looks as though the downward pressure will continue for a while yet, with an uncertain outlook for British North Sea oil.

E. C. Edge

REFERENCES
[1] Organisation of Arab Petroleum Exporting Countries (OAPEC) Bulletin, Vol. 8, No. 7. July 1982.
[2] Encyclopedia Britannica, 1974 Edition.
[3] Anthony Sampson: The Seven Sisters, Hodder and Stoughton 1974.
[4] Ida M Tarbell The History of the Standard Oil Company. New York, 1904. Vol.1.
[5] Unsigned article "The Implications of Cheaper Oil". Petroleum Economist, March 1983.
[6] Remarks by the Shah of Iran in 1973, quoted in Ref. 3. p259.
[7] Editorial in Ref. 1 entitled "Aid to the Developing World in Surplus Oil Market".
[8] Article by Alexander G. Kemp and David Rose (University of Aberdeen) in Petroleum Economist, March 1983.
[9] Rod Chapman (Energy correspondent), The Guardian. 9 March 1983.
[10] Roland Gribben (Business correspondent), The Daily Telegraph. 23 March 1983.

The Meaning of Exploitation (1933)

From the May 1933 issue of the Socialist Standard

Reports often appear in newspapers of companies formed to “exploit” lands, mines, oilfields and so forth. What does this signify ? When the word “exploit” or "exploitation” is used in this or similar ways, what is really meant ?

To exploit is to make use of, but the directors of a company formed to “ exploit ” certain oilbearing territories do not propose merely to use the land in question, nor do the shareholders of the company intend to take any part in the actual work of oil getting. In fact the mass of the shareholders will probably never even see the land from which the oil comes.

Further, the company is not formed for the pleasure of providing oil to a needy world, nor for the vindictiveness of polluting the sea and the air. It has only one purpose—to provide dividends for the holders of shares in the company. It is only because the particular oil wells appear to hold out the promise of being fruitful in this direction that they figure at all in the prospectus of the company. From the same point of view it is immaterial whether the oil be good or bad, Russian, Dutch, or American. The claims of patriotism, religion and humanity take second place before the claims of the purse.

The question that presents itself, then, is why should oil wells be instrumental in producing dividends as well as oil? This brings us to the question of the source of dividends. A glance at the published returns of companies carries the matter a little further. They show us that dividends come out of profits, past or present. But whence come profits ?

As soon as the company is formed work goes rapidly ahead to get the production of oil under way, because until oil is sold no funds flow to the company, apart from loans and what the shareholders provide. When oil is sold over a definite period the difference between all the expenses of getting it and the money produced by its sale represents profit; but we still need to know from whence this profit comes—how it is possible for the production and sale of oil to be the means of also producing profit. The answer is a simple one.

In order to get oil produced, workers as well as oil wells are required. If the workers were to receive in return for their labour the equivalent in value of the oil produced, there would be nothing left for the shareholders of the company—there would be no profit from which to draw dividends. It follows, therefore, that the employees of the company cannot receive a value equivalent to the oil produced.

How are the wages of the company’s workpeople arrived at? Experience tells us. They are paid on the average what it costs them to live and bring up families, regardless of the result in the form of oil due to the application of their energies in the company’s service. This wage may differ according to place and type of worker, but it still remains what it costs the worker to live. For instance, at a meeting of Courtauld's recently it was complained that Japanese competition was seriously affecting the firm on account of Japanese labourers being able to live on smaller wages than their employees.

Whatever the wage of the worker, however, it is far below the value of what he produces, and it is owing to this fact that the investors and directors of the company expect it to prosper and anticipate dividends. It is out of the surplus labour of the oil worker, the labour above the value of his means of existence, that the profit and the dividends of the shareholders will come. An illustration will make the matter plain. If one man can lie in the sun while two others work to provide him and themselves with the food and so forth they need, then the first man is living on the surplus labour of the other two. This, on, a larger scale, is the position of the oil company. It is neither the land nor the oil that is exploited, but the worker. It is he in reality who is made use of by the company.

Exploitation, then, is squeezing from the worker surplus labour. Other things remaining the same, the more surplus labour squeezed from the worker the greater is the exploitation, regardless of the level of wages paid, and the more successful is the company in providing dividends for its shareholders.

It is, therefore, plain that exploitation is the root of all accumulations of wealth by private individuals. At one time it was the exploitation of chattel slaves, at another the exploitation of serfs. In modern times it is the exploitation of wage workers, or, more truly, wage slaves.

With this end in view the earth has been covered with manufacturing centres, and the bulk of its population reduced to beasts of burden, but without the security of livelihood of the latter.

Exploitation has brought into existence the glittering civilisations that have expressed the agony as much as the achievement of man across the centuries. The process will continue until the workers awake to the fact that it is they who produce and distribute the wealth of the world, and that they have no need to carry parasites on their backs to do so. The day the workers arrive at this knowledge exploitation will cease.

Gilmac.

Algeria: Who has won? (1962)

From the April 1962 issue of the Socialist Standard

The cease fire in Algeria is likely lo bring neither peace nor relief to that unhappy country. Those who oppose a treaty with the Algerian nationalists — the settlers and the soldiers — are numerous and powerful enough to keep Algeria under the dark cloud of fear which has hung over the country for so long. The O.A.S. seem to be everywhere that matters. If one of them is singled out for arrest by the French Authorities, as like as not the men who have to fetch him in are O.A.S. sympathisers and can easily be persuaded to let him go. If the O.A.S. don't like what foreign journalists write about them, they can force the newspapermen to go home. They can virtually take over the centre of an important town like Oran. And all this is done by fear; fear of the plastic bomb, of death by a multitude of stab wounds or by the bullet from a passing car.

It is as well to remember here that the O.A.S. came into existence only after some years of guerrilla activities by the Algerian nationalists, which the French government had seemed powerless to stamp out. During those years, French policy seemed settled upon staying in Algeria. There was little organised retaliation from the Europeans, who put a rather shaky trust in their government. The O.A.S. burst to the surface when it seemed that de Gaulle was about to abandon the policy of a French Algeria. What the F.L.N. had won by their terrorism, the colons would try to regain by theirs.

Now, the O.A.S. outstrip the Moslem guerrillas in ruthlessness and brutality. On a typical day in Algeria, between twenty and thirty people are killed by them. Sometimes they kill indiscriminately, as when they drove two cars into the packed Moslem shopping area of Oran and left them with time bombs ticking inside. Sometimes they are diabolically selective; they recently tried to provoke a postal strike by killing several harmless Moslem postmen. President de Gaulle is reported as saying that the O.A.S. is a minor problem. which he will deal with when the cease fire is out of the way. This seems to be rather optimistic—the problem is surely much more complex and delicate.

The French came to Algeria in 1830, after a fleet under General Clausel had bombarded Algeria into surrender. This was the last of the expeditions which the maritime powers — England, Holland, Spain, America and France — had sent out to deal with the Corsair pirates, who from their base in Algiers were causing such disruption to the trade routes of the Mediterranean. Before the French conquest the country had been under, among others, the Phoenicians, the Romans and the Turks. The French established their word as law in Algeria and their colonisers settled along the coast, planting vineyards and developing, the cities. There was none of the incentive to penetrate the interior which other parts of Africa offered their European conquerors. The Congo, for example, had its rubber but for the colons the Algerian hinterland had only the Atlas mountains and then the pitiless Sahara. For over a century the great desert withheld the secret of its wealth from the French. And if eventually the Sahara's oil and gas have caused more suffering than joy—well, that is typical of capitalism's discoveries.

The Nationalists

The first rumblings of Algerian nationalism were heard in the 'twenties, when the Étoile Nord-Africaine plotted to overthrow French rule. This organisation's membership was mainly of Algerians living in France. After the Axis powers had been pushed out of North Africa an active nationalist movement was revived in Algeria. But it was one of bits and pieces, of sects who hated each other as much as they did the French and who often took time off from their war against the French to cut each others' throats. By late 1954 there were only two Algerian movements of any consequence and of these the National Liberation Front (FLN) was the more powerful and the better equipped to wage the long war for national independence.

The war against the F.L.N. has been a serious drain on French resources. One government after another tackled the problem without success. None of them could beat the F.L.N. and none felt able to bow before the storm of Algerian nationalism. The political instability for which France before de Gaulle was noted saw eight such governments off. In Algeria the Europeans were under a fearful strain and they grew impatient with their government's inability to stop the terrorism without surrendering the country. Once, they showed their exasperation by pelting a French prime minister — Guy Mollet —with tomatoes. His government promptly fell. It was this exasperation, pushed to the brink by the withdrawal from Tunisia and the apparent intention of the short-lived Pflimlin government to do the same in Algeria, that led to the 1958 revolt which put de Gaulle into power and ended the sorry tale of the Fourth Republic.

If there was one thing which de Gaulle was expected to do, it was to stamp out the Algerian rebels. In the event his policy has never been so bull headed. True, he has made some statements which contradict themselves. In his television broadcast during the uprising in January, 1960, he said:

  Frenchmen of Algeria, how can you listen lo the liars and conspirators who tell you that, in granting their free choice to the Algerians, France and de Gaulle want to abandon you, to withdraw from Algeria, and to surrender it to the rebellion?

But in fact de Gaulle was contemplating doing just that. Earlier in the same broadcast he said:

  . . . I have taken in the name of France this decision: the Algerians shall have the free choice of their fate . . . it will be the Algerians who will say what they wish to be.

Yet beneath this apparent confusion, de Gaulle has been firmly if slowly pushing a policy of independence for Algeria. Up to now he has dealt skilfully with the opposition to his policy. All this has earned him the hatred of the very men who put him in power.

The opposition to de Gaulle is indeed formidable. There are the European settlers, who grow the grapes and who run the banking and commercial life of the country. Many of these are poor — a settler working class, in fact. But some of them are rich and there are about a dozen landowners who we can call very rich. The Moslem farmers outnumber their European counterparts by nearly thirty to one, but they own less than three times as much land. The big farms and the best land belong to the colons. Settler interests are always in the thick of the trouble when a colonial power plans to hand out independence. The Europeans in Algeria—some of them French, some Spaniards, Maltese, Italians and Jews—are a pressure group which any capitalist government would find it hard to deal with.

French Army

Then there is the French army, which has built the roads, the railways, and the hospitals in Algeria, has supplied the doctors, teachers and engineers, and has looked upon the country as a tiresome but helpless baby. Take away the French army and running Algeria as capitalism says it must be run —profitably—is going to be a difficult matter. It is typical of French governments that they should have given the army its head in Algeria. For they have never really come to grips with their military and taught them that their job is to protect the general interests of the French ruling class. Other capitalist powers have solved this problem. Lloyd George took on—and beat—not only the generals, but the king as well, in the First World War; we all know what happened to MacArthur when he tried to dictate policy to his bosses in Washington.

But this is a difficult time to start tugging the rein on the French army. They have had no real victory since 1918; they were crushed in 1940 and have since been humiliated in Indo-China. It is easy to imagine the generals' mood when they learned that Algeria was to be added to their list of defeats. Here, it seems, is one war which the French army feel they cannot afford to lose.

To complicate matters still more, there is the mineral wealth in the Sahara. Perhaps the French would once have been willing to abandon Algeria, as they did Tunisia, if oil and natural gas had not been struck there. De Gaulle once said that when coal was the vital fuel, France had little of it and that when oil was vital she had no oil. The Sahara strike was looked on as something of a miracle find and it has bedevilled the situation ever since. It has also added to de Gaulle’s headaches by landing him with problems of distribution and international competition. The French have tried to attract capital to Algeria by offering tax concessions and other incentives, but there was not much hope of success for that policy while the situation remained so unstable.

So it all came back to the basic fact that somehow Algeria had to be settled. De Gaulle is only facing a fact of capitalist life when he recognises that a nationalist movement cannot be held down for ever. When he tries to hang on to the naval base at Mers El Kebir, the nuclear test area at Reggan and the interests in the mineral fields he is only trying, on behalf of the French ruling class, to make the best of a bad job. This sort of thing has happened many times since 1945, in Africa and in the Near and Far East.

De Gaulle has been warned, by the settlers and the army, of the possible consequences of his policy. There is a striking likeness between the French President’s difficulties and those of President Kennedy when he is trying to deal with segregationist towns in the American South. In both cases, the very people who are employed to carry out their government’s orders have simply ignored them. There is a clue here for those who are looking for the source of the power of the capitalist class. Ironically, the O.A.S. are showing us that capitalism’s coercion depends upon the acquiescence of its underdogs.

The Future

If history is worth anything, the O.A.S. cannot win in Algeria. However much fuss they manage to kick up when the country gets its independence, it seems certain that the army and the settlers will be put in their place. Algerian nationalists will rule the country and perhaps one by one the colons will be forced to leave. The oilfields and the gas may be nationalised so that the profits go to the Algerian ruling class instead of to the French. The Algerian peasant will blossom into a worker just like the Frenchman and the Briton. He will take on a mortgage, worry for his job, console himself with an H.P. telly. He will read of—and click his tongue over—colonial wars in other parts of the world. One day he may, like the South African, forget his past and himself support the brutal suppression of some racial group. The F.L.N. and the O.A.S. will fade into history. Capitalism’s grisly wheel will turn another full circle, lubricated by the blood and tears of countless ordinary, useful human beings.

Ivan