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 Reward of Honest Industry (1942)

From the December 1942 issue of the Socialist Standard

No matter how careful the capitalists and their apologists may be, the inconsistencies of the present economic system constantly come to light. Even such an innocent radio programme as “In town to-night” sometimes brings out a point that an observant listener can use to show the inconsistency of what our masters would have us believe is a happy land, providing peace, comfort and security for all those who are willing to work.

On Saturday, September 26th, in this programme, a manager of a pawnbroker’s shop gave the usual tbree-minute talk on the people with whom he deals. To a Socialist, the most important observation was that although some of his customers occasionally tried to swindle him, “Nine out of ten of the customers are honest, hard-working people.”

Well might the Socialist ask what sort of system it is in which “honest, hard-working people” have to pledge their clothes and blankets in order to obtain the necessities of life ?

This statement was made with reference to peacetime, not war-time. In fact, such are the contradictions of capitalism that during a war, when one might expect hardship, many of the workers who were forced to frequent the Labour Exchanges for the measly shillings which the Government granted to those in the “industrial reserve army,” as it has been called, are now in the position of having money to spend and few goods to buy. The Government, knowing the temptation to spend money that arises in those who are all too often denied that pleasure, are fearful of inflation, as occurred in the last war, and are pleading and cajoling the workers to put all “surplus” money into war saving, with the idea of helping to pay for the war. “Helping” is right, for even with the relatively high wages earned during wartime, the money that the workers could save, i.e., the money over and above the cost of living, would not pay for the war in a million years !

There is also the fact that whatever money the workers are able to save now that they are all in work will assist them to live through the slump that most economists predict to follow the post-war boom.

All the capitalist juggling in the world will not be able to create new markets to take the commodities which will result from the change over from war-time to peacetime production, and without a market, i.e., a group of buyers with the purchasing power to acquire the goods which the capitalist has for sale, the production of commodities will soon be curtailed, though the need for the goods may and will be as urgent as ever. If no one can purchase the goods which industry will be turning out by the million, those goods will stay in the warehouses, or be destroyed, as coffee, wheat and fish have been destroyed, among other goods, in the past. Under a capitalist system, goods are produced for sale, not for use. The difference may appear slight, but a worker who has no money, standing outside a boot shop in a broken-down leaky pair of boots, knows the practical difference between a commodity, i.e., an article produced for sale, and an article produced solely for use, as they will be under a sane system of society.

The only way to do away with pawnbrokers, and their immediate cause, poverty, is to do away with the private property system of society and substitute a system in which the means of production are owned by and run for the benefit of society as a whole.

Phillips.

Pieces Together: Out of sight, out of mind (2009)

The Pieces Together column from the March 2009 issue of the Socialist Standard

Out of sight, out of mind

“From the steam grates of Pennsylvania Avenue to the porticoes of the city’s grand buildings, homeless Washingtonians who live inside the nation’s tightest security zone are being encouraged to decamp during the inauguration for shelters in the city’s outer neighborhoods. The security sweeps will probably begin Monday. Buses will make one-way trips to two of the District’s largest shelters, which will remain open round-the-clock, said D.C. Council member Tommy Wells (D-Ward 6).”Everyone has to be out of the perimeter by then,” Wells said.” (Washington Post, 15 January)

Growing old disgracefully

“Miriam Gorman wanted to retire more than a year ago, but steep financial losses in her retirement savings mean the 71-year-old bookkeeper now plans to work on indefinitely. ‘I would have preferred to retire at the end of 2007, and then I was thinking at the end of this year, and now maybe it’s next year. I really don’t know,’ said Gorman, who’s been with an advertising company in Bethesda, Maryland, for 15 years. Across America, older workers are postponing retirement plans, dismayed by huge losses in the value of the investments they had depended on to fund their retirement. The U.S. recession has compounded the problem, with home values too low to provide the nest egg many seniors need and interest rates on safer assets close to zero.” (Yahoo News, 17 January)

Hard times

“Think pawnshops, and you probably conjure up old jewelry, desperate customers, and seedy storefronts. Hardly, it would seem, the ingredients for innovation. Yet amid recession, the country’s largest chain, Cash America International (NYSE:CSH – News), is using the credit-crunch boom time to lure new customers and expand. To woo the growing number of consumers facing a credit squeeze, Cash America is boosting the amount of short-term loans it offers online, and is adding a cash-advance feature to electronic payroll cards. Such cards are gaining popularity among employees with poor credit, or those without traditional bank accounts.” (Yahoo News, 5 February)

Mortgage misery

“One house was repossessed every ten minutes in the third quarter of last year as the rate of seizures almost doubled, the Financial Services Auithority said yesterday. The City regulator said that 13,616 homes were repossessed in the three months to September last year, a 92 per cent rise on the third quarter of 2007. There was also a rise in the number of homeowners in arrears, indicating that hundreds of thousands of borrowers could lose their homes. The FSA said that 340,000 borrowers were behind on mortgage repayments, a 10 per cent rise compared with the previous quarter of last year and a 24 per cent rise on the same period in 2007.” (Times, 23 January)

Debt is a four-letter word (1990)

From the December 1990 issue of the Socialist Standard

In a speech which did not dominate the discussion in pubs and work canteens the Governor of the Bank of England recently revealed how anxious and angry he is about the state of the nation.

"Some people", he moaned, "are undoubtedly in difficult situations . . . they feel vulnerable and confused . . . The distress suffered by individuals and their families is obviously a matter of concern for all of us . . ." He was not talking about impoverished bankers with their begging bowls obstructing the free passage in the City of London nor about pathetic landowners developing claustrophobic tendencies when they are shut up in their stately homes with only a few thousand acres around them. What stimulates the anxiety of the Governor is the growth of what he calls consumer credit, but which others might call living on tick, which he says has doubled over the last ten years:

  Thrift has gone out of fashion. Indeed the all-to-prevalent outlook on life has become I want it, and I want it now.

These sentiments would have been well received in Downing Street, by a prime minister who has such fond memories of her father's dour parsimony and whose professed ambition is to run British capitalism like a thrifty housewife who never gets in debt. The only snag is that the credit boom has happened while the thrifty housewife has been in charge, even if the Chancellor who did so much to help her is now increasingly denounced as a reckless wastrel. It is not new for a moral issue to be made of debt: this governments contribution to this particular piece of hypocrisy has been to link it with what it has called the dependency culture—of single mothers passing their responsibilities on to the state, of scroungers battening on to a naively generous Department of Social Security, of hypochondriacs absorbing almost the entire resources of the National Health Service.

Tally men and credit cards

It is not convenient to this theory that people who rely on earning a wage for their living can hardly avoid getting into debt and that it has been like this for a long time. A lot of today's consumer credit would once have been supplied by the less exotically named tallyman with his bicycle and his mini-ledger and through the "cheques"—credit vouchers—often sold by churches who took a commission on the repayment by instalments. Now these same functions are performed through credit cards, mail order, HP agreements, bank overdrafts and the like. This is not to mention one of the most common forms of modern debt—the mortgage which, according to the Governor, has grown even faster than the other types of credit and which has widely replaced rental as the most available method for a worker to get somewhere to live. At the lower end of the poverty scale, this government has recently created a new tribe of debtors in the social security claimants who are now forced to grovel for a loan from the DSS if they need things like clothes or furniture, where before they were likely to get an outright grant.

But this nation apparently seething with debtors is not a happy place where everyone is getting everything they want now because they can't be bothered to save for it, through the benevolence of the money-lending institutions. A survey of the situation in 1989 carried out by the Policy Studies Institute, Credit and Debt in Britain, found that more than ten per cent of families in the UK were is arrears, some of them with multiple problem debts. The average arrears amounted to £600. which may not be much to the Governor of the Bank of England but is a mountainous sum to a single parent family or someone who is unemployed. In these days of the mortgaged home, rent arrears remain a serious problem; the survey said that over a million families were in trouble over rent last year.

There is no happier news about mortgages, which have long been fondly advertised as the way to a secure home. "Mortgage misery" is a phrase which has been overworking in the headlines of the popular press lately. It encapsulates the kind of evidence published in August by the Council of Mortgage Lenders—that the number of mortgages in arrears of six to twelve months was 95,030 in the first six months of 1990. compared to 58,040 in the same period last year. Mortgages more than 12 months behind rose from 12,030 to 18,750. Those friendly banks and building societies, who have put so much effort into assuring us that their main concern is to help us get a roof over our heads, have responded to this situation by taking the roof back, with the rest of the house. Repossession cases numbered 7,390 in the last half of 1989; in the first half of this year they reached 14,390—almost double. A spokesman for Barclays Bank said (he was trying to be helpful). "Anyone who is having difficulties shouldn't just ignore them . . ." as if it were possible to ignore the trauma of repossession, of being homeless. "We've advised him to go the the council's homeless person's unit", said a local Citizen's Advice Bureau of one man with a pregnant wife and two children who owes £3,500 to a building society. "He’ll have to prove real financial and personal difficulty before they rehouse him”.

Capitalist debts

At the same time we have been hearing of many other cases of people who, whatever the Governor of the Bank of England may think, wanted something now and were willing to get into debt for it. There is a crucial difference between these people and those who fall behind with the mortgage, or can't pay for the fridge they got on HP, or have to apply for a loan from the DSS and that is the scale of what might be called their operations. The Parkfield group, which had investments in engineering, property and entertainments, recently crashed owing £288 million of which £27 million is unlikely ever to be repaid. News Corporation, the huge media conglomerate controlled by Rupert Murdoch whose British papers have worked so hard to keep Thatcher in power and in so many other ways to titillate working-class delusions. has a "long-term” debt of A$7.58 billion (£3.22 billion). The vast and complex empire of Robert Maxwell, who was once a Labour MP and who is still extravagant enough to call himself a socialist, has debts of over £1.5 billion. It is the same story with other groups whose reputations rest on the charisma—or should it be the media hype associated with one person such as Brent Walker and Saatchi and Saatchi. When capitalism was in boom these people were revered as super intellects who had done the impossible—they had produced infinite profitability even if the proceeds were not available to all those readers of the Sun and the Mirror who so admired them. Sales went on soaring and the groups snapped up one expansionary deal after another. It seemed it would never end.

That was all very well as long as profits kept rising and interest rates were low but as the situation changed the extravagant debts of these groups put them under a lot of pressure. Many famous company names—Coloroll. British and Commonwealth—were extinguished while others—Laura Ashley—struggled on. Among the most spectacular of recent struggles has been Polly Peck whose chairman and chief executive, Asil Nadir, has been under scrutiny by the Serious Frauds Office. Polly Peck controlled over a third of the press in Turkey, it owned the Sansui hi-fi company and Russell Hobbs Kettles. Most famously it also owned Del Monte, the canned fruit firm which ran those TV ads in which Mediterranean peasants waited anxiously in the early morning sun for the Man from Del Monte to sample the fruit and give the go-ahead for it to be picked for canning . . . Polly Peck borrowed about £570 million to buy Del Monte: its total debts were estimated at around £1.3 billion and Asil Nadir anxiously grovelled to the Turkish government to help rescue him before disaster, not to mention the boys from the SFO, overtook him.

These debts put into proportion the problems of mortgage, HP and rent arrears. The working class, who depend on employment for their living, need to borrow money—sometimes to survive, sometimes to buy something which the Governor of the Bank of England and Margaret Thatcher's father would no doubt regard as a luxury like a TV set or a washing machine. At one time they did this through "cheques" or tallymen or the pawnbrokers who lent small amounts on the flimsiest of security such as a man's best (and only) suit. There was always a certain stigma attached to these methods—tallymen did not advertise themselves and there was nothing brazen in the manner of those who slipped into the pawnbrokers on a Monday. But this does not apply to credit cards or bank overdrafts or mortgages: in most cases these are seen as evidence that a worker has arrived at some sort of economic maturity: they have solved the problem of poverty and can read the financial press with the same interest as a Maxwell or a Nadir. Not many people regard themselves as members of the working class when in the company of their Flexible Friend.

But capitalism can wipe out delusions as fast as it promotes them. Facing reality can be a painful business, for the worker whose dream of a secure home turns into a nightmare of council bed-and-breakfast accommodation and possibly for the tycoon whose financial juggling act falls into disarray and ends up in bankruptcy. Except that when this happens it usually leaves them down to their last few million, their last few thousand acres, their last private jet and yacht. It is the class who end up in homeless families accommodation who make all these things, who produce the profits which finance the machinations of people like Murdoch and Nadir but who suffer the anguish and the humiliations of poverty. And that will not Do Very Nicely.

Ivan

A Visit To Lancashire (1952)

From the July 1952 issue of the Socialist Standard

Very tired, I strolled out of London Road Station, Manchester. Its tall grim buildings lent small contrast to the litter-ridden streets. It was cold, and grime hung to every wall. Not yet 7 a.m., and already the streets were cluttered with people—or are these workers people? Early bent with age, the sickening look of lifelong servitude clouds their faces; old macs, lifeless trousers, and a quick walk; working automatons, fed and kept to make a profit for their bosses.

At that early hour cars were still asleep and their wealthy owners turned weary heads around soft pillows. Crowded buses filled the roads and as if to pack them tight, bicycles long past their age of safety cut everywhere between them.

Later, as my train pulled out of Victoria Station, I realised how little changed was Manchester. There seemed to be small concern about the slump which was gnawing at its guts: 100,000 on short time, 30,000 dismissed.

My next stop was Rochdale, and here the sight was more depressing. I saw groups of men standing on street corners, hands in pockets, wondering “What next? Perhaps we will soon be hearing the old Tory cry: 'these men are lazy, they do not want to work, unemployment will do them good.' ” A local lavatory attendant a little later expressed this view: “They have had their way long enough, now let the bosses have their turn. Most of them don't want to work, that’s why they were sacked first." I was reminded of what Mr. H. Kershaw, Assistant Secretary of the Weavers' Association, said a fortnight ago at a meeting in Stockport: “We don't want something for nothing, we want the right to work." It is the old story returning, the story of the years between the wars.

I saw an old woman turn down a narrow unwelcoming street carrying a parcel. I looked along the road and about thirty yards to the left I saw three balls hanging on the wall arched against all weathers. The old woman turned in the door. I looked over the curtained window, was not satisfied and walked in. Six tired unhappy females were parting with chattels. On the walls were notices: “No females’ clothes accepted." “Medals not wanted," “Watches not accepted unless in working order." Behind the counter was the “philanthropist," his hard lines betraying all that was worst in capitalism.

I made an excuse and walked out, and nearly pushed some bread and jam into a little girl’s face. “You're enjoying yourself' I said. She ignored me. “Your lunch?" I asked. “Yes." “Why eat it in the street?" “ Dad's eating his and there ain't enough, so Mum sent me and Bill out" She turned and ran away.

I went back into the high street and surveyed the crowds. How many of them remember that just two years ago they were being told that never again would there be unemployment, prosperity was assured for at least another ten years? And now, out of the 18 big mills in Stockport, 11 are closed and the rest are working two or three days a week. In the small town of Heywood, 1266 are unemployed. The News Chronicle editorial (10th May) says (referring to Oldham) that out of 38,000 workers 6,000 are unemployed, thousands more are only partly employed and the fully employed comprise mere hundreds. The Manchester Evening Chronicle (14th May) states that hundreds of thousands of shirts are being unloaded on Lancashire retailers at below cost There have been crowded meetings of workers all over the county, demanding that the Government take action and asserting that they will not allow the industry to return to the state it was in the '30s. In Bolton the average number of operatives stopped during the last eight weeks has been 42 per cent. Mr. E. Mella, president of the Oldham Operative Spinners Association, opening a conference at Blackpool on May Day, said that the two weeks holiday with pay had come at an unfortunate time and the per cent. of total earnings which was granted for holiday money would under present conditions be of no use because many workers have been out of work for several weeks, and even if the agreement gave them 20 per cent they would still have no money. Also at this conference of the United Textile Factory Workers Association the secretary said: “We have not seen the worst of the slump; unless something is done to clear the high-priced goods, our industry is faced with a complete shut down for several weeks in the summer."

My next move was to visit a local furniture saleroom, as I wanted to compare prices with London. I considered that owing to the complicated and unique position that second-hand goods hold, their prices would vary very strongly with the law of supply and demand, having no ordinary cost basis behind them to stop them selling below their cost price—they are therefore much more at the mercy of market conditions than new goods. I was proved correct: goods were being sold for a song, the auctioneer was hard pressed to get 5s. for small lots. The audience gasped at some of the ridiculous prices, but with no money they could not buy.

I made trips to Royton and Oldham, but conditions were much the same, the slump was on everyone's lips.

Now I looked at some of the statements being made by our textile experts and economists. Space unfortunately only permits me to quote a few of their recent utterances.

George Hosty, President of the Federation of Master Cotton Spinners Association (the Chronicle, 10/5/52) thinks reduction in costs is the solution.

Mr. A. Knowles, Secretary of Oldham Operative Spinning Association (Oldham Evening Chronicle, 13/5/52) said: “I am satisfied that textile goods are as cheap as they ever will be. I think it is time the public started to buy.”

Liverpool Daily Post (14/5/52) editorial states that in just over a year the price of wool has been halved and instead of retail demand picking up, the commodity has plunged the textile industry into suffering through lack of orders.

Mr. A. Knowles again (Oldham Evening Chronicle, 13/5/52) says that 25 per cent purchase tax cuts are chicken feed.

Manchester Evening News (13/5/52) says that traders consider Butler’s purchase tax cuts would unsettle the market and start further price landslides. The editorial of the same edition says that any concession, however small, must be welcome.

In the face of these contradictions, it is obvious that these people have no idea what the slump is all about, and it is doubtful if they would be interested anyway. They will try the old cures while the depression grows even if its tentacles strangle the whole of the capitalist world.

S. Roseneil

Living on Tick (2016)

From the June 2016 issue of the Socialist Standard

From Shakespeare’s Shylock to Dickens’ Scrooge, moneylenders have generally had a bad literary press, probably revealing people’s instinctive reaction to them, but their place in society remains central. We examine the role of debt in working-class life.

Robert Roberts’ The Classic Slum describes life in Salford in the first part of last century. The pawnshop was an essential part of the local community; many people were dependent on the short-term loans offered, with women often pawning the family’s ‘best’ clothes on Monday until the following Saturday. There was a social hierarchy among the working class, with skilled workers at the top, and various ‘disreputable’ individuals at the bottom; and position ‘was judged not only by what one possessed but also by what one pawned’. True destitution meant pawning not just clothes but also pots and rugs, and finally not being able to redeem what had been left with the broker. The interest charged was usually a penny in the shilling per week; sky-high, but less than the moneylender, who charged threepence in the shilling per week.

Pawnbroking is not now the widespread industry it was in the days Roberts was writing about, but it began to grow again from the 1980s. There are now over two million loans a year, and the market as a whole is worth £850m, though the average loan is less than £200 and is for three or four months. The National Pawnbrokers Association states that 88 percent of loans are redeemed, but that still leaves around 250,000 which are not (though this does not mean that the value of the goods has been completely lost). The NPA describes pawnbroking as ‘a serious alternative to using the services provided by the High Street bank’ and ‘a modern, friendly and convenient way of getting cash quickly’. They claim it is cheaper than a bank loan or using a payday lender.

In July 1954 war-time food rationing came to an end, as did restrictions on hire-purchase (‘never-never’) agreements for consumer durables such as radios, fridges and vacuum cleaners. This meant buying what were then relative ‘luxuries’, in contrast to buying essentials such as furniture this way back in the 30s. Nowadays, hire purchase is often used in buying cars, including companies buying a fleet of cars. For personal consumers, it avoids the need to pay a big sum up-front, but it can lead to problems: if you return an item after paying less than half its cost, you have to pay enough on top of what you’ve already paid to make up that half cost (so you might get just three months’ use of something but have to pay a year’s worth of instalments).

The extreme case of hire-purchase is that of the weekly payment stores, which make big profits, primarily from the massive interest rates they charge on their loans and the service cover they also sell. Back in 2012 the Guardian gave an example of an oven that could be bought from one such company for £562 (or £389 elsewhere) but would cost a whopping £1433 if bought on weekly instalments from that same company with service cover over three years. Sales pressure plus an inability to pay by other means can easily result in people taking on such commitments without quite realising what they are letting themselves in for.

If people are having trouble repaying any kind of debt, they may well have recourse to one of the payday loan companies that now exist on almost every high street. But these again are incredibly expensive, with annual interest rates sometimes topping several hundred percent. The debt charity Step Change gives an example of someone borrowing just £200 for twenty days at the maximum allowable rate of 0.8 percent a day. If you repaid the loan on time, you would pay back £232, which is already quite a stiff rate of interest. But if you are late, then the interest mounts up, a late fee is added and you have to pay interest on the late fee. If you are ninety days late repaying, you would repay £400 (double the original loan, and the legal maximum that can be charged).

As this suggests, being poor is in itself expensive. Using prepayment meters for energy is more expensive than a standard tariff; and borrowing money means a higher rate of interest if you do not have a good credit record. No wonder debt counselling has become a minor industry in its own right. Some writers have even referred to there being a ‘poverty industry’.

Mortgages are of course the biggest source of debt, while students typically have over £40,000 in debt when they graduate. But plenty of people borrow – especially from payday loan companies and even doorstep lenders – to pay for everyday expenses such as food and energy as they struggle to make it to the next payday. They also borrow to pay for Christmas and so avoid disappointing their kids. And they borrow to pay off existing debts, which can swiftly lead to things spiralling out of control. Losing your job, falling ill, the break-up of a relationship: all these can tip people over the edge into chronic indebtedness.

The Money Charity provides a great many statistics on the extent of debt. For instance, in February this year, the average debt per household, including mortgages, was over £54,000. Outstanding consumer credit lending was £180bn, including £63bn on credit cards. Every day over two hundred people are declared insolvent or bankrupt, and twenty-five properties are repossessed. Other sources have noted the big increase in household debt over the last year or so, with the average increasing by over a third to £13,500 (mortgages aside). Shelter reported that one in ten parents thought that they might be unable to pay their rent or mortgage bills in January this year. Moreover, in March the increase in borrowing was the biggest since March 2005, before the recession began, leading debt charities to become increasingly worried.

The definition of ‘problem debt’ is when a family pays more than 25 percent of their gross monthly pay on servicing unsecured debts, and this applied to 3.2 million families by 2014 (up from 2.5 million in 2012). The pressure of debt can be overwhelming. In the words of one man who eventually did cope with his problems: ‘I felt like I was drowning, felt trapped. There was no light coming from anywhere, it was horrendous. And at one point I did go really dark and I did want to end it all’ (BBC Online, 20 January). Some people do in fact commit suicide because of their debt problems. In November 2013, for instance, a 60-year-old man from Southampton killed himself after taking on £20,000 in debts from twelve payday loan firms: his jobseeker’s allowance had been stopped on the grounds that he was fit to work, even though he had an illness that prevented him from swallowing (Daily Mirror, 22 July 2014).

Pawnbroking dates back at least to Ancient Greece, but it takes capitalism, with the cash nexus touching almost all aspects of life, with the never-ending influence of advertising, and with the insecurity felt by many workers, to make so many people subject to the worry and pressure of debt.

                                                                                                                                     Paul Bennett

Uncles (1999)

A Short Story from the December 1999 issue of the Socialist Standard

When I was a very little girl my family had a benefactor called Uncle. At the time I thought he was a relation of ours. In those days it was considered to be impolite for children to call adult friends and neighbours by their first name; it would have to be Auntie Betty or Uncle Fred even when they were no relation to you whatsoever. But my parents were rather unconventional and so dispensed with this silly tradition. So I thought this Uncle must be a real uncle even though I had never met him.

What was bewildering for me was listening to my parents discussing him. Mum would say "I'll take your suit down to Uncle's on Monday and get it back in time for the weekend." Dad wouldn't be likely to wear his best suit for work. He had a working uniform of dark blue denim with WBC (Woolwich Borough Council) etched on the back of the jacket. His suit was worn at weekends only. Uncle paid my mother for the loan of the suit, and sometimes she would let Uncle borrow my eldest brother's suit as well. This led to a terrible quarrel in our house. Alex, my elder brother, had a new girlfriend he was constantly trying to impress. Whenever he brought her to the house my younger brother and I would mouth the word "Yuk" to one another; they were forever kissing each other and we thought they were sloppy. Anyway, the row was over the fact that Mum had taken Alex's suit to Uncle's and had failed, for some reason, to get it back in time for the weekend when the beloved girlfriend was due to visit. They all shouted at each other for hours and Dad told him to get out if he didn't like it. He said very angrily, "It's to put food on the table." It was an ugly scene.

I spent an inordinate amount of time trying to imagine this Uncle of mine. Why would he need to pay Mum for the loan of Dad's rather tatty suit? And what would he want with Alex's suit too? I even asked a couple of the kids at school if their dads and brothers had uncles who borrowed their clothes and, looking mystified, they shook their heads. One girl told me, "My dad hasn't got a suit."

Then the day came when I was to meet Uncle. I had been away from school with a head cold and as Mum refused to leave me alone in the house when she went out, we both got on a tram to town. Mum carried with her one of those battered, cardboard suitcases, the only kind poor people could afford in those days, and a woman who got on the tram at the same time asked me, "Going on your holidays, are you?" I told her, "No, we're going to Uncle's, aren't we Mum?" Later Mum glared at me saying, "Must you show me up like that?" All my life I've felt sorry for children. They are seldom given any examples of how to be truthful, and adults have so much more practice in lying. Wasn't it Shakespeare who said, "Out of the mouths of babes and of sucklings"? Well, something like that.

In town I trotted alongside my mother excited at the prospect of meeting Uncle at last. We turned into an alleyway and there stood a small building with three brass balls over the top of the door. Inside it was dim and dusty and there was a counter like ordinary shops have. A man appeared suddenly from a door behind the counter and Mum opened the case and took out the suit. He looked the suit over and then gave her some money and a ticket. I watched this transaction with great interest. Some uncle—the man ignored me! I had a real uncle who used to pat me on the head and say, "You're a little beauty, just like your mother," and sometimes he would give me a packet of sweets and tell me not to talk so much.

This man was not my uncle. He wasn't pleasant to my mother, nor she to him. She resented him. Well, who wouldn't resent a man who took your husband's suit, laid it on a dusty old shelf somewhere, lent you money and charged you interest on it?

Mum picked up the empty case and we traipsed back through the town and caught a tram home. My mind teemed with questions, none of which I could give a name to and something warned me against trying to voice any of them. That day, young as I was, I saw the rudiments of capitalism—that every action must involve money, that nothing, absolutely nothing, can exist without exploitation to make the system work. Of course I didn't really understand that at the time, but I peered out at the world, short-sighted though I was, and suspected that it was a very strange place indeed. And so it is. I waited for the adults to discover my myopia and recommend spectacles. When at last I got them the world came into sharper focus and my mind reeled at the absurdity of it all, that humans arrange affairs in such a way as to create chaos. Uncle's was a tiny part of the personal experience which shaped me into the person I am today and into being a socialist. That experience was invaluable I think.

Heather Ball

Voice From The Back: Pawn move (2003)

The Voice From The Back column from the April 2003 issue of the Socialist Standard

Pawn move

We are constantly being told what a wonderful society modern capitalism is and how it has solved the problems of poverty that used to occur in the “bad old days”. So what have me to make of the following information in the Business Section of the Times (18 February)? “With many banks suffering from rising bad debts and margin pressures, pawnbrokers have emerged as one of the few sectors of the finance industry expected to see strong growth in 2003. Experts yesterday predicted that Britain's pawnbroking industry would expand as much as 15 per cent this year to achieve record turnover of more than £85 million, almost triple the amount seen five years ago . . .The business is not helped, it says, by its perception as a “Dickensian institution” and the existence of annual interest rates of more than 100 percent.” Despite two Labour governments it seems that some of us have still got to go down to the pawn. We know how you feel. Sometimes we get skint.

Crawling to work

When Chelsea Clinton, daughter of the ex-president, was offered a job at McKinsey management consultants, starting at £40,000 a year, The Guardian ran a feature on this long established firm. It revealed some of the slavish attitudes that capitalism engenders. “Among things that McKinsey stands for is consistency of presentation. Until the early 1960s, that meant all McKinsey men were expected to wear hats because their chief executive clients did so. When one executive realised that fashion had changed and turned up for work bare-headed one day, colleagues reacted warily. “Should we all give up our hats?” asked one. “I'd wait six weeks,” a partner replied. “It may be a trap.” The Guardian (21 February) It is easy to sneer our critics may say. We reply how many arses would you lick for 40 grand a year?

There be dragons

“A panel of Church of Scotland ministers and psychiatrists has been formed to revisit the controversial area of exorcism for the first time in 15 years. It follows concerns the Church is not doing enough for people some believe have been possessed by devils.” The Herald (4 March) In their leaflet “Dealing With Darkness” the church claims that signs of this demonic possession can be “revulsion from Christian ideas”. It seems more likely to us that this revulsion could spring from christianity's awful record of torture, sexual suppression, misery and mumbo-jumbo like exorcism.

Another Great Man speaks

As if to prove that the US President isn't the only one of the US capitalist's representatives to speak in a less than lucid fashion. Donald Rumsfield, the US Secretary of Defence has come up with a couple of gems to rival his boss. When asked why such heavy bombs were being used in Afghanistan he uttered this profundity. “They are being used on frontline al-Qaeda and Taleban troops to try and kill them.” And when asked about Bin Laden, “We do know of a certain knowledge that Bin Laden is in Afghanistan. Or in another country. Or dead.” The Times (13 March) Bombs being used to kill people? Bin Laden is either alive or dead? Its good to know that such sages are in charge, isn't it?

T-shirts of mass destruction

That war hysteria breeds irrational behaviour is surely proven by the case of Stephen Downs, who was arrested and charged with trespassing at a New York mall. His crime? He was wearing a T-shirt that said Peace on Earth and Give Peace a Chance. “I was confronted by two security guards and ordered to either take off the T-shirt or leave the mall”, said Stephen Downs. Newsweek(17 March) What such guardians of New York malls will make of our comrades in Canada who have been distributing for some years T-shirts proclaiming “Abolish the wages system” is left to your imagination.

A fishy tale

Members of the world socialist movement base their ideas on science. So of course we were extremely interested in the way-out happenings that recently occurred in New York .”According to two fish-cutters at the New Square Fish Market, the carp was about to be slaughtered and made into gefilte for Sabbath dinner when it suddenly began shouting apocalyptic warnings in Hebrew.” The Observer (16 March) “Many of the 7,000 Skver sect of hasidim in New Square, 30 miles north of Manhattan, believe God has revealed himself in fish form.” Next time you buy fish and chips listen to the God instead of eating the cod. What a load of nonsense. All religious ideas are.

Uncles

Originally posted on the Socialism Or Your Money Back blog

When I was a very little girl my family had a benefactor called Uncle. At the time I thought he was a relation of ours. In those days it was considered to be impolite for children to call adult friends and neighbours by their first name; it would have to be Auntie Betty or Uncle Fred even when they were no relation to you whatsoever. But my parents were rather unconventional and so dispensed with this silly tradition. So I thought this Uncle must be a real uncle even though I had never met him.

What was bewildering for me was listening to my parents discussing him. Mum would say "I'll take your suit down to Uncle's on Monday and get it back in time for the weekend." Dad wouldn't be likely to wear his best suit for work. He had a working uniform of dark blue denim with WBC (Woolwich Borough Council) etched on the back of the jacket. His suit was worn at weekends only. Uncle paid my mother for the loan of the suit, and sometimes she would let Uncle borrow my eldest brother's suit as well. This led to a terrible quarrel in our house. Alex, my elder brother, had a new girlfriend he was constantly trying to impress. Whenever he brought her to the house my younger brother and I would mouth the word "Yuk" to one another; they were forever kissing each other and we thought they were sloppy. Anyway, the row was over the fact that Mum had taken Alex's suit to Uncle's and had failed, for some reason, to get it back in time for the weekend when the beloved girlfriend was due to visit. They all shouted at each other for hours and Dad told him to get out if he didn't like it. He said very angrily, "It's to put food on the table." It was an ugly scene.

I spent an inordinate amount of time trying to imagine this Uncle of mine. Why would he need to pay Mum for the loan of Dad's rather tatty suit? And what would he want with Alex's suit too? I even asked a couple of the kids at school if their dads and brothers had uncles who borrowed their clothes and, looking mystified, they shook their heads. One girl told me, "My dad hasn't got a suit."

Then the day came when I was to meet Uncle. I had been away from school with a head cold and as Mum refused to leave me alone in the house when she went out, we both got on a tram to town. Mum carried with her one of those battered, cardboard suitcases, the only kind poor people could afford in those days, and a woman who got on the tram at the same time asked me, "Going on your holidays, are you?" I told her, "No, we're going to Uncle's, aren't we Mum?" Later Mum glared at me saying, "Must you show me up like that?" All my life I've felt sorry for children. They are seldom given any examples of how to be truthful, and adults have so much more practice in lying. Wasn't it Shakespeare who said, "Out of the mouths of babes and of sucklings"? Well, something like that.

In town I trotted alongside my mother excited at the prospect of meeting Uncle at last. We turned into an alleyway and there stood a small building with three brass balls over the top of the door. Inside it was dim and dusty and there was a counter like ordinary shops have. A man appeared suddenly from a door behind the counter and Mum opened the case and took out the suit. He looked the suit over and then gave her some money and a ticket. I watched this transaction with great interest. Some uncle—the man ignored me! I had a real uncle who used to pat me on the head and say, "You're a little beauty, just like your mother," and sometimes he would give me a packet of sweets and tell me not to talk so much.

This man was not my uncle. He wasn't pleasant to my mother, nor she to him. She resented him. Well, who wouldn't resent a man who took your husband's suit, laid it on a dusty old shelf somewhere, lent you money and charged you interest on it?

Mum picked up the empty case and we traipsed back through the town and caught a tram home. My mind teemed with questions, none of which I could give a name to and something warned me against trying to voice any of them. That day, young as I was, I saw the rudiments of capitalism—that every action must involve money, that nothing, absolutely nothing, can exist without exploitation to make the system work. Of course I didn't really understand that at the time, but I peered out at the world, short-sighted though I was, and suspected that it was a very strange place indeed. And so it is. I waited for the adults to discover my myopia and recommend spectacles. When at last I got them the world came into sharper focus and my mind reeled at the absurdity of it all, that humans arrange affairs in such a way as to create chaos. Uncle's was a tiny part of the personal experience which shaped me into the person I am today and into being a socialist. That experience was invaluable I think.

Heather Ball

A Socialist Life by Heather Ball

A collection of sort stories by Socialist Standard writer Heather Ball. Many readers liked her distinctive writing style, finding it full of charm, warmth, humanity and humour.

Sadly, Heather died before she could complete her writing project. This collection, published by the Socialist Party, presents the case for Socialism on the basis of individual, everyday experience. £3.75 From Socialist Party 52 Clapham High Street, London SW4 7UN.