Letter: Debt slaves or wage slaves? (2012)

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

Debt slaves or wage slaves?

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

Dear editors:

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

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

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

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

 

Reply:

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

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

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

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

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

Voice From The Back: A Sick Society (2012)

The Voice From The Back Column from the January 2012 issue of the Socialist Standard

A Sick Society

The owning class are always seeking ways of increasing their profit margins and one way of doing that is by decreasing their expenditure on welfare and health. “People should be signed off for long-term sickness by an independent assessment service not GPs, a government-backed review says. The review also suggests tax breaks for firms which employ people who suffer from long-term conditions. It is estimated the changes would send 20% of those off sick back to work.” (BBC News, 19 November) In sickness and health the working class must be kept toiling to keep those profits rolling in.

Figures Don’t Lie

Politicians like to claim that under their benign guidance we are all better off but what do their own statisticians find? “New figures from the Office of National Statistics show that average salaries in the UK have fallen by 3.5% in real terms as pay rises fail to keep pace with inflation. An average full-time employee earned £26,200 in the year to April, up 1.4% on the previous 12 months. However, with inflation running at 5%, that amounts to a pay cut” (The Week, 23 November). It is true that statistics don’t lie – unlike some politicians.

Optimism And Reality

With the discovery of oil and gas in the North Sea many optimists predicted that gas for home heating would cost next to nothing. Another piece of optimistic prediction about the future that was once made was that with the great technological advances we would soon enjoy a much shorter working week and we would all be retiring a lot sooner. A glance at your last gas bill shows the hollowness of the first prediction, but even wider of the mark was the second one. “More than 6 million (28%) of today’s over-50s expect to work past the state retirement age, according to the working late index compiled by LV. They expect to work an extra six years, the retirement specialists said” (Sunday Times, 27 November). The realities of capitalism often leave the optimists looking foolish

A Family Man?

The Conservative Prime Minister David Cameron is fond of the role of “the family man” and is often reported as praising “family values”,  but the realities of capitalism show just how hollow such claims are. “British families are suffering the worst squeeze in living standards for more than half a century, and will be no better off in 2016 than they were in 2002. The Institute for Fiscal Studies (IFS) revealed yesterday that the average family on middle income will have £2,496 less to spend next year than three years ago” (Times, 1 December). Mr Cameron’s  family will probably survive though, don’t know about yours!

Hard Times?

Everyone is aware that we are living in hard times, the media tells us this everyday, but it is not too tough for some people. “This huge superyacht is so sleek you’d almost be forgiven for mistaking it for a floating limousine. This is no coincidence – the ‘Sovereign’ yacht is based on the design of a limo, and even comes with its own matching car. And the vessel fit for a king could be yours, if you’re willing to shell out a mere $132million – that’s £85million” (Daily Mail, 3 December). They are not making such things unless they know that some extremely rich people are potential customers.

Bighead Blows It

Up to two million workers went on strike on 30 November and on the BBC programme, The One Show, Jeremy Clarkson the BBC motoring correspondent had this to say about the strikers: “Frankly, I’d have them all shot. I would take them outside and execute them in front of their families. I mean, how dare they go on strike when they have these gilt-edged pensions that are going to be guaranteed while the rest of us have to work for a living?” (BBC News, 1 December) Let us just hope for Jeremy’s sake he doesn’t have a road accident on one of those overpriced super-charged motor cars of his and has to rely on the attention of an ambulance driver or a nurse who can remember that particular piece of arrogant bombast.

Cooking the Books: The Gnomes of the Market (2012)

The Cooking the Books column from the January 2012 issue of the Socialist Standard

The Eurozone is an economic area in which 17 different countries have agreed to use a common currency, both internally and externally. In the years between 2002 when it was introduced until the crash of 2008 the economies of these countries were growing and investors (largely banks) were prepared to lend the governments their money to cover their budget deficits by purchasing their bonds. They took the view that their money was safe as the governments would be able to pay the interest and repay the loan out of future tax revenues.

The crisis upset this as economic growth, and tax revenues from it, fell. Some Eurozone countries had borrowed an amount that was higher in relation to their GDP than others and so were harder hit. They are now denounced in the financial pages of the press (generally more favourable to creditors than debtors) for having been “profligate”.

Creditors began to fear for the repayment of their loans and brought pressure to bear on the governments concerned by refusing to lend them more except at higher, penal rates of interest. They have gone farther, making it a condition for future lending at lower rates that the governments cut their spending so as to have the money to repay any loans. They picked off the governments one by one: Ireland, then Portugal, then Greece; and now Italy, with Spain and even France possibly next.

All this has been done impersonally through “the markets” but not the less effectively for that. The debtors are not entirely at the mercy of the creditors because they always have the nuclear option of bringing the whole house down by defaulting; in which case the creditors would lose all or most of their money.

So creditors have an interest in not pushing the debtors too far and in coming to some arrangement which will ensure that they get most of their money back, eventually.

These negotiations have taken place through governments (rather than being left to “the markets”) and have resulted in the holders of Greek government debt agreeing to being repaid over a longer period and even to a “haircut”, i.e. the writing off of some of the debt.

Critics of the euro have gleefully shouted “we told you so”. Here for example is the Times on 7 November: “Greece’s crisis might have been a localised problem rather than a continental threat, but it has been aggravated by the common currency. It has also been rendered more difficult to resolve owing to the inability of weaker Eurozone members to devalue their currency and thereby secure an adjustment in living  standards.”

A downward adjustment, that is. Depreciating a currency (these days by letting its value float downwards rather than a formal devaluation as in the days of fixed exchange rates) leads to imports costing more, so reducing living standards that way.

Despite the political rhetoric, it is not certain whether the British capitalist class really wants a return to a situation where some of its major European competitors, France, Italy, Spain, would be free to let their restored national currencies float downwards, so making their exports cheaper. One of the reasons Britain stayed out of the euro was precisely to retain the flexibility to do this, knowing that their competitors couldn’t.

The Times admits that Greece would still have had to reduce living standards even if it hadn’t been in the euro. So, it’s a question of damned if you’re in the euro and damned if you’re not. In other words, it’s not being in the euro that’s the problem, but being in a capitalist world. After all, Britain is not in the euro but the government is still having to impose austerity.

Halo Halo!: Look out. He’s behind you! (2012)

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

Right! That's Christmas over and done with. We’ve had enough mince pies, mistletoe and baby Jesus to keep us going till next December when the whole bloody farce kicks off again. It’s pantomime season now, so let’s take a look at one of religion’s other comic characters.

Every good pantomime has its villain, and the Catholic Church is no exception. This baddie doesn’t usually get a look in over Christmas, but recently he’s been back in the news. It’s our old friend Satan.

If you’ve been possessed by the devil recently, Father Gabriele Amorth is the man you need. He’s been the Vatican’s chief exorcist for 25 years and claims to have carried out 70,000 exorcisms. (And in case you haven’t got a calculator handy, that’s 2,800 a year or 7.67 exorcisms per day, seven days a week). And some people say the clergy don’t earn their money.

Father Amorth hit the headlines back in March 2010 when he informed the Telegraph online that people possessed by Satan vomit shards of glass and pieces of iron. And the Catholic sex abuse scandals happened, he said, because Satan had managed to get a foot in the door at the Vatican. “The Devil resides in the Vatican and you can see the consequences”. “He can remain hidden, or speak in different languages.” “At times he makes fun of me. But I’m a man who is happy in his work.”

Nevertheless, he reported, there were now “cardinals who do not believe in Jesus and bishops who are linked to the demon”. Fortunately, he reassured us, “His Holiness believes wholeheartedly in the practice of exorcism”.

In November the Telegraph again reported Father Amorth’s concerns. “Practicing yoga is Satanic, it leads to evil just like reading Harry Potter,” we were told. Science, he said, was incapable of explaining evil. “It’s not worth a jot.” Even children who are possessed gain superhuman strength, he explained, and have to be held down by up to four people. Perhaps this is not the best example he could have given. The image of a child being held down by four sweaty priests won’t do much to help his case.

What Satan makes of all this, goodness only knows, but he’s probably not too concerned. There’s no way they’re going to get rid of him. Think of all those priests, rabbis, mullahs, etc it would throw out of work.

In fact, Satan has his own church now, and a website. See www.churchofsatan.com. “Our members span an amazing political spectrum,” the blurb informs us. They include “Libertarians, Liberals, Conservatives, Republicans, Democrats, Reform Party members, Independents, Capitalists, Socialists, Communists, Stalinists, Leninists, Trotskyites, Maoists, Zionists, Monarchists, Fascists, Anarchists and just about anything else you could possibly imagine”.

Hmm, not sure about the “socialists” or “communists”. Other than that, though, they sound a right bundle of fun. Questions on their membership application include:

• Are you satisfied with your sex life?
• How many years would you like to live?
• Do you feel oppressed or persecuted in any way?

No wonder the Catholic Church’s chief exorcist is confused.

NW

Tiny Tips (2012)

The Tiny Tips column from the January 2012 issue of the Socialist Standard

Saudi authorities have executed a woman convicted of practicing magic and sorcery:

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In Indonesia the province of Aceh adheres to the strict precepts of Sharia law. If caught by the religious police, residents face public flogging and prison. Still, the rich have ways around it:

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A shoulder-mounted laser that emits a blinding wall of light capable of repelling rioters is to be trialled by police under preparations to prevent a repeat of this summer’s looting and arson:

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Rather than asking how the financiers would make a living if we forbade interest, we should be asking, “why have financiers at all?” We are the only species on the planet that uses money. Why must we pay to live on the planet we’re born on?

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It’s an old dream among anthropologists — one that goes back to Rousseau. In 1968, Graeber’s own teacher, Marshall Sahlins, wrote an essay, “The Original Affluent Society,” which maintained that the hunters and gatherers of the Paleolithic period rejected the “Neolithic Great Leap Forward” because they correctly saw that the advancements it promised in tool-making and agriculture would reduce their leisure time. Graeber approves. He thinks it’s a mistake when unions ask for higher wages when they should go back to picketing for fewer working hours:

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The results of an experiment in which rats opened a door to free trapped cage-mates astonished scientists. No reward was needed and not even the lure of chocolate distracted the rescuing rats. ‘’This is the first evidence of helping behaviour triggered by empathy in rats,’’ said US study leader Professor Jean Decety:

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According to current estimates, Indian men outnumber women by nearly 40 million. That startling gender gap, activists say, is the result of gendercide. Nearly 50,000 female fetuses are aborted every month and untold numbers of baby girls are abandoned or murdered. “It’s the obliteration of a whole class, race, of human beings. It’s half the population of India,” said women’s rights activist Ruchira Gupta of Apne Aap Women Worldwide. Part of the reason is money. Girls are a financial burden to their parents, who must pay expensive dowries to marry them off:

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Every now and again, one reads an editorial that stops the reader in his tracks. On 8 December, with the headline “War Inevitable To Tackle Indian Water Aggression,” Pakistan’s Urdu-language Nawa-e Waqt, issued such a screed. Nawa-e Waqt bluntly commented on India’s Kashmiri water polices and Islamabad’s failure up to now to stop New Delhi’s efforts to construct hydroelectric dams in Kashmir, “India should be forcibly prevented from constructing these dams. If it fails to constrain itself, we should not hesitate in launching nuclear war because there is no solution except this.”

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Greasy Pole: Theresa May . . . or May Not? (2012)

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

When things are that desperate it is worth trying anything. Which is why the voters swing from one discredited party to another and back again and why they have at times experimented by trying women to lead the government instead of the wearily ineffective men. But then came the real experience of Golda Meir, Angela Merkel, and Maggie Thatcher.  And now, there is Theresa May, the first  female chair of the Conservative Party and, after holding other lesser roles,  Home Secretary – only the second woman to land in what one of its incumbents, Jack Straw, once called a “ministerial graveyard”. The first female to be there was Labour’s Jacqui Smith who will not wish to go down in history as a minister who claimed parliamentary expenses for the cost of her husband watching television pornography.

On that matter, a media-gratifying coincidence revealed that Theresa May’s name is close enough to that of a soft-porn actor, known as Teresa (without the h) May, to cause some embarrassment but Theresa (with the h) brushed it aside by allowing only that, “We do get telephone calls from time to time from people who want to book me to do programmes which are perhaps not about politics . . . She may think it slightly estranged that some people might like to earn their living as a politician”. Indeed. But Teresa (without the h) might think it more than slightly strange that politicians should adopt such a self-justifying attitude on an issue such as pornography when the living which they “earn” relies on established venality with no regard for the suffering of the people they are elected to represent. All this suggests that there is no significant difference between their way of getting a living and hers. Theresa (with the h) May is married to a banker, they live in the lush rural beauty of Berkshire and between them they own two houses worth £1.6 million. She signalled her moving up the Greasy Pole by changing her wear for designer products, notably her shoes; “She is,” rhapsodised her press officer, “the most glamorous woman in the House of Commons”.

“Rising star” was how one journalist assessed her as she emerged onto the Front Bench. Industrious self-publicist Boris Johnson recorded, as an MP, “ . . . the upcoming bête noire as I spotted some months ago … even John Bercow was fulsome”. But the Daily Telegraph was not ecstatic on her elevation to Shadow Secretary for Education and Employment: “…while she is clearly competent she has done little that obviously merits so swift an ascent”. And now there is some cause to question whether she and her pretty shoes and pricey dresses have not persuaded her to overreach her political safety zone. For since she attained the heights of the Home Office she has been linked – to put it mildly – to enough blunders, misjudgements and clumsy handling of delicate issues to suggest that she is a serious candidate as a victim of Cameron’s first reshuffle. If that happens there will be much referring back to her speech to the Tory conference in 2002 when she suggested to the constituency members that their electoral failure could be something to do with the fact that the voters saw them as “the nasty party”. That was a phrase which has become attached to her very name regardless of the fact that a party which tries to be “nice” will not survive very long its exposure as politically useless to the requirements of capitalism.

As Jack Straw and not a few others quickly found out, the Home Office is no place for impulsive, ill-informed decision-taking. In these terms, Theresa May has not succeeded where others have failed. Rather, there is some evidence that when in difficulty she tends to bend the truth and shovel responsibility onto others. Last October she spoke at the Conservative Party conference on one of her favourite obsessions – abolishing the Human Rights Act. What she said went down very well with her audience for she gave an example of an illegal immigrant who came from Bolivia in 2009 and recently won an appeal against a Home Office attempt to deport him “…because – and I am not making this up – he had a pet cat”. This was eagerly accepted by the assembled Tories, and the headline-writers got busy. There was, however, a drawback. The Royal Courts of Justice, which had allowed the appeal, stated that the grounds were that the man was in a stable, genuine family relationship with a British woman and the cat was not material in the case but only one of the pieces of evidence. To make it worse for May, the case did not involve the Human Rights Act; the appeal succeeded on the grounds that the attempt to deport the man contradicted an established Home Office policy. There was more embarrassment for May when Lord Chancellor Kenneth Clarke weighed in with his opinion that her speech was “laughable and childlike”. All in all, not a good day at the Home Office for her.

And that was not the end of it. Another crisis was the policy of temporarily suspending immigration checks at airports when they are under pressure. News about this was seen likely to encourage a vengeful neurosis among the voters who feared the country being invaded by welfare-seeking cat-owners from places like Bolivia and suicide bombers ready fitted up with their devices. On the hook over this, May tried to pass her responsibility in the Commons and at the Home Affairs Select Committee, onto unauthorised decisions by the man in charge, one Brodie Clark – who denied May’s accusation and, taking such pride in his 40-year record as a civil servant, resigned his job, had his say to that same committee and announced that he would be taking out an action for constructive dismissal. The matter has yet to be resolved.

The Home Office was once described by a Home Secretary as “not fit for purpose”. He got it partly right, except that it is not just a ministry or a government with that problem. The society outside the ministry’s doors is constructed and conditioned to operate against the interests of the majority of its people, while those who attain positions of power soon learn to develop the techniques of passing the buck – onto other people or onto details such as the gender of those rulers. If we are to deal with all aspects of social dislocation it is necessary to begin from a more sustainable basis.

Ivan

Rouble-makers - Part 2 (2012)

From the January 2012 issue of the Socialist Standard

Link to Part 1

The concluding part of our article on how some capitalists originally accumulated their capital.

Roman Abramovich grew up poor: both his parents died when he was young, and he was brought up by an uncle. He was nothing out of the ordinary at school or in the army where, after two years, he was still a private; though as a soldier he is said to have sold contraband petrol to the officers of his unit. He married young and “married well” as the phrase is, because his wife’s parents gave the newlyweds a wedding present of 2000 roubles, worth at the time about £1000 (which was more valuable then than now). With this starting capital he set himself up as a street trader, selling plastic ducks. Abramovich’s present fortune is about ten thousand million pounds, so one’s first thought is that he must have sold a lot of them. Reports suggest that the ducks (which could be relied on not to quack) were smuggled in, thus avoiding the due taxes and increasing the resulting profits. (All this private buying and selling was then illegal, of course.)

Abramovich then went into trading automobile parts, retreaded tyres, other plastic toys and commodities generally. But the significant fact is that Abramovich was twenty when Gorbachev came to power, and small private businesses became tolerated. So Abramovich began making plastic dolls.  This, in our society, means that he was able to organize other people into making plastic dolls which he then sold, keeping the surplus value. Soon Abramovich was forming and liquidating numerous companies: he was into bodyguard recruitment, pig farms, and trading in oil and oil products. As one of the first out of the starting gates into private merchandising he was now making a lot of money – though some press reports claim it was not always along completely legal channels. There were occasional setbacks. In 1992 a goods train arrived in Moscow carrying diesel worth 3.8 million roubles. Abramovich met it and gave instructions for a different destination. He was arrested, charged with stealing state property and held in prison. But the people who got the oil duly paid for it, so Abramovich got out of jail and it was all forgotten.

Abramovich got to know Pyotr Aven, businessman and politician, who was in 1992 the Minister for External Economic Relations and, in 1994, the President of the Alfa Bank, one of Russia’s largest. On Aven’s yacht Abramovich met an even greater personage, Boris Berezovsky, who was in Yeltsin’s inner circle.

Abramovich made sure he became close to Berezovsky: their families even holidayed together. Berezovsky provided Abramovich with what is known in Russia as “krysha”, literally meaning roof: that is, with contacts, with political protection and, indeed, with a connection to the very centre of Russia’s government – to Yeltsin and Yeltsin’s friends. Berezovsky became Abramovich’s “godfather”.

Abramovich paid for this personal line to the centre of power with vast amounts of money: according to Abramovich on the witness stand in the current case, he paid Berezovsky during the 1990s no less than 2.5 billion dollars – well over a billion pounds (Times, 11 November). It was money well spent, since the 1990s was the decade when Yeltsin was disposing of Russia’s state industries. After cosying up to Berezovsky, Abramovich now cosied up to Yeltsin and his entourage, including his daughter Tatyana Dyachenko and his security chief Alexander Korzhakov. Soon he had an apartment in the Kremlin and was proving the truth of the old saying – it’s who you know that counts.

Yeltsin had come to power in 1991 when, like many other politicians, he was going to make everything fine for everybody. A year or two later (like many other politicians) he was despised as a failure. In 1996 he had to stand for re-election. He desperately needed money to finance a political come-back. Various auctions were held of state assets. Abramovich wanted to get hold of Russia’s oil industry – refineries, exploration enterprises, marketing company, everything – in a new entity called Sibneft. Abramovich’s witness statement to the court says, “Mr Berezovsky helped him acquire Sibneft in one of several rigged government auctions. These privatizations . . . allowed a group of oligarchs to gain control of vast state assets relatively cheaply in return for supporting Boris Yeltsin’s re-election campaign” (Times, 29 October). These are Abramovich’s own words, very carefully considered – telling untruths in a court case would rank as perjury, so he must have felt sure of what he wrote down. Since another Russian company, Gazprom, bought 73% of Sibneft in 2005 for 13.1 billion dollars, which would value the whole of Sibneft at 17.9 billion dollars, or at least a hundred times as much as Abramovich paid for it, one can agree that it was bought “relatively cheaply” and that the government auction must indeed, to use Abramovich’s word, have been “rigged”. In court, Berezovsky’s lawyer said that “an oil refinery manager who had opposed the deal that underpinned Mr Abramovich’s initial fortune had ‘died in difficult circumstances . . . he drowned’. Tantalizingly, no further detail was given” (Times, 2 November).

Abramovich moved on to consider the Russian aluminium industry. He said in his witness statement: “Prior to 2000, the Russian aluminium industry was disorganized, its assets were split between a number of different owners, and some of the players in the industry resorted to forceful methods and violence to protect their interests.” So he “was not keen to get involved in the industry, given its violent and unstable history. Criminal groups were fighting fierce battles for control of the profits generated . . . and dozens of businessmen had been killed in this struggle for control.” In fact, “someone was murdered ‘every three days’ at that time”. This period became known as “the aluminium wars.” However, another oligarch, Badri Patarkatsishvili, persuaded Abramovich to go for it, in return for the small consideration of half a billion dollars for his help as an intermediary. (Patarkatsishvili unfortunately died suddenly at his Surrey mansion in 2008, aged only 52, the very day after sending an urgent message to Abramovich saying, “he had something very alarming to tell me, and asking me to meet him urgently.” They decided it must have been a heart attack.) Abramovich, in alliance with another oligarch, Oleg Deripaska, successfully acquired Russia’s aluminium industry. Subsequently he extended his holdings in other Russian industries.

Deripaska, of course, was the man who hosted a holiday party on his luxury yacht in the eastern Mediterranean in 2008. The guests included Nathaniel Rothschild, George Osborne and Peter Mandelson. Mandelson was then the EU Trade Commissioner, and the EU had reduced aluminium tariffs, thus benefiting Deripaska. Some commentators alleged that it was inappropriate for Mandelson to accept Deripaska’s hospitality, but probably they were annoyed at not having been invited to sunbathe on the yacht. Others claimed that Osborne tried to get Deripaska to contribute to Conservative Party funds, but no doubt it was all a misunderstanding.

Abramovich insists he has earned his success. His wealth, he said, he had “generated through hard work and by taking risks associated with doing business in Russia”. It is true that some of those hopefuls who started out like Abramovich with the same aim of taking over some of Russia’s state industries have now retired to the nearest cemetery. Some of the men who took “the risks associated with doing business in Russia” are no longer with us; they have died of “lead poisoning”, to use the old euphemism, unless it was suspected that more exotic means of settling business disputes had been employed. And it is certainly true that all wealth is generated through “hard work”; it is only necessary to add that the person doing the hard work and the person getting the wealth are not always identical.

Abramovich’s evidence is currently causing raised eyebrows in London’s High Court, as he explains that he often gave out inaccurate information to the public and to potential shareholders, about who really owned his companies (“mainly for reasons of security”), that he signed important business documents which carried an intentionally incorrect date and that some people who signed documents as acquiring shares were not in fact acquiring shares at all – all of which would be offences under English company law. “If backdating documents is something that is not very ethical, then perhaps we can be accused of that. This practice existed in Russia and for sure we have done it,” said Abramovich. “If backdating this agreement is a sham, then so be it,” he told the court. “This is a uniquely Russian story,” Abramovich asserted. Other documents recording purchases, Abramovich told the court, contained the names of people who were supposedly purchasers and recipients of shares but in fact were nothing of the kind. “It is a Russian tradition”, Abramovich told the (somewhat surprised) court. Indeed, some of the state companies apparently were kind enough to give important assistance to the oligarchs who were bidding to take them over. Private Eye (11 November) said: “the puzzled judge did try but failed to get Abramovich to explain exactly why state-owned companies would assist in their own purchase without any written agreement. Another ‘uniquely Russian story’.”

Abramovich is now very close to Putin. He apparently interviewed politicians to see if they were suitable candidates for Putin’s cabinet. Abramovich has become enormously rich and, not surprisingly, has a squad of forty security officers to look after his personal safety. According to the Daily Mail earlier this year, he has four homes in Russia, two in the U.S., and three in France. In England he has six flats in Knightsbridge, and the Fyning Hall estate in West Sussex (not to mention a Premier League football team). He also owns the Eclipse, a luxury yacht 560 feet long, which has two swimming pools, two helicopter landing pads, several subsidiary boats or tenders and a submarine. According to reports in the papers, he has several other luxury yachts. He also has a Boeing 767, an Airbus 340, several helicopters, and ten luxury cars – a Porsche, a Rolls, a Ferrari and so on. However, he told the court that he had been “astonished by Mr Berezovsky’s spending habits when they met in 1994, and that he did not want a similar ‘extravagant lifestyle’” (Times, 2 November). So Berezovsky must have been living it up.

In the 2011 Forbes list of the world’s richest men, Abramovich was only the ninth richest man in Russia (where there are now no fewer than 114 dollar billionaires). So there are eight Russians who probably wonder how Abramovich can make do with so few houses, cars, luxury yachts and so on.

In the present clash of the tycoons, Berezovsky claims that the vast amounts of money Abramovich paid him were dividends from Berezovsky’s share of the companies acquired from the state in the 1990s, while Abramovich says they were nothing more than payments for Berezovsky’s services in keeping Abramovich’s name before Yeltsin as an appropriate man when Yeltsin wanted to make more money out of state assets. These matters will not be easy to decide when whole industries changed hands with little more than a nod and a wink, or in transactions recorded at best in documents which were unfortunately false as to date, and as to personnel, and as to share-holdings. (“It is a Russian tradition.”)

Several other cases involving the Russian oligarchs are down for early hearings in London. But surely any unbiased person who reads the reports of the current case must, on the facts revealed there alone, abandon any support of capitalism. The courts and the judges and the lawyers can argue till the cows come home about whether one oligarch has done the dirty on another, or whether one oligarch ought to have a few billion more and another oligarch a few billion less. It all misses the essential point completely. What these two oligarchs are arguing about is not about creating industry: the Russian oil industry existed and still exists; the Russian aluminium industry existed and still exists. Nothing in all these nefarious dealings in Moscow altered the basic facts of those industries. All this laborious and expensive squabbling in London is concerned with one thing only: which extremely rich person shall have more of the surplus value produced by these industries, and which shall have less. As Abramovich himself said in the courtroom about the Russian aluminium industry, “criminal groups were fighting fierce battles for control of the profits generated”. Not a single voice has been heard, either in the courtroom or in the lengthy reports of the proceedings in the papers, asking the essential question: why should the Russian oil-workers and the Russian aluminium-workers go to their work every day and produce oil and aluminium, and have so much of their hard work creamed off to in order to provide disgustingly extravagant luxury for people who probably couldn’t even explain what it is the oil-workers and the aluminium-workers do.

But then, that is what capitalism, whether the state variety or the private variety, is all about.

Alwyn Edgar

Revolution or Reform? (2012)

From the January 2012 issue of the Socialist Standard

This key question is also being debated among some in the Occupy Wall Street movement.

The Occupy Wall Street (OWS) movement is united in its outrage against grotesque social inequality and in its desire to bring an end to the dominance of a tiny minority (the “1%”) over the will of the majority. So it was disingenuous – or daft – for onlookers to say that the movement has no demand. The demand for social equality is clear enough, but the critics who ignored, then ridiculed the OWS movement understood “demands” in the specific sense of concrete reforms to make things less bad.

Somewhat strange logic, if you stop to consider it: as if it were up to the victims of capitalist inequality to figure out how to turn a profit-chasing system built upon worker exploitation and minority ownership of the elements of production into an egalitarian society.

No. The demand has been made by OWS – at the very least a demand for less social inequality. So it is up to capitalism itself (or those who fancy themselves to be at its helm) to either try to meet the demand or defend inequality.

Of course there are those – and indeed many – within the OWS movement who remain hopeful that capitalism can be reformed to the point of at least being less awful, and who believe that this is a goal worth fighting for. And the Democratic Party and its allies are doing their utmost now to keep Hope for (reformist) Change alive. Some might say that the reality of capitalism in the months and years to come will dispel those hopes. But it seems both foolish and dangerous to wait around for yet another lesson in the School of Hard Knocks. So the nascent “reformism versus revolution” debate among OWS participants is a welcome development.

Still, it is hard to gauge how far the “revolutionary camp” has gained ground. And even if they are gaining momentum, there is the question of how the word “revolution” is being used. For its meaning has been stretched rather thin after a year that saw the “Tunisian Revolution” and the “Egyptian Revolution.” These were indeed momentous events that sent one smug dictator into exile and another to jail (even though the military remained embedded in power). But a change in government, no matter how repulsive the one toppled, is not in itself a social revolution.

There are those within the OWS movement, however, who are using the term “revolution” in a more specific and appropriate way, in the sense of a transformation that replaces capitalism with a fundamentally new social system. One of the clearer statements in favour of revolution was made by the radical cartoonist and syndicated columnist Ted Rall, in an article titled “Revolution Versus Reform”.  There are many things a socialist can agree with in this article; there are more than a few head-scratchers too. And then there are some important points that are not addressed at all.

First the things that might just as well have appeared in a Socialist Standard article. Such as the idea that revolutionaries “don’t want to nibble around the edges of a system they despise” and if they “get their way . . . capitalism won’t exist.” He is also right to point to how reformist victories of the past are often rolled back later.

In short, Rall highlights the vision between the reformists who “see the system as broken and in need of repair” and the revolutionaries who think that the “system itself is the problem.” His own conclusion is: “Amending the Constitution won’t do the trick. Electing better officials isn’t enough. Yes, the system is broken. But that’s not the main point. The system is irredeemable. Nothing short of revolution will do.”

Yes, yes, and yes again to what Rall is saying. But at times his critique of capitalism – or “the system” as he often calls it – does not rise above the level of moral outrage. He writes, for instance: “Revolutionaries … think the system is inherently unfair, corrupt and violent; that unfairness, corruption and violence are the system.”

The denunciation of capitalism is justified, for who could deny its tendency to be unfair, violent, and corrupt? But throwing adjectives at capitalism does not do much damage. Better to understand, simply, that it is a system of production carried out to generate profit – a trick that can only be turned by exploiting labour. And this “magic” is performed even when the worker receives “fair” payment for his or her labour-power (at its market value). Unfairness, corruption, and violence do not really get to the heart of the matter.

In fairness to Rall, he wrote on his blog, in a response to a comment on his article, that he is “currently working on a book that proposes what should follow the Revolution.” So, we can only look forward to seeing whether he has envisaged a new society that is truly beyond capitalism, rather than reformism in a revolutionary guise.

If the OWS movement as a whole is not animated by a vision of what can replace capitalism, it seems hard to imagine that it will be able to develop beyond the stage of demonstrating the widespread frustration with the status quo.

Michael Schauerte

Capitalism on Trial? (2012)

From the January 2012 issue of the Socialist Standard

How the BBC rigged capitalism’s acquittal.

Lord Reith, the founder and Director General of the BBC, famously gave the wink that “[the British establishment] know they can trust us not to be really impartial”, a policy that he and his successors have pursued with great consistency ever since.  The BEEB may veer politically a little to the left or to the right, but it never deviates from promoting the interests of the British capitalist class.  Interestingly, though, it has always trusted its highbrow radio stations, Radios 3 and 4, to debate political and economic issues a little more frankly than its mass-market television news programmes. This may be because Radio 3 and 4 listeners are relatively few in number and are assumed to be properly on-message (On profile, they have been through the mill of higher-education and professional training.)  It was no surprise, then, to find that in the summer of last year, Radio 4 put out a two-part series called ‘Capitalism on Trial’ – though the verdict it would deliver was, of course, never in doubt.  

To make the programme, the producers invited a group of professional philosophers, historians, economists and journalists to the studio to deliver their opinions (presumed to be ‘evidence’) on the subject of capitalism.  To these, they added a management consultant and hedge-fund manager, presumably to give what passes on Radio 4 for a “real-world” perspective.  Predictably absent from the discussion was anyone with a view from the sharp-end of capitalism during this time of crisis – anyone, that is, who could have punctured this little Radio 4 bubble of lofty intellectualism in a trice.  If this was a trial, then the jury was rigged, the witnesses carefully ‘vetted’ and the judge nobbled.  The council for the defence (who also happened to be the presenter of the programme) was that well-known and impartial commentator on current affairs, Michael Portillo.

Early in the programme Michael hinted at the purpose behind all this.  “As a former politician,” he said, “I think about whether we can maintain public support for a system that many associate with inequity and unfairness.”  This was the task then: to defend capitalism from its critics and re-establish its credentials in the minds of an increasingly doubtful and hostile public.  How was this to be achieved?  Simply: by sleight of hand, misdirection, omission and fraud.   In Portillo’s final summing up, he announced for instance, that capitalism had been put on trial and “compared to the alternatives, favourably and unfavourably….”   This claim was very revealing.  It was simply false.  No meaningful comparison had been made during the one-and-a-half hours of the series. Like many Radio 4 programmes, the producers and editors had stitched together a series of sound-bite opinions with commentary from the presenter to lull the audience (and possibly those taking part as well) into thinking it all added up to a coherent analysis.  In this rapid jumble of opinions how many actually believed that they had heard capitalism being compared with alternatives, once they had been told they had?

It would have been foolish for the BEEB to deny or skirt round the current recession and national debt kerfuffle.  The programme’s strategy was, therefore, to come clean on the credit crunch and then to try to explain it away.  This, as sometimes happens on talk radio, led to several interesting admissions.  There was an eager and unseemly rush by the contributors to tell us, for example, that capitalism was necessarily a very unequal society.  We learned, in fact, that capitalism needed to create ‘victims’.  We learned that, its economic downturns such as we are currently experiencing, are normal and inevitable. We learned also from one Crispin Odey, a hedge-fund manager who pocketed £23 million by betting on the crisis happening (a small personal detail omitted from the programme) that to function properly, capitalism needs both ‘trust’ and a profitable banking sector, something; he opined that “may not be popular news to the public.” Presumably he perceived a distinction, between “the public” and Radio 4 listeners who were, of course, sophisticated enough to understand his point. Or maybe he didn’t care – you got the feeling at least that when he referred to ‘us’ or ‘we’ he was not talking about you or me.

Despite all this we discovered, that all these unfortunate-sounding features of capitalism were really rather good and necessary things.  Inequality was an excellent motivator, we were told, without which capitalist enterprise could not function.  Downturns in the economy, though inevitable were positively to be welcomed as part of a cycle of “creative destruction.”  And even capitalism’s need to create victims can, fortunately, be legitimised by ensuring that those “who do badly out of it don’t suffer too much” – a great gladness to all those who are currently having to rely on the ‘generosity’ of the state or to keep the landlord at bay.   

We heard further that the credit crunch was not actually capitalism’s fault.  What had happened in 2008 was a “departure” from capitalism; or was an “extreme” or “very dysfunctional” form of it.  Alternatively, the crisis had resulted from the system not living up to its “principles”.  “Capitalism” we heard, “in a very fundamental sense [had] stopped working.”   Voice after voice was raised to assure us that the actions of the bankers were, in some mysterious way, aberrations; that they were somehow not driven by the engine at the heart of capitalism itself: the remorseless pursuit of profit.  No-one raised the possibility that capitalism itself might be dysfunctional.

Some of the most fantastically pixilated opinions came from Jamie Whyte, an extreme free-marketeer, introduced to us by Michael as ‘a philosopher’ but currently working as a management consultancy researcher. Jamie told us with disarming frankness that within capitalism there could be no equal opportunities.  The idea was “nonsensical,” he said, “a myth”.  But then he let us in on a secret.  Though the idea was a myth, it was a most valuable myth, because if you really believed it, it might give you a “good shot at the top [and] increase your chances.”  He didn’t add that, in a competitive world without equality of opportunity, the majority would remain helplessly stuck at “the bottom” whatever they believed.  Nor did he add that such myths delude working people into falsely believing that there is a realistic chance of capitalism fulfilling their social needs, a belief that works much to the benefit of their employers, whose own ample needs are met by the appropriation of wealth created by their employees.  

And the fairy dust just kept on falling…

“Abject poverty is… dreadful”, claimed Jamie, mustering in his voice all the conviction of a telephone answering service.   “And of course one would want to eliminate that.”  (Indeed one would!)  “Capitalism”, he argued, “has proved over the centuries to be the best economic arrangement for getting rid of abject poverty.”  Clearly Jamie’s cloud has not touched earth recently.  He hasn’t been out on the streets of Britain speaking to the increasing number of workers learning to cope with homelessness, or to the women fleeing domestic violence who are being forced, now in significant numbers, onto the streets through hostel closures, or to the rising numbers of those predicted to die this winter because they cannot afford adequately to heat their homes.  What Jamie principally objects to, though, is not abject poverty, but the irritating concept of relative poverty:  “I see [the concept of relative poverty] as a threat to the market mechanism that creates the wealth that stops people actually being materially poor.”  Perhaps someone should tell him that it is not the ‘market mechanism’ that creates wealth but the productive labour of the working class.  

As workers, we have always been patronised by those like Jamie Whyte who embrace a utopian vision of capitalism but who cannot quite grasp the idea that we might aspire to something slightly better than a life of relative poverty (even if, in his view, it is “not bad”).  Some of us might even be attracted by the idea of a life of “equal opportunity” and economic security in which we are able to make a genuine contribution to the world in which we live and have the freedom to make real choices.  

These characters live in an ideal, intellectualised world where economic cycles of boom and bust are “to be welcomed, because in the downturns, bad companies go out of business and entrepreneurs with new ideas take over or elbow aside the weak performers – what some call Creative Destruction.”  In other words, recessions are really just the necessary means by which capitalism cleanses itself of inefficient companies, restores profitability and makes possible the next boom. This is true, and to Michael and Crispin this is an exciting, elegant and intellectually satisfying idea.

To most of us, on the other hand, recessions load our economically insecure lives with ever more pressing problems and threats: loss of livelihood, dignity, home and maybe even family.  At a time when many of us are facing redundancy and there is little on offer but insecure, part-time, low-paid work; when claiming benefits is becoming an increasingly hard and humiliating experience; when many of us are cutting down on basic food items to pay their rising rents; when lives are going down the pan, it is possible that some of us will perhaps fail to appreciate the elegance and regenerative power of “creative destruction”.  We might regard a society which cannot remain efficient except by periodically raising the normal levels of poverty and misery to greater than usual levels as not worth supporting.  We might even be antagonistic to the idea of efficiency when it turns out to mean the efficient exploitation of our own labour.  It might be that we want to turn our backs on capitalism and consider an alternative.

As Michael picked his way among his witnesses’ contributions, introducing and reflecting on them, or ignoring them sometimes when they raised an inconvenient point or two, his line of argument became gradually clearer: it may be that capitalism creates victims; it may actively create inequalities; and it may visit both relative and abject poverty upon working people, but against these minor inconveniences (and many others we could add) there is one outstanding fact: capitalism is the most fantastically successful way of creating wealth humanity has so far evolved.

And we can wholeheartedly agree with this.  But to it we would add that capitalism’s purpose, and only purpose in creating all this wealth is to fill the few but ample pockets of the capitalist class into which much of it flows.  For capitalism creates poverty just as inevitably as it has creates wealth, and the wealth it creates does not drive out poverty but merely towers above it and makes it intolerable. We would also add a certain emphasis to Michael’s claim: that capitalism is the most fantastically successful way of creating wealth humanity has evolved – so far.

As every radio producer knows, a programme’s conclusion is all important because the last thing listeners hear will be the idea they take away with them.  In his summing up, Portillo speaks of capitalism and its current state of contraction: “my guess is that it will emerge, however bedraggled from its battering.  But maybe that’s just because I cannot imagine the alternative.”  And so, finally, we come to the big message, the one that the series has been warming up to.  And this is it: THERE IS NO ALTERNATIVE.  After all the odd and insubstantial claims that capitalism actually does meet our needs, this is the system’s keystone argument.  No wonder, the producers avoided making comparisons.

And it is at this point, too, that we are allowed to see clearly the spectre that has been hovering indistinctly over the programme throughout, the spectre of Karl Marx, whose writings are for the first time in many years showing signs of generating popular interest.   We know that we are about to be warned.

That warning comes in the final contribution from Gareth Stedman Jones, academic and reformed leftist: “…when Marx came to trying to think out how would you have an efficient and productive society without a market this is where I think he got stuck.”  That’s it then: there is really no use in looking for an alternative to capitalism – like it or not, you are stuck with it, chum, because even Marx couldn’t find a way out.  But to socialists listening (those that were still awake by this time) this claim will have come as something of a surprise.  Marx was not foolish enough to try to make detailed predictions of a future society (it is, of course, impossible to predict in detail what any society will look like even a few years ahead, even a capitalist one) but he was far from “stuck” for an explanation.  As a disillusioned Leninist who formerly placed his faith in the very unMarxist Soviet regime, it’s understandable that Gareth Stedman Jones would be unable to admit this.  

Marx, in fact, derived from his analysis of capitalism some definite conclusions.  To be sustainable, a post-capitalist society would need to abolish the source of class conflict: private ownership of the means of production.  Because of this, a post-capitalist world, he argued, would necessarily be classless and stateless.  And without private ownership there could be no money or exchange.  Such a society would also necessarily be global – just as capitalism is now.   

When Portillo and the BBC shut down discussion on an alternative to capitalism, it is worth considering whose interests they are protecting, especially since, by their own admission, we live, at present, in a structurally unequal, victimising world – one incapable of meeting human need.

Hud.

50 years ago: The Common Market — the Real Issue (2012)

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

The Common Market has become front-page news. Papers that could hardly spare it a thought a few short months ago now give it headlines. Special features set out to explain things in simple terms for “the man in the street.” On radio and TV it is the same. Even ITV did a series and got criticised for slanting the programme too heavily in favour of Britain going in.

There is plenty of such criticism, of course. Dire warnings of what will happen to us if Britain goes into the Common Market are matched by equally dreadful ones about our fate if she stays out.

We are told of other possible consequences. Of how the Government is thinking of going over to decimal currency—after hesitation on the part of its predecessors for close on a hundred and fi fty years. And of the way Mr. Marples is apparently making preparations just in case we have eventually to drive on the right hand side of the road! How much keener can British capitalism’s representatives show themselves than that?

But, more seriously, why this sudden about-turn? Why, after resolutely refusing to have anything to do with the Common Market for years, is the British Government desperately trying to get in? Even in 1958, when the writing was pretty plainly on the wall, they still preferred to set up the rival firm EFTA (the Seven) rather than come to terms with the Six. They had the chance of joining then and turned it down. (…)

The reason, then, for British capitalism’s change of front is the one we should always seek when we wish to discover the motive for the really important activities of capitalist nations and their political spokesmen—the motive of harsh, real, cold economic interest.

Plain and inescapable is the fact that if British capitalism does not go into the Common Market, it is going to be left isolated in a world increasingly under the sway of the economic power of the Six. This isolation will become more and more pronounced as the Market’s internal tariffs fall and its duties on imported products increase. Eventually, if the avowed aims of the Common Market were to be achieved, British capitalism would be left high and dry. The Tory Government has, belatedly, woken to the danger and is now fighting a desperate last-minute battle to avert it.

(Editorial, Socialist Standard, January 1962)

Voice From The Back: All Right For Some . . . (2012)

The Voice From The Back Column from the February 2012 issue of the Socialist Standard

All Right For Some . . .

We are told every day by the mass media that we are living through an economic downturn, but some seem to be surviving it rather well. “Rolls-Royce Motor Cars has reported record sales for 2011, having sold 3,538 cars. Sales at the BMW-owned luxury marque grew by 31% from the previous year, although the growth rate was weaker than in 2010 when sales jumped by 150%. Rolls-Royce’s £165,000 Ghost model, which is smaller and less ostentatious than the £235,000 Phantom models, has been the main driving force for sales” (BBC News, 9 January). Bentleys have been selling well too. “The luxury carmaker Bentley has defied the economic gloom with a 37% surge in global sales” (Guardian, 3 January). So while members of the working class are told to tighten their belts the owning class are still buying their Bentleys and Rollers in increasing numbers.

… But Not For Others

Politicians are fond of speaking about ‘family values’ and love photo opportunities that depict them as happily married decent individuals. In practice, though, when defending the profit margins of the owning class they ruthlessly attack the living standards of working class families. “Families with children will be hardest hit by tax and benefit changes aimed at cutting the deficit, a charity argues. The Family and Parenting Institute (FPI) says the average income of households with children will drop by 4.2% between 2010-11 and 2015-16, the equivalent of £1,250 a year. Average household income however will fall 0.9%, or £215 a year, say the FPI” (BBC News, 4 January).

Another Empty Promise

An ex-Prime Minister, Margaret Thatcher, once boasted that we lived in a property-owning democracy, but that boast seems somewhat laughable today. “Almost a million people have turned to a high cost payday loan to cover their mortgage or rent in the past year, the homelessness charity Shelter has claimed. A further 6 million have used other types of credit, including unauthorised overdrafts, other loans or credit cards, to help pay their housing costs, it said (Guardian, 4 January). It seems we now live in a pawn ticket owning society.

An Inhuman Society

Capitalism is a society that constantly attempts to cheapen production so that it can boost profits. This drive is not confined to the factory; it also applies to the hospital. “Hospitals have been accused by ministers of treating patients ‘like parts on a production line’ after official figures suggested that hundreds of thousands of people every year are being sent home before they are well enough. More than 660,000 people were brought back to hospital last year within 28 days of leaving, statistics show, sparking allegations that patients are being hurried through the system so the NHS can meet waiting-list targets” (Daily Telegraph, 29 December). Needless to say, this heartless treatment only applies to members of the working class. The owning class enjoy the best possible medical treatment just as they enjoy the best of everything that society can provide.

The Season Of Goodwill?

During the big sales drive of the Christmas period advertisers put great emphasis on phrases like ‘goodwill to all men’ and ‘peace on earth’ but there is one group of salesmen who don’t rely on such nonsense. The gun manufacturer and arms dealers know that Christmas time is a boom period for gun sales. “According to the FBI, over 1.5 million background checks on customers were requested by gun dealers to the National Instant Criminal Background Check System in December. Nearly 500,000 of those were in the six days before Christmas. It was the highest number ever in a single month, surpassing the previous record set in November. On December 23 alone there were 102,222 background checks, making it the second busiest single day for buying guns in history” (Daily Telegraph, 1 January).

Pathfinders: The New Untouchables (2012)

The Pathfinders Column from the February 2012 issue of the Socialist Standard

Socialists will greet with mixed feelings the news that a milestone in genome sequencing has been reached, enabling anyone to have their entire genome sequenced in one day for just £650 (Independent, 11 January). This task, until recently a hundred-million dollar enterprise involving tens of years and hundreds of scientists, can now be knocked off on a wet Wednesday by a single bored boffin using a machine the size of a microwave oven. In a year or two perhaps, the same feat will be achieved in ten minutes by licking the end of your smart phone.

That this is a testament to the awesome acceleration of science is undeniable. The benefits for the future management or prevention of diseases through individual designer treatments are also undeniable. Humanity’s drive to know itself, to know its essential nature is irresistible, the stuff of legends. There ought to be no down side. But this is capitalism we’re talking about. Information about your body and health prospects can be used against you as well as for you, and the fact that this information will be of interest to insurers and employers is not merely a probability but a racing certainty. As in the film Gattaca (1997), your life and career choices could well be determined and circumscribed by what’s in your genes.

Genome-profiling could be written into contracts everywhere from pre-school to pre-nuptial agreements. It could become the hot new style accessory, the ‘new black’, better than the sports car or the Rolex, better than the implants or the permatan.  Eyes won’t meet anymore across crowded bars, or pheromones traverse the stilly air, nor will courage have to be summoned for the first hesitant approach. Instead, iPhones will poll each other automatically, protocols will synchronise, alerting you to genetically suitable breeding partners according to matched genomic probabilities. Before you’ve even exchanged glances, your hardware will have exchanged financial histories, bought the first round of drinks and booked the dinner table. While nature remains red in claw, human nature will become blue in tooth.

Disability groups, accustomed anyway to being ‘second-class citizens’, have every right to worry about all this. From being chronically under-employed, they may soon become regarded as unemployable, a highly disquieting condition in a social system that only values ‘productive’ workers and which in the past has thought nothing of liquidating ‘unproductive’ ones. But this technology will have the effect of ‘disabling’ many more people than those currently bearing the label. The definition of ‘disability’ will also be extended forward in time to include anyone who is likely to develop a disabling disease in the future, creating a large subset of sell-by-date workers whom employers will not want to bother investing in, whom state institutions like health and education will neglect, whom mating partners will avoid, and whom insurers won’t touch with a barge pole.

Would this subset, driven by lack of opportunity and perhaps a cold sense of fatalism, turn in desperation to insurrection or to crime? Would they be categorised as a social problem at birth? Could two such individuals, the new genetic ‘untouchables’, be charged with criminal negligence if one got the other pregnant? Hard upon the arrival of the genomic ID card would follow the inevitable question of controlled breeding, forced sterilisation, and euthanasia. Capitalism’s quest for maximum return for minimum outlay could give rise to a new fascism in which only the genetically ‘perfect’ have any chance to succeed, or even survive. Eugenics, the dirty word of the Nazi era, could make a comeback.

Given what happened in Nazi Germany, people forget that the eugenics movement of the early twentieth century was not initially seen as some right-wing state-backed war on the underdog, but a forward-thinking, progressive and humane project based on good science. The Fabians supported it, as did Bernard Shaw, the Webbs, Darwin’s own son, in fact virtually all of the ‘right-thinking’ intellectuals. Who would not want a purer gene pool, they thought? What justification could there be for allowing pain and disease to proliferate? Wasn’t eugenics in the best interests of the whole human race?

The theory wasn’t entirely watertight even in its own terms. It had already been shown by 1915 that genetic mutation could jump heritability lines and that heritability was not a closed system but was subject to outside interference. Nowadays a lot more is known about horizontal gene transfer through viral drift. This won’t stop the modern eugenicists, however, since engineering can build by design what crude artificial selection cannot sculpt by elimination. Even if a mutation crops up in a previously ‘pure’ strain it can be engineered back out again. In theory, anyway. In practice, the codebook is open, but nobody knows what the letters mean, and we can only guess by inference when a letter changes. Even if they could read the code, geneticists may never untangle the complex webs of phenotypic effects influenced by one genetic ‘word’, nor identify all the genetic elements necessary to create one – and only one – effect. This unfathomable complexity – pleiotropy – yawns like an abyss between the engineers and their brave new world, but the bridges are being constructed.

There will of course be cries of moral outrage, appeals to civil liberties, and demands for ethical oversight. Capitalism will pay lip-service to these insofar as it has to, but its logic compels it to find out whatever can be found out about the ‘worth’ of each worker, each human tool, and stock its toolbox accordingly.

The argument that it won’t put in its toolbox is the one about putting all your eggs in one basket. Evolution is even more blind and capricious than capitalism. The last thing any thinking species ought to do, if it wants to survive, is confine itself to one tight genetic niche and thereby maximise its vulnerability. That’s the way to become beautiful – and extinct. Genetic diversity doesn’t lead to a shallow and polluted gene pool, as our elitist, narrow-minded and anally-retentive forebears conceived of it. It leads to the best possible defence against extinction in the event of future diseases. Even if one leaves aside every possible moral argument about the ‘right to life’ of all humans, the simple threat of evolutionary extinction alone ought to be enough to annihilate this silly notion of eugenics once and for all. Let all humanity prosper, and bugger the chromosomes.

It’s something of an indictment of capitalism that one even has to make this utilitarian argument in the first place. Moral outrage ought to be enough. But it isn’t, because capitalism has no brain, no heart, and no foresight. As long as the money rolls in, let the heads roll as they may.

Paddy Shannon