Venezuela: another failure of reformism (2026)

From the February 2026 issue of the Socialist Standard

Venezuela is a petro-state, defined as a country with an economy and government that depend heavily on money from extracting and selling oil and gas. Oil was first extracted there in the 1920s and Venezuela was one of the founding members in 1960 of the oil-producers’ cartel, the Organization of the Petroleum Exporting Countries (OPEC), that held the rest of the capitalist world to ransom after the 1973 Yom Kippur War which closed the Suez Canal and led to petrol rationing. The other four founding members were all in the Middle East: Iran, Iraq, Kuwait and Saudi Arabia. Venezuela in fact has more oil reserves than Saudi Arabia.

Ground rent

The main income of a petro-state is ground-rent rather than profit. Ground-rent is an income that accrues to ground owners because they happen to own land that contains some natural resource. In agriculture this would be land that is more fertile. The price of, say, wheat will reflect the cost of growing it on the land which provides the producer with a normal profit. Wheat grown on land that is more fertile than this will sell at the same price, despite the cost of growing it being less. The difference between the price the wheat sells at and the lower cost of production is ground-rent. In other words, those who own land with a lower cost of exploiting its natural resource than at the margin, whether this be wheat or oil, get an extra income above normal profit.

Saudi Arabia, as the country where the cost of extracting oil is lowest, gets the biggest proportional ground-rent. Other oil-producing countries, except those with the highest production costs, also benefit to a greater or less extent. The amount of oil rent a petro-state receives depends on the price of oil, the higher this is the more the rent (which is the economic logic behind the OPEC oil cartel). But OPEC can’t fix the price of oil at will or forever; other factors are involved such as the demand for oil, which fluctuates up or down depending on whether world capitalism is in the boom or the slump phase of its economic cycle.

The Gulf oil-producers are all dynastic states and a large part of the ground-rent they get goes to the ruling dynasty. The rest of the population, mainly immigrant workers from Asia and other Arab states, as non-citizens have no say in how the rent is distributed. Most of them live in poverty while the kings, princes and sheiks and their families live in the lap of luxury.

Politics and the price of oil

Venezuela was different from the other founder members of OPEC in that it was more developed both economically in already having a capitalist economy and politically in that its population were citizens with the right to vote. Because the government was so dependent on oil rents, the course of the political life of the country reflected changes in the price of oil.

From 1948 to 1958 Venezuela was a dictatorship, backed and brutally enforced by the army. During this period oil prices were high but the benefits went to the US oil corporations that had been granted concessions to extract oil, though some was used on infrastructure projects and to enrich the dictator and his political allies.

In 1958 the dictatorship was overthrown and Venezuela became a formal political democracy with competitive elections between rival parties. Successive governments began to take back ownership of the oil as concessions expired. In 1976 all oil in the ground became government property via a state enterprise, Petróleos de Venezuela (PDVSA). Things were relatively normal until oil prices fell in the 1980s due to the ‘oil glut’ that came about following the post-1973 energy crisis.

The high price engineered by OPEC after the 1973 Yom Kippur War led other capitalist countries to seek and develop other energy sources (coal enjoyed a bit of a revival) and other sources of oil, leading to overproduction. The result in Venezuela was an economic crisis and in 1989 the government imposed an austerity that led to strikes and riots and attempted coups, including one in 1992 led by Hugo Chávez, a young army officer from a poor background. He was jailed but released after two years. On his release, he turned to conventional politics and won the 1998 presidential election, taking office in 1999. He was re-elected under a new constitution in 2000, then, despite a short-lived coup against him in 2002, again in 2006 and 2012.

There is no reason to doubt that Chávez sincerely wanted to improve the lot of the population of Venezuela, particularly the poorest. He was, basically, a populist Venezuelan nationalist. He didn’t claim to be a socialist when first elected president in 1998, just to be anti-elite and for using oil revenue to help the poor majority. It was only in 2005 that he declared himself an advocate of ‘21st century socialism’. In 2007 the name of his party was changed to the United Socialist Party of Venezuela (PSUV), which is still the ruling party there today.

He was lucky in that soon after he first came to power the price of oil rose, providing his government with funds to pay for improved services for the mass of the population:

‘When Chávez took office in early 1999, oil was trading at less than $15 a barrel, but its price started going up almost instantly. By the time he was elected to his third term, in 2006, it was trading at about $60 per barrel; by the time his presidency ended upon his death in 2013, a barrel of oil was worth almost $100’.

With a healthy income from oil rents, the Chávez government was able to improve the living standards of the mass of the population:

‘Chávez’s government focused its efforts on bringing people out of poverty using the surpluses generated by oil revenue, buffered by high market prices. Social spending per person in Venezuela grew, in real terms, 170 percent from 1998 to 2006 and if we included the social spending made directly by Petróleos de Venezuela (PDVSA) the figure reached more than 200 percent per person. In 2008 education spending was more than double what it had been in 1999. The number of people living in poverty dropped from 55 percent in 1998 to 34 percent ten years later. University enrolment has almost tripled since 2000. (… ). All of the redistributive measures undertaken by the government meant that in 2011 Venezuela was, by Gini coefficient, the least unequal country in Latin America …’.

Pretty impressive, which explains why Chávez was re-elected three more times. Some, particularly leftists from Europe, saw this as a successful move from capitalism towards socialism. The prominent Trotskyist Alan Woods (a leftover from the old Militant Tendency) was particularly impressed and met Chávez a number of times, becoming a propagandist for the ‘Bolivarian revolution’. But he wasn’t the only one. Even today some of those demonstrating against the US attack on Venezuela are doing so to defend the regime there because they believe it to be socialist. ‘The Bolivarian Revolution is committed to building socialism and independence’ declares one group (revolutionarycommunist.org). But it wasn’t socialism or a step towards it; it was an attempt to reform capitalism into a less unequal society which appeared to be working due to a period of high oil prices and rents.

Chávez died in 2013 shortly after being re-elected. In a sense he was lucky again, as oil prices eventually fell as a result of the drop in industrial activity that followed the Crash of 2008. He thus avoided being the head of government in Venezuela during a period of falling oil prices. That poisoned chalice was passed to his successor, Nicolás Maduro, and the Chavista military and political bureaucracy that ruled the country.

Maduro’s poisoned chalice

In 2014 oil prices fell from $100 a barrel to $40 and did not rise much again (even today it’s only about $60). The Maduro government was in an impossible position. Unable to maintain spending to benefit the population at its previous level it was forced to cut back. Popular discontent rose and in 2016 opposition parties won a majority in the National Assembly which went on to refuse to recognise that Maduro had won the 2018 presidential election. The ruling bureaucracy was not prepared to give up power and turned to political manipulation and repression to maintain it. The US and Europe, too, refused to recognise that Maduro had been legitimately elected and imposed economic sanctions on Venezuela which continue to this day.

With less income from oil rents the government had to cut the benefits it handed out, with the result that poverty and inequality grew:

‘According to a quality of life study conducted by a group of universities in the country, the Gini coefficient, which measures income inequality, reached 56.7 in 2021, surpassing that of Brazil. The research also shows an increase in the income poverty rate, with more than 90% of households living below the poverty line. The most recent data indicate an increase in inequality, with an index of 60.3, and a decrease in income poverty to 80.3% of households, a result of the modest economic recovery of 2022’. (translated from Spanish)

So, while the proportion of people in poverty fell from 55 percent in 1998 to 34 percent in 2008, by 2022 it was up to 80 percent. In 2011 Venezuela had been the least unequal country in Latin America in terms of income. Between 1999 and 2011 the Gini coefficient had fallen from almost 50 to 39. In 2022 it was back up to 60, higher than it had been when Chávez was first elected.

Some of this will have been due to the sanctions imposed in 2019 by the US and Europe but the decline had set in before that. Imposing sanctions is a cruel and cynical policy, arguably worse than military action. Its aim is to make the situation of ordinary people worse in the expectation that they will kick out the sanctioned government. It worked in the sense that it did make people even worse off as the government was forced to cut back yet more on the reforms of the Chávez period, and this did make people more inclined to vote to remove the Maduro government from office. Sanctions do not affect those in charge of the state as they can always ensure that they don’t suffer any personal privations and that adequate resources are attributed in priority to maintaining the state apparatus and its repressive powers.

Capitalist economists say that Chávez should not have distributed so much of the oil rents to improve the position of the poor, but should have instead invested more in developing capitalist industry to provide jobs and incomes to counter what would happen if oil prices and so oil rents fell or oil ran out. This is a lesson that the Gulf sheiks had learned, using their rents not just to lead a personal life of luxury but to convert themselves into capitalists in their own right by investing in industry abroad as well as in their sheikhdoms.

Given capitalism and how it works, there is something in what its economists say, but this is further confirmation that a government cannot continuously redistribute wealth to the poor; this will be unsustainable and lead to economic disaster. To function normally, the capitalist economy requires that even oil rents should be invested in capitalist production, not spent on improving people’s lot.

Living standards in Venezuela fell by 75 percent between 2013 and 2023, driving some 7 million out of a population of 30 million to leave the country to seek a better life elsewhere. Supporters of capitalism gleefully trumpet this as a failure of ‘socialism’. In fact, it was a failure of redistributive reformism that showed both the fragility of reform measures and that no government can keep on redistributing income to the non-owning majority without this eventually ending in economic disaster.

Adam Buick

South African domination (1986)

Book Review from the October 1986 issue of the Socialist Standard

Apartheid's Second Front: South Africa's War Against Its Neighbours by Joseph Hanlon. (Penguin 1986).

As South Africa once again dominates the news, Hanlon's study provides a valuable addition to the analysis of the situation that exists there. South Africa's aim of domination within this area involves a mixture of military, political and economic action against its neighbours to create a buffer for the system of apartheid. South Africa's destabilisation policy has involved it in a war which has not hit the headlines but which has since 1980 "cost more than 100.000 lives and £10,000 million, and has made at least one million people homeless". This is part of the nightmare of South Africa. The aim of the war is to force dependency on South Africa by undermining the effectiveness of the economic organisation of the Southern African Development Coordination Conference (SADCC). Victims of that destabilisation have included Lesotho, Zimbabwe, Mozambique, Malawi and Angola. South Africa also sees itself as a crusader against what it believes to be the rising tide of "Marxism" and for this reason it is prepared to back Unita forces opposed to Angola's so-called Marxist government. Lesotho and Swaziland are totally surrounded by South Africa and use the rand as their currency Along with Botswana, Lesotho and Swaziland are also part of the customs union with South Africa. This is a system administered by South Africa in which there is free flow of goods within the four states with high tariffs on imports. Effectively this ensures South African domination because most businesses are located in South Africa and the high tariff rates necessitate purchase of goods from South Africa. SADCC attempts to relieve this reliance on South Africa by an integrated development including coordination and transport but all the neighbouring states are still integrally linked to South Africa. One aspect of this dependence can be seen in energy. South Africa is energy deficient but it still dominates. Botswana, Lesotho and Swaziland purchase all petroleum products from South Africa which also supplies significant amounts to Malawi, Zimbabwe and Zambia even though that oil is as much as 50 per cent dearer than world market prices. Similarly about 50 per cent of SADCC imports and exports go through South Africa although this is partly guaranteed by the fact that South Africa has bombed Angolan and Mozambiquan railways so that they could not carry traffic to and from ports in those countries.

The benefits to the South African ruling class of its destabilisation policy are fourfold. They ensure "security" insofar as they involve punitive attacks against ANC bases and escalate the notion of an outside threat. The creation of chaos and instability in neighbouring states allows South Africa to claim that alternatives to the apartheid system are less successful economically. The fact of economic dependence does not permit of a more aggressive policy against South Africa. Chaos elsewhere also makes South Africa appear as a bastion of stability in an economically backward area. Hence they can cry out against sanctions because, as Hanlon argues. “P. W. Botha talks of South Africa bringing 'salvation' to the neighbouring states, and of the west preventing this by actions against apartheid". The irony is that South Africa claims that it is being destabilised by the actions of its neighbours, by supporting the ANC and calling for boycotts and sanctions. It also justifies South Africa's destabilisation programme as retaliation. This includes arming rebels in Mozambique, Angola, Lesotho and Zimbabwe and cutting food supplies, as in Mozambique, Zambia and Lesotho in order that the indigenous populations would direct their frustrations at the individual governments. There have also been varied economic destabilisation tactics that have included limiting access to South Africa's railways, restricting migrant labour, closing borders, curbing imports, regulating exports and cutting electricity. This ensures South Africa's regional dominance, making the neighbouring states "a buffer against sanctions — just as Pretoria hopes to make them a barrier against liberation movements" This is why South Africa is opposed to SADCC which would free the neighbouring states from such reliance.

South Africa sees itself as the regional power of Southern Africa in the same way that USA operates in Latin America and USSR in Eastern Europe. Its incursions into neighbouring territories have been many and as Hanlon points out "commandos have raided seven of the neighbouring capitals and tried to assassinate two prime ministers". Only Malawi and Tanzania have escaped military insurgence. South Africa funds Unita, Mozambique National Resistance, the Lesotho Liberation Army and dissidents in Matabeleland in Zimbabwe. This adds to the claim that majority rule does not work.

There has been verbal support for SADCC from USA. Britain and West Germany but these countries have been less favourable to the notion of breaking with South Africa. Actual support for SADCC has come from countries without substantial investment in South Africa and have included Scandinavia, Italy, Canada, the Netherlands and Belgium, while the USA, Britain and West Germany are more concerned about "their existing investments. markets and sources of minerals" in South Africa. Destabilisation may be a short term answer to South Africa's paranoia but it requires markets for its products and chaotic economies are not such markets. Developing capitalism in South Africa will bring divisions based on class rather than racial differences and a population capable of acting as a market. Hanlon's argument is that, although limited in their effect, sanctions, boycotts and disinvestment should be pursued against South Africa. Sometimes this is a facade pursued by countries, as is the case with Japan who bans investment but allows licences and technology transfer "so Japan is now South Africa's second largest trading partner and Japanese firms have 40 per cent of the South African market". For Britain and USA there has been a reluctance to impose sanctions, not that this is a point of principle (USA has wide ranging sanctions against Poland and Britain has done the same to Argentina). Hanlon argues that Britain must be prepared to suffer as a result of imposing sanctions and that this is a moral question. For Hanlon it is also a belief that this might constitute a long term investment for future majority rule might not look favourably on a Britain that was unwilling to take up such a moral stance There has been a high price to pay and SADCC in its report to OAU in mid 1985 said that between 1980 and 1984 destabilisation cost SADCC member states a total of £7,000 million as a result of war damage, higher transport costs, sanctions imposed by South Africa, production and export losses and caring for the many refugees. SADCC calls for sanctions even at the risk of its own suffering. The case that sanctions against South Africa will cause harm to the "frontline" states is the latest that South Africa has created to ensure its continued existence. It forces dependency as an act of calculated cynicism. Hanlon's answer is to replace one form of exploitation by another in the hope that capitalism without South Africa and apartheid will be an improvement. The dilemma for capitalism is the extent to which South Africa can survive with limited markets. For western capitalism the question of sanctions is one in which vested interests must be weighed against the possibility of future interests. In these economic arguments morality has a very minor role to play As for the majority black community they are merely the pawns calling for a voice in a world of rival capitalist interests.

Philip Bentley

Material World: Venezuela – a year on (2025)

The Material World column from the August 2025 issue of the Socialist Standard

The article on Venezuela published in last June’s Socialist Standard referred to the upcoming presidential election there as ‘unlikely to be free and fair’ and likely, whatever the real outcome, to result in Nicolás Maduro declaring himself ‘the winner’. And that’s exactly what happened. Maduro’s opponent, Edmundo González, produced figures to show that he had won around 67 percent of the votes compared to Maduro’s 29 percent. But this did not prevent Maduro from shamelessly declaring victory though not providing any supporting data as no official results were ever published. Previously he had banned his chief opponent, María Corona Machado, from standing, blocked her proposed replacement, and then adopted various other tactics to manipulate the vote.

Repression

Maduro responded with brutal repression against the thousands who took to the streets to protest, calling it a ‘fascist outbreak’. Since then Human Rights Watch has documented widespread violence against opponents by the Venezuelan authorities and by pro-Maduro armed groups known as ‘colectivos’, including killing of protestors and bystanders, ‘disappearances’ of opposition party members, arbitrary detentions and torture and ill-treatment of detainees. Protestors are often charged with broadly defined offences such as ‘incitement to hatred’, ‘resistance to authority’, and ‘terrorism’, with possible penalties of up to 30 years. Before the election, close to 8 million people had left Venezuela, an exodus constituting one of Latin America’s largest mass population movements in history. Since then, many more have fled, including elected officials, local authority workers, polling station workers, human rights advocates and journalists, and it is being projected that 2 to 3 million more will leave in the foreseeable future. This is being driven not just by the existence of a full-blown authoritarian regime, where the last shred of popular legitimacy – properly democratic elections – has vanished, but also by dire economic conditions including reliably reported frequent power failures, lack of basic foodstuffs, and sky-high crime rates partly associated with gang warfare and drug trafficking.

The intolerance of opposition was confirmed during the period of Maduro’s official ‘self-inauguration’ in January of this year when, things having ‘gone quiet’ in the outside world and with little media attention on the country, he announced plans for constitutional changes to further consolidate his power. He declared the beginning of what would be a more entrenched phase of authoritarian rule based on a strong alliance between civilian authorities, military forces, the police and the intelligence apparatus. On the day of the inauguration itself, widespread and ultra-expensive precautions were taken to counter the possibility being mooted that the opposition could somehow carry out its declared intention to return its president-elect, González, to the country from exile in Spain and hold a parallel counter-inauguration.

USA sabotage?

Outside Venezuela, Maduro enjoys the backing of some other authoritarian states – for example Cuba and Nicaragua in the Americas, and Russia, China and Iraq beyond. The USA is Maduro’s chief opponent having put up a reward of 25 million dollars for information leading to his arrest. This gives Maduro and his supporters both inside and outside Venezuela ammunition to attribute to American actions (eg, economic sanctions and CIA sabotage activity) the decline in the country’s economy, the poor state of its health care and education systems and its inability to feed large numbers of its people. This also gives Maduro the opportunity to portray the country as a beleaguered socialist enclave oppressed by, but standing up to, a bullying capitalist power. Not that this has prevented him from cooperating with Donald Trump in agreeing to accept back into Venezuela thousands of the desperate refugees who had left for the USA and who Trump is now having deported.

Predictably, the parliamentary and local elections held in May of this year again saw Maduro declaring overwhelming victory, this time with a claimed 82.68% of the votes cast and governorships in 23 out of the country’s 24 states. On this occasion, however, it seems likely that he did have a genuine majority given that the main opposition parties boycotted the elections and urged voters to do so on the grounds that they could not be free and fair. The turnout was said to be as low as 25 percent.

Not socialist

A recent report on the deportations in the Washington Post, while correctly describing Venezuela as ‘authoritarian’ and ‘repressive’, also referred to it as ‘Marxist’ and ‘Socialist’, neither of which labels is correct. While it’s true that both these terms are much debated, they are often abused and there is absolutely no warrant in Marx for the form of state-run capitalism that exists in Venezuela to be called ‘socialism’. In fact, the system there, based as it is on the market and buying and selling, is the very antithesis of socialism, which is a world society of common ownership and democratic control. Maduro’s regime may pose as ‘socialist’, but it is no more socialist than those other state capitalist regimes such as China and Cuba that support it. Yet the fraudulent use and circulation of the term allows those on the political right of the capitalist spectrum to point to the ‘failure of socialism’ for the poverty, tyranny, population flight and legalised violence that are its salient features. At the same time left-wing supporters of the Maduro regime blame the USA for stifling a valiant ‘socialist’ experiment by starving the country of resources and fomenting discontent among its population. The essence of a socialist society is a moneyless, stateless system with free access to all goods and services and based on voluntary cooperation and economic equality. Nothing of this is even close to existing in Venezuela or any of the countries that support it.

The future?

So what is the future for Venezuela? Maduro’s regime has been described as ‘a criminal mafia gang with the trappings of governmental power’. Can he hold on to power indefinitely, despite the minority support he has among the population and an economy that continues to be run into the ground, leaving most people struggling just to survive? For now Maduro seems to have the loyalty of the military, with its high-ranking officials being generously rewarded and the support of special police units, militias and intelligence facilities backed by Cuba’s secret service. But will this patronage allow him to survive, especially in the face of what still seems to be a widely supported opposition, peaceful yet determined?

If Venezuela proves capable of moving to the kind of liberal democracy that capitalism can offer, limited as that is, then this will create an environment where genuine socialist ideas will have a better chance of being put forward, and hopefully spreading.

Howard Moss

South Africa—chrome and cricket (1975)

From the September 1975 issue of the Socialist Standard

It is the perennial cry of Socialists that as long as the capitalist system remains intact it will, by and large, dictate the course of events and politicians find they cannot implement promises and policies; and find themselves doing things different from or even utterly opposed to all they are supposed to stand for. The Labour Party, in common with most leftist types such as those represented by The Guardian, has for years been screaming about the iniquity of apartheid in South Africa. And quite right too. It is an abominable system.

So at times they try and do something that will make a big noise and at the same time do nothing to upset the real objective of all governments — to make the system work as efficiently and profitably as possible for the capitalist owners of the country. A convenient opportunity along these lines occurred to the last Wilson government in 1970. Wilson and his henchmen joined with the Hainites and The Guardian to strike a mortal blow at apartheid. They actually succeeded in stopping a cricket tour — and by all the sound and fury generated, one could have been forgiven for thinking that this blow had brought down apartheid, the racialist government of Vorster, and perhaps the whole evil capitalist system into the bargain. Of course apartheid has gone on just the same and as long as governments, Labour, Tory or east of the Curtain, were prepared to carry on trading and investing, Vorster and Co. would survive the loss of a cricket tour.

However, among the promises which Labour’s election manifesto poured out, was one about the iniquity of investing in South Africa. Fresh investments that is: there was no question of throwing away the vast sums already invested, or of ceasing to trade with Britain’s third biggest customer. That would worry Vorster and his apartheidists, but it would worry British capitalism even more, so such real gestures were out. The name of the game is to kid the leftists (such of them, that is, who believe their own claptrap). Not to hurt British capitalism. As though that lot isn’t in deep enough trouble already!

And so again, the needs of running the system fly in the face of all the leftists are supposed to stand for. I cannot do better than quote from a long and almost literate letter from a Labour MP called Kinnock (Guardian, July 31):

“Last October all Labour candidates fought in support of a manifesto which said that a Labour government would take urgent steps to reduce drastically British economic involvement in South Africa . . . End all financial links . . . Bring about the withdrawal of all or part of existing investment and establish machinery to prevent any further investment . . . Now, ten months later, the government permits the British Steel Corporation to invest heavily in a chrome plant in S. Africa”.

Well said, Kinnock! You have in fact exposed the Labour government as a bunch of hypocrites who would not tell a black man the time if it conflicted with the interests of the British capitalist class. Only one trouble: these people are your kith and Kinnock. You can’t accuse the government without accusing yourself at the same time. You are a Labour MP (masquerading as a socialist like all your swindling clan), and you keep that government in power for the privilege of riding to the cushy jobs at Westminster on the bandwagon. So what does that make you?

In the leading article on the same subject in The Guardian (July 29) the humbugs of Grays Inn Road give their own views: “Chrome: the only decision.” Unlike Kinnock, who denounces his own Fuehrer, the great leftist mouthpiece tells us that Wilson and his gang were quite right to rat on the manifesto. “The Labour Left may not like the idea of giving aid and comfort to South Africa”: it is “making an unnecessary fuss.” Among the reasons for this remark from the paper which made such a screaming fuss over a blasted game of cricket is:— “British Steel is among the companies with better reputations as employers of black labour. It claims it has gone to some lengths to make sure that the 184 black workers it will employ will be paid a reasonable wage, above the poverty datum line.”

Now isn’t that just ducky? It’s all right to break your word and give aid and comfort to the apartheidists if you “claim” to . . . do what? To pay the blacks good screws for working in the chrome mines? Equal to those earned by those who write hypocritical leading articles? Not quite: “Above the poverty datum line.” An extra handful of mealy, from the mealy mouths of our do-gooder Press.

But that’s only half of it. The editorial goes on to say: “It is hard to believe that what the British Steel Corporation does with its blocked funds is going to make any difference to apartheid.” So the same creeps who fooled the idiot wicket-sitters that they were striking a blow at apartheid, who endorsed the Labour manifesto without demur, now have the impudence to tell us that investment in chrome is neither here nor there as far as Vorster is concerned. They may be right. Maybe Vorster doesn’t give a monkey’s whatever Wilson and his capitalist lackeys do or do not do. But for The Guardian to say so beggars belief.

The main reason for Wilson’s decision is that South African chrome is cheaper than the rest. The editorial keeps to capitalist basics on this. If the chrome is dearer in South Africa it is right to honour your principles and buy elsewhere. But if it is cheaper, why, then you are right to say: Let the blacks go hang, we are buying in the cheapest market. There is a delightful bit at the end. In the case of another precious commodity, uranium, Tony Benn (the sanctimonious twit who wants to shed his name — but not the wealth that derives from it) wrote a letter to The Guardian in Sept. ’73 (when he was not yet in power and talk was therefore cheap) “pledging himself to end Britain’s contract to buy uranium from the Republic”. But when his lot came to power, they found: what? Why, that it would cost more to buy elsewhere. So they have not honoured this rat’s pledge to end the contract at all. Money talks louder than principles with Labour leaders — and with Guardian leader-writers.

Last, in the New Statesman, that other rag which stands for Labourite capitalism masquerading as socialism, around the same date there was a leading article on the same subject. But they objected to the betrayal of the blacks. How nice of them. The blacks will be very pleased to see them denounce the Labour Party at the next election. (A likely story.) But they actually say that something or other that Wedgbenn has done has “fastened the chains of slavery still tighter” round the victims of racialism in South Africa. I wonder what the sages of Great Turnstile will say about Benn at the next election? Workers beware? He is another twister who will sell the workers down the river (white ones as well as black)? Another likely story. One can only conclude by borrowing a pun from Marx. Es lebe der wurst! Es lebe der Hanwurst ! Long live the sausage! Long live the clown!

L E Weidberg

South Africa: metals before morals (1986)

From the Summer 1986 issue of the World Socialist

In July of last year at Helsinki there was a meeting of various foreign ministers called to discuss economic sanctions against South Africa. Delivered to the meeting room was a single sheet of paper from the South African government which carried a list of the metals it exports to the rest of the world. The message was crystal clear, and to gentlemen who deal in conniving it needed no explanation: they knew that sanctions against South Africa might provoke the government in Pretoria into cutting vital metal exports and that any pressure contributing to the downfall of the racist government could bring civil disturbances that would disrupt mineral supplies for the Western and other economies.

How desperately do the Western economies need South African metals and what would be the result of a ban in supplies?

Strategic stockpiles

Western Europe and Japan are the most heavily reliant on South African minerals. In most metals, world reliance is not particularly great because other production sources or mineral substitutes are available; but in two metals, chromium and platinum, a disruption of supplies would be grave. The only country to plan for a shortage of metals is the US. Its $38 billion (US) stockpile contains a 3-year supply of "strategic metals" defined as those coming mainly from unstable countries and at the same time being vital to industry and the military. Until recently stockpile planners made no allowance for South African instability, with the result that, in some important metals, stocks are inadequate. The US stockpile, for instance, is badly deficient in platinum.

There are five metals which South Africa produces enough of to seriously matter if output were disrupted: platinum, vanadium, gold, chromium and manganese.

Vandium, normally included in stockpiles, is a strong metal mainly used in steel for pipelines, bridges and high-rise buildings. According to Peter Robbins, director of the International Metal Trade, Unicoal Metals Ltd, a cut in South African vanadium supplies, "would not be an insoluble problem. Other metals such as molybdenum, can be substituted for vanadium. With the decline in pipeline building, there is lots of both metals around at the moment. China is also a big producer. So if there was a disruption of months rather than years in South Africa, it probably wouldn't affect the market at all" (Toronto Globe and Mail, October 1, 1985).

Similarly with manganese which is in glut and available elsewhere. Used in dry-cell batteries and as one of the main ingredients in alloy steel, it is a cheap metal; the quantities added to steel are small. Having to pay higher prices to alternative producers would not be crippling. Neither would there be drastic problems if South African gold production were hit, though gold prices would rise, according to Antony Murray of the Commodities Research Unit, one of the largest international minerals consulting firms:

More than 90 percent of all gold ever mined is still around on the gold markets. Known world gold stocks are more than 20,000 tonnes — equal to more than 30 years of South African production. In uranium, where there is over-supply, it would be a relief if South Africa stopped production. Diamonds are also an embarrassment. Industry need not worry about the diamond supply (Toronto Star, September 30, 1985).

But what about platinum?

The West seems able to cope with any South African disruption except chromium and platinum:

Chrome consumers who use the metal in making high quality steel for aerospace, petroleum and chemical industries, have already persuaded South African producers to store extra supplies abroad, and West German users are turning to the Philippines as an alternative supplier. Even with this added to government stockpiles, disruption would hurt badly, particularly in Western Europe. Though South Africa produces 30 percent of the world's chrome supplies, Britain, for example, depends on it for 60 percent of its consumption. The British government over the years, could, but didn't, find other suppliers such as Albania, which sells its chrome through an agent in Milan (Leslie Plommer, Toronto Globe and Mail, October 1, 1985).

The West could, perhaps, cope with a partial reduction in chromium supplies by substituting other metals where possible. One problem they would have is that the Soviet Union might withhold its chromium from the West, in its attempts to damage their economies. On the other hand, it might sell. During the Vietnam war, Russia sold nickel to the US (when there was a nickel-miners strike), knowing it was being used for production in the war against the North-Vietnamese, who they were backing. Commodities, including raw materials, are made (or mined) for sale at a profit on the market and one market is as good as another.

To what extent a cut-back in chromium supplies would affect Western economies, would be dependant on how long it would last. A one or two-month disruption would be no major problem, though it would force prices up. However, a 6-month break would create major difficulties.

Equally crucial are the expensive platinum group metals (PMG) of which the most important are platinum, palladium and rhodium. Their uses include catalysts for the petro-chemical industry and for reducing toxic-emissions from cars. Platinum is currently in good supply with prices low and palladium is in glut. Rhodium, however, is in short supply as Japanese and US car production has increased. Its price has quadrupled in a year. Demand for the platinum group is soon to increase further as the European community phases in new exhaust regulations for auto-makers starting in 1987. It could be that a disruption in South African supplies might force suspension of laws on auto-emissions in the US and Japan and a delay of the European measures. Rising prices could also induce jewellery owners - who absorb about 10 percent of world production — to sell their bangles for industrial use. At present no country keeps a stockpile of platinum and at the moment there is only a 3-month world supply in stock. Canada, the only significant Western source, produces one-tenth the volume mined by South Africa. With other metals, it may be possible to find ways of getting around shortages, but with platinum it's not possible. There would be a major industrial disruption, causing technology and industry to be redesigned completely.

Fear of losing supplies

Keith Shaw, senior mining analyst for Laing and Cruickshank, one of London's largest stockbrokers, believes Western dependence on South African supplies across a range of minerals is underestimated. "No country is indespensible", he said, "but, if the US gets tucked into Star Wars, there will be a big increase in the importance of South African metals. In an increasingly high-tech world, South Africa is a sensible supplier of these things" (Toronto Globe and Mail, October 2, 1985).

Experts point to another possibility. South Africa has the power to block mineral exports from Zambia, Zaire, and Zimbabwe. These countries, along the African mineral spine, which stretches from the Congo to the Cape, are huge producers of many of the same metals as South Africa and to export them they are dependant on South Africa for locomotives, sea access and port facilities. Any move against them by South Africa would not only ruin their economies, but increase world reliance on South Africa, even more than at present.

Given the profit-oriented nature of capitalism, there are a few basic points we can be sure of. Governments, elected or otherwise, exist primarily to administer the affairs of capitalism. Since capitalism's very death blood is the profit-motive it logically follows that major government decisions, like major business decisions, are with view to profit, both long term as well as short term. To keep business, hence profits, moving smoothly (or as smooth as possible in the anarchy that is capitalism) they must have the necessary raw materials.

No government gives a damn about ethical and moral considerations, not because they are composed of nasty people and not because many of them weren't concerned before they came to power, but because once in power, they quickly find out there is only one thing they can do — run the affairs of capitalism. The dog wags the tail, not the tail the dog. Whatever politicians say and whatever minor steps are taken against South Africa, there will be no major course of action against it for fear of losing needed supplies. Breaking off diplomatic relations can hardly be considered a major course of action if one still buys from them; that's like not having a chat with your butcher when you buy his meat. Nor would economic sanctions solve anything.

History has proven that racial prejudice cannot be eradicated within capitalism, a system which, by its very class divisions and the competitiveness these create, divides worker against worker. Only by recognizing that socialism (as defined below) alone is the answer to the major social problems and that political organization is the way to achieve it, can people really start to remove apartheid, racism and economic sanctions as well as all forms of economic blackmail.

Ray Rawlings

(Canada)

Why is Iraq Singled Out? (1996)

From the October 1996 issue of the Socialist Standard

“When you abuse your people and threaten your neighbours you must pay the price”

This pearl of wisdom was uttered by President Bill Clinton after the US had fired 27 Cruise missiles during the first of two attacks on Iraq by US B-52 bombers in early September.

You don’t need to be an expert in international affairs to realise how pathetic and hypocritical his statement is.

Clinton was attempting to justify the US attack on Iraq because Saddam Hussein had ordered his troops into Kurdish-held northern Iraq. He seemed totally unaware that Turkey, a NATO ally has been bombing the Kurds in northern Turkey on a regular basis for years — Kurds, like those in Irbil, attacked by Saddam, who demand autonomy — and from the same air base used by the US to attack the Iraqi army.

We might well ask why such logic is not used as a pretext to bomb Indonesia, whose government ruthlessly suppresses the people there and has murdered 200,000 since the invasion of East Timor some twenty years ago. Or why the US is not currently intervening in the present 25 ongoing conflicts in which people are “abused” and neighbours “threatened”.

One would think, judging by the number of separate occasions on which the US has bombed Iraq, that it would be easier for the US to oust Saddam, as they have done to countless other world leaders in the past. Bombing raids are, after all, expensive. The Cruise missiles alone that were fired at Iraq in early September cost $42 million.

However, what should have become apparent by now is that the US does not want Saddam toppled. He is, in fact, invaluable to the furtherance of US interests for a number of reasons,

Firstly, and most obviously, Saddam, as has been the case in the past, acts as a buffer to the spread of militant Islam from Iran, which itself regards the US as the “Great Satan” and is feared by the pro-US regimes in Saudi Arabia and Kuwait.

Secondly, if Saddam is toppled, there is a strong chance that Iraq will break up into warring factions that will result in further regional instability.

Thirdly, so long as Saddam, the world’s number one “monster”, remains in power, he remains unpredictable and thus frightens his neighbours, who are only too willing to buy western arms and defence systems. Since 1990, the countries bordering Iraq have spent $75 billion on such hardware.

Furthermore, Saddam provides the US President and his cohorts with a timely vote-catcher. Unless you’ve been on a desert island or in a coma these past few months, you will know that the US presidential elections take place this November – elections already dragged down to gutter level by sex scandals and the like. The attack on Iraq can also be seen as a piece of electioneering aimed at a gullible and jingoistic electorate. Indeed, an ABC News poll, carried out after the first attack on Iraq, found that 81 percent of those questioned were in favour of it.

Big Game

Perhaps most importantly the US attack on Iraq should be seen as part of a larger game plan, with Saddam’s aggression not the issue at all.

By far the biggest threat to US interests in the Middle East is Iran, a country of 60 million ruled by Islamic fundamentalists who detest the US; a country with a huge army and arsenal to match and a probable nuclear capability.

The US has for years made every attempt to castigate the “mad mullahs” of Iran and turn world opinion against them, blaming them for every explosion from Saudi Arabia to the downing of an airliner 8 miles east of New York two months ago.

August had in fact brought much pressure on the US government to bomb Iran. “US prepares air strikes against I ran” ran a headline in the Sunday Telegraph (4 August) while a day later the Times reported: “Pressure grows for US raids on Iran” (5 August).

However, the Pentagon is fully aware that any attack on Iran would result in a far greater response than anything elicited from Iraq. Most certainly the bombing of the American heartland by Iranian terrorists.

With this in mind the attack on Iraq was also a message intended for Iran “mess with our interests and this is what you’ll get” — ‘a message far less costlier than any attack on Iran would be.

Again, with the US still looking for its hegemonic raison d’être, the anti-Communist passport now expired, the Middle East is still as good a place as any for the US to assert its presence on the world stage, and Saddam is as good a target as any to bully and to show anyone watching you’re still policeman of the world.

Hate and War

For a bigoted white American, the average Middle Easterner is an ideal target of hate and one that confirms the average prejudice. They are generally of a different hue. They have strange cultures and customs. They have a different religion and speak a funny language and are always staging wars. What other motives do you need to convince an already brainwashed audience (Clinton fans) that they (the Iraqis) have no place in the civilised world and that it is okay to bomb them?

It can well be argued that the Iraqi working class has more than paid the price for Iraq’s brief incursion into Kuwait back in August of 1989.

Six years of sanctions have not only crippled the economy, but have also, the World Health Organisation argues, resulted in 500,000 deaths from want of decent food and medicine. The sewage system has collapsed, disease is every-where and there are 5,000 new cases of malnutrition every month.

A plan to allow Iraq to sell $2 millions-worth of oil to buy food and medical supplies (as if this is sufficient for a population of 17 million) was supposed to come into operation at the end of September. This has currently been suspended. One thing is certain, the future looks bleak for the average Iraqi.

All of this is not to say that Saddam deserves a break and should not incur the wrath of the world, even though, he argued, he had been invited into Kurdish–held territory by Kurdish leaders. And neither do we care to imply that the US were wrong insofar as they “misinterpreted” Resolution 688 of 5 April 1991, which made no mention of justifiable attacks on Iraq or of no-fly zones.

The entire episode should reveal the desperate lengths the world’s ruling capitalist elite will go to secure their own interests and that all conflicts, when properly analysed, are the result of the desire of a minority to make a profit at the expense of the majority — whether through trade routes, areas of influence, foreign markets or mineral wealth. The crisis in the Middle East actually fits all these criteria.

John Bissett

After Hezbollah, war with Iran? (2006)

From the September 2006 issue of the Socialist Standard

Was Israel’s attack on Hezbollah part of preparations for a coming US attack on Iran?

As we go to press, a serious and already escalating crisis can be expected to go into overdrive the instant the Iranian government, at the moment under a UN deadline to stop uranium enrichment by 31 August, tells the UN what it can do with its resolution.

Sanctions will no doubt be announced, but to what effect and with what response from Iran remains to be seen. Iran has already intimated it would spark a global oil price crisis in response to UN sanctions, and it is unclear whether China and Russia – each with vested oil interests in Iran – will go along with any sanctions. The worst-case scenario is that the US will express feigned frustration at Iran’s unwillingness to cooperate and use the rejected resolution as a chequered flag to attack Iran militarily.

It is against this backdrop that we can begin to set the present Middle East crisis in context, particularly the recent Israeli attack upon Lebanon. This latest act of Israeli aggression was not about capturing back the two Israeli soldiers kidnapped on 14 July but was rather, it would seem, about oil and the securing of other resources and about preparing for any wider conflict against Syria and Iran.

Planned in advance

There are numerous claims that the war in Lebanon had been planned in advance by Israel. Reporting from Tel Aviv for the San Francisco Chronicle (21 July), Matthew Kalman wrote: “More than a year ago, a senior Israeli army officer began giving PowerPoint presentations, on an off-the-record basis, to US and other diplomats, journalists and think tanks, setting out the plan for the current operation in revealing detail.”

Speaking to CNN, veteran investigative reporter Seymour Hersh said: “July was a pretext for a major offensive that had been in the works for a long time. Israel’s attack was going to be a model for the attack they really want to do. They really want to go after Iran.” (Guardian, 14 August).

In bombarding Lebanon and the Gaza strip (Gaza is still being bombed) the objective was to neutralise two opponents of Israel – and the US – Hezbollah and Hamas. Hezbollah’s fire power and missile capabilities needed to be tested. Israel was unsure of the number of rockets in the hands of Hezbollah (some said 20,000) or indeed their range. Now they know. The Israeli bombardment of key roads and bridges and passage to Syria can serve no other function than to cut of the weapons supply route to Hezbollah. By striking pre-emptively Israel seems to have planned to destroy as many Hezbollah weapons as possible in advance of any rocket attack on Israel resulting from any US-allied bombardment of Iran.

Oil and water

Widely unreported in the Western popular media and brought to a wider audience by Michel Chossudovsky, a Canadian economics professor, on the Global Research website was the inauguration of the Ceyhan-Tblisi-Baku (BTC) oil pipeline. This links the Caspian Sea to the Eastern Mediterranean, and was opened one day before Hezbollah’s kidnapping of the two Israeli soldiers that ostensibly started the recent war in Lebanon.The BTC pipeline is anticipated to carry a million barrels of oil a day to Western markets. In attendance at the inauguration ceremony were BP’s CEO Lord Browne and senior officials from the UK and USA, along with Israel’s Minister of Energy and Infrastructure Binyamin Ben Eliezer, accompanied by a delegation of top Israeli oil officials.

The BP-dominated pipeline skirts the Russian Federation, cutting through new pro-US states Georgia and Azerbaijan, countries allied with NATO and with a standing military pact with Israel. Israel already gets 20 percent of its oil from Azeri oil fields and this new pipeline is set to increase Israeli imports from the Caspian basin. Israel is now tipped to be a key player in the East Mediterranean oil transport protection racket.

Officially, the BTC pipeline will be channelling oil to Western markets. What is not admitted, however, is that some of this oil will be redirected towards Israel via a proposed underwater pipeline from Ceyhan in Turkey to the Israeli port of Ashkelon, and from there via a pipeline system to the Red Sea. The plan not only seems to serve Israeli oil consumption needs, but also plays a part in the US’s wider game of global-politics.

Oil channelled from Ashkelon to the Red Sea will then be re-exported from the Red Sea port of Eilat to Asian markets. This will help undermine the inter-Asian energy market eventually weakening the position of Russia in Central Asia and cutting off China from Central Asia’s oil reserves. In April of this year Ankara and Tel Aviv publicised their intention to create four pipelines which would bypass Syrian and Lebanese territory. As the Jerusalem Post (11 May) reported:

”Turkey and Israel are negotiating the construction of a multi-million-dollar energy and water project that will transport water, electricity, natural gas and oil by pipelines to Israel, with the oil to be sent onward from Israel to the Far East.”

The scheme further envisages a pipeline to carry water to Israel from upstream Anatolian rivers Tigris and Euphrates. Not only is this plan catered for in the recently-announced military pact between Israel and Ankara, its implementation will be devastating for Syria and Iraq. The execution of this joint Israeli-Turkish venture requires that land and sea routes between the Ceyhan border, through Syria and Lebanon, and to the Lebanese-Israeli border, be militarised.

Michel Chossudovsky asks in his article ‘The war on Lebanon and the battle for oil:’

“Is this not one of the hidden objectives of the war on Lebanon? Open up a space which enables Israel to control a vast territory extending from the Lebanese border through Syria to Turkey.”

Israel is keen to play a more dominant role in the Middle East and seeks to achieve a degree of economic autonomy by becoming a key player in oil politics. Its military programme is increasingly looking like being tailored to the region’s strategic oil pipelines and by the Western oil companies commanding the pipeline passages. Of course to punch above its weight it needs outside help, hence alliances with the US and more recently with Turkey and NATO.

Chossudovsky’s oft-cited piece “Triple Alliance”: The US, Turkey, Israel and the War on Lebanon details the alliances and agreements which apparently underpin the war with Hezbollah.

“We are not dealing with a limited conflict between the Israeli Armed Forces and Hezbollah as conveyed by the Western media. The Lebanese War Theatre is part of a broader US military agenda, which encompasses a region extending from the Eastern Mediterranean into the heartland of Central Asia. The war on Lebanon must be viewed as ‘a stage’ in this broader ‘military road map’.”

Significant, for Chossudovsky, is the Turkey-Israel alliance which involves military and intelligence sharing on Iraq, Iran and Syria, as well as joint military exercises and training.

Pepe Escobar, writing for Asia Times, stresses Israel’s water needs as partly behind the recent war in Lebanon. : “There’s also the all-important matter of the waters of the Litani River in southern Lebanon. Israel might as well prepare the terrain now for the eventual annexation of the Litani. Beyond Lebanon, Israel is mostly interested also in Syria. The motive: the all-important pipeline route from Kirkuk, in Iraqi Kurdistan, to Haifa. Enter Israel as a major player in Pipelineistan. So Israel wants to grab water (and territory) from Palestine, water (and territory) from Lebanon and oil from Iraq. This all has to do with the inevitable – the 21st-century energy wars.”( Link.)

Seeking greater independence and an enhanced role in the Middle East, the smell of profits all around, Israeli aggression now becomes more understandable.

Long war

Tel Aviv recently announced it was in for a “long war” – clearly not with Hezbollah. It has been stockpiling weapons for several years and was re-supplied throughout the war with Hezbollah by the US. On top of its arsenal of 200 nuclear warheads it has in excess of 500 bunker-busting bombs, only a few, by all accounts, used recently in Lebanon. Clearly Israel is preparing for a widening and intense conflict. Speaking of the Israeli-Hezbollah conflict, British Prime Minister Tony Blair said: “We need to make clear to Syria and Iran that there is a choice: come into the international community and play by the same rules as the rest of us, or be confronted.”

Can this hypocritical statement be interpreted as anything other than a serious threat ofviolence to those Middle Eastern countriesthat would stand in the way of profit-hungry masters of war and their ambitions for global domination of the planet’s vital resources?

Seymour Hersh has repeatedly asserted that President Bush ordered all-out war against Iran shortly after his re-election in 2004. Pat Buchanan’s American Conservative, amongst other sources, sides with Hersh in arguing that vice-president Dick Cheney has drawn up a war plan for Iran inclusive of the possible use of nuclear weapons.

US Defence Secretary Don Rumsfeld has placed US forces on alert and Lieutenant-Colonel Bruce Carlson, commander of the 8th Air Force acknowledges: “We’re now at the point where we are essentially on alert. We have the capacity to plan and execute global strikes in half a day or less.”

Dan Plesch (Guardian, 8 August) suggests President Bush has at his disposal: “200 strategic bombers (B52-B1-B2- F117A) and US Navy Tomahawk cruise missiles. One B2 bomber dropped 80,500lb bombs on separate targets in 22 seconds in a test flight. Using just half the available force, 10,000 targets could be attacked almost simultaneously. This strike power alone is sufficient to destroy all major Iranian political, military, economic and transport capabilities.”

Dangerous times

We live at a dangerous stage of human history, in which the greatest crime a country can commit is to have more than its fair share of resources in a world in which the leading superpower is seeking full-spectrum dominance. Iran’s real and unforgivable crime – leaving aside its refusal to halt its uranium enrichment programme – is to have enviable oil and gas reserves, to control access to the Persian Gulf , which is a vital oil and gas transhipment route to Europe, Japan, and the rest of the world, and to have contemplated oil deals with a serious rival for US supremacy, China. With China expected to have oil demands similar to US levels within 20 years, already consuming vast resources of coal, iron and steel, not to mention almost 70 percent of the world’s cement supplies on a single dam project, the panic button has clearly been pressed.

As Socialists we are naturally fearful as we watch events unfold; fearful for our class, our fellows throughout the world and for whom we hold no ill feelings. As always, we refuse to take sides in conflict, seeing all war as rooted in the desire to make profit, and viewing workers, wherever they are, united as one class with the same basic needs and common interest, diametrically opposed to the interests of those who would urge them to kill each other.

 Before the slaughter begins again, we once more take the opportunity to declare our heartfelt solidarity with the workers of all countries, and their true common cause. We appeal to workers to organise consciously and politically and to use the power at their disposal to head off the threatening bloodshed, and secure the space we need in order to build a world of peace and stability. As ever, we appeal to the workers of all lands to join with us in campaigning for a system of society where there are no leaders, no classes, no states or governments, no borders, no force or coercion; a world where the earth’s natural and industrial resources are commonly owned and democratically controlled and where production is freed from the artificial constraints of profit and used for the benefit of all; a world of free access to the necessaries of life. A world without waste, or want, or war.

John Bissett

In the news (2001)

From the March 2001 issue of the Socialist Standard

More devastation for the working class

Almost immediately after the latest UK/US air strikes on Iraq, it was perhaps quite strange to read in a Guardian headline: “Allies ready to ease Iraq sanctions.” According to Whitehall sources, “Britain and the US have agreed to rethink their policy towards Iraq in the face of mounting hostility from the Arab world, inflamed by airstrikes.”

Was this the final throw of the dice—going out with a bang rather than with a whimper? Perhaps it was a show of strength by the new president, cementing relations with Tony Blair to assure everyone that the special relationship is still intact. This said, the strategic timing could not have been worse given current Arab-Israeli relations (with the remote possibility of a wider regional conflict). We also have to consider the potentially damaging relations with OPEC, which could react by squeezing oil production—thus pushing up oil prices—as Arab opinion becomes ever more hostile to Western interests.

Of course, with it being an open secret that the oil sanctions are already being routinely flouted (especially via the new Iraqi-Syrian pipeline)—combined with the fact that the major players such as France, Russia and China want sanctions to be lifted—it could well be that the US/UK are about to bow to the inevitable and bring Iraqi oil back on tap. The rehabilitation process may have already begun with a new proposal to move towards “smart sanctions”. These sanctions would be predominantly concerned with arms control and controlling the freedom of movement for leading members of the Iraqi regime. However, as the Guardian further points out: “Imports for rebuilding Iraq’s infrastructure and oil industry would be allowed.”

We have previously documented the murderous and hypocritical policies of the US/UK towards Iraq with the resulting mass slaughter of the working class and we condemn it once again.

It now appears that the US/UK hegemonic policy is slowly giving way to what the other major powers wanted all along—the rehabilitation of Iraq. But this does not mean that the US/UK strategy has been in vain. On the contrary, it has kept a brutal dictator in power, Iraq’s borders intact (thus also containing Iran) and it has devastated the working class.

Screened for profit

Insurance firms were questioned by members of the House of Commons Science and Technology Select Committee on genetic testing on 7 February. The spokesman for Norwich Union said that only tests for Huntingdon’s disease had been carried out by his firm, as agreed by the insurance companies’ self-regulating body.

“But during questioning Mike Urmston, chief actuary at Norwich Union, was forced to explain that breast and ovarian cancer tests were also being used,” says the Times.

Shock, horror and gasps of amazement from the committee. Could this be a capitalist firm putting profits before human wellbeing? Surely not?

“Dr. Ian Gibson, a member of the committee, accused Norwich Union of trying to set up a ‘genetic ghetto’. He called on the Government to stem the tide of genetic testing by insurance companies. Self-regulation is clearly not working. These companies are attempting to identify a genetic underclass which can only lead to them profiting and individuals being discriminated against.”

The Journal of the Royal Society of Medicine has also carried a report that such screening was putting people’s lives at risk. “The risk, the authors say, is that people will be discouraged from taking tests with potential medical benefits because they fear insurance companies will discriminate against them.”

The mapping of the human gene code, with its possibilities of a cure for Alzheimer’s disease, diabetes, breast and ovarian cancers, should be celebrated as a great triumph for humanity. However, we live in a capitalist world where profit is paramount and where human health and happiness count for very little.

The snows of Kilimanjaro and the drive for profit

At least one-third of the massive ice field atop Tanzania’s Mount Kilimanjaro in Africa has disappeared or melted in the last dozen years, according to Lonnie Thompson, professor of geological sciences at Ohio University, speaking at the annual meeting of the American Association for the Advancement of Science. About 82 per cent of the ice field has been lost since it was first mapped in 1912.

A similar picture emerges from his research for South America, China, Tibet and for glaciers around the world. “These glaciers are very much like the canaries once used in coal mines,” Thompson said. “They’re an indicator of massive changes taking place and a response to the changes in climate in the tropics.”

Dealing with the dramatic loss of glaciers in the Andes, he said: 

“The loss of these frozen reserves threaten water resources for hydroelectric power production in the region, and for crop irrigation and municipal water supplies. What they’re really doing now is cashing in on a bank account that was built over thousands of years but isn’t being replenished. Once it’s gone, it will be diffficult to reform.”

“In such cases, the countries will probably have to switch to burning fossil fuels to meet their power needs. And by doing so, they’ll add more carbon dioxide and water vapour to the atmosphere—two gases that are known to enhance the greenhouse effect and intensify global warming.”

This is typical of capitalist society which, in its drive for profit, uses cheap fossil fuels to deal with the effects of global warming, and thereby causes more global warming. See www.acs.ohio-state.edu/units/research/archive/glasgone.htm.

Cooking the Books: Energy wars (2022)

The Cooking the Books column from the October 2022 issue of the Socialist Standard

In September the G7, the group of the world’s leading Western capitalist economies (US, Canada, France, Germany, Italy, Japan and Britain), agreed to try to impose a cap on the price of Russian oil. The level has not yet been fixed but is likely to be somewhere near to the cost of production plus a mark-up for profits. Russia would still have an incentive to export oil but would only make a ‘normal’ profit rather than the super-profits that they and others (such as Saudi Arabia and the Gulf States) get because the cost of extracting oil there is less than the cost in the other parts of the world whose higher cost of production sets the world price.

What the West seems to want is to impose as the price of Russian oil is what Marx in Volume III of Capital called its ‘production price’, ie, its cost of production plus the average profit on the capital invested in its production. Over a fifth of Volume III is devoted to a discussion of this in relation to ground-rent, the money paid to a landlord for the use of their land to grow crops or raise livestock but also to extract materials.

David Ricardo is credited with being the first to explain why different areas of land yielded a different rent. The price of what it was used to produce was fixed by what Marx later called the production price on the least fertile land producing it. Those farming more fertile land, where the cost of production was correspondingly less, still sold their produce at the higher price and so made super-profits but which, unless they owned the land themselves, were taken by the landowner as ground-rent.

Marx accepted this theory. Ricardo explained how it applied to mines:

“[T]here are mines of various qualities, affording very different results, with equal quantities of labour. The metal produced from the poorest mine that is worked, must at least have an exchangeable value, not only sufficient to procure all the clothes, food, and other necessaries consumed by those employed in working it, and bringing the produce to market, but also to afford the common and ordinary profits to him who advances the stock necessary to carry on the undertaking. The return for capital from the poorest mine paying no rent, would regulate the rent of all the other more productive mines. This mine is supposed to yield the usual profits of stock. All that the other mines produce more than this, will necessarily be paid to the owners for rent” (Principles of Political Economy and Taxation, ch. 3).

This applies today to the extraction of oil, its price being fixed by the production price in the least productive oilfield in use.

What the G7 are trying to do is to prevent Russia from benefitting from having a lower cost of production than in the oilfields that set the price of oil and so reaping a super-profit. This is to be done by forcing Russia to sell its oil at a price nearer to its price of production. It’s a clever scheme – to be enforced by refusing to insure tankers carrying Russian oil bought above this price – but it may be too clever. Russia has already announced that it will refuse to sell oil to any country that goes along with the G7 plan. And it can’t be a coincidence that the day after the plan was announced Russia suspended the direct supply of gas to Germany.

While the capitalist West and capitalist Russia battle it out, economically and militarily, as to whose sphere of influence Ukraine should be in, workers everywhere are suffering the consequences in terms of higher and higher energy bills reducing their standard of living. But it’s a pain both sides have no qualms about inflicting.

Cooking the Books: Mutual Assured Downturn (2022)

The Cooking the Books column from the July 2022 issue of the Socialist Standard

Since Russia invaded Ukraine at the end of February, the response of the West (ie, the US and those states protected by its nuclear weapons) has been to declare economic war on Russia.

Might being right under capitalism, sanctions are a weapon that powerful states can use to try to impose their will on states that they come into particular conflict with in the struggle built into capitalism over sources of raw materials, trade routes, investment outlets, markets, and strategic points and areas to protect these.

Oil is an obvious example. Who controls the Middle East oilfields and the pipelines and trade routes to export it has been the cause of the many wars that have taken place there since the end of the last world war. Currently the West is particularly concerned that the leading power there should not be Iran and has imposed sanctions on it to try to stop it increasing its might by acquiring nuclear weapons.

As an alternative to actual war, sanctions are quite attractive to the sanctioning power. At a small sacrifice of depriving itself of a market and an investment outlet, they weaken the rival state without having to fire a shot or drop a bomb. Even though they increase the premature death rates amongst the civilian population, especially children, this is not regarded as a war crime.

Russia, however, is not Iran. It has much more might at its disposal, in particular an arsenal of nuclear bombs and the missiles to deliver them to the US itself. Here the strategic policy of ‘mutual assured destruction’ (MAD) comes into play – both the US and Russia built up an arsenal of nuclear weapons not with the intention of using them, but to prevent them being used as each knows that if they did they would be destroyed too. Instead, the West has decided to wage economic war, with some effect:

‘Russia is reportedly set for its deepest recession since the fall of the Soviet Union. The country is facing a growing number of sanctions over the invasion of Ukraine, with the European Union dealing a further blow this week as it vowed to ban nearly all oil imports’ (Independent, 1 June).

But this ‘success’ has come at a price:

‘The head of the World Bank sounded the alarm over an impending global recession on Wednesday, warning it was difficult to envision a future where a worldwide downturn could be avoided. Speaking at an event hosted by the U.S. Chamber of Commerce (USCC), World Bank president David Malpass said the war in Ukraine—and its impact on food and energy costs—could spark a global recession. “As we look at global GDP… it’s hard right now to see how we avoid a recession,” he said. “The idea of energy prices doubling is enough to trigger a recession by itself.”’ (Fortune, 26 May, bit.ly/3xs5VoG).

And Russia has yet to use its economic nuclear bomb: cutting off gas supplies to Europe. ‘That would result in industrial blackouts this winter and a substantial hit on consumer incomes caused by spiralling inflation’ (Times, 1 June).

So, it is not just workers in Russia who will be collateral damage in this economic war but the workers in the sanctioning states too, not to mention those in the rest of the world.

As usual when capitalist states fall out, it is ordinary people who suffer.

Cooking the Books: Russian gold (2022)

The Cooking the Books column from the May 2022 issue of the Socialist Standard

‘The Bank of Russia has resumed gold purchases this week, but more importantly, the regulator is doing so at a fixed price of 5,000 rubles ($59) per 1 gram between March 28 and June 30, raising the possibility of Russia returning to the gold standard for the first time in over a century,’ RT reported on 2 April (bit.ly/3juJTda)

This led to speculation that, in a further bid to get round Western sanctions, Russia’s next move might be to require all its exports be paid in roubles that would in effect link their price to the price of gold. This would not be a return to the gold standard that existed up until 1914 but would be more like what the US did up until 1971 when it agreed to buy gold at $35 an ounce. This was part of the ‘gold exchange’ system where other currencies had a fixed rate of exchange with the dollar and so were linked to gold that way.

The US decision to end this in 1971 led to the present era of floating exchange rates where rates go up and down depending on the demand for a particular currency to pay for imports or to invest abroad. In practice the dollar remained the main, but by no means the only, ‘reserve currency’ as the currency in which central banks held money for their country’s international transactions.

The West’s decision to deny the Bank of Russia access to its dollar reserves may be more significant than anything Russia might do. It will be a signal to other countries that holding dollars is not as safe as they assumed and may lead them to find alternatives, even to rely more on gold. It could be the beginning of another change in the international payments system.

The previous regime in Russia – the one that came to power in November 1917 with the Bolshevik coup d’état – also toyed with the idea of a gold rouble. Trotsky, who considered himself the leader, albeit in exile, of a within-the-system opposition to the Stalin government, was an advocate of this. In an article published in English in 1935 entitled ‘If America Should Go Communist’ (bit.ly/3xjYJuS), he affirmed his belief that a gold-based currency was best:

‘Your “radical” professors are dead wrong in their devotion to “managed money”. It is an academic idea that could easily wreck your entire system of distribution and production. That is the great lesson to be derived from the Soviet Union, where bitter necessity has been converted into official virtue in the monetary realm. There the lack of a stable gold ruble is one of the main causes of our many economic troubles and catastrophes.’

Trotsky mistakenly believed that Russia, even under Stalin, was in a transition from capitalism to socialism and that, during the transition, money was needed, ideally linked to gold. He was, however, aware that socialism would be a moneyless society, but that was only for the dim and distant future:

‘Only when socialism succeeds in substituting administrative control for money will it be possible to abandon a stable gold currency. Then money will become ordinary paper slips, like trolley or theater tickets. As socialism advances, these slips will also disappear, and control over individual consumption – whether by money or administration – will no longer be necessary when there is more than enough of everything for everybody!’

What he failed to realise was that the very existence, due to ‘bitter necessity,’ for money in the Russian economy showed that it was still a capitalist economy. It wasn’t in a transition to socialism. If anything, the state capitalism that existed there in his time was a transition to the more classic type of capitalism that existed in the West, and which largely came into being when the old USSR collapsed in 1991.

US flexes its muscles (1998)

From the January 1998 issue of the Socialist Standard

As we mention in our editorial, at the end of October 1997 another crisis emerged in the Middle East when Saddam Hussain banned Americans from the UN Special Commission (UNscom) charged with monitoring Iraq’s weapons of mass destruction. A further conflagration threatened when Saddam promised to shoot down any US reconnaissance planes flying over Iraqi airspace.

Within days, US forces were put on alert with Britain’s Labour government offering wholehearted support.

What became clear as the waiting game unfolded, and perhaps surprisingly so for US Middle East watchers, was that the US and Britain were alone in their stand that Saddam should again have his ass kicked. Not only was caution urged by France, China and Russia (who together with the US and Britain make up the UN Security Council), but condemnation of US belligerence came from normally pro-US states such as Egypt (the second biggest recipient of US aid), Saudi Arabia and Kuwait.

While Russia and France feared another US strike would jeopardise potential oil contracts and the recovery of old debts, Arab states’ reasons were two-fold.

The first had nothing to do with support for Saddam, but was more an alleged empathy with the long-suffering Iraqi people, still awaiting the lifting of UN sanctions that have resulted in the deaths of hundreds of thousands from malnutrition and disease since 1991.

The second is that many Arab rulers see the US as reneging on a post-Gulf War promise to deliver a Middle East peace settlement and because of the sanctions the UN refuses to impose on the Middle East’s other villain of the piece—Israel.

It is no secret that the US still bankrolls Israel to the tune of billions of dollars each year—a country whose nuclear arsenal is clouded in mystery—and in spite of US foreign aid legislation from 1977 barring funds to any state secretly developing nuclear weapons. Moreover, while Iraq’s flouting of one UN resolution can plunge the region into a long and protracted war, Israel is still in breach of six UN resolutions (338, 465, 476, 672, 673 and 681).

We might add that while the US is desperate to prove to the world that Iraq is hiding weapons of mass destruction, it is silent on its own chemical weapon stockpiles, and just as it can turn a blind eye to Israeli bombings of Libya in 1982 and 1996, so too can it ignore Turkey’s frequent over-the-border incursions to murder Kurds and the oppression Indonesian forces still carry on in East Timor.

All of this can be set against President Bush’s Gulf War Orwellian double-speak that “America stands where it always stands—against aggression”. Interesting words indeed from the first ever head of state to be condemned by the World Court, for “unlawful use of force against Nicaragua”.

The whole episode should make it immediately clear that the latest round of US sabre-rattling has less to do with any perceived threat Saddam poses to the present world order and rather more to do with US hegemony and US control of world oil supplies.

This is perhaps why Tony Blair could announce at the recent Lord Mayor’s banquet: “When Britain and America work together on the international scene, there is little we cannot achieve . . . we must not reduce our capacity to exercise a role on the international stage” (Observer, 18 November).

What Blair’s overt support for the US reveals is an all too common acknowledgement by the British elite that Britain can only ever move forward in America’s shadow.

Meanwhile, UN inspectors have since returned to Iraq, but with a reduction in the proportion of Americans represented. The US alleges that Saddam will have exploited the UN absence to conceal Iraq’s weapons of mass destruction, and insist they will not stop until all of Saddam’s weapons and related facilities are uncovered and the world is again a safe place to live in; a hollow sounding notion considering Russia and the US still have 5,000 nuclear warheads pointed at one another.

In the immediate future we can expect further military stand-offs in the region, with the working class hostage to the ongoing power struggle over control of the world’s centre of oil extraction.

John Bissett