Voice From The Back: A high priest speaks (1998)

The Voice From The Back column from the September 1998 issue of the Socialist Standard

A high priest speaks

"Markets are surely one of God’s great gifts to mankind. But alas, man is conceited. Nowhere is this more manifest than in politics". Sir Alan Walters, Financial Mail on Sunday, 5 July.

A worshipper sings

"Americans have been experiencing the heartiest bull market in history. The Dow Jones average of 30 blue-chip allegedly representative industrials has more than doubled, from 3,760 in June 1994 to flirting with 9,000 today. Unemployment is 4.3 percent while inflation and interest rates have inexplicably remained low . . . With the computer revolution at full throttle, the strictures of classical economics appear no longer relevant for the US. And the economic chattering classes-from the stately John Kenneth Galbraith through the cryptic Alan Greenspan to the trendy Esther Dyson can only anticipate millennium market madness. Let the good times roll". Crocker Snow Jr, World Times, Boston, 5 July.

Hunger persuades

"American legislation to put a time limit on welfare payments is proving a success as more people find jobs. Figures show that people are moving off the unemployment register twice as quickly now than before 1996, when Congress imposed the limits. The Republican law, which went much further than reforms being tried in Britain, was denounced as inhumane because it laid down that no one could receive more than a total of five years of welfare payments from the federal government during their lifetime". Telegraph, 20 June.

Sacrificial victim protests

"[G]rowing evidence suggest that the larger the income gap, the wider the health gap. For example, infant mortality in social classes IV and V in the UK is twice as high as in Sweden. In America’s booming economy, the gap has now reached the point where a child born in Bangladesh has a greater life expectancy than a child born in Harlem". Donald Read, Chief Executive, Association for Public Health, letter in Guardian, 23 July.

Noblesse oblige

"Land reforms proposed for Scotland could destroy traditional family estates, according to the Duke of Buccleuch, Britain’s largest landowner. The duke, 74, who owns more than 400 square miles, mainly in the Borders, said that the system of land ownership most [people] sought to preserve was falling apart . . . . In a 17-page document, the duke said that only 80 years ago nearly 90 percent of the countryside in Scotland was managed by traditional family run estates. Today it is less than 30 percent, due mainly, he said to a wealth tax in the form of estate duty". Daily Telegraph, 20 June.

Dirty neighbours

"The governments of Norway, Sweden and Denmark are demanding that the Sellafield nuclear plant in Cumbria stops reprocessing after it was found that radioactive seaweed collected on their countries’ coasts is a result of new discharges from the site. An analysis by Southampton University shows that levels of Technetium-99-a rare radioactive element which is a waste product of reprocessing plutonium-has increased 15-fold in Norwegian seaweed since the early 1990s. A new plant that discharges Technetium-99 was opened in 1994 at Sellafield and the increases are linked to that". Guardian, 18 June.

Ssh-not a word!

" “Well, all this is a sanitised area,” he said, gesturing at the hotel atop the ridge, the manicured lawns, the trimmed shrubs, the tennis courts, the winding driveway up to the front door, the police checkpoint, more police again in the woods. “Really, you’re wasting your time,” he said. “Really, you are-there’s no one booked to play today.” He was a plain clothes member of Operation Orchid, the codename given by Strathclyde police to the impenetrable security ring surrounding this year’s Bilderberg meetings; a highly exclusive, little known and barely reported annual conference which has been held since 1954 at grand hotels across Europe and the USA. Attendees debate the state of the world and, critics insist, manipulate global politics and economics from behind the scenes. At Turnberry last month, the 120-strong guest list made intriguing reading . . . There was Henry Kissinger, David Rockefeller, billionaire chairman of the Chase Manhattan Bank; James Wolfensohn, president of the World Bank; Giovanni Agnelli, head of the Fiat empire; Javier Solana, secretary general of Nato; Jurgen Schrempp, chairman of Daimler-Benz; the chairmen or chief execs of the Xerox Corporation, BP, Reuters and a bunch of big-league banks and law firms; John Deutch, former head of the CIA; Tory leader William Hague, Kenneth Clarke, Leon Brittan; Defence Secretary George Robertson; assorted other politicos . . . No reporters are admitted, no press conferences held, and no record of what was said is published". Night & Day, 14 June.

Wild Guess Chase (1997)

From the November 1997 issue of the Socialist Standard

Anyone who spends any time observing the erratic workings of capitalism will realise that it almost never lives up to the claims made for it. It is a social system supported by mythology. One myth—that it provides for everyone—is easy to debunk. You only have to look at the Third World, or even the poor sections of the West. Another—that its competitive motor always produces the best products—is also easy to debunk. Here one may point to the market success of theVHS video system over the superior Betamax. or again that of IBM/Intel computer chips over the vastly superior Apple/Risc chips.

But the biggest myth—that which keeps people voting for political parties to run capitalism—is that it is indeed possible to "run” capitalism. With no steering wheel, no brakes and no happy end in sight, capitalism is nevertheless not short of prospective "drivers" who will do and say anything for a chance to sit up front with the big hat on. Governments of the world govern by the myth of control. They persuade us that they can control market forces, but only until the next crisis, whereupon they blame market forces or foreigners, or both.

Evidence for the chaotic nature of capitalism is not scarce. Since the days of Adam Smith in the 18th century, economists have been trying in vain to find the right combination of knobs, levers, sliders, switches and buttons with which to control the monster reactor of the money and market system. Each would-be government has to claim that it has everything finally figured out. so that you will vote for them. If they admitted that they can’t control capitalism, nobody would bother electing these self-styled "market managers" at all.

Peter Day (In Business, BBC Radio 4, 8 August) presented the curious proposition that the present boom might actually continue forever—that is, without the presumed inevitable slump. The wishful thinking behind this daring notion tells you a lot about how much of economics is real theory, and how much is wild guesswork. Peter Schwartz of the Global Business Network points to the fact that where 50 years ago the ratio of measurable to unmeasurable growth was around 60/40, today it is the other way round. In other words. 60 percent of the modern US economy is “invisible" and cannot be measured.

This gives you some idea of how difficult the "experts” find it to measure growth in capitalism. Naturally, all policies and strategies for the future are based on these vague measurements, which should confirm us entirely in our lack of faith. The problem with new technology, says Schwartz, is that you have to wait for the society to learn to use and apply it. And you may have to wait some considerable time. Electricity was around for 40 years Henry Ford in Chicago realised that you could use it to revolutionise the factory, and as a consequence the growth rate for Chicago between 1900 and 1930 was 68 percent per annum, where previously it had been nil. In today's terms we have the silicon chip, but apart from a few geeks on the Internet, this technology has not yet come into its own. Beyond the telecommunications revolution stretches the even more awesome potential of nanotechnology—the building and application of molecular machinery. What the world will look like in 20 or 30 years from now is anyone’s guess, and what the world's economy will look like is also anyone's guess.

So the "experts" frankly don’t know. They can’t predict what the market will do. And they can't control it anyway. It is on this basis that they are suggesting a slumpless economy. In short, when nothing is predictable then anything is possible.

Makes you wonder why people bother listening to them, doesn’t it? In all the breathless excitement about the hi-tech future, those predicting “No end of a boom” are enthusiastically ignoring the past. They do not have the evidence of history on their side, and so are obliged to claim that today's economy is not like yesterday’s. Because telecommunications are exploding, and productivity relies on telecommunications, they reason that productivity will explode too. But in that case the demand also needs to grow, and although it will do for an unpredictable period, the time will come when demand slackens its pace (for instance because people only have so much to spend). Productive forces are never able to anticipate this, and always overshoot the mark, like a man walking over a cliff. It doesn’t matter what is being produced. If it is a commodity in capitalism, it relies on buyers. If there are no buyers, the ground disappears from under foot and production takes the long drop.

The most enduring if not endearing thing about capitalism and the market is that its supporters, fully recognising what has unfailingly happened in the past, always insist that this time it will be different. Allow us therefore our own little prediction, and you can hold us to it: No, it bloody well won't!

Paddy Shannon