Letter: to Bob (2005)

Letter to the Editors from the August 2005 issue of the Socialist Standard

Letter to Bob

Dear Editors

Below is a letter I sent to Bob Geldof.

Dear Bob,

I deeply respect your sincerity in campaigning for the end of poverty through the world. My understanding of poverty is the insufficiency of the necessities of life leading to an inability to enjoy the wealth potentially able to be created in abundance by humankind, including leisure pursuits, the arts and the basic necessities including shelter, warmth, food and water and the freedom from illness. This deprivation leads inevitably to hunger and disease. I believe that this insufficiency is largely caused by money.

As I am sure you will agree, it is important to understand that wide-scale hunger and even famine can occur when the available food supplies are not necessarily less than sufficient to feed the people they should be intended for. For example the well-known study of the 1943 Bengal Famine by Armatya Sen, which I am sure you are familiar with, showed this clearly. Other famines in recent times have occurred when there has been a sufficiency of food. Indeed food exporting from Ethiopia continued during the famine of the 1980’s.

It is also important to understand that not all the population of an area affected by hunger will go hungry. It is often what has been called ‘entitlement’ that denies access to the available food. Under the present way of ordering Society this entitlement can be determined by money or barter and not necessarily by a person’s need for food. Having money alone that would ordinarily secure enough of the basics does not always ensure sufficient access to those basics as, for example, when there is a shortage caused by ‘natural’ or human factors. Generally, as with anything else, when there is perceived to be a shortage, the ‘value’ of goods and services (including food) rises. Because of the way things are ordered it is the poorest who suffer most when the price of commodities rises. Therefore Poverty can be said to cause hunger and hunger to cause poverty, because hunger weakens resistance to disease, which in turn leads to an increasing tendency to an inability on the part of its victims to tend to their needs.

As things are presently ordered, therefore, there is an advantage to those who control the availability of essentials and who in some way or other profit from their sale to regulate the supply of goods and services anywhere in the world.

If the products of human labour and indeed the plentiful raw materials throughout the world – including Africa – were freely available to those who needed them and indeed to those who help make them available for human consumption without the intervention of money or any other limiting factor imposed by a minority of humans then there could not be need of any kind, much less catastrophes like famines. Where there were factors held to be beyond the immediate control of humankind, for example floods or droughts, then the technology presently widely available could be used to ameliorate their worst effects. Water can be transported, sea water can be desalinated, rivers can, to some extent, be contained in their capacity to cause widespread damage to the lives of people who happen to live in their flood plains.

Presently some African countries are troubled by, among other things, wars, corrupt government as well as crop failure due to drought and other factors. To some extent many other parts of the world have also been affected in similar ways over the last few centuries. The ‘debt’ that is owed by many countries in Africa and elsewhere is often at least in part due to the efforts of other countries to trade with them. With things ordered as they presently are – in other words governed by money – there is no incentive for traders with Africa or anywhere else to be ‘fair’. These traders are bound by the same rules all traders in the present system are – i.e. to maximise their profit in trading with anyone. If they were ‘fair’ they would quickly go out of business because their profits would decline.

Therefore ‘wiping out’ present debts is no guarantee of a long term solution to the poverty that has been more or less imposed on many African countries. Rather the abandoning of the money system itself by the entire world and sharing the resources of the earth in common is the only real way. Perhaps those countries that have experience in combating the worst effects of droughts could be called upon to help. There are many examples of international co-operation at present under the money system, Space Exploration to name one large one. Another example near to my home is the construction of the Thames Barrier, which utilised the expertise of the Dutch in Flood Defences, the Americans in producing heavy duty waterproof bearings for the gates, the British with their expertise in large scale steel structures, and Austrians with other necessary skills. If this can all be done now, with money as a limiting factor – imagine what could be done when the entire world is united in the will to solve the problems any other area may suffer! We could all share the skills and resources we all have in plenty for the benefit of all humanity! Imagine what kind of world that could be!

Yours,

Tony Norwell, 

London SE2 

Feeble attack (2001)

From the June 2001 issue of the Socialist Standard

Attac France is another group who think they can tackle poverty. Is their answer any better to the World Development Movement’s?

The vice-president of Attac France, Susan George, addressed a public meeting on 27 March in my hometown of Aarhus, Denmark, attended by several hundred people. Attac was founded just under three years ago in France and professes to be an anti-capitalist movement. The acronym “Attac” stands for “Association pour une Taxation des transactions financières pour l’Aide aux Citoyens". Today it has some twenty sections around the world. An Aarhus branch was formed after the meeting was finished.

Attac has entered the popular vocabulary, especially after one of their very peaceful demonstrations, outside the Danish medicine firm Novo Nordisk. Novo was one of the companies involved in the legal action against South Africa. Novo produce AIDS medicine; due to its cost – South Africa has an HIV/AIDS epidemic – the SA government decided to import a copy medicine for medical aid. Novo were against this policy. The demonstration has the slogan: “People before profit”.

The flyer advertising the meeting already revealed that Attac is not anti-capitalist but rather anti-big business. It mentioned some of their aims: a redistribution of goods via taxation of currency speculation (the Tobin Tax) and the abolition of tax havens; better conditions for the Third World, necessarily involving the writing-off of debt; and democratic control of the market and the multinationals. None of these aims is strikingly original. There are a number of Social Democrats who share these views – and who believes those parties can be described as anti-capitalist?

The market cannot be controlled. Both inflationary policies of Keynes and the old, Eastern bloc command economics ought to be proof positive; the market simply cannot be regulated. Taking due consideration of the fact that a capitalist who has sold does not have to buy (i.e. reinvest), the market is nothing but the sum total of businesses buying and selling products, with a view to profit. Capitalist production is anarchic; this is never more obvious than at times of economic slow-turn and recession (slump). At the time of writing the Asian tech market has nigh-on crashed; America is facing a downturn; and Marks & Spencer have suspended their European operations. Capitalism runs through periodic cycles of boom-bust and back, despite Blair and Brown’s off-heard: “We will not return to the days of boom and bust.”

George was adamant “that public services are not for sale”. We might also ask what Attac’s redistribution of goods amounts to. It would seem that Attac want healthcare, etc to be state owned and funded by greater taxation of the (already taxed) capitalists. This is merely “Old Labour” policy.

Writing off Third World debt is already governments’ policy. The World Bank has a strings-attached policy on debt relief. What this reveals is that the (short-term) loss of money involved is not nearly so important as creating politically and economically stable areas for trade and investment, with future profit gains in mind. (“Debt prevents economic growth” – George.)

George’s lecture confirmed that the so-called anti-capitalist movements don’t attack capitalism as a system. George and the others single out multinationals as the baddies, as the root cause of the problems facing the workers of the world. We certainly can agree on what multinationals have done – that need not detain us. Attac, like others, base their critique of multinationals, however, on a caricature. Multinationals cannot act willy-nilly. They do have to abide by the laws in the countries where they are established as well as by international agreements. (The ultimate power in society is political power and not economic power.) Furthermore, multinationals are not immune to the economic laws of capitalism as expounded by Karl Marx in Capital. Whilst their size mean they only get a buffeting when others go to the wall, recessions do affect the Multis.

Whilst businesses are interested in shifting taxation burdens to others and do try to reduce wage claims – all of which eat into profits – it is not entirely true to state these are all they worry about. High taxation and wages are related to more developed capitalist countries, where the workers are educated and well trained. Such a workforce is more productive. Inefficient techniques and workers do not interest multinationals too much, when they have an adverse effect on profits. Capitalists seek high profits with security.

Capitalist realities

George revealed an ignorance of capitalist realities. She thought it strange that remuneration comes to capital from goods. Her explanation for financial crises was that anyone is allowed to invest anywhere in the world. Scathing remarks were saved for the WTO because “it wants to make everything a commodity”. (Fancy that! George ought to read the opening paragraph of Capital.) The word “capitalism” was hardly used; she talked of “globalisation” incessantly, and her definition of it was pretty flimsy. No mention was made of the unending rivalries between capitalists.

Attac’s ignorance of capitalism, both in the domains of economics and history is fundamentally crucial. Any political programme takes its starting point in axioms. In judging the Attac movement, and anything else, those axioms are the first things to be looked at. Attac clearly believe in the continued existence of capitalism.

Like all reformers, Attac limit themselves to attacking features which they do not like; they fail to realise that those features are due to capitalism. The Multies’ growth is a mere reflection of the growth of the global capitalist system – they aren’t anomalies. Because they fail to recognise this, Attac will not be able to eradicate inequality and poverty. Two features are at the core of capitalism – a minority own the wealth of the world, which forces the majority to sell their ability to work for a wage (and millions don’t even have jobs) and production is carried out for profit. It is true: “Capital is rewarded to the detriment of labour”, but she has drawn the wrong conclusions and ought to think about doing away with the capital-wage labour relationship altogether. Does she not know why the system is called capitalism?

How does Attac view changes occurring? They do not denigrate parliament. George stressed the need for laws, “new rules” and “political procedures”; broad coalitions should be formed; trade unions have an important rôle to play; and Attac are for “popular education towards action”. George is utterly mistaken if she thinks governments can ever work in the interests of the workers, since their policies are formed by the dictates of capitalism.

George described Attac. It was founded by people from a variety of backgrounds; the only organisation named was the French Small Farmers’ Union – Attac. She said Attac has internal democracy and that they work to get a consensus of opinions. She sent a message to those who would use Attac for their own ends: it is not permissible to use Attac as a front. This was fine, although it will do little good, since the local Trotskyist vanguard have been licking their chops and been busily promoting Attac. (These days, the Leninists are more reformist than they used to be.)

In the questions and answers session, I addressed some of Attac’s weaknesses. When I noted the Soviet Union was a state capitalist dictatorship some of the audience laughed; George, however, agreed with me – let us hope others in Attac share this view. I sold some Socialist Standards, received praise for my comments from my fellow workers, and was interviewed by national TV.

In conclusion, then Attac does not differ from other left-wing reformist groups. All they want is some nebulously-defined humane, egalitarian capitalism where business is accountable to the workers. And people call socialists utopian!

Graham C. Taylor

The poison of development aid (1986)

From the Summer 1986 issue of the World Socialist

The following article has been translated from the Internationales Freies Wort, journal of the Bund Demokratischer Sozialisten, the section of the World Socialist Movement in Austria.

The poison gas catastrophe in Bhopal in India with its large number of dead plus many more blinded and injured shook world opinion. The American multinational chemical corporation Union Carbide, to whom the Indian poison laboratory belonged, was quick to point out in the media that its production of protection for plants (pesticides) aided India towards self-sufficiency in food and thereby saved many people from dying of hunger. So, after deducting the thousands who were poisoned Union Carbide still comes out as positive!

But the truth is that India doesn't need any poisonous material for pesticides. The poverty-stricken small farmers lack the most basic implements such as spades and hoes as well as pumps for irrigation, etc. But there's no business in this for big industry in the Western countries. So the underdeveloped countries get pushed the products which the industrialised countries want to sell, all in the name of development aid. In other words, "we are helping ourselves, not the underdeveloped countries" as no less than President Nixon openly declared when development aid was under attack in America.

So the Indians, happy with their unordered poison which of course the poverty-stricken small farmers could not buy, were forced to migrate to the towns as they couldn't make a living from agriculture, where they settled in front of the gates of the chemical factory and died "like flies" when the poison gas leak came.

World opinion, prevented from a correct insight into the problems of the underdeveloped countries by all the manoeuvres that go on over loans and exchange rates, was taken unawares by this catastrophe. But not anyone who had taken the trouble to inform themselves of the facts. Some years ago the American writer Susan George published her How The Other Half Dies in which she attacked established myths and exposed the businesses of the industrialised countries as responsible for the poverty of the underdeveloped countries.

Such statements are not approved of by the establishment of the industrialised countries — but the latter's failings make their investigation of the problem worthless. This is also the case with the "Independent Commission for Development Questions", a committee under the chairmanship of Willy Brandt (SPD), the majority of whose members are "representatives" of the underdeveloped countries themselves but they are all from the capital-benefiting elite-strata of these countries. The consequence is that the first report (1980) carefully avoids everything that could go against the capital interests of the industrialised countries and so ignores all the real problems and can show no way towards solving them.

The second report (1983) is just the same. In the foreword Brandt points out that events have regrettably confirmed the worst apprehensions of the first report. In which case the Brandt Commission was useless. Of the 94 proposals in the first report not one had been implemented. Of course something else will happen — more recommendations and more pious wishes.

Development to what?

In reality everything resolves around the preservation of the existing economic institutions of the industrialised countries. The assumption is that the underdeveloped countries should be lifted to the splendid heights of the developed countries. But people in the developing countries are less and less enchanted with this. It has been noticed that all the aid has not reduced the gap between living standards in the South and those in the North — on the contrary the backward countries have fallen even further behind. It has also been noticed that the industrialised countries are not a paradise for all their inhabitants. The introduction of industry into the underdeveloped countries has led to more disadvantages than advantages — the uprooting of traditional ways of living and working, the cut-back in home production in favour of the products of the multinational corporations, the growing impoverishment through the ever-increasing dispossession of those who are insolvent, ending in the disasters like Bhopal.

If the practice of industrial development is so unsatisfactory this is above all because its theory, the basic concept of raising the underdeveloped countries to the level of the developed countries, is nonsense from the beginning. When the whole world is "developed" and busies itself with profitable stock exchange transactions where would the raw materials and foodstuffs at present imported from the underdeveloped countries come from?

But this leads to the view that real aid for the underdeveloped countries demands fundamental changes in the developed countries — and that the establishment does not want to hear. It wants to push forward normal business to an ever greater extent, to exploit the population of the underdeveloped countries as underpaid producers of raw materials and, beyond this, also to make them low-wage industrial workers and customers for the products of the multinationals. In this effort large factories have been set up in the underdeveloped countries, to the detriment of existing industries in the developed countries. Their financing has mainly come from credit.

International debts

High finance, which likes to go on about being thrifty, once again didn't follow its own advice. The big banks queued up to lend credits to the underdeveloped countries. Now they are faced with the international debt problem, the consequences of which are borne by the underdeveloped countries. Over-burdened with debts these have growing interest payments and an increasing dollar exchange rate to worry about too. The much-ballyhooed recovery of the American economy which Reagan boasts about has taken place mainly to the detriment of other countries. Tax reductions for the rich and unlimited increasing arms spending has led to an enormous deficit in the American budget with no noticeable inflation — at home. The inflation was in fact exported through the increased interest rates which attracted international capital to the US and made it a debtor country, but pushed up the exchange rate of the dollar.

The underdeveloped countries are now faced with a mountain of debts expressed in expensive dollars, borrowed at ever-increasing rates of interest. On top of this the International Monetary Fund (IMF), which the second Brandt report still hoped would increase its support for these countries, forced devaluations on the debtors, further increasing the burden of their dollar debt. In 1985 the interest payments alone were 50 per cent of the borrowed amount for Argentina and Brazil and 40 per cent in the case of Mexico. These are the so-called "threshold countries" who stand on the threshold of industrialisation and so should be "somewhat better" than the ordinary underdeveloped countries!

The Debtors

Brazil was the first country to break the hundred billion dollar debt level. In Sao Paulo 34 per cent of those available for work are unemployed. They don't known that they each owe 14,000 Schillings (about $750) to the international bankers, and, even if they did know, it wouldn't worry them. The debts were contracted under the military regime to use on numerous large projects which were in part profitable, but which in many cases became unprofitable through mismanagement and the downturn in the economy. Home-produced cars fill the streets, but have no petrol and run on alcohol which is produced from raw sugar. The cultivation of this together with that of soya beans for export means that the cultivation of foodstuffs has fallen by 12 per cent, and this in a country of chronic undernourishment! The really pressing problem of increasing the production of home-grown foodstuffs has been forgotten in the industrialisation-illusion.

The Pinochet regime in Chile, supported by international finance capital, came to power through the murder of the democratically-elected President Allende and has since practised a murderous reign of terror. But this has not meant that there have been no business swindles under it. The five big banks which Pinochet had privatised could only be saved from bankruptcy by being renationalised. And a number of bankers and two Ministers have been found guilty of fraud by the Courts.

In this respect there is no essential change if a military government is replaced by a civilian one, as has happened in Argentina and now also in Brazil, so long as the civilian government continues to obey international capital and its bailiff, the IMF. In the rest of South America and in Africa and Asia things are similar: foreign credit is mainly used for projects which ignore the needs of the population because these only very sporadically correspond to the valorisation requirements of capital.

The spectre

There is a saying that if you owe the bank $1000 you have problems but that if you owe the bank $1,000,000 the bank has problems. And the underdeveloped countries have debts of billions of dollars! Hence the spectre of a debtor's cartel: if all the developing countries were to stop their payments at the same time then all the big banks in the industrialised countries would go bankrupt and there would be an economic earthquake. At present it hasn't happened as the governments in these backward countries are in the hands of wealthy capital-benefiting minorities and have openly gone into the (well paid) service of the foreign exploiters. But in the last analysis they have to understand that an explosion threatens them if they exact further sacrifices from the population.

The creditors can no longer seriously hope to ever recover their capital. It is now only a case for the creditor-banks of not having to cancel the uncollected debts and thereby admit their faulty credit position. The debtors are given a delay for repayment and are lent yet more money so that they can pay the interest. In theory the debtors receive the new money but they never see it; it remains in New York, London, etc in the hands of the banks who are thus enabled to achieve considerable profits.

The truth is that these countries can only settle these new debts inadequately. Among the many proposed solutions there is the tried solution which always emerges when the capitalists are in difficulty: let the much-suffering state pay! This would save the banks, before or after, from their bankruptcy - naturally at the expense of the majority of the population of the industrialised countries who thereby see established a forced solidarity with the inhabitants of the underdeveloped countries.

We can't help thanking them. Financial pressures have produced more than enough harm — they have poisoned not only the thousands in Bhopal but the whole economy of the underdeveloped countries. And the economy of the industrialised countries is in no better state: they suffer from stagnation and unemployment and so have unused resources that could be used to produce the things the underdeveloped countries really need.

But this is opposed to the basic principles of the profit economy: only what yields or at least promises a profit is produced. Here is the real problem and any attempt to find a solution must start from here. The removal of the profit system is the watchword. That the Brandt Commission and the other aid schemes are chained to the profit system is the real reason for their failure.

Latin America: poverty and pollution (1993)

From the August 1993 issue of the Socialist Standard

Latin America has provided many of the striking images of ecological devastation which have fuelled debate on the environment in recent years. Few have been left unmoved by the relentless deforestation of the Amazon Basin or the mercury-polluted moonscapes left by gold prospectors still searching for the mythical Eldorado.

Reactions to the crisis vary. Some view the problems as intractable; the result of overpopulation and a flawed human nature. They retreat into defeatism—mouthing prophesies of the eco-Apocalypse as they go. Others retain their faith in the tired arguments of the reformists; there’s no environmental problem that couldn't be solved with a few more laws, a change of leader, some nature reserves and a little more charity. Socialists, however, reject both reformism and defeatism, recognizing that the roots of environmental destruction lie in the capitalist system and its uncontrollable production for profit, a system incapable of incorporating the rational and democratic decision-making process which will be necessary to ensure an ecologically- sustainable future.

How then has capitalism developed in Latin America, and what have been the consequences for the environment?

Precious metals

Following colonization by European powers in the 15th and 16th centuries Central and South America and the Caribbean were forcibly subjected to the priorities and demands of the fledgling capitalist world market. The new social system imposed on the Americas gradually swept away the technologies, agricultural techniques and cultures of centuries and replaced them with an economic system geared solely to capital accumulation for the few based on the exploitation of the many.

Greed for precious metals led the colonists all over Central and South America. The resultant human misery and environmental degradation was catastrophic. Open-cast mining left wastelands from Mexico to Bolivia, and the timber extracted for mineshafts accelerated deforestation. As the richest seams were exhausted the colonists used mercury from the Peruvian Andes to separate metals from the crushed ore of poorer seams. The waste was just dumped, and poisoned workers and polluted ecosystems bore witness to the new exploitative social system which saw no need to worry about environmental conditions.

The introduction of sugar-cane plantations early in the 16th century, first in the Caribbean and later on the mainland provided the basis for the exploitation of further wealth. However, owing to the genocidal effect of colonization on the indigenous inhabitants of the Americas the ruling class needed a further source of labour.

The African slave trade developed and millions were transported to work on the plantations. The triangular trade routes which flourished between Europe, Africa and the Americas not only strengthened the emerging capitalist class, and left a bitter legacy of racism but led to wholesale deforestation and soil erosion in the plantation areas. The irrigation systems of the plantations also facilitated the spread of infectious diseases such as malaria.

Cash crops

The political map of the continent was reshaped by the nationalist independence movements of the 19th century as local élites freed themselves from the remaining shackles imposed on them from Europe. However, the workers and peasants remained shackled with a class society organized around their exploitation. Environmental problems escalated as new cash-crops such as coffee, bananas and cotton were introduced. By the late 19th century much of the fertile arable land had been taken over by commercial plantations. Cattle ranching and deforestation developed apace.

Those displaced by the plantations and huge estates were forced to find new land on which to grow food. They found it on steep hillsides where rain washed away the topsoil, leading to serious erosion. New land was also found as more and more forest was cleared. The monocultures, deforestation and soil erosion affected the hydrology of many parts of Latin America. Topsoil washed into lakes and rivers causing silting problems and ultimately affecting delicately balanced marine ecosystems. For example, the coastal mangrove swamps of El Salvador were reduced from 300,000 to 6,800 acres and local fish populations dwindled.

As ecologically unsustainable monocultures bled the soil dry and were plagued by pests the owners turned to fertilizers and pesticides to bolster production. Again, it was the workers and the environment who suffered the consequences. Harmful pesticides were, and still are, used with abandon. In many parts of Central America cotton workers are sprayed along with the crop, while their children bathe in and drink polluted water. Mother's milk in parts of Nicaragua reportedly carrries the world’s highest levels of DDT. On the extensive banana plantations on the Atlantic coast of Central America thousands of workers have been sterilized by pesticide poisoning.

Debt crisis

The large-scale borrowing from Western banks made by Latin American governments and private companies during the 1970s and the ensuing debt-crisis have had profound effects on worker and environment alike. With the falling prices of cash-crop and raw material exports such as coffee, bananas, tin etc and the rising prices of essential imports, e.g. machinery and oil. Latin American economies faced serious balance of payments crises. Following the advice of those in power in Western countries many Latin American governments sought to boost their own industrial base in a vain attempt to compete on more equal terms with the more highly developed capitalist economies. Huge amounts were also borrowed to fund the military forces necessary to maintain the status-quo within their borders.

The Western banks were only too keen to lend the “petro-dollars” deposited with them by the oil-producing countries as a result of the OPEC price rises in the early 1970s. The industrial developments financed by the borrowing were often totally inappropriate to local conditions, and incredibly environmentally destructive. For example, huge hydro-electric power schemes in Amazonia necessitated the damming of many rivers flooding vast forested areas occupied by indigenous groups and poor farmers. The dams affected the regional hydrology causing silting problems and the proliferation of floating weeds. Malarial parasites also spread in the artificial lakes.

The Latin American economies borrowed at floating interest rates, so that as interest rates rose in the early 1980s a debt crisis developed when they were unable to keep up with the interest payments. They were also hit by contemporaneous further falls in the prices of their essential exports, and a world slump. Fearing the consequences of large-scale defaulting to the international banking system, the World Bank and the IMF negotiated Structural Adjustment Programmes for those Latin American countries troubled by debt. All the Structural Adjustment Programmes included the slashing of public expenditure, and the boosting of cash-crop exports in order to provide governments with extra revenue for debt repayments.

The benefits to the capitalist class of the IMF and World Bank plans are clear: the stabilization of their economic system. The victims, as ever, are the propertyless majority. The slashing of public expenditure has led to redundancies, wage-cuts, less social services, and less environmental protection. Boosting cash-crop production has led to further deforestation, soil erosion and the increased use of fertilizers and pesticides.

As the region has been progressively immiserated by debt, unemployment and worsening environmental conditions thousands more have flocked to the urban squalour of Latin America’s shanty-towns. The poor sanitation, over-crowding, pollution and disease suffered there is a direct result of a social system which organizes all production around the prospects of profitability for the owning few.

What is the way out of this intolerable state of affairs? As ever reformists offer national solutions, piecemeal reforms and schemes to preserve nature in isolation from humans. What they fail to recognize is that the environmental problems faced are not new or isolated phenomena but intricately linked with the rise to dominance of world capitalism over the last 500 years. It is the uncontrollable nature and ecological unaccountability of capitalist production which must be abolished to rid Latin America and the world of environmental destruction and of working-class poverty. Socialists work to replace a divided world governed by capital with a stateless, moneyless commonwealth under the democratic control of a socialist majority.

Peter Owen

Voice From The Back: Cracks in the dynasty (1999)

The Voice From The Back Column from the June 1999 issue of the Socialist Standard

Cracks in the dynasty

When the gossip columnist Liz Smith announced the Murdochs’ separation in the New York Post last spring there was little sign of the storm to come . . . On the surface, the sticking point is money—whether Murdoch’s lawyers will agree to the rumoured $2 billion settlement Anna is seeking . . . Anna’s interest in the trust arrangement may have less to do with the size of the settlement than the issue of the succession. A director of News Corp since 1990, she was once viewed as a successor herself. And while Lachlan, who heads News Corp’s Australian publishing operations, is considered the front runner, Anna still holds a candle for her eldest child, Elisabeth, the head of BskyB. News Corp is already under fire for shielding profits through a series of complex financial arrangements involving off-shore tax havens—arrangements that have seen News Corp pay no net British corporation tax in 11 years, despite profits here of £1.4 billion. Observer, 28 March.

Progress!

Two out of every five children are born into poverty and are likely to die poor unless urgent action is taken to tackle the effects of Britain’s growing inequalities of wealth, according to a landmark Treasury report. The study, the most in-depth by the government so far, makes clear the way chronic poverty can be passed on from generation to generation, emphasising unemployment as a root cause. It shows the number of people living in relative poverty has trebled since 1979. One of its most striking findings suggests four million children, one third of the total, live in low-income households. The report also confirmed that the gap between rich and poor widened substantially under the Tories, a development that makes the UK almost unique among developed countries in seeing an increase in inequality. Only New Zealand has seen a similar increase. Inequalities in Canada, Ireland, Italy, Portugal, France, Germany and Holland have been reduced or remained stable. The Herald, 30 March.

John Browne’s bodies 

[F]or the cigar-puffing Browne [chief executive of BP], who gained his knighthood last year, the difficult part is just beginning. To justify Arco’s purchase he has to find savings of more than £625 million from the deal over the next two years, slashing 2000 jobs as he goes. At the same time he has to maintain morale at Arco’s Los Angeles headquarters to keep the middle management talent that is crucial to his vision of a lean, mean multinational giant. Financial Mail on Sunday, 4 April.

Cheap wars?

The markets and Mr Milosevic seem to have been making the same calculation, that however much Nato governments huff and puff, at heart they care more about the budget than the Balkans. Before too much money has been dropped out of the sky, the markets seem to have reasoned, Nato will want to declare that it has ‘achieved its aims’ and send the bombers home. The stock market’s indifference also reflects recent experience of short, relatively cheap wars. In 1990-91, the Gulf war added about £1 billion to Britain’s defence [sic] spending, and the defence budget rose sharply in the next couple of years as hardware was replaced and plans revised. But virtually all Britain’s direct costs of war were met by Middle Eastern governments. Financial Mail on Sunday, 4 April.

The new slavery

[T]he International Monetary Fund extracted $1 billion from Africa in the last two years. The IMF received $390 million more in loan repayments from the continent in 1998 than it provided in new finance . . . the figure in 1997 was $643 million . . . international financial institutions and western governments were paid back $13 by developing countries for every $1 they distributed in grants in 1998, up from $9 in 1996 . . . Despite borrowing less than they paid back in 1998, total debt in developing countries rose again—by $150 billion to a new total of almost $2.5 trillion because of the backlog of interest payments. Guardian, 8 April.

Dirty Tricks? 

An investigation into the left-wing political extremists who have infiltrated an 18,000-strong Birmingham Council union branch is being hampered by death threats to witnesses, it was revealed today. Dozens of terrified council employees—mostly women—have told the leaders of Unison, Britain’s biggest union, that they are not prepared to give evidence unless they are given protection. Other council officials who have complained about bullying and intimidation by a group of militant activists with warnings that their homes would be “damaged” if they testified . . . As well as harassment complaints, he [Phil Lenton, national secretary of Unison] is looking into complaints that thousands of pounds of branch funds have been wasted booking the International Convention Centre of illegal meetings and subsidising the Socialist Workers Party. Evening Mail, 14 April.

Not Peru's failure (1985)

Book Review from the June 1985 issue of the Socialist Standard

Peru: Paths to Poverty by Michael Reid  (Latin American Bureau, London, 1984).

Peru’s prominence in the modern world began with a period of boom in the nineteenth century based on the export of guano. Its economy has always struggled and as early as 1879, after attempting to pay off foreign loans by printing money, it declared itself bankrupt. The pattern that gradually emerged was one in which power came increasingly to be held by a small proportion of the population with interests in sugar and mining. It was also dominated by foreign capital, particularly American, and this trend continued until General Velasco took power in 1968.

The Velasco government, a military regime, expanded the role of the state in the economy through a series of nationalisations and takeovers of foreign and oligarchic enterprises. This was done partly out of fear that the poverty of the population might lead to insurrection, but more importantly represented a transfer of economic power from one section of capitalists to another. Reid sees this as radical and contrary to "capitalist orthodoxy” but does not explain how either process would have been beneficial or detrimental to the interests of workers. In the event, the interests of private capital were rejected in favour of a state controlled economy, although there were those who criticised the government "under the banner of anti-communism” (p.54). Such propaganda merely feeds the confusion over what is essentially a conflict between state and private capitalism and it is a fault of this work that it tends to be descriptive rather than analytical.

By 1974 the Peruvian economy was suffering the effects of economic stagnation and the government responded by printing money and taking on board foreign loans. In 1975 it began cutting wages to reduce the budget deficit, restricted public investment and devalued the currency. Reid provides a clear picture of the increasing poverty of most of the population as government spending on health and education was cut but arms purchases from abroad were increased. Popular protest continued to be met with repression.

Under Fernando Beluande in 1980 there was a transfer of resources to private ownership and a series of mini-devaluations to maintain the international competitiveness of Peruvian exports. Peru continued to fund state spending by foreign loans and printing money but by 1983 the former had dried up and the country was entrenched in a deep recession. As usual, those who suffered most were the impoverished majority. The government equated strikes with the subversion of democracy and the failure of the system to satisfy human needs was covered up by blaming those who suffer its consequences the most. Within Peru the unions have become ineffectual and this pinpoints the weakness of trade unionism as a means of coming to terms with capitalism.

The book does not explain why capitalism has failed to fulfil the Peruvian people's needs or even offer a practical alternative. The main response described by Reid is Sendero Luminoso, which seeks violent insurrection and a "rejection of the capitalist money economy in favour of barter” (p. 109). It also rejects modern technology as a tool of imperialist penetration and desires a return to some "golden age” before the advent of capitalism. What is really needed is a strategy of revolutionary transformation of society. Peru has failed to generate internal sources of capital development and this has exacerbated its problems at a time of world recession. It is not Peru’s failure, however, but that of world capitalism.

Philip Bentley

Borrowers and Lenders (2005)

Book Review from the August 2005 issue of the Socialist Standard

Noreena Hertz: I.O.U.: The Debt Threat and Why We Must Defuse It. Harper Perennial £7.99.

Hertz is fairly well-known as a commentator on and critic of globalisation. But unlike some, she does not even make the pretence of being anti-capitalist. In her previous book The Silent Takeover, she made it clear that she was advocating another form of capitalism in contrast to a laissez-faire version that sidelined justice and democracy.

The book under review focusses on developing-country debt and its consequences, not just for the Third World but for ‘advanced’ capitalist countries too. For debt and possible defaults can lead to desperation and terrorism, environmental damage and general economic recession. During the ‘Cold War’, loans were often made for strategic reasons, to keep countries friendly, whether US loans to Latin America or Russian and Chinese lending to Africa. The collapse of Eastern European state capitalism brought a sudden end to this, with loans being called in and new lending being on much less favourable terms. Hertz gives a good account of many of the mechanisms by which lending occurs, such as the roles of the International Monetary Fund and World Bank. Many Western countries have export credit agencies that underwrite sales by domestic companies and step in to pay them if anything goes wrong (so much for the risks of entrepreneurship). There are even traders who buy and sell developing-country debt as if it were pork or oil, usually making vast profits in the process.

In 2004, the world’s poorest countries owed $458 billion. The consequences of this seem pretty devastating:

  “Millions of children continue to die every single year because money that could be spent on preserving their health is still being spent on debt service. Millions of children are prevented from attending school because money that could be spent on their education is still being spent on repaying debt.”

Hence the demand to ‘Drop the Debt!’, and Hertz’s proposals for deciding when debt  is illegitimate and should be cancelled, plus her suggestions of ‘new principles for borrowers and lenders’.

The problem is that all such proposals effectively accept the status quo, i.e. global capitalism. They do not even begin to address the question of why people are poor in the first place. The passage quoted above assumes that money spent on repaying debts would otherwise be used for health care and education, but there is no guarantee of this at all: governments in developing countries, like all governments, run affairs in the interests of the ruling class. In a world rooted in ownership of resources by a tiny minority of the population, poverty, famine, and lack of access to decent health care and education are inevitable. Cancelling debt (which is anyway less costly to the lenders than might at first appear) relates to just one aspect of the way in which the basic inequality of capitalism reveals itself. It does not affect underlying causes — which is why, whatever the sincerity of those who support it, it will make no contribution to ending poverty.

Paul Bennett

Making poverty history or helping capitalists exploit Africa? (2005)

From the July 2005 issue of the Socialist Standard

Who is the G8? In a nutshell, it is a clique of the 8 leading industrial States who have appointed themselves rulers of the world. The G8 leaders are actually the executive of the capitalist class of their respective countries and are the staunchest defenders of neoliberal corporate globalisation, the custodians of privilege and corporate power and the guardians of world capitalism. They help rule the world and maintain the playing field for profit-hungry western corporations. Together they have the power to dictate who eats and who starves, who lives and who dies, to declare war regardless of the wishes of the people who elected them. Their policies have resulted in global poverty and environmental destruction. They are meeting in Edinburgh this July to decide on which international strategies they can commonly pursue, allegedly in the interests of the people of the word and the natural environment.

Lined up against the G8 leaders this July in Edinburgh is the campaign group Make Poverty History, a loose coalition of  some 450 NGOs, unions and charitable organisations, united in the demand for fairer trading conditions for developing States, debt cancellation and increased and improved aid.

Oxfam’s role

By far the biggest development organisation within Make Poverty History is Oxfam, which has been widely accused of pandering to the whims of New Labour and propagating objectives which are identical to those of a Blair government frantic, in the face of the Iraq fiasco, to implement a foreign policy that campaign movements can stomach. Indeed, there are individuals and groups associated with Make Poverty History who identify with the objectives of Messrs Blair and Brown. The celebrity Bono, for instance, referred to the smiling duo at the last Labour Party conference as the “Lennon and McCartney” of poverty reduction.

Loud-mouthed celebrity Bob Geldof, a week after Bono’s remark, revealed he was backing Tony Blair and Gordon Brown’s attempts to deliver development to Africa because of their Christian values. Geldof can well support New Labour and obsessively promote the agenda of the MPH campaign, but you have to begin asking questions when even Blair has been spotted wearing a white Make Poverty History wristband.

The praise is of course reciprocal. On 3 June, Gordon Brown expressed his support for Sir Bob the Gob’s Live8 concerts and encouraged demonstrations at the G8 summit, as long as they take the form of a “peaceful march”. Any other government would have feared a march by one million demonstrators, but not New Labour. Blair and Brown are so happy with the convergence of their own overseas agenda and the demands of the Make Poverty History campaign that they rather see a million person march as being a rally in support of Labour Party policies.

Chancellor Gordon Brown is nowadays advised on international development by former Oxfam trustee and former director at the US bank UBS Warburg, Shriti Vandera, and Blair has the backing of Justin Forsyth – one time Director of Policy and Campaigns at Oxfam – on the Downing Street Policy Unit. Said the latter back in 2002: “When you speak to Tony Blair and Gordon Brown, they really understand [the] issues. They are easily some of the best leaders when it comes to talking about development and dismantling subsidy, and they are making the right arguments time and again.”

Of course there are some within Making Poverty History that see through the scam. War on Want is dismayed at the way New Labour’s overseas policies are winning widespread acceptance and undermining their own campaigning efforts. And neither is Christian Aid happy at Oxfam’s over-cosy, less critical relationship with the government. Friends of the Earth likewise believe there are disadvantages to the privileged position Oxfam enjoys with the government, believing the demands of campaign movements are becoming diluted and generalised.

They have a point. Blair sees himself as somewhat spearheading the MPH campaign at Gleneagles and queries why the MPH are heading for Edinburgh when he speaks their jargon. In Dundee, in March of this year, he commented: “It would be very odd if people came to protest against this G8, as we’re focusing on poverty in Africa and climate change. I don’t quite know what they’ll be protesting against.” 

Making Poverty History has been so linked to the government as to be rendered toothless. When the main players in the coalition demanded a meeting with the government, Whitehall couldn’t accede fast enough. So closely have Blair and Brown been identified with the objectives of the coalition that they have been criticised by other EU member states for softening their pro-liberalisation stance.

And who is it that rallied to the defence of the government to counter the claims of Blair’s cynics in Europe? None other that Oxfam who issued a statement criticising Blair’s detractors for trying to hamper Britain’s attempt to help the world’s poor. It is no secret that Oxfam has informed other developmental groups linked to Make Poverty History that it is important not to be perceived as being confrontational with the government now that Blair and Brown are singing from the same hymn sheet as them.

Opening up Africa

Meanwhile, John Hilary, Director of Campaigns and Policy at War on Want, says that the British contingent at the WTO told him to “get real. The development agenda does not go very far. We have to be pro-business and pro-trade” (New Statesman, 30 May).

Hilary appears to have been well-informed when one considers the agenda emerging from the much praised Commission for Africa Report. This report, which was published on 11 March is the showpiece of the Blair government’s strategy for the G8. responding to its launch, the BBC, (http://news.bbc.co.uk/1/hi/world/africa/4337239.stm) listed eight areas necessitating action by the West, inclusive of doubling or trebling aid, cancelling debt, spending more on HIV/AIDS, financing African universities and the removal of trade barriers to African exports in the West. (The report can be downloaded in full or in sections at the following link.)

There is much in the report to whet the appetite of the anti-poverty campaigner. But, you need only read the precis of the various chapters to suss out what is in fact the real schema.  In chapter 7, for instance, objectives for fiscal growth in Africa are alleged to be possible “only if the obstacles of+ a discouraging investment climate are overcome”. And it proposes the “public and private sector working together to identify the obstacles to a favourable investment climate”. How else can this be interpreted other than in suggesting more liberalisation and privatisation and more opportunities for western corporations to exploit African resources and labour?

The summary of Chapter 8 says: “Investments in infrastructure and the enabling climate for the private sector are at the top of the agenda.” Is this not the government spearheading neoliberal reform in Africa on behalf of big business?

Business Action for Africa has been in cahoots with the Commission for Africa. This coalition of 250 business representatives met with the Commission in February following formal dialogue between the Commission and the private sector on the continents of Africa, North America and Europe – a meeting arranged via the Business Contact Group, itself set up to provide private sector input to the Commission for Africa, and the result of a meeting co-chaired chaired by Gordon Brown and Reuter’s chairman, Niall Fitzgerald.

Referring to the Business Contact Group, Corporate Watch observed:

  “Its 16 or so corporate members read like a roll call of the most exploitative and despised companies currently operating on the continent including Anglo American, Shell, De Beers, Rio Tinto and…Diageo, who also own the Gleneagles hotel where the G8 Summit will take place. Its programme was managed by Shell International’s Senior Business Development Advisor for Africa. Also managing the Contact Group is the Commonwealth Business Council (CBC). The Corporate Council on Africa and the Canadian Council on Africa also gave input, thus allowing oil corporations, ExxonMobil and ChevronTexaco, a say.” (http://www.corporatewatch.org.uk/?lid=1535)

Dave Miller, writing for Znet in an article entitled Spinning the G8, commented:

  “The corporations involved can barely contain their excitement. The ‘outlook’ of the business community is a ‘positive one’ says one of the CFA commissioners.  ‘It believes Africa is the next frontier for investment’. James Smith, the UK chair of Shell, which co-hosted the meeting, noted that progress ‘requires that the private sector has a bigger role’. The chair of the Commonwealth Business Council, the business lobby group co-hosting the meeting, read out the concluding statement. Dr Mohan Kaul affirmed that ‘getting the conditions right for doing business in Africa is the biggest single investment for the future well-being of its citizens’. A ‘vibrant and successful private sector+ is required’ he noted. (http://www.zmag.org/content/showarticle.cfm?ItemID=7852)

EU states may well be critical of Britain’s new pro-Africa stance as being influenced by celebrities and NGOs, but the truth is that affiliates to Make Poverty History, in applauding Brown and Blair,  are the unwitting accomplices  of a government which forms the vanguard of the latest corporate drive to open up markets throughout the developing world.

World-wide reaction

Increasingly, in the last decade, there has been a worldwide reaction against neoliberal globalisation, corporate power and the injustices associated with modern-day capitalism. Everywhere where the world’s ruling elite have assembled to decide their next step they have been met with protests and demonstrations that have attracted hundreds of thousands. Demonstrations at Seattle, Gothenburg, Cologne, Evian, Birmingham, Prague, Genoa and Quebec, have stimulated debate on the nature of modern day capitalism. Thousands of articles have been written on the subject and hundreds of books have been published that explore the aims, objectives and the alternatives offered by the anti-globalisation movement.

What is now clear is that the anti-globalisation/pro-development movement, however well-meaning, does not seek to replace capitalism with any real alternative social system. At best it attracts a myriad of groups, all pursuing their own reformist agenda. Some call for greater corporate responsibility. Some demand the restructuring of international institutions like the IMF, World Bank and the WTO. Others call for the expansion of democracy and fairer trading conditions, debt cancellation and more aid. All, however, fail to address the root cause of the problems of capitalism and promote the damnable system they are critical of by applauding any meagre reform.

One thing is certain: no amount of high table reform is going to legislate poverty out of existence as the MHP coalition believes. Capitalism cannot be reformed in the interests of the world’s suffering billions, because reform does not address the basic contradiction between profit and need. Moreover, reform can be so packaged and camouflaged as to be acceptable to protestors whilst leaving their real grievances unaddressed. The world’s leaders simply cannot be depended upon to implement real change because they can only ever act as the executive of corporate capitalism.

The protesters at the G8 might think they are united in common cause, but in truth they are only united in supporting capitalism and in their mistaken belief that poverty can be legislated out of existence, They have no blueprint for change other than the three demands put forward by the Make Poverty History campaign – Fair trade, more aid and debt cancellation. – and this is about as radical as it gets. In mirroring in their objectives the overseas goals of Blair and Brown they are anything but the modern day revolutionaries they claim to be.

It is now no utopian fantasy – but a practical, revolutionary proposition – to suggest we can live in a world without waste or want or war, in which each person has free access to the benefits of civilisation. That much is assured. We certainly have the science, the technology and the know-how. All that is missing is the will – the global desire for change that can make that next great historical advance possible; a belief in ourselves as masters of our own destiny; a belief that it is possible to free production from the artificial constraints of profit and to fashion a world in our own interests. And how soon this happens depends upon us all – each and every one of us.

John Bissett

Open letter to some anti-capitalists (2005)

From the July 2005 issue of the Socialist Standard

MAKEYOURMARK are part of the Dissent! Network of resistance against the G8.  The group adheres to the Hallmarks of Peoples’ Global Action which call for a rejection of capitalism through civil disobedience and non-violent direct action.

Dear Friends,

I attended your meeting in Carlisle last night.  It was good that so many people had turned out.  I have sympathy with your organisation’s objectives, but a few comments about your strategy.

I thought much of your analysis of capitalism as a system that can only put profit before people was correct, as well as the relation of capitalism to the issues of AIDS, water availability and poverty in Africa and South America.  However, I have problems with the idea of nations as victims of capitalism.  Less developed nations are the losers in competition against large industrialised nations and the majority of people in those countries suffer because of it, but the state in either type of nation represents the dominant economic interests.  Indigenous capitalists in the less developed nations are fighting for themselves, for domination of local resources against multinational corporations – both of which wish to continue the exploitation of people and natural resources.  The corollary is that you are supporting small nations against big nations, small capitalists against big capitalists, Robert Mugabe or King Mswati III against George Bush or Silvio Berlusconi for example – and in that I fail to see a rejection of capitalism. 

You made an excellent point in your presentation about the man-made laws of capitalism being assumed to be natural laws and therefore unchangeable.  I believe that this point also applies to the nation and inseparably the state which are also man-made constructs that have arisen to their present form with the need to manage the conflicting interests within capitalism.  In short, the state is part of capitalism not separate from it.  Which leads to another point in your presentation where you considered that state-owned industries are worth defending.  The experience of state-run industries in this country and elsewhere is no utopia, in fact in some cases it has been a disaster.  State-owned industries mostly don’t have much difference in character to private industries, they consist of capital put forward by the state which wage or salary workers operate and the goods or services they produce are either sold or rationed out by bureaucrats.  Neither for the consumer, as goods or services are still allocated according to ability-to-pay or by handout, or the producer, still embroiled in the labour-capital conflict, is the state ownership of capital a rejection of capitalism.

In one of your slides you asked whether the G8 should be reformed or abolished, I don’t think either will ‘make poverty history’ or allow people to come before profit, nor will ‘dropping the debt’ or rearranging trade rules.  Capitalism existed before the G8 and it would exist without the G8.  You’ve recognised that asking for reforms won’t work, but I don’t really see how making your own reforms through civil disobedience and direct action will change the fundamental social relations of capitalism.  It is capitalism – the system of minority ownership of the means of producing and distributing goods and services and allocation according to ability to pay – that causes poverty and war, breeds racism and alienation, and hampers social organisation.  If you were to abolish the G8 then another organisation could take its place or they could meet in secret – back to square one.  I feel what is important is not challenging aspects of capitalism and trying to change them, but challenging the system as whole.  

One of the slogans you displayed in the meeting room was about a small number of committed people making a difference.  However well intentioned, I don’t believe a minority of society can run society in the interests of the majority.  The goal of those who reject capitalism should be to break the consensus that supports capitalism and organize politically – democratically – to a replace private ownership of the means of producing goods and services with common ownership, production for profit with production for need and ‘can’t pay, can’t have’ with free access – that is to replace capitalism with socialism.   I think that a society run for the majority must be made by the majority and the shortest distance between capitalism and an alternative society is a straight line.  Let’s campaign for the abolition of capitalism and not misdirect our energies in trying to humanise capitalism, which can only – as you recognise – put profit before people.

I’m hoping to get to Edinburgh for the G8 protest but not to beg for, or batter, a nicer kind of capitalism out of the G8 leaders. I’ll be trying to get socialist ideas across to all those there who recognise that the world is in a mess and are willing to do something about it.  I hope I’ll see you there, maybe I’ll give you a leaflet or a copy of the Socialist Standard.

Yours for world socialism

Piers Hobson

A world in common (1991)

Editorial from the July 1991 issue of the Socialist Standard

We live in a world which has the potential to adequately feed, house and provide clean water and decent medical care for every single man, woman and child on Earth. The resources exist to banish material want as a problem for members of the human race. Yet millions throughout the world are malnourished, live in squalor or are actually dying of starvation or starvation-related diseases. The big question that faces the human race is what can be done about it?

For some years, pressure groups concerned with the plight of populations in the less developed countries have urged bankers and governments in the richer nations to cancel the Third World debt. They imagine that if the billions of dollars in loans and interest owed by governments in Africa, South America, and Asia were written off then the crushing burden of poverty suffered by the mass of people in those regions would begin to lift. A fresh way would be open for development, they argue. Food subsidies and health programmes would attack the deaths from malnutrition and disease. Education and housing would raise the quality of life for millions.

These things would not happen. The cancellation of the debt would leave the curse of world poverty intact. The beneficiaries would be amongst the ruling elites who own and control production and distribution in the debtor countries. They are the ones who through their governments owe the money but they are not poor. Amidst the poverty of the masses they live in luxury. Holding power often with brutally oppressive methods they care little for their populations. Their aim is their own self-enrichment. Why should we want to bail them out? Why should we want to ease the way for the rising capitalists of the underdeveloped countries to accumulate capital from the exploitation of workers?

There is of course a case for the populations of the advanced regions giving aid and assistance to the people in areas where infrastructures, services, means of production and distribution are poorly developed. This is the compelling case that those with advantages should put themselves out to help those in need. Most people will accept this but it cannot happen under world capitalism which keeps even our ability to help others in economic shackles—or reduces it to the pathetic levels of charity. The tragic illusion which is misguiding those organising the Cancel the Debt campaign is their belief that the devastating problems of world capitalism can be tackled by re-arranging its finances.

The things that are desperately needed—food, clean water, housing, sanitation, transport, medical services and so on, can only be provided by useful labour, of which there is an abundance throughout the world. Finance is part of a system which operates as a barrier to useful labour producing what people need. Useful production must be freed from the constraints of profit and class interests. Only useful labour applied through world cooperation in a system of common ownership can solve the problems of world poverty.

World socialism could stop the dying from hunger immediately, and provide the conditions for good health and material security for all people across the Earth within a short time. It would do this by producing goods and services directly for need.

World socialism will operate with one simple and ordinary human ability which is universal—the ability of every individual to co-operate with others in a world-wide community of interests. For too long has indignation at human suffering been dissipated by useless causes. How much longer must the price of failure be the misery of countless millions?

Free Trade Claptrap (1997)

From the July 1997 issue of the Socialist Standard

In February of this year, a World Bank press release on Africa boldly declared: “Economic performance has improved considerably with over 24 countries posting growth figures of over 4 percent—above the rate of inflation . . . this success has given ground for cautious optimism" (New African, May 1997). "Cautious" indeed.

What the Bank failed to point out is that when you are on the bottom, the only way you can go is up. As always, World Bank reports continue to confirm they suffer what critics have termed the bikini syndrome—what is revealed is interesting; what is concealed is more so.

We are not told, for instance, that of the 174 countries listed on the United Nations Human Development Index, 25 of the poorest 30 are in Africa, and that 44 African countries are ranked below the 100 figure. Neither will you hear of Zambia spending 35 times more servicing multilateral debt between 1990 and 1993 than on primary education.

Again, we are no more likely to hear of the 47 percent of sub-Sahara African children not attending school than we are to hear them report their share of the £400 million in interest and capital repayments transferred from the "Third World” to the West every day between 1982 and 1990. Such revelations will only ever portray the big financial policemen of the World Bank and the IMF as the corrupt and self-serving profit-mongers that they are.

The World Bank and the IMF can often be heard saying that the cause of Africa’s mis-development are its leaders and the failure of its economic policies, neglecting to mention that it is they who make the Mobutus wealthy and that it is their structural adjustment programmes that makes economic stability preclusive. Thanks to the assistance of these multilateral organisations. Mozambique debt in 1994, as a percentage of its GNP, was 450 percent.

Mozambique, still suffering from a devastating civil war and a GNP per capita of £60, the lowest in the world, hardly needed the IMF-imposed privatisation measures which are aimed at reducing inflation of 15 and which the country was advised to adhere to if it wanted further loans.

It is understandable that the IMF and the World Bank have every reason for wanting others to believe their propaganda. The 1980s are painful times to remember. It was then, that having loaned so much, they were faced with a growing unwillingness to repay. When Mexico and Peru threatened to renege on repayments, they were only cowed back into line by having their repayments rescheduled. Today, there are undoubtedly concealed but real fears that many countries might come to the conclusion that being so poor they’d be no worse off for withholding cash earmarked for the IMF and World Bank.

It was perhaps this realisation that brought the IMF, World Bank, various commercial banks and governments together last September to hammer out a new initiative to reduce the debt burden on the HIPCs (heavily indebted poor countries). This might have sounded promising but for the fact that this new venture has been put on hold for a few years. And of course, there are the usual preconditions. Countries wishing to qualify must be "well behaved" and prepared to commit themselves to further structural adjustment programmes. The hair-of-the-dog remedy indeed.

Though they will try to deny it, the power of the World Bank and the IMF is increasing. Like the colonial regimes of old, they have power to influence which government is elected, what is produced and the size of a country’s health service. In short they have power to decide who lives and dies.

In fairness, the World Bank is the lesser evil of late, going so far as to insist that public expenditure cuts should not hit health and education, prepared to accept criticism and supposedly taking heed of voluntary agencies and the UN. Of course, there is method in their madness, so to speak. They are all too aware that in the longer term a healthy and educated workforce means increased profits and an increased chance of debt repayment.

Conversely, the more powerful IMF couldn’t give a damn. It preaches a pay-up-or-else creed, is less accountable and has erected a higher temple to the god Mammon, even going so far as to oppose, in recent months, World Bank plans for the building of schools in Mozambique.

There is a third pillar supporting the global economic order—the World Trade Organisation. As the enforcer of the GATT "free trade" agreement, it is likely that many African countries will be dragged into the mis-named "free trade global economy” by the WTO and in Darwinian fashion only the fittest will survive.

The supposed logic behind this "free trade" clap-trap is that with barriers removed, the world economy functions at the height of efficiency and to the benefit of all. We can immediately ask. however, how African countries are supposed to compete with the 500 mainly western companies who control over 70 percent of world trade, or the likes of Cargill, the giant grain conglomerate whose income is higher than that of the poorest 10 African countries. Already, of the 47 countries deemed to be “too slowly" integrating into the world economy, 21 are African.

It goes without saying that the only real benefactors of free trade are the multinationals.Their power is such that they can control not only the fate of national currencies, but also force governments to tailor their economic policies to their own interest. In addition, they face little host government opposition when they destroy a country’s environment. Witness Shell in Nigeria. Like sharks scenting blood they are drawn to countries where there will be tax concessions and where they will be exempt from local labour laws. And it is not uncommon for them to have non-union policies and to take advantage of low-cost economies with poor health and safety standards.

This then is the reality of the "free trade" Africa will benefit from. This is the reality of the "new dynamism" the World Bank claims is taking hold in sub-Saharan African.

From the Red Sea to the Atlantic Ocean coup and conflict are commonplace. From Mali to Mozambique, homelessness and hunger exist alongside illiteracy and unemployment. This on a continent potentially the richest on Earth. And all of this in the name of profit.

We can at least offer a little consolation to the pessimistic. In the last year the seeds of socialism have been scattered around Africa and are already taking root. Workers in Uganda. Gambia and Sierra Leone have already joined us in our struggle to rid the world of capitalism and to replace it with a world of free access. Others await in Zambia and Namibia. At last something of real world significance is germinating on the fertile land of the poorest continent on Earth.

John Bissett

Letters: Work within capitalism? (2006)

Letters to the Editors from the April 2006 issue of the Socialist Standard

Work within capitalism?

Dear Editors

The article about Fair Trade (Socialist Standard, February) was certainly very interesting and the author puts forward a strong case, I haven’t got the time to outline counter-arguments to all the points but I can give an overview of what we are calling for. As a development charity we are working to improve people’s lives. You may disagree with the present socio-economic system but there is no current alternative, therefore, we think it is better to try and work within this system rather then just point out the difficulties and decide that nothing can be done. It also doesn’t take in to account that not all benefits for developed nations are so overtly determined by economics. For instance, what about the problems caused by mass-migration due to poverty? Surely rich nations have a vested interest in helping poorer nations to try and stem this flow. Our position is quite clear. We want developed nations to stop putting tariffs on imports from developing nations, stop using protectionism that leads to dumping and allow developing nations to protect their fledgling industries. I disagree with the article, as this would make a difference to the lives of some of the poorest. They would be able to sell their produce domestically and eventually be able to export it. To read about our ideas on Fair Trade please follow this link: http://www.oxfam.org.uk/what_we_do/fairtrade/index.htm

I think 2005 was a landmark year in the struggle against poverty. Firstly, there was the agreement to write off debt at the G8, something that the author can’t account for using his/her premises, Gordon Brown also reconfirmed the pledge to raise aid levels to 0.7 percent GDP. Added to this is the fact that due to the Global Call to Action against Poverty Campaign (GCAP) more people all over the world protested to end poverty then has ever been seen before. If we can keep the pressure on in this way we can force our governments to change their actions. Governments aren’t just led by economic determinism, they are also led by public pressure. Therefore, while there is still a lot to be done we think that there have already been successes and that we need to keep up the pressure.

Ian Sullivan, 

Supporter Relations, Oxfam

Reply:

We have never denied that campaigning charities like Oxfam can, and do, help a limited number of people. Our case is that they will never solve the problem they have chosen to concentrate on. We note that you confirm that Oxfam does have a reformist approach, as you claim that there is no current alternative to “the present socio-economic system” (capitalism) and so pursue a policy of working within that system to try to reform it. We, on the other hand, think in terms of action to replace capitalism by a system in which begging bowls can be assigned to the museum of antiquities because, with common ownership and production for use, people’s basic needs would be able to be met as a matter of course. – Editors.

Feeling Lucky

Dear Editors

My thanks for pointing out that www.worldmapper.org is worth a look (March Socialist Standard) .

Readers of the Socialist Standard may think they know a lot of the answers and even more of the problems, but look worldwide and inequalities are somewhat more stark than between the two social classes you refer to.  Are you feeling lucky? Then here’s an old thought game. You are having a child and you are concerned that your child might not to live to see the end of its first year of life. You can choose when and where you give birth and your class. You have three options:

Your husband is a very rich factory owner living a hundred years ago in England, you have servants, a huge home and gardens (in say 1906).  You are a middle class women in Pakistan living in Islamabad in 2006.  You are a working class woman living in Yorkshire in England in 2006. The respective chances of your child dying before their first birthday would be roughly: 1 in 10, 1 in 30 and 1 in 100. You could improve those chances further to 1 in 300 and almost 1 in 1000 by being middle class now in Yorkshire, or being that and moving to Iceland.

What I’m trying to point out is that the importance of class is contingent on both history and geography – and a woman giving birth in the world today cannot choose her history, or geography or class. You claim that “So, if ‘where you are born’ determines how your life will pan out, that has to be seen as a matter of class, not of geography”. I think that if it was quite as easy as that then there would no longer be a problem. It is a matter of class and geography and history (and sex, race and more) as to how you are treated, what your chances are and how your life will pan out or whether you will live through your first year to have a life at all. None of these are circumstances of your own making. In Britain – increasingly, geography is helping make class – but that is another story altogether. 

Danny Dorling, 

Sheffield.

Reply: 
We have no quarrel with the idea that a person’s date and place of birth affects their chances in life. And we assume you wouldn’t deny that class enters into the picture too. Our article dealt not with infant mortality but with the kind of job people are likely to have. There is no middle class (they’re part of the working class). And it’s the class people are born into (working class or capitalist) that determines whether they will need to worry about working for a living. We appeal to workers on the basis of their class interests, not the question of being from Yorkshire or Iceland. Not everyone can move to Iceland, but we can get rid of class divisions. — Editors.