Vodka-cola (1979)

Book Review from the November 1979 issue of the Socialist Standard

Co-production deals between Western enterprises and East European governments are becoming big business and attract a lot of notice in the press. These deals now represent 10 per cent of East-West trade and are rapidly growing in number and importance.

Co-production is distinct from normal East-West trade, which is handicapped by the fact that it doesn’t allow the Eastern bloc to buy all it needs. The West doesn’t want payment for exports in roubles or other Eastern currencies as these are practically worthless. Russia has been paying for much of its imports with large amounts of gold but as this tends to reduce its price then Russia’s trading position simply worsens, while other Eastern countries have little or no gold anyway.

Barter deals are hopelessly inadequate as Western exporters rarely want the commodities being offered in exchange. Even so, barter does exist. Pepsi-Cola, long reviled by communist propagandists as a “monopolist”, has built a plant in Russia capable of producing 74 million bottles a year for Russian consumption. Since Pepsi wouldn’t take roubles and Russia needed its gold for American wheat, payment is made in Vodka and Pepsi were given the monopoly for selling Russian wines in the USA.

Despite Kruschev’s boast that Russia would surpass the West economically within 15 years, she has fallen further behind and the gap is widening all the time. To catch up, Russia and her satellites need Western technology but cannot acquire enough of it for the reasons given. Also, they already owe the West such a staggering debt (at least 80 billion dollars) that they cannot count on extended credit forever.

However, steps are being taken to rescue the Eastern bloc from its predicament, for a price, by none other than Western big business —the very “multinationals” who are supposed to be the mortal enemies of “international communism”. Just how and why this is being done is explained in a new book, Vodka Cola, by Charles Levinson. (Gordon and Cremonesi, £7.90.)

In the book Levinson lays bare the reasons for the current “detente” between the West and the Eastern bloc. This has nothing to do with either side learning to love the other but is dictated by their respective economic needs. The East must modernise its industry in order to keep its population passive. After all, expectations of a better life must be met someday. For Western big business there is the glittering prospect of a potential new market of 400 million people, plus the opportunity to switch its production away from a unionised, high-wage, strike-prone labour force to one which is state regimented, low-wage and forbidden to strike.

So the last thing the multinationals want to do is disturb the status quo behind the Iron Curtain. Any growth of political freedom there would produce genuine trade unions and the inevitable inroads into profit margins. Hence their enthusiasm for detente. Levinson also points out that the agreements signed by Eastern and Western politicians are only political window dressing. It was the businessmen of both sides who made the real breakthrough and all the politicians have done is merely help smooth the way for future deals. When it comes down to it, ideological differences are demolished by economic realities.

These co-production deals enable the West to sell the East what it needs and get paid, not in dud currencies or shoddy, inferior products, but in cheap Eastern made goods manufactured to Western standards which can be sold on the world market at a fat profit.

Co-production takes a variety of forms:

LICENCING: until the early 1960s only a few licences to use Western technology were purchased in the East. Now there are several thousand. These were previously paid for in scarce hard currency but now payment is likely to be in the products being made under licence. For example, Fiat, Volkswagen and British Leyland have been paid for their licences in vehicles and parts.

BUY-BACK: this means that industrial giants like Renault of France and Montedison of Italy will supply—in this case Russia—with an entire car factory and chemical plant and be paid in cars and chemicals for sale throughout the world. The Eastern partner is also helped to market its share of production through distribution companies specially set up for the purpose. In this way much needed hard currency flows back to the East to enable it to buy more of what it requires.

LEASING: the Eastern bloc also uses equipment rented from Western companies. So far this has not happened within Russia itself, but its merchant fleet has leased thousands of cargo containers and other equipment from the West, so privately owned means of production and distribution exist in part of the Russian economy. Levinson’s view is that leasing will increase because of the advantages it offers the East, among which is the acquiring of modem technology without spending huge amounts of hard currency. He predicts that it is only a matter of time until leasing will be allowed within Russia.

The list of “monopolists” involved in co-production deals makes fascinating reading: General Motors, Exxon (Esso), Ford, Unilever, IBM, Krupp, ITT (played a leading part in setting up Pinochet’s regime in Chile), Coca-Cola, Du Pont, Westinghouse, ICI, Union Carbide, Fiat . . . Many of them are bitter opponents of trade unionism in their own plants and all of them, needless to say, collect their share of the surplus value created by the Eastern workers employed in the various projects.

Cyrus Eaton, the American multimillionaire, revealed how it is done when he explained his 40 million dollar 50/50 deal for building a tyre factory in the East in 1970. The communist state partner would own and operate the plant. Eaton’s half would be in tax-haven Switzerland and would market the tyres in the West. Eaton says

“This enabled the Eastern country to earn hard currency and because of lower labour costs the venture can sell tyres cheaper than Western countries can. The plant in the East sells the tyres to the marketing subsidiary at cost —thus leaving profits to the joint marketing subsidiary.” (p. 87.)

Nice one, Cyrus.

All of this must have its effect on Western jobs. Naturally, the co-production partners deny this and claim that the increased trade will provide the West with 2 million new jobs. But the Eastern products, because they are made by low-wage labour, consistently undercut similar Western products. Indeed Western manufacturers and trade unions are forever protesting about “dumping” on Western markets. In Britain the footwear, textile, tailoring, motor car and TV tube industries, to name a few, have been badly hit by cheap imports from many countries and thousands of jobs have been lost. So while the British Communist Party demands action to “fight unemployment” their Eastern counterparts are busily contribute: it.

Unfortunately for the Eastern bloc the present type of co-production deal cannot fully solve their problem. The technology they are buying tends to be second rate and outmoded by Western standards. The West will not hand over the latest developments because it feels it does not have sufficient safeguards as things stand. For example, equipment and know-how supplied under one deal can easily be pirated and used by the East for other projects of its own, so Western companies are increasingly demanding a 50/50 share in the ownership of the plants as well as the products and profits. Because the Russians have refused to allow this they have failed to clinch several important deals. The Russian government’s refusal stems from an unwillingness to lose face: how would it be able to explain away such a blatant example of private, as opposed to state, ownership of part of “socialist industry?

Hungary and Rumania have gone some way towards meeting this problem. Although not allowing Western-owned plants, they do permit Western companies to own a large share of the profits of the joint venture (payable of course in hard currency). Volvo of Sweden has an agreement with Hungary for the assembly of Volvo cars with 48 per cent of the profits going to Volvo shareholders. This represents legal ownership of part of Hungary’s means of production. In Poland the government has gone all the way; foreign companies can legally own the entire project and if the deal is terminated then company can take out its original investment plus its share of capital gains.

The pressure on Russia to come some sort of compromise is enormous. Russia apparently needs the latest in mini computers but IBM and other suppliers are refusing to provide them. They want to protect their technology by retaining control over its use and means joint ownership of the project where it is being used. Only in this way can the company prevent its technology being applied outside of the contract.

Levinson frequently refers to the theories of Karl Marx and seems to have understood these better than most writers. For example, he says

“The end result of co-production operations is profits for the capitalists, and this means that the socialist enterprises are involved in creating the surplus value which Marxism regards as the basis of the capitalist class’s exploitation of the worker.” (p. 261.)

If the words “Eastern state capitalist” had been substituted for “socialist” then we couldn’t have put it better. He mistakenly attributes the failure of Russian nationalisation to “Marxist ideas” but continues

“Nobody (in Russia), unfortunately, had raised the minor question, ‘Whether the business be private or nationalised, how does it profit the worker who is subjected to the same authoritarian labour methods in either case?’ ” (p. 224.)

Although the book contains several other mistakes regarding Marx’s views, these cannot obscure the value of Levinson’s work as an aid to understanding how business, East and West, operates and what its priorities are. And we cannot help noticing that the analysis of modern society by Levinson, and many others outside our ranks, is very similar to our own. Nowadays, you don’t have to be a socialist to be struck by capitalism’s glaring contradictions and antisocial nature.

Vic Vanni

Blogger's Notes:

Charles Levinson replied to this review in the March 1980 issue of the Socialist Standard.

In connection to Levinson's book, the following might be of interest to some readers. In 1981, there was a fictional adaptation of the book entitled Beloved Enemy. Directed by Alan Clarke (who also directed Scum, The Firm and Elephant) and adapted for television by David Leland, it was transmitted on the BBC as part of the Play for Today series of dramas.

Beloved Enemy is available to watch on YouTube:

Notes on Russia: Russia and world trade (1962)

From the July 1962 issue of the Socialist Standard

In recent years there have been many signs that Russian industry is becoming more and more interested in finding foreign markets for its products, from ships and motor cars to oil and from timber to diamonds.

Immediately after the Communists captured power in Russia in 1917 they introduced State control of all foreign trade largely because they feared that German and other exporters would undercut Russian home industries with a flood of cheap goods. It was the aim of the Russian Government to restrict imports to those articles regarded as essential and to pay for them by exporting surpluses produced in home industries. There was at that time no urge to expand trade and in 1938 the volume of foreign trade was only fifty per cent of what it had been before they came to power, though trade was expanding fast in the world as a whole. But by 1959 with the successful building up of great manufacturing industries Russia had come into line with the general expansion of foreign trade, and her imports and exports had recovered so far that they were half as large again as in 1913 and three times what they had been in 1938.

This change of trend found expression during June of this year at the Conference of the Russian bloc countries in Moscow, which dealt with industrial and trade relations with each other and with the rest of the world. They are reported (Times 9 June, 1962) to have “expressed their desire for the further expansion of foreign trade with capitalist countries”, and also supporting a call for an international conference to set up a worldwide organisation to promote trade, and remove discriminatory actions by one country against another. Doubtless, from the Russian government’s standpoint, the latter proposal is directed against the development of the European Common Market and the possibility of Britain joining it, both of them developments that may threaten Russia’s position as expanding exporter in world markets.

Edgar Hardcastle

What about the Common Market: A socialist guide (1971)

From the July 1971 issue of the Socialist Standard

What is the Common Market?

The European Economic Community (EEC), to give it its proper name, is a customs and economic union between France, West Germany, Italy, Belgium, Holland and Luxemburg set up in 1957 under the Treaty of Rome. The aims were to create one huge market by abolishing all customs barriers between the Six  and by erecting a uniform tariff against goods from outside and to establish common agriculture, indirect tax, transport and energy policies. These have largely been achieved. The next stage, to which tentative steps have been taken, would be full economic union with a common currency and after that maybe military and political union.

Why was the Common Market set up?

Basically because big industry needs a big market. After the war the rulers of the industrial countries of western Europe, whose economic rivalries had twice plunged the world into war, realised somewhat late that the traditional European nation-State was not large enough either as a market or as an outlet for investment. In this sense the Common Market is an example of the continuous centralization of capital into bigger and bigger units and it was no accident that it grew out of the free trade in coal and steel the Six had introduced in 1953. Also, Germany wanted free access for its industrial goods to France and France free access for its grain to Germany.

Why didn’t Britain join at the start?

Britain’s pattern of trade was different. The Commonwealth was not only a market for British industrial goods and an outlet for investment but was also a source of cheap food and raw materials. To have joined would have meant giving this up for something whose success was uncertain.

Why does Britain want to join now?

Growing industrialisation in the Commonwealth changed Britain’s pattern of trade. Towards the end of the 1950’s Europe emerged as the best alternative market for Britain’s industrial goods. After failing to stop the Common Market by organising a wider European industrial free trade area, Britain under a Conservative government applied to join in 1961 only to be rejected. The present negotiations arise out of a second application to join made in 1967 under a Labour government.

So, this is all a question of markets?

More or less, and so is essentially a capitalist problem. Joining the Common Market is an attempted solution to the problem of finding new markets for British capitalism whose goods have not been selling so well in recent years. It is not a problem that concerns wage and salary earners, either here or in the Six.

But aren’t some British industrialists opposed to entry?

Yes, those with investments and trade interests in the Commonwealth. They are in a minority but do have some influence on sections of the Conservative Party. The argument for and against the Common Market is basically between those firms who think they will gain and those who think they will lose from entry. Russia, too, is opposed to the Common Market as a rival capitalist power and so therefore is the British Communist Party and the pro-Russia section of the Labour Party who have concocted various allegedly socialist reasons why workers should take the side of those against entry.

What will happen if Britain joins?

After a transitional period Britain will have to bring down its tariffs against the Six (and any others like Ireland, Denmark and Norway who might join at the same time) and to put up tariffs against outsiders, including the Commonwealth. British agricultural policy will have to fall in line with that of the Six.

Won’t that mean an increase in food prices?

Yes. For historical reasons continental Europe has protected agriculture through high prices while Britain has pursued a "cheap food’’ policy. The British industrial capitalists were strong enough in the 19th century to abolish the Corn Laws which kept food prices — and wages — high. The continental capitalists were weak and, to get protection for their industry, had to ally themselves with the big landowners and to agree to protection for agriculture too.

But won’t this make wage and salary earners worse off?

Not necessarily, since the level of wages is largely determined by the cost of living. Lower prices mean lower wages, as the workers of Britain found after the Corn Laws were repealed in 1846 and as the Six recognise when they say that for Britain to keep its "cheap food” policy would be unfair competition. Similarly, higher prices mean higher money wages. This is not an automatic process of course. Workers have to fight through trade unions and strikes to keep money wages rising along with prices. But this is what they’ve got to do all the time in all countries, and what workers in Britain must do whether Britain is in or out of the Common Market.

What will happen to wages if Britain joins?

They say money wages are higher in all the countries of the Six except Italy, but this is what you would expect if food prices are higher. And these wage levels were not achieved without struggle. There was a General Strike in Belgium in 1960 and in France in 1968 and a wage explosion in Holland after the failure of job evaluation; in recent years strikes have become more frequent in Italy and have even broken out in Germany.

Won’t there be an influx of cheap Italian labour?

Maybe, but the answer would not be co-operation with the anti-Common Market section of British industry. The important point is that workers in all countries face the same problems and so have a common interest in uniting to solve them.

What about taxes?

The governments of the Six raise their money more by indirect than by direct taxes. Critics say that indirect taxes fall more on the poor and give this as a reason why workers should support those against entry. That indirect taxes — such as the value added tax — fall on the poor is only an illusion. All taxes in the end fall on rent, interest and profit as only the rich can afford to pay them. The tax system is irrelevant as far as the overall standard of living of wage and salary earners is concerned. Insofar as taxes raise the cost of living they can, if the workers are strong enough, be passed on to employers as higher money wages.

What about social benefits?

Supporters of entry say they are better, but as you would expect some are and some are not. Family allowances, which generally are higher in the Six, were long looked upon with suspicion by trade unions in this country as a wage subsidy for employers, which is what they are. The higher the family allowance paid by the State the less the employer need pay the family man. In any event, “social benefits” along with contributions and income tax are a means of evening out the income of workers so as to ensure that nobody is paid either too much or too little to keep fit to work, and leave the overall standard of living unchanged.

Will we lose our sovereignty?

What do you mean our sovereignty? Not having a stake in the country we have nothing to lose. Our rulers may have to hand over part of their law-making powers to the Common Market, but that’s not our worry. It makes no real difference whether we are ruled from Brussels or London.

But won’t we be ruled by bureaucrats from Brussels?

That’s a bit of an exaggeration. The powers of the EEC Commission in Brussels were granted by the governments of the Six which (like those of the four who are applying to join) depend on popular election and majority acceptance. Governments and bureaucrats can only get away with what people let them.

Isn’t a United States of Europe a good idea?

No, it would just be another capitalist super-power armed with nuclear weapons. Some nationalist delusions might disappear, but this would be no advance if they were replaced by another, different one.

What is the attitude of The Socialist Party of Great Britain and The World Socialist Party of Ireland to the Common Market?

First, that whether or not Britain joins is a capitalist, not a working classe issue. Second, that Britain’s joining would not solve, and is not meant to solve, working class problems; it may not even solve British capitalism’s problem of markets. Third, that, equally, working class problems will remain if Britain stays out. We are neither for nor against entry and regard this as an irrelevant issue. We advocate instead the establishment of a world community without frontiers based on common ownership with production solely for use.

How would you suggest we vote in any referendum on the Common Market?

The government don’t want to risk one in Britain for fear that the anti-German and imperialist prejudices stirred up in the past might result in a vote for “no”. But in Ireland there’s got to be one. We suggest abstention, or rather rejection of the false choice by writing “World Socialism” across the ballot paper.

50 Years Ago: Trade almighty (1966)

The 50 Years Ago column from the April 1966 issue of the Socialist Standard

The god of capitalist society is Trade.

According to its prophets, when it flourishes there is more wealth for capitalists and more work for the workers. All men, with the exception of the unemployed—who are always with us—sing its praises. When it declines there is weeping and wailing and gnashing of teeth—with little between them to bite, in the case of the working class. There are plenty to sell and few to buy; and while the capitalist fears for his profits, the worker for his job. and one and all marvel at the mystery, not daring to seek an explanation for consequences so universal and so disastrous.

Yet, after all, what is trade? Briefly, it is the exchange of wealth. Now wealth cannot be exchanged until it is produced. It follows therefore, that exchange or trade is something which transpires after the production and before the consumption of wealth. Trade or exchange is altogether distinct from distribution. The latter is absolutely necessary in any form of society where there is division of labour.

Exchange could not exist under Socialism, because wealth would be owned in common and distribution only would be necessary. 

From the Socialist Standard, April 1916.

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.

Letter: International Exchange. (1923)

Letter to the Editors from the February 1923 issue of the Socialist Standard

Dear Comrades,

Re answer to Mr. Hart concerning rate of exchange in, I think, the November issue, would you be good enough to make it clear how the total figures are arrived at of the prices of goods exchanged between two countries; also to whom is the gold settlement made, to balance any difference there may be? The principal difficulty to me is the fact that it is individuals who trade and not countries. Also, would your explanation cover the fall of the mark in Germany?

Yours fraternally, 

Enquirer.

Answer to Enquirer.

When using the terms “two countries enter into commercial relations,” we were using the terms in common use. Actually, of course, it is the private merchants, or firms, who enter into these relations and carry through the exchange of goods.

The difference between what is bought and what is sold is shown by the demand for Bills of Exchange in the market of the country under consideration. If the demand in England for Bills on French mediants was greater than the demand in France for Bills on English merchants, this would show, under normal conditions, that more goods had been sold to English merchants, than had been bought from them. From this it is easy to see that the total figures are not of prime importance. It is the difference between the two sets of accounts that matters.

The gold balances are paid, usually, through the Banks holding the Bills mentioned. If the Bills have been bought by the Banks, the gold is placed to their own reserves. If the Bills are 'merely held for customers the amount of the gold is credited to those customers' accounts.

The goods passing into or out of two countries have to pass through the customs departments of those countries. The quantities, weights, and values, of the articles have to be declared on forms drawn up for that purpose. These “returns” give the total figures of the trade between those countries.

All these factors apply to trade under normal conditions. At present Germany is not under such conditions. The fall of the paper mark is due to loss of credit of Germany.

So long as people believe that the paper will be “honoured”—that is, exchanged for gold upon demand, or at a specific date —the paper will circulate at approximately its face value. If this belief begins to decline, the exchange value of the paper will begin to fall at a similar rate. This process may continue until, as in Austria, the paper falls to its value as actual paper, or waste paper. The German mark is nearing the same position, owing to the great uncertainty of the future.

It must, of course, be understood that we have only dealt with the main points of the question. To cover the details of the matter, particularly in the present exceedingly complicated circumstances, would take a huge volume. If, however, Enquirer wishes to raise any other detail question we shall be pleased to deal with it.

Editorial Committee

By The Way. (1924)

The By The Way Column from the March 1924 issue of the Socialist Standard

What abundant evidence in various forms obtrudes itself upon us in the daily press and other journals to prove our contention, that, as the Capitalist system develops, the gulf between the working’ class and the Capitalist class must ever become wider and deeper. At one end of the social scale we have insensate luxury, at the other sordid and sickening, misery such as indicated in the following reports :—
  “Sir Richard and the Hon. Lady Musgrave have left for Paris en route for the Riviera, and from there will go to Egypt, where they will spend the remainder of the winter.

  “The Hon. Ernest and Mrs.Guinness are shortly returning to England from a cruise round the world on their yacht, on which they took a party of young people.” (Westminster Gazette, 8.1.24).

By no means isolated instances, the more expensive pictorials are filled with the escapades of these wealthy idlers to whom the world is a beautiful hunting ground of pleasure,where they chase the seasons and live out their useless lives. If such is the lot of these social drones, what of the workers, the class who make possible their enjoyment ? The following are striking contrasts:

  “At last night's meeting of the Fulham Public Health Committee it was reported that a husband and wife and five children had been occupying one room for five years. Several of the family had tuberculosis.” (Same page, same date, Westminster Gazette, 8.1.24.)
  "Three millions of our people, men, women and children, are festering and rotting in slums, living three and four in a room, huddled together, the healthy in close contact with the diseased, in tenements where neither the woman in childbirth, the sick, or the dying, can be given the ordinary decencies of life.” (Mr. C. A. McCurdy, Daily Chronicle, 8.9.23.) 

The object of these quotations is not to arouse a sentimental sympathy, useless by itself, but to urge the non-Socialist reader to study our position in order that he or she may join with us to help achieve our object, a system,. in which the enjoyment of life will not be based upon the misery of others.

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 “I am opposed to Socialism. I believe in the liberty of the individual and the Britishers’ constitutional right, to be a free" man.” (Sir Robert Aske, Morning Post, 14.1.24.)
  “I believe in my heart it is a God-given opportunity that the Labour movement of this country has to-day to stave off upheaval in India. . . . We want India to be the brightest jewel in the great British federation of free peoples.” (George Lansbury, quoted Democrat, 12.1.24.)

What a charming coincidence! Two “great" minds with but a single thought—and both wrong. For—“they are not free that mock their chains," even if those chains be the invisible ones of wage slavery.. If, 'tis true, “He is the freeman whom the truth makes free," alas! how many slaves must be!

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The Capitalist need for raw material and markets often expresses itself in a burning desire to be friendly and restore to more stable industrial conditions a former enemy country.

Such a face-about attitude amazed many unthinking workers when the canting war cry of "never again” trading with Germany was converted into appeals for merciful treatment to aid her recovery. An analogous position presents itself with regard to Russia, the possibility of exploiting the vast mineral resources and the potential market existing in such a country makes our masters yearn to "restore trade relations":—

  “There are many who have loudly declared that 'they will not shake hands with murderers,' but are quite aware of the advantages which might ensue from the murderers' hands being shaken." (Time and Tide, 8.2.24.)

This oft repeated assertion placed the Capitalists in the humiliating position of having to eat their own words and expose their hypocrisy if they themselves were to negotiate with Russia on supposed friendly terms. But the opportunity arose of a compromise that would allow of government by the Labour Party. The latter have proved their readiness to serve Capitalist interests, as past numbers of the Socialist Standard have shown, so it was not surprising to find them ready to undertake the dirty work of the master class on this occasion—for a price—the fruits of office. Under cover of “Our first Labour Government” they could arrange a “friendly" Anglo-Russian Conference and present a labour veiled appeal to M. Poincaré for "Honour among thieves," moves which have already received blessing and approbation from the Capitalist Press.

Another reason in favour of the Capitalists helping the Labour Party to office, despite the stage thunder of their pretended opposition, is the inevitable failure of such a Party, elected as it is upon a re-hash of Liberal reforms, to solve any working class questions by action that will adversely affect Capitalists’ interests; not without reason has the Capitalist Press reiterated with wearying monotony the lie that the Labour Party is a Socialist Party, for they anticipate that when the hopes of the trusting workers fail to materialise they will be able to discredit Socialism in their eyes; we claim that while the working class do not understand Socialism, they will, under whatever guise or name, continue to support Capitalism as the only system they believe possible. To abandon one incorrect position to take up another equally unsound—or the same position with but a change of name, leaves the workers—as they were.

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  “I am quite satisfied that a lot of the housing trouble is caused through young women staying at home instead of going into domestic service." (Judge Crawford, Southend County Court, Daily Chronicle, 11.2.24.)

Such self satisfaction does not require proof or precision of statement. That might mean admitting that it is reserved for the daughters of the working class to enjoy the delights of domestic drudgery.

Our learned beak has also run a very great risk of being called to order for grossly insulting the young ladies of the "Upper Ten,” who might feel hurt by being included among those who bring this trouble (sic) upon us by refusing to be slaveys. Alas! it is the workers who build both the mansion and the slum, but while they remain content to be servants, domestic or industrial, to a class they wrongly think they could not live without, they will accommodate that class with luxuriously appointed residences, while permitting themselves to be herded in sunless barracks and foul smelling jerry built shelters. Housing problems have no separate existence from other working class problems. They will be solved when that class undertakes the task itself instead of waiting for “somebody to do something.”'

Mac.

Brexit, Schmexit (2018)

From the December 2018 issue of the Socialist Standard

So, with only a few months till Brexit Day, the government (or most of it) has agreed with the EU on the terms of a withdrawal agreement. As previously negotiated, there is to be a transition period of 21 months between 30 March next year and 31 December 2020 during which the UK will remain in the EU’s customs union and single market but with no say in any decisions about them; which Boris Johnson has described as being a ‘vassal state’, even though he was Foreign Secretary when this  was agreed.

The intention is that during this period the two sides will agree a final settlement on the future trading arrangements. If they are unable to, then, again as previously agreed, there will be a ‘backstop’ to prevent a hard border, i.e. with customs checks, being re-erected between the two parts of Ireland.

The only new element is the terms of this backstop, with the EU insisting on safeguards to, in the event of no future trading agreement, prevent goods from the UK which don’t meet the rules of the single market sneaking into it by this backdoor. It is this last that the extreme Brexiteers object to as a means of sabotaging the agreement. As do the DUP on the grounds that this would mean a different, however slight, trading arrangement with the EU for Northern Ireland.

The negotiations are all about trading arrangements and, as such, don’t concern the majority class of wage and salary workers. So we can let the capitalists and their political representatives settle the matter and observe who wins between the dominant section who want as similar a trading link with the EU as now (and who never wanted to leave anyway) and those that George Osborne, now editor of the London Evening Standard, has called ‘those naive business leaders and hedge fund managers who thought that the dispossessed of our industrial towns were voting with them for Britain to become a Singapore in the North Sea’ (14 November). We can also watch with amusement the Tory party tear itself apart over the issue.

We would only be affected in the event of the capitalist class’s political representatives not being able to settle the matter, resulting in the UK crashing out of the EU without any agreement. This is unlikely but, if it happened, our lives would be temporarily, and from our point of view unnecessarily, disrupted. In Northern Ireland the Border with a capital B would be restored with all its negative effects on working class thinking, not to mention Irish Republican action, there.

One thing we don’t want, thank you, would be the matter to be referred back to us in a second, irrelevant referendum. Why should we be asked to settle an argument between our masters which doesn’t concern us?

Unique New Zealand (1969)

From the August 1969 issue of the Socialist Standard

New Zealand’s development has perhaps been unique in two fields. First, certain reforms were achieved in New Zealand at a very early stage. As early as 1879 men had the vote, and by 1893 women were also entitled to vote. But even today certain restrictions are placed upon Maori voting. By 1894 New Zealand was the first country in the world to have established the system of compulsory state arbitration for fixing wages and settling industrial disputes. This was a retrograde step as far as the workers were concerned, for as all class-conscious workers know, in practice, courts for fixing wages etc. are there purely to prevent workers from striking as further pressure for their claims. Arbitration courts are often long-winded and the capitalist knows that the majority of workers can be distracted from their original determination if things drag on too long.

These early reforms and others, like the eight-hour day in 1897, plus a restricted programme of immigration (thereby maintaining a fairly full state of employment) have tended to give the New Zealander a false sense of security.

As well as long hours of overtime and wives going to work, secondary employment has become to the New Zealander an accepted way of life. He has his house, car, and washing machine, but the price has been high, New Zealand being only second to America in the number of hours worked per head of population. The veneer of affluence, like that of any so-called affluent country, for the working class is very thin.

The second unique aspect of New Zealand’s development is that it has been a farming community from the start and has remained so ever since. This can be a very precarious situation since New Zealand’s exports, the greatest bulk of which go to Britain, are made up almost wholly of agricultural produce—meat, wool, tallow, butter, cheese, powdered milk, and some timber.

Reading an extract from The New Zealand Trades Alphabet, 1968 edition, we can see just how far New Zealand is committed to agriculture as a means of overseas earnings, and to Britain as the buyer.

  For more than a century, Britain and New Zealand have been trading partners. New Zealand, whose whole economy is based on our ability to produce cheap foodstuffs, has sold them to Britain in return for goods and services we cannot provide for ourselves. The money which changes hands in trade between New Zealand and Britain now exceeds $860 million a year.
  New Zealand’s farming industry has been developed primarily to suit British needs and tastes, and Britain now buys some 85 per cent of New Zealand’s butter exports, 92 per cent of the lamb, and 78 per cent of the cheese. Last year sales of these three products were worth $216 million, or 30 per cent of this country's total export earnings. Outside Britain there is simply no substantial market open for any of them.

It is no wonder then that the clouds of economic anxiety began to gather over New Zealand when in 1958 the European Economic Community or Common Market was formed.

Looking at New Zealand over the past few years, one can sense the air of change. Unemployment has crept into existence, something until recently almost unheard of, and while the government tries to tell us that today we are back to full employment it fails to take into consideration the 11,064 persons that constituted a population loss to New Zealand in 1968, (see Auckland Star, December 10, 1968). Industrial unrest has been greater than ever as workers are trying to maintain their standard of living. Big mergers are taking place with almost indecent haste to constitute a position of strength for the struggle that is almost inevitable. We see Mr Holyoake a very worried man, chasing around the world talking and almost pleading with prime ministers of various Common Market countries in a puny effort to try to avert the disaster that could come to New Zealand if Britain joins the Common Market. We can see a great need for trade union solidarity. But most of all, if there is a lesson to be learned from this, it is that we can see a greater than ever need for socialist organisation for the overthrow of capitalism.

Ernie Higdon, 

Socialist Party of New Zealand.

Britain and the Common Market (1961)

Editorial from the July 1961 issue of the Socialist Standard

The Common Market has become a burning issue for British capitalism. After being convinced for years that it would fail, the Government has now belatedly realised that it may after all be here to stay. But so late have they left it, and so long have they dithered, that if they are to do something about joining they must do it quickly. Otherwise, it will be impossible for them to jump on the bandwagon at all.

Hence Mr. Macmillan's somewhat panicky efforts to get matters straight with the Commonwealth and his undignified haste to prepare the ground at home.

For it is clear that the issue of whether Britain should go into the Common Market is causing a lot of heart-searching in many quarters. Not only is the Government worried, but industry, the Commonwealth, the Conservative Party, the Labour Party, even the trade unions. And not only worried, but very much divided. Even allowing for the fact that the Labour Party has long abandoned all pretence of being anything but an appendage of capitalism, it is indeed strange, for example, to see Mr. Michael Foot and Viscount Hinchinbrooke lined up against Britain's entry, at the same time as Mr. Shinwell vies with the Daily Express in concern for the Commonwealth. And on the other side, Mr. Woodrow Wyatt, Rev. Donald Soper, and Lord Home certainly make an odd collection!

As far as industry is concerned, to the giants like l.C.I. the whole question is academic. They are going into the Common Market regardless of what decision the British Government may take. Confident of being able to compete on equal terms with the Europeans, the only thing they are afraid of is being left outside. On the other hand, there are many industries and firms that are very much afraid of meeting European competition and who are consequently violently opposed to going in.

The majority of the agricultural interests share this view, worrying whether their system of protection will disappear once the British market is thrown open to efficient Dutch production and the fast rising food surpluses of France. These anxieties are also shared by Commonwealth countries like Australia, Canada, and New Zealand whose agricultural outlets in Britain would be seriously threatened and who have nothing to gain and everything to lose in a unit which is largely self-sufficient in foodstuffs save for those of tropical origin.

These are only some of the conflicting economic interests which the Government is being called upon to resolve. Unfortunately for Mr. Macmillan on this occasion, however, the usual policy of British Governments when conflicting interests are at loggerheads to make a show of compromise that is really only a temporary camouflage for the dominant capitalist interest to have its way in the long run is a non-starter since the Common Market is itself in no mood for compromises. To them, it is either in or out. For the British Government, then, the long prevarication will soon have to end—a decision must be made one way or the other.

Strong rumour has it that the decision has already been made and that British capitalism is in. But this may be only part of Mr. Macmillan's softening-up tactics and the opposition may be stronger than he thinks. Whatever the outcome, it will throw interesting light on the political strengths of the various sectional interests in present-day British capitalism.

But much more interesting will it be to watch how the economic forces of capitalism, driving society’s development towards ever larger units, will eventually win the day—whatever the decision.

Cooking the Books: The Money Shuffling Business (2018)

The Cooking the Books column from the January 2018 issue of the Socialist Standard

There is trade and trade. Trade in tangible things – what most will understand by 'trade' – and trade in services. This was brought out by a news item in the Times (6 November):

'Data published by the Office for National Statistics last week showed that Guernsey, with a population of 63,000, was one of Britain's largest international trade partners and the sixth-largest consumer of British services, putting it ahead of major economies including Italy, China and Japan'.

In other words, the UK exports more services (not tangible goods of course) to the island than it does to the other countries mentioned. According to the statistics, export of services to the Channel Islands, the Isle of Man, the British Virgin Islands and the Cayman Islands accounted in 2006 for 11 percent of all such exports.

What are these services? The ONS lists 52 of them, but excludes travel, transport and banking. On the list some such as technical advice on production are useful in themselves. Most are only useful in a capitalist society and some only to capitalists and capitalist corporations: accounting, advertising, market research, management consultancy, public relations, legal services, leasing, financial services, merchanting.

As sales of technical advice on how to grow potatoes, tomatoes and flowers must be rather limited, it is not difficult to guess what the 'trade' in 'services' with Guernsey will be. And why. In a word, tax-dodging.

That some capitalists and corporations don't pay their fair share of taxes compared with other capitalists and corporations is not really of concern to socialists or to the wage and salary working class generally. But it does expose the hypocrisy of those who preach patriotism to the workers while in practice being, as they used say of the Northern Ireland Protestants, more loyal to the half-crown than to the Crown.

Trade is a buying and selling transaction but what is traded doesn't have to be tangible. Anything – in fact everything – can be bought and sold and, under capitalism, is. Some services such as health care, education and entertainment are useful in themselves, even though corrupted by being sold. Other services – all those concerned with money – are useful only under capitalism. They would not make sense in a socialist society.

In fact, there would not be any trade or trading in socialism. There won't need to be as what is produced will be the common property of society and will just need to be moved from where it is produced to where it is needed (actually, technically this is still part of production). So, goods will still be moved from one part of the world to another. This won't be trade because no equivalent will have to be moved in the opposite direction. If people in some part of the world need farm machinery it will simply be shipped there. The same goes for food or minerals that can't be grown locally. There will be no expectation that something has to be shipped back in exchange. No doubt people will move from one part of the world to another to provide services like technical advice, training or health care. Once again, in exchange for nothing.

All the financial services necessary under capitalism – and the vast waste of resources and work involved in them – will disappear. The people of Guernsey will be able to give up shuffling about paper claims to wealth and concentrate on doing something useful, sure in the knowledge that, as with all communities, they will be provided with all the things they can't produce locally.

"Communism" Trades With Capitalism (1973)

From the June 1973 issue of the Socialist Standard

Recently trade between Russia and America has grown immensely. In May last year talks were held in Moscow and credit agreements, barter deals and other trade deals are now under way.

The Moscow Narodny Bank has underwritten a recent Ford share issue. Occidental Petroleum of Los Angeles has signed a barter deal worth £3,300m. in American fertilizers and Soviet chemicals. Other deals are under discussion and may well be finalized before this appears in print.

Such trade is perfectly natural, ordinary, everyday and unremarkable if you, like us, regard Russia as a state capitalist country, part of the world capitalist system. Socialists have in fact the only analysis of Russian society which fits the facts. The only correct explanation of Russian trade with Western capitalist countries is that Russia is also a capitalist country.

Marx outlined the salient characteristics of capitalism as commodity production and wage labour. These characteristics are just as evident in Russia as in America: a fact conveniently ignored by all those obsessed and enthusiastic supporters of that “workers’ paradise”, that star in the east, who keep trying to demonstrate how different it all is there, “over the rainbow”.

Since Russia is a commodity-producing country, where goods are made for sale with a view to profit, we do not find it surprising that the people who control Russia’s economy discover the usefulness of foreign trade.

Yet their ideology — perhaps this is a euphemism for the mixed-up opportunism and dogmatism which pass for ideology among the readers of Pravda — their ideology lays down dogmatically that Russia has a “socialist” economy and is quite different from capitalism. So how do the Russian rulers themselves explain the existence of trade between the Western capitalist countries and their own “socialist” country?

In Pravda, the official journal of the CPSU, there appeared on April 3rd an article by V. Alkhimov of the USSR Ministry of External Trade. Under the headline A Useful Step he asks: “What is the significance of the [trade and credit] agreements recently concluded between the USSR and the USA?”

Then, fruitlessly poking about in history, he invokes the holy name of Lenin as one who “drew up a broad programme of business collaboration with capitalist countries, including the field of credit transactions”. He bows to the Holy Trinity of Eisenhower, Nixon and Rockefeller, and invokes the august presences of the Chase Manhattan Bank and the Export-Import Bank of the USA as godparents of the new trade, barter and credit agreements — worth, he says, up to $225m.

He further sanctifies these agreements with a quote from Brezhnev (21 Dec. 1972): “The implementation [of the credit agreements] may constitute the basis of large scale, long-term collaboration in this field. Moreover it would also favour an improvement of the political climate between the USSR and the USA, and would facilitate a further advance towards the chief aim of the foreign policy of the Soviet Union — a lasting peace,” (Our emphasis).

Their "chief aim”, in these guarded phrases, is certainly not Socialism or Communism, an end to exploitation through the wage-labour system, and an end to the profit-motive society based on commodity production. For by no stretch of the imagination could it be said that more trade, barter and credit agreements — whether with governments, private individuals or trading combines — have any effect except to promote the interests of capital accumulation.

Exploitation and wage-labour? These will continue in both hemispheres. Commodity production — producing things only when there is a profitable market and not because they are needed? This pernicious prostitution of man’s productive powers will continue unabated. But Socialism, production for use, common ownership, cooperation in place of competition? Not a hope.

V. Alkhimov has nothing to say on this for Pravda’s readers, no statement by Nixon or Brezhnev, Lenin or Rockefeller, and all he himself will venture is a guarded agreement with an inoffensive and meaningless remark by Nixon’s special assistant Peterson. As a peach of a diplomatic platitude it deserves recording: "Trade is the cement which strengthens the normalisation of relations between our countries”.

Business as usual, in short. The Kremlin and the White House have so much in common, so very much.

Charmian Skelton

Keep an eye on Spain (1958)

From the January 1958 issue of the Socialist Standard

"On October 12th in Washington the Spanish Ambassador gave a Columbus Day reception to which Soviet diplomats were invited for the first time. The Ambassadors of Poland and Czecho Slovakia were also present"

— (Manchester Guardian. 12/11/57.)

One evening in 1951 our Branch-room was filled to overflowing. The London correspondent of the official Yugoslav News Agency. Tanjug. was vainly attempting to defend the proposition that Yugoslavia is a Socialist country. A Hackney comrade, known for his bluntness, asked what our visitor’s reactions would be if it ever should suit his Government to sip champagne with Franco as Molotov had done with Ribbentrop, betokening the switch from enemy to friend and the desire to inaugurate trading and to co-operate militarily. His retort was an impassioned denial of such a possibility at any time in the future and resentment at the very suggestion. Of course our comrade's question was born of a whole history of switched alliances between the nations of the modem world. Each Nation-state represents a privileged and powerful minority who owe their position to their direct (private) or indirect (state) ownership of industry and wealth. In a world competing for export markets, supplies of the raw materials necessary for industrial production and strategically placed war bases, every participant in the world economy is a potential enemy of every other, though each will try to sink as many differences as possible with as many countries as. possible so as to present a stronger “front" in the course of the struggle against the rest. It is the interests of the capitalist class in the particular situation which basically decide who is friend and who is foe.

Sputnik Scientists in Barcelona

Six years have passed. The course of events has once again shown the correctness of the Socialist contention that it is not sentiment nor is it high principle but the desire for trade and power that motivates the ruling class of each country. Actually, latest reports from Spain go one better. There are all the signs of at least a partial "rapprochement” between Franco Spain and the Kremlin itself. Fortunately for him, our adversary of that evening six years ago does not have the responsibility of answering for the new situation. He wisely departed from the field of journalism and as far as we know has refrained from returning to his native country. How would be view this latest development? First the game of football against a Spanish team in Belgrade. Then a return match though there are still no diplomatic relations between Spain and any of the East European countries. Russian technologists freely participated in the recent Barcelona Geophysical-year Conference and already Franco can say in connection with the Sputnik, "We have to fact up to the fact that we are living under the sign of the Soviet earth satellite. The old Russia could not have launched the satellite; it could only happen in the new Russia. Great enterprises call for unity, discipline, authority . . . " (News Chronicle, Wed. 30/10/57).

For the first time under the Franco regime Spanish newspapers reproduced the front page of the Russian "Pravda,” dealing with the satellite. “Never before” said the Guardian correspondent “had the press been allowed such freedom to play up things Russian." Manchester Guardian, 12/11/57).

Trade goes on

We have known for some considerable time that trading between these supposedly irreconcilable enemies, the “Christian Gentlemen of Spain" and the “Atheistic Reds" had been going on. At least three years ago bananas, which are quite a luxury in Russia, were finding their way from the Spanish Canary Islands to the Soviet bloc via Switzerland. The traditional Spanish export of saffron to rice-eating China, communist or otherwise, has steadily continued. The News Chronicle article quoted above reports the recent arrival of several Russian delegations to Madrid. This has not been reported in the censored Spanish press as it will no doubt require some little time to recondition the public's attitude to Russia. There is talk of some sort of Russo-Spanish agreement over the gold reserves which, it is claimed, were handed over to the Russian Bank by Negrin, the Prime Minister, at the fall of the Republic, for safe keeping. Russia has insisted up till now that the gold was but a partial payment for debts incurred by the Republic when buying Russian arms. Other East European countries are also involved in the development of trade with Spain. The following is reprinted by the Manchester Guardian (12/11/57): —

“Spain is negotiating S25 millions trading with East Germany. Spanish negotiators are in contact with Czechoslovak Government Government officials. There arc direct trade relations with Poland."

Calculated Risk

Moscow also took a bold step by recently repatriating several thousand Spanish and Basque refugees, many of whom, having gone there as children as long ago as 1938, and spent almost all their lives and had their education there. Quite a lot of them returned with Russian wives (in itself quite a concession!) and almost all brought back household goods now being mass produced in the U.S.S.R. Khrushchev must have thought long before permitting so many disgruntled people to return to the West though be probably counted on Spanish working class conditions being such that the comparison between life in both countries would favour industrialised Russia, notwithstanding the flamenco singing so eagerly lapped up by the tourists on the Costa Brava.

Pumping Uncle Sam

It would seem that Franco, the most long lived dictator bar neighbouring Salazar of Portugal, “Britain's oldest ally" is taking a leaf out of dictator Tito’s book. The U.S. Government may have been taking his alliance too much for granted. How better to prompt further economic “shots in the arm" than to play “hard to get," with the hint that there may be others in the offing? And in case anyone says that Yugoslavia would not necessarily be a party to a Russo-Spanish “rapprochement " who would have thought that the one-time “fascist hyena" Tito would be spending time last month hunting, fishing and shooting with Marshal Zhukov ? But then it does not seem to have done Zhukov any good, does it?

Eddie Grant

TTIP: Putting Profits Before People (2015)

From the October 2015 issue of the Socialist Standard

The Transatlantic Trade and Investment Partnership (TTIP) is a free trade and investment treaty  being negotiated in secret between the European Union and the USA. The main goal of TTIP is to remove regulatory barriers which restrict the potential profits to be made by transnational corporations on both sides of the Atlantic.

The British government claims TTIP could add £10bn to the UK economy, $80bn to the US and €100bn to the EU every year. It says consumers would benefit by the removal of EU import tariffs. And reducing regulation would help UK small businesses export to the US. Tariffs between the EU and US are already low, averaging around 3 percent but both sides foresee they will be eliminated under the agreement. The main focus of negotiations is on harmonising regulations, reducing 'non-tariff barriers' to trade, or abolishing them if they're deemed unnecessary. US and EU regulators have different requirements for testing the safety of products. Going through the different tests is expensive for business but TTIP aims to reduce those costs by bringing in common standards.

TTIP is championed by the capitalist class. Cameron has described it as 'the biggest bilateral trade deal in history' (Guardian 17 June 2013). John Cridland of the CBI added 'with the UK already trading more and investing more with the US than any other country, there are real advantages to drive home particularly for smaller firms. TTIP would be the biggest free trade deal ever negotiated' (CBI News 18 December 2014).

Godfrey Bloom, the ex-UKIP MEP commented:

'For the conviction Free Trader, the international classical liberal TTIP is very natural progression in a global society especially between two great trading blocks the USA and the EU. It begs the expectation of such supporters of 19th Century advocates such as Frederick Bastiat that 'when trade crosses borders armies do not'. A qualified welcome therefore from such idealists was fairly immediate, rightly so. One might carry forward Bastiat's theory to fit with more pressing international concerns such as migratory refugees: 'when trade crosses borders migrants don't'. Liberal societies with free trade agreements prosper.'

Bloom concluded 'the theory of TTIP is noble and worthwhile but in practice is doomed to failure. Does anybody imagine for a moment the regulators both sides of the Atlantic will not protect their turf, that they will voluntarily give ground, that big business in the world of crony capitalism really want to see increased competition from small and medium sized businesses?' (Huffington Post UK 11 June).

Trade and investment deals

The EU has been negotiating a similar trade and investment deal with Canada, known as the Comprehensive Economic and Trade Agreement (CETA). One of Canada’s key negotiating aims was to promote the use in Europe of oil from its tar sands. In 2012, the EU’s Fuel Quality Directive (FQD) proposed that oil from tar sands should be given a 20 percent higher carbon value than conventional oil. This reflected the greater pollution caused by its production and was designed to steer companies away from using it in the EU. However, a few weeks after CETA was concluded, the final version of the FQD had been watered down, and lacked the earlier requirement that companies needed to account for the higher emissions from tar sands, effectively neutering it.

Another free trade agreement is the Trade in Services Agreement (TISA) which would further consolidate transnational corporate power. TISA covers 52 countries including the EU, North America, some South American nations, Japan, Israel, Australia, New Zealand and Pakistan. It is set to affect up to 70 percent of the global services economy. It includes the removal of restriction on moving 'natural persons' from one country to another which will mean the capitalist class can use migrant workers to drive down wages and conditions. For some countries their only 'comparative advantage' is cheap labour. TISA would allow multinational corporations to exploit migrant workers with impunity.

The Trans-Pacific Partnership (TPP) is considered by the US as the companion agreement to TTIP.  This agreement covers the US, Singapore, New Zealand, Australia, Canada and Japan. TPP is one of the primary goals of the trade agenda of the Obama administration in the US.

Right to sue governments

TTIP also consolidates the Investor-State Dispute Settlement (ISDS) which gives transnational corporations the right to challenge a country's laws. ISDS allows transnational corporations to receive compensation for the absence of a 'predictable regulatory environment.' Already under existing WTO free-trade rules this type of argument has been used to attack clean energy, mining, land use, health, and labour rights. More than $14 billion in 16 claims are now under litigation in the US. Under TTIP, a transnational corporation could sue a Government if their profits might be affected by food safety standards or wage increases. ISDS creates a parallel legal system, independent of national law, allowing transnational corporations to sue governments in secret corporate courts over laws or regulations that might prevent or reduce profit, what they term 'indirect appropriation.'

In 2012, the government of Ecuador decided to terminate its contract with US oil corporation Occidental, after Occidental sold 40 percent of its production rights to another company without abiding by its legal obligation to obtain government approval. Occidental turned to the ISDS provision in the US-Ecuador Bilateral Investment Treaty. This allows companies to sue governments through international courts for policies that threaten their profits. Occidental won and, as a result, Ecuador was forced to pay out $1.77 billion to Occidental, the highest compensation awarded to an investor through ISDS to date.

The government of Slovakia moved to restrict the powers of private insurance firms in the public health system which led to a number of health insurance companies successfully suing the Slovak government for their loss of profits. The Dutch firm Achmea attempted to use the same powers to block the Slovak government from setting up a public insurance scheme that would provide health cover to all the country's citizens. Achmea lost but because the scheme had not yet been adopted. If it is, no doubt they will try again.

The Vattenfall Corporation, a Swedish energy company is using an ISDS clause in an energy treaty to sue the German government for €4.7 billion following its decision to close its nuclear power stations in the wake of the Fukushima nuclear disaster in 2011. This case has not yet been decided.  Corporations don’t win every time but merely suing is an attempt to stop governments acting. As TUC General Secretary, Frances O’Grady has pointed out, it represents the spread of ‘compensation culture’ to the international level. Addressing the European Commission Trade Policy Day in Brussels in June, she said that ISDS identifies 'the compensation culture that is building up in multinational companies, where suing democratically elected governments becomes more remunerative than actually providing a service' (TUC, 23 June).

Screening regulatory measures

All new US or EU proposals for legislation or regulation would have to be screened first for their impacts on trade and business. 'Mutual recognition' means that the EU would recognise US standards as 'legitimate' and would therefore allow US exports into the EU even when they don't meet EU standards.  TTIP is not to stimulate trade through removing tariffs between the EU and USA, as these are already at minimal level. The main goal of TTIP is to remove regulatory 'barriers' which restrict potential profits to be made by transnational corporations. The EU has much stricter regulations on GM crops, pesticides, food safety, and the environment than the US. TTIP deal could open the EU market to cheaper products with poorer standards such as hormone-fed beef rinsed in acid, genetically modified oil from pesticide-soaked crops, and butter laced with antibiotics. In the EU, the precautionary principle is paramount to policy-making, meaning that a business must prove to government that a product poses no threat to human health or the environment. In the USA, a product is presumed safe, and for it to be banned government must prove that there is a threat to human health or the environment.

If global temperature rise is to be kept below 2 degrees and the most severe impacts of climate change mitigated, around 80 percent of known fossil fuel reserves must be left in the ground. The EU is pursuing a trade deal that would undoubtedly lead to even more money being poured into fossil fuel extraction. One of the key aims of TTIP is to push the US to reduce or remove current restrictions on the export of crude oil and shale gas.  This would facilitate the export of tar sand oil, mined in Canada and refined/transported via the US. A EU 2014 report by the Global Commission on the Economy and Climate confirmed that high-carbon investment over the next 15 years will only serve to lock in the risks of dangerous climate change.

TTIP would allow private firms running NHS services to sue the government. The NHS is a 'public service' (the 1993 General Agreement on Trade in Services Treaty defines a 'public service' as one supplied 'neither on a commercial basis, nor in competition with one or more service suppliers') but as a result of the 2013 Health and Social Care Act, more health services in the UK are being put out to tender in a competitive market by Clinical Commissioning Groups. This commercial competitive element means that large parts of the NHS will not be protected from TTIP.

Unemployment

The EU has admitted that TTIP will probably cause unemployment as jobs switch to the US, where labour standards and trade union rights are lower. Examples from other similar bi-lateral trade agreements around the world support the case for job losses. The Economic Policy Institute in Washington DC estimates that the North American Free Trade Agreement (NAFTA) between the US, Canada and Mexico caused the loss of a million US jobs and shrinking real-terms wages for millions more workers. The Centre for Economic Policy Research concluded in a study commissioned by the European Commission itself that TTIP could cause between 680,000 and 1.3 million job losses in Europe and between 325,000 and 715,000 jobs in the US.

The US also has lower labour standards and employment rights than EU countries. The US has not ratified a number of the most important International Labour Organisation Conventions, including the rights to freedom of association and collective bargaining. The US has also passed Right to Work legislation in 24 states, most recently in the traditional union stronghold of Michigan, which clamp down on unions capacity to bargain and organise. European companies may take advantage of the ease of market access created by TTIP to relocate to the USA, and take advantage of the weak labour regulations. There is also the possibility that American companies may be encouraged by TTIP to relocate to EU states such as Bulgaria, Romania and Slovakia where incomes are low and trade unions are weaker than in other parts of the EU.

For transnational corporations, barriers to trade are things that restrict their profits such as labour rights, food safety rules, regulations on the use of toxic chemicals, the minimum wage, health and safety laws, and environmental regulations. TTIP is a charter for profit before people. The casualties will be working class people the world over, who will end up as collateral damage, more powerless and more vulnerable than ever in the face of global capitalism. TTIP is a race to the bottom, to the lowest common denominator that will further the interests of global capitalism.

Marx in his Speech on the Question of Free Trade in Brussels in January 1848 pointed out that 'when you have torn down the few national barriers which still restrict the free development of capital, you will merely have given it complete freedom of action... every one of the destructive phenomena to which unlimited competition gives rise within any one nation is reproduced in more gigantic proportions in the market of the world.' He concluded 'the Free Trade system works destructively. It breaks up old nationalities and carries antagonism of proletariat and bourgeoisie to the uttermost point. In a word, the Free Trade system hastens the Social Revolution. In this revolutionary sense alone, gentlemen, I am in favour of Free Trade.'

Steve Clayton