Whats the Matter with Pennsylvania?

From the Marx and Coca-Cola blog

Recently at a campaign event Barack Obama made the following comment about the dying Rust Belt towns in Pennsylvania:

"You go into these small towns in Pennsylvania and, like a lot of small towns in the Midwest, the jobs have been gone now for 25 years and nothing's replaced them...And they fell through the Clinton administration, and the Bush administration, and each successive administration has said that somehow these communities are gonna regenerate and they have not.

And it's not surprising then they get bitter, they cling to guns or religion or antipathy to people who aren't like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations."

I couldn't agree more (except for the gun part. People like guns, because like cigarettes, they're cool). The goal of this blog is to channel working class bitterness away from religion and xenophobia into actual constructive action (I admit it's a long term project). According to a McCain spokesman that makes me a latte-drinking, New York Times reading, Volvo drinking liberal freak show:

"It shows an elitism and condescension towards hardworking Americans that is nothing short of breathtaking," [Steve] Schmidt said. "It is hard to imagine someone running for president who is more out of touch with average Americans."

This from a candidate that thinks everything is going great in Iraq.

Hillary, who's made 109 million dollars since leaving the White House, also disagrees:

"Well, that is not my experience," she said. "As I travel around Pennsylvania I meet people who are resilient, optimistic, positive, who are rolling up their sleeves. They are working hard every day for a better future for themselves and their children"

Move along. Nothing to see here. Everything is fine. People are working harder, but for a lot less then they used to. Not for a better future, but just to keep their heads above water. Obama with his typical silver tongue, fired back in Indiana:

"When I go around and I talk to people there is frustration and there is anger and there is bitterness. And what's worse is when people are expressing their anger then politicians try to say what are you angry about? This just happened - I want to make a point here today.

"I was in San Francisco talking to a group at a fundraiser and somebody asked how're you going to get votes in Pennsylvania? What's going on there? We hear that's its hard for some working class people to get behind you're campaign. I said, "Well look, they're frustrated and for good reason. Because for the last 25 years they've seen jobs shipped overseas. They've seen their economies collapse. They have lost their jobs. They have lost their pensions. They have lost their healthcare.

"And for 25, 30 years Democrats and Republicans have come before them and said we're going to make your community better. We're going to make it right and nothing ever happens. And of course they're bitter. Of course they're frustrated. You would be too. In fact many of you are. Because the same thing has happened here in Indiana. The same thing happened across the border in Decatur. The same thing has happened all across the country. Nobody is looking out for you. Nobody is thinking about you. And so people end up- they don't vote on economic issues because they don't expect anybody's going to help them. So people end up, you know, voting on issues like guns, and are they going to have the right to bear arms. They vote on issues like gay marriage. And they take refuge in their faith and their community and their families and things they can count on. But they don't believe they can count on Washington. So I made this statement-- so, here's what's rich. Senator Clinton says 'No, I don't think that people are bitter in Pennsylvania. You know, I think Barack's being condescending.' John McCain says, 'Oh, how could he say that? How could he say people are bitter? You know, he's obviously out of touch with people.'

"Out of touch? Out of touch? I mean, John McCain--it took him three tries to finally figure out that the home foreclosure crisis was a problem and to come up with a plan for it, and he's saying I'm out of touch? Senator Clinton voted for a credit card-sponsored bankruptcy bill that made it harder for people to get out of debt after taking money from the financial services companies, and she says I'm out of touch? No, I'm in touch. I know exactly what's going on. I know what's going on in Pennsylvania. I know what's going on in Indiana. I know what's going on in Illinois. People are fed-up. They're angry and they're frustrated and they're bitter. And they want to see a change in Washington and that's why I'm running for President of the United States of America."

As I've said before I like Obama's populist rhetoric. It will probably carry him to the White House. His actual policies, however, aren't much of a change from the liberal consensus. So when he says "And so people end up- they don't vote on economic issues because they don't expect anybody's going to help them." he's not quite right. The working class can't vote their economic interest, because even Democrats, like Obama, believe that the market is a force of nature. You may be able to cover people's head, but you can't stop the rain from falling. Us working folk shouldn't expect the government (or religion, or nationalism) to save us. So we'll have to find another way.

JM

The Sick Society

Manchester Branch Day School

Saturday 19 April, 1pm to 5pm

Capitalism on The Couch

Speaker: Peter Rigg

Can Socialism Cure our Ills?

Speaker: Ed Blewitt

Friends Meeting House,
Mount Street,
City Centre
(next to Central Library and Manchester Town Hall)

Weekly Bulletin of The Socialist Party of Great Britain (42)

Dear Friends,

Welcome to the 42nd of our weekly bulletins to keep you informed of changes at Socialist Party of Great Britain @ MySpace.

We now have 1230 friends!

Recent blogs:

Intellectual Property: a further restriction on personal freedom

Mary Gray and Eleanor Marx

Labour and the unions: back to square one

This week's top quote:

"So long as the system of competition in the production and exchange of the means of life goes on, the degradation of the arts will go on; and if that system is to last for ever, then art is doomed, and will surely die; that is to say, civilization will die." [William Morris, Art Under Plutocracy, 1883.]

Continuing luck with your MySpace adventures!

Robert and Piers

Socialist Party of Great Britain

Breaking News: SEIU invades Labor Notes

News that was broken by the World Socialist Party of the United States website

10:30 PM Saturday April 13

The Service Employees Industrial Union (SEIU) has sent in several bus loads of members to disrupt the annual meeting of Labor Notes in Detroit. The Labor Notes conference is one of the most important gatherings of rank and file labor activists in Canada and the US.

Friends of the WSP at the conference report that an SEIU activist bloodied a 70+ year old female member of Labor Notes.

This is an episode in a conflict between the California Nurses Association (Labor Notes version) and SEIU (SEIU version) as well as Labor note’s support of a dissident leader within SEIU. The leader of the CNA and the dissident SEIU leader had been scheduled to be at the Labor Notes annual meeting.

Whatever the dispute, this is a disgraceful return to the labor thuggery of the mid-20th Century labor movement.

We’ll update this post as more information is learned.

Update 1 (11:30 PM Pacific)

Discussion on the conflict between SEIU and CNA available here.

Update 2 (8:45 AM Pacific)

From Labor Notes website:

SEIU International Backs Away From Debate, Disrupts 2008 Labor Notes Conference

SEIU protesters attempt to storm the banquet at the 2008 Labor Notes Conference. Photo: Jim West.

When you are trying to put the movement back into the labor movement, you’re going to meet resistance. Labor Notes supporters are no strangers to heated debate—and the SEIU International is not the first union to protest at our conference. During the 1980s, for example, we saw opponents of the New Directions Movement inside the United Auto Workers put up picket lines outside our conference hotel and had BLAST—the Brotherhood of Loyal Americans and Strong Teamsters—try to intimidate Teamster reformers attending our events.

People are going to disagree and that is fine. There is no idea that can’t be discussed at a Labor Notes conference. We welcome debate on any and all issues facing the labor movement, including the heated dispute between the California Nurses Association/National Nurses Organizing Committee (CNA/NNOC) and the leaders of the Service Employees International Union (SEIU) over the best way to build power for health care workers. But that debate must take place with respect and free from intimidation. Despite being welcomed to the conference earlier in the day—and given space to debate supporters of the CNA/NNOC about neutrality organizing agreements—SEIU staff and members shouted down speakers at workshops and panels throughout the event.

At our Saturday night banquet hundreds of SEIU protesters stormed into our conference and confronted our volunteers and supporters. In 29 years we have never had a group of protesters attack our conference or the brothers and sisters who attend it. Violence has no place within our labor movement, and we call on the national leadership of SEIU, including President Andy Stern, to repudiate it.

Pieces Together - "War is stupid." (2008)

From the April 2008 issue of the Socialist Standard

Land of the Free?

"For the first time in U.S. history, more than one of every 100 adults is in jail or prison, according to a new report documenting America's rank as the world's No. 1 incarcerator. It urges states to curtail corrections spending by placing fewer low-risk offenders behind bars. Using state-by-state data, the report says 2,319,258 Americans were in jail or prison at the start of 2008 — one out of every 99.1 adults. Whether per capita or in raw numbers, it's more than any other nation. The report, released Thursday by the Pew Center on the States, said the 50 states spent more than $49 billion on corrections last year, up from less than $11 billion 20 years earlier. The rate of increase for prison costs was six times greater than for higher education spending, the report said." (Yahoo News, 29 February)

This is Freedom?

"As if the Government doesn't know enough about us already, it is now using lie-detector equipment (or ‘voice-risk analysis’, as it is euphemistically known) to signal whether people claiming benefit are telling the truth. If you receive a phone call from a town hall official asking about your circumstances, it seems that your answers - or rather, the tone of voice in which you give them - could well be scrutinised by a computer for telltale signs of ‘stress‘. ... In the Government's book, apparently, stress in the voice is a pretty good indication of flagrant dishonesty. You will be investigated further. Big Brother is most certainly watching you." (Times, 27 February)

War is Stupid

"The last French veteran of World War I, an Italian immigrant who lied about his age to join the Foreign Legion and fight in the trenches, died Wednesday aged 110, President Nicolas Sarkozy said. Lazare Ponticelli, the last of more than eight million men who fought under French colours in the 1914-18 war that tore Europe apart, died at the home he shared with his daughter in Kremlin-Bicêtre, a Paris suburb. Reflecting on his wartime experiences, he once said: "You shoot at men who are fathers: war is completely stupid." (Yahoo News, 12 March)

The American Dream?

"More American homeowners are mired in negative equity than at any time since the Great Depression of the Thirties ... Close to 9 million Americans, or 10.3 per cent of homeowners in the US, now owe more on their mortgages than their house is worth, according to the latest figures from Moody's, the ratings agency, as inventories of unsold homes continue to pile up in an already over-supplied market." (Observer, 24 February) "House prices in America are now falling at their fastest rate since records began in 1964, while repossessions and new houses for sale are at levels not seen since the Depression in 1929." (Observer, 2 March)

Democracy in Action?

"President Bush has vetoed a law preventing the CIA using interrogation techniques condemned by many as torture, because it ‘would take away one of the most valuable tools in the War on Terror’ ...The veto throws the spotlight back on to America's use of so-called coercive interrogation methods like waterboarding, the simulated drowning technique invented by Spanish inquisitors and adopted by regimes such as the Khmer Rouge." (Times, 10 March)

Weekly Bulletin of The Socialist Party of Great Britain (41)

Dear Friends,

Welcome to the 41st of our weekly bulletins to keep you informed of changes at Socialist Party of Great Britain @ MySpace.

We now have 1217 friends!

Recent blogs:

Marxism and Darwinism

’Manufacturing Britishness’

Foreign takeovers: a non-issue

This week's top quote:

". . . There is something in human history like retribution: and it is a rule of historical retribution that its instrument be forged not by the offended, but by the offender himself.

The first blow dealt to the French monarchy proceeded from the nobility, not from the peasants. The Indian revolt does not commence with the Ryots, tortured, dishonored and stripped naked by the British, but with the Sepoys, clad, fed, petted, fatted and pampered by them." Marx, The Indian Revolt, New-York Daily Tribune, September 16, 1857.

Continuing luck with your MySpace adventures!

Robert and Piers

Socialist Party of Great Britain

If I Were A Rich Man . . . (2008)

From the April 2008 issue of the Socialist Standard

‘There’s class warfare all right, but it’s my class, the rich class, that’s making war, and we’re winning’. New York Times, 26th Nov 2006

So said, with more than a hint of shame, the person revealed by Forbes magazine last month to be the world’s richest man – Warren Buffett. With a fortune estimated to be in the region of 62 billion dollars, Buffett is now a couple of billion ahead of the Mexican telecoms tycoon Carlos Slim, and four billion or so ahead of his friend and bridge partner, Bill Gates. Britain’s richest man, Labour Party donor Lakshmi Mittal, is fourth, one of 49 billionaires living in the UK.

Buffett, dubbed the ‘Sage of Omaha’ because of his homespun wit and wisdom, is something of an enigma, a compulsive accumulator of wealth that he is in some respects embarrassed about. He may be the richest man in the world, but lives in the same house he bought for $31,000 when he was 28, exists on a diet of hamburgers, candy bars and Cherry Coke, and refuses to have more than one car (an old one, at that). In a world obsessed by conspicuous consumption, he is hardly a man given to ostentatious displays of wealth.

From a very early age Buffett was fascinated by numbers, mathematical calculations and money, and was obsessed with becoming rich, to such an extent that according to Mary Buffett, as a child in 1938, ‘in the sweltering summer heat of Nebraska, he walked miles to the racetrack where he spent hours on his hands and knees scouring the sawdust-covered floors for discarded racing stubs, hoping to find a winning ticket’ (The New Buffettology). The son of a Nebraska stockbroker, he made his first stock market investment when he was eleven (three shares in a firm called Cities Service) and by the time he was old enough to go to college he had made $6,000.

Harvard reject

After his degree, Buffett applied to study at the prestigious Harvard Business School and was rejected. But this was a blessing in disguise for him, because he ended up going to Columbia University instead where he studied under Benjamin Graham, considered by many at the time (and plenty since) to have been the greatest investment analyst of the twentieth century. Graham wrote two seminal works: Security Analysis (co-authored with David Dodd) in 1934, and The Intelligent Investor, the original edition of which was published in 1949. The teachings of Graham, and these two books in particular, had a profound impact on Buffett, to such an extent that he eventually persuaded Graham to take him on at his own Wall Street investment firm (at one stage he even offered to work for free).

When Graham retired in the 1950s, a homesick Warren Buffett returned to Nebraska to set up his own investment partnership. This was the real beginnings of his fortune, where he began to turn an initial investment of $105,000 collected from friends and family (only $100 of which was his own) into the $62,000,000,000 it is now. Buffett’s fund management fees were performance-related and by 1969, when he decided to close down the partnership, assets under management had grown to around $104 million, in which Buffett’s personal stake was over $20 million. By this time Buffett was convinced that a bear market was around the corner, where sustained downward pressure would be put on share prices after the end of the 1950s and 60s economic boom.

But it was also in this period that Buffett laid the foundations for his greatest leap in wealth, taking over the company with which he has been synonymous ever since: Berkshire Hathaway. This ailing textile company was steadily bought up by Buffett and his partners typically for around seven to eight dollars a share and in 1965 they seized control of it. When Buffett dissolved his investment partnership he offered his partners a choice of either cash or a stake in Berkshire Hathaway. Those who took the shares instead of cash have seen them rise in price in the period since to the extent they currently trade in excess of $140,000 each on the New York Stock Exchange.

Woodstock for capitalists

So, how did Buffett really become so rich and help other Berkshire Hathaway shareholders to be the same? By being, in Buffett’s own words, in the right place, at the right time, but also by being the perfect capitalist. As Buffett would be the first to admit, he has never invented or made anything; indeed, he is very far from being the great all-American entrepreneur of popular mythology – he’s happy to let Bill Gates take that sobriquet. Instead, he is the most famous example of a phenomenon Friedrich Engels wrote about in the nineteenth century, where Engels identified that the key technical role that entrepreneurs played in the growth of capitalism was on the wane:

‘All the social functions of the capitalist are now performed by salaried employees. The capitalist now has no other social function than that of pocketing dividends, tearing off coupons, and gambling on the stock exchange, where different capitalists despoil one another of their capital.’ (Socialism: Utopian and Scientific).

In this sense, the capitalist class, as owners of capital who no longer have to work and whose key technical function in the rise of capitalism has been largely taken away, become functionaries of capital – and interestingly, Buffett has defined himself as being an ‘allocator of capital’ above all else. In this respect, Buffett is a very modern capitalist – an investor in companies and markets rather than an inventor of things. Every year, Berkshire Hathaway shareholders arrive in Nebraska for their annual shareholders’ meeting to pay homage to Buffett and his side-kick Charlie Munger in an event they call ‘Woodstock for capitalists’; there is little entrepreneurial spirit to be seen, for there is no need.

Meet ‘Mr Market’

Buffett used Berkshire Hathaway as an investment vehicle, using it to take over insurance companies and other firms that generated steady cash flow. In owning firms outright, he was able to mitigate his exposure to the stock market when he felt it necessary. Over time, though, Buffett used Berkshire’s excess cash to selectively buy back into stocks.

In doing so, he abided by the investing principles handed down to him by his mentor, Ben Graham, often referred to as ‘value investing’. In essence, this meant investing in companies based on their real value and assets (and their ability to grow them) rather than what was likely to happen to their short or medium-term share price. Graham and Buffet both took the view that value and price were not identical, even if they gravitated in the same direction over the long-term (leading Graham to famously comment that ‘in the short run the stock market is a voting machine but in the long run it’s a weighing machine’).

In particular, Graham and Buffett took issue with the academic theory known as ‘Efficient Markets Hypothesis’. This theory states that stock market prices (allegedly like all other prices) are efficient, in that all known information is reflected in them so that it is impossible for significant market inefficiencies to occur, and impossible for any investor to ‘beat the market’ in the long run through anything other than pure luck.

Ben Graham had attacked this view with his parable of ‘Mr Market’, an agreeable potential business partner who is always ready on any given day to do a deal over a business or share of a business so long as he can name the price. One Graham and Buffett acolyte has explained the concept this way:

‘Mr Market is bipolar. Our partner goes through gigantic mood swings from the highest euphoria to the lowest depression. Most of the time Mr Market is taking his meds, and on most days he’s pretty lucid about the prices he sells and buys at. That means most of the time the price of a business is pretty close to its value. But sometimes he can get so insanely optimistic that he prices everything insanely high. On other days Mr Market can get so depressed that, unlike Annie, he’s convinced the sun will not come up tomorrow . . .

It’s kind of a shame to take advantage of someone who’s emotionally unbalanced, but then again, he doesn’t seem to mind. He’s been bipolar for so long he just thinks it’s normal. He doesn’t honestly think that he’s mispricing anything, even if one day the price is $100 a share and just a few months later it’s $10. And if you ask the professors who study Mr Market, they’ll tell you the guy is fine.’

(Phil Town, Rule 1.)

In essence, this is how Buffett has made most of his money – by realising that the market economy isn’t intrinsically an efficient allocator of resources and is driven by wild swings of sentiment that often belie underlying reality. In the great bear market of 1973-4, when stocks in the US more than halved in price measured by the S & P 500 index, and fell by nearly three-quarters in the UK, Buffett said he felt ‘like an over-sexed guy in a whorehouse’. He invested massive amounts and saw share prices recover within a year or so, despite no significant change in the performance of the underlying economy or the companies within it.

Buffett is no lover of the free-market and has made much of his money through exploiting the fact that capitalism isn’t nearly the competitive ideal that many of its fiercest advocates assume. Illustrative of Buffett’s approach is the type of company he has used Berkshire Hathaway to buy into: those he identifies as having an economic ‘moat’, a durable competitive advantage or quasi-monopoly position that their competitors (if they have any) cannot easily breach. Buffett hates, and steers clear of, companies that operate in price-competitive markets, as they are the most vulnerable to the vicissitudes of the capitalist economy and those whose growth is least assured and steady over time. Instead, he typically invests in companies that have very different characteristics – for example, firms:

1. that achieve dominance through having strong brands that involve repeat buying (Buffett has been a major shareholder in both Coca-Cola and Gillette),

2. that can exercise control over a service through which they allow access by charging others for the privilege (such as some utility network companies),

3. that secure massive forward orders based on major long-term contracts, typically with the state sector, for outsourcing, regeneration, etc.,

4. that have a product that becomes so all-pervasive that switching to a competitor isn’t worth the trouble (Microsoft),

5. that have a company secret such as a patent that acts as a barrier to entry for other firms (e.g. Intel, GlaxoSmithKline),

6. that have such economies of scale they can undercut their competitors and achieve market dominance (e.g. Wal-Mart in the US and a recent Buffett buy in the UK, Tesco).

When these type of firms are mispriced in the stock market because of negative sentiment – giving what Graham called a ‘margin of safety’ to the buyer – then Buffett starts accumulating shares. Companies with an economic moat typically grow their profits well in excess of 10 per cent per annum on average; indeed, Buffett usually looks for firms that can grow their ‘book value’ and profits at 15 per cent, potentially giving him a huge compounded return over the years, especially if he has already bought them well below their real value. And he has declared his favourite holding period for such companies to be ‘forever’ (Buffett rarely involves himself in short-term speculation and when he does it tends to be through taking advantage of arbitrage opportunities, again based on market mispricing).

Unions

In many respects, Buffett probably has a better understanding of how capitalism works than most other supporters of it. While, for instance, he understands the need of workers to organise themselves in trade unions so as to defend their interests, he is apparently wary about investing in highly unionised companies:

‘The inherent financial weakness of the price-competitive business has given organized labor enormous power to demand a higher cut of a company’s profits . . . in situations like these, unions become demanding semi-owners with whom shareholders must constantly share their wealth or risk a strike that could lead to the financial destruction of their business. Warren doesn’t like to own businesses that have organized labour.’ (Mary Buffett, The New Buffettology).

This quote illustrates that Buffet knows perfectly well what is going on in the struggle between capital and labour (and which side he necessarily sits on).

Irony

One of the many ironies of Buffett’s life is that he has accumulated capital for the sake of it, very much as the system demands, yet has never really known what to do with his vast personal wealth; he spends very little of it and doesn’t believe in inherited wealth either. So in 2006 he declared he was going to give away at least $30 billion of his fortune to the Bill Gates Foundation, so that it could be spent improving healthcare across the world.

In many ways this was a noble gesture, and a more generous act than anything from most of the world’s other rich men, yet it is the very system in which he is a proud ‘allocator of capital’ that leads to world poverty and lack of decent healthcare in the first place. Buffett has recently attacked the Republican administration in the US on the grounds that it is obscene that he pays less of a proportion of his income in tax than someone on the minimum wage. Yet, above anyone else, Buffett should know that in capitalism, capital accumulates to those who have it and invest it. And it expands because those who are relatively poor (the working class) create value greater than they ever receive back in wages and salaries, with this ‘surplus value’ created by those who have to work for a living sustaining those who don’t, generating rent, interest and profit for the system as a whole than can be reinvested in the capitalist treadmill. In the market economy, the rich are rich because the poor are poor. Indeed, companies grow because the rich are rich and exploit the poor, and it can’t work any other way.

Mr Buffett may be a highly intelligent man and a great philanthropist, but the bipolar extremes characteristic of Mr Market are no way to run a sane society, but are characteristic instead of a system where only a minority can be winners and they depend for their position on the vast majority being losers. And no amount of well-intentioned philanthropy is ever likely to change it.

Dave Perrin

Cooking the Books: That's Capitalism (2008)

The Cooking the Books column from the April 2008 issue of the Socialist Standard

In the February Socialist Standard, in an article on the price of bread, we commented on the fact that under capitalism a basic foodstuff such as wheat was “a world commodity traded on world markets and so subject to international speculators betting on its future price going up or down”.

At the end of the month the news broke that a “rogue trader” called Dooley working for a firm called MF Global had lost his employers $141.5 million. Rather foolishly, it might be thought, he bet that the price of wheat would go down. But it went up:

“He had bet on the price of wheat declining by entering into about 4,000 futures contracts, which would require him to deliver about 20 million bushels of wheat at an agreed time and price. The greater the decline in the price between agreeing the contract and delivering the wheat, the cheaper the cost of satisfying the delivery and the larger the profit Mr Dooley stood to make. But instead, the price of wheat kept on rising . . .”      (London Times, 29 February)

It should not be thought that MF Global is in the business of delivering wheat. It doesn’t run a fleet of ships or trucks. It is a financial institution specialising in speculating on how the price of wheat – and anything else – moves. When the delivery date of, in this case, wheat comes near they pass the contract on to a shipping or delivery firm.

As Marx once pointed out, the capitalist is not interested in any particular product. All they are interested in is profit and they don’t care whether they make it from producing and selling bibles or producing and selling whisky. Firms like MF Global, with no connection with actual production, illustrate this point well.

Wheat is not sold to individual consumers. It is sold to capitalist firms with money invested in milling it into flour, who, in turn, sell this on the other capitalist firms with money invested in baking it into bread. These intermediary firms are not happy with the rise in the price of wheat which has doubled over the past year. The head of one of them, Sir Michael Darrington, lashed out at wheat speculators on the occasion of his retirement as managing director of Greggs, the high street bakers:

“There are stocks of wheat and grain in the world, and crops are growing at the moment but funds are being set up as speculators see an opportunity to make some short-term money and someone has to pay for it. It’s really sad for people in the developing world where food can account for 70 per cent of the family budget. Wheat is predominantly grown in America, Australia, Europe – the wealthier areas – and people in under-developed countries are hurting the most”.

The (London) Times (12 March), reporting this, said he added:

“I suppose that’s just capitalism but it’s jolly disappointing. If society looked down on these funds then perhaps it would make a difference”.

It is indeed a powerful indictment of capitalism that firms like MF Global speculate on the price of wheat while at the same time millions throughout the world are suffering from a lack of food. Proof, as if any more were required, that capitalism is a system geared to profit-making not the satisfaction of human needs.

But would it make any difference if MF Global and other speculative funds were “looked down on”? It is probably true that most people in the world do already look down on them, including a decent-minded capitalist like Sir Michael. But they can’t do anything about it. After all, investing money to make more money is what capitalism is all about. MF Global and the other funds are just applying the profit motive.

Howard Zinn's 'Je Ne Suis Pas Marxiste'

The following is from The Zinn Reader (1997, Seven Stories Press, pp 574-578) and is reprinted with the permission of the author. It has been posted on the blog on two previous occasions.

For a long time I thought that there were important and useful ideas in Marxist philosophy and political economy that should be protected from the self-righteous cries on the right that "Marxism is dead,” as well as from the arrogant assumptions of the commissars of various dictatorships that their monstrous regimes represented “Marxism.” This piece was written for Z Magazine, and reprinted in my book Failure To Quit (Common Courage Press, 1993).
Not long ago, someone referred to me publicly as a "Marxist professor.” In fact, two people did. One was a spokesman for “Accuracy in Academia,” worried that there were “five thousand Marxist faculty members” in the United States (which diminished my importance, but also my loneliness). The other was a former student I encountered on a shuttle to New York, a fellow traveller. I felt a bit honoured. A “Marxist” means a tough guy (making up for the pillowy connotation of the “professor”), a person of formidable politics, someone not to be trifled with, someone who knows the difference between absolute and relative surplus value, and what is commodity fetishism, and refuses to buy it.
I was also a bit taken aback (a position which yoga practitioners understand well, and which is good for you about once a day). Did “Marxist” suggest that I kept a tiny stature of Lenin in my drawer and rubbed his head to discover what policy to follow to intensify the contradictions o the imperialist camp, or what songs to sing if we were sent away to such a camp?
Also, I remembered that famous statement of Marx: “Je ne suis pas Marxiste.” I always wondered why Marx, an English-speaking German who had studied Greek for his doctoral dissertation, would make such an important statement in French. But I am confident that he did make it, and I think I know what brought it on. After Marx and his wife Jenny had moved to London, where they lost three of their six children to illness and lived in squalor for many years, they were often visited by a young German refugee named Pieper. This guy was a total “noodnik” (there are “noodniks” all along the political spectrum stationed ten feet apart, but there is a special Left Noodnik, hired by the police, to drive revolutionaries batty). Pieper (I swear, I did not make him up) hovered around Marx gasping with admiration, once offered to translate Das Kapital into English, which he could barely speak, and kept organising Karl Marx Clubs, exasperating Marx more and more by insisting that every word Marx uttered was holy. And one day Marx caused Pieper to have a severe abdominal cramp when he said to him: “Thanks for inviting me to speak at your Karl Marx Club. But I can’t. I’m not a Marxist.”
That was a high point in Marx’s life, and also a good starting point for considering Marx’s ideas seriously without becoming a Pieper (or a Stalin, or Kim Il Sung, or any born-again Marxist who argues that every word in Volume One, Two and Three, and especially in the Grundrisse, is unquestionably true). Because it seems to me (risking that this may lead to my inclusion in the second edition of Norman Podhoretz’s Register of Marxists, Living or Dead), Marx had some very useful thoughts.
For instance, we find in Marx’s short but powerful Theses on Feuerbach the idea that philosophers, who always considered their job was to interpret the world, should now set about changing it, in their writings, and in their lives.
Marx set a good example himself. While history has treated him as a secondary scholar, spending all his time in the library of the British Museum, Marx was a tireless activist all his life. He was expelled from Germany, from Belgium, from France, was arrested and put on trial in Cologne.
Exiled to London, he kept his ties with revolutionary movements all over the world. The poverty-ridden flats that he and Jenny Marx and their children occupied became busy centres of political activity, gathering places for political refugees from the continent.
True, many of his writings were impossibly abstract (especially those on political economy; my poor head at the age of nineteen swam, or rather drowned, with ground rent and differential rent, the falling rate of profit and the organic composition of capital). But he departed from that constantly to confront the events of 1848, the Paris Commune, rebellion in India, the Civil War in the United States.
The manuscripts he wrote at the age of twenty-five while an exile in Paris (where he hung out in cafes with Engels, Proudhon, Bakunin, Heine, Stirner), often dismissed by hard-line fundamentalists as “immature”, contain some of the most profound ideas. His critique of capitalism in those Economic and Philosophical Manuscripts did not need any mathematical proofs of “surplus value.” It simply stated (but did not state it simply) that the capitalist system violates whatever it means to be a human. The industrial system Marx saw developing in Europe not only robbed them of the products of their work, it estranged working people from their own creative responsibilities, from one another as human beings, from the beauties of nature, from their own true selves. They lived out their lives not according to their own inner needs, but according to the necessities of survival.
This estrangement from self and others, this alienation from all that was human, could not be overcome by an intellectual effort, by something in the mind. What was needed was a fundamental, revolutionary change in society, to create the conditions – a short workday, a rational use of the earth’s natural wealth and people’s natural talents, a just distribution of the fruits of human labour, a new social consciousness – for the flowering of human potential, for a leap into freedom as it had never been experienced in history.
Marx understood how difficult it was to achieve this, because, no matter how “revolutionary” we are, the weight of tradition, habit, the accumulated mis-education of generations, “weighs like a nightmare on the brain of the living.”
Marx understood politics. He saw that behind political conflicts were questions of class: who gets what. Behind benign bubbles of togetherness (We the people…our country…national security), the powerful and the wealthy would legislate on their own behalf. He noted (in The Eighteenth Brumaire, a biting, brilliant, analysis of the Napoleonic seizure of power after the 1848 Revolution in France) how a modern constitution could proclaim absolute rights, which were then limited by marginal notes (he might have been predicting the tortured constructions of the First Amendment in our own Constitution), reflecting the reality of domination by one class over another regardless of the written word.
He saw religion, not just negatively as “the opium of the people,” but positively as the “sigh of the oppressed creature, the heart of a heartless world, the soul of soulless conditions.” This helps us understand the mass appeal of the religious charlatans of the television screen, as well as the work of Liberation Theology in joining the soulfulness of religion to the energy of revolutionary movements in miserably poor countries.
Marx was often wrong, often dogmatic, often a “Marxist.” He was sometimes too accepting of imperial domination as “progressive,” a way of bringing capitalism faster to the third world, and therefore hastening, he thought, the road to socialism. (But he staunchly supported the rebellions of the Irish, the Poles, the Indians, the Chinese, against colonial control.)
He was too insistent that the industrial working class must be the agent of revolution, and that this must happen first in the advanced capitalist countries. He was unnecessarily dense in his economic analysis (too much education in German universities, maybe) when his clear, simple insight into exploitation was enough: that no matter how valuable were the things workers produced, those who controlled the economy could pay them as little as they liked, and enrich themselves with the difference.
Personally, Marx was sometimes charming, generous, self-sacrificing; at other times arrogant, obnoxious, abusive. He loved his wife and children, and they clearly adored him, but he also may have fathered the son of their German housekeeper, Lenchen.
The anarchist, Bakunin, his rival in the International Workingmen’s Association, said of Marx: “I very much admired him for his knowledge and for his passionate and earnest devotion to the cause of the proletariat. But…our temperaments did not harmonize. He called me a sentimental idealist, and he was right. I called him vain, treacherous, and morose, and I was right.” Marx’s daughter Eleanor, on the other hand, called her father “…the cheeriest, gayest soul that ever breathed, a man brimming over with humour".
He epitomised his own warning, that people, however advanced in their thinking, were weighted down by the limitations of their time. Still, Marx gave us acute insights, inspiring visions. I can’t imagine Marx being pleased with the “socialism” of the Soviet Union. He would have been a dissident in Moscow, I like to think. His idea of the “dictatorship of the proletariat” was the Paris Commune of 1871, where endless arguments in the streets and halls of the city gave it the vitality of a grass roots democracy, where overbearing officials could be immediately booted out of office by popular vote, where the wages of government leaders could not exceed that of ordinary workers, where the guillotine was destroyed as a symbol of capital punishment. Marx once wrote in the New York Times that he did not see how capital punishment could be justified “in a society glorifying in its civilisation.”
Perhaps the most precious heritage of Marx’s thought is his internationalism, his hostility to the nation state, his insistence that ordinary people have no nation they must obey and give their lives for in war, that we are all linked to one another across the globe as human beings. This is not only a direct challenge to modern capitalist nationalism, with its ugly evocations of hatred for “the enemy” abroad, and its false creation of a common interest for all within certain artificial borders. It is also a rejection of the narrow nationalism of contemporary “Marxist” states, whether the Soviet Union, or China, or any of the others.
Marx had something important to say not only as a critic of capitalism, but as a warning to revolutionaries, who, he wrote in The German Ideology, had better revolutionise themselves if they intend to do that to society. He offered an antidote to the dogmatists, the hard-liners, the Piepers, the Stalins, the commissars, the “Marxists.” He said: “Nothing human is alien to me.”
That seems a good beginning for changing the world.

Howard Zinn

Latin America: Muddy Road Ahead

A special issue of the World Socialist Review (issue 21) which focuses on politics in Latin America is now available. Articles in this issue include:

A Pre-Socialist Left?

Viva la revolucion!

Looking for Socialism (in all the wrong places)

Brazil repeats history

Is Cuba socialist?

The changing geopolitical context

A review of Michael Lebowitz’s ’Build It Now: Socialism For The 21st Century’

Print Copies are available for $3:50 Send Cash ($US), Check, Money Order (made out to WSPUS) from:

The World Socialist Party of the United States

P.O. Box 440247
Boston, MA 02144
Email: wspus@covad.net
Website: WSPUS

Food For Thought (2008)

Book Review from the April 2008 issue of the Socialist Standard

Bob Torres: Making a Killing. AK Press

Some Socialists are vegetarians, but others are not. We have never seen a reason to take a stand on this issue as a party, however strongly some individual members may feel. In this book, though, Bob Torres makes a political case for veganism, in keeping with his support for social anarchism.

Torres begins by accepting a Marxian economic analysis of capitalism, as commodity production involving exploitation. But he then goes on to claim that animals perform unwaged labour and are super-exploited living commodities. In Marxian economics, however, they are a part of the means of production, i.e. of what Marx called “constant capital”, which does not create new value but merely transfers its value to the product. Just as slavery involved some humans being the property of others and hence treated just as means to the end of the owners, so animals are under the power of humans. They are bought and sold, kept and killed in appalling conditions, experimented on, and used to provide milk, meat and eggs. This is speciesism, he says, integrated into society as much as racism once was (though note that there are separate species with identifiable characteristics, but no distinct races).

The ‘animal rights’ movement comes in for heavy criticism. For one thing, it is dominated by large organisations that employ professional activists earning high salaries. As such, it can be co-opted by the meat and animal products industry. People for the Ethical Treatment of Animals has even given awards to someone who invented a more ‘efficient’ kind of slaughterhouse.

In contrast, Torres argues, the advocacy of animal rights needs to become part of a wider movement that challenges all hierarchy, domination and exploitation, whether of other humans, animals or nature. We do not need to eat meat or animal products in order to live, therefore we should not do so. Vegetarianism is not sufficient, since the production of both milk and eggs involves cruelty (e.g. cows must constantly be kept pregnant in order to provide milk). Veganism, which involves making no use of animal products at all, ‘must be not only the foundation and baseline of any movement to end the domination of animals, but also the daily practice of anyone who seeks to live their life free of all domination and hierarchy’.

There can be no dispute that many animals are treated abominably under capitalism. One question is to what extent their treatment is due to capitalism’s demands for profit and for constantly cheapening the costs of production. For it does not follow that mistreatment is a hallmark of all use of animals for food. It is perfectly possible that a Socialist society would involve less eating of meat and eggs, and any animals kept for food purposes would certainly be treated as humanely as possible. It’s all very well to talk about opposing all hierarchy, including that of humans over animals, but if it came to the crunch I suspect almost everyone would regard the life of a fellow human as more important than that of a non-human animal. So there can be no real equality of treatment between humans and animals.

Paul Bennett

Further Reading:

From the August 2003 Socialist Standard 'Animals For Profits'

From the Socialism Or Your Money Back blog 'Cages for animals - boxes for workers'

Getting screwed in America

From the Marx and Coca-Cola blog.

It’s not often you hear a politician in America talk about class, especially about the working class. So I was surprised to learn that senator Bernie Sanders (I-VT) had asked his constituents to send him their stories about being caught in the "middle-class squeeze". He received over 360 responses, which is pretty good for a tiny state like Vermont. For those of you who don’t know much about Bernie, he was elected to the senate in 2006 after a about 10 years in the House. He describes himself as a democratic socialist (he has a picture of Eugene Debs in his office, he never combs his hair, loves Scandinavia, etc.). Despite (Because of?) his "European" politics he does quite well in the electoral arena (he beat the riches man in Vermont by 33% the last election). He’s probably the only politician who would actually care if anyone is having trouble making ends meet.

Before I post some of these stories I should say a few words about the term "middle class". There is no such thing. What we think of as the "middle class" is actually a section of the working class that has either attained a high level of education, or income, or both. So professionals, paper pushers, managers, as well as some union and skilled jobs are considered "middle class". These jobs are thought of as secure from the economic turmoils that affects the working class. But as these people testify that is not actually the case:

"My family has been hit so hard by this economy, we are barely staying afloat.
We have remortgaged the house 4 times in the last three years to pay credit card debt. Now we are trying to tap into our annuity to pay more credit card debt. The debts on the credit cards are all for bills. Mostly grocery, oil and the mere cost of living.

My husband is a union carpenter who works outside the state of Vermont and they just changed our fantastic insurance plan to a terrible one with barely any coverage. I have none of my doctors on it and I suffer from a painful burning nerve damage, due to a hysterectomy that I had four years ago. I am not eligible for social security disability and I am unable to work.

We had a dream to live in Vermont (we are originally from Long Island) and to own our own home, that dream came true seven years ago. I am afraid our dream is slipping through our fingers and it wont be long before we lose our home, the way things are going."

Most of the stories mention either the increase in either oil or food prices.

"As a couple with one child, earning about $55000/year, we have been able to eat out a bit, buy groceries and health insurance, contribute to our retirement funds and live a relatively comfortable life financially. We’ve never accumulated a lot of savings, but our bills were always paid on time and never any interest on our credit card. Over the last year, even though we’ve tightened our belts (not eating out much, watching purchases at the grocery store, not buying "extras" like a new TV, repairing the washer instead of buying a new one...), we find ourselves with over $7000 of credit card debt and trying to figure out how to pay for braces for our son! I work 50 hours per week to help earn extra money to catch up, but that also takes a toll on the family life--not spending those 10 hours at home with my husband and son makes a big difference for all of us. My husband hasn’t had a raise in 3 years, and his employer is looking to cut out any extra benefits they can to lower their expenses, which will increase ours!"

"I cannot afford the middle class. I live on Social Security Disability Income and live in subsidized housing.

Between the cuts in Medicare, increased prescription costs and escalating food prices, I have cut my expenses to the bare bone. Not even my food stamp allotment is enough. By the way, whenever a Food stamp recipient turns 65 as I did in February, we are no longer eligible for food stamps. Instead, we receive a cash allotment through our EBT cards.

When I grocery shop, I buy generic brands and whenever possible, I buy in bulk, thereby saving more than I would shopping either White Market of Price Chopper.

I know people who are choosing between buying gas so they can get to work; paying for medical care/prescriptions; and/or buying food. Too often they can no longer afford child care.

Thank you, Bernie, for caring about us."

"Wife of 50 years and I retired after 50 years of work. We had what we believed was enough to let us live frugally but ok. The last 3 years have been tough. We live on $1593.00 a month plus a income of $2200. a month from rental of our spare rooms. Our mortgage alone is $3300.00 a month This is our fault some what due to the ease of borrowing money. We have stopped paying all cards and bills. The first of June we will be forced to file a petition of Bankruptcy.

We will lose our home we built out of a old barn. And has been our home for 30+ years. We do not know what to do next.We have attempted to consolidate our bills.We have been turned down by even those who loaned us money originally. We do not want to loose our home. What can we do? If a bank or other institution will only listen. I believe we could weather this period."

You can read the rest of them here. I recommend you do, it’s not often you here the experiences of regular people. And feel free to leave your own in my comment section.

JM

What is the public's opinion? (2008)

From the April 2008 issue of the Socialist Standard

In the vicious world of capitalist competition, opinion polling finds a vital and profitable niche not for the laudable purpose of discerning or complying with the public interest but with the manipulation of public opinion in the interest of profit.

As in all previous stages of human social development, today wealth is produced and can only be produced by the application of human labour power to the resources of nature. Capitalism complicates the process of wealth production by the separation of these two productive essentials; a relatively small minority of human beings claim a right to the ownership of nature’s resources, which are effectively the means of life of the whole of humanity, while the great majority are obliged to sell their physical and mental abilities to these owners. The wealth that results from this combination of resources and labour power becomes the property of the owners who give those who have expended their labour power tokens which are called wages with which they can purchase the part of the vast aggregation of wealth they have created.

That is the basic nature of capitalism. However, in effect it is much more convoluted and wasteful than this might suggest. In today’s world all the goods and services needed by people are produced mainly in the form of commodities against the background of their real or imagined use value. But the shareholders who own the enterprises that produce these goods and services and the usually richly-rewarded directors who organise the enterprises are not philanthropists concerned with the public good.

Their interest is not primarily the use value of the commodities they produce; it is the exchange value of those commodities; the price for which they are bought and which contains, in normal circumstances, that surplus beyond the cost of production (including the cost of sale) which enriches the shareholders and allows for continued economic viability.

So the kernel of this complex and extremely wasteful exercise is profit which is yielded only when purchasers are persuaded to buy specific goods or services from among the competing suppliers. It is important for capitalist enterprises to ascertain public attitudes either to adopt their products or prices to prevailing modes or to influence change in those attitudes by product design, price or advertising.

Politics and public opinion
In the last British General Election, the Labour and Tory parties spent some £18 million each and the Liberal Democrats spent £4.3 million. These large sums were additional to what might be called their ’constant capital’ in the form of existing organisation, publicly-funded offices, salaries and equipment; vast sums that must surely conflict with the notion of ‘free’ elections.

These amounts are being dwarfed by the massive sums currently being invested in the US primaries, where the two candidates for the role of capitalism’s political office manager are being selected. In contradistinction to the nonsense about ‘spreading democracy’ in areas deemed of consequence to US interests, the American variety of that system reveals a monumentally expensive and cynical exercise between two politically indistinguishable groups concerned with sculpting politics in the general interests of capital. As in Britain and the rest of the developed world, other aspiring politicians, denied real public exposure by a pensioned media, will be permitted to enter the hustings to make up the numbers and reinforce the fiction that the public are offered a fair and informed choice.

Obviously Public Opinion in both politics and commerce is of considerable importance; but it is politically innocuous in that it never questions the fundamental way in which the needs and requirements of the human family are organised. Politicians, the business fraternity, clerics and journalists may criticise some aspect or aspects of the system: show a preference for making some adjustment in planning or administration or suggest a different political or economic strategy but always within the framework of the existing social system.

Such people may display courage, energy and enthusiasm in campaigning for a cause but always they do so on the assumption that there is no alternative to the present order of things; that the old political and economic fundamentals of capitalism are as inevitable as the seasons; that they have always existed and that there is no other way of running society.

Dominant ideas
Karl Marx made the obvious point that the ideas that dominate in society are those of its ruling class. It doesn’t follow that in our present society the majority of people like capitalism. On the contrary, the mere want or dire poverty of capitalism, the frightening destruction of the biosphere, the increasing disparity of wealth between rich and poor, the permanent threat of war, violence and crime, these things are too pronounced, too close to the lives of the people to escape being the daily staples of news and public concern.

The point was well made by a contributor to the World Socialist Movement’s website (WSM_FORUM@yahoogroups.com) who quoted a University of Michigan opinion poll showing that some two-thirds of Americans believe government is being “run by big interests looking out for themselves”.

We do not need an opinion poll to confirm this finding; ask those you work with or the people in the pub or in the club. It is no secret that a small minority of people are millionaires and billionaires or that such people do not actively participate in producing goods and services. Unfortunately, despite claiming that they live in a democratic society, most people’s reaction to their own condemnation of the system is likely to be something like. “Yes, it’s true but, unfortunately, there’s not much we can do about it!”

In the past

Capitalism’s great historic mission has been to make the production of wealth social; socialists want to make the distribution of wealth social. To achiever its purpose the bourgeoisie overthrew feudal society and its aristocracy by means of violent revolution. To do that, to get the political control of that combination of labour power and the resources of nature, they had to contest and overcome the prevailing public opinion.

A stalwart of the, then, prevailing public opinion was the church. It proclaimed that the power of kings to rule was ordained by God. In turn this ordinance of Divine Right was reciprocated by loyalty from king to church. Power under the monarch was organised by patents of vast estates to men who were favoured by the monarch for service to the crown and who paid tribute and pledged loyalty to the crown. This aristocracy of lords and titled personages in turn granted servitude to the poor and dispossessed serfs who, in return for working their landlords estates and being available for military service, were afforded the privilege of a portion of land on which to provide habitation and subsistence for themselves and their families.

As the medieval merchants, the burghers of the towns, grew more affluent and nascent technological developments created the basis of greater productive unit’s for the employment of labour the middle class, the bourgeoisie, challenged the aristocracy for political power in order that it could legislate political conditions conducive to its interests. The public opinion that underpinned feudalism had to be changed including the theological dictums of the church which upheld the power base of the king and the aristocracy and condemned such practices as usury, as banking was an important function in the new fledgling capitalism.

So Europe saw the birth of Protestantism and ‘religious’ wars that concealed the profane interests of the opposing owning classes. The victory of capitalism over its archaic rival was assured; it represented a progressive social development, in fact an idea whose time had come and it was ultimately irresistible.

Public opinion today

Today capitalism reigns supreme throughout the world not because the majority support it but simply because the majority accept it and they accept it because they know of no alternative to it. Socialists offer a clear, practical and rational alternative but as yet the socialist movement is small and unfortunately the broad Left, whatever its intentions, has not only created massive confusion among our class but in claiming state capitalism as its goal, these ersatz socialists have created a mass consciousness of the cure being worse than the disease.

This notion of the immutability of capitalism is the bulwark that defends that system and the ruling class and their political hirelings are not slow to use lies and scare tactics in defence of their system. The millionaires and billionaires do not invest their millions and billions in the electronic and print media to inform the working class about the cause of their problems; these are valuable instruments in fashioning contemporary public opinion. The media will find space for acres of nonsense: a man who bites a dog, a Prince, of whose mother, the Head of the Anglican Church, advised him to go killing in Afghanistan, the lunacies of celebrities. . . Effectively, what we call ‘news’ is part of the conditioning process of capitalism.

The fare served up by political journalists is simply the current vicissitudes of capitalism; the vices and virtues, as they or their masters see them, of the inevitabilities of the system. Rarely are they equipped with a knowledge of the socialist alternative and even if they were and wished to advise the public it is unlikely that their material would pass muster with the concealed editors – the shareholders.

Socialism is not a palliative for the ills of capitalism; those ills are endemic to the system and they have defied the best plans and the best intentions of the wise and the well-intentioned right across the political spectrum. Uniquely socialists do not suggest that they have the answer to either the system or any the system’s problems; in fact we argue that they are not problems, they are inevitable aspects of capitalism; that instead of voting to change the politicians who run the system we should be voting for representatives mandated to abolish capitalism and establish socialism.

Still, whether they like what is happening or not, the media must deal with what are deemed newsworthy situations They must report the presence of 200,000 people demonstrating in Trafalgar Square about the war in Iraq. The case for socialism, too, will become ‘news’ when 200,000 people are demonstrating not against a particular war but against the system that causes wars and the multiplicity of social evils of which the Left make separate causes.

The socialist objective

The public opinion that socialists want to promote is one that encourages the public to consider the case for socialism and ultimately to use the limping democracy afforded by capitalism to abolish that system and establish socialism.

Socialism will mean that all the instruments of production and distribution will be taken into the common ownership of society as a whole and will be used solely to produce the goods and services needed by the human family. The axiom: “From each according to their ability; to each according to their need” will become the general principle underpinning the production and distribution of wealth. The wages and money system, so wantonly wasteful of most human activity today, will become redundant; people will no longer be stratified by class divisions; the nexus between property and crime will be broken and the vested interests that promote armaments and wars and a frightening threat to the entire biosphere will cease to exist.

The nature of the socialist case determines the means by which it will be achieved. Socialism from its inception will need the voluntary co-operation of its citizens. The mass of people will no longer be anonymous wage slaves. Those who opt for socialism must know the life-changing benefits to be derived from the new system; equally, they must be clearly aware of their individual obligations to that system.

That is what socialism is about; it is not a quick-fix; it involves clarifying the meaning of socialism and shattering the belief that there is no alternative to capitalism and that cannot be done by claims that we can patch-up the system with piece-meal reforms.

That is something we would ask out fellow-workers on the Left to consider.

Richard Montague

Further articles by Richard Montague can be found here.

World Bankers (2008)

Book Review from the April 2008 issue of the Socialist Standard

The World Bank – A Critical Primer. By Eric Toussaint. Pluto Press.

Throughout this comparative study of official World Bank statements and internal memos, Eric Toussaint lays bare the absolute conflict between the public and private ideologies, time after time revealing the imperative of achieving US political aims above all other considerations. It is a very interesting book making the facts and figures of economics accessible to the layperson through ample explicit tables and clear explanations with minimum use of jargon.

Contrary to common belief, the mission of the World Bank under the umbrella of the UN was not and is not to reduce poverty but (1) to rebuild Europe post second world war and (2) to promote the economic growth of the South through development. As a part of the World Bank Group the World Bank is (supposedly) bound by the UN Charter and according to the International Court of Justice it is the duty of the World Bank to respect human rights and customary law in general. However, nowhere is this obligation seen to be incorporated in the implementation of their policies; in fact examples abound as to how readily and easily these obligations have been circumvented or simply disregarded. In strict violation of a UN right of people to self-determination the World Bank granted loans in the 1950s to Belgium, France and Britain to finance projects in their colonies, mostly for mining for the benefit of the colonial powers and then, following independence, the debt was transferred to the newly emerging nations. This “odious debt” is a violation of international law which Toussaint describes as having been imposed on “the Bank, with the connivance of its main colonial shareholders and the blessing of the US”.

The Bank’s mandate was to be purely economic, not to be involved in politics but even the first loan it granted in 1947, to France, was held up by the US government until Communist Party members were ousted from the coalition government. One chapter is specifically devoted to examples showing that the policy of granting loans is first and foremost determined by the US government often on the basis of purely political objectives. From the 1990s the US influenced against granting loans in areas that would compete with US products. Where oil was concerned drilling was encouraged, refining, not. In essence, more primitive accumulation, showing no regard for environmental concerns or human rights and contrary to the UN Charter. The over-riding message is the blatant, systematic disregard for the founding principles of the Charter.

As to the answers to criticisms of the Bank’s succession of errors or bad management Toussaint reveals them to be “a deliberate part of a coherent, carefully thought out, theoretical plan, taught with great application in most universities.” The strategy, in a nutshell, is that providing infrastructure should fall on the state sector and anything that might prove profitable should be given to the private sector (preferably favouring multinational corporations), i.e. privatisation of profits combined with the socialisation of the cost of anything not profitable. Within the indebted country failing private companies would have their debt transferred to the state (as the military junta in Argentina transferred $12 billion of private debt to the state). Thus the capitalists in developing countries escape their debt, having it paid instead by the Treasury at the expense of the workers (Toussaint’s analysis). In Argentina in the 80s (just one typical example) even subsidiaries of transnational corporations indebted to their parent companies had their debts transferred to the Argentina Treasury; Renault, Mercedes-Benz, City Bank, Chase Manhattan, Société Générale etc. etc., all transferred their debt and as the government had no access to their accounts, one might raise an eyebrow!

Describing the demise of Mexico in the 80s Toussaint is of the opinion that “Mexico has lost control of its destiny which, historically, has been the US’s objective since the nineteenth century.” By the end of the 90s all six major developing regions showed negative net transfer meaning simply that their debt to the World Bank was continuing to grow because they couldn’t keep up with the payments. Reports and internal memos reveal the Bank saw the crisis on the horizon but their “double discourse” informed the public and indebted countries that there was nothing to worry about. When the subject of Debt Reduction was eventually raised (in 1989) by the US government the Bank complied. This consisted of indebted nations buying US Treasury bonds in exchange for a reduction of their debt; in effect now the indebted countries were financing the policy of indebtedness of the US itself. As for the Bank’s own accounts, since its founding in 1946, they have consistently produced positive net results. Since 1985 each year has exceeded $1billion in profits whilst all developing countries’ net transfers since 1987 have been negative, resulting in increasing debt.

Eric Toussaint is President of the Committee for the Abolition of Third World Debt (CADTM) whose mission is “to contribute to the emergence of a world based on the sovereignty of its peoples, on international solidarity, equality and social justice” with which we can broadly agree. Throughout the book he promotes “a break with the capitalist system” and tells us that “a system of redistribution of wealth is needed.” Point 30 of 31 indictments of the World Bank says “a new international, democratic institution must urgently be found to promote a redistribution of wealth and to support people’s efforts towards development that is socially just and respectful of nature.” Then he goes on to talk of 21st century socialism without addressing what this means except to break away from the Washington Consensus, the World Bank and the IMF in favour of new financial and monetary institutions and to point to possible alternatives such as Venezuela, Bolivia and Ecuador.

An alternative system, hostile to capitalism but without a commitment to abolishing money? – Is it possible that Eric Toussaint hasn’t yet heard of the Socialist Party?

Janet Surman

Pathfinders: Home is where the heart attack is . . . (2008)

The Pathfinders column from the April 2008 issue of the Socialist Standard

It is the year 2028. You have just put the kids to bed, and adjusted your aging parents nightly feed tubes. It is 11.00 pm and you are still wearing the same dressing gown you got up in. You are tired out with looking after the whole family in one flat, and now it’s time to go to work.

You commute 12 metres to your office, where your first holographic design meeting is already underway. You hit the ‘attend’ button and a fresh-faced, sharp-suited, young male version of yourself appears at the meeting. You give your report and take your instructions.

This is not your ‘job’, because there are no ‘jobs’. This is just one of a dozen ‘projects’ you currently serve, each short-term contract found for you by the vast Scout employment network you subscribe to. As projects end, so others must be found, each the subject of heavy competitive bidding. Over years, your rates have been cut and cut. You are working at least 12 hours a day just to get by. You barely see another living soul, outside your family, from one month to the next. You are the most diversely and highly skilled worker the capitalist system has ever produced, and one of the most-overworked.

You are paid by results, so no boss ever needs to watch over you or check your attendance or punctuality. The meetings you attend are not even in real-time. This gives you the flexibility to be exhausted beyond anything a physical workplace would be allowed to tolerate. Soon you will not even need an office, because the office will be inside your head, as all humans will have microchip brain implants, wetware through which your brain can view the world directly and, more importantly, employers and the state can view your brain. The only thing worse than the isolation of your 21st century slavery is a ‘power down’, a sustained cyber-attack which takes out not only your ability to communicate with anyone at all, but your ability to earn and hence your ability to live. The threat of starvation is quite real.

All of this is being predicted now, but for ten years time, not twenty. Home-working is being hailed as the answer to traffic pollution, expensive office-space and heating, and the increasingly complex and fractured work timetables required both by businesses operating in a 24/7 internet environment, and by workers forced by shrinking health provision to take on the care of their elderly and infirm as well as their children (Guardian, March 14). A report produced by the Chartered Management Institute, a kind of employers’ think-tank, lists a number of imminent and desirable scenarios, including mass home-working, project-based multi-employment and aggressive self-marketing, extreme flexi-time, virtual holographic meetings, robot managers, home care of an aging population, a blurring of ‘work’ and ‘home’, and, on a less gleeful note, the possibility of endemic cyber-warfare.
What’s interesting about this is the spin placed on it by the Institute, which emphasises the upskilling of workers together with their greater flexibility as if these are self-evidently in the interests of the workers themselves. The argument is that workers, being able to pick and choose from a huge, non-geographically based work menu, will be in a position to refuse ‘meaningless jobs’ and ‘will choose ethical careers and not the rat race.’ There is also a lot of reported guff about companies learning ‘to regard wisdom as a valuable resource. Some would try to nurture… rituals and storytelling, and listening to the accounts of long-term employees.’ Managers (not the robot ones, presumably) will be expected to show ‘a greater degree of emotional intelligence… so they can understand how people work and their likely reaction to change’.

In a pig’s eye. What will really happen, if we let it, is this: the global job-market will be matched by a global labour pool, all undercutting each other and desperately vying for ever shorter contracts on ever worse terms, while simultaneously taking on itself the cost of office space, power and heating, formerly borne by the employers, as well as health care for old workers or children, formerly borne by the state. Unionisation, a product of a time when workers physically met together to operate factories, will be made ever more difficult, rights will be eroded, heart attacks and other stress-related diseases due to poverty, long hours, deadlines, isolation and loneliness will rocket, as will antisocial behaviour, binge drinking, drug addiction, depression and suicide. All of this will be unseen and invisible to Health & Safety at Work inspectors, hidden away behind closed doors, the statistics uncollected, uncollated, and unreported. Employers will literally get away with murder.

Conditions for today’s workers in capitalism are not great, even in advanced capitalist countries and even where they are in work. But we can remember the time when we were told energy would be ‘too cheap to meter’ and automation would give us all a problem with how to fill our extensive leisure hours, so we know what such promises are worth. Never trust a capitalist who tells you the future is looking bright, because he doesn’t mean your future, he means his. Things are not so bad for workers that they couldn’t get worse, and extensive home-working, though it might save on car bills, will save employers and the state a fortune by passing costs on to the worker, and in the process creating a workforce ever more fragmented, alienated and easy to control. Looking ahead, ten or twenty years, if one can borrow H G Wells’ Time Machine, the future for workers could be bright, but not as a breed of pasty and enervated hi-tech Morlocks, beavering away in windowless cells to keep the pleasure-loving Eloi in luxury and indolence. For workers to really have a future, they have to stop being ‘workers’. And that means they have to start being socialists.

Paddy Shannon