The War in Ukraine (2014)

From the December 2014 issue of the Socialist Standard

The second in our three-part series on wars currently going on due to capitalism

The Ukraine Defence Minister stated 'A great war has arrived at our doorstep, the likes of which Europe has not seen since World War Two' (Independent, 2 September). The war in Ukraine in 2014 rose out of the 'Euromaidan' protests in Kiev in November 2013 when Ukraine under pressure from Russia backed out of a trade deal: the Association Agreement and Deep and Comprehensive Free Trade Agreement with the European Union. For the pro-European Ukrainians EU membership is seen as synonymous with democracy as opposed to membership of Russia's Customs Union: the Eurasian Economic Community (EAEC) which also includes Belarus, Kazakhstan, and Armenia. The divisions in Ukraine are basically a conflict between two groups of the capitalist class over the choice of the external orientation of the country; toward Europe or toward Russia. As a carrot Russia promised Ukraine $15 billion in loans and 30 per cent discount on natural gas prices.

Ukraine is the 'bread basket of Europe' with its extensive fertile farmlands of rich black soil (chornozem black earth) and the vast fields of wheat, barley, rye, oats, sunflower, beets and other grain and oil crops. In 2011, it was the world's third-largest grain exporter, and according to a 2013 forecast by the U.S. Department of Agriculture, Ukraine is poised to become the world’s second biggest grain exporter in the world, shipping over 30 million tonnes of grain out of the country last year. Ukraine also has a well-developed manufacturing sector, particularly in aerospace and industrial equipment, nuclear power generation and hydroelectric generation, an advanced rocket systems industry plus the old industries from the Soviet period of coal mining, steel, and metals. It also has its own proven, significant, but yet totally undeveloped shale gas reserves.

East or West?

For the Russian capitalist class Ukraine is the 'near abroad' and therefore within the sphere of influence of Russia. On 28 February Crimea (given to Ukraine in 1954) was occupied by Russia. Since the 1700s it has been the base of Russia's Black Sea Fleet but since Ukrainian independence in 1991 the base in Crimea has been leased from Ukraine, and the leasing agreement was due to expire in 2017, and unlikely to be renewed. This would have meant Russia not having a warm water port giving access to the Mediterranean and via the Suez Canal to the Indian Ocean. A great deal of Crimean real estate is Russian-owned, in late February Russia’s Ministry of Economic Development called on Russian capitalists to invest $5 billion in infrastructural projects in Crimea. Gazprom is interested in rich oil and gas deposits off the Crimean coast, as are such western companies as Exxon, Shell and ENI. In April Chevron signed a 50-year lease to develop Ukraine's shale gas reserves which probably stoked Russian fears about losing its influence in Ukraine and as a major gas market. International Business Times (8 November 2013) wrote that 'Chevron's agreement with Ukraine was supported by the US as part of its national security strategy to help reduce Russia's hold on Europe and Kiev.'

In April pro-Russian separatists in the Eastern Ukrainian provinces of Donetsk and Luhansk declared themselves 'independent' of Kiev as the People's Republic of Donetsk. Russia in a throwback to Tsarist times refers to the disputed areas of south-eastern Ukraine as Novorossiya. In six months of fighting 3,000 people have been killed. This area includes the old heartland of Soviet industry with its concentration of coal and steel production; the Don coal basin known as the Donbass. Essentially Russia wants the Donbass as a 'protectorate' so that Ukraine can never join NATO or fully orient its foreign policy westward. The loss of the Donbass region which accounts for 16 per cent of GDP and 27 per cent of industrial production would be a disaster for Ukraine, whose economy will contract 7 per cent this year and may not expand at all in 2015 according to the European Bank for Reconstruction and Development (Russia Today 14 May). In August the war expanded when a new war front opened on the coast where pro-Russian separatists took Novoazovsk, a small town on the way to the strategic port city of Mariupol on the Sea of Azov.

The economic war between Russia and Ukraine meant that Russian loans were frozen in January, the price of gas to Ukraine was raised by 80 per cent in April, and Russia insisted that Ukraine pay a $2.7 billion gas debt or it would halt natural gas supplies. Also Ukraine had a foreign debt of $135 billion in 2012 with $13 billion due to be paid in 2014 mostly to European banks, and another $10 billion due in 2015. Standard & Poor cut Ukraine's credit rating describing it as 'a distressed civil society with weakened political institutions' (Bloomberg.com 28 January). In March the IMF authorised an $18 billion loan to Ukraine over two years, and the World Bank coughed up $3.5 billion, both designed to stop Ukraine defaulting on interest payments on its foreign debt. The hryvnia (Ukraine’s currency) has lost 35 per cent of its value against the dollar since the beginning of 2014.

Ukraine has not recovered economically from the world capitalist crisis of 2008-09 and further austerity is required, nay demanded by the IMF as a condition of its loans. The IMF want 'commitment from the country to undertake painful austerity measures, tough reforms and a near-certain recession as a result' (The Times, 25 February) while Reuters called it 'some harsh economic medicine' (5 March). This will mean cutting fuel subsidies, government spending, pensions, and wage freezes for workers. All this will lead to higher gas prices which are projected to rise by 50 per cent in 2014 and by 120 per cent at the end of four years, rising inflation, an increase in unemployment, and a decline in the standard of living for the Ukrainian working class.

The economic crisis hasn't affected the profits of Rinat Akhmetov, the richest man in Ukraine (assets of up to $28.4 billion), his company DTEK controls half of Ukraine's coal, steel, iron ore and thermoelectric industries, and is the largest employer in the Donbass. A Russian oligarch Abramov owns the mining company EVRAZ. The coal industry in Ukraine is affected by a crisis of over production which was identified in the trade magazine Coal Age in December 2013: 'A production surplus in 2013 has hurt the Ukrainian coal industry which needs to reduce the level of production, and in addition, has even decided to temporarily close about 17 percent of all mines in the country. Ukraine is the fourth largest coal producer in Europe after Russia, Germany and Poland. The Ukrainian coal industry is believed to have 4 per cent of world coal reserves, or 33.9 billion Mt of proven reserves. This is enough to maintain the level of coal mining for 2012 in the country for almost 400 years.'

As always in capitalist crises, the working class are made to pay for the failures of the capitalist system. Ukrainian miners in the Independent Trade Union of Miners at the EVRAZ-owned Krivyi Rih iron ore mine in the Kryvbas (iron ore basin) near Dnepropetrovsk in Eastern Ukraine are fighting to defend their interests as workers against attacks by the capitalist class who are seeking to make redundancies, and 30 to 50 per cent cut in their real wages. The miners oppose Ukrainian nationalism and Russian separatist ideology and concentrate on fighting against 'the never-ceasing encroachments of capital' (Marx Value, Price and Profit), but the miners have had to establish self-defence militias to defend themselves against intimidation, and attacks by lumpen elements called 'Tatushka' recruited by the Russian separatists. Essentially these are gangs of thugs organised by mine bosses to crush organised workers before the region can be absorbed into the petro-oligarchy and anarchic-capitalist state that is Russia.

Sanctions

Because of Russia's involvement in Ukraine, the western capitalist powers have imposed sanctions on Russia's capitalist economy with its large energy reserves (oil and natural gas represent 68 per cent of Russia's total exports). These commodities are under pressure as new and cheaper supplies come onto the market, and crude oil prices worldwide hit a nine month low in August. Russian capitalists targeted by western sanctions included the largest bank Sberbank, oil companies Rosneft and Transneft, and Gazprom. Their access to capital markets for any long-term funding was restricted, new exploration projects in Siberia and the Arctic were affected by barring foreign oil companies Exxon and Shell from providing any equipment, technology or assistance to deep-water, offshore, or shale projects with Gazprom Neft, LukOil, Surgutneftegas, and Rosneft. Russian gas is delivered to Europe by pipeline which probably explains why Gazprom's main business is reported not to be on the sanctions list.

Russia is the EU’s third-biggest trading partner with a cross-border trade of $460 billion, and the EU gets a third of its oil and gas from Russia with 40 per cent of that gas pumped across Ukraine. The dominant capitalist power in Europe, Germany, has an economy intertwined with Russian gas and oil exports worth more than $75 billion a year. Larry Elliott wrote that 'a key aim of Berlin's foreign policy for the past quarter of a century has been to re-integrate what used to be the Soviet Union and its satellites into the market economy. Expanding capitalism to the east was seen as both good for German business and for German security. Resistance from German industry makes it unlikely Merkel will agree immediately to Iran-style sanctions that would freeze Russia out of western markets' (Guardian 28 August). The objective of US and European capitalism is energy diversification which means to reduce dependence on Russian oil and gas.

The US and EU capitalist blocs are using the military threat of a revived NATO against Russia as part of the western capitalist attempt at influencing the external orientation of Ukraine towards Europe. In September NATO announced the creation of a spearhead 4,000 strong 'rapid reaction' force, with a HQ in Poland and forward units in Poland, Romania and Estonia who have all indicated willingness to host the bases so that NATO would have a continuous presence in eastern Europe. Ukraine has decided to pursue membership of NATO, and clearly the western capitalist powers regard the Russian 'near abroad' as their own sphere of influence. The Lithuanian president said 'It is a fact that Russia is in a war state against Ukraine. That means it is in a state of war against a country which would like to be closely integrated with the EU. Practically Russia is in a state of war against Europe' (Financial Times, 31 August).

The war in Ukraine was no impediment to the NATO military exercise in Ukraine in September known as 'Rapid Trident' at the International Peacekeeping and Security Center at Yavoriv, 60 km from Lvov in Western Ukraine close to the Polish-Ukrainian border. 1,300 troops from fifteen countries including the US, Britain, Germany, Spain, Poland, Norway, and some former Warsaw Pact countries that are part of NATO's Partnership for Peace programme (non-NATO members such as Ukraine and other former Soviet Republics) took part.

Russia went to war with Georgia in August 2008 when Georgia sought to join NATO. Russia could not allow this and Russia halted NATO expansion into the Caucasus. A Ukraine integrated into the EU and NATO would encircle Russia, which was the same reason for war against Georgia in 2008. As always in capitalism the economic conflict over control of mineral resources and trade routes (such as pipelines) will be the cause of war.

Steve Clayton

(Next month: concluding article on the war in Gaza)

Editorial: The Choice is Always Ours (2014)

Editorial from the December 2014 issue of the Socialist Standard

The media have not been short of political drama to occupy them in recent months: the rise and rise of UKIP, the defections of two sitting Tory MPs , the accusations of dirty tricks, or the ‘nail-biting’ drama of the Rochester by-election.   Anyone following all this might be forgiven for thinking that the political process is a media soap centred on the rivalries and intrigues of a cast of political celebrities.  They might think, too, that it is a game of little consequence for the lives of working people whose only role in all this is to be persuaded to vote this way or that.  With the declining turnout at the polls in recent years, it seems that working people, the majority of voters, think so too. 

But then in September a remarkable 84.5 percent of the electorate north of the border went to the polls to vote in the Scottish referendum on independence.  If working people in Scotland were disillusioned with the current political establishment, then they showed themselves still strong in their belief that their future depends on having the right national institutions and leaders to run the capitalist system. Whichever way they voted, ‘yes’ or ‘no’, they demonstrated their ongoing willingness to give away their power to political leaders, representatives of the capitalist class.

Then, in November, alongside the reports of political recriminations and infighting, the media sought to bring a patriotic lump to our throats by reporting on an ‘art installation’ at the Tower of London.  The installation consisted of an assemblage of 888,246 ceramic poppies, each one representing a British military death in the ‘Great’ war.  (An insult, you might think, to those conscripts among the dead who objected to the slaughter). The unintended symbolism of the event went largely unremarked, but revealed the nationalist and militarist sentiments underpinning it – for the poppies, forming a blood-red sea of lost working-class lives, were set in the defensive moat of the Tower of London,  a building deliberately erected to represent the authority of the state in eleventh-century Britain and the power of the economic elites that controlled it. 

Millions of working people of many nationalities followed the orders of their political and military leaders and slaughtered  one another on the battlefields of WWI – the ‘business war’ as it was known. Yet it was also tens of thousands of working-class Germans in uniform that helped bring the slaughter to an end by their refusal to carry on the fight. We should also remember that had the fragile internationalism of working-class organisations before the war been more firmly cemented, their pledge not to fight one another might have withstood the onslaught of nationalism. War would then have been prevented and millions of lives spared. Our past failures as a class stand as lessons to us for the future.

We always have a choice: we can continue to place our power as a class into the hands of institutional leaders who use it to pursue the narrow interests of a capitalist elite, or, we can take responsibility for it collectively and democratically, use it to further our own majority interest and, in the process, act in the interests of all humanity.

Fascism in Britain (2005)

Book Reviews from the August 2005 issue of the Socialist Standard 

Martin Pugh: Hurrah for the Blackshirts! Fascists and Fascism in Britain Between the Wars. Jonathan Cape.£20.00.

Nigel Copsey and David Renton, eds: British Fascism, the Labour Movement and the State. Palgrave Macmillan. £50.00.

These two books are not recommended for the various views expressed by the authors and contributors, but for the wealth of information, much of it new, on British Fascism.

The first fascisti, under the leadership of Benito Mussolini, was founded in Italy in 1919; Britain’s first Fascist organisation emerged in May, 1925, six months after Mussolini’s coup. It, too called itself Fascisti, but the following year changed its name to the British Fascists. Most of its leaders were aristocrats or men from military or naval backgrounds. They were militantly anti-Jewish and, through endorsement by such newspapers as the Times, Morning Post and the Daily Mail, believed in a worldwide Jewish conspiracy as portrayed by the infamous forgery, The Proctocols of the Learned Elders of Zion. The British fascists soon, however, split into even more extreme sects such as the National Fascisti and Arnold Leese’s Imperial Fascist League.

Martin Pugh demonstrates in considerable detail the close connections between the Fascist groups and parties and rightwing, and even “mainstream”, conservative politicians. The Fascists were often looked upon as more decisive Tories who. wanted a more powerful, corporate state which would, hopefully, keep the “lower orders” in control and stop “alien” immigration. Many members of the Conservative Party would also be members of one of the fascist groups at the same time. Both could be depended upon to defend the Nation and the Empire. Indeed, between the two world wars, not a few members of the Royal family, including the then Prince of Wales, were sympathetic to Mussolini’s Fascism  and later Nazi Germany. Winston Churchill expressed admiration for Mussolini, and the Prince of Wales had Nazi friends.

Of course the Fascists opposed the General Strike of 1926. In fact, as Pugh notes, they were particularly enthusiastic anti-strike volunteers, enrolling in the Organisation for the Maintenance of Supplies, and as Special Constables. Chief constables welcomed the Fascists, but only as individuals and not as uniformed members of Fascist parties as these had hoped.

In 1920, the Conservative Member of Parliament, Oswald Mosley, crossed the floor to sit as an independent; in 1924, he joined the Labour Party. His views were already interventionist, corporatist, almost Fascist, but he was enthusiastically welcomed into the Labour Party. By 1929, Mosley was appointed Chancellor of the Duchy of Lancaster, but he soon resigned, and in February 1931 he launched his New Party.Then in 1932, after visiting Rome, he founded the British Union of Fascists. The BUF adopted the Corporate State, with the abolition of political parties, as its official policy. At this stage, Mosley and the BUF looked to Italy for their model, and it was not until 1936 that the BUF became pro-Nazi. Pugh notes that Mosley regularly visited Italy, and was rewarded with funding by Mussolini for several years. Mosley did not meet Hitler until 1935. During this period, the British Union of Fascists, which added the phrase “and National Socialists” to its title, became increasingly anti-Jewish. The BUF was organised militarily, complete with uniforms until these were banned in 1936. For a number of years, the Daily Mail, owned by Lord Northcliffe, supported the BUF and promoted Fascism.

Besides the BUF, there were still a number of small Fascist parties, as well as various “front” groups such as the January Club and Anglo-German Fellowship and, later, the Link. As in the 1920s, such groups had many Tories, rightwing and mainstream, as members. Indeed, most Conservatives, in Parliament and the country at large, were either pro-Fascist Italy, pro-Nazi Germany or, like Neville Chamberlain, appeasers, as Martin Pugh demonstrates in some detail. Many of them continued to hold similar ideas even after Britain had declared war on Germany, on 3 September, 1939. In 1940, Oswald Mosley, as well as about 800 Fascists and others considered to be pro-German, were arrested and imprisoned. But by 1942, most had been released. Mosley was conditionally released from prison in 1944. The BUF had been banned in June, 1940.

British Fascism, the Labour Movement and the State is a collection of fairly short and diverse essays by various authors. Richard Maguire discusses the use of Fascists by the Conservative Government in defence of what Stanley Baldwin called the “community” in defeating the miners, and during the General Strike of 1926. And, as noted in Pugh’s book, the authorities were more than prepared to use Fascists as strike-breakers, their views being that the Fascists could be depended upon as Special Constables and the like.

Richard Thurlow outlines the formation of the Security Service (MI5), and its collaboration with Special Branch in surveillance of the Communist Party, and Comintern agents in Britain, particularly during the 1920s and  1930s. After about 1933, MI5 and Special Branch began to interest themselves in the British Union of Fascists, which hitherto they had not done. Interestingly, Thurlow points out that Maxwell Knight of MI5 had himself been the British Fascists’ Director of Intelligence in 1927. Graham Macklin discusses the attitude of the police and magistrates towards the Fascists in their confrontations with the Communists, and shows that in general they were more sympathetic towards the Fascists than the Communists. Not surprisingly, Oswald Mosley was particularly effusive in his support for the police, many of whom were anti-Jewish. Philip Coupland outlines what he calls “left-wing fascism”, in which the BUF use leftwing terminology to attract workers and disillusioned Labourites and Communists. In parts of the country this was quite successful.

David Renton discusses the so-called anti-Fascism, during the 1974-79 period, by such organisations as the Anti-Nazi League, the Trade Unions and the SWP, all of which from a socialist viewpoint achieved nothing in defeating fascist ideas and activities. Indeed, a party like the BNP today probably has as much support as did the BUF in 1935. Possibly more.

Peter E. Newell

A brief history of Public Relations (2011)

From the April 2011 issue of the Socialist Standard

Are workers brainwashed by capitalism?

If you want to know the truth, you cannot rely on newspapers. We have that on good authority – in fact, on the authority of the more honest newspapers. (The more honest papers are those that are read mainly by capitalists who need reliable information about the world in order to make investment decisions, as opposed to those that are read mainly by workers.)

In a startlingly frank appraisal of the history and practice of the public relations (PR) industry, The Economist (18 December 2010) admits that PR was invented in the early 20th century to counter working-class struggles, and rising popular resentment against capitalism, by getting newspapers and journalists, until then sympathetic to the workers, on the side of the business class. American business was at the time worried by the rise of a new phenomenon: public opinion. The business élite feared this, especially as it was developing in an anti-capitalist direction, and were determined to take control of it and manipulate it for their own ends. PR’s founding father, Edward Bernays, was quite explicit about the aim: ‘the conscious and intelligent manipulation of the organised opinions and habits of the masses’.

That all this is true, and that the century-long and ongoing pro-capitalist PR campaign was and is a great success, to the extent that there are today no mainstream media outlets that are not pro-capitalist, is pretty much indisputable. This means that, today, newspapers and news programmes (those read and watched by the working class) are not what they appear and claim to be. Their role is not to enlighten and inform, but to mould public opinion so that it reflects the interests of the capitalist class and the state. ‘News’ is propaganda, not genuine journalism.

The truth of this has, however, led to a logical but erroneous conclusion among many radical thinkers – that the working class accepts capitalism because it has been brainwashed into it by clever capitalist PR. The argument can even take a Marxian-sounding form: capitalist society, say some Marxists, maintains and reproduces itself through the dissemination of the ‘ruling ideology’ – i.e., the ideas, beliefs and values of the ruling capitalist class – and its acceptance by the working class. The working class, in accepting these ideas, as they learn them from newspapers and so on, is thereby integrated into capitalism and comes to accept its own subordination. This theory has the added appeal, for Marxists, of seeming to explain something that stands rather in need of explanation in Marxian theory – the failure of the class struggle to materialise into the revolution predicted by Marx.

The argument is compelling but mostly false, as shown in an excellent essay by Conrad Lodziak in the journal Radical Philosophy (‘Dull Compulsion of the Economic: The Dominant Ideology and Social Reproduction.’ No. 49, Summer 1988). The essay, and the empirical data and ethnographic studies it draws upon, is obviously now dated in some respects. But its arguments are still strikingly relevant and persuasive. This article will reprise Lodziak’s argument and briefly consider its implications for socialist politics.

Dull compulsion versus brainwashing

The idea that working-class acceptance of capitalism can be ascribed to the workers’ ‘false consciousness’, Lodziak calls ‘the dominant ideology thesis’, and it is, he says, ‘taken as a self-evident truth amongst a majority of the left’. But is it true? It is, after all, a proposition capable of empirical proof or disproof. Do workers in fact believe and accept the ideas that make up the ‘ruling ideology’? The answer, says Lodziak, is yes – and no.

It is true that most workers accept certain key ideas that are essential to the continuation of capitalism – for example, they accept the justness of ‘a fair day’s wage for a fair day’s work’, they accept meritocracy (the idea that it’s OK for people to rise above them in the social hierarchy if the rise is based on merit and talent), they accept that most people should get a job or career and strive to ‘get ahead’, and so on. They do not, however, universally accept or agree with other aspects of the ruling ideology, such as property and inheritance rights, principles of capital accumulation and the right to a profit, state neutrality, occupational structure, distribution of incomes, the right to manage, and so on.

At this point, a Marxist might say, OK, the ‘dominant ideology thesis’ is then justified: the working class does accept the most important aspect of the ruling ideology, which is the acceptance of the inevitability of working for wages. But this is not so, says Lodziak. To prove the ‘dominant ideology thesis’, you must show not just that workers accept certain ideas, but that those ideas are sufficiently important to them for them to commit to the ideas and act upon them. And this is where the thesis falls down: ‘the required degree of ideological motivation appears to be absent amongst a majority of the populations of advanced capitalist societies’. Instead, what you find is ‘an absence of belief’: passivity, resignation, bewilderment, confusion, disorientation and marginalisation are all more important in determining working-class actions than so-called ‘false consciousness’. And the explanation for this passivity is easier to find in ‘largely publicly identifiable features of the social environment’ than in ‘some mysterious process of class brainwashing or collective hypnosis’. 

The ideas which do dominate working-class thinking tend to be those ‘directly relevant to the practical and immediate demands of the everyday life-world as experienced’ – ideas related to things over which workers do have some control, such as deciding whether to resign and look for a new job, or wait for a promotion; whether to get married, or divorced; how to organise home life and what to do with free time, and so on. Workers’ thinking is, quite understandably and sensibly, focused on finding security, and avoiding insecurity. This is impossible without building relations of dependence and subordination with an employer, the state, or a breadwinner. Workers are materially, not ideologically, subordinated; economic necessity and state coercion are more important than ideology. Workers do what they do because they must – not because they’ve been tricked into thinking it’s a good idea.

This also goes some way to explaining why Marx’s prediction of revolution was premature, and why workers often eschew ‘oppositional’ politics. ‘Workers rightly believe that opposition may lead to redundancies or closures, and that it may be impossible to get another job.’ And the more intolerable the alternatives are, the worse the prospect of unemployment is, the worse pay and conditions workers will be prepared to accept – explaining the present government’s determination to push through punitive benefit reform, even though unemployment is on the rise.

In short, the consciousness of the working class is best understood not in terms of ideology, but in terms of ‘needs-based motivations’. By talking in terms of indoctrination, the left displays an ‘insensitivity to the lived experience’ of the working class.

Political conclusions

We in the Socialist Party are often accused by our opponents, and even sometimes by our supporters, of not having made any progress in our 100-year history. What the foregoing arguments should have made clear is that it is not within our power to make the kind of progress demanded of us. The working class generally is ideologically indifferent, and accepts capitalism because it must. The only thing that can disrupt this to the advantage of socialists is, says Lodziak, ‘effective oppositional practices inscribed with oppositional viewpoints’ – in other words, the development of the class struggle. We can contribute to the development of this struggle, and we do, but it is not within the power of a small party such as ours to determine its course. The failure of sufficiently large and powerful oppositions to arise is down not to a lack of energy or dedication on the part of socialists, nor the absence of a sufficiently clever socialist advertising campaign, but to the power of economic necessity and state coercion.

This article may seem to have argued itself into a corner. If all this is true, what can be done? The answer may not satisfy socialists who understand the urgent need for radical change, but it is inevitable all the same: we just keep struggling.

Lodziak has three other main concluding points of advice for any socialist opposition. (The commentary that follows the advice is of course ours, not Lodziak’s.)

First, participation in organised politics must be made sufficiently attractive to entice people out of their privatised worlds. This means that the boring treadmill of reformist politics and the ridiculous sectarianism, authoritarianism and leadership-dominated activity of Leninist sects is out. Of course, the Socialist Party has not been wildly successful at attracting people, but it is a commonplace on the left that we have at least managed to be human and charming, make our meetings places of free and open discussion, and our activity the result of freely arrived at decisions and voluntary activity. Our members tend to join and remain members for life; most rival leftist outfits operate a ‘revolving door’ policy.

Second, ‘effective opposition is, amongst other things, always an effective ideological opposition’, which means engaging in a ‘vigorous and continuous ideological contestation in the public sphere, not only in challenging the dominant, but also in the advocacy of oppositional alternatives’. Again, we cannot claim sufficient success in this area, but we have at least taken the challenge seriously, unlike the left generally, which is content to pander to prejudice rather than challenge it, propagate the ruling ideology rather than contest it, and mock the advocacy of alternatives as utopian. Credibility for socialism, says Lodziak, can only come from ‘the relentless public display of commitment to oppositional alternatives, and from the unwillingness of agents of opposition to compromise principles’. Yet again, the Socialist Party, unlike the left, can lay claim to a proud history of doing just that.

Third, we need to demonstrate the relevance of socialism to the needs of the vast majority. Most people will not struggle or even vote for abstract things or ideas, says Lodziak, but will fight to win material benefits to improve the quality of their lives and guarantee the future of their children. This might seem to argue against the Socialist Party’s case. Indeed, we are often accused by our leftwing opponents of doing nothing but try to win support for abstract ideas. This is not true: what we have tried to do is show that many of the material benefits people are fighting for are only possible of realisation in a socialist society. If what you want is a pay rise, then you can join a union. If you want to fill the lonely, empty nights, you can join an evening class or the local darts team. And so on – workers will need no advice from socialists on these counts. But what if you want a full and satisfying life for you and your children – with meaningful and enjoyable work, plenty of free time to spend with your family, friends and loved ones, and to pursue your interests and passions, a life free of stress and anxiety and boredom (if you’re lucky), and of extreme poverty and violence and war and environmental catastrophe (if you’re not)? In that case, you will have to think carefully about what socialists say. What we say is that this is a laudable aim – indeed, our rightful inheritance as human beings – but is impossible to achieve under capitalism.

This is clearly a difficult argument to make, especially to ‘ideologically indifferent’ workers. But we live in interesting times – capitalist crisis is to a large extent making our argument for us, and making it more strongly and reaching more people than we have ever been able to. As the foregoing arguments should have made clear, crisis can have the effect of making workers feel even more insecure and therefore even less likely to become socialist. But it also calls into question the viability of the system, and makes it more obvious than ever that it cannot satisfy our needs as human beings. This crisis has a dual potential: it makes aspects of the socialist case for us, even as it threatens to drive the working class further into the welcoming arms of capitalist domination and exploitation. Which way it goes is down at least in part to what socialists and workers think and do over the next decade. Our work as socialists is therefore more urgent than ever.

Stuart Watkins

Loud-Mouthed Upstarts (2008)

Book Review from the September 2008 issue of the Socialist Standard

Who runs Britain? How the Super-Rich are changing our lives. By Robert Peston, Hodder & Stroughton. 2008.

According to Peston, currently the BBC’s business editor, it’s the new super-rich of private-equity and hedge-fund capitalists. They run the country in the sense that the present Labour government feels the need to kow-tow to them for fear of them taking their businesses elsewhere:

“Much of this book is about how New Labour in Government has never flinched from the view that economic disaster for the UK and electoral disaster for Labour would be inevitable if the super-wealthy ever felt their interests were under attack in the UK. Blair and Brown are true believers in one of the main commandments of the Book of Globalization: ‘Thou shalt not be seen to use the tax system to take from the well-heeled, for fear of driving them and all their valuable capital into exile’”.

A number of these capitalists have been given knighthoods and peerages and – this came first of course – have made very generous contributions to the Labour Party amounting in total to millions of pounds. In fact, they – rather than the trade unions – funded Labour’s last three successful election campaigns. Peston’s chapter on the dealings between Blair, Brown, Lord Levy and those he call’s Labour’s “plutocratic benefactors” can only confirm disgust and contempt for the leaders of the Labour Party for the lengths they are prepared to go just to stay in power.

The new super-rich come across as a bunch of loud-mouthed upstarts who buy companies, “rationalise” them at the expense of the workforce, and then sell them, pocketing a huge personal profit for themselves. Their profit is personal because they own their own companies outright and so have a much freer hand to do what they want, not having to comply with the normal company law that applies to “public”, shareholder-owned companies.

Although he criticises them for not paying their fair share of taxes and as a potential threat to political democracy, Peston cannot disguise his admiration for them, seeing them as fulfilling an essential role within capitalism of channelling capital into the most profitable lines of activity (instead of it stagnating in long-established businesses run by stuffy ex-Etonians). He wants the managers of pension funds to behave in the same ruthless way towards the companies they’ve invested the funds in, so as to bring in more money for present and future pensioners.

His chapter on pensions – and the run-down of final-salary company pension schemes – is instructive. Employers originally set these up to retain the loyalty of their salaried employees, but over the years governments have imposed so many obligations on them (frozen pensions, pension transfers, taxes, etc) that it has become no longer worth their while keeping them going. So they have been disposing of them to, among others, private-equity capitalists who hope to make a profit out of investing their funds.

In other words, reforms aimed at protecting people’s pension rights have had the opposite effect. Employers have walked away, leaving workers without the desired protection. Another lesson in the futility of reformism.

Adam Buick

Carry on Campaigning (2012)

From the February 2012 issue of the Socialist Standard

Single issue campaigners ignore the root cause of the problems they highlight and continue along the road of calling for a reform here and there.

Looking back is enormously important to understanding what must be done to avoid repeating earlier mistakes. Unless deliberate steps are taken to change the ultimate direction of politics and economics then people’s needs and welfare will continue to be treated as of lesser import to the overall system. The challenge is more than overcoming an unending string of 'single issues.' It is recognising the overriding necessity for a coherent, viable system which finally serves the people –a truly social system.

As individuals, it's possible or even likely that certain 'single issues' strike a chord which are more personal or pertinent than others. However, until the realisation hits home that they are all the result of capitalist norms and that it is the cause that has to be dealt with, not the effects, we, as 'the 99%' will continue along the road of calling for a reform here and there, and inviting for ourselves and future generations more of the torture we vowed to end.

Shortfalls

The shortfalls of capitalism, in the news big time last year, have been expressed loud and clear around the world.  Numerous items for serious discussion which are generally labelled political, economic or social have been raised but which can rarely be considered in one of these areas in isolation. The links between these three areas and between the separate issues are more of a tangled web than isolated connections.

Consider the connections here in matters which would be seen by activists as environmental problems: mountain top removal for coal, deforestation for monocrops, localised industrial pollution of water, air and ground, depleted uranium contamination from wars, nuclear waste from energy production, etc. All are primarily urgent social problems for reasons of serious risk to the short- and long-term health of workers and their communities but which have been subsumed by the imperative of business and 'the market' to continue making profits - economic considerations come first. Politics being so intricately bound to capitalist economics, politicians are required to make decisions to uphold the system and keep it running as efficiently and profitably as possible. Whichever single issue is selected for scrutiny a similar pattern appears –when it comes to the crunch, decision time, however, the vast majority of politicians smothers it with platitudes and toes the economics line.

When problems related to work are considered it is found that what concerns the worker is different from what concerns the employer. Everything, every angle, every detail, every aspect is decided according to economics. Hourly pay; sick benefits; overtime; final pension; holiday, and paternity or maternity leave, and contracts are for the employer to break or change –not the employee. Time for breaks and lunch, penalties for late arrival, sudden lay-offs, unexpected redundancies, late meetings –you name it, they decide. Trades unions may manage to fight off some of the worst pay cuts, reduce some of the workforce losses and maybe claw back some previously lost advantage, but overall they are fighting an endless, losing battle. A brief scan at statistics clearly shows which side is winning. A social system would approach the work situation from a different perspective: what work is needed to be done by and for cooperating communities, how it can be shared out, satisfaction at work, full participation in decision making and common ownership of all the means of living.

Identifying the cause

When broken down, it can be seen that the stand-alone 'single issues' all spring from a common root, that of the world capitalist system which places the economy and politics above social considerations. One of the more noticeable factors common to popular demands being made around the world is that individuals within the occupations and uprisings have taken note of the indisputable position of the vast majority –'the 99%' –and are protesting and rejecting it.

It is unacceptable to them to be without a voice or proper representation; to be denied free speech within supposed democracies; to have banks and too-big-to-fail companies bailed out whilst witnessing record numbers of house repossessions, unemployed, and children in poverty; to witness increased spending on the military, and huge hikes in the cost of further education; to see social services and public sector personnel hammered; to have all kinds of deals and social contracts reneged on as political and corporate interests refuse to grapple with the problems of climate change; and on and on ad infinitum.

End not mend

Anyone who has tried to remake a garment, repair a complicated bit of carpentry, refashion an item from mismatched pieces or in any way attempted to put something back together so that it works well when it didn't fulfill its function properly to begin with will know that it's far simpler to start from scratch and create a new item. So it is with capitalism and reformism –bin the idea of trying over and over to reform something that has never worked for the vast majority, tweaking it a bit here and there and then having to have another go at it a few months or years down the road when it comes apart again. Far better to use the combined energies of all those seeking a better way of living and working, one based on people as social beings, to organise together according to real democratic principles to bring in a new social system altogether.

If we are seeking an end to the current structure of relations which puts economic matters at the forefront of each and every issue and which is supported wholeheartedly by the current political system then it follows that we are determined to pursue a system organised for the benefit of all –one where social need is the guiding principle. Many social movements and activists go a long way to pointing out just such failings as have been written about here but most fall at the last hurdle. They will reveal the reasons for failure clearly enough; the capitalist economic system that doesn't work for the mass of the people, the logic of which sets out deliberately to fail many. They talk about, suggest, even demand actions to socialise, to redistribute or more fairly distribute assets, jobs, wages, access to land and the means of living but fail to see they are calling for something from a system that can't respond to their demands because of its innate logic.

Making any significant changes calls for a thorough understanding by the majority of a different kind of politics. A raising of awareness of how participatory democracy can really change the status quo to a democracy that is actually, noticeably, determinedly and deliberately organised to reinforce the social aspect by placing the satisfaction of human needs, not economics, at the forefront of all decision-making. This can only be achieved by first removing the primary cause of previous failures, that is, by removing the capitalist system itself. The system of socialism, by its very principles, is a whole lot simpler than that which has had to be endured daily within the capitalist system. Removing the prime motivation of continuous accumulation by ending all incentives or inducements for pecuniary advantage in favour of free access for all empowers the majority. This broad democratic shift to revolutionise the political and end the economic will complete the transformation to the new social system.

Janet Surman

Marx was righter than this (2011)

Book Review from the November 2011 issue of the Socialist Standard

Why Marx Was Right. By Terry Eagleton (New Haven and London: Yale University Press, 2011) £16.99

Was Marx right? As Terry Eagleton points out in the preface to this book, of course he wasn’t. No thinker gets everything right, nor can any reasonable person expect them to. But was Marx “right enough of the time about enough important issues to make calling oneself a Marxist a reasonable self-description”? In this sense, Eagleton says the answer is yes. And Eagleton is right.

As Eagleton puts it, you can tell capitalism is in trouble when people start talking about capitalism – people become aware of capitalism in crisis, just as an illness or injury makes you newly aware of the body you always took for granted. Thanks to the crisis, people all around the world are talking about capitalism again. How can this discussion become deeper and better-informed? Well, in all kinds of ways, but we can hardly ignore Marx’s body of work, which has “for long [been] the most theoretically rich, politically uncompromising critique of that system”, as Eagleton puts it. Marx was the first person to “identify the historical object known as capitalism – to show how it arose, by what laws it worked, and how it might be brought to an end”. That must surely be of interest to those who are wondering whether capitalism has a future.

What, then, could be more welcome and timely than a book that demonstrates why Marx was right, in what ways he was right, and the relevance of his ideas for political action? And who could be more relied upon to write a witty, engaging and accessible account of this than Terry Eagleton, the author of many justly popular books on subjects related to Marxism, and of regular witty essays and polemics pricking the pomposity of many of our culture’s most unjustly respected liberal thinkers? It would seem to be the perfect book for our time, written by the person perfectly placed to do the subject justice. Sadly, Eagleton lets us down.

Marxists reading this book may think twice about just what it is they’ve signed up for. Virulent anti-Marxists will wonder where all (what they consider to be) the most devastating arguments against Marxism are to be found. But most importantly, non-Marxists, politically interested, anti-capitalist or disillusioned working-class readers, are highly unlikely to be convinced by it either. Eagleton makes no effort to carefully define what Marx’s thought was, nor to compare it with the reality of everyday life under capitalism. Marx’s supreme achievement, as Eagleton says at the start of his book, was to identify an historical object known as capitalism, and show how it worked. But in the book’s 258 pages, we do not hear a word about Marx’s thought on that subject. We do not hear once just what capitalism is, or how it works. Instead, we are just exhorted to believe, from various vague pronouncements and polemical swipes, that capitalism is mostly a very bad and unjust thing. Quite why it is bad, or quite why it leads to such results, we are none the wiser.

As for what socialism is, we hear much more about that. But anyone who is familiar with Marx’s arguments about what capitalism is will wonder just what the difference between capitalism and the various forms of “socialism” Eagleton champions is supposed to be. Even if you’re not familiar with Marx’s arguments on this, anyone who reads Eagleton’s apologias for the Bolshevik dictatorship in Russia and Mao’s China would be quite justified in snapping the book shut and concluding that their prejudices were quite correct after all: that Marx and socialism were things to be avoided at all costs. For Eagleton, these “socialisms” were “botched experiments”, a disgustingly coy way to describe the blood-soaked, anti-working-class tyrannies that imposed state-led, capitalist industrial development on economically backward countries. Whenever Eagleton does bump up against the occasional sensible argument, he quickly dismisses it as “ultra-left”, and veers off to the right – to the rightwing deviation, the senile disorder, of Leninism. Perhaps that’s why Eagleton can find room to mention approvingly or critically just about everything that has ever been dignified with the name of socialism apart from the idea, put forward by Marx and Engels in the Communist Manifesto, of the “communistic abolition of buying and selling”. Genuine socialism is just too ultra-left for him.

This book is, then, a bitter disappointment and a wasted opportunity. The capitalist West is just emerging from a long period of illusion. As Eagleton points out, the illusion was not so much a deep belief in capitalism, but a disillusion about the possibility of changing it. “What helped to discredit Marxism above all, then,” says Eagleton, “was a creeping sense of political impotence. It is hard to sustain your faith in change when change seems off the agenda…” Change is back on the agenda. Marx’s analysis of capitalism remains as astute and relevant as ever. But if you want to know why, you’ll have to go to better sources than this book.

Stuart Watkins

Is the 'Manual' Worker the Only 'Producer'? (1930)

From the April 1930 issue of the Socialist Standard

A book recommended by the translators of Marx's "Capital" (E. and C. Paul) is the Marxian Economic Handbook, by W. H. Emmett. This is one of the books supposed to simplify Marx, but it makes Marx more difficult than it is supposed to be. It contains also many errors. The author was prominent at one time in the Socialist Labour Party in Australia, and seems anxious to attack De Leon's explanation of Marx's "theories."

Dealing with that fine chapter of Marx on "Co-operation," Mr. Emmett says :

“In a pamphlet entitled "Marx on Mallock," Daniel de Leon implies that, according to Marx, managers and superintendents, by virtue of their brain work, are productive of wealth." (P.343.)

Mr. Emmett quotes Marx but leaves out the essential quotation. The advantages of division of labour and the necessary cooperation of producers in the modern factory are well brought out by Marx, who explains the necessity of "directive labour" in the following words : —

"Labour that is directly social, community labour on a large scale, always stands more or less in need of guidance, of a management which can establish harmony among the individual activities, and fulfil the general functions that belong to the movement of the unified productive organism as contrasted with the movements of the independent organs out of which the organism is made up. An individual violinist manages his own affairs ; an orchestra needs a conductor. This function of guidance, superintendence, and arrangement devolves upon capital as soon as the labour subordinated to it becomes co-operative. As a specific function of capital, the function of management acquires special characteristics." ("Capital," page 346 Everyman Ed.)

Mr. Emmett makes the following statement :—

"If the increased yield of modern wealth be not the exclusive yield of the manual labour employed, then this will mean that the labourers productive power is not (neither individually nor collectively) increased at all by the co-operation." (Page 343.)

The co-operation of workers does increase the output by means of the cooperative method in production, but does that mean that the work of foremen, superintendents, etc., in directing the division of labour and the co-operation of the various parts of the process, does not play a part in the increased output?

Mr. Emmett fails to take note of Marx's point in the quotation we give.

Marx clearly shows that the functions of guidance, superintendence and arrangement are essential to the co-operative labour process.

Mr. Emmett makes a further point. He. says : —

"If the managers and overlookers were a part of the co-operation (or that "collective power that resides in the manual workers and their direction, collectively ") how could Marx tell us that, "while the work is being done" these managers, etc. "command in the name of the capitalist " (Page 343.)

Naturally, under capitalism the foremen, managers, etc., command in the capitalists' name, but does that mean that they do not perform an essential part of the producing process ? Marx clearly -shows that management acquires "special characteristics" to-day, because of the "twofold nature" of production, "being, on the one hand, a social labour process intended to produce use-values, and, on the other hand, a process for promoting the self-expansion of Capital, a process for making surplus value." ("Capital," page 348.)

That two-fold character of modern production explains why the foremen, superintendents, etc., of industry are essential to the increased production of wealth in social production, and also "command in the name of the capitalist" for the purpose of producing- more surplus value.

Adolph Kohn

Rise and Fall (1967)

Book Review from the January 1967 issue of the Socialist Standard

The Clydesiders by R. K. Middlemas (Hutchinson, 50s.)

In the general election of 1922 twenty Independent Labour Party members were elected from Glasgow and the West of Scotland alone. As a vast, hymn-singing crowd saw the new MPs onto the London train one of them, Emmanuel Shinwell, was aware that "they had a frightening faith is us . . . we had been elected because it was believed we could perform miracles and miracles were needed to relieve the tragedy of Clydeside in 1922." (Conflict Without Malice by E. Shinwell) The miracles, of course, failed to come. Capitalism proved more than a match for the reforms of the Independent Labour Party. Mr. Middlemas traces the gradual decline of that organisation.

The cover announces his book as "an important contribution to contemporary political history." This claim would not be so wide of the mark if he had got a few more of his facts right. Take, for example, his confusion of the founding of the Socialist Party of Gt. Britain with that the British Socialist Party on page 32:

The impossibilists', the hard core of followers of the American Daniel De Leon broke off in Scotland in 1903 to form the extremist Socialist Labour Party (SLP), and two years later in London to form the British Socialist Party.

Let us make it clear that our founder members were opposed to the confused industrial-unionism if De Leon and that the date of formation was 1904, not 1905 as he suggests. He is plainly mixing up the SPGB with the so-called 'British Socialist Party' (BSP), the inaugural meeting of which was held on 30th September, 1911—with Hyndman in the chair. (See H. M. Hyndman and British Socialism by C. Tsuzuki and the Socialist Standard, November 1912). The BSP held negotiations with sections of the SLP and of the ILP, and others, in 1920-21 and it was this reformist cocktail which eventually became the 'Communist' Party.

Despite the unfortunate mistakes, there are some interesting passages in this book. One of these, on page 276, gives a classic example of policy reversal by the Communists. In October 1932 the CP and ILP were co-operating and they organised the first Hunger March. Yet, only a year before, a Communist Party manifesto had referred to "the struggle against the ILP which is an inseparable part of British social fascism." Elsewhere we find that Shinwell gained his 'socialist' education by reading "the German Socialist Bernstein" and that Maxton, with unconscious schizophrenia, claimed to recognise the class struggle and the labour theory of value—but not the materialist conception of history!

Mr. Middlemas has little to say about the present little group, all that remains of the once powerful ILP. He merely reflects that "like the old-time SDF and the contemporary 'Impossibilists', the ILP was on the inverted road of splinter groups for whom it is more important to decide the details of the socialist millenium than the present methods of achieving it." But it is quite wrong to imply that the ILP sacrificed numbers for the sake of socialist understanding. They have been strongly influenced by anarchist ideas and, now that the great days of Maxton, Brockway and Wheatley have gone, feel that "parliamentary action . . . has many limitations, and its members cannot adequately represent the interests of the working class." Their demands include the extension of the "comprehensive system of education and abolition of the Grammar School system: and the introduction of "differential rent schemes", although "only a socialist society will be able to bring down the rents"! Finally, they have pledged themselves "to fight within the capitalist system" so that "commodity production (can) be organised for the benefit of the community." Could confusion go any further.

From the start the ILP followed an opportunist line and sneered at the 'impossibilists' in the Socialist Party of Gt. Britain. Never having Socialist principles, it could at least boast of a fair body of working class support. Now that that is gone, there is nothing left. It should be a lesson to all those who preach reformism.

John Crump

Editorial: Socialism: a world of free access (1986)

Editorial from the Winter 1986-7 issue of the World Socialist

We inhabit a world of potential abundance for all, but it is also the case that we have trapped ourselves within a social system of mass deprivation. Throughout the world millions and millions of our fellow men and women are denied the satisfaction of their basic needs. Millions die each year from starvation (635 million live on or below l,600 calories per day) and millions more are blinded, crippled or made lethargic and socially wasted because they lack food, clean water, any medical care. Even in the so-called rich countries poverty is the lot of the majority: not just official 'poverty' which means that the government concedes that you are proof, but the poverty which characterises the life of every worker who is deprived of access to what society could provide for them, but they cannot afford to buy. The reader of this journal whose needs are fulfilled may be an eccentric millionaire, but more likely such a claim of fulfilment is a self-deception - an attempt to hide one's own poverty from one's own consciousness. Let us be honest as workers: our lives, our parents' lives and the lives of our children, however hard the struggle has been to make them 'decent' or 'prosperous', have been less than satisfactory in relation to the level of need-satisfaction, comfort and happiness which society could allow us to enjoy. The working class are confined by the present social system to cut-price lives.

In a socialist society the means of wealth production (the factories, land, offices, mines, transport, media and all the resources required to satisfy human needs) will belong to the entire human community, all of us owning and all of us controlling what will be our world. Production will no longer be for sale and profit; no longer will needs be ignored if there is no money to convert them into 'purchasing power'. In a socialist system of worldwide production the only reason for producing goods and services will be to satisfy needs. Production will be solely for use.

Having scrapped the present system of only producing goods and services if there is an expectation of profit for the parasitical minority who monopolise the earth's resources, socialism will forget the old rules of the buying and selling game (the market) and will distribute what is needed on the basis of free and equal access. Money will be abolished: you cannot buy from yourself what you commonly own. The satisfaction of human needs will involve people giving according to their abilities and taking according to their needs.

Free access means that no human being will need to buy anything. Anything that society can produce will be there for the taking. Decent food; the best houses possible to build; gas, electricity, water; TVs, radios, entertainment; all medical and educational services - all completely free and available for all.

Socialists do not have a narrow conception of need. We would not wish to give the impression that socialism will do no more than satisfy basic living requirements - although doing that alone will be a momentous step forward for the millions of workers now denied the satisfaction of their most elementary needs. More than that, socialism will allow humans to be creative and to explore our wider needs. For too long our needs have been over-influenced by the selling process and the crude mind manipulation of the advertisers: in a socialist society we can begin to think about what we really require to be happy human beings and we shall set about supplying ourselves with the resources needed to live as fully as we can. In answer to the opponent of socialist ideas who asks, 'But will you be able to provide a colour TV for every man and woman in a socialist society?' we answer 'Yes, indeed: a world which can provide enough weapons to murder every person alive could be transformed into one which will provide a colour TV for every person alive, but we feel somehow that once such a new system is established the desire to see ultimate luxury in an escape into technicolour fantasy will not be the ultimate goal which men and women will express.' In short, socialism will not only be able to satisfy our existing needs, but it will enable us to question and challenge those needs - to escape from the poverty of capitalist-determined needs.

Needs are social. We are only free to have goods and services to use if it is technically possible to produce them and if there are people ready to do so. In a socialist society there is not going to be a sudden, utopian-like abundance of everything: the skies will not rain with goodies. Socialism will release from the constraints of profit the abundant resources of the planet and these will be used to allow us to live decently and well. There can be no socialism without socialists, and conscious socialists will have to realise that living in a world of cooperation entails giving as well as taking. Under capitalism most of us do plenty of giving (to the profits of our bosses) and an impoverished degree of taking. In a world of free access it will be a pleasure to fulfill the necessity of working to produce goods and services, sure in the knowledge that one is not doing so to make a boss rich, but to make all of our fellow inhabitants of the global village rich in life. In a worldwide human family there will be no shortage of willing volunteers to ensure that those who cannot work are cared for; there will be no problem of people refusing to do what cooperation demands of their humanity. To be sure, no person will be made to do anything as a matter of compulsion in a socialist society: if they refuse to work and insist upon the glorious right to sleep all day they will be regarded as very odd, perverse sorts. The last thing an intelligent social animal of the human species will do once he or she is free to live in cooperative equality will be to sleep as a form of luxury - indeed, what a perverse system capitalism is when it regards the man or woman who enjoys the freedom to sleep all day as having made a success of life.

Socialism will be a stateless society. No government will be present to tell people what they may or may not have. Free access means precisely what it says: people will be quite free to decide for themselves what they want and to take it. Production will be totally geared to that objective. If people want what cannot yet be produced - what is beyond social resources as developed at that stage - then they cannot have that particular need satisfied. But that will be a very different situation from the kind of mass denial of basic needs which characterises the profit system.

A world of production solely for use and free access for all is there for the making. All it requires is a majority of workers who understand and want it to join together for the purpose of bringing it about. For years a minority of workers have argued the case for such an exciting social alternative. For how much longer we will remain a minority is up to our fellow workers. Will they accept a world of misery and insecurity and poverty in the midst of potential plenty, or will they unite for the creation of a system where never again will the pained cry of a hungry child whose parents lack the money to feed it be heard on our planet?

What Goes Up Must Come Down (2002)

Editorial from the August 2002 issue of the Socialist Standard

It's funny how often people only believe what they want to believe. For instance, it might suit their interests for property prices to go up, so they convince themselves that, over the long run, they always do. It's the same with shares. Individual shares may go up and down, so the thinking goes, but across the board – as an investment – they're a fairly safe bet if you're lucky enough to have some cash to spare and can play at being a capitalist for a day.

However, recent events have served to shatter some of these illusions. Stock markets across the world have tumbled and a fully-fledged “bear market“ has been pushing shares steadily lower week after week. The series of financial scandals that have been unfolding in the United States (such as at WorldCom) have dented the confidence of investors and the capitalists are now taking flight from the stock market casino. The recent symbolic decision by one investor to spend £50 million buying a lost Rubens masterpiece says it all – fine paintings and antiques are now seen as safer investments than shares.

In reality, the stock market falls are not just a recent phenomenon and they haven't just developed since the catastrophic events of 11 September either. The bear market has been in existence for the best part of three years as financial reality has triumphed (as eventually it always does) over the baseless optimism engendered by a speculative boom. But why should this always be the case?

As legendary Wall Street investor Warren Buffett once said, in the short-term the stock market is like a voting machine – but in the long-run it acts more like a weighing machine. The growth in the paper value of shares (and property too) tends in the long-term to reflect the slow growth, over time, of the real economy, where goods and services are produced and distributed and not just bought and sold. However, two factors serve to complicate matters.

One is that the capitalist economy does not grow in a steady fashion but is periodically beset by economic convulsions which lead to notable periods of decline. The capitalist economy is not on a smooth upward curve but is a roller-coaster ride of booms and slumps. Slumps follow when companies over-invest because of their competitive drive to acquire more profits, a phenomenon which leads them to produce more than the markets they are selling to can absorb. This does not initially happen across the board, but in key sectors that have typically seen huge growth during the boom and in which, for a time, expansion seems limitless. The knock-on effect from this over-expansion can be enough to produce a slump, with falling output, rising unemployment and wage cuts for those still in work.

The second factor working against the steady growth of stock markets is that they can in some ways become de-coupled from the workings of the real economy for short periods. This can occur for all sorts of reasons, such as when shares seem a particularly risky option in an unstable economic environment (e.g. the 1930s and 1970s) or, conversely and most notably, when they become a vehicle for speculation as the act of successfully buying and selling them becomes a more profitable means of investment than long-term investment in the real economy itself.

As an example of the former situation – when share prices seem artificially low for long periods – an investor in the US share market buying their shares just before the Great Depression of the early 1930s would have had to wait well over over twenty years to see them reach their former value despite the big increases in production during that period overall as the US economy recovered from the slump. Similarly, while US Gross National Product rose by 373 percent between 1964 and 1981 the Dow Jones Index of US stocks stood at 875 – less than one point higher than 17 years earlier (Sunday Times, 15 July).

Conversely, however, in the 17 years after 1981 the US economy grew by less than half as much while at the same time the Dow Jones ballooned more than tenfold to over 9,000 points. What happened over this period in particular (not only in the US but in most other markets) is that there was a flight towards speculation, especially in the once-booming hi-tech “dotcom” and telecommunications sectors, which pushed share prices to levels where they bore no relationship whatsoever to the real underlying values of the companies involved. That speculative bubble – based on over-confidence – has now been shattered by the realisation that the profits of these companies were an ephemera. And the situation has since made worse by the discovery that many of them have been cooking the books to buy themselves a bit of time before the inevitable happened.

The fall in world stock markets is already significant (in Britain the FTSE 100 has lost over 40 percent of its value as we write, wiping tens of billions off paper share values). However, past experience from similar speculative bubbles suggest that the markets may have some way to go yet before they start to recover, prompting a serious slump in production as investors save or hoard their cash. Historically, it is not unusual for shares to fall between 70-80 per cent from their peak. That is what they did after the Wall Street Crash, it is what happened in the early 1970s during the last really sustained bear market in countries like Britain (when the FTSE fell 73 percent) and it is what has happened in Japan in recent years as the Nikkei Dow has fallen from its peak at over 39,000 points to around the 10,000 mark.

Surreal as the capitalist system may appear to be, its ridiculous speculative bubbles are always burst sooner or later – and the larger the bubble, the greater the correction that usually follows. And unfortunately, the consequences are typically worst for the most vulnerable section of society – the wage and salary earners who have nothing of real worth to sell except their ability to work for the employers. In truth, we can pretty much leave the capitalists to look after themselves – but for the workers there is only one solution to the economic crises and slumps of capitalism: a socialist revolution that will sweep away the fetters of the market economy for good.