The unions we deserve (2000)

Book Review from the May 2000 issue of the Socialist Standard

All Power to the Imagination!: Revolutionary Class Struggle In Trade Unions and the Petty Bourgeois Fetish of Organisational Purity by Dave Douglass. Class War Federation, P.O. Box 467, London E8 3QX.

This is really interesting and readable book, despite some horrendous comments on "national liberation", particularly relating to Ireland. The author is a life-long mineworker and NUM activist who is also a member of the IWW and the section of Class War which decided to continue with the CW paper and federation. The aim of this book is basically to attack the argument popular in some anarchist and left-communist circles that trade unions are inherently tools of the capitalist establishment that act to stifle workers' militancy and so on.

This position has led some revolutionaries to declare themselves "outside and against the unions"—though whether in practice they would choose not to join a union is another thing. The point about all this, as is brought home by Douglass, is that unions are essentially about workers uniting to defend themselves within capitalism. To criticise "the unions" for being reformist misses the point, as a union and its membership are one and the same. Workers are not "reformist" because "the unions" make them so; rather the level of political consciousness within a union will be a reflection of the general consciousness of the working class at the time. As Douglass points out, trade unions are not ideological monoliths—the processes of class struggle go on within unions.

If more militant members are losing the arguments then this reflects a wider passivity: something that is hardly surprising given the shattering defeats organised labour has suffered in Britain in recent decades. Trade unions can only be as militant and class conscious (and effective) as their memberships are, which must depend on the wider situation. Though this isn't to take away from the damage done by union bosses, whose frequent knighthoods and other "honours" are tawdry campaign medals minted by the real bosses, whose class interests they have served. However, to create a dichotomy between "the unions" and "the workers" can only lead to a distorted analysis of the uses and limitations of union struggle.

As a way of illustrating the dangers of this "against the unions" position Douglass points to the direct correlation between declines in union membership and the decrease in days lost (or won) in strikes. Hardly surprising—but if "the unions" were really responsible for holding back working-class combativity shouldn't the opposite be the case? In reality, non-union workers have not "broken free" from the unions—falls in membership are symptoms of the hammering the working class as a whole has taken. On the other hand, resistance to the attacks of capital is generally stronger in those sectors where there is still significant unionisation. There are some signs however that union membership and general combativity are rising. And let's not forget that this is vital if our class is to develop some of the solidarity and self-confidence essential for the final abolition of wage slavery.

Interestingly, one of the few sources quoted with any sort of approval by Douglass is the October 1994 edition of Spartacus, a publication put together by Socialist Party comrades in Norwich. He generally agrees with the case put in an article called "Socialism and Trade Unions":

"[T]he essence of the trade union is workers uniting to protect their interests in the workplace, and . . . ultimately the union and the workers are one and the same thing. If these workers have reformist outlook on life, i.e. believe that capitalism can be made to run in the interests of all, the unions must therefore have the same outlook; on the other hand if there were more revolutionary workers in the unions—and in society generally—then the unions would have a more revolutionary outlook, no longer harbouring any illusions about 'common national interests' or other such rubbish. That would not in any way alter the essential nature and role of the trade unions as the defensive organisations of the working class; but it would make them far more effective fulfilling that role" (p.10 - quoted from Spartacus).

Ben Malcolm

Wall Street (1988)

Film Review from the August 1988 issue of the Socialist Standard

For once a film that has been a box office success is worth going to see. Wall Street is a thoroughly believable portrait of the world of the New York stock market. It has excellent acting performances by Michael Douglas as the ruthless corrupt tycoon Gordon Gecko and by Charlie Sheen as Gecko's young conscience-ridden apprentice. Both have slick but convincing dialogue to deliver and scenes which, while having loads of technical detail about financial dealings that go right over your head, are so tightly held together as to keep you riveted for the whole two hours.

The film has social messages too. And what better way to deliver them than to make them part of a powerful human drama? The director, Oliver Stone, has already shown his moral and political concerns with films like Salvador and the recent one about the Vietnam war, Platoon. Wall Street, it has been said, is a condemnation of the capitalist ethic, of the institutionalised greed the market system represents. In one key scene in the film, Gecko addresses a hall full of shareholders and, making no apology for his ruthless dealings, says of the market:

"Greed is right. Greed is good. Greed clarifies." Of course, coming from the mouth of an absolute stinker, this is a speech whose message to the filmgoer can only be the reverse of what was intended.

But does the filmgoer actually leave the cinema thinking the market is bad? Well, yes and no. In the end the apprentice escapes the clutches of his sorcerer and helps deliver him to justice. But the justice he delivers him is a law that classifies as illegal some of the dealings Gecko has been involved in, so-called "insider dealings". So, from this point of view, profit-making through the market is seen as fine as long as it takes place within the rules laid down by the profit-making system. Yet, at the same time, in its representation of the way in which the millions of people who run society are powerless pawns of the market and can see their livelihoods and futures upset by it at any time, Wall Street will set many people thinking that there must surely be a better, saner way of organising the way we live and produce. The film itself doesn't go so far as to suggest one, but then if it had it would probably have been more didactic, less watchable, and no doubt less of a box-office success.

Howard Moss

Terms and Terminological Inexactitudes (1940)

From the July 1940 issue of the Socialist Standard

All of the opponents of the S.P.G.B. have at some time or other twitted us with being hidebound to terms. What we insist—as we invariably do—that Capitalism and Socialism are different and distinct systems of society, both of which have predominant features that can be defined and described, we are told that because certain feudal remnants remain in Capitalism or because the capitalist state imposes restrictions on the freedom of action of the capitalist, therefore complete definition is impossible, and all definition should be abandoned. Where such looseness of thought has led can be seen in the depressing spectacle of social reformers who year after year hopefully propose new modifications of Capitalism believing that it will some day cease to be itself and become its opposite. They can only cherish such vain hope because they do not know how to recognise what are the basic, unchanging, features of the Capitalist system of society.

There are others whose inaccurate use of terms is due to indifference rather than ignorance; they change their terms to suit their policy. Thus, during the past few years, as policy has changed the same persons have been able to describe Russia as Socialist and as Capitalist (the Express newspaper is a case in point); others have looked round Europe and have been able to discern democracy in this or that country where earlier and later they could see only dictatorship. Hitler and Mussolini have been much to the fore in this verbal juggling. Both have claimed at times to be upholders of revolution and at others to be guardians of tradition. Both have pretended in some places and at some times that they stand for Socialism and working-class interests against Capitalism and the "pluto-democracies." Hitler, after years of hostility to Bolshevism, chose last year to discover close affinities between the Nazi and Bolshevist systems. Mussolini, likewise, while building warships for the Russians, declared that Fascism is a bulwark against Bolshevist encroachments on Christian civilisation. On the other hand, he has at times denounced Bolshevism, not for being anti-Capitalist, but for being "State super-Capitalism carried to its most ferocious expression" (The Times, November 2, 1936). All of which brings us to a point which needs no labouring in the utter confusion of thought which clouds political discussion at the present time, that there can be no progress towards the goal of a better social system without a clear perception of the nature and laws of the system now in being.

The S.P.G.B.'s insistence on the value of definition of terms and clarity of thought has never been more necessary than it is at the present critical juncture.

Is It Work We Want? (1923)

From the January 1923 issue of the Socialist Standard

"It is work we want, not charity," said a spokesman of the unemployed at a street corner meeting. This sums up the outlook of the average worker of to-day. He can see no other method of life than toiling or existing on charity. The fear of having to beg for bread, or go into the workhouse, spurs him on to find a job, though the conditions of work become ever more degrading.

How strange that such a view should find general acceptance among people already worn out with work; and at a time when wealth can be produced with such ease and abundance! It is stranger still that some must work hard and spend niggardly, whilst others work not and yet spend lavishly. If the former cease work for a brief while they come suddenly to the end of their resources; the latter buy palaces and furnish them brilliantly, live in magnificence, and yet at the end of their days they are more wealthy than at the commencement.

Who brings the rare jewels from far lands? Who sows and reaps that we all may live? Who drives the flying locomotive, the liners, the great cranes, the electric plant, and the plough? Who toils in sorrow and wretchedness that others may enjoy the best fruits of this wonderful old earth? Who is this strange being that makes possible for others an almost unlimited pleasure, beauty, and luxury, and takes for himself what is miserable, ugly, and poor? Who else but they who are born with the curse of slavery upon their brows?

Day after day, week after week, and year after year, thousands upon thousands of human beings do little more than eat, drink, sleep, and work. To the mass of the people the solitude of the mountain pass is unknown. Each day they—the "lucky" ones—must be at work to perform their allotted tasks.

Is it a pleasure to toil until limbs refuse to perform their accustomed tasks? Is it healthy to eschew fresh air and sunshine and pass the greater part of one's life in poisonous atmosphere? Is it intelligent to stagger with work-worn limbs and work-dimmed eyes along the thorny path of toil in order that parasites may prosper?

Through thousands of years a large part of the earth's inhabitants have fretted out their lives in slavery. Yet slavery, though hoary, had a beginning at a definite stage in the evolution of mankind. There was a period far back in the past when slavery was unknown. Just as certain definite social conditions in a past age brought slavery into existence, so other definite social conditions will bring it to an end.

It is leisure and idleness the worker needs (leisure to enjoy and idleness to recuperate), and yet he pursues work like a hound on the trail. How high above him, in one respect, is the "ignorant" savage of Herman Melville's "Typee," who worked little and laughed and sang long? And yet the worker does not pursue work because he loves the burden of toil; he does so because, as a rule, unless he works he cannot obtain the wherewithal to live. It is not a fault of his, but a misfortune—he is born into slavery.

So powerful is the influence of a part of his environment upon the worker, and so heavy is the weight of more recent tradition, that he believes slavery to be an eternal institution. A mighty thinker of the past, one Aristotle, shared this belief; but he made a profound qualification—there would be slavery, he said, until tools and machines were self-operating. We are now at the period when this is possible. With a touch of the hand mighty masses of machinery are set in motion which perform astonishing evolutions and accomplish wonderful results. With proper organisation little work on the part of man is required to turn out vast quantities of the necessaries of life.

Through succeeding ages, a privileged class has thrived upon the produce of an oppressed class, and it is the same to-day. In the past conditions were such that could not promise ease and comfort for the many, except where nature was particularly liberal and the population comparatively small. The needful things were produced by simple tools with much labour. Now all is changed. The needful things are produced by complicated tools with little labour. The conditions are such that they promise ease and comfort, leisure and luxury, to the many. But this promise can only be fulfilled when the many own the product of their energy.

GILMAC.

Terrorism and political violence (2004)

From the July 2004 issue of the Socialist Standard

It has become a commonplace to declare that ‘one man’s terrorist is another man’s freedom fighter.’ But has violence ever been an effective political tool and, if so, is it still? The American ruling class has declared ‘war on terrorism’ in an attempt to legitimise their own use of political violence around the world. But both the US and their enemies are indulging in an identical activity. The question therefore arises as to whether humankind’s political problems are ever resolved through military conflict.

It is possible to trace the history of warfare back to the origins of private property in Mesopotamia, Egypt and the Levant some 5,500 years ago. The initial raising of armies to defend the agricultural surplus from raiding nomads soon became used to attack other city-states. The once elected warlords evolved into permanent kings whose main role became the protection of their class’s power and wealth. The first imperial regimes emerged together with those who struggled against such oppressive empires. Those who opposed any established power regimes have been demonised by their enemies ever since. It is these ‘resistance’ movements who have used political violence (terrorism) in an attempt to destroy and replace existing (usually) imperial regimes. We will not discuss the historical logic of the violence between states but this is where the seeds of internal political conflict are invariably sown. That the subsequent ‘terrorists’ are almost always armed and trained by a state is well documented and  such regimes show staggering hypocrisy by demonising their own students when they turn on their teachers. History has given a very mixed reception (usually dependant on their success) to these heroes or criminals: Spartacists, Thugees, Dog Soldiers, Boxers, Mau-Mau, Assassins – the list is endless. Since violence was used to impose political regimes, many have concluded that it is only through such conflict that they can be destroyed. Before we attempt to analyse whether history backs up this logic let us take a detour to try and understand why our culture is so immersed in the cult of the warrior and the belief that violence can resolve human problems.

Ever since Homer’s tales of the heroic deeds of the Greeks at Troy western culture has been saturated with a military ethos. We cannot imagine Malory, Shakespeare, Cervantes or Fenimore Cooper without Lancelot, Macbeth, Don Quixote or Hawkeye. Such is the central place it occupies in our story-telling that we can hardly conceive of drama itself without a conflict of some kind within the narrative. As we have seen, the very origins of private property produced a warrior elite who subsequently became a ruling aristocracy and it this class who were the patrons of the creators of culture. Given the moral dualism of Christianity it was not difficult for the rulers to characterise their opposing city, or later, nation states as evil. War became described as a struggle between good and evil – the relevant designations were, of course, dependent on which side you were on.  After six millennia of warfare the idea that it still represents a way to resolve problems is still an insidious part of our culture – not because it has proven to be so but because the ruling classes need us to believe in it. As evidence for this, let us consider the outcome of the longest and most bloody conflict of the last century between two of Europe’s ruling classes – Britain and Germany.

It is still a matter of great debate who actually started the war of 1914-18; some say it was provoked by France to recover territory lost during the Franco-Prussian conflict whilst others believe it an inevitable consequence of Germany’s need for an empire. What is not disputable is that the opposing economic interests of the ruling classes concerned were vital in their decision to go to war. They utilised the martial cultural traditions of their nations to convince the populations to slaughter each other. History shows that nothing was resolved by the allied ‘victory’ of 1918 because, as a consequence of the imposed terms of the German surrender, the whole thing erupted again in 1939. Again millions died, but did the fighting end with the defeat of Nazism? The Russian Empire was formed out of the division of Europe after 1945, as was much of the ‘third world’ where they and the U.S. fought out the ‘cold war’. Even today we still endure the consequences of the two world wars where the victors redrew the world map according to their interests – Palestine, Iraq, Yugoslavia, Chechnya, etc. All we can be say about the direct result of war is that the ruling class of one nation state replaces another. Clearly this is not why those who fought the war did so, thus we can say with some legitimacy that war has not resolved the problems it was (at least in propaganda terms) supposed to. Can we also make this claim for the results of terrorist campaigns?

Many leaders of movements for ‘national liberation’ (terrorists) have subsequently become part of the ruling class they once fought. Israel, Zimbabwe, South Africa, Northern Ireland and many others now enjoy the fruits of their murderous campaigns. But what has become of the promises made during the struggle? Most who killed and were killed did so in the belief that they were creating a better and more just society than the one they lived in. In cases such as Zimbabwe things seem to have become worse in some respects. The exploitation and murderous repression of the Palestinians has plunged Israel into a nightmare of endless violence. The Irish  ruling class seem incapable of resolving their internecine power struggle . So again it would appear that violence has failed to deliver a better life to those who indulged in it and suffered from it. Why? One obvious reason is the inability of humankind to learn from its history. An understanding of history is far and away the most important component of any political consciousness. Before any course of political action is undertaken we must make an effort to understand how the world came to be the way it is. A motorcar cannot be repaired without some knowledge of how it works and no amount of moral outrage and violent action will resolve the problem. War and its bastard progeny we call terrorism, together with the regimes both have brought into the world, are the problem and not the solution.

Socialists have always opposed both violent struggles for ‘national liberation’ and the ‘legitimate’ wars fought between nation states. We see that causing more of it cannot lead to an end to the suffering in the world. War and all organised violence can only be stopped when it is rejected by those who alone must fight it. The ruling class and their media, political ideology, establishment history and all the other paraphernalia of the capitalist propaganda machine can never acknowledge this because to do so would illegitemise the origins of their own power. As to the other myth they peddle concerning mankind’s inherent violence, we can only look within ourselves for the answer. If you sincerely believe in the efficacy of violence to solve your own and the world’s problems then you simply deny the evidence of history.

Andrew Westley

Global March of the Gurus (2005)

Book Review from the January 2005 issue of the Socialist Standard

How Mumbo-Jumbo Conquered the World. By Francis Wheen, Fourth Estate, 2004.

A few years ago Wheen had a critically and commercially successful biography of Karl Marx. This survey – A Short History of Modern Delusions, as the book’s subtitle puts it – takes 1979 as the decisive year. In that year two key events occurred that shaped the modern world: Margaret Thatcher came to power in Britain and Ayatollah Khomeini returned to dominate Iran.

The link between the Iranian revolution of 1979 and the rise of Islamic fundamentalism is uncontroversial. The Shah of Iran was a stooge of western governments, there to guarantee oil supplies. The ideology used to remove him therefore took the form of an anti-western Islam. This ideology then spread through the Middle East and beyond. But Wheen’s interpretation of Thatcher’s rise and the global spread of free market fundamentalism is less convincing. In Wheen’s account, the old status quo (which he clearly favours) was overthrown by New Right zealots spouting mumbo-jumbo. Or put another way, the post-war consensus on the mixed economy, guided by government intervention and Keynesian economics, was supplanted by monetarism, privatisation and the worship of market forces. Of course these facts are not in dispute and Thatcherite/Blairite ideology is mumbo-jumbo dressed-up as common sense (“we are all ‘Thatcherite’ now,” said Peter Mandelson, Labour MP, in 2002). However, what Wheen fails to appreciate is why the post-war consensus was so easily swept away. In the 1970s the long post-war boom had come to an end and the Keynesian status quo was perceived to be a failure in dealing with recession and high unemployment. Hence the spread of free market mumbo-jumbo.

Wheen sets great store by the Enlightenment values of reason and progress. This book is far more wide ranging than space here permits us to discuss. Cults, gurus, irrational panics and post-modernists are all subject to a withering criticism very much in the style of George Orwell. Despite the reservations above, this is a superb piece of work and it will be an invaluable resource for socialists.

Lew Higgins

Pathfinders: Yo-Yos a-Go-Go (2015)

The Pathfinders Column from the February 2015 issue of the Socialist Standard

What on earth is going on with the price of oil? For the past five years it’s been stable at somewhere north of $115 a barrel, but since last June it’s fallen by 40 percent to below $70.

The fall in price has caused pandemonium in energy boardrooms just as companies have been sinking unprecedented amounts into R&D looking for new sources of the increasingly hard-to-get black gold and other fossil fuels – an estimated $670 billion last year alone. Samsung are just in the process of launching Prelude, the biggest ship ever built, with a water displacement equal to the world’s six largest aircraft carriers combined (BBC Online, 16 December 2014). Its purpose? To act as a giant floating platform to exploit deep-ocean natural gas fields and liquefy the gas on the spot instead of pumping it through expensive pipelines to existing facilities on shore. Prelude is supposed to be the prelude to an entire fleet of LNG monsters, but now that the rug has been pulled from under it, it may turn out to be the world’s largest floating white elephant instead.

Environmentalists will be delighted that new drilling projects in the Arctic are likely to be shelved, ditto further exploitation of the super-dirty Canadian tar sands. Meanwhile anti-fracking campaigners in the north of England will be ecstatic that Lancashire County Council have vetoed Cuadrilla’s plans to drill for shale gas at two sites near Blackpool, and even more so at the fact that fracking companies who have sunk millions into new drilling sites across the world have been left high and dry with ‘stranded assets’ as the oil price crash has wiped out the value of ‘alternative’ shale and left their operations uneconomic.

Motorists too will be able to celebrate by flooring it in their gas-guzzlers, while shrinking gas bills are expected to lead to a warm glow among household consumers. Providing of course that the energy companies heed the government’s urgent demands to lower their tariffs in line with the price fall. But energy companies won’t be too keen to respond, and not just for the obvious reason that they make more money out of customers that way, but also because, as they are fond of pleading, oil prices can go up as well as down, and they don’t want to catch themselves flat-footed with a price cut just as Brent crude decides to go stratospheric.

So, good news all round then? Well not exactly. Low oil prices will encourage consumption, which will wipe the smile of the faces of those environmentalists, considering that 14 out of the last 15 years have been the warmest on record (BBC Online, 16 January) and that sea level rise is now estimated to be 25 percent steeper than previously thought (BBC Online, 14 January). Still,New Scientist finds reasons to be cheerful, with an optimistic guess that the price-crash might spell the beginning of the end of the world’s oil dependency (‘Over a barrel’, 17 January).

Wholesale gas prices have also dropped 20 percent since November, and may drop further. China is moving away from coal and towards gas, which will stiffen the price, but then on the other hand, Japan is moving away from gas and back towards nuclear, which will weaken it.

Worse news is to follow for the benighted energy corporations, bless ‘em, with a new paper (Nature, 8 January) which could be seen as kicking them when they’re down. Building on estimates by the International Panel on Climate Change (IPCC) that, in order to keep within the target global temperature increase of 2^oC, total carbon emissions from now until 2050 cannot exceed 1,240 gigatonnes, the report authors quietly went about their sums, totting up the actual potential gigatonnage that’s left in the ground. Their conclusion was that with remaining reserves (defined as recoverable under present economic conditions) equating to nearly 2,900 gigatonnes, and total recoverable resources around 11,000 gigatonnes ‘the disparity between what resources and reserves exist and what can be emitted while avoiding a temperature rise greater than the agreed 2^o C limit is therefore stark.’ In other words, about a third of oil reserves, 50 percent of gas and 80 percent of coal must be left in the ground. To the industry’s argument of mitigation through proposed Carbon Capture and Sequestration schemes (CCS) the authors give short shrift. CCS is too little, too expensive, too uncertain and too late anyway. The damage has already been done. There’s no more wiggle room.

Worried, the Bank of England is conducting an enquiry into the risk of a global economic crash if governments are reckless enough to pay attention to climate scientists and start tightening the climate change rules, rendering fossil assets essentially worthless. However Shell and other firms are more sanguine, seeing no great risk to their business model because they don’t believe that politicians, for all their bluster, will stick to their promises on carbon limits (BBC Online, 7 January). Which sounds about right.

So why did the price drop? Partly because, with global warming, northern winters are getting milder. Partly because the recession has led to low economic activity and therefore low oil consumption. Partly because America got carried away with its fracking bonanza and stopped importing oil, unintentionally creating a world glut. And partly because Saudi Arabia, OPEC’s leading producer, is refusing to curb output because it’s having a price war with Iran and Russia. With $900 billion in cash reserves Saudi Arabia can easily afford to sell low (their extraction costs are around $6 a barrel) thus murdering the opposition, as well as all those Yankee frackers who thought they were riding the gravy train (Economist, 8 December 2014).

In other words, the price drop is due to a number of contingent factors which may or may not apply at any given point in the future. Now that quantitative easing has been applied in Europe, the oil price has seen a 2 percent uptick. If OPEC decides to curb output, the oil price will rocket and with it the value of shale assets. The plan to turn the Arctic into an oil well will be back on the table, and the Canadian tar pits will start to look inviting again.

What’s so weird about capitalism, and not in a good way, is how a global fall in the price of one key commodity can reverse global policy overnight. It’s even worse with ‘long latency’ commodities where changes at industrial source take years to feed through to the market, by which time they may have precisely the wrong effect and start a panic.

How is humanity supposed to plan for the future, given this yo-yo economics? How are we supposed to make our civilisation sustainable, and guarantee a planet in good health for our descendants? We can’t, basically. For that we would need a steady-state economy, with patterns of production and consumption that didn’t keep yo-yoing up and down unpredictably and didn’t depend on thousands of fast-buck investors who at any moment might either blow it into a giant gas bubble or drain every last gasp out of it. Gambling in a casino might be fun, if you can afford to flutter. But it’s no way to run a planet.

PJS

Editorial: A Century for Socialism (2004)

Editorial from the June 2004 issue of the Socialist Standard

Welcome to this special edition of the Socialist Standard, a commemorative issue marking one hundred years in the political life of the Socialist Party of Great Britain. When our Party was formed on 12th June 1904, in a hall in a little alley off Fetter Lane, Fleet Street, London, the founder members would rightly have viewed the possibility of our existence a century later in something of a negative light. The aim of the Socialist Party has always been ‘socialism and nothing but’ and the founder members conceived the Party as a mechanism through which socialist ideas could be rapidly spread and, potentially, through which the working class of wage and salary earners could come to political power. The subsequent creation of socialism would render the need for a socialist party redundant and so, one hundred years on, the very continued existence of the Socialist Party of Great Britain is indicative of the fact that the system of society the founder members were dedicated to overthrowing – capitalism – is still with us.

To this effect, today, ownership of the means of living (the factories, farms, offices, communication systems and so on) is still in the hands of a minority social class that can live a luxurious existence without having to work.Virtually all the useful work in society is being done by the majority, a class of people forced by economic compulsion to sell their working energies for a wage or a salary that is less in value than what they produce. It is a society characterised by extremes of wealth and poverty, by wars and chaos and by a meanness of spirit that undermines much that is decent about human beings. For the  last hundred years the Socialist Party has been waging a war of our own – against capitalism and for  socialism. We have waged a war too against all the political parties who have supported capitalism, including those that have done so while paying lip-service to socialism. The achievement of socialism has been our sole objective, because our understanding of capitalist society and its working has told us that it is a system capable of change over time but not change that can abolish its fundamental defects. Capitalism has altered over the last century, but not fundamentally so and all the problems associated with it in 1904 are still present today, with some new and unforeseen ones too.

Technological powers

In one sense, capitalism is the most successful social system that has ever existed in that the working class, through its collective efforts, has been able to develop the powers of production to previously undreamed-of heights, from putting a man on the moon to mapping the human genome. But these powers of production are wasted and distorted by a system that puts profit before needs as a matter of course and where collective effort is destabilised by competition and division. A society that can now send spaceships to Mars but which cannot adequately feed, clothe and house the world’s population despite the massive technological resources at its disposal is a society that is seriously and fundamentally flawed.

One hundred years ago the men and women who founded the Socialist Party came to a significant political conclusion, which is just as important now as it was then. This was that capitalism, through creating an interconnected world-wide division of labour and unparalleled leaps in productivity (whereby ten years in its lifespan is equal to one hundred years and more of previous  systems like feudalism), has created the conditions of potential abundance necessary for its own replacement and also a social class of wage and salary earners with the incentive to organise for this. What pioneers of the socialist movement like Marx, Engels and Morris envisaged as socialism or communism, had become a practical possibility and tinkering with an inherently defective system like capitalism a waste of time and energy in the light of it.

The founders of the Socialist Party recognised that the time was ripe for the working class to organise itself consciously and politically to democratically take control of the state machine in countries across the world, dispossessing the owning class of capitalists and socialising production on an international basis. In doing so the working class would consciously create a system where human activity would be carried out solely and directly to meet the needs and desires of the population, and where all the defining categories of capitalism had been abolished: production for profit, money, national frontiers, the class system and – as a result – the enforcer of class society itself, the state.

Reformism

At the time of our Party’s foundation other politicalactivists agreed that this type of society was possible and desirable, but disagreed about how it could be created. Due to what they took to be the backward intellectual development of the working class, they thought that  capitalism would need to be gradually transformed into socialism by a series of reform measures. They labelled the founder members of the Socialist Party and others who thought on similar lines ‘impossibilists’, people who were demanding the impossible when piecemeal and gradual reform was all that was realistic. This was the substance of our break in 1904 with our parent body, the Social Democratic Federation, and the basis for our criticism of other organisations of the time like the Independent Labour Party and the Fabian Society.

Organisations like the SDF that had a paper commitment to socialism were in practice swamped by people who were attracted by their reform programmes rather than their supposed commitment to abolishing capitalism. In these circumstances, those who viewed reforms as a stepping-stone to socialism were themselves swamped by people for whom reforms were simply an end in themselves, palliating the worst excesses of the system. The history of the Labour Party – formed out of the Labour Representation Committee in 1906 – is a case in point. More than any other organisation in Britain, the Labour Party developed as a body hoping to reform capitalism into something vaguely humane. Today, in 2004, the modern Labour Party stands as an organisation which has instead been turned by capitalism into something rather more than vaguely inhumane. From Keir Hardie and  Ramsay MacDonald onwards it has steadily drifted towards where it is today – a party which has abandoned any hope of seriously changing society for the better but which now markets itself as the most efficient managerial team for British Capitalism PLC instead.

Over decades, millions of workers the world over have invested their hopes in so-called ‘practical’, ‘possibilist’ organisations like the Labour Party, hoping against hope that they would be able to neuter the market economy when, in reality, the market economy has successfully neutered them. As such, the damage these organisations have done the socialist movement is colossal. That they turned out to be the real ‘impossibilists’ – demanding an unattainable humanised capitalism – is one of the greatest tragedies of the last century, made all the greater because it was so utterly predictable.

Vanguard politics

Unfortunately for the socialist movement, the reformist distraction has not been the only one, however. Another political tendency emerged, principally out of the Bolshevik seizure of power in Russia in 1917, claiming that they had found another route to socialism. However sincere some of their number may have been at the outset – and whatever their laudable success at curtailing Russia’s part in the First World War – Lenin’s Bolsheviks proved to be a political tendency that set the clock back for socialism at least as much as reformism did. In claiming that socialism could be created by a political minority without the will and participation of the majority of the population, and through their wilful confusion of socialism with nationalisation and state-run capitalism generally (a type of opportunism also shared – over time – by the reformists), they shamelessly distorted the socialist political programme.

The Socialist Party was the first organisation in Britain (and possibly the world) to foresee the disastrous state capitalist outcome of the Bolshevik takeover but we gained no satisfaction in doing so. Even now, years after the collapse of the Kremlin’s empire, the association of socialist and communist ideas with state capitalism, minority action and political dictatorship is one of the greatest barriers to socialist understanding. Today, both reformism and Bolshevik-style vanguardism stand discredited. As ostensible attempts to create socialism they didn’t just fail, they were positively injurious to the one strategy that could have brought about a better society during the last century. The modern far left – by combining the two elements together in an unfortunate mix – have opted for the worst of both worlds and rightly are politically marginalized because of it.

Looking forwards

From our standpoint in 2004, the Socialist Party of Great Britain and our companion parties abroad in the World Socialist Movement regard our situation with both pride and sadness. Sadness because two political currents we warned against most vehemently – reformism and vanguardism – succeeded in derailing the socialist project so spectacularly, but pride because of the part we have played in keeping the alternative vision alive.

The political positions of the Socialist Party were not handed down on tablets of stone in 1904. With the Object and Declaration of Principles as our guide we have developed our own analysis and political viewpoints as the last hundred years have worn on. Occasionally we may have made mistakes, but we are confident that our record over the last century stands for itself – of propagating the case for real socialism, in exposing the promises and trickery of the reformists and the vanguardists, in opposing the senseless butchery of the working class in two world wars and countless others, and in presenting a clear analysis of capitalism in language readily understandable to those whose interest lies in socialism.

In the pages of this special issue you will read about the remarkable men and women who have been members of our Party over the last hundred years and about the political input they have had to make. Without doubt, their contribution has been an immense one and we pay public tribute to them for it, but there is a lot more work still to be done.

Capitalism today stands as a social system that bears with it little by way of a positive perspective for humanity. In the major industrial centres of the system, significant rises in productivity coupled with trade union action by workers to win a half-decent share of the gains, have led to rising purchasing power for many. But capitalism and insecurity continue to go hand in hand and in the so-called ‘Third World’ millions starve every year while literally billions now live in disgusting conditions with no hope in sight for them. Everywhere on the planet capitalism has spread its malignant influence: creating a society where everything (and everyone) can be bought and sold, where an ‘every man for himself’ culture leads to escalating brutality, crime and violence and where the social codes built up during the system’s formative years have been undermined by a rampant drive to commercialisation, fostered by a distorted and ruthless individualism. In 2004, nationalism, political gangsterism, religious fundamentalism and terrorist atrocities are the order of the day in a system that neither knows or cares where it is heading.

In the first edition of the Socialist Standard we called upon our readership to “help speed the time when we shall herald in for ourselves and for our children, a brighter, a happier, and a nobler society than any the world has yet witnessed”. One hundred years later we are still here, and make the same plea, with the same force and urgency. No matter how inconvenient it may be for our political opponents, we are not going away until our job is done.

That day will come when the working class has seen through the lies and false promises that have proved such a distraction this last one hundred years. And it will come when the supposedly incredible idea of creating a world without wars and worries, money and markets is accepted as not only necessary for the sake of humanity, but recognised for being just as realisable as other once ‘impossible’ projects are today . . . like a man on the moon,or a spaceship to Mars.

Help The Aged (1977)

From the April 1977 issue of the Socialist Standard

Well this here's the story of old Jake Twist
Who wrote him a letter to a Socialist.
He said I do declare I like what I hear
About free cigarettes an' a glass o' free beer.
I was also told there'll be no cash
An' I must confess it sounded pretty brash
But when I got to thinking an' usin' my brain
The whole of the Case became mighty plain.
Singin' Hey Ho — Watcha know! 

There'll be no more fightin' in these here hills
An' no more trouble 'bout old folks' wills
There'll be nobody to lay down the law
Cos there'll be no point in robbin' no more
Well all o' this sure does seem fine
But you see I've reached the end o' the line.
I'm gettin' mighty close on seventy two
An' it seems too old to be helpin' you.
Singin' Hey Ho — Watcha know! 

Well Old Jake's letter was put in the post
An' he settled him down to skunk on toast.
Three days later there came a reply
And what it said hit him in the eye.
It said: Well ole man I'm ashamed o' you
Thinkin' you're too old at seventy two
Y'oughta know it ain't never too late
Cos I'm still here an' I'm a-ninety eight.
So it's Hey Hey — Watcha say!

Paul Breeze

Economics (2012)

Book Review from the October 2012 issue of the Socialist Standard

Remaking Scarcity – From Capitalist Inefficiency to Economic Democracy. By Costas Panayotakis, Pluto Press.

The subject of economics is commonly understood as being the problem of unlimited wants in the face of finite resources. Likewise socialism, communism and common ownership are seen as arising out of conditions which bring about the elimination of scarcity. Panayotakis, who describes himself as a “recovering economist”, frames the issue a little differently. For him scarcity itself is not necessarily the problem but rather it is the “the undemocratic determination of the configuration of scarcity that people live under” that leads to the social-ills of today.

This book is in effect in two halves, the first is a well written critique of many of the underlying assumptions that make up neo-classical economics and the second explores what Panayotakis calls “economic democracy” and compares two models for the operation of such a society. Panayotakis uses economic democracy “the principle that all citizens should have an equal voice over the goals and the operation of the economic system” as a yardstick to measure how successful an social system is. According to this measure and as would be expected, capitalism fares badly.

David Schweickart's conception of economic democracy is also put up against this measuring stick. Schweickart sees his system as achieving a balance between democracy, planning, and markets. Workers have democratic control of the companies they work for, firms trade between themselves and the general public and should the smooth functioning of this worker ran market economy be disrupted the State will step in to ensure that all is returned to a happy state of bliss. How close this proposal is to the current economic system is striking. Schweickart does not seem to realise that the problem with the market economy is not so much that the workers do not have democratic control of the means of production but that market forces ultimately control any decisions that have to be made, “accumulate or die” will remain the mantra until the competitive struggle for profits is removed. Panayotakis seems aware of these criticisms but does not really drive the point home.

To contrast with this “market-socialist” blueprint Panayotakis offers up the schemes of Michael Albert and Robin Hahnel. Commonly known as “Parecon” this system of participatory economics sees productive decisions co-ordinated by a network of workplace, neighbourhood, and facilitation councils which communicate amongst each other until pricing and production levels are agreed upon. However, in this system competition between enterprises is not eliminated, the law of value still operates, enterprises that fail to compete would go under and so the tension between profit and wages remains. Albert and Hahnel are trying to find political solutions to what is essentially an economic problem.

What is missing from this book is the argument for the type of classless, stateless and non-market system of free access which we would call world socialism. Economic democracy is as much a problem of economics as it is of democracy. A truly democratic economy cannot be realised until the economy is governed directly by human need.

DJP

How I became a Socialist (1977)

From the December 1977 issue of the Socialist Standard

Looking back, I can see that I was nearly a middle-of-the-road floating voter, swayed by whichever tricky-slick talker promised me the most in the shortest possible time—be he Conservative, Liberal, Labour, Communist or whatever. How your head swims at election times when all the MPs and prospective MPs are in top gear! All they need, they say, is to get into Power and everyone's worries will be over. What bloody optimists!

I was born and live in Stoke-on-Trent, the grimy industrial city somewhere in the middle of England. And take it from me, the air isn't much less murky now that can be seen in those old photographs taken during the bottle-kiln days. It's just that when you live in a certain kind of atmosphere for most of your life you tend to take it for granted. It's only on a return to the Potteries after a day in the country or seaside that you notice what a depressing place it is.

Like most people, I grew up with ambitions of becoming someone famous—great footballer, pop star, TV personality, anything that would make me plenty of money, enable me to live a life of luxury. Then BUMP! I left school. Oh yes, marvellous at first, money in my pocket, high hopes of climbing from the lowly dogsbody of junior employee to the dizzy pinnacle of Chairman. "It can be done," they drill into you. But of course, the time comes when reality seeps in—no matter how hard you try to thwart its progress. At that point you take a stone-cold look around. And what do you see? Thousands and thousands of ordinary people just like you, dreaming exactly the same impossible dreams, people who you come to fear and regard as competitors—or putting it in its sober perspective, deadly enemies. You grow to hate them, despise every penny they make more than you, completely unaware that you are giving life-blood to the system that thrives on such emotions.

Then came the time when I gave up such hopes of becoming somebody and settled down to accept my lot. But when I'd reached this stage I became frightened: no overstatement, I can assure you. I saw myself in five years, ten, twenty, thirty, maybe even longer, working at the same place, doing the same job week in week out. It's enough to make anybody contemplate suicide if dwelt upon. So what was the answer? Change jobs. I trued that: clerk, factory worker, labourer, cleaner. Still I had that nagging sensation that something wasn't right. So what was the answer? I couldn't see one. I tried to tell myself that there are people a lot worse off than me, people dying of starvation, homeless, living in poverty. But that type of negative thinking gave no lasting satisfaction but led to questioning more deeply the whole set-up, adding even more questions to my tired mind. Questions like: Why are people starving? Why are people homeless? That's when I turned my hopes for a solution towards the field of politics.

Being a city of mines, pot-banks and other factories, it's not surprising that the Labour Party has held a monopoly in Stoke. The false, though understandable, theory is that as most people in the area "labour" for a living, it follows that the "Labour" Party have their interests at heart. I was no exception in arriving at this conclusion, helped by the older generation's barrage of remarks to the effect that Labour was on the side of the underdog. (When I think of the breath I've wasted in the past defending such notions myself, I honestly struggle not to blush, even in an empty room.)

Anyhow, I was then a Labour man, and with my vote helped the LP into Power. The slow realization crept over me that the Labour Party dealt in nothing more tangible than promises.

Facade

Sad and shattered I looked around, increasingly aware of the injustices in the world. I'm too sensitive, I tried to console myself, so started to listen to the Conservatives and Liberals, but for all their expressions of sincerity I could see through the facade. There's no difference between the lot of 'em, just various methods of giving nothing, So what's left? The Communists: I inquired of a couple of self-confessed reds but there seemed to be no clear aim. "Overthrow the Government! Put our Leaders in power like in Russia!" In fact they were merely another version of all other parties, wanted to dictate to the masses—namely me—what they wanted us to do. That wasn't freedom. 

Dejected I concluded that the world was as it was, that there was nowt anybody could do. There'd always be poverty and starvation. All we could so was to send a few bob when we could afford it to one of the hundreds of charities in the vain hope that we'd relieve the suffering of some poor soul whose belly was forever rumbling. But what satisfaction was there in that when you could see and hear of people spending hundreds of thousands on paintings, jewellery, driving round in chauffeured Rolls, going on cruises of the world three times a year, never having to lift a finger, yet never going short of a thing?

That's how I was feeling when I came across the Socialist Party of Great Britain in an advert in the Socialist Worker, the organ of the then International Socialists, a so-called left-wing group, whatever that might mean. It was the first time I'd heard of such organizations as IS, testifying to my ignorance of how the world revolved. I bought the paper in the hope that it would shed some light on how to get a better deal from life. It offered little hope at all, concerned itself mainly with slagging off the other political parties, not even sparing the Labour Party who it urged people to vote for. Very confusing! The little hope turned out to be the small advert asking the reader whether he would like to see One World, a classless, moneyless system of society based on the common ownership of land, buildings, means of production, ect., and democratically controlled by free individuals. Sounded like a set of cranks to me. Still, what had I got to lose? I'd tried everything else so I sent off for literature.

Suspicious 

Naturally, the proposition of a world without money and of co-operative human beings put to a person in a state of mind whereby he thinks things can never alter and is suspicious of all politics seems ludicrous. What about human nature? Who'd do the work? Surely there'd be leaders to influence and coerce people? All these questions and many more come to mind to batter these mad views. How else can you react when right from childhood you've been conditioned into thinking purely in terms of money, buying, selling, competition, winning, etc.

Gradually, after reading the straightforward articles which explained how nearly every problem on earth is caused primarily because of the system known as capitalism that we live under, it dawned on me that not only was such a new system desirable—indeed essential—it was so easily possible with majority understanding.

At last here was hope for the future, something positive to aim for, I'd broken free from the muddled thinking of my past, un-brainwashed myself from the conditioning we are all subject to. What a sense of enlightenment! And what's more gratifying is that I am now in the knowledgeable position of being able to urge you to do the same, to find out about the REAL Socialism of the SPGB and its companion parties abroad.

It's a fact that the world we live in is sickening but it need not be so. Don't just accept things as they are. Do a little enquiring, question all you see and hear, and you'll discover that Socialism is the ONLY way of making life a pleasure instead of a burden!

Paul Breeze 

Roots (1977)

From the September 1977 issue of the Socialist Standard

Okay you Smiths, Joneses, Bloggs and Leeses
I bet your roots go back as far as the Breezes.
Right! There's me, a wage slave, and also me dad,
And me dead and buried grandfather, and none of us mad.
Further back than that I'm unable to go
But I'll bet a pound to a penny we were all pretty low.
Perhaps I'm Spanish or German or Welsh
But the truth of it is I'll never know. 

And what do I care? Not such a lot.
Apart from a purely academical point of view
The best I can say is it's all so much rot. 

Now don't get me wrong, don't twist what I say,
We're here 'cos of history and that's how it'll stay
But let's get it straight, put it all nice and clear,
The past is the past, but it's the present that's here.
Right!Stop looking back with your complacent shrugs
And clinging to tradition with your endearing hugs.
Wake up to the present, take a cold look around,
Observe the ness that should be razed to the ground.
Pull up the rotten capitalist roots,
Jerk them, yank them free.
Pick up your spades, exercise your brain
And help to plant the Socialist Tree.

Paul Breeze

The Breakthrough (1977)

From the March 1977 issue of the Socialist Standard

I once asked a Labour man,
"Are you a Socialist? Answer me if you can".
"I'm a Labour man", he answered.
"So it's obvious I am". 

"There's nowt obvious it", says I,
And he looked at me strangely before he said,
"Are you quite alright, mate,
Or are you goin' funny in the head?" 

"No", says I simply, saddened by his manner,
Reflecting that all Labour men
Say they wave the Socialist banner.
But you ask 'em what Socialism is
And they haven't got a clue.
They think it's Nationalisation
Or some other pathetic view. 

I say, "Do you think it's a world system
That has no need for money?"
And he looks at me again in that same old way
As though he thinks I really have gone funny. 

"Well that's Socialism", I say.
"No buying, no selling, no spending, no pay.
There'll be no need, you see,
Everything's readily available,
Everything's free". 

"What about work? he says.
"Who's goin' do it for nowt?"
"That's no problem", says I.
"That's not hard to figure out.
You'll work cos you want work
Not cos of what they pay ya.
If you had a choice of doin' summat
           or nowt all day,
I'm sure you'd choose summat, what say ya?" 

"Mm, reckon so," he says. "You might have summat after all."
"There's no reckon about it," says I, "it's a fact
Or my name ain't Paul".
"Well, when's this free world going to come about, then?
Tell me how long we've got?"
"As soon as folk like you come and join us
Instead of listening to that Labour rot". 

He nodded reflectively,
As though he'd just seen the light,
And I knew in my heart
He was going to say what was right.
"Are you a Labour man?" I asked again.
"Or cab you now see clearly through the mist?"
"Nay, lad," he replied smilingly,
            I'm no Labour man.
I'm a Socialist."

Paul Breeze

Einstein and Socialism (2005)

From the April 2005 issue of the Socialist Standard

This year sees a double anniversary for Albert Einstein: fifty years this month since his death, and one hundred since the publication of his first seminal papers on quantum theory and relativity. No doubt there will be fulsome, and well-deserved, tributes to one of the great names of twentieth-century science. But it is likely that there will be little if any reference to Einstein’s political views, especially his opposition to capitalism, including his acceptance of the labour theory of value.

In 1949, Einstein published an article ‘Why Socialism?’ in the first issue of the American left-wing journal Monthly Review. It is available on the web at various places. e.g. here.  In it he argued that class society is an instance of ‘the predatory phase’ of human development (in Thorstein Veblen’s phrase). Yet humans depend on society to provide food, clothing, a home and so on. We have a fixed and unalterable biological constitution, but during our lives we acquire a ‘cultural constitution’ which is subject to change. Anthropological research shows that people’s social behaviour differs greatly, so our biological make-up does not determine the way we live.

But small groups of humans cannot be self-sufficient: ‘mankind constitutes even now a planetary community of production and consumption.’ This dependence on society, however, is seen as a threat to our existence rather than as a positive asset. This is largely due to ‘the economic anarchy of capitalist society’. All those who do not share in the ownership of the means of production, Einstein calls workers. Workers’ wages are determined not by the value of what they produce but by their minimum needs. As private capital becomes more and more concentrated, it achieves a power that even democratic politics cannot check.

Under capitalism, he continues, production is for profit, not use. Unemployment exists almost always, and workers are in fear of losing their jobs. Unlimited competition results in an enormous waste of labour. The worst evil of capitalism, he says, is the ‘crippling of individuals’, as education inculcates competitive notions.

Having given a pretty decent sketch of how capitalism works and of what’s wrong with it, Einstein goes on to advocate a planned economy which guarantees a livelihood to everyone and adjusts production to the needs of the community. But a planned economy, he recognises, is not socialism, as it may involve ‘the complete enslavement of the individual’ (so perhaps he had Russian-style state capitalism in mind?). And after a few misguided remarks about so-called problems of socialism (how to limit the power of the bureaucracy? etc), Einstein closes his contribution. It’s a shame that he is so inconclusive, but his article is still well worth reading, even if you can’t get through it at the speed of light.

Paul Bennett

‘Abenomics’: Japan Retests a Failed Experiment (2015)

From the February 2015 issue of the Socialist Standard

Japan’s prime minister is so confident in his economic policy that he has named it after himself. But will his ‘Abenomics’ cure what ails Japanese capitalism?

Increased stimulus or austerity? This has been the key choice for policymakers seeking to lift their national economies out of the crisis that has dragged on since the collapse of Lehman Brothers in late 2008. It’s the question of whether government should try to cushion the blow of a crisis or rather let it run its course.

But Japan’s Prime Minister Shinzo Abe has put forward an economic strategy, dubbed ‘Abenomics’, that seems to adopt the belief that there is no need to choose. The basic idea is that, first, government should aggressively introduce fiscal and monetary policies to stimulate demand, and that, once the ball is moving, the government can back off and let the free market work its wonders.

More specifically, the prime minister says he has three ‘arrows’ in his quiver to slay economic recession and prod the economic growth that has eluded Japan and the rest of the world. Those three key policies are: monetary policy centred on quantitative easing, fiscal policy aimed at stimulating demand, and structural reforms to deregulate the economy.

For Abe and his government, the root of Japan’s economic problems is thought to lie in deflation. Following a simplistic Keynesian logic, Abe is convinced that the expectation of continued deflation has discouraged investment and led consumers to defer purchases. If Japan were in an inflationary period instead, the argument goes, this would stimulate economic activity and raise consumption.

The ‘first arrow’ of Abenomics in particular aims to reverse the deflationary trend. This has involved the Bank of Japan, under Abe’s yes-man Haruhiko Kuroda, implementing an ultra-loose monetary policy. Kuroda announced in April 2013 that the BOJ would double the ‘monetary base’, aiming to deliver 2 percent inflation within the next two years. This involves purchasing around 7 trillion yen worth of Japanese government bonds and other assets every month, rivalling the amount the Federal Reserve has been pouring into its own ‘quantitative easing’ policy. The BOJ has also left interest rates for commercial banks at around 0 percent in the hope that this will encourage lending.

Abe’s second arrow is fiscal stimulus; the building of more ‘bridges to nowhere’ and other lavish spending on infrastructure. In early 2013, just a few weeks into office, Prime Minister Abe introduced a 10.3 trillion yen stimulus package. And, in January of this year, he announced a supplementary budget of 3.12 trillion yen to fund further stimulus spending.

Given the Keynesian dimensions of the first two arrows, it’s not too surprising that a right-wing reactionary like Abe could win praise from a number of liberal economists, most notably Paul Krugman. In a May 2013 column for The New York Times titled ‘Japan the Model’, Krugman wondered why the ‘Western world’ was ‘overtaken by economic defeatism’, instead of taking a ‘sharp turn toward monetary and fiscal stimulus’ as Japan was doing. ‘A short-term boost to growth won’t cure all of Japan’s ills’, Krugman wrote, ‘but, if it can be achieved, it can be the first step toward a much brighter future’.

In short, for Krugman and other Keynesian economists, Abenomics has been seen as an alternative to the austerity policies that they believe are at the root of the current economic stagnation.

The long-awaited ‘third arrow’

But Abe has had quite a few fans among conservatives and free-marketeers as well. They are looking to the prime minister to follow through on his pledge to carry out structural reforms that will free capital from its chains. This is the aim of the ‘third arrow’ of Abenomics. The non-Keynesian fans of Abe have hoped (although their hope is fading) that the benefits resulting from the structural reforms would make up for the debt incurred from the lavish fiscal and monetary policies.

In June 2014, Abe finally unveiled some of the third-arrow policies he hopes to introduce, including cutting corporate income tax to below 30 percent, creating special economic zones with fewer regulations and lower tax rates, and lifting the ban on online sales of drugs. The list of specific proposals was fairly long, but the combined effect was underwhelming, at least in the eyes of the foreign business press, which had been looking forward to the third arrow with great expectation.

‘Misfire’ was the title of an article in the Economist that described Abe’s structural reforms as ‘timid’. In particular, the magazine’s editors were disappointed that Abe did not promise more measures to reform the labour market and the agricultural sector.

The prime minister’s ‘timidity’ is not surprising, however, since the potential third-arrow reforms concern issues of keen political importance to influential lobby groups within the ruling party itself as well as issues that could divide the public. The LDP is far from agreement on matters related to free trade and agriculture, and cutting taxes for corporations while raising the consumption tax is not likely to win over the public. If the political headwinds are strong enough, Abe could easily end up the target of his own third arrow.

Roundabout solutions

The idea (or hope, really) behind Abenomics is that each arrow hitting its bull’s-eye will have a combined ‘synergistic’ effect capable of lifting the crisis-laden economy out of its rut. The optimistic charts presented to explain how this might all happen tend to look something like the diagram of a Rube Goldberg machine; a chain reaction where the initial steps bring improvements that in turn generate other improvements.

For instance, a chart created by the investment bank Nomura Holdings plots out how the aggressive monetary policy will drive up stock prices; this in turn will boost corporate profitability, which will expand capital expenditures and increase wages; while the lower yen will drive up exports, thereby also boosting capital expenditures. And while this is going on, the fiscal stimulus is expected public investment, thus also raising consumption, wages, and capital expenditures. On top of this, the structural reforms are expected to boost all of the drivers of growth. All of this combining to allegedly raise the level of effective demand and break away from deflation.

It is incredibly convoluted, but then again capitalism itself is an incredibly convoluted system of social production; a system where hardly any problem lends itself to a straightforward solution. The reason in most cases is that all of the production decisions are made by the capitalists who own or manage the means of production; each of these actors making decisions on the basis of their own profit calculations. Any effort to influence how capitalists choose to behave can only be attempted in a roundabout way, since private ownership and the rights stemming from it are sacrosanct under capitalism.

Those capitalists are in charge of production; certainly not society as a whole, or even the government, despite its pretentions to leadership. What the government can do, in attempting to coordinate the private (and fundamentally selfish) activities of capitalists, is to introduce this or that incentive or regulation to encourage behaviour thought to benefit capitalism as a whole. The problem, though, is that capitalists will not budge, no matter how strongly cajoled, if they do not see the point (=profit) for themselves of such behaviour. This fundamental reality leaves a ‘leader’ like Abe with few options except to throw money at the problem in the form of fiscal and monetary stimulus in the hope that it will spur productive activities.

How different the situation would be in a socialist world, where no minority has a stranglehold on the means of production, which are instead held in common. There the questions related to production are transparent; no longer economic problems at all, actually, but mere ‘technical’ issues related to how to go about producing whatever the members of society have determined democratically to be necessary. No need for the domino or billiard-ball approach where every problem is only dealt with indirectly or at an angle.

Dominos still standing

So what has been the effect of Abenomics so far? Initially, the outlook was pretty rosy. Not surprisingly, the aggressive quantitative easing and 0 percent interest rate policy quickly sparked a stock exchange boom. By mid-November 2014 the Nikkei average had risen to 17,490 points, a 70 percent increase compared to the time Abe took office. The fall of the yen was equally dramatic, with the currency losing around 40 percent of its value against the dollar since Abe took office in December 2012. GDP growth also looked promising (at first), increasing in the first three quarters of 2013.

But the first flaw in the mechanistic logic of Abenomics became increasingly clear as the year 2014 progressed. The stock-market boom has done little to lift the real economy. In fact, the boom itself reflects the fact that most of the money pumped into the economy is ending up in speculative (rather than productive) activities. This reality is seen in the figures for Japan’s GDP which shrank in the second and third quarters of 2014 by 7.3 and 6 percent respectively.

Even the dramatic fall in the Japanese yen has not ended up lifting the country out of its trade deficit, as Japan recorded an excess of imports over exports of 893 billion yen in November, marking the its 29th consecutive month for trade to be in the red.

Wages also have not risen much either, despite Abe’s appeals to corporate leaders. In August 2014, real wages (adjusted for inflation) fell by 2.6 percent year-on-year, the 14th straight month of declines. The bottom-line of profit has again proved to be a weightier concern to capitalists than the opinions of politicians or the public.

On top of all these setbacks to the plan, the Bank of Japan is even having difficulty reaching its 2 percent inflation target. This is particularly troublesome for Captain Abe and his obsessive crew, since deflation has been their White Whale that had to be slayed at all cost. Rather than admit defeat in this quest, the BOJ has decided to  increase the monetary stimulus by enlarging to 80 trillion yen the annual target for expanding the monetary base, as compared to the previous 60 to 70 trillion yen range.

In short, although the first two arrows may have hit the mark insofar as their immediate goals, few of the expected knock-on effects have materialized. This should not be too terribly surprising to anyone, especially to the members of the LDP, since for well over two decades Japanese governments have experimented with similar monetary and fiscal policies in the hope of economic recovery.

It goes without saying that the experiment failed (again and again). Slashing interest rates to zero was not the answer; nor did previous stimulus packages provide much incentive to the real economy. Japan introduced no fewer than 15 stimulus packages between 1992 and 2008, averaging around 2.3 percent of the country’s overall GDP.

What grew as a result of these efforts was not the economy but government debt; to the point where it is now 780 trillion yen, which is roughly 240 percent of Japan’s GDP, forcing the government to channel around 40 percent of its revenue to the servicing of this debt.

Abe himself seems to be well aware that ‘Abenomics’ will hit the wall sooner or later, if it hasn’t made contact already. His decision to call a snap general election in December, even though he had two years left in his current term, was widely recognized as stemming from his expectation that things are likely to get worse, economically. Better to call an election now, he reasoned, while the opposition is in disarray, than to wait another year or two.

The ploy worked, as the LDP and its coalition partner Komeito preserved their two-thirds parliamentary majority, while around half the population abstained from voting at all. But Abe may have been too clever by half; in making Abenomics the centrepiece of his campaign, he has laid further claim to his responsibility for the performance of the Japanese economy. The prime minister is free to remain in office another four years, but with his 'three arrows' looking more like damp squibs he may not last that long.

Michael Schauerte