Cooking the Books: Currency wars (2010)

The Cooking the Books column from the December 2010 issue of the Socialist Standard

“More than a dozen countries”, the (London) Times (11 November) reported, “have been intervening in the foreign exchange markets to weaken their currencies and protect exporters, raising fears of a rerun of currency wars that damaged the world economy in the 1930s.”

The 1930s – that’s the spectre currently haunting those in charge of trying to run capitalism. Then, faced with the contraction of world trade, states tried to grab as much as was left by resorting to protectionism, export subsidies and devaluations. The conventional wisdom is that this only made things worse, deepening and prolonging the depression.

The World Trade Organisation (WTO), and its predecessor GATT, have made it difficult for states to adopt protective tariffs and export subsidies. So, all that’s left, to try to get the better of their rivals (and it’s a war of each against all), is to devalue their currencies.

Strictly speaking, since the collapse in 1971 of the Bretton Woods agreement, which had laid down fixed exchange rates between currencies, the sort of formal devaluation that the Labour governments of the 1960s were forced to carry out no longer occur. Currencies now “float”, which means that their exchange rate with other currencies is determined by supply and demand on foreign exchange markets.

Normally (if there’s a level playing field) what would happen is that the more a state exported the higher would be the demand for its currency due to those buying the exports having to acquire some to pay for these. This would lead to the currency’s exchange rate rising; which would make its exports more expensive. Similarly, a state with a balance of trade deficit would find its currency’s value fall; which would make its exports cheaper. So matters would be more or less self-regulating.
That’s the theory. The real world is rather different, since governments can influence the exchange rate of their currency by affecting the supply and demand for it. If they want to keep its exchange value low (so as to encourage exports by making them relatively cheaper) they can increase the supply on foreign exchange markets by themselves selling more there (printing more if necessary). Which is what has been happening:

The US points the finger at China but China is not the only state trying to grab a bigger share of world trade in this way. One of the main reasons why Britain didn’t join the euro was that this would have prevented it letting the pound float downwards to encourage exports. The US too has recently been increasing the supply of dollars (via “quantitative easing”) with this end partly in view as a means of putting pressure on China to upvalue the yuan.

The matter was the main item of the agenda of the G20 summit in Seoul in November, but all that was agreed was to adopt a pious declaration condemning “competitive devaluations” and wishing for “market-determined exchange rates”. Some sort of agreement may eventually be cobbled together. But maybe not. The competitive struggle for profits built-in to capitalism has already prevented agreement on a further round of tariff reductions, let alone on what to do about the threat of climate change.

Build It Now? (2007)

Book Review from Issue 21 of the World Socialist Review

Build It Now: Socialism For The Twenty-First Century by Michael A. Lebowitz

Marx wrote: “Men make their own history, but they do not make it as they please; they do not make it under circumstances chosen by them- selves, but under circumstances directly encountered, given and transmitted from the past.”[1]

The circumstances encountered by those of us striving to build a socialist majority in the North today include a population made up almost entirely of people who have never known any form of society except for capitalism. Arguably, this is the greatest obstacle to building a socialist majority here in the United States, and has been so for many generations.

But in Venezuela, this obstacle does not loom quite so large. In a speech made on Dec. 15, 2006, Hugo Chávez claimed that the indigenous peoples in Venezuela had “lived in socialism for centuries,” and called them “the bearers of socialist seed in our land.”[2] (According to the Encyclopedia Britannica, about two-thirds of Venezuelans have some Indian ancestry.) In other words, the constituency who voted overwhelmingly for Hugo Chávez in 2006 is made up, in part, of people who can still remember another way of life. A case can certainly be made that the “circumstances directly encountered” by people striving to build a socialist majority in Venezuela are more propitious than what we Americans are used to.

Build It Now: Socialism for the Twenty-First Century gives us a fascinating look at contemporary Venezuela. Its author paints a picture of “a country which at the time of this writing embodies the hopes of many for a real alternative to capitalism.” (Introduction, p 10). Since most readers of this journal understand that the only two possible “real alternatives” to capitalism are socialism or barbarism, in this review I would like to address the question: “Is Venezuela under Hugo Chávez actually on the road to socialism?”

Lebowitz is a Marxist writer based in Caracas, and in Build It Now he makes many worthwhile points. One is that, once you understand the nature of capitalism, “you can no longer look at capital as this wondrous god providing us with sustenance in return for our periodic sacrifces. Rather, you understand capital as the product of working people, our own power turned against us.” He makes the case that we must “go beyond capitalism” if we want to end the exploitation of the working class; and states (p. 30):

The society to which Marx looked as an alternative to capitalism was one in which the relation of production would be that of an association of free producers. Freely associated individuals would treat ‘their communal, social productivity as their social wealth,’ producing for the needs of all.

The chapter entitled “The Knowledge of a Better World” contains some of the key points in the book. Lebowitz tells us:

Knowing where we want to go is a necessity if we want to build an alternative. But, it is not the same as being there. We live in a world dominated by global capital, a world in which capital divides us, setting the people of each country against each other to see who can produce more cheaply by driving wages, working conditions, and environmental standards down to the lowest level in order to survive in the war of all against all. We know, too, that any country that would challenge neoliberalism faces the assorted weapons of international capital — foremost among them the IMF, the World Bank, and imperialist power… We need to recognize the possibility of a world in which the products of the social brain and the social hand are common property… For this reason, the battle of ideas is essential.

It is easy to find inspiration in the following words, that Lebowitz addressed, in 2005, to a National Conference of Revolutionary Students for the Construction of Socialism in the Twenty-first Century, in Mérida, Venezuela:

We need to remember the goal. If you don’t know where you want to go, then no road will take you there. The world that socialists have always wanted to build is one in which people relate to each other as members of a human family, a society in which we recognize that the welfare of others concerns us; it is a world of human solidarity and love where, in place of classes and class antagonisms, we have “an association, in which the free development of each is the condition for the free development of all.” (pp. 64-65)
…We see that our productivity is the result of combining our different capabilities and that our unity and the common ownership of the means of production make us all the beneficiaries of our common efforts… (p. 66)
All of these characteristics and relations coexist simultaneously and support one another in the world we want to build. Democratic decision making within the workplace (instead of capitalist direction and supervision). Democratic direction by the community of the goals of activity (in place of direction by capitalists), production for the purpose of satisfying needs (rather than for the purpose of exchange), common ownership of the means of production (rather than private or group ownership), a democratic, participatory, and protagonistic form of governance (rather than a state over and above society)… (p. 66-67)

So, how can we build this world?

He suggests (in Chapter 2 and elsewhere) that this world can be built in Venezuela with the support of Chávez’s government. Lebowitz asserts (pp. 98 –99) that if the Venezuelan government under Hugo Chávez encourages “radical endogenous development,” e.g., “preparing people for new productive relations through courses in cooperation and self-management,” (which would be possible only for a government “prepared to break ideologically and politically with capital”), that can be seen as a step towards socialism.

Socialists have sometimes called government “the executive committee of the capitalist class.” For that reason, the World Socialist Movement does not envision any role in socialist society for government per se, but anticipates that the men and women living in socialism will devise some method of managing affairs, with the necessary administrative authority but no coercive power.

One must ask, can a government “prepared to break ideologically and politically with capital” exist in the present world? Can a socialist nation exist, surrounded by capitalist nations on all sides? Certainly, it must be pointed out, contemporary Venezuela is not an example of a socialist society. Although Lebowitz may have asserted, “We see that… our unity and the common ownership of the means of production make us all the beneficiaries of our common efforts,” there is really not, at this moment, common ownership of the means of production anywhere. (If there were, there would also be common ownership of the goods and services produced, which would imply free right of access to these things — but, as of this writing in 2007, Venezuelan citizens do not enjoy free access. It remains a goal to be achieved.)

On the other hand, this is not to say that they have not taken a step in that direction. “Radical endogenous development” could include building a socialist majority. Chávez has stated that as his intention. If that should happen, then a global Socialist Revolution would have a real chance of beginning in Venezuela.

“Socialism” with a qualifier
I want to take a moment here to talk about words. When Lebowitz speaks of “Socialism for the Twenty-First Century,” does he mean the same thing by “socialism” that Hugo Chávez does? Does either of them mean the same thing that we do? Over time, words change their meanings. When I was a child, for example, all wristwatches had faces, and when you said “watch” the concept called up was a circle of numbers with 12 at the top and 6 at the bottom. Since the advent of digital technology, “watch” no longer has that meaning. Now, if you want to refer to that kind of watch, you have to add a qualifier: “analog watch.”

In order to call up the concept of “socialism” as Marx used it in the 19th Century, it is also now necessary to add a qualifier. The qualifier is “non-market.” Without that qualifier, the word “socialism” means many different things to different speakers. Because I want to be crystal clear about what I mean by “socialism” in this writing, I will make a distinction between “non-market socialism” and “market socialism” (although I am aware that most people do not add "market" any more than people who wear a digital wristwatch add "digital").

Socialism is not a market economy. It is (as developed in Engels's Socialism, Utopian & Scientific) a society where money has become superfluous because the means of production are completely under social control. All labor is voluntary, everyone has free access to whatever goods and services are available.

Without importing goods from other nations, the people of Venezuela could never maintain an acceptable standard of living. No country in the world has all the raw materials necessary to do that, within its own national boundaries. Therefore, even if a socialist majority were to be created in Venezuela under Chávez, as long as there is a global capitalist economy, it could not establish non-market socialism. It could not become either moneyless or classless.

Perhaps Lebowitz has lost sight of this — or perhaps he believes that this aspect of Marxian socialism is not to be present in the Twenty-First Century version. He emphasizes, “I am convinced that worker management is the only real ultimate alternative to capitalism,” (p. 74), which implies he has forgotten that when the means of production are under social control, there is no more class of workers, and no more class of capitalists either. There are just people, all equal members of society.

Venezuela needs a money economy now to trade even with neighboring Latin American countries, let alone with giant imperialist states like the US; so, when one refers to “socialism” in Venezuela under Chávez — or in Cuba under Castro — what is really meant is “market socialism,” in which money is still used to regulate the exchange of goods and there is no common right of access. Moreover, the government of a “market socialist” economy (think: Cuba) is forced to exert coercive authority over people from time to time.

Will a conscious, political socialist majority in Venezuela put up with this? Or, freed from the logic of capital, will they take the next step and demand free access to what they produce?

Hope for a real alternative
I think there is reason for optimism, and I applaud Lebowitz for his careful and insightful development of the situation in Venezuela. Certainly, there is hope for a real alternative to global capitalism resulting from the circumstances described in Build It Now.

Hugo Chávez himself, shortly after his election last year, called on his followers to dissolve their existing parties and to form a new “United Socialist Party of Venezuela,” which would provide a forum for discussing how to “construct socialism from below.”[3] The material conditions in the world are ripe today for a global Socialist Revolution, except for the lack of a majority of people who understand that non-market socialism represents a viable alternative to capitalism and are willing to commit themselves to making it work. Capitalism has wrought so much havoc on the ecology of Earth that the welfare of all human beings — capitalists as well as workers — is threatened. Not just the working class, but all of humanity, need to stop the engine of capital, if we are to survive.
The revolution has to start somewhere, and the indigenous Venezuelans who elected Chávez may yet set an example for the rest of the planet.

Karla Rab

Footnotes

[1] The Eighteenth Brumaire of Louis Bonaparte.
[2] “Chávez Calls or United Socialist Party of Venezuela" by John Riddle< Socialist Voice, December 2006.
[3] “Chavez Calls for United Socialist Party of Venezuela,” by Gregory Wilpert; retrieved from Dec 18, 2006

Editorial: The revolution begin . . . again (2010)

Editorial from the December 2010 issue of the Socialist Standard

In 1855, riots broke out in London’s Hyde Park in protest over a Sunday Trading Bill. Karl Marx was there and the next day declared that he did not think he was exaggerating in saying that “the English Revolution began yesterday in Hyde Park”. Marx did not begin, but nor did he end, a long history of embarrassingly premature predictions of the demise of the British ruling class.

On Wednesday 10 November, a demonstration, long planned and organised jointly by the University and College Union and the National Union of Students, took place in central London to protest against the government’s cuts in education funding. The demonstration was expected to be the usual poorly attended, tame and boring affair – marching from one spot to another, waving placards, and chanting slogans.

The reality was somewhat different. Around 52,000 university workers and students attended, and the demonstration quickly turned into “something resembling a Mardi Gras carnival”, as a reporter for Red Pepper magazine put it. “The young faces and large grins, combined with incessant whistle-blowing, trumpet blasting and drum beating, all mix[ed] together to form … a fun-filled, party-like atmosphere.” A breakaway from the march, 200 strong according to a reporter from the Guardian, then broke into and occupied 30 Millbank, the Conservative party's campaign headquarters. Once inside, the demonstrators quietly staged a protest – alongside some minor scuffles with the police and a broken window, ludicrously blown up out of all proportion by the mainstream media – and issued some inspiring propaganda:

"We stand against the cuts, in solidarity with all the poor, elderly, disabled and working people affected. We are against all cuts and the marketisation of education. We are occupying the roof of Tory HQ to show we are against the Tory system of attacking the poor and helping the rich. This is only the beginning.”

Commentators from both the Leninist and anarchist left predicted that the day marked the beginning of a new politics – another Poll Tax-style rebellion, according to some; a mass revolutionary insurrection a week Wednesday, according to others. Did the English revolution begin yesterday at Tory HQ?

We in the Socialist Party are more cautious. We welcome any upsurge in the militancy and resistance and organisation of our class. But we also know, from bitter experience, that work of an altogether quieter, patient, more political kind is also needed. The skirmishes in the class war must be fought if we are not to be reduced to beasts of burden. But as human animals capable of rational thought and long-term planning, we must also seek to stop the skirmishes by winning the class war, and thereby ending it. This is only possible if the capitalist class is dispossessed of its wealth and power. That means that the working class as a whole must understand the issues, and organise and fight for these ends themselves – by organising a political party for the conquest of state power that will convert the means of production into the common property of the whole community.

As Marx’s fellow socialist Engels came to realise, this would have to involve not “surprise attacks” by minorities, but the “long, persistent work” of socialist education and organisation. If he had known just how long this work would have to go on, he might well have despaired. But the task hasn’t gone away. And it won’t as long as capitalism lasts.

World poverty: cause and effects (2010)

From the November 2010 issue of the Socialist Standard

How should poverty be measured if at all?

Part of the measure of statistics is that, however well-meant the goal, there are bound to be flaws and weaknesses. Any individual's subjective assessment of their own poverty will likely be quite different from that of an objective report. Over the years different studies have listed different requirements to be included into what constitutes poverty, but how many of these have consulted with the subjects of the report as to their own assessment of their situation? If poverty is to be eliminated, how it is manifested in different parts of the world, how it impacts differently on people of different regions and particularly its causes need to be thoroughly understood.

“Our aim should be to set the poverty line at a level where people can actually have a standard of living which we would consider morally acceptable,” says David Woodward in a July/August New Internationalist article. The article, based on a report which he co-authored with Saamah Abdallah, (See here.) explains the pitfalls and openings for misinterpretation of such economic-based poverty lines as the well known dollar-a-day as used in measuring the Millennium Development Goals. At least, he says, the dollar-a-day approach put poverty on the agenda 20 years ago – but the discrepancies in interpretation are so wide as to be almost meaningless and could make huge differences in the numbers of people being either included or, worse, excluded. Woodward proposes instead a 'Rights Based Poverty Line' – not based on income but as a starting point for agreed indicators such as economic and social rights, health, education and nutrition. This aims to be a more far-reaching attempt to identify those in need (and to ameliorate their conditions?) – a worthy goal no doubt within the capitalist system and one which will gain the support of many altruistic (dare I add misguided?) folk as they learn of it.

The focus of any of these studies in general is measuring poverty – how many, how much, how little, how widespread? – with little, if any, reference to why it is as it is or how it could be dealt with. If income levels are the problem who's going to agree to raising wages to the necessary level on the scale the studies show to be necessary? If it's social services which are inadequate where is the money to be found to raise them to the required level? No figures are given but it's pretty obvious that any solution in the current structure of the world's order would have to be in monetary terms.

Address the cause or ameliorate the effects?
The question that socialists would wish to see addressed more widely is why should we be expected to declare a position on what is acceptable as a baseline; why should we be discussing minimum adequate shelter, required basic living standards, access to sufficient food, clean water, health care, education and a minimum daily wage? In a world of from each according to ability to each according to need, a world of voluntary work and free access there will be no need to set base lines to keep people from falling below, needs will be self-determined and self-fulfilled with no requirement for money. Yes, we recognise the intolerable level of poverty in the world, the huge numbers with little or no access to clean drinking water, widespread hunger, the appalling lack of health care, deaths from treatable diseases and the millions caught up in wars and occupation not of their making. We recognise all this and more and we recognise the huge numbers of people worldwide who work hard in the belief that they can improve some of the conditions for some of the people. We also recognise that with all the hard work, time and money injected into so many projects over so many years that whilst there may be some temporary amelioration conditions for the majority are actually deteriorating. Our position is clear. We must address the cause not the effects. This is the big discussion that fails to hit the headlines.

The effects
Statistics may not always be totally reliable, or be biased one way or another, intentionally or not – and they can also put you to sleep – but it sometimes helps to shock us back to reality when we see them presented in an unusual or unfamiliar way. Sometimes it's the seeming impossibility of juxtaposed figures that can bring us to question the accuracy and then recognise all over again the sheer iniquity of the capitalist system. The numbers vary between reports but reveal that 55 percent of India's population, 645 million people, are living in poverty (a new Oxford University study); 51 percent of the world's poor, 844 million, live in South Asia and 28 percent, 458 million, in Africa (the Multidimensional Poverty Index – MPI ); that poverty in eight Indian states exceeds that of the 26 poorest African countries combined; that contrary to the Congress Party-led government's claims that economic growth has been inclusive figures show extraordinarily high levels of poverty among India's castes and tribal peoples; that using the $2 a day household income benchmark India is home to 828 million (75.6 percent of their population) below the poverty line compared with 551 million (72.2 percent) in sub-Saharan Africa. These millions are all individual people – often the same people in different studies – but they add up to an awful lot of noughts and between them they have pretty well nothing to their names.

The cause
Now for the wealthy. The ones on the right side of the tracks. The year 2010 has so far recognised 49 US$ billionaires in India who between them have amassed nearly 31 percent of GDP, four times the global average, which adds up to a staggering $340,900,000,000 (Forbes magazine).

In summing up How Poor is Poor Woodward recognises that a global poverty line fixed in monetary terms “is too unwieldy and can give wildly inaccurate results” and goes on to state that no improvements in our understanding of measurements of poverty are of any use ”unless effective action is taken not merely for poverty reduction but for a permanent eradication of the blight of poverty in a meaningful sense”. However poverty is measured it is simply another set of statistics revealing effects not causes and is of little benefit to any impoverished persons. To return to my earlier point 'permanent eradication' can only come from the worldwide decision to eradicate the cause, the blight of capitalism. We do have that choice and for the world's vast majority the day can't come too soon.

Janet Surman

"What's Wrong With Using Parliament?"

Via the SPGB's MeetUp Page:

Saturday, 20th November 5pm.

Official launch of The Socialist Party's latest publication:

"What's Wrong With Using Parliament?",

with an introduction by Stair.

"Stair has had a long interest and involvement with what he may have described at one time as "anti-authoritarian politics".

Housmans was one of the destinations he had on his agenda pre-internet on numerous trips to London when further exploring these ideas.

His employment meant he did his "time" in the "retail and service sector" and will talk about his experience of the attitudes and positions of his fellow workers and how some of these observations tie into the question of "how we get from here to there", a classless, wageless, moneyless, stateless society.

This pamphlet comes at a time when many people are questioning the destructive effects of capitalism and also with it a rejection of leaders and the traditional left. This is something that can be encouraged. The aim of the pamphlet is to show that there is another view of social change that may be a "blind spot" with those who get involved with "anti-capitalist", "activist" or/and "anarchist" politics".

Location: Housmans Bookshop

5 Caledonian Road,

Kings Cross,

London N1 9DX

Rich Politicians (2010)

Cross-posted from the World Socialist Party of the United States website

CBS News reports that although the basic pay for members of Congress is $174,000, nearly half — 261, to be exact — are millionaires (there are 535 total members of the House and Senate). Just 1 percent of Americans overall can say the same. 55 members had an average calculated wealth of $10 million or more in 2009.

While the economy has generally faltered over the past two years, congressional members actually saw their collective personal wealth increase by more than 16 percent between 2008 and 2009.

The wealthiest member of Congress is Rep. Darrell Issa (R-Calif.), whose holdings exceed $303.5 million. Rep Jane Harman (D-Calif.) is close behind with $293.4 million, and Sen. John Kerry (D-Mass.) rounds out the top three at $238.8 million. In the House, five Democrats and five Republicans make up the 10 wealthiest members, while in the Senate, six Democrats and four Republicans make up the top 10.

The median wealth of a House member in 2009 stood at $765,010, while the median wealth for a senator in 2009 was nearly $2.38 million.

The most popular company among members of Congress, CRP found, was General Electric, in which 82 current members invested. The second most popular company was Bank of America, which 63 members invested in.

FN Brill

Things about capitalism (2010)

Book Review from the November 2010 issue of the Socialist Standard

23 Things They Don’t Tell You About Capitalism. Ha-Joon Chang (Allen Lane)

Three things Ha-Joon Chang doesn’t tell you about capitalism. As a form of society it’s only a few hundred years old. It won’t last forever. And it will be replaced when a majority of the world’s people stop supporting it and organise a better alternative.

The author makes no bones about supporting capitalism: 

“This book is not an anti-capitalist manifesto…my criticism is of a particular version of capitalism that has dominated the world in the last three decades, that is, free-market capitalism…there are ways in which capitalism should, and can, be made better.”

It takes two pages to list the headings of the 23 ‘things’, in no particular order. Four are on the market: no such thing as a free market; free-market policies rarely make poor countries rich; we are not smart enough to leave things to the market and financial markets need to become less efficient. Three are on economics: greater macroeconomic stability has not made the world economy more stable; we are living in planned economies and good economic policy does not require good economists. Three are on the US: it does not have the highest living standard in the world; its managers are overpriced and what is good for GM is not necessarily good for the US. The 13 remaining ‘things’ can be filed under miscellaneous’.

Ha-Joon Chang knows a thing or two about Marx and Marxism. He understands that Marx “argued that the fundamental problem with capitalism was the contradiction between the social nature of the production process and the private nature of ownership of the means of production”. Unfortunately he equates Marxism with central planning, which he says led to the unravelling of ‘communism’ in the late 1980s.
In his concluding chapter the author offers eight mostly disputable points:

1. “The profit motive is still the most powerful and effective fuel to power our economy and we should exploit it to the full.” No – the profit motive applies to and benefits only the tiny capitalist class at the expense of exploiting workers.

2. We should build our new economic system on the recognition that human rationality is severely limited.” No – this is too pessimistic an assessment of human rationality.

3. “We should build a system that brings out the best, rather than the worse, in people.” Yes – capitalism certainly doesn’t.

4. “We should stop believing that people are always paid what they ‘deserve’.” Yes – socialists never started believing that.

5. “We need to take ‘making things’ more seriously.” Yes – a system based on making things is better than one based on making money for the minority.

6. “We need to strike a better balance between finance and ‘real’ activities.” No – we need to get rid of finance as an impediment to real activities.

7. “Government needs to become bigger and more active.” No – government of persons needs to give way to administration of things.

8. “The world economic system needs to ‘unfairly’ favour developing countries.” Yes – but not in the way the author means it. The world socialist system may at first need to favour populations which have the greatest deprivations.

Stan Parker

THAT Student Demo

Cross-posted from the Socialism Or Your Money Back blog

THE REVOLUTION BEGINS...AGAIN

On Wednesday 10 November, a demonstration, long planned and organised jointly by the University and College Union and the National Union of Students, took place in central London to protest against the government's cuts in education funding. The demonstration was expected to be the usual poorly attended, tame and boring affair – marching from one spot to another, waving placards, and chanting slogans.

The reality was somewhat different. Around 52,000 university workers and students attended, and the demonstration quickly turned into "something resembling a Mardi Gras carnival", as a reporter for Red Pepper magazine put it. "The young faces and large grins, combined with incessant whistle-blowing, trumpet blasting and drum beating, all mixed together to form … a fun-filled, party-like atmosphere." A breakaway from the march, 200 strong according to a reporter from the Guardian, then broke into and occupied 30 Millbank, the Conservative party's campaign headquarters. Once inside, the demonstrators quietly staged a protest – alongside some minor scuffles with the police and a broken window, ludicrously blown up out of all proportion by the mainstream media – and issued some inspiring propaganda:

"We stand against the cuts, in solidarity with all the poor, elderly, disabled and working people affected. We are against all cuts and the marketisation of education. We are occupying the roof of Tory HQ to show we are against the Tory system of attacking the poor and helping the rich. This is only the beginning."

Commentators from both the Leninist and anarchist left predicted that the day marked the beginning of a new politics – another Poll Tax-style rebellion, according to some; a mass revolutionary insurrection a week Wednesday, according to others. Did the English revolution begin that day at Tory HQ?

We in the Socialist Party are more cautious. We welcome any upsurge in the militancy and resistance and organisation of our class. But we also know, from bitter experience, that work of an altogether quieter, patient, more political kind is also needed. The skirmishes in the class war must be fought if we are not to be reduced to beasts of burden. But as human animals capable of rational thought and long-term planning, we must also seek to stop the skirmishes by winning the class war, and thereby ending it. This is only possible if the capitalist class is dispossessed of its wealth and power. That means that the working class as a whole must understand the issues, and organise and fight for these ends themselves – by organising a political party for the conquest of state power that will convert the means of production into the common property of the whole community.

Too rich to know you are getting robbed

Cross-posted from the Socialism Or Your Money Back blog

Megamillionaire feng shui master Tony Chan traveling by private jet to Teterboro Airport in New Jersey, was picked up by a car-service driver and paid for the trip with his American Express card -- and that car-service driver then used the card number to rack up almost eight hundred thousand dollars in charges over the next few months.

Chan is so rich that he didn't even realize he was being bilked. It was only after a bank-security specialist noticed a suspicious pattern of activity on the card - some of which hit $19,000 in one month alone - and notified authorities that the $794,986 scam was uncovered.

From here.

Pathfinders: Extracting the Miguel (2010)

The Pathfinders Column from the November 2010 issue of the Socialist Standard

Extracting the Miguel

When the shift started on August 5 most people had never heard of the San Jose mine, and could barely point to the Atacama desert on a map. By the time the 33 miners were rescued on October 14 the mine was front-page news worldwide and the site tented like Glastonbury with journalists and press photographers.

What happened in between, from the moment the mineshaft collapsed and bottled up the miners in a mile-deep tomb, is a fairytale of capitalism in action, together with feelgood ending.

First, the collapse itself. Maybe somebody’s fault, maybe not. Accidents happen, who knows? The mine was already ‘crying’ rocks from the tunnel roofs so they knew something was wrong, but they went in anyway, being offered double-pay.

"Hopefully this will teach us not to chase money, but to be humble and treasure our friends and family instead," said one miner’s sister. Easy to say afterwards, but sometimes to escape poverty people will take big risks. Will it teach the mine-owners not to chase money but to be humble and treasure their families instead? Hardly.

The film-script almost writes itself. Tom Hanks will be down there, gritty and long-suffering, wearing a large moustache and a fake accent. They have air, but only 48 hours rations, the first rescue attempt aborts after another collapse, and nobody’s going to reach them for weeks, if not months. Can they survive alone, in the dark and fetid heat? Can they keep together and keep sane, against the odds, until the first pilot drillbit breaks through?

On the surface, drill teams work heroically round the clock, effort and money no object. The President is on hand, the Minister for Industry is camping there permanently, the eyes of the world are helicoptering overhead. A bit of science and diagrams to keep us hooked, nothing too difficult. Will they or won’t they make it? We hold our breath.

And then... breakthrough – the first book deals smash through the rock and scatter among the buried men, followed by a blast of cool, refreshing sponsorship offers. Pretty soon every company who can send a product down a hole in the ground is vying to get a piece into the action and five seconds of on-screen logo time. Yes, trauma or triumph, capitalism knows how to extract the most out of any situation.

And then, up they come, designer sunglasses and media contracts in place, a teary-eyed President on hand to drape them in the flag, sing the national anthem and praise God and all things Chilean as his own popularity rating winches through the roof faster than any bullet capsule. These men are made for life, with a thousand job offers to share among them, and all the nightmares and the PTSD to come might even seem worth it.

So, a rousing saga of how humans pull together to pull out the stops when their brothers need their help, a fairytale of our times, the stuff of legend.

It wouldn’t be the stuff of socialism though. Rather than thanking God and their bosses for getting them out, why weren’t they blaming God and their bosses for sending them down in the first place? In a moneyless socialist society those men couldn’t have been economically blackmailed into doing anything so dangerous. It is highly debatable whether socialist extractive industries would be going to such lengths to extract gold or copper, but even supposing they did, and that machines could not be used instead, the socialist approach would be to make the mine safe first rather than to throw technology at the problem afterwards. As Bernard Shaw once put it: ‘it’s better to build a fence at the top of the cliff than a hospital at the bottom.’ But in capitalism, where the private company has to pay for the fence whereas the state has to pay for the hospital, logic functions somewhat differently. With a wage-slave workforce you don’t have to rely on volunteers to walk towards the abyss, and in the event of accidents you can count on victims not being able to afford the kind of lawyers you can buy.

Still, the prolonged tale and likely success guaranteed global media interest so at least the world had a chance to ignore all the thousands of industrial accidents that happen every year without happy outcomes, all the result of capitalism’s ruthlessly extractive nature, both of natural and human resources.

These 33 miners got out in one piece, and good luck to them, but the carnival of capitalism at the drillhead shouldn’t disguise that basic truth. Most workers don’t get celeb status for their sufferings, they just get shat on and forgotten.

Sludge funds
Meanwhile, what happens if you mix large amounts of rust, quicklime and radioactive trace metals and then add the Danube? Answer, a hell of a lot of recrimination. While the Chilean President has declared in a moment of unguarded recklessness that legislation on deep mining will be tightened up so that accidents like San Jose don’t happen again, over in Hungary there are axes poised over heads as their own mini-Gulf disaster leaves their neighbours seeing miles of red. Mining companies in Europe are apparently notorious for not spending money on double-walling toxic waste as is standard in other industries (New Scientist, 16 October) and there is no legislation in place to make them do it. 8 people died and 100 were injured by this tsunami of red gunk, and it would only have cost the company the price of a second back-up wall to prevent it. But no doubt it was more ‘financially astute’ to let the state provide hospitals for the victims.

Getting Shafted

October 2010, China: Explosion in Yuzhou mine in central Henan province kills 37 (BBC News, 17 October).

China is responsible for 80 percent of global mining deaths, with more than 2,600 miners dying in accidents in 2009, but major mining accidents in 2010 with dozens of fatalities each have also occurred in Colombia, Russia and the United States, while at least 200 have died in Sierra Leone.

There are no reliable global statistics for mining deaths, but the International Federation of Chemical, Energy, Mine and General Workers’ Unions (ICEM) estimates there are 12,000 fatalities per year.

“A lot of mining deaths aren’t recorded. It is really hard to put a number on it. In a lot of countries, management will go to the widows or family and give them money and make them sign statements not to talk about it”, said a spokesman for ICEM (International Business Times, 11 October).

NB: the good news is that safety standards are slowly improving. Now mining is not considered as dangerous as construction or agriculture, which annually kill more workers.

Paddy Shannon

Material World: The Caspian Sea: oil and gas versus caviar (2010)

The Material World column from the November 2010 issue of the Socialist Standard

The overwhelming focus of mainstream Western literature on the Caspian Sea and its environs is on their vast oil and gas resources – on controlling them, extracting them, and “getting them out” to the European and world markets. Close attention is always paid to the commercial and strategic competition between the Western powers – mainly the United States and the European Union – and their rivals for control over the Caspian region – Russia, China and Iran.

As for the people who actually live in the region, they get a look-in only insofar as they may assist or impede Western business in this worthy endeavour. Nonhuman species, of course, are ignored completely.

A unique ecosystem
And yet the inland sea that we call the Caspian is a unique ecosystem. It once abounded in wildlife, including many marine species found nowhere else (the Caspian seal, the Caspian gull, etc.). Already weakened by overfishing, untreated sewage, and other human damage, the ecosystem of the Caspian Sea – like those of the Gulf of Mexico, northern Alberta and southeastern Nigeria – is now being rapidly degraded by oil pollution.

Even though oil and gas development is still at a fairly early stage, the worst affected parts of the sea, such as the waters around Baku and Sumgait in Azerbaijan, are already devoid of life. The whole ecosystem is probably doomed. For one thing, the sea level is steadily rising – one effect of the region’s geological instability (as a landlocked water body, its level is independent of that of the world ocean). A rise of 2.5 meters since 1978 has inundated almost 800 rigs. These submerged rigs are a major and ever expanding source of oil seepage.

Recently I translated a series of papers about the Caspian issued by a Russian international relations institute. I was intrigued to discover that the Russian analysts, unlike their Western colleagues, dwell at length on the ecological costs and risks of Caspian oil and gas development.

The caviar factor
It is revealing to consider why this should be so. It does not reflect any general Russian concern with protecting the environment. Russian experts do not seem to worry overmuch about the ecological effects of oil and gas development in Siberia or the Arctic (see MW, September 2007 Socialist Standard). Some factor specific to the Caspian must be involved.

That factor is fish – but above all, sturgeon, and especially its roe, known as caviar. As Bystrova points out:

“Even comparatively recently, the Caspian was capable of an annual yield of 500-550,000 tonnes of fish, with the bulk of the catch consisting of valuable varieties (sturgeon, white salmon, etc.). In the 1970s and 1980s the Soviet Union produced 2,500 tonnes of black caviar annually, which was about 90 percent of world output... The biological potential of the Northern Caspian is about $37 billion. This sum is comparable with the value of the enormous hydrocarbon deposits recently discovered in this part of the sea. But while Caspian oil and gas will in time be used up, biological resources, if rationally exploited, are renewable and therefore practically everlasting.”

The Russian oil company Lukoil operates in the North Caspian, so Russian hydrocarbon and fishing interests are in conflict here. This makes for a certain ambiguity in Russian policy. Nevertheless, Russia is much more inclined to favour constraints on Caspian hydrocarbon development than are Kazakhstan, Turkmenistan and Azerbaijan, which depend much more heavily on Caspian oil and gas. Iran aligns itself with Russia out of concern for its own fisheries (it has enormous amounts of oil and gas, but not in the Caspian).

Crossing the Caspian
The Russian literature especially emphasizes the real ecological dangers of transporting oil and gas from Kazakhstan and Turkmenistan across the Caspian Sea, either by tanker or through underwater pipelines laid on the seabed. Russia itself relies on south-north land pipelines and has no need for trans-Caspian routes. However, Western businessmen and politicians seek to avoid routes into Europe through Russian or Iranian territory, so they fund projects that envision crossing the Caspian very appealing.

Western analysts never seem to mention the environmental problems associated with underwater pipelines. Are they deferring to the enthusiasm of their masters or are they just ignorant? In either case their silence is remarkable, because some of these problems cast doubt on the feasibility of using such pipelines at all. The Caspian seabed is steeply inclined in many places, consists of loose and crumbly material, and is prone to gas releases, eruptions of mud volcanoes, frequent seismic tremors and occasional earthquakes. Any of these events could easily set off a landslide that breaks and displaces a section of an underwater pipeline.

Again, Russian policy experts have no general objection to messing about with geologically unstable land masses. The Yamal Peninsula in northeastern Siberia is every bit as unstable as the Caspian, but that is never given as a reason to stop exploiting its huge deposits of natural gas.

Playing cards
As we see from this example, ecological concerns are not, after all, completely ignored in the game of capitalist politics. Like all other concerns, however, they are constantly reduced to cards in the hands of players in the ongoing competition among sectoral and national sections of the world capitalist class. Each card is played when and only when the player holding it decides that it is convenient and profitable for him to play it. And so it will go on until we gather our strength and intervene, confiscate the cards and close down the game.

Stefan

Greasy Pole: Blunt instrument of justice? (2010)

The Greasy Pole column from the November 2010 issue of the Socialist Standard

It did not need George Orwell's 1984 to make us aware that a system of privilege propagates itself through verbal distortions so that war is indeed peace, freedom slavery, ignorance strength and a Ministry of Truth conveyor-belts lies while our security depends on being watched by Big Brother. Consider, for example, this thing called “justice”. This is what people are supposed to “get” from a court if they breach the arrangements which are made to protect the pointedly weighted structure by which the lesser mass of people monopolise life's essentials and prevent access to them by the greater mass, no matter how acute their needs. A few years ago, when it was considered necessary for the long-established but mal-functioning Home Office to be split up there emerged from some part of it a new Ministry of Justice, with a number of Ministers to administer its affairs. What kind of match is there between these exalted personages and the protective concept of justice and how devotedly, effectively, do they nurture it in their work in government?

Reigate's Donkey
Step forward Crispin Blunt, since 14 May this year Parliamentary Under Secretary of State at the Ministry of Justice responsible for, among other matters, prisons and probation. Since 1997 MP for Reigate, notably verdant even among Surrey's leafy constituencies. Educated at Wellington public school and Sandhurst with the inevitable commission in the Army which made him so attractive to the Tories in Reigate after they had de-selected Sir George Gardiner when his Eurosceptic ravings became too strident for them. After Gardiner, Blunt was soothingly reassuring; he was, as the chairman of the constituency Conservative Party put it, “...happily married with two children”. It was almost as if Blunt could have held that seat for as long as he wanted, growing stout and bald and querulous on the back benches – had he not revealed a tendency to become famous for particularly embarrassing gaffes. To begin with there was, even before he had been voted onto the green benches, his dismissive assessment of the local electors he hoped would put him there when he reckoned that “You could put up a donkey as the Conservative in Reigate and it would win” – tested out when Gardiner walked a donkey called Crispin along the High Street there. And after the donkey had duly taken his seat in the Commons his style of claiming expenses was shown to be not of the high standards expected of an officer and a gentleman as, after being told he could not claim for a second home because he lived there with his children he bought a larger place, claiming £16,000 for stamp duty and fees then a total of £87,728 second home expenses which included £417 for the repair of a water wheel.

Parties Inside
Meanwhile there was the work of administering the administration of justice whatever that meant. Somewhere along the line Blunt had become converted to the ideas now being espoused by his boss as Minister of Justice and Lord High Chancellor Kenneth Clarke. The theme of this is the “rehabilitation revolution” which is in fact driven by the need to manage reductions in budgets before any concern for helping prisoners to better cope with life outside the prison walls. In his first speech on the issue, Blunt outraged the tabloids by stating an intention to scrap a ban, imposed under Labour in 2008 after rumours circulated about a wild “ horror-themed fancy dress” party in a prison, on any further “inappropriate events”. Blunt described the ban in unparliamentary terms as “daft” – meaning unhelpful to the kind of “reforming” regime which prisons exist for – in theory at any rate. But in the predictable hysteria about murderers and rapists having obscene fun “at the taxpayers' expense” Blunt's intention was swept away – almost taking him with it under an effectively public reprimand from Number Ten. As a blunder it was on a par with the donkeys of Reigate. And how many more, his friends and enemies asked, would there be?.

Marriage
They did not have to wait long for an event which was more revealing – and thereby more damaging – than any blunder. Blunt's 20-year marriage must have been as comforting to the Reigate Tories as his love of cricket. Victoria Blunt is a daughter of a wealthy American family who abandoned her career as a banker to support him in his political ambitions. “She gave up everything for him” said one acquaintance “She is the perfect MP's wife and would attend every fete and garden party..” But this, as another put it, “...was all built on a lie” – which became clear in August when Blunt abruptly announced that he is gay and was leaving his family to “come to terms with my homosexuality”. In itself this was not particularly shattering but there was more to it for his stated opinions have not been noted for any relaxed attitude towards gays. He voted against giving them the right to adopt and against allowing lesbian couples equal access to IVF treatment. In 1998 he opposed a move to scrap the ban on openly gay men joining the armed forces, pronouncing that “Military ethos has been progressively undermined . Letting overt gays in is another stage in the process” and on another occasion he complained about “a much greater strand of homosexuality which depends for its gratification on the exploitation of youth”. Such views, although without any real supporting evidence, must have convinced many constituency Conservatives that they had chosen the right man to replace the reviled Gardiner.

It may be different now among the lawns and trees as around Westminster sharply dressed civil servants suck through the froth on their cappuccinos while offering the very lowest odds on Blunt being shaken out in Cameron's first re-shuffle. Blunt's wife was said to be “...completely traumatised”. Well, naturally. But did Mrs. Blunt's lucrative time as a banker not teach her anything about the ruthless cynicism essential to finance and commerce? Did her long intimacy with politician Mr. Blunt leave her vulnerably uneducated about the same atrocious features of capitalist politics? Does she now wonder about the nature of this thing called justice and why an exposed practitioner in deceit should have been in a position to inflict it on us?

Ivan

Pieces Together: Kick 'Em When They Are Down (2010)

From the November 2010 issue of the Socialist Standard

KICK 'EM WHEN THEY ARE DOWN

"Disabled people will be hit with more than £9bn in welfare cuts over the next five years, a think tank has warned. Demos suggests the government's plans will see 3.6m disabled people and carers lose about £9.2bn by 2015. It said moving those on incapacity benefit who were reassessed as fit to work to jobseeker's allowance would account for half of the losses" (BBC News, 9 October).

GRIM PROSPECTS

"A million people are expected to lose their jobs in the next four years as a result of the Government's decision to cut public spending by £83 billion, according to a report out today. Nearly 500,000 jobs are likely to be cut in the private sector as the Government stops building schools, hospitals and roads and cancels other contracts. This is on top of about 500,000 job losses in the public sector as employers reduce budgets by about a third and lay off civil servants, town hall staff, nurses, teachers and police officers" (London Times, 13 October).

HUNGER INCREASES

"UN food agencies said Wednesday that 166 million people in 22 countries suffer chronic hunger or difficulty finding enough to eat as a result of what they called protracted food crises. Wars, natural disasters and poor government institutions have contributed to a continuous state of undernourishment in some 22 nations, including Afghanistan, Haiti, Iraq, Somalia and Sudan, the Food and Agriculture Operation and the World Food Program said in a new report" (Associated Press, 6 October).

REFORM FAILS AGAIN

"West Africa's cocoa industry is still trafficking children and using forced child labour despite nearly a decade of efforts to eliminate the practices, according to an independent audit published by Tulane University. A US-sponsored solution called the Harkin-Engel Protocol was signed in 2001 by cocoa industry members to identify and eliminate cocoa grown using forced child labour. A child-labour-free certification process was supposed to cover 50 per cent of cocoa growing regions in West Africa by 2005 and 100 per cent by the end of 2010. But independent auditors at Tulane University's Payson Center for International Development said in a late September report that efforts have not even come close to these targets" (Globe and Mail, 8 October).

The Meaning of the U.S. Midterm Election Results

Cross-posted from the World Socialist Party of the United States website

For Republican politicians and the corporate media, the U.S. midterm election results are supposedly evidence of “a massive conservative trend sweeping the nation.”[1] Proclaiming the victory of his party on election night, top House Republican John Boehner declared that “the American people have sent President Barack Obama a message through the ballot box to change course” – and he was not calling on Obama to steer further to the left.

There has clearly been a significant decline in public support for Obama. However, there is no massive conservative trend in national opinion. The real picture is more uncertain and more complex.

The majority did not vote

One point will suffice to deflate the overblown rhetoric. The American people have sent no one a message through the ballot box to do anything, for the simple reason that the majority of the American people – 58.5%, to be more precise – did not vote.
Well, nothing unusual about that. Voter turnout in the United States is low. In fact, a turnout of 41.5% is rather above average for midterm elections: it usually lies between 30% and 40%. Turnout in presidential elections, and in congressional elections held in the same year as presidential elections, is considerably higher, in the 50—60% range, though this is still low by international standards. In the 2008 congressional elections 57% voted.[2]

How likely people are to vote depends heavily on such factors as age and income. People with higher incomes are more likely to vote than the poor, while the elderly are more likely to vote than those of working age. Moreover, these differences are especially wide when overall turnout is very low. People with higher incomes and the elderly vote disproportionately for the Republicans. That is why the Republicans tend to do better in midterm elections than in presidential election years, even when there is no real shift in public opinion.

In the November elections Republican candidates won 54% of the total vote. It is equally true to say, taking turnout into account, that slightly over a fifth of Americans (22%) voted for Republicans and slightly under a fifth (19%) for Democrats. This hardly represents a groundswell in public support for the Republicans. Due to the way the electoral system works, the votes of just 3% of citizens made all the difference between a Democratic and a Republican landslide. It is also striking that a lower proportion of Americans voted Republican in 2010 than in 2008 (25%).

“Progressive” Democrats did well

The “tea party” movement has swept many new Christian fundamentalist and other extremist Republicans into Congress. This would seem to support the thesis of a massive conservative trend. At the same time, however, there has been a marked shift in the composition of congressional Democrats that points in a different direction.

The Democrats in Congress are divided into several groups. To simplify matters, let us compare the relative positions of the groups furthest to the “right” and “left”—the “Blue Dogs” and the Progressive Caucus. The elections have reduced the number of Blue Dogs in the House of Representatives by over half, from 54 to 26. In contrast, the number of “progressive” Democrats has fallen only slightly, from 79 to 75. As a proportion of all Democrats in the House, the Blue Dogs have fallen from 22% to 14% while the progressives have risen from 32% to 40%.[3]

So while the Democrats as a whole suffered a major setback in the elections, many if not all “progressive” Democrats did quite well. To take one important example, although the Democratic Party lost its traditional hold on the once industrial but now largely deindustrialized Midwest, with dozens of incumbent Democrats losing their seats, in Ohio’s 10th Congressional District the “progressive” former presidential candidate Dennis Kucinich defeated his Republican opponent by the safe margin of 53% to 44%. By distancing themselves from Obama, many “progressive” Democrats were apparently able to capture a share of the protest vote of Americans who had backed Obama in the presidential elections but were now disappointed in him.

The electoral successes of “progressive” Democrats give socialists some grounds for hope. That is not because the “progressives” are socialists or even close to being socialists: their reform program basically aims to make the U.S. more competitive in the context of world capitalism, whose continued existence it assumes. Nevertheless, they have shown that it is possible to withstand the hostility of the corporate media and find other ways to establish and maintain contact with ordinary people. If they can do it, socialists can too.

Breakup of the two-party system?

Thus, the trend revealed by the election results is not clearly conservative in nature. The change in the relative strength of the Democratic and Republican Parties is less significant than it appears. But there has been a further strengthening in the position of the extreme “right” within the Republican Party and of the “extreme left” (by the standards of U.S. politics) within the Democratic Party. In other words, American public opinion is undergoing a process of polarization.
This raises the question of the future shape of the American party system. The two-party system is deeply entrenched, but under extreme stress its breakup is surely conceivable. Both the Democratic and the Republican Party are now more deeply divided than ever before. Should one or both of them split apart over the next few years, the result could be a more varied and changeable political landscape with three, four, or even more large national parties.[4] The political process might then no longer be under such tight corporate control, placing socialists in a somewhat less constraining political environment.

Stefan

Notes

1. Reese Erlich, therealnews.com/t2

2. Figures taken from the following site

3. Democracy Now link

4. See the speculations of the activist film maker Michael Moore at following link

Slums and Slumps: Housing under Capitalism (2010)

From the November 2010 issue of the Socialist Standard

In 1942 the Beveridge Report identified five giant evils that government social policy should aim to overcome: Want, Disease, Ignorance, Idleness and Squalor. The last of these referred to housing, and more generally to town planning and the environment. The report was, by the standards of such documents, tremendously popular, selling thousands of copies. Newspapers in Nazi Germany were forbidden from mentioning it, on the grounds that it would represent an enormous propaganda victory for the enemy.

Beveridge effectively laid the foundation for the post-war welfare state and the introduction of, among other things, the National Health Service. On the fiftieth anniversary of the report, the academic Ben Pimlott assessed its success. Want and squalor still existed, he argued, with plenty of beggars and homeless people in central London: ‘for the majority, there is less hunger and disease than in the Forties, but for the millions in the minority, there is much more’ (Independent, 1 December 1992).

And despite the decades of legislation, the ‘housing problem’ indeed remains, although its precise nature varies somewhat over time. The overcrowding and unsanitary conditions that were rife in (say) the early twentieth century are largely, though not entirely, things of the past, but housing is one of the biggest failures of the efforts to slay Beveridge’s giants and so shows how reforms cannot banish capitalism’s problems.

In some cases, government policies have been a contributing factor to not just bad housing but loss of life and other disasters. The Housing Subsidy Act of 1956 gave local councils bigger subsidies the higher the tower blocks they built, on the basis that this meant more and cheaper homes in a particular area. In May 1968 the Ronan Point block in east London collapsed after a gas explosion, and four people died. The block had been built using pre-cast concrete panels, which had the ‘advantage’ of not requiring skilled construction workers. But this method of building was intended to be used for six storeys at most, and Ronan Point had twenty-two.

There are many ways of looking at the effect that the recent rise in house prices has had. Between 1959 and 2009, for example, real earnings rose by 169 percent but house prices rose by 273 percent, making houses less affordable than fifty years ago. For many years the average house price has been around three times the median wage, but by last year it was over six times as high. Many workers are forced to rely on the ‘Bank of Mum and Dad’ as a way of scraping together a mortgage and getting on the property ladder. Some take on mortgages that they will not pay off until well into their sixties, or put off starting a family because of worries about the affordability of housing. In the current recession, the lesser availability of mortgages means that more are forced to rent (though in no way are they ‘choosing’ to rent as is sometimes claimed).

The recession has also led to a dramatic rise in the number of repossessions, though in the UK not as yet to the levels seen in the 1990s. In 1991, for instance, 75,000 homes were repossessed, as against 46,000 last year. In the US, there were 92,000 repossessions in April this year alone, an all-time high. Behind each of these cases is a human tragedy of various degrees, from homelessness to far worse housing conditions, along with general financial melt-down. Landlords who went in for buy-to-let in the hopes of an easy return are turfing out tenants, sometimes changing the locks so that people are made homeless with just the clothes they are wearing (Guardian, 23 June).

In 2000 the government launched the Decent Homes programme to upgrade social housing, with the aim of this being completed by the end of this year. But deadlines slipped so that eventually 2018 was the target year. In the first quarter of this year, just sixty new local authority homes were completed, a figure which reflects among other things the impact of government policy which has emphasised and tried to promote home ownership at the expense of renting. The National Housing Federation recently warned that waiting lists for social housing are at record levels, and ‘an entire generation…would be left with little hope of ever being allocated a social home’. Recent cuts in housing benefit mean almost a million people will lose £12 a week, which is a lot for those on the lowest incomes. Some people, of course, have no trouble finding suitable homes. The W8 postcode in the Kensington area of London is the UK’s most expensive, with the average house costing £1.5million. But even that has desirable and somewhat less desirable areas, with Kensington Palace Gardens as the priciest street in the country, properties there averaging £18million.

It is often implied that there is something ‘natural’ about wishing to own your own house rather than being dependent on renting, but actual housing demand in fact varies widely across a person’s lifetime and, indeed, in different places. In many parts of continental Europe, for instance, home ownership is at much lower levels than in Britain, and far more people live in flats as opposed to houses, without this being seen as in any way unnatural.

The number of homes built goes up and down from year to year (425,000 in 1968 for instance, but just 156,000 in 2009) in a way that has nothing at all to do with people’s demands or needs for somewhere decent to live. Rather it has everything to do with the market, what property companies can make a profit from and what people can afford. According to one standard source, ‘the building industry exists to meet human needs’ (David Donnison and Clare Ungerson: Housing Policy, 1982). If only this were true! Like all industries under capitalism, it exists in fact to make a profit, which is why capitalism will never be able to provide secure and decent housing for all.

In fact it can sensibly be said that there is no ‘housing problem’ at all. People know how to build houses, there are plenty of people with the requisite skills and sufficient supplies of materials. But if you can’t afford the rent or mortgage, then you don’t really count as far as the profit system is concerned. So it’s a problem of poverty in truth, one that would not exist in a society that aimed at meeting human needs rather than making profits for the few.

Paul Bennett