Cooking the Books: Was the crisis just a mistake? (2011)

From the March 2011 issue of the Socialist Standard

The Financial Crisis Inquiry Commission set up by the US government reported at the end of January. They concluded that the crisis of 2007 and 2008 was the result of “human action and inaction, not of Mother Nature or computer models gone haywire”, but “of human mistakes, misjudgments, and misdeeds” and so avoidable (http://www.fcic.gov).

Obviously, the crisis was the outcome, even if unintended, of decisions by humans to behave in particular ways, but that’s not at issue. We need to know why the economic decision-makers involved took the decisions they did. What was the context of their decisions? What were the constraints acting on them?

The driving force of capitalism is the pursuit of profits by competing enterprises. As the Commission put it, “in our economy, we expect businesses and individuals to pursue profits…” If there is a chance to make a profit from some activity then the businesses in that field will go for it. If the profits are high enough then other businesses will enter the field to share in the bonanza.

This is what happened in the US. From 1997 until 2006 there was a boom in house building and buying. Big profits were to be made from lending money either directly to housebuyers or to businesses that did so. Easily able to borrow funds at relatively low rates of interest, the Wall Street investment banks decided to get in on the act, and in a big way,

“The large investment banks and bank holding companies,” the Commission reported, “focused their activities increasingly on risky trading activities that produced hefty profits.” The prospect of making “hefty profits” out of lending money to build and buy houses led them to borrow more and more money to take part in the chase after them:

“In the years leading up to the crisis, too many financial institutions, as well as too many households, borrowed to the hilt, leaving them vulnerable to financial distress or ruin if the value of their investments declined even modestly. For example, as of 2007, the five major investment banks – Bear Stearns, Goldman Sachs, Lehman Brothers, Merrill Lynch, and Morgan Stanley – were operating with extraordinarily thin capital. By one measure, their leverage ratios were as high as 40 to 1, meaning for every $40 in assets, there was only $1 in capital to cover losses.”

Note the matter-of-fact acceptance here that banks cannot create money out of thin air but are dependent on themselves borrowing the money they lend.

The Commission criticised the investment banks and other financial institutions for taking such risks but could those involved in making these decisions have decided otherwise? Could they have decided to forgo the chance of making the ‘hefty profits’ that were there to be taken? No, because if one of them decided not to pursue these profits, the others would have enthusiastically taken their place. It wasn’t a mistake on their part. Given the competitive, profit-seeking nature of capitalism they had to take the decisions they did. In that sense the financial crisis was not avoidable.

It was outside the remit of the Commission to examine the housing boom whose collapse in 2006 triggered the financial crisis. They merely recorded that “when housing prices fell and mortgage borrowers defaulted, the lights began to dim on Wall Street”. If they had gone further into the housing boom and why it ended, they would have discovered that it was a classic case of the pursuit of profits leading to overproduction (too many houses being built in relation to what people could afford to buy) and perhaps revised their view that “the profound events of 2007 and 2008” were not “an accentuated dip in the financial and business cycles we have come to expect in a free market economic system.”

Look back, move forward

Cross-posted from the Socialism Or Your Money Back blog

Two things are utterly predictable whenever there is a mass protest, or a demonstration of significant size, and the anti-cuts demonstration organised by the TUC on 26 March was no exception. The first is that the police will do their best to turn it into a riot and to intimidate all present with violence. The second is that, regardless of police actions, most people will come away with a new sense of purpose and meaning in their lives – awake and invigorated, full of the collective joy that spontaneously arises when human beings get together to show their strength of feeling or merely their urge for festivity. After many decades of a relatively lonely and boring struggle to survive, a struggle that those in power have faithfully promised us will get worse in the coming years, people will have come home on 26 March at the least relieved that "I'm not alone".

That's the positive side. Unfortunately, with the decline of the traditional left and trade unions in this country and around the world, and the accompanying lack of faith in democracy and political parties, it's hard to know what exactly to do with those feelings – how to transform a feeling of solidarity and commitment to opposition into something that will last, something capable of delivering long-term, lasting change for the better.

That lack of faith is not just confined to the mass of people who are not ordinarily involved in politics. It is sometimes declared to be a positive thing from those committed to radical change. The thinking is that the traditional political parties and trade unions and so on have held us back – their ideas have been tried and failed and defeated, and their hierarchical structures and outmoded ideas are boring and not fit for purpose. Instead, we are to celebrate spontaneity and freedom – to get together in small groups and do exactly whatever we want.

There is something to the argument, but it has lost its appeal in the face of a major attack from the ruling class and its representatives who control the state machine. An extremely serious economic crisis that started with the banks has changed the game. The rich were rescued by huge state bail-outs. The costs of the crisis were shifted instead to the state – and the state intends to shift the burden to us, by slashing our jobs, pensions, social services, benefits, and so on. The attack is organised and centralised – shouldn't the opposition be too?

There are no easy answers to these questions, and we don't pretend there are. But perhaps it's time to hear once again a voice that has been marginalised for over a century. From the formation of the Labour party in 1906, and then the Russian revolution in 1917, socialism has come to mean either state management of welfare capitalism, or state dictatorship over a centralised economy. But these rightly discredited ideas marginalised a previously existing conception that it might be worth reviving. The word socialism was already beginning to lose its original meaning by 1894, which caused William Morris, one of the Victorian age's greatest polymaths, to say:

"I will say what I mean by being a Socialist, since I am told that the word no longer expresses definitely and with certainty what it did ten years ago. Well, what I mean by Socialism is a condition of society in which there should be neither rich nor poor, neither master nor master's man, neither idle nor overworked, neither brain-sick brain workers, nor heart-sick hand workers, in a word, in which all men would be living in equality of condition, and would manage their affairs unwastefully, and with the full consciousness that harm to one would mean harm to all—the realization at last of the meaning of the word COMMONWEALTH."

The 20th century did its best to let the curtain fall for ever on this vision of socialism, but a small number of dedicated activists have done their best to keep it alive. We in the Socialist Party count ourselves among their number. We say that it is right that people have lost faith in traditional politics – it has proved by its actions what it is all about. But to say that therefore we must give up on a vision of the future, and an organised commitment to attaining it, is to throw the baby out with the bathwater.

The inspiring struggles for democracy and against austerity we are seeing emerging around the world have a common cause – they are the divided and isolated battles of workers against the relatively united attack of the world's ruling class in its attempt to resolve its economic crisis. We need to follow the ruling-class example – come together and organise in order to resolve the crisis in our way. That is, by organising a political party dedicated to taking state power out of the hands of the ruling class, and to establishing socialism. And given the extremely serious nature of the ecological catastrophe we are all facing, this is not just a nice idea. Increasingly, it's a matter of survival.

Stuart Watkins

Egypt: The hard road to political democracy (2011)

From the March 2011 issue of the Socialist Standard

What will happen in Egypt now? Will the army keep control until a new leader acceptable to the West emerges?

At the time of going to press, the “revolution of anger” in Egypt seems to be entering a new phase. Tahrir Square has been reopened to traffic and commerce. Massive political demonstrations are over, at least for the time being, but strikes and protests by various groups of workers continue. The employees of the National Bank of Egypt have forced the resignation of its chairman, a Mubarak ally. Ambulance drivers, public transport workers, and even the police are demonstrating for better wages and conditions.

Many Egyptians are dissatisfied with what has been achieved so far, and with good reason. Mubarak has gone. But what sort of democrat is the man who took over from him on 31 January – Omar Suleiman, assassin and torturer-in-chief of the dreaded Mukhabarat (General Intelligence Service)? The demand to suspend the emergency law that permits detention without charge has not been met, nor have political prisoners been released. The ruling military council has set no firm timetable for elections and transition to civilian rule. They have made plenty of promises, but who is naïve enough to trust them?

To understand what is happening in Egypt, we must first understand the nature of the ruling regime.

A military oligarchy
The regime is not a personal dictatorship. It can survive the removal of Mubarak or any other specific figure. It is a military oligarchy. The main power centre is the supreme command of the armed forces (the eleventh largest in the world). In addition, there is a ruling party – under Nasser the Arab Socialist Union, renamed by Sadat the National Democratic Party – but its role is secondary.

The military regime has its origins in the Free Officers’ Movement, which overthrew the British colonial puppet king Farouk in 1952. Its domestic and foreign policy has changed over time, under the successive leadership of Nasser, Sadat and Mubarak, but the regime itself has remained the same. It has never been in the least bit democratic.

Why then does the Trotskyist International Socialist Review tell us that Egypt “has been ruled by a dictatorship for 30 years, with arrests and torture a constant occurrence” (socialistworker.org/2011/02/11)? Only 30 years? Didn’t Nasser too jail thousands of political opponents? Ah, but those were “progressive” and “anti-imperialist” jails – and that makes all the difference, doesn’t it?

Before regaining independence, Egypt was ruled by a succession of empires. Before that it endured the despotism of the pharaohs. Mubarak too was popularly known as “the Pharaoh”. Egypt has been a dictatorship for 11,000 years.

From Nasser to Sadat and Mubarak
This is not to deny important differences between the Nasser and post-Nasser periods.

Nasser conducted a protectionist policy on behalf of national capital. A state-owned iron and steel industry was created. The Aswan Dam was built. In 1956 the Suez Canal was nationalised, leading to armed invasion by Britain, France and Israel. Social reforms were undertaken. Land was redistributed and rents paid by tenant farmers controlled. A minimum wage was established. There were also reforms in the areas of housing, health, education, women’s rights and family planning. In foreign policy Egypt was formally non-aligned; in reality it became a client state of the Soviet Union.

Nasser’s successor Sadat expelled Soviet advisers, realigned Egypt with the West (and eventually with Israel), and replaced protectionism by an “open-door” policy. Currency controls were loosened and foreign companies invited to invest in tax-free “enterprise zones”. Mubarak went further in the same direction. Cheap food imports were allowed to flood the country, ruining Egyptian farmers. The gap between rich and poor widened. The country fell deeply in debt to the international financial institutions and became financially dependent on US aid.

Much of state industry was privatised. As was later to occur in post-Soviet Russia, valuable state assets were acquired on the cheap by a handful of businessmen with inside connections. That is how Ahmed Ezz, a close friend of Mubarak’s son Gamal, emerged overnight as a wealthy steel tycoon.

Another lucrative scam was the legal requirement that a foreign investor must give (not sell) a local partner a 20 percent stake in his venture. The “local partner” always happened to be a general or high official.

Mubarak and his family were themselves the greatest beneficiaries of this “crony capitalism”. The family fortune has been rumoured to be as much as $70 billion (£43.5 billion). Both of Mubarak’s sons are billionaires in their own right. Most of this money is held in British and Swiss banks or invested in American real estate.

It should be noted that under Mubarak the regime did not serve the interests of the whole capitalist class. Some businessmen did very well, while others lost out. For example, Ezz used his political clout to force other businessmen to buy his steel rather than importing cheaper steel from China. Similarly, it was difficult for businessmen lacking inside connections to obtain bank loans. This helps explain why some businessmen back the opposition.

The clan and the regime
While most Egyptians want an end to the military regime, the immediate target of the “revolution of anger” was the “Mubarak clan” – Mubarak, his family and their closest allies and associates. The demonstrators wisely took care not to offend the military as an institution. According to some analysts, the Mubarak clan had powerful enemies inside the regime (resentful, perhaps, that they were not getting their fair share of the loot) who used the protests to mount a “half-coup” – meaning a coup against the clan but not the regime. Perhaps this is to overstate tensions inside the regime. It is clear, however, that there were people in the ruling group who did not belong to the Mubarak clan and who were prepared to sacrifice it in order to save the regime. (Apparently they were encouraged to take this step by the Obama administration.)

This was one reason why no attempt was made to use the army to suppress the protests. Another likely reason was that the generals judged that the soldiers and junior officers could not be relied upon to obey orders to shoot into the crowds. The security police – the “thugs” who mysteriously appeared “out of nowhere” riding horses and camels – could be used, because they were more isolated from ordinary people and more effectively under clan control, but there were too few of them to scare off the enormous masses of demonstrators.

Youth movements and trade unions
The key role in organising the demonstrations seems to have been played initially by the April 6 Youth Movement. This organisation began as a Facebook group set up to call on all workers to stay at home on 6 April 2008 in solidarity with striking textile workers. (There has now emerged a new umbrella organisation called the Youth Coalition for the Revolution of Anger.)

So the demonstration organisers appear to have been closely connected with the workers’ movement and, in particular, with the campaign to create independent trade unions to replace the old state-controlled Egyptian Trade Union Federation. The textile workers tried to establish an independent union in 2006–2008, but large-scale arrests of activists made this impossible at that time. One of the major gains of the “revolution” was achieved on 30 January, when an independent trade union movement finally emerged in the form of the Federation of Egyptian Trade Unions.

An important point that media coverage fails to convey is that the mass political demonstrations are only part of the upheaval. There are also numerous strikes and protests over “bread and butter” issues. That is not surprising when you consider the rising prices of staple foods and the fact that 40 percent of Egyptians have to survive on under $2 (£1.30) a day. While political demands are uppermost in Cairo, it seems that material demands are much more prominent in other cities. In Port Said, for instance, crowds angry over the shortage of housing set fire to the local state security headquarters, the governor’s office and the main post office.

The opposition parties
The regime selectively and intermittently allowed opposition parties to exist but restricted their activity. As a result, these parties are all very small – except for the Moslem Brothers, who despite being illegal were able (like Islamists in other countries) to take shelter in the mosques. Observers estimate that only 5 percent of Egyptians support any of the parties.

Almost all of the opposition parties belong to one of three categories.

First, there are several liberal capitalist parties that advocate civil rights and “free enterprise.” An example is the New Wafd Party. These parties are backed by a number of prominent businessmen.

Second, there are various Islamist parties. The Moslem Brotherhood is the largest of these, but not the only one.

Third, there are parties that regard themselves as leftist or socialist. What this usually means in the Egyptian context is loyalty to the legacy of Nasser, so it is more accurate to call these Nasserite parties. Thus, the National Progressive Unionist Party (known for short as Tagammu) “defends the principles of the 1952 revolution”.

Some parties combine Nasserite with Islamist ideas. For example, the Umma Party stands for “socialist democracy with Sharia (Islamic law) as the main source of legislation” (!). Finally, there is also an environmentalist Green Party.

It is hard to see what can come out of the negotiations that Suleiman is conducting on behalf of the regime with leaders of various opposition parties. None of the parties played any part in organising the “revolution” and few demonstrators regarded the parties as representing them. In fact, due to popular suspicion the negotiations may further weaken the parties’ base of support. A report from Suez mentions mass resignations from the parties participating in the negotiations, including Wafd and Tagammu, and connects this development with the creation of a Council to Protect the Revolution in Al-Arish (near the border with Gaza).

Who would win free elections?
The weakness of the parties makes it very difficult to predict who would win free elections if they were held today. As the theme of social justice has been prominent in the upheaval, the popular appeal of the liberal opposition may be limited. Social protest can work to the advantage of either Islamists or the left. Given the secular nature of the protests (not only were Islamic slogans conspicuous by their absence: there were also slogans in support of Moslem-Christian unity), the left may do quite well. The Moslem Brothers obviously have considerable support, but they themselves apparently do not think they are strong enough to gain power at this stage.

The existing left-wing opposition parties, however, are handicapped by their Nasserite orientation. To the extent that the demonstrators are against the military regime and committed to democracy, they might hesitate to vote for parties that hark back to an earlier form of the same anti-democratic regime. And, of course, only the older generation has direct memories of the Nasser period. So conditions may be favourable for the emergence of a new democratic left, possibly linked to the independent trade unions. There may even be potential for the spread of genuine socialist ideas.

Dragging out the transition
The uncertain outcome of elections is one reason why the generals aim to delay the transition to democracy as long as they can. They may also seek to retain a power of veto and other prerogatives even after a civilian government takes office, as well as an ability to reassert control whenever they consider it necessary – as in the “Turkish model”.

The wish to delay democratisation is clearly shared by the American and European governments on whom the Egyptian generals depend. These governments are great champions of elections, but only provided that the outcome is predictable and acceptable to them. They need time to prepare the ground for such an acceptable outcome – in particular, to select parties and politicians who can be trusted to respect Western interests and then give them financial, PR and other aid to help them win. Candidates for this role – El-Baradei, for instance – are well aware that pleasing Egypt’s Western patrons is at least as vital to their prospects as pleasing their fellow citizens.

How much time is needed? Statements from the ruling military council hint that six months may not be enough. German chancellor Angela Merkel has drawn a parallel between the transition in Egypt and the process of German reunification, suggesting that a whole year may be needed. And just in case the results of political engineering are disappointing, the generals and their patrons probably want to keep open the option of dragging out the transition indefinitely, perhaps co-opting a few handpicked opposition figures into what remains basically a military regime.

In the meantime, it is the job of the regime to restore and maintain “order” and “normality”. Ordinary people must stop making trouble and get back to work! To achieve that, the regime can be expected to combine – or perhaps alternate between – sweet talk and arrests, appeasement and repression. Neither approach will easily succeed.

As socialists, we do not regard political democracy in itself as sufficient to emancipate humanity. But we do recognise that it provides by far the best conditions for the development of the socialist movement. That is why we wish those well struggling for political democracy in Egypt – and, indeed, throughout the world

Stefan

Kropotkin (2011)

Book Review from the March 2011 issue of the Socialist Standard

Mutual Aid. An Introduction and Evaluation. By Iain McKay. AK Press.

Socialists have always recommended Kropotkin’s Mutual Aid, including it on lists of books for sale. Kropotkin was an anarchist, but had been a scientist (geographer) himself and in this book was writing as science writer. It was originally written as a reply to T. H. Huxley, the biologist known as “Darwin’s Bulldog”, who had argued that both in nature and in human society “life was a continual free fight, and beyond the limited and temporary relations of the family, the Hobbesian war of each against all was the normal state of existence”.

Huxley was a biologist and an expert on Darwin’s views, but here was expressing a popular prejudice; in fact, more than this, a view that justified the division of society into rich and poor, oppressors and oppressed. As Iain McKay puts it in this pamphlet:

“In its most extreme form, this became ‘Social Darwinism’ which (like much of sociobiology today) proceeds by first projecting the dominant ideas of current society onto nature (often unconsciously, so that scientists mistakenly consider the ideas in question as both ‘normal’ and ‘natural’). … Then the theories of nature produced in this manner are transferred back onto society and history, being used to ‘prove’ that the principles of capitalism (hierarchy, authority, competition, etc.) are eternal laws, which are then appealed to as a justification for the status quo!”

Kropotkin produced the evidence from scientific studies to show that this was not the case, neither in nature nor in society. In nature a “struggle for existence” certainly went on, but cooperation (“mutual aid”) was just as much “a factor in evolution” (the book’s subtitle) as competition. It wasn’t just a struggle of members of the same species against each other to survive and so leave more offspring; in many species cooperation was a survival strategy with the less cooperative having less chance of survival and so leaving less offspring.

McKay goes into detail to show that many sociobiologists, including Dawkins himself, accept this, even if on the basis of mathematical models. Kropotkin can be seen as a bit of a sociobiologist himself in that he too argued from animal behaviour to human social behaviour. Only two of his book’s eight chapters are devoted to biological evolution, the rest dealing with human social behaviour and social evolution. However, these are governed by quite different factors that have nothing to do with genetics. But Kropotkin did at least turn the tables on the Social Darwinists by arguing that it was capitalism, not socialism, that was against human nature.

McKay’s 60-page pamphlet is a useful account of the background, significance and influence of Kropotkin’s book.

Adam Buick

Proper Gander: Brooker's Bile (2011)

The Proper Gander column from the March 2011 issue of the Socialist Standard

Television is a “flickering fibbing machine”, according to uber-critic Charlie Brooker in How TV Ruined Your Life (BBC2). Using a snappily-edited mix of archive clips, flippant sketches and scalpel-sharp observations, his six-part polemic describes how manipulating and distorted television has become.

Brooker bases his argument on ‘Cultivation Theory’. This claims that if we spend too much time gawping at the goggle-box, then our expectations, morals and fears are more likely to be influenced by what we see on screen than what we experience in real life. For example, television has conditioned us to be frightened of dark city streets because this is the setting for so much televised violence. And, he argues, production companies have got away with this by presenting violence in a glossy, titillating way through public information films (“government-approved mini horror movies designed to fear you into not going all dead”) and scare-fests like Crimewatch and Wire In The Blood.

In his second episode, Brooker focuses on how different demographic groups are portrayed on television. Young adults are “mindless jigging gits”, dads are “tragic shuffling pitiful individuals”, and older people are “hilarious irrelevances”. TV encourages us to perpetually look youthful – and makes us feel inadequate if we don’t – through dross like the “devastatingly mean makeover show” Ten Years Younger. This trend manifests itself as ‘aspirational television’, where Brooker’s bile is focused in episode three. The theory behind aspirational programming is that “if you watch beautiful fun-loving people on TV you’ll somehow feel like they’re your friends, whereas in reality of course you’re essentially just a tramp staring at them from the other side of the room”. Some of his examples are jaw-droppingly unedifying, like My Super Sweet 16 UK. This docu-soap follows slappably-spoilt brats, including one who stages an X-Factor-style audition to judge which of his sparkly-eyed acquaintances are fit enough to attend his birthday party. How our relationships are influenced by television is the target of Brooker’s next episode. With hilarious bitterness, he shows us how television perpetuates the myth of ‘the perfect relationship’ through adverts that turn toothpaste into an aphrodisiac.

On first impression, it’s easy to dismiss Charlie Brooker as misanthropic and sneering. But his acerbic tone is really just a way of filtering out those viewers he would consider too shallow to appreciate his arguments. Buy into his style, and Brooker’s work is refreshingly perceptive, even exhilarating.

Mike Foster

Cooking the Books: Capitalism will not be controlled (2011)

The Cooking the Books column from the March 2011 issue of the Socialist Standard

Gordon Brown will go down in history as a failure. Politically, as a prime minister who never won an election. Economically, as the man who arrogantly and pompously announced that his policies had led to the end of the boom/bust cycle, only to find himself a year or so later presiding over capitalism’s biggest slump since the 1930s.

Philip Collins commented on this claim in his column in the (London) Times on 7 January:

“Weirdly, the Labour Party appeared to have concluded that capitalism had become stable, ordered and pliant. They need to read their Marx again, They’ll find a picture of capitalism as creative, destructive, radical, disruptive and prone to cycles of boom and bust, even when commanded to behave by Labour chancellors.”

But had they ever read Marx in the first place? Not that the Labour Party has ever accepted Marx’s analysis of capitalism. They haven’t even used the word “capitalism” for years. A previous Labour Prime Minister, Harold Wilson, once famously declared that he had never got beyond a long footnote on page 2 of Capital.

Brown, on the other hand, as a leftwing student leader in his youth and as author of a book on the ILP leader Jimmy Maxton, would probably have read some Marx. As would his successor as chancellor, Alistair Darling, if he really was once a member of the International Marxist Group (though he might have therefore been more familiar with Lenin than Marx). The Miliband brothers would have heard of Marx and his ideas from their father and perhaps even read some.

Collins used to be a speechwriter for Blair but he doesn’t seem to have made Blair make this criticism of Brown. They, apparently, had other things to argue about. But his description of Marx’s view of capitalism is substantially correct.

If Harold Wilson had persisted he would have found (some 500 pages later) Marx’s description of the course of capital accumulation:

“The life of industry becomes a series of periods of moderate activity, prosperity, over-production, crisis and stagnation” (chapter 15, section 7).

In a boom the competitive struggle for profits leads to overproduction (in relation to its market) of one sector of the economy that then spreads to other sectors. Capital accumulation stalls. During the resulting slump the conditions are created (through lower wages, interest rates, and asset values and the elimination of unprofitable businesses) for a slow recovery and eventually another boom which, like the previous one, will eventually bust. And the cycle continues.

Brown’s Tory opponents forget that he wasn’t the first chancellor to have claimed to have ended the boom/bust cycle. Nigel Lawson, Thatcher’s chancellor from 1983 to 1989, also believed he had done so. David Smith, the economics editor of the Sunday Times, recounted in his 1991 book From Boom to Bust:

“Even before an economic miracle was being proclaimed in the late 1980s, the Conservative Party’s boosters had declared that Nigel Lawson had achieved something, without explicitly trying for it, that had eluded all previous post-war Chancellors. He had, it was said, abolished the business cycle, a boast that Lawson was happy to live with…” (p. 196). “…until,” Smith added, “it proved to be woefully misplaced,” when the recession of 1990-91 broke out.

So, it’s not just commands from Labour chancellors to behave that capitalism ignores. It does the same to commands from Tory chancellors too. In fact, to commands from any government, including Tory-Liberal coalitions, as the decline in GNP in the last quarter of 2010 showed.

Editorial: What’s the alternative? (2011)

Editorial from the March 2011 issue of the Socialist Standard

“What’s the alternative?” As capitalism remains mired in crisis, and criticisms of the system become more commonplace and compelling, expect to hear this question asked more and more. It is often used politically and rhetorically – because every sensible person is supposed to know the answer. The idea that “There Is No Alternative”, or TINA, is one of Thatcher’s enduring political legacies. It will often be asserted angrily in political debate, which is revealing. No one feels the need to angrily assert the truth of the law of gravity. No one, then, should feel the need to angrily assert the fact that there is no alternative if there isn’t one. They do because there is.

The Trades Union Congress (TUC), a federation of Britain’s main trade unions, has organised a national demonstration against the government’s spending cuts, which will take place on 26 March. The demonstration has been called a ‘March For The Alternative’. Which sounds great. At last, after decades of ‘TINA’, an alternative! Unfortunately, the TUC’s alternative looks much the same as ‘business as usual’. The alternative, according to them, is ‘Jobs, growth, justice’. This is indistinguishable from what every political party in this country, whether of the left or right, promises every election time. We should not be too surprised by this. The TUC, like all trade unions, exists to win a better deal for wage-slaves. This is a laudable aim, and we support it.

But we do not just want to win a better deal for wage-slaves. We want to abolish slavery. We are wage-slavery abolitionists. As one socialist famously put it, we ought not to exaggerate to ourselves what these trade-union struggles and demonstrations and ‘actions’ can achieve. “We ought not to be exclusively absorbed in these unavoidable guerrilla fights incessantly springing up from the never ceasing encroachments of capital or changes of the market.” Instead, we need to organise for something new.

That was Marx in 1865. Unfortunately, his advice has been mostly ignored, including by those counting themselves as his followers, ever since. As the linguist and social critic Noam Chomsky puts it, “the effort to overcome ‘wage-slavery’ [has] been going on since the beginnings of the industrial revolution, [and] we haven’t advanced an inch. In fact, we’re worse off than we were a hundred years ago in terms of understanding the issues.”

Chomsky is right, and it’s the reason we in the Socialist Party devote so much of our time and energy to promoting an understanding of the issues. We seem, in fact, to be the only political organisation in this country to take this task at all seriously.

The alternative, then, is not the amelioration of our suffering under the wages system. It is the abolition of modern slavery – the emancipation of labour. Under slavery, you are sold to a master once and for all. Under wage slavery, you hire yourself out by the hour or the week or the month. The basic relationship between master and slave has not changed. We need to get rid of the master, take the means of making a living under our collective ownership and control, and organise our own lives, democratically, and on the basis of freely organised, freely given work. In a word, the alternative is socialism.

Lazy workers?

Cross-posted from the Socialist Courier blog

A defense of capitalism often heard by socialists is that socialism would be impossible because without the goad of the wages system workers would be too lazy to work, but recent statistics seem to contradict that argument:

"A record 5.26 million people worked unpaid overtime last year, clocking up an average of more than seven hours a week without pay, according to a new study. The TUC said workers were missing out on almost £5,500 a year, worth £29bn to the economy. One in five employees regularly put in extra unpaid hours last year, with public-sector workers most likely to work unpaid overtime,said the TUC. The number of workers doing unpaid overtime was the highest since records began in 1992, the research found, with 5.26 million people clocking up an average of seven hours 12 minutes unpaid overtime every week." (Independent, 25 February)

RD

Cooking the Books: Doom and gloom (2011)

The Cooking the Books column from the February 2011 issue of the Socialist Standard

In November David Segal of the New York Times interviewed a number of economists to see what ideas they had about how to get out of the current slump (See here).

His opening words were “we are not going to shop our way out of this mess”. Which is true enough since capitalism is not a system geared to meeting consumer demand but one driven by capital accumulation out of profits. Consumer demand merely reflects capital accumulation. If capital accumulation stalls, as at present, so does consumer demand. Consumer demand can only increase if capital accumulation does; it can’t wag the dog.

The silliest suggestion came from Professor James K Galbraith who proposed paying unemployed workers their full social security benefits when they reached 62 which, he claimed, would create jobs because “they would have 22.5 percent more purchasing power than they would if forced to wait until the age when full Social Security benefits kick in”. But where would the money to do this come from? Only by transferring it from somewhere else in the economy, but this wouldn’t increase overall demand. Since he was also recorded as saying that “we’re likely to see a situation that makes people angry and miserable for years” he didn’t seem particularly convinced that his proposal would be adopted.

Professor Gar Alperovitz saw the way-out as via more employee-owned enterprises. “If the economy and the government don’t have an answer to the problem,” he said, “people are forced to try social enterprise.” But such enterprises – small businesses such as laundries – are not going to generate enough investment to get capital accumulation going again. In fact they survive largely by paying lower wages and accepting lower profits than a business normally would. Most will probably eventually go bust anyway.

Others realised that only something that would stimulate capital investment might work. Someone suggested investing in “green energy initiatives” but wasn’t too convinced that this would happen as, not being profitable in the short run, it would require government subsidies to get started. Someone else suggested that as the average age of the population was rising there would be more demand for medical treatment and that this could generate investment in technological breakthroughs in this field.

A mad marketeer from the Cato Institute pointed out, correctly as it happens, that “time was a key ingredient to a recovery”. Yes, time for the slump to create the conditions for a slow recovery, through unemployment exerting a downward pressure on wages and spare capital exerting a downward pressure on interest rates, both of which help to restore the rate of profit. He, however, looked forward gleefully to another consequence: governments cutting their spending to lower taxes on profits. “I think,” he said, “we also have a bubble in the labor market for state and government employees and over the next two years we might see as many as one million of these employees lose their jobs.”

Professor Andrew Caplin saw the answer in a growing inequality of wealth and income providing jobs for “the poor and middle class to cater to the economy’s biggest winners” servicing them as cooks, nutritionists and financial advisers. "Professor Caplin worries,” reported Segal, “that this concept might be caricatured as ‘cater to the rich’.” As well he might, but, given capitalism, he was on the right track. Increased inequality – a shift in favour of property-incomes – is a necessary, though not a sufficient, condition for a resumption of capital accumulation and, when it eventually does, will lead to a further increase in inequality.

That‘s all capitalism has to offer – periods of pain alternating with periods of increased inequality. It‘s not so much economists as the system they study, capitalism, that‘s dismal.

Ghana – can oil make a difference? (2011)

From the February 2011 issue of the Socialist Standard

Who fill benefit from the discovery of offshore oil in Ghana?

The fanfare and euphoria that greeted the discovery of oil in Ghana is not only based on the assumption that it will help boost the not-so-healthy economy of this poor nation but more fundamental though unvoiced factors also account for the uproar. The dismal reality of the actions of the global oil magnates in African countries is one such factor. They act in brazen defiance of the norms of civility and dignity of the local populations. The humiliating treatment meted out to Liberia’s Charles Taylor due, in part, to his refusal to do business with Dick Cheney’s Halliburton is a prime illustration of such corporate arrogance. But more importantly, the expectation of Western oil companies to make their super-profits is also a cause of the excitement.

The debates

When the actual pumping started in mid-December, the world media was replete with all sorts of stories about Ghana hitting the jackpot. As discussions on the issue livened up attracting comments and analyses from Ghana and especially the BBC and RFI, the Squealers of the Ghanaian government got down to work. Amidst all this confounding hullabaloo, the spokespersons rebuffed the claims of the ‘prophets of doom’ that Ghana will go the way of Nigeria, Angola, etc, where the oil wealth has become a curse rather than a blessing. They claimed that stringent measures have been put in place to forestall the intolerable prospect of corruption, mayhem, kidnappings and killings that Nigerians have to contend with all these years on account of the petro-dollars.

However, it soon came to light that as of the time the Squealers were frantically trying to convince the doubting Thomases to drop the deep-seated cynicism that makes them attribute negative theories to the project, the legislature had not even deliberated on the matter in parliament yet. Not that parliamentary approval is of any relevance here since, generally, laws passed under this money-dominated economic system are either in favour of the rich and powerful or against the poor. But the fact that it had not yet been done suggests that, contrary to government claims, no precautionary had been taken against the possibility of Ghana going the way of Nigeria, Angola and co. Or, even more seriously, that the Western companies rushed the Ghanaian authorities into having the drilling started without ensuring that adequate protective legal instruments are duly concluded. This creates the impression that, contrary to what the Ghanaian authorities claim, the investors are, and this is obvious, the senior partners of the whole enterprise.

Then, later, some concerned Ghanaian observers intimated that even before the drilling got started, Ghanaian policy-makers were already using the anticipated oil proceeds as collateral to contract loans from abroad. An ominous beginning if the insinuation is well-founded.

Production relations

The development of modern industry, brought about by the profit-oriented economic system, makes it necessary for the production of wealth to be socialised. This means that the point of production is not the individual factory, goldmine, oilfield, etc but it is society. It follows therefore that those who control society are the ones who effectively control the use of the wealth produced. It is neither those who do the hard labour nor those who manage the workplace, i.e. the factory, goldmine or oilfield.

As the state is the recognised controlling body of any society, it is an undeniable fact that whoever controls the state, whether directly or indirectly, is the de facto controller of society and, by extension, the wealth produced.

It is also common knowledge that the political leadership in Africa, and indeed in all former colonies, have, to a large extent, the same tastes and lifestyles as the ruling elite of the former colonialists. The two groups share the same consciousness. Both work towards the preservation of the status quo – the exploitative relations of production – as it is the guarantor of their luxurious, albeit parasitic, lifestyle.

The so-called New World Order being vigorously pursued by these leaders in the West and their “experts” and advisers is nothing but an attempt at intensifying the exploitation of the world’s resources in the interests of the Western big business community whose interests Western governments serve. This insignificant minority of multi-billionaires control the wealth and political leadership of the West by virtue of their ownership of the means of production and distribution of wealth – land, factories, railways, the media, communication networks etc.

The states and governments of the former colonies are under the complete control of the Western powers and if any of these poor countries shows the slightest sign of attempting to resist Western domination, such a country is brutally forced to ‘cooperate’. That is in conformity with the near-invariable practice of the powers that be. There are too many examples of this state of affairs to need any mention here. Thus the whole of society and its resources are effectively controlled by the rich minority and they alone determine what to produce and how to use the wealth thereof.

Consequently, governments of the peripheral countries, who also represent their local business community, will, in accord with inherited convention, leave no stone unturned in enticing Western multinational corporations to come and invest in their countries. They do so with the hope that the local money-owners may get the chance to pick some crumbs falling from the sanguinary table of the foreign investors.

To facilitate foreign investment, the governments are ordered to create an ‘enabling environment’, an expression which is a euphemism for holding down the ordinary citizenry for the investors to mercilessly exploit them by way of cheap labour.

The Ghanaian reality

In Ghana, those at the helm of affairs, in routine fashion, fail to realise that not all are fools. Gold, bauxite, manganese, diamonds, cocoa, timber, just to name a few, have been produced since time immemorial. If ever any ordinary citizen benefited from the proceeds of these resources by way of, maybe public conveniences, untarred roads, ill-equipped health centres, few schools or some such tokens of basic necessities, then it was an unintended necessity.

That an overwhelming majority of Ghanaians have been wallowing in abject poverty whist a few cabal of the old boy network live in stinking affluence tells a lot. Though information on how the national cake is distributed is deliberately made unavailable or at best scanty, yet it is not entirely unknown. The several coups d’états, firing squads, commissions of enquiry etc are open pointers as to how the cake is shared.

Today, oil is being pumped and, in this world of money-based economy, exploitation cannot be avoided since production is carried out for the sake of making profits. It would be a contradiction to have a money-based system without profit. If investors will not make a profit, they will keep their money, but if they will realise a profit, they are going to do so at the expense of the worker and the host country. Then their collaborators in the form of local politicians and business people will be given the task of using sophistry to cover up the truth. Since the Ghanaian masses are effectively excluded from the decision-making process, except for the periodic elections during which time they are hoodwinked into voting for which bunch of looters to come and rob them, they are left helpless.

Corporate journalism

Those who could have saved the situation are the journalists who, at least, are able to glean into the corridors of power and have an idea of what is going on in there. Now, it is received opinion that Ghana is one of the few countries in Africa where press freedom has developed to a stage that is almost ineradicable. It is therefore expected, and observers of the Ghanaian oil scenario have concurred with this, that the vibrant press will serve as an uncompromising watchdog over the operations of those involved in the business. It is thus claimed that the eagle-eyed vigilance of the ubiquitous journalists will put fear into officials who may try to get involved in any financial misconduct. But the snag is the kind of journalism that is practised in Ghana and, indeed elsewhere in this profit-oriented world.

Corporate journalism is stunted journalism. The media houses operate to make a profit, just like the oil companies pumping the oil. And since the process of making profits necessarily entails shady deals, graft and unconventional methods, the media personnel cannot but play the game according to the rules. And that, exactly, is their stock in trade.

However, it is not to be discounted that there are individual journalists who may profess genuine intent in their work. But corporate media as an institution is an indispensable cog in the profit-making machine and hence works in accordance with the odious practices of the system. And that is precisely why they refer to themselves as the fourth estate of the exploitative ruling class.

Not surprisingly, the media coverage is appallingly terrible. It would not be an overstatement to say that over ninety percent of media activities is devoted to three trivial issues.:

1 Entertainment – to divert attention from real issues of official theft, but not to genuinely satisfy people’s spiritual needs.

2 Advertisements – to promote the consumption of worthless or fancy goods.

3 Misinformation – to keep the masses ignorant.

An instructive case of such disinformation was seen on New Year’s Day when BBC’s Network Africa was summing up the important events of the past year – 2010. It was written by Elizabeth Ohene, a former BBC journalist and also a former minister in the previous government in Ghana. She wrote that she was surprised to learn that Ghana had just been promoted from a least developed country to a ‘middle income’ one. Who did it and why?

All said and done, Ghana may not go through the kind of physical violence and killings that is the lot of Nigeria today. However, it will surely experience the other aspect of what is happening in oil-rich Nigeria. The oil corporations will siphon off more than the lion’s share of the proceeds from Ghana. Then the political and business leadership will stash away as much as they can. And finally, the ordinary citizens, like their counterparts in Nigeria, will continue to live below the needless but inescapable poverty line.

Suhuyini

Inconsistent (2011)

Book Review from the February 2011 issue of the Socialist Standard

Ecology and Socialism: Solutions to Capitalist Ecological Crisis. By Chris Williams. Haymarket Books 2010.

The introduction bodes well with clear statements of where the blame lies for the ecological mess we’re now in. ‘We live in a social system predicated on endless expansion” and ‘The blind, unplanned drive to accumulate that is the hallmark of capitalist production – the profit motive – has created the problem of climate change, not individuals” profligate natures or overpopulation.’ The book’s title is ‘Ecology and Socialism’ and the ecology side is explained admirably well. (Williams gives ecology courses as part of his work at Pace University, N.Y.) but not the socialist aspect.

The first four chapters cover the science of climate change, debunk the myth of overpopulation (an excellent chapter that can be read in isolation) and ‘make the case as to why there can be no such thing as sustainable or environmentally friendly capitalism’. Williams’s arguments are backed up with well-documented notes in which he refers to a host of well-known and well-respected ecologists, scientists and writers, along with named articles and reports. Although he repeatedly states that capitalism as a system is the cause of the world’s environmental problems he also stresses that it is neoliberalism that has speeded up the process detrimentally. In fact, at this stage, by pages 57/58 some reforms to neoliberalism are listed as being a way ‘to roll back the hostility’ that small farmers have suffered.

Unfortunately, from a very promising beginning, Williams quickly negates the case he started to build ostensibly for socialism by saying in one breath the productive forces need to be in the hands of the producers and in the next that we, as workers, must fight for “good unionised jobs”. There is a definite lack of coherence in his argument from hereon in. He writes of “solutions”, but how many solutions can there be to capitalist ecological crisis? If the argument has been all the way through that it is capitalism that has caused the ecological crisis then the solution must be single and particular: get rid of the cause.

He does address the difficulty of writing for an American readership in that the general misconceptions widely held by many US citizens as to what socialism actually is may prevent them from serious consideration of these or similar arguments. Perhaps it is this that has led to his muddled thinking when attempting to lay out what socialism is? He states and agrees with Marx’s position that ecology (nature) and socialism are inextricably linked but goes on to muddy the water by detailing more of an overhaul than an overturn of capitalism. He claims that separate nation states and borders could not exist but nowhere is there any mention of a moneyless world. And that the government needs to be pushed into making changes – as it has been before – by millions of people fighting for change in this area or that; but no mention of how reformism is an endless treadmill of two steps forward and two steps back.

In comparing the US situation with that of Europe he has this to say, ‘As European capitalism has survived and prospered with tougher governmental regulatory controls and greater restrictions on corporations, it is clear that we can win important and life-enhancing reforms without threatening the overall structure of capitalism.’ Are we to seriously consider that ‘European capitalism’ has done or is going to do anything beyond nodding towards serious climate change reversal? And what of the statistics of the unemployed, homeless, malnourished; how do they fit into the ‘important and life-enhancing reforms?’ Then he goes on to say that reforms, theoretically possible in capitalism, will only be made if politicians are ‘forced’ to implement them (by us). So now, it seems, we are to devote all our spare time and energy to demonstrations and strike action for a bit of reform here and there. Surely if all that mass energy is to be rallied we go for the whole thing – system change – now heard so often, and even featured on the book’s cover, but obviously misunderstood by many to mean a system of reforms. To end the chapter there is a hint that he doesn’t really support what he’s written when he writes of competing capitalist states that can’t plan and coordinate on the global level required and that, ‘such planning could only realistically come about through a completely different way of organising production – one based not on making a profit but meeting human need’.

Williams doesn’t seem to have really come to his own conclusion yet as to what he sees as the alternative. Where are his proposals as to how we rid ourselves of the profit motive? If we don’t rid ourselves of money how do we rid ourselves of the profit motive? He offers plenty of solid argument to back up the idea that only a society not driven by the profit motive would benefit both labour and nature positively and yet Williams seems to shy away from total commitment. How can he write that nothing short of totally remodelling the world on a social, political, technological, cultural and infrastructural level within a fully democratic process carried out by those who will be affected by those decisions, with no nation states or borders and therefore no resource wars – and then add that the Global South will require ‘technological help, capital and training’ (my emphasis).

He has shot himself in the foot by seemingly offering an alternative, having given ample reasons why capitalism can’t change its logic, but by being far too ambiguous about the solution(s) he offers. Conspicuous by its absence is just what Williams proposes is our actual route to this ill-defined alternative society.

Janet Surman

Let the walls come tumbling down (2011)

From the February 2011 issue of the Socialist Standard

How much longer are you willing to sit around and let a tiny minority divide us?

According to the Bible, 1400 years before our saviour arrived on Earth, the walls of Jericho came tumbling down; demolished by the buglers of the Israelite army marching around the city walls blowing their trumpets. No mention is made of any aural damage.

Walls, have had several roles in society since their inception. Several thousand years ago our ancestors would have built rudimentary walls for shelter against the elements, and these eventually evolved in to the walls of communal living spaces.

With the emergence of private property walls began to assume a new role in society: the defence of landed property. Kings, queens, emperors and a motley assortment of nobles laid claim to the land through divine approbation and conquest. What had once been held in common ownership gradually came to belong to a tiny minority that enforced their ownership through coercion.

Fortress and City walls were not enough for some rulers. The threat of losing the property that had been stolen from the majority led to the construction of fortifications of immense proportions. The Great Wall of China was under construction from the 5th century BC up until the 16th century to protect the Chinese Emperors from a northern threat to their borders. Nowadays, it is a major tourist trap. However, it is doubtful whether the tourist guides reveal that ‘it is estimated that over one million workers died building the wall’ [wikipedia.org].

Medieval walled cities had become commonplace, but walls also served another purpose for those in power, and that was for imprisonment. Dungeons were often used to hold prisoners prior to execution or transportation. And, there was also debtors' prison, where the debtor was imprisoned until the debt was repaid. But it wasn't until the 19th century that the modern prison system took root, beginning in Britain, when incarceration was viewed as a punishment in its own right. Walls could now be seen to confine members of society as well as repel them.

The Berlin Wall demonstrates how capitalist states can contain and control their populations. The construction of the ‘Wall of shame’, as the West Berlin state dubbed it, began on the 13th of August 1961. The state capitalist élite of East Germany declared that it was erected as a defence against fascists who were conspiring to impede the ‘will of the people’ from the building of a socialist state – which is a contradiction in terms. Its real function was to prevent the mass emigration of East German workers to the private capitalist workshops of the West. However, by 1989 the economic decline of the Russian empire led to a change in policy by their ruling élite, and access to Russian coercion was to be denied to the puppet states. It was this that brought about the tumbling of the Berlin Wall.

Amid the rejoicing some people in power were not as jubilant as the East Berliners, and millions elsewhere. Margaret Thatcher, wary of a united Germany, was reported to have pleaded with President Gorbachev ‘not to let the Berlin Wall fall’, and to ‘do what he could to prevent it happening’ (The Hindu, Sep 15 2009). Similarly, the French President, François Mitterand warned Mrs Thatcher that a unification of Germany could lead to them making ‘more ground than Adolf Hitler had’, and ‘that Europe would have to bear the consequences’ (London Times, 10 September 2009). Both quotes offer an insight into how the competitive nature of capitalism affects the thinking of its leaders, and directly works against the overwhelming majorities’ hopes, dreams and desires of living in a humane world.

Israel's ruling élite ordered the construction of their wall in 1994, and duly baptised it the 'Separation Barrier'. You would have thought that the Israeli's might have recalled the wall that the Nazi's imprisoned 400,000 Jews behind in what became known as the ‘Warsaw Ghetto’ prior to their elimination, but evidently memories are short, and propaganda long. The justification for its construction is that it has been built to protect Israeli's from Palestinian suicide bomb attacks. Opponents regard the wall as a means to further annex Palestinian land, and that security is just a subterfuge. The wall also violates international law as laid down by the International Court of Justice. However, ‘justice’ under capitalism inevitably pans out as ‘might is right’, especially when the US is your Godfather.

The establishment of an Israeli state was the goal of Zionism and its founder Theodor Herzl’s entry in his 1895 diary reveals the thoughts of a ‘righteous’ man:

“We must expropriate gently the private property on the state assigned to us. We shall try to spirit the penniless population across the border by procuring employment for it in the transit countries, while denying it employment in our country. The property owners will come over to our side. Both the process of expropriation and the removal of the poor must be carried out discretely and circumspectly” (Righteous victims, p. 21-22).

The Israeli 'settlers', are also opposed to the barrier, but their opposition is because it appears to relinquish the Jewish claim to the 'Land of Israel'. This is the land that God promised to the descendants of Abraham. This is a biblical deal struck between God and the Jewish ‘people’ some 3500 years ago. It is also the ideological engine of Zionism, and the Likud party’s rationale for the expansion of Jewish settlements in the West Bank and Gaza.

Voltaire once wrote that ‘if God did not exist, it would be necessary to invent him’, and like the ancient mariner, Jonah, who was supposedly swallowed by a whale, millions of people swallow the Bible’s fairy tales as literal truths. And this suits the powerful; if it didn't the Bible, and all of the other ‘holy books’ would have been consigned to the fiction shelf of the Children's Library a long, long time ago. Within the Bible’s pages we have a superman walking on water, and feeding four thousand people with a shopping bag of groceries. The Red Sea opening up to allow the 'chosen people' to cross, but the 'all loving' God deciding in his infinite wisdom to drown the pursuing Egyptians. There's a man whose hair is the secret of his immense strength. A midget slaying a giant. Talking snakes, talking bushes, a dead man coming to life, and the useful trick of turning water into wine. Pages and pages of fantasy. But, in the hands of religious fanatics, and conniving élites these tall tales create intense misery for millions of people. And the 'Separation Barrier' is a symbol of that suffering.

Another 'separation barrier' has been constructed in the 'land of the free'. This 1951 mile long wall acts as a ragged border between the United States and Mexico. The justification from the US side about why they have erected this wall is that it is to deter drug smugglers and prevent illegal immigration. On neither count can the US authorities claim any success. The US is awash with drugs, as is the rest of capitalist society, and the answer to drug abuse does not reside in the construction of a wall.

The US Border Patrol in 2005 apprehended 1.2 million people trying to cross over from Mexico, and by their own estimates they only catch 1 in 4. In a country where it is estimated that 40 percent of the population live below the poverty line, it does not take a George Bush to understand what it is that drives these people to leave their homes and families for an uncertain future in a hostile country.

The North American Free Trade Agreement (NAFTA), like every other trade agreement is always constructed to benefit the few to the detriment of the many. Contrary to the rhetoric of the capitalist media, NAFTA had a predictable effect on the Mexican people. The peso crashed soon after the NAFTA was passed, and those already struggling were pushed further in to penury. Economic migration became inevitable as this Oxfam report underscores:

“NAFTA has created dramatic economic dislocations in Mexico. These economic impacts, among other factors, are leading Mexicans to migrate…For example; imports of U.S. corn have severely affected the local Mexican agricultural sector. NAFTA arrangements have helped increase the imports from 3 million metric tons in 1994 to more than 5 million metric tons in 2002. Also, the brief rise in outsourced U.S. manufacturing that helped the Mexican economy has ceased as these factories have now moved to Asia” (OXFAM; USDA, Nadal, 2002).

Even the walls that once gave us a feeling of security is undermined by capitalism as the debt incurred on the commodity that people have been persuaded to call their homes, has been transformed in to four walls of anxiety through the threat of unemployment, or just a few upward ticks in interest rates. The question is how much longer are you willing to sit around and watch a tiny minority dominate your life? Why not help us to bring the walls of capitalism tumbling down? We are asking you, as Shelley, once did to:

“Rise like lions after slumber
In unvanquishable number
Shake your chains to earth like dew
Which in sleep had fallen on you.
Ye are many. They are few.”

Andy Matthews

Material World: Training to kill, training to sell (2011)

The Material World Column from the February 2011 issue of the Socialist Standard

Is aggression part of our human nature? Are we born killers? Socialists don’t think so. Nor, as it so happens, does Lieutenant Colonel Dave Grossman, a military psychologist who claims to have invented a new science called “killology”.

In his book On Killing, Grossman shows that without special conditioning almost all of us are extremely loath to kill anyone. For the “masters of war” (as folk singer Julie Felix called them) this is a big problem. Brigadier General Marshall found that only 15-20 percent of American foot soldiers in World War II ever fired their rifles (and some of those deliberately missed). Similar results have been obtained for the American Civil War and World War I.

We have powerful inhibitions against killing our own kind, and these inhibitions remain strong even when we are under direct threat of being killed ourselves. Trauma in war veterans is rooted mainly in feelings of guilt at having killed. Medics and others who though constantly exposed to the danger of death are not required to kill rarely suffer trauma.

How then did so many people manage to get killed in these wars?

Well, a tiny minority (2 percent) did enjoy killing and made a vastly disproportionate contribution to the body count. Also, inhibitions are much weaker when due to distance or for some other reason you can’t see your victim’s face. Where weapons are operated by teamwork, social pressure comes into play and the sense of personal responsibility is diffused. Finally, a soldier will generally kill if an officer is right behind him yelling: “Kill him, for Godsake, kill him!”

Training to kill
In response to Marshall’s study, the US armed forces developed more realistic and psychologically intrusive training methods. During physical exercise new soldiers chanted: “Kill, kill, kill, kill!” Instead of aiming at the bullseye on a geometrical target, they learned marksmanship by shooting at human-shaped silhouettes. And they were forced, by means of specially designed head and eyelid clamps, to watch many hours of gory war films that desensitised them to the sight of carnage.

The new conditioning methods were effective. The proportion of soldiers who fired their rifles soared to 50 percent in the Korean War and 90 percent or higher in Vietnam. At last soldiers were made to act like efficient killing machines. Of course, they were not really machines. As human beings they paid for their “improved performance” in intensified trauma.
Today’s young people are also being conditioned to kill by watching increasingly violent films and television programming. Most dangerous of all are interactive video games that simulate armed combat. Using the same methods as in military training, they inculcate the practical skills as well as the psychological response mechanisms needed for efficient killing.

Training to sell
I was struck by one of the reader’s reviews of On Killing at the Amazon site. The reviewer, a sales manager, comments that his profession has a problem that closely resembles the generals’ problem of soldiers who are reluctant to kill. Many of us, it appears, are not just insufficiently aggressive to kill people. We even aren’t aggressive enough to clinch a sale!

Perhaps, the reviewer muses, the same methods that work so well on soldiers could be adapted for use in the field of sales. The mind conjures up an image of squads of uniformed salespeople at boot camp, chanting “Sell, sell, sell, sell!” as they run.

The literature on training sales personnel discusses a dire condition called Inhibited Social Contact Initiating Syndrome or (more narrowly) Sales Call Reluctance. This syndrome, we learn, affects over a quarter of salespeople. They have negative thoughts and emotions that inhibit them from trying hard enough to sell things. Companies can test job applicants to screen out those prone to the malady by purchasing a “diagnostic” questionnaire (110 questions).

The emotions that inhibit sales workers from performing well are of various types – at least twelve, according to “behavioural scientist” George W. Dudley, author of The Psychology of Sales Call Reluctance. Many, for instance, feel embarrassed to solicit sales from individuals of higher social status than themselves.

The main problem, however, is lack of aggression. People feel “distress, fear and anxiety” at the mere thought of seeming “pushy”.

Imposing your will
Sales coach Paula Crutchley has a confession to make: “When I first started in business, I sometimes felt overly concerned about the feelings of others.” (Shame on you, Paula!) View the initial sales contact as building a relationship, she advises. “This point of view will make the process easier on your soul.” Although she has learned not to be “overly” sensitive or considerate, her soul is still giving her trouble.

Her colleague Tom Crouser expresses a tougher outlook. Here is his comment on the “toxic condition” of “yielding to others”: “Children are taught that it’s rude to impose your will on anyone. But selling is all about imposing your will on others.” Being a manager, he adds, is also all about imposing your will on others.

The soldier, the salesperson and the manager do indeed share a common plight. They are required by their bosses to dominate others. However, it is not their own will that they impose, but rather the will of those who dominate them and others through them. In order to impose this alien will, they must constantly suppress their own. The clash between this inner will and the insecurely internalised will of the boss causes them agonising inner conflict and confusion. The class struggle rages within their souls.

Stefan

Made in Dagenham (2011)

Film Review from the February 2011 issue of the Socialist Standard

Made in Dagenham, depicts the true-life struggle of female workers for equal pay, in 1968 in the Ford Plant in Dagenham.

Produced by ‘BBC Films’, it stars Sally Hawkins as Rita O’Grady, the girls’ main spokesperson, Rosamund Pike, as Lisa Hopkins, the wife of a Ford executive, who opposes him when the women strike, and Miranda Richardson, who delivers a crackerjack performance as Minister for Employment, Barbara Castle. Castle is initially angry that after two years of Labour goverment, with a large minority, they’ve had 26,000 strikes, lost five million working days and now, these women want to add to it.

Ford’s Dagenham plant in 1968 was the fourth largest auto manufacturing plant in the word, producing 3,000 cars a day. It comprised an area of 42 million square feet, employed 55,000 men and 187 women. The women were previously classified as semi-skilled, but were demoted to being unskilled with a corresponding pay cut, which wasn’t objected to by the Union.

According to their shop steward, played by Bob Hoskins, “This has nothing to do with being unskilled. Ford decided to pay you less, because they can, because you’re women.”

Initially, the strike, opposed by the Union, was to upgrade the women to semi-skilled status but under O’Grady’s fiery leadership, became a battle for equal pay for equal work. The women, all 187 of them, sewed seat covers, but nowhere in Made do you see one man doing that; equal work?

Most of the movie deals with opposition from men in various areas. The overall view is, in 1968, most Englishmen were chauvinistic. Though this reviewer hasn’t lived in England since 1966, he knows the depiction was reasonably accurate.

Without seat covers the Plant shut down. Laid-off male workers bitterly opposed the strikers, which caused problems in the marriages of couples who were both employed at Ford. O’Grady’s husband was extremely nasty when their fridge was repossessed. This made the women more bitter, considering they were supportive of the men when they were on strike.

Union leaders begged them to return to work. One, in a fit of profundity, declaimed, “Marx said men make history; he didn’t say women make history.” The word ‘man’ in the greater sense, which is how Marx meant it, carries no gender connotation.

In desperation, an executive from head office in Detroit came over to put the world to rights. This economic genius argued, to grant equal pay, would shoot up the price of product, which would kill the market. Surveys have shown, an average of 7 percent of the price goes to wages and salaries, including that of high-price CEOs. A few years before the strike London busmen were out all summer for higher wages. A survey, conducted a year later, showed that for every pound received in extra fares, only two shillings (then one tenth) went towards wages.

Perhaps the most perceptive comment in the movie is when Lisa Hopkins tells the guy from Detroit, Ford should take a leaf from Vauxhall’s book and not be so aggressive towards the union. Though Hopkins didn’t say it, this aggression stems from the early days when Henry Ford did all in his considerable powers, to prevent unions getting a foothold in his plant.

After crashing the Union’s national conference, the delegates vote in favour of equal pay and Castle, realising the women won’t quit, sides with them even after being warned by Harold Wilson, “Don’t upset Ford, I’ve enough trouble with Americans.” The women settle for 93 percent of their demand. In 1970 the UK Parliament passed the Equal Pay Act, which was soon adopted by other countries. Even Ford management accepted it.

The movie, directed by Nigel Cole, is well acted, fast moving, totally absorbing and contains some humour, arising from real life situations. Perhaps, the funniest is when an attractive girl finks on the rest by entering the plant for a photo shoot and double crosses the company.

Though Made is recommendable, this reviewer has one small quibble. The thrust of it is no different to millions of movies; you don’t know what you can do until you try. Certainly, one must admire O’Grady and her friends, who had no previous experience of negotiating and propagandising. Nevertheless, Made depicts people fighting for improvements within capitalism. At one point, the shop steward says, “Someone has to stop those exploiting bastards from getting away with what they’ve been getting away with for years.” Meaning forcing them to be less exploitative. The question of no exploitation full stop, is never addressed. One thing which Marx said that the union official never repeated is “…abolition of The Wages System.” The most a Socialist can say about the women is their aims were alright as far as they went, but they didn’t go far enough. For real equality, a society where all will stand equal in relation to the tools of production, is the only answer.

Steve Shannon

Cooking the Books: Ed’s Dad (2011)

The Cooking the Books column from the February 2011 issue of the Socialist Standard

“My Dad,” Labour Leader Ed Miliband told BBC Radio 5, “would have considered himself a socialist too, but he would have said we need to have public ownership of everything.” ((London) Times, 27 November).

It’s true, his dad, Ralph Miliband, was a left-winger who identified “socialism” with full-scale nationalisation, or state capitalism – as we pointed out in a review of his book The State in Capitalist Society in the August 1969 Socialist Standard:

“This is a confusing book in which Miliband sets out to prove what he takes to be the Marxist theory of the state. Although he does define his terms he uses words like ‘capitalism’ and ‘class’ in a non-Marxist way. Capitalism, he holds, is based on private enterprise, private profit and private accumulation. This raises suspicions, which are confirmed, that he has an odd view of Socialism too. Russia, he says, is ‘collectivist’, ‘non-capitalist’ and, in an unguarded moment, even ‘socialist’. The concept of state capitalism is clearly unintelligible to him and is nowhere discussed, not even in relation to nationalisation in the West.”

Nationalisation is not socialism as it is only a change of owner and employer, leaving workers still having to sell their labour power for a wage or salary and still exploited for surplus value. In the West the former owners were paid compensation and so continued to receive a property income but as interest on government bonds rather than as dividends. In Russia the beneficiaries were those who dictatorially controlled the state and awarded themselves a privileged income as bloated salaries, prizes, country houses and other benefits in kind.

Ralph Miliband’s best known book is probably his 1961 critical history of the Labour Party from a leftwing Labour point of view, Parliamentary Socialism. In the concluding chapter, entitled “The Sickness of Labourism” he observed:

“By the late fifties, the Labour leaders, obsessed as they were with the thought of electoral success, had come to be more convinced even than were their predecessors that the essential condition for that success was to present the Labour Party as a moderate and respectable party, free from class bias, ‘national’ in outlook, and whose zeal for reform would always be tempered by its eager endorsement of the maxim that Rome was not built in a day – or even in a century. Never indeed had Labour leaders been so haunted by a composite image of the potential Labour voter as quintessentially petit-bourgeois, and therefore liable to be frightened off by a radical alternative to Conservatism.”

Plus ça change. There was nothing new about New Labour, except that Blair succeeded where Gaitskell failed in getting rid of Clause 4, which committed Labour on paper to full-scale state capitalism.

He went on to quote from the study of the 1959 General Election by David Butler and R. Rose their view that the Labour Party “as in all recent elections …played down any claim to stand, as a socialist party, for a radically different form of society …it asked the voters to say that it could administer the mixed economy welfare state better than the Conservatives”.

Which is precisely what Ed Miliband is on record as promising to try to do. As he told the Observer (29 August): “I’ll make capitalism work for the people”. Oh no, he won’t – because that’s not possible, not even if he followed his dad’s line and nationalised everything. State capitalism can’t be made to work for the people either.