The Crisis

Capitalism’s financial markets are the lubrication for the entire capitalist economy. The advance of credit mostly keeps capitalism running smoothly and speeds up greatly its circuits of production. The problem arises when--as always happens as the boom reaches its peak--credit is being advanced effectively as a life-belt to those enterprises in serious difficulties because they have produced too much for their available market. The more credit is advanced, and the longer this process continues, the more serious the necessary "correction" will have to be. If financial institutions keep extending credit to unprofitable enterprises, they will all go under, not just the latter.

From one point of view, this crisis is caused by capitalists choosing not to buy, that is, not invest profits because they judge they won't make any profits or not enough. The current crisis of capitalism is that there is "surplus liquidity". In other words, the rich have so much wealth they have exhausted places to store it. If it is not invested its value depreciates. And they won't invest unless it produces a return. This is why we see record amounts being spent on gold or on art (ironically mostly on art that depicts the pain and isolation of capitalist society). While workers are having their jobs and wages cut and governments are enforcing austerity, companies have never held so much cash. As one economist says: "Globally, companies are sitting on more than $5 trillion." This is a classic case of "over-production".

This article describes the findings of a group of University of Massachusetts economists on how America's largest banks and non-financial companies are hoarding $3.6 trillion in cash. Banks are sitting on $1.6 trillion in reserves -- about 80 times the $20 billion they held in 2007. Non-financial companies are keeping their profits liquid, rather than plowing them back into investments, to the tune of about $2 trillion. Together, that amounts to almost a quarter of the U.S. gross domestic product all the while small business are having a hard time getting anyone to lend them money.

While this other article talks about £19 billion held in cash in the banks by UK non-financial companies. Research from corporate financial health monitor Company Watch found that 211 UK-listed non-financial companies are sitting on cash of at least £1 million. Construction giant Amec led the way with £521m, followed by fashion house Burberry, which has £338m in the bank. Argos and Homebase owner Home Retail Group has £194m stashed away and Carphone Warehouse has £103m.
In total, European firms are sitting on £110 billion net cash.

The Financial Times writes that in 2006, "Corporate treasuries placed a mere 23 per cent of their funds in banks. But 2011, the proportion of funds sitting in banks doubled – and this year it rose above 50 per cent. Companies are eschewing capital market products, since they think that the returns are too low to justify the risk. Another factor that is prompting this flight towards the bank is a perception that bank deposits are relatively safe, if they are Federal Deposit Insurance Corp insured. Thus, the favorite destination for treasurers now is a non-interest bearing account, which carries a FDIC stamp. Never mind that this is producing negative returns; it does at least promise to return the cash. And that is important in a world where 98 per cent of treasurers are now also telling the AFP that their top priority is to protect their money, not earn yield. It could take years before they really start feeling confident enough to take long term investment bets again. The velocity at which money moves around the system - and cash is used in a productive way - may have now slowed in a more permanently; doubly so since the banks themselves are very risk averse and wary of lending. A corporate freeze is a world where money has slower velocity is also a place where it will be harder to produce growth. Companies could return to the capital markets again. History suggests that greed usually triumphs fear, in the end."

Much the same can be seen from a Business Insider report

"Borrowing costs for government are plummeting everywhere. US 10-Year Treasury, which is once again within a few basis points of an all-time low. Australian 10-yr bonds are at new lows. What this essentially means is that there's a lot of money out there that sees no productive investments in the real world, and thus people are willing to stick it with entities that promise them a very meager return. It's not about governments reaching their end-game. It's about a growth-deficient world, governments being the one place that can absorb all this money."

We also read in the Canadian newspaper Globe and Mail
"Never before in the history of the world has so much cash been hoarded in so many places by so many large organizations...Canadian companies have piled up more than $525 billion in cash reserves – almost a third the size of the entire economy – up from little more than $150 billion a decade earlier. According to a recent analysis by the Gandalf Group, at least 45 per cent of Canada’s biggest companies are hoarding cash rather than investing... In America the Federal Reserve estimates that a staggering $5.1 trillion – an amount larger than the economy of Germany – is piling up in American corporate cash holdings...In Britain, companies have accumulated almost $1.2 trillion in cash and deposits, equivalent to half the entire economy. And, no surprise, investment there grew by only 1.2 per cent last year......It’s strange, because this should be a great time for companies to invest: low prices, low interest rates, cheaper labour costs. A sensible company would build up cash during boom times – when investments are more expensive – and spend it during recessions, when consumer demand is weak and capital is cheap. Yet this is the precise opposite of what actually happens. Companies look at the low consumer demand and become terrified"
Companies are actually cash-rich and not re-investing but hoarding - can it be described as a capitalist strike?
A survey of chief financial officers (CFOs) from accountancy firm Deloitte, which showed worries about recession and a break-up of the euro are having a direct impact on the confidence, behaviour and business strategies. In regards, to the Federal Reserve Bank, the Bank of England injecting all that Quantitative Easing - as the saying goes - you can lead the horse to water but you can't make it drink. No prospect of profit - no investment and their money is put under the mattress big style!!!

Why this should all come as a surprise is a puzzle. Marx and those who understand capitalist economic have written about this a long time ago.

 "When trade is slow, money circulates slowly. When it is stagnant, money lies fallow. It goes to “sleep” in the bank vaults. There is no work for money. It is “unemployed...There being no profitable fields for reinvestment, they were obliged to hold their money in idleness.” explained John Keracher Economics for Beginners "The “big boys,” the finance capitalists who hold the gold, cannot find profitable and safe investments for their money and, much to their disgust, they are obliged to hoard it."
http://www.marxists.org/archive/keracher/1935/economics-for-beginners.htm

There is always a place in capitalism for scapegoats. John Keracher in Economics for Beginners explains the credit crunch and why banking were targetted as the culpable industry as the recent recession engulfed us all. "Whenever a crisis develops and “hard cash disappears,” when commodities are unsaleable and, as a result money is not changing hands and credit has tightened up, there usually arises much agitation against the existing monetary system. At present the great bankers with great hoards of gold are anxious to lend it out, but they can find few enterprises to which they can lend safely and at a profit. Countless numbers of businessmen are now trying to borrow. It is always so in a crisis, but fewer than ever can make the grade because of their insecurity. Therefore, at a time when the bankers (not the bankrupt ones, of course) have most to lend, and are very anxious to so, they find very few secure businessmen to whom they can lend. This condition creates the illusion that business is bad because the bankers will not let out their money. It is easy to see that there are plenty of people without money, but they can offer no security, and, in fact, many “securities” vanish in a crisis, leaving many bankers with no choice but to close their doors [all those recent bank mergers and take-overs] . However, the large bankers who survive have plenty of money on hand...Loss of income in relation to expenditure wiped out so much of their capital that they became insolvent. Reckless speculation helped to hasten their downfall, just as in the case of other speculators. But not all bankers failed. The large bankers, the real financiers, are in a very powerful position today...finance capital, as such, is in the saddle and will probably be riding hard when the old horse capitalism runs its last lap "
Even though written in the 1930s, it is surprisingly fresh and fully applicable in to-days economic crisis.

Socialists argue that capitalism, like every society, is an organisation of the human production process, which means that people work on their natural environment and transform it into forms that they can consume. Human beings are peculiar in that this process is culturally rather than biologically determined. In our culture today, social reproduction is dependent on the fact that access to natural resources is controlled by a small group of people, through the medium of money. Which means that the people who actually control the production process are interested not in production per se, but in an increase in their social control, which we call the making of profits. Goods are only produced if they can be produced in such a way that the owners of the production process—of capital—are able to make a profit. Capitalism, as explained by Paul Mattick Jr in his "Business as Usual" is not primarily a system for producing wealth to meet consumer demand, but for making money. This is what business is all about: using money to make more money. The capitalist (or, increasingly, a capitalist institution subsidised and backed by the state) starts off with a sum of money, which they throw into circulation in the expectation that it will return to him as a greater sum than he started with. To this end, the capitalist buys means of production and labour power on the market, then puts these to work to produce goods, which he then takes to market in the expectation not just of sales, but of profits. If he is successful in his aim, and if he is to remain a capitalist and keep up with the competition, he must reinvest at least a portion of that profit in yet more production, buying yet more labour power and means of production, to produce yet more wealth and, potentially, money profits. And then the cycle begins again, on an ever-expanding scale. he motive here is not the satisfaction of consumer need – a relatively straightforward matter – but the production and appropriation of profits on an ever-expanding scale – a much more tricky thing to achieve. And as the production of social wealth increasingly takes on this capitalist character, the production of the things we need increasingly relies not on our need for them, nor on our ability to produce them, but on the ability of capitalists to make profits from the whole process. When they cannot make or do not expect to make a profit from production, or when they produce too much to sell profitably, they will not invest in production, but in a general tendency, worldwide, to substitute speculation for real capital investment, or will not invest at all, and hoard money. This can affect not just their own line of business, but the whole system of wealth production. Crisis, in this view, is not caused by any bogey-man in the wings, but is a necessary result of the process itself.

There has been a tendency for periods of prosperity to lead to depressions, and periods of depression to lead to renewed prosperity. This process has been going on, more or less, since the beginning of the nineteenth century. This crisis, like those that have punctuated the history of capitalism since the beginning of the nineteenth century, is due to the inadequate amount of profit produced by workers in the capitalist economy, relative to the amount required for a significant expansion of investment. This problem has been hidden by the enormous expansion of debt – public, corporate and private. The credit-money created by governments and spread throughout the system by financial institutions created the basis for an apparent prosperity.

The truth is there is now a real conflict between the interests of ordinary people, that’s to say the working class, and the interests of the capitalists. The fundamental problem, the low profitability of capital, has not been overcome. The preservation and future prosperity of capitalism demands the impoverishment of the population. If workers accept government policy and opt for austerity and therefore to be impoverished to save capitalism, so be it, then, they will indeed be poverty-stricken. The problem many workers don’t yet understand is that capitalism is not going give them back their previous wage-levels or their pensions without a fierce struggle. The problem is that people are so used to the existence of capitalism, they’re so used to the idea that you have to work for somebody else, that they don’t see that they can just take it over. If all the owners of capital were to disappear, the world would be exactly the same, we would have the same farms, the same factories. Yet if all the workers disappeared, then everyone would starve to death. We have this wonderful and enormous productive technology, a world full of factories and farms. And there is absolutely no reason why people shouldn’t simply take political and economic control and start providing for the needs of all.

For more see here , and here

A DIVIDED CITY

A walk down the streets of Houston would impress most visitors. The beautifully appointed offices of some of the most powerful corporations in the USA could not fail to impress, but behind the facade of opulence lurks the poverty of many of their employees. Janitor Alice McAfee got a standing ovation when she spoke to the NAACP convention in Houston about her plight and that of over 3,000 fellow janitors in the city. "The Houston janitors are currently paid an hourly wage of $8.35 and earn an average of $8,684 annually, despite cleaning the offices of some of the largest and most powerful corporations in the world—Chevron, ExxonMobil, Wells Fargo, Shell Oil, JPMorgan Chase and others in the "City of Millionaires." They are asking building owners and cleaning contractors for a raise to $10 an hour over the next three years; the counter offer is a $0.50 pay raise phased in over five years, virtually guaranteeing that the janitors continue to live in poverty." (The Nation, 13 July) Houston may well be called the City of Millionaires but it is also the city of paupers. RD

PROGRESSING BACKWARDS

Politicians, supported by the mass media are always telling us that capitalism is the most efficient way to run modern society. Inside Europe as the economic crisis worsens that claim looks more and more insupportable. "Some 5.7 million Spaniards, equivalent to almost one in four, are now seeking work, according to official figures. The country's unemployment rate rose to 24.6% during the April to June quarter, up from 24.4% during the previous quarter. That is the highest rate since the mid-1970s, when the right-wing dictator Francisco Franco died and the country reintroduced democracy." (BBC News, 27 July) Forty years of so-called progressive democratic capitalism and one in four is unemployed - some progress!  RD

Past Reflections 3

 It’s a pity that there is so little written information about the history of Glasgow branch. However,  when I joined in 1963 there were still two founder members of the branch  and some other members who knew stories about the branch’s early days while the old minute books contained some really fascinating tales, but be warned, what I can tell is mostly hearsay. 

There may have been individual members in Glasgow before the branch was formed because in 1907 the SOCIALIST STANDARD carried details of seven newsagents in the city where the S/S could be obtained.

The founding of the branch was reported in the December 1924 issue of the S/S, but branch details in the S/S vanished in August 1927 so there was no Glasgow branch until the details re-appeared in October 1928. Included among the early members were John Higgins, Tommy Egan, Harry Watson, “Professor” Barclay, W. Falconer and Alex Shaw.

I’ve already written about the contribution made by Alex Shaw but it was probably John Higgins who did most to establish the party in Glasgow. Higgins was fearless in face of hostility: for example, in 1930 he spoke at a meeting which included a number of communists in the audience, and he read out part of a bill placed before the German Reichstag which included a proposal to expropriate the entire property of all Eastern Jews without compensation. The communists raged at the Nazis for this  until Higgins revealed that it was the German communists who were proposing this bill and this can be verified in Alan Bullock’s “Hitler, a study in tyranny” (pages 172/3).

Another outstanding speaker, this time indoors, was Tony Mulheron. He paced about the platform, speaking without notes, and was as good to watch as to listen to. Paul Foot of the SWP was a big fan of Tony and so was I. One evening during the war Tony was speaking at an outdoor meeting and Esme Percy, a well known actor of the day, joined the audience and saw fit to criticise Tony’s diction. Tony’s response was to point out that all over the world millions of people were being killed, maimed and enslaved yet here’s a man who is only concerned with trivia. After the meeting a chastened Percy was nevertheless invited to accompany Tony and some members to the home of a comrade who had a supply of hard–to-get whisky!

Tony had a fondness for using grandiose-sounding words. For example, he described a short spell when he was out of the party in the 1930s as “a brief hiatus”, and the water for his whisky was “aqua pura”. A bit pretentious? Maybe, but what a character and what a speaker.

Vic Vanni

A class education 2

Once again Scottish universities are in the spotlight over their failure to recruit sufficient numbers of students from deprived backgrounds. Scottish universities will take 40 years to achieve fair access for students from the most deprived backgrounds at current rates of progress, according to a new report. The proportion of Scots from the 20% least advantaged backgrounds going to university increased by just one percentage point – from 10.6% to 11.6% – between 2005/06 and 2010/11. St Andrews, where Prince William studied, recruiting only 13 students from the most deprived backgrounds in Scotland in 2010/11.

The universities– while accepting more can be done – feels the issue is not of its own making. Numerous previous studies have shown that the educational gap between the haves and have-nots opens up from nursery onwards – and can become insurmountable by the time pupils start sitting exams such as Standard Grades and Highers.

THE FUTURE IS BLEAK

One of the illusions beloved of supporters of capitalism is that although workers may suffer some social problems these are gradually lessening and the future will see them disappear. The following report seems to knock that notion on the head. "Struggling consumers spend the equivalent of one week a year worrying about money as personal debt soars, says a study. With families facing the toughest squeeze on living standards since the Twenties, it found the average person spends three hours and 15 minutes a week fretting over finances. The Which? Quarterly Consumer Report into how we are coping with the downturn says more are being forced to take on new forms of debt to make ends meet." (Daily Mail, 24 July) RD

Producers and Parasites

The only useful people today are those engaged in producing the wealth. It is they alone who must eliminate the parasites and usher in a new social order. The future of civilisation is in the hands of the producing class.

 Many other workers talk about “my job.” It is partly habit and partly belief that in some way or other it is their job. The job is regarded as a sort of fundamental right, but the truth of the matter is that the worker has not got a job. It is the other fellow’s job. The capitalist own the means of wealth production; therefore, they own the job. When the capitalists tells the workers to “get out” They are obeyed. The workers have to leave. They are obliged to leave “their jobs” behind. Dependence upon a job and the wages are the invisible chain that binds us to the machine cuts them to the quick. The workers must struggle to keep up their wages and to better their standard of living. In this struggle the odds are always against them and on the side of the capitalists. The competition for jobs keeps wages down to a minimum. If, for a time, there is a brief industrial boom, it is always followed by a crisis that creates a jobless army. Every improvement, every invention that increases production, is a further economic fetter on labour.

The worker under capitalism is a “free” man. He is free to go where he likes. He does not have to work for any one boss. If he does not like an employer he can quit, but if he does not like the employing class he can not quit, unless he is prepared to starve. He is a slave to a class. His freedom amounts to having a longer chain than his predecessors – the serf or chattel slave. It is true that he is not bought and sold and that he has liberties unknown to former generations of workers. It is also true that he takes greater risks than former workers and that while he is not sold he is obliged to sell himself.

Employees are often described as wage-slaves with good reason.  The worker sells his labour-power and as he cannot deliver that without delivering himself he is as much a slave as any worker that ever responded to the crack of his master’s whip. The modern whip is an economic one. The lash of hunger, or the fear of it for himself and those depending upon him, keeps him ever on the jump. The slave of old knew little of occupational diseases. He knew nothing of that scourge that drives the modern worker on – unemployment. The industrial scrapheap was unknown to the serf.  In the past an escaped slave was hunted down. It was a cruel system, but no less cruel is the present system in which the slave has to hunt the master.

The worker finds himself in the position described by Robert Burns:

“See yonder poor, o'er – labour'd wight,
So abject, mean, and vile,
Who begs a brother of the earth
To give him leave to toil,
And see his lordly fellow-worm
The poor petition spurn,
Unmindful, tho’ a weeping wife
And helpless offspring mourn.”
Many workers know their condition while others have an instinctive feeling that they are getting the worse of it. The question these workers may ask is “What are we going to do about it?” Some prefer to take what they think is the easiest way and slide along and make the “best” of a bad job. When asked to organise in the struggle of their class, they want to know why they should pay to keep labour leaders and union headquarters. They prefer to “spend their own money.” They are individualists and tell us that they are capable of fighting their own battles. That is just exactly the way the employing class want them to think. The employer has no fear of an individual worker. He has him where he wants him so long as he is unorganised. Some individual workers get ahead by allowing themselves to be used as tools against the others. The individual worker, however, who becomes militant and goes to the boss with his demands, if he is able to reach the boss at all, usually gets turned down and sometimes gets fired from the job altogether. When the workers go individually to the employer, cap in hand, they are met with the sharp retort “What do you want?”

It is the other way about when the workers bargain collectively. Employers understand the power of organisation and are aware of the thousands standing behind the union delegate. When the representatives of the workers enter the office of the capitalist Their attitude is “ what can I do for you? Sit down, let’s talk.” Negotiate – arbitrate – compromise; these are the weapons the capitalists are obliged to resort to. They know that the workers have one thing they can not take away from them. That is their numbers. Organisation is the greatest weapon that the workers have at their disposal. All that the workers have ever gained has been through the power of organisation. The power of numbers alone, however, is not suffice. There must be the  power of knowledge to back it up. The struggle between capital and labour at first sight appears as a struggle for more pay and better working conditions. That is all that the average worker sees in the struggle. Many of the capitalists see no more than that. They merely struggle to keep down wages, as part of their production expenses. Others know that this is only the surface and at the back of it is the question of the ownership of the tools – the machinery of production, the conquest of political power and taking possession of the industries. The all important thing is the building of powerful political party of the proletariat, a united force with a common understanding and a common will to action, moving along a definite course, not pulling in different directions. Its present task is to ripen the proletariat as a political class, reaching out to our fellow workers to influence and change their social outlook. Revolutionaries do not confine themselves to cursing labour leaders, rotten enough as many of them are. The elimination of the union traitor and bureaucrat labor can only be brought about by an enlightened membership.

 Everywhere that workers gather the aim of socialists is to keep class issues before them. Certain economic laws govern the capitalist system, A knowledge of those laws is an important tool, if the workers are going to struggle against their exploiters. What makes the class struggle a political struggle is the coercive power of  the State which upholds the power of the owning class when workers resist the rule and robbery of their masters. Organisation must be met with organisation. It is the existence of class society with the State power in the hands of the exploiters of labour that determines the need for a political party to combat the ruling class and organize the working class for its final act as a class, namely, the political overthrow of capitalism.

Adapted from Kerachers "Producers and Parasites"
 
Appendix

The Proletarian Party of America's John Keracher was born January 16, 1880, in Dundee, emigrating to the United States in 1909. Keracher colleagues included a number of individuals who had cut their ideological teeth in the “impossibilist” Socialist Party of Canada, eschewing the ameliorative reforms traditionally cobbled on to the socialist program for their reinforcement of the capitalist system. As far back as 1914 there was a group in Michigan that had succeeded in controlling the state organization and adopting an anti-reform program, as opposed to the opportunistic program of the Socialist Party. The center of this opposition was the city of Detroit and was inspired to some degree by comrades from England and Canada who adhered to the Socialist Party of Great Britain and the Socialist Party of Canada, respectively. The group was very active in socialist educational matters.

"We will leave reforms of all kinds to those who think the present social system worth reforming. For our part, the revolutionary watchword, “the abolition of the system,” will be the keynote" he wrote. Keracher was also critical of the semi-syndicalism of the Industrial Workers of the World and its industrial unionism explaining that "The framework of the new social order requires no building within the old. It is already built — in the form of highly organized, socialized production, which by the way is in no way connected with industrial unionism. The task that presents itself is to abolish the present class ownership. Let us not fritter away our time dreaming about how affairs will be administered in the future social order. Let us rather take up the work of clarifying out movement; let us cast out the dross of legislative reform, and carry to the working class an uncompromising message, rallying them for the first step — the conquest of political power." Nor was Keracher a proponent of nationalisation, saying  "workers should not allow themselves to be fooled into believing that State capitalism is in their interest, that it will “save” them... Complete State capitalism, government ownership of all property, will not necessarily improve the lot of the workers one iota. They will still be wage slaves, producing surplus-values which will be appropriated by the government "
In declining affiliation to Comintern the PPA responded "The following must be understood and accepted by any group that expects to function as the Communist organization in America. Firstly, America has not been, is not, and will not be for a considerable time upon the verge of revolution. The faith of the masses in the bourgeois political institutions of America has not broken and does not show any signs of breaking. The psychology of Americans is such that the ruling class would not experience any great difficulty in mobilizing national sentiment against either Japan or England. They are still thoroughly possessed of the provincial psychology which arose with America’s frontier development." It argued that “it is impossible to accomplish a social revolution of the character of the proletarian revolution without the conscious support of the great mass of the people.” and that "A broad use of parliaments and parliamentary campaigns for the purpose of educating the masses to Communism is absolutely necessary, doubly so in countries like the United States where the masses still have faith in bourgeois parliaments." It contended that it would be necessary for the majority of the workers to have a clear conception of the principles of Marxism in order to carry out the Revolution.

A Class Education

Despite some of Scotland’s most exclusive fee-paying secondary schools charging more than £30,000 for a year’s tuition, 80 per cent of their annual rates bills are being paid for by ­councils – because they are classed as charities. The classification of private schools as charities, not businesses, means the public purse foots almost all of each independent school’s annual non-domestic rates bill – even although they are already exempt from income and corporation tax. As a result, Scotland’s most prestigious private schools enjoy massive tax relief despite charging colossal annual fees while state schools struggle. In Glasgow and Edinburgh, the state schools’ non-domestic rates bill in 2011 was £23.6million, paid for by each council.

Edinburgh’s George Watson’s College, was spared £330,119 of charges.

Fettes charges £27,150 a year for senior school boarders. Its bill for non-domestic rates last year was £209,139, but an 80% discount meant the school had £167,311 taken off. By contrast, Wester Hailes Education Centre  which had 40.5% of its pupils registered for free school meals last year attracted an NDR bill last year of £261,873. The charge was paid in full by the local authority, six times as much NDR as Fettes.

Brian Boyd, emeritus professor of education at the University of Strathclyde, said: "The idea that Fettes can pay proportionately less in rates than a comprehensive school in Drumchapel is repugnant." He says that “Charitable status has been shown to be little more than a smokescreen for subsidies"

Glasgow’s ­Hutchesons’ Grammar charge up to £9459 for a year’s education. In the past three years the school’s rates bill totalled around £924,923. As a charity, the trust who run the school have had £739,934 of that paid by the taxpayer. Deemed a charity because 2.2 per cent of children at Hutchesons’ Grammar pay no fees.

Glasgow City Council figures show the charge for state schools was £13.8m in 2011. More than 95% was paid. Over the past three years, the total bill for Edinburgh's 16 private schools was £6.32m, but around £5.1m was knocked off.

Glenalmond College, a Perthshire boarding school had £126,747 chopped off its rates bill last year, Gordonstoun was liable for £148,086 last year, but got a reduction of £118,468. This charity charges up to £31,839 a year for its services.

DESPERATE FOR WORK

Fifty-four people trying to reach Italy from Libya have died of thirst after a 15-day voyage in which their rubber boat gradually deflated, the United Nations Refugee Agency (UNHCR) has said, citing the sole survivor. The agency said on Tuesday that the only survivor, an Eritrean national, was rescued by the Tunisian coastguard in a state of advanced dehydration and clinging to the remains of the boat after being spotted by fishermen the previous night. "The Eritrean said that he left Libya towards the end of June as part of a 55-strong group, half of whom came from Eritrea. "He told us that there were immediately problems on the boat, that unfortunately they weren't even allowed to take a bottle of water and so once they got lost and the voyage went on, people started to feel unwell and die because of the lack of water," Laura Boldrini, a UN spokeswoman, told reporters." (Aljazeera, 10 July) Workers are so desperate for work they are dying of thirst. Where is that notion of "lazy workers" now we wonder? RD

Fact of the Day

8 million Italians, 11% of the population, are living in poverty, while nearly one in four living in southern Italy are defined as poor.

http://thecitizen.co.tz/editorial-analysis/-/24263-8-million-italians-living-in-poverty-as-outlook-worsens

THE CLASS WAR

Inside Israel like every country in the capitalism world there are many problems but the one that most motivates the owning class is how do they keep a grip on their class ownership. One of the most obvious ways is to frighten other owners away from their possessions. "The navy is looking to purchase four 1,200-ton vessels which will be required to accommodate an advanced radar system, a helicopter as well as a launch system capable of firing long-range air defence and surface-to-surface missiles. OC Navy Adm. Ram Rothberg said that the navy needed the new ships to effectively protect the state's economic waters, the gas rigs and the pipelines that will carry the gas to Israelis shores." (Jerusalem Post, 9 July) Hey, Israel workers may have problems but the main job of the Israel capitalists is to frighten other capitalists. RD

THE CAUSE OF WAR

Socialists are probably the only people that say it but modern war is caused by capitalist countries quarrelling over trade routes, sources of raw materials and spheres of political influence so we may be the only people who are concerned about this development in the Mediterranean where Israel and Turkey are in dispute over who owns recently discovered gas sources. "Israel can support and secure the rigs that we are going to have in the Mediterranean," Landau told a security conference when asked if Israel would safeguard the gas platforms after the warship challenge floated last week by Turkish Prime Minister Recep Tayyip Erdogan. "That's the simple answer that I can give," Landau said. .... Landau, whose formal title is national infrastructure minister, said there had been no claim so far by any state that the Tamar and Leviathan natural gas fields, estimated to be worth tens of billions of dollars, do not belong to Israel." (Haaretz, 22 July) Every war so far has always started with diplomatic nonsense about geography, ethics, philosophy and other high sounding subjects but usually descends into military conflict. This area has the potential revenue of 150 billion euros so look out for future conflict. RD

Fact of the Day

According to the United Nations Industrial Development Organization post-harvest losses in Asia are estimated at around 30 percent of yearly food production which means at least 100 million tons of food is lost every year.
In rice-producing countries all over Asia, rats are blamed for the loss of 6 percent of production, which is equivalent to the amount that 225 million Asians consume in a year.

As others see us 2

The late Paul Foot, the veteran SWPer, and nephew of the ex Labour Party leader, Michael Foot,  in an article in the Socialist Worker called "Why I became a Socialist" recalls hearing a member of the SPGB speaking on an outdoor platform where that member, who had worked in the shipyards, told of his disgust at the celebrations in Clydebank of the local yards getting a contract, because it meant more misery for workers on Tyneside and Belfast. He attended a lot of SPGB meetings when he worked in Glasgow for the Daily Record. He, of course, dismissed the Socialist Party as impossibilists.

An excerpt from a letter (15th January 2003) wrote of his memories of the SPGB in Glasgow in the early sixties, when he was living and working there as a journalist:

    "I went to Glasgow for my first job (a reporter on the Daily Record) in September 1961. I joined the Young Socialists and the Woodside Labour party. A highly influential figure in the Woodside YS at the time was Vic Vanni, a big, very good-looking and persuausive bloke, a sheet metal worker, whose father had come to Glasgow from Italy, and ran a fish and chip shop. I became friendly with Vic and liked his sense of humour. He was greatly influenced by the SPGB, and many times I went with him and others to hear the SPGB lecturers in St Andrews Hall (I think). We also heard SPGB speakers like Dick Donnelly speak at open air meetings off Sauchiehall St. Before I left Glasgow in 1964, Vic joined the SPGB and I think he is still a member, probably a very senior one. . .These SPGB speakers had a wonderful, proletarian, down-to-earth way of conveying Marxist ideas. They were all, without exception, sardonic and witty speakers, and they made a profound impression on me. In particular, they scornfully rejected the idea - prevalent at the time, that Russia etc were Socialist countries . . ." 

 However Paul Foot was not totally convinced by the Party's case "I was, however, always irritated by their passivity, brought on by the ludicrous notion that the workers had to be educated to socialism, and do not have to fight for it"

And since we have mentioned Michael Foot it is worth recalling his memories of the SPGB too:
 “Of all the sights and sounds which attracted me on my first arrival to live in London in the mid-thirties, one combined operation left a lingering, individual spell. I naturally went to Hyde Park to hear the orators, the best of the many free entertainments on offer in the capital. I heard the purest milk of the world flowing, then as now, from the platform of the Socialist Party of Great Britain." Michael Foot, Debts of Honour.

 

Giving their blood for others

Obviously Socialist Courier wonders why a member of the working class should randomly slaughter 14 people in a movie theater. But one lesser publicised fact was that Colorado residents flooded local blood centers and hospitals after the deadly shooting eager to help - literally with their on blood.

About 17.2 million units of blood are collected in the U.S. each year of hich 15 million are transfused. Nearly 11 million donors give blood each year, including about 3.1 million first-timers

Fact of the Day

Critics claim that Britain is over-crowded. They are wrong, whatever you might feel about being packed into a crushed commuter carriage. The UK is only the 39th most crowded nation; we could add almost 10 times the latest population increase and still be less packed than the likes of Belgium or Holland.

A housing crisis

Scotland is facing a housing crisis with local councils planning for 180,000 fewer homes than are needed for the nation’s growing population. Unless there are more homes, the analysis suggests, Scots will face rising house prices, a struggle to secure rented accommodation and family friction as young people are forced to spend years ­living with their parents. Professor Glen Bramley, a lecturer in urban studies at ­Heriot-Watt University, said the consequences of a housing shortage would ripple out across Scotland. “A shortage means house prices rise and only the most affluent can ­afford to buy. This means the middle classes may rent ­instead of buy and they in turn push out other people from the rental market, which puts more pressure on social housing. It will mean young people have to live longer with their parents and that has its own problems if the house is small.”
Planning experts Geddes Consulting studied the housing plans of local authorities in the four main city regions –south-east Scotland, Glasgow and the Clyde Valley, Aberdeen and Aberdeenshire, and Tayside and East Fife. Overall, it says, according to the plans drawn up by the Strategic Development Plan Authorities (SDPAs) that cover the four areas, 352,670 new homes will be needed over the next 12 years. However, the same authorities have set aside land capable of siting just 173,000 new homes, leaving a shortfall of 179,000 homes.

Aberdeen City and Aberdeenshire have stated that they will require 35,630 homes before 2027, but, according to their most recent development plans, their land supply is enough to cover just 16,000 new homes, leaving a shortfall of 19,630. Glasgow and Clyde Valley have stated that they will require 183,500 new homes before 2025, but the land set aside for building will allow 85,000 new homes, leaving a shortfall of 98,500. The South East of Scotland (SESplan), which covers East Lothian, Edinburgh, parts of Fife, Midlothian, Scottish Borders and West Lothian, have a projected need of 107,500 new homes but have set aside land for 60,000, leaving a shortfall of 47,500. Similarly, the TAYplan, which covers Dundee City, Angus, East Fife and St Andrews and Perth and Kinross need 26,040 but have land ready for 12,000, leaving a projected shortfall of 14,040.

Fact of the Day

The bottom 50% of American households held just 1.1% of the nation's wealth in 2010 while the top 10% of earners held a whopping 74.5% of the nation's wealth during the same period.

 http://www.ibtimes.com/articles/365404/20120720/bottom-50-percent-1-wealth-income-inequality.htm

Who owns the North Pole - Part 50

We have now reached a land-mark half-century of posts titled Who Owns the North Pole. Why bother? Because it raises questions of national sovereignty over a previously ecologically vulnerable region that will become increasingly exploited for its natural resources as a consequence of climate change. The issue of the arctic reveals the nature of capitalist expansion.

Dan Sullivan, a former state attorney general, is the commissioner of Alaska's Department of Natural Resources says that Alaska has about 40 billion barrels of technically recoverable oil and more than 200 trillion cubic feet of conventional gas.with some experts predicting that the United States could become the largest hydrocarbon producer in the word -- outstripping Saudi Arabia and Russia -- by 2020. Developing Arctic resources will promote our American interests in many ways: securing a politically stable, long-term supply of domestic energy; boosting U.S. economic growth and jobs; reducing the federal trade deficit; and strengthening global leadership on energy issues. Leading academic researchers and economists in Alaska have estimated that oil production from Alaska's outer continental shelf will bring federal revenues of approximately $167 billion over 50 years, and create 55,000 jobs throughout the country.

Sullivan argues that America possesses some of the highest standards in the world for environmental protection. "Developing U.S. resources in the Arctic has the added benefit of enhancing global environmental protection. One of the arguments used by Arctic drilling opponents is that "we aren't ready," but it is obvious that no matter what preparations are made, they will argue that it isn't enough...Delay or disallow responsible resource development, the end result is not to protect the environment, but to drive hydrocarbon investment and production to countries with much lower environmental standards and enforcement capacity. Last year, it was reported that between 5 million and 20 million tons of oil leak in Russia per year. This is equivalent to a Deepwater Horizon blowout about every two months. Russia had an estimated 18,000 oil pipeline ruptures in 2010 -- the figure for the U.S. that year was 341. If we do not pursue responsible development in the Arctic, countries such as Russia -- perhaps even China, which is interested in securing access to Arctic hydrocarbon resources -- will dominate energy production from the Arctic. Such a scenario does not bode well for the global environment."

When Sullivan cites Shell as an example of good providence, it seems he conveniently forgets about their operations in the Niger Delta. The estimated oil spill in the Niger Delta ecosystem over the past 50 years is equivalent to about one “Exxon Valdez” disaster each year.

SOCIALISM SOLVES ALL PROBLEMS

Inside capitalism we have countries, inside socialism we will have no countries. We will live in a worldwide society. There will be no borders. The German energy company EWE has begun construction on an offshore wind park in the North Sea, but Germany and the Netherlands can't agree on which side of the border it is on. "When the Riffgat offshore wind farm is finally finished, it will include 30 gigantic wind turbines jutting above the waves of the North Sea. The columns to be driven into the sea floor are fully 70 meters (230 feet) long and the first of them have already descended to the sea floor. Construction has already gotten underway. And yet, despite the building activity, nobody quite knows if the project site is part of Germany or part of the Netherlands." (Spiegel, 9 July) Inside capitalism one group will win another lose, inside socialism the human race would gain. RD

Failing to report

Roche, one of the world's biggest drug companies, is at the centre of an investigation after failing to report that people died while taking their medication. Roche, which made profits of £6.3 billion in 2010, has a legal duty to examine every suspected side effect and report them to regulators around the world so that potential safety concerns can be investigated. This means that each side effect reported to the patient support call centre should have been immediately sent to the safety team to be assessed. These must then be sent to regulators – within 15 days for the most serious reactions – even if no link between the drug and the reaction be proved.

15,000 people died while taking its medicines. Roche also failed to pass on a further 65,000 reports of suspected side effects that were recorded by patient.

http://www.dailymail.co.uk/news/article-2170317/Roche-investigation-UK-watchdogs-80-000-adverse-reactions.html

How other see us

How the the Small Party of Glesga' Bookies (as the local branch in Glasgow was known in its early days because, it turns out, a number of its members were bookies, an illegal occupation back then) has been seen by others.

“At the Barras market in Glasgow about 25 years ago open air political meetings were not uncommon, and the best were conducted by a fiery brand of working-class revolutionaries called the Socialist Party of Great Britain. Founded about a hundred years ago (and still going, I’m glad to say) and proudly hostile to all other allegedly socialist or communist political parties, they had several fine speakers and in those less apathetic days could always raise a fair crowd of the starvelings whom they hoped to rouse from their slumber. Scorn for their hearers’ meek acceptance of poverty and satire upon the quality of goods and services supplied to the workers were prominent in their arguments, as when the speaker would draw our attention to an evil-looking greasyspoon caff and recite parts of the horrible menu, concluding with Stomach pump free of charge. Once, when challenged by a wee bauchle with scarce a backside to his trousers on the grounds that ‘under socialism we widnae be individuals’, the agitator on the soapbox paused from his remarks on the rival attraction of ‘Jehovah’s Jazzband’ (a Salvation Army ensemble) just down the street, fixed him with a baleful eye, and loosed a withering tirade about how the questioner was obviously a proud specimen of individuality, with your individual Giro and your individual manky shirt and your individual football scarf and your individual council flat and your individual Scotch pie for your individual dinner . . .It went on for ages, a tour de force of flyting”. [Kenneth Wright, Glasgow Herald, 13 February 2001.]

"The Labour Party, Trades Council and the STUC . . . were largely responsible for securing the biggest postwar demonstration in Glasgow till then, at the start of the 1960s. Incidentally, that was the demonstration that produced the slogan to end all sectarian slogans. Just as we were turning round the corner of Sauchiehall Street two grim stalwarts of the Socialist Party of Great Britain were standing heralding the march with a huge banner and slogan which read: ‘This demonstration is useless – You must first destroy capitalism.” [Janet and Norman Buchan, “The Campaign in Scotland”, in The CND Story, edited by Hohn Minnion and Philip Bolsover, 1983, p. 53.]

Scotland's most famous living anarchist, Stuart Christie:

    [Writing of the Workers Open Forum that existed in Glasgow in the 50s and 60s] I remember one exemplary SPGB graduate speaker mounting the platform, drawing a ten-shilling note from his pocket and holding it dangling from his thumb and forefinger for a quarter of an hour or so while delivering a devastatingly witty attack on money. The audience of thirty or so were spellbound. There was not a single heckler, until he set fire to it”. My Granny Made Me An Anarchist: 1946-1964, 2003, p. 157.

CONSPICUOUS CONSUMPTION

There are many events inside the capitalist system that sicken socialists. One of them is reports of world hunger, starvation and death caused by poverty whilst the owning class indulge themselves with all sorts of luxuries. This is a particularly nasty example. "If you're feeling flush with money, this could be the ultimate domestic accessory on which to splash your cash. Toilets made from solid gold have been created by a company that specialises in manufacturing luxury loos for super yachts. Designers customised the bathrooms on board a new £12 million Majesty 135 yacht at the request of a wealthy Arab client. Now other multi-millionaires are said to be queuing up for the bespoke toilets and bidets that cost up to £10,000. Made from regular porcelain, the toilets are then coated in three layers of 21 carat gold. For those who want an extra bit of sparkle, a platinum finish is also available." (Daily Mail, 5 July) Its time we flushed capitalism down history's toilet. RD

RECESSION? WHAT RECESSION?

Not all of the population is experiencing an economic downturn as can be seen from the returns from the auction house Christie's. "A record breaking £53.8 million price tag for an abstract painting by Mark Rothko has helped Christie's to deliver a healthy surge in art sales as wealthy collectors splashed out on postwar masterpieces. The auction houses half-year art sales jumped by 13 per cent to £2.2 billion in a sign that the top end of the market remains largely exempt from global economic uncertainty." (Times, 18 July) The Rotho is by no means unique as a Yves Klein painting went for £23.6 million and a Henry Moore sculpture fetched more than £19 million. The owning class seem to be surviving the recession rather well. RD

scotland's health shame

Scotland's suicide rate is almost 80% higher than England and Wales. More people die by suicide than from road accidents and drug deaths put together. It is the leading cause of death in young men. Over the past year, Tayside Police has collected information about every call where someone was at risk of suicide. It attended about 150 attempted or threatened suicides every month. On average, four suicide deaths a month in just Tayside.

 Detective Chief Inspector Gordon Milne said of the figures: "Extend that out across the whole of Scotland; there is a significant number of calls every day, every week, every month, every year, involving people who are in mental health crisis."

The mental health charity SAMH said even these latest figures from Tayside were still just the tip of the iceberg. Kirsty Keay, the charity's national programme manager for suicide prevention, said: "Suicide devastates Scotland's communities..."

A quarter of patients who end up in intensive care in Scotland have drink problems, most with chronic alcohol disease. The study of 771 patients across all 24 intensive care units published by the Anaesthesia medical journal, said many young and less well off people were affected.

Dr Timothy Geary, an anaesthetic registrar at Glasgow's Victoria Infirmary and report co-author, said: "Alcohol disease adversely affects the outcome of critically ill patients and the burden of this in Scotland is higher than elsewhere in the UK." He added: "In Scotland, the frequency and volume of alcohol consumed is significantly higher than in the rest of the UK, as is the proportion of people with hazardous drinking habits. This corresponds to higher death rates, particularly for Scottish men, but only indicates a fraction of the deaths attributed to alcohol."

DEALING WITH HOMELESSNESS

All over the world millions of workers find themselves homeless but in the city of Guangzhou in China they have come up with a "solution" to the problem of homelessness. "Sharp concrete spikes are cropping up under China's city bridges in a bid to stop homeless people from sleeping there. Pictures of the lethal 20cm high barbs in Guangzhou have sparked online outrage with citizens angry that authorities are trying to 'hide' the homelessness problem. A staggering 200 million of China's 1.4 billion population are believed to be living on the streets, according to recent statistics." (Daily Mail, 3 July) No doubt in some American and European cities the local authorities will soon be considering this Chinese "solution" to homelessness! RD

CLASS DETERMINED BY OWNERSHIP

You can always rely on the political experts in the HM government to come up with facts that are blindingly obvious. "Published this month, the all-party parliamentary group report, 7 Key Truths About Social Mobility, confirms the OECD's findings that the UK has the lowest social mobility rate compared with any other "developed" country and warns that "it does not appear to be improving". Key findings from the report include the discovery that, by the age of just three years old, the "class" of British children is already defined. Also, half of all British children's future prospects will be determined by the circumstances of their parents." (Aljazeera, 27 June) All over the world we live in a class divided society wherein the majority own little or nothing but their ability to work for a wage or a salary and must sell this ability to the owning class who live off the resulting profit. We don't need "experts" to tell us this. RD

Fact of the Day

The six heirs to the Walmart fortune are worth as much as over 40% of all American households.

The Walton family was worth $89.5 billion in 2010, the same as the bottom 41.5% of U.S. families combined, according to Josh Bivens of the Economic Policy Institute. That's 48.8 million American households in total.

Glasgow branch of the Socialist Party

MARYHILL COMMUNITY CENTRAL HALLS
BRANCH MEETING AT 8.30pm
WEDNESDAY JULY 18,
 

HOW LENIN DISTORTED MARXISM

SPEAKER RICHARD DONNELLY

“Of all the distortions of socialism that we have to deal with probably the most obvious one is that the USSR had something to do with socialism. The failure of the USSR to deal with the problems of the working class has been portrayed as the failure of socialism. In this discussion session I hope to have a look at how this distortion became possible and how many workers have become confused about Marxism and Leninism.”

.

LIQUIDITY PROBLEMS

Times are tough even for members of the capitalist class as this news item shows. "Landscape artist John Constable's The Lock has become one of the most expensive British paintings ever sold, fetching £22.4m at auction at Christie's in London yesterday. The sale is also highly controversial. .... But as the BBC reports, the Constable's sale by Baroness Carmen Thyssen-Bornemisza has prompted Sir Norman Rosenthal, one of the European art world's most respected art curators, to resign as a trustee of Madrid's Museo Thyssen-Bornemisza in protest. The baroness called the sale "very painful" but said she was forced to part with the painting because the current economic crisis had left her with "no liquidity"." (The Week, 4 July) The Baroness once the beauty queen Miss Spain has been finding things tough recently but £22.4m should keep the wolf from the door for a little while we imagine. RD

doom and gloom

Insolvency body R3 figures could mean 274 retail businesses and 30 hotels in Scotland had a "high risk" of failure. A further 1,238 retailers and 137 hoteliers were "vulnerable to failure" in the next year.

 R3 indicated 26.15% of all retail firms and 17.99% of all hotels were at risk.

 A report last week by accountancy firm PKF suggested Edinburgh's hotels may struggle later this year to compensate for a poor performance in the spring. Its hotel survey for May reported a fall in both occupancy rates and revenues for the third month in a row.

Fact of the Day

In 2012, the World Economic Forum calculated that 1 per cent of the world's population - just 70 million people - own half of the world's wealth.

http://www.theage.com.au/opinion/politics/as-long-as-the-rich-can-speculate-on-food-the-worlds-poor-go-hungry-20120630-219ja.html

Past Reflections 2

 Another installment in the recollections of members and once again from Glasgow member Victor Vanni.

The party’s heyday began with WW2 and lasted into the early 1950’s. During this period party activities and membership grew and this certainly applied to Glasgow branch. Huge audiences attended indoor and outdoor meetings and from 1945 to 1948 the branch even had a rented shop and eventually enough members to form a second branch in the city until 1961 when the two branches amalgamated.

By the time I joined in 1963 the branch’s activities were really expanding. Several parliamentary and council elections were contested while new, successful outdoor speaking stances were established, but the big day of the week was Sunday when two outdoor meetings were held in both Glasgow and at The Mound in Edinburgh. If Donnelly was the speaker in Glasgow then Shaw spoke in Edinburgh with the order reversed the following week.


These meetings at the Mound were my own favourites. The afternoon meeting was usually good but, the evening meeting was the big event, especially during the three weeks of the Edinburgh Festival when the large audiences included visitors from all over the world and the party’s case would always get a good reception. These meetings created enough interest to get Donnelly interviewed on TV at The Mound and we had a regular following who came every week to see our opponents get a drubbing. These meetings paid-off by getting new recruits for the party and soon there were enough to form an Edinburgh branch.


When the Glasgow contingent returned from Edinburgh they would head for the new branch premises to meet other branch members and swap stories about the meetings in both cities. These premises were provided by the generosity of Sid Earp, a veteran Canadian comrade, who was visiting Glasgow and they enabled the branch to hold its meetings and classes there until 1969 when the building was emptied prior to demolition.


But not all speaking stances were successful. An example of this was in the early 1970’s when the branch decided to try holding outdoor meetings in nearby Paisley, a town with a violent reputation. The meeting was held at 3pm on Saturday afternoons in Dunn Square at Paisley Cross but there was trouble ahead. The problem was that when the pubs closed at 2.30pm local yobs would come to Dunn Square to continue drinking until the pubs re-opened  and they gave us a hard time just because we came from Glasgow.


There were some unpleasant incidents but the end came when at one meeting a burly member of the audience was so angered by one of the yobs that he picked up the man and threw him on to a wooden bench which shattered leaving him howling in agony amid the wreckage. We never went back to Paisley after that.


There are other articles in the SOCIALIST STANDARD dealing with branch history. They are the September 1979 and May 2004 issues. There is also an excellent verbatim report of a debate in Edinburgh in 1970 between us and I.S. The party was represented by two Glasgow members.
Vic Vanni    

CRISIS IN CALIFORNIA

We are quite used to hearing of the awful financial straits that exist in European countries such as Greece and Spain but capitalism's crisis is world wide and it even affects the USA. "Stockton filed for Chapter 9 protection on Thursday, making it the largest American city by population ever to declare bankruptcy. The filing comes after officials were unable to reach a deal with the city's creditors to restructure hundreds of millions of dollars of debt under a state law designed to help municipalities avoid bankruptcy. Stockton, a river port of 290,000, is the first California city to file for bankruptcy since Vallejo, which did so in 2008." (New York Times, 28 June) Capitalism is a world wide system when it enters recession it effects even formerly prosperous California. RD

End of the Dream

No, not third division Rangers FC but the United States of America.

The "American dream"- consisting of the traditional ideals of freedom, equality and an upward social mobility achieved through hard work - turns out to be a myth, according to Howard Friedman, a statistician and health economist at the United Nations. The United States, the land of opportunity is no more.

Friedman drew this conclusion after systematically comparing the United States to 13 other wealthy countries in five key areas: health, education, safety, democracy and equality. All wealthy countries with GDP per capita exceeding $20,000, and have populations of more than 10 million. They are: Australia, Belgium, Canada, France, Germany, Greece, Italy, Japan, Portugal, The Netherlands, South Korea, Spain and the United Kingdom.

In the last 30 years, the gap between rich and poor has widened. The top 1 per cent of US citizens saw their incomes grow by 275 per cent between 1979 and 2007, according to the Congressional Budget Office. At the same time, the bottom one-fifth of US citizens only experienced income growth of 18 per cent. The US has very little socio-economic mobility compared to other wealthy nations. Canada has nearly twice the level of socio-economic mobility as the US.

"The amount of support poor people get in the US is much less than in any other country in terms of social benefits. There's not much of a safety net to help you out. On the other hand, if you do well, you can do very well in the US. In America, if your parents were poor, you were more likely to be poor compared to other countries. The top student from a poor neighborhood has roughly the same chance of graduating from college as the worst student from a wealthy neighborhood" said Friedman.

Americans spend on average nearly two to four times more on healthcare than any other wealthy country, yet have lower life expectancies. Americans are confident that the US education system is one of the best in the world, but again, the data indicates that this perception is not supported by facts. In 1960, the US had the 12th-lowest infant mortality rate in the world, but it sank to 34th by 2008.  The US used to have the highest rate of college education and now it barely makes it into the top 15

A Chinese report on the US said that in the last 20 years, incomes of 90 per cent of US citizens have stagnated, while incomes of the richest 1 per cent have grown by 33 per cent. According to the report, the US has the largest prison population in the world per capita and the highest rate of incarceration. One out of every 132 Americans is behind bars. In his book, Friedman notes that US incarceration and homicide rates are 10 times higher than Japan's. "There's an interesting financial incentive. Not all prisons are run by the state. Those privately run prisons make profits when people are put into jail, so they support laws that improve incarceration," he said

Nothing new in New Zealand

New Zealand today has one of the worst rates of income inequality compared with other developed or wealthy countries. Two-income families are increasingly worse off than single-income families were a generation ago.

Inequality has increased here faster than in any other Organisation for Economic Co-operation and Development (OECD) country. Most of the increase has been the result of larger rises in overall incomes for the top 20 per cent of income earners; and incomes for the bottom 20 per cent have decreased over the two decades from the mid-1980s. To make things worse, wealth is even more unevenly distributed than income and the level of wealth inequality is twice that of income inequality.

The most recent statistics available show wealth inequalities have increased to the extent that the top 10% of the population accounts for 51.8% of the country's net worth, while the bottom 50% of people owns just 5.2%

Over 500,000 people live in households with "negative wealth" - that is, they have more debt than income - and half of New Zealand income earners cannot afford to save.

Those on middle incomes are also bearing the brunt of the rich getting richer and the poor getting poorer, among them 200,000 children living in poverty. Federation of Family Budgeting Services chief executive Raewyn Fox  said she had seen a large increase in the number of people who might be considered "well off" coming in for advice on how to handle their money. She said easy access to credit (another ploy of the rich) was a trap that too many people fell into, without giving thought to the future and something tipping the balance and leaving them in a financially dangerous position.

truth - the wounded casualty of war

“The human rights situation in Libya now is far worse than under the late dictator Muammar Gaddafi,” stated Nasser al-Hawary, researcher with the Libyan Observatory for Human Rights. Hawary is no fan of the Gaddafi regime. The former Salafist and political oponent of Gaddafi was imprisoned numerous times as a poitical dissident by Gaddafi’s secret police. Hawary emerged from his periods of incarceration beaten and bloodied, but not broken.

Despite the interim National Transitional Council’s (NTC) pledge to bring the more than 6,000 detainees currently in detention to trial or to release them, only some have been freed while the atrocities committed by pro-revolutionary rebels have been overlooked. Armed militias controlling the streets and enforcing their version of law and order is a problem even in the major cities where the NTC has supposedly retaken control.

“All the young men here have guns,” former rebel fighter Suheil al Lagi tells IPS. “They are accustomed to sorting out political differences and petty squabbles this way, or they rob people using weapons. The high unemployment and financial hardship is aggravating the situation...This is not the new Libya we fought for and we may have to take up arms again if the corruption and greed continue. This time against the new government,” warns al Lagi.”

Meanwhile in Syria, amidst the slaughter, the propaganda and misinformation war carries on unabated. A government attack on the Syrian village of Tremseh was described by the media as a massacre of innocent civilians. The BBC's Jim Muir says the UN initial findings are more in line with the government's claims that it was attacking what it calls "nests of terrorists" or rebel hideouts.

SPEND, SPEND, SPEND

All over the world capitalism is experiencing an economic recession. Even formerly booming Japan is feeling the pinch with markets in free-fall. Amidst this period of uncertainty and fear there is of course one section of the population that continues to spend, spend, spend as usual. "An apartment that is believed to be the most expensive one-bedroom property in the world is on sale in Tokyo with a price tag of a cool Y1.8 billion (£14.72 million). .... The price means that 1 square foot of the property costs £3,320.33. The owner of the penthouse apartment – whom Sotheby's would only identify as a successful and married businessman – spent 18 months completely refurbishing the property from a four-bedroom family home." (Daily Telegraph, 13 July) The owning class continue to indulge themselves no matter the economic world climate. RD

What is wage slavery?

“At one time in the U.S. in the mid-nineteenth century, a hundred and fifty years ago, working for wage labor was considered not very different from chattel slavery,” so said Noam Chomsky. In the decade between 1846 and 1855, more than three million immigrants came to the United States, with a vast majority of them settling in the free states of the North. By 1855, foreign-born residents were becoming a majority group; immigrants approached or exceeeded half the total population of several Northern cities.The growing industrial economy of the North swallowed these new workers into its factories, employing them for long hours at low wages. These manufacturing jobs were repetitious and sometimes hazardous. And from their meager earnings, Northern labourers had to pay for every one of life's necessities. For some Southerners of the period, the situation of Northern workers looked a lot worse than slavery. In fact, they argued, unlike the "wage slavery" of the North, the slavery system in the South provided food, clothing, medical care, and leisure to slaves, caring for them throughout their lives.

When you sell your labour, you sell yourself, losing the rights of free men and becoming vassals of a monied aristocracy that threatens annihilation to anyone who questions their right to enslave and oppress. The invisible hand of the market clamps on to workers invisible hand-cuffs. Capitalism cannot function unless it subordinates workers, so the employers close ranks and built their class domination backed by the power of the State. But workers are not commodities; they are human beings.

Class inequality increases over time because employers pay workers less than the value of what they produce. However, this exploitative relationship is hidden by the lies that a) employers create jobs and b) workers are lucky to have them. In fact, labour creates all wealth, and capitalists are lucky that workers keep producing it for them.

We are taught that workers who are better off have achieved this position at the expense of workers who are worse off — that men benefit from the oppression of women, that whites benefit from the oppression of blacks, that workers in richer nations benefit from the exploitation of workers in poorer nations, and so on. If this were true, then class solidarity would be impossible. Fortunately, it’s not true at all. There is no middle class. There are only workers with "half-decent" jobs, and workers who don’t have decent jobs. The purpose of pitting workers against one another is to prevent unity. Accepting the lie that some workers benefit from the oppression of others does not serve the need of the oppressed to end their oppression, nor does it serve the need of the working class to unite. On the contrary, it feeds the employers’ strategy of divide and rule. The presumed beneficiaries of oppression feel guilty around their oppressed co-workers who, in turn, feel resentful toward their more ‘privileged’ brothers and sisters. Only employers benefit when workers are divided. The differences in wages and benefits between various sections of the working class go to the employers.  When workers unite, they raise the living standards of all workers.

Capitalism is not a system of fair exchange as argued by free-marketeer propertarians. The interests of employees and employers are sharply at odds.This creates conditions of conflict and employers have to take ever-stronger measures to exert and maintain control. Hostility and resentment among workers thrives. When workers challenge the employers’ right to dictate what happens in the workplace, they challenge capitalism itself. The word of the manager is the law, and endless time and energy is expended rationalising its essential goodness. But where is a person less free than in the typical workplace? Workers are denied bathroom breaks. They cannot leave to care for a sick child. Some workers have been reduced to little better than slave-like conditions. In the current climate of unemployment, the worker has little choice but to submit. And pretend to like it. A medieval peasant had plenty of things to worry about, but the year-round control of daily life was not one of them. Historians points out that in pre-capitalist societies, people toiled relatively few hours over the course of a year compared to what we work now. They toiled and sweated during harvest-time when there was an urgency, true, but there was ample free time during the off-seasons. Holidays were abundant through fairs and holy days – as many as 200 per year. Marx saw that modern industrial production under capitalist conditions would rob workers of control of their lives as they lost control of their work. Unlike the blacksmith or the shoemaker who owned his shop, decided on his own working conditions, shaped his product, and had a say in how his goods were bartered or sold, the modern worker would have little autonomy. His relationships with the people at work would become impersonal and hollow. Clearly, the technological wonders of our capitalist system have not released human beings from the burden of work. They have brought us more work. They have not brought most of us more freedom, but less.

Many working people have unconsciously accepted the conditions that exist as somehow natural, unaware of how the machine is constructed and manipulated to favor elites. Fear and frustration can even make us crave authority. We collaborate in our own oppression. Workers should not permit themselves to be treated like machines, ruled by despots determined to drive down what few freedoms and rights we possess, and to crush our physical and mental health, all in the interest of wage slavery and accumulation of capital.

ANOTHER WORKER DIES

Socialists look at the world differently from other people. maybe that is why this piece of information makes us sick. " Kane Gorny, 22, from Balham, south London, phoned 999 from his bed at St George's Hospital, in Tooting, because he was so thirsty. The inquest heard a nurse failed to give him his diabetes medication and police were sent away when they responded to his call in May 2009. .... Recording a narrative verdict at Westminster Coroners' Court, deputy coroner Dr Shirley Radcliffe said: "Kane was undoubtedly let down by incompetence of staff, poor communication, lack of leadership, both medical and nursing, a culture of assumption." (BBC News, 12 July) Let us face it, if Kane Gorny had been a member of the owning class he would have had the best possible medical attention and he would be alive today. Being a member of the working class in Britain today could mean that you or your children die at 22 years of age just like Kane. RD

DESPERATE WORKERS

In their desperate struggle to survive many workers from Africa try to get to Europe by any means possible. "The only survivor of 54 Africans who tried to cross to Italy in an inflatable boat has described throwing overboard the bodies of fellow passengers who died during the voyage. Abbes Settou, from Eritrea, who was rescued by Tunisian fishermen, said the migrants, including three members of his family, and ten women, slowly died of hunger, thirst and exhaustion." (Times, 12 July) According to the UN High Commissioner for Refugees (UNHCR) some 170 migrant have died attempting the Mediterranean crossing this year. Capitalism's hellish conditions force workers into unbearable situations. RD

take a pill

Half a million more anti-depressant pills have been prescribed for Scots.  5,015,323 anti-depressants which include Prozac and Citalepram were dispensed by the NHS in 2011-12

Fact of the day

Data of the Delhi government states that the per capita income in the national capital is 176, 000 Rupees yearly, but the truth seems to something different as one person dies of huger or poverty in every week here. An under-estimate according to those in the field.

"Autopsies of the abandoned and homeless are completed in a routine fashion. The investigating officers hardly ever try to find their relatives and attempt to understand the reason behind the death,'' said an NGO worker. Not all the deaths accounted for. Many are never brought to public notice

Trump in a bunker

There has been plenty of coverage of Donald Trump's newly opened golf course and his campaign agains wind-power but less about just where his enormous wealth came from. In March 2011 Forbes estimated Trump's net worth to be $2.7 billion, with a $60 million salary. Many praise his “success” as if it were self-made.

Trump was born in New York City in 1946, the son of real estate tycoon Fred Trump. Fred Trump’s business success not only provided Donald Trump with a posh youth of private schools and economic security but eventually blessed him with an inheritance worth an estimated $40 million to $200 million. It is critical to note, however, that his father’s success, which granted Donald Trump such a great advantage, was enabled and buffered by governmental financing programs. In 1934, while struggling during the Great Depression, financing from the Federal Housing Administration (FHA) allowed Fred Trump to revive his business and begin building a multitude of homes in Brooklyn, selling at $6,000 apiece. Furthermore, throughout World War II, Fred Trump constructed FHA-backed housing for US naval personnel near major shipyards along the East Coast.

In 1974 Donald Trump became president of his father’s organization. During the 15 years following his ascension, he expanded and innovated the corporation, buying and branding buildings, golf courses, hotels, casinos, and other recreational facilities. In 1980 he established The Trump Organization to oversee all of his real estate operations. Trump eventually found himself in serious financial trouble. In 1990, due to excessive leveraging, The Trump Organization revealed that it was $5 billion in debt ($8.8 billion by some estimates), with $1 billion personally guaranteed by Trump himself. The survival of the company was made possible only by a bailout pact agreed upon in August of that same year by some 70 banks, allowing Trump to defer on nearly $1 billion in debt, as well as to take out second and third mortgages on almost all of his properties. If it were not for the collective effort of all banks and parties involved in that 1990 deal, Trump’s business would have gone bankrupt and failed.

Nor should his anti-government intervention rhetoric be treated seriously. In 2005 Trump supported a Supreme Court decision on Kolo v. New London, which affirmed the government’s ability to transfer land from one private owner to another for the purpose of economic development in the area. Trump has taken advantage of eminent domain laws on multiple occasions, once even demanding that an elderly widow give up her home so that he could build a limousine parking lot.

Trump made clear his own interpretation on the creation of his wealth: “Over the years I’ve participated in many battles and have really almost come out very, very victorious every single time. I’ve beaten many people and companies, and I’ve won many wars. I have fairly but intelligently earned many billions of dollars, which in a sense was both a scorecard and acknowledgment of my abilities.”

Yet, from the moment of his birth, Trump was set up for success. The large inheritance left to him by his father, coupled with the contributions and the protections of society and the US government made his ascension to the Forbes 400 list almost inevitable. Nevertheless, Trump fails to recognize this phenomenon and continues to express his belief that he did it alone.

Who is being milked?

Milk has probably played an important role in many a youths personal history, whose first paid job was perhaps as a milk-boy delivering it to door-steps. The importance of milk in the global food story can’t be overestimated. Mankind first learned the value of keeping animals alive for dairy production as early as 9,000 to 7,000 B.C.

Dairy farms are on the verge of extinction. The price farmers are paid for milk is set to fall. The latest cuts will see farmers being paid around 25p a litre for milk, compared to more than 30p it costs to produce.  Today’s milk business is dominated by a handful of large supermarkets and processing dairies, Wiseman, Unigate and so on. Milk is plentiful and cheap, with supermarkets frequently using it as a loss-leader. Dairy farmers sprayed thousands of liters of milk outside the European Parliament in Brussels on Tuesday, creating a "milk lake" to protest against low prices. Protesters from around Europe, including Italy, Germany, Ireland and France blocked off a square with tractors. In the UK thousands of farmers protested at Parliament. The "milk lake" was intended to symbolize an oversupply of milk in the European market, with protesters ringing cowbells and denouncing moves to phase out production quotas, resulting in more milk on the market and lower prices - excess milk production and less little farmers are getting paid. Marc Tarabella, a "socialist" member of the European Parliament, said the protesters had a just cause. "Their fight is also ours," he said. "How can we accept that some workers are working at a loss? Working to lose money? We cannot close our eyes to this human and social drama."

In Britain dairy farmers are being pushed to the brink by the latest cuts to the price they are paid for their milk, farming leaders warned as more than 2,500 farmers gathered in London to protest against the reductions. The farmers are angry at the latest round of cuts of up to 2p per litre, which come on top of similar cuts in the spring, recently announced by major milk processors. They say the cuts will force many farmers out of business, pushing up the price of milk for consumers in the long term.

National Farmers' Union deputy president Meurig Raymond said: "These latest cuts are the feed bills, the wages, the housekeeping and will take us well into loss-making territory, with many farmers losing up to 6p per litre. Society has to recognise what these dairy farmers have been put through by a market place that doesn't work and is not fair."

Robert Wiseman, one of the dairies announcing cuts, said: "The decision follows a collapse of in the value of cream in each litre of farm gate milk over the last 12 months. We have done everything we can to minimise the reduction in our farm gate milk price but we must now reflect the substantially lower returns from the markets which we serve."

The farmers' complaints against supermarket prices are not entirely misplaced, but their real problem in large part is due to plummeting world prices. Production at the world's four biggest dairy regions has increased simultaneously. New Zealand is up 9 per cent, Australia rose by 3.6 per cent and the US and European Community by 2 per cent.

Many dairy farmers, in their bid to drive down costs, now keep their cows off pasture, feeding them instead on high-energy cereals and maize, and on high-protein crops like soya. Herds are getting bigger, and some farmers are choosing to keep them inside for much of the year or even all of it. US-style mega-dairies — in effect, battery-farmed cows — are now threatened for the British countryside. Professor Ton Baars, a global expert on the health qualities of dairy foods, says milk produced this way contains lower levels of key disease-fighting nutrients, such as omega-3 fatty acids, vitamins and the anti-cancer substance CLA. From a health point of view, the best milk comes from cows grazing fresh pasture in which there are plenty of clover plants and deep-rooting herbs such as plantain, dandelion and chicory.

Farmers’ relentless drive for cost savings has put increasing pressure on the long-suffering dairy cow. A milch-cow is now forced to produce twice the volume of milk provided by her 1960s forbears, and it’s taking a heavy toll on her health, fertility and lifespan. Actress Joanna Lumley has taken up the cudgels on behalf of dairy cows. She’s heading an animal rights’ campaign aimed at giving them the sort of protection in European law that’s provided for battery hens. One of the key guarantees she’s seeking is the animals’ freedom to graze fresh pasture, at least in summer.

The rule of the market - it is the whey of the world

As others see us

"Scottish author, Robert Louis Stevenson of Treasure Island fame, penned a novella that many consider to be a foundation stone of modern fiction’s addiction to substances, transformation and death – The Strange Case of Dr. Jekyll and Mr. Hyde. Dr. Jekyll liked to swallow chemicals turning himself into something unpredictable, Mr. Hyde. It’s a good metaphor for the calamity that is tearing Scottish soccer apart.

Think of Scottish soccer as a test tube in Dr. Jekyll’s lab marked with skull and cross bones, WARNING – DO NOT SHAKE! Sitting at the top of the mix is the colors of Irish green and British blue – green is the substance called Glasgow Celtic Football Club bonded to the blue known as Glasgow Rangers Football Club. Mix them up and they can explode but when they sit side by side at rest they produce something called the Old Firm, a successful alliance of opposites that has largely dominated Scottish soccer, economically and culturally, for over a hundred years. The elements that make up their wholes would require too long a label to delineate – suffice to summarize it as an emulsion of historical grievance, religious division, sectarianism, and nationalist politics that produces a soccer clash unrivaled anywhere in the world. The Old Firm is the defining intense soccer rivalry. Super hot, beyond sport.

But now things have changed. The tube has been ruptured. The blue half of the mix has evaporated. Rangers have been declared bankrupt due to many years of mismanagement. They consumed a hubristic formula of reckless expenditure in an effort to destroy their other half, Celtic. They failed. And were left weak to the point of death like Dr. Jekyll.

They have been discharged from the top Scottish league. The league rules and the animosity of rival clubs and their fan bases dictated their plunge. They now face the prospect of starting from scratch in the bottom division of Scottish football, three levels below the top tier. The economic implications are negative. Fears for other teams evaporating are real. Rangers worked the pump of investment in the Scottish game – their games with Celtic broadcast globally, a premium brand – the Old Firm was the bank that all the other clubs had an interest in. No Old Firm game and it could mean less or no money from TV contracts, and therefore less monies to share with the other clubs. The prospect of Scottish soccer boiling down is now a possibility.

The Scottish Football Association believes it may be the end for the Scottish game should Rangers not be allowed to return to the top flight within a year. Besides the economic armageddon for the clubs, the chiefs have warned of “social unrest” if Rangers are exiled to the deep. It’s an extraordinary claim that social strife could result as a consequence of a soccer club going bust. The commentary from Scottish soccer fans has ranged from celebratory dances on Rangers grave to dire warnings of revenge when/if Rangers return from the shadows.

Dr. Jekyll was unrecognizable after swallowing the poison – disfigured, mean and hostile – and finally death. Will Scottish soccer follow the script or synthesize a new beginning free from the mix of the Old Firm chemistry?"

http://blog.sfgate.com/soccer/2012/07/10/the-strange-case-of-scotlands-rangers-football-club/

 The price paid by Charles Green for Rangers included a £1.5 million fire sale for Ibrox Stadium, Murray Park and the club’s valuable car park. The knockdown value was approved by administrators Duff & Phelps despite them valuing the assets at three times that price just two weeks earlierat over (£4.5million) . And when David Murray sold the club to Craig Whyte two years ago, he had the same land, bricks and mortar assets valued at £110 million. The difference between the valuations compared with what they actually sold for has left fans scratching their heads.

The report also revealed that Green also factored in a fee of £2.75 million to buy the contracts and registrations of the club’s players, which would have been worth £25 million in an open market.

Rangers made trading losses of almost £4 million from the time it was placed in administration. Duff & Phelps have collected almost £3 million in fees from Rangers.


Stop supporting capitalism !

A SENSE OF VALUES?

We live in a society that sees millions of workers trying to survive from day to day on the equivalent of less than $2 a day and yet we can have a news item such as the following. "A baseball enthusiast has discovered a trove of sports cards hidden inside a soot-covered cardboard box in his grandfather's attic – with an estimated collected value of more than £2 million. ..... Kissner and his family said the cards belonged to their grandfather, Carl Hench, who died in the 1940s. (Daily Telegraph, 11 July) Pieces of old cardboard are valued more than human life inside capitalism. RD

trumped by the capitalist

Donald Trump opened his new £100m golf course. Trump had flown into Aberdeen on a private jet emblazoned in gold with the Trump brand.

The course is built across a stretch of stunning land overlooking the North Sea, some of which had been designated a site of special scientific interest (SSSI) because of the way the dunes moved northwards over time. Trump claims to have stabilised the land to create the "greatest golf course in the world". The Golf Environment Organisation, which vets courses and is backed by the European Tour, complained of the course's "considerable negative impact on what was one of the UK's most valuable mobile sand dune systems".

Trump denying there were any protesters, declaring after the first nine holes: "The environmentalists love what I have done." A second question about the environmental impact saw the billionaire shepherded by an aide away from the media and towards the VIP refreshment tent.

Later Trump said "Nothing will ever be built around this course because I own all the land around it," he said with a smile. "It's nice to own land."

Susan Monro home is just 100 metres away from the course clubhouse and she refused to sell up so Trump  piled an 8 metre high sand berm around her house, blocking her sea views. Huge gates have been erected at the end of her lane and she complains Trump's security staff shine lights into her home at night.

Another local who resisted Trump's attempts to buy him out is now forced to live behind a row of tall spruce trees planted on Trump's orders at the edge of his property which screen off spectacular views of the dunes and the sea.

Trump once declared "It's our property, we can do what we want."