Paranoid Politics

 Conspiracy theories are not new – far from it. But with the arrival of the internet offering easy dissemination and access to them conspiracy theories have proliferated and taken hold even amongst those who claim to be sophisticated and well-educated. Conspiracy theorists gain plausibility by taking established fact and embellishing it, so that one can’t tell where truth ends and fiction begins.

Major events cannot, in the popular mind, have trivial causes, because our world-view cannot allow it. Believing ourselves to be rational creatures in a supposedly ordered and rational universe, we shy away from the hideous tyranny of randomness, that force of Nature which defies our control and thus denies us our sense of meaning and “place” in the world. Thus, JFK, who ninety percent of Americans believe could not possibly have been killed by one lone fantasist with a rifle and some personal issues but with rather good eyesight and some luck. Princess Diana didn’t die because a driver got drunk, it was all a vast conspiracy involving the top echelons of power. Ditto John Lennon that the blame is again placed upon the "lone nutter" who had been receiving treatment for paranoid schizophrenia for his entire life since childhood but rather Chapman was being used as a "Manchuran Candidate" by Richard Nixon. Ditto 9/11, which clearly couldn’t have been simply the work of a few terrorists who got very, very lucky.

Conspiracy theorists take the view that the modern world must be controlled from the top – someone, somewhere must be pulling the strings, somehow. The conspiracy theorists interpret every event (even contradictory ones) as being evidence that everything is under some group’s secret control. The stock-in-trade of the conspiracy writers is rumour, innuendo, guilt-by-association and half-knowledge passed off as fact and a re-iteration of the inter-connection of some sections of the capitalists class (the Rothschilds, being an example).

The conspiratorial world-view is certainly not promoting an understanding of society. Those unfamiliar with the analysis of Marxian economics are yet to realise that at the heart of the capitalist economy is a genuine “anarchy of production”. Conspiracy theorists' assertions that a complex, technologically advanced society like capitalism cannot be at root “anarchic” in many of its operations, are misplaced. There are conspiracies all the time. Big ones tend to spring leaks however, and rarely last without being "outed". The capitalist class is not a conspiracy, not because it is democratic and transparent in its dealings which it very clearly isn’t but because it is not united, as the Illuminati presumably are. Because of the anarchic, competitive and contradictory nature of capitalism a conflict-free “New World Order” is practically impossible.

Scientific issues can be vulnerable to misinformation campaigns. Many people still believe that vaccines cause autism and that human-caused climate change is a hoax. Science has thoroughly debunked these myths, but the misinformation persists in the face of overwhelming evidence. Efforts to combat conspiracies can often backfire.

"You have to be careful when you correct misinformation that you don't inadvertently strengthen it. If the issues go to the heart of people's deeply held world views, they become more entrenched in their opinions if you try to update their thinking." says Stephan Lewandowsky, a psychologist at the University of Western Australia.

Psychologists call this reaction “belief perseverance” - maintaining your original opinions in the face of overwhelming data that contradicts your beliefs. Everyone does it to a certain extent , but we are especially vulnerable when invalidated beliefs form a key part of how we understand and live our lives. Researchers have found that religious faiths  are especially vulnerable to belief perseverance but also how we view ourselves. A  study  found that people are more likely to continue believing incorrect information if it makes them look good by enhancing ones self-image.

For example, if an individual has become known in her community for purporting that vaccines cause autism, she might build her self-identity as someone who helps prevent autism by campaigning for parents to avoid vaccination. Admitting that the studies  linking autism to the MMR vaccine were mistaken would diminish her self-respect. In this circumstance, it is easier to continue believing that autism and vaccines are linked, according to Dartmouth College political science researcher Brendan Nyhan. "It's threatening to admit that you're wrong," he says. "It's threatening to your self-concept and your world-view."

We are more likely to believe a statement if it confirms our preexisting beliefs, a phenomenon known as confirmation bias. Accepting a statement also requires less cognitive effort than rejecting it. Even simple traits such as language can affect acceptance: Studies have found that the way a statement is printed or voiced (or even the accent) can make those statements more believable. Also hence the debate on how the question in the up-coming Scottish independence referendum should be exactly phrased.

Correcting misinformation, however, isn't as simple as presenting people with true facts. When someone reads views from the other side, they will create counter-arguments that support their initial viewpoint, bolstering their belief of the misinformation. Retracting information does not appear to be very effective either. Some researchers have published retractions, and at best, halved the number of individuals who believed misinformation.

But it is not all bad news. There is now near-universal agreement that smoking is addictive and can cause cancer. In the 1950s smoking was considered a largely safe lifestyle choice—so safe that it was allowed almost everywhere and physicians appeared in ads to promote it. The tobacco industry carried out a misinformation campaign for decades, reassuring smokers that it was okay to light up, offering biased scientific reports and suppressing research while discrediting whistle-blowers. Over time opinions began to shift as overwhelming evidence of ill effects was made public by more and more scientists and health administrators. Smokers could now personally understand and have the association of their individual hacking cough confirmed with its cause.

 The Food and Agriculture Organisation is convinced there is sufficient global capacity to produce enough food to adequately feed the world’s seven billion people and many more besides. But globally a billion people go to sleep every night without eating dinner, and extreme poverty, 1.2 billion people live on less than 1.25 dollars a day. A child dies every 10 seconds from malnutrition – not because their parents are reckless, stupid or lazy – but because they were unlucky enough to be born at a time and place where tragically,  people cannot afford to buy the food that is available. This is a known but socialists must break through the conspiracy that declares it an unavoidable condition and an inevitable situation.

Capitalism And Crime

Any TV viewer is aware that one of the most popular themes in dramas is crime and its solution. Super smart policemen solve baffling crimes inside the stipulated hour programme. It is all very reassuring but unfortunately it is complete nonsense. Britain's biggest police  force is "screening out" almost half of its crimes after deciding that they are too hard to solve. 'The Metropolitan Police stopped investigating 76 per cent of motor vehicle theft, 40 per cent of burglaries and 23 per cent of robberies at an early stage in the past year. Forty-five per cent of a total of 770,448 crimes in the Met's area were "screened out".' (Times, 16 July) Why don't they send for Miss Marples or Hercules Poirot? RD

Doom and Gloom Again

The pharmaceutical industry, like oil companies and arms manufacturers, isn’t viewed highly in the public imagination. And for good reason. There is growing awareness of an inherent conflict of interest in the testing of drugs by the companies that manufacture them — like Pfizer, Merck and Eli Lilly — and a steady stream of tales from journalists, researchers and doctors of deliberately dodgy trials, buried unfavorable results, and purchased academic journals.

Yet the greatest crime of the world’s major private pharmaceutical companies is not what they do, but what they don’t do.

Antibiotics revolutionized healthcare. In the ongoing war against bugs and infection, these companies have abandoned their posts at the most critical time: when the enemy is mounting its most ferocious attack in generations. As these firms continue to shirk their duties — effectively abandoning antibiotic research for some 30 years now — senior public health officials are warning that the world could soon return to the pre-antibiotic era, a miserable, fearful time that few people alive now remember. We have forgotten how common and deadly infectious disease once was. We’ve taken antibiotics for granted, but we can hardly blame ourselves for such complacency.

The director of the US Centers for Disease Control and Prevention, Thomas Frieden, warned authorities of their “limited window of opportunity” to deal with the “nightmare” presented by the rise of a family of bacteria highly resistant to what are often our last line of antibiotic defense: the suite of drugs known as carbapenems. A few months earlier, the UK’s chief medical officer, Sally Davies, used similar language to describe a future “apocalyptic scenario” in 20 years’ time, when people will be dying from infections that are currently understood to be trivial, “because we have run out of antibiotics.” Davies described how the phenomenon “poses a catastrophic threat” to humanity akin to that of climate change and imagined a scenario in the coming decades in which “we will find ourselves in a health system not dissimilar to the early 19th Century,” where any one of us could go to the hospital for minor surgery and die from an ordinary infection that can no longer be treated. Major interventions like organ transplants, chemotherapy, hip replacements and care for premature babies will become impossible.

What did the pre-antibiotic era look like? There was 30% mortality from pneumonia. Mortality from appendicitis or a ruptured bowel was at 100%. Before Alexander Fleming’s serendipitous discovery of the first antibiotic penicillin, hospitals were filled with people who had contracted blood poisoning through cuts and scratches. These scratches often developed into life-threatening infections. Using amputation or surgery as common medical responses for scraping out infected areas is not pleasant or preferred, but these were the only options for the doctors.

Reports in medical journals, charity organization analyses, government studies, and the pharmaceutical sector’s own assessments attribute the dangerous threat to insufficient market incentive - lack of profit. Unlike drugs that millions of people have to take for the rest of their lives to target chronic illnesses such as heart disease — drugs that suppress symptoms but do not cure — antibiotics are usually taken for a few weeks or months at most. This makes antibiotics unfavorable for capitalism.

The Infectious Diseases Society of America in 2008 put it: “[Antibiotics] are less desirable to drug companies and venture capitalists because they are more successful than other drugs.” It is long-term therapy — not cures — that drives interest in drug development, the paper concluded.

Only four of the global Big Pharma 12 are engaged in antibiotic research. Capitalism encourages these firms to cherry-pick the products that make the most money for their shareholders, such as Viagra.  A common criticism from the Left of these companies has been that their profit-seeking hurts the poor of the developed and developing world, who can’t afford their drugs. This is true as far as it goes, but doesn’t tackle the scale of this problem. It is the capitalist command to accumulate profit that  pharmaceutical companies must obey that is the major threat to public health and needs to be done away with entirely.

See full article here

Socialism, the steady-state system

Capitalism  have given the top 1% of the population what they want, which is the opportunity to be the wealthiest and most powerful of the richest people ever seen. The present competitive exploitative system is  driven by increasing consumption of energy and resources. Competition works is the contest is to maximise wealth and power and to produce the most goods and services for the least cost. Capitalist economies are motivated and controlled with competition, which has replaced social needs as the motivator. Furthermore, as the competition and rivalry intensifies,  cooperation and caring decreases. Capitalism shifts the blame of a dysfunctional and unfair social system to people. The capitalists’ interest is their self-interest, which is why they are plutocrats; it is to be successful in capitalism. This means they are what they are. This also means ordinary people are not in charge of the economy or of the political system.

We in the Socialist Party of Great Britain are seeking a "steady-state economy" which corresponds to what Marx called "simple reproduction" - a situation where human needs were in balance with the resources needed to satisfy them.

The Lazy Worker Myth

From time to time newspapers like the Daily Mail and the Daily Express like to put all Britain's economic woes down to welfare grabbing lazy workers, but recent statistics give the lie to that notion. 'Workers feel less secure about their jobs and are taking fewer days off sick, according to two new surveys. The CBI said the number of days lost to absence in British workplaces had fallen to  a new low, while Law & General's monthly Job Security Index dipped to its lowest reading since its inception in January last year.' (Times, 15 July) How few days are taken off for sickness is shown by the figures. Down from 6.5 days per year in 2010 to 5.3 days at present. RD

Utopian Socialism

Is it possible to mobilise people to fight oppression without fashioning models for a socialist economy for people to fasten on to? The capitalist slogan ‘There is No Alternative’ was answered by ‘Another World is Possible’. We need to know and say much more about this other world.

Socialist thought has to deal in prediction, but only in broad terms. We live in dark days.  One often has to aim at objectives which one can only very dimly see. Socialism is a vision of the future, while its advocates are actively at work in the present. Socialists have typically avoided the tactic of the utopian blueprint. One reason for this was that no matter what your utopian vision is, you won’t be able to achieve it under capitalism. The other reason was that after capitalism is overthrown, it will be up to the people to determine how to run their society. Some people may prefer a return to Nature. Others may want robots tending to their every need.Why should one person’s utopian preference determine how society should be run for everybody else?

Charly's Profits

Prince Charles' tax exempt, capitalist property empire, the Duchy of Cornwall, is worth £847m and according to his top adviser it is a "force for social good".

It is definitely a force for his personal individual good, the scrounger gets around 19 million pounds a year from it! 

The National Ill-Health Service

From time to time British politicians like to boast about the NHS and claim it is the envy of the world. This is a hollow boast as these figures show. Five children die unnecessarily every day of conditions such as asthma, meningitis and pneumonia because NHS care for young people is badly organised and dangerously inadequate, the leader of Britain's 11,000 specialists in children's health warns. 'Around 2,000 children a year lose their lives because of an array of problems, which means the UK has some of the worst death rates among children up to the age of 14 in Europe, the president of the Royal College of Paediatrics and Child Health told the Observer.' (Observer, 14 July) RD

A Grim Choice

In the city of Asbest in Russia workers face a grim choice - work to produce asbestos, which will probably kill you or else move somewhere else. Valentin K. Zemskov, who worked in the asbestos factory and developed asbestosis, a respiratory illness caused by breathing in  asbestos fibres summed up the position of workers in Asbest. ' Still he said the city had no other choice. "If we didn't have the factory, how could we live?" he said gasping for air as he talked in the yard of a retirement home. "We need to keep it open so we have jobs." (New York Times, 13 July) Obviously inside a socialist society no one would have to endure such a hellish dilemma. RD

The Commonweal

According to the Herald, “the so-called Common Weal plan, which has been injected into the referendum debate by the left-wing Jimmy Reid Foundation.” The Common Weal model envisages a fundamental break with the UK's market-led economic and social model, with Scotland importing policies from Germany and Scandinavia designed to make the country wealthier, fairer and more equal. A key part would be an expanded welfare state providing "from-the-cradle-to-the-grave" services which are paid for through an overall higher tax take. But the Common Weal model would also entail a diverse, high-skill, high-pay economy in which Scots firms are supported by lending from state banks and favoured in state procurement.

Commonweal means the common welfare, a commonwealth. The commonweal  shall satisfy peoples’ material needs from the common storehouse, according to their desires. Everyone will be able to have what he or she desires in food, in clothing, books, music, education and travel facilities. The abundant production now possible, and which invention will constantly facilitate, will remove any need for rationing or limiting of consumption. Every individual, relying on the great common production, will be secure from material want and anxiety. There will be neither rich nor poor. Money will no longer exist. There will be no selling, because there will be no buyers, since everyone will be able to obtain everything desired without payment. The possession of private property, beyond that which is in actual personal use, will disappear. There will be neither masters nor servants.

This is the commonweal. Socialists are determined to work co-operatively for this commonweal.

No amount of sophistry can change commonweal to mean capitalism, no matter what variety claimed.

Taxation and its burden

Continuing our tedious but necessary economic education posts. This one on the subject of taxes.

When capitalist political parties are in disagreement, the issue of taxation usually looms large. Should income tax be reduced or increased?  The serious-minded worker who does his own thinking will probably at first be amazed at the dexterity exhibited by both the Labour and Tory sections of the capitalist class. We watch them handling figures and statistics in a way that must cause a circus juggler to turn green with envy, each proving that the poverty and misery is bound to increase if the proposals of the other side are adopted!

A Society Of Debtors

Politicians love to paint a picture of steadily improving living standards, but it is a complete illusion as a recent newspaper article by Christian Guy, Director of the Centre for Social Justice has revealed. 'Yesterday's grim figures revealed that more than 800,000 households will soon spend more than half their income on debt repayments. We already know that 274 people are declared insolvent or bankrupt every day, 88 properties are repossessed and average household debt, including mortgages, is almost £55,000.' (Times, 12 July) Hardly 'steadily improving living standards' is it? RD

Anarchism

Socialist Courier has had a couple of recent posts about the history of anarchism inn Aberdeen and Glasgow so before the blog is accused of being an anarchist one we should highlight the political differences between ourselves and anarchists.

The Socialist Party of Great Britain possess a clear definition of what we would describe socialism to be. The definition of "socialist" generally meant in the 1840s was anyone who wanted to reform society, in whatever way, so as to benefit Labour. That was indeed how it was used them and was of course one of the reasons why Marx and Engels called the manifesto they wrote for the Communist League of Germany in 1848 the "Communist Manifesto" and not the "Socialist Manifesto". Basically, it was much too broad a definition that included too many contradictory views that we suppose the more appropriate word (then as much as today) would be "social reformers". It is only on that basis that supporters of private property and the market such as Proudhon, could be called "socialist".

Banking 7/7

Socialists have no love for banks. A world without banks would be a wholly better place. However to blame the banks for creating our debt-ridden society is just too biblical, like a re-run of Christ expelling the money-changers from the temple. Even if the banks were state-owned, they would still have to lend. If they didn't there would be no point in them existing. Banks and interest are not the villain of the piece but capitalism and production for profit. We need to abolish money before we can get rid of banks. But to get rid of money we need an end to property. And you can't abolish property relations until you abolish capitalism.

The Housing Shortage

Housing is probably the one basic need which, were it properly satisfied, would be the most conductive to good emotional and mental health. It is, surely, very pleasant and soothing to relax among pleasant and agreeable surroundings. The fact remains that such a happy situation only applies to the small to the small minority of the population who have the means to buy beautiful homes. Housing is one problem of capitalism which has been a constant source of difficulty and is part and parcel of working class life. Few members of our class escape some aspect of housing trouble. Whether it is the crisis of homelessness or overcrowding, or the stress involved in keeping a roof over our heads through paying rent or the mortgage.

It could be more than 20 years before enough new homes are built in Scotland to meet the country's projected needs. Scotland requires 21,230 new homes each year between 2011 and 2035 to meet a projected 21% increase in the population to 2.9 million by 2035.

Councils and registered social landlords  have built 14,000 fewer homes since 2005 than the Scottish Government said were needed. Funding for housing fell by around one-quarter between 2008/09 and 2011/12 with further reductions to come, while the number of new private homes built has more than halved since 2007/08 when the economic crisis took hold. The Scottish Government’s Audit Scotland  blames the recession, along with constraints on lending, competing and increasing demands on capital resources, and reduced government subsidies. Changes to the benefit system, an ageing population and the rising number of single person households are creating further pressures.

There are more than 400,000 people currently on housing waiting lists. Audit Scotland said the housing supply was not keeping up with levels of need.

The first fallacy to dismiss is the belief that “housing shortage” is the beginning and end of the problem and is the source of the problem, because if it were, it could be logically assumed that there was some intrinsic inability of society to meet the housing needs of its population. It has had plenty of time and resources to do so, so this is clearly not the full story.

Another fallacy which tends to cloud our conception of the issue is that which suggests that the housing problem has its basis in the inefficiency and lack of organisation of the building industry. It is true that this industry is not generally well organised in relation to output and the workers employed there; it is also true that at times it can operate in an inefficient manner. The fallacy is however that this is a cause of the housing problem rather than, like the housing problem itself, an effect of an inefficient and unrealisable social system. How can the construction industry possible be efficient when it is subjected to the demands of profitability in a system which produces an uneven flow of work, conflict between employers and employees, and most importantly, the fact that buildings which create the greatest profit in construction are usually the least socially useful and therefore take preference over housing?

The facts tell us the industry suffers many problems which have been related to one thing: the contradictions and conflicts of the system of capitalism. Governments do initiate various housing reforms to try to solve these problems, but these always fail. Why is failure so total, especially when the materials, know -how and labour power exist to adequately deal with the problem of providing decent housing for all?

Is it because of stupid or corrupt politicians? Many people believe so and view a particular governments shortcoming’s in light of the various abilities and characters of its leading members. But in actual fact these factors play a very subsidiary part and make no fundamental difference. Some politicians and civil servants , assigned various tasks, may be very well-meaning and in some respects efficient, but in the final analysis fail because they cannot succeed.

Under capitalism all production, government-initiated or not, is with a view to profit, not the satisfaction of human needs, material and recreational. Since the profit motive is the very life-blood of the capitalist system, it logically follows that government housing programs will also be introduced with a view to providing a profit for some capitalist group or other. Whether or not the politicians involve be good guys or con-artists is immaterial, because the financial institutions putting up the money for these reforms want a return for their investment.

Banking 6/7

Surely, the current banking crisis has exploded the myth about banks being able to create credit, i.e. money to lend out at interest, by a mere stroke of the pen but apparently not. Financial crises always spark interest in critics of the system. They see the problems of capitalism—like its vulnerability to crises—as primarily financial in origin. The whole point of production under capitalism is not the satisfaction of needs, but the accumulation of money. In other words, it’s impossible to separate the economic world into a good productive side and a bad financial side; the two are inseparable. The monetary surpluses generated in production—the profits of capitalist businesses—accumulate over time and demand some sort of outlet: bank deposits, bonds, stocks, whatever. It’s going to be that way until we replace capitalism with something radically different. What we need to ask is why people today tend to blame banks rather than capitalism as a whole.

Anarchism in Glasgow

Some may find this article on the history of anarchist and socialist activity in Glasgow of interest.

The earliest known Glasgow anarchist history centres around the figure of Duncan Dundonald, a Clydeside-based engineering worker who is said to have met Mikhail Bakunin in Geneva in 1869, translated the Revolutionary Catechism in 1870, and then returned to Scotland to carry out anarchist propaganda and revolutionary sabotage. His obscurity to later generations of Glasgow anarchists could be related to the fact that he emigrated to Australia, possibly in the 1890s, where he settled in Melbourne and continued his activities under the assumed name of Donald Duncan.

In 1884 was the founding of the Social Democratic Federation branch in Glasgow. Many of those involved in the SDF had been members of the Democratic Club and/or the Republican Club in the city, and were in the main ardently anti-parliamentarian. This caused divisions as happened elsewhere, and when William Morris broke away to form the more vibrant Socialist League, most Glasgow SDF members simply de-camped to the new body. Branches then quickly appeared in other parts of Scotland.

In 1886 there was the visit to Glasgow of Peter Kropotkin. In 1888,  Lucy Parsons, partner of Albert Parsons, one of the executed Haymarket martyrs. Emma Goldman made her firstvisit in 1894. Voltairine de Cleyre in 1897 and 1903

By 1937, there were 3 groups of libertarians in Glasgow, Aldred's United Socialist Movement, Wm McDougall's Anti-Parlimentarian Communist Federation and Anarchist Federation of Frank Leech.

breathing is bad for you

More than two million deaths occur globally each year as a direct result of air pollution from human activity, scientists have said.  

2.1 million people die after inhaling fine sooty particles called PM 2.5s generated by diesel engines, power plants and coal fires. Another 470,000 are thought to be killed by high levels of ozone, created when vehicle exhaust gases react with oxygen.

Banking 5/7

Dealing with the conspiracists

The oft-given explanation circulating around the internet is that banking originated from goldsmiths is misleading as it suggests that this was widespread when there may only have been the odd example of this. There is one film (Money As Debt) which gives the impression that every mediaeval and early capitalist town had goldsmiths who did this. Currency cranks  use the goldsmith argument fairly extensively to show that a bank can lend more than has been deposited with it. It is also strange that this historical theory should be widespread in the US where there would ever have been any goldsmiths who did this (if only because the money-commodity there was silver to start with) and where paper money originated from the states printing it and making it legal tender for paying taxes.

Adam Smith makes no mention of "goldsmith bankers". His description of how the Bank of Amsterdam operated confirms that the currency cranks have not been able to produce any example of a bank that issued more certificates of receipts than the gold it had (and survived). Only a state or state-guaranteed bank can issue "fiat" money as money not backed by anything.

It would be much more likely that banking originated from moneylending, which would have been more widespread, when people with money to lend began issuing trade bills to factory owners and merchants to cover the period between production and sales. And if they started issuing more bills than they could honour (as goldsmiths are supposed to have done) they'd go bankrupt fairly quickly.

There were some goldsmith-bankers in London in the 17th century (but not in every town). Here's an example of how the currency cranks interpret what they say happened:

But the goldsmith-bankers seem rather to have been more like pawnbrokers for the idle rich according to this article.

A contemporary account of how goldsmith bankers actually operated can be in Richard Cantillon's "Essai sur la nature du Commerce en General" (it's in English) written in 1730. Here's what he wrote:

"If a hundred economical gentlemen or proprietors of land, who put by every year money from their savings to buy land on occasion, deposit each one 10,000 ounces of silver with a goldsmith or banker in London, to avoid the trouble of keeping this money in their houses and the thefts which might be made of it, they will take from them notes payable on demand. Often they will leave their money there a long time, and even when they have made some purchase they will give notice to the banker some time in advance to have their money ready when the formalities and legal documents are complete. In these circumstances the banker will often be able to lend 90,000 ounces of the 100,000 he owes throughout the year and will only need to keep in hand 10,000 ounces to meet all the withdrawals. He has to do with wealthy and economical persons; as fast as one thousand ounces are demanded of him in one direction, a thousand are brought to him from another. It is enough as a rule for him to keep in hand the tenth part of his deposits. There have been examples and experiences of this in London. Instead of the individuals in question keeping in hand all the year round the greatest part of 100,000 ounces the custom of depositing it with a banker causes 90,000 ounces of the 100,000 to be put into circulation. This is primarily the idea one can form of the utility of banks of this sort. The bankers or goldsmiths contribute to accelerate the circulation of money. They lend it out at interest at their own risk and peril, and yet they are or ought to be always ready to cash their notes when desired on demand. If an individual has 1000 ounces to pay to another he will give him in payment the banker's note for that amount. This other will perhaps not go and demand the money of the banker. He will keep the note and give it on occasion to a third person in payment, and this note may pass through
several hands in large payments without any one going for a long time to demand the money from the banker. It will be only some one who has not complete confidence or has several small sums to pay who will demand the amount of it. In this first example the cash of a banker is only the tenth part of his trade."

Nothing here about the goldsmith banker being able (or even trying) to lend more than the 100,000 ounces of silver deposited with them, as in the fairy tales of the currency cranks.

Cantillon's full account of how the banks of his time operated can be found in Chapter VI

Being poor = poor reading

Scotland had the worst record of the 32 nations taking part in the Organisation for Economic Co-operation and Development (OECD) international PISA reading tests. Bright boys from poorer backgrounds in Scotland’s schools are nearly three years behind their rich, clever male classmates in reading, a study has suggested.

The Uncaring Society

Carers are being forced to cut back on essentials such as food and electricity because of the so-called bedroom tax. 'Despite Government promises to protect them from the under-occupancy charge, one in six carers forced to pay it are falling behind on their rent and face eviction, research by Carer UK shows. .... Ministers pledged £25m in discretionary payments to protect carers and disabled people when the policy was introduced in April, but campaigners warned it would be only enough to support around 40,000 of the 420,000 disabled people affected by the cuts.' (Independent, 9 July) Just one in ten cases are receiving these discretionary payments on an on going basis, this latest research shows. When it comes to cutting welfare payments capitalism is ruthless even if you are disabled. RD

Child Labour

With the advent of the industrial revolution British capitalism made its fortune on the exploitation of child labour, but the advent of the trade union movement, after a long hard struggle, saw that ended. Ever ready to make profits the British capitalist class have shifted their source of child exploitation to Asia. The British sugar giant Tate & Lyle has imported large volumes of sugar from Cambodia through a supplier that is accused of using child labour. 'Tate & Lyle - which is the EU's largest cane producer and whose ingredients are used in a wide range of foods around the world - has used the Thai KSL group since 2011 for its supplies from Cambodia. However KSL is alleged to have been complicit along with the Cambodian government, in the eviction of people from the land, arson and theft. ..... Children as young as nine years of age work on Cambodian plantations run by KSL.' (Guardian, 9 July) RD

Hungry children in Scotland

Some children may be going hungry over the school holidays because their parents cannot afford to feed them properly, the Church of Scotland has warned.

"There is the real possibility that many children from all parts of Scotland will spend the summer break not getting enough to eat," said the Rev Sally Foster-Fulton Convener of the Church and Society Council. "People may jokingly mock school dinners but they provide essential basic nutrition and for many children they are the one substantial cooked meal they will get."

It was recently reported that the number of people using food banks has more than doubled in Scotland in the past year. The Trussell Trust said 14,318 people were helped during 2012-13; up 5726 on the previous year.

The rewards of owning Scotland

Wealthy landowners are qualifying for state hand-outs of £12,000 a week, according to a new report.

The report claims that with just 432 owners controlling 50% of all the privately owned land, Scotland has "the most concentrated pattern of land ownership in the developed world".

The report notes "the ready access estate ownership gives to the public purse" is a key attraction of land ownership to "the rich and super-rich".

It points to the £600,000-plus a year in government subsidies available to the future purchaser of a £11.4m Argyll property – the Auch and Invermearan Estate near Bridge of Orchy, that is on the market, a fact which is highlighted in the sales brochure.

See also this post on our companion blog.

Banking 4/7

Money! What is money? Money is a ticket that enables one to buy goods with, just as a railway ticket enables one to ride on the train goes the argument. The more tickets one has in one’s pockets, the more someone can buy. These tickets are, therefore, merely media of circulation, purchasing power. They may be made of anything. The material is of no consequence. What is of consequence, though, is the quantity of money in circulation. The mortal sin of the banks is that they refuse to issue enough money, or credit, to enable the “common man” to procure the necessities of life. Therefore, the power to issue money and credit based on social wealth must be taken over by a state-owned, claim the advocates of reforms and panaceas. Money, they explain, causes commodities to circulate, but herein they are certainly deceived by appearances. In reality, the movement of money is simply the reflex of the circulation of commodities. Money only realises the prices of commodities. Given the velocity of money, among other things, the quantity of money required in a community is just the amount sufficient to realise the prices of the goods to be exchanged. More than this the system cannot and will not absorb. For money, in the sphere of circulation is an effect not a cause. Hence, there is nothing seriously wrong with money, as such. Consequently, to increase the quantity of money will not put more goods into the hands of the people. Such an increase, in place of causing a greater quantity of commodities to circulate, can only have the effect of cluttering up the machinery of exchange. To advance as an argument for such an increase that many people are suffering because they have not the money with which to buy the necessities of life is not an argument for the relief of distress. Many are deeply moved because many are scarcity amidst plenty. It is a condition the reason for which baffles them. They can see easily enough that the products of labour are not properly distributed. That does not require much brain work . But they do not have sufficient insight into the capitalist system to be able to understand that this condition arises from the fundamental contradiction of the system. This fundamental contradiction is that goods are socially produced, but individually appropriated by the private owners of the means of wealth production. The profit system, albeit appropriately modified, must be maintained at all costs. Hence, they want to retain the capitalist system, but at the time escape the inequalities and distress which it produces. So when they speak of changing the system, what they have in mind is an indefinite idea of correcting some of its faults. Yet those faults will only end when the means of production are brought into common ownership and democratic control so that they can be oriented towards directly satisfying people’s needs – when banks, money and all the rest of the buying and selling system will have become redundant.

Graduates on the dole

As youth unemployment figures soar many workers think the solution is for a better education, but that often proves a futile move. 'This summer's university leavers face a tougher jobs market, with a forecast of a 4% fall in graduate vacancies. The Association of Graduate Recruiter (AGR) annual summer survey shows that leading UK employers are receiving 85 applications for each job.' (BBC News, 10 July) With 85 applicants for each vacancy the old notion of "lazy workers" looks a bit foolish. RD

A Bleak Future

The following grim findings emerged from a poll carried out for the Association of British Insurers. YouGov asked 2,506 employees questions relating to retirement and welfare. 'One in five working people believe that they will never retire. According to a survey being published today, of those who believe they will stop working full-time, more than four out of ten reckon they will have to keep a part-time job. Two thirds of those polled said they would struggle to meet the cost of paying for long-term care as they became infirm.' (Times, 9 July) Having suffered a lifetime of exploitation workers cannot even see some relief in old age. RD

Anarchism in Aberdeen

"You sing about your bonnie Scotland and your heather hills. It's not your bonnie Scotland. It's not your heather hills. It’s the landlord’s Bonnie Scotland. It’s the landlord’s heather hills. And if you want enough earth to set a geranium in, you’ve got to pinch it" declared J.L Mahon  a socialist who visited Aberdeen in 1887 and started a series of open air meetings and helped in the setting up of the Aberdeen Socialist Society, a branch of the Scottish Land and Labour League. 

The anti-parliamentarians broke in early 1891 to form the Aberdeen Revolutionary Socialist Federation. In 1893 the group changed its name to the Aberdeen Anarchist Communist Group.

The Aberdeen Anarchist Communist Group hosted the third conference of Scottish anarchists on January 1st 1895 and welcomed the delegates from Dundee, Edinburgh, Glasgow, Hamilton and Motherwell.  Aberdeen had a membership of 100, with sympathisers “not less than one thousand” and was asserted to be the greatest socialist force in the city.

Full article on Libcom link 

The earliest Socialist Party of Great Britain branch in Scotland was in the North East of Scotland (Fraserburgh or Peterhead?) In the 1970s a Socialist Party group in Aberdeen existed for a brief time.

socialist sport?

 The Gaelic Athletic Association in Ireland was founded in 1884 with now over 1 million members in 2,600 clubs .

Its players are amateurs, the grass roots are as important as the top echelons, and the majority of big games remain on free-to-air TV. And unlike football, clubs cannot be bought and sold and there are no private club owners. On the administrative side, club members elect an executive committee to carry out the running of the club on an annual basis. At the higher echelons of the GAA, such members must vacate their post after four years.

But Dr David Hassan of the University of Ulster denies that running the game with volunteers at grass-roots level means off-field activities are also "amateur". "At a community level, local competent professional people who are sympathetic to the GAA often do administrative jobs, such as a local accountant becoming club treasurer."

"The clubs and games are based in the community and operate on behalf of those people who are based in the community. If the grass roots say some policy proposal is a move in the wrong direction, the administrators cannot just say - as may be the case in English soccer - 'This is just business'."

Banking 3/7

Banking Myths

The first banks were the merchants of ancient world that made loans to farmers and traders that carried goods between cities. The first records of such activity dates back to around 2000 BC in Assyria and Babylonia. Later in ancient Greece and during the Roman Empire lenders based in temples would make loans but also added two important innovations; accepted deposits and changing money. During this period there is similar evidence of the independent development of lending of money in ancient China and separately in ancient India. The Templers began generating letters of credit for pilgrims journeying to the Holy Land: pilgrims deposited their valuables with a local Templar preceptory before embarking, received a document indicating the value of their deposit, then used that document upon arrival in the Holy Land to retrieve their funds. This innovative arrangement was an early form of banking, and may have been the first formal system to support the use of travellers cheques. The Order of the Knights Templar arguably qualifies as the world's first multinational corporation. Banking in the modern sense of the word can be traced to medieval and early Renaissance Italy, to the rich cities in the north like Florence, Venice and Genoa. The Bardi and Peruzzi families dominated banking in 14th century Florence, establishing branches in many other parts of Europe. Perhaps the most famous Italian bank was the Medici bank, set up in 1397. A bank was founded in 1609 under the protection of the city of Amsterdam. This bank at first received both foreign and local coinage at their real, intrinsic value, deduced a small coinage and management fee, and credited clients in its book for the remainder. This credit was known as bank money. Being always in accord with mint standards, and always of the same value, bank money was worth more than real coinage. At the same time a new regulation was introduced; according to which all bills drawn at Amsterdam worth more than 600 guilders must be paid in bank money. This both removed all uncertainty from these bills and compelled all merchants to keep an account with the bank, which in turn occasioned a certain demand for bank money.

Events such at the appropriation of £200,000 of private money by King Charles I from the royal mint, in 1640 caused merchants to lose trust in the existing institutions and drive them to find more trusted alternatives such as the goldsmiths. The goldsmiths soon found themselves with money for which they had no immediate use, and they began to lend the money out at interest to both the merchants and the government. Finding substantial profit in this business, they began to solicit deposits and pay interest on them. The goldsmiths eventually discovered that the deposit receipts they provided were being passed on from one person to another in lieu of payment in coin, which prompted them to begin lending paper receipts rather than coins. By promoting acceptance of the receipts as a means of payment, the goldsmiths discovered they could lend more than the gold and silver coin they had on hand, a practice that became known as fractional-reserve banking. These practices created a new kind of "money" that was actually debt, that is, goldsmiths' debt rather than silver or gold coin, a commodity that had been regulated and controlled by the monarchy. This development required the acceptance in trade of the goldsmiths' promissory notes, payable on demand. Acceptance in turn required a general belief that coin would be available; and a fractional reserve normally served this purpose. The monarchy's urgent need for funds at rates lower than those charged by the goldsmiths, and the example of the public Bank of Amsterdam, which had been able to make an ample supply of credit available at low interest rates, led in 1694 to the establishment of the Bank of England. The Bank of England succeeded in raising money for the government at relatively low rates.
http://en.wikipedia.org/wiki/History_of_banking

Food for thought

The tenth anniversary of the US invasion of Iraq was marked by seventeen car bombs exploding, killing sixty people and wounding one hundred and ninety. Iraq is torn apart by Sunni Muslims revolting against the Shiites in power. Youth unemployment has reached appalling heights and western consumer goods are scarce to none. During the decade the Americans were there, 4,484 of their soldiers were killed and 32,200 were wounded in a mission that cost between
$3 and $4 trillion dollars, to say nothing of the Iraqi death and wounded toll and the destruction to the country. Imagine what could have been done for both countries with proper use of that amount of social wealth. So much for capitalist achievements and its priorities. John Ayers.

Banking 2/7

"I think that people have learned that money is not made in banks. It is made by real people working hard at real jobs. Actually, deep down we knew that all along. We just have to learn it again." Asbjorn Jonsson, an Icelandic fisherman, in a week when Iceland was effectively a bankrupt state. Its banks owed the world an astonishing £35 billion - 12 times the size of Iceland’s gross domestic product and £116,000 for every man, woman and child.

Because money so dominates people's lives and because they associate money with banks, people's resentment at their money problems is aimed at banks but banking or monetary reform are not going to stop money dominating people's lives.

Many seek out solutions without understanding the causes. Marx wrote extensively on money and banking and credit yet how convenient it is to forget his conclusion that it is the entire capitalism system not simply individual aspects of its functioning that is the problem. Theorists seem to forget that the capitalist system remains, in all essentials, the same as it was when Marx studied in the British Museum. Lest we forget, the source of all Rent, Interest and Profit is the unpaid labour of the working class. It’s not a revolution if you’re only taking out the bankers. The bankers are not wicked finance capitalists against whom the anger of workers should particularly be directed, just capitalists with their capital invested in a particular line of business, no more no less reprehensible than the rest of the blood sucking parasitical capitalist class. Recessions are inherent in the boom bust cycle of capital. “Greedy bankers” are a scapegoat distracting from the fact that this will happen again and again and again. Blaming them alone implies you could have a nicer capitalism with good bankers. Pinning the blame on “greedy bankers” lets the rest of the culprits off the hook. This is not just a financial crisis, but a crisis of the whole capitalist economy in which the whole business and political class are fully implicated.

Champagne And Capitalism

 

At present lots of politicians are expressing disgust at how much alcohol the working class are consuming. They are particularly outraged at cut-rate booze on sale at supermarkets.  None of these politicians are concerned about the owning class's consumption. Here is an example of the owning class and alcohol. 'There is a nightclub called Aura, in London, where the cheapest bottle of champagne is Taittinger 2004 at £255 for a bottle (it's £42 at Oddbins.com). The real rich won't drink this. This is what they give their servants for Christmas.' (Sunday Times, 7 July) This report goes on to say that a just-released 2004 vintage Dom champagne cost £600 a case. Not many workers will be queuing up at Asda for a case we imagine. RD

Hypocrisy In Action

Capitalism is a competitive society with groups of capitalists grouped in countries always trying to get the advantage on their rivals, so it should come as no surprise to learn that the USA has been accused of bugging EU offices in Washington and New York. This has led to the French government exploding in indignation at such chicanery. 'At the American ambassador's July 4 garden party in Paris, Manuel Valls, the French interior minister, denounced American spying on France and other countries. On Thursday, Le Monde reported that French security agencies routinely collect data on emails, text messages, phone calls and posts on Facebook and Twitter.' (Sunday Times, 7 July) Another case of "Don't do as I do, but do as I say you should." RD

Game, set and match

Andy Murray is already worth an estimated £32 million, but his latest Grand Slam victory will see his earnings soar into the ranks of the world’s wealthiest sportsmen.

Industry experts say that sponsorship and endorsements could see Andy earn around £100m over the next five years.

That would dwarf his career earnings of £18.5m and annual sponsorship deals currently worth around £9m, putting him in the same league as David Beckham.

The Yellow Brick Road

"Have you heard of the wonderful wizard, The wonderful Wizard of Oz, And he is a wonderful wizard, If ever a wizard there was"

While many today consider gold an instrument of financial and personal freedom, Frank Baum, author of 'The Wonderful Wizard of Oz' painted it as a villain - the tool of oppression. Baum published the book in 1900, just after the US emerged from a period of deflation and depression. Prices had fallen by about 22% over the previous 16 years, causing huge debt. Farmers were among those badly affected, and the Populist political party was set up to represent their interests and those of industrial labourers. The US was then operating on the gold standard - a monetary system which valued the dollar according to the quantity of gold. A key plank in the Populist Party platform was a demand for "free silver" - that is, the "free and unlimited coinage of silver and gold" at a fixed ratio of sixteen to one. Populists and other free-silver proponents advocated unlimited coinage of the white metal in order to inflate the money supply, This would have increased the US money supply, raised price levels and reduced farmers' debt burdens thus making it easer for cash-strapped farmers and small businessmen to borrow money and pay off debts. Baum's allegory is a critique of the Populist rationale. The Land of Oz, is a microcosm of America and Oz is short for ounce, the measure for gold and silver. Emerald City, its center and seat of government, represents Washington, D.C. The journey to Emerald City corresponds to the Populists effort to acquire power in Washington. The yellow brick road is the gold standard. The brainless Scarecrow represents the midwestern farmers. The Tin Man represents the nation's workers, in particular the industrial workers. The Wicked Witch of the West and the Wicked Witch of the East represent financial-industrial interests and their gold-standard political allies (NY banker J.P.Morgan and JD Rockefeller), the Emerald City of Oz (green-back money is also a delusion). The Wizard is simply a manipulative politician who appears to the people in one form, but works behind the scenes to achieve his true ends through deceit, and even Dorothy’s silver slippers (changed to ruby slippers for more effect in the color movie version) is a symbol of the belief that adding silver coin to gold coin would provide much needed money to a depression-strapped, 1890s America). Oz is full of monetary reform symbolism.

But it also included some utopian hopes.

In the sequel to the Wizard of Oz 'The Road to Oz' Baum has the Tinwoodman explain:
“It must have cost a lot of money,” remarked the shaggy man.
“Money! Money in Oz!” cried the Tin Woodman. “What a queer idea! Did you suppose we are so vulgar as to use money here?”
“Why not?” asked the shaggy man.
“If we used money to buy things with, instead of love and kindness and the desire to please one another, then we should be no better than the rest of the world,” declared the Tin Woodman. “Fortunately money is not known in the Land of Oz at all. We have no rich, and no poor; for what one wishes the others all try to give him, in order to make him happy, and no one in all Oz cares to have more than he can use...
...[later]"Don't they work at all?" asked the shaggy man.
"To be sure they work," replied the Tin Woodman; "this fair city could not be built or cared for without labor, nor could the fruit and vegetables and other food be provided for the inhabitants to eat. But no one works more than half his time, and the people of Oz enjoy their labors as much as they do their play." ”

The next book in the series , The Emerald City of Oz, Baum goes into more detail (inconsistencies notwithstanding) on the money-less economics:
"There were no poor people in the Land of Oz, because there was no such things as money, and all the property of every sort belonged to the Ruler. The people were her children, and she cared for them. Each person was given freely by his neighbors whatever he required for his use, which is as much as anyone may reasonably desire. Some tilled the land and raised great crops of grain, which was divided equally among the entire population, so that all had enough. There were many tailors and dressmakers and shoemakers and the like, that made things that any who desired them might wear. Likewise there were jewellers who made ornaments for the person, which pleased and beautified the people, and these ornaments also were free to those who asked for them. Each man and woman, no matter what he or she produced for the good of the community, was supplied by the neighbors with food and clothing and a house and furniture and ornaments and games. If by chance the supply ever ran short, more was taken from the great storehouses of the Ruler, which were afterward filled up again when there was more of any article than the people needed. Every one worked half the time and played half the time, and the people enjoyed the work as much as they did the play, because it is good to be occupied and to have something to do. There were no cruel overseers set to watch them, and no one to rebuke them or to find fault with them. So each one was proud to do all he could for his friends and neighbors, and was glad when they would accept the things he produced."

A wizard idea!!!

 Mary E. Lease, is the supposed model for Dorothy in the Wizard of Oz and she was the speaker for the Farmers' Alliance and the Populist Party touring the country making speeches telling farmers to "raise less corn and more hell." She believed that big business had made the people of America into "wage slaves", declaring:
 "Wall Street owns the country. It is no longer a government of the people, by the people, and for the people, but a government of Wall Street, by Wall Street, and for Wall Street. The great common people of this country are slaves, and monopoly is the master... Our laws are the output of a system which clothes rascals in robes and honesty in rags. The political parties lie to us and the political speakers mislead us. We were told two years ago to go to work and raise a big crop, that was all we needed. We went to work and plowed and planted; the rains fell, the sun shone, nature smiled, and we raised the big crop that they told us to; and what came of it? Eight-cent corn, ten-cent oats, two-cent beef and no price at all for butter and eggs-that's what came of it.The politicians said we suffered from overproduction. Overproduction, when 10,000 little children, so statistics tell us, starve to death every year in the United States, and over 100,000 shopgirls in New York are forced to sell their virtue for the bread their niggardly wages deny them...."

Banking 1/7

Are the banks and greedy and incompetent bankers to blame for the current economic crisis? That’s what a lot of people think and what the media seems to want us to think. Certainly, bank directors generally are greedy – awarding themselves huge “salaries”, bonuses and pensions – and some of them are incompetent on their own terms. But blaming them is to let the real culprit off the hook: the capitalist system of production for profit. There are few places in the world more pointless than a bank. There are few compelled to toil more uselessly than bank employees. In every respect, the function of banks is to facilitate a form of exchange in which nothing is produced and much can be lost. A world without banks would be a wholly better place.

For all its worth, the distinction between productive and non productive capitalists remain a question of who gets what share of the unpaid labour of the working class.

Workers are exploited by virtue of the fact that we produce surplus value for the capitalists which is appropriated and used for their own ends. Nothing to do with low wages or being harshly treated. Exploitation is something which is built into the very nature of the employment relation itself which implies the division of society into employers/owners and employees/non-owners .

In fact, capitalism is not interested in producing things as such. It is only interested in profit expressed in money terms. Investing in the production of goods and services is an inconvenience which it has to go through in order to achieve its aim of ending up with a greater financial worth than it started with. Thus the purest form of capital is finance capital and, from the capitalist point of view, the most convenient way to make more money is to do so by financial dealings of one sort or another. It’s an illusion of course. It’s production, not finance, that makes the world go round. The financial world cannot go on feeding off rising paper asset values for ever. Reality must intrude at some point. But capitalism without finance capital is inconceivable; so too, therefore, is capitalism without financial crashes.

Capitalism is not a place (‘financial centres’) or a thing (‘multinational corporations’ ), it is a social relationship dependent upon wage labour and commodity exchange where profit is derived from capital’s theft of unpaid labour. Concentrating on “nasty” financiers and multinationals and defining “capitalism” in those terms can only end up as a massive diversion from the goal of abolishing the capitalist system.

This idea that bankers are any worse than other types of capitalists is not convincing. To repeat ad nauseum. The capitalist class as a whole, and all of the individual capitalists, enrich themselves thanks to workers adding more new value to the commodities they produce than the value of the wages received as payment for their labour-power. Any party to this exploitation of labour – whether the capitalist who lends the investment funds, the capitalist who supervises the commodity production process, or the capitalist who is tasked with selling the commodities – is entitled to a piece of the action and therefore share equally in the blame. It is nonsense to argue that one type of capitalist is more or less culpable than the others. The relations between capitalists is very much like those between a gang of thieves, who cooperate to pull off a heist and then divide the loot among themselves. Conflicts easily arise from such an arrangement: as a bigger share for one means a smaller share for the others. “Wall Street vs. Main Street”. It is more a re-distribution of booty among the robbers. Such squabbles are of little concern to the person who has been robbed. In the end it is just the old “divide and conquer” approach with a subtle new twist – instead of dividing the working class, the internal divisions of the capitalist class are emphasised to deflect attention from the actual real class divide that exists.

The task for socialists is not to drive out speculators from capitalism to perfect the system but to move beyond production as merely a means of capital accumulation.

Who are the people who find a difficulty in paying for the money they use? Not the working class in any sense of the word. Not the large capitalists, for they control the powers of government and have a currency suitable to their interests. There is left the small capitalist and shopkeeping section, who, fond of calling themselves the “middle” class, find themselves unable to hold their own positions against the giant production and “chain store” system of distribution that is crushing them out in all directions. Hence this howl for an extension of “credits” and the introduction of “cheap” money for the purpose of paying their debts. There is no chronic shortage of purchasing power. Sufficient to buy the product is generated as wages and profits in the course of production. Slumps are not caused by an absolute shortage of purchasing power but arise when, because of falling profit prospects, capitalist firms choose not to spend all their profits on fully renewing or on expanding production.

As Marx identified “So long as things go well, competition effects an operating fraternity of the capitalist class…so that each shares in the common loot in proportion to the size of his respective investment. But as soon as it is no longer a question of sharing profits, but of sharing losses, everyone tries to reduce his own share to a minimum and to shove it off upon another. The class, as such, must inevitably lose. How much the individual capitalist must bear of the loss, ie, to what extent he must share in it at all, is decided by strength and cunning, and competition then becomes a fight among hostile brothers. The antagonism between each individual capitalist’s interests and those of the capitalist class as a whole, then comes to the surface…”

 Marx also pointed out that “the moneyed interest enriches itself at the cost of the industrial interest in the course of a crisis” Bankers are enriching themselves at the expense of industrial capitalists in other words.

The present banking crisis is not all that complicated. When borrowing became less available and more expensive banks came unstuck. They found that, when their loans came up for renewal they had to pay more interest on them than they were getting from those they were lending money too. Since banks make a profit by paying depositors and creditors a lower rate of interest than they charge those they lent money to, this meant they were making a loss. That’s what can go wrong when banks can’t get hold of other people’s money on the right terms. What can also go wrong is that they make unsound loans - the sub-prime situation. If they buy a house and the lend someone the money to buy it, if that person defaults they are left with the house. In normal times they can resell it but because there has been overproduction in the housing market they are finding that they can’t get the same price for it as they paid for it. In other words, they lost money.

In fact this effective overproduction in the housing sector could be said to be what has provoked the present financial crisis.

What socialists say about the banks is not regulate them, nor nationalise them, but make them redundant. Abolish them, along with all the rest of the complicated, financial superstructure of the capitalist production-for-profit economy. The mythology surrounding the power of banking helps those who take the view that this vast institution is so necessary that the prospect of a world without money would be unthinkable. Let’s abolish capitalism and live in a moneyless, propertyless world without banks. That means moving from a demand for ‘regulation change’ to one for ‘system change’. Perceived wisdom is that it should be easier to make socialists in a recession when the shortcomings of capitalism are more evident. This capitalist recession will eventually end and the economy at some time in the future will inevitably return to growth. If there are more socialists at that future time, then at least one positive outcome will have resulted from this sorry and preventable mess.

“…no kind of bank legislation can eliminate a crisis” – Marx

 The only way to solve the worlds problems is to escalate and intensify the class struggle. Capitalism is subject to periodic slumps and is a global system, global economic crises are inevitable from time to time. I’d like to think that this would trigger off a world-wide movement for global socialism but experience has unfortunately shown that there is not necessarily a fixed one-to-one relationship between economic crises and the growth of socialist ideas. Other factors too are involved and only time will tell how the socialist movement will fare.

The middle class

Marx uses the term “middle class”. In the Victorian period this term was used to refer to the bourgeoisie or capitalist class. In modern Marxist terminology the words “middle class” would be replaced by “bourgeois” and “bourgeoisie“ as appropriate.

Class is defined by the position in which you stand with regard to the means of production. In capitalist society there are two basic classes: those who own and control the means of production and those who own no productive resources apart from their ability to work. The job you do, the status it might have, the pay you receive and how you chose to spent it, are irrelevant as long as you are dependent on working in order to live. This means we are living in a two-class society of capitalists and workers.

The existence of a “middle class” is one of the greatest myths of the twentieth century. In the last century, the term was used by the up-and-coming industrial section of the capitalist class in Britain to describe themselves; they were the class between the landed aristocracy (who at that time dominated political power) and the working class. However, the middle class of industrial capitalists replaced the landed aristocracy as the ruling class and the two classes merged into the capitalist class we know today. In other words, the 19th century middle class became part of the upper class and disappeared as a “middle” class. The term, however, lived on and came to be applied to civil servants, teachers and other such white-collar workers.

Having to work for an employer was how Marx defined the working class. Commodities express the amount of labor time embodied in them and that is how Marx has defined money.

The traditional division between “working class” and “middle class” implies that there is a conflict between these two groups, with the middle class being better paid, educated and housed, often at the expense of the working class. In order for the left liberal politics to maintain its appeal, the enemy had to be found, not in the abstract workings of a social system, but in the concrete everyday realities. The owning class is too remote to be tangible, and certainly too remote to be vulnerable. So the left reformers dragoon the “middle-class” into the role. Their immediate enemy is the “middle class” ie the lower /middle echelons of management, civil servants, social workers, teachers and all the other functionaries of capital. Making a supposed middle-class into an enemy is as divisive as anything dreamed up by the owning class.

Too young to die, too old to live

There's no question that the population's aging is of major importance, and that it will change the whole tenor of social life health care, the consumer culture, architecture, living arrangements, and even population sex ratios, since women live longer than men. But the real crisis for capitalism and its governments is that the costs of health care and pensions will grow, something that's usually presented as a "burden" on the non elderly members of society. Older people are not to be cared for, even cherished they're a cost that has to be minimised in the name of fiscal prudence, growth, and productivity. Unless older people are to starve, some provision for their income must be made. In pre -industrial societies, where life is short, people tend to work until they can no longer, and then their families take over. With industrialisation families break apart, and such informal arrangements can no longer be relied on.

According to the doomsters, there are many faults to existing pension systems. Too many of the benefits go to affluent retirees, funds that could be better targeted to the poor; public pensions crowd out spending on other worthy public purposes, like education; the assurance of a reasonably generous income at retirement discourages personal saving; and the retired are essentially a parasitic layer of old folk feeding off the non-old. While a public system may work well when it's young, when the number of contributors greatly outweighs the number of retirees drawing on it, as the system matures, the rate of outgo rises to match the rate of income. "Who pays for what?" This is the central question in public finance. But this one question is actually two questions: "who pays?" and "for what?"

Your wage or salary is the sum of money necessary to reproduce your ability to work and your pension is nothing else than wages or salaries deferred until you retire, money that employees would have been paid as cash salary but choose, instead, to have placed in the state operated or company pension fund where the money can be professionally invested (at a lower cost of management) for the future. Expecting individuals to be experts at investing their retirement money in defined contribution plans — instead of pooling the money so professional investors can manage the money as is done in defined benefit plans — is not sound economics. The concept, at its most basic, is buying wholesale instead of retail. Wholesale is cheaper for the buyers.

With pension rule changes, expecting workers to make a larger contribution to their pension and benefits programs. What they are actually asking is that the employees take a pay cut. Unions agreeing to these deals on their benefits are accepting the obligation their members paying for them out of their own pockets.

Some commentators have made the point that, while it is true that it is state-employees’ own money that funds the pension plan, when the pension plan comes up short it is up to the employer to make up the difference. There is some truth in this – but not as much as many seem to think.

Because the pension plan is a defined benefit plan – requiring the state to pay the agreed benefit for however long the employee may live in retirement- if the employee lives longer than the actuarial plan anticipated, the taxpayer is on the hook for the pay-outs during the longer life. But is this the fault of the employees? The pension agreements are the result of collective bargaining. That means that the state has had every opportunity to properly calculate the anticipated lifespan and then add on some margin for error.

Nor can the losses taken by the pension funds over the past few years be blamed on the employees. We had employers failing to make annual payments (taking regular extended pension holidays in the past) for their pension systems. There has been lower investment returns from the recession and increased taxation by the government on funds, not at all linked to the employee outrageous audacity of living longer.

 Concerns over the effect of increasing life expectancy – sometimes described as a "burden" – are only smoke screens. We need to be clear – lowering pension levels and raising the retirement age are in effect real pay cuts.

Pensions are a transfer payment from the profits of the capitalist class – which ultimately come from what workers as a whole produce. That there is at present a "problem" once more proves that the market economy is incapable of going beyond the limits of the wages system. It cannot adequately provide for the needs of the class that produces and distributes all the wealth in the first place.

Advances gained from the increased productivity of our labour – including an increased life span – are being clawed back by capital to its advantage, pushing the burden from the capitalists onto the workers.

The capitalist class encourages us to see their interests and problems as ours. As a result we find our lives opened up to the chaos and uncontrollable insanity of the market. The market system cannot provide any security for us in the long run, which is why we need to turn the current struggle over wages, salaries, and pensions into a politically organised movement for a society based upon the direct satisfaction of human needs.

Many politicians call for the raise of the retirement age to 70. This isn't based on any evidence that people are working longer and don't actually need it, but on the fact that people are living longer and draining from the fund longer than in years past. In fact, the real belief is that many who have to retire before 70 will do so for health reasons on truncated benefits and die before they ever reach 70, thus saving the system money. Those few that actually can and do work until 70 will continue to pay into the system, so it's a win/win move. Added to that is the fact that earners in the top half of the economic strata have a longer life expectancy than those in the bottom half and have a far greater chance of making it to 70 and drawing full benefits Another solutions though could be raising the rate of immigration since immigrants (legal or not) tend to be young, and swell the ranks of those paying into the system rather than drawing it down. GDP growth will, since the size of the economy decades hence will determine how much money is available to pay retirees. The bankruptcy scenario is based on an assumption that GDP will grow at a rate seen only in depression decades.

Also, the World Bank, the voice of world capitalism, proposes a three -pillared system to finance pensions. A mandatory public system, financed by tax contributions on a pay-as-you go basis, to provide a minimum floor income for the elderly possibly a single, flat-rate benefit for all. The second is a mandatory privately managed system, financed by contributions from either employers, workers, or both a form of forced saving with the accumulating balances invested (Privately management in order to prevent the backdoor nationalisation of the private sector that could occur if public entities invested their funds in the stock market). And the third is a system of similarly invested voluntary savings, also financed by worker and/or employer contributions, but not required by law. The public pillar would assure a minimum income (subsistence) in old age, but nothing terribly comfortable. Comfort would only be achieved through the second and third pillars.

Increasing reliance on private savings, forced or voluntary, to fund retirement takes it on faith that funds invested in the stock and bond markets will magically grow to meet rising needs. Over the very long term, interest rates on long-term bonds average about the same as economic growth rates. Stocks do better than this, but it seems economically unwise to bet that financial asset prices can forever grow more rapidly than the value of the underlying real assets the present and future profits of private corporations they're a claim on.

The Bank's favorite model is Chile yet the Chilean system fails to live up to the Bank's promises. The poorest, supposedly protected by a "safety net," get a payment equivalent to a loaf of bread and a cup of coffee per day. Less poor workers are hardly well taken care of by the new system; it's likely that about half of all retired workers will fall under the official poverty line. Women, with lower wages and longer lives than men, come up particularly short. Administrative costs are far higher than the old public system; investment managers are a lot more expensive than public sector bureaucrats. As with most private pension funds, workers have no say over how their savings are used; fund managers cast the stockholders' votes by their own lights, even though they're really only the workers' agents. In the USA the The National Academy of Social Insurance detailed some options workers could pay more; reduce benefits; reduce the cost of living adjustment; increase the age for full retirement benefits; lengthen the career-earnings averaging period; and reduce benefits for new beneficiaries.

The ones being sacrificed on the altar of economics are society's oldest and frailest, an almost inevitable result of the pursuit of profit above all else in our society.

It is encouraging to see the fight back by the public sector unions. The gains made by wage and salary workers on pay, pensions and other related issues have not, after all, been granted by benevolent governments or employers – they had to be fought for. If those gains are to be defended, democratic and unified action by workers is necessary. If governments and employers win on pensions and wages they will try it again with something else. Nevertheless, important as activity of this sort is today it still does not get to the crux of the question.

The Socialist Party urges all workers to consider their position. Workers have to strike because they are slaves to the capitalist class who buy our lives by the week or by the month. So, besides making the greatest possible use of trade unions, we ask for recognition that even at their best such action cannot bring permanent security or end poverty. No strike can stop a government determined to have its way. In the end the logic of capitalism will always win out.

While trade union activity, including strike action, is necessary as long as capitalism lasts it can't work miracles. There can be no lasting solution to the problems the market economy creates within the market system itself. Austerity and insecurity, in a world of potential plenty, is always the lot of the working class. In addition to trade union action socialist political action is needed on the basis of a clear understanding and awareness of our class interests.

Unions cannot make revolutions – only the working class themselves can do that, through clear, democratic, determined political action.

Our interests are opposed at every point to those of the capitalist class. Our cause can only be the cause of revolution for the abolishing of classes based on a real understanding of our position as workers. Without that understanding, militancy can mean little.

The Socialist Party does not ask for blind support. We do not put ourselves forward as potential leaders. What we seek is understanding. Over the past century we have seen movements rise and fall, we have heard slogans fade into distant echoes, we have encountered scores of "solutions" loudly acclaimed only to be discarded.

The single, simple fact we urge working people to recognise is that capitalism generates problems it is incapable of solving. Workers are so busy taking care of the business of capitalists, we don't have the time and the resources to take care of ourselves. The remedy – the only remedy – is to consciously end the property system that divides and oppresses us.