Not such a taxing year for some

My , isn't the State generous to certain capitalists .

The Aberdeen -based oil and gas company Venture Productions have had a boom-time in 2006 with a 50% increase in output helped by bringing fields onstream and strengthened by acquisitions. It averaged a net production for 2006 of 44,706 barrels oil equivalent daily and conducted a £153m takeover of CH4 Energy .

"2006 was a record year for Venture and we have continued to make great progress in increasing both production and reserves," said chief executive, Mike Wagstaff.

In September it announced a profit of £97.7million in the six months ended June 30 .

YET:-

Venture said it probably would not have to pay any tax on its 2006 profits after claiming 100% tax relief .

THE ROAD TO HELL- Revisited

Vic Vanni’s posting on this site has generated a lot of comment at the Socialist Standard MySpace blog

Vic doesn’t have a computer so he apologises for the delay of this response.
(Could Darren post this on his MySpace blog?)


Sorry, but I can’t reply to all of the responses to “ The Road to Hell” but there are some that I must comment on.

First, I want to make clear how much I admire Michael Moore. I’ve watched all his TV programmes, his movies and read some of his books. Many others criticise some of what capitalism does – we have John Pilger, Mark Thomas and others, but, like Michael Moore, they have nothing to put in its place, but Michael Moore is special.

He’s special because of his originality, humour and, above all, his courage. I would never have the nerve to beard the lions in their dens as he does, but it still isn’t enough.

I’ll begin with you, Hollywoodartchick.
I can agree with much of what you said but I’m a tad wary of “the coalition” you want to see built. The trouble with coalitions is that they are made-up of groups, which have different agendas and have only come together over some single issue or other. What is required is a united, worldwide movement determined to replace capitalism with the new society of common ownership and democratic control.

This movement would need to understand and desire socialism: Karl Kautsky was a master of Marxist theory but was, in his political activity, just another reformist, even so, he did explain this need beautifully
“Every conscious human action presupposes a will: the will to socialism is the first condition for its accomplishment”.
I wish I’d said that.

Phil, you think that consciousness doesn’t come in a flash but comes step by step.
You are right and I’m a case in point. I could never have made the leap from near political ignorance to any kind of understanding of Marx’s theories without being influenced by others along the way.

You see Michael Moore as a stepping-stone to a growing consciousness for many. I started in the British Labour Party and learned from some of the people I met there, but stepping-stones, if they are to be useful, should lead to somewhere worthwhile, but I would never have got there if I hadn’t stumbled across those who introduced me to socialist ideas. Getting that introduction is absolutely essential.

Next up is you, Carl. Michael Moore was your hero but is no longer because, despite his attacks on capitalists, he has supported politicians who are itching to run American capitalism. He is only following in footsteps of generations of “progressives” who usually justified supporting these politicians because they were “the lesser evil”. Of course, if elected, they would do whatever it takes to maintain and extend the interests of American capitalism. We only have to remember Kennedy, Carter and Clinton to see that.

Cindy, you’re kidding yourself if you think Michael Moore “knows very well how capitalism works”. If he does then he should at least know that profits can’t be “fair” or “reasonable” as he would like. They MUST be maximised, not out of greed, but because this is necessary for businesses to keep up with or get ahead of the competition.

Malcolm, your views are truly a gospel of despair. Their implication must be that capitalism will last forever because people have been brainwashed into accepting it. Capitalism can’t last forever, Malcolm, nor can anything else in the universe. It is just another stage in social development and, unless it destroys us all first, will eventually be replaced by the “full-blooded socialism” you mentioned. This, of course, would depend on what people like you and me do about it.

I’ve kept the best to the last.
Courtney, you have shown that you understand very clearly that humans are conditioned by circumstances, that it is the capitalist system (or any other property society) that makes we humans do the awful things we do to one another. I found your contribution most heartening. My thanks to you.

While I’m at it, my thanks once again to all who responded and if, as I suspect, I’ve stood on some toes then please visit us again. Finally, if any of you want to know more about us then log on to…. The Socialist Party

V.V.

Iraq denies UN casualty report

Iraq has dismissed a United Nations report that put the number of killings across the country last year at 34,400, saying it did not correspond with reality.
Ali al-Dabbagh, spokesman for Prime Minister Nuri al-Malaki, said Thursday that the report, released Tuesday, "does not reflect the reality on the ground. It is based on individual stories."
The United Nations based its findings on data provided by the Iraqi health ministry, which collated figures from hospitals around the country as well as from the Baghdad morgue.

But Dabbagh said: "Unfortunately the report is not based on official sources."

When asked if the Iraqi government could provide its own casualty figures,The spokesman said:-

"We do not have casualty figures because we have been unable to gather them due to security reasons."

ERRRRRRRRMMMMMM , WHAT'S ZAT !!!

A Bit of Light Relief

A joke Courtesy of Wee Matt

This little boy goes to his dad and asks, "What is politics?"

Dad says,"Well son, let me try to explain it this way. I'm the bread-winner of the family, so let's call me Capitalism. Your mom, she's the administrator of the money, so we'll call her the Government. We're here to take care of your needs, so we'll call you Human Needs. The nanny, we'll consider her the Working Class. And your baby brother, we'll call him the Future. Now, think about that and see if that makes sense."

So the little boy goes off to bed thinking about what Dad has said. Later that night he hears his baby brother crying, so he gets up to check on him. He finds that the baby has severely soiled his diaper. So the little boy goes to his parents' room and finds his mother sound asleep. Not wanting to wake her, he goes to the nanny's room. Finding the door locked, he peeks in the keyhole and sees his father in bed with the nanny. He gives up and goes back to bed.

The next morning, the little boy says to his father, "Dad, I think I understand the concept of politics now."The father says, "Good, son, tell me in your own words what you think politics is about."

The little boy replies, "Well, while Capitalism is screwing the Working Class, the Government is sound asleep, Human Needs are being ignored and the Future is in deep shit."

Meeting..Free software..dot . communism ? In Edinburgh-Glasgow

Tuesday 30 January 2007 at 20.00
Quakers Hall
Victoria terace (above Victoria street)
Edinburgh
----------
Wednesday 31 January 2007 at 20:00
Maryhill Community Centre
304 Maryhill Road
Glasgow
Click on image above or text image below to enlarge.

Tuesday 30 January 2007 at 20.00
Quakers Hall
Victoria terace (above Victoria street)
Edinburgh
---------
Wednesday 31 January 2007 at 20:00
Maryhill Community Centre
304 Maryhill Road
Glasgow

Click on text image above to enlarge.

The Insecure Society

In Dundee after the Second World War the NCR Company in Dundee employed over 7,000 workers, but over the years this has fallen to less than 1,500. So when Bill Nuti, the company's chief executive announced 14 months ago that he was "one million per cent committed to the Dundee operation" the remaining workers felt relieved, but capitalism doesn't work that way.
Their American employer dismissed a total of 650 factory workers in Dundee via transatlantic video link yesterday after being told that production was to be switched to cheaper plants overseas.Employees at NCR, which makes automatic teller machines, were summoned to a meeting at midday yesterday where amidst angry scenes, the job loses were announced by video-link by Bill Nuti, the company's chief executive." (The Times, 12 January) R.D.

THE UNEMPLOYMENT WEAPON

If anyone has any doubt your unemployment (poverty) is a concern for the bosses maybe this will change your mind.

More than three quarters of UK bosses think their companies would benefit from an annual quota of staff dismissals, a report has found.


The survey by recruitment consultancy Hudson UK spoke to 562 senior managers.
It found that one in six executives thought their company could target up to 20% of its workforce each year for dismissal without damaging productivity and morale. Less severely, 43% of bosses agreed that dismissing up to 5% of staff each year would be healthy.

"Sometimes the best career direction for an employee is out of the company."

Notice the use of healthy and benefit, would you like the benefit of healthy dismissal?

I think the best direction would be towards common ownership of the means of production, that’s the healthy beneficial career direction the working class could arrive at.

CARING REFORM?

Almost six million workers throughout the UK - more than 500,000 of them in Scotland - will receive extra four days holidays this year.
I certainly won’t refuse this, but are the bosses being generous?

The deal, which was thrashed out before the 2005 General Election by the government and the trade unions, will bring UK workers closer to their European counterparts, who enjoy a more generous holiday entitlement.

The government has wrestled with holiday entitlement, wanting to introduce it in a way that will not alienate the business community.

The changes are expected to cost business around £4bn a year which the DTI said amounted to 0.4% of the total wages bill. The department also pointed out the cost of absenteeism in the workplace, which the new measures are expected to reduce, was estimated at around £11.6bn.

Well I think saving the business community £7.6bn must have been the arm lock the government used. Like a lot of other welfare reforms, its not caring and sharing that motivates the business community.

Downward pressures on wages

American and Japanese firms are welcomed into Britain. They provide earnings for unemployed workers, can’t be bad? However, when they decide to move their business to another part of the world, questions get asked, we have dealt with some of them on this site. Sprawling Prawns and THE ROAD TO HELL are worth a read.

Workers may not have noticed that overseas capitalists maybe think the lower wages paid in Britain were the attraction, even if they were aware of this, a wage is a must have and certainly better than social insecurity.

The dismissal of 650 workers by NCR means The fall-out could put as many as 1000 out of work as smaller companies dependent on the American firm shed staff.

Attempts will be made by some to blame the foreign worker and use nationalistic propaganda as a solution, however. I’m sure you will be aware of local bosses doing the same sort of thing when they are not making a profit; it’s a class thing, no profit, no employment.
The bosses struggle against each other, here in East Kilbride at the end of this month, the CO-OP will close its main shopping mall. All the staff will be redundant because of the competition from outlying areas such as Kingsgate.
Not a lot is made of this closure, no big number, these things are happening all the time; the result is the same, anxiety, uncertainty and worry for many members of the working class.

Industrial and financial experts may be called in to help the hundreds of jobless make a profit for someone.
There will be no end to this until the working class think globally and act globally in their interest, by establishing common ownership of the means of production, i.e. Socialism.

A distasteful flavour of the menu presented to the Dundee workers follows.
Just over a year ago management gave assurances that manufacturing in Dundee would be unaffected by the new plant in Budapest.

NCR’s president and chief executive, Bill Nuti said he was “one million percent” committed to the Dundee operation.

These are the assurances given to the workers in this Dundee factory. However, the profit motive evidently overrides the promises. Caring and Sharing? No way!

Dundee operations director Allan Valentine said, “This is a very difficult but necessary proposal in response to changing market conditions. Our competition is also moving its manufacturing operations to lower cost areas.”

The production of automatic teller machines, the ubiquitous “hole in the wall” cash dispensers whose development was pioneered in Dundee, will now go to Hungary, China and India.

“The proposed re-alignment of our manufacturing operations will help create a level playing field that will enable us to become more competitive by lowering costs and freeing up resources to invest in new product innovation.”

Well are they thinking of your welfare?

Paid too Much

The name Martin Gilbert cropped up in a previous blog on Socialist Courier for being an over-paid fat cat parasite . Seems as if we aren't the only ones who question his worthiness .

Pirc, which advises largely public sector pension funds has singled out Aberdeen Asset Management for criticism in its latest review, branding as "excessive" last year's £4m pay package for chief executive Martin Gilbert. The company's annual report revealed at the end of December that Gilbert was paid a £2.6m bonus during the year, on top of a basic salary of £435,000, and also received pension contributions of £890,000. The total of £3.95m compared with £1.2m the previous year.

Pirc is urging its members to vote against Aberdeeen's remuneration report at the annual meeting next week claiming that its chief executive annual bonus equivalent of 656% of salary and an LTIP (long-term incentive plan) award of 312% of salary is indeed extravagent .

Pirc is very welcome to contact the Socialist Party and we will gladly furnish them with a further list of overpaid capitalist bureaucrats .

The State of the Welfare State

Councils in England are restricting access to social services such as home care, day services and respite care. The Commission for Social Care Inspection warned this was happening by default, and without debate.

The Commission for Social Care Inspection chairman Dame Denise Platt said many people were being left to make their own arrangements because access to services was being tightened to include only those deemed to be in the most serious need.

Neil Hunt, chief executive of the Alzheimer's Society, said the system was in crisis, and accused the government of being unwilling to provide sufficient funds to help people with serious medical conditions.

Age Concern's director general Gordon Lishman said: "This is a damning indictment of a social care system that is failing older people. Not providing services for people with so-called moderate needs causes much anguish for the individual - but can also result in much higher and more expensive care needs in the future."

Dame Denise said: "In some cases people rely on family and friends, in others they pay for their own care. Some people have no option but to do without. "
Nearly five million people are classed as carers, with 1.5 million of those providing over 20 hours of care per week.
Dame Denise said: "They are doing this without the proper infra-structure in place. It is a complex sector, but they are often given no help navigating through it."

The promise of care from the cradle to the grave was one that was boasted of by the social reformers of the Labour Party - A promise that can be broken and forgotten , as we see .
And as Dame Denise states , it is not the power of the Capitalist State but mostly actual people-power who look after family and friends . Another reason to forgo this forlorn society .

THE ROAD TO HELL

Michael Moore, American TV programme and movie maker, is a compassionate guy who hates what capitalism does to people and strives to right what he sees as wrongs. Sadly, he hasn’t a clue about how capitalism works and is a prime example of the idealist who fights effects but leaves causes untouched.

He thinks that corporations and the filthy-rich should be content with less wealth and should share profits with their workers. What a hope, but here in Scotland we have our own version of Michael Moore in showbiz personality in Elaine C. Smith.

In her column in the SUNDAY MAIL (December 31st) Elaine, having applauded “the risk-takers” and endorsed the capital-labour relationship, lambastes business fat cats who pocket huge sums of money and asks, “Do they really need all that money? Couldn’t they have just put a couple of hundred quid in the pay packets of their workers?”

What Elaine doesn’t realise that those fat cats get their wealth by trying to ensure that their business MAXIMISE their profits and keep shareholders happy. What investors want is not smaller but bigger profits and dividends.

It’s not just fat cats and shareholders who want more: everybody does, even working class savers with, say, building societies look for the highest rate of interest. That’s what capitalism is all about.

Michael Moore and Elaine C. Smith want a caring, sharing capitalism and although they mean well they should remember that the road to hell is paved with good intentions. V.V.

Burnt out at 50

Scotland's ageing population does not represent a "crisis" according to a Holyrood think tank.
A year-long study by the Scottish Parliament's Futures Forum says the nation can afford to grow old, if it rethinks its approach to retirement.

"An awful lot of people are peeling out of the workforce at 50, burned out," said Lord Sutherland "That shouldn't happen. There's something wrong with the way that we're operating in society if that's the case."

Indeed there is something wrong with this society - it's called capitalism . A social system that does indeed use and abuse people , prematurely sending them to the poverty of Invalidity , Incapacity and Sickness Benefits , then on to an early grave .
That is the real crisis - we aren't able to age long enough and enjoy it long enough .

Just some local news

The second 'Social Atlas' of the Borders just published by Scottish Borders Council.
Earnings in the Scottish Borders are about £80 a week below the national average .

Average income is just over £355 a week compared to £436 across Scotland.

SCOTTISH Executive defines households being in fuel poverty when they have to spend more than 10 per cent of their income on all household fuel, and while there are varying degrees of fuel poverty across the Borders it is generally widespread across the region.

The percentage of the population suffering chronic mental health problems continues to increase and over a twelve year period between 1992 and 2004 the percentage of the population taking prescribed anti-depressant drugs increased from 1.9% to 8.3%."According to Scottish Executive statistics, the Scottish Borders has the second highest rate of the population prescribed drugs for anxiety, depression or psychosis in Scotland, after Dundee City.

And talking of Dundee , data from the Tayside Economic Review 2005 showed that wages had fallen by 1.2% across the region, while the Scottish average increased by 3.1%.

So are we one Scotland ?

Gates and Profits

Mailstrom , has posted an interesting blog concerning Bill Gates and his charitable foundation based on a recent article in the L.A. Times . How the hunt for profits is often the primary motivation for the fund managers investment policy . And how the need to protect Microsoft profits leads to the defence of the drug companies monopolies over medicines by use of patent rights .

It is of interest because at the end of the month Edinburgh Branch of the Socialist Party will be hosting a public meeting later in the month that is in many ways directly related to this subject .

SSP tames Capitalism!

Reformist political parties in opposition always claim how much better everything would be if only they were in power and the Scottish Socialist Party (SSP) is no exception.

One of their policy documents tells us they would provide free public transport and that this, on it’s own, would bring fabulous benefits in just about every area of life.

Everything would be better: the NHS, the environment, the economy, business efficiency, productivity, road safety, more tourists, etc. On top of all this there would be savings of many millions, even billions, of pounds, giving us all more spending power as well as big savings for businesses.

And how is all this to be achieved? By two old leftist illusions; taxing the rich and nationalisation (disguised as public or social ownership). Apparently, nationalisation would be more efficient and cheaper, despite the evidence of past experience, and taxing the rich must mean that we’ll still have them. The source of their riches is the surplus value wrung from the working class but the SSP seem not to have noticed this.

We are grateful that the word “socialism” isn’t mentioned once in this document because its contents have nothing whatever to do with socialism. The SSP’s aim is really just the same as all the other reformist parties – they try to solve capitalism’s problems by merely re-organising it. If all their proposed reforms were adopted – nationalisation, the multitude of changes in the tax system, defence budget cuts, etc., we’d still be living in a money-driven, buying and selling economy, still working for wages and salaries, still insecure, being hired and fired, in short, in capitalism.

Free transport for all can really only be achieved in a worldwide, moneyless, production for use society in which ALL goods and services would be freely available to everyone. That’s what genuine socialists campaign for and what the SSP NEVER does. V.V.

Unpaid overtime

Workers put in £23bn of unpaid overtime last year, losing out an average of £4800 each, according to a study which highlights Britain's long-hours culture.

Scottish employees who do unpaid overtime lose £79.82 a week for the extra six-and-a-half hours they work. This is the equivalent of £4151 a year in lost earnings.According to figures released yesterday by the Scottish TUC, Scots worked £1728m worth of unpaid overtime last year.

A survey by the TUC found employees work an average of seven hours and six minutes extra every week and if they did all their unpaid work at the start of the year, the earliest they would be paid would be February 23.

On February 23, employees will be encouraged to take a proper lunch break and go home on time. Employers will be asked to use the day to thank their staff by buying them lunch or taking them out after work.

Is this really going to be the response of the STUC ? To request a free meal from management for us working for our bosses for nothing ?

And of the working class ?? It is one of the cornerstones of Marxist economics that unpaid labour is the source of the Capitalists' profit - the Labour Theory of Value . It is why we in the The Socialist Party call the Capitalists thieves for appropriating this unpaid labour . Now , to actually do even more extra unpaid work beyond our contractual hours of employment , that's an act of the greatest charity by workers - and the Capitalists go laughing all the way to the bank . Indeed we are truly the ragged trousered philanthropists .

FUNNY SOLUTIONS FOR NOT SO CHEERY PROBLEMS

Elaine C Smith is an entertaining woman; she has a full page in the Sunday Mail
(31st December 2006).
Among her solutions for the alcoholic problems that are filling the accident and emergency departments are dearer prices in supermarkets for alcoholic drinks. I agree drunkenness at time leads to anti-social behaviour but does this apply to old age pensioners? Not the pensioners that write to her complaining their quiet pint is to dear, because they are the ones who don’t arrive at the A&E on Saturday and Sunday she thinks they should get their pint at a cheaper rate.
Well I did say she was an entertaining woman; I was thinking of asking her if raising the price of food with cheaper rates for slim people could solve the obesity problems plaguing the NHS.

Social problems need a lot more thought than that expressed in the Sunday Mail. Pensioner’s poverty and anti-social behaviour are an expression of an anti-social system called capitalism; I think socialism is worth a thought.

Hypocrisy Over the Death of a President

" The nation honoured Gerald R. Ford ...a man whose name was a synonym for integrity..." eulogised one newspaper -

The President of the United States of America , who in 1975 gave Indonesia and the dictator Suharto the green light to invade East Timor that has left perhaps 200,000 dead . Ex-President Gerald Ford can rightly be held partly responsible for the death of one-third of the population of East Timor . General Suharto briefed US president Gerald Ford and his secretary of state Henry Kissinger on his plans for the former Portuguese colony hours before the invasion .

"We want your understanding if we deem it necessary to take rapid or drastic action," Suharto told his visitors

Ford replied: "We will understand and will not press you on the issue. We understand the problem you have and the intentions you have."

While some may pay homage to Gerald Ford , we in the Socialist Party will remember and mourn his victims .

Inside the Bolshevik Cul-de-sac

Another article from the Socialist Standard archives which once again ( but in a slightly more theoretical depth ) demonstrates the bankruptcy of the Socialist Workers Party ( then the International Socialists ) and their kindred Trotskyists. Although dated from 1970 and discusses a Russia that has now changed , not too much has actually changed .

Inside the Bolshevik Cul-de-sac

Those who still cling to the basic Bolshevik premise - that the Russian insurrection of October 1917 amounted to a Socialist Revolution - are caught inside a trap of their own making . Whichever way they turn , they are landed with an uneasy antagonism between their theory and reality …

IS Group

However most of the people who have recently come round to the view that Russia is capitalist have not adjusted all of their political views accordingly , but have merely corrected this one point, failing to notice the inconsistencies which then emerge in the remainder of their ideas. For example the group known as International Socialism ( IS) is basically a trotskyist group except that it holds Russia to be state capitalist .

The growth of working -class understanding is a contradictory process. With their emphasis on violence and minority action IS are peddling dangerous deceptions. Yet these are more advanced deceptions than those marketed by the “Communist” Party 20 years ago - more advanced in the sense that they recognise the impracticability these days of equating nationalisation and the Russia with Socialism . True , the incorporation of the correct view that modern Russia is capitalist into the fundamentally mistaken and anti-working-class doctrine of Bolshevism , allows this doctrine to gain greatly in immediate appeal. But only at the expense of yet more glaring inconsistencies within the doctrine itself. For instance , the IS claim that capitalism sprang into being in Russia in 1928 after 10 years of transition towards Socialism is breathtaking in its lack of connection with any kind of reality [ In case the point is missed , this is not only an exercise in labelling the past . So long as IS maintain that the 1917 revolution was Socialist they will be unable to seriously criticise all the garbage that comes in its train, Lenin’s ignorant theory of Imperialism ; the concept of the vanguard party and “transitional demands” etc. So long as they fail to do this , they are an obstacle to the establishment of Socialism .] Even the Bolshevik leaders ( with the exceptions interestingly enough , of Trotsky and Stalin ) conceded that state capitalism existed in Russia following 1917.

Kidron and Mandel

There has recently been a controversy between Michael Kidron (IS) and Ernest Mandel (orthodox trotskyist) [ Kidron in International Socialism 36; Mandel’s pamphlet The Inconsistencies of State Capitalism ; Debate between Kidron and Mandel at Hull University , 4/11/69; Harman in International Socialism 41 ] which is interesting to Socialists since it shows Kidron failing to draw reasonable conclusions from his view that Russia is capitalist 9 in fact failing to fully comprehend what this means 0 , and Mandel taking advantage of Kidron’s confusion to discredit the whole theory of state capitalism .

Mandel points out that if they were consistent , IS would adopt a position of hostility towards the “Communist” movement . If North Vietnam is state capitalist , how can IS support the Vietcong? If the “Communist” parties are capitalist parties , the potential nuclei of future ruling classes , and if these ruling classes would not be historically progressive , why do IS co-operate politically with them ? Mandel might well ask.

Of course , he regard such a position of hostility as unthinkable . But this is precisely the standpoint of the Socialist Party of Great Britain .We have at no time combined with the “Communist” Party or ceased to expose it, and we have always adopted a policy of opposition to both sides in every capitalist war. Unlike IS , we unite theory and practice .
In order to combat Mandel’s argument that Russia is a “transitional society,” Kidron says that there can be no transitional society between capitalism and Socialism . Quite correctly , he states : “The only possible transition is a sudden , revolutionary one.” This promising statement ( astonishing coming from IS ) is somewhat undermined by the fact that Kidron hasn’t the foggiest clue what Socialism is;

“ Socialism is a total system. It cannot grow piecemeal within the interstices of a capitalist society . How does workers’ control of production coexist with the control by the ruling classes when the means of production in dispute are one and the same? How does self-determination and consumer sovereignty ( ‘production for use’ ) coexist with the external compulsion and blind accumulation that results from capitalist dispersal”

This is one of several instances where Mandel ( who has read Marx) has a field day demolishing Kidron ( a mere Keynsian-eclectic mouthing misunderstood Marxist phrases). Socialism , of course , has nothing to do with “workers’ control of production” . Socialism means a classless world society , without commodities , without the state , without frontiers . It is therefore interesting to note that Mandel realises what Socialism is , but relegates it to the distant beyond , whereas Kidron wants “Socialism” as quickly as possible , but his “Socialism” isn’t Socialism at all ! Mandel’s “transitional society ” is basically similar to Kidron’s “Socialism” and both are actually models of capitalism, since both envisage the retention of the wages system.
Marx argued that wage-labour and capital were quite inseparable . And in a reply to Mandel , C. Harman of IS comments:

“Nowhere…is there a single mention of the working class or a single reference to the wage labour/capital relationship. Now this is curious . For it was not Michael Kidron but Karl Marx who wrote ‘The relation between wage labour and capital determines the entire character of the mode of production’ And this is not an accidental aside….”

But later we find Harman flatly contradicting this , as he must because wage-labour is to remain a feature of the “worker’ state” which is the avowed aim of IS . Harman argues that Russian industry from 1917 to 1928 was not capitalist , though presumably he would not deny that it featured wage-labour.

Neither Mandel nor Kidron seem unduly aware of modern Russia’s realities . Both seem to believe the Russian economy is “planned” full stop.
What then is the situation of the Russian worker ? He is free to move from factory to factory , from town to town , or occupation to occupation , in pursuit of higher wages , or under pressure of unemployment. And he is forced to do so , since he owns no means of production (except a substantial but dwindling number who have small plots of land , and indeed , need them to keep starvation at bay ). He is therefore “doubly free” in Marx’s phrase . He sells his labour- power to a state enterprise for a wage which is less than the price of his product . The surplus is mostly reinvested for his further exploitation, with a small proportion going to keep his rulers in the manner to which they are accustomed . In any circumstances ( except general forced labour) it would be quite impracticable for the state to plan wages with any accuracy , but this is impossible in Russia where most workers are on piece rates ( described by Marx as ‘the form of wages most in harmony with the capitalist mode of production’ ) It has been a pretty constant feature of Russian state capitalism that the actual total wages bill has exceeded (sometimes vastly) the amount foreseen in the plan. In Russia , labour power is clearly a commodity .
A popular view of the Russian economy is that a plan is devised at the top , orders are issued , and enterprises promptly fulfil the plan. The goals of the plan are , first , making an overall profit , second , catching up with the West . Yet to possess any effectiveness at all , the plan must be based on reports from the enterprises which as well as being concerned to fulfil plans , also have their own profit or loss account, with plenty of incentive to get their profits up .
In fact , the long-term ( five-year and seven-year) plans are always drastically modified in practice . They are merely guidelines for the annual ( and quarterly and monthly) plans . Even so , several of the long-term plans could not be decreed until long after they were supposed to have started , and one ( the 6th five-year plan ) had to be abandoned altogether .

In the process of adapting the long term plan year by year , all sorts of unforeseen factors have to be take, many of which are even by Mandel’s account , unambiguously the product of market forces . Much of the Russian state’s “planning” is thus a matter of anticipating , or even subsequently conforming to , these market forces . It is , however , true that they can exercise considerably “arbitrary” influences . Any capitalist state can do this to some extent ( development grants , SET , etc ) The Russian state has much more power , mainly because , with the state monopoly of foreign trade functioning as a protective tariff , and with prevailing internal scarcity , the Russian capitalists have a seller’s market . In relation to the peasants they have a buyer’s market . It is exactly in such monopolistic situations that commodities can sell consistently above or below their values [ If Mandel reasoning was correct and Russia lacked some of the essential features of capitalism , this would show not that it was transitional between capitalism and Socialism , but “transitional” between Asiatic feudalism (tsarism) and capitalism . The peculiarities of Russian capitalism are the outcome of an unprecedented combination of backward peasant production and advanced industry ]

But what happens as the disappearing peasant reserve strengthens the workers bargaining power ? As consumer good production is increased to raise the worker’ productivity ? As consumers ( workers and capitalists) get greater choice in their purchases , so that enterprises must become more responsive to the market , hence freer of central direction? What happens as the era of telescope development passes , so that Russian industry must imitate less and innovate more ? The Russian capitalists are compelled to abandon by degrees the system of planning with material targets , which served them well as a method of rapid industrialisation , but has now outlived its usefulness .

There are many defenders of western capitalism who assert that “Socialism” has failed in Russia which is therefore “returning” to capitalism . Mandel plays into the hands of these people by describing the current decentralisation of profit -seeking initiative as “degeneration” when it is clearly necessitated by advancement . He also thereby gives ammunition to those who argue that “Socialism” is suitable only for backward countries.

What has failed in Russia is not “planning” , much less Socialism , but the attempt to plan a capitalist economy . It is not impossible to operate a technologically advanced society according to a common plan , but it is quite impossible to do this if there are competing economic interests , and if all those working for the plan have to be provided with a monetary incentive for everything they do . In a Socialist economy , with all work entirely voluntary and the price system abolished , it will be entirely feasible to plan all production according to democratically decided criteria .

Between capitalism and Socialism there cannot exist a stable , lengthy transitional period . This point seemed to have dimly penetrated the brain of Trotsky , who recognised the silliness of a transitional society which stably maintained itself for generation after generation . He therefore described Stalin’s regime as a pyramid balanced on its head , and predicted it would be toppled in a major war. When the war came , it demonstrated the Russian system to be rather a pyramid stood firmly on its base .[ It is revealing that Mandel doesn’t dare use Trotsky’s long-since shattered argument that a state bureaucracy cannot constitute a ruling class . Trotsky was prepared to concede that state capitalism could in theory exist provided there was individual ownership of shares in the state ]

Far from Russia being on the road to Socialism , workers there still have to win elementary political and trade union rights already gained by western workers . Capitalism continues to exist throughout theory because workers put up with it , and can be abolished as soon as the majority of workers desire Socialism , though this is most strikingly evident in countries , unlike Russia , have effective workers’ suffrage . It is quite wrong to believe , as Mandel does , that we should support Russia or China against America . It is not worth a single workers’ life of limbs to advance the interests of the Russian rulers against their rivals. Neither does it matter whether Russian enterprises remain formally , legally state-owned or not . This has no bearing on workers’ interests and is beside the point anyway - a nationalised industry can be as free from de facto central control as some “privately-owned” firms.

Mandel’s view would have slightly more plausibility if all his “transitional societies” were politically united under one state . But they compete economically and militarily , and if the whole world owned by them alone , the danger of our species being exterminated in a war would be no less than it is today - “transitional” indeed !

Russia must of course be seen in its international context . It is here that the IS arguments against Mandel are strongest . As Harman rightly says , there is no such thing as the “inner logic” of a plan . The goals of Russian national planning have been fixed by international competition .

But the force of the IS attack here only throws into more startling relief their position on the national question ( especially now that they have taken to supporting , not only the Vietcong, but also the Chinese state which they admit to be capitalist) . It is no get-out to proclaim , as Harman does , that they also supported the Kenyan anti-colonial movement , or the “ the Cypriot struggle led by the cleric Makarios and the fascist Grivas” That is nothing to be proud of . Neither is this justified by calling it “ the Marxist position” What conceivable excuse can there be for people supporting the slaughter of workers which is a side-effect of the rival capitalist powers’ perennial jostling for a place in the sun?

By S in the Socialist Standard April 1970

Further reading :
SPGB Education Document (1995) WHERE THE SWP IS COMING FROM