More doom and gloom

Scottish firms are going bust at their fastest-ever rate, official figures revealed.

 “We have seen long-established, well-known businesses collapse in the past year and yet there appears to be no end in sight for the misery facing Scotland’s business community. It is undoubtedly due to a whole raft of factors including low consumer demand and confidence, with export markets in turmoil due to the European Union financial crisis and economic figures that are unrelentingly gloomy.” Bryan Jackson, corporate recovery partner at accountancy firm PKF said.

Joanne Gillies, a partner at law firm Pinsent Masons, said:“Patience seems to be running out for those businesses that have been given time to trade their way out of trouble – either by financiers or other parties such as HM Revenue & Customs"

The state-owned company bailed-out Northern Rock and Bradford & Bingley yesterday warned it was braced for an increase in customers struggling to cope with their mortgages. The uncertain economic outlook, rising cost of living and falling house prices would lead to more customers experiencing difficulties. Around 10 per cent of its customers were finding it difficult to meet mortgage repayments.

The Crisis

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

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

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

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

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

Much the same can be seen from a Business Insider report

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

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

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

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

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

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

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

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

For more see here , and here

A DIVIDED CITY

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

PROGRESSING BACKWARDS

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

Past Reflections 3

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

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

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

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

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

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

Vic Vanni

A class education 2

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

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

THE FUTURE IS BLEAK

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

Producers and Parasites

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

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

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

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

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

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

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

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

Adapted from Kerachers "Producers and Parasites"
 
Appendix

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

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

A Class Education

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

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

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

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

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

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

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

DESPERATE FOR WORK

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

Fact of the Day

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

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

THE CLASS WAR

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

THE CAUSE OF WAR

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

Fact of the Day

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

As others see us 2

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

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

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

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

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

 

Giving their blood for others

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

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

Fact of the Day

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

A housing crisis

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

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

Fact of the Day

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

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

Who owns the North Pole - Part 50

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

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

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

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