Without the Rose-tinted Glasses

This rather unsympathetic article by Gary Girod about Red Clydeside is of interest and a rich source of facts and details.

The Background

For many years, the Left have painted a picture of Glasgow and Red Clydeside as a revolution that almost was. Some have argued that the unrest in Glasgow during WWI and the immediate post-war period was a prelude to the establishment of a workers' republic in Scotland. Willie Gallacher's said of the 40 Hours' Movement that "we were carrying on a strike when we ought to have been making a revolution." Memoirs written decades after the 1914-1919 period and the government's hysteria paint a picture of Clydeside which was far more revolutionary in hindsight than it ever was in reality. In 1983 Iain McLean's "The Legend of the Red Clydeside" asserted that Red Clydeside was neither a revolution nor "a class movement; it was an interest-group movement." Glasgow was not Petrograd and it never could have been. Its goal to maintain the standard of living in Glasgow as the war strained the economy. According to the 1916 STUC report, the cost of living between July 1914 to July 1915 increased by 35% while food prices increased by 17% in small towns and 19% in cities.This would prove to be but a mere taste of the war's costs for the lower class. By December 1917, food prices had increased 106% while the cost of living increased by 85% to 90% as compared with pre-war levels. Workers' wages did not even come close to keeping up with this inflation. By April 1917, skilled laborers' wage increased by only 50%.

In 1913, for the first time in the history of Great Britain, a census of production catalogued the wealth of Great Britain. According to the report the £712,000,000 that formed the net output of Great Britain was divided between 6,984,976 workers, which would mean that if this wealth was divided evenly, each person would make  £102 per year. However, the average wage of workers in Great Britain was "officially stated to be not more than 24 shillings per week, or  £62 4/- per annum. Thus in 1907, the British worker was generous enough to pay the manufacturer  £40 per annum for the privilege of working to produce wealth. The Scottish Trades Union Congress uses the findings of the report to calculate the inequality amongst engineers and determined that the "net output per person employed [was]  £108." Meanwhile, the average annual wage of engineers was £67. "There is the simple answer, £41 per employed person to the capitalist." The 1920 Manifesto of the Socialist Labour Party notes that "of the wealth produced in this country, roughly £1,700,000,000 per annum, the workers' share is, according to capitalist authorities, less than £665,000,000 so that the working class gets little more than a third of the wealth produced." The manifesto would conclude that "this is wage-slavery."

NATIONALIST NONSENSE

Nationalism is a horrendous condition that has been used by the owning class to turn worker against worker in wars and has led to millions of death. A particularly stupid manifestation of nationalism was displayed in Belfast recently. Because the union jack flag was only going to be displayed on designated days at the city hall so-called British patriots rioted in the streets."Eight police officers have been injured and 12 people arrested following clashes between loyalists and riot police in Belfast. Six officers were injured in the Crumlin Road and Ligoneill Road area of north Belfast and two at Shaftesbury Square in the city centre." (BBC News, 8 December) If it wasn't so tragic it might be called comical that workers, many of them without a job, should take to the streets to support "their" country. RD

Fracking Gas

More than 20,000 square kilometres (7800 square miles), A quarter of Scotland, covering the entire central belt and a part of the southwest, have been earmarked by the UK Government for possible exploitation by controversial technologies such as fracking to extract gas from wells dug deep into the ground. Scotland is rich in coalbed methane gas because of its coal reserves. Plans are afoot to drill 22 wells to tap the methane gas in coal seams near Falkirk and Stirling. Some 16 exploratory wells have been dug.

One recent study published in an international scientific journal found that 632 chemicals were used to extract underground gas in the US. Of the 353 on which there was detailed information, more than three-quarters were potentially hazardous to health, with over one-third being gender-benders (chemicals that can disrupt sexuality) and one-quarter capable of causing cancer. "These results indicate many chemicals used during the fracturing and drilling stages may have long-term health effects that are not immediately expressed," concluded the researchers from The Endocrine Disruption Exchange in Paonia, Colorado.

 Scottish Environment Protection Agency (Sepa) warns that fracking for gas is "very likely" to bring radioactive wastes to the surface in fluids. The radioactivity is naturally present in the ground, but is released by the process. Sepa also points out that, in addition to the climate pollution caused by burning the gas, there could be accidental emissions. Releasing methane, a much more potent greenhouse gas than carbon, would help accelerate global warming, it says. Mary Church, a spokesperson for Friends of the Earth said  "Communities around the world are seeing the devastating impacts of coalbed methane and shale gas expansion. We need to learn from these experiences and ensure the same doesn't happen here."


The UK Government suspended fracking after it was blamed for causing small earthquakes near Blackpool last year, though it is now expected to give it the go-ahead.

1: Fracking, hydraulic or ballistic: This frees the gas by deliberately fracturing the rock by drilling down and then pumping in high-pressure liquids, or even detonating explosive charges. Fracking can be used to extract the gas from shale, a type of rock, or to free "tight gas" held in deeper, denser rock formations. It can also be used to help mine the methane that inhabits coal seams.

2: Tapping "coalbed methane": This involves drilling into and along the seams, and then pumping out and disposing of large quantities of water, a process known as dewatering. The removal of water may be enough to stimulate the flow of gas, though sometimes fracking may also be necessary.

A reality check

All working-age benefits, including tax credits and child benefit, will only go up by 1% a year – less than half the rate of inflation – for the next three years. A cut, in other words, that will be worth £3.75 billion a year to the Treasury, in addition to all the previously announced cuts and freezes. The poorest 30% will be made to bear most of Osborne's budget cuts in the age of austerity.

The Joseph Rowntree Foundation explained that as things stand – which is to say, before the next round of cuts – out-of-work benefits cover 60% of the minimum income standard for couples with children, and 40% for single adults.  It is calculated simply by asking ordinary members of the public what they think is "an essential minimum standard of living".

28% of workers engaged in the Scottish private sector earn less than £7.20 an hour. 17% of Scots are stuck in relative poverty – defined as having a household income of less than 60% of median household income. 

Six out of 10 children in Scotland belong to families enduring the contradiction known as in-work poverty. 57% of children in poverty had at least one parent in work.

Oxfam claims, however, that four million of the 13.5 million poor in Britain are in work, of sorts. Meanwhile, the Child Poverty Action Group points out that a couple with two kids would need to find 58 hours of work a week on the minimum wage – if work could be had – simply to be out of poverty.

Zero-hours contracts are spreading. One million workers, by the latest estimate, are stuck in part-time jobs, hoping for more hours.

 In November 2011, the Trussell Trust established a food bank in the south-east of Glasgow. During the Christmas period last year, it helped 168 people, including 103 children. The Trust estimates that up to 60,000 Scots will need its help every year.

 To some, "recession" means a little more prudence when managing the monthly finances. But others, those who can least afford any further cuts in their household budgets will suffer long-term job losses and find it more difficult to feed and clothe their families. They will be much more susceptible to mental and physical ill health and another couple of years will be deducted from their life expectancy. Many will turn to alcoholism and drug misuse as a pitiful means to get to the end of the day in one piece. A particularly cold winter will carry off the vulnerable and elderly people.
The vast majority of those who rely on benefits and tax credits are either in work, have worked, or will be in work in the near future. Families are scraping by in low-paid work, or being bounced from insecure jobs to benefits and back again. The means testing is being de facto deployed by Atos, the inquisitors of the disabled with the presumption of benefit fraud before any claimant is given a single penny of welfare.

The richest 10% in Scotland have incomes equal to the earnings of the poorest 50%. The sheer greedy, corrupt and rapacious bankers and hedge fund managers who caused the recession tell us that they shouldn't be punished for their avarice because the country need their expertise too much but that we the victims should pay the price of their failures and to just knuckle under.

The poor are being blamed for being poor.

BILLIONAIRES AND PAUPERS

We live in a crazy society wherein children die for the lack of fresh water and billionaires have so much wealth it is almost impossible for their minions to account the totals. Here is a recent example. "One of Germany's richest men - heir to an estimated £11 billion fortune - died last month but his secretive family only leaked details of his passing today. Berthold Albrecht was the son of Aldi's co-founder - the discount supermarket chain that holds the majority share of the grocery market in Germany and much of Europe." (Daily Mail, 7 December) Albrecht was 58 when he died yet he managed to accrue £11 billion during his exploitive life - how many millions died during that fifty eight years of poverty and hunger? Capitalism sucks! RD

Who owns the north pole - Part 54

No-one and Everyone!! 

Greenpeace declares sanctuary around North Pole to protect Arctic. 

Greenpeace isn’t going to stand by while greedy companies and selfish politicians destroy the Arctic. – We need to act now, before it’s too late. ‘So here’s the plan. We’re declaring a global sanctuary around the pole, to become enforceable by international law, that will mean a ban on oil drilling and other activities that threaten the Arctic.

Tough at the top? Not really

Capitalists love touting the benefits of trickle-down economics. It is a rationalization of inequality. By linking the welfare of the working-class  directly to the prosperity of the rich, they can protect the interests of corporations and the wealthy without the fear of backlash.

The investment banking hierarchy is essentially a large bureaucracy. At the bottom are the manual unskilled maintenance staff like security guards, the janitors and the cleaners who keep the offices safe and warm and clean. Then there are the administrative assistants, who support several bankers at one time and make about $35,000 a year. Above them are the analysts, college graduates whose life consists of 120-hour work weeks and an endless stream of menial tasks for $65,000 to $90,000 a year. Next up, and supported by the analysts, are the associates -- freshly minted MBAs with more than a $100,000 in school loans hanging over them -- who can look forward to taking home between $100,000 and $175,000 a year. If these young men and women, who work 90-hour weeks while trying to juggle a family, survive long enough to become vice presidents, their compensation can rise to $200,000-$300,000 per year.

Above the vice presidents are the directors, which is a training zone for the next pay grade (or a graveyard for those who don't have what it takes). Directors rely on the workers below them to do all the grunt work, including research, financial analysis, and client presentations, while they mainly babysit clients and occasionally come up with ideas to pitch to them. Their pay for these relatively cushy tasks ranges from $350,000 to $500,000 per year; but even this is meager compared to what their superiors make. Managing directors, who work even less and spend more time golfing instead, can make anywhere from a million to several million dollars a year.

Finally you have the really big fish -- the CEOs, presidents, executive vice presidents, and others who manage the entire circus, think deep thoughts, and schmooze with politicians to get regulations loosened. What makes these gigs so coveted is not just the fact that few ever manage to join that echelon but that the pay-scale jumps to tens of millions of dollars (even hundreds of millions) per year for work that is only moderately more challenging than that of the managing directors. It may be lonely at the top, but it's  lucrative.

It should be clear from the above that the wealth generated in these organizations gathers mainly at the top of the pyramid, while the people at the bottom, who do a lot of the heavy lifting and are instrumental in building that wealth, receive only a fraction of those riches. Sure, the pay scales in investment banking are pretty good by the standards of other industries, but it is the proportional difference between the compensation at the top and the bottom that makes a difference. This large income gap leads to an exponentially faster accumulation of wealth in a few hands, which in turn widens the prosperity gap even more. In other words, prosperity is not really trickling down but trickling up.

The more wealth trickles up in the capitalist system, the more it frustrates those at the bottom -- without whose efforts that wealth could not be created in the first place.

Taken from here

Fact of the Day

Nearly half the French people consider themselves poor or fear they soon will be, said a survey.

Salaried employees, manual labourers and independent workers felt the most exposed to poverty, while executives and professionals felt the least exposed.

 Unemployment numbers stand 10%—the worst since 1999. Youth unemployment hit 24.9%, the highest since the data series began in 1996.

Increasing misery

Jérôme Sainte-Marie, director of the political opinion department at the market research firm CSA, which had conducted the survey, was worried that France has “entered a new era.” This was now no longer a question of “lowered status but of pauperization.” Many French people not only had the impression of being “worse off than their parents or worse off than hoped,” but they worried “that they could be thrown into misery, if they aren’t already in it.”

Henry George

Green MP Caroline Lucas is supporting an annual land value tax, based on its market price, but, of course, with many "new" ideas this one has been proposed before. Henry George, a nineteenth-century writer who had popularized the notion that no single person could claim to “own” land. In his book Progress and Poverty (1879), George called private land ownership an “erroneous and destructive principle” and argued that land should be held in common, with members of society acting collectively as “the general landlord.”

Henry George's book "Progress and Poverty" was very popular. The book's starting point was man's God-given right to the land. Private property in land was unjust as it restricted access to the land. As technological progress increased industrial production, the benefits, George argued, went not to the labourers or even to the capitalists but to the landlords in the form of increased rent. The remedy proposed in Progress and Poverty was the raising by the state of a tax equivalent to the rental value of the land. Not only would this "single" tax compensate the poor labourer for his lost birth right to the land, but it would obviate the need for other forms of taxation and be politically more acceptable than full land nationalisation.

Scotland proved the most receptive to his message. It was here after all with the Crofters' Revolt raging and the cities crowded with Highland and Irish exiles that the unacceptable face of landlordism was most apparent and keenly resented. The Presbyterian Scots also responded to the religious strain in Georgism. The Scottish Land Restoration League, a purely Georgite body was established in Glasgow with branches in Edinburgh and Aberdeen. "The land question" Henry George wrote to an English friend, "will never go to sleep in Auchtermuchty."

CONSPICUOUS CONSUMPTION

 

The owning class are fond of boasting about their obscene wealth but even by their excessive behaviour the following Christmas dinner menu takes a bit of beating. "Costing £125,000 for four people, or £31, 250 per person, the menu for what will be the world's most expensive Christmas dinner menu has been devised by London chef Ben Spalding, who has completed residencies at restaurants including The Fat Duck in Bray, Gordon Ramsay's Royal Hospital Road and Per Se in New York. Among the ingredients being used are a Yubari King melon costing £2,500, in addition the the £2,600 Densuke watermelon; 150-year-old balsamic vinegar costing £1,030; whole white Alba truffle costing £3,500; and gold leaf coming in at £6,000. To drink, a £37,000 bottle of Piper Heidsieck 1907 champagne will be served in diamond-studded flutes; diners who prefer spirits can sip from a £2,000 stock of DIVA vodka, described as a "diamond-sand-filtered vodka" and served in a bottle that is filled with Swarovski crystals." (Daily Telegraph, 7 December) All of this excess is taking place in a society where millions are trying to eke out an existence on less than $2 a day. RD

Food for thought

Egyptian President, Mohammed Morsi, has given himself sweeping powers that, in effect, make him a dictator. The people are calling him 'the pharaoh' and are taking to the streets again to demand the democracy that they supposedly won last year. That it can all be lost so quickly emphasizes the need for class consciousness and a knowledge of socialism in order to carry out the revolution. Otherwise the people simply hand power to the next dictator, as has happened here. John Ayers

How Clydebank stitched up Singers

The 1911 Clydebank Singers strike is considered the first battle between labour and international capital in Scotland if not in the UK. It was also the biggest single firm strike in Scotland up to 1914. The strike lasted three weeks.

In 1867/8 the American company Singer Sewing Machine Co. expanded into Scotland. It first opened a small sewing machine factory in Glasgow near John St. However growing demand forced the company to expand to a larger factory in the Bridgeton area of Glasgow. In 1882 they moved again, to a greenfield site at Kilbowie in Clydebank. It was a very anti-union company. Tom Bell, an activist during the 1911 strike, in his book “Pioneering Days” states; “The firm refuses to recognise any union, and those union men that were employed had to keep it quiet.”

Food for thought

Will this coal or any other resource bonanza, mean a better life for the workers of that region? For the answer to that we go to Mozambique, one of the poorest countries in the world, torn by war and failed 'Marxist' economic policies (this is the New York Times reporting). Now, however, due to the discovery of large coal and gas reserves it has become an African Lion. World Bank estimates run to $70 billion for the gas alone. Far from the expected 'good' jobs in mining, the local workers were moved 40 kilometres away, housed in leaky buildings, and given barren plots from which to eke out a living. Just a bump on the road to prosperity you say? The rising tide will raise all boats? In Gabon and Angola, two more countries experiencing the curse of high growth, poverty has spiked. Probably the worst thing for an underdeveloped country is the discovery of something valuable to capitalism. Primitive accumulation -- moving people out of the way, by force if necessary and with government compliance, and the theft of those resources -- is a precondition of capitalism. John Ayers

Nationalisation is not social ownership

These are not good times. We have an economy with no stability, no guarantees that hard work will provide a consistent living, and a constant possibility of being cast aside simply because we happen to be in the wrong place at the wrong time. And there is little people can do in their personal lives or behavior to change this. Many well-intentioned people say “We must do something. This is something. Therefore, we must do this.” and recommend all manner of reforms and palliatives. The Socialist Party in its stand against such cure-all solutions is accused of standing aloof and doing nothing but abstract talk of a future revolution.

Many have come to identify socialism with state ownership, government intervention, state subsidies and expenditure on ‘public’ services. This has nothing to do with socialism. Support for nationalisation as a "socialist" measure is a short-cut, a short-cut to nowhere. Marx and Engels while in favour of many reforms to the capitalist system, saw the purpose of such reforms as to place the working class in a better position to carry out the revolutionary overthrow of capitalism. It was not because such reforms of themselves were the means to bring socialism into effect.

Today calls on the state to do good are presented as the means to win workers’ votes, which will ultimately lead to socialism, while the goal is considered too advanced to be put forward clearly, put to them as something that they must do and only they can achieve. The avoidance of socialism and its real content today goes under the name of anti-capitalism or under the banner of broad left parties and alliances which hide what its sponsors claim they really stand for. Today some demands for nationalisation and state redistributive policies are designed to manoeuvre workers into a movement for socialism without even mentioning the word never mind misrepresenting its real content! The Trotskyist demands for widespread nationalisation and defence of the welfare state imposes demands on the capitalist state to do things it simply will not and often cannot do.

Fact of the Day

One in five women in Scotland will experience domestic violence at some point in their lives.

PRODUCTION FOR PROFIT IS UNHEALTHY

Socialists are often told by supporters of capitalism that it is the most efficient way to run society but recent event in Germany would seem to deny that notion. "Cancer experts have warned of a 'frightening' crisis as pharmaceutical companies abandon production of one of the most widely used chemotherapy drugs because it is not profitable enough. Fluorouracil - also known as 5-FU - is one of the most frequently used components in chemo combinations used to treat bowel and breast cancer in the UK and worldwide. But cancer specialists in Germany have warned that the drug has become increasingly difficult to obtain as producers turn to newer, more profitable treatments." (Daily Mail, 12 November) Production for profit is the basis of capitalism in contrast to world socialism's production solely for use. RD

ROUGH SLEEPING IN THE ROUGH SOCIETY

Politicians like to pose as supporters of families but young people and families with children are increasingly facing homelessness, according to a study, which says rising numbers of people are finding themselves without a roof over their heads. "The report, by academics from Heriot-Watt University and the University of York, says all forms of homelessness are continuing to rise in England, and argues that "deepening benefit cuts are likely to have a much more dramatic impact on homelessness". .... The report says national rough sleeper numbers rose by 23% in the year to autumn 2011, from 1,768 to 2,181 – "a more dramatic growth dynamic than anything seen since the 1990s". The number of families who end up asking for assistance from local authorities because they are about to lose their homes rose from 40,020 in 2009/10 to 50,290 in 2011/12. (Guardian, 4 December) This is the madness of capitalism in action - houses lying empty while people are forced to sleep in the street. RD

We are all Spartacus - political football

Celtic come face to face with Spartak in the Champions League.  Moscow is the home of Spartak as well as Dynamo, CSKA, Torpedo-Luzhniki, Lokomotiv and Torpedo-ZIL but historically, the main Moscow grudge derby-match is between Spartak and Dynamo

Sport has always had a political dimension, especially football.

In the early days of Soviet football many government agencies such as the police, army and railroads created their own clubs. So many statesmen saw in the wins of their teams the superiority over the opponents patronizing other teams. Almost all the teams had such kind of patrons such as  CSKA – The Red Army team. Dynamo Moscow were a creation of the Interior Ministry, then essentially a euphemism for the secret police. The de facto founder of Dynamo was Felix Dzerzhinsky, the first head of the OGPU (forerunner to the KGB). Spartak were created as an independent football team, with no affiliations to one or other part of the state machine and considered to be the "people's team". The name Spartak that was derived from Spartacus, the gladiator-slave who led a rebellion against Rome.

In the Soviet Union millions attended matches and obsessed about their favorite club, and their rowdiness on game day stood out as a moment of relative freedom in a society that demanded rigid conformity and control. Fans of Spartak Moscow would have you believe that their club almost single-handedly defied the state machine.

Spartak emerged from the rough proletarian Presnia district of Moscow and spent much of its history in fierce rivalry with Dinamo. To cheer for Spartak, Edelman shows, was a small and safe way of saying "no" to the fears and absurdities of Stalinism.

Spartak was for seven decades by the four Starostin brothers, the most visible of whom were Nikolai and Andrei. Perhaps because of Spartak's too frequent success against state-sponsored teams, they were arrested in 1942 and spent twelve years in the gulag. Instead of facing hard labor and likely death, they were spared the harshness of their places of exile when they were asked by local camp commandants to coach the prisoners' football teams. Beria, the secret police chief, was possibly fuelled by a personal vendetta. As left-back for a Geor­gian side in the early 1920s, Beria had turn­ed out against Nikolai Starostin, who had completely played him off the park. Beria, Stalin's henchman, was not a man to forgive and forget. In 1942  branded “en­emies of the people”, with Nikolai and Andrei initially accused of plotting with the German Embassy to kill Stalin and set up a Fascist state but instead charg­ed with stealing a consignment of clothing,embezzlement and bribery. Returning from the camps after Stalin's death, they took back the reins of a club whose mystique as the "people's team" was only enhanced by its status as a victim of Stalinist tyranny.*

Like the Rangers Ibrox Disaster, Spartak has suffered tragedies. 30 years ago in a game against HFC Haarlem in a UEFA Cup one section of Spartak fans started streaming out to get to the Metro but a late goal in injury time caused some fans to turn back and the two streams collided with the tragic result of 66 dead according to official figures but probably many more.

Sadly the club like so many others these days is under the ownership of an oligarch, Leonid Fedun, estimated wealth of over $6 billion, and its fans have been associated with racist chanting.

* See here for more

Food for thought

So now that everyone agrees on global warming, how is the response going? As one would expect in a profit driven economy, not very well. For example, The New York Times (Nov.25, 2012) reported that coal demand in China is so great that in 2010 a traffic jam of coal trucks coming out of Mongolia was 120 kilometres long and involved 10 000 trucks. India relies on coal for 55% of its electric power and, of course, the US is a big user (although, according to industry advert on TV, they only use 'clean' coal! Having used coal in the 1940s in England, I can personally vouch for the fact that there is nothing clean about coal.) World demand for this cheap source of energy is growing fast and is expected to reach 8.1 billion metric tons by 2016, increase fifty per cent by 2035, and coal will surpass oil as the leading source of energy in the world in the next two years. So much for working on a looming major catastrophe. Money and profit trump all. John Ayers

Is Lending the Solution?

The Grameen Scotland Foundation will oversee the running of a microfinance-style lending in Scotland. Tesco Bank will provide £500,000 of the loan capital for what will be Grameen’s first venture in the UK. The Scottish Government have donated £100,000, and supporters such as businesswoman Ann Gloag, who has also given £100,000. The original Grameen bank, founded more than 20 years ago in Bangladesh to offer small loans to those excluded by the traditional banking system. The borrowers are almost exclusively women. They are required to organise themselves into groups of five, which creates a support system for repaying the loan. The average loan is around £1,000 and repayment rates are high, often close to 100%. Grameen now has around 8 million borrowers and has issued more than £3.5bn in small loans in the past two decades. Grameen Glasgow will be based in a community-run centre in the Sighthill area of the city, where more than 59% of children live in workless households with up to four generations unemployed.

Has microfinance genuinely benefited the world's poor? Held up for decades as a "miracle cure" for global poverty, microfinance became one of the world's most high-profile and generously funded development interventions. Everyone was talking about how small loans could unlock endless opportunities for the world's poorest people.

New studies began to challenge the promise of microfinance to bring about an unprecedented reduction in poverty that prompted parallels with the US sub-prime mortgage collapse. Reports of skyrocketing interest rates and suicides among indebted borrowers in Andhra Pradesh, India, suggested a sinister side to the microcredit boom. Last year, a sweeping review of the evidence, funded by the UK government, concluded that the "enthusiasm [for microcredit] is built on … foundations of sand". It was unclear when, and for whom, microfinance had been "of real, rather than imagined, benefit to poor people", it said. A further study commissioned by the UK Department for International Development (DfID) advised against lending to the poorest of the poor, who are more vulnerable to the dangers of debt. A study on microcredit in Bosnia found a substantial increase in child labour in businesses opened through microloans, raising concerns about the unintended consequences of increasing access to credit and self-employment. Norway says it will stop funding microfinance due to changes in the sector, including more competition and the addition of commercial capital. A recent Deutsche Bank report describes microfinance as "a development programme turning commercial". Banks and other for-profit organisations are taking the lead, it notes, as "NGOs seem to have lost their role as the primary vehicle for microlending". Private funding is on the rise. Last week – in the largest deal of its kind – Luxembourg-based fund Bamboo Finance announced its $105m (£66m) acquisition of a controlling stake in Accion Investments in Microfinance, a powerful for-profit equity fund, which counted some of the biggest development finance institutions among its founding shareholders.


"Microcredit is not a 'silver bullet' to end all poverty … The leaders of the microfinance industry have known this for some time." said the CEOs of eight Mictofinance organisations.

Cambridge University economist Ha-Joon Chang puts part of its popularity down to a "strange alliance" between a financial industry that "does nasty things to make money, and people who genuinely wanted to help the poor but were against the collective approach". What's more, it enabled some institutions to say they cared about the poor without having to spend on social welfare, he argues.

 Why aren't we all wealthy? The wealthy have an answer: the poor are ignorant and lazy. The rich say they have nothing to do with our poverty. But a necessary part of becoming wealthy and staying wealthy is keeping your neighbor poor. There are a large number of relationships in capitalist society that keep the rich wealthy and the poor in poverty. The whole goal of the self-interested actor in the marketplace is buying low and selling high, hoping to profit. Working for wages that pay the worker less money than the value his work creates for the owner is one such transaction. Usually, the owner will not even hire a worker unless they believe they can make a profit. A person renting from a landlord, whether an apartment, house, or piece of land pay for landlords to make a profit over and above their costs. Banks and others loan money to borrowers and collect interest. The wealthy work to protect their wealth.