The Housing Shortage

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

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

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

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

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

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

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

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

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

Banking 6/7

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

Anarchism in Glasgow

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

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

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

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

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

breathing is bad for you

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

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

Banking 5/7

Dealing with the conspiracists

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

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

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

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

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

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

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

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

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

Being poor = poor reading

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

The Uncaring Society

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

Child Labour

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

Hungry children in Scotland

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

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

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

The rewards of owning Scotland

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

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

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

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

See also this post on our companion blog.

Banking 4/7

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

Graduates on the dole

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

A Bleak Future

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

Anarchism in Aberdeen

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

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

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

Full article on Libcom link 

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

socialist sport?

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

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

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

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

Banking 3/7

Banking Myths

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

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

Food for thought

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

Banking 2/7

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

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

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

Champagne And Capitalism

 

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

Hypocrisy In Action

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