Charly's Profits

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

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

The National Ill-Health Service

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

A Grim Choice

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

The Commonweal

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

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

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

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

Taxation and its burden

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

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

A Society Of Debtors

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

Anarchism

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

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

Banking 7/7

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

The Housing Shortage

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

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

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

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

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

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

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

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

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

Banking 6/7

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

Anarchism in Glasgow

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

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

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

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

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

breathing is bad for you

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

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

Banking 5/7

Dealing with the conspiracists

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

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

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

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

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

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

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

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

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

Being poor = poor reading

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

The Uncaring Society

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

Child Labour

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

Hungry children in Scotland

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

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

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

The rewards of owning Scotland

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

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

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

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

See also this post on our companion blog.

Banking 4/7

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

Graduates on the dole

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