What is Poverty?

The state has an interest in defining poverty in such a way that only a minority are classified as poor.

  It was hardly surprising, after the depredations of war and the austerity of rationing, that the early post-war years should have been a period of rising expectations. This increasing optimism was fuelled by rapid growth. The huge task of social reconstruction soaked up labour like water in a sponge. Low unemployment pushed up wages and that, together with the introduction of the "welfare state", meant that the scourge of poverty seemed to be inexorably receding. Technological advances made affordable household items that were once the province of privilege. The mass market had at last truly arrived: a veritable cornucopia disgorging its superfluity of refrigerators, TV sets and automobiles. And it was against this backdrop of rising consumption that the first green shoots of a new kind of social protest would soon emerge—from budding environmentalists to the hippies of the "flower-power" generation-fulminating against the crass materialism and extravagant excesses of the "throwaway society".

  It was in these years that a spate of books appeared which seemed to capture the mood of the time. One such was one written by the economist, J.K. Galbraith, called The Affluent Society (1958). Galbraith's thesis was that we live in an age of unprecedented affluence yet our habits of thought are still rooted in the past. This was a past traumatised by the experience of "grim scarcity". We need, he argued, to radically adjust our economic thinking if we are to fully capitalise on the new prospects opening up and avoid jeopardising what had hitherto been achieved.

It was just as well that Galbraith saw fit to prudently qualify his observations, restricting their scope to what he called a "comparatively small corner of the world populated by Europeans". Yet, it must be remembered that, at the time, even among the developing countries, there was a widespread expectation that the benefits of modernisation would soon "trickle down" to everyone, heralding the end of global poverty. They had only to keep to the same trajectory of economic development that had so unerringly guided their ex-colonial masters towards the sweet pastures of capitalist paradise. Little did they know what awaited them around the corner. The 1970s' oil crisis, mounting Third World debts and the crushing, hope-extinguishing cutbacks imposed by IMF structural adjustment programmes soon put paid to such wishful thinking.

Relative poverty
 
  But, to be fair to Galbraith, he did not suppose that the disappearance of "grim scarcity" in the so-called First World signalled the eradication of poverty altogether. There remained a more intangible, indeed intractable, kind of poverty—the "elegant torture of the spirit which comes from contemplating another man's more spacious possessions". "People," declared Galbraith, "are poverty-stricken when their income, even if it is adequate for survival, falls markedly below that of the community. Then they cannot have what the larger community regards as the minimum necessary for decency; and they cannot wholly escape, therefore, the judgement of the larger community that they are indecent."

  This is "relative poverty". It is often contrasted to what is called "absolute poverty"—the kind of poverty where one has barely enough to survive on—but, in a sense, that can be quite misleading. Indeed, it can lend itself to the complacent conclusion we having nothing really to grumble about; at least compared to others less fortunate. Like a child, admonished for not eating all their peas, we are told to remember "the starving millions in the Third World". So we should. Not the inference that we should be eternally grateful for living in a society that manages to put food on our plate—providing we can afford it—is, frankly, one that sticks in the gullet. For this is a society the vast majority have good reason to get rid of and, perhaps, none more so than those it lets starve in the very shadow of the food mountains it has wilfully created.

  Rather than see "relative poverty" as something to be contrasted to, and separate from, "absolute poverty", it can be better understood as encompassing the latter. As the anthropologist, Marshall Sahlins, perceptively observed:

    "The world's most primitive people have few possessions but they are not poor. Poverty is not a certain small amount of goods, nor is it just a relation between means and ends; above all, it is a relation between people. Poverty is a social status. As such, it is the invention of civilization" (Stone Age Economics, 1974, p.37).

  In short, poverty presupposes affluence just as affluence presupposes poverty. Each only acquires meaning in and through its relation to the other. And, paradoxically, what underpins their mutual dependence is what enables us to analytically separate one from the other: our experience of material inequality. In other words, we would not be aware that we were poor unless we had reason to believe others were better off then ourselves.

  It is conventionally assumed that it is the duty of government to look after the "less fortunate". But if poverty is essentially relative, how does one differentiate between those who supposedly warrant this support and those who do not? In other words, on what grounds are we to classify one person as "poor" and another, "affluent"? After all, a millionaire might conceivably be considered "poor" by the standards of a billionaire.

  One approach might be to calculate the average income—or arithmetic mean—for society as a whole such that all who fell below it are deemed "poor" and all above it, "affluent". By this token, given the highly skewed distribution of wealth in society today, a clear majority of the population would fall into the former category, and a small minority, the latter. However, while this pattern of distribution remained the same, any increase in overall living standards which the state may rely upon to improve the welfare of its citizens would, by definition, have no impact on the extent of poverty among them. This is because the proportion of "poor" would itself remain unaltered. For a government committed to the alleviation of poverty, this would pre-empt any possibility of success on those terms and, so, may prove politically damaging.

  It could, of course, decide to significantly alter this pattern of wealth distribution. Even so, short of everyone getting exactly the same, the optimum outcome it could thereby hope to achieve—which, in statistical terms, means eliminating any "skewness" around the "mean"—would be to reduce the ratio of poor to only half the population by this reckoning.

  There are, in any case, clear limits to a policy of redistribution that a government cannot ignore in a competitive environment without hindering the process of capital accumulation. In this regard, there is undoubtedly some truth in the neo-liberal critique of the welfare state: "excessive" redistribution, involving massive increases in sate welfare, would impose an unacceptably high tax burden on capitalist enterprises which would substantially reduce their profits. That, in turn, would diminish their capacity to mobilise capital for future investment and, hence, their ability to compete in an increasingly globalised market.

Redefining the poor
 
  Clearly, then, from the state's point of view, some other approach to the identification of poverty is needed to circumvent these difficulties. Ideally, this would allow it to conclude that the problem of poverty was, by no means, widespread. An appropriate formula could then be devised to yield just such a conclusion. By such means, a state could, if not altogether define it out of existence, at least enable this problem to "assume" manageable proportions. There are several reasons why such an approach might be officially favoured.

  Firstly, the "poor" could thus be portrayed as a minority, small enough not to appear as a serious political threat and not too large as to overwhelm the state's efforts to render them some token "assistance". Secondly, by defining poverty in this arbitrary fashion, this draws attention away from a structural explanation of poverty, allowing it to be blamed, say, on personal "defects". Thirdly, by effectively splitting the working population into those officially classified as "poor" and those who are not, this facilitates the state's ideological objective of securing their support through a process of "divide and rule".

  Since Elizabethan times, poverty was equated with destitution. Initially, parishes were responsible for supporting the poor but, after the 1834 Poor Law, this task was taken over by boards of "guardians", each comprising several parishes, which were overseen by a government commission. As David Donnison points out, paupers "had to pass a crude kind of means test-calculated in loaves of bread—and the relief they were given kept them alive at a standard which was intended to be worse then the lot of the lowest-paid labourers . . ." (The Politics of Poverty, 1982, p.10).

  According to Donnison, one of the main purposes of the 1834 poor law was to "impose the labour disciplines required for an industrial economy". Another was to mitigate the risk of social unrest. However, the "lowest-paid labourers" were themselves not given any assistance, and this effectively remained the case right until 1971 when the family income supplement was first introduced.

  Then, in the early 20th century, the meaning of poverty underwent a subtle shift, in part instigated by Seebohm Rowntree's classic surveys of poverty in York. Rowntree's notion of poverty involved the formulation of a minimum income needed to ensure the reproduction of labour power at a level of physical efficiency increasingly demanded by industry. To that end, a simple diet sheet was prepared with help from the British Medical Association which would ensure adequate nutrition at minimum cost to the state. "Subsistence poverty" was held to be a standard of living that fell below this tolerable minimum; as such, it was distinguishable from "destitution poverty"—or what we usually mean by "absolute poverty"—which was simply concerned with physical survival.

  From the standpoint of the state, the advantage of setting a fixed threshold is that it enabled it to look to a gradual rise in living standards to lift growing numbers of the poor above a condition of poverty without having to seriously address the vexed question of unequal distribution. In short, it could thus hope to progressively reap the political benefits of a society that was becoming increasingly "affluent". However, at around about the time that The Affluent Society was first published, an increasing number of social scientists, led by Peter Townsend, began to question the validity of this approach.

  Townsend and his colleagues, argued that, far from disappearing since the war, poverty had increased. They pointed out that the "poverty line" adopted by the then National Assistance Board (set up in 1948) was actually lower than even that recommended by Rowntree himself. Further, it was unrealistic to expect the poor to confirm exactly to such a stringent spending pattern paternalistically laid down by the state; what the state regarded as a "necessary expenditure" was not something that could be absolutely fixed for all time but constantly changed along with society itself. This called for a definition of poverty that was essentially relative and thus sensitive to the distribution of social wealth.

  Their approach was one that had been anticipated, not only by Marx, but also, Adam Smith. In The Wealth of Nations Smith wrote that "by necessaries I understand, not only the commodities which are indispensably necessary to support life but whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without". Such a sentiment was, as we saw, echoed by Galbraith himself.

  In due course, the notion of a fixed "poverty line" was abandoned and replaced by more relativistic measures of poverty. One current example is what is known as "Households Below Average Income" (HBAI) which identifies "the poor" as those living below 50 percent of average income. But, crucially, from the standpoint of the dominant ideology, this still retains the assumption that the poor constitute only a minority and, consequently, that the majority have reason to be grateful for not being included amongst their number.

  But, in truth, that majority is impoverished. It is impoverished insofar as it has no other option than to sell its working abilities to those who monopolise the means of living and whose conspicuous wealth must irresistibly provide the very yardstick by which that poverty will be starkly exposed.

  This may not be the poverty of material destitution. But if the measure of a human being consists in the accumulation of material possessions to which he or she may claim the, by that token, we are demeaned. And, ultimately, it is in this devaluation of our human worth—not simply in the fact of material inequality but in the meaning this society attaches to it—that we may glimpse the very essence of this poverty.

ROBIN COX 

(From Socialist Standard June 2000)

Masters of War: A Scots firm named in Ukraine arms deal corruption probe

A Scots firm was named in Ukraine arms deal corruption probe in The Glasgow Herald on 27 January 2017. This is no surprise of course to hard headed socialists who know the nature of the capitalist beast.

 The overall death and destruction that took place during World War II may well be beyond human comprehension. Historians estimate that military casualties on all sides, in both the European and Pacific theaters, reached up to 25 million, and that civilian casualties ranged from 38 million to as high a figure as 55 million – meaning that somewhere between 3 and 4 percent of the world’s total population died in the conflict.

  Don't let us ever forget either, the war science practiced upon Hiroshima and Nagasaki by the 'Good Guys', despite how it is spun as, 'the end of war', as well as the potential for more of the same destruction being wreaked upon humanity as trade wars and sanctions, fuel blundering and conscious recourse to battles over raw materials, trade routes and spheres of geopolitical advantage between competing capitalist nations and blocs.

"Business by other means" has not gone away as a latent as well as a potent reserved option at all times.
If money, according to Augier, “comes into the world with a congenital blood-stain on one cheek,” capital comes dripping from head to foot, from every pore, with blood and dirt. Marx.

 The latest episode however features a Scottish firm at the centre of major corruption probe in the former Soviet arms industry.

Ukraine’s elite National Anti-Corruption Bureau or Nabu has accused one of Scotland’s increasingly controversial “tax haven” firms of skimming £1.5 million from the multi- million-dollar export of war planes to Kazakhstan.

Detectives say an Edinburgh- registered Scottish limited partnership (SLP) called Portvilla Trading was paid for acting as a fictitious intermediary on the deal.

They have discovered some of the cash was funnelled through a Latvian bank, Rietumu, which is part-owned by Celtic football club’s biggest shareholder, Dermot Desmond. There is no suggestion the bank, or Mr Desmond, had any knowledge of the alleged wrong-doing. When you are awash with cash capitalist anarchy will see it seem to take on a life of its own as your minions invest it on your behalf.

The Nabu allegations, part of a major crackdown on corruption in Ukraine, immediately sparked calls from SNP MP Roger Mullin for UK Security Minister Ben Wallace – the politician in charge of MI5 – to order a British investigation into the case.

  Mr Mullin, who has campaigned for SLP reform, said the latest revelations were “deeply worrying” and highlighted the transnational nature of the allegations involving a Scottish firm, a Ukrainian exporter, Kazakh importer and the Latvian bank, Rietumu.

  He said: “This clearly calls for full investigation. I will be contacting the Securities Minister and asking him to consider a particular review of this case.”
Well he may too but however sincere politicians may or may not be, their outrage is misplaced as they continue otn support an economic and political system where such actions are inevitable war and poverty, twin hand maidens of capitalist development, will see short-cuts and subversions of legal and juridical frameworks any time there is a quick buck to be made.

 The Ukrainian corruption probe into Portvilla Trading is just the latest to feature a Scottish limited partnership or SLP, a kind of firm whose owners can remain secret, pay no taxes and file no accounts.

Last year a separate probe into allegations another SLP, Lanarkshire-registered Fuerteventura Inter, was used to skim $2m from the export of aircraft cannon shells from Ukraine to the Middle East.

  Ukrainian sources have warned that Scotland has become a popular place for their country’s so-called “arms-mafia”, crime groups with strong links in the nationalised weapons manufacturing industry, to set up front companies.

  The latest Ukrainian probe by the elite Nabu investigators centres on an order for two Antonov An-74 military transport aircraft worth a total of $59m placed by Kazakhstan’s National Security Committee or KNB, the republic’s successor organisation to the KGB, with a factory in Kharkiv.

  According to papers filed by an investigating magistrate at Solomianka district court in Kiev, the Ukrainian capital, Kazazh officials were unaware of any services provided by the SLP.

  Court documents said payments to Portvilla Trading were made to accounts at two banks in Riga, Latvia, including Rietumu.

  SLPs are marketed in the former Soviet Union and elsewhere as “zero-tax offshore companies” and sometimes offered as a package with Rietumu accounts.

 Mr Desmond owns around a third of the bank, which in 2015 was fined for violations of money-laundering rules and is currently contesting French allegations of facilitating tax evasion.

  Portvilla Trading is registered at a flat in Leith, whose occupants are not accused of knowing anything about the firm’s activities. The SLP’s owners are called Western Admin Ltd and Global Admin Ltd. There was no way to contact these firms.

  Green MSP Andy Wightman, who has campaigned against SLPs, said: “These latest revelations show the urgent need to stop the abuses of Scottish Limited Partnerships that appear to be taking place.

"Scotland’s reputation as a place to do legitimate business is being tarnished. I’m pleased that there is to be a UK-wide review but believe Scottish Ministers can take a pro-active approach and I will continue to press them on this.”


 But the legitimate business of capitalism is profit and we can not have profit without war and poverty. It is a reformist delusion that capitalism can be made squeaky clean or, 'jist a wee bit manky', in Scots parlance.

 In contrast to the Greens and SNP or any other of the outraged supporters of capitalism, the socialist argument is as follows,

 It is time we took ownership and control into our collective hands to end the capitalist system, the immense majority being self led and using democratic means, the end of governments over people and utilisation of this political awareness to have the people themselves administer over things , utilising recallable delegates when necessary.

We urgently need to consider changing from how things are done today, with standing armies and competing local, regional and global interests allied with anarchic production for sale market allocation, for the benefit of 1-5% minority privileged owning groups, with the majority in waged enslaved conditions of rationed access to the wealth they collectively produce.

 We need to be moving into a commonly owned production for use cooperative, global, regional and local, endeavours with free access and the situation is resolved into cooperative allocations and sharing of raw materials as opposed to warring competition.

 The material productive forces of society have come into conflict with the existing relations of production. From forms of development of the productive forces, these relations have turned into their fetters or, in other words, the productive forces have outgrown the production relation.

All wealth comes from the world's working class.

The capitalist class, liberals or neocons, are an economic parasite class.

 Time to get rid of them.

"They're all immigrants!"

 Trump has made lots of speeches about the dangers of immigration to the U.S.   He is going to build a high wall 1989 miles long, much of it through "uninhabitable deserts", along the whole Mexican border.

 He has just said, "A nation without borders is not a nation. Beginning today the United States gets back control of its borders."

   
 Exclusive (though imaginary) interview!

      "Mr Trump, what was your mother?"
      "An immigrant."
      "What was your father?"
      "The son of two immigrants."
      "What was your first wife?"
      "An immigrant."
      "What is your third wife?"
      "An immigrant. Now I must go to allow the Energy Partners Transport scheme to drive an oil pipe line through North Dakota."
      "You do know that the local Standing Rock tribe of the Sioux Nation (supported by 200 Native American tribes) fear it might contaminate their water supplies, as well as desecrating their sacred burial grounds?"
      "So what?   The EDP chief executive gave me $100,000 for my election campaign. Not that it has influenced me in the slightest."


    Another (imaginary) exclusive interview, this time with a member of the Sioux Nation, asked his opinion of the Americans -

      "They're all immigrants!"

-    ALWYN EDGAR

Calculation

 Supporters of capitalism, especially the Von Mises school, may not be able to conceive of production without money and prices, but we socialists can. The definitive answer to the "economic calculation problem" is a (largely) self-regulating system of stock control in which calculations are made in kind rather than in terms of a common unit like money.

 A self-regulating system of stock control will permit producers in a socialist society (workplace councils, industry councils etc) to ascertain more or less immediately the availability of stocks of any particular item throughout the system; the communications technology to enable this to happen is already in place.

 Given this, their assertions that the "only practicable way to tell how 'abundant' B is, by comparison with A, is to look at the relative prices" is absurd.

 'Abundance' is a relationship between supply and demand, where the former exceeds the latter. In socialism a buffer of surplus stock for any particular item, whether a consumer or a producer good, can be produced, to allow for future fluctuations in the demand for that item, and to provide an adequate response time for any necessary adjustments.

  Achieving 'abundance' can be understood as the maintenance of an adequate buffer of stock in the light of extrapolated trends in demand. The relative abundance or scarcity of a good would be indicated by how easy or difficult it was to maintain such an adequate buffer stock in the face of a demand trend (upward, static, downward).

 It will thus be possible to choose how to combine different factors for production, and whether to use one rather than another, on the basis of their relative abundance/scarcity. By following the rule of using the minimum necessary amounts of the least abundant factors it will be possible to ensure their efficient allocation.

 Money as a "general unit of cost" just would not come into it.

In further asserting that "if the output of X is increased, output of Y must be reduced" they are begging the question at issue, which is precisely, whether or not, resources are and always will be, scarce.

 It is to assume that society's resources are fully stretched and that there are no reserves to draw upon. But given the productivity of modem technology and the elimination of capitalist waste, there are likely to be substantial untapped reserves. In addition, socialist society can, as just explained, deliberately plan to produce surpluses of various items just to meet the eventuality you have in mind.

 With regard to human resources in particular, even today under capitalism tens of millions of people are unemployed. Though of course in socialism no one will be "employed" as such, the average workload for individuals is likely to be much less (thus resulting in a sizeable reservoir of labour) and the opportunities for individuals to move flexibly from one kind of work to another much greater.

 This will make much less likely the occurrence of the bottlenecks they foresee in the production of any particular good following an unexpected increase in demand for it.

But scarcity is not simply a function of supply; it is also a function of demand. It is in this area that the anarcho-capitalist critique of socialism, based on its premise of infinite demand, is particularly weak and unrealistic. For it takes little, if any, account of the effect of the social environment on the likely structure and size of demand in socialism.

 In a system of capitalist competition, there is a built-in tendency to stimulate demand to a maximum extent. Firms, for example, need to persuade customers to buy their products or they go out of business.

 They would not otherwise spend the vast amounts they do spend on advertising those products. At the same time, there is in capitalist society a tendency for individuals to seek to validate their sense of worth through the accumulation of possessions.

 This is not surprising for if, as Marx contended, the prevailing ideas of society are those of its ruling class then we can understand why, when the wealth of that class so preoccupies the minds of its members, such a notion of status should be so deep-rooted. It is this which helps to underpin the myth of infinite demand.

 In socialism, status based upon the material wealth at one's command, would be a meaningless concept. Why take more than you need when you can freely take what you need?

 In socialism the only way in which individuals can command the esteem of others is through their contribution to society, and the more the movement for socialism grows the more will it subvert the prevailing capitalist ethos, in general, and its anachronistic notion of status, in particular.

 Nor do we accept their premise that prices arise out of conditions of scarcity. They arise out of conditions of private property.

 So even if genuine shortages occur in the conditions of common ownership that will exist in socialism - it is likely that some shortages (e.g. decent housing) will persist (if only as a receding problem) into the early stages of socialism - this will not undermine the new society by leading to the re-emergence of money and prices.

 For socialism to be established, there are two fundamental preconditions that must be met. Firstly, the productive potential of society must have been developed to the point where, generally speaking, we can produce enough for all. This is not now a problem as we have long since reached this point. However, this does require that we appreciate what is meant by "enough" and that we do not project on to socialism the insatiable consumerism of capitalism.

 Secondly, the establishment of socialism presupposes the existence of a mass socialist movement and a profound change in social outlook. It is simply not reasonable to suppose that the desire for socialism on such a large scale, and the conscious understanding of what it entails on the part of all concerned, would not influence the way people behaved in socialism and towards each other. Would they want to jeopardise the new society they had helped create? Of course not.

 One must therefore assume that whatever shortages may persist can be tackled by some system of direct rationing and will be borne with forbearance - even, one might say, with a sense of altruistic restraint.

 For whatever the problems that socialism may have to contend with, and there will still be many, if the alternative has to be the re-instatement of capitalism then there would not be a real alternative.

Capitalist supporters in pursuit of glittering profit ignore the twin concomitants springing from the bosom of their iniquitous economic class domination system, of war and poverty. They seem to know the price of everything but the value of nothing.

Trekonomics

 The New Statesman in December 2016 had Yo Yushi visit a Star Trek convention in Birmingham where he recalls amongst other things," In a 1988 episode of The Next Generation, the captain of the USS Enterprise, Jean-Luc Picard (Patrick Stewart), lectures a 20th-century executive who has been defrosted from cryogenic preservation about the Federation’s economic beliefs.  

“A lot has changed in the past 300 years,” he says. “People are no longer obsessed with the ­accumulation of things. We have eliminated hunger, want, the need for possessions.”


  The businessman protests that without money his life would have no purpose. Picard responds that “the challenge” of life is merely to “improve yourself”, and to “enjoy it”. If that sounds striking today, it was doubtless more so when the episode first aired in the United States, just a year after Gordon Gekko’s “greed is good” speech in Wall Street gave the free-market Washington consensus its most abiding slogan.

 Socialists of our kind have been ahead of this learning curve for over a hundred years.  Although not the main theme, or even a minor one, it is clear from the characters’ behaviour and occasional asides (at least in the first two series) that it’s a money-free world. Set in the 23rd and 24th centuries, scarcity no longer exists as anything material needed to meet human needs can be produced by ‘replicators’. This prompted one trekkie, Manu Saadia, to write Trekonomics: the Economics of Star Trek that appeared earlier this year and which sparked a discussion on ‘post-scarcity economics’.

  Actually, ’post-scarcity economics’ is a contradiction in terms as academic economics defines itself as the study of how societies and individuals allocate scarce resources. The opening chapter of a typical American textbook (Economics by Byrns and Stone) is headed ‘Economics: The Study of Scarcity and Choice’. Paul Samuelson, in his much more widely-used textbook of the same title, invents ‘The Law of Scarcity’:

‘If an infinite amount of every good could be produced, or if human wants were fully satisfied, it would not then matter if too much of a particular good were produced. Nor would it then matter if labor and materials were combined unwisely… There would then be no economic goods, i.e., no goods that are relatively scarce; and there would hardly be any need for a study of economics or ‘economizing’. All goods would be free goods, like air.’

 This is not a ‘law’ but a definition and an odd one at that. In its normal sense ‘scarcity’ means there’s not enough of something, that it’s in short supply. But economics defines it as a situation where Samuelson’s ‘infinite amount of every good’ cannot be produced, i.e. as the absence of sheer abundance.

 For Byrns and Stone  ‘a world in which all human wants are instantly fulfilled is hard to imagine.’ But this is just what Star Trek  does imagine and what its creator, Gene Roddenberry, insisted should be a background assumption. It is thus a direct challenge to economics and economists.

 Accusing Roddenberry of espousing ‘utopian socialism’, a certain Gardner Goldsmith asserted that a ‘no-money society’ was a fantasy:

‘Like Roddenberry, many thinkers have tried to envision a world in which there is no need for money, no market exchange, and no property. And every one of those thinkers, whether be they followers of John Lennon, Michael Moore, or Karl Marx, has overlooked one key insight: man’s nature does not change.’

 As if we hadn’t heard that one before! Paul Krugman made a more intelligent point that, while replicators might be able to produce material things in demand, they wouldn’t be able to provide services.

 Star Trek is of course fiction. But Roddenberry’s assumption raises the question of what humans would do (besides exploring space) if they didn’t have to work to satisfy their needs. Provide services for each other perhaps?

 Even in 2-300 years time humans will still have to put in some work to satisfy their needs, if only to maintain the replicators. But this doesn’t undermine the case for a society based on common ownership of the means of production where exchange and money would therefore be redundant and where people work at what they do best and take according to their needs.

 Scarcity has already been conquered, not in the economists’ eccentric sense of the absence of sheer abundance, but in the sense that the resources, technology and human skills already exist to produce enough satisfy likely human needs and wants. No need to wait for the invention of replicators to establish this down here on Earth in the 21st century.

Adapted from a Cooking the Books article in The Socialist Standard

A Man's A Man For A' Tha

Robert Burns (1759-1796)

    Is there for honest Poverty
    That hings his head, an' a' that;
    The coward slave-we pass him by,
    We dare be poor for a' that!
    For a' that, an' a' that.
    Our toils obscure an' a' that,
    The rank is but the guinea's stamp,
    The Man's the gowd for a' that.

    What though on hamely fare we dine,
    Wear hoddin grey, an' a that;
    Gie fools their silks, and knaves their wine;
    A Man's a Man for a' that:
    For a' that, and a' that,
    Their tinsel show, an' a' that;
    The honest man, tho' e'er sae poor,
    Is king o' men for a' that.

    Ye see yon birkie, ca'd a lord,
    Wha struts, an' stares, an' a' that;
    Tho' hundreds worship at his word,
    He's but a coof for a' that:
    For a' that, an' a' that,
    His ribband, star, an' a' that:
    The man o' independent mind
    He looks an' laughs at a' that.

    A prince can mak a belted knight,
    A marquis, duke, an' a' that;
    But an honest man's abon his might,
    Gude faith, he maunna fa' that!
    For a' that, an' a' that,
    Their dignities an' a' that;
    The pith o' sense, an' pride o' worth,
    Are higher rank than a' that.

    Then let us pray that come it may,
    (As come it will for a' that,)
    That Sense and Worth, o'er a' the earth,
    Shall bear the gree, an' a' that.
    For a' that, an' a' that,
    It's coming yet for a' that,
    That Man to Man, the world o'er,
    Shall brothers be for a' that.

What is Patriotism? An Analysis

 A meeting of the leaders of far right parties this weekend proclaimed “the return of nation-states” and “patriotism as the policy of the future” (BBC -Link)  In reply we republish the classic socialist analysis of patriotism that appeared in the December 1915 Socialist Standard that “The only universal bond of nationality or patriotism that exists for us to-day is, then, that of subjection to a single government. Patriotism in the worker is pride in the common yoke imposed by a politically unified ruling class.”

The Johnsonian Definition and Others

 The answer depends largely upon the point of view. From one standpoint patriotism appears as the actual religion of the modern State. From another it is the decadence and perversion of a noble and deep-rooted impulse of loyalty to the social unit, acquired by mankind during the earliest stages of social life. From yet another viewpoint, that of capitalist interests, patriotism is nothing more or less than a convenient and potent instrument of domination.

 The word itself, both etymologically and historically, has its root in paternity. In tribal days the feeling of social solidarity, which has now become debased into patriotism, was completely bound up with the religion of ancestor worship. In tribal religion, as in the tribe itself, all were united by ties of blood. The gods and their rights and ceremonies were exclusive to the tribesmen. All strangers were rigidly debarred from worship. The gods themselves were usually dead warriors.

 Every war was a holy war. Among the ancient Israelites, for instance, the holy Ark of Jehovah of Hosts accompanied the tribes to battle. It was this abode or movable tomb of the ancestral deity that went with the Jews in their march through the desert, and even to Jericho, playing an important part in the fall of that remarkable city. All the traditions of the Jewish religion, in fact, were identified with great national triumphs.

The Merits of the Early Brand

 Thus tribal religion was completely interwoven with tribal aspirations and integrity. Tribal “patriotism" and religion were identical. Indeed, without the strongest possible social bond, without a kind of “patriotism" that implied the unhesitating self-sacrifice of the individual for the communal existence, it would have been utterly impossible for tribal man to have won through to civilisation.

 Natural selection insured that only those social groups which developed this supreme instinct of mutual aid could survive; the rest were crushed out in the struggle for existence. Is it a matter for wonder if it be found that such a magnificent social impulse, so vital to the struggling groups of tribal man, received periodical consecration in the willing human sacrifices so common in primitive religious ceremonial ? Bound up with the deliberate manufacture of gods for the protection of the tribe and its works, there is indicated a social recognition of the need for, and value of, the sacrifice of the individual for the common weal.

 This noble impulse of social solidarity is the common inheritance of all mankind. But being a powerful social force it has lent itself to exploitation. Therefore, with the development of class rule this great impulse is made subordinate to the class interests of the rulers. It becomes debased and perverted to definite anti-social ends. As soon as the people become a slave class “the land of their fathers” is theirs no more. Patriotism to them becomes a fraudulent thing. The “country” is that of their masters alone. Nevertheless, the instinct of loyalty to the community is too deep-seated to be eradicated so easily, and it becomes a deadly weapon in the hands of the rulers against the people themselves.

 With the decay of society based on kinship, religion changed also, and from being tribal and exclusive it became universal and propagandist. “Patriotism” at the same time began to distinguish itself from religion. The instinctive tribal loyalty became transformed, by the aid of religion and the fiction of kinship, into political loyalty. In a number of instances in political society, as in Tudor England, the struggle for priority between religion and patriotism became so acute as to help in the introduction of a more subservient form of religion. Thus patriotism became emancipated from religion, and the latter became a mere accessory to patriotism as handmaiden of class rule.

A Most Accommodating Conception

 Though universal religion did not split up at the same time as the great empire that gave it birth, patriotism did so. The latter has, in fact, always adapted, enlarged, or contracted itself to fit the existing political unit, whether feudal estate, village, township, county, kingdom, republic or empire. No political form has been too absurd for it to fill with its loyalty. No discordance of race, colour or language has been universally effective against it.

 What, then, is patriotism in essence to-day? It is usually defined as being devotion to the land of our fathers. But which is the land of our fathers? Our fathers came from many different parts of the world. The political division of the world in which we live is an artificial entity. The land has been wrested from other races. The nation they call “ours” is the result of a conquest over original inhabitants, and over ourselves, by successive ruling classes. Unlike the free tribesmen we are hirelings; we possess no country.

 Nationality, of which patriotism is the superstition, covers no real entity other than that of a common oppression, a unified government. It does not comprise any unity of race, for in no nation is there one pure race, or anything like it. It does not cover a unity of language, for scarcely a nation exists in which several distinct languages are not indigenous. Nor is it any fixity of territory, for this changes from decade to decade, while the inhabitants of the transferred territory have to transfer their allegiance, their patriotism, to the new nation.

The Product of the Analysis

 The only universal bond of nationality or patriotism that exists for us to-day is, then, that of subjection to a single government. Patriotism in the worker is pride in the common yoke imposed by a politically unified ruling class. Yet it is this artificial entity that we are called upon to honour before life itself. This badge of political servitude is called an object worthy of supreme sacrifice. The workers are expected to abandon all vital interests and sacrifice all they hold dear for the preservation of an artificial nationality that is little more than a manufactured unit of discord: a mere focus of economic and political strife.

Ignoble Exploitation

 Thus one of the noblest fruits of man’s social evolution—the impulse of sacrifice for the social existence—is being prostituted by the capitalist class to maintain a system of exploitation, to obtain a commercial supremacy, and preserve or extend the boundaries of a superfluous political entity. The workers are duped by the ruling class into sacrificing themselves for the preservation of a politico-economic yoke of a particular form and colour. Many so-called Socialists have fallen headlong into this trap.

 Had social solidarity developed in equal measure with the broadening of men’s real interests, it would now be universal in character instead of national. The wholesale mixture of races, and the economic interdependence of the whole world, show that nationalism is now a barrier, and patriotism, as we know it, a curse. Only the whole world can now be rightly called the land of our fathers. Only in the service of the people of the whole world, and not against those of any part of it, can the instinct of social service find its highest and complete expression. The great Socialist has pointed the way. He did not call upon the workers of Germany alone to unite. He appealed to the toilers of the whole world to join hands; to a whole world of labour whose only loss could be its parti-coloured chains. And in this alone lies the consummation of that tribal instinct of social solidarity of which patriotism is the perverted descendant.


Something Better than Patriotism

 Capitalism, therefore, stands as the barrier the destruction of which will not only set free the productive forces of society for the good of all, but will also liberate human solidarity and brotherhood from the narrow confines of nationality and patriotism. Only victorious labour can make true the simple but pregnant statement: “Mankind are my brethren, the world is my country.” Patriotism and nationalism as we know them will then be remembered only as artificial restrictions of men’s sympathy and mutual help; as obstacles to the expansion of the human mind; as impediments to the needful and helpful development of human unity and co-operation; as bonds that bound men to slavery; as incentives that set brothers at each other's throats.

 Despite its shameless perversion by a robber class the great impulse to human solidarity is by no means dead. Economic factors give it an ever firmer basis, and in the Socialist movement it develops apace. Even the hellish system of individualism, with its doctrine of every man for himself and the devil take the hindmost, has been unable to kill it. And in the great class struggle of the workers against the drones, of the socially useful against the socially pernicious, in this last great struggle for the liberation of humanity from; wage-slavery, the great principle of human solidarity, based upon the necessities of to-day and impelled by the deep-seated instincts of the race, will come to full fruition and win its supreme historical battle.

A Vile Use of a Noble Sentiment

 That is our hope and aspiration. For the present, however, we are surrounded by the horrors of war added to the horrors of exploitation, and subjected to the operation of open repression as well as to the arts of hypocrisy and fraud. With the weakening power of religion to keep the workers obedient, the false cult of nationality and patriotism is being exploited to the full. Like religion, patriotism has its vestments, its ceremonies, its sacred emblems, its sacred hymns and inspired music; all of which are called in aid of the class interests of our masters, and utilised desperately to lure millions to the shambles for their benefit. Thus is an heroic and glorious social impulse perverted and debased to the support of a régime of wage-slavery, and to the furtherance of the damnable policy of the slave-holding class: to divide and rule.

F. C. Watts

Our Object and Declaration of Principles with explanations

  

 Our Object

 

The establishment of a system of society based upon the common ownership and democratic control of the means and instruments for producing and distributing wealth by and in the interest of the whole community.

Declaration of Principles

The Socialist Party of Great Britain holds
Working class emancipation necessarily excludes the role of political leadership. The Socialist Party has an absolute need of supporters with understanding and self-reliance. Even if we could conceive of a leader-ridden working class displacing the capitalist class from power such an immature class would be helpless to undertake the responsibilities of democratic socialist society.

1. That society as at present constituted is based upon the ownership of the means of living (i.e., land, factories, railways, etc.) by the capitalist or master class, and the consequent enslavement of the working class, by whose labour alone wealth is produced.
    How are decisions about the operation of society made? What principles govern what goods will be produced in what quantity and quality, or what social programs and laws will exist?
   If decisions were made based upon the needs of humanity then the food that is regularly destroyed by the truckload would instead feed the starving.
   
    Decisions are made based upon the expectation of making a profit. The ecology of the world is being devastated, even though this devastation may wipe out the human race, because of profit. Poor quality goods are produced, not because people want to have junk, but because it is profitable to produce junk. The rich can get the best, the rest of us often have little choice. Anyone can think of dozens of examples of how decision making puts profit-making before the satisfaction of human needs.
   
    The owners of the production and distribution facilities are responsible to no-one but themselves. Governments pass laws that maintain profits for the owners as a group. Sometimes one owner or one sub-group of owners loses a bit, but overall, the class of owners always benefits in the long run. By focussing on the worst excesses, and legalizing the rest, their profits are protected from demands for significant changes.
   
    While many British people have generally seen the benefits of increased production in terms of material wealth, the decisions are made not to improve our lives, but to improve the lives of those who own the means of production. The gap between the very rich and the rest of us continues to grow.
   
   
2. That in society, therefore, there is an antagonism of interests, manifesting itself as a class struggle between those who possess but do not produce and those who produce but do not possess. 
    There are many different divisions in society. Divisions of hatred by sex, skin colour, national origin, religion or the amount of money that a person makes, among others. The insecurity of capitalism breeds these hatreds. We must eliminate their breeding ground, before they infect our children.
   
    Socialists see a division of society based upon the means of acquiring wealth. If you must work for a living then you are working class, if your main income is derived from the work of others then you are a capitalist.
   
    This distinction clearly exists. Even though some of us own shares, workers do not have the luxury to quit their jobs and live off investment income.
   
    When you analyze society using this class division, many problems that otherwise defy understanding have obvious solutions. Profit is derived by owning. Wages or salary are derived by labouring, by expending our physical or mental energy working for those who own the means of production and distribution.
   
    The owner of a particular factory may not even know that they own it. It may be just a part of an immense holding company that is administered by someone else. The workers in the factory, however, are directly connected to the production. It is the labour of these workers (including the plant management) that creates the profits that keep the capitalists rich. It is vital that the capitalists pay their workers less than the value that their labour produces. It is this difference between the value of what workers are paid and the value of what they produce that is the source of profit.
   
   
3. That this antagonism can be abolished only by the emancipation of the working class from the domination of the master class, by the conversion into the common property of society of the means of production and distribution, and their democratic control by the whole people. 
    As long as the ownership of the means of production and distribution rests with the minority capitalist class, this antagonism will continue to exist. The antagonism is caused by the necessarily differing interests of the classes.
   
   No matter how nice capitalists may be on a personal level, they will always have different interests than the working class. It is not a matter of good and evil or anything like that, it is inherent in any class system. Therefore the only way to eliminate the antagonism is to eliminate the class system and establish a system of common ownership where the previous antagonism has no basis.
   
   
4. That as in the order of social evolution the working class is the last class to achieve its freedom, the emancipation of the working class will involve the emancipation of all mankind, without distinction of race or sex. 
    The hate and distrust that exists in society today is a direct result of the nature of societies past and present. A society in which we must compete to survive, in which our jobs are threatened by other workers, in which we do not feel secure, is fertile breeding ground for racism, sexism, nationalism and all the other hatreds that abound.
   
    Even today, while this hatred is sometimes used to pit one worker against another, it appears that overall, these hatreds are being rooted out and made socially unacceptable. This is particularly noticeable in countries like South Africa where there is a shortage of white workers, and black workers must be brought into previously "white" workplaces without the major disruption that is caused by overt racism.
   
    No society can meet our human needs as long as there are different classes of people. Every person has abilities that differentiate them from others, but we are all equal in our humanity. We all have strengths and weaknesses.
   
    What we need is a society that allows us to use our strengths, and that accepts and accommodates our weaknesses.
   Socialism will be a society geared to meeting human needs, and the need to be accepted for what we are is probably the most basic of human needs.
   
    When the breeding ground for these hatreds has disappeared, people will naturally be able to eradicate them with all the other negative leftovers of capitalism.
   
   
5. That this emancipation must be the work of the working class itself.
6. That as the machinery of government, including the armed forces of the nation, exists only to conserve the monopoly by the capitalist class of the wealth taken from the workers, the working class must organize consciously and politically for the conquest of the powers of government, national and local, in order that this machinery, including these forces, may be converted from an instrument of oppression into the agent of emancipation and the overthrow of privilege, aristocratic and plutocratic.
    It would be foolish to expect the capitalist class to voluntarily give up its privileged position in society. Governments exist solely to administer the society as it exists, in the interests of the ruling (capitalist) class, so governments will not end the privilege. Capitalism will continue as long as the working class accepts it. The working class will have to force the capitalist class to give up its position of privilege.
   
    Socialism will be the result of workers democratically choosing a new, classless society based upon the satisfaction of human needs. And since capitalism is a global system of society, it must be replaced globally.
   
    It is dangerous and futile to follow those who support violence by workers against the armed force of the state. Violent revolution has sometimes meant different faces in the capitalist class, always meant dead workers, and never meant the liberation of the working class. Unless workers organize consciously and politically and take control over the state machinery, including its armed forces, the state will be ensured a bloody victory.
   
    Political democracy is the greatest tool (next to its labour-power) that the working class has at its disposal. When the majority of workers support socialism, so-called "revolutionary" war will not be required. The real revolution is for workers to stop following leaders, to start understanding why society functions as it does and to start thinking for themselves.
   
   
7. That as all political parties are but the expression of class interests, and as the interest of the working class is diametrically opposed to the interests of all sections of the master class, the party seeking working class emancipation must be hostile to every other party.
    Political parties of the left, right and centre, claim to be working for the betterment of society. Because society functions in the interests of the capitalist class, it is clear that these parties are then supporting the interests of the capitalist class. History shows us that no matter what these parties say, when elected they administer capitalism in the only way it can be administered - in the interests of the capitalist class.
   
    Each of them has their own idea of how to run capitalism, often stealing the ideas of their supposed political opposites. The reforms that they implement must reflect economic reality. If they do not, they will not get re-elected - until the next party fails to reflect that reality. There is no way that capitalism can meet the needs of the majority, but all of these parties pretend it can if only they find the right plan. None of them have any really new ideas, only rehashed reforms that have failed in the past. Voting for any of these parties is voting for capitalism, forever.
   
    Socialists are therefore hostile, not in the sense of committing violent acts against other parties or their members, but to the ideas of those parties which support capitalism.
   
   
8. The Socialist Party of Great Britain, therefore, enters the field of political action determined to wage war against all other political parties, whether alleged labour or avowedly capitalist, and calls upon the members of the working class of this country to muster under its banner to the end that a speedy termination may be wrought to the system which deprives them of the fruits of their labour, and that poverty may give place to comfort, privilege to equality, and slavery to freedom.
    The Socialist Party is part of a global socialist movement that believes capitalism cannot meet the needs of the majority of the people in the world. It does not today, and it never can.
   
    In order to meet these needs capitalism must be replaced by socialism.
   The only way to achieve socialism is for the working class to recognize this and consciously and politically work to replace capitalism with socialism.
   
    The Socialist Party of Great Britain does not support the idea of reforming capitalism and therefore does not work for reforms. There are plenty of other organizations that do and yet the problems remain. By relegating socialism to the future, it is relegated to never. Only a party dedicated only to socialism can promote socialism in any real, honest manner.
   
    Among all the political parties in Great Britain, only the Socialist Party is dedicated to socialism as an immediate goal. It is this objective that makes the Socialist Party revolutionary - our dedication to peaceful, democratic and immediate change.
   
    The Socialist Party is, therefore, engaged in a war of ideas against all other parties. Those other parties, no matter what they claim, are supporting the capitalist system and opposing the immediate establishment of socialism.
   
    Only the conscious support of the working class will create socialism, and to this end the Socialist Party seeks to increase understanding of, and mobilize support for, socialism.
   
    The Socialist Party calls upon every worker to support these efforts in any way that they can.
   

 

Marxism Revisited

Marx revisited

 Since the break-up of the USSR and its eastern European empire, with the consequent collapse of Leninist ideas of revolution, it had become the accepted wisdom that Marxism is outdated. In this series of public forums The Socialist Party examined that body of thought known as Marxism and reassessed its relevance to modern conditions and to the development of an alternative society.

 Each forum lasted two hours including the discussion which followed each talk.
From 'Summer School 1998', 3-5 July, at Fircroft College, Selly Oak, Birmingham. Audio recordings are also available by clicking the titles below.... 

Contents

1. Who the hell was Karl Marx?

2. Was Marx ever a Leninist?   
(Did Lenin really distort Marx?)

3. The fetishism of commodities
(or is Nike cooler than Adidas?)

4. Has the modern market superseded Marxian economics?

5. Is The Socialist Party Marxist?                             

Banks and Credit

This article from February 1975, is well worth a study and is still pertinent to the circumstances leading up to the crisis of recent years. Although some of the references are dated they have been retained for historical purposes.


Economics:

THE USE-VALUE of loan capital, which is made available through the banking system, consists of producing profit, and this type of profit is described as interest. The rate of interest is arrived at by competition between lenders and borrowers, or by supply and demand; the lender of loan capital striving to obtain the highest rate of interest for the use of his capital, and the borrower seeking the lowest rate. There is no "natural" rate of interest, nor is there any limit to the rate that can be charged.

 In the German Weimar Republic during the period of great inflation after World War 1, the rate of interest was raised weekly in some cases to 200%. The "natural" rate theory has its basis in the repetitive form of dealings between merchants and industrialists in the negotiation of Bills of Exchange. A substantial part of the business of a bank consists in discounting (cashing) Bills of Exchange. They are, generally speaking, promises to pay between merchant and industrialist at 60-90 day intervals, or longer. These Bills usually represent goods in transit or in store, and for the facility of advancing cash immediately on the strength of the Bill, which guarantees the value of the goods nominated in the Bill, the banker will deduct or discount a fraction of the amount shown and
buy the Bill. If, for example, a Bill of Exchange was valued at £10,000, and the annual rate of interest was 10%, and the Bill was due in 90 days, the banker would deduct the sum of £250, i.e. 90 days' interest, and advance the sum of £9,750. When the Bill was finally redeemed, the banker would then receive the sum of £10,000 - the full value of the Bill.

Rates of Interest

 Naturally the merchant and the industrialist (incidentally banking transactions as described above are not just confined to these two) would seek out the most favourable discount rates, and over a period of years the rate would tend to become adjusted at a regular rate. For many years between World Wars I and II the bank rate remained almost stable, around 2.5%-3%. The old bank rate was
based on this practice of discounting Bills, and gave rise to the theory of the "natural" rate of interest. Regarding the possibility of the banker getting the better of the merchant, industrialist etc., by successfully charging high discount rates; this would only result in a transfer of wealth between them. Were the British banks to consistently charge usurious rates, capitalists would endeavor to have their Bills discounted elsewhere, say New York or Paris.


 Since interest is part of industrial Profit, the maximum limit of interest is marked by profit itself.
The leaves can never be greater than the tree, or the part can never be greater than the whole. The high rate of interest today, i.e. 15%-16%, is distorted by inflation. The Chairman of Barclays Bank, Mr. A. Favil Tuke said:
"1t is worth recording that of the three parties who make up a bank, namely stockholders, staff and customers, none has gained much from these profits. Customers do not need to be told how much interest rates have risen in the last year or two; the increases in the salaries of our staff have been limited to about 7% per annum, and that of the stockholders dividend to 5% per annum; all
this at a time of inflation of some 10%, per annum." (Directors' Report to AGM, 1974).


 Obviously the depreciation of money is taken into account when fixing a rate of interest, and this is basic to the preservation of the value of the loan capital. On the other hand any prolonged fall, resulting in a total loss of interest, as well as an erosion of the value of the money capital, would eventually remove loan capital from the money market. This would, sooner or later, have repercussions in the productive process, as industrialists and other capitalists would find difficulty in raising capital for certain projects. As capitalism's wealth develops there is a tendency for the owner of inherited wealth to live on the annual interest without actively participating in the productive process. The same attitude is adopted by retired capitalists who want to take things easy,instead presumably of just taking them - as in their youth. Loan capital arises mainly from these sources.

 Were there no profit in loaning capital, that capital would be hoarded until such times as things improved. The owners of such capital would not retain it in the form of paper currency at the mercy of inflation, which has the effect of gradually reducing the wealth of the banker and the landlord, as well as literally confiscating such savings as are owned by workers. They would hold their hoard
either in gold, works of art, land, buildings, or any other desirable commodity which retained its value. No profits would accrue from assets held in this way, but on the other hand, there would be no losses either. However, if this happened on any scale there would be industrial dislocation.

Lenders & Borrowers

 The function of banks is firstly to make recurring payments on behalf of their customers; meeting mortgage payment rates, quarterly bills, and regular annual orders. These are payments which are entirely concerned with the circulation of commodities. But their second and most important function is to provide credit or capital for industry, commerce, property, etc. This is not provided out of the resources of the bank, as can be seen by the statement of the London Clearing Banks.
Total advances were £16.7 thousand millions (Quarterly analysis of Bank advances; Bank of England, 20th November 1974), whereas the total capital of these banks was £658 millions as at December 1973 (Annual Reports, 1973).
 Generally speaking, bank overdraft limits are reviewed every year, and bank borrowing is mainly short-term; up to 3 years in the main. Long-term loans are usually handled by the merchant banks who charge a higher rate of interest for this facility. The credit system which owes its development to the specialized function of the bank has proved to be a significant force in the centralization of
capital. Gathering as they do all the disposable money which is spread throughout society, they channel it into the hands of groups of capitalists, who turn it into capital. The accumulation of capital is speeded up, and with it the productiveness of labour, as more and more machinery is introduced into the productive process.

 Credit, and the credit system, have given rise to many misconceptions about the power of banks to create credit. Firstly, credit, whatever its form, whether in money or goods, consists in a transfer from one person to another.

"Credit, in its simplest expression, is the well or ill founded confidence which induces one man to extend to another a certain amount of capital, in money or in commodities, estimated at a certain value, which amount is always payable after the lapse of a definite time." (Tooke. Capital, Vol. III.Kerr edn., p. 471).


 Elements of social wealth, and the conditions under which the transfer takes place, or the trustworthiness of either of the parties to the transaction, need not concern us. An owner of goods may be separated by an interval of time from realizing the value of these goods in money. Certain articles take a longer time to produce than others, and others longer to market. The production of certain commodities, mainly agricultural products, depends on certain seasons of the year.

  Inevitably the owner of the commodities will borrow money on them, or sell his right to them for money on the spot, or the written promise of money. This is putting it at its simplest - the goods providing the security for the loan. In any case, goods are exchanged or secured against a sum of money which is due to be repaid at a given date in the future. Payment in advance of delivery, or
delivery in advance of payment, represent the two sides of simple credit. It is to be assumed that the credit seeker has a reputation for solvency, and that fraud is not the purpose. Credit advances in this way merely facilitate the circulation of com-modities by getting them to the market quicker.


Weakest to the Wall


 The second and most important function of the banker is to provide money for industry, which is capital. This has a separate function from money as the medium of circulation. The function ofcapital is not merely the circulation of commodities but their production in the first instance.


 Therefore, money used as capital is withdrawn from circulation because the wealth which it represents has been locked up in the process of production. The credit system of advancing capital allows individuals to use capital which is not theirs, and has opened the door to all sorts of swindles and reckless speculation. Who would not gamble with other people's money?


 If banks could create credit with the stroke of a pen, that would mean in effect they could create wealth, and consequently the Marxist Theory of Value would be shown to be wrong. However, as time passes the validity of the Labour Theory of Value, i.e. that wealth can only come into existence when men apply their energies to nature, is all too apparent. If banks could create credit, they would never be in financial difficulties, nor would they go bankrupt. As we have seen in recent years, a number of bank failures are taking place. The Ideal Savings Bank, and the Bank of the Lebanon, for example. More recently, the Herstatt Bank of Germany, and the Sindona group of Banks in Italy; the Israel British Bank (London) with deficits of over £40 millions. Many of the 40 or so fringe banks are in dire trouble, and some have gone into liquidation, including Mr. Jeremy Thorpe's London & Counties Bank. (His insight into the political future has not helped him in his banking adventures.) Many of these failed banks had the dubious benefit of advice from economic and political experts forecasting the future of capitalism. Once again they have come unstuck, and
we can say with certainty that more banks will fail as the competition increases - the large fish will gobble up the little ones.

Credit Creation a Myth

 In these circumstances, why did these banks not create a bit of credit for themselves and literally pull themselves up with their own shoelaces? The answer is all too obvious. The credit of the banker is provided only by his depositors. This is real money. It matters not whether the bank transfers depositors' credit to a bad risk or a dud enterprise - he is liable for its return. At the present time, the pro-perty market has turned out to be a bad financial risk, and the little fish are in trouble having lent long to property speculators, and borrowed short from their bigger brothers. The alleged "rescue" operations organized by the Bank of England are nothing other than the lambs being eaten
up by the wolves. The smaller fry of the financial and banking world are no more immune from the centralization of capital than the small car firms, garages, shopkeepers, etc. In the last four years the Big Five Banks, Westminster, Barclay's, National Provincial, Lloyd's and Midland, have become the Bigger Four. A number of Scottish banks have been taken over by the Big Four - the Bank of Scotland for example is now under the control of Barclay's, whilst the Clydesdale Bank is controlled by Midland; National Westminster controls Coutts & Co., also the Ulster Bank Ltd. Lloyd's control the Bank of London and South America, the National Bank of New Zealand and many others.


 If these small satellites wanted to remain independent all they need have done was to create credit by increasing their capital by a stroke of the pen. Such fictitious capital would no doubt pay a fictitious dividend, and create a series of fictitious deposits. Unfortunately, however, the original depositors who have loaned real money have no sense of fiction - even the science fiction of the
economic experts - and would require repayment in very realistic banknotes.


 The bank profits for 1973, the last accounting year of the London Clearing Banks and subsidiaries, do not bear out the miraculous power of credit creation. Although this was a bumper year the total profits, after tax, were £335.7 millions (Annual Statement for 1973). This is a large profit, but it is only a small portion of the total industrial profit.


Inflation Fraud

 The one institution which appears to create credit is the State, operating through the Bank of England. This is an act of deliberate political policy, the reasons for which will be given in aseparate article. The Government, in a variety of ways, instructs the Bank of England to print an excess of paper currency, which the Government uses to finance its own schemes, and without
having to introduce tax legislation to deal with particular cases. This inflation of the currency does not, nor cannot, add to existing wealth. What is really happening is that, far from creating credit, the Government is confiscating other people's. This has the same effect as a general increase in taxation. The constant dilution of the purchasing power of money by inflation raises prices and
dislocates production and distribution. This is public fraud posing as public credit.

  Capitalism is a system of production and distribution with many contradictions, and inflation adds yet another. Whatever strategy is worked out by economic planners and monetary specialists will make no difference. Capitalism will run according to its own laws, and they can only run after it.

After all - who ever heard of an expert on anarchy?

J.D

Socialist Standard February 1975

Economic spin monkeys

In a discussion with a correspondant in the Guardian about former Labour treasury minister Liam Byrne's latest wheeze,"It’s time to rewrite the rules of economics to end the growing chasm of inequality", he took exception to the notion of socialism proper and wrote:

  "I'm not sure a fully egalitarian system will ever be possible with capitalism; but this is as good as it's going to get. Capitalism, despite its evident faults, has a proven track record of lifting people out of poverty. Socialism has never been tried, its Marxian version - of a wageless, class-less society - is pie-in the-sky, as Lenin recognized. Since his day, socialism has simply referred to varying degrees of state control and expenditure (hence, some refer to Sweden, laughably, as a socialist state!) This form of socialism demonstrably fails, on all counts. True socialism is impossible."


Response:

 You are correct as far as capitalism goes.Which is why it must be removed and replaced with the post-capitalist majority revolutionary alternative. It can't be reformed in any major way, Swedish and Labour Party models do not impinge in any way upon capitalism's rapaciousness. It is like trying to make a vegetarian out of a tiger.

 Lenin's model was a Jacobinistic one to win power. Lenin wasn't trying to make socialism, but to make state capitalism, because socialism was impossible in one country and certainly in Russia emerging out of feudalism, not because socialism was impossible or an impossible dream, but because of the fact, as real Marxists told him at the time, socialism is a post-capitalist society and not a post feudal one, which Russia was becoming.

 You are correct also that capitalist development creates the tools to eradicate poverty and an educated workforce to create and run ever more of it (the capitalist class are a redundant class now inasmuch as they are not needed for wealth production), (which is why Marx supported capitalist revolutions to overthrow feudalism), but then it has to increase or curtail production to satisfy an artificial 'market' demand in the interest of the minority classes profit accumulation.

 The minority capitalist class has become a fetter upon the realisation of the productive potential of the technological capabilities of the potential productive capacitive process capitalism has bequeathed to the 95% wealth producers. Socialism will build upon capitalism.


  Capitalism can not distribute resources to satisfy human needs without destroying itself in the process and it also doesn't lift us out of the relative poverty, but retains it as a necessity, to ensure a constant supply of waged slaves. as Voltaire wittingly put it, "The comfort of the rich depends upon an abundant supply of the poor."

 The comparison is not with early capitalism and todays, but between the social and economic position of the immense majority relative to the wealth they collectively produce. The needs of industry demands an educated , fed workforce in many instances, as workers also run capitalism from top to bottom, the diseases of poverty can jump class barriers, so self preservaation of the system requires different scenarios to early developmental models, but can revert to smokestack circumstances and shanty towns also, as the developing world shows us.

  Poverty in those twin senses, relative and absolute, is entrenched forever if capitalism is retained, as is war (business by other means), trade wars, war over resources and geopolitical interests.
Don't forget also the horror of two world wars for economic dominance and the war science upon Nagaaski and Hiroshima by the kind hearted capitalist class as they currently pick sides for another go.

 To say as you do that 'true socialism is impossible' is akin to a person in feudal times expounding against the coming 'impossible' capitalist revolutions.

Nothing will stop social change or an idea which time has come.

 The post-capitalist revolution has of necessity to be a majority one. The first time ever for majority revolution and not some vanguardist, Lenin style minority putsch as all previous revolutions have been minority led, 'meet the new boss' ones.

 Using the Achilles heel of bourgeois democracy a politically aware immense majority, conscious of their class interest in abolishing the last great slavery, that of wage slavery, can transform the world into a commonly owned , production for use , free access socialist society without elites and change the operating tenet from the present minority favouring exhortation of , "Accumulate, accumulate", into a majority one of , "From each according to their ability, to each according to their needs".

 It will not happen by gradually reforming capitalism,nor by premature nationalist adventures masquerading as 'socialism in one country', an impossibility, or mislabelling state capitalist monstrosities, but the primary task of socialists these days is education to this end however long this takes.

imagine

To form an idea or notion with regard to something not known with certainty...(Oxford Dictionary)

 It has been said that the first victim of war is the truth, but surely the first victim of orthodox education is imagination. From a very early age every worker is taught to be “practical”, “realistic” and stop “dreaming dreams”. And yet imagination is the very act of being human.

 Whatever other aspects make human beings different from other animals, the human capacity to imagine is one of the most striking.
“I imagine, therefore I am a human being”, is a better aphorism than Descartes’ “ I think therefore I am.”
Imagination is not only the wellbeing of all poetry, music and art; it is the source of all science.

 Where would science be if Newton hadn’t imagined an invisible force called gravity? Or, if Einstein hadn’t imagined the concept of relativity? Indeed it was well after the original flight of imagination that his view that light was bent by gravity was factually proven.

 Darwin’s view of evolution wasn’t really proved conclusively until the discovery that the process of heredity, as earlier shown by Mendel, backed up his view. In a sense Darwin had imagined what was true. This new way of looking at the natural world was achieved by a leap of imagination.

  The stifling of imagination is essential if the owners are to retain their class monopoly of the planet.
The great revolutionary act for the working class is to imagine an alternative to present day society.

  Elsewhere in this issue very practical analyses of society, of economics, and politics are made, but let us indulge ourselves here in that most human of all pursuits – let us imagine the future.

A socialist view of the future society is one where the whole earth and all its resources are owned and controlled in common by the whole world’s population. Socialism is a world without money, prices or wages. Let us take a trip into that future. Let us take a leap of the imagination.

A future

 Having arranged that he wouldn’t be needed for a couple of days Billy decided to take Jane’s kids to the Museum of Ancient Artefacts.
The children loved it, but the trouble was that they kept asking awkward questions. “Why did people use stone tools?” “Billy, Why did people walk about in suits of armour?”
By reading the cards that accompanied the exhibits he managed to answer most of their questions.
“You see Susan, stone tools and weapons became redundant with the discovery of smelting metals.The iron age succeeded the stone age.” “Well Jack, suits of armour were used for warfare inside feudalism. They became useless, with the discovery of gunpowder and the improvements in the manufacture of artil-
lery in the 17 th century.

What was a dollar?
 
  It was then that they came to the Hall of Capitalism. Now that was more difficult. There were so many baffling exhibits. What was a cheque? What was a cash register? The children had lots of questions as they
played with the cash registers on display.
“Billy, what was a dollar? What was a pound note? “Billy, had a lot of difficulty answering the questions and was a bit relieved when the kids got bored and asked to go to the café for an ice-cream.

What was a cash register?
 
  As Susan and Jack ate their ice-cream. Billy sipped his coffee and wondered how this cash register thing could have worked in the Old Days. How did it tie in with the other astonishing exhibits in the Hall of Capitalism.

 Did people who wanted an ice-cream have to bow to the Queen? Or did they have to recite a verse from the Koran? Now this seemed daft. Did they have to give tokens to the cash register? No matter how you looked at it, it was a bizarre business.

  It seems today an obvious thing – if you want an ice-cream you take an ice-cream. Tomorrow Jane and the children were going to the South of France to pick fruit and he was going to visit Stephen in Amsterdam about the wood carving course. He wondered what the role of the cash register was in aeroplane trips in the Old Days. If you didn’t have enough tokens for the cash register did they throw you of the plane? Did they forbid you from entering the plane even though there were empty seats.

Why not eat fruit.
 
  It surely couldn’t have been as bad as that though. No, surely not. But then again, inside capitalism they starved children.....killed them because they hadn’t enough tokens to put in the cash registers. Children died because their parents hadn’t enough tokens.

“No!”, thought Billy. “Perhaps I’ve misunderstood those exhibits in the Hall of Capitalism.” But then, there was that ghastly photograph of tiny children starving as they sucked their mother’s empty teats.
Young Jack had asked him, “Billy, these people lived in warm places. Fruit grows in warm places, doesn’t it? Why did they not eat the fruit?” Come to think of it Billy wasn’t sure it was a good idea to let young children see such horrible images. Still, they had to learn about the Old Days he supposed.

“The past is a foreign country; they do things differently there” L.P.Hartley

RICHARD DONNELLY

Socialist Standard June 1994

Capitalism is the actual source of inequality

 In signs of rising income inequality, India's richest 1% now hold a huge 58% of the country's total wealth -- higher than the global figure of about 50%, a new study showed on Monday.

 The study, released by rights group Oxfam ahead of the World Economic Forum (WEF) annual meeting in Davos attended by rich and powerful from across the world, showed that just 57 billionaires in India now have same wealth ($216 billion) as that of the bottom 70% population of the country. Globally, just 8 billionaires have the same amount of wealth as the poorest 50% of the world population.

 The study said there are 84 billionaires in India, with a collective wealth of $248 billion, led by Mukesh Ambani ($19.3 billion), Dilip Shanghvi ($16.7 billion) and Azim Premji ($15 billion). The total Indian wealth in the country stood at $3.1 trillion.

 The total global wealth in the year was $255.7 trillion, of which about $6.5 trillion was held by billionaires, led by Bill Gates ($75 billion), Amancio Ortega ($67 billion) and Warren Buffett ($60.8 billion).

 In the report titled 'An economy for the 99%', Oxfam said it is time to build a human economy that benefits everyone, not just the privileged few. It said that since 2015, the richest 1% has owned more wealth than the rest of the planet.

http://www.dnaindia.com/money/report-india-s-richest-1-own-58-of-country-s-total-wealth-oxfam-2293003

Oxfam's overall conclusions are misleading - Capitalism is the actual source of inequality, Specifically exploitation takes place at the point of production and regardless of the wage transacted.

There is no doubt that Oxfam's statistics are reliable and a valuable source.

 However, the conclusions made by Oxfam about the reasons of extreme global inequality- and the needed solution to the problem- consist a misleading message to the people. The misleading message is that the capitalist system can be improved and change towards a... "human economy that benefits everyone, not just the privileged few".

  Oxfam points out some actual issues, such as the tax dodging by corporate companies which drive down the wages of the workers in order to maximize profit, the use of tax heavens etc. However, the heart of the problem cannot be found in theories such as the "super-charged shareholder capitalism" or "casino capitalism". The heart of inequality the capitalist system itself- the capitalist mode of production is the root of all problems.

  When Oxfam refers to the need for the creation of a "human economy", it hides the simple fact that, within Capitalism, an economy for the majority, for the working people, for the masses, isn't possible. It is also quite hypocritical from the side of Oxfam to keep calling on business leaders to play their part in building a human economy - the only part the bourgeoisie can play in Capitalism is the role of the oppressor.

 The only solution for humanity lies on the total overthrow of the capitalist system. The working people, the masses in every country, must not have illusions about a supposed "human economy" within Capitalism, because Capitalism cannot be humanized. The only way out of the misery and the huge inequalities is the struggle against the capitalist exploitative system, for a new society, where the people will be the real masters of the wealth they produce.

Dipak Kumar Bhattacharya

A breath of fresh air (Not)

 Since the demise of most of the smoke stack industries in Scotland and elsewhere the, passing of the Clean Air Act 1956 which was an Act of the Parliament of the United Kingdom passed in response to London's Great Smog of 1952. It was in effect until 1964, and sponsored by the Ministry of Housing and Local Government in England and the Department of Health for Scotland.

  The Act introduced a number of measures to reduce air pollution, especially by introducing "smoke control areas" in some towns and cities in which only smokeless fuels could be burned. By shifting homes' sources of heat towards cleaner coals, electricity, and gas, it reduced the amount of smoke pollution and sulphur dioxide from household fires. Reinforcing these changes, the Act also included measures to relocate power stations away from cities, and for the height of some chimneys to be increased.

  The Act was an important milestone in the development of a legal framework to protect the environment. But it came rather late on after capital had exhausted its initial steamrollering of human rights and expectations of dignity in life and work and in response to the fact that the killing smogs of the day could not be expected to distinguish, which class of lungs they permeated, as city institutions demanded at least some occasional attendance from the moneyed classes.

 Since then however although there has been a marked reduction in visible smoke polution, there has been an increase in recorded invisible polution and carcinogenic particulates in the air we breathe, this time from the rapid increase in the use of motor vehicles.

FoE Scotland campaigner Emilia Hanna said it was particularly harmful for small children, pregnant women and people living in poverty.

"For people living in an official pollution zone or near traffic-choked streets, breathing in toxic air is an inescapable fact of life," she said.

"It should not be this way, we have the right to breathe clean air just as we have the right to drink clean water.

"The Scottish government and local authorities are not tackling this public health crisis with the seriousness and urgency required."

The number of pollution zones in Scotland has risen, according to new figures from Friends of the Earth (FoE) Scotland.

The group found that there are now 38 zones where safety standards for air quality are regularly broken - five more than last year.
The environmental campaigners warned the pollution levels were a "public health crisis".


 But it is even more serious than this. As we reported in January of last year.

In Britain, where latest figures suggest that around 29,000 people a year die prematurely from particulate pollution and thousands more from long-term exposure to nitrogen dioxide gas, emitted largely by diesel engines, the government is being taken to court over its intention to delay addressing pollution for at least 10 years.


 The World Health Organisation has issued a new warningabout deadly levels of pollution in many of the world’s biggest cities, claiming poor air quality is killing millions and threatening to overwhelm health services across the globe. WHO says there is now a global “public health emergency” that will have untold financial implications for governments. According to the WHO, air quality is deteriorating around the world to the point where only one in eight people live in cities that meet recommended air pollution levels.  The latest data, taken from 2,000 cities, will show further deterioration in many places as populations have grown, leaving large areas under clouds of smog created by a mix of transport fumes, construction dust, toxic gases from power generation and wood burning in homes.

 Maria Neira, head of public health at the WHO, said “Air pollution leads to chronic diseases which require hospital space. Before, we knew that pollution was responsible for diseases like pneumonia and asthma. Now we know that it leads to bloodstream, heart and cardiovascular diseases, too – even dementia. We are storing up problems. These are chronic diseases that require hospital beds. The cost will be enormous.”

 Frank Kelly, director of the environmental health research group at King’s College London, and an adviser to several governments on the health risks of pollution, told the Observer that air pollution had become a “global plague”. “It affects everyone, above all people in cities. As the world becomes more urbanised, it is becoming worse.”

 A report from the EU’s European Environment Agency (EEA) says pollution is now also the single largest environmental health risk in Europe, responsible for more than 430,000 premature deaths. “It shortens people’s lifespan and contributes to serious illnesses such as heart disease, respiratory problems and cancer. It also has considerable economic impacts, increasing medical costs and reducing productivity,” said the EEA director Hans Bruyninckx.

Trying to improve the air quality of 38 streets in Scotland is laudable, but the problem is a global one, requiring a global solution, which only a post-capitalist, production for use society of common ownership and democratic control of resources can provide.


 Working people are continually involved in a day-to-day struggle against business and government over the basic necessities of life. Hazards in the industrial environment result in disease, disability, and death on an unprecedented level. Millions of cases of occupational disease due to factory pollution occur annually. Workers are forced to breathe air highly saturated with tiny particles, leading to all sorts of diseases such as black lung, silicosis, and asbestosis.


 We have to recognize that there are forces in the society which are anti-life — the ruling class, which is content to maintain its rule as the entire society rushes towards oblivion, a force that we must struggle against if life is to be guaranteed. And in this struggle the primary question is who is going to have the power and it is the necessity for socialists to realize that, the end is life. But the beginning is the successful struggle for a socialist society. A confident, organised working class is essential for the creation of a society in which workers can truly formulate and decide between alternatives.