Banking 3/7

Banking Myths

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

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

Food for thought

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

Banking 2/7

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

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

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

Champagne And Capitalism

 

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

Hypocrisy In Action

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

Game, set and match

Andy Murray is already worth an estimated £32 million, but his latest Grand Slam victory will see his earnings soar into the ranks of the world’s wealthiest sportsmen.

Industry experts say that sponsorship and endorsements could see Andy earn around £100m over the next five years.

That would dwarf his career earnings of £18.5m and annual sponsorship deals currently worth around £9m, putting him in the same league as David Beckham.

The Yellow Brick Road

"Have you heard of the wonderful wizard, The wonderful Wizard of Oz, And he is a wonderful wizard, If ever a wizard there was"

While many today consider gold an instrument of financial and personal freedom, Frank Baum, author of 'The Wonderful Wizard of Oz' painted it as a villain - the tool of oppression. Baum published the book in 1900, just after the US emerged from a period of deflation and depression. Prices had fallen by about 22% over the previous 16 years, causing huge debt. Farmers were among those badly affected, and the Populist political party was set up to represent their interests and those of industrial labourers. The US was then operating on the gold standard - a monetary system which valued the dollar according to the quantity of gold. A key plank in the Populist Party platform was a demand for "free silver" - that is, the "free and unlimited coinage of silver and gold" at a fixed ratio of sixteen to one. Populists and other free-silver proponents advocated unlimited coinage of the white metal in order to inflate the money supply, This would have increased the US money supply, raised price levels and reduced farmers' debt burdens thus making it easer for cash-strapped farmers and small businessmen to borrow money and pay off debts. Baum's allegory is a critique of the Populist rationale. The Land of Oz, is a microcosm of America and Oz is short for ounce, the measure for gold and silver. Emerald City, its center and seat of government, represents Washington, D.C. The journey to Emerald City corresponds to the Populists effort to acquire power in Washington. The yellow brick road is the gold standard. The brainless Scarecrow represents the midwestern farmers. The Tin Man represents the nation's workers, in particular the industrial workers. The Wicked Witch of the West and the Wicked Witch of the East represent financial-industrial interests and their gold-standard political allies (NY banker J.P.Morgan and JD Rockefeller), the Emerald City of Oz (green-back money is also a delusion). The Wizard is simply a manipulative politician who appears to the people in one form, but works behind the scenes to achieve his true ends through deceit, and even Dorothy’s silver slippers (changed to ruby slippers for more effect in the color movie version) is a symbol of the belief that adding silver coin to gold coin would provide much needed money to a depression-strapped, 1890s America). Oz is full of monetary reform symbolism.

But it also included some utopian hopes.

In the sequel to the Wizard of Oz 'The Road to Oz' Baum has the Tinwoodman explain:
“It must have cost a lot of money,” remarked the shaggy man.
“Money! Money in Oz!” cried the Tin Woodman. “What a queer idea! Did you suppose we are so vulgar as to use money here?”
“Why not?” asked the shaggy man.
“If we used money to buy things with, instead of love and kindness and the desire to please one another, then we should be no better than the rest of the world,” declared the Tin Woodman. “Fortunately money is not known in the Land of Oz at all. We have no rich, and no poor; for what one wishes the others all try to give him, in order to make him happy, and no one in all Oz cares to have more than he can use...
...[later]"Don't they work at all?" asked the shaggy man.
"To be sure they work," replied the Tin Woodman; "this fair city could not be built or cared for without labor, nor could the fruit and vegetables and other food be provided for the inhabitants to eat. But no one works more than half his time, and the people of Oz enjoy their labors as much as they do their play." ”

The next book in the series , The Emerald City of Oz, Baum goes into more detail (inconsistencies notwithstanding) on the money-less economics:
"There were no poor people in the Land of Oz, because there was no such things as money, and all the property of every sort belonged to the Ruler. The people were her children, and she cared for them. Each person was given freely by his neighbors whatever he required for his use, which is as much as anyone may reasonably desire. Some tilled the land and raised great crops of grain, which was divided equally among the entire population, so that all had enough. There were many tailors and dressmakers and shoemakers and the like, that made things that any who desired them might wear. Likewise there were jewellers who made ornaments for the person, which pleased and beautified the people, and these ornaments also were free to those who asked for them. Each man and woman, no matter what he or she produced for the good of the community, was supplied by the neighbors with food and clothing and a house and furniture and ornaments and games. If by chance the supply ever ran short, more was taken from the great storehouses of the Ruler, which were afterward filled up again when there was more of any article than the people needed. Every one worked half the time and played half the time, and the people enjoyed the work as much as they did the play, because it is good to be occupied and to have something to do. There were no cruel overseers set to watch them, and no one to rebuke them or to find fault with them. So each one was proud to do all he could for his friends and neighbors, and was glad when they would accept the things he produced."

A wizard idea!!!

 Mary E. Lease, is the supposed model for Dorothy in the Wizard of Oz and she was the speaker for the Farmers' Alliance and the Populist Party touring the country making speeches telling farmers to "raise less corn and more hell." She believed that big business had made the people of America into "wage slaves", declaring:
 "Wall Street owns the country. It is no longer a government of the people, by the people, and for the people, but a government of Wall Street, by Wall Street, and for Wall Street. The great common people of this country are slaves, and monopoly is the master... Our laws are the output of a system which clothes rascals in robes and honesty in rags. The political parties lie to us and the political speakers mislead us. We were told two years ago to go to work and raise a big crop, that was all we needed. We went to work and plowed and planted; the rains fell, the sun shone, nature smiled, and we raised the big crop that they told us to; and what came of it? Eight-cent corn, ten-cent oats, two-cent beef and no price at all for butter and eggs-that's what came of it.The politicians said we suffered from overproduction. Overproduction, when 10,000 little children, so statistics tell us, starve to death every year in the United States, and over 100,000 shopgirls in New York are forced to sell their virtue for the bread their niggardly wages deny them...."

Banking 1/7

Are the banks and greedy and incompetent bankers to blame for the current economic crisis? That’s what a lot of people think and what the media seems to want us to think. Certainly, bank directors generally are greedy – awarding themselves huge “salaries”, bonuses and pensions – and some of them are incompetent on their own terms. But blaming them is to let the real culprit off the hook: the capitalist system of production for profit. There are few places in the world more pointless than a bank. There are few compelled to toil more uselessly than bank employees. In every respect, the function of banks is to facilitate a form of exchange in which nothing is produced and much can be lost. A world without banks would be a wholly better place.

For all its worth, the distinction between productive and non productive capitalists remain a question of who gets what share of the unpaid labour of the working class.

Workers are exploited by virtue of the fact that we produce surplus value for the capitalists which is appropriated and used for their own ends. Nothing to do with low wages or being harshly treated. Exploitation is something which is built into the very nature of the employment relation itself which implies the division of society into employers/owners and employees/non-owners .

In fact, capitalism is not interested in producing things as such. It is only interested in profit expressed in money terms. Investing in the production of goods and services is an inconvenience which it has to go through in order to achieve its aim of ending up with a greater financial worth than it started with. Thus the purest form of capital is finance capital and, from the capitalist point of view, the most convenient way to make more money is to do so by financial dealings of one sort or another. It’s an illusion of course. It’s production, not finance, that makes the world go round. The financial world cannot go on feeding off rising paper asset values for ever. Reality must intrude at some point. But capitalism without finance capital is inconceivable; so too, therefore, is capitalism without financial crashes.

Capitalism is not a place (‘financial centres’) or a thing (‘multinational corporations’ ), it is a social relationship dependent upon wage labour and commodity exchange where profit is derived from capital’s theft of unpaid labour. Concentrating on “nasty” financiers and multinationals and defining “capitalism” in those terms can only end up as a massive diversion from the goal of abolishing the capitalist system.

This idea that bankers are any worse than other types of capitalists is not convincing. To repeat ad nauseum. The capitalist class as a whole, and all of the individual capitalists, enrich themselves thanks to workers adding more new value to the commodities they produce than the value of the wages received as payment for their labour-power. Any party to this exploitation of labour – whether the capitalist who lends the investment funds, the capitalist who supervises the commodity production process, or the capitalist who is tasked with selling the commodities – is entitled to a piece of the action and therefore share equally in the blame. It is nonsense to argue that one type of capitalist is more or less culpable than the others. The relations between capitalists is very much like those between a gang of thieves, who cooperate to pull off a heist and then divide the loot among themselves. Conflicts easily arise from such an arrangement: as a bigger share for one means a smaller share for the others. “Wall Street vs. Main Street”. It is more a re-distribution of booty among the robbers. Such squabbles are of little concern to the person who has been robbed. In the end it is just the old “divide and conquer” approach with a subtle new twist – instead of dividing the working class, the internal divisions of the capitalist class are emphasised to deflect attention from the actual real class divide that exists.

The task for socialists is not to drive out speculators from capitalism to perfect the system but to move beyond production as merely a means of capital accumulation.

Who are the people who find a difficulty in paying for the money they use? Not the working class in any sense of the word. Not the large capitalists, for they control the powers of government and have a currency suitable to their interests. There is left the small capitalist and shopkeeping section, who, fond of calling themselves the “middle” class, find themselves unable to hold their own positions against the giant production and “chain store” system of distribution that is crushing them out in all directions. Hence this howl for an extension of “credits” and the introduction of “cheap” money for the purpose of paying their debts. There is no chronic shortage of purchasing power. Sufficient to buy the product is generated as wages and profits in the course of production. Slumps are not caused by an absolute shortage of purchasing power but arise when, because of falling profit prospects, capitalist firms choose not to spend all their profits on fully renewing or on expanding production.

As Marx identified “So long as things go well, competition effects an operating fraternity of the capitalist class…so that each shares in the common loot in proportion to the size of his respective investment. But as soon as it is no longer a question of sharing profits, but of sharing losses, everyone tries to reduce his own share to a minimum and to shove it off upon another. The class, as such, must inevitably lose. How much the individual capitalist must bear of the loss, ie, to what extent he must share in it at all, is decided by strength and cunning, and competition then becomes a fight among hostile brothers. The antagonism between each individual capitalist’s interests and those of the capitalist class as a whole, then comes to the surface…”

 Marx also pointed out that “the moneyed interest enriches itself at the cost of the industrial interest in the course of a crisis” Bankers are enriching themselves at the expense of industrial capitalists in other words.

The present banking crisis is not all that complicated. When borrowing became less available and more expensive banks came unstuck. They found that, when their loans came up for renewal they had to pay more interest on them than they were getting from those they were lending money too. Since banks make a profit by paying depositors and creditors a lower rate of interest than they charge those they lent money to, this meant they were making a loss. That’s what can go wrong when banks can’t get hold of other people’s money on the right terms. What can also go wrong is that they make unsound loans - the sub-prime situation. If they buy a house and the lend someone the money to buy it, if that person defaults they are left with the house. In normal times they can resell it but because there has been overproduction in the housing market they are finding that they can’t get the same price for it as they paid for it. In other words, they lost money.

In fact this effective overproduction in the housing sector could be said to be what has provoked the present financial crisis.

What socialists say about the banks is not regulate them, nor nationalise them, but make them redundant. Abolish them, along with all the rest of the complicated, financial superstructure of the capitalist production-for-profit economy. The mythology surrounding the power of banking helps those who take the view that this vast institution is so necessary that the prospect of a world without money would be unthinkable. Let’s abolish capitalism and live in a moneyless, propertyless world without banks. That means moving from a demand for ‘regulation change’ to one for ‘system change’. Perceived wisdom is that it should be easier to make socialists in a recession when the shortcomings of capitalism are more evident. This capitalist recession will eventually end and the economy at some time in the future will inevitably return to growth. If there are more socialists at that future time, then at least one positive outcome will have resulted from this sorry and preventable mess.

“…no kind of bank legislation can eliminate a crisis” – Marx

 The only way to solve the worlds problems is to escalate and intensify the class struggle. Capitalism is subject to periodic slumps and is a global system, global economic crises are inevitable from time to time. I’d like to think that this would trigger off a world-wide movement for global socialism but experience has unfortunately shown that there is not necessarily a fixed one-to-one relationship between economic crises and the growth of socialist ideas. Other factors too are involved and only time will tell how the socialist movement will fare.

The middle class

Marx uses the term “middle class”. In the Victorian period this term was used to refer to the bourgeoisie or capitalist class. In modern Marxist terminology the words “middle class” would be replaced by “bourgeois” and “bourgeoisie“ as appropriate.

Class is defined by the position in which you stand with regard to the means of production. In capitalist society there are two basic classes: those who own and control the means of production and those who own no productive resources apart from their ability to work. The job you do, the status it might have, the pay you receive and how you chose to spent it, are irrelevant as long as you are dependent on working in order to live. This means we are living in a two-class society of capitalists and workers.

The existence of a “middle class” is one of the greatest myths of the twentieth century. In the last century, the term was used by the up-and-coming industrial section of the capitalist class in Britain to describe themselves; they were the class between the landed aristocracy (who at that time dominated political power) and the working class. However, the middle class of industrial capitalists replaced the landed aristocracy as the ruling class and the two classes merged into the capitalist class we know today. In other words, the 19th century middle class became part of the upper class and disappeared as a “middle” class. The term, however, lived on and came to be applied to civil servants, teachers and other such white-collar workers.

Having to work for an employer was how Marx defined the working class. Commodities express the amount of labor time embodied in them and that is how Marx has defined money.

The traditional division between “working class” and “middle class” implies that there is a conflict between these two groups, with the middle class being better paid, educated and housed, often at the expense of the working class. In order for the left liberal politics to maintain its appeal, the enemy had to be found, not in the abstract workings of a social system, but in the concrete everyday realities. The owning class is too remote to be tangible, and certainly too remote to be vulnerable. So the left reformers dragoon the “middle-class” into the role. Their immediate enemy is the “middle class” ie the lower /middle echelons of management, civil servants, social workers, teachers and all the other functionaries of capital. Making a supposed middle-class into an enemy is as divisive as anything dreamed up by the owning class.

Too young to die, too old to live

There's no question that the population's aging is of major importance, and that it will change the whole tenor of social life health care, the consumer culture, architecture, living arrangements, and even population sex ratios, since women live longer than men. But the real crisis for capitalism and its governments is that the costs of health care and pensions will grow, something that's usually presented as a "burden" on the non elderly members of society. Older people are not to be cared for, even cherished they're a cost that has to be minimised in the name of fiscal prudence, growth, and productivity. Unless older people are to starve, some provision for their income must be made. In pre -industrial societies, where life is short, people tend to work until they can no longer, and then their families take over. With industrialisation families break apart, and such informal arrangements can no longer be relied on.

According to the doomsters, there are many faults to existing pension systems. Too many of the benefits go to affluent retirees, funds that could be better targeted to the poor; public pensions crowd out spending on other worthy public purposes, like education; the assurance of a reasonably generous income at retirement discourages personal saving; and the retired are essentially a parasitic layer of old folk feeding off the non-old. While a public system may work well when it's young, when the number of contributors greatly outweighs the number of retirees drawing on it, as the system matures, the rate of outgo rises to match the rate of income. "Who pays for what?" This is the central question in public finance. But this one question is actually two questions: "who pays?" and "for what?"

Your wage or salary is the sum of money necessary to reproduce your ability to work and your pension is nothing else than wages or salaries deferred until you retire, money that employees would have been paid as cash salary but choose, instead, to have placed in the state operated or company pension fund where the money can be professionally invested (at a lower cost of management) for the future. Expecting individuals to be experts at investing their retirement money in defined contribution plans — instead of pooling the money so professional investors can manage the money as is done in defined benefit plans — is not sound economics. The concept, at its most basic, is buying wholesale instead of retail. Wholesale is cheaper for the buyers.

With pension rule changes, expecting workers to make a larger contribution to their pension and benefits programs. What they are actually asking is that the employees take a pay cut. Unions agreeing to these deals on their benefits are accepting the obligation their members paying for them out of their own pockets.

Some commentators have made the point that, while it is true that it is state-employees’ own money that funds the pension plan, when the pension plan comes up short it is up to the employer to make up the difference. There is some truth in this – but not as much as many seem to think.

Because the pension plan is a defined benefit plan – requiring the state to pay the agreed benefit for however long the employee may live in retirement- if the employee lives longer than the actuarial plan anticipated, the taxpayer is on the hook for the pay-outs during the longer life. But is this the fault of the employees? The pension agreements are the result of collective bargaining. That means that the state has had every opportunity to properly calculate the anticipated lifespan and then add on some margin for error.

Nor can the losses taken by the pension funds over the past few years be blamed on the employees. We had employers failing to make annual payments (taking regular extended pension holidays in the past) for their pension systems. There has been lower investment returns from the recession and increased taxation by the government on funds, not at all linked to the employee outrageous audacity of living longer.

 Concerns over the effect of increasing life expectancy – sometimes described as a "burden" – are only smoke screens. We need to be clear – lowering pension levels and raising the retirement age are in effect real pay cuts.

Pensions are a transfer payment from the profits of the capitalist class – which ultimately come from what workers as a whole produce. That there is at present a "problem" once more proves that the market economy is incapable of going beyond the limits of the wages system. It cannot adequately provide for the needs of the class that produces and distributes all the wealth in the first place.

Advances gained from the increased productivity of our labour – including an increased life span – are being clawed back by capital to its advantage, pushing the burden from the capitalists onto the workers.

The capitalist class encourages us to see their interests and problems as ours. As a result we find our lives opened up to the chaos and uncontrollable insanity of the market. The market system cannot provide any security for us in the long run, which is why we need to turn the current struggle over wages, salaries, and pensions into a politically organised movement for a society based upon the direct satisfaction of human needs.

Many politicians call for the raise of the retirement age to 70. This isn't based on any evidence that people are working longer and don't actually need it, but on the fact that people are living longer and draining from the fund longer than in years past. In fact, the real belief is that many who have to retire before 70 will do so for health reasons on truncated benefits and die before they ever reach 70, thus saving the system money. Those few that actually can and do work until 70 will continue to pay into the system, so it's a win/win move. Added to that is the fact that earners in the top half of the economic strata have a longer life expectancy than those in the bottom half and have a far greater chance of making it to 70 and drawing full benefits Another solutions though could be raising the rate of immigration since immigrants (legal or not) tend to be young, and swell the ranks of those paying into the system rather than drawing it down. GDP growth will, since the size of the economy decades hence will determine how much money is available to pay retirees. The bankruptcy scenario is based on an assumption that GDP will grow at a rate seen only in depression decades.

Also, the World Bank, the voice of world capitalism, proposes a three -pillared system to finance pensions. A mandatory public system, financed by tax contributions on a pay-as-you go basis, to provide a minimum floor income for the elderly possibly a single, flat-rate benefit for all. The second is a mandatory privately managed system, financed by contributions from either employers, workers, or both a form of forced saving with the accumulating balances invested (Privately management in order to prevent the backdoor nationalisation of the private sector that could occur if public entities invested their funds in the stock market). And the third is a system of similarly invested voluntary savings, also financed by worker and/or employer contributions, but not required by law. The public pillar would assure a minimum income (subsistence) in old age, but nothing terribly comfortable. Comfort would only be achieved through the second and third pillars.

Increasing reliance on private savings, forced or voluntary, to fund retirement takes it on faith that funds invested in the stock and bond markets will magically grow to meet rising needs. Over the very long term, interest rates on long-term bonds average about the same as economic growth rates. Stocks do better than this, but it seems economically unwise to bet that financial asset prices can forever grow more rapidly than the value of the underlying real assets the present and future profits of private corporations they're a claim on.

The Bank's favorite model is Chile yet the Chilean system fails to live up to the Bank's promises. The poorest, supposedly protected by a "safety net," get a payment equivalent to a loaf of bread and a cup of coffee per day. Less poor workers are hardly well taken care of by the new system; it's likely that about half of all retired workers will fall under the official poverty line. Women, with lower wages and longer lives than men, come up particularly short. Administrative costs are far higher than the old public system; investment managers are a lot more expensive than public sector bureaucrats. As with most private pension funds, workers have no say over how their savings are used; fund managers cast the stockholders' votes by their own lights, even though they're really only the workers' agents. In the USA the The National Academy of Social Insurance detailed some options workers could pay more; reduce benefits; reduce the cost of living adjustment; increase the age for full retirement benefits; lengthen the career-earnings averaging period; and reduce benefits for new beneficiaries.

The ones being sacrificed on the altar of economics are society's oldest and frailest, an almost inevitable result of the pursuit of profit above all else in our society.

It is encouraging to see the fight back by the public sector unions. The gains made by wage and salary workers on pay, pensions and other related issues have not, after all, been granted by benevolent governments or employers – they had to be fought for. If those gains are to be defended, democratic and unified action by workers is necessary. If governments and employers win on pensions and wages they will try it again with something else. Nevertheless, important as activity of this sort is today it still does not get to the crux of the question.

The Socialist Party urges all workers to consider their position. Workers have to strike because they are slaves to the capitalist class who buy our lives by the week or by the month. So, besides making the greatest possible use of trade unions, we ask for recognition that even at their best such action cannot bring permanent security or end poverty. No strike can stop a government determined to have its way. In the end the logic of capitalism will always win out.

While trade union activity, including strike action, is necessary as long as capitalism lasts it can't work miracles. There can be no lasting solution to the problems the market economy creates within the market system itself. Austerity and insecurity, in a world of potential plenty, is always the lot of the working class. In addition to trade union action socialist political action is needed on the basis of a clear understanding and awareness of our class interests.

Unions cannot make revolutions – only the working class themselves can do that, through clear, democratic, determined political action.

Our interests are opposed at every point to those of the capitalist class. Our cause can only be the cause of revolution for the abolishing of classes based on a real understanding of our position as workers. Without that understanding, militancy can mean little.

The Socialist Party does not ask for blind support. We do not put ourselves forward as potential leaders. What we seek is understanding. Over the past century we have seen movements rise and fall, we have heard slogans fade into distant echoes, we have encountered scores of "solutions" loudly acclaimed only to be discarded.

The single, simple fact we urge working people to recognise is that capitalism generates problems it is incapable of solving. Workers are so busy taking care of the business of capitalists, we don't have the time and the resources to take care of ourselves. The remedy – the only remedy – is to consciously end the property system that divides and oppresses us.

Jack And The Beanstalk

Another short story from the the Socialist Party of Canada website

A Discussion Between Jack, the Beanstalk Plantation Owner and Henry, His Golden Egg Mint Man.

HENRY: Man you play it cool. You do what you like, and you do it when you like to do it. And all those frails who part their hair just the way you like it. How do you make this scene?

JACK: Easy, man. I got all kinds of giants growing beanstalks for me.

HENRY: Wild! How do you get them to do that?

JACK: Easy, man. I just give them some of those golden eggs you mint for me.

HENRY: Crazy! Why do they want those?

JACK: Simple, man. They need them to buy some of the beans they produce.

HENRY: Way out! How come the giants don't just help themselves to the beans?

JACK: Can't, man. I give a few golden eggs to other giants to guard my beans with rifles and keep the giants in cages if they get caught.

HENRY: Holy masochism! How come they don't see the con game?

JACK: Ain't easy, man. I got other giants running schools to train them that the only thing to do is to try and climb beanstalks. This keeps them seeing the world through my eyes.

HENRY: Holy apprehension! Don't you worry about them getting to your position?

JACK: Not much, man. Most of the giants can't even get past the first low branches. Only a few get high enough that I have to have the beanstalk cut down. About one in a thousand gets up and we just absorb him.

HENRY: What a plot! You must have it real cozy.

JACK: Well, not quite, man. I got problems. The giants produce so many beans that even my groovy living doesn't use them all.

HENRY: What a hangup! What do you do with with the rest?

JACK: Well, I try to get rid of them across the sea for more golden eggs.

HENRY: Way out, man. You've got the solution.

JACK: Well, not exactly. You see there are bad Jacks over there who are trying to do the same things I'm doing.

HENRY: What a paradox, man. What can be done?

JACK: Well, I give a few more eggs to other giants to fly bombers to blow up the bad Jacks' beanstalk plantations before the bad Jacks get their giants to blow up my beanstalk plantations. These military giants also guard my source of beanstalk fertilizer and try to get new sources away from the bad Jacks.

HENRY: What a smooth solution, man. You should feel cool.

JACK: Well, almost, but I have a bit of a paranoia about mushroom clouds.

HENRY: Holy dilemma, man! I wonder why all the giants don't educate themselves outside the Jack schools so they could take all the beanstalk plantations away from all the Jacks and make them serve everyone.

JACK: Go wash out your mouth with acid, and if I ever hear such utopia again I'll send you down to work on the beanstalks. You dig, man?

HENRY: I dig, and I am not yet ready to trade my white collar in for a blue one. I start minting new golden eggs for you right away.

AND THEY ALL LIVED HAPPILY EVER AFTER?


LARRY TICKNER

Food for thought

A recent article in The Canadian Jewish News focused on the German company, Topf and Sons, who made the crematorium furnaces for the concentration camps. The depression of the 1950s nearly bankrupted the company but was saved from insolvency by government contracts for their machinery of death. One sentence says it all, "By all accounts, they were neither fanatics/Nazis nor rabid anti-semites, just heard-headed entrepreneurs eagerly cashing in on an
unprecedented business opportunity." How could any comment be a more damning indictment of capitalism? John Ayers.

What is capitalism...again

People tend to accept as true the things they hear over and over again. But repetition doesn't make things true. Because the truth and the facts often contradict "common knowledge", socialists have to show that "common knowledge" is wrong. Socialism is almost globally misunderstood and misrepresented. Socialism will be a basic structural change to society, and many of the things that most people take for granted, as "just the way things have to be", can and must be changed to establish socialism.

Commodity production is organised within the constraints of the circulation of capital. This capital can accumulate, maintain its level or become depleted . The economic pressure on capital is that of accumulation , the alternative is bankruptcy. The production and distribution of goods is entirely subordinate to the pressure on capital to accumulate. Therefore the practical, technical organisation of production is entirely separate from the economic organisation of the accumulation of capital in which cost/price, value factors play a vital part. The economic signals of the market are not signals to produce useful things. They signal the prospects of profit and capital accumulation. If there is a profit to be made then production will take place; if there is no prospect of profit, then production will not take place. Profit not need is the deciding factor.

This market system, involving the circulation of capital, generates commodity values which are brought into a relationship of exchange in the market, so that value , surplus to the value of labour-power, embodied in commodities is realised through sale. When enterprises calculate costs as a relationship of labour-time to output this is not with a view to passing on socially useful information about the organisation of production . They are calculating costs plus the average rate of profit. Through the exchange of labour- power for wages , capital is invested in the power of workers to produce goods. It is with active labour functioning as deployed capital that capital expands. Labour-power generates more values than it consumes . These surplus values belong to the enterprise in the material form of commodities which are then sold on the market . This is where capital realises its self-expansion and thereby accumulates. The market price of commodities produced must exceed the price of the materials and labour-power required to produce them. This is what costing is all about, it has nothing to do with the practical organisation of production In its overall effect the subordination of useful production to the accumulation of capital distorts and constrains social production. The market is at every point in the system a barrier of exchange between production, distribution and social needs. The circulation of capital confines useful labour within a self-enclosed system of exchange. Labour is activated by an exchange of labour-power for wages and this is determined by the capacity of the market to provide profit through sales.

In a socialist society, there will be no money and no exchange and no barter. Goods will be voluntarily produced, and services voluntarily supplied to meet people's needs. People will freely take the things they need. Socialism will be concerned solely with the production, distribution and consumption of useful goods and services in response to definite needs. It will integrate social needs with the material means of meeting those needs.

Common ownership is not state ownership. State ownership is merely the ownership by the capitalist class as a whole, instead of by individual capitalists, and the government then runs the state enterprises to serve the capitalist class. In the self-proclaimed "communist" states the state enterprises serve those who control the party/state apparatus. The working class does not own or control. It produces for a privileged minority.

Common ownership means that society as a whole owns the means and instruments for distributing wealth. It also implies the democratic control of the means and instruments for producing and distributing wealth, for if everyone owns, then everyone must have equal right to control the means and instruments for producing and distributing wealth.

The task of capitalist ideology is to maintain the veil which keeps people from seeing that their own activities reproduce the form of their daily life, the task of Marxism is to unveil the activities of daily life, to render them transparent. As soon as people accept money as an equivalent for life, the sale of living activity becomes a condition for their physical and social survival. Life is exchanged for survival. Creation and production come to mean sold activity. As soon as people accept the terms of this exchange, daily activity takes the form of universal prostitution.

Capitalist ideology treats land, capital, and the products of labor, as things which have the power to produce, to create value, to work for their owners, to transform the world. This is what Marx called the fetishism which characterizes people's everyday conceptions, and which is raised to the level of dogma by economics. For the economist, living people are things - factors of production, and things live money - works, Capital - produces. When men refuse to sell their labour, money cannot perform even the simplest tasks, because money does not "work". The notion of the "productivity of capital" and particularly the detailed measurement of that "productivity" are inventions of the "science" of economics.

The production of surplus value is a condition of survival, not for the population, but for the capitalist system. Surplus value is the portion of the value of commodities produced by labour which is not returned to the labourers. It can be expressed either in commodities or in money, but this does not alter the fact that it is an expression for the materialized labour which is stored in a given quantity of products. Since the products can be exchanged for an "equivalent" quantity of money, the money "stands for" or represents, the same value as the products. The money can, in turn, be exchanged for another quantity of products of "equivalent" value. The ensemble of these exchanges, which take place simultaneously during the performance of capitalist daily life, constitutes the capitalist process of circulation. It is through this process that the metamorphosis of surplus value into Capital takes place.

The portion of value which does not return to labour, namely surplus value, allows the capitalist to exist, and it also allows him to do much more than simply exist. The capitalist invests a portion of this surplus value; he hires new workers and buys new means of production; he expands his dominion. What this means is that the capitalist accumulates new labour, both in the form of the living labour he hires and of the past labour (paid and unpaid) which is stored in the materials and machines he buys.

The capitalist class as a whole accumulates the surplus labour of society, but this process takes place on a social scale and consequently cannot be seen if one observes only the activities of an individual capitalist. It must be remembered that the products bought by a given capitalist as instruments have the same characteristics as the products he sells. A first capitalist sells instruments to a second capitalist for a given sum of value, and only a part of this value is returned to workers as wages; the remaining part is surplus value, with which the first capitalist buys new instruments and labor. The second capitalist buys the instruments for the given value, which means that he pays for the total quantity of labor rendered to the first capitalist, the quantity of labour which was remunerated as well as the quantity performed free of charge. This means that the instruments accumulated by the second capitalist contain the unpaid labour performed for the first. The second capitalist, in turn, sells his products for a given value, and returns only a portion of this value to his laborers; he uses the remainder for new instruments and labour.

If the whole process were squeezed into a single time period, and if all the capitalists were aggregated into one, it would be seen that the value with which the capitalist acquires new instruments and labour is equal to the value of the products which he did not return to the producers. This accumulated surplus labour is Capital.

In terms of capitalist society as a whole, the total Capital is equal to the sum of unpaid labour performed by generations of human beings whose lives consisted of the daily alienation of their living activity. In other words Capital, in the face of which men sell their living days, is the product of the sold activity of men, and is reproduced and expanded every day a man sells another working day, every moment he decides to continue living the capitalist form of daily life.

Matters little if capitalism is small or large - either way, it is based on robbery .

The choice of "good" or "bad" capitalism is little different than choosing between typhoid or cholera

Food for thought

The federal government is in free-trade talks with the European Union and the Asia-Pacific Block. Although it will affect the lives of ordinary Canadians strongly, the Harper government, that always trumpets transparency, is keeping the details secret. This passes for democracy!
The New York Times (May 19, 2013) describes the New Delhi suburb of Ashok Nagar as a warren of dusty battered lanes, tangles of wires hanging between poorly constructed buildings, and sewage coursing through the alleyways. Not atypical of India, but this place is not supposed to even exist. This unauthorized colony of 200 000 people is a part of the five million in New Delhi living in spontaneous developments in the city. It seems you have to help yourself even
living in an Asian economic tiger, and don't wait for the rising tide to lift all boats!
The New York Times (May 12 2013) gave a profile of Sohel Rana, owner of the collapsed garment factory in Bangladesh. He travelled by motorcycle accompanied by a gang of thugs. Mr. Rana The Times writes, is a product of the global garment industry in which large corporations search for cheap labour for high profits. Rana, involved in drugs, had five factories in the building, the bottom floor reserved for the pleasures of the local politicians. Now he has had his assets seized and has been arrested. It should be the capitalist system that allows, no, encourages, such a situation, that should be on trial. John Ayers.

Separate Scotlands

A new study examining the minimum amount of money people need to have an acceptable living standard in rural Scotland found this is up to 40% higher than in urban Britain.

The cost of living in a countryside town is consistently more expensive in remote Scotland than in England, in some places by as much as 25%.

The study was commissioned by several councils, housing bodies, Scottish Enterprise and Highlands and Islands Enterprise.

Research was carried out in three remote rural areas: the Highlands, the islands and southern Scotland. The study looked at living costs in towns such as Lerwick, Wick, Campbeltown and Stornoway, as well as in small settlements.

People living in remote areas have to pay more for many goods including food, household items, petrol and clothing. They also endure "significant additional costs" because they often have to travel further to get to work, the report said. Household energy bills in remote rural Scotland are "much more" more than elsewhere in the UK to allow people achieve the same levels of comfort.

People in remote rural areas of Scotland require "significantly higher incomes to attain the same minimum living standard as those living elsewhere in the UK", adding: "This is partly due to the costs of additional travel but mainly caused by the higher cost of buying the same things as elsewhere, and the extra cost of keeping warm."

Welfare benefits "do not cover the cost of living in remote rural Scotland", the report said.

State benefits only provide up to 90% of the amount of money a pensioner needs, as little as a third of what working-age people need and only about half of what a family with children needs.

The minimum wage "only produces about two-thirds of a minimum income for a single person living in remote rural Scotland", the report said.

"For an adequate income, a single person needs to earn about 90% of the median, whereas in urban parts of the country someone on two-thirds average earnings has enough."

Marxist Economic Theory

What is Capitalism

Much of the left today have abandoned Marx. Many people who are against certain aspects of capitalism snatch pieces of Marx to give themselves a progressive legitimacy but being anti-capitalist does not really say much. It only begs the questions: how do we describe capitalism and from what angle are we criticizing it?  Much of the Left chooses to divide capitalism between good and bad ones. They replaced Marx's criticism of capitalism with a host of reformist and even reactionary demands peddled under this name. Academics have tried to convert it into a scientific sociology or an alternative economic science for the left wing of the bourgeoisie. Pseudo-socialist presented workers with repulsive examples of despotic societies in the name of socialism, like the Soviet Union, China and Albania. The result is to alienate workers from communism and cut the connection between worker and communism.

 Terminology is important to discussion and bandying words around without fully comprehending their meanings won’t be fruitful. Capitalism is defined in many ways. Each of these definitions of capital leads to a specific political conclusion.

Food for thought

The collapse of the garment factory in Bangladesh put the spotlight fully on the garment industry and rightly so after so many similar tragedies there. However, this type of profit seeking with such blatant disregard for workers' lives has been going on for centuries and continues to this day. In 1991 in Hamlet, North Carolina, twenty-five people died in a fire at a poultry plant because of locked doors. Examples abound! Read on...
On April 28, The Brampton-Mississauga and District Labour council unveiled a monument honouring workers killed or injured in the workplace. According to Ontario' Workplace, Safety and Insurance Board (WSIB), in 2012, 389 fatalities occurred. This included eighty Ontarians killed at work, 273 died from occupational diseases and thirty-six from work-related disabilities after years of suffering. Total injuries reported to WSIB for 2012 was 283, 323. Furthermore,
since 2000 11,000Canadians have died because their employers failed to keep their workplace safe. One SPC member went to see this impressive monument, but what would be more impressive would be a museum monument to the passing of capitalism and an end to lack of health and safety concerns! John Ayers.

health and safety

The number of people who died at work in Scotland rose last year, an increase driven by fatalities in agriculture and industry, a new report reveals.  There were 22 deaths at work in Scotland in 2012-13. Deaths rose north of the Border for the second year running, while falling across the UK. The death rate in Scotland is now 0.9 per 1,000 workers, almost double the 0.5 in England.

David Snowball, regional director for Scotland and the north of England for the Health and Safety Executive (HSE), which compiled the report, said risk-taking farmers, and a lack of precaution in industry, were factors in many of the deaths.

The Scottish Trades Union Congress (STUC) wants more to be done to protect workers. Grahame Smith, STUC general secretary, said: “Once again we have seen a rise in the number of workers killed in Scotland – 22 workers left for work never to return home and this is unacceptable and does not compare to an overall reduction in the UK wide figure of 148 which is 24 fewer than last year. These figures are the tip of the workplace fatality iceberg and do not include deaths through industrial disease, occupational traffic accidents or in sectors not[covered by the HSE].”

The STUC also wants to see fatal accident inquiries processed quicker and their recommendations enforceable by law. “It takes too long for bereaved families to get justice,” assistant secretary Ian Tasker said. “When sheriffs do make recommendations there is no legal basis for them to be brought into law.”

A Political Revolution

There is scarcely any subject upon which there is greater confusion of thought than that of the relation between reform and revolution. Throughout history long periods of imperceptible growth and development have been followed by sudden upheavals, which, notwithstanding their apparent isolation, are really incidents in and a part of the general social evolution.

In the system known as capitalism there is a class struggle between workers and capitalists and the reason is not difficult to understand. The means of production today are privately owned. A small section of society own all the factories, mines, mills, workshops and through that ownership they are able to live a life of ease and luxury. The other section owning nothing are forced to sell themselves as workers to the owners of property in order that they get food, clothing, shelter for themselves and their wives and children.

Many political parties claim to exist only for the purpose of assisting the working class and have drawn up programmes of social reforms which they all guaranteed would, if the workers would only trust them and vote for them; solve all the ills which afflicted the working class. The Socialist Party of Great Britain has no reforms on its programme and is opposed to all parties who asked the workers to support a reformist policy. Reform of capitalism would still leave workers in their slave position. Reforms, apart from the fact that in many cases they had proven worse than the evil which they set out to remedy, were but the normal features of capitalism. Capitalism and their representatives had been busy reforming the capitalist system since it had been established but in spite of all their reforms the condition of the working class was worse today than ever it was in its history. Defenders of capitalism boast reform is the antidote to revolution. The parties of the Left with their ever-changing lists of reforms should be an example to the workers of the futility of wasting valuable time and energy attempting to reform a system which could not be reformed in the interests of the working class.

An injury to one is an injury to all

Ignorance leads to indifference. If somebody suffers and I don’t do anything to diminish his or her suffering, something is wrong with us. One can be raised in ignorance and educated that eliminates others’ suffering. Entire populations can be psychologically shaped this way, with those doing the shaping being the truest of the true believers. Such conditioned ignorance lays the foundation for indifference to the fate of others.

It is all too easy to blame immigrants for causing problems such as unemployment, bad housing or crime. Whether it is Eastern Europeans or Asians, a finger can always be pointed at “them” for making things worse for “us”. Some cannot contain their indignation that immigrants should try to come here at all and talk about foreigners undermining “our” culture. It is bulls**t. The problems facing working people and their families are not caused by immigration or immigrants and will not be solved by the Fortress Britain or a policy of "British Jobs for British Workers". They are caused by capitalism.

 The immigrants who now try to settle in Britain come at the bottom of the social scale, taking the worst houses, accepting the worst conditions. Migrants are rarely well off in the country they move to, forming an underclass with little if any security of employment or housing. Immigrants often receive low paying work in the service industry (the 3-D jobs - dirty dangerous and difficult), once they enter the developed capitalist system and they can never afford the education to gain higher paying jobs. As a result they stay in the service industry their entire lives, being some of the most lowly-paid members of the working class of wage and salary earners. Selling the Big Issue on the streets may not be everyone's idea of escape from poverty but for many it may be a lot better than where they have come from.

At the behest of politicians in search of scapegoats the he mass media choose to concentrate on perpetuating urban myths about the arrival of foreign workers, furthering divisions and mistrust.  Without doubt some English or Scottish workers may have seen their pay lessen from the competition of newcomers. From this point of view, then, immigration might be a minus for British workers. We should not, however,  blame another worker for our poverty, whether migrant or not, whether illegal or legal. Those travelling long distances through fear or desperation are people no different to ourselves. Instead of falling for the divide and rule tactics which weaken us all, workers should recognise who their real enemy is and work together to defeat the system that enslaves us all. Employers needs a reserve army of unemployed, to exert a downward pressure on wages. A  labour shortage threatens the growth of the economy because it puts the working class in a strong position and clearly the employers wish to counteract this. All things being equal, a labour shortage causes wages to rise and thus puts workers in a comparatively stronger bargaining position.

 Naturally, the bosses will always seek to counteract such a situation by importing (often cheaper, more compliant) workers, which in turn intensifies competition among workers, potentially fermenting xenophobia and racism. For workers fighting over crumbs in lower wage unskilled jobs, the temptation to blame  unemployment or low wages on foreign labour may be strong. But nevertheless such views are false. The blame lies with the   employers’ demands for cheap labour. In the nineteenth century, capitalists in Britain welcomed many thousands of Irish immigrants to  keep wages down. These days it is the influx of Eastern Europeans which  had the effect of increased unemployment for existing workers and putting a downward pressure on their wages in some sectors.

No ruling class is ever completely unanimous. Capitalism creates conflicts within each ruling class since no two capitalists have interests which are exactly the same. The question of immigration causes disputes within the British ruling class. Some want to establish the principle that when a particular industry or trade is short of workers, its owners have the right to bring in workers from any other country, and thus help to counteract the danger of having to raise wages and salaries. Some other members of the capitalist class feel it would be a mistake to let in too many workers from other countries. Some members of the capitalist class take advantage of any "foreign" immigration to whip up nationalist feeling, using the perception among workers (who have the votes) that there is some threat to themselves from competitors from overseas. Those who are in possession of little are easily frightened by the threat of some other coming to take it away. The appearance of jobs going to these “foreigners” whilst their “own” go without work reinforces the illusion that migration causes unemployment.

Some capitalists have pointed out that this policy of importing migrant labour put an intolerable stress  on housing and welfare service such as education and health. Now that the economy is going through yet another of its inevitable cyclical crises, a crisis which makes migrants unwanted on the labour market, it now  puts the very same  politicians under maximum pressure to keep migrants out so to minimise state expenditure. So while many of those seeking to enter the UK might be well-qualified machine operators, engineers, builders, doctors etc (as they are), if the capitalist economy is going through yet another of its inevitable cyclical crises, there'll be no employers or money to pay for these much-needed workers. Public spending reduces the nation's profitability the bigger it gets, and is especially disliked when making profits is increasingly difficult. Racism and nationalism become more likely as high unemployment and poverty produce considerable social suffering, provoking the pained to find and lash out at those they think responsible, and politicians in need of scapegoats, chauvinistic bigots and money-mad tabloids all eager to finger some other victim as the cause .

Yet some dispute this negative side of immigration. The Government's fiscal watchdog, the Office for Budget Responsibility, said higher levels of immigration would help the economy to grow faster and ease the pressure to cut spending. The OBR said that an ageing population would put pressure on state finances through increasing health spending, higher state pension costs and rising social care bills. The OBR also forecast that if net inward migration were cut to zero over the next five decades, the scale of the public austerity facing Britain would need to be three times larger. Instead, a higher net migration than in our central projection would put downward pressure on borrowing and PSND [public sector net debt], as net immigrants are more likely to be of working age than the population in general.

Those who today argue for “fair” or “just” immigration controls ought to realize that over a century ago trade unionists were fighting controls in principle. They rejected all notions of “fair” controls and instead appealed for workers solidarity against a system that exploits all workers. The problems we face are not caused by workers from other parts of the world migrating to this part, but by the capitalist system of class ownership. What an extraordinary idea it is that members of the human race should be forced to remain on that small section of the earth's surface in which they happened to be born. Who gave the world's rulers the right to tell us which bit of land we should live on? How much longer are we willing to sit around and let a tiny minority divide us? Socialists understand that the thing which makes workers leave behind their communities, and go to a place where their language is not spoken, the same food is not eaten or the same clothes are worn , is the wages system itself.

Unique amongst all political parties, left or right, the Socialist Party has no national axe to grind. We side with no particular state or government. We have no time for border controls. The world over, workers must do what they can individually and collectively to survive and resist capitalism. In many parts of the world that means escaping political tyranny or economic poverty. Workers should try and resist taking sides.

Fact of the Day

 Annually we lose 24 billion tons of topsoil and 160 billion tons of aquifer water, we create 6 million hectares of desert every year while 17 million hectares of forest disappears. We have less than 20% of 1980’s fisheries stocks. These are shocking statistics.

We have to address the way we produce and transport food so it is within the resources of the planet.

End competition and embrace collaboration.

The SPGB and the IWW

In regards to the Industrial Workers of the World the Socialist Party of Great Britain has revised its attitudes as a result of changes within the IWW. The official position is that as long as the IWW behaves and acts as a workers union then its up to individual SPGB members  to decide whether or not it is in their interests to join.

Previously, during the formative years of both organisations, the IWW was seen as more of an anti-political i.e. an anarchist organisation, promoting industrial unionism, which the SPGB disavowed as sectional and undemocratic, since it was about industries controlling the means of production and distribution and not society as a whole, those outside the work-place. But the SPGB now accepts that in recent years the IWW can be more accurately described as an a-political organisation, a difference of emphasis, since it itself has changed its approach to the class struggle and for all practical purposes now acts as a democratic and progressive, inspirational and educational union that is to be recommended for membership when it is to the workers advantage, which is the majority of the time and situations. No longer being divisive with outright opposition to the pure and simple reformist trade unions by its adoption of the dual -card policy has been another change which differentiates the present from the early IWW that the SPGB criticised. It has also accepted the principles of agreed contracts of employment and even state recognition and registration. For all practical purposes it now operates as a union and an umbrella for workers of many political persuasions and not just the one. So it is not a formal position to the IWW that has been taken by the SPGB but an informal one (and a practical one), which can change if the IWW decide that certain ideas should take precedence over others or again become dominated by one particular strand of political thought, rather than an open and inclusive workers' organisation which exists now. We also have to be minded that even within syndicalist unions the more effective the union is in achieving victories against capitalism , the more the non-radical workers will join it for the trade union benefits and this could just as like water down its revolutionary aspects as to militantise those new recruits. It is just as likely that they will desert the union if the revolutionary aspirations of the union hinder the practicalities of the daily bread and butter fight .

The Loch Ness Monster

Italian geologist Luigi Piccardi credits the Great Glen fault system for reported its sightings.

"There are various effects on the surface of the water that can be related to the activity of the fault," Piccardi said in an interview published in the Italian newspaper La Repubblica. Piccardi also claims that alleged Loch Ness monster sightings have coincided with periods of seismic activity. "We know that this was a period [1920-1930] with increased activity of the fault. In reality, people have seen the effects of the earthquakes on the water."

Socialist Courier holds that there is more truth in the Loch Ness monster than the claims of the Labour Party or the SNP that they represent the true interests of the working class. 

Martian Story

Another short story from the archives of our companion party Socialist Party of Canada.

During one of those long weekends that crop up every so often, an adventurous Martian, deciding for a change to visit the earth, gathered the wife and kids together and set off through space. Arriving after a while at his destination, he and his family started out to see the sights and met a sad-looking Earthling. There was a dialogue.

Martian: "Why such a gloomy face, my friend?"

Earthling: "Hungry."

Martian: "Hungry! How come? The crops around here look good. The factories look big and plentiful."

Earthling: "That's just the trouble. The crops are too good. The factories are too plentiful. We've produced too much."

Martian: "Hungry because you've produced too much?"

Earthling: "Say, Mac, what's the matter? Ain't you been around?"

Martian: "Well — ah — I am a stranger in these parts, if that's what you mean. How can you be hungry if you've produced too much?"

Earthling: "That's always the way it is. When you produce too much, you're no longer needed at the factory. You lose your job and this means you have no wages to buy the things you've produced. So you go hungry."

Martian: "That's strange. I'll have to try and figure it out. But how much worse must conditions be when you're not producing too much?"

Earthling: "That's where you're wrong. When there isn't very much, the wheels of industry are turning full time, everybody is working and we have prosperity. When we have the least, that's when we have the most. It's when we have too much that we don't have enough. And when we have too much, we have to wait for the surplus to become wasted or destroyed or used up somehow till there's hardly any left and we can all have enough again."

Martian: "Get the kids back in the saucer, ma! We're going home!"

J.M. (Jim Milne)

Addressing the Green Party

Many Greens claim to advocate a society based on cooperation and production for use, a sustainable society where production is in harmony with the environment and affairs are run in a decentralised and democratic manner. They argue that only in such a system can ecological problems such as pollution and global warming be solved. The ultimate aim is a participatory economy, based on smaller-scale enterprise, with a greatly-reduced dependence on the world market. What is being proposed is the abolition both of the world market, with the competition for resources and sales it engenders, and of existing centralised states, and their replacement by a worldwide network of smaller human communities providing for their own needs. This will involve a steady-state economy based on maximum conservation of materials and energy.

The Socialist Party of Great Britain place ourselves unambiguously in the camp of those who argue that capitalism and a sustainable relationship with the rest of nature are not compatible and unless the Green Party embraces socialism, their vision is unachievable. Because people believe there is no alternative to capitalism, it keeps on existing. The environmentalist’s dream of a sustainable ‘zero growth’ within capitalism will always remain just that, a dream. If human society is to be able to organize its production in an ecologically acceptable way, then it must abolish the capitalist economic mechanism of capital accumulation and gear production instead to the direct satisfaction of needs.

A Society Without Conflict

It is the sort of event that disgusts socialists. That people should be celebrating death, destruction and militarism but we have even got the Lord Provost of Glasgow celebrating the same nonsense at this awful  Armed Forces Day. 'it is important that our serving military and our veterans know they have the support of this city and the whole of Britain.' she said.' (Sunday Express, 30 June)Her view and the few of millions of others is that there is something wonderful about killing people, makes us sick. We want a new society. Inside a socialist society there will be no armed conflict. There will be no lord provost either talking nonsense. RD

On the scam

Lord Smith of Kelvin, the Scots chairman of the UK Government's flagship Green Investment Bank (GiB), has come under fire after it emerged he earns more than £2300 a day in his part-time role. The executive, one of Scotland's leading business figures, is paid £120,000 a year to work one day a week at the publicly owned Edinburgh-based GiB, set up to invest in environmentally sustainable projects.

Full details of his remuneration emerged as the bank made what it said was an expected net loss before tax of £6.2m in its first 10-and-half months.

Lord Smith's remuneration in other posts includes £250,498 as chairman of Weir Group for 2012, £353,000 as Scottish and Southern Energy chairman for 2013 and about £83,000 as director of South Africa-based Standard Bank. Lord Smith, who chairs the organising committee for the Glasgow 2014 Commonwealth Games, was appointed the Chancellor of Strathclyde University which he undoubtably claims expenses for. 

A spokesman for Lord Smith said: "Frankly, Scotland needs more people like Robert Smith."

Socialist Courier cannot agree with that assessment!

Worldwide crises need global solutions

That headline in the Scotsman immediately caught our attention and raised our hopes. Yet the very first sentence proved disappointing. “ Mobilising action to develop the planet sustainably without winners and losers will require international co-operation on a huge scale.” [Socialist Courier emphasis] While the declared aim appears to be admirable it contains a fatal flaw. It assumes  the continuation of the market system and  the continuation of the capitalist system which is the cause of the problems in the first place.  It remains firmly wedded to a belief that capitalism can be reformed so as to be compatible with achieving an environmentally sustainable society.

The article by May East, a CEO of CIFAL Scotland, a United Nations Institute for Training and Research sustainability centre based in Edinburgh,  continued “about the need to understand the convergence of multiple crises. With half the world’s growing population living in poverty, reserves of fresh water becoming increasingly scarce and climate change threatening to make large swathes of the planet unsuited for food production and habitation.”

The explanation is not complicated or complex to comprehend. The excessive consumption of both renewal and non-renewable resources and the release of waste that nature can’t absorb that currently goes on are not just accidental but an inevitable result of capitalism’s very essence. The capitalist system creates vast amounts of energy waste in the military and its socially useless jobs such as marketing, finance and banking which are part of its profit making machine. Endless growth and the growing consumption of nature-given materials this involves is built into capitalism. Capitalism differs from previous class societies in that under it production is not for direct use, not even of the ruling class, but for sale on a market. Competitive pressures to minimise costs and maximise sales, profit-seeking and blind economic growth, with all their destructive effects on the rest of nature, are built-in to capitalism. These make capitalism inherently environmentally unfriendly. The ecological contradictions of capitalism make sustainable, or "green" capitalism a confidence trick. The only way in which the article’s aims could be achieved is through socialism.

The author appears to be rather delusional on the subject of the government and international NGO summit successes, from 1992 pledges to the more recent promises. Capitalist politicians have proved incompetent to deal with the problem.

Sadly, the Scotsman article concludes with a list of reforms to be applied which are no doubt of some merit but as for them being a global solution to the world-wide environmental crisis, little better than a band-aids.

The author and her organisation is setting out to impose on capitalism something that is incompatible with its nature. The Socialist Party place ourselves unambiguously in the camp of those who argue that capitalism and a sustainable relationship with the rest of nature are not compatible. Perhaps, one day she will join us. The real powers of action are with the great majority of people. This will be when we decide to create a society in which we will be free to co-operate and to use all our great reserves of energy and ingenuity for our needs. We should construct permanent, durable means of production which you don’t constantly innovate. We would use these to produce durable equipment and machinery and durable consumer goods designed to last for a long time, designed for minimum maintenance and made from materials which if necessary can be re-cycled. In this way we would get a minimum loss of materials; once they’ve been extracted and processed they can be used over and over again. It also means that once you’ve achieved satisfactory levels of consumer goods, you don’t insist on producing more and more. Total social production could even be eventually reduced, once the needs of all have been satisfied.

If the environmental crisis is to be solved, this system must go - and that entails the capitalist class being the losers,  leaving the rest of humanity to be the winners 

The Labour Party - The Soft Left

The Labour Party has failed, so let’s start a new one. That’s what some trade unionists and left-wingers are saying. But why? Einstein defined insanity as doing the same thing over and over again and expecting different results. Surely one of the lessons of the 20th century has been that Labourism is a dead-end. It can’t succeed. Not because its leaders are insincere or incompetent or corrupt or not resolute enough (although many are one or more of those things). It fails because it sets itself the impossible mission of trying to gradually reform capitalism into socialism. This can’t be done, as experience, not just theoretical understanding, has confirmed. The last thing that is needed today is a non-socialist, trade-union based “Labour” party. We have seen the past and it doesn’t work.