Bankers, bonuses and “brains”

While in no way endorsing all their views, SOYMB blog often come across writers who make many insightful observations about capitalist society. Mike Marqusee is one such writer as these extracts from an article published in the Indian newspaper The Hindu makes clear.

"At a fringe meeting at last month’s Conservative party conference, one of the speakers began a defence of British bankers’ bonuses (£7 billion this year) by observing that “When God gave out brains, he didn’t give them all out equally, and so we have to live in an unequal society.” The speaker in question was Stuart Fraser, a multi-millionaire stockbroker and leading light in the City of London Corporation, which governs the “square mile” of the financial district as an autonomous enclave within but separate from the Greater London Authority...

...Back in June 2008, Fraser described the gathering financial storm as a “phoney crisis”. But that’s not the only reason to wonder – if we are to accept Fraser’s coarse terminology – where he was “when God gave out brains”. Can he really believe that the distribution of wealth corresponds to the distribution of intelligence? Does he think that FTSE-100 chief executives – whose average reward last year was £3.2 million – are 741 times more intelligent than people living on a state pension and 277 more intelligent that those living on the minimum wage? Does he think that the richest 45,000 people, the 0.1% of the population who control one third of the country’s liquid assets, also possess one third of its collective intelligence?

Probably not. In the end Fraser’s comment is another illustration of one of the very few constants in human history: the beneficiaries of the social hierarchy always believe they are where they are by right – whether derived from God, heredity, hard work or “brains”. They believe they are entitled to their wealth and power, and that this wealth and power reflects their own superiority. In order to sustain this illusion, to bolster their sense of entitlement, they’ll buy into any theory and disregard any fact.

Fraser, like many others who consider themselves blessed with it, treats human intelligence as a uniform commodity that is “given out” in measurable quantities. But surely it’s clear that this protean capacity has many and varied manifestations and always exists, in any individual, in partial, selective forms. The world is not divided between the “brainy” (or as the Americans say the “smart”) and the “stupid”. There is no “intelligent” person who is not capable of the gravest stupidity.

One result of thirty years of neo-liberalism is the a widespread assumption that if you’re unhappy dominating or exploiting your fellow human beings it must be because you’re stupid or incapable. Since, according to Fraser, we are unequal economically because we are unequal intellectually, it follows that the only reason for failing to make tons of money is intellectual inadequacy...

...Of all those who had a hand in creating the financial crisis, not one has suffered a meaningful fall in his living standard because of it. The same cannot be said for the far greater numbers who neither promoted nor benefited from unregulated speculative accumulation but who have paid for it with jobs, wages and now vast reductions in social support. It’s often argued that those who take the greatest “risk” deserve the greatest reward. But as we’ve seen in recent years, the rich use their wealth and political clout to ensure they do not pay for their mistakes: the burden is shifted on to the wider public.

...It seems that what’s required for success in Fraser’s world is not so much “brains” as indifference to the consequences of one’s actions for other people.

Now the financial institutions whose solvency was propped up by government threaten Britain and other countries with a downgrading of their credit ratings should they fail to implement public spending cuts and privatisations. The result of these policies, should they run their course, will be that the top 20% will acquire control of a larger portion of national wealth while the bottom 50% lose out. I’m sure there will be no shortage of “intelligent” people telling us why this is the natural order of things."

The Spending Cuts and the Alternative

In anticipation of the approaching announcement of those Con-Dem cut-backs SOYMB posts the following article. In preparation for the cuts to be announced on 20 October the Treasury issued a “Spending Challenge” on its website for members of the public to suggest savings. Here’s the reply one socialist sent.

The capitalist system has become clapped out and is in decline. It cannot maintain sufficient genuine growth to prevent enough of the world's population from experiencing worsening deprivation and misery. This includes Britain, where we face decades of deteriorating living standards as the rich capitalist minority require governments to keep cracking down on the working class majority so that their pig troughs are kept as full as possible. The incomes of the many will keep being squeezed by whichever government is in office so that the incomes of the few on top can be protected and increased. There will be no end to these cut backs and reforms because capitalism is never going to return to the growth levels seen in its heyday. Politicians will tell us all that is needed is better money management, and no doubt, some members of the public will fall for this, and go along with monetary cuts directed against others in their own (working) class.

In reality, what is needed is something that will strike most people as being bizarre and scary when they first here it. A complete end to money, and the outdated capitalist system that requires it! Here's a surprising fact. We, the working class majority, do NOT need money to produce all the goods and services that a modern society requires. Only capitalists need money to carry out their exploitation of those able to work and everyone else.

If we reject capitalism and money, and choose a new system ("moneyless real socialism"), how would the jobs that need doing get done? Well, when we are all the direct collective owners of the means of production and distribution (factories, farmland, power stations, rail systems, sources of raw materials etc) we will also collectively own everything that is produced and provided. The food produced in factories and on farms will be ours. The electricity from the power stations will be ours. The trains will be ours. Iron ore and all the other minerals mined from the planet will be ours. You do not have to buy what's already your property, and therefore, everything that we have to pay for today will be freely available. Obviously, the work will still have to be done, but by doing so, everyone will have the right to a home of their own, the right to take whatever they need from shops (this will not result in blind greed because taking more than is needed will then be daft and pointless), everyone will be entitled to free travel, free medical care and education of the highest standard possible, and much more.

Won't we have to work far harder? Absolutely not. The opposite, in fact. In Britain alone, there are millions of people doing fundamentally useless money-related jobs only necessary under capitalism (making money, manufacturing cash machines, sales, insurance, welfare benefits, banking, accountancy, debt recovery etc). When capitalism and money are dumped, all these millions of people will then become available to contribute something of real benefit to society. Furthermore, without money-related problems, arguments and crimes, many more people involved in policing, prison work, social work, solicitors, courts etc will also be freed up to contribute. All these millions of extra people, added to the millions of unemployed not wanted by capitalist employers, will mean that the average working week will be considerably shorter than it is now.

Money is not the answer. It, and the outdated system that requires it, is the problem. We need a new economic system, and moneyless real socialism is the only option. The feudal economic system declined and was abandoned and replaced (by capitalism) when it became clapped out. Now, capitalism is also obsolete and in decline and will cause years and years of misery (for the vast majority) until we dump and replace it.
MAX HESS

capitalists claw back benefits

One out of every six Americans are in government anti-poverty programs, according to USA TODAY. More than 50 million Americans are in Medicaid. Forty million receive food stamps and 10 million receive unemployment benefits.

One million US public school students homeless. No part of the country was spared.
“These children share bedrooms with extended family, check in to cheap motels, and sleep in cars or shelters” the Delaware Online reports. “Some are with their parents. Others go it alone.”
“These kids have a lot more stress” Kathleen Kropf of Macomb County (Michigan) Intermediate School District told The Voice, a local newspaper. “They know what is going on at home, if their parents have lost their jobs or their homes are in foreclosure. How can a child do well in school and on their tests if they have not eaten or are not sleeping or they are sick?”

Employers passed health-insurance costs onto employees at a sharply higher rate this year, and businesses' premiums grew more slowly than they have in a decade, according to an annual survey of companies. As companies to cut costs amid difficult economic times, more of them are reducing benefits they offer workers or making workers pay more for them. Employees paid an average of about $4,000 toward their family coverage this year, up 14% from last year. But total insurance premiums paid by the employer and the employee rose just 3% for a family plan—the slowest rate of growth in 10 years. Cost shifting has become the norm for many of the roughly 160 million Americans who receive health insurance through an employer. 30% of firms said they reduced benefits while 23% said they raised the amount their employees pay for coverage.
"There wasn't much complaining because they feel like they're better off having a job" Mr. Becker said.

stock-market farm wars

There has been a $40billion, $130-a-share, hostile takeover bid for the for the Potash Corp of Saskatchewan by the Australian mining conglomerate BHP Billiton (profits for the full year ended 30 June 2010 $12.7 billion, a growth of 116.5 per cent) .

In 1989, the government of the Canadian province of Saskatchewan started the privatisation of PotashCorp through an initial public offering – and raised a mere $231m. It sold the shares at $18 but, by the end of the first trading day with investors showing little interest, the price had fallen to $17.75. Investors were little interested in an obscure commodity such as potash. Now the sector has become the darling of Wall Street. In the first eight months of the year, deals valued at $61bn have been announced by companies in the industry. The cost of potash has rose from less than $150 in 2006 to almost $1,000 a tonne in 2008. For years, fertiliser consumption increased only slowly, in parallel with the growth in global population. But in the late 1990s and 2000s new factors accelerated demand.

Modern agriculture relies heavily on fertiliser to boost crop yields. “Potash, for all intents and purposes, is food,” says Vincent Andrews of Morgan Stanley in New York.

Economic growth in emerging countries has been accompanied by greater demand for proteins such as meat and milk, and a rapid increase in demand for grain to fatten livestock (7kg for every 1kg of beef). The development of the global biofuels industry further increased demand for agricultural commodities and hence fertilisers. The UN Food and Agriculture Organisation forecasts that global food demand will jump by 70 per cent between now and 2050 as the population rises by 3bn to more than 9bn, further boosting demand for fertiliser. As a result, countries are starting to see potash much as they see crude oil - as a hunted, strategic commodity.

Potash deposits are not evenly spread. A handful of nations – Canada, Russia, Belarus and Israel – command the bulk of the reserves. Eight companies control more than 80 per cent of global supply. Two marketing groups – Canpotex for North American producers and BPC for the Russian and Belarusian groups – dominate the global trade. Potash is the only fertiliser in which China is seriously deficient. The country, which feeds 20 per cent of the world’s population using just 7 per cent of global arable land, has huge fertiliser needs. China has to import about half of its potash needs, a dependency that “may become a major threat to China’s fast-developing national economy and long-term strategic needs”, according to the Chinese Academy of Social Sciences, a think-tank that advises the government.

Tim Lang, professor of food policy at City University, London, explained
“The potash story is very significant. This is an attempt at a commodity grab. The price of potash will rise and, with it, the price of food. Right now agriculture is like a junkie, hooked on things like potash and oil. If the challenge is about future soil fertility and human health, we can develop a system based on nutrient recycling. Humans need to become part of the cycle, literally, using recycled sewage to restore fertility to the land. At the moment we drain it out to sea – it could be used to increase yield and health of crops.”

Lang fears that the activities of BHP signify an attempt to control the food supply.

The Great Money Trick

A passage from Robert Tressell's 'The Ragged Trousered Philanthropists'

‘Money is the cause of poverty because it is the device by which those who are too lazy to work are enabled to rob the workers of the fruits of their labour.’
‘Prove it,’ said Crass.
Owen slowly folded up the piece of newspaper he had been reading and put it into his pocket.
‘All right,’ he replied. ‘I’ll show you how the Great Money Trick is worked.’
Owen opened his dinner basket and took from it two slices of bread but as these were not sufficient, he requested that anyone who had some bread left would give it to him. They gave him several pieces, which he placed in a heap on a clean piece of paper, and, having borrowed the pocket knives they used to cut and eat their dinners with from Easton, Harlow and Philpot, he addressed them as follows:
‘These pieces of bread represent the raw materials which exist naturally in and on the earth for the use of mankind; they were not made by any human being, but were created by the Great Spirit for the benefit and sustenance of all, the same as were the air and the light of the sun.’
... ‘Now,’ continued Owen, ‘I am a capitalist; or, rather, I represent the landlord and capitalist class. That is to say, all these raw materials belong to me. It does not matter for our present argument how I obtained possession of them, or whether I have any real right to them; the only thing that matters now is the admitted fact that all the raw materials which are necessary for the production of the necessaries of life are now the property of the Landlord and Capitalist class. I am that class: all these raw materials belong to me.’
... ‘Now you three represent the Working Class: you have nothing – and for my part, although I have all these raw materials, they are of no use to me – what I need is – the things that can be made out of these raw materials by Work: but as I am too lazy to work myself, I have invented the Money Trick to make you work for me. But first I must explain that I possess something else beside the raw materials. These three knives represent – all the machinery of production; the factories, tools, railways, and so forth, without which the necessaries of life cannot be produced in abundance. And these three coins’ – taking three halfpennies from his pocket – ‘represent my Money Capital.’
‘But before we go any further,’ said Owen, interrupting himself, ‘it is most important that you remember that I am not supposed to be merely “a” capitalist. I represent the whole Capitalist Class. You are not supposed to be just three workers – you represent the whole Working Class.’
... Owen proceeded to cut up one of the slices of bread into a number of little square blocks.
‘These represent the things which are produced by labour, aided by machinery, from the raw materials. We will suppose that three of these blocks represent – a week’s work. We will suppose that a week’s work is worth – one pound: and we will suppose that each of these ha’pennies is a sovereign. ...
‘Now this is the way the trick works -’
... Owen now addressed himself to the working classes as represented by Philpot, Harlow and Easton.
‘You say that you are all in need of employment, and as I am the kind-hearted capitalist class I am going to invest all my money in various industries, so as to give you Plenty of Work. I shall pay each of you one pound per week, and a week’s work is – you must each produce three of these square blocks. For doing this work you will each receive your wages; the money will be your own, to do as you like with, and the things you produce will of course be mine, to do as I like with. You will each take one of these machines and as soon as you have done a week’s work, you shall have your money.’
The Working Classes accordingly set to work, and the Capitalist class sat down and watched them. As soon as they had finished, they passed the nine little blocks to Owen, who placed them on a piece of paper by his side and paid the workers their wages.
‘These blocks represent the necessaries of life. You can’t live without some of these things, but as they belong to me, you will have to buy them from me: my price for these blocks is – one pound each.’
As the working classes were in need of the necessaries of life and as they could not eat, drink or wear the useless money, they were compelled to agree to the kind Capitalist’s terms. They each bought back and at once consumed one-third of the produce of their labour. The capitalist class also devoured two of the square blocks, and so the net result of the week’s work was that the kind capitalist had consumed two pounds worth of the things produced by the labour of the others, and reckoning the squares at their market value of one pound each, he had more than doubled his capital, for he still possessed the three pounds in money and in addition four pounds worth of goods. As for the working classes, Philpot, Harlow and Easton, having each consumed the pound’s worth of necessaries they had bought with their wages, they were again in precisely the same condition as when they started work – they had nothing.
This process was repeated several times: for each week’s work the producers were paid their wages. They kept on working and spending all their earnings. The kind-hearted capitalist consumed twice as much as any one of them and his pile of wealth continually increased. In a little while – reckoning the little squares at their market value of one pound each – he was worth about one hundred pounds, and the working classes were still in the same condition as when they began, and were still tearing into their work as if their lives depended upon it.
After a while the rest of the crowd began to laugh, and their merriment increased when the kind-hearted capitalist, just after having sold a pound’s worth of necessaries to each of his workers, suddenly took their tools – the Machinery of Production – the knives away from them, and informed them that as owing to Over Production all his store-houses were glutted with the necessaries of life, he had decided to close down the works.
‘Well, and what the bloody ‘ell are we to do now?’ demanded Philpot.
‘That’s not my business,’ replied the kind-hearted capitalist. ‘I’ve paid you your wages, and provided you with Plenty of Work for a long time past. I have no more work for you to do at present. Come round again in a few months’ time and I’ll see what I can do for you.’
‘But what about the necessaries of life?’ demanded Harlow. ‘We must have something to eat.’
‘Of course you must,’ replied the capitalist, affably; ‘and I shall be very pleased to sell you some.’
‘But we ain’t got no bloody money!’
‘Well, you can’t expect me to give you my goods for nothing! You didn’t work for me for nothing, you know. I paid you for your work and you should have saved something: you should have been thrifty like me. Look how I have got on by being thrifty!’
The unemployed looked blankly at each other, but the rest of the crowd only laughed; and then the three unemployed began to abuse the kind-hearted Capitalist, demanding that he should give them some of the necessaries of life that he had piled up in his warehouses, or to be allowed to work and produce some more for their own needs; and even threatened to take some of the things by force if he did not comply with their demands. But the kind-hearted Capitalist told them not to be insolent, and spoke to them about honesty, and said if they were not careful he would have their faces battered in for them by the police, or if necessary he would call out the military and have them shot down like dogs, the same as he had done before at Featherstone and Belfast.

Making bread

Wheat is the new gold. As poor countries brace for shortages, it's boom time for Kansas farmers.
"It feels like Christmas in August" admitted Darrell Hanavan, of the Colorado Wheat Administrative Committee, noting that the harvest just completed in his state seems to have been the most bountiful for 25 years.

The dollar value for the crop is almost sure to set a record.The US Department of Agriculture expects US exports to surge by 36 per cent this year. The futures prices of wheat on the Chicago commodities exchanges are spiking at heights that even a few weeks ago would have seemed mad –above $7 (£4.50) a bushel in recent days. Speculators have rushed to buy wheat in the wake of Russia's export ban may have created a bubble that is not immune from bursting.Russia announced that weeks of fierce heat and uncontrolled fires would cost the country a quarter of its crop and that its wheat exports, which will be frozen from tomorrow, may not resume until next year. Output in Ukraine and Kazakhstan has slumped too. Canadian wheat farmers have been struggling with crops drowned by rains that won't stop, and in eastern Australia, the wheat crop could be devastated by a plague of locusts expected to start hatching next week.

Egypt, the world's biggest wheat importer, and Indonesia and Thailand, which also both rely on imports of grain, complained this week that they face a sudden price squeeze on such staples as bread, pork and sugar and with that, the risk of social unrest of the kind witnessed in 2008, when food price hikes provoked riots in a number of countries. Abdolreza Abbassian, a senior economist with the UN's Food and Agriculture Organisation in Rome, said Morocco, Libya, Tunisia and Iran all face higher budget deficits because of the amounts they spend on bread subsidies.
"Some are politically unstable countries – they simply cannot afford" the social effects that bread queues could have on the urban poor.

Daryl Larson, who farms 1,500 acres in Kansas sold nearly half of his wheat crop but will keep the rest in the silo in the expectation that the prices will at least climb further. Most analysts would concur with Mr Larson's strategy of holding on to some grain for added profit. SOYMB would only ask why does some in this world face destitution and hunger while others hoard food to obtain more and higher profits.

Chinese Capitalism

According to a new report China’s households hide as much as 9.3 trillion yuan ($1.4 trillion) of income that is not reported in official figures, with 80 percent accrued by the wealthiest people, a study showed.

Findings indicate China’s wealth gap between rich and poor, already one of the world’s highest, is even wider than official figures show. China’s households hide as much as 9.3 trillion yuan ($1.4 trillion) of income that is not reported in official figures, with 80 percent accrued by the wealthiest people, a study showed. The money, much of it likely “illegal or quasi-illegal,” equates to about 30 percent of China’s gross domestic product. The “grey income” comes from many sources, including gifts to officials at weddings, profits from land transfers, kickbacks from construction projects, and payoffs from state monopolies such as the tobacco industry

The World Luxury Association, a U.S.-based non-profit association engaged in market research in the luxury space, said in a report last July that spending on luxury products of all types in China has surpassed that of the United States, with wealthy Chinese spending $8.6 billion on luxury goods inside the country.
"This year, Armani expanded by 20 percent in a matter of months [in the Chinese market], while Louis Vuitton and Gucci extended their networks from first tier to second tier provincial capitals," the report said.
It’s estimated that if China continue to grow at a similar pace, the nation will surpass Japan as the world’s largest luxury goods market within five years upping its spending to a staggering bill of $14 billion every year.

The study found that the top 10 percent of China’s households take in 139,000 yuan a year, more than triple the official figures, suggesting that most of the ill-gotten wealth ends up in the hands of the rich. The bottom 10 percent earns 5,350 yuan and the top 20 percent of households account for 81.3 percent of total hidden income.

Being rich in America

The Obama administration wanted to extend tax cuts for everyone except those in the $250,000 per annum income group but not a lot of people knew that this figure only pertained to approximately 2% of the population.

If we want to retire by age 35 then we realistically need to have approximately $12 million in savings by that time. This would net an income of $300,000 per annum if the savings were bringing in an income of 5% and factoring in the cost of living and inflation adjustment figures. At this rate a person could live on a $300,000 income per year, from age 35 up to past the retirement age.

speculating in food

The World Development Movement have said that banks which caused the financial downturn have created volatile food prices. Bankers poured money into commodities like wheat and maize after giving up on failed mortgages.

"Bankers are to blame for price rises in coffee, chocolate and bread," stated the report

Cocoa prices jumped to a 33-year high as it emerged that a London hedge fund had snapped up a large part of the world's stock of beans. On Friday, traders say, Armajaro took delivery of 240,100 tonnes of cocoa – the biggest from London's Liffe exchange in 14 years and equal to about 7% of annual global production, according to the Financial Times. A 150% rise in cocoa prices over the past 18 months has forced many chocolate-makers to raise their prices and often to use less cocoa. Last month there was a sudden 20% jump in coffee prices as hedge funds rushed to cover their positions taken in the hope that prices would fall.

The WDM's Great Hunger Lottery report says "risky and secretive" financial bets on food prices have exacerbated the effect of poor harvests in recent years. It argues that volatility in food prices has made it harder for producers to plan what to grow, pushed up prices for British consumers and in poorer countries risks sparking civil unrest, like the food riots seen in Mexico and Haiti in 2008.The group used figures in Goldman Sachs' annual report to estimate that the bank made a profit of $1bn (£650m) through speculating on food last year.

Deborah Doane, WDM director, said: "Investment banks, like Goldman Sachs, are making huge profits by gambling on the price of everyday foods. But this is leaving people in the UK out of pocket, and risks the poorest people in the world starving.Nobody benefits from this kind of reckless gambling except a few City wheeler-dealers. British consumers suffer because it pushes up inflation, because of unpredictable oil and raw material prices, and the world's poorest people suffer because basic foods become unaffordable."

The World Development Movement, a UK-based anti-poverty campaign group, says it seeks to "establish economic justice", which means "the right of poor communities to determine their own path out of poverty, and an end to harmful policies which put profit before people and the environment".

Unfortunately, for campaigners such as WDM, capitalism cannot be so easily tamed.The answer to the problems that global capitalism engender is not a governemet policies for "ecnomic justice", even if pursued at global level.Those would still leave intact the basic structures and mechanisms of capitalism. It is something much more far-reaching that is required - a rapid and radical change of world society that will make the Earth's resources the common heritage of all humanity. That capitalism is chaotic is evident. That the poor had better abolish it before it kills them needs to be stressed with all possible urgency.

The unequal society

Incomes nearly quadrupled for the top 1 percent of Americans in the last three decades, while barely rising among middle- and lower-income households, according to new data from the Congressional Budget Office.

The Government Declares Class War

The ‘savage cuts’ in spending by government departments, cuts in housing benefit, a two-year pay freeze for public servants, less indexation for welfare benefits, price increases due to higher VAT announced in the 22 June Emergency Budget, and openly trailed as inaugurating a new ‘Age of Austerity’ and ‘years of pain’, confirm that the role of governments is to run the state machine in the general interest of the capitalist class, the tiny minority of super rich who own and control the means of wealth production. That governments really are the ‘executive committee of the ruling class’ that Marx said they were.

In fact, in a throwback to the 19th century, this particular government is overwhelmingly composed of members of the ruling class. And these millionaires have the cheek to tell us that we must tighten our belts and change our way of life while – even, so that – theirs can continue.

In reducing corporation tax the Chancellor followed the advice of a fellow Tory writing in the Times (17 June) to choose “the interests of employers and wealth creators. That won’t be popular but healthier businesses – free of tax and red tape – are essential for generating tax revenues, exports and new jobs.”

Note the arrogance of these people in describing themselves as ‘wealth creators’ when in fact it is employees, not employers, who create wealth by transforming materials that originally came from nature into useful things. What employers do is organise that the maximum amount of this newly-created wealth goes to their business as profit.

But the Tory did have a point. Under capitalism the engine of growth is capital accumulation by businesses and this is fuelled by profits. In this sense, tax receipts and jobs do depend on profit-healthy businesses, even if only as by-products which are used to try to convince the general public that it is in their interest that priority should be given to profits.

That priority has to be given to profits at the expense of the living standards of working people and their dependants is confirmation that capitalism is a system that does not work in the interest of the wealth-creating majority, only in that of the profit-taking minority. Which is why it must go.

In the meantime we have to live with it. That doesn’t mean we have to take what the government has planned lying down. The precise cut in our living standards is not something the government can decree. It depends on how determinedly we resist. In other words, on the class struggle. But, since the cards under capitalism are always stacked against us, this will only be a defensive, rearguard action to try to stop things getting worse.

Yet another reason why we should be organising, not just to limit the damage, but to put an end to capitalism and usher in a society based on common ownership and democratic control of productive resources, so that production can be geared to satisfying people’s needs instead of being subordinate to making profits for the few.

Cuts , cuts and more cuts

As the party in charge of the finances of the capitalist state in Britain, the Con-LibDems has to find the money to pay for the government. There exists an ongoing desire for “cheap government”. Governments are entirely dependent for their finances on the profit-making sector of the economy. This is the sector where the profit motive reigns supreme. As governments are not engaged in producing wealth themselves, the only way they can get money is by taxing or borrowing from this sector. Governments, not just in Britain but everywhere, have had to resort to drastic measures to raise money. When Chancellors say they haven't got the money to maintain public services at existing levels they are telling the truth. They haven't. The cupboard really is bare.

They have drastically reduced the level of services provided by national and local government. They have considerably worsened the working conditions of public sector employees, attacking their alleged “privileged” terms and conditions. When they oppose higher wages they do so because their responsibility, by virtue of being the government, is to keep the capitalist system functioning in the only way that capitalism can function, that is by enabling the capitalists to make profits. We can blame the “wicked Tories” for all this. But the Tories have essentially been the agents - granted , the all-too-willing agents, it is true - of economic forces beyond the control of any government. Government spending has to be squeezed to allow the profit-seeking sector to retain more of the reduced profits they have been making. And governments have no alternative but to dance to this tune.
Their fervent hope is that through increasing the efficiency of business, market discipline will make Britain an attractive place for investors and so help further domestic economic expansion. Their policies are thus geared around providing the "right environment" for businesses to grow.

Marx once wrote that the government is "but a committee for managing the common affairs of the whole bourgeoisie". And it's still true. The function of any government is to manage the common affairs of the capitalist class as a whole. This involves spending the money raised from taxes in a prudent way on things that will benefit the capitalist class as a whole. That's what most government spending goes on, and balancing this against income from taxes is what budgets are essentially about.

The lesson of all this is? First, governments are there not to further the common interest but to run the capitalist system, in the interest of those who live off profits to the detriment of those who live off wages and salaries. Second, that under the profit system workers are always on the receiving end.

It's Going to Ruin Us !

Further to our earlier blog on those Australian capitalists who are protesting a windfall tax that is to be imposed upon the mining industry,SOYMB came across this You Tube video by one of the Australian trade unions.

Capitalism's Contradictions

We see the major problems of today stemming primarily from the basic contradictions of capitalism. By this we mean that the social relationships of production conflict with the technical relationships.

In modern society where wealth takes the form of "a vast accumulation of commodities", production is "socialised". This means that no commodity is the result of one person’s work, but that it takes the productive apparatus of the world to produce the commodity.

For example, take the simple match. Someone has to know which trees to cut, how to cut them, how to make the saws to saw them, how to make the right steel to make the saws, how to make the lorries that convey the logs, how to obtain and process the rubber to make the tyres for the lorries, how to extract and process the petroleum to provide the power for them, to indicate only some of the basic processes involved. And of course all these materials and people have to be transported from place to place by air, land and sea with the assistance and support of administrative and agricultural workers. Modern capitalism (including Russia, China, etc.), which is the dominant economic mode, has brought into being a world based on the socialised production of wealth. But (and this is the biggest "but" in history) the wealth when produced is not the property of the producers, i.e. the working population of the world. It is appropriated by a relatively tiny section of society which monopolises the means of production, for reasons of his­tory either in private or in state forms of possession. Furthermore this minority section or class is divided up, generally on a national basis, into particular ruling classes. These can only maintain them­selves as the ruling classes in their own sector (given the acquiescence of the working population) and realise the wealth which the commodities represent by selling them, profitably, on the world market.

The ensuing conflict entails bitter struggles over markets, energy-yielding products, sources of cheap materials and labour, and the strategically important areas, bases and trade routes associated with them. The minor and major wars, together with the criminal stupidities, social and environmental, with which we are confronted are primarily caused by or are traceable to this contradiction.

Our social and political systems derive from this basic mode of organisation and it is absolutely impossible to eliminate these problems, which are specific to capitalism. unless the social relationships of production are brought into harmony with the technical ones. That is, as well as having socialised produc­tion. the means of production and the wealth produced must be the property of the whole of society and simply used by society in a rational. democratic manner in line with the precept: "from each according to his ability. to each according to his need". This does not require governments, armed forces and so on. It does require knowledge and a common understanding of aim, purpose and method. It does entail organisation and administration but not permanent organisers and administrators (as individuals).

Education for this kind of world is important but it is not simply a matter of formal education (which is socially derivative anyway), but of social educa­tion, i.e.. experience, as well. Men learn and modify their behaviour. Our environment is dominated by capitalist competition and this forces the ruling groups to revolutionise continually the techniques of production, including those of communication.

This means that whole sections of the community are confronted by changes in their lives and the need to question the existing situation. This does not mean that their tentative attempts to grasp the meaning of events are always constructive but it does open the way for the valid analysis, presented appropriately. The important point, however, is that, time being money for the ruling classes and communications being im­portant militarily, the means of com­munication are improved so rapidly that it is harder and harder for rising gener­ations to see themselves as other than "Earthmen", "world citizens" and so on. This is not simply for reasons of political or moral theory but as something related to experience in a world of short-wave radio, international tele­vision, satellites and space shots . No doubt governments attempt to use these techniques for pernicious ends but the inherent universality of some of these media subverts their efforts.*
J.
(Socialist Standard, September 1970)

* SOYMB would add that now in 2010 , with the developments of the internet and mobile phone technology - the blogs , You Tube-type websites , and the social networks such as Facebook and Twitter - we see repeated attempts by governments to impose censorship or to manipulate them but often with little success as those means of communication and information sharing spread throughout the world , linking peoples of all countries .

SUPPORT THE STATUS QUO!

Are you happy with your life? Is your work fulfilIing? No problems getting up in the morning? No stress? No complaints?

Good. We' re perfectly happy too. But there are a group of dangerous fanatics who say that they're "anti-capitalist". These groups are threatening everything we hold dear. Because we are basically satisfied with our lot, we want to defend the status quo, and we need your help. Here's what YOU can do:

LIMIT YOUR VISION

Ignore the structural causes of your problems. Pretend that psychological disturbance has nothing to do with social conditions. OK, so stress and depression are the second biggest killers in the western world. But let's not imagine that that has ANYTHING to do with how we live our everyday lives. And if you must enquire after causes, only intervene at the individual Ievel. It's fine to help depressed - or, say, homeless - people on a case-by-case basis. But don 't look into the social and economic arrangements that brought about their predicament. That would only serve to invite drastic changes. Treat each example of corporate wrongdoing (illegal dumping of toxic wastes, sweatshop labour, etc) as isolated incidents caused by a few corrupt individuals - believe that those in charge are just "bad", sabotaging what would otherwise be a perfectly all right system.

ADAPT

The best way to support the status quo is to make sure that you adjust yourself to serve its needs. This was once enforced by crude authoritarian means. Today this is hardly necessary. After all, you 've been trained since you were four to get up every morning on time, go to an institution where you surrender all control of your activity, and get asked to perform mostly meaningless and boring toil. So by the time you're asked to do the same for your employer, who hopes to profit from your work, it should come naturally. Should you find such an existence dreary or pointless, dori't worry. A wealth of advice is available on how to become successful, or at least to cope. All such advice proceeds from the premise that you should adjust yourself to conditions as you find thern. This means you must salve your problems within the institutions according to the rules that already exist. lf your principles or needs or desires come up against reality, just abandon them. On no account try to change the reaIity.

ONLY THINK ABOUT YOURSELF

The more you limit your concerns to what you've already been given or offered, the more you help to sustain the larger system. Sure, exercise your limited power as a consumer. But as a producer, as a worker, fit in and do as you 're told. Even therapeutic and spiritual enterprises are useful for preserving the status quo. They encourage you to attend to what you have been told are your own needs - they effectively direct attention away from social structures. Look after yourself, and let the rest of the world ga on its way. Politics is for politicians.

BE REALISTIC

You don't have to defend "capitalism", or the regimes in what were called the "socialist" or "communist" countries. Nor do you need to explicitly support what flows from supporting this system - such as its wars, starvation, or the poverty of your own everyday life. You can even nod in sympathetic agreement with those who condemn such regimes. But accompany this nodding with a shrug. Phrases such as "that's life" and "that's the way the world works" or vague references to "human nature" should be used liberally to emphasise that nothing can be done. (Such protestations of powerlessness are actually very powerful, of course, since they help to make sure that things are left exactly as they are.)

DISMISS "IDEALISTS"

When you come across people who refuse to resign themselves to the way things are or to believe that we are helpless and incapable of making fundamental changes, immediately label them "idealistic" or "utopian". An "idealist" is someone who doesn't understand "the real world" (real world" = "capitalist society" = "as it is" = "as it always will be"). This label calls attention to their fauIty understanding of "human nature" and "economics", and helps to ensure that they are not taken very seriously.

AS A LAST RESORT...

For those who remain concerned about social problems, however, there is a last resort for saving the status quo. You can become a leftie. As a leftie, you can remain "realistic" and condemn "idealistic" schemes while at the same time claiming to be in favour of radical change. You could even call yourself a socialist, or communist, and join one of the political parties on the left wing (of capitalism - the same bird). Go on demonstrations. March people to the top of the hill, then march them back down again. Chant boring, unimaginative, meaningless slogans. Flog a leftie newspaper. Then march all the way to Trafalgar Square just in time for a good beating from the police.

OVER TO YOU

So, it's up to you. We need you to keep supporting this system so we can all keep our jobs, our wars and our democracy (which may end at 9am every moming, but at least we can choose our rulers!) and everything else we love so much about our present social arrangements.

Whatever you do, don't listen to dangerous fanatics who say that instead of producing things for sale and for profit, we should produce things to satisfy our own needs. Don't listen to the extremists who say that we could and should take control of our own lives and collectively make our own decisions about work and play. Especially don't listen to the World Socialist Movement who have been saying this since 1904. They're used to being ignored anyway. Whatever you do, don't think, don't debate, don't look at the world around you, don't question, don't ask 'Why?' That definitely won't change things.

REGULATORS REDUNDANT

Oil giant BP, the mining company Massey Energy, and investors Goldman Sachs all have something in common. They’re all outwardly respectable firms involved in massive and irresponsible plunder in persuit of profit.

BP’s oil spill is already one of the biggest and most damaging in history. Company executives are now engaged in the blame shifting game. Giving testimony before the US Senate a top executive of BP focused on a critical safety device that was supposed to shut off oil flow on the ocean floor in the event of a well blow-out but which "failed to operate."

At the same hearing Transocean, which owned the rig that exploded, suggested work done by subcontractor Halliburton could have been the key factor. Halliburton and BP, meanwhile, say the blow-out preventer that failed on Transocean's rig was critical but "failed to operate."

"That was to be the fail-safe in case of an accident," Lamar McKay, chairman of BP America, said, pointedly noting that the 450-ton blowout preventer — as well as the rig itself — was owned by Transocean Ltd.

Massey’s April 5, 2010 mine disaster near Charleston (West Virginia) which claimed the lives of 29 miners was one of the worst in recent American history. The company had been cited for 515 violations at the same mine in 2009. (L.A. Times 7 April 2010).

Goldman’s alleged fraud is but one of number of swindles in recent years.

All three of these companies are primarily in the business of making money.

Shareholders benefited when BP made big profits extracting oil without paying attention to a possible “blow-out” – the technology involved has not changed in 20 years. Massey Energy increased earnings from its criminally negligent coal mining operations. The judge trying an earlier safety violation case stated that the firm “acted with deliberate intent regarding the unsafe working conditions in its coal mine.”

Goldman Sachs did very well for its own stock holders by allegedly defrauding others.

In fact it was pressure from their shareholders seeking the highest possible returns — and from their executives whose pay was linked to the firms’ share performance — that led all three companies to cut whatever corners they could cut in pursuit of the profits which are the lifeblood of capitalism.

So where were the regulators?

Even where regulations exist, the law has set such low penalties that disregarding the regulations and risking fines have been treated by firms as a cost of doing business. And for years, enforcement budgets have been slashed, with the result that there are rarely enough inspectors to do the job.

The assumption has been that markets and the profit motive know best. And these have been the results.

GT

On the night of April 16 last, petrol was poured through the letterbox of a top floor flat in Glasgow and then set on fire. The Doyle family was trapped in the blaze and six of its members, aged between 18 months and 50 years old died. Summing up at the end of what became Scotland’s worst multiple murder trial; the judge provided the convenient scapegoat for the horrific incident. “No decent person could be other than appalled by such dastardly deeds. Those who set fire to the flat, were, wicked, depraved, inhuman and evil” (Scotsman, 9 October 1984). But did these men just want to kill without reason? Evidently not, as they had had plenty of opportunities to do so simply with a shotgun and, according to one of the two men accused, the fire was only meant as “a frightener which went to far” (Scotsman, 20 September 1984).

"There was nothing wrong with the competition during the normal dealings in day to day business. But when this developed into some kind of feud between rivals in which criminal offences were committed, it was totally unacceptable. The danger of such a matter is that it can escalate out of all proportion."(Sheriff at Glasgow Sheriff Court. Scotsman, 3 August 1984)

To find the real reason we have to look beyond that simplistic excuse “human nature” and examine a more dominating factor in determining the everyday actions of people, their everyday environment. All the time, people find that this society denies them access to food, clothing and housing by such things as cash registers, security guards and rent demands. The main concern for most people therefore is how they get money and how much they can get, in the case of the two men convicted, they sold ice cream from a Fifti Ices van. The events finally leading to the six week trial started in the summer of 1982 in the Cartyne and spread to other housing schemes in Glasgow. According to the Guardian, “Trouble began in Garthamlock when an ice cream van operating under the name of Fifti Ices appeared in September last year. It invaded the patch which a rival ice cream company, Marchetti Brothers, had held a virtual monopoly for years” (11, October)
This rivalry soon led to a spate of intimidation and violence, including a shotgun being fired at a 15-year-old salesgirl. However, according to the wife of one of the convicted “the people of Garthamlock wanted another van in the area because the Marchetti’s was ….overcharging them” (Scotsman, 2 August 1984). The couples hired vans on hire-purchase from Fifti Ices and were able to undercut their rivals by selling stolen cigarettes and other goods.

The trader get about ten per cent of the weekly turn over, which would rarely be more than £200, the rest going to the companies. Marchetti Brothers, on the other hand, by leasing all their 37 vans on a week-to-week basis only, also ensure that the traders buy all their stocks from them.

According to the Marchetti Brothers’ accountant however, the subsequent loss of business from threats, abuse of customers and the "wedge" achieved by their rivals, had moved the company's profitability out of the black and into the red (Scotsman, 4 September 1984). This was obviously a far more serious situation than a few incidents of violence, so the firm put a third man into the battlefield. The unfortunate new employee - Andrew Doyle _ was presumably chosen because, as the Glasgow Herald described him, he was "...a young man of massive appearance but quiet disposition" (11 October l984). In court, he was described as "...not a hassle man. He was just a young boy from a nice family..." (Glasgow Herald, 7 September 1984).

At one point in the war, according to the Herald, "the beleaguered company secretary of the van firm, Marchetti brothers, asked a colleague What is it going to take to stop these people . . . a body?" But these six deaths have only stopped the activities of the men convicted A social system based on conflict will no be restricted by the charred remains of a few human beings. Even as they were being sentenced, other members of their team were putting further ice cream vans on the road This is despite the fact that "ever since the fire which killed the Doyles . . . Marchetti Brothers have tried to re-establish themselves in Haghill" (Glasgow Herald, 11 October 1984). The war, it would seem, must go on.

This is not an unfortunate little incident, a sad aberration in an otherwise acceptable society. St Tropez had its own ice cream war fought on the beaches of the Riviera this summer, with French police arresting one man for planting explosives in the sand ("Beaches mined in ice cream war", Guardian, 23July 1984), and all over the world the same conflicts arise, initiated by the rivalry of a system of society in which access to wealth is controlled by a minority in conflict, rather than by the whole of humanity in co-operation.

But of course those who stand to gain most profit out of these battles are not those who do the fighting. Quite the opposite would seem to be true in this case. The Glasgow Herald considered it “a matter of considerable embarrassment" that the owners of the two rival companies were related through marriage and enjoyed harmonious relations. The fighting and dying then is left for the workers, whether it is Andrew Doyle or the two would-be entrepreneurs whose only mistake would appear to be that they did the job themselves. In fact, while denying in court that he was overheard in a pub offering “an easy £300" for help to “torch" the Doyle house, one said “if I wanted somebody assaulted, I would assault him." (Glasgow Evening Times,28 September 1984).

AII violence under capitalism, from world war to muggings, is for property - be it the land and wealth within borders - or the notes in a pensioners purse. In each instance can be seen the effects of a society based on control and powerlessness; ownership and non-ownership.

Capitalist society is no innocent bystander but rather the main determinant of human behaviour.

BRIAN GARDNER
Socialist Standard January 1985

The case , not the face

In 1997, Blair , the new PM , said to Labour MPs “You are not here to enjoy the trappings of power but to do a job and to uphold the highest standards in public life. You are all ambassadors for New Labour and ambassadors for the Government.” . After which we had Derek Draper selling his influence , Bernie Eccleston buying access to Number 10, the purchase of peerages , 'yo-yo-he-is-in-he-is-out' Mandelson accepting suspicious loans , the gravy train expense claims scandal of sitting MPs , Tony Blair's own nefarious business dealings and now ex-ministers whoring their influence out to whoever can pay .
We have also witnessed capitalism becoming a dirty word again because of the recession and banking collapses and the credit crisis and simple out and out company fraud .

Yet even if every politician were up-standing , honest and genuinely interested in improving the lives of ordinary people rather than in furthering their own careers , filling in their inflated expenses claims and enlarging their bank balance , this would not make any difference. The problems we face doesn’t arise from governments being composed of dishonest or self-serving politicians. What a government can do depends, not on the honesty or determination or competence of its members, but on the way the capitalist system works and on what, as a profit-making system, it requires any government – even one composed of selfless saints – to do. Capitalism just cannot be made to work in our interest.

What’s wrong with capitalism is that it is based on class privilege and exploitation.What’s wrong with capitalism is that its competitive struggle for profits leads to speed-up, stress and insecurity at work, to damage to the environment, to wars .Capitalism simply cannot be reformed to work in the interest of the majority of workers. In regards of the candidates in this election , whether perfectly sincere or not , it’s not a question of what they want to do, but of what they can do – or rather cannot do – within the framework of the profit system. Politicians are constrained to operate within parameters set by the economic system for which they stand. Politicians are merely the errand boys and girls of the rich and powerful .Based upon minority ownership of the means of living, capitalism can only ever operate in the interests of the capitalist minority, not the electorate as a whole.

Politicians have long been attempting to cope with this anarchic market volatility since the beginning of the modern day industrial state two hundred years ago and havent yet succeeded. Their job is to manage the day to day chaos of capitalism little more. It makes not an iota of difference whether they are honest, clever, stupid, or educated. Nor does it matter if they are well meaning. If good intentions or any of these other things were all that were required to fix capitalism there would be no problem.The forces of the economy are beyond the management of the politicians. Changes in world market conditions and the natural booms and busts of the capitalist commercial cycle brings them back to the grim reality of business.

The Socialist Party are not interested in upholding capitalist economics. We are not asking anyone to vote for us who does not understand and want socialism. We are not in the business of providing reformist promises to patch the system back together. We are asking you to study the case for socialism so that when you do vote for socialism, you will, in effect, be voting for yourself for your own interests. Rather than dither in a futile panic between one bunch of hopeless corrupt careerists and another, why not use the vote properly and effectively and opt for a real alternative?

Vote for the case not the face.

Adding to the hunger

The suffering of the people of Haiti continues but this time it is not from the result of the earth-quake , but as a result of the capitalist market system .
We read here that after the Jan. 12 quake, 15,000 metric tons of donated U.S. rice have arrived.

Paul O'Brien of Oxfam America says the lessons of the harm of flooding a country like Haiti with subsidized rice should have been learned a long time ago.
"The days are gone when we can throw up our hands in terms of unintended consequences; we know now what these injections can do to markets," he said.

And what exactly are the consequences ?

Renan Reynold, a Haitian farmer explains - "I can't make any money off my rice with all the foreign rice there is now.If I can't make any money, I can't feed my family."

Corpses become commodities

People in the UK can decide in advance to donate their body or organs to medical science after their death. No payment is made to the person who donates their body, nor to the estate of the deceased.In the US, however, there is an increasingly commercial element to this supply and demand.

The Anatomy Gifts Registry charges fees for supplying bodies and tissues to medical companies and universities.
"We expect to recover between $5,000 and $6,000 per cadaver - either in its entirety or after the body has been divided"

In the US, it is a felony to actually purchase or sell a body, human tissue or organs.But the law excludes the payment for the removal, processing and preservation of cadavers.Getting reimbursed for such services opens up a huge window for commerce.

"The US is a wonderful place to see entrepreneurs in action and this is what they have done" Professor Michel Anteby at Harvard University said "About 15 years ago, some people decided that there was a niche for such services and these ventures have become extremely successful.Some of them get more than 1,000 donations a year."

Capitalism knows no bounds when it comes to making a profit .

“capitalism, oppressor of the living, is the murderer also of the dead” - Amadeo Bordiga