socialist standard january 2009

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1SocialistStandard January 2009

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2 SocialistStandard January 2009

SubScription orderSshould be sent to The Socialist Party, 52Clapham High Street, London SW4 7UN.rateSOne year subscription (normal rate) 15One year subscription (low/unwaged) 10Europe rate 20 (Air mail)Rest of world 25 (Air mail)Voluntary supporters subscription 20 or more.Cheques payable to t Ss p G b.

the SocialiSt party of

Great britain

The next meeting of the Executive Committeewill be on S 17 J at the addressbelow. Correspondence should be sent tothe General Secretary. All articles, lettersand notices should be sent to the editorialcommittee at: The Socialist Party, 52 ClaphamHigh street, London SW4 7UN.: 020 7622 3811

-m: [email protected]

January 2009

3 eCapitalism must go

4 PathsReady, aim...press enter

5 ls

6 M WThe mobile war

8 ps tg

8 c ds

9 ckg bks 1D-Words

14 ckg bks 2Fictitious capital

20 rvwsBasic Kropotkin; Goodbye Mr

Socialism; Marxs Theory of the

Genesis of Money21 Mgs

22 50 ys agHighlights of 1958

23 Gs pPost Ofces are to go?

24 V m bkThe Futility Of Reformism; The

Cost Of Warand more

24 f l

contents

website: www.worldsocialism.org

reGularSfeatureS

10 om n gThe hope many have in Obama to implement policies that will benet

the class that matters is misplaced.

12 bks, m An urban myth is circulating on the internet that banks have beencreating money out of thin air.

15 e, s ggTodays education system is presented as preparation for a careerignoring the political conditioning it also involves.

17 Five more benets of not having moneyWe continue describing how things could be like in a socialist society,where there would be no need for money.

a mg s v ssImmense prots can be made in capitalism even in a trade recession.

socialist standard

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The Socialist Party is like no otherpolitical party in Britain. It is made upof people who have joined togetherbecause we want to get rid of the protsystem and establish real socialism. Ouraim is to persuade others to becomesocialist and act for themselves,

organising democratically and withoutleaders, to bring about the kind ofsociety that we are advocating in this

journal. We are solely concerned withbuilding a movement of socialists forsocialism. We are not a reformist partywith a programme of policies to patchup capitalism.

We use every possible opportunityto make new socialists. We publishpamphlets and books, as well as CDs,DVDs and various other informativematerial. We also give talks and take partin debates; attend rallies, meetings anddemos; run educational conferences;host internet discussion forums, make

lms presenting our ideas, and contestelections when practical. Socialistliterature is available in Arabic, Bengali,Dutch, Esperanto, French, German,Italian, Polish, Spanish, Swedish andTurkish as well as English.

The more of you who join the SocialistParty the more we will be able to getour ideas across, the more experienceswe will be able to draw on and greaterwill be the new ideas for building themovement which you will be able tobring us.

The Socialist Party is an organisationof equals. There is no leader and there

are no followers. So, if you are goingto join we want you to be sure that youagree fully with what we stand for andthat we are satised that you understandthe case for socialism.

IntroducingThe Socialist Party

Editorial

csm Ms GWe are now in the middle of thebiggest economic and nancial crisissince the 1930s. In a world that hasthe potential to produce enoughfood, clothes, housing and the otheramenities of life for all, factories areclosing down, workers are being laid

off, unemployment is growing, housesare being repossessed and people arehaving to tighten their belts. Thereare in fact already 16 million ofciallyrecorded unemployed in the EU.Outside Europe the situation is worseand people are rioting because theycant afford even the basic necessitiesof life.

Capitalism in relative good timesis bad enough, but capitalism in aneconomic crisis makes it plain for allto see that it is not a system geared tomeeting peoples needs. Its a systembased on the pursuit of prots, wherethe harsh economic law of no prot, noproduction prevails. Its because theheadlong pursuit of prots has led to asituation where they cant make protsat the same rate as before that thosewho own and control the places wherewealth is produced have gone on strike refusing to allow these workplaces tobe used to produce what people need,some desperately. So, as in the 1930s,its poverty in the midst of potentialplenty again. Cutbacks in productionalongside unmet needs. Why should weput up with this?

But thats the way capitalismworks, and must work. The politiciansin charge of governments dont reallyknow what to do, not that they can domuch to change the situation anyway.

They are just hoping that the panicmeasures they have taken will work.In Britain the Labour governmentis trying to spend its way out of theslump, but this has been tried beforeand has never worked. The slump willonly end when conditions for protable

production have been recreated,and that requires real wages to falland unprotable rms to go out ofbusiness. So, theres no way thatbankruptcies, cut-backs and lay-offsare going to be avoided, whatevergovernments do.

What can be done? Nothing withinthe prot system. It cant be mended,so it must be ended. But this issomething we must do ourselves. Thecareer politicians, with their emptypromises and futile measures, cant doanything for us. We need to organise tobring in a new system where goods andservices are produced to meet peoplesneeds. But we can only produce whatwe need if we control the places wherethis is produced. So these must betaken out of the hands of the richindividuals, private companies andstates that now control them andbecome the common heritage of all,under our democratic control. Inshort, socialism in its original sense(which has nothing to do with thefailed state capitalism that used toexist in Russia or with what still existsin China and Cuba) as a society of

common ownership, democratic controland production for use not prot, withgoods and services available on thebasis of from each according to ability,to each according to needs.

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r, m... pss e

Youll know by now whether the UK retailindustrys fear of the worst Christmas protsfor 30 years came true or not. Hopefullyworkers can draw some comfort from

the thought of all those skinned fatcats and broke brokers, though its littleenough comfort when youre wonderingwhich of your children to sell to pay thestupendous gas bill this winter.

Ever ready with expensive andimpractical solutions most workers will neverbe able to afford unless they win the Lottery, NewScientistsuggests we all go off the grid (5 December). Certainly,given suitable location and a few tens of thousands of pounds,you can install your own wind, water, solar and geothermalsystems and forever laugh in the face of price increasesand power outages. But when you cant even afford a bit ofmiserable lagging in your loft, such helpful suggestions dont cut

much ice off the inside of your windows.Still, for the rich among us who matter, theres anotherreason for turning your stately pile into a self-sufcient domesticfortress with solar-powered electric fences and heat-seekinglaser turrets. If the current economic downturn keeps goingdown, and the unemployment gures keep going up, youllbe wanting to do more than keep the heat in. Youll bewanting to keep the poor out.

Could things get that bad? Well, quite possibly.The world is going through a process of technological

convergence which globalisation and theinformation revolution are making possible. In

itself this might be a good thing, and would greatlyassist in the establishment of global non-market socialism. But

this is capitalism were talking about, and one should neverunderestimate its ability to turn a triumph into a disaster.

The very fact of convergence means that not onlyare the worlds nancial systems vulnerable to cyber-attack, but so are its power systems. One concerted hackoffensive could stop an entire country in its tracks and turnall its lighting and heating off. Needless to say, the rich

man in his self-sufcient castle wont be bothered, but pitythe poor man at his gate.

Yet surely nobody would commit such a monumental actof vandalism? Oh really? Guess again. China, it seems, havebeen sponsoring hacker groups for years, for the purposesof espionage and industrial sabotage against rivals, and arearguably in a position to paralyse the UK or USA (Guardian,21 November). At a time when global trends are pointing tothe decline of US unipolar dominance and the emergence ofmultipolar power factions, cyber-attack of this sort is not only

more likely, it becomes an almost irresistible option.After all, pressing that button doesnt seem half sodifcult as pressing the nuclear one. True, you may killpeople through denial of service, but its not as if youre

incinerating millions.

Note ImperfectStrange but true, a binman on his rounds found two binsstuffed with 10,000 in 10 and 20 notes, the bizarrecatch being that they were all cut up into one-inch pieces(BBC Online Magazine, 5 December). What was needed,explained a self-styled puzzle expert, was a scientic system

to reassemble the notes,which the binman will beallowed to keep, as theyhave not been claimed.When I read the story I was very tempted to givehim a call and offer myhelp, said the expert. Well

just bet he was.Apparently note

destruction is not unusual,and every year the Bank of

England receives returnednotes to the value of 40million, which have beenburned, water-damaged,defaced, ripped, cut,chewed or eaten. Is theresome campaign of moneyvandalism going on thatwe dont know about? Bethat as it may, our scienticadvice to workers would beslightly different from thepuzzle experts. Why notstart the New Year by cuttingup all the other notes too,

and not bothering to stickthem together?

Balls to the GamersFirst, you need to buy genitals. You start

off with no genitals and then you buy some. Theseobjects can do all sorts of things. You can have onesthat ejaculate at the right moment. Thus Adrian Mars,technology journalist with the suitably other-worldlyname, explains virtual anatomy to us (http://news.bbc.co.uk/1/hi/magazine/ 7729207.stm).

If youre thinking of joining the throngs of peopleinvolved in that desperate exodus from reality knownas online gaming and you feel up for a bit of slap andtickle, you need to bear in mind that escapist virtual

reality is even more capitalist than capitalism, andthat what nature normally provides for free has

to be bought and paid for. Still, at least you getto choose size, colour and special functions.Be warned though, this kind of cyber hanky-panky has already resulted in one real-world

divorce, as Mrs Avatar walked in to nd Mr Avatar on the sofa

with Ms Streetwalker Avatar polishing his proud purchase.But then, the aforementioned couple met andmarried in the rst place viaan online chat-room, soperhaps there is a kindof internal symmetrygoing on after all.When you think onlinegamers cant get anysillier, they do. If onlyall that imaginationcould be turned backtowards the physicalworld, where thereal balls-ups are

taking place.

Nowhe wontneed to over-compensate...

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Taxing Problem

Dear EditorsIn My Cupboard is Bare (Letters,Socialist Standard, November) theletter writer states many inaccuracies- he doubled the income-tax burdenon the poorest earners in society. -

The working-poor, whose income-taxhe doubled, do not bother to vote,(as he knows) for we, the low-paid,realise that there is no-one worthvoting for. - Middle-England, onmiddle incomes, voted Labour intopower, and for that voting-baseincome-tax was reduced in anattempt to retain support for theLabour. - If the British governmentmakes yet another mistake ofhaving ordinary hard-working Britishcitizens bail-out British banks andthe greedy millionaires who helpedcause the problem.... This might be

worthy of comment.GLASGOW BRANCH

Reply:

We published the letter as anexpression of opinion by adiscontented worker. We agree thatit is inaccurate to imply that incometax is a burden on the working classand that it is workers who are bailingout the banks.

Workers are exploited at the point

of production but are paid more orless the value of the working skillsthey sell, i.e., enough to buy whatthey need to reproduce and replacethem. If the government imposes atax on wages, this will eventually,after a struggle, be passed on toemployers as the cost of reproducingthe workers skills will have gone up.

In any event, in Britain, mostworkers dont even personally payincome tax as they do other taxes bygoing to the post ofce or writing acheque as this is deducted at source

by the employer and paid by themto the government. In this case what

is important is take-home pay. Thissaid, when the government doeschange income tax the take-homepay of some individual workers cango up or down for a time, and didgo down in the case the letter writermentioned.

Although the money to bail outthe banks will have ultimately come

out of the surplus value extractedfrom the working class, it has notdone so directly the capitalistemployer extracts the surplusvalue, part of which is paid to thegovernment as taxes, some of whichwas used to bail out the banks Editors.

Letters

Poles Apart?Capitalismor Socialism as theplanet heats up

w s m G

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In place of CapitalismRecently the word capitalism seems tobe on everyones lips. The main reasonfor this is probably that capitalism alsoknown as the economy or the marketsystem is going through a bad patch.The Labour governments claim to haveended the cycle of boom and bust hasbeen proved disastrously wrong. The

last boom, during which food, energy,house and stock market prices rose atunsustainably high rates, has given wayto bust.

As usual, workers are the mainvictims. Many of us have lost our jobs,cant get new ones or cant enter thelabour force for the rst time. We haveseen our outgoings soar, our incomessqueezed, even our homes repossessed.Even if we have so far personally avoidedthe worst of these fates, the worry that wemay not continue to do so can be verystressful.

Who or what is to blame for this sorry

state of affairs? More constructively, howcan it be put right? Only the pitifully smallsocialist media insist that we need toreplace capitalism with socialism. All theother media, which shout so much louderthan we can, say things like Weve gotthe wrong kind of capitalism or Somepeople (bankers) have been too greedy.

There is a widespread and heavilypromoted belief that capitalism is theonly game in town. Anyone who disputesthis, for example by advocating that allgoods and services should be availableon the basis of need, not ability to pay,is dismissed as idealistic or utopian. It is

a classic case of self-fullling prophecy:support (or at least acquiesce in) the way

things are organised today and tomorrowwill be more or less the same. But itdoesnt have to be.

Socialists urge that it is futile to tryto reform capitalism the whole systemneeds to be scraped and replacedby something better. As we explain inour pamphlet Socialism as a PracticalAlternative, this means being asconstructive as possible, not destructive.For example, such bodies as the WorldHealth Organisation and the UniversalPostal Union can be adapted for socialistpurposes.

We have as our object theestablishment of socialism. In a sense thisis true, but we also talk about a socialistmovement in the here and now. Everymonth we say in this journal we are solelyconcerned with building a movement ofsocialists for socialism. We distributepaper and electronic publications, givetalks, take part in debates, run educationalevents, make lms, and much more.

With more members and particularlyactive members we could do things and

on a scale we are prevented from doingfor lack of human and other resources.For example, we could set up socialistpublishing houses producing, promotingand distributing paper and electronicliterature. We could organise socialisteducational networks at different levels:schools, colleges, universities, distancelearning for potential socialist citizenship,not capitalist employment. Other activitieswill no doubt be suggested, tried out andperhaps become widespread whoknows?

The point is that more of us will cometo realise that we alllive in the real world,

not with submission to endure it but withimagination to revolutionise it.Stan parKer

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although the peace accord of 2003 ended veyears of war in other parts of the DemocraticRepublic of the Congo, ghting has continued

intermittently in the eastern Kivu region. Thelatest bout began on October 25, when the rebelforces of Laurent Nkunda resumed their offensive,accompanied by the usual atrocities against civilians,burning villages, and oods of starving refugees.

What is this war about?

Spillover from Rwanda?At rst sight, it looks like spillover from the Hutu-

Tutsi conict in neighbouring Rwanda. General Nkunda,a Congolese Tutsi and Christian fundamentalist, sayshe is protecting his people from theInterahamwe, the Hutu militia thatperpetrated the Rwandan genocide of1994 and later ed over the border.

He is backed by troops of the currentTutsi government of Rwanda, which theInterahamwe seeks to overthrow.

This version is a smokescreen.Nkunda has shown much less interestin pursuing the Interahamwe thanin seizing control of Kivus richmineral resources partly on behalfof Rwandan business interests, partlyperhaps for his own enrichment. Heexploits the memory of genocide tomobilize the Tutsis in his supportand win foreign sympathy, much as Israel exploitsthe memory of the Holocaust for its purposes. Controlover resources is also the main concern of the Congo

government in Kinshasa and its armed forces.The most valuable minerals in the Kivu region are two

metallic ores called cassiterite and coltan. These containsubstances whose special properties are ideally suited tovarious high-tech applications. Niobium alloys are usedin jet and rocket engines because they remain stable atvery high temperatures, while tantalum and tin oxide areused in making electronic circuitry for devices rangingfrom computers to DVD players and MRI scanners. Inparticular, the rapidly rising demand for mobile phoneshas pushed up the price of coltan, fuelling the ght tocontrol and mine its deposits. So we could call the war ineastern Congo the mobile phone war.

On both sides, part of the proceeds from selling

resources (through chains of middlemen) on the worldmarket goes to nance military operations, which in turnsecure access to the resources. This is an example ofthe war as business model (Material World, November2008), which arises in this case from the weakness ofstate institutions in Central Africa.

A helpless giantIn the Congo it is especially difcult for the

government to exercise sovereignty over its territory,which is roughly the area of Western Europe (2.34million km2). The transportation and communicationsinfrastructure is extremely underdeveloped; no road orrail link traverses the whole country from east to west.Under these conditions, it is quite impossible to defend

borders with nine neighbours that stretch over 10,744km.

Neighbouring states can therefore invade Congo

territory whenever they like. No fewer than seven foreignarmies fought in the civil war that began in 1998. In thebackground, the old colonial powers France, Belgiumand Britain and two players newer to the region, theUnited States and China, jockey for position, assiduouslypromoting the interests of their corporations whilecarefully concealing how these corporations hire privatearmies and fuel the conict. All these governments,armies and corporations are after the same things,the vast resources that lie on and especially under Congolese soil: various metals, diamonds, uranium,potash, timber, wildlife, oil and gas, etc.

Then there are the peacekeeping forces of the UnitedNations, even though there is no peace to keep. The

real reason for their deployment is,in fact, to protect the interests ofFrench and other foreign capital. It isthis that explains the apparently odd

fact that most of the peacekeepersare kept well away from the areasaffected by the current ghting.Those who do enter the combat zonemake no effort to assist relief workor protect civilians, who vent theiranger by yelling and throwing stonesat the UN vehicles.

Torn apart by rival predators,there is a striking parallel betweentodays Congo and another helplessgiant China in the second half of the

19th and rst half of the 20th century.

A curse not a blessing

In a different system of society, many resourcesin central Africa could be utilized for the purpose ofecologically sustainable development for the benetof local communities. The natural products of therainforest could be preserved and harvested fordietary and medicinal use. There is a vast potential forhydroelectricity and, of course, solar power.

But in a capitalist world Congos resources have beena curse not a blessing for the overwhelming majority of itspeople, bringing them invasion, enslavement, starvation,war and upheaval. European capital rst descended onthe country in 1885 in the horric form of the CongoFree State, a corporate state controlled personally byKing Leopold II of Belgium, who made money from it

by exporting rubber collected under compulsion bythe indigenous people. Those who failed to meet theirquotas were mutilated; those who refused to work for theconquerors were killed.

This reign of terror, which would have done the Nazisproud, led to a population loss of some ten million (seeAdam Hochschilds King Leopolds Ghost). How manypeople must have wished that their country had norubber!

In 1908 the Congo Free State gave way to the BelgianCongo, which gained formal independence in 1960.Mobutus kleptocracy followed in 1971 and lasted until1997, when the recent period of upheaval began. Regimescome and go, but the ravenous extraction of resources byforeign corporations never stops.

STEFAN

cg t m w

Congolese Tutsi and Christianfundamentalist General Nkunda

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Uk Branches &contacts

Londoncl Ld b. 2nd Weds.6.30pm. 2nd Wednesday 6.30pm.

Sekforde Arms, London. EC1 (Nearest

Underground: Farringdon).Eneld and Haringey branch.Thurs 8th and 22nd. 8pm. AngelCommunity Centre, Raynham Rd, NI8.Corres: 17 Dorset Road, N22 7SL.

email:[email protected] Ld b. 1st Tues.7.00pm. Head Ofce. 52 Clapham HighSt, SW4 7UN. Tel: 020 7622 3811W Ld b. 1st & 3rdTues.8pm, Chiswick Town Hall,

Heatheld Terrace (Corner Sutton CourtRd), W4. Corres: 51 Gayford Road,London W12 9BYPimlico. C. Trinder, 24 Greenwood Ct,155 Cambridge Street, SW1 4VQ.

Tel: 020 7834 8186

MidLandsWest Midlands branch. Meets everytwo months on a Sunday afternoon (seemeetings page for details. Tel: TonyGluck 01242 235615

northeastn b. Contact: Brian Barry,86 Edgmond Ct, Ryhope, SunderlandSR2 0DY. Tel: 0191 521 0690.E-mail [email protected]

northwestL b. Meets every Monday8.30pm. P. Shannon, 10 Green Street,Lancaster LA1 1DZ. Tel: 01524 382380M b. Paul Bennett, 6

Burleigh Mews, Hardy Lane, M21 7LB.Tel: 0161 860 7189Bl. Tel: H. McLaughlin.01204844589

Cumbria. Brendan Cummings, 19Queen St, Millom, Cumbria LA18 4BGCarlisle: Robert Whiteld.E-mail: [email protected]

tel: 07906 373975

rdl. Tel: R. Chadwick. 01706522365su M. Enquiries:Blanche Preston, 68 Fountains Road,

M32 9PH

Yorkshire

Skipton. R Cooper, 1 Caxton Garth,Thresheld, Skipton BD23 5EZ.

Tel: 01756 752621Todmorden: Keith Scholey, 1 LeeviewCt, Windsor Rd, OL14 5LJ. Tel: 01706814 149

south/southeast/southwest

su W b. Meets every twomonths on a Saturday afternoon (seemeetings page for details). Ray Carr, Flat

1, 99 Princess Road, Branksome, PooleBH12 1BQ. Tel: 01202 257556.Bristol. Shane Roberts, 86 High Street,Bristol BS5 6DN. Tel: 0117 9511199Canterbury. Rob Cox, 4 StanhopeRoad, Deal, Kent, CT14 6ABLu. Nick White, 59 Heywood Drive,

LU2 7LPrdu. Harry Sowden, 5 ClarenceVillas, Redruth, Cornwall, TR15 1PB.Tel: 01209 219293

eastangLiaEast Anglia branch. Meets every twomonths on a Saturday afternoon (seemeetings page for details).David Porter,

Eastholme, Bush Drive, Eccles-on-Sea,NR12 0SF. Tel: 01692 582533.

Richard Headicar, 42 Woodcote, Firs Rd,Hethersett, NR9 3JD. Tel: 01603 814343.Richard Layton, 23 Nottingham Rd,

Clacton, CO15 5PG. Tel: 01255 814047.Cambridge. Andrew Westley, 10Marksby Close, Duxford, CambridgeCB2 4RS. Tel: 07890343044

northern ireLandNewtownabbey: Nigel NcCullough. Tel:028 90852062

scotLandEdinburgh branch.1st Thur. 8-9pm.The Quaker Hall, Victoria Terrace (aboveVictoria Street), Edinburgh.J. Moir. Tel: 0131 440 0995 JIMMY@

jmoir29.freeserve.co.uk Branch website:http://geocities.com/edinburghbranch/Glasgow branch. 3rd Wednesday ofeach month at 8pm in CommunityCentral Halls, 304 Maryhill Road,Glasgow. Richard Donnelly, 112

Napiershall Street, Glasgow G20 6HT.Tel: 0141 5794109. E-mail: [email protected]

Ayrshire: D. Trainer, 21 Manse Street,Salcoats, KA21 5AA. Tel: 01294

469994. E-mail: [email protected]. Ian Ratcliffe, 16 Birkhall Ave,Wormit, Newport-on-Tay, DD6 8PX. Tel:01328 541643West Lothian. 2nd and 4th Weds in

month, 7.30-9.30. Lanthorn CommunityCentre, Kennilworth Rise, Dedridge,Livingston. Corres: Matt Culbert, 53Falcon Brae, Ladywell, Livingston, WestLothian, EH5 6UW. Tel: 01506 462359E-mail: [email protected]

waLes

sw b. 2nd Mon, 7.30pm,Unitarian Church, High Street. Corres:

Geoffrey Williams, 19 Baptist WellStreet, Waun Wen, Swansea SA1 6FB.Tel: 01792 643624

Cardiff and District. John James, 67Romilly Park Road, Barry CF62 6RR.Tel: 01446 405636

InternatIonaL contacts

africa

Kenya. Patrick Ndege, PO Box 56428,Nairobi.Swaziland. Mandla Ntshakala, PO Box981, Manzini.Zambia. Marxian Education Group, POBox 22265, Kitwe.asia

India. World Socialist Group, VillGobardhanpur. PO Amral, Dist. Bankura,

722122Japan. Michael. Email:[email protected]

Denmark. Graham Taylor, Kjaerslund 9,

oor 2 (middle), DK-8260 Viby JGermany. Norbert. E-mail:[email protected]

Norway. Robert Stafford. E-mail:[email protected]

coMPanIon PartIes

oVerseas

World Socialist Party of Australia.P. O. Box 1266 North Richmond3121, Victoria, Australia.. Email:

[email protected] Party of Canada/Parti

Socialiste du Canada. Box 4280,Victoria B.C. V8X 3X8 Canada. E-mail:[email protected] Socialist Party (New Zealand)

P.O. Box 1929, Auckland, NI, NewZealand.World Socialist Party of the United

s P.O. Box 440247, Boston, MA

02144 USA. E-mail: [email protected]

Contact Details

WORLD HUNGER GROWSIt is the new face of hunger. A perfect storm of food scarcity, global warming, rocketingoil prices and the world population explosion is plunging humanity into the biggest

crisis of the 21st century by pushing up food prices and spreading hunger and povertyfrom rural areas into cities. Millions more of the worlds most vulnerable people arefacing starvation as food shortages loom and crop prices spiral ever upwards. Andfor the rst time in history, say experts, the impact is spreading from the developing tothe developed world. More than 73 million people in 78 countries that depend on foodhandouts from the United Nations World Food Programme (WFP) are facing reducedrations this year. The increasing scarcity of food is the biggest crisis looming for theworld, according to WFP ofcials. (Sunday Herald, 30 November)

ANOTHER EXPERT RECANTSAlistair Darling will be forced to admit tomorrow that the credit crunch has plunged Britaininto a deep recession, and the economy will contract for a full year in 2009, for the rst time

since the early Nineties. As the credit crisis ravaged the worlds nancial markets earlier thisyear, the Chancellor insisted repeatedly that Britains `economic fundamentals` were sound.

In the budget six months ago, he pencilled in a strong recovery for 2009. ( Observer, 23November)

ANOTHER EXPERT SPEAKS

This week Citigroups already depressed shares have lost half their value, and sharesof Bank of America and JPMorgan Chase are down 30 percent. Those declines havecome despite reassuring comments from Treasury Secretary Henry M. Paulson Jr.,who told National Public Radio a week ago that people were no longer worried aboutthe possibility of a major bank failure. Ive got to tell you, he said. I think our majorinstitutions have been stabilized. I believe that very strongly. The Standard & Poorsindex of 500 stocks fell by more than 6 percent on two consecutive days, Wednesdayand Thursday, something that had not happened since July 20 and 21, 1933, in themidst of the Great Depression, when panic was brought on by collapsing commodityprices. Such prices have fallen rapidly this week as well, as evidence mounted of aworld recession. (New York Times, 20 November)

GOOD BUSINESS PRACTICEThe European Union accused drug companieson Friday of adding billions of dollars to health

care costs by delaying or blocking the saleof less expensive generic medicines. Onecommon tactic, said Neelie Kroes, the European

competition commissioner, was for drugcompanies to amass patents to protect active

ingredients in the medicines in one case,1,300 patents for a single drug. Another tactic,

she said, was for pharmaceutical companies tosue the makers of generic drugs for ostensible

patent violations, which tended to delay theavailability of the lower-cost products for years.

Ms. Kroes made her comments Friday while

presenting the preliminary ndings of a broadinvestigation into accusations of anticompetitivepractices in the drug sector. She also turnedher sights on the generics companies, which

she said had received $200 million frompharmaceutical companies over seven years

in exchange for holding their products off themarket. (New York Times, 28 November)

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d-wsD is for Depression. And for Deation. Two

words economists and journalists tried to

banish. The rst they replaced by the more

innocuous-sounding recession while the

second was conned to history books. But

now they are having to use them again.

The Penguin Dictionary of Economicsdenes depression as a business cycle in which there is

unemployment and then adds:

Only the period 1929-33 in the United Kingdom is usually

referred to as a depression (see Recession).

Well, it looks as if they may have to add and the period

2008- , especially as even the Bank of England has raised the

spectre of deation, by which they mean a period of falling

money prices.

The Bank of Englands remit is to keep the rate of the rise

in the general price level (popularly called the rate of ination,

misleadingly since the rise in the general price level is an

effect of ination properly so called) down to 2 percent a year.

The main cause of its non-stop rise since 1940 has been the

overissue, or ination, of the currency, which has gone on

incessantly since then, and which will have increased with thegovernments recent bail-out of the banks and attempt to spend

its way out of the coming depression.

When, however, in November the Bank dramatically

slashed the bank rate from 4.5 percent to 3 percent it justied

this, in terms of its remit, on the ground that the members of

its Monetary Policy Committee felt (actually, took a gamble or

guessed) that a rise in the general price level as a result of the

ination of the currency would be outweighed by a fall in it as a

result of the depression, so that it still wouldnt increase by more

than 2 percent.

If there is no ination of the currency then, in a depression,

the general price level will tend to fall because paying demand

falls (due to bad business conditions and to less income from

employment) relative to supply (saturated markets following

overproduction). This is what happened throughout the 19thcentury at the time that Marx was writing and, again, in the

depression of the 1930s. In fact, one of the proposals that

brought down the 1929 Labour government in 1931 was to cut

the salaries of civil servants as well as the dole in line with falling

prices. But this was not deation in the proper sense since this

is a cut-back in the issue of the currency, such as was done in

1920 when 66 million worth of currency notes were taken out

of circulation and the general price level fell by 30 per cent.

Keynes in his The General Theory of Employment, Interest

and Moneythat came out in 1936 offering an explanation for the

depression, devoted a whole chapter to Changes in Money-

Wages. While rejecting the view of other capitalist economists

that pushing wages down was the way-out of a slump, he

accepted that in a slump real wages (what they can buy) would

go down but argued that it was better to do this by keepingmoney-wages stable while allowing the general price level to

rise (through inating the currency). As he put it:

A movement by employers to revise money-wage

bargaining downward will be much more strongly resisted than

a gradual and automatic lowering of real wages as a result of

rising prices.

If there really is a fall in the general price level that outweighs

the effects of ination, then wages, as a price (that of workers

ability to work, or labour-power), will tend to fall too. If they didnt

fall, or not as much as prices, then workers in employment would

be better off since they could buy more with their money than

before. Some commentators have mentioned falling money-

wages as a possibility, but have not dwelt on this too long.

If it does happen, then workers will have to struggle to limit

the damage, which as Keynes pointed out, they will do morestrongly than otherwise. A time of intensied class struggle can

be expected.

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January 09 bdh.indd 9 11/12/08 10:44:01


10/24


Judging by the ubiquitousmedia-generated euphoriathat greeted the Barak Obama

victory in the US presidentialelection, you could be forgiven forthinking that the class strugglehad ended in the USA. Across theglobe, the worlds media intimatedthat this was the dawn of a newage and hundreds of millions of

workers breathed a sigh of relief,

convinced President Obama will nowundo all the wrongdoing carried outby President Bush and generally

improve the quality of their livesand the safety of the planet.

The rst thing to note, however,is that this had been the mostexpensive American election so far.

The pooled cost of the Republicanand Democratic campaigns was acool $1 billion. The McCain campraised $340 million whereas theObama team secured $640 million.While Obamas team boasted that

most of their money came fromsmall $100 and $200 donors, intruth the great bulk of his nancial

support came from Wall Street andthe US corporate elite and was

way in advance of that given toJohn McCain, suggesting the UScapitalism plc feels its prots arebest protected via Obama. The USpower elite bankrolled the Obamacampaign and for no other reasonthan that they know he will have torepay their loyalty.

An estimated 64 percent of the

US electorate turned out to vote a record by all accounts - 62.3million votes. The majority of the

The hope many have in Obama to implement policies that will benet the class thatmatters is misplaced.

Obama Noreal changeObama Noreal change

January 09 bdh.indd 10 11/12/08 10:44:01


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extra voters were Blacks and Latino,not only drawn to the ballot box bythe longing to oust a reactionaryRepublican regime, or by Obamaspromise of change but, moreover,because Obama was nonwhite.Socialists could only watch on andcomment that this election was nota race issue, but a class issue andlament their selective amnesia. Onetime Secretary of State Colin Powellrose through the ranks covering upthe My Lai massacre and famouslypresented false evidence to the UNin furtherance of the US justicationfor the invasion of Iraq. Considertoo his successor Condoleezza Rice,the zealous maid-servant to Bushsimperialist strategy.

To be sure, Obama was notbreaking any mould, despite hishope-fused rhetoric. The vast

majority of voters, indeed workersthe world over, were heartily fed up

with Bushs wars, his imperialistconquests, the US disregard forinternational law and the increasingpariah status this had earnedAmerica and sincerely wanted to seethe back of it. The signs, however,that Obama was more of a wolf insheeps clothing were already there,not least in the Senate where hesanctioned every increase in fundingfor the Iraq war that George Bushrequested.

Furthermore, like Bush, Obamais a supporter of the death penalty.He is pro-pollutant nuclear andcoal industries and, whilst theGuardiancould optimistically run aheadline Obama will move to vetoBush laws (10 November), has notmentioned eradicating repressivelegislation such as the Patriot Act,homeland security, the MilitaryCommissions Act, internet control,and wiretapping and spying on theUS populace.

It certainly looks like the Bushadministrations imperial ambitions

will continue under Obama. He hasalready spoken about building up

US military power by 20,000 troopsand has declared his intention to cuttroop numbers in Iraq and transferthem to a surge in Afghanistanand indeed spread war to nucleararmed Pakistan. All of this willbe, as under Bush, carried out tofurther the interests of a prot-

hungry corporate elite and veiledin pompous patriotic oratory aboutspreading democracy and Americanvalues and ghting the war onterror. Undoubtedly, Obama willsoon be using the hackneyed themeof social unity to wage the class warinternally and abroad on behalf of asmall power elite.

He also undertaken, to isolateHamas, elected in democraticelections that were veried by aninternational team of observers and,picking up the baton from Bush,

used his rst press conferenceas president-elect to likewisecock a snook at the US NationalIntelligence Estimate and evidencepresented by the IAEA on Iransnuclear intentions, and accused Iranof the development of a nuclear

weapon and vowed to prevent thatfrom happening.

If Obama apologists think thePresident Obama will put a halt tothe blood letting they are going tobe sorely disappointed. Make nomistake; whilst the left are fond

of castigating Republicans as themasters of war, the truth is thathistorically the Democrats havestarted far more wars than theGOP. More recently, under the lastDemocrat to hold ofce, PresidentClinton, one million Iraqis are saidto have died under US enforcedsanctions, 500, 000 of themchildren. Sorties over Iraq wereown every single day Clinton wasin power. Yugoslavia was mercilesslybombed and a much neededpharmaceutical plant in Sudan wasbombed on the pretext that it wasmanufacturing Chemical weapons,and villages in Afghanistan were

attened because Bin-Laden waspresumed to be living there. And

who could forget the US invasion ofSomalia, with troops storming thebeaches live on prime time TV!

Who will make up the Obamaadministration is at the time of

writing speculation, though we do

know his Chief of Staff is Israeliarmy veteran Rahm Emanuel,popularly viewed as Likudist hawkand that his National SecurtiyAdviser will be architect of theMujahedeen Zbigniew Brzezinski.

Not only is Obama incapable ofushering in signicant change, bara few miserly reforms, but neitheris there anyone he can bring to hisadministration capable of bringingthe change that was so promisedin his election campaign for noother reason that changers do

not get conrmed by the Senate.There exist quite inuential interestgroups the AIPAC, the militarysecurity complex, Wall Street etcto hinder the advancement of suchundesirables

The hope many have in Obama toimplement policies that will benetthe class that matters is misplaced.His political rawness means he willbe manipulated by more experiencedadvisers, little different from theneo-cons, maybe even key guresfrom the Bush administration, and

pressured by a corporate elite whofunded his victory to execute policiesthat t in with their own agenda.

The outcome of US electionscarries one truth: namely that

whichever candidate becomespresident, he has but one remit oncein ofce to further the interests ofthe US corporate elite. Its just not afeasible option for any newly electedpresident to entertain any idea otherthan guaranteeing a safe playingeld for the domestic prot machineand doing whats needed to try toensure the US maintains its globalhegemonic status.JOHN BISSETT

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January 09 bdh.indd 11 11/12/08 10:44:02


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those who have seen the cultlm Zeitgeistand its sequelZeitgeist Addendum, popular

amongst conspiracy theorists andothers suspicious of governmentsand banks, will have heard recountedthe argument that banks cansomehow create money out of thin airby the stroke of a pen or, these days,by the touch of a computer keyboard.

In Zeitgeist Addendumthisargument is based on what isstated in an educational bookletpublished by the Federal ReserveBank of Chicago. Entitled ModernMoney Mechanicsit rst came out in1975 and has gone through severaleditions.

Zeitgeist Addendumbegins bydescribing how it thinks the FederalReserve Bank (the Fed) createsmoney. If, it says, the governmentwants more money then, throughthe Treasury, it creates Treasurybonds which it exchanges with theFed for currency notes of the sameface value; as the government has to

pay interest on the bonds this addsto the National Debt and so is debtmoney. Both the Treasury bondsand the currency notes have beencreated out of thin air.

This is one way of putting it butit is misleading. It is rather the otherway round in that the initiative tocreate more currency comes fromthe Federal Reserve Bank. Once ithas decided that more notes areneeded it asks the Treasury toprint them (for which the Treasurycharges). The normal way these getinto circulation is by the commercialbanks converting into currency someof the reserves they are obliged tolodge with the Fed. Modern MoneyMechanicsexplains:

Currency held in bank vaultsmay be counted as legal reserves aswell as deposits (reserve balances)in the Federal Reserve Banks. Bothare equally acceptable in satisfactionof reserve requirements. A bank canalways obtain reserve balances bysending currency to its Reserve Bank

and can obtain currency by drawingon its reserve balance (p. 4).

In any event, both the Treasuryand the Federal Reserve are partof government so we are talkingabout internal state accountingarrangements. It is, however, truethat the new currency has beencreated out of nothing. Since it isnot backed by gold and convertibleon demand into a pre-xed amountof gold, it is what in the US is calledat money, that is, money createdby a mere act of State.

Modern Money Mechanicsdoesnot in fact have much to say aboutcurrency creation but concentrateson what it calls money creation.It draws a distinction betweencurrency and money. This isexplained clearly enough on the rstpage of the booklet where moneyis dened as currency plus bankaccounts with a cheque or debit card;which is M1 in the jargon (In theremainder of this booklet, moneymeans M1).

Banks, money and thin air

An urban myth is circulating on the internet that banks have been creating money out ofthin air.

January 09 bdh.indd 12 11/12/08 10:44:02


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Congressman Ron Paul, fromTexas, a critic of fractional reservebanking and advocate of a return toa gold-backed currency, has an evenwider denition of money:

M3 is the best description ofhow quickly the Fed is creating newmoney and credit. Common sensetells us that a government central

bank creating new money out of thinair depreciates the value of eachdollar in circulation. (27 April 2006,see http://www.lewrockwell.com/paul/paul319.html).

M3 includes other types of bankdeposits and liabilities not includedin M1. In claiming that all newmoney created by the Fed depreciatesthe dollar he is overstating his case.Allthe US currency (but, as we shallsee, not bank deposits) is createdout of thin air but an increase wontlead to a depreciation of the dollar as

long as it corresponds to an increasein the amount required by theeconomy for its various transactions(paying for goods and services,settling debts, paying taxes, etc). It isonly currency issued in excess of thisthat will cause a decline in its valueand so a rise in the general pricelevel.

Everybody accepts that cash(currency, notes and coin) is money.Some might be prepared to includecash deposited in banks as well. ButModern Money Mechanicsdenitionof bank deposits is wider than this. It

doesnt mean just deposits by peopleof the money they already possessbut any account for which theholder has a cheque or debit card,i.e. including credit lines granted tothose who banks have lent money to(so enabling Zeitgeistto go on talkingabout debt money):

Checkable liabilities of banksare money. These liabilities arecustomers accounts. They increasewhen customers deposit currencyand checks and when the proceeds ofloans made by banks are credited to

borrowers accounts (p. 3, emphasisadded).

So, when it talks about moneycreation it is not talking aboutcurrency creation but mainly aboutbank deposit (in the above sense)creation.

The Federal Reserve booklet goeson to explain what fractional reservebanking involves and how it canlead to the creation of more moneyin the sense of more bank deposits.Banks, it explains, have learnedthat when cash has been depositedwith them they only need to keep

a part (a fraction) of it as cash asa reserve to deal with likely cashwithdrawals; the rest they can lend

out. What this fraction is depends onthe circumstances, but historically ithas been around 10 percent.

On the booklets denition, inmaking a loan a bank is creatingmoney as their loans will take theform of creating a new bank depositas a credit line which the borrowercan draw on as if they had made a

deposit of their own money (exceptthey will be paying interest on it). The

booklet then asks What Limits theAmount of Money Banks Can Createand answers that this depends onthe cash reserves it has decided tohold or is required by law to keep.

It is here that Modern MoneyMechanics, by suddenly shifting fromwhat an individual bank can do towhat all banks together (the bankingsystem) can, opens the way to themisinterpretation of people like Ron

Paul and the makers of the Zeitgeistlms that banks too can createmoney out of thin air. The booklet

explains that US banks are requiredby law to keep a fraction of depositsas reserves in its vaults and/or abalance with the Fed, and says:

For example, if reserves of 20percent were required, deposits couldexpand only until they were vetimes as large as reserves. Reservesof $10 million could support deposits

of $50 million (p. 4).This is a very misleading way of

putting as it could suggest that ifbanks receive total new deposits of$10 million they can immediatelyproceed to make loans of four timesthis. This is not so, and not reallywhat the booklet meant to suggest.What it means is that the banks canimmediately lend out only four-fthsof $10 million, or $8 million, andthat this circulates throughout thebanking system leading in theoryto new loans totalling in the end$40 million, bringing total bankdeposits up to $50 million.

Confusingly, the numericalexamples the booklet goes on to giveto illustrate this are based not on a20 percent reserve fraction but ona 10 percent one (which is more orless what the law in the US requiresfor the kind of bank deposits inquestion). So, to take its example, if$10,000 is deposited in the bankingsystem, initially say in one bank,that bank can make loans (createcredit line bank deposits) of $9000.When it is spent this $9000 will be

re-deposited in other banks whichcan then lend out 90 percent ofthis, or $8100; which in turn willbe re-deposited in banks, allowinga further $7290 to be lent out, andso on, until in the end and over theperiod, a total of $90,000 new loanswill have been made.

This shows how the Fed canpractise fractional reserve bankingto control the amount of money(currency plus bank deposits) inthe economy. This is done via openmarket operations as explained in asection headed Bank Deposits HowThey Expand or Contract:

Let us assume that expansionin the money stock is desired bythe Federal Reserve to achieve itspolicy objectives . . . [T]he FederalReserve System, through its tradingdesk at the Federal Reserve Bank ofNew York, buys $10,000 of Treasurybills from a dealer in US governmentsecurities. In todays world ofcomputerized nancial transactions,the Federal Reserve Bank pays forthe securities with an electroniccheck drawn on itself . . . The Federal

Reserve System has added $10,000of securities to its assets, which ithas paid for, in effect, by creatinga

Above: the Federal Reserve Bank ofChicago. Below: Ron Paul, a critic offractional reserve banking

January 09 bdh.indd 13 11/12/08 10:44:02


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fs

The present crisis has led journalists tolook for quotes from Marx. Heres another

example, this time from John Plender ofthe Financial Times (18 October):

Karl Marx was wrong about manythings, but in 1893 he provided as goodan account of todays nancial implosionas any living commentator. To the

possessor of money capital, the process of production appearsmerely as an unavoidable intermediate link, as a necessary evilfor the sake of money-making. All nations with a capitalist modeof production are therefore seized periodically by a feverishattempt to make money without the intervention of the processof production.

(http://www.ft.com/cms/s/0/b63025ca-9cad-11dd-a42e-000077b07658.html?nclick_check=1)

Plender was wrong about many things. First, Marx died in

1883 so he could not have written anything in 1893. This wasthe date that Engels published the second German edition ofVolume II ofCapital. Second, it is not even an accurate quote.The rst six words are not part of the quote, but something theperson Plender was quoting from added in square brackets tointroduce the context. Third, the last sentence about all nationswas added by Engels, as he explained in a footnote (in section4 of chapter 1).

This said, the passage brings out well that the aim ofproduction under capitalism is not really to make things thatis only incidental but to make money, more money than thosewith or controlling money-capital set out with. The source ofthe added money is the unpaid labour of those who actuallyproduce wealth, the class of wage and salary workers, but this

is obscured in nancial dealings.Marx dealt with the illusion that money can give rise to more

money without production in Volume III ofCapital. Here (chapter29) he introduced the concept of ctitious capital. There isnothing dodgy about such capital. Its something insurancecompanies have been doing for years. As Marx explained:

The formation of a ctitious capital is called capitalization.Every periodic income is capitalized by calculating it on the basisof the average rate of interest, as an income which would berealized by a capital loaned at this rate of interest. For example,if the annual income is 100 and the rate of interest 5%, thenthe 100 would represent the annual interest on 2,000, andthe 2,000 is regarded as the capital-value of the legal title ofownership on the 100 annually. For the person who buys thistitle of ownership, the annual income of 100 represents indeedthe interest on his capital invested at 5%. All connection withthe actual expansion process of capital is thus completely lost,and the conception of capital as something with automatic self-expansion properties is thereby strengthened..

Examples of this are government bonds, the price of land,and stocks and shares. Marx called these ctitious capital

because the capital sum did not really exist, only the estimatedfuture income stream did and that depended in the end onfuture production. In the case of shares, the real capital is inthe xed assets (factories, equipment, machines) and workingcapital (to buy materials, pay for energy, the wages fund) of thecapitalist rm; this capital does not exist a second time in theprices of the shares.

One thing that banks had been doing in recent years wasto increase the amount of such ctitious capital by turningmortgage repayments into bonds, securitising them in the

jargon. If, however, the future income stream is threatened orfails to materialise as has happened the ctitious capitalso created is depreciated or ceases to exist. But this does notmean that the real capital to which it corresponds has ceased toexist, only that its paper duplicate has gone to money heaven.

A reminder that the conception of capital as something withautomatic self-expansion properties is an illusion.

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liability on itself in the form of bankreserve balances (p. 6).

The bank from which theTreasury bills were purchased nowhas reserves above the 10 percentlimit and so can turn the $10,000into loans, which starts the processdescribed above rolling, leading to anextra $90,000 bank lending.

In theory the Fed could contractbank lending in the same way, butthis has never happened. So M1 hasgone up and up each year. But whatabout the currency in all this? Ittoo has gone up but passively andalmost automatically. With increasedbanking activity more currencynotes are required, which banksget by converting their reservesinto this and which, if it hasntenough notes, the Fed just asks theTreasury to print more. But this hasconsequences the depreciation of

the dollar and the rise in the generalprice level Congressman Paul doesntlike.

But has the banking system reallycreated more money? Only if youregard bank deposits as money. Ifyou dont, all that has been shownis that currency has circulated inthat the whole process depends

on the initial deposit or injectionof cash being recycled as furtherdeposits by depositors (as opposedto by banks creating a credit line).So, neither an individual bank northe whole banking system can lendmore than has been deposited withit. By the end of the process, in theexample given, the rst loan (out of

the rst deposit of $10,000) of $9000has been used and used again forgenuine deposits totalling $90,000.But all this assumes an expandingeconomy, since where is the moneyto repay the loans and the intereston them to come from without beingassured of which the banks wouldnot lend the money in the rst place?

So the banking system does notcreate money to lend out of thin airbut can only lend money depositedwith it and then only when economicconditions permit it.

Today, bank deposits are notthe only source of what the bankslend. They also borrow on the moneymarket (as has been highlighted bythe present banking crisis). Thismeans that their reserves are aneven smaller percentage of their totalloans, only about 3 percent in fact.This gure is mentioned in Zeitgeist

Addendumas if this was now thefractional reserve and that thereforebanks, or the banking system, cancreate loans of up to 33 times aninitial deposit. Another silly mistake.

If currency cranks such as themakers of the Zeitgeistlms havegot the wrong end of the stickabout fractional reserve banking

and imagine that it means banks,whether singly or all together, cancreate money or credit out of thin airthis is partly the fault of the way thatbooklets like the one produced bythe Federal Reserve Bank of Chicagotry to explain it. Of course the Feddoes not believe the thin air claim,but to refute the currency cranksit would have not only to re-iteratethat no single bank receiving anadditional deposit of $10,000 canforthwith loan out $90,000, but alsospell out that the expansion of credit

line bank deposits still depends onpeople making real deposits of theirown, unborrowed money (whetherin cash or by cheque or by banktransfer). Which would restore asense of reality and explode the myththat banks can create loans out ofthin air.ADAM BUICK

January 09 bdh.indd 14 11/12/08 10:44:03


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Todays educationsystem is presentedas preparation for acareer ignoring thepolitical conditioning italso involves.

our species is unique in

terms of the length of our childhood. Mostbelieve this to be so because of the advantages

of learning which can be passed on culturally. Inthe natural environment as opposed to the culturalhuman one, we would not progress very far if wehad to learn through personal experience how tocreate the technological world in which we live.

Vital in this process is an efcient way in whichto communicate the lessons of the past language.As a child grows it exhibits a skill for languagethat still amazes those who study and analyse theprocess. Capitalism depends on an authoritariansocial structure that seeks to justify and protect theminority who currently have social power. It is notsurprising to socialists, then, that these values are alsocommunicated within the process of the education ofthe young. Together with the more obvious forms ofcoercion: continual testing to destroy communal feelingsby presenting others as competition; enforcement ofuniformity in appearance to suppress individuality; livingby the clock to impose the illusion of the normality of lifeas a wage slave; the presentation of careers such as inthe military or banking as being acceptable rather thanlives celebrating murder or the exploitation of their fellowman there is also a far more powerful and subversiveuse of language that this article will seek to illustrate.

Before continuing this analysis we must mentionthe other type of education that exists within capitalistsocieties what, in this country are called public

schools. They possess, unsurprisingly, a very differentethos than that described above. For the children ofthe elite who are not taught at home these institutionsexist to prepare their pupils for university where theylearn the techniques needed for theCity, Westminster, Inns of Court or anyof the other institutions dedicated tothe suppression and exploitation of themajority class. That this is self-evidentto socialists but is seen as an expressionof envy and class hatred by theEstablishment and even by many membersof the working class itself is testamentto the power of education and its socialvalues (on both sides).

To the powerful, of course, a socialisteducation is political manipulationbased on propaganda. That to many

the education system isseen as preparation for acareer rather than politicalconditioning is evidence ofthe subversion of the verylanguage used to describe theworld. In an effort to presentthe current social structurethe language used presents it

as the only possible world andany alternative as either naveor dangerous fantasy. Whyelse would it be consideredreasonable to debate theexistence of a supernaturalentity that created theuniverse (God) but ridiculousto explore the possibility ofa stateless and moneylessrational society?

Speaking of money agreat way to start an analysisof the subversion of language

in this society. How many times have we heard thatmoney can give us independence and choice? Forinstance it is said that it gives us the ability to travel.Apparently we dont need the labour and talent thatproduces cars, boats, trains and planes. What need dowe have of shoes, food, clothes and maps to get to ourdestination? The idea that money can create these thingsis one of the great illusions implicit within our language.

All the coloured paper and shiny coins in the worldwill not get you across water unless someone buildsyou a boat and not just someone but hundreds andeven thousands are involved in producing the possibilityof travel. Money represents an involuntary contractthat involves an interdependence of, sometimes, globallabour the complete opposite of independence. And

how many times have you heard it said that King Henrybuilt this castle and Lord Muck built that stately home?No designers, masons, architects or carpenters wereapparently involved. For many it is money that createsour world and not the interdependent labour of us all.What is this if not a political subversion of language?

Perhaps the ultimate triumph of this kind of linguisticperversion is the contemporary view of what constitutespolitics itself. We are told that we live in a democracyin which we are free to choose what kind of society welive in. But the most important of all political decisions what the community produces is never subjected toany kind of democratic process. Instead the city brokersmerely decide which commodities will deliver the greatestor most reliable prots. In other words these decisionsare made by a tiny elite minority in the interests of aneven smaller minority. In capitalist society the onlychoice voters have is who will decide how taxes are

distributed to create and maintain the stateinfrastructure armies, police, road, rail,law, health and social security system and,of course, the education system.

Even this choice is only given to thepeople once every ve years betweentwo political parties with no importantdifferences in ideology. And this is politicaldemocracy? Apart from its obvious farcicaland unjust nature it makes politics soboring. Its not just cynicism that turns

people off from this media politics it is thatits been sucked dry of meaning and nowonly represents platitudes and repetitious

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Who controls the pastcontrols the future; whocontrols the presentcontrols the past

this was the slogan of thedreaded Thought Police inGeorge Orwells book 1984.

It is todays rulers slogan too, forthe ruling class want to perpetuatetheir dominance. This is whytheir ideologues and media have

redened socialism; to maintaina class-divided society; this is whythere are many career politiciansclaiming socialism to gain power.It is a pity that many follow themwho have a genuine sympathywith suffering and seek to remedythe disease of capitalism. But, asOscar Wilde said, the remedies donot cure the disease: they merelyprolong it, Indeed, their remediesare part of the disease (Soul ofMan under Socialism).

Technology, science and humangoodwill can solve the problems

confronting humanity but only afterremoving the restrictions of theabsurd market system.

The minority capitalist classpromote the market system asit maintains private property, bywhich they gain ownership ofwealth produced by the workingclass who actually run industryfrom top to bottom. The ownershipof this monopoly must be takenfrom the capitalist class. How? Wesuggest that the socialist majority ofsociety impose the democratically-

expressed will for commonownership on the minority

capitalist

class. Then, with common ownershipestablished, the whole edice of themarket, private property, wage labour,money, rent, capital, interest, for theyare all interdependent, is abolished.It is replaced by a rational, classless,society with free access for all to thecommon wealth of society; and realhuman progress begins.

Conscious democratic controland application of shared availableknowledge will allow the opportunityof real true freedom. The evidencethat everyone has equal power and an

equal vote in every decision taken willbe obvious within this future, statelesssociety by the removal of hunger

used as a subtle form of control undercapitalism. Within this society of freelyassociating equal individuals, everywoman, man and child will take whatgoods they need from a communalstore. This free access, this freedom, iswhat will maintain real democracy andit will be possible because money willbe non-existent and unnecessary. Ourcommon sense will tell us not to wastewhat could be shared with others; this

is what the early socialists expected.As socialists we want to participatein a progression of the globalcommunity to free humankinds realhuman potential. Give us our world,you will say. It will not be given; youmust make it. Socialists are equal butare each different. We dont acceptleaders, Thought Police or careerpoliticians, which is why we invite youto ignore leaders and Thought Policetoo. Begin to free yourself, be condent,be disobedient; think for yourself, askquestions and inquire after the case wesuggest. We have nothing to lose butour chains. We have a world to win.CB

clichs. But this is the way our rulers like it.Their media continues to produce meaninglessgarbage about political celebrities (leaders) andevil foreigners or unions, knowing that whiletheir readers are obsessed with such trivianothing will ever change. This is the primaryaim of our education system the inculcationof language without political meaning.

For over one hundred years the task of

the socialist party has been to counter thepropaganda of the status quo. Not just inideological terms but in trying to restoremeaning to political language. Even ouropponents have to admit that the meaning theygive to words like socialism, democracy, humannature, economics, history and politics itself isvery different from ours.

Although socialists grow weary of redeningthe very language of politics for every individual

new to our perspective it is quite possible that when wend we do not have to do so, then change is close. Foralthough the ruling class seek to own the language asthey own everything else, the needs of a highly technicalmeans of production necessitate a higher and moreexible education system. Their wealth may give thempower but it cannot give them intelligence or talent forthat they need us.

It may be that the days of a narrow education to t

the needs of a narrow division of labour are past. Moreof us are not able to tolerate the public school, universityexperts ponticating on politics any more. They musttake responsibility for the dire state of the world. Themajority are taking possession of knowledge and donot need politicians, priests, doctors, scientists, primeministers or any other type of leader to make politicaldecisions on our behalf.WEZ

Make

adec

ision

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17SocialistStandard January 2009 17

We continue describinghow things could be likein a socialist society,where there would be noneed for money.

1. evmBear in mind the aim here is

an excursion into the benets ofmoney totally disappearing fromour lives; for all to have access tothe necessities of life and in returnto contribute their effort for thecommon good. Havoc has beenwreaked on the environment bycorporations and others with the fullconsent of successive governmentsaround the world for the acquisitionof necessary resources but usingunnecessarily harmful methods.Peak oil and climate change areterms on everyones lips and thegeneral consensus from Joe Publicis that somethingneeds to be done and fast.

If we remove the agents for prot(corporations and governments ofthe capitalist system) and engagein honest democracy of the people,

by the people and for thepeople decisions can be madeto halt damaging practicesand implement methods of

farming, shing, mining,extraction, energy production,manufacturing etc. that dono harm to either man orenvironment. Safe working practiceswill be the norm. Resources canbe protected and used carefullywhen incentive for their rape andpillage is gone. Energy usage canbe reduced drastically in 1001ways using alternative energies,building using integral insulationand energy conservation techniques,vastly reducing transport as work

and societal practices change,stopping air freight of luxury andunnecessary goods, producing andmanufacturing locally whereverfeasible, etc.

Local communities could have thenal say on resources in their areawith the possibility that sometimesthe resource will be deemed off-limitsand so remain untouched, and ifno one is prepared to work miningor tunnelling to extract a particularresource then an alternative will needto be found. With a system of nomoney there can be no forced labour

or unacceptable workingpractices. Resourceswill be valued for whatthey are, not what pricethey can be sold for,and protection of theenvironment can be putrmly on the agenda asdemanded by the worldsmajority.

2. War and ConictEnvisaging this newly

emerging moneylessworld, it is apparent thatcooperation rather thancompetition will be the

driving force to its development andthe glue that will bind communities.Having removed the prot incentiveand made access to resources free,production will be for use only. Thereare no losers in this scenario, all areto benet from the new world order.Its just that a tiny minority mighthave difculty in coming round to seeit that way. As a consequence of thistotally different emphasis freedomof access and no monetary element

it isnt difcult to accept that militaryforces will become redundant.

Wars have always been aboutcontrol of territory for resources andare usually promoted in the nameof democracy, expansion abroad orprotection of the domestic populationfrom threat of real or manufacturedenemies but which always utilisearmies recruited from the mass ofthe population and sacrice workersin the service of the capitalistcause. Internal conicts involvinggovernment backed forces against

insurgents/freedom ghters,breakaway independence groups/terrorists when looked at rationallyare (a) about lack of rights forcertain sections of the community,groups deprived of their own self-determination; tensions deliberatelyfostered betweens sections of societyso the elites can keep control (divideand rule) and (b) only temporarilydealt with (if at all) through force.If the causes arent dealt with theeffects are sure to reappear. Dealingwith the causes, injustices, lack ofaccess, etc. needs the pawns in the

game to recognise that that is whatthey are and to join forces againstthose controlling them, putting the

Five morebenets vgm

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power of decision making into thehands of the majority and ending thereasons for future conict.

No need for ownership or use ofwar material will render a massiveservice to the environment, savingresources on a huge scale andstopping pollution of the planet fromthe harmful waste created in both

their production and deploymentbesides avoiding millions of deaths.Saving lives could become the newunarmed forces raison dtre. Bodiesof t, well-trained, well-resourced,motivated men and women availableto deal with the effects of naturaldisasters and unexpected calamitieswould be one of a number of ways todeploy the willing volunteers, a civilaction force for true humanitarianintervention.

3. M avsg

Media without money? In todayssystem we buy newspapers andmagazines, a licence to watchtelevision plus payments to aprovider for umpteen other channelsand subscribe to internet providersfor access to theworld wide web.If somethingarrives at yourhouse for free,it has beenpaid for byadvertising andadvertising

gets its moneyfrom servicesprovided tobusinesses, andbusinesses gettheir moneyfrom customersbuying theproducts and services.

Without the prot motive itwould be possible to watch alm or interesting documentaryuninterrupted by advertisementsthat always intrude at a higherlevel of decibels. Junk mail wouldbe redundant; another positive forthe environment. Ugly advertisinghoardings crowding town spaces androadsides would give way to morethoughtful and aesthetically pleasingadditions to our visual surroundings.Many talented artists would befreed up to turn their expertise inmore socially acceptable and usefuldirections. Media, in general, couldbecome what the people want, notwhat theyre told they want. Realchoice, real variety, true informationand not warped by an individual

proprietors view. This could besuch an exciting area with muchmore community involvement from

planning to production. Releasedfrom wage slavery and with theintellect free from worry aboutunemployment, housing, health careetc. etc. the capacity for individualpersonal development will expandconsiderably.

4. e

In its broadest sense educationis just that individual personaldevelopment. The most fullledindividuals are those who can reachthe end of their lives knowing theyhave spent their time exploring to thelimits the areas that most interestand motivate them. These individualsare not satised by or limited toan eight-hour day, they continuewillingly for extended hours becausethey enjoy and are motivated bywhat it is they are doing. Conversely,of the various ofcially recognised

systems of education available inthe world today none come close toencouraging youngsters to pursuetheir own individually chosen path inlife. Institutional education is abouttting young children to become

compliantteenagestudentswho canthen besteered inone of thevery limiteddirections

on offer.This iscalledchoice. Thebest timeto learnanything iswhen the

individual is motivated to do so atwhatever age. The best way to learnis usually by doing a combinationof observation and practice. Sittingat a desk in a room with 20, 30, 50or so others for several hours a dayis not conducive to good learningand not conducive to producingfree thinking adults, but it is a goodpreconditioning for adult life in amoney-oriented world which requiresboth a compliant workforce andpassive unemployed.

To hear a nine-year olds responsewhen asked what he would like todo when he leaves school, Well, Illgo and get my Giro is a shockingindictment of a system which by itsvery nature excludes many people.Whether in the examination systemor later in the work situation, a

certain percentage every year mustbe expected to fail. How humiliatingand degrading is that? But that is

how this system works; there is onlyroom for so many to achieve.

When the work situation changesso that all are contributing regularlyto the common good by the workthey perform and all are freely takingtheir daily needs from the commonstore youngsters will experiencea totally different example from

todays. Education will be embracedas offering ongoing opportunities forall to succeed in their chosen areasin societies which value all membersregardless of their so-called IQ.

5. Q lIn a world of money quality is

equated with cost. A quality itemcosts more than a shoddy or massproduced one, e.g. Rolls Royce v astandard Ford. Quality chocolatecosts the consumer more but doesntgive more to the grower. Quality is

a term used to convey superiorityand status, something better thanthe rest, better than the others.Unfortunately when coupled withtime most families have little of it andthe cost can be great. Quality of life istalked about as something desirable,to be aspired to and implies a certainlevel of income but, in fact, everyonehas a quality of life, a comparativequality which could be measuredagainst many different yardsticks.Most people would admit they arelooking for ways to improve theirown.

In order to achieve the positivechanges to be gained by thedisappearance of money, power hasto be taken away from the elitesand placed rmly in the hands ofthe people. None of the proposalsposed above could become realitywithout the will of the majority butwhat is the will of the majority, thepopular perception of the systemtoday? Active consent for the systemis generally lacking and peoplehave allowed themselves to becomeresigned to it instead of opposing it,believing that there is no alternative.Surely it is within the capacity ofthis miracle of evolution to reasonits way back from the headlongrush to condemn billions of its ownto degradation and misery, whilstdestroying its own habitat with thephilosophy that money can solveall problems? With money gonethe generally accepted meaningof quality of life can becomea reality for all to contemplateand world citizens will be free toaspire to achieving goals worthy ofhumankind.

Janet SurMan

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arecent issue of themagazine Time (14 October)highlighted the immense

prots to be made in capitalismeven in a trade recession. Needto start a war? No problem. Whilestock markets grate and nancialinstitutions (and even whole

countries, like Iceland) teeter onbankruptcy, one global industryis still drawing plenty of high-endtrades and prots: weapons.

The article reported the case ina Paris courtroom where 42 ofcialswent on trial for taking millions inkickbacks and organising huge armscommissions from the Angolangovernment during the mid-1990s.This group, which included a formerFrench Interior minister and theson of the late French PresidentMitterrand, were charged withhaving supplied almost $800 million

worth of arms to Angola, including 12helicopters, 6 naval vessels, 150,000shells and 170,000 mines.

The Angolan President JoseEduardo Dos Santos used thishuge stockpile to crush theUS-backed Unita rebels during

Angolas devastating civil war. Itis worth noting that Dos Santos isreckoned to have made millions ofdollars from the transaction and that he isstill in power with no prospect of a fraudtrial for him.

The source of this arms hardware wasthe huge stockpiles of Soviet weapons

left behind when the Soviet Unioncollapsed. The French businessmanPierre Falcone allegedly plied

Angolan ofcials with tens of millions of dollars some of it

stuffed in suitcases and deposited other sums in offshoreaccounts.

You might imagine that these shady dealings havingbeen brought to light could no longer occur, but you wouldbe dreadfully wrong. Researchers say arms trading hasboomed in the decade since the Angolagate scandal was

uncovered. Thats partly due to heightened supply. As ex-Soviet republics emerged as economic actors in their ownright, several countries developed national arms industries,retting weapons from their stocks and manufacturing newweapons of their own. These industries have taken off inrecent years. Ukraine has about 6 million light weapons fromSoviet stockpiles, and has modernised tanks, anti-aircraftmissiles and other weaponry, says Hugh Grifths, an experton illicit weapons at the Stockholm International Peace

Research Institute.It is very difcult to stop arms trafcking, because there

is no control, says Grifths, who has researched Ukrainesarsenal for the US government. Although NATO fundsUkraine to destroy its stockpiles, the Ukrainians realize howmuch money they can make by selling surplus weapons, hesays. In an action that broke no laws, the Ukrainians shippedabout 40,000 Kalashnikov ries to Kenya last year during thetense standoff following the countrys disputed presidentialelection.

As the struggle for oil and minerals intensies insidecapitalism we have rebel conict in Chad, Sudan, Congoand elsewhere. This conict needs weapons and so the armstrade legitimate or otherwise ourishes. In Africa and all overthe world capitalism reigns supreme. The basis of capitalism

is production for prot, so in its remorseless drive for prot itleads to conict, and eventually armed conict. It is the natureof the beast to maim and kill and all attempts to civilise it bysuch grandiose titled groups like the Stockholm InternationalPeace Research Institute are doomed to failure. As the expertHugh Grifths himself admits there are plenty of arms outthere - so long as you have the money to pay for it.rd

a mg s

RPGsales arerocketting

AK-47: Must-Have accessory.Price in Africa, around $200

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Book Reviews

A Basic Mistake

Basic Kropotkin Kropotkin and

the History of Anarchism. Brian

Morris. Anarchist Communist

Editions, 2008. 32 pages. 2

Russian migrprince Kropotkin,pioneeringadvocate ofanarchist-communism,is probably bestknown for hiswork MutualAid: A Factor of

Evolution. Thisshort pamphlet takes us ona eetingtour through the many strands ofAnarchism as related to his theories.

Firstly we are presented with asketch of the libertarian impulsethroughout human history; Lao Tzu,classical Greek philosopher Zenoof Citium, the Diggers and evenan Islamic sect, the Najadatam allpossessed an anarchist sensibilityand were forerunners of Anarchismproper, it is claimed. For Kropotkinit is William Godwin who rst statedthe basic principles of Anarchismin his 1793 Enquiry ConcerningPolitical Justice though he did notuse the term it was rst used by

Pierre-Joseph Proudhon.In the next chapter we meetBakunin whom, rather confusingly,we are told was at heart acommunist even though he defendeda form of private property wherethe products of labour are tradedbetween individual and thereforecompeting labour associations orfree communes.

Finally we come to Kropotkinsdispute with the mutualists, mostnotably Proudhon, Warren andTucker. Kropotkin applauded theirvigorous defence of the rights of the

individual but in defending privateproperty they opened up the way forreconstituting under the headingof defence all the functions of thestate.

The main aw of the pamphletis in Morriss failure to see thedistinction between Marxs thoughtand the Leninist concept of thevanguard party. Marx is falselylumped together with the Blanquistsof which Engels commentedBlanquis assumpti

socialist standard january 2009

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