Wednesday 9 December 2015

The Wisdom of Social Media

Half an iPhone conversation, overheard on a London bus:

‘I was thinking of getting that jacket, but didn’t like the feel of the material. Then the guy in the shop came up and tried to persuade me to buy it.

‘He claimed that Kanye West was in his shop yesterday and was getting measured up for a bespoke leather jacket.

‘What a lie! And he was stupid to tell that lie to me! I follow the Kardashians and I know full well that Kanye West wasn’t even in England yesterday!

‘I don’t like his music, but I think he looks cool.’

If only critical attention to lies and inconsistency had a different focus.

Tony Norfield, 9 December 2015

Wednesday 2 December 2015

The Dogs of War: Syria and the Middle East

International crises can have the effect of making clearer what is going on in the world. At least, that is a potential benefit, although it is one not likely to be used by those who would prefer not to see. Today, the UK political position has become clear with a large majority of 397 versus 223 members of the British Parliament being in favour of bombing Syria. This article looks at the background to why the British government is aiming to get more involved.
The most important reason behind UK Prime Minister David Cameron’s campaign to bomb Syria is that he does not want the UK to be left out of the running when a new carve up of the region occurs. That means bombs, and bombs mean prizes![1] Cameron’s rationale is that this is an attack on IS/ISIS/ISIL/Daesh to ‘protect the UK’, because the UK cannot allow its ‘defence’ to be left up to ‘other countries’. Further, Cameron raises the rhetorical question of what will the UK’s other allies think of the UK if it cannot come to the aid of its ally, France, when France has asked for assistance. For example, what about Britain’s allies in the Gulf, including Saudi Arabia, on which many commercial and financial deals depend? The key issue for the British state is that game changing political moves in the Middle East involving Syria and Iraq should not take place without Britain properly being in the game. All those networking opportunities and deals that could be done – but only if you are recognised as a player.
This underlying rationale is cloaked in implausible arguments about defending national security against IS, ignoring, as usual, that the UK has on innumerable occasions trampled on the security of others around the world. Just to mention the Middle East, how about recalling when the Royal Air Force bombed Iraqis in the early 1920s, both to repress revolts and to encourage them to pay their taxes, let alone the bombing of Iraq and Libya in more recent years?
A big problem for all the major powers is that the ‘country’ boundaries that they had drawn, especially in the Middle East, but also in Africa and elsewhere, have no legitimacy. All countries or nations are political inventions that depend for their stability on some form of political agreement, or acquiescence, among the population that exists within its boundaries. This ‘national’ set up can be quite fragile, even in what might look like established states, such as Belgium, Spain and Italy. Most strikingly, even the three-century old political deal between England and Scotland was questioned by Scotland’s independence referendum. How much more fragile are the lines in the sand drawn by external powers in the oppressed countries of the Middle East less than a century ago. Even more damaging was the way in which colonial powers often established reactionary regimes that had little popular support and depended upon the colonist’s military force – a specialisation of the Brits. This often underpinned a repressive society, one that was both defended by the ‘democratic’ imperialist powers and one that liberal critics from these powers would criticise as being backward and reactionary, while ignoring their own country’s role in the proceedings. All this prevented a legitimate political power developing within the ‘national’ borders.
The focus of most attention in the news media these days is on IS. Something this group of brutal, militant jihadis would not want to recognise is that western powers have given backing to Sunni-based regimes in a number of countries, particularly those in which much of the population is not Sunni. Neither would it want to recognise that the key opposition to western rule in these countries has been from secular nationalists – ones whom they have often opposed on religious grounds, while being in the pay of the major powers! However, the main problem IS causes for the major powers today is that it does not accept the national barrier between Syria and Iraq. Some historical examples show that they have a point. The existing national lines are not, as one might say, ‘God given’.
Before 1918, much of what we now call the Middle East was part of the Ottoman Empire, run by Turkey. It was mainly organised on a regional level, with the main objective being to have a local administration that would pay duties and taxes into the centre, Istanbul. These regions were often multi-ethnic and multi-religious. The largely Sunni Moslem ruling centre had no significant prejudice or discrimination against Christians, Jews or other versions of Islam, as long as they paid their taxes and did not cause trouble for the Empire.
After the First World War in 1918, and even before it ended, the UK and France planned to carve up between themselves Turkey’s colonies in the Middle East. A key deal between the two countries, subsequently modified in favour of the British, was the infamous Sykes-Picot Agreement in 1916. This was the deal over which Lawrence ‘of Arabia’, the British intelligence officer fighting with the Arabs against the Turks, had his pangs of conscience about betraying Arab nationalists. Not worrying too much about this problem, however, was the British Prime Minister of the time, the Liberal Herbert Asquith. He said ‘if … we were to leave the other nations to scramble for Turkey [ie its wider empire] without taking anything for ourselves, we should not be doing our duty’.[2]
In this context, the UK took over and invented the modern boundaries of Iraq in the early 1920s, out of an area that, more or less, had been called Mesopotamia by classical scholars. By 1926, Britain had edged out France and added the Mosul region (now called the Nineveh Province) to the new Iraq, which was under its domination, after large potential oil resources were discovered there. Britain had far less interest in Syria. It had already manoeuvred to get the Palestine Mandate from the League of Nations, so having access to Eastern Mediterranean coastal ports and a means to protect the hinterland to the Suez Canal. Basically, the British left the Syrian region to French imperialism, which also allowed France’s division of Syrian and Lebanese territory. Arab nationalism’s plans post-1918 for a ‘Greater Syria’, incorporating most of the previous areas, were then stymied. As part of the new arrangements, in 1921 Britain made Faisal, a capable but trusted collaborator, the King of Iraq, as long as he dropped his previous claims to rule Syria. Britain had a dominant role in Iraq for decades afterwards.
The UK also invented the country now called Jordan in the early 1920s. Initially called ‘Transjordania’, it was made up from part of the area awarded to the British with the League of Nations’ Palestine Mandate. This area was a place in which they could place their Hashemite stooge, Abdullah, the incompetent older brother of Faisal, and keep him out of trouble (especially trouble with Saudi Arabia). Their rationale was mainly to have a military base in a strategic area and with a compliant country ruler, although that meant subsidising him more than they had bargained for.
As is often forgotten these days, there had been several attempts to construct Arab unity in the Middle East region, even after the challenges to the Ottoman Empire during and immediately after World War One. These were often undermined by internal rivalries between different governments, the most recent being the United Arab Republic of Egypt and Syria, in 1958-61.
A big problem in all this also comes for Israel, the least legitimate state of all in the region, one that is based not on imperial line drawing after 1918, but in 1948, and also upon the theft of land beyond these artificial borders. Of course, Zionists like to claim that Palestine is theirs, ‘a land with no people, for a people with no land’. But while Palestine was not previously a ‘nation’, being part of the Ottoman Empire, the racist, absurdly ethnic definition of being a Jew common to the Zionist outlook, something that dates from 19th century European racism, can still less invent its own ‘nation’ in this area, one that its aggression extends to ever wider borders. When boundary lines are being redrawn by IS, or being pushed back by the major powers, can the undisturbed extension (even ‘internally’) of Israel’s borders continue? No wonder the voluble Israeli government has kept relatively quiet on this issue!
The US role in the Middle East is paramount, but clearly not in anything that can be considered to be ‘control’. Russia has been a relatively new element, also militarily involved, with its aim being to support Syria, where it maintains a seaport, and also to prevent itself from being enclosed by the ever-expanding NATO forces surrounding its borders. Problematic for the US, this has undermined the influence of the supposedly overwhelming power of the US military, although the US will attempt to push Russia to agree to its aim of regime change in Syria. France, like Russia, having been attacked by IS, but having lost much influence in Syria, wants to re-establish an interest there, and determinedly bombs Syria to exact revenge. Its efforts nevertheless kill many civilians and Hollande’s firepower only highlights how fragile is his own domestic political support.
As for the UK, the government pretends that there is a pliable 70,000 group of rebels to oust Syria’s Assad. It may even give them almost ‘democratic’ credentials, but the main thing is that they will bend, at least a bit, to British interests. After all, showing British flexibility, British official flags were set at half-mast for the death of that other great leader, Saudi King Abdullah in January 2015, as a sign of the lucrative defence, commercial and financial deals with the right kind of regime.
Jeremy Corbyn, leader of the Labour Party, is in a more tricky position. He has had a consistent view that he is against the UK military bombing of Syria, although he also thinks that it would be OK if the United Nations legitimised such an imperial policy. He considered that the decision to go to war was a ‘most serious, solemn decision’, but then refused to exert any leadership discipline over his MPs votes, with no threat of sanction if they disagreed with him. I cannot say I was surprised, since he has found it possible to belong to the pro-imperialist Labour Party for more than three decades. The farce here is that a Labour MP voting for the Conservatives austerity measures would have faced party sanctions, whereas, if an MP votes to bomb Syria, that is a matter of conscience.

Tony Norfield, 2 December 2015

(note: some later rephrasing of  text, 6 Jan 2016)

[1] I am too polite to mention that Dave’s first foray into military matters, teaming up with French President Sarkozy to encourage US and ‘allied’ intervention in Libya, has not turned out that well.
[2] This and some other details are taken from an informative and well-written work by John Keay, Sowing the Wind: The Seeds of Conflict in the Middle East, John Murray: London, 2003.

Saturday 14 November 2015

Developing Marxist Theory

In some recent events, I have given my views on world developments and heard what others have had to say. One theme of these was Marxist theory, and here I sum up my views on how to develop it.
Marx was a genius in many respects, not least in the way that he had a clear perspective on the dynamics of the capitalist economic system from the earliest stages of its industrial development. So why is it that some key elements of his theory are still being debated or disputed, or sometimes expounded as if read from a holy book? Surely, this is a little odd, more than 120-150 years after the theory was first set out. Was Marx such an astonishing genius that his ideas cannot be fully understood even today? Considering why this has been the case also leads to my perspective on what should be done next.
Marx’s theory shows how social labour, ie the work that people do as part of their social cooperation to survive, takes a peculiar form under capitalism. This peculiar form – where workers are employed by capitalists to produce commodities for the market – obscures the underlying relationships. For example, it will appear that there can be a ‘fair wage’ for work done at the same time that the worker also provides the employing capitalist with a profit. Where does the profit come from? Mainstream economics does not recognise that it comes from the surplus labour workers perform. While surplus labour is evident under social systems such as slavery or feudalism, under capitalism the riches of those running the system are supposed to come from the magical powers of ownership and the ‘entrepreneurial spirit’. Such beliefs persist, despite the fact that many capitalists also gain their extravagant revenues these days from government spending.
The previous points would probably find agreement among almost all those who have studied the basic elements of Marx’s theory. But most soon fall into a ditch when other issues are raised. In particular, there is chronic misunderstanding of the structure of Marx’s arguments in the three volumes of Capital. I confess to finding this depressing, rather than amusing. Despite the clear, readable exposition of Marx’s approach in Roman Rosdolsky’s The Making of Marx’s Capital, published more than three decades ago, the result of the subsequent decades of much ‘Marxist’ writing can be more accurately described as cacophony rather than it having achieved much clarity or having made much progress.
However, there is a more fundamental problem, not simply a failure to get to grips with the theory. The problem is that an understanding the world does not easily develop in the absence of an active political debate, where questions are raised and demand to be answered, with consequences that follow from what has been said. Marx, Engels and Lenin developed their theories in such political turmoil, which provided them with fertile ground on which to build their outlook on the world. Today, the opponents of capitalism still have its destruction and disasters to provide raw material for their views. But, in the rich countries at least, they must also find a way through the quicksand left by widespread illusions in the potentially progressive character of the capitalist state. This dates back to the late 19th century, and was attacked by Marx in his 1875, unfortunately semi-private, Critique of the Gotha Programme. Such illusions have been given more substance from the welfare systems established in the post-1945 period.
Even though a deep crisis is now dismantling these forms of political cohesion in richer countries, most radicals today respond by arguing for a return to the status quo ante, not by explaining that the game is up. Consider the following examples of Marxist cognitive dissonance.
A longstanding one in Britain has been where many self-described ‘revolutionaries’ would argue to vote for the Labour Party as the least bad alternative in an election (better than the Conservatives), despite Labour’s consistent role as a supporter of British imperialism. (For those less familiar with this history, Labour’s pro-imperial strategy is part of a more general national-welfarist outlook, one that is to be paid for, as far as possible, by other countries) Not surprisingly, this trend has been strengthened with the elevation of Jeremy Corbyn as the Labour leader-saviour for gullible dissidents.
Another is how many of those who would claim to adhere to a Marxist perspective, for example on the trend fall in the rate of profit resulting from capital accumulation, see no problem in also advocating the nationalisation of banks. A demand to nationalise banks is not a challenge to the power of the capitalist state; it endorses illusions in that state as the potential saviour of the national economy and the mass of people. Nevertheless, they see no problem with this because they too believe that the capitalist state can be used in this way – given the right amount of popular pressure, of course. Surely, there are some problems here for anyone who wants to build a revolutionary movement, based on the power of the working class and opposed to the national state?
Probably worst of all, however, is the fact that most radicals ignore the division of the world between rich and poor, oppressed and oppressor, as outlined by Lenin. This is the major difference in political perspective between Lenin and Marx. But Lenin’s view reflects the development of capitalism into imperialism and this rightly contradicts Marx and Engels’s optimism expressed in the earlier, 1848 Communist Manifesto slogan: ‘Workers of the world unite!’. Lenin did not work out the point fully, but the logical conclusion is something that has been borne out by decades of disappointment: the mass of the populace in most of the richer countries is politically tied to their own state and not in the least interested in a revolution. This goes well beyond the narrow, unconvincing notion that such a political outlook is the fault of a ‘labour aristocracy’.
My view on the development of Marxist theory is quite simple: develop it! Analyse the way that the world works today and expose the exploitation and oppression that hides behind what is otherwise seen as the abstract, natural workings of the market. Analyse the forms taken by capitalist rule in the imperialist world economy today. This is the way to develop Marx’s ‘law of value’. Observation and experience have convinced me that while disputes on the so-called ‘transformation problem’ and the falling rate of profit, etc, cannot be completely ignored, there is nothing to be gained from prolonged debates on these issues with those who have every incentive not to learn. Not to push the cynical boat out too far, there is a lot of truth in the old saying that it is not possible to convince people of something when their salaries depend upon them not understanding it.
At this weak stage of development, I also think that there is little point in spending a lot of time honing the finer points of Marxist theory with those who are roughly along the correct lines, although that does not preclude my willingness to share views and engage with interesting ideas. If this somehow comes across as the position of a philistine who does not want to learn, then I would point readers both to the many articles on this blog and to my being awarded a PhD last year.
In recent years, I have paid particular attention to analysing the global financial system. This is at the forefront of popular misunderstanding, and a particular feature of the pro-imperialist reform initiatives from those who want to save the capitalist/imperialist system. Many, of course, will not admit that this is their underlying objective, or that it is an outcome with which they would be quite comfortable.

Tony Norfield, 14 November 2015

Friday 6 November 2015

Poppy Militarism

Wear a poppy to commemorate what? Along with other facts of imperial history that are known by some, but never mentioned without risking censure from popular opinion, is that the cult of poppy wearing began with a militaristic poem from World War One.

Here is the poem by a Canadian soldier, John McRae, in 1915, once the carnage of war had begun to be evident, but before it had become an embarrassment to the major powers:

"In Flanders fields the poppies blow
Between the crosses, row on row,
That mark our place; and in the sky
The larks, still bravely singing, fly
Scarce heard amid the guns below.

We are the Dead. Short days ago
We lived, felt dawn, saw sunset glow,
Loved and were loved, and now we lie
In Flanders fields.

Take up our quarrel with the foe:
To you from failing hands we throw
The torch; be yours to hold it high.
If ye break faith with us who die
We shall not sleep, though poppies grow
In Flanders fields."

Wearing a poppy does not represent sympathy with the victims of war, and opposing the political forces that brought it about. As the poem makes clear, the idea is to 'take up our quarrel with the foe' (while we lay buried in the mud, underneath the poppies) and not to 'break faith with us who die'. It is an affirmation of national militarism.

British politics is unashamedly militarist. It celebrates the processions of dead soldiers from Britain's imperial adventures in Royal Wootton Basset, and casts into tabloid hell those who do not do the right thing on Remembrance Day. This outlook is also seen in the widely-observed convention that not wearing a poppy when appearing on TV, especially as a news reader or commentator, shows a disgraceful lack of empathy with national ideals, above all a lack of patriotism (which is even worse).

After reading this, if you still wear a poppy then consider yourself eliminated from my October Revolution greetings card list.

Tony Norfield, 6 November 2015

Friday 30 October 2015

'The Old is Dying and the New Cannot Be Born: States, Strategies, Socialisms'

The journal Historical Materialism is holding its twelfth annual conference, The Old is Dying and the New Cannot Be Born, in central London on Thursday 5 to Sunday 8 November 2015.

The venue is the School of Oriental and African Studies, the Russell Square Campus, Thornhaugh Street, London, WC1H 0XG. Further details regarding the conference, accommodation, etc, are found here.

The conference covers a wide range of topics, with 14 sessions over the 4 days, each with up to 12 different discussions, plus three plenary sessions.

For those interested, I will be presenting in a talk on 'Facets of Imperialism'; other speakers are Ella Wind and Zeno Leoni. My presentation is entitled 'Shifting Tectonic Plates: the West and the Rest'. It will focus particularly on recent changes in the world economy and the greater prominence of China.

The 'Facets of Imperialism' talk is scheduled for Friday 6 November, from 14.15 - 16.00. The room is yet to be confirmed.

Tony Norfield, 30 October 2015

Tuesday 27 October 2015

A Modest Proposal for Solving the Tax Credit Crisis

In the interests of stimulating debate on a matter of national importance to Britain, my advisers have suggested that a private communication with our esteemed Chancellor, Gideon Oliver Osborne, should now be made public.
Dear Chancellor,
One can only share your perturbation at the decision of the House of Lords to reject your plan to remove from the pockets of the poor a large share of their income. However, your ingenious scheme to lower their state subsidies and so to encourage them to work harder has unfortunately overlooked something. I must say that I was surprised by this omission. The very essence of your policy is to improve the lot of ‘hard working families’. But, despite the aforesaid objective, you have failed to see that it contains within its own title the solution to the problem at hand, namely how to save £4.5 billion from the public purse.
To make my opinion plain, I wholeheartedly agree that such a saving will help right the ship of state in the world’s stormy seas. Nevertheless, the point I must raise is that not all members of such families are actually ‘hard working’ and will not become so within the current parliamentary term, despite your proposed measures. I do not propose myself as a paragon of virtue in the respect of being hard working, since my real estate advisers inform me that my property assets have been working harder than I have in recent years to earn an honest income. However, I must point out how much more indolent, even than your humble servant, are those members of families that do not work at all for their daily bread! Of course, the most flagrant examples I must bring to your attention are those called ‘children’.
It is well known that these creatures can wreak havoc in neat and tidy homes; they eat and drink – but often cannot use a WC; they are foolish in their conversation and prone to believing in ridiculous absurdities such as ‘fairness’ and ‘sharing’;[1] they are calculated to cost the country many times what you have attempted to save in your tax credit policy, simply in the costs of their schooling and medical care! How can this evident fact have been ignored by your policy proposals?
Such a damaging, debilitating burden of children on the country must be removed! Doubtless, this will be seen as a too-radical policy measure, since not all have begun to see the advantages of dogs to overcome their isolation. Many seem to favour these unreasonably more expensive ‘human’ animals. But that is where a strong, clear-headed policy maker can win the day and lead the nation!
May the Good Lord help you to see a way out of your impasse, and I humbly submit to you my considered thoughts on this matter.
With all joy deserved, and wishing you an exquisite Poll-tax moment,

Yours sincerely,
Jonathan Swift[2]

[1] One would have thought that the lesson that there is no such thing as society would have penetrated even their undeveloped brains!
[2] For those who do not get the reference, see

Sunday 25 October 2015

Bank Nationalisation?

Nationalising banks might look like a good idea, especially if you think that private sector banks caused the worldwide economic crisis and that state ownership would eliminate the risk of it happening again. It would look even more attractive if you think that popular pressure on the state doing the nationalising would make sure that, in future, banks, or important parts of the financial system, would then benefit the national economy. This article explains why this view not only misunderstands what is really at stake but how it is a ‘reform’ proposal that can only endorse the capitalist system of power and control.
I do not claim that this proposal is at the forefront of most people’s minds, but it does come up in discussions and was also raised in questions on a lecture I gave at the Institute of Contemporary Arts on 6 October. Given time limitations, I preferred to respond to other questions from the audience in the Q&A session at the ICA and left to one side the question of calling for bank nationalisation. It would have taken more than a minute or two to respond adequately because it raises a number of different points. In the following paragraphs I will set out the key issues. Later this week, I will cover these points, and many others, in another lecture on the crisis (29 October, at the Marx Memorial Library, 37a Clerkenwell Green, London EC1R 0DU, 7pm).
Two views underpin the ‘nationalise banks’ proposal. First is the notion that there is a national economy that can be managed in a progressive way. Second is the idea that the capitalist state can be forced to do it by popular pressure.
Proponents of nationalisation are aware that, in the wake of the crisis, many capitalist governments have already put some institutions into state ownership, even in the home of liberal financial regulation, the US and the UK. In the US, this was called putting important financial companies into ‘conservatorship’ to avoid the politically charged term. In the UK, the term ‘nationalisation’ was also avoided, and the government made a special effort for the largest affected banks, RBS and Lloyds, to keep a portion of their shares in private hands. However, not embarrassed by the capitalist state having upstaged their demands, proponents of nationalisation would argue that the state could have forced these banks, and others, to redirect their lending policies to boost domestic industry, investment, employment and the economy in general.
A belief in the benefits of nationalisation is more than simply naïve. It reflects the view that the capitalist state is like a weapon that can be taken from the hands of the capitalists and used against them in favour of the mass of people. So the state, with its laws, institutions, multi-layered backing and means of applying influence and force can be redirected in a progressive way, rather than remaining a capitalist machine churning out policies that reflect capitalist class power. Proponents of such a view avoid the key distinction between taking power away from the capitalist class and advocating reform policies within a framework that keeps the capitalist class in place. This is why, when reform proposals fail – when they are rejected by capitalist markets as unworkable – the reforms are junked and the reformers are either kicked out of office or capitulate to the demands of the market. Worse than this, such a political stance always has the logic of demanding that the state do something for the mass of people. It is not a demand for social resources to be put into things that people need and organising people to do this. It is a plaintive call for the capitalist state to deliver on its ‘obligations’, ones that it does not have except in the imaginations of the reformers.
Then there is the question of the role of finance and banks in the capitalist system. What is called a ‘financial crisis’ is the outward expression of a more serious and fundamental problem. Recent decades have seen a boom in financial transactions, new ‘financial instruments’ such as derivatives, and massive loans and debts worldwide. Especially in the 2001-2007 period, these helped boost global demand, output, employment and ‘prosperity’, especially in richer countries. However, these things ran well beyond the production of value and profit in the world economy. The bubble then burst when US mortgage defaults hit financial markets. The impact was so big because these financial markets had become inflated worldwide. Essentially, this boiled down to a problem of capitalist profit versus the huge level of debt and the ability to pay off this debt, or not – with the problem then of taking the losses. The following chart from a recent report from the Bank for International Settlements illustrates that the debt problems have not gone away, and were even worse at end-2014 compared to the size of the global economy than in 2007.
Core Debt in Non-Financial Sectors, % GDP 

All this has not that much to do with banks. Yes, banks played a part in the process of credit creation and financial excess. Yes, the banks were bailed out with ‘taxpayers’ money’. Yes, most people would prefer to see senior bankers in jail or under a bus, rather than retiring on huge pensions. But financial power in the modern world is not confined to banks, and is certainly not constrained within national boundaries.
Financial securities are issued by and traded by banks, but the securities are mainly issued on behalf of the many industrial and commercial companies that are otherwise seen as the good guys versus the ‘bad bankers’. As Marxist theory shows, and as common sense would endorse, value is created by productive workers. From this value, profits are derived, and commercial capitalists and financiers share in these profits. They are all directly concerned with and benefit from the exploitation of workers. Furthermore, the major capitalist corporations operate internationally, backed by their states, and the ones from the powerful countries can use their financial leverage, though mergers with and acquisitions of other companies, to increase their economic power in the world market. This also has little to do with banks: all kinds of financial and non-financial company are involved in this process. One study showed, using data for 2007, that just 50 companies, largely based in the major powers, controlled through cross-shareholdings around 40% of the equity in a total of 43,000 international companies based in 116 countries. Most of these 50 were financial companies, but they were mainly asset managers and insurance companies, only a minority were banks.
In the light of this reality, the idea that nationalising banks will rectify the national capitalist economy is ludicrous. It is an idea based on a nationally-oriented social democratic delusion, one that soon becomes political support for the national state to protect the domestic economy against the ‘unfair’ policies of other countries. Recently in the UK, the loss of steel industry jobs due to a decline in the world market has led to demands from across the political spectrum that the British government take action against cheaper imports of Chinese steel. This makes a defence of jobs and livelihoods dependent upon state action to oppose another country, rather than showing how the job losses result from an outmoded, dysfunctional capitalist system of production. Worse still, it encourages the natural opposition that workers have to bearing the consequences of capitalism to become a demand for the state to defend the national version of capitalism against other national versions. In the UK case, it is all the more naïve when the policy of the British government is to expand deals with China, both to finance energy and other infrastructure projects that local capitalists will not do and to open up financial transactions with one of the few expanding areas of the world economy as a means of boosting British imperialism’s revenues.
To conclude, I should add that I am not, in principle, opposed to taking control of the banking system. But the precondition is first to have a progressive, anti-capitalist force taking political power to make this work, also known as making a revolution. That is something British radicals do not want to mention because its probability shrinks under the weight of a very long experience. The irony is that even with such political power and control, the issue of ‘nationalisation’ does not necessarily arise. For example, the Bank of England was nationalised in 1946, but that has made no difference to its operations as a supporting institution of British imperial power. The European Central Bank is also owned by its respective national governments, but has hardly been progressive in its policies. More importantly, since when has nationalisation been a sign of a socialist outlook, except in the capitalist state-oriented outlook of the British Labour Party and the delusions of its radical supporters?

Tony Norfield, 25 October 2015

Thursday 8 October 2015

Origins of the UK Welfare State

The golden age of the British Labour Party was the 1945-51 Labour government. So it is worth noting some little known aspects of its policies to cast some light on the political background to the modern day resurgence of ‘Corbynism’. Highlights of this administration in British popular consciousness are the introduction of the welfare state, establishing the NHS and a pension system. While there were economic problems in spending on welfare, since the UK was essentially bankrupt in 1945, the Labour government rose to the challenge. How did they do this? By using British imperial power!
One of the 1945-51 Labour government’s priorities was to maintain Britain’s imperial role. For good measure, this also included re-establishing French and Dutch colonial power in Asia, as a sign that the status quo ante could be revived in Burma, Malaya, Vietnam, Indonesia, etc. Using colonial Indian troops and Japanese troops to bring this about highlighted British politicians’ pragmatism and flair. Who else would have come up with the idea of defeating anti-colonial nationalists with soldiers both from a colony and from a recently defeated imperialist power? A stroke of imperial genius![1]
Although these events might seem to be an unfortunate foreign policy to liberal souls, having nothing to do with progressive social policies at home, in fact the two things were closely linked. Just look at how the new welfare state was financed.
Britain’s finances in 1945 depended upon foreign loans in 1945 amounting to £2,100m, or a massive 20% of GDP (note that £1 used to be worth something in those days). Of this sum, £1,100m was from the US. It was not exactly enthusiastic about Labour’s spending plans, but it was happy that the Brits were playing a necessary role worldwide in suppressing ‘communism’. For example, apart from the colonial efforts, think of Britain’s role in the defeat of Greek radicals and establishing a military dictatorship after 1945. So, history will record that the US played a role in funding the setting up of the UK welfare state! Another £250m was from Canada, which was both politically close to the UK and had done well out of the Second World War. Significantly, Britain’s colonies ‘lent’ £750m through the financial mechanism of the Sterling Area that gave them no choice but to do so. These were borrowings by Britain whose international value was reduced when sterling’s exchange rate against the US dollar fell in later years.[2]
After 1945, the welfare system quickly became unaffordable on the basis of Britain’s economy, especially when Labour increased defence spending during the Korean War. Apart from charges for prescriptions of medicines, something that led to ructions in Labour’s ranks and the resignation from government of Labour saint Aneurin Bevan in 1951, it also led to several years of rationing goods even more stringently than during the war. Above all, it prompted ever more nefarious plans to milk the colonies for economic resources in addition to the previous Sterling Area financial rip offs. Details on the former are set out in my article on this blog, 'Labour's Colonial Policy', 7 December 2014.
That is some of the historical background to typical Labour ‘progressive, alternative’ policies. It is based on using Britain’s privileged position in the world economy to deliver benefits to the British populace, completely consistent with Britain’s imperial role and nothing that could be described as a socialist view of policy in the world economy, far less anything that is anti-capitalist.
Jeremy Corbyn may know the history, in which case being a longstanding, proud member of the Labour Party raises a few questions. If he does not know the history, then it would reflect the more widespread arrogance, all appearances to the contrary in his case, of assuming that the rest of the world owes the Brits a living.

Tony Norfield, 8 October 2015

[1] I am not making this up. See Christopher Bayley and Tim Harper’s book, Forgotten Wars: the End of Britain’s Asian Empire, Allen Lane, London, 2007.
[2] There are few studies of these embarrassing (for Labour loyalists) events. One accessible source, written from a pro-capitalist market, although strikingly critical, perspective, is Edmund Dell, A Strange Eventful History: Democratic Socialism in Britain, Harper Collins, London, 1999, especially Chapter 7.

Thursday 24 September 2015

October Events

This is an advertisement for two events in the next few weeks, and some shameless self-promotion. Both talks are held in London.

Tuesday, 6 October, 6.30-8pm

Venue: The Institute of Contemporary Arts, The Mall, London SW1Y 5AH

Topic: The Future of the Global Economy

Speakers: James Meadway, Mary Robertson, Tony Norfield

Admission fee: £10 (£7 for ICA members)

This is the first session in a series run by Verso Books, entitled, 'Radical Thinkers: Crisis Economics'. See their advertisement here.

I will be discussing financial aspects of the crisis.

Thursday, 29 October, 7pm

Venue: The Marx Memorial Library, 37a Clerkenwell Green, London EC1R 0DU

Topic: The Current Capitalist Crisis

Speaker: Tony Norfield

I believe there is no admission fee, but you may be asked for a donation to the Library.

See the MML advertisment here.

(Incidentally, the Library is open as a reference library from 12 noon to 4pm Monday-Friday)

Hope to see those interested at one or both events! (My talks will overlap a little, but cover different things)

Tony Norfield, 24 September 2015

Thursday 27 August 2015

Women and Society

Societies must reproduce themselves year after year, or they would cease to exist. They do this not simply by producing enough food, shelter, clothing, etc, for people to survive. Just as importantly, there are particular relationships between the members of that society determining how things are produced. [1] Slave owners might force slaves to do all the work on pain of death. A class of landlords might extract payments of rent from the tenants working on their land. Capitalist employers will offer jobs to those whose work will make them a profit. But could there also be something more fundamental than this division of society into classes? Could it be that, despite the many ways in which societies develop, there is always the same group of people that come off worse, no matter to which economic class they might belong?
This, basically, is the stance taken by much feminist literature that identifies men as being the problem for women. In this view, men have a privileged position in all kinds of society and use that position to oppress women, either by force or by making sure that legal and other forms of discrimination keep women ‘in their place’. Many examples back this view, and they appear all the stronger as convincing evidence because only some have changed very much over history. These include denying women the right to vote in elections, to own property, to have the right to end a marriage or to get the same kinds of job as men for equal pay, or where social rules are invented that allow women less freedom than men. For example, still today in personal relationships, the socially ‘correct’ procedure is usually one where the man makes advances to the woman and invites her on a date, or proposes marriage.
What might account for this? Evidence shows that, on average, men are stronger and bigger than women. This might appear to back the idea of there being an innate male ability to use force against weaker women since time immemorial. Hunting for food and overpowering large animals is important in primitive societies. Yet, it should not be ignored that this is usually done in a social way by many hunters, even if they are men, who cooperate to capture the prey. It is not a wrestling match between a beefy hunter and a wild animal. Physical strength might be a key issue in hand-to-hand combat in a war, but even then it is a question of what weapons are at the disposal of the warring parties. Weapons are produced in a social division of labour, and do not occur naturally in the hands of the male fighter. In a deadly confrontation, most people would prefer to be a weakling with a gun than a muscle-bound fighter with a big fist. Still less are these physical differences between men and women an issue in everyday life now. How much physical strength is required to order groceries online or to type on a keypad?
Nevertheless, for the past several thousand years, the form taken by social organisation has meant that women have usually been in a subordinate position to men. This fact can make it seem valid to place the responsibility for women’s oppression at the hands of men, as it would not seem to be determined by a particular kind of society. However, that would be to miss out some important historical facts, ones that show how women in earlier forms of society were not subordinate to men.
1. The basis of social equality and inequality
Historical evidence shows that the social subordination of women has not always been the case. Even with no such evidence, on reflection it is not clear why it would be true. Just consider that the key to the maintenance of society depends upon there being children of adults – or else the social system dies out – and that women are the ones who bear the children. This makes one question why women would have been subordinate in all history. In primitive societies, where economic life was organised around kinship groups of people, not families as we know them today, this meant that women played a huge part in running society. The role of caring for, educating and socialising infants was specifically a woman’s task, following on from childbirth. It was obviously a fundamental feature of social reproduction. Often, in primitive society women had an equal, even higher status compared to men. While the identity of a child’s father was unclear, or at least not certain until recent DNA testing, it was obvious who the child’s mother was. Descent could only be reckoned in the female line, from mother to mother, and matrilineal custom prevailed in early societies.
A sign of this is seen in the belief system of ancient Greece, 2000-3000 years ago. This system included many female gods. Even though Zeus, a male, was the king of the gods, the females did not just include Aphrodite, the goddess of love. Artemis was a hunter goddess and Athena was the goddess of everything from wisdom and courage to law, mathematics, war strategy and the arts. Notably, one of the most important surviving relics of ancient Greece is the Parthenon, dedicated to the goddess Athena, and after whom Athens is named. This suggests that women had a significant social role in ancient society, although the evidence from the Greece of Socrates, Plato, Aristotle and Archimedes is that this social role had by their time already been undermined by the domination of males. As Engels put it in his book, Origin of the Family:
‘In the heroic age a Greek woman is, indeed, more respected than in the [later] period of civilization, but to her husband she is after all nothing but the mother of his legitimate children and heirs, his chief housekeeper and the supervisor of his female slaves, whom he can and does take as concubines if he so fancies’.
Between the time of the primitive societies in which women had an equal, even higher, status than men and that of the ‘heroic’ age of the Greeks, something had happened to change the social status of women. There was a shift away from more communal relations between groups of people, ones that included group marriage. In the place of such communal relationships, there was a shift towards monogamy, a single pairing of a woman and man, but one in which the male was dominant, and in which he also had more sexual freedom. The key factor prompting this major social development was the growth of private property at the expense of the resources available to the social group as a whole.
In the earlier forms of society, there were few resources available in excess of those needed to survive, and communal relationships between people, in economic as well as personal terms, tended to dominate. But as the productivity of agricultural production rose, and as surplus products came to be traded between different groups of people, this formed the basis upon which property also came to be owned by some individuals and groups more than others. Slowly, over centuries, and at a different pace in different areas of the world, individual property became a more important factor in social organisation, and class divisions developed within society.
If there was a move away from communal property, why was the focus on the man as the individual who owned private property and not the woman? The reason was that the surplus of resources that became this property arose outside of the domestic sphere that was the realm of the woman. So, from being at the heart of the community and society, the woman’s domestic role made her relatively isolated from the accumulation of wealth. Men had more direct command of tools and agricultural output, from crops to cattle, and more access to markets in which to sell these products. This led to a diminution of women’s social status, and, eventually, also to monogamy.
As Engels puts it: monogamy ‘was the first form of the family to be based, not on natural, but on economic conditions – on the victory of private property over primitive, natural communal property’. The institution of monogamy had nothing whatever to do with a man and woman wanting to raise children on their own. It had everything to do with the man being in control and having superior social rights, as made clear from the ability of the man to have affairs, etc, something which in the case of the woman was liable to be met with punishment. Monogamy as a social institution came about essentially as the ‘marriage version’ of the ownership of and control over property.
Some later forms of society were not as harsh on women as the classical Greek one. Furthermore, because relationships between people will always vary according to circumstance, there is no strict model that is followed by all societies at a particular stage of economic development. Even a society with a male-dominated monogamy can be more or less restrictive for women. Solid evidence about the social relations between men and women also gets patchier the further back in history one goes. Nevertheless, the historical evidence available to make inferences about these relationships backs up these points, especially the information about legal systems relating to property rights.
Another important point is that the property aspects of marriage and monogamy were of far more concern to the upper, richer strata of society. These strata had wealth to pass on to their offspring, while ordinary people had little or no wealth, and, for them, passing on small items of property to descendants would have been a very minor concern. But as social productivity developed to allow a surplus of goods well beyond what was needed simply to subsist, this was also the basis for a class society. The economically richer, more powerful minority of families had the means to control the labour of, or to buy the products from, the majority. Over time, these groups became a class of people ruling over all society, and the social system they put in place, along with laws and rules for morality, applied to everyone.
Women’s social status has been subordinate to that of men for a very long time, but not for all time, nor in all kinds of society. In his book, Origin of the Family, Engels gives examples up to as late as the 11th century in which there was far more freedom for women in pairing forms of marriage in Wales – and in which women could even divorce men on the grounds of bad breath! – than there was in much of the rest of Europe. What drove the subordination of women was the way that all developed societies eventually adapted to the growth of the economy, especially in commerce and commodity exchange. This occurred at the expense, in terms of social importance, of the social realm that women occupied.
2. Women and capitalism
Capitalism as a form of social production has existed for around three hundred years, developing initially in Europe and then throughout the world. Capitalism is a peculiar form of society, one that depends upon a division between workers, who own no means of producing what they need by themselves, and capitalists, to whom workers must sell their ability to work on the market. Capitalists are the owners of the means of production, and they will employ workers if they can profit from what they have produced. This is a different form of social production from earlier ones. It is not slavery, in which slaves are actually owned by the slave owners. It is not feudalism, where serfs must work part of the week for their landlord and hope to produce what they need to live by working for the remainder. In these pre-capitalist societies, despite the class distinctions, there was nevertheless usually some obligation of the rich to the poor, as much as there was one of the poor to work for the rich.
For example, the feudal lord had a duty to protect his tenants and manage disputes between them. In return, the tenants were usually under obligation to support the lord in any military campaign. Despite outrageous things like the droit de seigneur, which meant that the feudal lord had the right to have sex with a peasant bride on her wedding night, this did not prevent feudalism lasting for five or six hundred years in Europe. After feudalism, which ended in Europe around 1500, came the beginnings of a more commercial society, and also the beginnings of capitalism. This was a form of society where economic dealings between people, groups and countries were much more based upon market exchange, although that overlapped very much with earlier forms, depending upon the degree of economic development in each area. The big social change that signified the beginnings of capitalism was where a worker’s ability to work was also sold on the market. Workers became ‘independent’ wage labourers, often by being driven from the land, as with the enclosures in England, especially from the 1600s. Of course, this meant that workers also had a problem if they were not able to find work with an employer in the market. A ‘free’ labour market also meant the worker was free to starve.
What does this all mean for women’s position in society today? Engels makes important points on this question, stressing how the role of women changed as society developed economically:
‘In the old communistic household, which comprised many couples and their children, the task entrusted to the women of managing the household was as much a public and socially necessary industry as the procuring of food by the men. With the patriarchal family, and still more with the single monogamous family, a change came. Household management lost its public character. It no longer concerned society. It became a private service; the wife became the head servant, excluded from all participation in social production.’
This change in the status of women predated capitalism, and so it cannot be blamed upon capitalism alone. But within capitalism the subordination of women takes a new form. The new form of capitalist organisation of society meant that while some things became worse for women, others improved. For a working class woman, the downside remained that she was the person in the family who had most responsibility for looking after children and maintaining the household. The upside, given by the growth of industrial capitalism from the 19th century, was that she could again take part in social production, could earn a living and be a part of the broader society. The latter positive aspects nevertheless had, and still have, many negative features.
Female workers have consistently been paid less than their male counterparts for the same work. Partly, this was based upon the capitalist employer calculating that working women needed less of a wage on which to live since they were likely to be married to a man who also earned a wage that would support a household or family. It was also based upon the actions of established (male) workers’ trade unions that collaborated with employers to keep such wage differentials in place – a disgraceful anti-working class activity from the very institutions supposedly defending the working class. For example, during the First and Second World Wars, when principally men in the UK had been ‘called up’ to fight, women were introduced into the factories as much-needed labour. But the women were dismissed again, with unions often driving this move, once the war was over and were replaced by men.
Even in recent decades, when there have been laws to prevent discrimination and for equal pay for equal work, the social factors that determine employment usually mean that far fewer women than men get the better paying jobs. With a woman’s role being signified by capitalism, as in earlier societies, as being one where they have the principal, or full, responsibility for looking after the family, and where this role is considered to be outside what capitalist society will take into account, this remains the basic problem for women in society today. Even when a woman is not married and has no children, and so has none of these burdens, she is defined and valued according to social type. Something that is as basic and necessary for any society as looking after children lies outside what capitalist society is prepared to allow for, and so is an economic disadvantage for all women in this kind of social organisation. It is only the so-called ‘superwomen’ of the privileged sections of the middle class who can gain highly paid jobs and successfully ‘juggle’ the responsibilities of work and childcare, usually helped by poorly paid female housekeepers, nannies and childminders taking on the domestic burden for them (and their husbands/partners).
3. Gender, class and society
By developing society’s ability to produce more things in a given time with less effort, capitalism appears to offer economic freedom. Historically, capitalism has been the form of society that has most increased productivity, so that the necessaries of life, and much more, can be afforded in richer countries by anyone with a job. But this has been a very uneven development. Not only because of rich capitalist countries’ plunder of weaker societies, with slavery, colonialism and later forms of domination, but also because of the contradictions that exist even within the richer countries, including unemployment and poverty, and, of more specific interest for this article, the oppression of women.
Domestic work remains outside the social sphere of capitalist production and it is a private matter, even if some people are able to buy things, or buy help from other people, to do it. Household appliances, bought by most families, from washing machines to vacuum cleaners, also help to reduce the burden of domestic work. This burden, and the related responsibility of bringing up children, nevertheless almost exclusively remains that of women. It continues to affect the position of women in the capitalist jobs market, even if it has sometimes given them some ‘advantages’ over men in getting a job because they are more favoured by employers as cheaper forms of labour. The result is that social differences based upon gender are overlaid onto class relations between workers and employers in capitalist society.
As Engels put it: ‘The emancipation of woman will only be possible when woman can take part in production on a large, social scale, and domestic work no longer claims anything but an insignificant amount of her time’. This, however, cannot occur within capitalist society based upon production for the market, because the domestic sphere of work lies outside the capitalist labour market and employers have no reason to take this important sphere of social activity into account. They are concerned only with their profits, and this will also have a major impact on the policies of any capitalist government. Only a form of society where all kinds of activity that are socially useful are valued, and given resources so that they can function, will lead to the emancipation of women. That will not happen under capitalism, where market production is the way in which the owners of society’s productive resources determine what will make them a profit and what will not.
4. Feminism or a theory of society
The term feminist indicates someone who supports women’s rights, but it is lacking in many respects. To understand the social forces that oppress half of humanity in particular, and humanity in general, including males, means that one has to go further than feminism. The dysfunctional capitalist social system ruins everyone, including men – even including those who benefit from that system, although they would be the last to admit it, and would fight violently to keep it in place (actually, they would provide money for others to fight violently for them).
Gender, sexuality, disability, etc, are all forms of potential and actual social discrimination, in addition to the disadvantages that might come from someone’s economic position in society. But an upper class woman or homosexual, or a black capitalist, or a rich, disabled person will have better life chances than a poor, white, able-bodied, working class man. People are unequal in many ways. I am taller, stronger and faster than some, shorter, weaker and slower than others. I know more or fewer languages, and I am better or worse in playing a musical instrument, swimming or calculating, or even in finding my way out of a revolving door. But the thing that would probably make me better than most other people – no matter how stupid or incompetent I may be – is if I belong to a superior economic class. Just ask George W Bush. This argues against focusing on the way that society may ‘identify’ different groups of people, and instead to look at where people actually stand in the economic hierarchy. That is what really determines their circumstances.
The oppression of women under capitalism goes beyond that of working class women alone. But all these ways of restricting rights and opportunities are still based upon capitalism, its social mores and its form of economic regulation. Fighting for the rights of women under capitalism means fighting against capitalism. Any effective action to improve the position of women must be taken in the clear knowledge that this will also challenge the economics of this moribund system. Real opposition to women’s oppression does not start by taking into account what the capitalist system can afford to concede. The starting point is what society, not what capitalism, needs.

Tony Norfield, 27 August 2015

[1] This article is based partly upon the 1884 book by Friedrich Engels, Origin of the Family, Private Property and the State, available here. It is also based upon other readings and observation of contemporary capitalism. My aim is to clarify some important points about how the role of women in society has been determined, and what this implies for women today.

Wednesday 26 August 2015

British Media

For those who wonder how the BBC and the rest of the British news media work, the Jimmy Savile sexual abuse scandal provided interesting examples of double dealing and cover up (see here and here). More telling for my purposes is how there is a systematic sidelining or downplaying of any information that is unwelcome to the political establishment. For example, this accounts for the way that Israel's aggression in Palestine is treated. There is ‘balance’ in the news reporting where an agitated Palestinian spokesman is given a few seconds to protest an Israeli crime, while a smooth Israeli diplomat is given ample time to distort the truth. This is predictable, but what nevertheless may be surprising is how the system works without any overt command from on high. With very few exceptions, the news media just ‘do the right thing’, whether it is reporting on Ukraine, Russia, Syria, what is going on with ISIS, or anything else that might be important for British political strategy.

Although the details have changed since George Orwell wrote the following paragraph in 1945,* his summary of the basic mechanism still looks apt:

“Unpopular ideas can be silenced, and inconvenient facts kept dark, without the need for any official ban. Anyone who has lived long in a foreign country will know of instances of sensational items of news – things which on their own merits would get the big headlines – being kept right out of the British press, not because the Government intervened but because of a general tacit agreement that ‘it wouldn’t do’ to mention that particular fact. So far as the daily newspapers go, this is easy to understand. The British press is extremely centralised, and most of it is owned by wealthy men who have every motive to be dishonest on certain important topics. But the same kind of veiled censorship also operates in books and periodicals, as well as in plays, films and radio. At any given moment there is an orthodoxy, a body of ideas which it is assumed that all right-thinking people will accept without question. It is not exactly forbidden to say this, that or the other, but it is ‘not done’ to say it, just as in mid-Victorian times it was ‘not done’ to mention trousers in the presence of a lady. Anyone who challenges the prevailing orthodoxy finds himself silenced with surprising effectiveness. A genuinely unfashionable opinion is almost never given a fair hearing, either in the popular press or in the highbrow periodicals.”

Ironically, here Orwell was complaining about his difficulty in getting his attack on the Soviet Union in Animal Farm accepted by publishers in the last year or so of the Second World War. Once imperial priorities had changed a little later, both that book, published in 1945, and his 1984 would form an important part of anti-communist propaganda.

Tony Norfield, 26 August 2015

* The quotation is taken from a Preface to George Orwell's Animal Farm. It did not get published in 1945, or in (many) later editions, and was first published in 1972 in The Times Literary Supplement.

Saturday 25 July 2015

Labour ‘Leadership’ and British Politics

The British media is focused on Jeremy Corbyn, the radical outsider who, according to opinion polls, might win the Labour Party’s leadership vote. That vote is in about seven weeks’ time, so don’t hold your breath. But it is worth making some comments on what this reveals about British politics.
Most of the Labour leadership contenders make Ed Miliband look like a charismatic guru who could inspire followers to walk over burning coals and not feel a thing. By comparison, Corbyn is an exception, at least in having a personality and some political beliefs. I would only point out that his political beliefs have not prevented him from remaining a Labour Party Member of Parliament for more than thirty years. Just consider what that means. So many years and so many crimes, either committed by, or supported by, the party to which you belong. Was the Labour Government’s interventions in Afghanistan and Iraq weird anomalies – against which a critical voice could build an effective opposition? Or would history judge instead that Labour has always supported British imperialism’s interests and that dissident voices reflected naivety at best?
However, Corbyn’s dissident beliefs on Iraq and Palestine, among other things, are not the basis of his support, either in his London constituency or among ordinary Labour party members in this leadership contest. Instead, that support comes from his anti-austerity stance. Yet while his inner-City constituency might support Corbyn’s position on opposing cuts in welfare payments, the rest of the UK does not. Against his stance, one has to consider why the other Labour leadership contenders basically support the Conservative government on the need to slash welfare payments, something summed up by the recommendation of Harriet Harman, acting Labour leader, to abstain in the recent Parliamentary vote on welfare cuts. The Conservative government’s proposals reflected not just a Conservative prejudice, but also a view that they would go down well with their supporters and others. Recall that, in the May 2015 UK general election, close to 50% of the British electorate voted either for the Conservatives (36.9%) or for UKIP (12.6%).
This is the substance of the horror expressed in the news media, by Tony Blair and others who are shocked by Corbyn’s rise to prominence in the polls. A vote for Corbyn as Labour leader will make Labour even more unelectable! It is not a question of his anti-New Labour beard, or even his opinion that the government should discuss with Hamas and Hezbollah. The key point is that he has failed to reflect in his political stance the fundamental conservatism of the British electorate.
It will take an eruption some years in the making even to begin to alter the scene. Perhaps that will come when this Conservative government eventually encounters its own ‘Poll Tax’ moment, a wall that Thatcher hit after believing that British politics was at her command. But, at close to the peak of her power, even she could not make her favourite adviser, Alan Walters, like Caligula’s horse, a consul and instead lost Nigel Lawson, her once-feted Chancellor. This miscreant group of slimeballs has less ability. It is full of low-grade chancers, not least Boris ‘water cannon’ Johnson, so it could unwittingly contrive to generate protest from the UK populace. However, personally, I do not bet on that eventuality making any real difference.

Tony Norfield, 25 July 2015
(some small amendments to the text on 31 July)

Tuesday 7 July 2015

Imperial Hypocrisy and Greek Debt Data

The recent Greek referendum 'No' to its creditors' plans was welcome, even unique in recent history, as a sign of some serious resistance to being crushed by the exigencies of capitalism. Yet, the referendum has changed nothing because the Greek economy remains at the mercy of the creditors, especially its euro-based creditors. It is worth looking back at some points on the history on this, which will shift attention from the intransigence of German politicians like Merkel and Schauble to the double dealing of the French.

The question of writing off some of the obviously unsustainable debts was first raised back in 2010, when Greece's problems first exploded into view as the debt was over 130% of its GDP. Then, a certain Dominique Strauss-Kahn, the hereditary European who was chosen as the head of the IMF, and also a key French politico, was against a debt 'restructuring' (ie write off). No doubt citing fundamental IMF principles and the laws of God, or Mammon, Monsieur DSK was no doubt also mindful of the fact that a large proportion of Greek debt was held by French banks. In March 2010, French banks were holding the biggest pile of dung. Out of €134 billion worth of European bank claims on Greece, French banks had €52 billion, one and a half times as much as Germany.

In 2010, Greece was given further IMF and other loans, amounting to €110 billion. This was not because Greece did not have enough debt already, but because this was a way of paying off liabilities to the European banks, among other things, and making the new debt a liability of the Greek state to official creditors, who would have more power in forcing eventual repayments. One study estimates that:

"Whereas in March 2010 about 40% of total European lending to Greece was via French banks, today only 0.6% is. Governments have filled the breach, but not in proportion to their banks’ exposure in 2010. Rather, it is in proportion to their paid-up capital at the ECB – which in France’s case is only 20%.

"In consequence, France has actually managed to reduce its total Greek exposure – sovereign and bank – by €8 billion, as seen in the main figure above.  In contrast, Italy, which had virtually no exposure to Greece in 2010 now has a massive one: €39 billion.  Total German exposure is up by a similar amount – €35 billion.  Spain has also seen its exposure rocket from nearly nothing in 2009 to €25 billion today.

"In short, France has managed to use the Greek bailout to offload €8 billion in junk debt onto its neighbors and burden them with tens of billions more in debt they could have avoided had Greece simply been allowed to default in 2010.  The upshot is that Italy and Spain are much closer to financial crisis today than they should be."

This was not a full escape for private creditors, since they (including non-Europeans) were also pressured to write off roughly half of their 'assets' - around €100 billion - in a 2012 restructuring of Greek sovereign debts. But in 2012 this had become more manageable, since there had been some economic recovery and also much more intervention by central banks to prop up the financial system.

The sticking point for Greece's creditors remains writing off official debt. Now the IMF, led by Christine Lagarde, another French politico - who once smiled sweetly at Yanis Varoufakis, perhaps expecting the compliance that her position demands - is able to negotiate with a lower exposure of the French banks and the French state. Her aim now is essentially to put the burden of the creditors' setbacks onto eurozone members in general, especially Germany. Previously, the (French) banks, as the main original creditors, would have been in the front line for write offs.

In this context, there is another neat, hypocritical manoeuvre by French president François Hollande, who now wants to act as the supporter of a deal for Greece. France has long positioned itself as the saviour of southern Europe, hoping politically to build up a counterweight to Germany's supporters in any euro-based vote. As long as France can manage to put the economic burden of its political decisions onto some other country, then it will continue to do so.

Tony Norfield, 7 July 2015

PS: The authors of the debt analysis cited above also note that Greece has an unusually large amount of defence spending compared to other NATO countries of more than 2% of GDP. Why Greece needs this, apart from idiotic nationalism believing that Turkey will invade at any moment, is a mystery, but is another dysfunctional feature of the economically unviable Greek state.

Sunday 28 June 2015

Greek Lessons

Here are some points to consider when sorting through the news stories about Greece.

The media coverage is naturally focused on day-to-day events. However, the key point to understand is that, long before the crisis broke in 2010-11, the Greek economy was unviable. It had for many years been dependent on grants from the EU, extensive credits and low interest rates. Before the 2008 worldwide financial implosion, these boosted Greek living standards. Post-2008, there was the reckoning, starting with much higher borrowing costs.

What had characterised Greece both before and after 2008 was a low level of tax revenues compared to state spending, but this was only another way in which its fundamental economic weakness was expressed. Greece had little to offer apart from shipping and tourism. But tourism had become more uncompetitive, while shipping was 'offshore', paying little tax. Along with other weak, usually southern European states, such as Portugal and Spain, but also Italy, Greece had found its competitive position undermined with the rise of cheap labour countries in Asia.

In 2010-11, the EU 'solution' was to lumber the Greek state with more debt so that it could pay off private bank creditors, mainly German and French banks. This was to avoid a reckoning in terms of writing off debts that could not be paid by adding to the debt pile which was now held to be held mainly by the Greek government. The political logic at that point was that the European banking system could not withstand taking more write offs when it was so weak, and the legions of policy-making geniuses had not yet managed to work out anything else.

A debt write off -  effectively 100bn euros or so - was then organised in 2012. Private creditors took a hit in a 'debt swap', being forced to restructure their 'assets' into loans at greatly subsidised interest rates. However, by that time, the Greek economy had collapsed under austerity measures imposed by creditors, so nothing improved and the ratio of debt to GDP continued to soar.

There followed a never-ending story of Greek-EU negotiations and subterfuge. By 2013, Syriza managed to convince itself, or at least had the political platform, that a much better deal was possible, both staying in the euro system and getting an end to austerity policies. After forming a government in January 2015, it did next to nothing to challenge the Greek oligarchs or deliver a reality check to the Greek middle class, its social base, and instead postured against Germany, the main creditor country, and annoyed all of its creditors. But, with their Ukraine policy falling apart, and with their policies in the Middle East and North Africa in a shambles, leading to many thousands of refugees trying to escape to Europe, the creditors had other things on their minds apart from endless meetings with recalcitrant Greek debtors.

So far, the Greek government has not yet defaulted on other official (government/IMF) creditors. But the European Central Bank (ECB) has extended many tens of billions of loans to the Greek government and given Greek banks another almost 100bn in emergency liquidity via the Greek central bank. On Tuesday there is also a Greek government payment due to the IMF, a default on which does not happen for a country that is meant to be one of the insider's club, yet there appear to be no funds to pay it.

The ECB may have today (Sunday) issued the coup de grace that the euro system is not otherwise able to deliver by refusing to increase its liquidity provision to Greek banks. So there will be a banking system closure in Greece on Monday, with no sign of when banks will be able to open again.

There is no legal mechanism for being kicked out of the euro, nor for a member leaving it, as far as I am aware. If anything, a euro member leaving might well threaten its membership of the wider EU. Yet, the ECB can stop doing business with one of its constituent parts, namely the Greek central bank. By stopping further funding of Greek's imploding banking system, the ECB, if it continues, will preside over the collapse of Greece's economy, forcing an exit from the euro system.

There are many economic details in dispute regarding the EU/IMF/ECB conditions to be agreed with Greece, but the creditor position at present is that the debtors have walked away from negotiations, so there is no more to discuss. One interesting angle is the question of taxes. Syriza's offer was to push the burden of adjustment onto corporate taxes rather than spending cuts, given that the latter would be focused on pensions, etc. Apart from any normal, reactionary bias in creditor demands, the inability of the Greek government to collect taxes must have been a factor in rejecting this alternative programme.

What happens in the next few days will signal again how far the 'independent' ECB is independent of the need to abide by its formerly sacrosanct rules in order to keep the euro political-economic system intact. A Greek exit from the euro is believed by many politicians to be less of a problem than it would have been in 2010-11. That is probably true, but it will nevertheless be a serious blow. One aim of Europe's bumbling ruling classes may have been to crush Syriza in order to undermine oppositional movements, such as Podemos in Spain. However, by showing that there is an exit door for euro members, even if it leads a lift shaft, this also shows that other countries may be pushed into it.

More broadly, the destruction of the Greek economy is a sign of what awaits other, previously privileged, countries that cannot make the grade in today's rapacious and imperialist world economy. If there is a lesson in the Syriza episode it is that a middle class-led movement that tries to restore the status quo ante inevitably fails.

Tony Norfield, 28 June 2015

Note: One of the first articles on this blog, 'Origins of the Greek Crisis', 24 June 2011, covered the background to recent events.

Friday 12 June 2015

Making Things Does Not Make You Smile

A pervasive economic euphemism is the 'value chain'. This neatly glides over what is meant by 'value' and simply notes, as far as statistics allow, how much each part of the initial development, production and marketing of the overall cycle takes of the final selling price of the good that is sold. The overwhelming lesson is this: to use fashionable parlance, absolutely the worst thing you could do, OMG, is to produce anything! How could you be so dumb? LOL!

What you need to do instead is to get poorly paid underlings to produce the goods. Then, assuming that you have any business sense, you take your cut from the branding, design or marketing of what the underlings have sweated over. If this simple lesson of modern international capitalist economics has escaped you, then let me present the 'Smiling Curve of Stan Shih', the founder of Acer, Taiwan's main IT company, as reproduced in an 8 June UNCTAD report:

As Mr Shih illustrates, if you want to add 'value', forget about manufacturing, ie actually making the product. I have not read the original document, but it probably does no more than note a material fact of his experience, rather than explain that the world economy is dominated by major monopolies and other companies that can use their market power to decide who benefits from the labour of humanity, and who works on behalf of whom.

The curve may be smiling, but billions of workers are not. Just consider: an idea, concept and brand design that cannot be marketed because nobody made it. This does not seem to cross the mind of those who draw the curves, even if their lines reflect imperial reality

Tony Norfield, 12 June 2015

Wednesday 10 June 2015

History and Change

Modern humans originated some 200,000 years ago. Agricultural society began a little over 10,000 years ago, and brought the first forms of civilisation. Capitalism as a form of organising social production began some 300 years ago, but many people see capitalism as the ultimate, unchangeable form of society, even though it has been such a small portion of human existence. If today we consider that, because we have lived our whole lives under capitalism, this would continue forever, that would be equivalent to believing, from humanity’s social standpoint, that the last eleven days in the past year would also continue forever. By contrast, history shows that things change. Not necessarily as quickly, although John Reed’s book, Ten Days that Shook the World, on the Russian revolution, indicates that it could even be less.[1]
Tony Norfield, 10 June 2015

[1] The calculation has been changed from when this text was originally posted in order to make the point more clearly. Note that 300 years of capitalism divided by 10,000+ years of all forms of human civilisation is 3% at most.