SPGB Meeting Friday 10 May on Zoom

 

Friday 10 May 19.30 (GMT + 1)

*WHAT IS POLITICS?*

*Guest speaker: Darren Poynton*

 

To join the meeting click https://zoom.us/j/7421974305

 

Socialist Sonnet No. 147

Cross Purposes

 

Polling stations are closed, ballot boxes

Collected, votes totalled, winners declared.

Capitalism has again been spared

Serious challenge as suffrage locks us

Once more into the status quo. The cross

Has been the mark of illiterates,

Also the spot where buried treasure waits

To be revealed. Votes are precious because

Potentially they could well change the way

The world is now to what it could become,

Fashioned for the benefit of all, not just some.

That’ll be a red-letter election day,

When all the old parties of left and right

Are voted down as the workers unite.

 

D. A.

Land of the free? Not under capitalism bud.

 

The Guardian, 3 May, reports that ,‘More than 2,000 pro-Palestinian protesters arrested across US campuses.’

https://www.theguardian.com/us-news/article/2024/may/02/university-protests-arrests-ucla-dartmouth

The Guardian, 29 April, reports that, pressure is being applied to the International Criminal Court not to press war crime charges against Israel.
The USA is particularly opposed to this the ICC proceeding with this.

‘US diplomats at the UN insisted that Washington regarded the ICC as independent and it would not be interfering in its decision-making process. The US and Israel do not recognise the jurisdiction of the ICC, which is vested with the task of prosecuting war crimes.

According to a report on the Axios news website, Netanyahu has appealed to Biden to intervene to stop the warrants being issued. The US is not a member of the court, but under the Trump administration it sanctioned court officials after complaining about its investigations of US military operations in Afghanistan and Israeli actions in the occupied Palestinian territories.

Asked about the prospect of ICC warrants, the White House spokesperson, Karine Jeanne-Pierre, said: “We’ve been really clear about the ICC investigation. We don’t support it; we don’t believe that they have the jurisdiction.”

US politicians spoke out, with the Republican speaker of the House of Representatives, Mike Johnson, saying: “Such a lawless action by the ICC would directly undermine US national security interests. If unchallenged by the Biden administration, the ICC could create and assume unprecedented power to issue arrest warrants against American political leaders, American diplomats, and American military personnel, thereby endangering our country’s sovereign authority.”

Democratic senator John Fetterman warned: “It would be a fatal blow to the judicial and moral standing of ICC to pursue this path against Israel.” He said he was calling on Joe Biden to intervene as part of the administration’s ongoing commitment to Israel.’

https://www.theguardian.com/law/2024/apr/29/icc-possible-war-crimes-charges-israel-hamas-g7

Other news outlets are describing the American’s attitude of one of menacing bullying with the threat of retaliation by the USA if such charges are brought forth.

The Axios site headlines the story, ‘Congress threatens ICC over Israeli arrest warrants.’

https://www.axios.com/2024/04/29/icc-congress-netanyahu-israel-gaza

The Socialist Party is opposed to global capitalism and does not favour any capitalist nationalists over any other. The Socialist party deplores and condemns armed conflict wherever in the world it occurs because members of working class are always te ones to suffer the most from capitalists power struggles for competitive advantages. American capitalism has a long history of using its power to quash both internal and external opposition to the interests of its ruling elites.

That individuals possess the social conscience to oppose such grievous abuses of power is to be applauded. However, until the majority recognise that it is capitalism that is inherently responsible for such abuses against humankind and will continue to do until it is replaced by socialism is the lesson that needs to be learned most quickly.

Capitalism remains in power; for now.

SOYMB posted, 5 May: 

Following the mayoral and local elections,

capitalism remains in power!

https://socialismoryourmoneyback.blogspot.com/2024/05/flash-point-1.html

To use a social media idiom, this makes a Socialist respond SMH.

Wasn't it Einstein who said something about insanity repeating the same actions over and over and expecting a different result every time?

The Socialist Party will continue to educate those who mistakenly believe that capitalism provides the best of all possible worlds.

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

Marx: the Man and his Work Part Two

From the Socialist Standard November 1973

Marx and the 1st International

Marx associated himself with working-class organizations although they were not Socialist in character. In his day as today, very few workers had a Socialist policy.

The International Workingmen’s Association (the First International) was founded at a meeting in St. Martin’s Hall, London, on 28th September 1864. It was not the work of one individual, and it was not “a small body with a large head”. It was neither “an insignificant shadow” nor “a terrible menace”, as it was described by various sections of the press of the period. The First International was a transitional form of the working-class struggle for better conditions, and it was as necessary as it was transitional.

In the capitalist mode of production, an embodied contradiction both produces and destroys modern states. It intensifies all national antagonisms to the utmost and at the same time it creates all nations in its own image. So long as the capitalist mode of production exists these contradictions are insoluble, and therefore the brotherhood of man about which we have heard from the apologists for capitalism has had no existence. While large-scale industry preaches freedom and peace between nations, it also has turned the world into an armed camp as never before in history. However, with the disappearance of capitalist production its contradiction will vanish also.

Early in the history of the working-class movement a tendency towards internationalism made itself felt. This is a vital condition for the very existence of the workers’ struggle for emancipation. The workers possess no magic wand in this respect any more than in any other — there is no level and easy path. The modern working class has to fight its battles under conditions created by historical development. It cannot overcome these conditions by any short cut but can triumph over them only by understanding, in the sense that to understand is to overcome.

This understanding was made more difficult owing to the circumstances of Marx’s time. The beginnings of the working-class movement coincided with, crossed and recrossed, the beginnings of a number of national states which were founded as a result of the capitalist mode of production. By drawing lessons from the struggles of the different sections of the International with their capitalist governments, Marx hoped to win various groups to his point of view and mould them into an international Socialist party. On the General Council of the International, and at its international conferences, he worked hard to realize his hopes.

Marx’s chief rôle in the First International began after it was organized. He soon became the guiding spirit of it. To him fell the task of presenting the inaugural address. It must be admitted that this address contained many compromises and concessions. Marx himself in a letter to Engels, dated 4th November 1864, in which he deals with the formation of the International, states:

  I was obliged to insert two phrases about “duty” and “right” into the Preamble to the Statutes, ditto “truth, morality and justice”, but these are placed in such a way that they can do no harm.

The address opens by recording the fact that in the years from 1848 to 1864 the poverty of the working class did not diminish, although this period had been one of unparalleled industrial development and commercial growth. It proves its point by comparing the statistics published in the official Blue Book concerning the poverty of the English working class with the official figures used by the Chancellor of the Exchequer, Mr. Gladstone, in a Budget speech to show “the intoxicating augmentation of wealth and power” which had taken place in the same period but had been “entirely confined to the classes of property”. The address exposed this contradiction of English conditions because England was the leading country of European trade and industry, but it pointed out that similar conditions existed on a somewhat smaller scale in, making allowances for local differences, all the continental countries where large-scale industry was beginning to develop.

All over the world this “intoxicating augmentation of wealth and power” was “entirely confined to the classes of property”, with the one exception perhaps that a small section of the workers as in England were receiving somewhat higher wages, though even this improvement was cancelled out by the general increase in prices.

   Everywhere the great mass of the working class sank into ever deeper misery to the same extent as the upper class rose in the social scale. In all the countries of Europe it is now an irrefutable fact, undeniable for every unprejudiced enquirer and denied only by those who have an interest in awakening deceptive hopes in others, that neither the perfection of machinery nor the application of science to industry and agriculture, neither the resources and artifices of communication, neither the conquests of new markets nor free trade, or all these things combined can succeed in abolishing the misery of the working class, and that on the contrary, every new development of the creative power of labour is calculated on the false bases of existing conditions to intensify the social antagonisms and aggravate the social conflict. During this intoxicating period economic progress, starvation raised itself almost to the level of a social institution in the capital of the British Empire. The period is characterised in the annals of history by accelerated return, the extended compass and the deadly effects of the social pest known as industrial and commercial crises.

The address then went on to look at the defeat of the working-class movement in 1850, and came to the conclusion that this period had its compensating characteristics. Two facts were stressed, first of all the legal enactment of the ten-hour day with its effects on the English working class. The struggle for the legal limitation of the working day had been a direct intervention in the conflict between the blind forces of the law of supply and demand, which summed up capitalist-class political economy, and production regulated by social welfare as represented by the working class.

  And therefore the Ten-Hour Bill was not only a great practical success, but also a victory of a principle; for the first time the political economy of the bourgeoisie was defeated by the political economy of the working class.

After a reference to the co-operative movement of the period, and the revival of the working-class movements in England, France, Germany and Italy and their efforts to reorganize politically, the address continues:

  They possess an element of success — numbers. But numbers are weighty in the scales only when they are united in an organization and led towards a conscious aim.

Past experience had shown that to ignore the fraternity which should exist between the workers of different countries and spur them on to stand together in all the struggles for their emancipation, always resulted in a general failure of all their unrelated efforts. This consideration had moved the meeting in St. Martin’s Hall to found the International Workingmen’s Association. The address concluded with the words: “Workers of the world, unite!”

The provisional rules, for which Marx was responsible, may be summed up as follows. The emancipation of the working class must be the work of the working class itself. The struggle for the emancipation of the working class is not a struggle for the establishment of new class privileges, but the abolition of class rule altogether. The economic subjection of the worker to those who have appropriated the tools of labour, i.e. the source of life, results in servitude in all its forms: social misery, intellectual atrophy and political dependence. The economic emancipation of the working class is therefore the great aim for which all political movement must serve as a means.

The conference of the International held at The Hague in 1872 concluded with a public meeting at which Marx in the course of his speech said:

  One day the working class must hold political power in its hands in order to establish a new organization of labour. It must overthrow the old political system which maintains the old institutions in being, unless it wishes, like the old Christians, who despised and neglected such action, to renounce “the Kingdom of the World”.

We now know that the First International was bound to collapse, due to the conditions which gave rise to it and the conflicts which arose within it. Marx from this period concentrated on his literary work. He suffered several personal losses. In December 1881 his wife died, and this was followed by the death of his eldest daughter. Engels tells us he never recovered from these losses, and they aggravated a condition of poor health from which he suffered for some time. On the fourteenth of March 1883 he died quietly in his chair.

Bob Ambridge

https://socialiststandardmyspace.blogspot.com/2019/09/marx-and-1st-international-part-2-1973.html

Marx : the Man and his Work Part One

From the Socialist Standard October1973

A Time of Revolution
Karl Heinrich Marx was born at Trier (Trèves) in Germany on 5th May 1818. Both the date and the place of his birth are significant. Not many years before, the armies of republican France had advanced over Europe carrying with them the emotional ideas of liberal democracy, ideas about liberty, equality and fraternity.

The victory of European reaction did not destroy the influence of revolutionary ideas in the backward countries of Europe. Politically and economically, Germany was a backward country, and consisted of thirty-six semi-independent states and principalities in which a feudal aristocracy held power. The whole of Germany was dominated by the extremely reactionary states of Austria and Prussia. Growing industry and commerce had created a capitalist class, but the aristocracy had no intention of giving way to the rising capitalists and were strong supporters of the absolute forms of government then existing throughout the German state.

In these circumstances the capitalists were in revolt and were demanding the setting up of a democratic form of government over a unified Germany, which was to be completely separated from Austria. Conditions thus brought into revolt much of the youth in Germany, and it is not surprising that Marx and others of that period became revolutionaries.

Philosophical Questions
The parents of Karl Marx were able to provide for their children what was by the standards of the time a good education. Karl appears to have shown good intellectual ability at an early age. He was attending Bonn University at the age of 16, and went from there to the Berlin University. Apparently it was the intention of his parents that he should prepare for a legal career. Marx, however, like many young students, was impatient of the ordinary methods of study, and was for some time very undecided. He dabbled in poetry, and toyed with the idea of writing a work on the philosophy of law, and engaged in other forms of literary activity.

At that time the main intellectual influence on the students of Berlin was the philosophy of Hegel, which was used to criticize the existing regime. Marx became one of a band of “Young Hegelians”. He now decided upon an academic career; in 1841 he obtained his doctor’s degree from Jena University for a thesis upon the Natural Philosophies of Democritus and Epicurus. This thesis was an anticipatory part of a larger work in which Marx intended to deal with the cycle of Epicurean, Stoic and Sceptic philosophy as a whole. In the end Marx did not publish his thesis. Its immediate aim was no longer a matter of urgency; political and philosophic affairs of quite another kind did not permit Marx to carry out his original intention.

For a short time Marx was editor of the Rheinische Zeitung, a paper owned by a group of radical industrialists which operated under great difficulties due to a strict police censorship. As editor Marx was confronted with questions concerning economics and socialism. Due to the kind of academic training he had, he found great difficulty in dealing with such questions. He decided to study these subjects as soon as possible. The possibility arose when the backer of the paper, in an attempt to save it from suppression by the adoption of a milder policy, forced Marx from his position as editor.

Revolutionary Theory
It was during this period, on the 19th of June 1843, that Marx married Jenny von Westphalen who became his support and counsellor up to the end of her life. Shortly afterwards they moved to Paris, where Marx had been offered employment as editor of the Franco-German Year Book. Here it was that he contacted Engels; it was this event which led to the lifelong friendship and collaboration which has left an invaluable legacy to the Socialist movement.

In Paris, Marx was in contact with and took part in the revolutionary movements of the time. He thus became acquainted with the numerous schools of thought existing in the revolutionary movements and made a deep study of economics and social questions. At the time Marx was editing the Rheinische Zeitung he was a radical democrat: it was his studies in Paris which transformed him into a communist, as that word was then understood. With the political change occurred the philosophical one. He became a materialist.

Due to the vindictiveness of the Prussian government, Marx was forced to leave Paris and went to live in Brussels. It was while he was resident in that town, in 1847, he gave a series of lectures on economics to the German Workingmen’s Club. The purpose of these lectures was to show the economic conditions which formed the basis of the class struggle. It is in the lectures, now to be found in the pamphlet Wage-Labour and Capital, that we find the germ of the theory of surplus-value.

1847 was also the year in which Marx published his book The Poverty of Philosophy. This work was levelled at the French Utopian, Proudhon, and in this criticism Marx outlined the fundamentals of scientific Socialism.

The Communist Manifesto

The Manifesto was published as the platform of the “Communist League”, a working-men’s association at first German and later international. Due to the political conditions on the continent before 1848, it was a secret society. At a congress of the League, held in London in November 1847, Marx and Engels were asked to prepare for publication a theoretical and practical party programme, and this was published in 1848 as The Communist Manifesto. It has since been published in many languages. In an edition of 1888 Engels wrote a preface in which he gave in detail the history of the Manifesto. The following quotations are important:

  Yet when it was written we could not have called it a Socialist Manifesto. By Socialists in 1847 were understood, on the one hand, the adherents of the various Utopian systems: Owenites in England, Fourierists in France, both of them reduced to the position of mere sects, and gradually dying out; on the other hand, the most multifarious social quacks, who, by all manners of tinkering, professed to redress, without any danger to capital and profit, all sorts of social grievances — in both cases men outside the working-class movement, and looking rather to the "Educated” classes for support. Whatever portion of the working class has become convinced of the insufficiency of mere political revolutions, and had proclaimed the necessity of a total social change, that portion, then, called itself communist.

Second:

  And our notion from the very beginning was that "the emancipation of the working class must be the act of the working class itself”.

Third:

  The Manifesto being our joint production, I feel bound to state that the fundamental proposition which forms the nucleus, belongs to Marx. That proposition is that in every historical epoch, the prevailing mode of economic production and exchange, and the social organisation necessarily following from it, forms the basis upon which is built up, and from which alone can be explained, the intellectual history of that epoch.

For the German edition of 1872 Engels wrote as follows:

  However much the state of things may have altered during the last 25 years, the general principles laid down in this Manifesto are, on the whole, as correct today as ever. Here and there some detail might be improved. The practical application of the principles will depend, as the Manifesto itself states, everywhere and at all times on the historical conditions for the time being existing, and, for that reason, no special stress is laid on the revolutionary measures proposed at the end of section II. That passage would in many respects be very differently worded today.

Engels made it clear that although much of the Manifesto had become outdated, as shown by his 1888 preface: “But then, the Manifesto has become an historical document which we have no longer any right to alter.”

The first quotation gives an insight to the political situation in the working-class movement of 1847. Engels leaves no doubt as to why it was called the Communist Manifesto. An explanation is provided for those who have become tired and frustrated, an answer to the cynics is to be found, in the second quotation: the establishment of Socialism as the work of the working class. That class is not yet ready to accomplish its historic mission.

The third quotation is important and interesting Here we have Engels telling us that Marx had, as early as 1847, mastered and was able to apply the materialist conception of history. Engels gives us in this statement a concise definition of the materialist conception of history.

Cologne and London

1848 was a year of European revolt. There was an insurrection in Paris and Marx, expelled from Brussels, accepted an invitation from the Parisian government to return to that city. Shortly afterwards the wave of revolt spread to Germany, and Marx and Engels decided to return there.

In Cologne they commenced the paper Neue Rheinische Zeitung, of which Marx was the editor. The paper was a radical democratic journal, but in it Marx put forward his view that it was only the workers who could be relied upon in the revolution and that the industrialists who were the leaders of the movement would check it as soon as its full possibilities became clear. Marx’s view of the rôle of the leaders proved correct, and the revolt in Germany collapsed.

The Neue Rheinische Zeitung was suppressed and Marx himself arrested and tried for high treason. He was acquitted, but was forced to go to Paris. With the crushing of the revolt there, expulsion again threatened him and he travelled to what was to be his home for the rest of his life, London.

The early years of their life in London were extremely hard for the Marx family. A period of European reaction set in after the revolts of 1848. The Communist League broke up, and Marx had to provide for his family by poorly-paid journalistic work. During this period of extreme poverty Marx continued his social studies, making use of the reading room at the British Museum, which finally led to the publication of Capital.

Bob Ambridge

https://socialiststandardmyspace.blogspot.com/2019/09/marx-man-and-his-work-part-1-1973.html

Flash Point (1)

Following the mayoral and local elections,

capitalism remains in power!

How many more Kent States?

May 4, 2024 is the 54th anniversary of the massacre at Kent State University when the Ohio National Guard opened fire upon peaceful protesters against America's military attacks upon Cambodia. Four students dead, nine wounded, one paralyzed for life.

Miss Allison Krause, 19, Pittsburgh, Pa.; Miss Sandy Lee Scheuer, 20, Youngstown, Ohio; Jeffrey G. Miller, 20, Plainview, N.Y., and William K. Schroeder, 19, Lorain, Ohio.

The invasion of Cambodia and killings at Kent sparked an unprecedented national student strike. Over 400 campuses were shut down and occupied by the students. Millions of people joined street demonstrations demanding an end to the war. 

Over 58,000 US soldiers died in Vietnam. Over 300,000 were wounded. Over 2,000,000 Vietnamese, Laotians and Kampucheans died under 15,500,000 tons of bombs and millions of gallons of defoliants that devastated an entire part of the planet.

Ten days later, Mississippi state police opened fired into a dormitory at protesting students at Jackson State University that left two dead and many wounded.

On May 11, 1970, in Augusta, Georgia the burned and tortured body of an incarcerated 16-year old black youth was dumped by his jailers at a local hospital. The resulting protest left six African-American men dead.

https://www.counterpunch.org/2020/05/01/sanitizing-the-kent-state-massacre/

 https://socialismoryourmoneyback.blogspot.com/2020/05/remembering-kent-state.html

‘They’re sending a message’: harsh police tactics questioned amid US campus protest crackdowns'

'More than 1,400 people have been arrested across the US during a week of intense police crackdowns on a sprawling campus movement of pro-Palestine student demonstrations.

As Joe Biden defended students’ free speech rights but warned them that “dissent must never lead to disorder”, colleges across the country brought law enforcement to campus to arrest dozens or even hundreds of protesters and clear away their encampments.

But the level of force with which some of these law enforcement agencies have responded to protests, which in the overwhelming majority of cases have been peaceful.' The Guardian 4 May

https://www.theguardian.com/us-news/article/2024/may/04/police-tactics-us-campus-protest-crackdowns

Fifty four years on and students, and others, are still protesting at the killing of innocent people in armed conflicts. 

In 1965, folk singer Donovan's song Universal Soldier propounding the idea that if soldiers refused to fight for their countries ten they would be no more war. 

His lyrics concluded with ,'He's the universal soldier, and he really is to blame His orders come from far away no more They come from here and there and you and me And brothers can't you see This is not the way we put the end to war?'

The only way to put an end to war is for you and me to realise that it's not te universal soldier wo is to blame, it's capitalism.  And things will only change when we universally decide to replace capitalism wit socialism.

THE SOCIALIST PARTY AGAINGST ALL WAR

Neoliberalism

 

We keep hearing about ‘neoliberalism’ (where private firms operate with little or no government interference, meaning increased insecurity for workers) as though it were something new. It isn’t. It was practised through the 19th and a good part of the 20th century, when it was simply called the free market.

For a time governments changed tack and practised increased intervention to try and ‘tame’ capitalism – to make it less prone to crises. It didn’t work so they moved back to what they had before, except they gave it a new name: neoliberalism.

But it’s not neoliberalism that’s the problem, it’s capitalism. It’s not a change of policy that’s required, but a change of socio-economic system.

SPGB Meeting Tonight Zoom

 

MAY DAY MEETING (ZOOM)

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Event Details

• Date: May 3, 2024 7:30 pm – 9:00 pm

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To connect to a meeting, click https://zoom.us/j/7421974305

SPGB May Day Meeting Friday 3 May Zoom

 

MAY DAY MEETING (ZOOM)

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Event Details

• Date: May 3, 2024 7:30 pm – 9:00 pm

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To connect to a meeting, click https://zoom.us/j/7421974305

Socialist Sonnet No. 146

Crossing the Floor

 

Divided, it seems, by just two sword lengths

Are green benched Capulets and Montagues,

Who, in vitriolic rivalry stew

As vexed ambition flexes its strength.

Whether feeling neglected, rejected

Or some bitter sense of injured pride,

One crosses the floor to the other side,

Where greater rewards might be expected.

This act of principle or betrayal

Is mitigated by the growing sense

That it makes little or no difference,

As every Commons cause is doomed to fail.

No matter what the rivals do or say,

Capital profits, and must have its way.

 

D. A.

Socialist Standard May 2024 Now Available On Line

https://www.worldsocialism.org/spgb/socialist-standard/2020s/2024/no-1437-may-2024/

 

London: May Day 24 Event

 

LONDON: MAY DAY 24

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Event Details

• Date: May 1, 2024 12:00 pm – 3:00 pm

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Clerkenwell Green, EC 1 (12 noon) (nearest tube: Farringdon)
Trafalgar Square (13.00)
The Socialist Party will have a stall at this event

Magic Money

 ‘Republic First Bancorp was seized by Pennsylvania regulators Friday, following a failed deal earlier this year to infuse the Philadelphia-based regional bank with new funds, amid a decline in deposits and a struggling mortgage lending business.’

https://www.forbes.com/sites/tylerroush/2024/04/27/heres-what-led-to-republic-firsts-collapse-and-why-its-different-from-2023-failures/?sh=58d6b8865878

From the Socialist Standard, December 2008

‘’One thing that the current banking crisis has done is to explode the myth about banks being able to create credit, i.e. money to lend out at interest, by a mere stroke of the pen. Events have clearly confirmed that banks are financial intermediaries which can only lend out either what has been deposited with them or what they have themselves borrowed or their own reserves. As the US Federal Reserve put it in one of its educational documents:

“Banks borrow funds from their depositors (those with savings) and in turn lend those funds to the banks’ borrowers (those in need of funds). Banks make money by charging borrowers more for a loan (a higher percentage interest rate) than is paid to depositors for use of their money.” (Dead Link. p. 57)

Actually, banks don’t just borrow from individual depositors, or “retail”. They also borrow “wholesale” from the money market. It is in fact the difficulties they have experienced here that has revealed that they cannot create credit out of nothing.

Because some banks had burnt their fingers by buying securities based on sub-prime mortgages in America, other banks were reluctant to lend on the money market for fear that the borrowing bank might turn out to be insolvent. Which meant that one source of money for the banks to re-lend to their customers had shrunk. Or at least had become too expensive as interest rates had risen too high compared with the rate banks could charge their borrowers to allow them to make a profit or enough profit. So, deprived of this source of money, the banks had less to lend out themselves. Which of course wouldn’t have been a problem if they really did have the power to create money to lend out of nothing.

But at least one person was unable to see what should have been obvious. On 15 October the Times printed a letter from a Malcolm Parkin, in which he wrote:

“Only 3 per cent of money exists as cash. Therefore the rest is magic money conjured into existence, and issued as debt by banks, at a ratio of about 33 magic pounds to 1 real pound, by the quite legal means of fractional reserve banking. In a rising market, it follows that anybody able to create such money, at such a ratio, can soon get rich.”

The “fractional reserve” he mentions is the proportion of retail deposits that a bank keeps as cash to handle likely withdrawals. Fifty years ago in Britain it was 8 percent. But, as banks resorted more and more to the wholesale money market to get money to relend, the percentage of cash to loans became almost irrelevant. Parkin’s figure of 3 percent is the percentage of cash banks hold compared to total loans, including those based on money borrowed from the money market (which even on his definition is not “magic money“).

What a “fractional reserve”, or “cash ratio”, of say, 10 percent means, is that if £100 is deposited in a bank that bank has to keep £10 as cash and can lend out £90. Parkin has misunderstood this to mean that a bank can lend out £900 – and charge interest on it. Easy money, as he says, if it were true. But it isn’t.

The theory of “fractional reserve banking” is that an initial deposit of £100 can lead to the whole banking system, but not a single bank, being able to make loans totalling £900. The argument is that the initial £90 will eventually be re-deposited in some bank (not necessarily the bank that made the loan), which can then lend out 90 percent of this, i.e. £81, which in turn will be re-deposited, and so on, until in the end a total of £900 has been loaned out.

This is theoretically the case as one of the key features of capitalism is that money circulates, but what the theorists never emphasise is that this is based on the assumption that the same money is used and re-used to create new deposits. If this does not happen then the process cannot work or continue. So, the banking system has not created any “magic money” out of nothing. It is still dependent on individual banks only being able to lend out what has been deposited with them or what they themselves have borrowed – they cannot magically lend out vast multiples of this, as poor Malcolm Parkin assumed.

https://socialiststandardmyspace.blogspot.com/2024/01/cooking-books-myth-of-magic-money-2008.html

Bread

The Guardian, 29 April, reports that, ‘Washout winter’ spells price rises for UK shoppers with key crops down by a fifth: Analysts say impact on wheat, barley, oats and oilseed rape harvests means price rises on beer, bread and biscuits and more food imported.

https://www.theguardian.com/environment/2024/apr/29/washout-winter-spells-price-rises-for-uk-shoppers-with-key-crops-down-by-a-fifth

Two historical examples of bread riots, one in France, one in Newbury,UK:

‘Bread was the basic staple of most people’s diets, and variations in the price of bread were keenly felt by the poor, especially by women who most frequently bought bread in the marketplace. Women would sometimes protest against what they thought to be unjust price increases for bread in what were known as "bread riots."... were a collective action designed to force bakers to sell bread at a "just" or "moral" price rather than at whatever price the market would allow.

(17 July 1725)—On Saturday the fourteenth, a baker of the faubourg Saint-Antoine seemingly tried to sell bread for thirty-four sous which that morning had cost thirty. The woman to whom this happened caused an uproar and called her neighbours. The people gathered, furious with bakers in general. Soon their numbers reached eighteen hundred, and they looted all the bakers' houses in the faubourg from top to bottom, throwing dough and flour into the gutter.’

https://revolution.chnm.org/items/show/491

‘The millers and bakers of the town and neighbourhood were the especial offenders, as notwithstanding the price of wheat was not immoderately high, they kept up the price of bread much in excess of what was fair and legitimate. At last the long subdued feeling of discontent found forcible expression. On a certain market day in August, during the time the sack of corn were being pitched for sale, the people broke out into wild riot.

Upsetting the open stalls, they flung themselves upon the scattered provisions, corn, meat, butter, and eggs, wrecked a couple of houses and so alarmed the bakers that they at once lowered the price of bread, and promised a further reduction. But the spirit of the mob was not easily to be managed. They proceeded to break into the mills, and throw the corn into the river; windows were broken, and damage to the extent of £1,000 was done. Several persons were injured in the fray, one of them fatally.

http://www.newburyhistory.co.uk/bread-riot

The following is from the Socialist Standard, May 1986.

‘Under capitalism food supplies are manipulated to increase profits regardless of the consequences to health. This is because food, like all other goods, is produced for its exchange-value and, therefore, supplied according to the dictates of the market instead of for social needs.

Profits from agriculture are maximised in the following ways: destroying or storing food when there is a surplus that cannot be sold at a profit, regardless of the number of deaths from starvation or malnutrition; cutting back on food production to prevent unsaleable surpluses in subsequent harvests; farming land more intensively by using artificial fertilisers and pesticides; extending the number of processes which food undergoes.

Although about a quarter of a million old people in Britain suffer from malnutrition and there are obscene inequalities of wealth in the rest of the population, generally speaking there is relative affluence compared with underdeveloped countries and the problem for food manufacturers is to try to persuade people to buy more in order that the market can be expanded and profits increased. Normally manufacturers can persuade the public to buy more by the skilful use of advertising, playing on the fears and insecurity of consumers in an aggressively competitive, acquisitive society. But food presents a greater problem because, beyond the level of satiety. people do not eat more as a result of increased wealth. Nevertheless, profits can be increased by extending the number of processes which food undergoes and adulterating it with cheaper additives.

In 1969 a Lancet editorial pointed out that, on average, three pounds of chemical additives a year were consumed in food by each person in this country and that the number of additives exceeded 20,000, but by 1985 this number had increased to 35.000 and the consumption of additives was a staggering 8-11 pounds a year! Indeed, a new term — 'junk-food' has been coined to describe the artificially flavoured, highly processed food that is increasingly consumed today. Additives are used to provide colouring, enhance flavour, inhibit mould, emulsify, sweeten and provide uniformity of ingredients in the products sold.

The extent of the profits that can be made from expanding the processes which food undergoes can be seen in the sale of potato crisps which cost forty or fifty times more than the same weight of potatoes. Fish fingers and chickens are treated with polyphosphates (E450) to absorb more water, while fish and prawns are dipped in water before being frozen to increase their weight. It has been estimated that the public pays nearly five million pounds a year for water! (Walker. C. and Cannon. G. 1985. The Food Scandal, Century Publishing). All of these practices are perfectly legal: the 1984 regulations only require water to be declared in uncooked cured meats if it exceeds ten per cent.

The addition of water alone in frozen fish and prawns has no detrimental effects on health but polyoxyethylene monostearate, an emulsifier used in bread to make flour absorb water, causes cancer in rats. Cancers can be caused by some synthetic food colours. The use of amaranth, a red food dye, is permitted in Britain although in 1970 a Russian study showed that in its pure form it possesses carcinogenic activity. Amaranth was banned in the USA in 1976. Its continued use in Britain is a feature of additives in that there is a complete lack of uniformity of products permitted or banned from one country to another. Commercial considerations determine which additives are permitted, however harmful, while public awareness of the dangers of certain substances and consumer pressure in refusing to purchase certain products restricts or modifies their continued use.

The production of meat involves a number of processes which are potentially injurious to health; milk and meat may become contaminated from the routine doses of antibiotics given to cattle to prevent infectious diseases. The modern methods of rearing cattle cause them to be considerably fatter than wild game; the fat is also higher in saturated fats, which contribute to heart disease. and lower in polyunsaturated fats. But meat products present the greatest threat to health. Profits are boosted by using hide, skin. bone, preservatives and large amounts of fat in sausages. Most processed meats not only contain preservatives and colouring but consist of two or three per cent salt by weight while salami consists of as much as five per cent salt. Processed meats and bacon contain nitrates which interfere with the body's ability to convert carotene into vitamin A and combine with amines, occurring naturally in food, to produce nitrosamines which can cause cancer.

It is estimated that about twenty times more salt (sodium chloride) is ingested in this country than is needed for the maintenance of health and that an excessive intake is, at least in part, a causative factor in the production of high blood pressure. But salt is added to a wide range of products besides processed meats, including cereals, tinned vegetables. soups and bread.

Sodium also occurs in the diet by the wide use of monosodium glutamate, a flavour enhancer which permits smaller amounts of more expensive foods to be used. It was also widely used in baby foods until a study at Washington University in 1969 showed that in large doses it damaged the brain cells of baby mice. As babies have a poorly developed sense of taste its use was clearly directed at the mothers who "tested" the food to ensure that it was suitable. The publicity that resulted from the study led to some manufacturers (but not all) withdrawing monosodium glutamate from their products. The extensive use of monosodium glutamate in Chinese cooking can lead to side-effects such as palpitations, general weakness, gall bladder discomfort and numbness of the arms and the back of the neck and has become known as the "Chinese Restaurant Syndrome".

Table salt, itself, is not free from additives but may contain sodium ferrocyanide and magnesium carbonate to prevent caking. In addition, sodium is consumed in the form of sodium citrate in soft drinks. It is, therefore, not surprising that a study in Scotland in the 45-64 age group found that one-fifth of them suffered from mild hypertension.

Sugar is an invaluable additive to the food manufacturer, it provides bulk cheaply, preserves, thickens and sweetens. Every man. woman and child in Britain consumes an average of two pounds of sugar a week. Tooth decay, obesity, constipation, diverticulitis, gall bladder disease, chronic digestive disorders and diabetes have all been implicated to some degree with the excessive consumption of refined foods in industrialised countries. By contrast. adult-onset diabetes is rare in rural Africa where a diet high in unrefined carbohydrates is eaten.

The food industry is also making more use of dextrose in food: more than 16lbs of glucose (dextrose) a year, on average, is consumed in processed foods. Fructose, a naturally occurring sugar which is twice as sweet as sucrose (white sugar) has been used in the food industry in the USA and could be an improvement in health terms because only half the amount needs to be used. But health needs under capitalism are always secondary to the requirement of profitability and the Common Market placed an import quota on high fructose com syrup to protect sugar beet production.

Highly refined foods provide more calories, but less nutrients (unless artificially added) and do not induce satiety as readily as unrefined food, tending to lead to higher consumption with greater profits for the manufacturers. White bread is made by the highly mechanised Chorleywood Bread Process which avoids the hours of fermentation that traditional bread requires. It also contains more air and water than the traditional loaf as a result of using additives that are potentially harmful. Polyoxyethylene monostearate, potassium bromate, propionic acid, ammonium sulphate, chlorine dioxide, nitrosyl chloride, benzoyle peroxide, sodium propionate. L-cysteine hydrochloride and azodicarbonamide are all used in refined bread. Agene was used for bleaching flour for nearly thirty years before it was linked with nervous disorders in humans and in 1968, 600 people in Johannesburg were poisoned by bread containing one per cent potassium bromate (Grant. D., Your Daily Food, Faber and Faber. 1973).

Even when additives are present in food at what are considered to be "safe" levels there is still a risk to health. The American Food and Drug Administration found that two chemicals taken at the same time can enhance the effect of each other; for example. silicone when used with an emulsifier makes the cells of the gut more absorbent and susceptible to poisoning.

There is also considerable contamination in food from the use of insecticides. In 1984 the Association of Public Analysts found that one third of fruit and vegetables were contaminated with DDT (despite being banned), aldrin (a carcinogen), dimethoate and mevinphos.

Although consumer pressure has resulted in a few dangerous substances being withdrawn from food the number of additives used has increased considerably in the last twenty years. Additives will continue to be used while it is profitable to do so. Only a socialist society which puts people first can stop the threat to health which capitalism imposes.’

Carl Pinel

https://socialiststandardmyspace.blogspot.com/2020/05/fit-for-consumption-1986.html