Friday 8 September 19.30

 Value

A nail or a nuclear reactor.

Each is a product of human labour,

Raw materials transformed by neighbour

And neighbour into something rather more

Useful than ore and unharnessed energy.

Both are products of all the work required

In their making. Workers only being hired

For rather less than whatever may be

The value they create, the difference,

When the total value is divided,

Is taken by those who have provided

The means whereby work works its immense

Power to create. Though those means come through

Workers previously creating their value.

D. A.

It is reported that, ‘Inflation in Türkiye spiked to 58.9% in annual terms in August, its fastest pace this year, from around 48% in July, according to data released on Monday by the Turkish Statistical Institute.

The month-on-month increase was 9.1%, mostly driven by rising energy and food costs. Transport costs jumped 16.6% month-on-month, while food and non-alcoholic beverage prices rose by 8.5% from July and 72.9% from last year. The core index, which excludes volatile food and energy prices and is seen as a bellwether for future inflation developments, posted an annual gain of 64.9%.

Analysts attribute the spike in inflation to the steep fall in the lira exchange rate and recent tax increases. The Turkish currency has lost about 30% of its value so far this year.

After years of interest rate cuts, which helped trigger a currency crisis in late 2021 and sent inflation to a 24-year peak of 85.51% last October, the Turkish central bank turned back toward more traditional economic policies earlier this year. It has so far hiked the key rate three times to the current 25%, although experts say that more tightening is in order, despite the slight gains in the lira since the latest rate increase in August.

“The recent lira appreciation is unlikely to trigger price discounts, in our view, but it may contribute to a slower pace of price gains through the rest of the year. We maintain our call for a year-end inflation rate of 57%, but recognize risks have emerged on both sides,” economist Selva Bahar Baziki told Bloomberg, commenting on the situation.

Turkish Finance Minister Mehmet Simsek has warned that the battle against inflation may be a long one.

“We are absolutely determined to fight inflation. We know that the fight against inflation will take some time. We are in the transition period. We will do whatever is necessary – monetary tightening, credit policy and income policies – to bring inflation under control and then lower it,” Simsek wrote on his X (formerly Twitter) account after the data release.’

In August, ‘The Turkish central bank raised its benchmark interest rate by 7.5 percentage points on Thursday to 25%, in a bid to curb spiraling inflation.

The hike was significantly higher than the increase to 20% that many economists had expected.

The regulator opted for a major increase in a sign of a turn to more “rational” economic policies after years of rate-cutting, which has been blamed for fuelling inflation and the cost-of-living crisis in Türkiye.

Thursday’s hike is further evidence that policymakers in Ankara are following through on their pledge to return to a more conventional approach to monetary policy. The lira rallied strongly in the wake of the move.

The governor of the Turkish central bank, Hafize Gaye Erkan, who was appointed in June, has nearly tripled benchmark interest rates from 8.5% since being appointed.

The regulator does not rule out further tightening in the coming months until the inflation situation in Türkiye improves. Price growth jumped from 38% in June to almost 48% in July.

The surging inflation has driven the central bank to sharply revise upwards its year-end inflation forecast from 22.3% to 58%.’

‘TEHRAN – A review of the data released by the Statistical Centre of Iran(SCI) shows that Tehran province with 42.1 percent recorded the lowest inflation rate in the twelve-month period that ended on August22, which marks the end of the fifth Iranian calendar month Mordad.

The highest 12-month inflation rate is related to Yazd province with 57.2 percent, based on the SCI’s statistics.

The SCI has put the country’s average inflation rate in the twelve-month period that ended on August 22 at 46.7 percent, falling 0.8 percent from the figure for the twelve-month ended to the fourth month.

The centre put the country’s point-to-point inflation rate at 39.8 percent in the fifth month, which means families have paid an average of 39.8 percent more for purchasing the same package of commodities and services in that month, compared to the same month in the preceding year.

The point-to-point inflation rate dropped 0.4 percent in the fifth month from the previous month.

The Statistical Centre of Iran has put the average inflation rate in the twelve-month period that ended on March 20, 2023, which marks the end of the past Iranian calendar year 1401, at 45.8 percent.

The centre had put the inflation rate in the twelve-month period that ended on March 20, 2022 (the end of the Iranian calendar year 1400) at 40.2 percent and that of the Iranian calendar year 1399 at 36.4 percent.

In mid-July, the International Monetary Fund (IMF) in an economic outlook report said inflation in Iran which was reported to be 49 percent in 2022 is expected to fall to 42 percent in 2023 and then to 30 percent in 2024.’

Tehran Times

 ‘Miss Marx… a biopic directed by Susanna Nicchiarelli (Nico, 1988) starring Romola Garay as Eleanor Marx, the youngest daughter of Karl Marx, a socialist and women’s rights activist.’

This film is likely by now to be available on some streaming services.   Before or after viewing, you may wish to hear a recent Socialist Party talk on Eleanor Marx.

‘Work with us. Do not believe those who tell you any political party, or any “reformers” or any special legislation, can do away with crimes that are only the result of our whole system of society to-day. If you would do away with these crimes, you must do away with their cause. Help us. Help us to save not only yourselves, men and women; not only your little children. Help us also to save the very criminals, who now “drain your sweat and drink your blood.” Come to us. Join hands with us; and hand in hand, heart to heart with us, labour in this great cause. Never forget that when once the people will there is no gainsaying them. Once you rise “in unvanquishable number,” you are many, they — your enemies — “are few” ‘ (Eleanor Marx-Aveling, The Pall Mall Gazette, August 1885).

 ‘Miss Marx… a biopic directed by Susanna Nicchiarelli (Nico, 1988) starring Romola Garay as Eleanor Marx, the youngest daughter of Karl Marx, a socialist and women’s rights activist.’

This film is likely by now to be available on some streaming services.   Before or after viewing, you may wish to hear a recent Socialist Party talk on Eleanor Marx.

‘Work with us. Do not believe those who tell you any political party, or any “reformers” or any special legislation, can do away with crimes that are only the result of our whole system of society to-day. If you would do away with these crimes, you must do away with their cause. Help us. Help us to save not only yourselves, men and women; not only your little children. Help us also to save the very criminals, who now “drain your sweat and drink your blood.” Come to us. Join hands with us; and hand in hand, heart to heart with us, labour in this great cause. Never forget that when once the people will there is no gainsaying them. Once you rise “in unvanquishable number,” you are many, they — your enemies — “are few” ‘ (Eleanor Marx-Aveling, The Pall Mall Gazette, August 1885).

 ‘Miss Marx… a biopic directed by Susanna Nicchiarelli (Nico, 1988) starring Romola Garay as Eleanor Marx, the youngest daughter of Karl Marx, a socialist and women’s rights activist.’

This film is likely by now to be available on some streaming services.   Before or after viewing, you may wish to hear a recent Socialist Party talk on Eleanor Marx.

‘Work with us. Do not believe those who tell you any political party, or any “reformers” or any special legislation, can do away with crimes that are only the result of our whole system of society to-day. If you would do away with these crimes, you must do away with their cause. Help us. Help us to save not only yourselves, men and women; not only your little children. Help us also to save the very criminals, who now “drain your sweat and drink your blood.” Come to us. Join hands with us; and hand in hand, heart to heart with us, labour in this great cause. Never forget that when once the people will there is no gainsaying them. Once you rise “in unvanquishable number,” you are many, they — your enemies — “are few” ‘ (Eleanor Marx-Aveling, The Pall Mall Gazette, August 1885).

 ‘Charity workers could walk out on strike for the first time in the 270-year history of the Royal Society of Arts (RSA) as a simmering row over pay, alleged union-busting and rising executive wages reaches boiling point.   Union members at the enlightenment charity, which once counted Karl Marx and Nelson Mandela as members, are being balloted for strike action by the Independent Workers Union of Great Britain (IWGB) over a below-inflation pay offer, with the result expected this week.’

The Pew Research Center has a new survey where the majority of Americans say U.S. is one of the greatest countries in the world. The survey does show that not everyone believes this. Real progress will be made when the majority of the working class realise that they have no country.

https://www.pewresearch.org/short-reads/2023/08/29/majority-of-americans-say-us-is-one-of-the-greatest-countries-in-the-world/

The Poison of Nationalism

‘In the struggle to win the minds of the working class Socialists have to contend not, on the whole, with rational critiques of the Socialist position but with deeply held and unquestioned values. A few of these, for example, might be religion, “human nature”, “a fair day’s wage for a fair day’s work” or the association of Socialism with Russia. One of the strongest of these sacred beliefs, and one of the biggest obstacles to the establishment of Socialism, is nationalism ― the loyalty felt by many members of the working class to “their country”, the political unit in which they happen to reside.

Socialists hold that the only real divisions which exist in the world are horizontal ones, between different social and economic groups. In advanced capitalist countries this consists in a division between the capitalist class, which owns and controls the means of production, and the working class, which owns none of them and which has to sell its mental and physical labour-power to the capitalist class in order to live. Feelings of loyalty to a nation-State are purely subjective, having no basis in reality; the working class in Britain has more in common with the workers in other countries than it has with the British capitalist class.

Classes not Kingdoms

There, is however, an alternative view of the world. This is the belief that the important divisions are not horizontal, between different classes, but vertical, between various nations. A “nation” consists, according to this view, of a hierarchy of men and women who, although having differing incomes, social status and power, all have a common interest in working in harmony for the benefit of the whole unit and, if necessary, in fighting against other nations to defend this interest. This completely erroneous outlook is the one held by most members of the working class and nearly all political parties (including the Labour Party). Most historians reject Marx’s declaration that “the history of all hitherto existing society is the history of class struggle”, preferring instead to see history as a succession of struggles of nations against foreign domination, of subjects against tyrannical kings and of nations and races against each other.

Broadly speaking, nationalist ideologies and movements represent the interests of the capitalist class. Nationalism as such did not exist in pre-capitalist society and its growth and development represents the parallel development of the capitalist class. Nationalism as we know it today first made its appearance during the French Revolution. In the early stages of the revolution cosmopolitan ideas were prevalent ― it was believed that the rest of Europe would be inspired by France’s example and would likewise overthrow the old order. When this failed to materialise strong feelings of nationalism developed; France was seen as a chosen nation, picked out to be the standard-bearer of revolution throughout Europe.

Ambidextrous Creed

Politically, nationalism is ambiguous, in that it can take on a “rightwing” or a “leftwing” form. This depends upon the position of the capitalist class in the particular time and place. If political power is held by the aristocracy or nobility, and the middle-class is struggling to assert itself, then nationalism will have “leftwing” connotations. This was the case in Europe until 1848, when nationalism was a romantic, revolutionary force against the traditional ruling class. However, once the bourgeoisie has captured and consolidated its power, then nationalism becomes a conservative and rightwing force.

. . . and in Ireland now.

Although every nationalist movement believes it is unique, there exist basically these two forms of nationalism side by side. In the advanced parts of the world ― the United States, Britain, Western Europe ― nationalism is conservative, whilst in pre-industrial countries engaged in struggles against a foreign ruling class, nationalism is a “leftwing” force.

The World Socialist Movement opposes all nationalist movements recognizing that the working class has no country. There are certain other groups ― the Communist Parties of the world, and the so-called revolutionary left ― which, though claiming to have a class outlook, have a wholly opportunist and ambiguous attitude to nationalism, which reflects not so much the interest of the working class as it does Russian or Chinese foreign policy. These groups fully accept the mythology of the existence of “the nation”. For example, from an Anti-Internment League pamphlet:

“The people of each nation have the right to determine how they shall be governed. Foreign interference is a fundamental attack on that right. When one nation takes offensive action against another, by introducing troops or in any other way, we cannot sit on the fence . . . And so to Ireland: Ireland is a nation; Ireland is not Britain; and the Irish have a right to decide whether or not they wish to have any association with the rest of these isles.”

This attitude is a complete denial of Marxism; it is almost incomprehensible that people who describe themselves as Socialists should write of the “right to re-establish Irish nationhood” (from the same pamphlet). The Irish republican movement is in essence no different from any other nationalist movement; it was brought into being because of the need of a fledgling capitalist class to break away from Britain and erect protective tariff barriers in order to build an industrial economy. Socialists give the IRA and Sinn Fein no support whatsoever.

What Marx Meant

It will be argued that Marx and Engels supported nationalist movements and that therefore Socialists should do so today. Such an assertion is based on a faulty understanding of the materialist conception of history. Marx and Engels were living in an era when the bourgeoisie was engaged in a struggle to assert itself against the old feudal regimes. The victory of this class was a historically progressive step at that time in that it brought about the re-organization of society on a capitalist basis, the essential precondition for the establishment of Socialism; and it created an urban proletariat, the only class which can bring about Socialism. This was why Marx supported the rising capitalist class in their bid to capture political power. However, once capitalism reaches the point where Socialism is a practical proposition, there is no need for Socialists to advocate the capitalist industrialization of every corner of the globe; they can concentrate fully on the task of establishing Socialism. Hence we give no support to any nationalist group, and in place of the opportunism and hypocrisy of the myriad Bolshevik groupings in advocating “national self-determination”, Socialists echo the rallying cry of Marx and Engels, “Workers of All Countries, Unite!”’.

Brendan Mee

March 1973 Socialist Standard

In a capitalist society the need to sell one’s physical/mental labour power is necessary in order to ‘earn’ money which allow one to bury the necessaries of life. Capitalism requires a ‘reserve army of labour’ in order to not only to ‘pour encourager les autres’.

It is reported that, ‘Unemployment in Italy grew unexpectedly to reach 7.6% in July after six consecutive months of decline, preliminary official data showed on Thursday.

Some 73,000 jobs were lost during the month, Istat reported, noting that the unemployment rate grew for the first time since February.

Economists polled by Reuters had expected the unemployment rate to drop to 7.4%. In the corresponding month last year, the rate was 8%.

Compared to July 2022, the number of employed in the Eurozone’s third largest economy was 1.6% higher, with 362,000 more jobs this year.

Despite the weak figures recorded in July, in the three months leading up to it, the employment rate in Italy was still up by 0.5%, versus the February-to-April period.

According to the data, the overall employment rate of 61.3% is ranked as one of the lowest in the euro area, and the unemployment rate among young people aged between 15 and 24 saw a month-over-month drop to 22.1%, compared to 22.2% recorded in June.

The preliminary data also showed that Italy’s GDP saw a 0.3% quarter-on-quarter decrease in the April-June period, with the coming quarters expected to demonstrate sluggish results, partially due to the latest hikes of key interest rates.

The government officially forecasts full year GDP to grow by 1% this year, compared with the major expansion of 3.7% recorded in 2022’.

‘Last November the leaders of the 15 member countries of the European Union met in Luxemburg for a summit on unemployment. At the last count there were about 18 million registered unemployed in the Common Market or 11 percent of the active population.

As was to be expected nothing spectacular was decided. Led by fellow conservatives Kohl and Blair, they limited themselves to endorsing measures aimed at helping the economy recover of its own accord. The buzzwords were “flexibility” (making it easier to sack workers), “competitiveness” (not placing any extra cost burdens on employers such as shorter hours with no proportionate loss of pay) and “employability” (sending people on training courses). Not only this but a public works programme, which even pre-Keynesian governments used to resort to in times of slump, was ruled out.

Marx called the unemployed “the reserve army of labour”, as a pool of workers which employers can draw on in periods of rapid growth and send back to in times of slump and stagnation. Changes in the size of this reserve army—the level of unemployment—depend on a number of factors. The growth of the working population obviously, but also on the rate at which jobs are destroyed by the rise in productivity (resulting in the same amount being produced with less workers).

So, for unemployment to fall, the economy must grow not just faster than the growth of the working population but faster than the rise in productivity as well. As Marx put it in a talk given to German workers in 1847, ironically enough in Brussels, “the most favourable situation for the working class” under capitalism is “the most rapid possible growth of capital” in the sense that “the more rapidly the worker increases the wealth of others, the richer will be the crumbs that fall to him, the greater the number of workers that can be employed and called into existence, the more can the mass of slaves dependent on capital be increased” (Wage Labour and Capital).

This basic fact of capitalism is recognised in a discussion paper “Long-term growth potential in the EU and its relation with employment and unemployment” produced by the European Commission’s Directorate-General for Economic Affairs. According to this, the working population in the EU countries is more or less static while productivity is growing at 2 percent a year. The rate of growth since 1990, however, has only been 1.4 percent, clearly not enough to reduce the current level of unemployment.

Defining full employment as 3 percent of the working population, the paper calculates that to get unemployment down to this level from its current 11 percent within ten years would require a sustained rate of growth of between 3 and 3.5 percent in each of the coming ten years.

That this could in theory happen is not the question (such rates have been achieved in the past). The question is: how likely is it to happen in practice? The European Commission itself clearly didn’t think it likely as the paper was not presented to the summit and remains a mere departmental discussion document. And the paper itself is not very confident either as its ideas are presented as a mere possible “scenario”.

It does not even offer any reason as to why the rate of growth should suddenly and spontaneously more than double from its current 1.4 percent to the required 3-3.5 percent. It merely mentions in passing increased exports (to where?) and expresses the hope that the currency stability, which it expects the Euro to bring, will give employers the confidence to invest more than up to now.

This is all pretty flimsy. Both the logic and the history of capitalism, which is a system driven by the accumulation of capital out of profits, show that the rate of accumulation only increases as a result of a sustained period of technological innovation (such as the application of the internal combustion engine to transport or the electrification of industry) which requires the stock of capital equipment to be renewed. It has never been consumption-led.

Increased consumption has always been a consequence, never the cause, of a sustained period of economic growth. So it is no good pointing, as reformists do, to the vast unmet need for better schools, hospitals and housing and for more food and clothing for the between 10 and 15 percent of the population living on or below the poverty line. That is not relevant since capitalism as an economic system is not geared to satisfying consumption but to accumulating capital, in the form of more and more productive plant, machinery and equipment.

So there is every reason to remain sceptical and to doubt that in ten year’s time unemployment will be down to 3 percent. Those who claim otherwise are either wishful thinkers or illusion-mongers’

Adam Buick

February 1998 Socialist Standard