Q. What was the bare minimum you needed to stay alive last week? A. Food, heating, accommodation.

Q. How did you get these things? A. With money, obviously!

Whatever the amount, if you’re working, it came from your wages for some employment.

Q. Why would anyone want to employ you? A. Simple: they expect you to produce enough to pay your wages, to replace whatever you use up while you work AND to fund their spending. Oh, and cash for reinvestment – to try to ensure they don’t end up in the working class too.

Remember – while capitalism lasts, your cost of living will always include the cost of carrying a capitalist on your back.

https://www.worldsocialism.org/spgb/

Clear Vision

A veil of ignorance and illusion

All too easily and widely taken,

Vision obscured or even forsaken,

Reinforcing a sense of seclusion,

Being distracted looking left or right.

With the view unsettled and unsettling,

Taking a step forwards is disturbing,

Could be wonderful, there again it might

Be safer and best to simply stay put.

Or maybe cast a glance backwards, because

There’s comfort in a scene that never was,

Better still, perhaps, keep eyes tightly shut.

Human potential remains retarded

Until and unless the veil’s discarded.

D. A.

As we navigate the complex landscape of the global economy in 2024, parallels to a novel set forty years ago in what was then the future are unceasingly alluring for many. However, while George Orwell’s Nineteen Eighty-Four will forever reverberate through the passage of time as a quintessential critique of authoritarianism, his Animal Farm offers us a far more compelling critique of the power dynamics, manipulation, and pitfalls of unchecked authority associated with the ultimate authority – the one in which all fascist and ‘communist’ systems have hitherto existed: capitalism.

The story of Animal Farm unfolds as a group of farm animals revolt against their human oppressors, led by the idealistic pigs Snowball and Napoleon. The revolution promises equality and prosperity for all, yet as time progresses, the pigs, who initially championed the cause of the oppressed, succumb to the allure of power and wealth. Over time, the pigs consolidate power, betraying their initial ideals and creating a hierarchy that mirrors the oppressive regime they replaced.

Sound familiar? Naturally one can chart these porcine similarities in the development of capitalism – particularly in the transformation of the ‘“start-up’” into the multinational corporation. In the spirit of Animal Farm’s pigs, these entities, once heralded as champions of economic freedom and innovation, have come to wield disproportionate influence over global and human affairs. One need only read a tweet from Elon Musk to understand why billions were wiped off a particular company on the New York Stock Exchange on a particular day or read the latest struggles of Amazon workers to wrest back control of their bladders from Jeff Bezos to understand the severity of this influence. Sadly, these latter-day Napoleons have since emerged as today’s elite, having manipulated capitalist conceptualisations of progress and innovation to the extreme.

In Animal Farm, Napoleon and Snowball are at first portrayed as comrades, sharing a vision of a utopian society. However, Napoleon’s lust for power becomes evident when he orchestrates the expulsion of Snowball, eliminating dissent and consolidating authority. One would also do well to recall the condescending hero-worshipping stage rallies of other capitalist exploiters like Steve Jobs and Bill Gates – seemingly once essential ingredients in the faux revolution of the nineties tech boom – and see in them the earlier manifestations of this elitist cunning. There, they extolled the cutting-edge popular utility of their technologies, encouraging perceptions that new tech would lead to a more transparent, equitable, and empowered society. To the contrary, tech giants like Apple and Microsoft have since amassed colossal wealth, buying out competitors, exploiting tax loopholes, and engaging in questionable labour practices. As Orwell wrote, ‘”All animals are equal’” but as the pigs consolidate power, this commandment undergoes subtle modifications, ultimately becoming ‘”All animals are equal, but some animals are more equal than others’.”

Here, Orwell’s work highlighted the manipulation of language to control perception, with the pigs modifying the commandments to justify their actions. Similarly, in the global economy, terms like ‘“free trade’”, ‘“globalisation’”, ‘“innovation’”, ‘“aspiration’”, and ‘“growth’” are employed to cloak a system that often perpetuates inequalities. At the global level, both developed and developing nations find themselves in positions of vulnerability, exploited by powerful economies and multinational corporations in a manner akin to how the pigs exploit the other animals on Animal Farm. Meanwhile, individuals are oppressed in every conceivable manner, from the chiming of the alarm clock signalling the commencement of the day’s shift to the incessant blaze of propaganda, emanating from every screen or frequency, affixed to every block or bus. We are told at every turn that we must have something to be someone – an exercise in the all-consuming tawdry display of capitalist accumulation.  

If one should take anything from Orwell’s tale, it is that complacency and conformity breed danger. The animals on Animal Farm gradually accept the pigs’ changing principles, rationalising their own subjugation. In the contemporary global economy, there’s a parallel in how the masses often accept economic policies that favour the wealthy, believing in the illusion of trickle-down prosperity. Reaganomics sadly remains the chief allure of our acquiescence. A totem under which we willingly swallow the erosion of workers’ rights, precarious labour conditions, and the widening income gap between rich and poor, if only for the chance to receive an extra portion of the workhouse gruel. Capitalism’s greatest achievement is our complicity. The Musks, Bezos’s, Jobs’s, and Gates’s of this world fully intend to feed us with the automatic updates necessary to ensure our continued function as the best software version of capitalism (indeed, helpfully Mr Musk has now developed and tested a brain chip, possibly with the idea capable of absolving us of the last vestiges of self-awareness!).

 In conclusion, as we assess the global economy in 2024, the parallels to George Orwell’s Animal Farm offer a sobering reflection on the persistence of economic inequity and the concentration of power. The pigs’ gradual descent into corruption, the betrayal of revolutionary ideals, the consolidation of corporate influence to the manipulation of language and the erosion of democratic principles, Orwell’s cautionary tale resonates in the dynamics shaping our contemporary economic landscape. It is a timeless critique, every bit as vital as Nineteen Eighty-Four, that prompts us to critically examine the principles guiding our societies and question whether they truly uphold the values of equality, justice, and genuine progress. The challenge remains to achieve a global working-class consciousness which strives for a more equitable and just global economy. World Socialism, in which we eradicate hierarchy, participate in decision-making, and produce according to need is the only viable alternative.

JOHN ELLISTON

 It is reported that, ‘Guinea’s military rulers have dissolved the West African nation’s government, which had been in power since July 2022. The presidency’s spokesman, General Amara Camara, announced the decision on 19 February without providing any specific reasons.

The presidential decree, read by General Camara in a pre-recorded video published on social media, said a new government would be installed but did not specify when that would happen. 

“The government is dissolved… The management of current affairs will be ensured by the directors of cabinet, the secretaries general, and the deputy secretaries general until the establishment of a new government,” he said in the presence of around 20 uniformed soldiers.

Guinea has been under military rule since September 2021, when soldiers overthrew President Alpha Conde, who had ruled for more than a decade. Conde’s election in 2010 marked the country’s first democratic transfer of power since its independence from France in 1958.

The Economic Community of West African States (ECOWAS) has demanded that the coup leaders in Conakry, as well as those in power in Mali, Burkina Faso, and Niger, hold elections within a reasonable timeframe and restore democratic order.

Colonel Mady Doumbouya, the interim president of the former French colony, agreed to return Conakry to civilian rule by the end of 2024 after facing sanctions over an initial three-year transfer of power. The military leadership has claimed that the transition period would allow it to implement major reforms in the poor but mineral-rich country.

In a separate statement posted on X (formerly Twitter) on Tuesday, the presidency ordered members of the dissolved government to return state property, including vehicles and travel documents “without delay.”

“The High Commander of the Gendarmerie and the Director General of the Police are responsible for taking all measures to put buffers in all departments until the temporary workers are fully taken over,” announced Ibrahima Sory Bangoura, chief of staff and general of the Armed Forces of the Guinean Transitional Government.

ECOWAS, which has been embroiled in disputes with military rulers in Mali, Burkina Faso, and Niger, has yet to issue an official statement on Guinea’s unexpected government dissolution. The three former French colonies have served notices to withdraw from the bloc, citing harsh sanctions imposed in response to coups in their respective countries. They accuse the 15-nation regional authority of being a tool for foreign powers. The bloc is also dealing with political unrest in Senegal, where a surprise postponement of presidential elections has sparked deadly protests in recent weeks.’

On the heels of the story about the sacked Ecuadorian office cleaner comes this – an inverted Aladdin tale, not new lamps for old but old military equipment for new – and war declared on bananas by the Russians in retaliation. What sort of farce would Tom Sharpe of made of it?

Between 2012 and 2019 Julian Assange, Wikileaks founder, took refuge in the London Ecuadorian embassy fearing arrest and extradition to the USA.

As history shows, that ended in tears and may still result in his being sent to America.

‘Free Assange’ SOYMB 30 December 2020

https://soymb.com/2020/12/freeassange.html

‘Ecuador will not supply Ukraine with outdated Russian military equipment, Foreign Minister Gabriela Sommerfeld has said, walking back her government’s previous plans.

Speaking to a group of lawmakers Sommerfeld stressed that Ecuador has been pushing for a “peaceful resolution” of the conflict between Russia and Ukraine that would be based on international law.

“Ecuador will not send any war material to a country that is involved in an international armed conflict,” Sommerfeld said.

In December, Ecuadorian President Daniel Noboa announced Quito’s intention to deliver aging Soviet-era equipment to Ukraine in exchange for modern equipment from the US worth $200 million. Sommerfeld argue at the time that the gear in question was “not operational” and that it would be “not illegal” for Quito to dispose of it any way the country sees fit.

The Soviet-made gear in Ecuador’s stocks reportedly includes Mi-17 helicopters and Osa anti-air systems.

Moscow had slammed the plan, saying that it would be a violation of contracts to transfer military equipment to a third party without Russia’s consent. Russian Foreign Ministry spokeswoman Maria Zakharova told Ecuadorian media that Quito had made “a rash decision” under outside pressure.

Shortly after the planned arms transfer was announced, Russia restricted imports of bananas from Ecuador, citing health violations. The Russian food safety watchdog Rosselkhoznadzor has lifted the partial ban saying that five Ecuadorian companies were again allowed to ship bananas into the country.’

It is reported that, ‘UK workers may face lower wage increases in 2024 as employers are mulling cutting pay rises amid persisting economic woes, a recent report by the Chartered Institute of Personnel and Development (CIPD) has found.

The drop in wage growth comes as many UK employers are cutting back on hiring plans due to slowing growth.

The average future expected pay rise in the UK dropped to 4% in the final quarter of 2023, after holding at 5% for some time, marking the first fall since the beginning of the Covid-19 pandemic. The median expected increase across the private sector showed the same expected decline from 5% to 4%, whereas the expected decrease in the public sector was steeper, from 5% to 3%.

“This feels like a key moment in the UK labour market,” said CIPD senior labor market economist Jon Boys. “The public and private sector gap in pay expectations is widening again, at a time of mounting pressures on public services,” he noted.

Lower pay rises would deal a blow to Britons’ purchasing power and curtail disposable income at a time when living costs are rising, prompting many to re-evaluate their budgets and expenses, experts warned.

“We’ve seen a sustained period of high wage growth in response to a tight labor market, and high inflation pushing up the cost-of-living. Pay growth has helped individuals but it leaves employers with a higher wage bill to cover,” Boys explained.

The survey, which was conducted in January involved over 2,000 employers. About a third of employers plan to increase their headcount over the next three months, while 10% anticipate reductions.’

In related. ‘The British economy fell into recession in the final quarter of 2023, according to official figures released on 13 February

GDP dropped by 0.3% in the fourth quarter following a 0.1% decline in the previous quarter, the Office for National Statistics (ONS) has said. A technical recession is typically defined as two successive quarters of contracting output.

All three main sectors of the economy – services, production, and construction – posted declines in the fourth quarter, according to the ONS.

For the whole of 2023, the economy is estimated to have increased by 0.1%, which the ONS described as “the weakest annual change in real GDP since the financial crisis in 2009,” excluding the pandemic year of 2020. In 2022, growth stood at 4.3%.

According to the government, high inflation has been the single biggest barrier to growth. Although price growth in the country has come down from the 11% peak recorded in 2022 and stood at 4% as of January, it’s still double the Bank of England’s 2% target.

If you think things are bad in jolly old England, ‘Annual inflation in Argentina hit a three-decade high of 254% in January even as the rate slowed slightly in monthly terms, according to official data.

Newly installed President Javier Milei has subjected the country to ‘shock therapy’ reforms aimed at stabilizing the ailing economy, including devaluing the nation’s currency by 50% against the US dollar and hiking the key interest rate to 133%.

“If one takes the number alone, isolated, it is horrifying. And indeed, it is, but you have to look at where we were and what the trend was,” Milei said in comments about the inflation data during a public appearance on the television station La Nacion Mas. The president estimated that inflation would come under control within two years.

Meanwhile, monthly inflation in the country stood at 20.6% in January, down from the 25.5% registered for December. Annual inflation in December was 211%. According to the report, transport prices in Argentina soared 26.3%, while the cost of goods and services skyrocketed 44.4% in January.

According to Milei, Argentina’s “economic activity would have fallen much more” had he not implemented the new policies. “We are focusing on taking care of the most vulnerable class,” the president argued. A self-described anarcho-capitalist, Milei, who took office in December 2023, has warned it will take time for the results of his program to be seen and that things could get worse before they get better. Latin America’s third-biggest economy has been beset by a severe economic crisis after decades of financial mismanagement.’

How long till the blind shall see, ‘Poverty levels in Argentina hit a multiple-year high in January following the drastic economic reforms carried out by newly installed President Javier Milei, the Social Debt Observatory of the Catholic University of Argentina (UCA) said in its latest report.

According to the data, the share of people in poverty in the country surged to 57.4% last month, the highest since 2004, and up from 44.7% in the third quarter of 2023, prior to Milei taking office.

In what he called ‘shock therapy’ reforms, the new Argentinian leader has introduced a slew of measures aimed at stabilizing Argentina’s struggling economy, including devaluing the peso by 50% against the US dollar and hiking the key interest rate to 133%. The measures have led to a surge in consumer prices. According to official data released earlier this month, annual inflation in Argentina hit a three-decade high of 254% in January. This, in turn, caused household incomes to collapse and greatly diminished consumer purchasing power, exacerbating poverty levels.

The report noted that the greatest increase in poverty levels was observed among middle-class households that were not beneficiaries of social programs, as well as among low-skilled workers. According to the data, the percentage of Argentinians considered “destitute” surged to 15% in January, up from 9.6% in the third quarter of last year.

The head of the UCA’s Social Debt Observatory, Agustin Salvia, told La Nacion news outlet that he doesn’t expect poverty levels to grow much further, but warned that the situation will likely get worse before it gets better.

“In February and March the situation will tend to worsen, but poverty will find a ceiling of around 60%. There is an expectation that it will tend to improve in two or three months,” he predicted.

Milei reacted to the UCA report in a social media post on Saturday, pledging that more reforms would ease the crisis in the country.

“The true inheritance of the caste model: 6 out of every 10 Argentines are poor. The destruction of the last hundred years is unparalleled in Western history. Politicians have to understand that people voted for change and that we are going to give our lives to bring it about,” he wrote.’

On the other dide of the globe, ‘Australia’s unemployment rate has risen to its highest level since early 2022, hitting 4.1% in January, the Australian Bureau of Statistics (ABS) reported.

The figure is slightly above the consensus expectation of 4%, an uptick from December’s reported 3.9%. The economy added 11,100 full-time jobs and shed 10,600 part-time jobs last month, according to the data.

The report added to concerns of slack in the country’s labour market in the face of a slowing economy and subdued consumer demand. Economists warn that unemployment could further deteriorate later in the year.

Commenting on the report, ABS head Bjorn Jarvis noted a changing seasonal dynamic in the labour market around when people start working after the summer holiday period in January. “While there were more unemployed people in January, there were also more unemployed people who were expecting to start a job in the next four weeks,” Jarvis said.

Meanwhile, Treasurer Jim Chalmers said during a press conference on Thursday that the latest figures indicate that the labour market continues to soften in expected ways. “This is also the inevitable consequence of higher interest rates and persistent inflation and global economic uncertainty, because of the pressures that people are under, the pressures our economy is under, and indeed the global economy as well – those are largely the reasons for the tick up in the unemployment rate that we are seeing today,” concluded Chalmers.’

In lighter news, not really, this is about just one example of an individual’s experience of capitalism: Headline in MailOnline, ‘The letter cleaning boss sent to single mother on £13-an-hour when he fired her for eating a leftover £1.50 tuna sandwich she had found in City law firm meeting room.’ The Ecuadorian cleaner is taking legal action. Judge for yourself whether it’s just another example of what ex- Prime Minister Edward Heath once called the unacceptable face of capitalism.

There are many vulnerable workers within capitalism and there may or may not issue a call from one of the capitalist supporting Parties to improve or increase legislation to prevent this sort of thing but the only real solution is for the abolition of capitalism altogether and its replacement by by a non-profit based social system that values everyone for their contribution to society without the capitalist threat of having their livelihood (no money, no eat) removed on spurious grounds.

https://www.dailymail.co.uk/news/article-13099985/The-hard-hearted-letter-cleaning-boss-sent-single-mother-13-hour-fired-eating-left-tuna-sandwich-meeting-room.html

High Society was a 1956 American musical romantic comedy film starring stars of the time, Frank Sinatra, Bing Crosby and Grace Kelly. Grace Kelly was an actress who married a Prince. Well Prince of the two square kilometres of the Principality of Monaco famous for a Formula One race, casinos and a tax haven for the rich.

The film is about a spoilt heiress and millionaires on their uppers. Sinatra and his girlfriend sing Who wants to be a millionaire? where they list all the millionaire lifestyle material possessions they eschew in favour of a loving relationship. Seems as those plenty of the ‘rich and famous’ (sic) do want private planes, super-yachts and country estates though.

The October Socialist Standard of seventy years ago noted the increasing number of millionaires in post-war Britain.

‘The number of very wealthy people in Britain, including millionaires, is well below what it was before the war but it appears to be picking up again now. This, at least, is the conclusion of Mr. Marshall Pugh writing in the Sunday Chronicle (5/9/54). He has provided himself—at a cost of ten guineas—with a published list giving an estimate of the present number of millionaires and he finds it to be 50. A list similarly compiled in 1946 gave only 28. Mr. Pugh concludes that “Britain is slowly recovering from her post-par shortage of millionaires.” He doubts if the list is complete and adds a few likely names. This doubt about the exact number is not surprising because there is no record of millionaires published by the Inland Revenue authorities, though they must certainly have a good idea how many there are.

There is, however, official information in Inland Revenue Reports about the numbers of people in various ranges of income. In 1938-9 there were 99 people, each with an income (before being taxed) of over £100,000 a year. By 1950-51 the number had fallen to 38; and the number of persons who had more than £6,000 left to spend, after paying tax, had fallen from 6,600 in 1938-9 to about 500 in 1950-51. The fall in the number and size of very big incomes is exactly what was to be expected. Contrary to the muddled view held by those who have never understood what capitalism is and how it works capitalism’s wars are paid for by the only class that can pay—the capitalists. The destruction of capitalist property and loss of overseas investments fell on the British capitalists, but now that war-time destruction has been made good accumulation is going ahead once more and we may expect to see a change some way towards the pre-war pattern again.

This will surprise those who have swallowed the nonsense about poverty having been abolished under the so-called Welfare State. Apart from an unusually long period with unemployment at a very low figure nothing has happened since the war to change materially the structure of capitalism. Neither the Labour Government’s social reforms nor its Nationalisation schemes have touched the permanent capitalist inequalities of income and capital. It is still true, as it was in 1918, when the Labour Party plugged it in its election address that about 90 per cent, of the accumulated wealth of the country is owned by a 10th of the population. Yet we have the fatuous organ of Mr. Bevan, Tribune, in its issue for 2 July, 1954, publishing some figures about “the flagrant contrast between poverty and wealth in Britain,” and calling them “discoveries!” Tribune’s comment is that these “appalling facts” “will shock those who believe that the welfare state has eliminated poverty in Britain—or that there is no case for a drastic redistribution of wealth.”

Of course outstanding among those who deceived the workers into believing that the welfare state would abolish or had abolished poverty are the people who run Tribune.

And now that Tribune—about a century and a half late—has discovered that under capitalism there is flagrant contrast between poverty and wealth in Britain, their remedy is to seek redistribution of wealth. Socialists, of course, are not seeking anything of the kind. Trying to seek redistribution of wealth under capitalism merely perpetuates the notion that capitalism would be all right if there were fewer millionaires and more capitalists with investments of a moderate size. But this, assuming for the sake of argument that it could be achieved, would not at all remove the evils of capitalism. It is a matter of no concern at all to the cow whether she is milked to make profit for a farmer, a co-operative society or a millionaire dairy combine. The worker, if he understood his own interest, would perceive that capitalism is a system that functions by milking him for the benefit of the capitalist class and it is not his worry if some capitals swallow up others and produce millionaires. Their multiplication or their elimination will make no difference to him. It is not the redistribution of the property of the capitalists that will solve the workers’ problems but the abolition of capitalism.

Tribune, however, knows of other “solutions” of the poverty problem for in September a contributor, Mr. Ian Mikardo, went to Hungary and made the discovery that “there’s very little real poverty in Red Hungary.” But there must be a catch in that word “real” for he also discovered that the Hungarian workers’ living standards “are about 30 per cent. below ours, even when one allows for a very much higher ‘social wage’ than we have in Great Britain.” (Tribune 17th September 1954.)

It is all rather confusing. The poverty in Britain, says the Tribune is appalling in spite of the “welfare state and in Hungary living standards are 30 per cent. lower than in Britain in spite of having an even better welfare state (“social wage”); but nevertheless they are not “really” poor.

In the meantime here is a comforting thought about millionaires and the way they spend their money, from Noel Barber’s column in the Daily Mail (11 Sept., 1954).

“Being—like all millionaires—a true lover of the arts. Onassis, the uncrowned king, Monte Carlo recently commissioned the French artist Verges to do four big murals for the spacious saloon of his big new yacht.

https://socialiststandardmyspace.blogspot.com/2023/12/editorial-news-about-millionaires-1954.html

An up to date report foresees an upsurge in millionaires within the BRICS grouping over the next ten years. Not if the world decides to abolish capitalism and implement Socialism it won’t matey. What benefit this would be to the global majority working class isn’t stated. The world needs even power power and wealth concentrated in the hands of a ruling class like a kick in the head. Another Sinatra song reference.

‘The number of new millionaires in the BRICS countries will see a surge by 2034, contributing to the biggest increase in wealth across any group of nations, according to a recent report by Henley & Partners.

The BRICS group of emerging economies, which previously comprised Brazil, Russia, India, China, and South Africa, underwent a major expansion after Iran, Ethiopia, Egypt, and the United Arab Emirates joined in January of this year. Saudi Arabia, which has also been officially invited, is also set to become a member.

According to the report, the total investable wealth currently held by individuals in the BRICS countries amounts to $45 trillion, while the number of millionaires is expected to surge by 85% over the next decade. There are currently 1.6 million individuals with investable assets of over $1 million in the group, including 4,716 with more than $100 million and 549 billionaires.

In comparison, the figure for investable assets in the G7, comprising Canada, France, Japan, Italy, the US, UK, and EU, was $110 trillion as of December 2023, according to data provided to CNBC by Andrew Amolis, an analyst at New World Wealth. The number of millionaires is expected to increase by 45% over the next decade.

“[BRICS is] challenging the world order and establishing itself as a powerful rival to the G7 and other international institutions,” Henley & Partners’ Managing Partner and Head of Southeast Asia, Dominic Volek, said during a webcast presentation of the report.

Meanwhile, Amolis told CNBC that “the 85% forecast for BRICS will be the highest wealth growth of any bloc or region globally.”

According to the report, India is leading the charge in terms of growth of investable assets, with an estimated 110% jump in wealth per capita by 2033. The UAE is poised for 95% growth, while the figures for China and Ethiopia are expected to rise by 85% and 75%, respectively.

BRICS is now a highly influential player in the global economy, offering attractive new opportunities for investors, entrepreneurs, and talented high-net-worth individuals, the CEO of Henley & Partners, Juerg Steffen, stated.

Meanwhile, leading personal finance and investment expert Jeff Opdyke said that nations once considered ‘developing’ or ‘emerging’ or the pejorative ‘third world’ are now dynamic economies that are changing the global order. “Economically, non-Western nations – with BRICS at the vanguard – are pushing the globe into a new reality: An emerging economic, social, and monetary status quo that is upending what the world has accepted as normal for nearly eight decades,” Opdyke stated, as quoted in the report.’

F

 ‘For more than seven decades, a secretive and highly influential organization has been bringing together the heads of Europe’s largest banks twice a year at luxury hotels and royal palaces across the continent to discuss global policymaking among other issues, according to a report by the Financial Times.

The article highlighted that the existence of the Institut International d’Etudes Bancaires (IIEB) is barely known outside its membership while the group has no website and its meeting agendas are not made public. Members are reportedly discouraged from sharing details of the discussions. “This is not like Davos, where anyone can buy their way in,” one long time member told FT on condition of anonymity. “This really is exclusive,” he added.

Some members have been complaining about lack of transparency within the group, which was set up to encourage closer ties among banks at a time of geopolitical tensions and challenges to financial stability across Europe. “We were members for decades when the organization served a purpose to bring European banks closer together,” Par Boman, the chair of Swedish bank Handelsbanken, told the FT. “But after the financial crisis we felt its extravagance and lack of transparency did not fit our values.”

According to the report, the IIEB was established in Paris in 1950 by the heads of four lenders from across the continent – Crédit Industriel et Commercial, Union Bank of Switzerland, Société Générale de Belgique and Amsterdamsche Bank. The aim was to hold regular high-level discussions on developments in the banking sector, as well as the economy and monetary system.

The topics under discussion reportedly reflected the concerns of European bankers at certain periods of time. In the 1950s, for example, it was the formation of subsidiaries in former colonies, while by the 1960s, the attention had turned to the global role of the US dollar, the problems with the Bretton Woods system of fixed exchange rates and the threat of American takeovers of European banks. Towards the end of the century, the IIEB discussions were more concerned with the impact of the euro, the growing derivatives market, and M&A deals between big banks, the FT wrote.’

“As Europe’s lenders come under pressure to improve their lackluster valuations – having fallen far behind their US rivals on profitability in recent years – and with the continent bracing for a long-heralded wave of cross-border dealmaking, the IIEB is entering one of its most important periods since it was set up in the aftermath of the second world war,” the paper wrote.

According to the FT, besides being a forum where Europe’s top financiers can exchange ideas, the IIEB serves as an elite social club where, over three days, the bankers’ spouses can enjoy gala dinners, private tours of historic landmarks and high-end shopping trips.

The report noted there has been almost no media coverage of the IIEB’s activities during its more than seven decades of existence despite the importance of the topics under discussion’

Bankers’ bonuses: who’s to blame for the greed?

Bob Diamond, Barclays bank’s chief executive, and one of Europe’s highest-paid bosses, last month faced a grilling from the Treasury Select Committee, a cross-party body appointed by the House of Commons. Those expecting a replay of previous confrontations between MPs and bankers – in February 2009, for example, when the bankers said they were ‘profoundly sorry’ for their role in the financial crisis – were to be disappointed.

Diamond was unrepentant. In answer to questions from MPs, he said it was about time that unfair public criticism ‘moved on’ so bankers could stop apologising and get back to business as usual. MPs wanted to know if Diamond was going to show ‘restraint’ on bonuses this year (no), refuse his own bonus (probably not), act more responsibly and increase lending to business (impossible to do both), accept personal liability for the failing of institutions (no) and if he was ‘grateful’ to ‘the taxpayer’, ie, the state, for bailing out the financial system and keeping him and his whole industry in business (grudgingly, and after much evasion, yes. In other words, reading between the lines, no).

Diamond’s performance added fuel to the fire of the ongoing bankers’ bonus controversy. Ministers in the present government, while campaigning for power, said they were determined to do something about the arrogance and excessive wealth of the bankers. And to be fair, they are doing something. In fact, as Will Hutton puts it in The Observer (16 January), compared with Gordon Brown and Alistair Darling, business secretary Vince Cable and chancellor George Osborne are ‘fire-breathing radicals’, clamping down on tax avoidance, taxing bank profits, setting targets for bank lending, regulating hedge funds and contemplating more banking reform and regulation. But so far, they are being relatively timid about bankers’ bonuses. Why? Now that they have taken power, they, in common with all governments, accept the reality of capital accumulation and their role in it. And that means not doing anything that will frighten the financiers too much.

Capitalists united – and divided

That remains true even in the face of an increasingly numerous opposition. After all, as Hutton says, the issue of bankers’ bonuses is uniting everyone in outrage – ‘from captains of industry bewildered how top bankers can earn so much more than they do to the newly unemployed who wonder what they have done to deserve poverty and hardship while the moneymen pocket millions’. That the state bailouts have poured into the pockets of private individuals, and the poorest and most vulnerable will be left to pay the price in terms of job losses, benefit cuts, and reduced levels of social services and so on, we have already stated (see Socialist Standard, passim). But how come we are also seeing criticism from captains of industry and government ministers and the business press and so on? Not so long ago, bankers could rely on them being ‘intensely relaxed’ about such matters. Why now so increasingly angry and vocal?

Partly it is a fear of social unrest and breakdown. It also reflects divisions within the capitalist class. As a class, the capitalists are united by the need to promote the conditions necessary for investment and business activity. For that, they need, for example, a supply of compliant and affordable labour, a state willing and able to provide socially necessary infrastructure, a financial system to facilitate the processes of capital accumulation, a vibrant consumer market, and so on. On issues such as these, capitalists stand united. But the capitalist also finds himself in competition with his comrades. Capitalists have differing needs and interests depending on exactly how they get their hands on the spoils of exploitation – whether as landlord, financier, industrialist, retailer or state official, for example. In the usual course of things, this is just the stuff of competition, of ‘business as usual’, the undertow of everyday life. But when crisis hits, everything breaks to the surface. As Marx puts it (in Capital, Volume 3, Chapter 15):

‘So long as things go well, competition effects an operating fraternity of the capitalist class […] so that each shares in the common loot in proportion to the size of his respective investment. But as soon as it is no longer a question of sharing profits, but of sharing losses, everyone tries to reduce his own share to a minimum and to shove it off upon another. The class, as such, must inevitably lose. How much the individual capitalist must bear of the loss, ie, to what extent he must share in it at all, is decided by strength and cunning, and competition then becomes a fight among hostile brothers. The antagonism between each individual capitalist’s interests and those of the capitalist class as a whole, then comes to the surface…’

Who wins out in this struggle is not simply a reflection of factional power, as the Marxist academic David Harvey points out (The Limits To Capital, Chapter 7). The existence of surplus value (profit) in money form is ‘the most adequate form of capital’, which means that ‘the moneyed interest enriches itself at the cost of the industrial interest in the course of [a] crisis’ (Marx). This, then, helps us understand the row about bankers’ bonuses. It’s a row about which class, or which fraction of a class, is going to be landed with the costs of the crisis. We see, therefore, that Marxian theory is not esoteric mumbo-jumbo or outdated rubbish, as often claimed, but a powerful explanation for what is actually going on in the real world. If you understand Marxian theory, bankers’ multi-billion-pound bonuses and the row surrounding them no longer look so much like an insane aberration, but a logical consequence of social and economic structure. Bankers are enriching themselves at the expense of industry and workers? Well, OK, that’s what we would expect to happen…

What is to be done?

The question is what is to be done about it. As Harvey says, however the class struggle eventually plays out, however the losses of the crisis are finally distributed between factions of the capitalist class, and between the working and capitalist classes, and whatever the power struggle that ensues, the necessary result will be the destruction of value (closure of workplaces, the laying off of workers, destruction of surpluses, defaulting on debt, cutting of state services, and so on) so that a new round of capitalist accumulation can begin. This is totally irrational and insane from the point of view of human needs, but inevitable and logical from the point of view of capital accumulation.

The film-maker Charles Ferguson, whose investigative documentary Inside Job exposes the delusions and deeds of the bankers during the course of the crisis, says that, ‘Those responsible [for the crisis] blame the system. Or they blame the bubble caused by irresponsible borrowers. Some of them blame low interest rates. In a grim way, it’s actually amusing to watch them blame anyone except themselves’ (Evening Standard, 17 January). The film-maker’s contempt for those who line their pockets and profit from social disaster is justified. But actually, in a sense, it’s the bankers who have got it right. It is the system that is to blame. And we should indeed ‘move on’ – from blaming capitalists who are as much at the mercy of the system as the rest of us, to an understanding of the world we live in and how it works. Politically, that means moving from a demand for ‘regime change’ to one for ‘system change’.

Stuart Watkins

From the February 2011 issue of the Socialist Standard

https://socialiststandardmyspace.blogspot.com/2021/02/an-unrepentant-banker-2011.html

This evening’s meeting will be:start at 19.30ut:

From The Guardian 14 February.

‘UK shop workers are facing 1,300 incidents of violence and abuse a day and a battle to control “brazen” acts of shoplifting, as pressure mounts on ministers to intervene to protect retail employees. ‘

https://www.theguardian.com/business/2024/feb/14/violence-and-abuse-against-uk-retail-staff-rises-to-1300-incidents-a-day

It notes, ‘The rise in retail crime has coincided with a period of rampant price inflation, with the cost of everyday goods from eggs to baby formula increasing over the past two years at a rate not seen since records began in the 1970s, leaving many families struggling to make ends meet.’

The ‘solutions’ on offer, the Chief Executive of the British Retail Consortium called for more arrests. “Despite retailers investing huge sums in crime prevention, violence and abuse against retail workers is climbing. Criminals are being given a free pass to steal goods and to abuse and assault retail colleagues. No one should have to go to work fearing for their safety.”

Absolutely correct. No one should put their health or their life on the line to ‘protect’ capitalist profits.

There are calls for the ‘offence of assaulting, threatening, or abusing a retail worker.’

‘The Co-op, which has more than 2,000 stores across the UK, said it was installing 200 secure till kiosks, locked cabinets for bottles of spirits and AI technology to monitor self-checkouts in its supermarkets after a 44% surge in retail crime last year. It has also doubled the amount it spends on security guards.’

Why is the real problem not being addressed? Capitalism. With the transition to Socialism, a social system where quality goods and services will be produced for use not free and the necessity to sell your labour power in order to earn money to live so that you can work to earn money to live ad infinitum a very large number of capitalistic socially useless jobs will become redundant. Immediate ‘occupations’ that spring to mind are financial, military, sales, marketing, adverting, insurance, taxation, security and retail check out ‘ There won’t be shoplifting because everything will be free access. And yes, there will be plenty of people happy to ensure smooth distribution and stocking up because working for the common good is its own reward.

From the Socialist Standard November 2023

‘One reason why we continue to work comparatively long hours, despite the labour-saving potential of modern technology, is the proliferation of many paid jobs that essentially contribute nothing whatsoever to our material well-being. They are, nevertheless, required simply to keep the money-based market economy ticking over on its own terms.

David Graeber in his 2018 book, Bullshit Jobs defines these loosely as jobs that, if you were to scrap them completely tomorrow, it would hardly make any discernible difference to the real world or to our standard of living. He noted in an interview that there is a certain delicious irony in the fact that while a Soviet-style system has often been held up by mainstream economists as grossly inefficient because of all those make-believe jobs it created to maintain the pretence of full employment, in a so-called free-market economy that is supposed to root out such inefficiencies, exactly the same thing has been happening.

In that book, Graeber invents a rather amusing and colourful lexicon of terms to describe the different categories of jobs he has in mind. These jobs are everywhere and multiplying like wayward bacterial spores in a Petri dish. There are ‘flunkies’, paid to hang around, like doormen or receptionists, simply to make their superiors feel important; ‘goons’ to harm or deceive others for some nefarious commercial interest like the ubiquitous lobbyists or telemarketers; ‘duct tapers’ to temporarily fix jobs that would be better, and more efficiently, fixed permanently; ‘box tickers’ that go through the motions of doing paperwork that appears important but is decidedly not; and, last but not least, ‘taskmasters’ who are either completely superfluous in the guise of superiors telling you what needs to be done when you already know what needs to be done or are otherwise known as ‘bullshit generators’ whose job it is to create yet more bullshit jobs and so keep themselves employed in their own bullshit jobs.

A great many of these bullshit jobs fall within the services or tertiary sector. This sector now comprises the great bulk of the workforce at least in the more economically developed countries and as stated, its growth has been linked to the concept of deindustrialisation. Some workers in the services sector – like nurses or teachers – of course, perform socially useful tasks but many others clearly do not.

The ‘tertiarisation’ of the economy strongly associated with the growth of such socially useless industries as commerce, finance and retailing is an expression of the evolving (and expanding) systemic needs of capitalism itself. However, tertiarisation in itself does not capture the full extent of capitalism´s structural waste since many apparently useful jobs in the secondary or manufacturing sector (and, by extension, the primary sector) have to do with providing products or physical infrastructure that are then used for socially useless purposes within the services sector itself.

These jobs don’t actually make us ‘better off’ in real terms. They don’t result in more socially useful wealth being produced and distributed around. However, the fact that more and more of us are doing them means that more and more of us are, in effect, dependent on economic transfers from the steadily shrinking part of the economy concerned with producing socially useful wealth to maintain what might be called our ‘real standard of living’.

Money is the mechanism by which these economic transfers are effected, but money is also the reason why they are needed in the first place. Bank employees shuffling around bits of paper called money (although these days this is largely digitalised) can’t live on the stuff. They have to exchange it for ‘real’ stuff – like pairs of shoes, takeaway pizzas, or a Toyota to drive to work.

This is equally true whether you possess a wad of cash or an electronic wallet of bitcoins. In both instances what we are talking about is just a symbolic claim to wealth, not wealth itself. Indeed, for all the current hullabaloo over the latter – the cryptocurrency of choice of money launderers and shady operators everywhere – society as a whole is not one jot better off. On the contrary, according to data supplied by the University of Cambridge and the International Energy Agency, bitcoin ‘mining’ consumes around the same amount of energy annually as the Netherlands did in 2019 (tinyurl.com/3yk9w3zw).

What an astounding waste of energy! And to achieve precisely what? Nothing except to boost some individuals’ symbolic claim to wealth at the expense of others. For that is all that it can ever logically amount to when you think about it. In themselves, bitcoins – or fiat money, for that matter – are completely worthless. How long would Robinson Crusoe survive on his island if that was all he had to live on?

Actually, the ‘Robinson Crusoe’ acid test is not a bad starting point for determining what we mean by a real ‘human need’ as opposed to a fake. We don’t ‘need’ money. What we need in this society is only (some of) the things money can buy – though a lot of other things our money can also buy we don’t really need at all either – what the counter-cultural philosopher Herbert Marcuse called ’false needs’ in his 1964 book, One Dimensional Man. These are systematically and subconsciously instilled in us as a way of better integrating us into a capitalist ‘consumer society’ that is then able to more efficiently repress and control us by manufacturing our consent, manipulating our inner desires, and generally soliciting our compliance with its core values.

Of course, banking or cryptocurrency transactions and the like are only a tiny visible tip of a veritable iceberg of structural waste that we are talking about. With fewer and fewer people involved in producing shoes, pizzas and cars and more and more people engaged in ‘socially useless’ (but capitalistically indispensable) work within the economy, it is not surprising that society’s overall workload has not diminished but increased. More and more people are employed today than ever before but, at the same time, more and more of these are engaged in work that contributes absolutely nothing to our material well-being. Consequently, from the standpoint of meeting our needs, we are in effect, as a society, having to run faster and faster just to stand still. That is, to maintain our real “standard of living”.

Indeed, this is the core argument that runs through Ken Smith’s thought-provoking book, Free is Cheaper (1988). According to him, capitalism or the ‘market economy’, from small beginnings at the end of the Middle Ages, has come to dominate life in every corner of the world. However, it has brought with it increasingly unacceptable costs:

‘The crime industry, war preparation, bureaucracy, the ”sales effort”, these and other non-productive activities absorb the efforts of nine-tenths of the working population and are growing faster than productivity itself’.

On the basis of evidence supplied by commentators such as Thorold Rogers (Six Centuries of Work and Wages, 1884) and Sir William Beveridge et al (Prices and Wages in England from the Twelfth to the Nineteenth Century, 1939), Smith came up with some quite startling conclusions. For instance: ‘it takes longer today for a carpenter or a bricklayer to earn the price of a pound of meat or a house brick than it did five centuries ago’. What accounts for this, he argued, is the ever-increasing on-costs – or transactional costs – imposed by the market system itself.

Smith arrived at a figure of 90 percent of the working population being engaged in one or other form of socially useless activity (from the standpoint of meeting human needs) by carrying out a fairly comprehensive sectoral analysis of the British economy as it was back then in the 1980s. A roughly similar figure has been reached by other commentators such as Buckminster Fuller.

That figure of 90 percent is probably on the high side. Most people who have looked into the matter would put the figure at, conservatively speaking, roughly half the working population or perhaps a bit more.

Much depends, of course, on how stringently you want to define ‘socially useless activity’. A luxury good, for instance, might be considered ‘socially useless’. Yet it is undeniable that ‘consuming’ it can afford us pleasure. The problem arises when the production of luxury goods reaches a scale that jeopardises the satisfaction of our more mundane and pressing basic needs by diverting resources and labour away from the latter to the former. So the question of opportunity costs – how much of a given resource should you devote to producing this particular product at the expense of producing more of some other product – needs to be factored into the equation. Additionally, there is the question of how you define a luxury good. Some goods that were once considered a luxury – like a car or a refrigerator – have over time come to be considered a necessity.

Nevertheless, the basic thrust of Smith’s argument is unquestionably on the right track. Even setting aside the example of the production of luxury goods, there is a very large number of occupations that can be unequivocally and categorically classed as ‘socially useless’ and, therefore, wasteful of society’s human and material resources. In fact, the full extent of capitalism’s ‘structural waste’ is truly massive, all-pervading, and steadily growing. However, it will remain completely invisible to the naked eye, so to speak, as long as the viewer adopts a standpoint that simply takes this money-based capitalist system for granted.

To really appreciate the enormity of this iceberg of structural waste, you have, as it were, to step outside of that standpoint, or way of looking at the world, and adopt instead, a standpoint external to the system itself. You have to imaginatively presuppose a hypothetical society in which money itself, as an institution, has completely ceased to exist.

Needless to say, in such a society a great many of the jobs bound up with the existence of money today – or what that existence entails –would likewise cease to exist. They would simply serve no purpose.’

Robin Cox

https://socialiststandardmyspace.blogspot.com/2023/11/capitalisms-structural-waste-2023.html