Sunday, January 27, 2013
Breaking Up the Big Banks is Not a Solution
Leo Panitch: Global capitalism needs massive banks, but big private banks have the power to prevent regulation and threaten more crisis; the solution is not breaking them up but making them public
Posted by nickglais at 4:35 AM No comments:
Saturday, January 26, 2013
UK heads for triple dip as Economy shrinks
Political Economy Research does not agree with right wing prescriptions to UK economic problems of Mark Littlewood of the Institute of Economic affairs a think tank proponent of more savage cuts.
Posted by nickglais at 9:56 AM No comments:
Counting the Cost - The economic malaise and its perils
Posted by nickglais at 9:45 AM No comments:
Friday, January 25, 2013
Wednesday, January 23, 2013
Sunday, January 20, 2013
Alfred Russell Wallace address to Land Nationalisation Society in 1895
The Only Solution to the Problem
of the Unemployed
[[p. (9)]] We are now approaching the end of a century which has far surpassed all preceding centuries in the increase of man's power over natural forces, and consequent enormous increase in the production of wealth. The amount of this increase may be judged from the fact that, fifteen years ago, the amount of actual steam-power in Great Britain amounted to about ten times the labour-power of the whole working population. It is now certainly much greater, and by the use of labour-saving machinery, this amount of mechanical power is again increased probably ten-fold in efficiency, so that our people now perform a hundred times as much productive work as during the preceding centuries when steam power and machinery were hardly used at all. Yet with this hundredfold-capacity for producing the food, clothing, and other commodities needed for the satisfaction of all the wants of human nature and the comforts and enjoyments of life, what do we find? Huge masses of people suffering untold misery and want in all our great cities, and in country villages surrounded by game-preserves and untilled fields; an increasing number dying of actual starvation; insanity and suicide increasing [[p. 10]] more rapidly than the population; and, according to a very competent authority, a Prison Chaplain, who has studied the statistics of crime for thirty years, an equally large increase in crime and in the prison population.1
As confirming and illustrating all these terrible facts, we have the Yearly Reports of the Registrar General, showing that for the last forty years there has been a continuous increase in the proportion of deaths occurring in workhouses, hospitals, asylums, and other public charitable institutions, from 16 per cent. of the total deaths (in London) in the five years, 1856-60, to 26 per cent. in 1886-90; and a similar increase, though not quite so rapid, is shown for the whole kingdom.
Co-incident with all these facts, and to some extent explaining them, is the continual depopulation of the rural districts and increase of town and city populations, certainly largely due, and I believe wholly so, to the monopoly of land in the hands of the landlord class, which has always forbidden and still forbids the free use of their native soil on fair terms to the workers. Hence has arisen the phenomenon of an ever-increasing lack of permanent employment; the flocking of large numbers of rural labourers and their families to the towns; the increase of poverty, starvation, suicide, insanity, and crime; millions of acres of land going out of cultivation, and the cry of agricultural depression, now raised the more loudly because the pockets of the landlords themselves are affected by it. Most of the aspects of the "problem of poverty" above adverted to I have dealt with more or less fully elsewhere, [[p. 11]] as have many well-known Socialist writers. My present object is to suggest an immediate practical remedy for some of the worst features of the present state of things, by with-drawing from the labour-market the superabundant workers and rendering them wholly self-supporting on the land. This once effected every other worker in the kingdom will be benefitted, and the movement for a greatly-improved organisation of society will be advanced by a practical illustration of the enormous waste involved in the capitalistic and competitive system that now prevails.2
The problem of general unemployment is well stated by Mr. J. A. Hobson in the Contemporary Review of April, 1895 ("Is Poverty Diminishing?"). He says:--"Why is it that, with a wheat-growing area so huge and so productive that in good years whole crops are left to rot in the ground, thousands of English labourers, millions of Russian peasants, cannot get enough bread to eat? Why is it that with so many cotton mills in Lancashire that they cannot all be kept working for any length of time together, thousands of people in Manchester cannot get a decent shirt to their backs? Why is it that, with a growing glut of mines and miners, myriads of people are shivering for lack of coals?" Now, not one of our authorised teachers of political economy, not one of our most experienced legislators can give any clear answer to these questions, except by vague reference to the immutable laws of supply and demand, and by the altogether false statement that things are not so bad as they were, and that in course of time they will improve of themselves. Mr. H. [[p. 12]] V. Mills had his attention directed to this subject by an individual instance of the same phenomena. He found in Liverpool, next door to each other, a baker, a shoemaker, and a tailor, all out of work, all wanting the bread, clothes and shoes which they could produce, all willing and anxious to work, and yet all compelled to remain idle and half starving. His book has been before the world several years; it contains a practical and efficient remedy for this state of things; yet no attempt whatever has been made to give his plan a fair trial. Let us therefore see if we can throw a little more light on the problem, and thus help to force it upon the attention of those who have the power, but who believe that nothing can be done.
The answer to the question so well put by Mr. Hobbs [[Hobson?? --Ed.]], and which Mr. Stead, in the Review of Reviews, considers to be the modern problem of the Sphinx which it needs a modern Œdipus to solve, is nevertheless perfectly easy. To put it in its simplest form it is as follows:--Unemployment exists, and must increase, because, under the conditions of modern society, production of every kind is carried on, not at all for the purpose of supplying the wants of the producers, but solely with the object of creating wealth for the capitalist employer.
Now, I believe, that this statement contains the absolute root of the whole matter, and indicates the true and only lines of the complete remedy. But to many it will be a hard saying; let us therefore examine it a little in detail.
The capitalist cotton-spinner, cloth or boot-manufacturer, colliery-owner, or iron-master, care not the least who buys their goods or who uses them, so long as they can get a good price for them. The cotton, the boots, the coals, or the iron, may be exported to India or Australia, to America or [[p. 13]] to Timbuctoo, while millions are insufficiently clad or warmed in the very places where all these things are made. Even the very people who make them may thus suffer, through insufficient wages or irregular employment; yet the upholders of the present system will not admit that anything is fundamentally wrong. The lowness of wages and irregularity of employment, are, they tell us, due to general causes over which they have no control--such as foreign competition, insufficient markets, etc., which injure the capitalists as well as the workers. The unemployed exist, they say, on account of the improvements in machinery and in mechanical processes in all civilised countries, which economise labour and thus render production cheaper. The surplus labour, therefore, is not wanted; and that portion of it which cannot be absorbed in administering to the luxury of the rich must be supported by charity, or starve. That is the last word of the capitalists and of the majority of the politicians. But though capitalists and politicians are satisfied to let things go on as they are, with ever increasing wealth and luxury on the one hand, ever increasing misery and discontent on the other, thinking men and women all over the world are not satisfied, and will not be satisfied, without a complete solution of the problem; which, though they are not yet able to see clearly, they firmly believe can be found.
Governments in modern times, have gone on the principle that they have nothing whatever to do with the employment or want of employment of the people,--with high wages or low wages, with luxury or starvation, except inasmuch as the latter calamity may be prevented by the poor-law guardians. A great change has, however, occurred in the [[p. 14]] last few years. Both the local and imperial Governments have admitted the principle of a reasonable subsistence-wage, and are acting upon it, in flagrant opposition to the principles of the old political economy. Now, too, I observe, the buying of Government stores abroad, because they can be obtained a fraction per cent. cheaper than at home, is being given up, though only three or four years ago the practice was defended as being in accordance with true economical principles, and also because it was the duty of the Government to buy as cheaply as possible in the interest of the taxpayer. I only mention these facts to show that new ideas are permeating modern society, and are compelling Governments, however reluctantly, to act upon them. We may, therefore, hope to compel our rulers to acknowledge that it is their duty also to provide the conditions necessary to enable those who are idle and destitute--from no fault of their own, but solely through the failure of our competitive and monopolist system--to support themselves by their own labour. Hitherto they have told us that it cannot be done, that it would disorganise society, that it would injure other workers. We must, therefore, show them how it can be done, and insist that at all events the experiment shall be tried. I will now give my ideas of how this great result can be brought about, and the reasons which I believe demonstrate that the method will be successful.
Hitherto there has been no organisation of communities or of society at large for purposes of production, except so far as it has arisen incidentally in the interest of the capitalist employers and the monopolist land-owner. The result is the terrible social quagmire in which we now find [[p. 15]] ourselves. But it is certain that organisation in the interest of the producers, who constitute the bulk of the community, is possible; and as, under existing conditions, the millions who are wholly destitute of land or capital cannot organise themselves, it becomes the duty of the State, by means of the local authorities, to undertake this organisation; and if it is undertaken on the principle that all production is to be, in the first place, for consumption by the producers themselves, and only when the necessary wants of all are satisfied, for exchange in order to procure luxuries, such organisation cannot fail to be a success.
My confidence in its success is founded on three considerations, which I will briefly enumerate. The first is, the enormous productive power of labour when aided by modern labour-saving machinery. Mr. Edward Atkinson, admitted to be the greatest American authority on the statistics of production and commerce, has calculated that two men's labour for a year in the wheat-growing States of America will produce, ready for consumption, 1,000 barrels of flour, barrels included; and this quantity will produce bread for 1,000 persons for a year. Now as we can grow more bushels of wheat an acre than are grown in America, we could also produce the bread for 1,000 persons by the labour of say four or five men, including the baking. Again, he tells us that, with the best machinery, one workman can produce cotton cloth for 250 people, woollen goods for 300, or boots and shoes for 1,000. And as other necessaries will require an equally moderate amount of labour, we see how easily a community of workers could produce, at all events all the necessaries of life, by the expenditure of but a small portion of their total labour-power.
[[p. 16]] The next consideration is, that in the Labour Colonies of Holland, the unemployed are so organised as to produce all that they consume, or its value, without the use of any labour-saving machinery. The reason they have none, the director told Mr. Mills, is that it would lead to a difficulty in finding work for the people of the colony, and it would then be less easy to manage them. The difficulty in this case seems to be to provide against the possibility of a too great success!3
The third consideration which points to the certainty of success, is, the demonstrable enormous waste of the present capitalistic and competitive system; and the corresponding enormous economies of a community in which all production would be carried on primarily for consumption by the producers themselves. This economy will be illustrated as we consider the organisation of such a community.
A careful consideration of the whole problem by experts will determine the minimum size of a colony calculated to ensure the most economical production of all the chief necessaries of life. Let us take it at about 5,000 persons, including men, women, and children, which is Mr. Mills' estimate. Enough land will be required to grow all the kinds of produce needed, both vegetable and animal--say two to three thousand acres--and a skilled manager will be engaged to superintend each separate department of industry. Not only will bread, vegetables, fruit, and meat of all kinds be grown on the land, but the whole of the needful manufactures will be carried on, aided by steam, water, or wind power, as may be found most convenient and economical. To provide clothes, tools, furniture, [[p. 17]] utensils, and conveniences of all kinds for 5,000 people, workshops and factories of suitable dimensions will be provided, and skilled workers in each department will be selected from among the unemployed or partially employed. A village with separate cottages or lodgings for families and individuals, with central cooking and eating-rooms for all who desire to use them, would form an essential part of the colony. The village would be built on a high yet central position, so that all the sewage could be applied by gravitation to the lower and more distant portions of the land, while all the solid refuse and manurial matter would be applied to the higher portions. Here would be the first great economy, both in wealth and health. Every particle of sewage and refuse would be immediately returned to the land, where, under the beneficent action of the chemistry of nature, it would be again converted into wholesome food and other products.
Another economy, of vast amount, but difficult to estimate, would arise from the whole effective population being available to secure the crops when at their maximum productiveness. Who has not seen, during wet seasons, hay lying in the fields week after week till greatly deteriorated or completely spoilt; shocks of wheat sprouting and ruined; fruit rotting on the ground; growing crops choked with weeds,--all involving loss to the amount of many millions annually, and all due to the capitalistic system which has led to the overcrowding of the towns and the depopulation of the rural districts. But this is only a portion of the loss from deficiency of labour at the critical moment. Agricultural chemists know that, even in good seasons, a considerable portion of the nutritious qualities of [[p. 18]] hay is lost by the cutting of the grass being delayed a few days or weeks, owing to uncertain weather, the pressure of other work, or a deficiency of labour. The critical moment is when the grass is in flower. Every day later it deteriorates; and in our self-supporting colonies the whole population would be available to supply whatever assistance the head farmer required to get the hay made in the best possible condition. A single fine day, utilised, with the aid of machinery and ample labour, would often save hundreds of pounds value to the colony. The same would be the case with wheat and other corn crops, as well as with fruit and vegetables.
In such a colony education could be carried on in a rational manner not possible under the present conditions of society, where the means of industrial training have to be specially provided. Ordinary school work would be at the most three or four hours daily; the remainder of the working day being devoted to various forms of industrial work. Every child would be taught to help in the simpler agricultural processes, as weeding, fruit gathering, etc.; and besides this each person would learn at least two trades or occupations, more or less contrasted; one being light and sedentary, the other more active and laborious, and involving more or less out-door work. By this means not only would a pleasant and healthful variety of occupation be rendered possible for each worker, but the community would derive the benefit of being able to concentrate a large amount of skilled labour on any pressing work, such as buildings or machinery.
But perhaps the greatest economy of all would arise from such a community being almost wholly free from [[p. 19]] costs of transit, profits of the middleman, and need for advertising. The total amount of this kind of waste, on the present system, is something appalling, and can be best realised by considering the difference between the cost of manufacture and the retail price of a few typical articles. Wheat is now about 22s. to 24s. a quarter, which quantity yields nearly six hundred pounds of bread. In our proposed community the labour of making the flour would be repaid by the value of the pollard and bran, while the bread-making would employ two or three men and women. The actual cost of their four-pound loaf, reckoning the labourers to receive present wages, would be about 2d., while it now costs 3 1/2d. or 4d.--a saving of at least 40 or 50 per cent. Again, the best Cork butter sells wholesale at 8d. a pound, the actual maker probably getting no more than 7d., while the retail consumer has to pay double--here would be a saving of at least 50 per cent. Milk is sold wholesale by the farmers at about 7d. a gallon, while it is retailed at 16d. a gallon--a saving of more than 60 per cent. In meat there would be, probably, about the same saving as in bread; in vegetables and fruit very much more; in coals bought wholesale from the pit, as compared with the rate at which it is sold by the hundredweight or the pennyworth to the poor in great cities, an equally large saving. And in addition to all this there would be the economy in the cooking for a large community; in the freshness and good quality of all food and manufactured products; and, further, in the saving of labour by all those improvements in gas and water supply, in disposing of refuse, in warming and ventilation, which can be easily provided for a large community living in a compact and well arranged set of buildings.
[[p. 20]] Taking all these various economies into consideration, it is probably far below the mark to say that our present system of production on a huge scale for the benefit of capitalists and landlords only, on the average doubles the cost of everything to the consumer; that is to say, the cost of distribution is equal to, and often much greater than, the cost of production. And this is said to be an economical system! A system too perfect, and almost too sacred to be touched by the sacrilegious hands of the reformer! We are to go on for ever spending a pound to get every pound's worth of goods from the producer to the consumer; just as under our Poor Law system it costs a shilling to give a starving man a shilling's worth of food and lodging.
But there is yet another economy, which I have not hitherto mentioned, and which may perhaps be said to be far greater in real value and importance than all the rest, and that is the economy to the actual producer, of time, of labour, of health, and the large increase in his means of recreation and happiness. Agricultural labourers now often have to walk two or three miles to their work; mill-hands, including women and children, walk long distances in all weathers to be at the mill-gates by six in the morning; workers by the million undergo a process of slow but certain destruction in unsanitary workshops, or in dangerous or unhealthy occupations, many of which (as making the enamelled iron advertising plates, for example) are quite unnecessary for the needs of a properly organised community; while in all cases it is only a question of expense to save the workers from any injury to health. In our self-supporting communities, all these sources of waste and misery would be avoided. All work would be near at hand. [[p. 21]] No work permanently injurious to health would be permitted; while the alternations of outdoor and indoor work, together with the fact that every worker would be working for himself, for his family, and for a community, of which he formed an integral part on an equality with all his fellow-workers, would give a new interest to labour similar to that which every gardener feels in growing vegetables for his own table, and every mechanic in fitting up some useful article in his own house. Then again, while living in and surrounded by the country and enjoying all the advantages and pleasures of country life, a community of five thousand persons would possess in themselves the means of supplying most of the relaxations and enjoyments of the town, such as music, theatricals, clubs, reading-rooms, and every form of healthy social intercourse.
Are all these economies, and all this health and comfort for a large population, of less importance to the nation than the increased wealth of one or two capitalists? Must thousands or millions continue to have their lives shortened, and during their short lives have a minimum of the comforts and pleasures of life in order that a few may be inordinately rich? I earnestly call upon all who have the welfare of humanity at heart, to consider at what needless cost to the workers the boasted wealth of the nation is now produced.
This is not the place to go into the minute details of the establishment of such communities, but a few words as to ways and means may be considered necessary.
It has been estimated that the capital required to buy the land and start such a colony would not exceed two years' poor rates of a Union where there are an equal number [[p. 22]] of paupers. But there is really no necessity for buying the land. It might be taken where required at a fair valuation and paid for by means of a terminable rental, similar to that by which Irish tenants have been enabled to purchase their farms; but in this case the county would be the purchaser, not an individual, and after the first year, or perhaps two years, this rent-charge would be easily payable by the colony. The capital needed for buildings, machinery, and one year's partial subsistence, should be furnished, half by the County or Union, and half by the Government, free of interest, but to be repaid by instalments to commence after, say, five or ten years. It would really be to the advantage of the community at large to give this capital, since it would inevitably lead to the abolition of unemployment and of able-bodied pauperism, and the saving thus effected would more than repay the initial outlay.
In each Colony there would be grown or manufactured a considerable amount of surplus produce, which would be sold in order to purchase food which cannot be produced at home--as tea, coffee, spices, etc., and also such raw materials as iron and coal. The things thus produced for sale would vary according to the facilities for its production and local demand. In some colonies it would be wheat or barley, in others, butter and cheese, in others again, flax, vegetables, fruit, or poultry, in others perhaps, leather or wool. And as all the products of our soil except milk are largely imported, there is ample range for producing articles for sale which would not in any way affect prices or interfere with outside labour.
At first, of course, such colonies must be organised and all the work done under general regulations and the same [[p. 23]] discipline as is maintained in any farm or factory, but with no unnecessary interference with liberty out of working hours. Accounts would be strictly kept and audited, and all profits would go to increasing the comfort of the colonists in various ways, and in paying surplus wages to be spent, or saved, as the individual pleased. Under reasonable restrictions as to notice every one would be at liberty to quit the colony; but with such favourable conditions of life as would prevail there it is probable that only a small proportion would do so. None, apparently, quit the Dutch colony of Frederiksoord.
But as time went on, and a generation of workers grew up in the colony itself, a system of self-government might be established; and for this purpose I think Mr. Bellamy'sa method the only one likely to be a permanent success. It rests on the principle that, in an industrial community, those only are fit to be rulers who have for many years formed integral parts of it, who have passed through its various grades as workers or overseers, and who have thus acquired an intimate practical acquaintance with its needs, its capacities, and its possibilities of improvement. Persons who had themselves enjoyed the advantages of the system, and who had suffered from whatever injudicious restrictions or want of organisation had prevailed, and who had nearly reached the age of retirement from the more laborious work, would be free from petty jealousies of their fellow workers, and would have no objects to aim at except the continued success of the colony and the happiness of all its inmates. On this principle those who had worked in the colony for at least fifteen or twenty years, and who had reached some grade above that of simple workmen, should form the [[p. 24]] governing body, appointing the superintendents of the various departments, and making such general regulations as were needed to ensure the prosperity of the community and the happiness of all its members.
Now, I would ask, what valid reason can be given against trying this great experiment in every county in Great Britain and Ireland, so as at once to absorb the larger part of the unemployed as well as all paupers who are not past work? The only real objection, from the capitalist's point of view, that I can imagine, is, that colonies in which the whole of the produce went to the workers themselves, including of course their own sick and aged, would be so attractive that they would draw to them large numbers of workers of all kinds, and thus interfere with the capitalists' labour supply. This, I believe, would, after a few years, inevitably occur; but, from my point of view, and from that probably of most workers, that circumstance would afford the greatest argument in favour of the scheme. For it would show that, with a proper organisation of labour, capitalist production was unnecessary; it would afford practical proof that labourers can successfully produce without the intervention of capitalist employers; and if they can do so it will hardly be contended that unemployment and pauperism must be maintained for the benefit of capitalists.
In this connection I will quote a passage from the writings of that remarkable observer and thinker, the late Richard Jeffrey. He says:--
"I verily believe that the earth in one year can produce enough food to last for thirty. Why then have we not enough? Why do people die of starvation, or lead a [[p. 25]] miserable existence on the verge of it? Why have millions upon millions to toil from morning till evening just to gain a mere crust of bread? Because of the absolute lack of organisation by which such labour should produce its effects, the absolute lack of distribution, the absolute lack even of the very idea that such things are possible. Nay, even to mention such things, to say that they are possible, is criminal with many. Madness could hardly go further."4
This was written a good many years ago. Now, we who hold such opinions are considered to be, not criminals, but merely cranks; and it is even allowed that we have good ideas sometimes, if only we were more practical. But surely nothing can be more practical than the proposal made here, since the experiment has already been tried in Holland, and has succeeded. To produce any real effect, however, it must be brought into operation on a large scale, and this can only be done by the local authorities, to whom must be given all necessary powers, with the needful financial assistance from the Government.
So soon as labour-colonies of the kind here suggested have been established for a few years, it is quite certain that the District Councils will no longer endure the old, bad, wasteful, and degrading system of the Union Workhouses, but will obtain land, in the vicinity of existing workhouses where possible, and establish labour-colonies of the same type. The effects of the new system will soon become palpable to every householder in the kingdom, in enormously decreased poor-rates, and the almost complete absence of the unemployed. Public opinion will then be all in favour of the new system, and legislation will be demanded and [[p. 26]] quickly obtained, enabling any number of persons, who wish to form such a community by voluntary association, to have the land required in any part of the county on a permanent tenure, and at a fair agricultural rental.
Numerous self-supporting co-operative labour-colonies being thus established all over the country, their connection by lines of tramways, where required, and the arrangements they would soon make for mutual assistance and exchange of commodities, for the common use of mills or of costly machinery, together with the healthy rivalry that would inevitably spring up, would still further increase the advantages to be derived from them. And these advantages would extend to every member of the community. For not only would the withdrawal of the whole surplus labour now represented by the unemployed or partially unemployed, inevitably cause a large rise in the rate of wages in all departments of industry; but the high standard of living, and the freedom from the anxiety now inseparable from capitalistic wage-labour would draw more and more of the workers to such communities, and thus compel capitalists to offer higher and higher wages, in order to obtain the services of the workers. This would result in the capitalist manufacturer being content with an amount of profit sufficient to repay him for his work as organiser and superintendent, as the only alternative to the loss of his fixed capital. The whole net profits of every industrial enterprise would then be distributed as wages to the various classes of workers, and Labour would, for the first time, receive its full and fair reward.
Notes Appearing in the Original Work
1. See "Increase of Crime," by Rev. W. D. Morrison in the Nineteenth Century of June, 1892. [[on p. 10]]
2. The suggestion that follows formed part of my Presidential Address to the Land Nationalisation Society in 1895.--[A.R.W.] [[on p. 11]]
3. See "Poverty and the State," by H. V. Mills, chapter X. [[on p. 16]]
4. "The Story of My Heart," p. 194. [[on p. 25]]
2. The suggestion that follows formed part of my Presidential Address to the Land Nationalisation Society in 1895.--[A.R.W.] [[on p. 11]]
3. See "Poverty and the State," by H. V. Mills, chapter X. [[on p. 16]]
4. "The Story of My Heart," p. 194. [[on p. 25]]
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Friday, January 18, 2013
Swindlers and Prophets - David Harvey
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What are the German Bankers thinking ?
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Wednesday, January 16, 2013
Video: Unraveling Capital´s Contradictions
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Video: Crisis Theory and the Current Conjucture
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Sunday, January 13, 2013
Thursday, January 3, 2013
China overtakes US as worlds top trading partner
The US ran a $295.4 billion trade deficit with China last year, about an 8 percent increase above the 2010 level. In just five years, China has surpassed the United States as a trading partner for much of the world, including US allies such as South Korea and Australia, according to an Associated Press analysis of trade data. China overtakes US as the world's top trading partner including US' backyard of Latin America. Is China rising, US falling or both?
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Tuesday, January 1, 2013
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