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Page 13                                                              Cooking the Books 2 below

Sound bites and soldiers

  Recently there have been a number of sound bites, profiles and coverage of NATO soldiers in Afghanistan and US soldiers in Iraq on CNN and BBC. Rank and file at 19/20, sergeants at 23/24 and officers in their late 20s /early 30s. My first response is generally emotional and angry – look at them, boys, just boys and young men.

 What are they doing? Who are they doing it for? And then, simmering, I turn to the
same old questions, trying to rationalise, to find the answers to stop the terrible
slaughter going on around the world in the non-stop battles for resources and/
or control.

 How is it that year after year, war after war, the military establishments around
the world are able to either conscript or (even worse?) persuade volunteers to
join up? Young, impressionable, mostly male, suckered in by the projected
macho image of recruiting videos and sophisticated video games. You’ve
mastered the game, now how wonderful to be part of a non-virtual, real-life,
grownup skirmish, battle, war! Are they really appealing to the sense of excitement, adrenalin rush, the biggest rush of your life? Even at risk of your
life? And then, how is it, whatever you stand for, there’s always an enemy ready
to fight you? An enemy with recruits just as passionate about their cause as you
are about yours? Can you always be in the right and your various and varied
enemies always in the wrong? It’s not statistically possible, is it?

 Being a volunteer, i.e. choosing to join up, presents several other questions. Is
it for the pay? To learn a trade? Because father and grandfather did it before you?
Because there’s nothing else on offer? As a show of patriotism? Or is it support
for a particular cause? If the latter, then what if you agree with the current
engagement but are opposed to the next? The main business of the leaders of the armed forces of all sides is that of instilling a sense of morality, justice, rightness about the fight, of invoking patriotism, nationalism and a whole lot of image building and supporting myths.

 Aside from numerous combatants, willing or not, civilians, innocents, young, old, male, female continue to be killed both deliberately and accidentally as collateral damage on most continents of the world on a daily basis and there is absolutely no indication that this can ever change under the capitalist system.

 The sound bites are part of the business of convincing the general public to support or have sympathy for the troops in achieving the capitalists’ goals. For me the sound bites succeed in reinforcing the socialist principle that all warfare is destructive of human values, simply pitting one section of the working class against another with the sole aim of furthering the capitalist cause. The young men of the world are worth more than that, much more.

 They are part of a world society which collectively could choose to work for peace, justice and prosperity for all in our time, putting aside the divisive issues of capitalism and recognising at last that with socialism unity is strength.

JANET SURMAN




A stroke
 of the
 pen


 The Office for National Statistics (ONS) is to revise the way Britain’s Gross Domestic Product (GDP) is calculated. According to the Times (26 February) “from 2008 the ONS will also add into GDP an estimate of the output generated by banks related to the higher rates of interest they charge on loans compared with deposits”. Output generated by banks? What are they talking about? Banks don’t produce anything.

  It is just that, given the way a country’s output is calculated, banks have to be
assumed to produce something. The value of the new national output produced in
a year has theoretically to equal the total annual income of the country’s inhabitants
as wages, profits, rent, interest, fees, etc in that year (national income). One way
new national output is calculated is to add up the monetary value of the goods and
services on which the national income is spent (final consumption). To do this it is
assumed that whatever a sum of moneyfor this purpose is spent on is an “output”.

 Thus, interest paid to banks is assumed to be a payment for the bank’s “output” (the service of lending the money). Similarly, taxes are assumed to be a payment for
the government’s output (the “service” of providing “defence” and “law and order”
as well as health and education).

 This is all right for statistical purposes, but wrong if this statistical device is taken
for reality. In reality neither banks nor governments produce anything. They – or
rather, the workers employed by them – do of course do something, but the activity
of banks and governments is in the end paid for out of the surplus value produced
in productive industry which transforms materials that originally came from nature. In the case of the government this is obtained through taxes. For banks, it’s through interest.

 An ONS paper explains how banks work, better in fact that most economics
textbooks: “In essence, financial institutions provide services in two ways; by direct
charging (overdraft fees, mortgage arrangement fee), and by an interest differential; that is paying depositors less than they charge borrowers . . . For
example, current accounts are usually maintained free by financial institutions,
and the associated costs are met by the difference between the low interest
payments awarded on credit balances maintained in such accounts whilst the
bank lends funds from such accounts at a higher rate to borrowers”.

 In other words, no nonsense about banks “creating” credit or deposits, but a
recognition that they make their money by lending out money deposited with them
at a higher rate of interest than that paid (if at all) to those who deposit money
with them. Even so, this description is still tied to the concept that banks
provide a service, i.e., that they are selling something. But what?

 Because of the theoretical and practical problems involved in the idea of banks selling something, the national income statisticians have till now not included in GDP any value for the “output” of banks for the services they are regarded as providing – banking facilities for depositors – and for which they don’t charge. The solution they have come up with, and which will be applied in Britain as from 2008, is to regard the income of banks from “paying depositors less than interest than they charge borrowers” as a notional payment for these notional services.

 It’s a bit of an artificial solution and it will increase GDP by a one-off 1.9 percent
or so – which is more than normal growth in some years – by a mere stroke of the
pen. But one held by statisticians rather than the bankers of currency crank myth.

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