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Letters

Marx and communism

Dear Editors,
I have been reading some of Marx's writings. I find him to be very good reading. I would like to hear your views on what he called "crude communism". The passages I refer to are in his Economic and Philosophical Manuscripts. In the section "Private property and communism", he mentions different types of communism which some have the ideal politically but are still under the influence of private property (democratic or despotic). How does this compare with, say, Russia's state-run system of seventy years? I believe just like the SPGB that Russia's communism was a form of state-run capitalism. I wonder if Marx would have agreed with this or just called it "crude communism" somewhere between, the first and second stages of development. What is the SPGB's view on this?
COLIN Robertson, Queenstown, New Zealand

Reply: Marx's Economic and Philosophical Manuscripts were private notes written in 1844 soon after he became a Socialist; indeed, as he was in the process of working out his Socialist ideas. They make interesting, even fascinating, reading but too much emphasis should not be placed on them. But they at least show that Marx understood from the start that communism/socialism means the abolition of money, private property and the state.

By "crude communism" Marx seems to have been referring to the ideas of some workers he met in France (where he was then living) who, not taking into account the possibilities opened up by the industrial revolution, felt that full equality between humans could only be realised on the basis of common ownership and equal sharing of what little there was. It was a sort of "communism of scarcity".

If we were to accept Lenin and Trotsky at their word, they too were trying to establish communism in conditions of scarcity after 1917. Naturally, they failed for a whole host of reasons (lack of majority socialist understanding, isolation, economic backwardness) and it soon became clear that (as Lenin himself openly admitted) what they were building was state-run capitalism not any form of socialism. The "crude communism" which Marx discussed was just a speculation which could never work in practice and which, given the development of industry and productive power in the 19th century, didn't need to be tried either. From then on the only practicable form of communism/socialism is the form we in the World Socialist Movement advocate, where the principle "from each according to their ability, to each according to their needs" can apply fully-Editors.

No mystery about banking

Dear Editors,
Recently someone lent me a copy of the Socialist Standard. In this issue (October 1999), I read something that brought me up rather sharply. On page 7 in "Poverty of the Greens", Pik Smeet says, a little mockingly, "Pardon me, pray, please do excuse me . . . So the Greens believe that when a bank wants to make a loan it just creates money by magicking it out of thin air, etc" Now, I'm not an expert on money (not even at getting it!) but I've always understood this to be exactly the case.

Recently, being a bit interested in the subject, I bought The Ecology of Money by Richard Douthwaite (published by Green Books for the Schumacher Society, £5). I enclose a photocopy of the part of the book that deals with this magic of creating money out of thin air, with apologies to P. Daniels!

I would be interested to learn what Pik Smeet thinks of the views of these experts—Lord Stamp and J.K. Galbraith.
FRANK COOPER, Redruth, Cornwall

Reply: The currency cranks did once try to argue that a bank's "cash ratio" of 10 percent, i.e. the amount they must hold as cash (which is actually nearer one percent these days), meant that if someone deposited £100 in cash the bank could then immediately lend out £900. Actually, of course, what it means is that they can lend out £90. Modern currency cranks, such as the one you refer us to, are less crude. They argue that it is the banking system as a whole rather than an individual bank that can magically multiply an initial cash deposit nine times.

According to them, something like this happens. One person deposits £100 in cash in a bank. This bank keeps £10 as cash and lends the remaining £90. This £90 is spent and those who receive it deposit it with one or other of the banks which are assumed to exist. These can then lend out £81 which is again spent and then eventually redeposited and so on. According to the extract from Douthwaite you sent us, if this happens ("if each bank now lends out 90 percent of whatever it has received") the end result is that "the original £100 cash deposit allows the ten banks to increase their loans to the public (and hence the money supply) to £1000".

All this argument proves is that money circulates and that the same coins and notes can be used for many different transactions including more than one bank deposit. So, in the example, while the total of bank loans will indeed increase from £90 to £900 but this will have come about because the banking system will have received an extra £900 in deposits. These will have been generated not by a "most astounding piece of sleight-of-hand" (Lord Stamp) or by a "stroke of the pen" (JK Galbraith, for once talking nonsense), but independently of the banking system, by the mainly productive activities in which the series of loans can be assumed, in the real world, to have been originally generated. When all this is taken into account the total amounts loaned throughout the process—at £900—is still only 90 percent of the total amount deposited, of £1,000.

A bank is no different from a building society: it can only lend out what people deposit with it, in fact a little less than this. This is clear for building societies. Nobody challenges the fact that they have to attract money from investors before they can lend anything to house buyers. A bank is no different, except that it gives out loans for a wider range of activities than buying a house.

Ironically, banks already are what Green Party currency cranks say they should be: financial intermediaries putting lenders and borrowers in touch and making a profit out of the difference between the rate of interest they pay to depositors and the rate they charge borrowers. It's simple really. No magic is involved-Editors.

 

Bunker mentality? (1)

Dear Editors,
Andrew Northall's letter (Socialist Standard, February) is indicative of the bunker mentality that has hampered the growth of the socialist movement. He claims that "identification of common ground with non-socialist organisations can only create confusion". But common ground needn't mean a common platform.

Andrew assumes that all members of non-socialist organisation (e.g. Reclaim the Streets) are non-socialists, simply because they are not members of the World Socialist Movement. In reality probably 99 percent of them are simply not aware of our existence. Many of them may be very attracted to the ideas of socialism but have rightly rejected what they think is only because of the undemocratic and unprincipled actions of the left wing.

We are not the keepers of some Marxian holy grail. Many of the ideas that are central to our "unique" position are in fact shared with others. Should we take heart from that, or begrudge it? The fact is, some people can be closer to our views than others. We tend to crudely view socialist consciousness as being one giant mental leap. Where you have to be on one side or another. I think human psychology is a bit more sophisticated than black and white. If we feel we cannot critically engage (even at the mildest level of publishing an open letter in our own journal) with those who share some of our ideas, without in some way feeling we are sullying our pristine hands, then maybe we lack confidence in our ideas.

Rightly, we address our case to the working class of the world, rather than any particular interest group or the left wing's supposed "advanced sections". But that surely doesn't mean that we cannot tailor our propaganda to focus on those workers who are probably at least a little bit more sympathetic to our arguments. Wasn't the maxim "if you aren't for us, you're against us . . ." one of Stalin's favourites?

Some members conveniently lay the blame for our lack of growth last century with the working class: if we are not able to engage and encourage those who are close to our ideas, then failure to grow in the coming century will lie squarely with the Socialist Party.
BRIAN GARDNER, Edinburgh (by e-mail)

 

Bunker mentality? (2)

Dear Editors,
Re. Andrew Northall's letter (Socialist Standard, January). As an active and campaigning revolutionary socialist, I for one welcome the advances in consciousness which we see affecting widening layers of workers in the post-Seattle climate. It inevitable that many of these will be affected by anarchist, syndicalist, single-issue campaigns and many other ideas, and the responsibility of socialists is to engage with these workers in a battle of ideas, and build activity in areas of agreement.

Central to this is the concept of the united front, of agreeing common issues on which to act, while preserving the independence of thought and criticism needed to ensure that while action takes place, debate and argument accompanies it. Does the Socialist Party of Great Britain agree the need to undertake joint activity, or does the idea of hostility to all other parties and strands of thought take precedence?

If the answer is the former, the entry of the SPGB to the many public campaigns should be welcomed, although sharp arguments in both directions may lie ahead. If the answer is the latter, when the SPGB faces a long period of self-contemplation, unable to interact with wider layers of disaffected workers for fear of losing its political virginity.

MIKE GREENHALF (by e-mail)

Reply: No, to be quite frank, we are not in favour of the concept of the united front and reject the need for Socialists to undertake joint activity for anything less than socialism itself. What we welcomed about recent developments was the emergence of the view that "the global capitalists system, based on the exploitation of people and the planet for the profit of a few, is at the very root of our social and ecological troubles" amongst those who have been involved in dead-end, reformist single-issue campaigns. We fully accept that it is the responsibility of Socialists to engage with these workers in a battle of ideas, by talking to, leafleting and debating with them, so as to encourage them to take the next step: if capitalism is the root cause of social and ecological troubles, then the intelligent course of action is to concentrate on removing the cause rather than trying to deal with a particular problem as a single issue since as long as the cause remains so, inevitably, will the particular problems.

That people who are concerned about these problems should concentrate their political activity exclusively on working to get rid of the capitalist system and replace it with a frontierless world community based on the common ownership and democratic control of the Earth's resources is precisely our unique contribution to this debate-Editors.