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In an email to a Socialist Party committee dated 25 May, Tony Malone says that XR has abandoned the “3.5% rule” (that a non-violent activist minority of 3.5% is enough to bring a government to its knees and achieve the aim of the movement). He writes:
“The 3.5 percent minority theory was something that is closely associated with Roger Hallam, but was based in empirical research done by Chenoweth and Stephan (2011) on political campaigns from 1990-2006.
Roger was a high profile advocate of this theory when he was with XR, however it does not inform our current strategy.
You can read more about it (including links to the Chenoweth and Stephan (2011) paper) here:Social Movements and the (mis)use of Research: Extinction Rebellion and the 3.5% rule
Hope this helps,
Tony Marone
Public Engagement Working Group”The academic paper he references argues that the rule only applied under autocratic regimes and only to movements overthrow such a regime, to resist foreign occupation, or to seek secession; it didn’t apply in “liberal democracies”.
It’s good that they’ve abandoned this undemocratic tactic, but their website still declares:
“We have a shared vision of change: Creating a world that is fit for generations to come.
We set our mission on what is necessary: Mobilising 3.5% of the population to achieve system change – such as “momentum-driven organising” to achieve this.”Scroll down to “Our Principles and Values”.
Link, before dealing with the main point at issue, of who creates new electronic money, let’s clear up the minor points.
1. Some currency cranks give the impression that banks can create new wealth out of thin air. If this were true then the labour theory of value would be invalid as that would be another source of wealth production to applying human labour to materials that originally came from nature. Your revised theory that banks create new token money though mistaken is not incompatible with the LTV any more than is the (correct) theory that states can create new money tokens. I think we are both agreed that banks can’t create any new wealth or any new value.
2. The quote from investopedia, that a bank running a loan to deposit ratio of over 100% “may” mean that it would have to borrow some of the money to lend, was not saying that such a bank would not have to cover its loans. It might also cover them by using its reserves (of accumulated capital). In practice most of the excess of loans over deposits will be covered by the bank itself borrowing money.
3. When I wrote that a bank had to have assets to cover its loans or acquire some “very quickly” I was referring to the fact that this has to be done by the end of the working day when what one bank owes another is “cleared”. If a bank is in real trouble through over-lending, to prevent collapse it will have to be “bailed out” by other banks or the central bank. That takes longer than the end of the trading day. Of course, as Bijou points out, if this doesn’t happen the bank collapses as has happened in the numerous cases he lists despite them supposedly having the power to conjure up money out of thin air.
Yes. Governments’ spending priorities are (and have to be):
1. Creating the best conditions for profit-making.
2. Military spending, currently openly called “preparations for war spending” (used to be called “defence” spending).
3. Spending on meeting people’s needs (health, education, welfare).
In that order.
The Starmer Labour government is not reluctantly or apologetically applying these priorities as some previous Labour governments have, but openly and enthusiastically.
Another comment on the political scene in Canada from our comrades there.
Note that Carney promises to make Canada the strongest economy in the G7. Starmer has made that promise too for the UK. Obviously one of them is bound to fail. And the one that does will come up with some excuse like “we were blown off course” or “we met unexpected headwinds”.
Doug Ford is the Tory premier of Ontario Province.
How did a war-monger and xenophobic dog-whistler like Starmer get to become leader of the a Labour Party. It just shows how rotten to the core the Labour Party is.
Somebody once suggested here that it was over the top to call Starmer a warmonger. But this headline tells it all:
https://www.thetimes.com/uk/defence/article/nuclear-submarines-war-readiness-qlblwqx2j
The Labour government even wants to involve the whole population on its militarist plans, put us all on a war footing. Bare-faced militarism. His father who called his son Keir after Keir Hardie must be turning in his grave.
1. The point of whether banks’ creating money out of thin air undermines the labour theory of value is easily cleared up. New wealth (use-values) can only be created by the application of human labour power to materials that originally came from nature. Under capitalism wealth takes the form of value and is the result of the application of socially-necessary labour to materials that originally came from nature. If banks could create money from thin air (as your book endorsed) then this would be tantamount to saying that value could be created other than by the exercise of human labour power. It is not incompatible with your revised position that banks create additional money tokens (in the same way that the state can). In fact, that creating an excess of money-tokens would lead to a depreciation of the money-unit and so to a general rise in prices is based on the labour theory of value. Banks don’t create any additional value. I think we are agreed on that point (even if not that banks create additional money-tokens when they make a loan).
2. Opponents of the intermediary theory of banks (that they borrow at one rate of interest and lend at a higher) claim that its supporters argue that what banks lend has to come from “deposits” ,ie money deposited in the bank from outside. But that is not the argument. Such deposits are not the sole source of what banks have to lend. Banks can also borrow from other financial institutions or use their own capital (reserves).
So a high loan to deposit ratio (of a 100 or more) does not mean that some of what banks loan is from thin air (not that you are claiming it does). It simply means that a higher proportion comes from sources other than deposits.
The Investopedia entry on this is quite helpful in understanding this :
“ a 100% LDR means the bank is lending out as much money as it’s taking in—an aggressive strategy carrying a lot of risk. The bank lacks liquid funds to cover withdrawals or unexpected expenses. Plus, when the LDR exceeds 100%, the bank may need to borrow money to fund its lending activities, adding interest costs that cut into its profit margins.”
“As a result, a bank that borrows money to lend to its customers will typically have lower profit margins and more debt. A bank would rather use deposits to lend since the interest rates paid to depositors are far lower than the rates it would be charged for borrowing money”.https://www.investopedia.com/terms/l/loan-to-deposit-ratio.asp
3. I don’t think that banks’ accounting methods prove anything either way. In any event, as explained above, the intermediary theory does not claim that the same money deposited with a bank is directly transferred to the deposit of the person the bank is making a loan to. The claim is only that a bank cannot lend more (mainly electronic) money than it has (or can get quickly).
If we can agree on these three points then we can move on to discuss the real point at issue — when a bank makes a loan, is it creating purchasing power (in the form of electronic token money) that didn’t exist before or is it recycling already existing purchasing power? Or, if you like, can excessive bank lending cause a depreciation of the currency leading to a rise in general price level?
Now Reform is claiming to be the party of working people.
https://www.independent.co.uk/news/uk/politics/farage-reform-starmer-workers-benefits-b2758386.html
Maybe the two parties should change names.
It’s behind a paywall but it’s the headline’s enough.
This of course is a cynical vote-catching move as Reform has no chance of being put in a position to honour it. The Greens aren’t either.
But clever as a way of conning Labour voters to switch to Reform. Whether workers will be duped remains to be seen.
“LabourList revealed in February the party had lost more than one in ten members since the general election with the party losing the equivalent of one member every ten minutes between December and February.”
Now Labour Party leaders are covering up the fall in the number of members:
https://labourlist.org/2025/05/labour-membership-numbers-members-how-many-political-party/?amp
This was picked up by the Socialist Standard at the time, as in this extract from an article that appeared in July 1920:
“Another interesting point is the ratio between the urban and country representatives. Thus for the All Russia Congress of Councils the Urban Councils send one representative for every 25,000, while the County Council Congresses send one delegate for every 125,000, or to put it another way, the Urban Councils have five times the representation of the County Councils. The same ratio applies to Regional and County Congresses. These figures have a peculiar significance.
The Bolsheviks, naturally, find their chief support in the urban centres. By this basis of representation they are able to ensure the practical certainty of a majority in “the supreme authority of the Russian Republic”. “And that’s how it’s done”, as the stage conjurer says.
This method may be suitable to Russian conditions, but to claim for such a system that it is “a million times more democratic than the most democratic regime in a bourgeois republic” – where the workers have a direct, and overwhelming, vote for the very centre of power – is the wildest nonsense.”
The full article, entitled “The Russian Dictatorship” can be found here:
https://www.marxists.org/archive/fitzgerald/1920/leninkautsky.htm
The first two sections — accepting the need for widespread socialist consciousness and for democratic decision-making — represent advances for groups in the left-communist ‘milieu’. It is third section that presents a problem.
It’s what they say about the state during the ‘transition period’ as ‘representing all non-exploiting strata and people’, defined not just as ‘petty producers and the peasantry’ but also ‘the huge numbers of people thrown out of the productive process, unable to integrate the productive forces, the homeless, unemployed, and others, victims of famine, disease, and war’? Presumably it will also include other non-economically active people like the retired, students, housewives and the chronically ill. Even in an advanced capitalist part of the world like Britain the percentage of so-called ‘inactive’ people is about 20 percent of the adult population.
These ‘strata’ are to be submitted to the dictatorship of the ‘proletariat’ defined only as those working in factories, offices, etc. The state is supposed to represent them (but how and by who?) but is to be subordinated to “workers’ councils”.
What IP is imaging should happen shows the limitations of the concept of “workers councils” running society. Why can’t those who make up the “non-exploiting strata” have an equal say with “workers” in the way post-capitalist society is run?
It also shows how their thinking is still conditioned by what obtained in Russia in 1918 and the 1920s. They would still seem to be, at heart, Left Bolsheviks trying to cope with the problems of yesteryear.
Just noticed that the Daily Excess above quotes Lowe as saying:
“Mere reform is inadequate – we need radical, principled change.”
I think he’s saying What We Need is Revolution Not Reform, though of course his idea of revolution is quite different from ours. Still, it’s a good criticism of any party calling itself Reform.
Thanks. But what a mish-mash of “vulgar Marxism” — the tendency of the rate of profit to fall becomes an iron law which results in less and less profits so the capitalists have to squeeze the workers more, so much that in the end the workers rise up and overthrow capitalism !
It is true that Marx did regard capitalism as historically necessary and, for a while until the material basis for a socialist society had been built up, historically progressive. His attitude to capitalists (as opposed to capitalism) is spelt out in the preface to the first German edition of Das Kapital:
“To prevent possible misunderstanding, a word. I paint the capitalist and the landlord in no sense `couleur de rose. But here individuals are dealt with only in so far as they are the personifications of economic categories, embodiments of particular class-relations and class-interests.“
Personifications of capital is what they are, whatever they themselves — and hack journalists — might think they are. The process of capitalist accumulation increases wealth. They are merely its expropriators.
As to the Labour Party and its present leaders. They simply accept capitalism as it is and get on with complying with its economic laws.
I see that RefUK’s equivalent did very well in the Portuguese elections the other day. It is called “Chega” which is simply the Portuguese word for “Enough”. Which might be a better name for RefUK as that is what seems to be the basis of its support. Another possible name might be The Protest Party. The trouble with such parties is that once they get elected and have to participate in running capitalism they become part of the “establishment” and another party of protest arises.
