[ALB]

ALB wrote:

that New Economics Foundation video starts with a quote for Sir Reginald McKenna, dating from 1924, when he was chairman of Midland Bank (now HSBC) though it gives the impression that it dates from 1915-6 when he was Chancellor of the Exchequer, which is all over the internet on Monetary Reform sites including US ones.

I have now checked the quote with how the Times of the time (26 January 1924) reported what he said. The passage in question is :

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I am afraid the ordinary citizen will not like to be told that the banks can, and do, create and destroy money. The amount of finance in existence varies only with the action of the banks in increasing or decreasing deposits and bank purchases. We know how this is effected. Every loan, overdraft, or bank purchase creates a deposit, and every repayment of a loan, overdraft, or bank sale destroys a deposit.

This passage is not in the Times report (maybe it was left out, as is possible) but this is:

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While banks have this power of creating money it will be found that they exercise it only within the strict limits of sound banking policy. Anyone who studies the monthly statements of the London Clearing Banks will find that these banks keep a reserve of cash fairly constant in relation to their deposits. If banks increased their loans and investments the result would be to increase the aggregrate amount of their deposits, but to add nothing to their cash resources. The proportion of cash to deposits would be reduced, and, in the judgement of those responsible for the management of the banks, would be less than sound banking principles dictated. Thus a limit is placed on a bank’s power of lending by the amount of its cash and, so long as the canons of conservative banking are conformed to, additional loans can only be made if this cash is increased. Banks lend or invest up to the full amount by their cash resources, but they do not go beyond that point.

Which gives a rather different interpretation as to what he meant than has been suggested.Another dodgy quote from the currency cranks hits the dust. 

[ALB]

A couple of posters from the colonnade at St Paul’s yesterday:One for us to adopt, I think?There really is a Wall Street in London, in Islington.There were ten of us yesterday, including two contacts. Which meant that we had more discussions, ran out of leaflets and disposed of more Socialist Standards and pamphlets.One troubling thing was a City of London policeman going around making notes about all the stalls. Apparently the police are thinking of cracking down on “hawkers”, probably as part of a plan of petty harrassment of the Occupation. Police have tried this on us in the past to try to stop us selling the Socialist Standard in the streets. There were in fact hawkers there selling souvenir posters and badges of the Occupation and there is a possibility that the Occupiers (who are pursuing the intelligent policy of strictly following the law so as not to give the authorities any excuse to intervene) might go along with banning them. Hopefully this will only be a remote possibility as for them to agree to others who have set up stalls without permission being moved on would be the height of irony (or would it be hypocrisy?).Anyway we are not hawkers. We are just there to discuss and hand out leaflets and other publications.

[ALB]

I don’t want to give the wrong impression. He began and ended with a call for political action to “end Thatcherism” (probably because he was speaking in Britain). In between he did say that there should be a global movement to try to stop capital accumulation and did instance movements by illegal workers in the US and by indigenous peoples in Bolivia and India as examples of this, but he didn’t outline any alternative to capitalism except to mention once the need for a “zero-growth, non-capitalist” economy without going into any more detail.I think this brings out the difference between “anti-capitalist” and “anti-capitalism”. I’m sure he is anti-capitalism but what he was advocating was resistance to the activities of capitalists within capitalism.It’s a pity you can’t see the video to judge for yourself.

[ALB]

Just watched it. A bit disappointing considering some of the things he has written. Although he identifies the 1 percent global elite as “the capitalist class” and calls them that by name, the main point he seems to be making is the need for a mass political movement not to end capitalism, but only to reverse and end Thatcherism and restore the situation that existed before her. He looks a bit like the Archbishop of Canterbury and in this respect sounds like him. Not a bad outdoor speaker though.

[ALB]

These seems arty-farty rather than socialist.

[ALB]

Just finished reading the book of that New Economics Foundation video. Here are some of its more ridiculous claims:

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private banks can really create money by simply making an entry in a ledger.

and not just money but real wealth too:

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Those with the power to create new money have enormous power — they can create wealth simply by typing figures into a computer.

But it’s not just banks:

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Building societies and credit unions also have the right to create money through issuing credit.

Tell that to the management committee of a credit union.But not only that. Banks (and presumably credit unions too) create money and wealth not just when they make a loan but whenever they spend any money even to cover their own expenses, including on the salaries of their staff:

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the bank creates new money when it buys assets, goods or services on its own account, or pays its staff salaries or bonuses.

They can even create their own capital (though why they need any when they can create money simply by making an entry in a ledger and then spending it is unclear):

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in aggregate, banks are not constrained by capital, as they create the money that circulates and can be used to increase capital.

With banks’ possessing such magical powers it’s surprising that any capitalists invest in the non-banking sector.  And why don’t we all set up credit unions and pay ourselves the money we need instead of going to work for an employer?And there’s this:

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It is the ability of banks to create new money, independently of the state, which gave rise to capitalism.

Marx tells a rather different story in the section of Capital on “So-called Primitive Accumulation”. Earlier of course he had explained that the only way wealth can be produced is by humans applying their mental and physical energies to materials that originally came from nature.

[ALB]

I agree. His book on Capital is good. I think he’s ex-Communist Party. Some people who consider themselves Marxists are in fact leftwing Keynesians. Maybe some of the authors of the Political Economy of Development fall into this category.

[ALB]

ciro wrote:

from you link and text, I understand that Marx like us wanted direct democracy. But: what about our idea that we should take power with elections where this is possible, and the underlying idea that to establish socialism we need that a vast majority of people wants this? Are those idea also in Marx?

Yes, Marx did argue that under certain conditions (control of the government by an elected parliament) a socialist-minded working class would be able to gain control of political power peaceably via elections. As he said in a speech in The Hague in Holland in 1872:

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You know that the institutions, mores, and traditions of various countries must be taken into consideration, and we do not deny that there are countries — such as America, England, and if I were more familiar with your institutions, I would perhaps also add Holland — where the workers can attain their goal by peaceful means. This being the case, we must also recognize the fact that in most countries on the Continent the lever of our revolution must be force; it is force to which we must some day appeal in order to erect the rule of labour.

It is a measure of the extent of Leninist and insurrectionary ideas in Italy that it is not easy to find an Italian version of this on the internet, but this might work.At the end of  the more readily available Preface that Engels wrote to the English translation of Capital that came out in 1886 Engels confirmed this when he wrote that

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the voice ought to be heard of a man whose whole theory is the result of a lifelong study of the economic history and condition of England, and whom that study led to the conclusion that, at least in Europe, England is the only country where the inevitable social revolution might be effected entirely by peaceful and legal means. He certainly never forgot to add that he hardly expected the English ruling classes to submit, without a “pro-slavery rebellion,” to this peaceful and legal revolution

This is more easily available in Italian and can be found here.Having said this, our position does not rest on what Marx said (we don’t slavishly accept him as an infallible authority) but on our own analysis of the facts which in our view confirm Marx’s point of view.Lenin argued that since 1872 conditions in England and America had become more like what they were in Europe in 1872 (where Marx saw insurrection as the only way) and so a peaceful winning of political power had become impossible in England and America too. We argue that, on the contrary, today conditions in Europe and many other parts of the world have become more like conditions in England and America in 1872 and so a peaceful revolution is possible in them too.

[ALB]

Doesn’t Nicolai Bukharin deal with this, from a Marxian perspective, in his Economic Theory of the Leisure Class.  As it was written in 1914 it is free from Bolshevik apologetics. Bukharin, in fact, was probably the best (least worst) of the Bolshevik writers on Marx.

[ALB]

A pro-capitalist rejoices.

[ALB]

The Socialist Standard did quote frequently from Pankurst’s paper the Workers’ Dreadnaught in 1921 and 1922 to show the confusion and mistakes of the “Communist” Party. She seems to have been mentioned by name only once when the October 1921 issue mentioned in passing that “Miss Sylvia Pankhurst has been expelled for not handing the paper … over to the control of the Communist Party” (actually a valid reason for being expelled — we wouldn’t have allowed a rich individual to publish their own paper either as this was one of the reasons the original members left the SDF).Anyway, here’s an extract from another article, from 1923, in which she gives a good definition of socialism:

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Under Socialism the land, the means of production and transport are no longer privately owned: they belong to all the people. The title to be one of the joint owners of the earth and its products and the inheritance of collective human labour does not rest on any question of inheritance or purchase; the only title required is that one is alive on this planet. Under Socialism no one can be disinherited; no one can lose the right to a share or the common possession.The share is not so many feet of land, so much food, so many manufactured goods, so much money with which to buy, sell, and carry on trade. The share of a member of the Socialist Commonwealth is the right and the possibility of the abundant satisfaction of the needs from the common store-house, the right to be served by the common service, the right to assist as an equal in the common production.Under Socialism production will be for use, not profit. The community will ascertain what are the requirements of the people in food, clothing, housing, transport, educational facilities, books, pictures, music, theatres, flowers, statuary, wireless telegraphy — anything and everything that the people desire. Food, clothing, housing, transport, sanitation — these come first; all effort will be bent first to supply these; everyone will feel it a duty to take some part in supplying these. Then will follow the adornments and amusements, a comfortable, cultured and leisured people will produce artistic and scientific work for pleasure, and with spontaneity. Large numbers of people will have the ability and the desire to paint, to carve, to embroider, to play, and to compose music.They will adorn their dwellings with their artistic productions, and will give them freely to whoever admires them.When a book is written the fact will be made known, and whoever desires a copy of it, either to read or to keep, will make that known to the printers in order that enough copies may be printed to supply all who desire the book. So with a musical composition, so with a piece of statuary.So, too, with the necessaries of life. Each person, each household, will notify the necessary agency the requirements in milk, in bread, and all the various foods, in footwear, in clothing. Very soon the average consumption in all continuous staples will be ascertained. Consumption will be much higher than at present, but production will be vastly increased: all those who are to-day unemployed or employed in the useless toil involved in the private property and commercial system, will be taking part in actual productive work; all effort will be concentrated on supplying the popular needs.How will production be organised?Each branch of production will be organised by those actually engaged in it. The various branches of production will be co-ordinated for the convenient supply of raw material and the distribution of the finished product.Since production will be for use, not profit, the people will be freely supplied on application. There will be no buying and selling, no money, no barter or exchange of commodities.

[ALB]

ciro wrote:

And it is clear that we we are for democracy. My questions are: 1)how much democracy is in Marx texts? 2)can it be that this party takes its democracy from Anglo-Saxon democratic tradition, so this is a kind of Anglo-Saxon democratic tradition Marxism/Socialism?

Before he became a socialist (communist) Marx had been a political democrat (which was a radical enough position in the 1840s because universal suffrage didn’t exist anywhere then). After he became a socialist he continued to favour political democracy even under capitalism (in exile in England he supported the Chartists demand for universal suffrage and the later Reform League which campaigned for the extension of the vote to more workers).Although he no doubt appreciated living in a country like England where certain political freedoms existed (though not universal suffrage) his conception of what a fully democratic system would be like seems to have been more influenced by events in France.  Here’s how he described the Paris Commune of 1871 (in The Civil War in France) which he held up as an example of how the working class should exercise political power once they had won control of it:

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The Commune was formed of the municipal councillors, chosen by universal suffrage in the various wards of the town, responsible and revocable at short terms. The majority of its members were naturally working men, or acknowledged representatives of the working class. The Commune was to be a working, not a parliamentary body, executive and legislative at the same time.

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In a rough sketch of national organization, which the Commune had no time to develop, it states clearly that the Commune was to be the political form of even the smallest country hamlet, and that in the rural districts the standing army was to be replaced by a national militia, with an extremely short term of service. The rural communities of every district were to administer their common affairs by an assembly of delegates in the central town, and these district assemblies were again to send deputies to the National Delegation in Paris, each delegate to be at any time revocable and bound by the mandat imperatif (formal instructions) of his constituents.

The Italian version of this pamphlet can be found here.You’re right that it was Lenin who dishonestly claimed that Marx stood for the sort of dictatorship that he and the Bolsheviks established in Russia (one-party rule by a vanguard), whereas in fact Marx stood for the sort of delegate democracy described above.

[ALB]

More news from St Paul’s. We were there yesterday for a couple of hours or so to leaflet and discuss with occupiers and passers-by. One discussion was with someone who had apparently flown over specially from Oakland in the US to be there. She was a member of the “Freedom Socialist Party” which seems to be a trotskyist organisation. For the record, one of the leaflets she was handing out criticised the Occupy Wall Street people for being opposed to leaders (a position we can commend them for), saying

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… a ‘leaderless’ movement with no clear programme will be easily diverted by Democrats … A movement that doesn’t have leadership directly opposed to the system will be co-opted by it.

Par for the course from a would-be vanguard of course. And the “clear programme” was (again of course) a list of reforms such as “Nationalize the banks under workers control”, “Cancel the debts on student loans”, “Establish a national public works job program at union wages”, “Tax the rich and corporations to restore social services for those hardest hit by the economic crisis”.The Occupiers have their own list of reforms but not these tired old trotskyist “transitional demands” which pretend to presume that capitalism can be reformed to benefit the “99 percent”. But, to be fair to the “Freedom Socialist Party”, they weren’t the only trotskyist group there putting them forward. Also doing so was the SWP and another US group which I can’t remember whether it was called the “Workers League” or the “Communist League”. Perhaps some leftwing trainspotter here can identify them, though I’m not sure it’s really worth the bother.The leaflets we were handing out said (among other things) that we want “a world of equality without leaders or followers”.

[ALB]

I think it would be more accurate to say that the SPGB “did not support” rather than “opposed” extending the franchise, on the grounds given, especially as it also said that the introduction of universal suffrage would be one of the first things a socialist working class would have to do on winning control of political power. What the SPGB was opposed to was the main Suffragette demand of votes for women on the same terms as then obtained for men. This would have had the effect of increasing the proportion of capitalists in the electorate while still leaving the vast majority of women and one-third of men without the vote. Sylvia Pankhurst opposed this too (unlike her mother and sister, she favoured universal suffrage).Were the SPGB and Sylvia Pankhurst know of each other? Yes, it’s impossible they didn’t. Both, in fact, had the same conception of socialism as the following article by her reproduced in the Canadian One Big Union Bulletin on 2 August 1923 clearly shows:

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The words Socialism and Communism have the same meaning. They indicate a condition of society in which the wealth of the community: the land and the means of production, distribution and transport are held in common, production being for use and not for profit.Socialism being an ideal towards which we are working, it is natural that there should be some differences of opinion in that future society. Since we are living under Capitalism it is natural that many people’s ideas of Socialism should be coloured by their experiences of life under the present system. We must not be surprised that some who recognise the present system is bad should yet lack the imagination to realise the possibility of abolishing all the institutions of Capitalist society. Nevertheless there can be no real advantage in setting up a half-way-house to socialism. A combination of Socialism and Capitalism would produce all sorts of injustice, difficulty and waste. Those who happen to suffer under the anomalies would continually struggle for a return to the old system.Full and complete Socialism entails the total abolition of money, buying and selling, and the wages system.It means the community must set itself the task of providing rather more than the people can use of all the things that the people need and desire, and of supplying these when and as the people require them.Any system by which the buying and selling system is retained means the employment of vast sections of the population in unproductive work. It leaves the productive work to be done by one portion of the people whilst the other portion is spending its energies in keeping shop, banking, making advertisements and all the various developments of commerce which, in fact, employ more than two-thirds of the people today.Given the money system, the wage system is inevitable. If things needed and desired are obtainable only by payment those who do the work must be paid in order that they may obtain the means of life. The wages system entails such institutions as the old-age pension, sick and unemployment insurance and widow’s pensions, or the Poor Law, and probably plus the Poor Law. These involve large numbers of people drawn from productive work to do purely administrative work. Thus useless toil is manufactured, and the burden of non-producers maintained by the productive workers is increased.Moreover social conditions are preserved which are quite out of harmony with Communist fraternity. The wage system makes the worker’s life precarious. The payment of wages entails the power to dismiss the worker by an official or officials.So long as the money system remains, each productive enterprise must be run on a paying basis. Therefore it will tend to aim at employing as few workers as possible, in order to spend less on wages. It will also tend to dismiss the less efficient worker who, becoming unemployed, becomes less efficient. Thus an unemployable class tends to grow up.The existence of a wage system almost inevitably leads to unequal wages; overtime, bonuses, higher pay for work requiring special qualifications. Class distinctions are purely differences of education, material comfort and environment.Buying and selling by the Government opens the door to official corruption. To check that, high salaried positions are created in order that those occupying them have too much to lose to make pilfering and jobbery worth while.

This was the basis of her saying that by this time Russia had adopted state capitalism, another view she shared with the SPGB (although the SPGB said Russia had never ceased to be capitalist while she said it went off the rails when the Bolsheviks adopted the New Economic Policy in 1921.

[ALB]

Not surprising that the relationship was fraught seeing that Malatesta was one of the anarchist members of the Socialist League whose advocacy (and practice) of bomb-throwing finally led Morris to leave and to declare that he wasn’t an anarchist and that a society without majority decision-making as advocated by his anarchist opponents in the League was impossible.Anyway, it sounds an interesting meeting.The SPGB didn’t think much of Malatesta either, as in this item from the July 1912 Socialist Standard:

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NOT TAKING ANY, THANKS !The following, we think, sufficiently explains itself.MALATESTA RELEASE COMMITTEE.London, W., June 14, 1912.Dear Comrade,—At a meeting of the above on the 13th inst., it was unanimously agreed that your party should be asked to send a delegate to join and co-operate with us, in order that this committee should be as representative as possible of all those who are in sympathy with the objects of this committee.We are resolved to carry on this agitation on a wider scale and are assured of the support of prominent men, including M.P.’s and other influential people.Awaiting your favourable reply,Yours fraternally, (Signed) J. F. TANNER, Hon. Sec.Mr. J. F. Tanner.  MALATESTA RELEASE COMMITTEE.Sir, –Your letter inviting the Socialist Party of Great Britain to send a Delegate to co-operate with your committee was duly placed before my Executive, who instructed me to inform you that The Socialist Party declines to join with working-class enemies for any purpose whatever, and that therefore your invitation is declined.Your Mr. Malatesta, if a victim at all, is but a victim of the system both he and you do your best to maintain by the spreading of confusion in the minds of the working class. Your whining for mercy, therefore, savours even more of the hypocrite than of the coward, while your “Demand” for release is grotesque.That your committee should have entertained the idea (even for a moment) that the Socialist Party could be seduced from its allegiance to the working-class by the glamour of temporarily associating with “prominent men including M.P.’s and other influential people” shows not only how woefully you have miscalculated the moral strength and integrity of the Socialist Party, but also the cant, humbug, and mental debasement of the ultra-revolutionists—the Anarchists—the anti-political giants who yet can be got to glory in the prospect of associating with “M.P.’s and other influential people.”In the interests of the working class we decline your invitation and say “Down with Anarchy ! Long live Socialism !”On behalf of the Executive ofThe Socialist Party of Great Britain,C. L. Cox, Gen. See. pro. tern.

Having said this, I don’t think that Malatesta was the worst of the anarchists. 

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