What causes world poverty?

From the Socialist Standard, June 2001. (Socialist Party of Great Britain)

The World Development Organisation claims that the policies of governments and multinational businesses cause poverty. Are they right?

"The world has the wealth and means to end poverty. Yet nearly half of the world's population live on less than £1.40 a day And over 11 million children will die from poverty-related illness this year alone, read the leaflet that fell out of a recent issue of the New Internationalist. This particular leaflet, entitled "Isn't it time we tackled the causes of poverty?" was issued by an organisation called the World Development Movement but it could have come from any of the numerous other campaigning charities in this field.

What they say is true - the world does have the wealth and means to end poverty - and, yes, it is more than time that we tackled the causes (or rather the cause) of poverty.

So what causes world poverty? Clearly, this is the key question since if you don't get the answer right, you're not going to get the solution right either.

According to the WDM, what causes world poverty are the policies currently pursued by governments and multinational companies:

"Policies of governments and companies are keeping people poor. Policies that ensure global trade benefits the rich, not the poor - the three richest men in the world are wealthier than the 48 poorest countries combined. Policies that give increasing power to multinational companies - for every £1 of aid going into poor countries, multinationals take 66p of profits out. The powerful are exploiting the poor to make bigger and bigger profits."

The WDM's solution to the problem of world poverty follows logically from this analysis that it is "the policies of governments and companies" that is the cause:

"We lobby decision makers to change the policies that keep people poor."

They claim that this can work, if enough pressure is brought to bear:

"In rich countries like Britain, decisions are made which can make or break the lives of the poor. We can influence those decisions. That's why our actions matter so much. Together we can be powerful and win change for the world's poor."

Is this true? Is world poverty caused by the mistaken policies of governments and multinationals? Can lobbying and campaigning get these policies changed?

As socialists, we have to say that the answer to both questions is "no". Governments don't pursue policies that put profits before poor people because they have chosen to do this rather than chosen not to. Nor have they given in to pressure from the rich and powerful to pursue policies that favour them. They don't have any choice in the matter, because they are not in control of things.

Governments operate within the framework of an economic system, and the current economic system - capitalism, to give it a name - is based on wealth being produced for sale on a market with a view to profit and on the competitive pressures of the market dictating that these profits be accumulated in the form of more and more capital invested to make yet further profits.

The aim of production under capitalism is not to satisfy people's needs but to accumulate profits. This is not a policy choice but an economic necessity imposed by the operation of impersonal and uncontrollable economic laws which governments have to abide by, unless they want to risk making things worse by provoking an economic crisis and stagnation in the area they rule over.

In short, governments put profits before poor people because they are obliged to by the impersonal workings of world market forces, not out of choice. The same goes, even more forcefully, for capitalist corporations. Their whole purpose is to make a profit on the capital invested in their businesses so that their shareholders can benefit. That's the nature of the beast, and we can't imagine that the World Development Movement is really so naïve as to believe that private companies, whether national or multinational, could pursue any other policy than to maximise their profits.

Classic reformist mistake
The WDM and the other campaigning charities are making, on the world level, the same classic reformist mistake that used to be made at national level: blaming policies pursued by governments rather than the economic system, and so seeing the solution as changing the government or even just its policies rather than changing the economic system. Not just in Britain but in many other countries too, governments have been changed but the policies involving putting profits before people continued just as they did under the old government that openly upheld the status quo.

So, to be frank, campaigning charities like the WDM have got no chance at all of getting governments, and even less multinational companies, to change their practice of putting profits before people. And it is not because they believe merely in lobbying that dooms them to failure; not even the most violent street demonstrations can bring about a change in this practice. As long as the international capitalist system continues to exist, its economic laws will operate to put profits before people, and governments will have no choice but to dance to this tune.

But what are the alternative policies that the WDM and the others would like governments and companies to pursue? The WDM don't go into details in their leaflet but you can find out if you return their cut-off coupon. But this is not really necessary as another leaflet that fell out of the New Internationalist provides the answer. Issued by Christian Aid, and entitled "Trade for Life" it claims that "every day trade rules keep millions in poverty and a few in riches":

"Trade affects almost everybody on earth. Over the centuries it has become an increasingly powerful international force. But it is being manipulated by rich countries and companies to suit their interests. Poor people are missing out on the opportunities trade could bring. They are forced to continue living in poverty, sacrificing their lives and livelihoods for others to get rich."

But if the current "rules" governing trade are the cause, then the solution, logically, is to change the rules, and this is precisely the declared aim of the "Trade for Life" campaign:

"With new rules, trade could become one of the greatest solutions to global poverty. Trade has the power to create jobs, improve healthcare and benefit people's lives and livelihoods. The Trade for Life campaign calls for a major overhaul of the rules that run the international trading system."

Trade - the buying and selling of goods and services - should not be confused with the physical transportation of goods and services from one part of the world to another to be used there. The two are not the same, though trade usually involves the latter. In fact, it is precisely because there is trade - and not mere transportation - that goods and services are not distributed today to people according to their needs.

Trade is buying and selling, and this means markets and that goods and services are only produced to be sold on some market with a view to making a profit. It means that production is carried on not to satisfy people's needs, but to satisfy only paying needs, i.e. needs backed up by what pro-capitalist economists call "effective demand". In short, it means the application of the economic principle of "can't pay, can't have".

As long as profit lives, life will take second place

It is because the millions of people living in absolute poverty, who organisations like the WDM and Christian Aid are rightly concerned about, do not have any money, or not enough money, that their needs are not met: they don't constitute a market, or only an insufficiently profitable market. Because their demand for decent food, clothing, shelter, healthcare and sanitation is "ineffective", trade and the international trading system ignore them. No change in the rules of international trade is going to change this since it is the "international trading system" itself (aka the world market, aka capitalism) that is the cause.

What is required is not a reform of this system such as demanded by the World Development Movement, Christian Aid and the others, but its abolition and its replacement by one in which the Earth's resources become the common heritage of all humanity. Only on this basis can these resources be mobilised to eradicate world poverty and ensure a decent life for every man, woman and child on the planet. Yes, the world does have the wealth and means to end world poverty. And, yes, it is high time we tackled the problem.

ADAM BUICK

Materialist Conception of History

The purpose of this pamphlet is to show that the capitalist social system is a dynamic and not a static organization, having developed out of previous social systems. The historical role of capitalism was progressive insofar that the means of production, hitherto small and fragmentary in character, were welded into the gigantic productive organizations which we know today. The social powers of production are not under the control of society and the relations of production do not serve the interests of the producers, the working class. The social classes have been reduced to two, a propertyless working class forming the vast majority, and a property owning capitalist class, the minority. The relations of production are antisocial because the object behind production is not the satisfaction of social need but the amassing of profit and the accumulation of capital.

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Biofuels…What the hell’s goin’ on?

A series of media reports indicate that fuel produced from food crops to replace fossil oil is far from the panacea it was hoped to be. For example Guenter Verheugen, a vice president of the European Commission, stated recently that "It makes no sense to make car fuel from plants that ought to provide human and animal food." Indeed, the 'moral' question of diverting food and using fertile food-growing land to produce fuel, while 850 million people in the world today are hungry, is a cause for concern.

The explosion in demand for food crops to be converted into biodiesel and ethanol in America and Europe is backed by government subsidies and enticements. Farmers, of course, have no compunction in chasing higher returns for their produce so food prices will be driven up by the biofuel industry. General Motors (USA) are already creating fleets of vehicles designed to run on ethanol by 2012. four hundred million tonnes of food will burn as a fuel substitute each year by 2020…equivalent to the entire rice harvest of the world, or the complete American wheat crop.

The destruction of the world's remaining jungle, forest and native vegetation, especially in South America, Malaysia and Indonesia, to grow palm oil and other such crops is a further worry. A Western Australian biofuel company intends to convert 400,000 tonnes of wheat, the entire harvest of mid-west farmers, when they commence production in 2009.

Research indicates that these activities in changing land use will actually increase greenhouse emissions. Advocates of biofuels counter that this is not a factor because existing crops will be used for conversion to ethanol etc. but, of course, replacement sites will then be in need to grow food crops for those who are able to afford escaping starvation.

Australian government involvement in biodiesel is now showing signs of caution and restrain by encouraging investigations into non-food waste biofuel production, possibly from garbage and sewerage. Strange, then, that the only operating biodiesel company in Australia has ceased production, citing financial non-viability, crippling difficulties in securing contracts with major oil companies and a 50 percent price increase to obtain tallow, the animal abattoir waste that is the main ingredient for its biodiesel. What will happen to this waste now?

Despite having to repay over $7 million in government grants, this company now plans on moving to New Mexico (USA), enticed by government financial incentives there and a compulsory rule that makes all diesel fuel to have five percent biofuel content.

Most of our food–vegetables, root crops, fruit, fungi, spices and animal meats–originated in forests; nearly all our healthcare products– medicines, vaccines, drugs, ointments etc–are from forest plants; forests absorb carbon and noxious gases, control ground-water levels thereby preventing surface salinity; they transpire oxygen and moisture which attracts rainfall and thus play an instrumental part in the recycling of ocean water and preventing drought. And they keep rivers flowing. Yet it is said the 'surface has hardly been scratched' with regard to the treasures that forests still hold. But they are being destroyed, all in the name of profit.

RON STONE, Western Australia

Capitalist Catch-22

From New York Times we hear that President Bush is threatening to veto a bill that “would pay tuition and other expenses at a four-year public university for anyone who has served in the military for at least three years since the attacks of Sept. 11, 2001.” The main reason for this? Fear that it would cause an exodus from military ranks.

In a society in which workers have faced a 35 year-year downward pressure on their standard of living (Independent (UK) 23 March), i.e. the cost of living has increased whereas wages have remained stagnant or decreased, many young people turn to military enlistment in hopes of obtaining a college education and/or career training - known as the “poverty draft.”

We can only urge workers not to look for the better carrot at the end of the rope, but to look for the source of this economic instability and wealth inequality.

As stated in the March ‘08 Socialist Standard:

As socialists we analyze social affairs in class terms. We approach problems in the field of economics and politics from a consideration of what we see as being the real interests of the world working class. It is our contention that there are only two classes in present day society. Firstly, the working class, who collectively produce the wealth of society and who, in order to live, have to sell their ability to work for a wage or a salary. Secondly, the capitalist class who accumulate profit through the economic exploitation of the working class.

This situation leads to an inevitable conflict of interests and the generation of social and economic problems that cannot be solved while capitalism of whatever form continues. Commodity production (production of wealth for sale with a view to profit) inevitably brings conflict over access to markets and sources of raw materials, and for the control of trade routes, and for strategic points around the globe. Attempts are made to resolve these conflicts through discussion and diplomacy. Where diplomacy fails there remains the threat of force of arms to get what is wanted. From time to time this clash of interests breaks out in armed conflict. For the Socialist Party “capitalism and war are inseparable. There can be no capitalism without conflicts of economic interest.” ( SPGB: War and the Working Class. 1936. p.1)

And so it is a vicious circle, wars are waged abroad with a view to capitalist profit, and wages are continually driven down for the same reason. Bodies are needed to fight these wars, however, and the capitalists are not going to do the fighting themselves. The only way the ruling class can garner these bodies (other than through force by a draft) is by offering some small hope of economic alleviation from the conditions they have created, lets not forget the nationalistic exhortations, to coax workers into killing each other and dying for causes which do not serve their own interests, but that of their masters.

As President Bush seems to have found himself in a catch-22, the WSP says don’t buy it either way. The only solution to the plethora of problems such as war and poverty is the dispossession of the ruling class through the conscious, political self-emancipation of the working class and the establishment of a system of common ownership and democratic control of the means of wealth production – socialism.

How close was France to a socialist revolution?

From the July 1968 issue of the Socialist Standard

One of the most amusing reports to come out of France during the recent unrest was of one panic-stricken capitalist, convinced that his class was about to be expropriated, who loaded his car with over £1 million in cash and made a dash for the Swiss border. But his terror, ridiculous in retrospect, was matched by a corresponding euphoria in left-wing circles. Anyone accustomed to thinking along Bolshevik or anarchist lines was convinced that "a revolutionary situation" had developed and, in Britain at any rate, there were several groups declaring that the socialist revolution had started. Already May 1968 is part of the mythology of the left and there is a generally accepted explanation of why the agitation seeped away and why the strikers drifted back to work. The French workers are supposed to have been ripe for revolution and all that was missing was "a large revolutionary organisation capable of giving direction to the demands of the working class".

This raises the whole question of what constitutes a socialist revolution. The Socialist Party of Great Britain argues that it is not enough to have thousands of demonstrators on the streets or even millions of workers occupying the factories. Above all the working class must have a clear understanding of what Socialism entails and what methods are effective in overthrowing capitalism. A grasp of socialist principles by the vast majority of the workers is a minimal condition for going forward to Socialism and no party, no matter how religiously it follows the Bolshevik tradition, can substitute for this.

If this is accepted, then we can estimate how close France came to a socialist revolution by taking a look at the demands which the workers advanced during the period of upheaval. Most prominent were the usual claims for higher wages, better working conditions, shorter hours and security of employment. (There are between two and three million workers on the minimum wage level of less than £8 a week and at least four million earning under £11 a week.) Such demands have the full support of the Socialist Party--but we must emphasise that there is nothing revolutionary about them. In fact, the wage increases that have been secured need to be put in perspective. They seem to be averaging out to a general rise of about 13 per cent (on the basis of a 10 per cent all-round increase and a 3 per cent rise in the minimum wage) but this needs to be set against the fact that nominal wages have been rising by 6 per cent annually over the last few years anyway. Although these increases will naturally cut into profits, the international capitalist class hastened to reassure itself that the outcome would be far from a disaster As the Economics Editor of the Sunday Times put it:

"The pay settlement will not be wholly adverse for France's economy. The big increase in the minimum wage will help send the poorer French firms to the wall, releasing workers for the big, profitable ones--which pay well above the minimum."

Yet the strikers did not restrict their demands simply to these issues. At numerous plants there were calls for "a radical change in the power structure" and for "participation of the workers in the running of the factory". A leader of Force Ouvriere (the social democratic trade union federation) pointed out his members were agitating for "genuine workers' participation in the policy of industry" and a senior Renault shop steward came out for nationalisation of key sectors of the economy, including all the car firms, the chemical industry and the banks. Understandably, demands such as these were greeted with rapturous delight by all those who imagine Socialism as a system of nationalisation under workers' control; but the Socialist Party rejects this view. For socialists nationalisation, whatever its trimmings, is nothing more than state capitalism. The policy of workers' control does not pose threat to the capitalist system as long as those workers are still committed to capitalism and have not understood the socialist alternative. That this was the case in France is made clear by the fact that even the most extreme elements, such as Cohn-Bendit, went no further than the old utopian demand for equal wages. Who was urging the abolition of the wages system and an end to the market economy? For this reason, we cannot accept the claims of one young activist in St. Nazaire:

"The long-term outlook is uncertain, but not hopeless. On one tier, there are the traditional union claims, which must be met immediately. On another, the government and the regime itself are in question. There is the challenge of capitalist society, of social orders based on private property."

Obviously there was a challenge to the government and the Gaullist regime but capitalism remained secure throughout.

For all that, the Socialist Party recognises that there are vital lessons to be drawn from the recent struggles of the French workers. One of the most important is the complete bankruptcy of the "communist" parties, as demonstrated by the PCF. Another striking feature was the way in which the factories and universities were organised while the employers and authorities were temporarily eliminated. Although there was no production during the strikes, all the factory services had to be maintained. At the Renault plant at Billancourt, for example, the factory hospital was still functioning, the firemen and security officers had to keep patrolling, food had to be prepared—and so on. Even more impressive was the Sorbonne, with the students in control. A hospital service, treating those injured in the riots, was centred on the Medical Faculty and it was estimated that a daily average of 10,000 posters and hand-outs were being produced by the Fine Arts School. Yet all of this was done by unpaid, voluntary labour, by people cooperating for a common purpose. Too much should not be made of this (we are not suggesting it represented "socialism in action") but it does at least disprove the often-heard objection to a socialist society that, if the coercive pressures of the wages system were removed, nothing but chaos would result.

Another important aspect was the role of the police and armed forces. Although vast publicity was given to the brutality of the CRS, there was less on the discontent which was building up among the ordinary police forces over their use as government thugs. Already by May 18 there were reports from the police unions of "extreme tension" in the forces. Some of the police were also adopting the tactics of the strikers themselves. An article in the Times mentioned that the branch dealing with intelligence on student activity had been deliberately depriving the government of information about student leaders in support of an expenses claim! This indicates that the majority of those who make up the police and armed forces are subjected to the general pressures which act on all working men and women.

As for the army, General Fourquet—the Chief of Staff—made it clear that it would obey any constitutionally elected government—even a "communist" one. Whether Fourquet and the general meant this or not is largely immaterial for, when we are in a position to establish Socialism, the bulk of the armed forces (as with the rest of the working class) will be socialists and will understand that their interest lies not in fighting their fellow workers but in freeing mankind as a whole by stripping the capitalist class of its wealth.

If there were a working class committed to Socialism in France the correct method of achieving political power would be to fight the general election on a revolutionary programme, without any reforms to attract support from non-socialists. In fact, the first stage in a socialist revolution is for the vast majority of the working class to use their votes as class weapons. This would represent the transfer of political power to the working class. We adopt this position not because we are mesmerised by legality and not because we overlook the cynical and two-faced double-dealing which the capitalists will no doubt resort to. We say, however, that a majority of socialist delegates voted into the national assembly or parliament would use political power to coordinate the measures needed to overthrow the capitalist system. Any minority which was inclined to waver would have second thoughts about taking on such a socialist majority which was in a position to wield the state power.

But since the workers in France are still convinced that capitalism is the only viable social system, the immediate task must be for genuine socialists to concentrate their efforts on spreading socialist ideas among the working class. For this purpose an independent socialist party, which does not compromise its principles or dissipate its activity in attempts to reform capitalism, is indispensable.

Appeasing the Nazis?

President Bush made the following comment last week:

Bush gave a speech to Israel's Knesset in which he spoke of the president of Iran, who has called for the destruction of the U.S. ally. Then, the president said: "Some seem to believe that we should negotiate with the terrorists and radicals, as if some ingenious argument will persuade them they have been wrong all along."

"We have heard this foolish delusion before. As Nazi tanks crossed into Poland in 1939, an American senator declared: 'Lord, if I could only have talked to Hitler, all this might have been avoided.' We have an obligation to call this what it is — the false comfort of appeasement, which has been repeatedly discredited by history," Bush added.

Of course, Bush ignores how his grandfather, Prescott Bush, sat on the Board of Directors of the company which made the steel for the tanks - even as the US was at war with Germany:

The Guardian has seen evidence that shows Bush was the director of the New York-based Union Banking Corporation (UBC) that represented Thyssen's US interests and he continued to work for the bank after America entered the war.

(Prescott) Bush was also on the board of at least one of the companies that formed part of a multinational network of front companies to allow Thyssen to move assets around the world.

Thyssen owned the largest steel and coal company in Germany and grew rich from Hitler's efforts to re-arm between the two world wars. One of the pillars in Thyssen's international corporate web, UBC, worked exclusively for, and was owned by, a Thyssen-controlled bank in the Netherlands. More tantalising are Bush's links to the Consolidated Silesian Steel Company (CSSC), based in mineral rich Silesia on the German-Polish border. During the war, the company made use of Nazi slave labour from the concentration camps, including Auschwitz. The ownership of CSSC changed hands several times in the 1930s, but documents from the US National Archive declassified last year link Bush to CSSC, although it is not clear if he and UBC were still involved in the company when Thyssen's American assets were seized in 1942.

Prescott Bush actually sat on the Boards of three companies confiscated by the US government for trading with the enemy.

A report issued by the Office of Alien Property Custodian in 1942 stated of the companies that "since 1939, these (steel and mining) properties have been in possession of and have been operated by the German government and have undoubtedly been of considerable assistance to that country's war effort".

This all comes as no surprise to socialists - capitalists will do business with other capitalists, enemy or friend no matter what political label they are operating under: As one nazi hunter tells the Guardian:

Loftus stressed that what Prescott Bush was involved in was just what many other American and British businessmen were doing at the time…"You can't blame Bush for what his grandfather did any more than you can blame Jack Kennedy for what his father did - bought Nazi stocks - but what is important is the cover-up, how it could have gone on so successfully for half a century, and does that have implications for us today?" he said.

"This was the mechanism by which Hitler was funded to come to power, this was the mechanism by which the Third Reich's defence industry was re-armed, this was the mechanism by which Nazi profits were repatriated back to the American owners, this was the mechanism by which investigations into the financial laundering of the Third Reich were blunted,"

You can best believe that capitalists - from both the Democratic and Republican capitalist factions - are making profits trading with the so-called terrorist states, Iran, etc.

War is something for workers to believe in and fight. The WSP says don't buy it.

For Capitalists, war is just another profit opportunity.

Xenophobic violence erupts in South Africa

About 12 people were killed and more than 50 were taken to hospitals with gunshot and stab wounds last night in Johannesburg, South Africa's largest city. Local police used tear gas and rubber bullets in attempt to try to stop the attackers - gangs of armed youths. (BBC)

This was not, however, the racial violence we are used to hearing regarding South Africa. The victims of these attacks are immigrants from neighboring African countries such as Zimbabwe, Mozambique, Malawi etc.

The BBC report sated that "Since the end of apartheid, millions of African immigrants have poured into South Africa seeking jobs and sanctuary. But they have become scapegoats for many of the country's social problems - its high rate of unemployment, a shortage of housing and one of the worst levels of crime in the world."

Incidents such as these are nothing new in modern history as immigrants are often the scapegoats for the economic problems of the various capitalist states. The common view is that the "aliens" are somehow the cause of unemployment, crime, and even poverty itself. The true source of these problems, however, is a chaotic and unequal economic system -capitalism. These nationalistic illusions, which beguile workers into fighting among themselves and believing that their interests and the interests of their rulers are linked, are a convenient instrument of the ruling class which serve as a divergent to the real struggle - the class struggle.

As the Socialist Standard summed up back in May 2001:

...it is the problem of "the haves and have-nots" which is central to war, violence and hatred. Thus the real solution will be to eliminate the present situation of a minority owning the means of production and distribution of wealth whilst the majority owning nothing, have to work for the few. In other words money, buying and selling, commodities and the like must be done away with. Humanity must commonly own the means of production and must have free and equal access to the produce. Under such circumstances there will be no want and consequently no war and hatred.

But this type of system can only be possible when people make efforts to understand it. When they understand and want it, they can organise to usher it in.