ALB
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I thought I would check with the original German of what Luxemburg wrote and the situation is not that clear-cut. The word that the Australian translator translated as “economics” is Nationalökonomie which literally means “national economy”, the word then in use to mean fir instance the subject studied at university.
This was the word Engels and Marx had used in their early writings (1840s) and which they later called “political economy”. In fact in some translations Nationalökonomie which they used has been translated into English as “political economy”.
There is another German word Wirtschaft which can also be translated as “economics” and which Luxemburg also used. It is a sort of literal translation of the Greek word from which “economics” is derived, ie rules of house-keeping.
What Luxemburg said would disappear in socialism was Nationalökonomie, which is obvious in one sense as with capitalism would go the study of how it works (and ideological justifications for it).
There is also a German word Naturalwirtschaft used to describe an “economy” where money is not used.
And in this month’s Socialist Standard,published online yesterday:
Here is what Rosa Luxemburg wrote for a course on economics she taught at the German Social Democrats’ school that was translated and published in Australia under the title What is Economics?:
https://www.workersliberty.org/files/29544399-Luxemburg-What-is-Economics.pdf
Here are a couple of relevant passages.
“Sometimes economics is simply defined as follows: it is the “science of the economic relations among human beings.” The question of the definition of economics does not become clarified by this camouflage of the issue involved but instead becomes even more involved-the following question arises: is it necessary, and if so why, to have a special science about the economic relations of “human beings,” i.e., all human beings, at all times and under all conditions?” (page 224)
“If we understand at this point why the science of economics originated only about a century and a half ago, then, from the vantage point gained, we will also be able to construct its subsequent fate. If economics is a science dealing with the particular laws of the capitalist mode of production, then its reason for existence and its function are bound to the life span of the latter and economics will lose its base as soon as that mode of production will have ceased to exist. In other words, economics as a science will have accomplished its mission as soon as the anarchistic economy of capitalism has made way for a planful, organized economic order which will be systematically directed and managed by the entire working force of mankind. The victory of the modern working class and the realization of socialism will be the end of economics as a science.” (pages 244-5).
The pamphlet is not 250 pages long (the above is from a collection of her articles) but only 30 pages and well worth reading to see how she develops her argument.
Another unintended consequence. The US supports Israel’s military actions to weaken Hezbollah and Iran who support the regime in Syria and opens the door to Al Quaeda.
Just like in Iraq where they overthrew the Saddam regime and so allowed the largely pro-Iran Shia Muslim majority to dominate.
Looks like the Islamist savages in the land of Isis are on the march again and another part of the relatively civilised world risks falling under their sway.
Labour thrilled at not losing:
Maybe if Caines hadn’t stood, the Greens might have won.
The Corbynists are seeing it the other way round. For example:
“I feel compelled to express my frustration with the Green Party’s decision to stand a candidate in this election. It was clear they had little chance of winning, yet their decision to run may have split the vote and prevented Jackson from achieving an even better result. To me, this highlights a level of selfishness that undermines the broader goal of supporting candidates like Jackson, who are genuinely dedicated to improving the commmunity.”
And even:
“Shame re green, socialist and other independent voters.”
It is true that the Greens only stood a paper candidate. No leaflets and just one letter in the local media. They didn’t seem to want to win.
Here’s the result in more traditional form:
POTTS, James Christopher (Labour Party) 785 40.4% (-22.0)
CAINES, Jackson (no description) 550 28.3% (New)
OSBORNE, Devon (Green Party) 219 11.3% (-11.2)
JONES, Rebecca (Liberal Democrats) 156 8.0% (+0.9)
WILKIN, John (The Conservative Party Candidate) 113 5.8% (-2.1)
POTTER, Brian Steve (Independent) 97 5.0% (New)
MARTIN, Bill (The Socialist Party of Great Britain) 22 1.1% (New)Turnout: 21.33%
We are only “new” in the sense that we didn’t stand in the last previous election but had stood there three times before.
In any event, a democratically-organised socialist-minded working class majority is not going to allow a recalcitrant minority of capitalists and a few of their supporters to impede the democratically arrived at will to replace capitalism with socialism. They would be dealt with, using armed force if necessary.
This has always been our position and one reason why we insist that the working class should aim at winning control of political power.
Incidentally, it is not us, the party, who would assume political control but the working class. There can be no question of a socialist party taking political control as a minority (as the Trotskyists preach). That wouldn’t and couldn’t lead to socialism, which by its very nature requires majority agreement and participation.
The Trotskyists are obsessed with the Russian Revolution, but conditions there — political as well as economic — have nothing in common with conditions in developed capitalist countries today, let alone with those which will exist when a majority of workers want and understand socialism. They are living in the past and posing irrelevant questions!
If the ceasefire works it can only be welcomed. As we said in the Peace Manifesto we issued in the middle of WW1:
“Every Socialist must, therefore, wish to see peace established at once to save further maiming and slaughter of our fellow Workers. All those who on any pretext, or for any supposed reason, wish the war to continue, at once stamp themselves as anti-Socialist, anti-working class, and pro-capitalist.”
Here’s Corbyn saying that his candidate will win:
I wouldn’t say Werner’s views were “interesting”. They are just bog standard currency crankism by someone who has someone managed to get the title “Professor” to go with his name which gives them a credibility they don’t deserve.
His views are dealt with in chapter 4 of our pamphlet The Magic Money Myth entitled “The Pure ‘Thin Air’ Theory of Banking’.
According to this, a meeting to protest against the erection of a tower block in the ward was held on Tuesday 19 November to which it had been announced that candidates in the by-election had been invited:
https://www.savearchwaycampus.org/news/community-rallies-against-plan
Apparently the Labour, Corbynist and LibDem candidates spoke at the meeting. So either the other 4 candidates weren’t invited, turned down the invitation, or didn’t speak.
Our candidate did not receive an invitation. We have contacted the presumed organisers for more information, asking to where any invitation was sent.
If we had known about the meeting we would at least have leafletted it.
The position our candidate would have expressed would have been along the lines of the (unpublished) letter to the Islington Tribune in message #254865 above.
Found the passage you are referring to:
“If the bank has found from experience that it only ever needs to retain 10% of deposits as cash to meet the needs of its customers, then it can loan the remaining 90%. So, here, if the bank starts out by loaning £10,000 to B, who uses it to buy a lathe, this loan appears as £10,000 of bank capital, against which the bank can then make additional loans. So, on this basis, it may make a further loan of £9,000, to C, which then also appears as additional bank capital. The bank can then make an additional loan of £8,100 to D, which then appears as additional bank capital making possible a loan to E and so on. Instead, of just issuing a loan of £10,000, this initial bank capital of £10,000 enables the bank to issue loans of up to £100,000, and each of these appear on its books as capital, whilst in fact this £100,000 is only fictitious capital, it is only able to earn interest to the extent that the money loaned out is used to buy productive-capital, and thereby generate surplus value.”
https://boffyblog.blogspot.com/2014/12/fictitious-capital-part-4.html?m=1
The first sentence is correct but what follows is not. If a bank lends a capitalist £10,000 to buy a lathe, when the capitalist actually buys the lathe then the bank has to transfer £10,000 to the bank of the person who sold it. The money has then gone. The asset represented by the IOU from the borrower has been liquidated and cannot be used to make another loan of £10,000 (In fact, the initial loan could only have been £9,000 but we can let that pass.)
There is, however, one circumstance under which theoretically it could — if the seller of the lathe happened to bank with it. There would then be a fresh deposit of £10,000 and the bank could lend 90% of this, ie £9,000. If the seller again happened to bank with it then it would have a new deposit of £9000, of which it could lend out 90%, or £81,000. This process could continue (assuming the sellers always banked with it) until total loans of £90,000 had been made. But this would have been balanced by total deposits of £100,000.
Of course this is a quite unlikely, not to say impossibke, scenario for a single bank but, applied to the banking system (all banks) it is the theory of fractional reserve banking which used to be taught in university economic courses. It is not incorrect but doesn’t mean what it is sometimes interpreted as meaning that (with a cash ratio of 10%) a single bank could lend 9 times an initial deposit.
Michael Roberts in that blog from 2014 does indeed seem to be putting forward a thin air theory of banking even if he doesn’t call it that — as the “bank capital” he bases it on does disappear as soon as the borrower spends the loan and the bank has to transfer money to the seller.
This is explained in chapter 5 of our pamphlet The Magic Money Myth:
I don’t know if he still adheres the view he expressed in 2014 but in a later blog he explicitly repudiates the thin air theory of banking embraced by David Graeber:
