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Yes, it was in 2004 by this Conference Resolution (note the original resolution was passed in 1984 not 1974):
Quote:That the 1984 Conference Resolution, ‘This Conference affirms that socialism will entail the immediate abolition and not the gradual decline of the State’, be rescinded and replaced with: ‘That as the State is an expression of and enforcer of class society, the capture of political power by the working class and the subsequent conversion of the means of living into common property will necessarily lead to the abolition of the state, as its function as the custodian of class rule will have ended. Those intrinsically useful functions of the state machine in capitalism will be retained by socialist society but re-organised and democratised to meet the needs of a society based on production for use’Jonathan Chambers wrote:How many members are actually intending to go? And where are we meeting? I’m travelling down from Wales and it’d be nice not to be all on my own!!It’s a bit early yet to have fixed the exact details, but there will probably be 2 meeting points. One for those to cover the assembly point of the march at the Embankment from 11am and one at Hyde Park. Since the Embankment is on a direct tube line to Head Office it may be best for members wanting to cover the start to go there first to pick up leaflets. In the afternoon, from say 1.30-2.00 onwards we’ll have a literature stall in Hyde Park (Marble Arch).At the moment we’ve decided to order 15,000 leaflets. This may prove over-ambitious as it implies that, if only 15 members turn out, each will have to distribute an average of 1000 leaflets. But if members coming to London for the Autumn Delegate Meeting on the Sunday turn out too we should have more 20 members leafleting.If members think that this is too ambitious now is the time to say so as the order can be reduced.
TheOldGreyWhistle wrote:Some members may be a little offended as the Communist Manifesto advocates reforms
Actually, strictly speaking, the 10 points in the Communist Manifesto were not reforms to be implemented within capitalism but measures to be adopted in what we can now see was the highly unlikely (not to say impossible) event of the Communist League of Germany winning political control there in 1848. The criticism that could be made of them (besides being based on an unrealistic, and unrealisable, assumption) was that they amounted to a programme for state capitalism even if under democratic control. Maybe that was all socialists could advocate as the way forward when conditions were not yet ripe for socialism. Fortunately we are now living in 2012 not 1848 and that dilemma has long ceased to exist.
Hud, here’s the argument you are wrestling with as presented by someone on another forum (Urban 75 discussing our debate with Positive Money on Wednesday):
Quote:But even more to the point, it is necessary to consider the banking system as a whole, because just as you might claim money created by private banks ‘leaves’ when it is drawn on to another bank, it arrives when the reverse happens. Suppose we have four major high st banks, each of them make a loan of £10,000 to one of their customers. Now suppose each of these customers draws their loan by paying someone at another bank, so each bank has given one loan and been paid by another. What is the overall position? None of the banks has any change in their position with the central bank. The banking system as a whole has created £40,000, out of thin air, by keystrokes on a computer.In this example the banking system has indeed made new loans totalling £40,000 but not “out on thin air”.The model this contributor is using of the way the modern banking system works assumes that at the end of each day payments out (which will include loans that are spent) are covered by payments in (electronic deposits of one kind or another). In his example the £10,000 each bank paid out to a borrower is compensated by payments in, the same day, of the same amount. (He assumes that they are compensated by payments in from the borrowers from one of the other banks, but they could come from anywhere.)The same model of the way the banking system works also assumes that, if at the end of the day, a bank ends up with payments out exceeding payments in, then it borrows the difference, either from the Bank of England or from other banks or from the money market. So once again any loans are covered by an equivalent amount.The only difference is that this model assumes that the money that covers the loan can be acquired after the loan has been made (even if only later the same day) rather than having to exist before the loan could be made. But it still assumes that all loans do have to be covered. So much for “thin air” (and bootstraps).
Hud955 wrote:In that respect, I think the Positive Money argument is stronger. That’s what’s giving me problems.I don’t think we should call the argument that a bank can make a loan without having the funds to cover it as long as it finds those funds by the end of the day “the Positive Money argument”. That is to give them too much credibility. They are basically currency cranks who have latched on to one side of an argument between economists about whether or not a central bank can control the level of bank lending and they propose a currency crank solution (basically the old Social Credit one that the government should organise lending).I think that the argument that is giving you problems is the one presented, for instance, in this article where the author argues that a bank does not necessarily have to have the funds available before it grants a loan, but that it does have to get them later. This is a rather different argument from currency cranks who argue loans don’t have to be counter-balanced by funds.The author argues that a bank making a loan without funds can get the money, via the clearing system run by the central bank. The central bank will grant it an overdraft but expect that to be paid off by the end of the day, so the bank has to borrow the money from other banks or the money market generally. He also argues that, as borrowing from the money market is more expensive than borrowing from outside depositors, banks have an incentive to seek deposits to lend from them rather than getting from the money market the money to cover loans:
Quote:Note underneath Bank A’s balance sheet I’ve shown the totals or net changes to its balance sheet overall, which is simply a loan created offset by borrowings in the money markets on the liability/equity side. So, the loan was made without Bank A ever needing to meet reserve requirements, without needing reserve balances before making the loan, and without needing any deposits. Can Bank A just continue to make loans forever this way without ever needing any of these? The key here is to understand the business model of banking—which is to earn more on assets than is paid on liabilities, and to hold as little capital (equity) as possible (since that’s generally more expensive than assets). The most profitable way to do this is to make loans (that are paid back, obviously, so credit analysis is an important part of this) that are offset by deposits, since deposits are the cheapest liability; borrowings in money markets would be more expensive, generally. So, Bank A, if it is not able to acquire deposits is not operationally constrained in making the loan, but it will find that this loan is less profitable than if it could acquire deposits to replace the borrowings.That doesn’t sound unreasonable and explains why banks seek deposit (something the currency cranks can’t explain). It brings profits into the picture and accepts that banks’ income comes from the difference on the interest they pay on their liabilities and the interest they get on their assets, i.e the difference between the rate they pay those who lend them money and the rate they charge lenders.Although we can object to some of the language employed, especially that banks can create loans “out of thin air” (a term that does occur in the article), I can’t see that this undermines our argument that loans do have to be covered by funds, i.e we don’t necessarily have to take the side of Krugman in this argument. In fact, of course, we don’t have to take either side. The currency cranks of course favour the anti-Krugman side for the reason that puts us off (the use of the term “out of thin air”), but the arguments of this side do not back up the basic currency crank argument that loans don’t have to be covered by funds or that banks make their money by making loans from nothing and charging intertest on this.
Hud955 wrote:Assume a single bank for now and assume a bank rate of 10%. If the bank receives a deposit of £100 and lends 900% of that or £900 as your green party guy claims, it will in due course receive a deposit of £900. Its books will then show £1000 in deposits (£100 and £900) and a £900 loan. There would be no obvious way of distinguishing between this situation and another where it recieved an initial deposit of £1000 and loaned 90% of that or £900. Again, its books would show deposits of £1000 and a loan of £900.But it would be what happens next that would be different. Assuming that the bank has chosen or is obliged by law to keep 10% of any deposit as cash, if on receiving a deposit of £100 it can lend then out £900 which then comes back to it, this means that it could then immediately lend out 9 times that, ie. £8,100. And when this comes back 9 times that, or £72,900. And when this comes back it could lend 9 times that, or £656,100. And then 9 times that, or £5,904,900. It doesn’t finish there. In fact in never finishes. I think the Ancient Romans logicians used to call this refutation by means of reductio ad absurdum.
Hud955 wrote:I think of only two ways to counter the positive money argument. The first would be to provide empirical evidence that this is not actual banking practice. But where would that evidence come from?Here’s what Glen Arnold (described as “a businessman, investor and a professor of investment at Salford University.”) says in an FT Guide to Financial Markets published earlier this year. After describing the classic way in which, with a required cash reserve, the banks collectively (but not one on its own) can use the money from an initial deposit to make loans many times that amount, through the loans, after being spent, being deposited in one or other bank, he comments:
Quote:The central bank is the only player here which can create money out of thin air and pump it into the system if the system is at equilibrium.Thus, despite the commercial banks’ ability to create money on the way to equilibrium, there is a limit to the amount that the system can go up to, because for every dollar, pound, euro, etc created there has to be a fraction held as a cash reserve. It is the central bank which controls the total volume of monetary base (reserves at the central bank plus cash in circulation and at deposit-taking institutions) and so the broader aggregates of money have an upper limit. (p. 126)Creationists oppose this “deposit multiplier” theory because they realise that it is based on each new loan being preceded by a new deposit.The sub-plot here is that there is a disagreement amongst economists about the way banks and the central bank (in the UK, the Bank of England) interact. Some say that commercial banks take the initiative and make loans without having the funding in the knowledge that the central bank will always create the funds needed to cover these loans (which still acknowledges that loans do need to be funded). Others challenge this view (such as Arnold above and Paul Krugman), pointing out that there are limits to the amount both an individual bank and the banking system can make.Positive Money relies on quotes from the first school of economists, especially as some of them do talk the language of “creating money from thin air”, even though none of them think that a single bank can do this on its own or that banks collectively can either without the intervention of the central bank (which, as a State institution) can create money out of thin air (if you want to put it that way).But surely the main argument against the Positive Money position is that banks do seek outside deposits and do borrow wholesale from the money market.? If they could create the money to lend from thin air why would they need to do this? For someone expressing the view that “banks do not (and never have) needed depositors for enable them to make loans” and “deposits play no part in that process” (his emphasis) on the Positive Money website and endorsed there as “an excellent comment” see this. Surely there is enough “empirical evidence” to show that this is not actual banking practice?
jondwhite wrote:The original Japanese manga was reviewed in the July 2009 Socialist Standard here (scroll down to the last item):http://www.worldsocialism.org/spgb/socialist-standard/2000s/2009/no-1259-july-2009/book-reviews
Quote:Also Marx’s Das Kapital For Beginners, Michael Wayne. Illustrated by Sungyoon ChoiThis is reviewed in the September Standard out tomorrow or Monday.
Hud955 wrote:What I doubt is that the whole banking system could keep up a massive overselling of loans indefinitely while maintaining the system in balance.Isn’t that the answer to your original question?Positive Money says that Northern Rock went bust because it expanded its loans faster than the other banks (so violating one of the assumptions of your ideal scenario). If you think that banks “create money” from thin air rather than from funds they already have this is the only logical explanation you can give. But since banks do make loans from funds they have it is perfectly possible for one bank to expand its loans faster than others, as long as it gets the extra funds. Northern Rock did so by borrowing heavily from the money market. It got into trouble when the interest rates at which it could borrow from here rose. What has been called “funding strains arising from reliance on short-term wholesale funds”. Positive Money of course deny that this could happen or would be a problem because they don’t accept that banks need funds to make loans.
gnome wrote:Here’s what that nice man Mr GraeberIf we are going to be all formal about this, shouldn’t that be “Dr Graeber”. Let’s hope he’s not aware that in our circles to refer to somebody as “Mr” is an insult !
Here’s a hint of what their line might be. From here (BD is Ben Dyson):
Quote:AB: The left appear to be wilfully blind about this most important of issues; according to the Socialist Party of Great Britain (in an attack on the Social Credit proposals of Major Douglas): “[banks] are essentially only financial intermediaries, borrowing money at one rate of interest from people with cash to spare and lending this at a higher rate to those needing money to spend or invest, their profits coming from the difference between the two interest rates”. As you pointed out in your critique of Bob Diamond last year, this is not true. Worse than that, it is an outright lie, because now it is generally accepted that banks do create credit ex nihilo. Why do so-called socialist organisations peddle such lies and toe the banks’ line?BD: It’s the ideological attachment to getting rid of capitalism that blinds them to seeing how things really work.Lies? Toeing the banks’ line?
SocialistPunk wrote:I was wondering what others think of the party argument on human nature?It can be found on this site, under publications – pamphlets – “Are We Prisoners of Our Genes?”Seems spot on to me.There’s also these two articles from the September 1969 Socialist Standard recently added to the Archives section here:http://www.worldsocialism.org/spgb/socialist-standard/1960s/1969/no-781-september-1969″Man: Ape is Wolf’s Clothing?” is a classic.
You keep saying that the scheme you are thinking about (where banks all extend credit at the same rate) has nothing in common with what happens today but I think it has. See if you can spot the error in this explanation by Positive Money of why Northern Rock went bust. According to them, it was because it extended credit too much and too quickly and so ended up with a continuing negative balance when the clearings with the other banks were over.
