Russia: What Really Went Wrong?

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John Molyneux gives the real story of Socialism's failure in Russia.



The sound is not great and drifts out of sync in this video, but the message should still be clear.

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Pre-Paid Profit

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I guess not everyone spends their days reading through the blogs of BBC journalists. It’s not the most rewarding of pastimes and at some points is downright infuriating. A little while ago I came across an article by Robert Peston in which the Beeb’s esteemed economics editor poured scorn on the idea that the energy companies were guilty of “rampant profiteering”.

I was reminded of Peston’s piece the other day when a friend, having recently moved to a new flat, explained that she was receiving her electricity from British Gas and her gas from Southern Electric. Before I had the chance to chortle at the illogical nature of the privatised utilities she began to describe the difficulties that her new neighbour was suffering with her energy providers.

Some time ago, crippled by debt and unemployment, the neighbour found she was unable to pay her electricity bills and was eventually £200 in arrears. On her return to her flat, after some time away, she found that the electric company had put her on a pre-payment key meter. Topping it up with £10 of credit she was baffled to find that within only a couple of hours all her lights went out, her cooker turned itself off and the telly packed up. Apparently the meter, programmed to know that she was in debt to the company, had taken £9 to begin repaying the outstanding balance and left her a quid for electricity.

Whether something similar will happen each time she puts the key in the meter, or will happen once every week I simply don’t know. More importantly neither does she.

However she is not alone in being shafted by energy providers who find forcing people – particularly those that owe them money - on to pre-payment key meters extremely lucrative. A trawl of chat rooms and forums reveals huge numbers of people who are rightly disgusted with the cost of key meters. The anecdotal evidence on show suggests people are finding their energy bills more than doubling after the transition from direct debit payment to pre-payment.

Last week energy watchdog Ofgem published the initial findings of a report showing that energy companies are making a £550 million profit each year from the additional charges they place of pre-payment meters. There are approximately 5.4 million people in the country that pre-pay for their energy. Each one of these people can expect to pay around £120 more per year than if they were able to pay via direct debit. Often it is the poorest and most vulnerable that pre-pay for their gas and electricity. One third of lone parents, people with disability or long term illness, and the unemployed find themselves with key meters. And the numbers keep on increasing. The Ofgem study goes on to say that 1000 pre-payment meters are being fitted every day to “recover energy debt”.

Of course those people who pay in arrears, either quarterly or monthly, have also been on the receiving end of the price hikes forced through by the “Big 6”, the energy companies that supply gas and electricity to people in the UK. In July, Centrica, the parent company of British Gas, announced that gas bills would rise on average by 35%, electricity bills by 9%. British Gas customers have seen their fuel bills rise by 75% since 2003. Unsurprisingly other suppliers quickly followed suit.

Energy companies have pinned these rises on increasing wholesale costs – particularly those of gas. While these costs have certainly gone up, the figures suggest that they have been disproportionately applied by firms in this country. The latest OECD figures show that the increases to UK gas and electricity bills, some 29%, are nearly double that of the average rise in other EU countries (15%). When compared to the rises in Germany (12.2%) and France (14%) the conclusion is simple. These people are hell bent on money whatever the cost.

Perhaps the charge of rampant profiteering would be easier to rebuff were it not for the huge sums of money being made by these corporations. The day after its customers were on the receiving end of its biggest ever price rise, Centrica announced profits of £992 million, and promptly raised their shareholders dividends by 16%. In total the payouts to shareholders by the companies supplying gas and electricity stood at £1.635 billion in 2007. This is a 19% increase on the previous year and the equivalent to £75 per household. Just to add insult to injury, British Gas also announced in July that it would be cutting 1500 jobs – or 8% of its workforce – in a bid “to improve efficiency”. It is now on track to “achieve £60 million in savings”.

New Labour is well aware of the problems. In the budget earlier this year Alistair Darling, a man not exactly feted for his warmth and compassion, decreed that the government would seek out a “better deal” for the 5 million people who live in “fuel poverty”. Yet even this mealy-mouthed promise has fallen by the way side. Perhaps the Thunderbird of the Exchequer will announce measures to tackle the problems in his mini-budget speech next week. Don’t hold your breath.

Socialists should be making all sorts of demands at this time. We should be calling for a windfall tax on all the energy corporations, not to mention the oil companies as well. We should be calling for the government to be capping prices and giving additional payments to those most vulnerable - those most susceptible to the cold, those stuck on key meters, and those struggling to make ends meet. A massive project of insulating houses would not only help people through the cold months ahead but also provide jobs and begin to tackle carbon emissions.

The question of public ownership is the most obvious argument to make. At a point in time when Gordon Brown is only too happy to pour billions of pounds into the banking sector, we should be raising the question of re-nationalising the utilities.

Unfortunately, whatever the government announces will be insufficient to deal with the problems working class people will face in the months ahead. As winter draws on the price of fuel bill rises will inevitably and tragically be measured in the numbers of people who die for the simple fact that they can’t afford to heat their homes. The human cost of the market and privatisation will be felt by millions.


Gareth Edwards

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Marx's Theory of Economic Crisis

Why is capitalism prone to crisis?

Why do recessions always happen and where did the credit crunch come from? Why do the mainstream explanations fail, and what is the alternative?

Capitalism in Crisis: Who will Pay the Price?

Joseph Choonara explains the causes of the credit crunch, and why we'll be pressured to take burden instead of the rich.

How to Stop the BNP

Simon Magorian explains the fascist reality behind the British National Party's democratic facade.

Stacey Whittle talks about Love Music, Hate Racism and building a broad culture of resistance to the BNP.

Socialist Woorker Student Society

OPEN MEETING

MARTIN SMITH

(SWP National Organiser)

on

WHY YOU SHOULD BE A SOCIALIST

Thursday 2 October, 5pm
Function Room
Students Union
Cambridge Rd

ALL WELCOME

CAPITALISM ISNT WORKING!

Fuel and food prices soaring,production stagnant,unemployment rising, the housing market in freefall, the credit crunch. Then banks and financial institutions going down one after another - Northern Rock, Freddie Mac and Fannie Mae, Lehman Brothers,AIG, Merrill Lynch,HBOS.Who next?

The policy u-turns are amazing - the Bush government, high priests of neo-liberalism, true believers in the free market, NATIONALISES Freddie Mac and Fannie Mae. The sums involved are staggering - in one weekend the US Federal Reserve produced $85bn to bail out AIG, that's $14 for every person on the planet, enough to feed all of the poor in the world for weeks or maybe months.

The trouble is we know that while the bankers walk away with golden hand shakes working people will be expected to pay the price.They will say now is the time for us all to tighten our belts, now is the time for sacrifice.

This is a huge challenge to everyone on the left. Everyone is talking about the issues. We have to be able to explain why capitalism breeds crises,(and why its not just a few spivs in the city). We have to restate the basic case for socialism i.e. for production based on human need not profit. Above all we need to defend the interests of working people and insist that we are not made to pay for their crisis.

To assist in this process Portsmouth SWP is holding an EMERGENCY PUBLIC MEETING.

CAPITALISM IN CRISIS : who will pay the price?

Speaker: Joseph Choonara

Wednesday 24 September 7.30pm
Southsea Community Centre, St.Paul's Square, Southsea

There will need to be many meetings, many protests, many strikes and many struggles of all kinds but this meeting will be good place to start understanding what is happening and preparing to resist. POMPEY RESISTANCE invites all its readers to attend.

State Capitalism – An Afterthought

Gareth Edwards, who presented the forum on "Were the Communist Countries Really Communist?", has written a short follow-up article.

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During the talk I suggested that there were a number of reasons why State Capitalism was important as a theory: firstly as a way to orientate oneself during the Cold War; secondly to help explain the ease of transition between “communism” and “capitalism” in the Eastern Bloc. Current events have thrown up another example.

The recent war between Russia and Georgia has been spun in many ways. It has been suggested this is merely an example of Vladimir Putin’s megalomania. Alternatively others have alluded to a flaw in the Russian character, predisposing them to expansion and aggression.

It strikes me that the conflict between Russia and Georgia can only be explained in terms of competing imperialisms. On the one side is Russia, keen to take control once more of its “near abroad” and on the other hand we have the US, looking to encircle Russia and reduce its economic and strategic influence to zero.

For a liberal media convinced that the relationship between the USSR and the USA during the best part of the twentieth century was a battle of ideologies, the advent of a “new Cold War” seems inexplicable. Yet if your understanding, informed by the theory of state capitalism, leads you to see the two countries as always having been competing capitalisms (and by extension rival imperialisms) then you are better placed to analyse recent developments and one will certainly not be surprised to see tensions rise once more.

None of this is meant to suggest that State Capitalism the theory can explain everything that happens between Georgia and Russia. Nothing substitutes for the analysis of a given situation. To understand the situation today one must consider the question of the right to self determination, the wider context of the “War on Terror”, the aggressive, expansionist policies of NATO, the growth of Russian nationalism, the increasing geo-political importance in the control of resources (particularly oil), and many other questions besides.

But we are far better placed to search for the answers to these questions armed with the theory of State Capitalism.

GE

Kajbar Dam Massacre

Local comrade, Maher Deyab,a refugee from Sudan, has submitted this video footage of a demonstration against the building of the Kajbar dam on the Nile near his home town.

Maher is a Nubian and says that Nubian land and culture has already been devasted by the Aswan Dam in Southern Egypt and this dam is set to do the same in Northern Sudan.

The demonstration was met with repression by the Sudanese government and four people were killed and dozens wounded.

Reform or Revolution?

Hew Williams presents arguments for why capitalism can't be reformed into something better, and why the only hope of socialism lies in overthrowing the system.

Recorded August 31st 2008, Citrus Cafe, Portsmouth, England. Running time 44 minutes.

Were the Communist Countries Really Communist?

Gareth Edwards sets out the arguments at a public forum, and answers questions from some of the 25 in attendance.

Apologies for the delay in putting this up - there were some big problems with the sound, which I've done my best to correct.

Recorded August 17th 2008, Citrus Cafe, Portsmouth, England. Running time 45 minutes.

Rally (16th July 2008)

Rally and demonstration against pay cuts in Portsmouth. The speaker links wage levels with the expense of the war in Iraq and the "War on Terror".

Socialism Today

John Molyneux speaks and answers questions on "Socialism Today" at a public forum.







Recorded July 27th 2008, Citrus Cafe, Portsmouth, England.

Coming Soon...

This blog will contain announcements of upcoming events such as meetings, debates, rallies and demos, plus pictures, videos, editorials and whatever else is relevant or interesting.

We're still working on the details, so all that good stuff will start to appear in a few days.

Grantski