Fools' Gold Mine (1985)

From the May 1985 issue of the Socialist Standard

The nature of socialism cannot be separated from the means to achieve it — the conscious. political action of a majority of the working class. By working class we mean the vast majority of the population (perhaps 90 per cent in Britain) who do not own the means of production — land, industries, transport. communications and so on — and therefore need to sell their mental and physical energies (labour power) to an employer. Without wages or salaries they do not have access to the fruits of their work. The capitalist class, on the other hand, through its class ownership (or monopoly) of the means of production, has access to wealth without the need to work. It employs the majority class to do every kind of work and. after wages and all of the other costs of running a complex system have been paid, there remains for the capitalist class a privileged and luxurious life style. "Every kind of work" means just that. If we look a little closer at this "complex system", it becomes obvious that rather more is involved than what takes place at the factory bench.

When explaining the role of the working class (the basis of exploitation) it is easier to start with the example of people in a factory making goods, and being paid less in wages than the value realised on the sale of those goods, with the difference being appropriated by the employer. If we add to this simplification the work involved with a fuel supply, raw materials, research, in the office, management and so on. it is still only part of the picture. We must also include marketing, finance, transport — and law. education, medicine . . . In other words, the production of surplus value is better understood as a social process. It is as a class that workers are exploited, and it is as a class that capitalists reap the benefit. Some questions may arise for those accustomed to the popular notion of several different class divisions in society. The ultimate explanation for wide variations in income within the working class is that the labour power of some workers is more expensive to produce and reproduce than that of others.

If we use the criterion of relationship to the means of production it is apparent that most people, including those on salaries well above the average and non-employed wives and pensioners, belong to the class which needs to work. Members of the capitalist class do not need to work, and do not become dependent on state pensions and social security. Their income, derived from their investments, is sufficient on its own. That some individuals do not appear to fit exactly into either category need not concern us. (In some cases the appearance is deceptive, as with holders of nominal directorships whose "employment" is only for tax purposes.)

But other questions remain. If the working class is dependent on employment does it mean that all employers are capitalists? Bearing in mind the previous paragraph, we can see that the answer is no. A few employees (the chairmen of nationalised industries?) have salaries which enable them to closely identify with both the life style and outlook of the capitalist class. But there are employers who themselves need to work long hours in their businesses and may have incomes which compare more closely to those of the working class. If an individual employer works in his own firm together with his employees, who are paid overall the value of their labour power, but cannot live off the surplus value produced by them, then that employer is a member of the same class. A "small" enterprise may be successful and grow to the point where the owner having accumulated sufficient capital, no longer needs to work in it; what Marx called "a special kind of wage worker" will be employed to manage the business — to do the work formerly done by the owner. Then the owner is indeed a member of the capitalist class. The class position is not altered for capitalists who choose to take part in their ventures.

Marx was referring to the general development from individual manufacturers to large scale Modern Industry, and the point where capitalist production "really begins". Individual employers and the self-employed are a group largely out of time. Having lost out to large scale enterprise in the competition for profit, the group now plays only a minor role in production and distribution. The percentage income of this group declined by about 3 per cent between 1938 and 1971. and the decline in numbers continued until the 1980s when the figures show an increase. By 1983 the number of self-employed, with or without employees, had increased by around a quarter of a million to 2,260,000. This is only about 9 per cent of a total working population of 26,776,000. (Pears 1977/78 and Annual Abstract of Statistics 1985.)

Over the years self-employment has provided one answer to the difficulty of finding work for a proportion of succeeding groups of immigrants but this does not account for the increase in current figures. There has been no recent increase in immigration and the majority of, for example, Asian shop keepers have taken over from other self-employed owners. The increase can probably be accounted for by the recession: a number of the unemployed "setting up" on their own, in enterprises ranging from consultancy firms to standing in the High Street with a suitcase of socks and hankies (although the latter are only likely to appear in the estimated statistics of the Black Economy). The government claims that the way out of recession is to be found with individual employers, small businesses, the entrepreneurs. Part of the theory (which includes the role of less capital-intensive firms) seems to be that the unemployed who have qualified for "generous" redundancy payments will set up in business and then take other workers off the dole queue. (New businesses of that size can probably only afford part-time employees.) In areas where the main employer has gone, or the mine has shut down, the competition between redundant workers to sell goods and services to their unemployed neighbours can be imagined! Though there are individual success stories, government claims of record numbers of new businesses always meet with counter claims of the rate of bankruptcies. The owners of the ventures which fail in the competitive struggle, the erstwhile employers, have themselves to seek employment.

From the successful to the failures, the self-employed category includes a wide range of occupations and incomes. Small businesses do the work that large companies are not interested in, though sometimes as sub-contractors to the large firms. House building is done by the Barratts and Wimpeys. but house repairs and alterations are the province of the individual, the small builder. Self-employment has been used in the building industry as a technicality, to avoid tax and insurance payments once called the lump.

Despite the continuing threat from changes in retailing methods (from supermarkets to hypermarkets) and shopping habits, a single outlet section still survives in the retail trade. Small shopkeepers are perhaps the best known example of the self-employed. They have to give some kind of service to customers not found elsewhere, perhaps in some specialised trade, by being local, or open when larger shops are shut. Some retailing companies are granting franchises, commercial concessions, for the running of their retail outlets, instead of employing managers. In the fast food trade particularly, the company provides identical fittings and decoration to each outlet and then sells (identical) supplies to the franchise owners, who have the responsibility of running "their" shops and only nominal independence. The advantage to the companies is in cutting out losses from fiddling which might arise if they employed managers.

Small businesses, including shopkeepers. will need the services of accountants and sometimes solicitors; there are accountants and solicitors to consult who may also run their own firms. Some of the self-employed struggling to compete with larger organisations in the same industry take on additional "self-employed" burdens. A Country Diary piece in the Observer (24 February 1985) told of farmers' wives who have turned to a "grockle" crop as an alternative source of income, taking in paying guests during the summer months. Any lingering doubts about the class status of these farming families (and indeed of their guests) are dispelled when we read that this entails letting all of the farmhouse bedrooms (there may only be two) as family rooms, while the hosts sleep in the garage or even the "suitcase cupboard".

As for those earning their living as artists or writers . . . Self-employed or not it makes no difference. Along with Marx we point out that "The bourgeoisie . . . has converted the physician, the lawyer, the priest, the poet, the man of science, into its paid wage-labourers" (Communist Manifesto)

We can safely say that the vast majority of the self-employed are members of the working class. Like the rest of our class, some enjoy their work, some have comfortable life styles and others just manage. And there are those who are trapped in their small businesses, and their poverty. It is not working independently in your own business that counts, but the need to work the need for employment. We in the working class do all of the work of society; why not change society, so that we can really work for ourselves.

Pat Deutz