Letter: Small Fry (1976)

Letter to the Editors from the August 1976 issue of the Socialist Standard

Small Fry

I read with interest your reply to Robin Cox, entitled “Working and Class” (March Socialist Standard), in which you say that a self-employed business man employing a handful of people cannot be classed as a member of the capitalist class proper. With which I agree, but by the same token, if a person retains the full value of his own labour and the surplus value of, say, 5 or 6 other people then he cannot be classed as a member of the working class proper.

I remember reading an article which, if my memory serves me right, made this very point, saying that the labour theory of value was very elastic and that the small business man came into an economic “grey area”, but that these people were such a small minority of the world’s population it was of no importance to the scheme of things. It also rightly pointed out that a self-employed person’s interest lies more with the working class than the capitalist class, as often in an economic crisis many find themselves fighting for their very existence. Indeed, thousands have found themselves relegated to the ranks of the dole queue in competition for the sale of their labour-power.

I would be most interested in your comments.

E. Higdon. 

Auckland, N.Z.

Reply:

In addition to the answer you yourself give, we would say the following. The kind of small enterprise you suggest is seldom independent and would not be capable of competition with larger companies. Instead, it is commonly dependent on one or another of them. It supplies components, or sub-contracts, or plays a part in distribution.

The “business man” running such a firm is theoretically getting his living from the surplus-value produced by those he employs, but in practice he is supervising a segment of the larger enterprise. Usually the use of his own labour-power is as indispensable as that of the employees, and in effect he is himself employed and exploited. When the major company reduces production he is likely to be left with his outlet diminished or gone and his liabilities to meet: hence the many bankruptcies among small companies.

It is convenient to the capitalist class to let small enterprises go on in this way. Many of them produce cheaply because they are in sub-standard premises, employ part-time or casual labour, or believe sacrificial cheapness equals competitiveness and will get them more contracts; and the volume of goods or services supplied to a company in this way is not sufficient to be worth the company’s while to incorporate in its own production. As an example, a few years ago the Esso oil company operated a system of “authorized installers” for central heating. Under it, small businesses installed boilers, pipes and radiators for small returns—so that Esso heating oil could then be sold. Not much doubt who was, and who was not, realizing the surplus-value in that case.

Editorial Committee.