Whichever party wins the coming General Election will have had to promise to curb the property speculators. In the arguments over the three-day week, fuel shortages, and the belt-tightening enforced to try to deal with British capitalism’s troubles, they have become the universal bêtes noires. Why, it is said, should the miners be denied a modest wage-increase when the speculators roll in unearned riches ? Who is going to be impressed by the Government’s call for sacrifices while Harry Hyams swells his fortune by keeping a mammoth office-building vacant for years ?
These are the voices of common-sense and fair play — and the sad truth is that they are irrelevant. If the appeals to run speculators out of town were responded-to, no difference would be made to the situation. That is why the present Government or its successor will not mind responding to them, if it has to. The Left, with its unvarying stupidity, has been demanding that “something be done” for years; in the agitation over housing and homelessness Hyams’ Centre Point remains an obligatory gathering-place and his name daubed on protest banners galore. A recent newspaper report showed the ultimate cure for profiteering in the Land of the Left:
Two directors of a Soviet drinks factory have been shot for leaving the fruit out of the fruit juice they were producing. The newspaper Babinski Rabochi says the two from the Southern Republic of Azerbaydzhan, sold a mixture of water, citric acid and sugar, pocketing more than £400,000. Their appeal was rejected and they were shot.(Guardian, 3rd Jan. 1974)
No doubt this sounded, to some, like the way to treat them. But will it stop privileged sections raking-in in Russia ? Not likely. Will it make a single worker better off? Of course not.
Profits Galore
Property developers have indeed had a bonanza in Britain since the war. Joe Levy’s profit from the development of the Euston Centre in 1967 was estimated at £22 million (Oliver Marriott, The Property Boom). In September 1972 it was said that sales of land in the Tolmers Square Development Area of London had “been taking place at the rate of £800,000 to £1,000,000 per acre’’ (Town Clerk’s report to Camden Council, 28th Sep. 1972). Of Hyams, The Observer on 23rd December said that his personal fortune
has increased by £300 million in the past six years — at a time when he has hardly been engaged in active development at all, but simply sitting on his steadily appreciating portfolio of office blocks.
Someone to Hiss
Supporters and revisionists alike of the capitalist system love a scapegoat. There is nothing admirable about the speculators. The illustrations to Marriott’s book are mostly portrait photographs of well-known property tycoons, and it would be hard to find another collection of faces of such ugliness and vulgarity. Nevertheless, they are only the latest in a succession of ogres but for whom, it is conveyed, the capitalist system would make us all as happy as kings. Their place in the nineteen-twenties was held by “the hard-faced men’’ who had done well out of the 1914-18 war. In the ’thirties it was the arms manufacturers. Malcolm Muggeridge says in his autobiography:
Armament manufacturers — commonly known among us as merchants of death — were a godsend in the way of providing us with an identifiable villain; one of the great needs of the political left being to be able to point an accusing finger at someone, or some corporate body, as being responsible for public and private wrongs and misfortunes.
It is part of the same tradition that the property speculators’ diabolic reputation rests largely on their immunity, so far, to legislation. Laws aimed at quelling them have helped them boom again. The post-war Town and Country Planning Acts, intended to snuff out speculative building, created favourable new conditions for it. The taxation laws in force till 1965, by assuming the developer who did not sell to be making no profit, gave him a magnificent advantage. Most uproarious of all was George Brown’s 1964 prohibition of office-building in London, which pushed up rents and profits and earned Brown the title of “the developers’ best friend”.
The most recent piece of legislation was Antony Barber’s taxation measures in his budget of 17th December 1973. The chief provision was to tax first lettings of new buildings as equivalent to outright sales. Financial writers like Bennie Gray and Christopher Booker in The Observer (as well as Labour critics) were quick to point out that applied to established examples this was anything but crippling, and concluded:
In other words, the situation whereby property profits have generally come to be regarded as the most conspicuous example of economic injustice in pur society is likely to remain.
It is interesting that Oliver Marriott, when his book appeared in 1967, thought the property boom had been demolished. He wrote at the end:
The era of the property tycoon as the arch-symbol of capitalism is over. Forces of competition and taxation have ended the days when an individual could rapidly amass a fortune with a few well-chosen deals and developments.
A Simple Answer
The rise of the office-building tycoons has been a direct outcome of the workings of capitalism. Its main sources have been wartime destruction; obsolescence; amalgamations of companies and the growth of fresh forms of commerce; the spread of administrative machinery; and the compulsion to rebuild town centres on account of road traffic. Given that proliferation of causes, there is no difficulty in seeing why fortunes have been made and why legislation has failed. Indeed, the motives of such legislation are always contradictory ones — acquiescing in the need for more development while hoping not to be shown the “unacceptable face” it inevitably wears.
It is worth remarking also on the belief that little or nothing is done about the speculators because Conservatives in government will not harm their capitalist friends. This could apply to Labour also. But the capitalist class is not united in its commercial interests; at any time, a section will be sent to the wall to suit the more vital needs of other sections. An example is the Act of 1915 which smothered landlords in the interests of industrial capitalists and the war. If the need were strong enough, any government would come down on property speculators. What must always be borne in mind, however, is that legislation is enacted for severely practical purposes and hardly ever for moral ones.
The contrast between poverty and plenty is an inevitable feature of capitalism: a class-divided society cannot help but display it. Likewise, in a society built round production for profit, it is no use lamenting that excessive profits are made. One can imagine fat capitalists tittering behind their hands at the naiveté of “radical” sentiments like Michael Duane’s in a letter to The Guardian on 7th January:
In the national emergency of war it was found impossible to create the unity necessary for survival until, by rationing food, clothing and fuel, we had demonstrated the good faith of our democratic protestations.
That is the kind of assurance rulers want. Given it, they know a few sops and humbug-gestures of “good faith” will quieten the murmurs — and the system will go on as before.
Rather than talking of injustice as if there were an alternative to be had, working men and women should ask why the benefits of their labour are unfailingly taken by somebody else. When the working class decides that this state of affairs can continue no longer and capitalism must go, the end of speculation in property, shares and lives will have come at last. The sight of vast wealth being accumulated by parasites who simply happened to be in the right place at the right time, understandably makes people sick; but none of us will feel better until we have established Socialism.
Robert Barltrop
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Original formatting retained . . . including the bolded paragraphs.
That's the February 1974 issue of the Socialist Standard done and dusted.
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