Applying Marx (1983)

From the March 1983 issue of the Socialist Standard

We are now in the heaviest trade depression since World War II, with little expectation that recovery will take place in the near future. This has caused dismay and confusion among the economists, dividing them into half a dozen groups each with its own remedy and denouncing their rivals. Not only did they not foresee the depression but nearly all of them denied that it could happen. They had accepted the belief that it is possible for a government to prevent unemployment if it wishes to do so.

First in the field was the Labour Party. In its Election Programme. 1918. Labour and the New Social Order, it stated: "It is now known that the Government . . . can arrange the public works and the orders of National Departments and Local Authorities in such a way as to maintain the aggregate demand for labour in the whole kingdom”. (While they were the Government, 1929-1931, unemployment rose by 1½ million.)

By 1944. under the influence of J.M. Keynes, the three parties. Tory, Labour and Liberal (and the TUC), had all accepted the commitment to maintain "full employment”. It was set out in a document Employment Policy issued by the three parties represented in the war-time national government. Confidence in the policy was confirmed by the Committee on the Working of the Monetary System in a Report in 1958. In Paragraph 484 they said: "When discussing with witnesses the impact of restrictive monetary measures we have been constantly reminded that, as compared with earlier decades, restrictive developments have a much less frightening aspect now that Governments are always committed to full employment policies”.

Commenting on this. Professor F.W. Paish wrote: “This belief springs directly from the expectation that no government will in future allow any really substantial amount of unemployment to appear, even temporarily”. (The Banker, October 1959.) Actually, at the time the Committee published their report, unemployment was already on an upward trend after the very low levels of the ten years after the war. Unemployment rose again while the Labour Party was in office from 1964-1970, though they declared they would not let this happen, and it more than doubled under the Labour government of 1974-1979.

Towards the end of that government's office Prime Minister Callaghan and Chancellor of the Exchequer Denis Healey began to question the validity of the Keynesian “full employment” doctrine. Later, for the first time since the war. a government — under Thatcher — formally repudiated it. But they still claimed to be able to deal with unemployment, firstly by curbing inflation and secondly by reducing taxation: “The State takes too much of the nation's income; its share will be steadily reduced. When it spends and borrows too much, taxes, interest rates, prices and unemployment rise”. (The Conservative Manifesto — 1979.) After four years of office unemployment has risen from 1,300,000 to over 3 million.

The one economist who comes well out of this confusion is Marx. He showed that, in competition with each other to gain a larger market share, capitalists are always seeking to reduce prices by means of labour-displacing machinery and that inevitably depressions occur from time to time: "Capitalist production moves through certain periodical cycles. It moves through a state of quiescence, growing animation, prosperity, overtrade, crisis and stagnation". He never accepted that unemployment and depression could be avoided by some change of government monetary, taxation or investment policy. Nor did he accept the validity of the argument that unemployment would fall and depression be avoided by putting up wages. (The policy which the Independent Labour Party sought to popularise in the 1920s.) Marx showed that not only do wages rise in every boom, but at that time the working class “actually get a larger share of the annual product intended for consumption”. (Capital Vol. Ill. Kerr Edition, p. 474.) Far from remedying the situation this is, said Marx, "always . . . a harbinger of the social crisis".

Marx showed the limitations of the trade union struggle for higher wages. The aim of the capitalist in carrying on business is "the augmentation of his capital”. Wages can therefore go on rising only as long as the rise “does not interfere with the progress of accumulation". (Capital Vol. 1, p. 678 in the Kerr edition). Beyond this, accumulation slackens, "because the stimulus of gain is blunted", in other words, the employer does not for long employ workers out of whom he cannot make profit. Marx saw as inevitable a fall of the workers’ standard of living in depressions when, owing to heavy unemployment, the supply of workers overshoots the demand. Though he did suggest that “it might in such circumstances be necessary to test the real state of demand and supply by a strike, for example, or other method". (Value Price and Profit).

After Marx's death, Frederick Engels put forward the idea that Marx's cycle no longer applied, and had given way to "permanent and chronic depression”, but events soon showed that he was wrong and he returned to Marx's “cycle” theory. In the depressions of the 1880s and between the wars, a considerable number of workers and even some economists became convinced that Marx was right about unemployment and depressions. Then Marxist theory was pushed into the background by Keynes. John Strachey, who had claimed to be a Marxist, told how reading Keynes’ book General Theory of Employment, Interest and Money made him change his views. (He became a Minister in the Attlee Labour government). Richard Crossman. Minister of Housing in the 1964 Labour government, said that Keynes demonstrated that capitalism is not "an inherently unworkable system” and, by so doing, undermined “the old economic case for socialism". (The Times, 24 February 1956)

Even before Keynes dominated the scene most economists rejected Marx's labour theory of value, including the few who looked favourably on other parts of Marx's writings. It is interesting to notice the irrelevance of some of the more common objections to the labour theory, clearly the result of not troubling to understand it.

Marx explained carefully that he was dealing with commodities, articles regularly produced for sale and capable of reproduction. Because Marx showed that commodities have a value and a price the critics assumed, without any justification, that Marx must also be saying that everything which has a price had to be a commodity and have value. They have instanced the enormous prices paid for old master paintings, forgetting that these are incapable of reproduction and are therefore not commodities.

Marx answered the critics:

Objects that in themselves are not commodities. such as conscience, honour etc. are capable of being offered for sale by their holders and of thus acquiring, through their price, the form of commodities. Hence the object may have a price without having value. (Capital Vol. I p. 115. Kerr edition).

The late Harold Laski. who wrote quite sympathetically about Marx, gave an astonishing interpretation to the labour theory, in his book Communism (Home University Library 1927, p.95):

Thus we can measure the amount of labour-power in each man's effort, and so determine scientifically how he ought to be paid.

Laski borrowed this from A.D. Lindsay's book Karl Marx’s Capital (page 61). Lindsay wrote “The Labour Theory of Value is misleading. It is primarily interested in what a man ought to get in reward for his labour”. Both Lindsay and Laski were quite wrong. No such idea entered Marx's head and it is impossible even to guess what can have given Laski and Lindsay this strange notion.

Much has been made by critics of the allegation that in Volume I of Capital Marx put forward the theory that commodities exchange at value and then changed his mind and concluded in Volume III that some commodities permanently sell above their value and others below their value. The critics failed to notice Marx’s explanation in Volume I that he was first dealing with value and would later deal with its price form and that they were not identical. There was, for example, the footnote on page 244 of Volume I (Kerr edition):

The calculations in the text are intended merely as illustrations, and in them, therefore. it is assumed that prices are equal to value. In Book Three we shall learn that even in the case of average prices no such simple assumption can be made.

As for the critics' assumption that the alleged change of mind took place later, Louis Boudin pointed out that "most of the third volume, and particularly those portions of it which are supposed to modify the first Volume, were actually written down by Marx in its present form before the publication of the first Volume". (Theoretical System of Karl Marx, page 133.)

Cartoon by George Meddemmen.

Mention has already been made of the way in which the emergence of Keynes as the leading economist pushed into the background what Marx had written about unemployment and depression. The reason for this was obvious: if, as was almost universally believed, “full employment” was guaranteed for all time, theories about unemployment and depressions ceased to be of interest.

The almost total disregard of what Marx had to say about inflation is less easy to explain. That it should have been disregarded in this country in the period of nearly 100 years before 1914 when the gold standard operated is understandable, because there was no inflation. Why then has there been no interest in Marx’s explanation in the nearly forty years of continuous inflation since World War II? One reason is that, while much has been written about other aspects of Marx's writing, his economics have stayed out of favour even among many people who profess to be Marxists. A second reason is that many of the latter appear to be unaware that Marx had something to say about inflation. A third reason has been that when Keynesian doctrines began to fall into disrepute because of the failure of the “full employment" policy, attention went to the monetarists led by Professor Milton Friedman, who added to the confusion with his absurd remark that Marx, too, was a monetarist.

It is beyond dispute that the policies of Labour and Tory governments have led to the present price level being at least ten times what it was in 1945. (Prices have risen by over 50 per cent under the Thatcher government). It is also beyond dispute that all the governments up to 1979 have claimed to be following Keynesian policies; yet the Keynesian document, the 1944 Employment Policy endorsed by the Tory, Labour and Liberal parties in the national government, proclaimed the intention of seeking to maintain a “more or less stable price level". It is also true that while Keynes himself advocated short term use of inflation to reduce real wages in certain circumstances, his long-term aim was “allowing wages to rise slowly while keeping prices stable" (General Theory page 271). It is at least arguable that if Keynes had lived to see what was being done in his name he would have disowned it.

Why then have prices been rising continuously for over forty years? Marx’s answer would have been that it became a possibility with the abandonment of the gold standard in 1931, and became an actuality through the increase of the currency (notes and coin) in circulation with the public, from under £500 million in 1938 to nearly £11,000 million. The gold standard background is important. While the gold standard operated the pound sterling was. by law, a fixed weight of gold (about a quarter of an ounce). The effect was that the notes could never deviate, except marginally, from the value of the legally fixed equivalent weight of gold. As it was said at that time, "a Bank of England note is as good as gold", and it was everywhere accepted as such. Now the notes are “inconvertible" and their purchasing power steadily declines through excess issue.

Marx defined it as follows:

If the quantity of paper money issued were double what it ought to he, then, as a matter of fact. £1 would be the money-name not of a quarter of an ounce of gold but of one-eighth of an ounce of gold. The effect would be the same as if an alteration had taken place in the function of gold as a standard of prices. Those values that were previously expressed by the price of £1 would now be expressed by the price of £2. (Capital. Vol. I page 144 in the Kerr edition)

Several points have to be noted. What Marx meant by "what it ought to be" was the total quantity of gold that would circulate with a wholly gold coin currency. It was an application of his labour theory of value, gold having value like all other commodities. He was not saying (as did some quantity theorists) that any increase of inconvertible paper currency causes prices to rise. The rise occurs only to the extent that the quantity of notes is in excess of “what it ought to be". If, for example, production and population increase, the "necessary" amount of gold in circulation would increase. Other factors also affect this, including the tendency for the “necessary" amount of currency to decline with the development of transport and the banking system.

Marx also pointed out that there are other, "non-currency" factors, which affect prices, including changes in the value of commodities and the rise of prices in a boom and fall in a depression. (Also, while the gold standard operated, a fall in the value of gold would raise prices and a rise in the value of gold would reduce prices.) Marx made another valuable contribution to the whole issue of inflation and deflation. In accordance with his labour theory of value wages too are prices, the price of labour-power. So inflation which raises prices also raises wages. And deflation, which lowers prices, also lowers wages. Both situations are however affected by whatever ability the workers have to gain wage increases beyond the rise of other prices, or to prevent wages falling as much as other prices.

Some people have been misled by Milton Friedman's talk of controlling “money supply" into believing that he and Marx were thinking on similar lines. This is not so. Marx was talking about "currency", notes and coins, while Friedman’s doctrine is concerned with bank deposits, based on an old fallacy that the price level is related to the rise and fall of bank deposits. Keynes held the same view. In his Monetary Reform (1923 p. 128) he wrote: "The internal price level is mainly determined by the amount of credit created by the banks, chiefly the Big Five . . . The amount of credit, so created, is in its turn roughly measured by the volume of the banks’ deposits"

One last word about Keynes. Now that the Keynesians are in disarray perhaps some of them will look again at Keynes’ statement that Marx’s Capital was “an obsolete economic textbook which I know to be scientifically erroneous and without interest or application for the modern world".

Do they still find that convincing?

Edgar Hardcastle

Lenin's Legacy (1983)

From the March 1983 issue of the Socialist Standard

It is irrelevant that in Russia the means of production are (mostly) not privately owned. Capital can be owned collectively: "the capitalists as a whole take direct part in the exploitation of the total working class by the totality of capital". [1] Bukharin emphasised the "class monopoly in the means of production", when "vulgar economists” had eyes only for private capitalists. [2] Engels wrote:

State ownership of the productive forces is not the answer . . . neither the conversion into joint-stock companies nor into state property deprives the productive forces of their character as capital . . . The workers remain wage-earners, proletarians”. [3]

Russian economic and political conditions differ from the West in that the means of production and distribution are formally owned by the state, and that there is a monopoly of political power by one party which consequently exercises monopolistic control over the means of production and distribution. Inequalities arising from the Party’s dictatorship have created a new exploiting class, powerful and privileged. "The workers remain wage-earners, proletarians."

Lenin preached and practised what Marx condemned. Lenin, a product of the Russian "intelligentsia", was caught up in the struggle against feudalism when the Russian proletariat was still only a fraction of the workforce. His policy was to control workers’ organisations by setting up secret cells. “The Party must be the vanguard, the leader of the broad mass of the working class”, he wrote. [4] Marx however declared: “The emancipation of the working classes must be conquered by the working classes themselves". [5]

Engels considered that in Russia "both the proletariat and the bourgeoisie exist only in sporadic form and have not passed beyond the inferior stage of development" Against Tkachev's view that Russians were "the chosen people" who could bypass capitalism altogether, he argued: "the existence of the bourgeoisie is . . . as necessary a condition for the socialist revolution as the proletariat. A person who maintains that this revolution could be carried out more easily in his country because it has neither proletariat nor bourgeoisie proves by his statement that he has understood nothing of socialism”. [6]

Marx held that Russia was not yet capitalist: “if Russia is tending to become a capitalist nation . . . she will not succeed without having first transformed a good part of her peasants into proletarians’’. [7] Fifty years later, Stalin presided over the ruthless process of primitive accumulation when

great masses of men are suddenly and forcibly torn from their means of subsistence and hurled as free and "unattached" proletarians on the labour-market . . . And the history of this, their expropriation, is written in the annals of mankind in letters of blood and fire. [8]

In 1918, the Socialist Party of Great Britain declared: "there is no ground whatever for supposing that (the peasants) are ready or willing to accept social ownership of the land". Could Russia be ready for socialism? “Unless a mental revolution such as the world has never seen before has taken place, or an economic change has occurred more rapidly than history has ever recorded, the answer is ‘No'.” [9]

Since the essential preconditions for a socialist revolution did not exist, the irony of history changed Lenin and his successors into midwives of capitalism, not socialism. The “vanguard party” with its "advanced theory” had to follow the bloody path of primitive accumulation, to clear the way for the capitalism they had willed to destroy.

Lenin gained power in a backward country whose economy had collapsed. The European revolutions he confidently expected failed to occur, and no class in Russia supported socialism. “The worst thing that can befall a leader of an extreme Party is to be compelled to take over a government in an epoch when the movement is not yet ripe", wrote Engels.[10] Since neither the economic nor the political conditions for socialism existed, any attempt to introduce socialism by abandoning the market economy and commodity production was utopian and doomed to disaster.

The Vanguard Party

Lenin claimed that "by its own forces the working class can only arrive at a trade union consciousness . . . the workers can acquire class political consciousness only from without, that is, only outside of the economic struggle, outside of the sphere of relations between workers and employers".[11] This view did not come from Marx but from the Narodnik tradition “Neither now nor in the future is the people, left to itself, capable of achieving the social revolution. Only we. the revolutionary minority, can". wrote Tkachev. [12] In 1891 Axelrod argued that the workers' struggle was industrial, not political: “in the struggle for political freedom. the advanced sections of the proletariat follow the revolutionary circles and the fractions of the so-called intelligentsia". [12]

Lenin believed in this leadership role: “the intellectuals are good at solving questions ‘of principle'. They are good at drafting plans and supervising the execution of plans". [12] His view reflected the undeveloped state of the Russian working class. It was not held by Marx who, while recognising the importance of theory, also recognised the workers’ ability to organise themselves without the leadership of a self-appointed élite. The early utopian socialists, he wrote, saw in the proletariat only "the most suffering class . . . incapable of any historical initiative"; to them "the gradual, spontaneous class organisation of the proletariat" was inconceivable. [13] These comments apply equally to Lenin.

Marx's view of the socialist revolution was that it will be achieved by the working class — "the only really revolutionary class”. They will organise themselves. Vanguardism is a denial of Marx's most basic proposition.

The Dictatorship of the Party

On leaving Switzerland, Lenin wrote: "the Russian proletariat is less organised, prepared and class-conscious than the proletariat of other countries . . . Russia is a peasant country and one of the most backward of European countries”. [14] He seized power knowing this, and knowing the Bolsheviks were a minority. To retain power he established a dictatorship.

Within weeks he created the Cheka, an “absolutely independent organisation . . . with power to carry out searches, arrests and executions". [15] Dzerzhinski. the head of the Cheka, was to become head of the VSNKh, set up to control the economy. The Constituent Assembly was dissolved, and trade unions were under the control of the Party.

Tackling starvation in the cities, Lenin declared the problem “has to be solved by military methods, with absolute ruthlessness". [16] Terror was not ruled out. “The dictatorship is a rule based directly upon force and unrestricted by any laws", he wrote. [17] Forget democracy: "no essential contradiction can exist between the Soviet, that is, the socialist democracy, and the exercise of dictatorial power by a single person”. [18]

Marx wrote of “the dictatorship of the proletariat" meaning the organisation of the proletariat as the ruling class, as exemplified in the democratic Paris Commune. Lenin, latching on to the phrase, interpreted it to mean instead dictatorship by the vanguard with himself at the head. He echoed the Blanquist theory of "a dictatorial power, whose mission it will be to direct the revolutionary movement . . . to be strong, to act quickly, the dictatorial power will have to be concentrated in as small a number of persons as possible". [19]

Rosa Luxemburg protested:

the historical mission of the proletariat . . . is to create, in place of the bourgeois democracy. a Socialist democracy, and not to destroy democracy altogether . . . The dictatorship of the proletariat consists in the manner of application of democracy, not in its abolition . . . this democracy must be the work of the class and not of a small minority in the name of the (working) class.

She was particularly opposed to “the abolition of the most important guarantees for a healthy public life and for the labouring masses — the freedoms of the press, of association and of speech”. [20]

Marx loathed press censorship: "the censored press . . . is a flabby caricature without liberty, a civilised monster, a horror even though sprinkled with rosewater". [21] Lenin’s dictatorship demanded it.

The Missing Link

Lenjn argued that “socialism" was a transition stage to “communism”. During this "rather lengthy process”, when "all citizens would be converted into workers and employees of one huge ‘syndicate' — the whole state”, the state would wither away. [22] This confused theory is contrary to the views of Marx and Engels, who both used the terms socialism and communism interchangeably.

Lenin asserted that "the first fact that has been established with complete exactitude by the whole theory of development, by science as a whole . . . is that, historically. there must be a special stage or a special phase of transition from capitalism to communism”. [22] “Science as a whole" had nothing to do with this “fact”: believing that the workers were not ready for socialism, since their class-consciousness had to be taught them by intellectuals, he did not accept that they could make "complete communism" work. That was "utopian” — so in the meantime, the aim had to be the “transition” stage.

In this "first phase” he decreed: “all citizens (would be) transformed into the salaried employees of the state, which consists of the armed workers . . . the whole of society will have become a single office and a single factory . . . escape from national accounting and control will inevitably become incredibly difficult, a rare exception, and will probably be accompanied by swift and severe punishment". [22] Russia did indeed become one vast labour-camp, but it differs from what Lenin claimed for his “socialism". Bureaucracy multiplied instead of disappearing, "equal pay" was soon abandoned, and "strict accounting and control" was replaced by widespread corruption.

The unpleasant reality of the totalitarian state was masked by theories about a "socialist state” — a contradiction in terms. The existence of the state ("the executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie” [24]) implies and reflects the existence of an exploiting class. The state in Russia has the same function as in any other country: "the main object of the state has always been to secure, by armed force, the economic oppression of the labouring majority by the minority which alone possesses wealth”. [25]

The proof of the pudding is in the eating. Marx’s conception of socialism means that, as Engels explained, “with the disappearance of an exclusively wealth-possessing minority there also disappears the necessity for the power of armed suppression. or state power”. [25] Since the state in Russia has not disappeared, after more than sixty years, we must conclude that its existence is proof positive of the existence of “an exclusively wealth-possessing class”, and exploiting class.

Ironically, Lenin in 1917 wrote opposing "the widespread view that . . . state monopoly capitalism is no longer capitalism, but can already be termed "state socialism’.” [26] However regulated and planned, he argued, the system remained capitalism. On this, at least, he was in agreement with Marx and Engels.

Charmian Skelton

References:

1. Capital Vol. Ill, chap. x.

2. The Economic Theory of the Leisure Class, 1914.

3. Anti-Dühring

4. Quoted by Rudolf Sprenger. Bolshevism.

5. Inaugural Address to the International Workingmen’s Association.

6. Social Problems in Russia (1874), quoted by Daniel Norman, Marx and Soviet Reality.

7. Letter, 1877.

8. Capital Vol. I. chap. xxvi.

9. Socialist Standard, August. 1918.

10. The Peasant War in Germany.

11. What Is To Be Done? 1902 .'

12. Quoted by Sprenger, Bolshevism.

13. Communist Manifesto.

14. Quoted by R. Payne, Lenin.

15. Decrees of 20 Dec, 1917, and 26 Sept, 1918.

16. Speech of 2 Feb, 1920, quoted by Alec Nove, An Economic History of the Soviet Union.

17. The Proletarian Revolution and the Renegade Kautsky, 1919.

18. Speech 28 April 1918. quoted by Kautsky, The Dictatorship of the Proletariat.

19. Quoted by Martov, The State and Socialist Revolution. 1919.

20. The Russian Revolution, quoted by D. Norman. op. cit.

21. Quoted by D. Norman, op. cit.

22. The State and Revolution, 1917-18.

23. Left-wing Childishness and Petty Bourgeois Mentality, 1920.

24. Communist Manifesto.

25. Engels, letter to van Pappen, 1883.

26. The State and Revolution.

Marx's partner (1983)

From the March 1983 issue of the Socialist Standard

Socialists cannot pay tribute to Marx without at the same time noting the role of his comrade and collaborator, Engels. It was Engels’ financial support which enabled the penurious Marx to carry out his researches into political economy.

But this financial support was not the least of Engels’ contributions. It is reckoned that about 1500 letters passed between Marx and Engels. They thought along the same lines, they spoke the same language, yet their life-experience was different. For Engels, there was the practical world of the Manchester cotton trade, he read widely, keeping himself fully informed of the latest developments in physics, chemistry and other sciences, with a special interest in comparative physiology and the controversies surrounding Darwin’s theory of evolution.

To Engels we owe volumes II and III of Marx's unfinished Capital, which he completed with difficulty from quantities of rough drafts and notes. After Marx’s death. Engels continued to publish translations and new editions of Marx’s works, providing prefaces in many languages. Yet it would be wrong to regard Engels only as Marx's editor, publisher and lifelong friend. His contributions to the socialist movement stand in their own right.

Many of the issues he discussed in his early work, The Condition of the Working Class in England in 1844, were taken up again by Marx in volume 1 of Capital. Engels' passionate indictment of slums, and the diseases and deformities of children at sweated labour (as in his analysis of the real cost of lace for fashionable ladies), such themes permeate his book. Yet there is more in it than indignation at the social evils of industrial capitalism.

Engels described how new technology and the division of labour were accompanied by the emergence of a new class, the urban proletariat. He posed the fundamental question: "What is to become of these propertyless millions who own nothing and consume today what they earned yesterday?’’ Industry, he wrote. ". . . regards its workers not as human beings but simply as so much capital for the use of which the industrialist has to pay interest under the name of wages”. Describing how competition affected the level of wages, he also emphasised the "cycles of boom and slump”; the Malthusian "surplus population” was the reserve army of the unemployed, available for industry's booms, and condemned to destitution and the Poor Law workhouses between-times.

Discussing both the value and the limitations of trade unionism (a theme to which he returned in some later writings [1]), and the main working class movements of the time. Engels criticised the English socialists for being metaphysical, lacking awareness of the significance of historical development. It seemed to him that they preached "philanthropy and universal love . . . the improvement of humanity in the abstract". He reiterated this criticism in his preface to the 1892 edition:

And today, the very people who. from the ’impartiality' of their superior standpoint, preach to the workers a Socialism soaring high above their class interests and class struggles, and tending to reconcile in a higher humanity the interests of both the contending classes — these people are either neophytes, who have still to learn a great deal, or they are the worst enemies of the workers — wolves in sheep’s clothing.

This first socialist examination of the effects of industrial capitalism, written from the standpoint of historical materialism, touched on many issues later developed in other works by Marx and Engels. Written in Germany on Engels’ return from two years in Manchester, The Condition of the Working Class has some faults. He was not able to check all of his quotations, and some are inaccurate; later, he acknowledged that his prediction that with the next crisis would come the revolution was “youthful ardour”.

Although the Communist Manifesto was published as their joint work, Engels himself expressly stated:

The basic thought running through the Manifesto — that economic production and the structure of society of every historical epoch necessarily arising therefrom constitute the foundation for the political and intellectual history of that epoch; that consequently (ever since the dissolution of the primeval communal ownership of land) all history has been a history of class struggles, of struggles between exploited and exploiting, between dominated and dominating classes at various stages of social development; that this struggle, however, has now reached a stage where the exploited and oppressed class (the proletariat) can no longer emancipate itself from the class which exploits and oppresses it (the bourgeoisie), without at the same time forever freeing the w'hole of society from exploitation, oppression and class struggle — this basic thought belongs solely and exclusively to Marx. [2]

One persistent criticism of Marx is that human behaviour is said to be influenced exclusively by class interests and material factors and nothing else. This is a gross distortion and Engels explicitly argued against such nonsense:

According to the materialist conception of history, the ultimately determining element in history is the production and reproduction of real life. More than this neither Marx nor I has ever asserted. Hence if somebody twists this into saying that the economic role is the only determining one he transforms that proposition into a meaningless, abstract, senseless phrase. [3]

In much of Engels' writing, we find the dialectical method explained. He considered phenomena as evolving through often complex interactions. His conception of history was not a simplistic model of a superstructure of laws, religions, ideologies and dogmas perched on top of a separate economic base, with something like a damp course separating one from another. On the contrary, the various elements of the superstructure "also exercise their influence upon the course of historical struggles and in many cases preponderate in determining their form"'. [3]

Criticisms of Marx as an "economic determinist” arise from "the common undialectical conception of cause and effect as rigidly opposite poles, the total disregarding of interaction. These gentlemen often almost deliberately forget that once a historic element has been brought into the world by other, ultimately economic causes it reacts, can react upon its environment and even on the causes that have given rise to it" [4]. In Anti-Dühring Engels showed that science had revealed just such a dialectical process in nature. There are no absolute truths, everything is changing: "motion is the mode of existence of matter".

Anti-Dühring supplies a thorough grounding in dialectical materialism, applied not only to science and philosophy (attacking with gusto the nonsense about "eternal truths" propounded by metaphysical thinkers), but also to the development of socialist theory from "Utopian" socialism to "scientific” socialism. Some chapters from Anti-Dühring were soon republished as a pamphlet, Socialism, Utopian and Scientific, and the central section of the book ("Political Economy”) serves as a helpful introduction to Marx’s Capital. Both the book and the pamphlet had an immediate and lasting influence in many countries.

In his next book, The Origin of the Family, Private Property and the State (1884). based on Lewis H. Morgan’s Ancient Society, Engels analysed the way civilised, class-divided society had evolved from barbaric and savage societies, and how property relationships changed family relationships. Engels also showed how the changing division of labour, with the introduction of herding, "forced women into second place": mother-right gave place to father-right. He showed how the state arose from the need to hold class antagonisms in check, so that the state "is, as a rule, the state of the most powerful, dominant class, which, through the medium of the state, becomes also the politically dominant class". It follows that the socialist has no choice but to emphasise that every class struggle is a political one.

The superficial objection to socialism — that it is against "human nature” — is based on ignorance of the fact that civilised society, with its class divisions and state coercive institutions, "has not existed from all eternity. There have been societies that did without it (the state), that had no conception of the state and state power". Engels described primitive societies which managed their affairs democratically and without the coercion that is considered right and natural today. Such societies demonstrate that it is not "human nature" which requires humanity to be divided into nation-states and opposing classes, or which would make socialism impossible.

This article has only discussed Engels's main works. There were others which are both readable and helpful. How far was the theory of "Marxism” his work? His own view was emphatic and consistent:

What I contributed — at any rate with the exception of a few special studies — Marx could very well have done without me. What Marx accomplished I would not have achieved . . . Marx was a genius; we others were at best talented. Without him the theory would not be what it is today. It therefore rightly bears his name. [5]

Charmian Skelton

References:

1. Cf. The Wages System (Progress Publishers)

2. Preface to the German edition. 1883

3. Letter to Bloch, 1890 (Marx and Engels — basic writings ed. Feuer, Fontana)

4. Letter to Mehring, 1893 (Feuer)

5. Ludwig Feuerbach, 1886 (Chap. IV. footnote)

Proper Gander: Realistically altruistically (2025)

The Proper Gander column from the April 2025 issue of the Socialist Standard

Radio 4’s The Infinite Monkey Cage has clocked up 32 series of ‘witty, irreverent’ conversations on science-related subjects, helmed by physicist Brian Cox and comedian Robin Ince. A recent edition asked ‘How selfish are we really?’, although the panellists focused on the flipside of selfishness: altruism, discussing the notion through the frameworks of psychology and evolutionary biology. Psychologist Matti Wilks and comedian Jo Brand give our usual definition of altruism as someone making an effort to be kind to another person with no expectation of anything in return.

Steve Jones, a professor of genetics, defines it in a more Darwinian way as an act which reduces someone’s fitness to survive (by using their time and energy on something they don’t directly gain from) and which increases someone else’s fitness. Superficially, it could seem counter-intuitive to do this, but as Steve clarifies, our genes will spread if we benefit our group overall, and our brains are wired to get a positive feeling when we behave in a nice way. In day-to-day life we don’t tend to think about altruism like this, and run with a general inclination to be helpful with a background assumption of ‘reciprocal altruism’, that if we act altruistically towards someone, then in future they will act similarly.

The panel ponders the extent to which this exists across the animal kingdom, particularly among our distant relatives. Steve says chimps engage in reciprocal altruism by picking lice off each other, although they also fight more than homo sapiens, which is why we’ve had the evolutionary advantage. Our ancestors went from living and collaborating in extended families to larger groups, and he adds that reciprocal altruism was later embedded by religions which have ‘do unto others as you would have them do unto you’ among their principles, with problems arising because as he says wryly, religions hate each other. He mentions that the structure of The Bible and Charles Darwin’s On the Origin of Species are ‘remarkably similar’, both starting with describing origins and ending with ‘mysterious stuff which you don’t understand’.

Psychologists have aimed to explain altruism through research into our views and behaviour. Matti refers to studies which found that people are prone to empathise with and be altruistic to those they feel akin to, such as Americans giving money to victims of the California wildfires rather than to people in need elsewhere. Children have been understood to also be ‘parochial’ in their ethical outlook, although Matti’s own research has shown they can be more likely than adults to say we should help people in faraway places. This may be because they haven’t yet been socialised to see some people as ‘other’.

The programme doesn’t consider how the type of society we live in shapes relations between people and therefore how we behave altruistically, although it gives numerous examples of this happening. There is the ‘identifiable victim effect’, shown in tests when people gave more money to a charity which used a picture of one person in need than when a picture of several people was shown. While this ostensibly demonstrates that we find it easier to be empathetic and altruistic to individuals rather than groups, the effect depends on there being a context of scarcity and charity, and possibly notions of ‘otherness’ too. Any conclusions drawn about altruism in these studies only apply to this societal situation, rather than necessarily being basic truths of what it is to be human. Further research has found that we’re less altruistic towards large groups, and this could also be socially conditioned. When Matti is asked how altruism expands from small groups (where its benefits are most obvious) to bigger ones, she replies that psychology hasn’t done a good job of illuminating this. To give a socialist perspective not explored in the programme, perhaps wide-scale altruism happens when people see through the divisions between groups which capitalism encourages and recognise our common humanity. This may also explain something else which Matti says psychologists haven’t been able to sufficiently account for: ‘extraordinary’ altruists, those who are exceptionally altruistic to strangers without expectations of reciprocity, such as kidney donors.

Steve cites blood donation as a familiar example of a ‘purely’ altruistic act, at least in the UK, where the only payment the donor receives is a cup of tea and a biscuit. In America, people receive money for their blood, and commodifying the process at this point has meant that to minimise additional costs to profit-hungry healthcare companies, inadequate checks have been done to avoid infected blood being passed on. Matti says that elsewhere, introducing payments to donors has led to a reduction in people coming forward, as the ‘intrinsic motivation’ for doing so had gone when it became monetised.

Economic considerations with altruism are also acknowledged by Matti when she says that it’s a ‘position of privilege’ to be altruistic, meaning that people often can’t afford to give to others if they lack enough goods themselves. This isn’t a blanket rule, though, as levels of trust and compassion in a group affect the extent that altruism is the norm. To try and measure how much altruism there is, researchers have compared which groups have more or less expansive ‘moral circles’, which contain things considered to have moral concern. Trying to quantify these qualities is ‘not as pure a metric’ as comparing countries on their GDP, as Matti says. Asked which country is the most altruistic, Steve jokes that it might be Norway because there’s nothing else to do there.

Steve’s contributions from the perspective of evolutionary biology tell us that we’re primed to act in an altruistic way because this has been evolutionarily advantageous. Some sort of altruism is essential for us to be able to live in groups, especially harmoniously. How altruism is manifested, and how psychology attempts to explain it, are moulded by society’s structures. In capitalism, we are conditioned to view some groups as ‘other’, and behaving altruistically happens through the constraints which a market-driven, divisive society imposes.

Mike Foster

How we live and how we might live - Part 8 (2025)

From the April 2025 issue of the Socialist Standard

(Continued from last month)

‘[The claim] that every individual is required to work is a social convention and disciplinary apparatus rather than an economic necessity’ (Kathi Weeks, The Problem With Work).

The post-capitalist society being argued for here is one where productive activity is taken up voluntarily by individuals, and access to the social product is open and free. Last month we showed how an objection often made that members of such a society would prefer to lie down and starve rather than do anything to meet their needs was unfounded. We can now look at the many immediate benefits that the structure of such a society would bring even before it developed more elaborate institutions. We have already seen how a system of free access would render ‘greedy’ behaviour pointless or counterproductive. We can now show that the same system of society would undermine the lazy-person argument.

The most immediate impact a free-access society is likely to have on its members would be a huge reduction in the amount of effort they would need to put in to sustain it. Capitalism is immensely inefficient in its use of human labour. Its system of corralling individuals, families and businesses into independent and competing property units, and then routing production through the profit motive, requires a gigantic social apparatus to sustain it. Not only does it force capitalism to maintain an elaborate monetary mechanism, it also requires a means of managing the resulting inefficiencies. Moreover, the competitive nature of the system creates much duplicated effort, and results in a great deal of labour being devoted to the production of useless and shoddy goods.

Wasted labour

In almost all capitalist states large numbers of jobs are dedicated to the management of a central banking system which, besides making valiant attempts at stabilising capitalism’s financial system, concerns itself with the production and issue of money. Upon this foundation whole industries have developed to finance business operations and to service the system’s property relationships. The pensions, insurance and brokerage industries are three of the largest of this kind. Out of a total UK working population of 43 million people well over one million are employed in this sector alone.

The property system also requires capitalist governments to employ armies of civil servants and local government officers to devise and administer welfare and unemployment payments to maintain the workforce through periods of unemployment, to provide for those unable to work, and to top-up the incomes of those whose wages are inadequate. Governments also employ workers to register ownership of land and property, assess and collect taxes, enforce weights and measures, etc. These systems require not only labour for direct planning and administration but also for the production and development of equipment such as computer hardware and software, buildings, stationery products, transport systems and sources of energy.

The bulk of capitalism’s legal systems, its judiciaries and police forces, is dedicated overwhelmingly to adjudicating property contracts, property disputes, and property transgressions, along with crimes against people motivated by monetary gain. Businesses based on gambling like casinos, amusement arcades, bookies, betting shops and stock exchanges flourish in the win-lose system that is central to capitalism. Capitalist states consume labour in the production of armaments and military hardware, for sale to others as well as for their own use. They maintain military personnel to further the interests of businesses within their territories in the international competition for markets, resources, trade routes, and the ability to project power and manoeuvre strategically to secure these essentials. In the aftermath of conflict labour is then deployed for rebuilding what has been destroyed.

Monetary tasks

In the world of business, firms of all kinds must dedicate labour resources to monetary tasks such as bookkeeping, accounting and debt collecting, while the demands of profit maximisation through competitive sale on the market forces them to devote huge labour resources to the advertising and marketing of brands and products. Companies work ceaselessly to bombard us with advertising online, in newspapers and magazines, on TV, at the cinema, on roadside hoardings, on the sides of lorries and buses, on bus shelters and railway platforms and on every available space. Capitalist companies employ labour to research and implement sophisticated psychological techniques for creating artificial wants in consumers. We are pressurised into buying by limited time offers, or into believing we are getting a bargain by supposed discounts, or into purchasing a lifestyle or an identity through branded items. In-store lighting, music, shelf placement and shelving layouts are designed to exploit our instincts and vulnerabilities. ‘Product placement’ on our favourite video channels keeps goods relevant to our interests in the forefront of our minds. Online ‘organic communities’ built around brands proliferate to keep us talking about a company’s products. PR consultants like the notorious Frank Luntz gleefully explain in their writings the techniques used to manipulate the public by a careful choice and placing of words and images.

And we submit to all of this because capitalism’s restless search for profit has uprooted or unsettled our communities. It has isolated us emotionally and economically. We buy stuff to fill up an emotional void. A halo of excitement surrounds each new product on the shelf or online platform and entices us to buy. At home, the excitement persists for a few days or weeks, but then fades and the exciting object becomes just one more thing we have. Our new possession morphs into junk or household clutter, or it falls apart or goes out of fashion. Still hungry, still unsatisfied, we dispose of it to make room for more. And more labour is then eaten up in transporting and disposing of the waste.

Planned obsolescence

Since the 1950s capitalism’s drive to maximise profit by ramping up sales has increasingly taken on various forms of planned obsolescence, so much so that it is now a regular sales strategy. Companies produce cheap products that soon fall apart and have to be quickly replaced. Parts or whole products are entombed in plastic or in spot-welded metal casings rendering them inaccessible and unrepairable. Companies use screws with proprietary heads that cannot be removed with an ordinary screwdriver. Spare parts are quickly withdrawn from sale, or they are sold at exorbitant prices that make it cheaper to replace the whole item. New components are designed to be incompatible with old ones. White goods that once were built to last 30+ years now break down in six or seven. Fashion houses rush out new fashions weekly or even daily. Smart phone manufacturers introduce new designs every year, simultaneously swamping public spaces with advertising, while about the same time punters begin to notice that their old phones are unaccountably starting to go slow.

A great deal of labour in capitalism’s competitive society is mopped up in the production of consumer goods that originate not in the spontaneous wants and demands of the population but in the requirements of profit making. In the mid-20th century, pundits predicted that rapidly advancing technology would result in a rise in the productivity of labour. As a result, they believed we would have to work fewer hours in the future. As early as 1930, the economist John Maynard Keynes declared that by the millennium, when his generation’s grandchildren had grown to adulthood, no one would have to work more than 15 hours a week. Keynes was right about capitalism’s drive towards increased productivity. He was wrong, however, about the forces that drive capitalism. In a profit system capital takes on a life of its own. It becomes ravenous. It must constantly seek out new outlets for investment, new ways of creating ever more capital. Inevitably this means that new products, new services are constantly being puffed into existence. Instead of reducing the work needed by society, the profit motive keeps us at work generating ever more ephemeral stuff. So we get not just the kind of unproductive work that the late anthropologist David Graeber referred to as ‘bullshit jobs’, but jobs dedicated to producing bullshit products, and then to marketing them to the ‘consumer’.

Eliminating the profit system

By eliminating capitalism’s class system together with its profit motive, huge amounts of unnecessary labour and whole industries would cease to exist. In the same move, the direct connection between production and consumption would be restored. The quantity of social effort required to meet social need would plummet, and the population would gain a new level of social control over its labour time. It would be free at last to decide how much effort it wanted to expend on production and how it wanted to use it.

Eliminating the profit system would transform the whole nature of work. When society is founded on common ownership and free access, work ceases to be ‘work’: the sale and exercise of labour power on behalf of an employer, and becomes productive activity, a voluntary social act, undertaken by individuals for social purposes. The aim of production would no longer be maximisation of profit by competing firms, but the meeting of social needs. And social needs include those of the producer as well as the consumer. Under capitalist conditions, unpleasant, mindlessly repetitive work often conducted in unhealthy conditions, with unsociable hours and overseen by a harsh disciplinary regime, is the product of the individual capitalist firm’s need to minimise costs. With the profit system removed like a glitch in software, only one social purpose for productive activity remains: the meeting of social needs.

Social psychology has known for decades that extrinsic ‘rewards’ or ‘incentives’ like wages and salaries are poor motivators for action. And to say this is already to miss something important. To a large extent, wages and salaries in capitalism are not primarily rewards or incentives. For the majority of the population they are an imposed necessity. The motivation for doing a task – any task – comes principally from intrinsic rewards, that is, from the rewards which arise out of doing the task itself. Human beings are primarily motivated by three things: by the ability to control their own lives; by the desire to master skills; and by social belonging. These are incentives that capitalism is very bad at providing. As we argued earlier, it provides intrinsic incentives only occasionally and only in certain industries where profits are temporarily above average and where there are shortages in the labour market.

In a post-capitalist world of common ownership and free access where class conflicts of interest are eliminated, communities engaged in productive activities can organise their work to meet those human needs for control, for mastery and for community. They can provide themselves with conditions of work that maximise their own satisfaction, and not the profits of their employers. Under these conditions productive activity becomes not a sacrifice of time and effort for an extrinsic wage, but a collective activity carried on for collective ends and as a seamless part of a community’s social life.

The final article in this series next month will dive deeper into what motivates human beings and answer the question of who will do the dirty work.

(A representative list of tasks required by capitalism’s money system is given in Chapter 3 of the SPGB’s pamphlet: ‘From Capitalism to Socialism: How we Live and how we Could Live').

Hud.

All fools now? (2025)

From the April 2025 issue of the Socialist Standard

Who now echoes the thoughts of the poet Robert Browning and his longing to be back home; ‘Oh, to be in England. Now that April’s there’? Many of us would probably far rather be somewhere else.

April 1st is April Fools’ Day, where it is traditional to tease someone in a practical joke in which the victim is humiliated by being call an April Fool. Custom says this may only happen up until midday. Schooldays on this date used to be fraught with the fear of falling victim to the perpetrators of such japes.

April is also when, in the UK, the new financial/tax year begins. Browning wouldn’t have been so gung-ho had he faced the rises in the cost of living that occur in this month. Expect increases in the cost of council tax, water rates, mobile phone bills, internet providers, car tax, insurance, travel fares, petrol, diesel, rent, mortgage payments and more.

For those on fixed incomes and benefits any small increase given through the beneficence of the state is quickly swallowed up leaving them no better off, or possibly worse off. A 2022 political campaign called Enough is Enough, led by the unions, demanded ‘A real pay rise, a cut in energy bills, an end to food poverty, ‘decent’ homes for all, higher tax for the wealthy, nationalisation of certain industries’. Even in the unlikely event of them being implemented, these Fabianesque aspirations would do nothing to change the underlying cause of the problems they aimed to resolve – capitalism.

Poet Adrian Henri once wrote a poem for Roger McGough asking, did a nun think, when standing at the checkout having shopped for one, what it was like to buy groceries for two? Most folk waiting in a checkout queue are probably thinking, ”kin ‘ell, how much is all this going to cost?’ along with … ‘why don’t they open more checkouts, this queue is ridiculous.’

Socialists in a payment queue might think that too, but they might also think ‘why aren’t the working class working toward socialism? Because then there would be no queuing up to pay because in socialism there would be no money and there would free access to goods.’ Along with, ‘don’t these people know that in socialism they wouldn’t be wasting their time and their lives adding to a capitalist’s profits?’ These sentiments apply to any situation where payment is required before the commodities being purchased are allowed to be removed from the shop or store in the hands of the new possessor.

The Joseph Rowntree Foundation (JRF) has a report, published at the end of January, the first one it has issued under the new Labour government. It is using figures for 2022/2023 but says that the statistics still remain relevant. According to these figures, one in five people in the UK experience poverty, including over four million children and almost two million pensioners.

The JRF says that there has not been a measurable drop in poverty levels in twenty years. The quoted statistics are deeply disturbing, or should be in an economy the size of the UK’s – in 2022/2023 six million people were in deep poverty. ‘Destitution, where people cannot afford to meet their most basic physical needs to stay warm, dry, clean and fed’ affected almost four million people, including children. The ‘solutions’ which the JRF proposes amount to nothing but a sticking plaster on an open wound.

In the 1953 film Trouble in Store, Norman Wisdom sang, ‘Don’t laugh at me ’cause I’m a fool, I know it’s true, yes I’m a fool.’ Socialists get called many names when they present the case for socialism, especially when those hearing it for the first time find it difficult to grasp. Statistically, a socialist has to have been called a fool at one time or another.

For some, the clarity of the socialist analysis is so obvious and easy to understand that the first reaction can be as if someone switched on a blinding light in a dark room, and the second reaction is an urge to share it.

We’ve all done foolish things in our lives that we subsequently regret but, to use a fairy story example, once a bite of the apple has been taken it is impossible to ignore or forget the knowledge which has been gained. As of now we are, all of us, fools for continuing to let capitalism, its elites, and its shills, carry on exploiting resources, the planet and us, the majority who run capitalism on behalf of the minority.

Dave Coggan

Communist idea (2025)

Book Review from the April 2025 issue of the Socialist Standard

The Idea. Anarchist Communism Past, Present and Future. By Nick Heath. Published by Just Books Publishing, 2022. ISBN 9781739723712

Suitably enough, The Idea, a book on the history of anarchist communism, is a dense, brick-like volume of nearly 500 pages, detailing the key figures, movements, activities, and publications of Anarchist Communists (AnComs) throughout history.

Anarchist communism, as opposed to anarchist collectivism, is the only anarchist tradition that explicitly calls for the abolition of the market economy and exchange value. Despite its many challenges, it has endured to the present day.

No movement is overlooked, with particularly extensive entries on France and documentation of the significant tendencies in Russia, France, Latin America, Ukraine, and beyond. The AnCom tendencies in China, Japan, and Korea are also covered, drawing in part on the published works of one-time SPGB member and political historian John Crump.

The Idea is a meticulous study that separates the wheat from the chaff, focusing on movements and organisations with a class-struggle perspective. However, as the book itself illustrates, many historical anarchist groups were far less discerning in their alliances. The book can be recommended to anyone with a historical interest in libertarian communism. Heath’s work is admirable in its scope and depth.

Nick Heath’s political journey began with the Labour Party, then the Communist Party, before he ultimately embraced anarchist communism.

It must be noted some key lessons emerge from this volume. Individualist tendencies are a dead end—sometimes literally. A lesser known and striking example being the case of Museifukyosanto, a small AnCom party in Japan that, being structured along Leninist lines, veered into adventurism, leading to the arrest of more than 700 of their comrades. The end fate of active anarchists tends to follow one these paths: imprisonment, exile, murder (often at the hands of the state), or suicide. To paraphrase a certain British prime minister, the problem with anarchism is that eventually, you run out of other anarchists.

It would be remiss not to mention the example of Korean AnComs, who, between 1910 and 1945, actively participated in electoral politics. This made their position similar to ours in that respect. They achieved notable success, serving in the Korean Provisional Government and later securing positions in the cabinet.

Nick Heath’s book is well worth reading and is a solid example of a disciplined work in a sea of anarchist garbage that was previously published and no doubt will come later. The Idea should interest anyone seeking libertarian socialist solutions to the practical problems of organisation and decentralised power.

A.T.

Cooking the Books: Blowing bubbles (2025)

The Cooking The Books column from the April 2025 issue of the Socialist Standard

In a Communist Party of Britain supplement in the Morning Star (18/19 January) one of its leaders, Alex Gordon, ex-president of the RMT, set out its theory of economic crises:

‘Beyond profits extracted from surplus value, capitalists amass capital via bank credit and stock markets. Fractional reserve banking creates new credit many times the original deposits. Stock markets likewise multiply the value of the original means of production. Marx called this fictitious capital, since it separates from and achieves value far beyond the original productive capital. Fictitious capital feeds the economy and finances debt out of all proportion to the means of production it is based on. When this bubble bursts this is a crisis’.

The first sentence is correct. Capitalist firms acquire additional money-capital to invest in production for profit by borrowing from banks and/or selling new shares on the stock market.

The second sentence is incorrect. Banks can’t lend more than they have as their own capital, deposits and what they themselves borrow, so they cannot — and so do not —artificially inflate credit in the way Gordon suggests. It’s a bit surprising that the Communist Party should have fallen for that old currency crank myth.

The third and fourth sentences are incorrect. Stock markets do not ‘multiply the value of the original means of production’.

The fifth sentence is incorrect. ‘Fictitious capital’ does not ‘feed the economy’ in the sense of providing more money-capital that can be invested in production. If anything, it feeds off the economy.

By ‘fictitious capital’ Marx simply meant what actuaries call ‘capitalisation’, or the conversion of an income stream into a notional capital sum which, if loaned, would yield over a given period of time interest of the same amount.

Shares are a form of fictitious capital calculated from the expected future stream of income coming from the profits made by a capitalist firm and entitle their owners to a share in these profits. They are subsequently traded in their own right independently of the capital originally invested in production, whether to share in the profits or to sell later at a higher price. But, as Marx noted:

‘The independent movement of these ownership titles’ values, not only those of government bonds, but also of shares, strengthens the illusion that they constitute real capital besides the capital or claim to which they may give title …. In so far as the rise or fall in value of these securities is independent of the movement of the real capital that they represent, the wealth of the nation is just as great afterwards as before’ (Capital, vol. 3, ch. 29, Penguin, pp. 598-9).

A recent example is ‘China’s cheap AI chatbox wipes billions off Silicon Valley shares’ (Times, 28 January) where a part of the fictitious capital was wiped out without affecting value of the real capital invested in the corporations’ tangible assets. Conversely, contrary to Gordon’s claim, an increase in share prices is not an increase in real capital (though it may reflect this).

Gordon is offering an essentially financial theory of crises, based on a boom in stock exchange prices (and on banks supposedly creating credit by a stroke of the pen) generating additional money-capital that is invested in expanding productive capacity; eventually too much in relation to paying demand is produced and the bubble bursts.

The stock exchange crash is indeed a consequence of such overproduction. It’s when stock market traders realise that the fictitious capital represented by shares is over-priced due to the future income stream of profits on which it is based becoming less than anticipated. But the question is: what causes the overproduction? Marx looked for the explanation in the ‘movement of real capital’ not in what happens in the world of finance.

SPGB April Events (2025)

Party News from the April 2025 issue of the Socialist Standard

Our general discussion meetings are held on Zoom. To connect to a meeting, enter https://zoom.us/wc/join/7421974305 in your browser. Then follow instructions on screen and wait to be admitted to the meeting.

50 Years Ago: Scots Nationalism (2025)

The 50 Years Ago column from the April 2025 issue of the Socialist Standard 

Today the SNP seems to have left the lunatic fringe behind and appears as a modern, mass political party using the techniques of public relations and advertising industries to give it a new slick image, and the Executive Suit has replaced the kilt as standard dress for the party candidates. Not only does the party have a large and youthful membership of 120,000 but they carry out their propaganda with a style and enthusiasm which leaves the older reformist parties gasping. At the October general election they all but demolished the Liberals, hammered the Tories, and promise it will be Labour’s turn next time. (…)

The nationalists have shown they are fast learners when it comes to political cynicism. They pretend to the workers that should independence come then all the oil revenues will automatically go into the Scottish exchequer and be used mainly for the benefit of the workers. They must know that the United Kingdom would get some of the revenue as part of any deal made over the granting of independence, and that the capitalist class in Scotland would insist that oil revenues be used to reduce the burden of taxation which rests on them.

Will the Labour government’s proposed Scottish Assembly, but still under Westminster, outflank the SNP? This is possible since it is doubtful if the electorate in Scotland want complete independence as various opinion polls have shown. However, as the Assembly will have no more success in abolishing capitalism’s problems than the SNP’s claim that only full independence can succeed, it will probably gain more support.

Should self-government eventually be established the SNP will discover that they cannot will or legislate away those problems of capitalism. No country in the world, no matter how independent or rich in resources, has yet succeeded in eliminating poverty, unemployment, insecurity, etc. For the working class there will be wages while they are working and pensions when they are too old or disabled.

[From the article 'Scots Nationalism - Part 2', from the Socialist Standard, April 1975.]

Action Replay: Fire and sales (2025)

The Action Replay column from the April 2025 issue of the Socialist Standard

Long gone are the times when cricket had just two formats, three-day county games and five-day Test matches. The one-day Gillette Cup, which began in 1963 and later had various changes of name, was the first departure from the original set-ups. There are now a number of domestic competitions run by the England and Wales Cricket Board (ECB), all with the aim of increasing audiences and sponsorship. The earlier versions, with long matches and lots of draws, were no longer up to the job.

There is still a men’s county championship, with two divisions and promotion and relegation. The Blast T20 competition (twenty overs per innings) is divided into two groups, North and South, supposedly ‘historic county rivalries’, and the One-Day Cup is a 50-over contest. From the coming season, women’s county cricket will be structured in the same way.

But the biggest innovation is the Hundred, a 100-ball competition launched in 2021, and based on cities rather than traditional counties. The teams are in Birmingham, Cardiff, Leeds, London (two sides), Manchester, Nottingham and Southampton. They have names such as Welsh Fire and Trent Rockets, presumably intended to sound exciting and perhaps intended to echo rugby league names such as Leigh Leopards and Warrington Wolves. The aim, according to the ECB, is ‘to open cricket to more families and young people’.

The Hundred has resulted in a great deal of take-over activity, with teams being sold off, in whole or part, to other companies. Yorkshire, for instance, sold their entire Hundred stake in Northern Superchargers to a group that already own an Indian Premier League side, while 49 percent of shares have been sold in both the Birmingham and Cardiff teams. The owners of Birmingham City Football Club now own part of Birmingham Phoenix (see last month’s Action Replay on companies owning several sports teams).

At the international level, too, there are a variety of competitions, run by the International Cricket Council (ICC), founded in 1909 as the Imperial Cricket Conference. In February and March this year, the ICC Men’s Champions Trophy was played, for the first time since 2017. The delay was due to security reasons, with the Indian team refusing to travel to Pakistan, the intended hosts, for matches. It was decided that India’s games would be played in the UAE, including the semi-final and final, which India won. Some people objected that it appeared to be India that were running the tournament, rather than the ICC. There were also calls for England to boycott their match with Afghanistan, given the Taliban’s attacks on women’s freedoms and the disbanding of the country’s women’s team in 2021, with women’s sport in general being prohibited. So, not for the first time, politics and profit inevitably find their way into sporting competitions.

Paul Bennett

County Council Elections (2025)

Party News from the April 2025 issue of the Socialist Standard

We are standing 3 candidates in these elections on 1 May. Folkestone East and Folkestone West in Kent and Stroud Central in Gloucestershire.

To help the campaign, in April, for Stroud, email stroud@worldsocialism.org or text or phone 07853965473. For Folkestone, email spgb.ksrb@worldsocialism.org or text or phone 07971715569.

We are also standing in the by-election in Herne Hill & Loughborough Junction ward in Lambeth, London, also on 1 May. Offers of help to spgb@worldsocialism.org

Editorial: What to do about Reform UK? (2025)

Editorial from the April 2025 issue of the Socialist Standard

Reform UK is a reincarnation of the Brexit Party and given the recent furore over Rupert Lowe MP, seems to be beset by the same type of periodic infighting among its representatives. In fact, it is effectively the same party with a change of name and led and financed by the same people — typically dissident members of the capitalist class who want less regulation of their financial activities. They realise that they can’t get this unless they control political power — the power to make laws and regulations — and that the route to such control lies through the ballot box. They are hoping to repeat their success in the Brexit referendum, by again appealing to anti-foreigner prejudice and distrust of a ‘liberal elite’ that they say is running the country. But they are no friends of the workers whose votes they need.

Reform may have been in the process of trying to develop detailed policies and promises like the other parties, but this is not the basis of its appeal nor why people vote for it. It’s the discontent felt by many about the economic problems they face and the failure of the Labour and Conservative parties to deliver on their promises to mitigate these.

Reform’s position can be described as ‘nativist’ in the sense of supporting a policy of prioritising the interests of native-born inhabitants against those of immigrants. In Britain this would include not just ‘white’ people but native-born and established ‘non-whites’. As Reform members and candidates fall into the latter group, to campaign against the party for being racist won’t wash as it can be seen not to be the case.

Even so, the way Reform expresses its nativism is crude, nasty and divisive. Obviously, socialists counter those spreading hatred against our fellow workers who are refugees or undocumented immigrants. That’s part of our general position that the workers of the world should unite to replace capitalism with socialism.

The pressure group ‘Stand Up To Racism’ proposes to ‘go door to door where Reform candidates are standing to mobilise the vote against them’. But voting for the other parties won’t stem the growth of Reform as the basis for its growth has been precisely the failure of these parties to deliver on their promises.

Reform feeds off the widespread view that the MPs and councillors of the other parties are out for themselves. But that’s not the reason these parties don’t deliver. It’s because they support and operate within capitalism. They fail because under capitalism, a system driven by profit-making, profits have to come before meeting people’s needs; a priority which those making political decisions have to apply. The established parties fail because it is impossible for them to succeed. They would fail even if all their MPs and councillors were saints.

Capitalism simply cannot be made to work for the benefit of the majority class of wage and salary workers and their dependants. Reform will fail too if ever it gets into positions where it is in charge of implementing policies. They too will have to run the system according to its priorities and economic laws.

The way to react to the growth of Reform is not to support the other parties against it. It is to campaign against capitalism and all the parties that support that system and for a society based on the common ownership and democratic control of productive resources so that they can be used to directly meet people’s needs.