Is this what Labour voters wanted? A world made safe for investors (1946)

From the March 1946 issue of the Socialist Standard

In a country where the whole adult population have votes and where the overwhelming majority of the voters are workers, the art of administering capitalism is a delicate, tricky business. To attract and keep the support of a majority of voters the party in power must have a programme that promises to introduce improvements in the miserable conditions of the poor; but in order to make capitalism function at all the government must not at the same time frighten and antagonise the rich, whose investment and spending has to go on unless industry is to slacken towards a standstill. Until such time as the workers recognise that their interest demands Socialism, the party that succeeds in persuading the electors that it can both please the workers and conciliate the capitalist will be the party that wins elections. The Labour Party succeeded in doing this, and is now carrying out its pledges, or some of them; but how many of the Labour voters who were attracted by the promises of more work, higher wages, social security, houses, etc., studied and understood the other half of the programme, the half that was directed to the capitalist class? How many of them observed that if wages rise and other things remain unchanged, then profits must fall; and that if profits go on at the old level (or increase), wages can only be prevented from falling if the total output of industry is increased? There has been plenty of Labour Party propaganda designed to make the workers believe that a Labour Government would reduce the wealth of the rich in order to help the poor, though this was not stated explicitly in the literature got out for the purpose of the general election. Workers can already see what is happening. War-time earnings, enlarged by overtime and various temporary bonuses, are now falling, and the changes introduced in the income tax, while decreasing somewhat the amount knocked off wages, also reduced Excess Profits Tax levied on companies, and reduced the total amount of tax levied on surtax payers. Mr. Dalton, Chancellor of the Exchequer, made two revealing statements in his Budget speech. While declaring that many surtax payers are idlers, he went on to announce that his Budget reduced their income tax. 

“The truth, in fact, is . . . that a large number of the surtax payers do nothing at all. They subsist on very large investment interests. Many of these have been inherited through many generations in the past, sometimes along with noble names, sometimes not. As a consequence of this, there is, in the total surtax income, a great quantity of completely unearned income, conglomerated in huge lumps around people who have inherited it, obtained it by luck, or other means." —Hansard, 19 Nov., 1945. CoL 152.

“ I repeat . . . that in terms of income, next year everybody will be better off, including surtax’ payers . . ." —Hansard. 28 Nov., 1945. Col. 1358.

The principal feature of the Labour programme at the election was the pledge to nationalise certain industries. In some vague way never clearly explained this was supposed to benefit the workers. It will, however, be noticed that since the Government entered office, the theme of numerous speeches by Cabinet Ministers has been that the compensation terms would be "fair" or even "generous" to the capitalist investors, while to the workers the Labour leaders' reiterated appeal is for harder work, austerity, and greater production.

This contrasts oddly with some of their speeches and writings during the war. Two examples, both from Cabinet Ministers, illustrate this. In 1942, Mr. Bevin, now Foreign Secretary, but at that time Minister of Labour in the Coalition Government, made a speech in which he said:— 

"At the end of the war we should be able to buy goods only for goods. The rentier, comfortably living on interest, would certainly be gone. It will mean that we shall have a nation at work, and that will not be an unhealthy thing."

—Daily Herald, 16 July, 1942.

Then there is Mr. Shinwell, now Minister of Fuel and Power. In his book, “When the Men Come Home” (Gollanz, 1944, page 41), he laid down the principle “that any physically and mentally fit individual who fails to make a useful contribution to the work of the community shall not be fed, clothed and housed at the expense of those who do work."

How are Mr. Bevin and Mr. Shinwell, and their Cabinet colleagues, progressing with their healthy doctrine that there should be no non-workers, comfortably living on interest, clothed and housed by the labours of those who have to work? It is only necessary to look at the nationalisation schemes to see that, far from abolishing interest receivers, the principal achievements for which this Labour Government will be remembered is that the “rentier, comfortably living on interest,” is being vastly increased in number and their position consolidated. The so-called epoch-making change brought about by the Labour Government is merely the transformation of some capitalist investors holding company shares, into holders of Government bonds. It was a development already making headway under the Conservatives before Labour came into power. Here are some examples of that nationalisation or State capitalism, wrongly described as Socialism by the Labour Party. The Central Electricity Board has over £50 million of stock outstanding and pays interest each year to the stockholders amounting to over £2¼ million. Port of London Authority, £34 million of stock, paying £1⅓ million interest. Metropolitan Water Board, £58 million, interest £1,790,000 a year. London Passenger Transport Board, stock, £112 million, paying interest of about £4½ million a year.

Then there is the buying out of owners of coal royalties, just completed, with payments of £66 million, available for investment elsewhere. This was a measure backed by the Labour Party though not introduced by them.

Since the Labour Government came into office the Bank of England has been taken over and the stockholders are to receive £58 million of Government stock on which the interest at 3 per cent, will amount to £1¾ million a year.

The Daily Express City Editor (20 Nov., 1945) gave the following rough estimates of the total cost of the Labour Government’s nationalisation schemes:—

Taking interest at, say, 3 per cent., this will involve payments by the Government of about £60 millions a year to the stockholders in exchange for the dividends they are at present receiving on their shares in the various companies. They will on the whole receive a lower rate of interest than before, but will get in return the greater security of bonds backed by the Government. 

As far as the workers are concerned, their position as wage slaves, exploited to maintain a propertied class in luxurious idleness, will not be altered. The State to an ever increasing extent will be the medium through which the exploitation is carried on. The accumulated wealth of the country (the means of production and distribution) will still be concentrated in the hands of the same small minority of individuals, the capitalist class, who own it at present. 

Edgar Hardcastle

Wages, interest and nationalisation (1951)

From the March 1951 issue of the Socialist Standard

Karl Marx was undoubtedly right when he said that the workers would seek every avenue of escape from the effects of capitalism before they turned to the only possible solution, the complete abolition of the capitalist system of society. Throughout the period of their history the workers have paid heed to all kinds of queer political notions, followed all kinds of political quacks and given allegiance to many political parties. They have plumped for Tariff Reform and for Free Trade, they have lent an ear to single taxers and to currency jugglers, they have supported Conservatives, Liberals, Labourites and others.

Towards the end of the last century a great new hope dawned in the minds of many. Industry should be controlled by the state and the state should be administered by the political party of the working class. Nationalisation offered a solution where all others had failed. Nationalisation, labelled “ Socialism,’ became the programme for which thousands of workers have since given their time and effort. With the workers’ own political party at the helm, controlling industry, most of the workers troubles should be swept away. Now, after a few years of nationalisation in some industries, the trick does not seem to have worked.

All the same, many workers cling to the idea that nationalisation does offer a solution to their problems. The failure, they consider, is not due to state control, but to the manner in which the state does the job. Some say that the rate of interest paid to the bondholders is too high. Some object to the large salaries paid to members of the various national boards. Others point accusingly at the lack of working class representation on the national boards. They still search for a way out where there is none. These proposals are mere tinkerings with surface effects and they offer no solution at all. If they were all put into operation the workers would not notice any difference in their living conditions.

A reduction in the rate of interest paid out of state controlled industries to the holders of bonds is not a practical proposition for a capitalist government, even a Labour capitalist government When an industry is nationalised, the act of parliament that converts it from so-called “private enterprise” to control by the state also sets out the terms of compensation. The rate of interest on the government stock issued to the former owners depends on the market conditions of the time. Two main factors will determine the level, the general level of interest rates throughout industry and the fact that the bonds issued are “gilt- edged,” that is, they are guaranteed by the government. The security that this guarantee offers will mean that the rate of interest, in most instances, will be lower than in company owned industry where no such guarantee exists.

The various national boards that manage the state controlled industries must have access to capital. To operate, to develope, to renew their plant, they must be able to raise funds. They can do this, through the government by the issue of stock. But if the rate of interest offered on this stock is very low, even taking into consideration the guarantee, nobody will be found to purchase the bonds. The attraction of higher interest rates in other fields of investment will determine that the investors of capital will turn their backs on nationalised industry. Just as a punter on a racecourse will turn from a dead cert if the gamble offers too small a return for his outlay, and will seek to place his money where he has the opportunity of longer odds.

If interest rates in nationalised industries are reduced no problem will be solved, but many will have been created. The workers have no guarantee that such a reduction would result in an increase in their wages. If they argue that the industry is too poor to afford the present interest rates, they are simply repeating the employers’ line that the industry is too poor to afford higher wages.

The real solution for the workers is not a reduction in interest rates on the capital invested, but in the total abolition of capital altogether.

Neither will a reduction in the salaries paid to members of the national boards offer any easement to the workers. The wages a worker receives are not determined by the amount that his employer pays to a manager. If the members of the national boards were deprived of all their salary, the workers would not necessarily get it. Even if they did, the amount per worker, when it was distributed, would be infinitesimal.

Greater representation on the boards and management committees of the nationalised industries is another will-of-the-wisp. The workers’ troubles arise from the capitalist nature of nationalised industry, not from the class origin of those who manage it. Whilst there is capital on the one hand and wage-labour on the other, there will be an incessant struggle between the two with the wage workers always at a disadvantage. No matter who is represented on the national boards, the general level of wage rates, like the general level of interest rates, will be outside their control. The need to capture export markets, the competition of like industries in other countries and the ever present need to produce cheaper will cause a constant pressure to be exerted on the workers' wages and conditions. This is an effect of capitalism. It matters not who administrates the system, it will not work in the interest of the working class. The workers can wriggle and twist and run after all sorts of hare-brained proposals, but they cannot escape the effects of capitalism whilst they tolerate that system.

Any plan, any scheme, any proposal that falls short of the abolition of the capitalist system is doomed to bring disappointment with a feeling of frustration and its attendant apathy. Ever seeking to improve wages results in continual adjustments to changing conditions of capitalism and little more. The 'sound line for the workers is to struggle for the abolition of the wages system. Without capital and without wages, men and women can work to produce wealth, not for the profit of a few but for the benefit of all.

W. Waters

Greasy Pole: The Thick of It (2010)

The Greasy Pole column from the January 2010 issue of the Socialist Standard

Abundant evidence of how a grateful nation unstintingly cares for its military heroes as they return, too often less than complete, from the battlefields has been supplied by Defence Minister Kevan Jones. Anyone who in combat in Afghanistan is unlucky enough to lose their penis – shot off, blown to pieces, burnt away – can put in a claim for compensation which might amount to £9,000. As expected of a properly prudent minister of the crown, Jones made it clear that such generosity applies only when the entire organ is lost; in cases of lesser damage, when “partial use” remains, the payment will be something under £3,000. Naturally such claims will have to originate with the appropriate form, signed and witnessed by a suitably qualified person. No doubt supporting evidence will be required. Then the claim will be processed through an appointed panel of specialists in the regular stream of applications for council tax relief, job seekers allowance, home carers…

Cenotaphs

We have, in fact, been here before. After the guns had fallen silent in 1918 the then government did their best to live up to the infamous Lloyd George promise about post-war Britain being a Place Fit For Heroes To Live In by making payments to survivors of the horrors who had left bits of themselves out on the battlefields. Perhaps Kevan Jones learned something from this for the 1918 compensation was carefully calculated with an appropriate scale of payments – so much for a missing hand, a bit more for an arm above the elbow, more again for above the elbow and the same kind of arrangement applying to missing legs. It was thought prudent to make an exception for anyone with a mangled head or face – nothing would be paid for any damage above the neck. This was done in accordance with regulations made in the safety of the Commons to be implemented by bureaucrats in their offices; in neither place was anybody likely to lose any limbs. It conformed to sound actuarial principles, taking into account that a lot of injuries “above the neck” would effectively deprive a potential claimant of any lasting interest in compensation, or of the need for any recognition of their plight other than a place on the local war memorials which were already being designed up and down the country (Edwin Lutyens had quickly drawn on the back of an envelope a rough sketch for a temporary Cenotaph, made of wood and plaster, for London). But never mind – it was, after all, the thought that mattered.

Chilcott

A natural response would be, in bewildered rage, to consign the episode to a file marked Madness. Except that this does nothing towards unravelling the matter. We are compelled to deal with a social system which does not just tolerate the insanity of war but actually nurtures it as the most rational available way of purging itself of certain problems. As the Chilcot enquiry into the Iraq war – there have already been two others, both of them predictably unrewarding and dishonest – is already informing us, capitalism needs to be a society of conflicts, driven by a momentum of its own which is lubricated by a disregard of inconvenient facts. Infuriatingly, we need to accept that the mass of capitalism’s people – who fight in the wars, willing to be maimed and killed – readily comply with and justify the entire disreputable chaos. It is almost as if nothing more is expected of a system which shows itself capable of massive human progress were it not hampered by the priorities of property; all that is demanded is that the dead are disposed of with due ceremony and the wounded are compensated according to an official scale.

Government

And for all of this there is always the essential machinery of government – that organ which millions of its subjects vote for under the impression that thereby they are ensuring a benevolent eye will watch over their welfare. Supposedly fulfilling this function are the ministers and secretaries of state on one level after another down to the achingly ambitious bag carriers and beyond, whose function persuades them to be in love with the protection of their protocol, its systemic committees and pressure groups where back-stabbing is an essential way of life. One who was until recently employed in the service of this odious machinery – so devotedly that when he retired he was rewarded with a gleaming medal to hang on his chest from a dazzling ribbon – needs very little encouragement to lift a corner of the shrouded mysteries of what is called democratic government. A minister’s special adviser by trade, he recalls that if his boss was being harassed by too persistent a straggle of complainants his confidential advice would be to surprise them with an offer of a personal hearing when he could make any needful promises, to be ignored once the other side had gone trustingly on their way. This kind of tactic is possible because a government has a more enduring energy than the most stubborn of protesters, whose pre-occupation must be with getting their living.

Tucker 

Some flavour of this nauseous brew was the theme of the recent TV series The Thick Of It – the conflicting ambitions, the manipulation, the treachery…We should not be unduly influenced in our response to the series by it being too flagrantly a caricature, particularly in the odious spin-doctor Malcolm Tucker (who will probably end up in the House of Lords).Tucker had to learn to communicate through unrelenting abuse to defend and assert himself and his career; it was just that he was more determined, more colourful, than the others. The affairs of capitalism must be conducted to meet its nature as a society – as abrasively as demanded by the privileges of class monopoly. It is in this process that predators such as Malcolm Tucker come to the surface.. And a lot more – the wars, the contemptuous treatment of the victims, the deception and cynicism with which it is all defended. Nothing can compensate us for this.

Ivan

Passing Comments: General Election (1951)

The Passing Comments Column from the July 1951 issue of the Socialist Standard

General Election

A review of “The British General Election of 1950,” by H. G. Nicholas, was published at the beginning of this year by Macmillan and Co. for 21s. Mr. Nicholas calculates that the Socialist Party spent more per vote on the election than did any other; and he also describes some of the propaganda put forward by the Party during the election. “‘One thing we must warn you about,' they told their followers. 'Do not trust in leaders, trust in yourselves alone. Unless you understand the cause and the solution of your miserable condition no leader can help you, no matter how honest and sincere he may be; if you do understand, then you do not require leaders; you will know what you want and how to instruct your delegates to get what you want.'  "


Candidates

Recently this column quoted a survey about the Conservative candidates at the last election made by the magazine “Comment." Now the more authoritative survey of Mr. Nicholas has appeared, covering the candidates of all parties. In the Conservative ranks, as might have been expected, the businessmen had preponderance. Of the 621 candidates, 168 were employers or company directors; 30 were concerned in business finance as stockbrokers or bankers; of those who had private means, 39 had done nothing to justify their inclusion in any other category; and there were 12 farmers and 21 landowners. The total is thus 270. It is tempting to include in this group those 39 candidates for whom a company directorship was a subsidiary occupation, as well as the 16 whose subsidiary occupation was farming; but they might also have been included in some of the other categories already counted within the group. Nevertheless, the real total is somewhere between 270 and 325—the latter figure being over half the total number of candidates. For the rest, the Law accounts for 114, the Services for 62, and there are 30 salaried managers. Other professional and well-to-do people number 137, and four white-collar and seven manual workers bring up the rear.

Socialists?

The Labour Party put forward 617 candidates; and it is worthy of note in a party which claims to be a socialist one that no less than 92 of these candidates were engaged in business or agriculture at the profit-making level, including 40 company directors. There were also 78 engaged in the Law, 8 from the Services and 21 salaried managers. In the other middle-income groups there were 180 candidates; 43 were white-collar workers; 92 were manual workers; and 91 candidates had been manual workers, but had now moved up into the white-collar group (the great majority of these being trade union officials).


Liberals

Of the Liberal Party's 475 candidates, some 143 belonged to the employing profit-making group, including 85 company directors. It is significant that, as Mr. Nicholas puts it, "of persons owning their own small businesses, small retailers, etc. (a category hardly worthy of separate mention amongst Conservatives or Labour), there can be listed 23.” There were also 71 Liberal barristers and solicitors, 39 salaried managers, and 16 from the Services. 188 others were in the middle income groups, and there were 16 white-collar and 13 manual workers.

Apart from the large petty bourgeois representation among the Liberal Party’s candidates, the companies with which the party’s business-men were connected “were in most instances of modest size, what in the U.S.A. would be called 'small business.' Moreover, the emphasis throughout the business group fell on the export, transport or retail trades, often in the form of family concerns or private companies run by their owners."

This analysis of the Liberal candidates would appear to confirm those conclusions as to the class-backing of the party which one would draw from the fact that it receives most support in the small-farmer areas of North Wales and North Scotland.

The Stick and the Carrot

It is a common assumption that the chief domestic issue in this country at the present time is that of Capitalism versus Socialism. But so far from a Socialist government having been in power, Socialism has never even been put before the electorate by any party with the resources to ensure that it would get a fair hearing. To adapt a famous saying, Socialism has not been tried and found wanting; it has never been tried.

The real quarrel is between two schools of thought, both of which accept explicitly or implicitly the foundations of the capitalist system. The first school is represented by those who think, privately or publicly, that a certain amount off unemployment is a good thing because it drives the workers, by fear of the dole, to increase production; that business should be left to the individual owner or joint-stock company; and that expenditure on social services should be restricted. The second school has insisted, ever since the days of Robert Owen and his new-style cotton mills at New Lanark, that the worker would produce more if he were given reasonable security and good conditions; and that laissez-faire was generally to be frowned upon because open competition deprived the worker of security. Since, as Robert Owen found, few individual factory- or mine-owners were willing to accept and put into operation these new theories, those adhering to the second school have called for state-intervention in industry and a measure of state-ownership. But the fundamental problem over which the two schools differ is that of how to get the worker to produce more; is the stick or the carrot more effective?


"Socialists" on Nationalised Boards

But though the Fabian society and the other theorists of the second school made only a few conversions among the upper class, they found allies in the trade unions, which naturally approved of a theory which aimed at giving security and reasonable conditions to the worker. Just as the donkey, if questioned, would doubtless favour the carrot method, so did the workers accept the Fabian nostrums. And as the Labour Party built itself up into one of the largest parties in the country, domestic debate began to centre round the “welfare state” and state-ownership. But the issue of Socialism versus Capitalism was never raised on a national scale; the Labour Party was first called a socialist party by the conservative press, intent on rallying the propertied class round the Conservative Party.

The difference between the Labour Party on the one hand and the Socialist Party on the other has been emphasised once more by Mr. Harold Roberts, President of the National Union of Railwaymen (Carriage and Wagon Grades). He is reported to have said (Sunday Times, 20-5-51) that each nationalised board should have at its head "a Socialist of unquestionable integrity with a deep-rooted conviction of the correctness Socialist policy.” It is symbolic of the widespread misuse of the word “Socialist” that a trade union leader can talk in apparent seriousness of an industry run on wage-labour and profit-making lines having a “ Socialist ” at its head.

Due Reward

Another quotation from the same paper illustrates again the gap between the private- and state-capitalist parties and the Socialist Party. The Rt. Hon. Richard Law, M.P., reviewing a book by Mr. George Goyder which advocates a change in company law “to make management explicitly responsible to the worker, the community and the state, as well as to the shareholder” (whatever that may mean) can go on to say that under such a system “the absent shareholder will get his due reward, but no more.” Those who want state intervention, those who want laissez-faire, all join in agreeing that there is such a thing as a “due reward" for a shareholder, and yet the Labour Party is still regularly called the Socialist Party.

Six of One

Recently there was a military parade in Prague past President Gottwald and Marshal Konev. Reviewing his armed forces, the President said that “the creation of a strong and efficient army and people's militia was in no way contrary to the purposes of peace. He said the stronger Czechoslovakia defence forces became the stronger would be the world peace front.” (News Chronicle, 7-5-51).

And Half-a-dozen of the other

On the other side of the Iron Curtain, in Yorkshire, we find Mr. Strachey saying that “we must push on with our defence programme. He was convinced that every new division of the Army, squadron of the R.A.F. and ship of the Navy which we could make available increased the chance of keeping the peace. And to keep the peace, to prevent a third world war, was the supreme object of all our endeavours.” (Observer, 20-5-51.)

Preserve Them From War

Another adherent of the curious theory that the best way to keep the peace is to produce more weapons of war is President Truman.

The News Chronicle (25-5-51) tells us that "in a memorable message sent to the Capitol, and at a press conference just before the message was read to Congress, the President set forth in simple and moving words a majestic aim that lies behind the policy the U.S. government is pursuing. It is to bring about peaceful conditions in which 'the century in which we live could become the brightest man has yet known on earth.’ ”

How are we going to bring about peaceful conditions? Why, by getting Congress “to vote another £3,000 millions to give free countries throughout most of the world weapons, raw materials, machinery and other aid to preserve them from war and conquest.”

Consoling Ourselves

Continuing the campaign to persuade the public that atom-bombs are not so bad after all, the Times leader-column recalls that a hundred years ago it used the phrase “perhaps the most terrible implement of destruction ever delivered into the human hand,” to describe the latest repeating pistol brought to this country by Samuel Colt. It goes on comfortingly to say that “to-day, surrounded by more formidable weapons, we may perhaps be forgiven for consoling ourselves with the realisation that in other ages, too, men have stood in awe of their own inventions” and remarks that “the man who had visions of blazing his way to glory with a smoking gun in each hand soon found how elusive a stationary target at fifteen paces could be.” (29-5-51)

The implied comparison between the atom-bomb and the Colt revolver, and the hint that the former may fall short of expectations as the latter did, is unworthy of the Times. Exactly how elusive would a modern city be when faced with a raid by a fleet of jet-bombers, or bv guided missiles? How elusive were Hiroshima and Nagasaki to the already out-of-date bombers used in the now old-fashioned year of 1945?

Not very.

Lord High Admiral

Spare a thought for Mr. Bernard Le Strange. Hereditary Lord High Admiral of the Wash. Finding himself in debt, he agreed last May to live on only £10 a week until his debts were paid off; and he moved “to an inexpensive harbour-front hotel” in St. Helier, Jersey. Now his creditors have been paid off, and Mr. Le Strange will doubtless be able to resume a manner of life more fitting to his station. But it is an interesting commentary on Mr. Le Strange's normal standard of life that a year living on the sea-front in Jersey with an income of £10 a week represents the crash which follows a financial crisis.

Drinks on the House

Another figure who claims our sympathy this month is the Lord Mayor of London. The Sunday Express (20-5-51) remarks on his princely hospitality. Apparently he has an allowance of £12,500 a year— £250 a week; but the Express envisages him having to pay an extra £20,000—£400 a week—for the entertaining he is doing during the current year.

Who said the rich had been almost destroyed by the tax-collector?

Alwyn Edgar

Finance and Industry: The Stock Exchange (1962)

The Finance and Industry Column from the June 1962 issue of the Socialist Standard

The Stock Exchange

The Stock Exchange has spent some time over the past years in trying to improve its public image, which was so badly mauled by the slumps between the wars. About eight years ago a Visitors' Gallery was opened, from which anybody can watch the Exchange at work. The Secretary's department is eager to answer any enquiries and will send a list of brokers on request. And now. although they have always frowned firmly and finally upon any broker advertising himself, the Stock Exchange is itself launching out on a publicity campaign.

The theme is that the work of the Exchange vitally affects us all and that without it we would all be a lot worse off. "Without investment,” says one advertisement, “ British commerce would just cease to exist. And without the Stock Exchange, investment would be next to impossible.” Vintage ad-man's stuff, this. Capitalism always took care to develop the machinery which its property basis needed, but that does not make that machinery socially desirable or useful. The Stock Exchange was developed to organise some of Capitalism's investments, but even without it there would still have been a Capitalist class who would have grown very rich from the work of the rest of us. So when the Stock Exchange pats itself on the back they are making a social virtue out of an anti-social necessity.

Who are the advertisements intended to influence? Presumably the Capitalists, who have the money to invest, already know all about the Stock Exchange. This must also apply to the trustees and the funds' organisers whose job it is to invest other people's money. Could the ads. be aimed at the worker who has a little money which he would normally put aside in the Post Office, for his holiday or something similar? A small gamble in stocks and shares would be enough to convince many workers that they were Capitalists and so make them loyal supporters of Capitalism. But many workers who play the shares find that for everyone who wins on the Stock Exchange somebody else must lose and that, although the Capitalists can take these losses, to lose is a different matter for them.

So we exclude ourselves from the scope of the advertisement's claim, that the Stock Exchange is ". . . helping us all to live as we want to.” Socialists want lo live in a free world, which is owned by its people. The Stock Exchange does not help us to live that life: in fact, it does just the opposite. By misleading workers into accepting Capitalism as a dynamic, logical, beneficial system it prevents us all from living not just the lives we want but the lives we desperately need.

How few own how much?

There are certain essential facts about Capitalism upon which we have always based our case against it. However the system may change in small ways, these facts are as relevant today as they always have been.

One of them is that the overwhelming mass of the world’s wealth is owned by only a small proportion of its population. That, like all property societies, Capitalism is made up of a small number of owners and a vast majority who own nothing or virtually nothing.

Equally important is the fact that this pattern has remained fundamentally unchanged over the years.

As long ago as 1904. Sir Leo Chiozza Money showed that about one-third of the country's total income was taken by only 3 per cent. of the population. In 1908, he estimated that about half was taken by 12 per cent.

In 1913, Sir J. C. Stamp calculated that no more than 36,000 owned about one-third of the total national wealth and that 400,000, or a tenth of the population, owned two-thirds of it. Another investigation by Daniels and Campion showed that in the same year one per cent. of the population owned 70 per cent. of the total capital and that 5 per cent. owned between 85 and 90 per cent.

The same investigators estimated that in 1924 one per cent. owned 60 per cent. of the national wealth and that 5 per cent. still owned 80 per cent, of it.

How has this position changed at the present time? In spite of all the talk of the "affluent society" and "you’ve never had it so good,” hardly at all.

The Economic Editor of the Observer has recently calculated that 27 per cent. of total personal wealth is accounted for by one-half of one per cent. of the people; 35 per cent. by one per cent: 42 per cent. by 1½ per cent.; and 52 per cent. by 2½ per cent. He adds that all these calculations probably under-estimate both the total of wealth and the inequality of its distribution since most of its owners have already taken steps to avoid the full effects of death duties (his figures are based on Inland Revenue estate duty figures).

And in the United States.

As chance would have it, a similar enquiry about the position in the United States has just been published. It reveals that in 1953 a minority of 11 per cent. owned 60 per cent. of the total American assets. These figures are again based on estate duty returns and would appear to under-estimate the true proportions as with the U.K. figures.

We hope to get hold of the book in due course to see what other information it gives about wealth ownership under American Capitalism, but even the sparse details quoted above make it clear that the position is basically similar to that in Britain.

Omission.

The paragraph on the railways in last month's issue unfortunately omitted to mention the amount of interest still paid out yearly on the £1,000 million of government stock handed over to the former railway owners by the Labour Government in 1946. The figure is £30 million.

Almost £500 million has therefore since been paid out in interest by a concern which is now so deep in the red that nothing will apparently save it. And this interest will continue lo be distributed year in and year out unless the government should one day decide to redeem the stock. Should this happen, the lucky bondholders will be paid out at par to the tune of the full £1,000 million.

No doubt about it. Whatever our Labour Government did not do, they certainly did the railway owners proud.

Stan Hampson

Old King Coal in His Labour Robes (1947)

From the February 1947 issue of the Socialist Standard

January 1st, 1947, saw the opening of one of the funniest political farces for a long time, the inauguration of State coal mines under the National Coal Board: time must pass before the miners discover its tragic aspects. M.P.s who had sung the Red Flag when the law was voted presided over the unfurling of flags bearing the mystic emblem “N.C.B.” – an emblem the irreverent have already happily refashioned. Notice boards were erected at the pitheads informing the coal wage-slaves that the mines are now operated by the State “on behalf of the people.” Leaflets were handed out telling the men of the stupendous transformation. Meetings were held and speeches delivered, at one of which Sir Ben Smith, now a regional coal official, told his miner audience they had reached “the end of a road.” Enough time and energy were spent on publicity to have raised a hundred thousand tons of coal, and all of it based, it, seems, on the curious notion that if you really had removed a prisoner’s handcuffs and leg-irons and thrown open the gates of his prison, you have to tell him so in case it should look to him that to-day is just like yesterday.

Cabinet ministers graced a ceremony at the Board’s London headquarters and the Minister of Fuel. Mr. Shinwell, handed over a specially bound copy of the Act to Lord Hyndley, the Chairman of N.C.B. Mr. Shinwell spoke about the campaign for nationalisation having at last triumphantly reached its goal. He said a few words about the pioneers – Mr. Keir Hardie and Mr. Robert Smillie – though it is at least open to question whether those two, if they were alive to-day, would feel gratified at what has come out of their well-meant but mistaken labours for nationalisation. The workers asked for nationalisation because they thought it would mean higher wages, and security against speeding-up and unemployment. The industrial capitalists wanted cheaper coal for their factories and thought that unification and modernisation of the mines was the way to get it. The Labour Government has adroitly wedded the two by giving the capitalists what they wanted but under the name that appeals to the workers. The catch will disclose itself in due course.

At Horden Colliery, Durham, the secretary of the local miners’ union “dropped a hatchet into a hole dug in the ground under the National Coal Board flagstaff. They were burying the hatchet, he said, as a symbol that in future there would be no dispute between owners and men. It was the end of the old regime” (Manchester Guardian, 6/1/47). The hatchet is already being dug up again long before it has had time to rust, and it is obvious that some at least of the miners have no illusions. The National Union of Mineworkers, on January 2nd, issued a statement that the miners do not intend to abandon the strike weapon. The statement was issued, the Union explained, in order to correct “a mistaken impression” that had got into the Press (News Chronicle, 3/1/47).

Mr. Ernest Thurtle, Labour M.P., informed the readers of his column in the Sunday Express that “capitalism has been deposed.” “A Socialist theory of long standing is being put to an acid test. It is that if private profit is taken out of an industry, and that industry is owned and controlled for the benefit of the nation as a whole, then the workers in it will exert themselves with increased zeal and enthusiasm” (Sunday Express, 5/1/47). Of course, the tongue-in-its-cheek Daily Worker (4/1/47) had to lend itself to the same game, with a report of a fall in absenteeism under the heading “State Pits Spur Miners to Record Turnout.”

Then to crown the farce one of the “people” who now own the pits was had up in court for stealing “coal worth 1s. 6d. belonging to the National Coal Board” (Daily Express, 7/1/47). The magistrate, binding him over, said “the coal was now the property of the King and stealing it was a serious offence.” Apparently the man had thought it at least equally serious that “he had no coal at home.”

A week later another criminal act took place. Someone unknown, either “as a prank or as an expression of hostility towards nationalisation,” had stolen the N.C.B, flag hoisted at Upton Colliery, Yorkshire. He had taken it “from the 50-foot flagpole which stands near the main offices.” The local miners’ secretary told a reporter “its disappearance had caused indignation among the 700 miners at the pit” (Manchester Guardian, 13/1/47).

Then, by contrast with the flag-wagging and jollifications, Lord Hyndley, Chairman of N.C.B., told some sober facts about the Board’s plans. Writing in the Observer (5/1/47), he mentioned the problem of “the closing of uneconomic pits and consequent transfer of labour,” the raising of £150 million new capital to modernise the mines, increase output and eliminate waste, and the likelihood that out of the proceeds of the industry some £10 million a year will eventually be needed to pay interest on the capital. (What Mr. Thurtle calls “taking private profit out of an industry” is thus shown merely to consist of calling profit by another name.) Of course, Lord Hyndley gave assurances that in all that is done to secure the production of coal “at the minimum cost,” due regard will be paid to the miners; but they will find that being speeded up, and being eliminated from their jobs by labour-displacing machinery, tastes just as bitter when served out by the capitalist State under the N.C.B. Flag as it does without those trimmings.

Looking to the future, it can be seen that the pressure to screw more and more production out of the miners will he accelerated as cheaper fuels come into competition with coal. The likely development of atomic energy is one and oil is another. The Manchester Guardian (2/1/47) points out that the proposed oil pipe line from the Persian Gulf to the Mediterranean “would make it profitable to sell oil here at, half the present price. With the cost of coal being what it is and transport on the verge of a great; development of the continuous combustion engine or gas turbine, cheap oil would deeply affect Britain’s industrial future.”

These developments will also deeply affect the miners, and help prove to them that, far from having reached the goal of Socialism which will emancipate them and other workers from capitalist wage-slavery, the struggle has yet to be waged. The ballyhoo surrounding the inauguration of State capitalism in the coal fields serves only to mislead them and to direct their minds away from the real issue that concerns the working class.

 Edgar Hardcastle

The Nationalisation of the Railways (1947)

From the January 1947 issue of the Socialist Standard

Railway nationalisation has a long and varied history. In comparatively recent times it has occupied a prominent place in the Labour Party programmes, has been backed by railway unions, and has been made an urgent problem for Governments because of the rise of competing motor traffic. Yet the first Act of Parliament giving the British Government power to take over the railways was passed over 100 years ago, more than half a century before the petrol motor was invented or the Labour Party was born. The Railway Regulation Act was passed in 1844 under Sir Robert Peel’s Conservative Government and was introduced into the House of Commons by Gladstone, at that time a Conservative Free Trader and President of the Board of Trade. The immediate purpose of the Act was to force the railways to reduce charges in the interests of the whole body of capitalist manufacturers and traders, by holding over their heads the threat of nationalisation. The power was never used, but the threat remained a useful weapon. It is an odd commentary on the broad continuity of policy under different governments that if the compensation terms of that Act had been applied before the recent War (25 times the annual profits based on a three-year average) the compensation would have been very near to the £900 millions that the Labour Government now offers. (If applied to the past three years when traffic and revenue were swollen by abnormal war conditions, the compensation would have been more.)

The Labour Government’s Transport Bill provides for the nationalisation of Railways, Road Haulage (except short-distance local carriers), Canals and Buses and Trams. London Passenger Transport Board will be included in the scheme, and power will be given to take over harbours. The present owners will be bought out. The whole organisation, employing nearly 1,000,000 workers will be managed by Boards set up by the Government. When the Bill becomes law British capitalism will have entered on a new stage in the organisation and control of inland transport, nearly a century after railway nationalisation began in some European countries. In Britain it has been a story of continuous conflict, between the sectional groups of capitalists who owned the various means of transport and the whole body of capitalists who depended on them. The former were out to get maximum profits; the latter wanted cheap and efficient service. The owners of the transport services also competed with each other. Proprietors of horse-drawn coaches on the 18th and early 19th century Turnpike roads were at war with the Turnpike Trusts over the tolls the latter charged for passage on the roads. With the first canal in 1761 an era of competition began between road and canal; followed after 1825 by the entry of a new competitor, the railways. The manufacturers needed the railways, but the canal and road vehicle proprietors used every effort in Parliament to protect their own investments by preventing the railways from being built. In due course the railways triumphed, then fought each other for traffic, then went in for amalgamation to protect themselves against wasteful competition.

At this stage a long battle was waged by traders to get the State to exercise more and more control over railway fares and charges. In the present century the petrol motor brought the roads back into the picture and it was now the turn of the railways to use their influence in Parliament against their road rivals. Already before 1914, many observers had become convinced that British capitalists’ problem of underselling the new great trading powers, Germany, America, Japan, etc., in the markets of the world required unification of inland transport with State ownership, or at least close State control, so that the whole body of manufacturers would get cheaper transport for their goods. Their chief argument was that national unification would eliminate wasteful competition and overlapping, and permit charges to be reduced. Supporters of the movement for nationalisation were the Fabian, Mr Emil Davies, the Liberal, Sir Leo Chiozza Money, and other Liberal and Labour politicians, as well as manufacturers and traders. It was, however, road competition that gave the movement new life, and in 1919 the Tory-Liberal Coalition Government declared its intention of nationalising, though it then drew back and contented itself with the compulsory amalgamation of the numerous large and small railways into the four existing companies.

It was Mr Lloyd George who, in March 1918, told a TUC deputation on nationalisation of railways and canals that “he was in complete sympathy with the general character of the proposals put forward”; and Mr Churchill, who said at Dundee, December 4th, 1918, “that the Government policy was the nationalisation of the railways (The Times, December 5th, 1918). It has remained for the Labour Government to complete what the Coalition Government in 1918 hesitated to do. Truly, as the Daily Herald remarks (November 19th, 1946): “the co-ordination of transport has been advocated by people who are far from Socialist in outlook”.

The reactions of the capitalists to the present Bill reflect their various sectional interests. The Manchester Guardian and The Times are much concerned with the new organisation that is to be set up, wanting to be satisfied that it will provide cheap and efficient transportation.

While most newspapers maintain that the compensation terms are harsh, one exception is the Beaverbrook Evening Standard (November 19th, 1946), which suggests that the shareholders have little to complain about and that it is the “taxpayer” to whom the deal “by no means represents a bargain”.

The Economist (December 7th, 1946) takes a cautious view. It starts off from the proposition that the railways and the road transport industry together are much more than is needed to carry the traffic. In fact, as the recent war showed, the railway system “is still about large enough to carry the whole burden”. Consequently it would be possible to divide the traffic between railways and road transport in such a way that each handled the kind of traffic it could deal with most efficiently and most cheaply. The railways could handle long-distance traffic and the road industry could act as “feeder” to the railways. The important point to notice is that this unification would enable both industries to dispense with a great deal of their present equipment (including railway branch lines) and reduce the number of workers employed, these economies being the chief object aimed at. Why the Economist hesitates about endorsing nationalisation is that it considers further inquiry is necessary to make sure that these economies can actually be achieved and that the structure proposed in the Bill is likely to produce them.

The Liberal Party issued a statement supporting the nationalisation of the railways (as it had also done at the General election, 1945), but opposing nationalisation of the general road transport industry. The Liberal view is that nationalisation will only give “cheapness and efficiency” if competition is retained. In their view there should be nationalisation of the railways, canals and docks, and also of the road transport services owned by the railways, but the rest of road transport should be left to compete with the nationalised concern. The Liberal Party also considers that the compensation arrangements are unsatisfactory (Manchester Guardian, December 11th, 1946).

Naturally the shareholders clamour for higher compensation. Their special grievance is that, unlike the Bank of England shareholders, they are not being guaranteed the same income as they were getting during or before the war. In effect, they are to receive a State-guaranteed income of about £22,500,000 a year in place of a larger but uncertain sum they received as shareholders in concerns the profitability of which had been rendered precarious by road competition. How the shareholders must regret not having jumped at Nationalisation on the much better terms they would have got in 1919, when profits and share values were higher!

So much for the shareholders. What of the workers? The workers merely change one employer for another; little else is changed, for the State undertaking, as the Daily Herald specially emphasises (November 19th, 1946), has got to pay its way. The Evening Standard remarks that nationalisation cannot bring any possible benefit to the railway worker—”for him it can mean neither higher wages nor shorter hours” (November 19th, 1946) And the Observer, in like vein, says, “It . . . leaves the transport workers and the consumers to wonder what difference it can make to them except for the worse” (December 1st, 1946). The sudden solicitude of these two journals for the worker is naturally suspect, but “Critic” writing in the Labour New Statesman (November 30th, 1946), also confesses that “nationalisation of the railways . . . really doesn’t much matter to anyone except the shareholders, who seem likely to make an uncommonly good thing out of it”. This deserves notice, coming as it does from a year-long supporter of nationalisation.

Another journal which has had a sudden flash of enlightenment is the News Chronicle. Writing on the trade union “closed shop”, and the danger it involves that if for any reason a man forfeits his union membership “he becomes an economic outlaw and may be unable to get a job at all in his trade”, the News Chronicle (November 21st, 1946) goes on to discover that “an even worse danger threatens in a society which is moving steadily towards ever wider nationalisation”, the danger that a worker will have to belong to one “monopoly union”, that union tending more and more to co-operate with the employer – the State – rather than represent the interests of the men. It will no doubt surprise the News Chronicle to be told that the Socialist Party of Great Britain at its formation 42 years ago was pointing out to the workers that nationalisation of an industry would put the worker even more at the mercy of the employer, the State. With competing concerns a worker sacked from one may seek employment in another, but the worker who earns the displeasure of the State monopoly and loses his job is effectively barred from the whole industry.

The other problem affecting the workers is that of redundancy.  Nationalisation, by eliminating overlapping will lead to the displacement of many workers, and even if some compensation is provided and they manage to get other jobs, it is bound to mean a worsened position for many of them. It was always the complaint of railwaymen, when the railways were being amalgamated, that a railwayman’s specialised training is largely useless for other occupations. The advocates of nationalisation have not been blind to the certainty that it would mean the displacement of many workers: it has, in fact, been one of their main arguments in its favour that it would eliminate waste. Mr Emil Davies in the Fabian pamphlet State Purchase of Railways (1910, p. 19), suggested that railway nationalisation ought therefore to be introduced gradually in order not to throw too many men out of work at once.

The Labour Government has kept its pledge to nationalise transport, but for the workers it is all sound and fury, signifying nothing. Nationalisation is State capitalism and leaves untouched the real problem of the working class of emancipating themselves from capitalist exploitation.

Edgar Hardcastle

50 Years Ago: Futility of Nationalisation (1976)

The 50 Years Ago column from the November 1976 issue of the Socialist Standard

All of the Labour Party’s nationalisation proposals involve the payment of compensation in the shape of interest-bearing bonds to the former owners. Now, apart from the futility of trying to introduce Socialism piecemeal, industry by industry, what will be the position when the Labour Party has finished nationalising all the essential services? The capitalist class will still be property-owners — their property being government bonds instead of company shares etc. They will still live by owning, and without rendering service . . . The working class will still be engaged in producing wealth for the benefit of the capitalist class. Socialism will not be in existence, and no important working-class problem will have been solved.

(From an editorial "Socialism and the Labour Party” in the Socialist Standard, November 1926.)

Editorial: Nationalisation of Iron and Steel (1948)

Editorial from the December 1948 issue of the Socialist Standard

The last of the big schemes of Nationalisation to which the Labour Government was pledged during the life of the present Parliament, the Nationalisation of iron and steel, is to take effect in 1950 under the terms of the Bill now being discussed. The scheme differs in various ways from the organisation set up for coal and transport and the attitude of the Government in explaining the Bill suggests that, with an eye on the next General Election, they are anxious to emphasise that it really will not make a very great difference. The Government is to take over the shares of 107 of the largest companies and place the industry under the ultimate control of the Iron and Steel Corporation but in such a way that the Corporation concerns itself with ‘‘planning the overall efficiency of the industry” without interference with the day-to-day management of each works. Unless the Corporation considers that certain directors are inefficient the existing managements will remain. Mr. Strauss, Minister of Supply, who introduced the Bill emphasised these aspects in his speech on 15th November. According to the Times (16/11/48) he described it as a way “to combine all that is best in private enterprise and public ownership.” The individual companies whose shares the Corporation will take over will retain their present identity and continue trading under their existing names. The Minister explained that "on the morning after the vesting date the only difference for them would be that the ownership of the securities had changed hands.”

The Corporation and the Nationalised Companies taken as a whole will have to pay their way like any other trading concern and will, in fact, be in competition with the smaller firms that are not being nationalised. The Iron and Steel Corporation will consist of a Chairman and from four to ten other members all appointed by the Minister. The workers employed by the Nationalised firms and their wholly owned subsidiary companies will number about 300,000 but there was no suggestion that their position will be essentially altered any more than it was when coal and transport were nationalised. The main arguments used by the Government spokesman in favour of nationalisation were that not only “prosperity” but also “security and influence on world affairs” are bound up with the production of “cheap steel in ample quantities” and these requirements cannot be met if the existing ownership and organisation continue. On the question of cheapness Mr. Strauss made the point that costs of production in this country are generally higher than in U.S.A. ‘‘in spite of the fact that American wages were much higher.” (Times, 16/11/48.) He laid emphasis on the argument that 30 per cent. of the existing industry is using antiquated and inefficient plant and that it would not be possible to secure 100 per cent. efficiency without centralisation—‘‘to rationalise the industry properly and to get the maximum efficiency a single owner must replace many . . .” Naturally the shareholders are more concerned with the amount of compensation (£300 million) than with arguments about organisation. The City editors of daily newspapers have all more or less agreed with the line taken by the Sunday Express (31/10/48) that the shareholders are being swindled because the Government “will pay £300 million for assets worth at least £600 million.” The Minister’s reply to this was to point out that the compensation is based on the prices quoted for the shares on the Stock Exchange and that “nearly all shareholders who had bought their shares any time during the last 10 years or so would receive in compensation more than they paid for them.”

Once the shareholders have received their compensation stock they will continue to receive interest on it in good times and bad while the steel workers, as in the past, will be dependent for their employment on the state of trade. The Minister incidentally let out that he at least does not count on good trade lasting for over. He claimed that in planning for the amount of steel to be produced the Government need not be as cautious as private capitalists would have to be “as soon as the present boom conditions fall off ” and he argued that it would be less disturbing to the industry to nationalise the companies now “when trade is good, than in a period of world depression.” (Daily Mail, 16/11/48.)

The Tories are opposing the scheme and threaten to undo it if elected in 1950. We need not concern ourselves with the argument whether this, or some Tory scheme of State control without State ownership, would better serve the interests of British capitalism. We can be quite certain that neither scheme will alter the wage-slave position of the workers.

Woe to the Victors (1934)

From the November 1934 issue of the Socialist Standard

The Labour Party Conference this year was held in an atmosphere of expectancy and confidence of triumphs to come. Rightly or wrongly, the delegates felt that the rule of the National Government, coming to a close, is not to be renewed, and that the defeats and desertions of 1931 will be forgotten in a sweeping electoral victory not far ahead. Then, with a majority to back up its decisions, a Labour Government will inaugurate a new era in British politics. That is the belief, but Socialists do not share it. Electoral victory maybe—though improbable without a Labour-Liberal alliance of some sort or other—but that victory will be more than perilous; it may well be one of the most disastrous episodes in working-class history, comparable with the post-war “victories” of the Social-Democrats in Germany and Austria, with all their aftermath of violence, despair and savage reaction. Such victory will be not a development towards Socialism, but yet another check to the growth of the Socialist movement. These are hard words. Let us justify them in the light of what was by far the most instructive of the resolutions of the Conference. It was a resolution which the Labour Party's official organ, the Daily Herald, regarded as of such importance as to merit being featured on the front page. It was carried “by the largest majority that has been polled at the present Conference" (Daily Herald, October 5th). What was this question which divided the votes into a stupendous majority of 2,118,000 on the one side and the tiny minority of 149,000 on the other? Surprising as it may appear to those who regard the Labour Party as a party of Socialists, this huge majority came together in order to demonstrate the Labour Party's abhorrence of anything smacking of Socialism. It was, to be explicit, a recommendation of the Executive Committee in favour of “fair compensation" for owners and shareholders whose property is nationalised by a Labour Government, the compensation to be based roughly on the present valuation of the property. The proposal which the majority rejected was one put forward by the Socialist League which would have meant depriving the owners of one-half to two-thirds of their property.

Let us, first of all, make it perfectly clear that the Socialist League’s proposal is not Socialism, and that the League, in our view, is almost as muddled in its views as the I.L.P., from which it sprang, and as the Labour Party, to which it is uneasily affiliated. Socialism does not mean State industries run on capitalist lines, either with or without compensation of the existing owners. Socialism means a system of society in which the means of production are owned by society as a whole, a system in which goods will really be produced for use, not for sale and profit-making, and in which there will be no such thing as an income from the ownership of property, whether as land, buildings, plant, shares or Government bonds. These things are plain enough to Socialists, but at present utterly beyond the comprehension of the great majority of members of the Socialist League and Labour Party.

It follows that Socialists are not at all interested in the issue which divides the Socialist League and the Labour Party, as to whether or not the owners should receive full or only part compensation. There can be no such thing as compensation if Socialism is to replace Capitalism. What the owners now possess is the right to an income from property, the right to live without working, the right to exploit the labour of the working-class. There can be no Socialism unless and until the means of production and distribution are taken from them and made over to society for the use of all. The former owners will then enjoy the fruits of associated labour on an equal footing with all other members of society, neither privileged nor suppressed, but as equals. But there can be no compensation. You cannot abolish exploitation and at the same time give the exploiters something equivalent to their former right of exploitation. A slave-owner, deprived of his slaves, could be given property rights of another kind under capitalism. But abolish capitalist wage-slavery and you end exploitation for all time and for all persons.

These elementary truths of Socialism are, of course, unknown to the delegates at Labour Party Conferences, but in their groping, muddle-headed way the Socialist League members feel that there must be some catch in the Labour Party's bland assurance that there is going to be more of the cake for the workers without decreasing the share of the capitalists—hence their attempt at revolt, which was crushed with such devastating completeness.

It means that the Labour Party has reiterated its belief in “compensation," that is, in capitalism. It will take office if opportunity arises, determined to apply its numerous and complicated schemes for reorganising industry, raising wages, abolishing unemployment, etc., while retaining all the essentials of capitalism. It will retain rent, interest and profit, the wages system, buying and selling, and the struggle for foreign markets, and will leave the capitalist class still possessed of their property rights, their right to exploit the working class.

The result will be another tragic collapse, tragic because many workers will believe it to be a collapse of Socialism, or proof that political methods are useless. Every individual who lends a hand in the establishment of the Labour Party in power is contributing to that collapse, and is helping to ensure a further lease of life for capitalism, with the likelihood that the subsequent Government may be one of iron-handed, panic-stricken repression.

Before concluding, we may usefully devote a little space to the arguments of those who opposed the Socialist League. Mr. Herbert Morrison, an astute Labour politician, put the case cogently from a Labour Party standpoint when he said that to adopt the Socialist League amendment would frighten the electors, and "You would keep yourself out of political power " (Daily Herald, October 5th). Mr. Morrison here, as elsewhere, shows himself a clever exponent of half-truths. He will say, as we do, that there can be no Socialism without political power, and no political power without the support of the electors. He knows, too (but is very careful not to proclaim it at times and in places where it may prove embarrassing to the electoral prospects of the Labour Party), that there is no solution to the poverty problem other than Socialism, that all the highfalutin schemes of his Party will leave the problem unsolved. That is where the Morrisons— those who are interested in political careers—necessarily part company from the Socialist. We face up to the logic of the situation. Mr. Morrison and his Party dare not do so. They dare not proclaim from the public platform that there can be no Socialism without an organised majority of Socialists, with its logical corollary that any acquirement of political power before that organised Socialist majority exists is a snare and delusion to the working class. Mr. Morrison knows, and admits, that a Government cannot go beyond the mandate and understanding of the electorate. He knows that a Labour Government cannot introduce Socialism, which the electorate and the bulk of its own members neither want nor understand. He knows that the reform measures the electorate will permit and endorse are not Socialism, and will not solve the problems facing the working class, who form the overwhelming majority of the electorate. He knows, therefore, that a Labour Government cannot do the one thing which alone can solve the problems it is promising to solve. Only Mr. Morrison and his colleagues can say why they play this double game. Is it vaulting ambition, reckless of consequences? Is it the insane over-confidence of the “leader," persuading himself against his own knowledge and experience, that his god-like gifts will enable him to lead the "mob" to impossible victory ? Is it, after all, merely that underneath the surface-smartness of the successful Labour politician there is a profound stupidity and ignorance about the realities of capitalism and Socialism?

Whatever the answer, the penalty for the working class is appalling to contemplate. Let the leaders and followers alike stop and consider the spectacle of savage Hitlerite capitalism before launching out blindly on the path which led the German Social-Democrats to destruction, and may lead to a similar end in this country.

Edgar Hardcastle

Straws: A Rotten Case. (1935)

The Straws Column from the June 1935 issue of the Socialist Standard

A Rotten Case.

“The possibility of a new workers' party being formed, with the I.L.P. and the Communist Party as the central core, was one not of the distant future. It was, in fact, very near to them." Thus Maxton, at recent I.L.P. Conference. Harry Pollitt, "fraternal delegate” from C.P. following, announced that his party was “ready and willing to achieve the creation of a mass united Communist Party, affiliated to the Communist International.” !


Whither Maxton?

How this view of “mass” swallowing was regarded by Maxton is not stated. Future developments will be interesting to follow. The "picturesque personality," personally popular (according to parliamentary reporters in the Sunday Press) with Conservatives in the House, will hardly consent to play second fiddle to tenth-rate performers in the Anglo-Moscow band.


Dark Diplomacy.

Meanwhile, headquarters of the “Communist International” has been demonstrating how to “ lead ” the workers to Socialism. You beflag Moscow like Limehouse on Eden’s visit, you toast the King, you goose-step the Red Army—but only to throw dust in the eyes of the British master-class . . . until that humourless periodical, The Labour Monthly, incontinently gives the game away.

 “Soviet diplomacy undoubtedly made a most brilliant use of this opportunity—including plenty of bunting and drinking the King’s health—to win whatever sections in Britain could be won against the anti-Soviet war-plans.” (Palme Dutt, May, 1935.)

“Bloody Cesspools ” of Passchendaele.

A recent review in the Daily Herald called attention to Lloyd George’s exposure of Haig’s Passchendaele exploit, where the "plan was a folly” and “the crime was the obstinacy with which Haig continued to fling his heroic battalions into the bloody cesspool.” It records the fact that Lloyd George himself, however, sent a letter to Haig, congratulating him on the “skill, courage and pertinacity which have commanded the grateful admiration of the British Empire.”


The Labour Party in 1914.

The reviewer fails to point out that behind Lloyd George was the enthusiastic backing of the Labour Party, whose whole organisation had been placed at the disposal of the Government on the outbreak of war, whose own “Uncle Arthur” signed a joint appeal with Bonar Law and Lloyd George to householders to urge kith and kin to partake in any and every war activity for the glory of God and the preservation of the British capitalist class.


Morrison's “Socialism.”

“On the ability, quality and idealism of our party, including particularly its public representatives, will depend enormously the success of Socialism.” (Herbert Morrison, May 13th, 1935.) “Socialism” to the leader of the London Labour Party means "public ownership" of the London Passenger Transport Board type, ”efficient” working of ”public services.” The ”idealism” would seem to include a resolute endeavour to keep down the rates, for “We know that if we go too far in expenditure, we shall be turned out at the next election,” (Daily Herald, October 3rd, 1934. Italics our own.) Vote-catching has always been the main object of Labourism.


Consecrated Lick-Spittling.

The Archbishop of Canterbury relates that, shortly after the visit of the King and Queen recently, to the widow of a victim of a colliery explosion, she said to him, with tears in her eyes: “I could not help kissing the floor where she had stood.” It must be admitted that the capitalist class has played the Queen for all it is worth. The Red Pawn game of the Socialist Party will eventually cry ”Mate” on the political field. . . . The pawns will be alive, consciously working towards the End, inevitably marked out by Economic Circumstance. (See No. 6, Declaration of Principles.)


Shelley Speaking!

Percy Bysshe Shelley, not unknown in the highest realm of Poesy, claims space in The Socialist Standard. Written over a hundred years ago, the principle enunciated still stands: —

  "The power which has increased is the power of the rich. The name and office of King is merely the mask of this power, and is a kind of stalking-horse used to conceal these 'catchers of men' whilst they lay their nets. Monarchy is only the string which ties the robber’s bundle. ”

(A Philosophical View of Reform, 1820.)

Compensation.

And the question of ”Compensation” when the robber’s bundle is untied will be quite irrelevant, as irrelevant as ”compensation” for the sweat and agony of the long ages of Wage-Slavedom.

Augustus Snellgrove

Letter From Europe: The French Nationalisations (1982)

The Letter From Europe column from the March 1982 issue of the Socialist Standard

President Mitterand and his PS/PC government were hoping that the nationalisation measures voted in December would be in force by the beginning of February, but an appeal to the Constitutional Council by the opposition parties in Parliament delayed matters. The Council ruled that, although the nationalisation measures in themselves were not unconstitutional, the compensation terms were not generous enough to comply with the rights of property as laid down in the 1789 Declaration of the Rights of Man. The government was thus obliged to revise this, and certain other aspects of their proposals, and to resubmit them to Parliament. Hence the delay.

The original plan was to nationalise 36 banks, two financial holding companies (Paribas and Suez), the steel industry and five other industrial groups involved in' such fields as chemicals, electrical goods, telecommunications, electronics, glass and fertilisers. Previously, the state had already acquired by mutual agreement a 51 per cent holding in two armaments firms, Dassault (Mirage jets) and Matra. Three other, mainly foreign-owned, companies—Roussel Uclaf (chemicals), CI1-Honeywcll Bull (computers) and ITT France—are to be nationalised later. The state sector in France is thus being considerably extended.

The last wave of nationalisation in France took place in 1945-6 and was initiated by De Gaulle. It involved coal, gas, electricity, civil aviation, the Renault motor firm and parts of the aircraft and arms industries. A number of banks (BNP, Crédit Lyonnais and Société Générale) and insurance companies were also nationalised. The railways had been virtually nationalised before the war and the manufacture of matches and cigarettes has been a revenue-raising state monopoly since the time of Louis XIV. To this list can be added the state oil company, ELF, set up in 1965.

France will therefore have quite an array of state capitalist enterprises, most of them competing in their fields mainly against foreign-owned firms at home and abroad (as Renault has been doing, fairly successfully for years). Although in their internal documents the PS talks about nationalisation being “anti-capitalist" and part of their strategy of “rupture" with capitalism, before the general public these measures are being justified on quite other grounds. Mitterand, for instance, has said that they will provide France with an “economic strike force", both to compete on the world market and to “reconquer the home market” from foreign suppliers, so placing these measures squarely within the logic of capitalism. He has been echoed here by his Minister of Industry, Pierre Dreyfus, who speaks from experience since under De Gaulle he was a managing-director of the state capitalist car company Renault.

In a very real sense this is a continuation of the policy pursued by De Gaulle, after his return to power in 1958, and by his successor Pompidou to try to make France a leading industrial power. De Gaulle wanted to encourage the emergence of French-owned industry able to compete on equal terms with the foreign-owned multi-national corporations which were threatening to take over the French market. These enterprises, which remained in private ownership, were brought into being and survived with help from the government, particularly in the form of orders but also by generous loans. These companies (CGE, Rhone-Poulencc, PUK, St. Gobain, Thomson-Brandt) are now being nationalised; but their role is to remain unchanged: to be French capitalism’s “industrial champions" at home and abroad. The new state capitalist concerns that have been set up will join Renault, Elf, SNECMA (aircraft engines), SNIAS (aerospace, headed by the President's brother. General Jacques Mitterand) and the others—with the exception of the bankrupt steel industry—as pace-makers for technological innovation; at least that’s what the government hopes.

The French capitalist class is well aware that these nationalisations are in no way opposed to their interests; indeed, those facing nationalisation only fought a rearguard action to get the compensation terms increased. Thus the financial daily Les Echos (14 October) headlined its front page the day after the debate on the nationalisation proposals opened in Parliament: “Pierre Mauroy pleads the case for the nationalisations. STATE CAPITALISM AND Till STRATEGY OF PACE-MAKERS”. The accompanying article explained:

   The socialist government wants to apply the doctrine of State industrial capitalism in the name of the strategy of large technological pace-makers. Pace-makers for the reconquest of the internal market, for independence and influence. Not a punishment nationalisation, but a move to give more dynamism to the factories of the Hexagon (France).

Shades of Harold Wilson and his “white-hot technological revolution”!

When a company or an industry is nationalised all that is changed is that the top management is henceforth appointed by the state instead of as previously by the biggest private shareholders. Everything else remains unchanged: the workers remain wage-earners selling their labour-power and producing surplus-value; the former owners remain capitalists living off the income derived from the compensation they are paid; the industry continues to be run on capitalist lines, producing for profit.

As practised in the long-established Western capitalist countries, nationalisation does not affect the social standing of the former owners as capitalists living off the exploitation of the workers. For nationalisation takes place within a legal framework which protects the rights of existing property-owners. In France in fact the “rights of property” are enshrined in the Constitution which requires the state to pay a “fair” compensation when it nationalises an industry or a company—something reaffirmed by the Constitutional Court in its ruling on the first version of the current nationalisation law.

Nationalisation is a buying and selling transaction between the state and the former owners. The state buys the assets in question from their owners more or less at their value. The wealth of the former owners is not reduced at all; it merely changes form. Previously they were shareholders, now they become bondholders. This is precisely what is happening in France, as Le Monde (22 January) explains:

   The shareholders of the companies to be nationalised are going to have to exchange their property titles for State bonds. These will be redeemed capital and interest over 15 years. The interest on these bonds will be paid by two sinking funds, one for the banks and one for the industrial groups, which will be constituted by grants from the budget but also by “contributions” paid by the nationalised industries if they make any profits. Each year the State will lay down how much of the interest payments are to fall on the budget of the State and how much on the industries themselves.

For 1983 it has already been decided that, of the 5,000 million francs (about £460 million) that will be needed to pay that year’s interest on these bonds, 3,000 million francs will be provided by the Budget and 2,000 million francs from the profits of the nationalised industries. The rate of interest payable will be the same as that paid in other medium-term state bonds. As can be seen, the workers in the nationalised industries will continue to be exploited by the former owners, part of whose interest will come directly from the surplus value they produce. And this is supposed to be a step towards “socialism”!

Apart from continuing to receive a property income as interest, the former shareholders will also be getting their capital back. Each year from 1983 until 1998, when the operation will be completed, a number of bonds will be chosen by lot for redemption at their face-value. Most of the former shareholders are in fact expected to sell their compensation bonds fairly quickly so as to be able to re-invest in shares. Thus, the former shareholders will, after a brief period as government bondholders, go back to being shareholders again! The bonds will end up in the hands of those financial institutions which specialise in investing in government bonds.

It has been estimated that the government will have to pay out over the 15 years a total of about 40,000 million francs (about £3,670 million) as compensation—and this is only the cost of redeeming the bonds: the interest payments (another 40.000 million francs) are in addition to this. The government upped the compensation terms (the price the state is to pay to buy up the industries it wanted to take over) twice, once on its own initiative and then again following the ruling of the Constitutional Council. The capitalists concerned must be quite happy with the final terms for the sale of their industries to the state, helped considerably as they were by the obstructionist parliamentary tactics of the opposition Gaullist and Giscardian parties, many of whose members and leaders have close connections with the business world.

The other great change often promised (but never put into practice) in connection with nationalisation is what used to be called “industrial democracy”, now revived by Benn and the Labour Party under the name of “workers’ control”. In France the term is autogestion (“self-management”) and is the official policy of the PS. In fact it is their (mistaken) definition of socialism: a society where the most important means of production would be nationalised and run by management committees composed of representatives of the workers, consumers and the government. But this would not be socialism because production for sale on a market with a view to profit would continue and the management committees, however democratically chosen, would still have to run the industry in accordance with the logic of the capitalist economy: keeping costs, including wages, down so as to remain competitive, making profits, accumulating capital, and so on.

But in any event the Mitterand government is only taking a token step in this direction. The existing elected works councils will be consulted more often and will be given more information. A number of so-called “workers’ representatives” (trade union bosses) have been appointed to the boards of the new nationalised companies, but real power will be in the hands of the government-appointed managing directors.

Even if it wasn’t just a façade, such “participation” in the organisation of their own exploitation, dressed up as an extension of democracy, is something workers in France and elsewhere would be well advised to refuse even from a simple trade union point of view. It blurs and is in fact meant to blur—the fundamental conflict of interest between wage-labour and capital which is built into capitalism. As long as capitalism lasts workers and their trade unions should avoid getting involved in the management of industry and should stick to being a permanent opposition to "management” (i.e. the owners or their agents) over wages and working conditions.

Adam Buick (Luxemburg)