Socialism means Equality (1975)

From the February 1975 issue of the Socialist Standard

The idea of equality was once taken for granted in even the most muddled talk about Socialism. Because that was the case, attacks on Socialism — or whatever passed for it — were largely concerned with attacking equalitarianism. Jerome K. Jerome wrote a childish essay envisaging people being stretched or shortened to make them all the same size; and Baden-Powell counselled young men not to be “unsportsmanlike” over “a fellow who has had the luck to have more money than you have”. A 1950 Tory pamphlet called Equal Shares contrasted Labour MPs’ statements on equality with their shareholdings and private wealth.

That these lines of argument are not now heard is not due simply to their crassness. The commonest cry was Jerome’s, that equality would mean uniformity and reduce us all to one dull wretched level, and it has become plain to everyone that capitalism achieves that effect par excellence. But, principally, the Labour and Communist parties have dropped talking about equality as an aim. The word appears occasionally in catchphrases with limited meaning such as “equal opportunity” and “equal sacrifice”; but the idea of general social equality (however confusedly misunderstood) is no longer put forward.

To take this further, in the past the parties which claimed to stand for radical change wanted to be judged by the yardstick of equality. Departures from it were seen as failures or betrayals. Thus, when the members of the first Labour Government in 1923 dressed up and behaved like flunkeys to royalty, and MacDonald’s appetite for kissing upper-class bottoms became obvious, there was widespread talk of their having “sold out”. Does the thought occur to Labour supporters today at the sight of their fat, well-dressed leaders hobnobbing in luxury? Apparently not. Likewise in Russia, in the early days, Lenin publicly regretted finding it necessary to pay high wages to specialists: “to pay unequal salaries is really a step backward; we will not cheat the people by pretending otherwise.” (Address on “Soviets at Work”, 1918.) Sixteen years later Stalin wrote off this view:

  These people evidently think that Socialism calls for equality, for levelling the requirements and the personal lives of the members of society. Needless to say, such an assumption has nothing in common with Marxism, with Leninism.

(Address to 17th Congress of the CPSU, 1934.)

According to Needs

Thus, the Socialist Party of Great Britain and its companion parties stand alone in advocating a society of equality; and it is as likely to be disparaged or attacked by a Labourite as anyone else today. What must first be made clear is the meaning of equality. It is not equal incomes, which is as absurd economically as a project for equal sizes would be biologically; or equal “rights”, which means the distribution of permit-packages by the ruling class.

Equality can be founded only at the point from which inequality at present derives: ownership of the means of producing and distributing wealth. Capitalism is based on the class ownership of those means, so creating two fundamental relationships — owning and not owning them. This is the inequality which causes all the apparent inequalities. People are rich or poor, inferior or privileged, top- or under dogs because of it and no other reason. Contrary to that social arrangement, if the means of production and distribution are owned in common, all people stand in the same relationship to them — and to one another.

Common ownership, the basis of Socialism, is equality. The condition which will exist under it is the one summarized by Marx: “From each according to his abilities, to each according to his needs.” That means everything it implies. Every member of society has unrestricted free access to the wealth society produces; his contribution is the one which he or she can make. Nor is this a question of applying a principle. It is what arises from common ownership, just as inequality and restriction arise from class ownership.

Abilities Restricted Today

The usual immediate objection to this used to be that people would not put forth their abilities unless inequality existed, i.e. for special rewards in status and getting more than others. The argument has become a weak one because, manifestly, people do. It can be added, first, that persons with exceptional abilities do not need inducements but simply want to exercise their powers as much as possible; and second, that in the history of man’s efforts to solve practical problems, most of it has been done by people getting on with their work unostentatiously.

Socialists are often supposed to hold the view that differences between people do not exist. We would not wear anything so dotty. On the simple physical level, a tall person and a right-handed one can do what the short and the left-handed cannot; and it is also true that the advantages can be reversed under appropriate circumstances. The healthy person obviously has abilities which are denied to the unhealthy.

But what matter are not the differences, but their implications in a given organization of society. Skin colour is unchangeable. It should not mean anything, but for historical and economic reasons black people are at serious disadvantages in “white” societies. It is quite possible to imagine the situation turned about, with exactly the same consequences. White people in a society traditionally ruled by black ones would no doubt be the objects not only of fear and distaste, but of a pseudoscientific mythology concerning their emotional and intellectual make-up; and might darken their skins and have their hair treated to try to gain social acceptance.

What is certain is that under capitalism all differences are distorted and all abilities subjected by the class division. Rousseau’s “Man is born free but everywhere is in chains” is as untrue in that situation as the American Constitution’s “all men are created equal”. The contention that Socialism would not work because of the expectations of people with particular abilities is derived from looking at a minority under capitalism. The fact is that the great majority would be glad of a chance to develop and use abilities for their own and others’ satisfaction.

Is It Brains ?

There is a present-day form of argument against equality that should be noticed. It asserts not that Socialism could not work but that it could not be established at all because men are unequal: for the majority to understand the Socialist case requires an intellectual standard of which only a minority are capable.

The same might be argued about a large number of everyday functions. Dr. Johnson, Plato and Henry VIII would all have been incapable of driving a motor-car — not simply because of the mechanical requirements, but in comprehension of the fluid relationships between vehicles moving at a mile a minute. The Army recruitment advertisements — “Join the Professionals” — promise young men who may not have done well in intelligence tests that they will learn technical and organizational abilities. Even the adage that “the fool of the family” (a well-to-do one) became a clergyman was not undermined by the fact that he had to study, master rituals, and become some sort of public speaker.

Intelligence is a social concept. Obviously, intelligence tests do measure something; but it is impossible to abstract them from the conditioning and conventions of society. What they measure is related to the requirements of the education system and industrial and commercial efficiency. Dr. Spearman, the father of intelligence testing, wrote:

  Every normal man, woman and child, is a genius at something, as well as an idiot at something. It remains to discover what — at any rate in respect of the genius.

(The Abilities of Man) 

In short, it is a matter of selection for a society which presumes inequality. Suppose that this had been put the other way round: discovery of the fields in which “clever” people are idiots. What would be made of intelligence then? I.Q. testing is often disparaged through the example of the “dull” boy who later excels. What is much more frequent (because capitalism pushes its “dull” in the waste-bin and tries to hold the lid down) is the opposite example, the “brilliant” person who is thoroughly ignorant and incompetent outside his specialist line. And the comparison must be made between Dr. Spearman’s idea that genius and idiocy are measured by prowess “at something” and the idea, which prevailed before capitalism’s division of labour had taken hold, of a “whole man” who was accomplished at several different things.

If differences in the facility to perceive and relate things exist, they are quite immaterial to understanding the establishment and running of Socialism. The answer to the argument is provided ultimately by Socialists themselves, who come from the common or garden of the working class, participate equally in the varied work of running their organization, and would laugh at the suggestion of superior brains or expertise. The society we work for will be brought about by equals, and the common purpose is

that poverty may give place to comfort, privilege to equality, and slavery to freedom.

Robert Barltrop

50 Years Ago: The Inefficiency of Capitalism (1975)

The 50 Years Ago column from the February 1975 issue of the Socialist Standard

Is it efficient to have millions of workers seeking employment while the machinery of production is standing idle? Is it efficient to put checks on Nature because she yields too generously of her bounty? And yet this is what happens in the production of rubber, tea, jute etc. Is it efficient to have trawlers dumping cargoes of fish into the sea in order to keep prices up? Is it efficient to fatten and pamper a useless few while half the people are on the verge of starvation? Is it efficient to be doing jobs which are not necessary for the ordering and use of society? Yet nearly the whole of the clerical profession are thus occupied. What need of insurance clerks in a world where risks are borne by society instead of by a special section with a view to making a profit. Solicitors’ clerks, what need of them except to haggle over private property? Abolish money economy, and what a reserve of labour is made available from the ranks of the bank staffs. Whichever way you look at it, this system is rotten, inefficient and destructive of the best potentialities in man. Social progress demands its overthrow, a task which only the working class can perform.

(From an article “Socialism and the So-called ‘Middle Class’ ” by A.L.T., Socialist Standard, February 1925.)

Who is Mao Tse-Tung? (1975)

From the February 1975 issue of the Socialist Standard

It is the purpose of this article to show what Mao really stands for by examining The Thoughts of Chairman Mao (“The Little Red Book”). This Chinese Bible contains extracts from Mao’s voluminous writings. There are quotes from his early works written when as a guerrilla leader, Mao (and his Red Army) were such a thorn in the side of the Chiang-Kai-Shek regime, right through to the 1960’s. Now Mao’s ideas are so influential in China that they actually do serve as the equivalent of religious dogma. Perhaps when Mao does die, he will be made the first communist saint. His position after the cultural revolution was so secure that he was able to bump off his supposed successor Lin Piao (not to mention poor old Confucius). When the veneer of rhetoric is stripped away what has Mao done and said?

The first point to make is that Mao Tse-Tung has led a backward economy along the harsh road of advanced capitalism. He has also led the Chinese development into a military power to be reckoned with. We are not saying that there is not less famine now than before 1949, or that Mao’s regime is more (or less) oppressive than the previous one, or that technical advances have not been made. But at what cost in terms of human suffering. As Marx graphically put in Volume 1 of Capital:

  “Capital is dead labour that vampire-like only lives by sucking living labour and lives the more, the more labour it sucks.” (p.233, Lawrence and Wishart edition.) 

It is not that the Chinese hero necessarily wants to be inhumane, destructive and oppressive to the Chinese people — it is that the development of capitalism inevitably results in poverty, shortages and deprivation for the majority. If Mao pursues the development of capitalism, he must also pursue the miseries inextricably associated with that development.

Mao’s own words show that he is in favour of keeping the Chinese workers in poverty. In 1958 (nine years after the revolution!) he wrote:

  Apart from their other characteristics, the outstanding thing about China’s 600 million people is that they are “poor and blank”. This may seem a bad thing, but in reality it is a good thing (p. 36 — our emphasis). 

It must be such a comfort for the poverty-stricken Chinese to know their leader thinks it is good for them to be poor. Mao does not make it clear that he thinks it is good for the leaders to be poor!

So far as one can tell the Little Red Book is compulsory learning in China. Indeed the introduction in the edition still being circulated over here (ironically by the disgraced Lin Piao) makes it clear that the workers should commit the book to memory in order that Mao’s guidance can help them in their daily problems. The book proves beyond doubt our contention that nothing but capitalism is being developed in China:

  The spontaneous forces of capitalism have been steadily growing in the countryside in recent years, with new rich peasants springing up everywhere and many well-to-do middle peasants striving to become rich peasants. On the other hand, many poor peasants are still living in poverty, (p.33—a passage written in 1955)

Mind you, even on basis of trying to develop capitalism, Mao’s book is full of meaningless twaddle. What sort of guidance do you think the production teams on the Chinese factory floor get from the following:

  “Grasp firmly.” That is to say, the Party committee must not merely “grasp”, but must “grasp firmly”, its main task. One can get a grip on something only when it is grasped firmly, without the slightest slackening. Not to grasp firmly is not to grasp at all. Naturally, one cannot get a grip on something with an open hand. When the hand is clenched as if grasping something but is not clenched tightly, there is still no grip . . . It will not do to have no grasp at all, nor will it do if the grasp is not firm, (p.111)

Secondly, Mao has been largely responsible for the giant confidence trick that has been so successfully played on the Chinese workers. By using phrases referring to common ownership, “Marxism”, and that contradiction “Marxism-Leninism”, he has duped large sections of the working class, both in and out of China, into thinking that Socialism is being established there. The merest glance at the Little Red Book will suffice to show how far Mao is from an understanding of either Marx or Socialism.

For example, Mao thinks that capitalism in Russia has been overthrown. He says that in Russia capitalism is a “museum piece”, (p.23) One can only wonder how this “Marxist” reconciles the existence of a wages system in Russia with Marx’s revolutionary call in Wages Price and Profit for the “abolition of the wages system.” He has even got the cheek to repeat that wretched reformist call for women to be paid equal wages to men (see page 197). He implicitly admits that women are not paid the same as men in China (and see also Socialist Standard November 1974). Women’s Lib fans of Mao, please note.

The whole principle of leadership is abhorrent to the Socialist. Socialism cannot be brought about by leaders but only by the democratic conscious actions of the workers themselves. Mao is firmly wedded to the idea of leadership and, one must assume, the benefits that go with it. He has after all been the chief leader since 1949 and the Little Red Book is riddled with statements about the importance of leadership (see for example at p.106 with his talk of “squad leaders”. ) Incidentally the book also points out that in 1958 only 10 million out of a population of 600 million were members of the Chinese Communist Party. Is it that the other 590 million don’t want to join or that they are not allowed to join?

In order to ensure that the workers are kept down. Mao can’t resist urging on them abstinence and sacrifice:

  To make China rich and strong needs several decades of intense effort, which will include, among other things, the effort to practise strict economy and combat waste i.e. the policy of building up our country through diligence and frugality, (p.186)

If those words had been spoken by Wilson or Heath in crisis-ridden Britain you would not have been surprised.

The similarity between Mao and other capitalist politicians is so striking as to make one rub one’s eyes in disbelief at the sight of people in the West waving banners with Mao’s picture on them and proudly calling themselves “Maoists”. Mao is just as much an anti-Socialist as his one-time hero Stalin was. They both have in common the fact that they successfully exercised a dictatorship over the proletariat in their own country. When workers throughout the world learn to examine the contents of the packet and refuse just to accept the label, the fraud of Mao Tse-Tung will also be a “Museum piece”.

Ronnie Warrington

So They Say: Corrective Education? (1975)

The So They Say Column from the February 1975 issue of the Socialist Standard

Corrective Education?

Among the other learned voices raised against the “lack of discipline” within schools is that of Dr. Rhodes Boyson. He is concerned that children are being exposed to

  cells of neo-Trotskyist, new left teachers who wanted to use schools to destroy our way of life. Unless these destroyers and wreckers were watched, every history lesson became a study of some peasant or racial revolt against real or so-called oppression.

(The Times 31st Dec. 74) 

We have no doubt that Dr. Boyson considers himself satisfactorily qualified to do some of the “watching”, having, as a Conservative MP, a clear idea of the correct “order, belief and structure” that society should take. His concern has a practical application for capitalism of course. He feels that teachers have lost sight of what schools are for:

  the three R’s, passing on our culture, preparation for outside work, and a development of individual talent.

There is nothing so useful to private property ownership than reasonably literate workers steeped in the idea of capitalism, and who are prepared to run it. If a worker has particular talent which may be exploited, so much the better.

Lesson Two

This theme is echoed by Dr. Joyce Morris, a BBC adviser on language usage. She said at a conference on education in the North of England on 2nd January, that “crazy and dangerous ideas” in education techniques have led to an increase in illiteracy, and urged those attending to restore reading “to the central pivot of the curriculum.” The dangers she sees in increasing illiteracy among secondary school pupils are similar to those of Dr. Boyson:

  As technology advances the need for unskilled labour decreases and the illiterate must face the prospect of almost certain unemployment in the not too distant future.

(The Times 3rd Jan. 75) 

Her call has not yet reached the eyes of Lt. Col. Stuart Townsend, headmaster of Prince Charles’s old school, Hall House Junior School. Townsend has his own ideas of education and has recently been explaining his views to the parents of his 500 boys, who pay up to £600 a year in fees:

  Today in London many school children have no manners, are destructive, look dirty, slack and lazy. Some Hill House School boys come to school like this and are a disgrace to the uniform. These boys should be removed.

(News of the World 12th Jan. 75)

The punch-drunk Colonel does not say where they should be removed to, but emphasises that good manners and discipline are of paramount importance, not least among members of his staff.

  There’s a battle going on in education. Someone has to make a stand. That’s exactly what I’m doing. I’ll win. I just get rid of anyone who doesn’t agree with me.

One thing which does not appear to trouble the Colonel, however, is illiteracy, at least not in his own case. One parent complains:

  He boasted to me that he never answers letters and when I went to meet him I saw a waste paper basket full of unopened letters.

Unread maybe, but surely not unopened? How could the Colonel have extracted all those cheques for £600?

Patent Mistake

A document for patent assigned to the Secretary of State and filed in 1962 has recently been taken off the secret list and is available to anyone visiting the Patent Office. Its title “Improvements in the manufacture of organic phosphorous compounds containing sulphur” reads like an improved formula for manure. It is in fact a detailed document explaining fully the chemical processes employed in the production of VX, one of the deadliest nerve gases ever to be invented.

In liquid form, a pinhead sized drop of VX on the skin is lethal.

(Sunday Times 5th Jan. 75) 

It appears that the patent was taken off the “classified” list by accident, and that the Defence Department is confused as to how this particularly nasty skeleton emerged from the cupboard. A spokesman attempting to defend what will doubtless be considered an error of judgement said:

  Information on how to make an atom bomb is freely available, but people don’t go around doing it.

That not everyone “goes around doing it” is quite true. However we are all aware that too many “people” have already done it, and continue to do so. In regard to VX itself, the production details were passed to the us some years ago “under a long standing agreement on the free exchange of chemical warfare information” with the inevitable result that the US

  eventually manufactured it on a large scale and put it into store.

Having learned who our friends are, MPs have been writing to Mr. Rodgers, Minister of State for Defence, not apparently concerned with the reasons for the production of this deadly gas, but appalled that the details of manufacture are now public knowledge. They will doubtless be happy to learn that Mr. Rodgers ordered a review of de-classification procedures on 6th January.

Black Power

Leaders vary in the degrees of subtlety they employ to maintain their positions of power. President Nguema of Equatorial Guinea is one who believes in taking the gloves off, straight away. On January 7th his constitution was approved by a referendum. Among other things this

  confirmed his dictatorial powers for life by threatening to torture or kill anyone who voted against it, refugees said in Madrid. The President had made sure of the outcome of the referendum by making members of his single National Workers’ Party the sole election judges. The balloting slips were printed beforehand, the vast majority of them with the word Yes. Anyone bold enough to pick up a slip from the ‘No’ pile and put it in his voting envelope, risked reprisal.

(The Times 8th Jan. 75)

Opposition spokesmen have so far failed to comment. Or materialize.

In the Clouds

Mr. Michael Burbidge of the sociological branch of the Department of the Environment said on the 6th January that many Local Authorities would be housing families in “unsuitable high-rise blocks for years to come”. The reason appears to be the same as that for climbing Everest — because they are there. Families thus housed will be those who are already suffering greatly from poor housing conditions. Speaking with reference to particularly unsatisfactory high-rise estates, he said:

  The more choosy tenants will move out and only disadvantaged families with no alternatives will be persuaded to take up the resulting vacancies.

He does not mean “perusaded” of course, but forced. However an angel of wisdom has since appeared on the scene in the shape of Prince Phillip. His rôle as president of the UK Council of European Architectural Heritage Year (i.e. 1975) led him to make some informed comment on the plight of the poorly housed.

  The public should complain if they disliked a building. He wanted people to say ‘Look, we don’t like living 16 furlongs up and the ideas of having more open space at the bottom is totally useless to us.’ 

After such practical advice, we viewed with some suspicion the comments of Lady Dartmouth, chairwoman of the executive committee of the European Heritage Year campaign, who remarked the following day:

  Architects and planners thought the best thing was to raze everything and start again. But now re-cycling was the vogue and the aim of conservation should be to re-cycle buildings.

(The Times 3rd Jan. 75)

A. D'Arcy

Letters: The Nazis and the Vote (1975)

Letters to the Editors from the February 1975 issue of the Socialist Standard

The Nazis and the Vote

I frequently disagree with your views and judgments, but I have always respected your paper for its truthfulness and honesty. I was sorry, therefore, to find a gross distortion of historic fact in the December issue. I am referring to the argument about the rise to power of the German Nazi party.

In your reply to a correspondent (p. 210) you say: “The facts of the Nazis’ rise to power are as follows”; and you then give the results, in votes and percentage figures, of the Reichstag elections held in March 1933, implying that these results accurately reflected political opinion. But Hitler had assumed power five weeks before polling day, and that the elections were shamelessly rigged by the ruling Nazi party.

The true facts are as follows. At the Weimar Republic’s last free elections in November, 1932, the Nazis obtained 33.1 per cent of the total poll, while the two left-wing parties, the Social Democrats and the Communists, received 37.3 per cent between them. On becoming Chancellor on the 30th January 1933 Hitler dissolved the Reichstag; new elections were to be held on 5th March. From the outset the Nazis blatantly abused their position to harass the opposition, and especially the Socialists and Communists, and to hamstring their electoral propaganda: their papers were suspended for one or two weeks, their election meetings broken up, their posters torn off the hoardings etc. Yet in spite of the terror it became plain, towards the end of February, that the Nazi-led Government coalition was most unlikely to get an overall majority in the elections. So the Reichstag building went up in flames on the 27th February. The Government immediately banned the entire press and all electoral publications of the two “Marxist” parties, prohibited all their meetings, and ordered the arrest of all Communist candidates The constitutional freedoms were suspended, and postal and telephone censorship was imposed throughout Germany. This was clearly meant to give voters the feeling that it would be pointless, and indeed dangerous, to cast an anti-Government vote.

But the Nazis still did not feel sure of their majority, and therefore resorted to massive electoral frauds; one of the results was that in some polling districts the official figure of votes cast exceeded the total number of voters on the electoral register—but there was no one to call the Nazis to account. Also, within a few weeks of polling day the Nazis kicked their conservative allies out of the Government and proclaimed the one-party state.

In the circumstances it is preposterous to assert, as you do. that the Nazis were elected by “the majority of the German people”. They achieved power by a combination of trickery, terror and coup d’état.

S. F. Kissin 

Reading.

Reply:

One reason why the Socialist Standard ascertains facts as fully as possible is that we have to deal with muddled, self-contradictory arguments such as this. You say in effect that the Nazis did as they liked without needing majority support because they needed majority support to do as they liked.

You deny that the 51.9 per cent of votes cast for the Nazis and their supporters in 1933 “accurately reflected political opinion”, and explain that the Nazis’ tactics “were clearly meant” to give workers the feeling that to vote otherwise was pointless. That is a political opinion, isn’t it? You offer as “true fact” that the Nazis obtained 33.1 per cent in November 1932. How does that rate as an “accurate reflection of political opinion”; and what is this phrase supposed to mean? No doubt the other votes would have differed if the Social Democrats and Communists had not “clearly meant” to persuade the voters of something false. This line of argument leads nowhere.

But who is distorting historic fact and disregarding truthfulness and honesty? A few lines after challenging us in these terms you attempt a sleight-of-hand by moving quickly from “Hitler had assumed power” to “the ruling Nazi party”; and progress to references to “the Nazi-led Government coalition” and identification of the Nazis with “the Government”. As we said in the reply you criticize, the facts are as follows.

In July 1932 the Nazis won 37.4 per cent of the votes, but the Reichstag was at once dissolved by the chancellor, Papen, and new elections called for 6th November. In these, the Nazi vote fell to 33.1 per cent, and a coalition was proposed. Hitler secured the chancellorship for himself (“assumed power”) but the Nazi Party was obliged to accept considerably less than had been demanded in June. In the coalition cabinet they had only 3 out of 11 seats (Hitler, Frick and Goring). Your representation that they were the Government is not “historic fact”.

Hitler persuaded the cabinet to have new elections immediately. However, you leave out from your account of the hounding and harassment of the other parties one key fact. Goring, as Prussian minister for the interior, was in control of the Prussian police. They were placed under Nazi control, heavily reinforced by Nazi men, and forbidden to interfere with acts of intimidation by the SA (who had been banned not many months before). You say “the Nazis blatantly abused their position”. What they were doing, for good or ill, was wielding the partial political power the 1932 “free elections” gave them—for the purpose of gaining the full political power they needed.

The effectiveness of these tactics is a matter of opinion. If they were reinforced by “massive electoral frauds” then the Nazis’ real gain was only small; as we pointed out, they received 43.9 per cent and were still dependent for their majority on the Nationalists’ support. We are astonished that you appear to dismiss any other factor in the voting. In January 1933 there were 6,000,000 registered unemployed in Germany. The Nazis had an extensive reform programme including the provision of jobs and security, higher prices for farm products to help the peasants, and legislation to help the small business man squeezed by She big concerns and banks. We think you are “preposterous” in treating these matters as having no bearing. Incidentally, the New Statesman on 11th March 1933 added something else: it attributed the Nazis’ victory to giving the electorate banners, uniforms and parades, and said the Social Democrats should have done the same.

The case stated in our December issue was that any group seeking power requires the support of the majority. Your letter supplies only further demonstration of that fact, even where you finally assert that the! Nazis made it by “trickery, terror and coup d’état” Trickery is the sine qua non of capitalist politics; but the terror and so-called coups required the acquisition of political power first. Indeed, you protest far too much. If these devices are all that is needed, why were the Nazis so anxious to get the majority of which— as you say—they “did not feel sure”?

Editors

Joseph nearly met Bretheren

I notice that one correspondent says that the interest of the paper has been enhanced by the upsurge in correspondence, and as I flatter myself that it was a letter of mine that assisted in that process, perhaps I might be allowed a semi-amusing comment in connection with your admirable article on Joseph. It refers to the fact that Sir Sheath (as Private Eye calls him) is vice-chairman of the family firm of Bovis. What it does not mention is that the firm ran into dead trouble and was only just saved by a take-over (at a bargain price) by the giant P & O shipping group. At the shareholders’ meeting of the latter needed to approve the deal, there was a vociferous opposition and the proposal was carried by a whisker. Had it been defeated, the shares of Bovis would not have been worth the paper they were written on and Sir Keith would have been class 5 at a stroke! It is worth noting that under capitalism, even capitalists cannot be always secure and prosperous.

S. Gamzu, 

London N.W.11.

Liberationists

Socialists go to other meetings in order to put the Party’s case. Being a Socialist for forty-five years, I have experience of reformist organizations such as Women’s Liberation Movement.

When I look back throughout my political life after the first world war, many of the reformist organizations of those times are no longer in existence e.g. British Socialist Party, and Herald League. For instance the Independent Labour Party at one time had two hundred Members of Parliament, but today they are hardly known.

In recent years CND which had thousands of supporters at the start now hardly exists.

About three years ago I decided to go to a Women’s Liberation Movement meeting which I saw advertized. Socialists of all people do like to listen to other meetings. The meeting was well attended, and approximately eighty per cent. of the audience were women. The chairman was a woman and there were five women on the platform. The meeting, which consisted of reading manuscripts went on for one and half hours, when two women in the front asked the chairman if questions were allowed. I also asked but was interrupted and shouted down by so-called communists, IS, IMG and others. I eventually decided to leave, as they obviously realized any questions I might ask would be regarding Socialism.

So, Jeanne Conn at least you had your letter published. Could I or any other member of the SPGB get a letter published in any of these reformist journals?

S. Highams, 

London N.l.

Chinese History

In reply to Paul Bennett, Chinese “history” is being continually rewritten to accommodate the current ideological fashion. Comrade Bennett may well be right in thinking that the official date for the transition to “socialism” is now 1949.

As the Chinese language is almost devoid of grammar, it is well-nigh impossible to render a literal translation either way between Chinese and a Western language. The point is that from its inception in 1921, and for at least the next ten years, the Chinese Communist Party was under the direct supervision of the Comintern in Moscow. It was the Russians who named it the Chinese Communist Party, rather than the Communist Party of China, thus implying a subordinate rôle for it unique among all the other national parties affiliated to the Comintern. For all practical purposes, the CCP was only a junior branch of the CPSU. It was left to the Chinese to translate the name which the Russians gave them into their own language.

Comrade Bennett is correct to point out that provincial officials in Imperial China were thin on the ground, and it was quite impossible for public works to be managed centrally. However, some were: for instance, the 1,500 mile long Grand Canal and the Great Wall were both maintained and constantly renovated by the central government. In the provinces, a system of indirect pressure and influence prevailed. The aim of the central government was to extract as much revenue as possible; it was usually wise enough to see that a prosperous rural community would produce the greatest revenue.

Although all officials were subject to periodic government inspection, and sometimes to investigation by the independent Board of Censors, their reports are generally unreliable and often give statistics which are obviously copied from previous submissions. To raise the allotted taxation, the government official had to rely upon the co-operation of the local gentry, and it is quite right that most of the local public works were implemented by local planning and local labour. This indirect approach went right through stage by stage from governor to village headman. But the initiative to promote public works might come either from local pressure or pressure from higher up. What the government wanted was revenue, and this was centrally planned; the actual raising of this revenue was left to a variety of interests to work out under the influence of Confucian harmony.

Of course there were a great many small market towns serving groups of villages in the countryside. Here the peasant came to exchange, usually by barter, his produce for the tools and utensils made in the town by the small family hand-craft workshop. There were also armies of pedlars selling small stuffs from the towns in the villages. Also in the small towns were the pawnshops, where the peasant mortgaged his land to the usurer landowner, to pay his taxes whenever the harvest failed. It was in the small market towns that the vast bulk of internal exchange took place right up to the revolution. City life, affecting less than ten per cent of the population was quite different, and was approaching very unevenly from city to city, something akin to the West. But from very early times, large-scale industry always was a state monopoly until the arrival of the Western capitalist. Salt manufacture, an essential nutrient for a basically vegetarian population, was a state monopoly from before Han times, and iron manufacture was brought under state control during the Han dynasty; many of the silk weaving factories, porcelain kilns and paper works were brought under state supervision. The state did not operate these works directly; the usual practice was to rent them out to a merchant agency for a period of years. All these large-scale industries were concentrated in very well defined localities.

J. Petter

Essex

Letters from A. Cox, F. Ansell, D. Brooks, C. Joyce, A. Labeck, B. Mestel, E. Morley and R. Ramshaw held over through lack of space.

A German Tragedy (1975)

Book Review from the February 1975 issue of the Socialist Standard

Leviné by Rosa Leviné-Mayer. (Saxon House, £2.50)

This is yet another biography by the wife of a well-known revolutionary. Mrs. Kusinen has written Before and After Stalin; Heinz Neumann’s wife has recounted by her harrowing experiences in Soviet labour camps; and now Mrs. Leviné has delved into the details of her comrade’s revolutionary career.

Eugen Leviné, a prominent member of the Spartacus Group of Liebknecht and Luxembourg, was sent to Munich to organize the Bavarian Soviet Republic. An extraordinary situation prevailed in Germany at the end of the first World War. On 9th November 1918 the Kaiser abdicated. Power was assumed by the leader of the Social Democratic Party, Friedrich Ebert.

The army transferred its loyalty to the new régime and General Gruber, speaking for the army, telephoned Ebert to say the armed forces were at his disposal “if he would fight Bolshevism and maintain army discipline”.

Workers’ and Soldiers’ Councils had sprung up all over Germany and elected a Central Council dominated by the Social Democratic Party. Included as an Appendix to the book is Leviné’s own report on the first All-German Soviet Congress. His lengthy speech can be summarized in one extract. Recounting the failure of the “left” to get any motion passed, he said of the first point:

to declare Germany a United Socialist Republic is one to which the SPD is particularly opposed. They do not want a Socialist Republic.

(p. 194)

The Spartacus Revolt in Berlin and Hamburg was crushed but a group of intellectuals, poets, artists and anarchists managed to proclaim a Soviet Republic in Munich, which hung on for two months, headed by Ernst Toller the dramatist. Sensing collapse and defeat Toller’s group packed it in and Leviné, instructed by the Spartacus Group and assisted by the Russians, took over.

His régime was soon crushed by the army under Social Democratic orders. In its proclamation the SPD asserted:

The troops of Hoffman’s [the SPD Prime Minister] come not as enemies of the working class, not as White Guards, but as protectors of public safety and order. Comrade Hoffman is no reactionary but a radical champion of the socialist movement.

(P-194)

The Bavarian Soviet was ruthlessly suppressed by working men, Social Democrats. Leviné was sentenced to death and faced the firing squad on the first day of May. His last speech to his murderers in the court showed him to be a man of considerable perception and boundless party loyalty: he was aware that the policy of the Spartacists was wrong, but was unable to betray it.

Horatio.

The Guardian of our Free Press (1975)

From the February 1975 issue of the Socialist Standard

It is as well to start by resolving the deliberate ambivalence of the title of this article. The Guardian might have been in italics as we will be dealing largely with the role of its editor, Mr. Hetherington, as the leader of the Editors’ Union (or words to that effect) in the war between them and the combined might of the National Union of Journalists and the government (in the person of Michael Foot) over the proposed law to enforce the closed shop in Fleet Street — including editors. And in this context, Hetherington has adopted the role of the guardian of the freedom of the press. Quis custodiet ipsos custodes? Who will guard The Guardian, as Max Beloff punned in a recent issue of Encounter magazine? And if one word might have been in italics, the last phrase could equally have been in inverted commas. For the freedom of the press is to a large extent an optical illusion, whether Hetherington realizes it or not, even before the government puts its Foot in it. (The Guardian having decided to afflict us all with a plague of puns of sickening puerility, no apology is required either from a Tory Professor or a Socialist propagandist.)

First, let us be clear that freedom of the press is regarded by Socialists as very much a good thing. Democracy is the reverse side of the Socialist coin, and freedom of the press is an integral part of democracy. Socialist society will not be one where all you can read is state-controlled propaganda masquerading as news compiled by the trained monkeys on typewriters of Pravda and Izvestia. We can at once concede that the kind of capitalist democracy we have here which gives us a choice of rags ranging from The Guardian to The Sun, is preferable to dictatorship.

And there is something more important which we readily concede — because it is obvious, some people affect not to see it. The very fact that you are reading this journal; and are doing so without the slightest fear that a copper will nab you; and that unheroic specimens like the present writer can churn this stuff out with never so much as a tremor — all this shows that we have at least a modicum of freedom of the press. Socialist propaganda can hardly begin to breathe in the “communist” dictatorships until that amount of freedom is won. They have, of course, in their samizdat, the underground press, the embryo of a free press (though by no means necessarily a Socialist one). But by its very nature, this can only hope to reach the tiniest minority of the working class.

Censors Possible

The row between the editors (and with them the managements) and the NUJ is based upon the fact that if, or rather when, the closed-shop law comes into effect, all journalists, including editors, are to be compelled to belong to the NUJ. This, unsurprisingly, is something the editors regard with horror. Up to now, the editor has either been the actual boss of the paper (as in the case of Hetherington’s predecessor C. P. Scott); or he has been the boss’s representative, rather like the Pope being the Vicar of Christ (except that the Pope is reasonably secure from interference from his boss, while the editor is not always so comfortable. But more of this anon). And of course it becomes pretty difficult for the boss when he has to join the same union as his underlings.

The idea of having to attend a meeting of the NUJ chapel (union branch) is anathema to editors. They fear (not without cause, it must be said) that this will make the editor subservient to the majority vote in the chapel meeting. And, say the Hetheringtons, this will mean that the usual vocal minority of agitators and “Marxists” (but the editors don’t use inverted commas; a Hetherington wouldn’t recognise a true Marxist if he tripped over Karl’s beard) would use their power to control the paper. And bang goes the freedom of the press.

There is something in what they say. How much freedom of the press we enjoy, we will deal with shortly. But, though the Socialist Party has always supported the cause of unionism as an essential protection for the working class (while making it clear that the real job of a Socialist is to agitate and educate for the ending of class society) there can be no doubt that, in many cases, a closed shop could lead to a clique using its power to dictate what goes in the paper — and what doesn’t. The implicit and explicit power of censorship which now resides with the editor and his proprietor could pass to a group of IS types or Communists.

— and Actual

One inkling of the sort of anti-free speech attitude that could lead to was shown a few years ago over the visit of a white South African cricket team to these shores. During the winter in which the Hain campaign was being built up there was a cricket Test series going on in Apartheidland between the Springboks and the Aussies — fully reported of course in Hetherington’s Guardian which was at the same time running the Hainites for all it was worth. But The Observer didn’t print anything, not even the scores. Why not? Had the paper decided it was improper to report racialist sport — and after all the Aussies were in some ways as bad as the Boers for their racialism?

No. The Observer chapel had decided to indulge in some censorship off its own bat — if you’ll excuse the phrase. Observer readers were not permitted to decide whether or not they wanted to read the stuff. Some ignorant little commissars had decided for them. Little Big Brothers are watching you; and that is no good at all for the freedom of the press. Censorship is an evil no matter who wields the blue pencil — even fully paid-up members of the NUJ. Who should have been thoroughly ashamed of themselves. Censorship is traditionally the weapon of the rulers against workers; it is dangerous and deplorable when the latter use it themselves. This foretaste serves to justify the fears of the Hetheringtons of how a clique could take advantage of closed-shop conditions.

But having said all that, it remains true that the freedom of the press which the rulers of Fleet Street have boasted about has been severely circumscribed. If these editors and managements really cared about freedom, they would have opened their columns to their opponents and thus showed that they believed in it. In practice, they have almost totally denied freedom to Socialists to print even a letter putting their views. Like the BBC, the press has done its best to keep a blanket over Socialist views. So whose freedom are you worried about, Mr. Hetherington? Are you really afraid of censorship in principle? Are you not the censor yourself? (To be scrupulously fair, The Guardian did print a quite decent notice of the SPGB’S 70th birthday: the only paper that did. One tiny swallow. And summer nowhere in sight.)

Independence?

It is worth referring before concluding to a contribution in the Lords’ debate on the matter from Lord Devlin, former Chairman of the Press Council (that sham tribunal if ever there was one). He said: “The man who had the power to let in or keep out must be free and independent and professionally pledged to make his choice primarily in the public interest  . . . That is the editor  . . . The freedom of the press depends on the . . . tradition that he is independent. He can be dismissed but he cannot be told what to do.” Only a top judge with an IQ of a million can possibly pack so much twaddle in so small a space. Only a Devlin could emit such crass poppycock as to say that an editor cannot be told what to do by a Beaverbrook and in the same breath admit he can be told: Put your hat and coat on and eff off out of your fine job with its fat salary. In other words, the press is just another part of the business of capitalism and exists primarily not “in the public interest”, but in the interest of the owners. Who are, indeed must be, concerned with circulation and profits. So that “independent” editors can be hired and fired by those who own the show just like less exalted members of the working class.

Whether the editors will be able to wring concessions in the Foot bill is not clear at the time of writing. What is always clear is that there is no happy solution to the problem of freedom of the press under capitalism, however much the Hetheringtons on the one hand and the NUJ chapels on the other delude themselves.

L. E. Weidberg

Politics: Syndicalism and the General Strike (Part II) (1975)

From the February 1975 issue of the Socialist Standard

Part 1 of this article can be read here.

In order to illustrate the power of the General Strike, the syndicalist Roller in his pamphlet The Social General Strike gives examples which point instead to the power in the hands of the state. He instances the General Strike which started in Alcoy, Spain, in 1874 where: “The accomplishment of the reconstruction, however, was prevented by the troops, which were sent by the government to reconquer the city." (Page 26; italics ours.) Next, the eight-hours movement in America, which culminated in the Haymarket tragedy in May 1886; here again the Government showed its teeth and the labour movement suffered. Referring to another general strike, at Barcelona in 1902, he concludes with the fatuous remark: “The comrades of Barcelona finally were defeated, nevertheless they proved the invincibility of the General Strike.”

Before leaving Roller we will give one more illustration of the influence on his outlook of anarchist ideas which, incidentally, are still propagated by the superficial and the impatient.

It is an indisputed fact that a brave deed, be it one of a single individual, or of an energetic enthusiastic minority, arouses thousands from their slumber, and with one thrilling shock turns them desperate fighters for the good cause, while ten years of theoretic agitation could not tear them away from their apathetic condition. 

This was implicit in it Blanquism and propaganda by deed. It is another way of saying: “The time for theory has passed, the day for action has come.” All action is based on theory, but when the theories are out of tune with the facts as in the case of the syndicalists, the action is likely to lead to disaster.

The syndicalists were also opposed to democracy. A. D. Lewis in Syndicalism and the General Strike quotes Emile Pouget’s views as follows:

Syndicalism and democracy are the two opposite poles which exclude and neutralize each other . . . This is because democracy is a social superfluity, a parasitic and external excrescence, while Syndicalism is a logical manifestation of the growth of life.

Another syndicalist work, Syndicalism and Revolution, says:

It is better to have an active group who know how to carry the masses and turn them in the right direction by their words and actions.

Sorel also makes bitter attacks on democracy. In fact all minority groups have always claimed to be acting for the mass of the people, whether the latter recognize it or not. The only movement in the interests of the great majority that can ever be successful is one they understand, desire, and freely and willingly work for.

In time, the CGT began to lean more towards political action and reform policies. After bitter experiences, belief in the General Strike lost its strength and the influence of ideas of sabotage and violence declined; until the movement paralleled that of the English trade unions that had absorbed numerous craft unions into a comparatively few large organizations. Then, after the first World War, the propaganda of Bolshevism gave new life to the old futile ideas.

The European syndicalist movement received considerable impetus from developments in America that culminated in the formation of the Industrial Workers of the World. The leaders of the radical movement in America, both political and industrial, were misled into believing that this movement was going to sweep all before it; they therefore wanted to get in and influence it with their particular ideas. Hence, like the old International, it was a hotch-potch of conflicting ideas and soon fell to pieces from internal quarrels.

The closed-shop attitude of the American Federation of Labour was stirring up revolt among unskilled workers and those organized in the Western Federation of Miners, the American Labour Union, and the American Railway Union. The AF of L’s policy of collective bargaining and separate contracts led to one union scabbing on another; the leaders of the AF of L acted on the principle that there was a harmony of interest between employers and employed, and they urged that the strike should be replaced by a mutual contract. High initiation fees (up to £100) and high membership dues closed the unions to almost all but the highly- paid skilled workers, who were a peculiarly American product. The masses of poorly paid men, women and children, as well as black workers, were practically ignored by the AF of L and had little chance of rising out of their depressed condition.

In January 1905 a few prominent trade unionists, some of whom were members of the Socialist Labor Party and the Socialist Party of America, decided to call a conference to set on foot an industrial union, based upon the class struggle, that would include all workers, skilled and unskilled, white and coloured, on an equal basis. The conference in June and July 1905 produced the Industrial Workers of the World. It was attended by anarchists, advocates of the General Strike, and advocates of political action; the result was a programme that endeavoured to meet these conflicting views. The futility of this compromise programme soon became evident, and after a few years the anti-political elements captured the movement. It was reduced to a few thousand members and, after the 1914-18 war, most of what was left was swallowed in the Communist movement.

At the founding conference of the IWW the General Strike was scarcely mentioned: the only two to do so were the anarchists Klemensic and Lucy Parsons. The latter referred to it in an emotional moment when speaking of the Haymarket affair and the execution of her husband. It may be mentioned that she, like many other delegates, had been carrying on a prolonged and unselfish struggle against the terrible conditions suffered by the workers.

The most controversial proposal adopted by the conference was that the workers must struggle to “take and hold that which they produce by their labour through an economic organization of the working class without affiliation with any political party”. The most persistent and acomplished defender of this standpoint was Daniel De Leon. His standpoint can be summarized as follows. Both political and economic organization are necessary, but the latter is more important because only it can “take and hold”. If the workers take political power out of the hands of the capitalists, the latter still retain their economic power. Political power is a reflex of economic power, and the former cannot reach fruition until the latter exists: the economic power of the workers can only be obtained through industrial unionism which organizes industry on a plan that gives the workers control.

In laying down this position De Leon made an astonishing statement. He repeated it a few days later, in more detail, in a speech which was published by the SLP in 1919 under the title Socialist Reconstruction of Society.

In no country, outside of the United States, is this theory applicable; in no country, outside of the United States, is the theory rational. It is irrational and. therefore, inapplicable in all other countries, with the possible exception of Great Britain and the rest of the English speaking world, because no country but the United States has reached the stage of full-orbed Capitalism—economic, political, and social—that the United States has attained. In other words, no other country is ripe for the execution of Marxian revolutionary tactics . . .

Later on, history played its little joke. The Bolsheviks put forward the above argument but based it on exactly opposite grounds—that it was because Russia was a backward country that circumstances made it the country where the Marxian theory of “tactics” (as defined by them) was first applicable!

According to De Leon, the political organization is not capable of organizing production. “Shoemaking, bricklaying, miners, railroad men” and the like were jumbled together in each parliamentary district. Only the organization based on industries is capable of industrial control, and therefore “taking and holding”: “Where the General Executive Board of the Industrial Workers of the World will sit there will be the nation’s capital.” (Socialist Reconstruction of Society.) How the workers are to get control of industry without first getting control of political power De Leon nowhere explains; he makes the nebulous argument that the socialist ballot is the emblem of right but is useless unless backed by industrial might to enforce it. The serpent of reform raises its head in his argument that, while the political movement must make a clean sweep, the industrial one can take over production gradually, a little at a time.

De Leon’s defence of industrial unionism sounds curious when taken in conjunction with an entirely different contention which he argued in two of his most popular lectures:

Obviously, independent, class-conscious political action is the head of Labour’s lance. Useful as any other weapon may be, that weapon is the determining factor. Entrenched in the public powers, the Capitalist Class command the field. None but the political weapon can dislodge the usurpers and enthrone the Working Class; that is to say, emancipate the workers and rear the Socialist Republic.

(Two Pages from Roman History, Edinburgh, 1908.) 

De Leon is an instance of the contradictory positions into which those are led who set out to build large followings by compromise, instead of waiting upon the growth of the workers’ knowledge. His difficulties were partly due to his treatment of the industrial and political movements as two absolute entities. He overlooked the fact that when the workers are sufficiently class-conscious to capture the political machinery for the purpose of introducing Socialism, the same people are in the industrial organizations and will have used their knowledge to bring these organizations to a similar state of development.

The total number of workers represented at the 1905 conference was nearly 50,000, but the main voting strength came from the Western Federation of Miners and the American Labour Union. There were a number of delegates representing small unions, and a number representing only themselves. The form of organization adopted for the IWW was “Thirteen industrial divisions subdivided into industrial unions of closely kindred industries”. A chart was subsequently published in a pamphlet by Trautmann, One Big Union, which gave a picture of the proposed constitution. Its final working-out deprived the ordinary members of real power. Delegates were appointed to committees, which in turn appointed delegates to higher committees, and so on in the fashion later adopted by the Russian Soviet constitution; ultimately, the officials of the Central Board were those wielding controlling authority.

There was a general subservience to the leadership idea, and the confused attitudes were expressed in a statement by a committee, which defined the co-operative commonwealth as

a system of society in which there shall be neither exploiter nor exploited, and in which he who contributes to the well-being of society shall receive the equivalent of the full product of his labour.

This attitude had been pulverized by Marx in the Critique of the Gotha Programme. According to it, those who produced most received most and those who produced nothing—the sick, crippled and aged, and children—received nothing! Also there would be no provision for future production. Behind the statement, however, lurks the syndicalist attitude—the mines for the miners, the factories for the factory workers, etc.

The IWW, like the syndicalist movement in general, was an attempt to force the pace without regard to, and in spite of, the backwardness of the workers. Failing to realize the significance of the phrase that the emancipation of the working class must be the work of the working class itself, they set on foot leadership movements that failed to achieve their avowed objects just because of the workers’ backwardness. Even the methods they advocate for developing working-class consciousness are such that they fail in their purpose and only breed confusion. A common argument was mentioned by Trautmann in his One Big Union pamphlet:

Equipped with the power of an industrial organization, with the knowledge gained in the everyday struggle against the oppressors, they will successfully strive for a higher standard of life-conditions, within this system, and they can master things and forces so that they will reach the final goal of their efforts—complete industrial emancipation.

As the industrial union movement claimed to be out for the overthrow of the system but as, at the same time, it professed to be able to fight the workers’ battle for better conditions more successfully, it would draw into its ranks those who agreed with its object and also those who thought it offered a better medium for gaining improvements in conditions. If the movement attracted a large number of workers, the first group would of necessity be very small, while the second would be so large that it would swamp the organization and turn it into a pure and simple trade-union movement.

But the chance of large bodies of workers deserting established unions for small organizations that can show no evidence of power, which is an immediate question for them, is poor. The IWW anticipated getting round this by striving to organize the unskilled workers who were excluded from the established unions; but these were just the workers who stood least chance of stopping the wheels of industry, and who also were not greatly attracted by the object and the grandiose scheme of organization. Although the IWW had some success at first and caused some employers a pain, it never reached threatening proportions and therefore could not offer the workers the alleged experience in the day-to-day struggle that was to clear their heads. (In fact the concentration on day-to-day struggles has usually the opposite effect.)

Syndicalism as a movement has a number of objectionable features from the working-class point of view. Its principal weapon the General Strike, if it could be as successful as its advocates hoped, would only result in social disaster. Its vision of the future is mixed, envisaging either groups of autonomous communities or a society split into self-contained industries. Its propaganda drives it to include violence. And violence kills free discussion, attracts the worst elements, breeds disunity, invites repression, and plays to the emotion rather than to the intelligence; it develops fear instead of conviction and encourages mutual distrust; it encourages the worship of leaders and endows them with an inordinate amount of power. Finally, syndicalism, by ignoring the source of state power and its effect, is incapable of enabling the workers to achieve their emancipation from capitalism and establish Socialism.

Gilmac.

Economics: Banks and Credit (1975)

From the February 1975 issue of the Socialist Standard

The use-value of loan capital, which is made available through the banking system, consists of producing profit, and this type of profit is described as interest. The rate of interest is arrived at by competition between lenders and borrowers, or by supply and demand; the lender of loan capital striving to obtain the highest rate of interest for the use of his capital, and the borrower seeking the lowest rate. There is no "natural" rate of interest, nor is there any limit to the rate that can be charged.

In the German Weimar Republic during the period of great inflation after World War 1, the rate of interest was raised weekly in some cases to 200%. The "natural" rate theory has its basis in the repetitive form of dealings between merchants and industrialists in the negotiation of Bills of Exchange. A substantial part of the business of a bank consists in discounting (cashing) Bills of Exchange. They are, generally speaking, promises to pay between merchant and industrialist at 60-90 day intervals, or longer. These Bills usually represent goods in transit or in store, and for the facility of advancing cash immediately on the strength of the Bill, which guarantees the value of the goods nominated in the Bill, the banker will deduct or discount a fraction of the amount shown and buy the Bill. If, for example, a Bill of Exchange was valued at £10,000, and the annual rate of interest was 10%, and the Bill was due in 90 days, the banker would deduct the sum of £250, i.e. 90 days' interest, and advance the sum of £9,750. When the Bill was finally redeemed, the banker would then receive the sum of £10,000 - the full value of the Bill.

Rates of Interest

Naturally the merchant and the industrialist (incidentally banking transactions as described above are not just confined to these two) would seek out the most favourable discount rates, and over a period of years the rate would tend to become adjusted at a regular rate. For many years between World Wars I and II the bank rate remained almost stable, around 2½%-3%. The old bank rate was based on this practice of discounting Bills, and gave rise to the theory of the "natural" rate of interest. Regarding the possibility of the banker getting the better of the merchant, industrialist etc., by successfully charging high discount rates; this would only result in a transfer of wealth between them. Were the British banks to consistently charge usurious rates, capitalists would endeavor to have their Bills discounted elsewhere, say New York or Paris.

Since interest is part of industrial Profit, the maximum limit of interest is marked by profit itself. The leaves can never be greater than the tree, or the part can never be greater than the whole. The high rate of interest today, i.e. 15%-16%, is distorted by inflation. The Chairman of Barclays Bank, Mr. A. Favil Tuke said:

"It is worth recording that of the three parties who make up a bank, namely stockholders, staff and customers, none has gained much from these profits.  Customers do not need to be told how much interest rates have risen in the last year or two; the increases in the salaries of our staff have been limited to about 7% per annum, and that of the stockholders dividend to 5% per annum; all this at a time of inflation of some 10%, per annum." (Directors' Report to AGM, 1974).

Obviously the depreciation of money is taken into account when fixing a rate of interest, and this is basic to the preservation of the value of the loan capital. On the other hand any prolonged fall, resulting in a total loss of interest, as well as an erosion of the value of the money capital, would eventually remove loan capital from the money market. This would, sooner or later, have repercussions in the productive process, as industrialists and other capitalists would find difficulty in raising capital for certain projects. As capitalism's wealth develops there is a tendency for the owner of inherited wealth to live on the annual interest without actively participating in the productive process. The same attitude is adopted by retired capitalists who want to take things easy, instead presumably of just taking them - as in their youth. Loan capital arises mainly from these sources.

Were there no profit in loaning capital, that capital would be hoarded until such times as things improved. The owners of such capital would not retain it in the form of paper currency at the mercy of inflation, which has the effect of gradually reducing the wealth of the banker and the landlord, as well as literally confiscating such savings as are owned by workers. They would hold their hoard either in gold, works of art, land, buildings, or any other desirable commodity which retained its value. No profits would accrue from assets held in this way, but on the other hand, there would be no losses either. However, if this happened on any scale there would be industrial dislocation.

Lenders & Borrowers

The function of banks is firstly to make recurring payments on behalf of their customers; meeting mortgage payment rates, quarterly bills, and regular annual orders. These are payments which are entirely concerned with the circulation of commodities. But their second and most important function is to provide credit or capital for industry, commerce, property, etc. This is not provided out of the resources of the bank, as can be seen by the statement of the London Clearing Banks. Total advances were £16.7 thousand millions (Quarterly analysis of Bank advances; Bank of England, 20th November 1974), whereas the total capital of these banks was £658 millions as at December 1973 (Annual Reports, 1973).

Generally speaking, bank overdraft limits are reviewed every year, and bank borrowing is mainly short-term; up to 3 years in the main. Long-term loans are usually handled by the merchant banks who charge a higher rate of interest for this facility. The credit system which owes its development to the specialized function of the bank has proved to be a significant force in the centralization of capital. Gathering as they do all the disposable money which is spread throughout society, they channel it into the hands of groups of capitalists, who turn it into capital. The accumulation of capital is speeded up, and with it the productiveness of labour, as more and more machinery is introduced into the productive process.

Credit, and the credit system, have given rise to many misconceptions about the power of banks to create credit. Firstly, credit, whatever its form, whether in money or goods, consists in a transfer from one person to another.

Credit, in its simplest expression, is the well or ill founded confidence which induces one man to extend to another a certain amount of capital, in money or in commodities, estimated at a certain value, which amount is always payable after the lapse of a definite time. (Tooke. Capital, Vol. III. Kerr edn., p. 471).

Elements of social wealth, and the conditions under which the transfer takes place, or the trustworthiness of either of the parties to the transaction, need not concern us. An owner of goods may be separated by an interval of time from realizing the value of these goods in money. Certain articles take a longer time to produce than others, and others longer to market. The production of certain commodities, mainly agricultural products, depends on certain seasons of the year. Inevitably the owner of the commodities will borrow money on them, or sell his right to them for money on the spot, or the written promise of money. This is putting it at its simplest — the goods providing the security for the loan. In any case, goods are exchanged or secured against a sum of money which is due to be repaid at a given date in the future. Payment in advance of delivery, or delivery in advance of payment, represent the two sides of simple credit. It is to be assumed that the credit seeker has a reputation for solvency, and that fraud is not the purpose. Credit advances in this way merely facilitate the circulation of commodities by getting them to the market quicker.

Weakest to the Wall

The second and most important function of the banker is to provide money for industry, which is capital. This has a separate function from money as the medium of circulation. The function of capital is not merely the circulation of commodities but their production in the first instance. Therefore, money used as capital is withdrawn from circulation because the wealth which it represents has been locked up in the process of production. The credit system of advancing capital allows individuals to use capital which is not theirs, and has opened the door to all sorts of swindles and reckless speculation. Who would not gamble with other people's money?

If banks could create credit with the stroke of a pen, that would mean in effect they could create wealth, and consequently the Marxist Theory of Value would be shown to be wrong. However, as time passes the validity of the Labour Theory of Value, i.e. that wealth can only come into existence when men apply their energies to nature, is all too apparent. If banks could create credit, they would never be in financial difficulties, nor would they go bankrupt. As we have seen in recent years, a number of bank failures are taking place. The Ideal Savings Bank, and the Bank of the Lebanon, for example. More recently, the Herstatt Bank of Germany, and the Sindona group of Banks in Italy; the Israel British Bank (London) with deficits of over £40 millions. Many of the 40 or so fringe banks are in dire trouble, and some have gone into liquidation, including Mr. Jeremy Thorpe's London & Counties Bank. (His insight into the political future has not helped him in his banking adventures.) Many of these failed banks had the dubious benefit of advice from economic and political experts forecasting the future of capitalism. Once again they have come unstuck, and we can say with certainty that more banks will fail as the competition increases — the large fish will gobble up the little ones.

Credit Creation a Myth

In these circumstances, why did these banks not create a bit of credit for themselves and literally pull themselves up with their own shoelaces? The answer is all too obvious. The credit of the banker is provided only by his depositors. This is real money. It matters not whether the bank transfers depositors' credit to a bad risk or a dud enterprise — he is liable for its return. At the present time, the property market has turned out to be a bad financial risk, and the little fish are in trouble having lent long to property speculators, and borrowed short from their bigger brothers. The alleged "rescue" operations organized by the Bank of England are nothing other than the lambs being eaten up by the wolves. The smaller fry of the financial and banking world are no more immune from the centralization of capital than the small car firms, garages, shopkeepers, etc. In the last four years the Big Five Banks, Westminster, Barclay's, National Provincial, Lloyd's and Midland, have become the Bigger Four. A number of Scottish banks have been taken over by the Big Four — the Bank of Scotland for example is now under the control of Barclay's, whilst the Clydesdale Bank is controlled by Midland; National Westminster controls Coutts & Co., also the Ulster Bank Ltd. Lloyd's control the Bank of London and South America, the National Bank of New Zealand and many others.

If these small satellites wanted to remain independent all they need have done was to create credit by increasing their capital by a stroke of the pen. Such fictitious capital would no doubt pay a fictitious dividend, and create a series of fictitious deposits. Unfortunately, however, the original depositors who have loaned real money have no sense of fiction — even the science fiction of the economic experts — and would require repayment in very realistic banknotes.

The bank profits for 1973, the last accounting year of the London Clearing Banks and subsidiaries, do not bear out the miraculous power of credit creation. Although this was a bumper year the total profits, after tax, were £335.7 millions (Annual Statement for 1973). This is a large profit, but it is only a small portion of the total industrial profit.

Inflation Fraud

The one institution which appears to create credit is the State, operating through the Bank of England. This is an act of deliberate political policy, the reasons for which will be given in a separate article. The Government, in a variety of ways, instructs the Bank of England to print an excess of paper currency, which the Government uses to finance its own schemes, and without having to introduce tax legislation to deal with particular cases. This inflation of the currency does not, nor cannot, add to existing wealth. What is really happening is that, far from creating credit, the Government is confiscating other people's. This has the same effect as a general increase in taxation. The constant dilution of the purchasing power of money by inflation raises prices and dislocates production and distribution. This is public fraud posing as public credit.

Capitalism is a system of production and distribution with many contradictions, and inflation adds yet another. Whatever strategy is worked out by economic planners and monetary specialists will make no difference. Capitalism will run according to its own laws, and they can only run after it. After all — who ever heard of an expert on anarchy? 

Jim D'Arcy

The Future of the Family (1975)

From the February 1975 issue of the Socialist Standard

Among the reasons given by the Women’s Liberation movement for the continuation of capitalism is the odd notion that the system is held up by the family. If we could break up the “nuclear” family capitalism would collapse! A corollary to this idea is that life in communes would be much better for everyone.

It is not our purpose to give a detailed history of the family but we cannot look at the possible future pattern of family life without some comment on its past. The changes in the form of the family have in general corresponded to the main stages in human development. Group marriage was appropriate to early tribal society but with the gradual introduction of more marriage restrictions gave way to the pairing family of the lower-stage barbarians. Women still made an important contribution to the collective economy and were respected members of the community.

Men had been the hunters—not a suitable role for the childbearing sex. Later, as hunting gave way to stockbreeding, that too was a male responsibility. When the plough welded together cultivation and stockbreeding women were deprived of their monopoly over the cereal crops and their social status. The rise of private ownership meant the breakdown of the clan structure. The patriarch had to be sure that his herd or flock his wealth, passed to his sons. Hence monogamy—at least for women.

These broad changes have encompassed a wide range of marriage customs. Human progress has not proceeded at a uniform rate, practices observed being tempered by local tradition and social level. The strict seclusion of Greek wives in antiquity did not apply to poor countrywomen. In the more recent past, while marriages were arranged for the wealthy, a jump over the broomstick could suffice for railway navvies. The wives of rising merchants and industrialists might be little more than ornaments in their husbands homes; but for the working class long grueling hours spent in factories, or down mines, left little time or energy for aught but the simplest meal and sleep.

For centuries women were economically productive in the home. Now water comes from a tap. We can switch on heat and light and buy oven-ready food and factory-made clothes. Work, health, education, and recreation are all provided for outside the home. The functions left to the modern family are home care, sex and child rearing. Much of the dissatisfaction with the family stems from the limitations placed on women by their involvement with housework and child care. Part of the reason for this kind of objection is the money and status valuation which is applied to all work. Rearrange the family as you will, while capitalism lasts you will be bound by the restrictions imposed by economic necessity.

Even an immediate change to Socialism will leave the family much the same as it is now. The idea that we would all pack up and leave our present partners is laughable. In any case the Socialist revolution will make it possible to sort out the mess left by capitalism. It will not wave a magic wand to perfection. One certainty about those early years is that they will be busy.

However there will come a time when the world community is long accustomed to the common ownership and democratic control of the earth and its resources. About the kind of family group appropriate to those halcyon days we can only guess! Let us do just that.

We cannot see any reason why all aspects of present- day marriage must be thrown out. Because we personally reject some concepts does not mean that everyone else will share our ideas. The writer views with horror the suggestions by Bebel and others that the private kitchen will disappear and that there will be “public restaurants and central kitchens to which everybody may come to take their meals”. This may be your choice!

The lack of restrictions at an earlier stage of human development did not necessarily imply “an injudicious pell-mell intercourse”. (They were probably too busy looking for food!) Likewise freedom from legal and financial ties is unlikely to herald the end of long-term relationships. Individual men and women who feel a mutual attraction (love?) will live together and for so long as they both wish. We do not suggest that all such relationships will be for life or necessarily exclusive. However, personal relationships do entail responsibilities.

Families, or other groups, will not be filed away as separate units. People being integrated into the community, belonging to the community does not have to mean living cheek-by-jowl in an undifferentiated mass! Rather, a mixture of private and communal life in accordance with individual choice.

Whatever else about our behaviour may be the result of social conditioning, the childbearing role of the female sex is entirely due to natural causes. This role may not appeal to all women but even today, surprising as it may be to some, mothers actually enjoy caring for their babies. It is the combination of problems involved, coping with children alone, in bad housing conditions, with money worries, or simply trying to keep up with some impossible child care standards, which now erodes the pleasure from motherhood. Children thrive in a variety of conditions but they do need a fair amount of individual attention. Though parents will not regard their offspring as possessions born to them. They will certainly not have to do so in isolation nor need it be the sole occupation of women (or men).

Men and women will co-operate to fulfil the needs of Socialist society. Necessary work is likely to occupy fewer hours than it does for most people now. Work freed from the indignity of employment will not be seen as separate from leisure, or education, but as part of our total existence. All tasks necessary to human wellbeing will have equal status. There will just be jobs which need to be done whether inside or outside the home.

To make quite clear the social position that women will occupy, we must point out that every human being will have the equal right of free access to the abundant social produce. What possible motive would there be for any group to hold another in subjection?

Sadly, the exact form the family of the future will take must for the moment be left to the realms of conjecture. It is not the family as such which prevents the abolition of capitalism but a lack of Socialist understanding among its members. When an immense majority of working-class men and women are armed with that understanding, they will not hesitate to take the conscious political action necessary to end capitalism.

This is our immediate task. Posterity will then take care of itself.

Pat Deutz