The Evolution of Money: From Barter to Inflation (Pt. 1) (1980)

From the February 1980 issue of the Socialist Standard

Since inflation is a monetary question and nothing but a monetary question, it cannot be understood without first knowing what money is. To most people money is the notes and coins they use to buy things, a convenient technical device for ensuring the smooth exchange and distribution of goods. While it is indeed such a medium of exchange, the currency we use today is not, strictly speaking, money at all, but only tokens for it. But to explain money it is convenient to start with this role of medium of exchange.

Exchange, as the exchange of goods, only exists in societies where there is private property: the goods involved pass from one property owner to another. In societies where there is no private property, where wealth is regarded as the common property of all the members of society, there is no exchange. People don't get what they need through exchange but directly, either by being given it or by taking it in accordance with established rules for sharing wealth. The original human societies were organised on this basis, without property and without exchange –and without money.

Exchange probably originated not within such primitive communistic societies but between them, and would have been on the basis of barter, the direct exchange of so much of one good for so much of another. Barter is the most primitive form of exchange and has obvious problems which don't need explaining at length. A person with two pots who wants a blanket must find another person with a blanket who wants two pots before any exchange can take place. At a certain stage in the evolution of exchange, the need becomes apparent for a good which can be exchanged for all goods. Then the person with the two pots can exchange them for this good and then later exchange this good for a blanket. The good that can be exchanged for all other goods is precisely money, and this gives us the basic definition: money is the good or commodity that can be exchanged for all others.

Various goods have functioned as money in the history of humanity, from cowrie shells to cattle (the word 'pecuniary' comes from pecunia, the Latin word for cattle), but in the end the most convenient have proved to be the precious metals, silver and gold. With barter, goods exchange in proportions determined by the amount of time it took to make them. Primitive people would have had a pretty shrewd idea of how long it took to make particular goods and would have regarded an exchange as fair where the goods involved had taken more or less the same period of time to make (or to gather from nature). Thus, if two pots habitually exchanged for one blanket, a blanket took twice as long to make as a pot.

In other words, commodity exchange is essentially an exchange of equivalents. When one good becomes money, this is not altered. The person with the two pots is not going to exchange them for the money-good unless both goods are considered equivalents. The money-good itself must therefore have value, must be the product of labour. This leads us to the second function of money, that of being a store of value. Someone who has exchanged their goods for the money-commodity is not obliged to exchange the latter straight away for some other good. They can keep and, if wanted, store and accumulate the money-good.

The money-commodity can best perform its role if it is not too bulky — if, in other words, it concentrates a relatively large amount of value in a relatively small bulk. This is precisely what the precious metals do. They are 'precious', or valuable, because it takes considerable labour to obtain a small amount of them. This feature would be a disadvantage had the precious metals not another characteristic — that of being easily divisible. A precious stone such as a diamond also concentrates much value in a small bulk, but because it cannot be easily divided it can't serve as the money-commodity, since the differing values of goods to be exchanged (the different times it took to make them) demand that the money-good be available in finely distinguished different amounts.

The precious metals, gold and silver, because they possessed these two features and had a fairly stable value, eventually emerged everywhere as the money-goods. Once one good has become money then exchange becomes buying and selling. Selling is the exchange of a good for the money-good, while buying is the exchange of the money-good for a good. This is still the case today but is no longer obvious because of the complications brought about by the subsequent evolution of money. The price of a good is its labour-time value expressed in amounts of the money-good. (1) This, being the standard of price, is money's third function. Prices were in fact originally expressed directly as weights of gold or silver.

The next stage in the evolution of money is the introduction of coins. About 2,500 years ago a ruler of Lydia (now Turkey) struck the first coin by stamping its weight on a piece of precious metal (electrum, an amalgam of gold and silver). This stamp served as a guarantee that it really did weigh the amount indicated. And this is all coined money is: a piece of the precious metal which is the money-commodity stamped with a guarantee of weight. At first anybody could issue coins, merchants as well as rulers, but this soon became a government monopoly.

The names of coins were originally weights of the metal of which the coins were made. Thus a pound (£) was originally, in early medieval times, a pound (lb) of silver. But over the years, if only because coins lose weight through wear and tear (but in practice for other reasons as well, as we shall see), the names given to coins came to differ from the names of the units of weight. This did not mean that the money-commodity had ceased to be measured in terms of weight; it merely meant that the money-commodity could always be translated into the more usual unit. Indeed, the new unit of monetary weight was legally defined in terms of the general unit of weight. Thus, in Britain for most of the nineteenth century, the gold coin known as a sovereign or pound was legally defined as being slightly more than a quarter of an ounce of gold (one ounce of gold was equal to £3 17s l0½d). In other words, 'pound' was an alternative name for about a quarter of an ounce of gold. Similarly, other names of currencies – dollar, mark, franc –were also alternative names for (other) weights of gold (or silver).

Gold and silver coins can lose weight not only through wear and tear but also through people deliberately filing them down, a criminal offence generally punished in the past by death. But there was a third way which was perfectly legal and unpunishable, since the 'criminal' was the government itself! Governments discovered soon after the invention of coins that issuing underweight coins – stamping one weighing, say, only 0.24 ounces as a 'pound' or 0.25 ounces –was an easy source of finance, at least in the short term. Such debasement of the coinage, however, had an unfortunate side-effect: it led to a rise in prices, not just of some goods but of all goods, a rise in the general price level. Since exactly the same mechanism operates here as with modern inflation, let's examine it in more detail.

Exchange, remember, is the exchange of equivalents (of equal amounts of socially necessary labour), selling is the exchange of a particular good for a certain amount of the money-commodity; and price is the expression of the value of a good in terms of amounts of the money-commodity. Say that four blankets are worth the same as an ounce of gold. That means that it takes as much socially necessary labour to produce four blankets as it does to produce one ounce of gold. The price of one blanket would then be a quarter of an ounce of gold, or £l.

This is an underlying real economic relationship which remains in force whatever the government does. If the government debases its coins by stamping 'pound' (quarter-ounce) on coins weighing only one-eighth of an ounce, (2) then this economic reality does not change. One blanket will still tend to exchange for a quarter-ounce of gold. If the government, by debasing the coinage, in effect changes the weight designated by the name 'pound' from a quarter-ounce to one-eighth of an ounce, then the price of one blanket will no longer be £1, since this now signifies one-eighth not one quarter of an ounce. The price will now be £2, the new way of indicating a quarter-ounce of gold. All other prices will also rise in the same proportion of 100 per cent. Prices will in fact tend to rise in the same proportion that the coinage has been debased. This would not happen immediately and all at once but would be spread out over a period of time as the effect of the debased coinage worked its way through, but the end result will be the 100 per cent rise in prices.

What will have happened is that the government's action will have changed the standard of price. This is a purely monetary matter and is in the end just a question of definition, of the weight of the money-commodity named by the word 'pound'.

The general level of prices can also change for real economic reasons as well as through the action of a government, intended or otherwise. If the amount of socially necessary labour required to produce an ounce of gold changes — if its value changes — then the prices of all other commodities are necessarily affected. To come back to our example of four blankets equal to one ounce of gold, we saw that this meant that four blankets and one ounce of gold contained the same amount of socially necessary labour, let us say five hours. Suppose that as a result of a new mining machine the average time it takes to produce one ounce of gold falls by ten per cent, to 4½ hours, while the time taken to produce four blankets remains unchanged. Four blankets will now no longer tend to exchange for one ounce of gold but for the amount of gold that can now be produced in five hours, 1.11 ounces. Since no government monkeying with the currency is involved here, 'pound' remains the name of one ounce of gold, so the price of four blankets now rises to £1.11. This happens to the price of all other goods too. This has in fact occurred a number of times in history, the last being in the thirty years up to the First World War when the value of gold fell due to the opening up of the South African and Alaskan gold mines.

A rise in the value of gold, on the other hand, due for instance to geological difficulties in working mines as they get older, would have the opposite effect, leading to a fall in the general level of prices.

The amount of money in circulation — the total weight of the coins made of the money-commodity (say, gold) which circulate as the currency — is determined by the workings of the economy and depends on three factors and their changes in particular:

1. the number of buying and selling transactions to be carried out, or the level of economic activity;
2. the total of the prices of the goods and services involved in these transactions (reflecting their value as measured by the amount of socially necessary labour they contain);
3. the average number of transactions carried out by a single coin in a given period (since coins of course circulate and are not cancelled after use), or the 'velocity of circulation' of money.

Other factors can be introduced, such as the number of debts to be settled and taxes, to be paid, and their amounts, but the basic formula is:

• Amount of money (total weight of gold) needed =
• Number of transactions x total price Velocity of circulation

This has been expressed algebraically as M = TP/V, and is known in the history of monetary theory as the Quantity Theory of Money.

Various versions of it exist, not all of which are correct. But if it is understood not as an equation but as a formula for what determines the amount of money (weight of gold coins) needed by the economy, then it is a key concept for understanding inflation. For it is saying that the amount of money needed by the economy at any time is a real economic fact determined by other economic facts, and as such not something that can be changed at will by government action. In fact it continues to be valid even when gold itself does not circulate as the currency and has been replaced in this role by paper and metallic tokens.

Adam Buick

1. "A relation between a weight of metal and the value of an object" is how Belgium's leading economist, Fernand Baudhin, who died in 1977, defined price in his Dictionnaire de l'économie contemporaine (1973 edition).

2.  This of course is an unreal example, but the mathematics is easier to follow.

Link to Part 2.

50 Years Ago: The Cost of Armaments (1980)

The 50 Years Ago column from the February 1980 issue of the Socialist Standard

At the moment of writing the stage is being prepared for the Five Power naval conference, whose object is to solve the problem that could not be solved in the 1927 Geneva conference.

What is the problem? To those who have not given much thought to it, the problem appears to be the question of the peace of the world and this view is supported by the frequent references in newspapers, pamphlets and books to the ‘spirit of peace’, the ‘spirit of humanity’, the ‘spirit of the Kellog Pact’ and various other spineless spirits . . . In fact, the problem is not the peace of the world but an attempt to set a limit to the ruinous expenditure upon armaments.

Where will it all end? The capitalist can see no end but the continued production of ever more terrible means of causing destruction. He is not concerned with the scrapping of implements of war, but only with decreasing their cost.

So, finally, the high ideals of the Naval conference are really £sd and have as much real concern for welfare of humanity as the capitalist has for the real welfare of his wage slaves.

From an article “What is behind the Naval conference?” by G. McClatchie, Socialist Standard February 1930.

Television work and play (1980)

From the February 1980 issue of the Socialist Standard

A quite remarkable letter from a viewer was published in the Radio Times recently. A Mr. Howell wrote a crushing exposure of a series of three BBC television programmes on “The Right to Work”:

   The first programme gave a glossy ‘To-morrow’s World’ treatment to the potential of the micro processors, with interviewers and presenters blissfully unaware of the contradictions. We heard how service industries would expand, and then saw computers taking the place of room service . . . We heard how leisure would become a big money- spinner, and next day found that those who have the leisure will be on the dole-or social security.
  Let us turn from the fact that the planners of those programmes did not know any answers to the questions of the effects of the introduction of the new technology: and look at the final programme which showed that they did not even know the questions to be asked.

Radio Times, 29.9.79.

And what was the response of the BBC Horizon programme producer, Michael Blakstad, and editor of the “Right to Work” programme? A pathetic confession that they understand nothing about it:

I cannot but agree that we need to re-examine the real meaning of “work”. We took an enormous subject and we drew no conclusions.

ibid.

In other words, Mr. Howell was right and they admit they don’t know what they are talking about. Perhaps the Socialist Standard can help.

Obviously the first job is to define “work”. What is here in question is not work as understood in physics, which is a straight, simple mathematical relation. “Work” in sociology is rather more complex. Here we are dealing not with inanimate objects but the effort of human beings. This is our first fundamental distinction, for it is obvious that many animals work and as Fourier, the French Utopian, pointed out, obviously derive the greatest happiness and joy in doing so. Bees, ants, spiders and birds build hives, nests and webs, while beavers build dams and termites actually raise reinforced structures.

Here we are indebted, once again, to Karl Marx for pointing out the basic difference between the work of chimpanzees who have been induced to join sticks or build ladders to reach food, or rats to push coloured buttons, or even angle worms to thread a maze, and that of human beings. Harry Braverman, the American author, quotes from Marx (the very first page of Capital, volume I) in Labour and Monopoly Capital:

We pre-suppose Labour in a form that stamps it as exclusively human. A spider conducts operations that resemble those of a weaver, and a bee puts to shame many an architect in the construction of her cells. But what distinguishes the worst architect from the best of the bees is this: that the architect raises his structure in imagination before he erects it in reality. At the end of every labour process we get a result that already existed in the imagination of the labourer at the commencement . . . he realises a purpose of his own . . .  to which he subordinates his will.

This above all, is the distinguishing feature of human work; the result of conceptual thought, and a pronounced enlargement of that part of the brain (the parietal) possessed by no other animal, making humans independent of the animal’s captor—Instinct. It produces articulate speech which can communicate and transmit knowledge, making a general social culture inevitable. It is this ability to imagine—to create the subjective image—which characterises the greatest scientists and artists.

“In recent times” writes Braverman, “the artistic mind has often grasped this special feature of human activity, better than the technical mind.” Quoting Paul Valery:

  Man does not merge into the materials of his undertaking, but proceeds from the material to his mental picture, from his mind to his model.
  Art, indeed, consists in the conception of the result to be produced, before its realisation in the material writes Aristotle.
  Men, who made tools of a standard type, must have formed in their minds images of the ends to which they laboured. Human culture is the outcome of this capacity for human thought Professor Oakley, Skill As a Human Possession.

This gives us the key to the understanding of the basis of the organisation of the capitalist production system; the division of labour or the breaking down of a process into its simplest possible parts, thus depriving the work of its natural essence-its imagination, its creativity.

Thus John Ruskin wrote:

We have much studied, and perfected, of late, the great civilised invention of the division of labour, only we give it a false name. It is not the labour that is divided, but MEN, divided into mere segments, broken into small fragments and crumbs of life, so that all the little intelligence that is left of a man is not enough to make a pin, but exhausts itself in making the point of a pin. The Stones of Venice.

The division of labour has always existed (for instance, in child-bearing) but its application to the capitalist system

is the breakdown of the processes involved in the making of the product into manifold operations performed by different workers.

Braverman, p. 73.

Labour power has become a commodity. Its uses are no longer according to the needs of that who sells it—but of employers seeking to expand their capital. The most common mode of cheapening labour-power . . .  is to break it up into its simplest elements.

ibid.

This explains the technology of capitalist society. In the words of Frederick Taylor the inventor of American “Scientific Management”

All possible brainwork should be removed from the shop and centred in the planning—or lay-out department.

Scientific Management.

Now we are on the track of the explanation of the system at the Lordstown plant of General Motors in Ohio, USA ‘the most advanced in the world’, where each worker on the assembly line gets 36 seconds “to complete work on one car and get ready for the next”. See this, from the Guide to Office Clerical Standards of the Systems Association of America:

                                               

                                                      Minutes

Open file drawer                             .04

Folder: open/dose flaps                   .04

Open center drawer                         .026

Close side                                        .015

Work “as an activity that alters natural materials to improve their usefulness” is transformed by capitalism into hated toil, converting the toilers into robot automatons repeating the simplest mechanical operations thousands of times. It is this which has induced some writers to predict a future where 15 per cent will be the all-powerful technicians with the ‘know-how’, 15 per cent managers who understand the general process, and 35 per cent general unskilled labourers, button-pushers and key-punchers, leaving 35 per cent of the workforce permanently unemployed, because redundant.

Each form of society produces the technology it requires. In capitalist society every machine, each process, which reduces the necessity for initiative or creativity, is welcomed, every elimination of personality introduced. The reason that the “experts” invited by the BBC proved utterly incapable of defining the nature of the problem is because they do not understand capitalism.

There is no solution but the abolition of capitalist technology itself. Knowing the main incentive for the fragmentation of the labour process under capitalism, enables us to extrapolate the nature of work in socialist society. The general guiding principles will obviously be the integration and synthesis of the mental (imaginative or planning) side with the actual operation, by the same people. Once again we turn to the creative artist for a description of labour in a socialist society:

In Socialist society all unintellectual labour, all monotonous dull labour, all labour that deals with unpleasant things and involves dreadful conditions will be done by machinery; and just as trees grow while the countryman is asleep, so while humanity is enjoying itself in cultured leisure, machinery will be doing the necessary and unpleasant work.

again

Every man must be free to choose his own work. No form of compulsion must be exercised over him. If there is, his work will not be good for him, will not be good in itself, and will not be good for others; and by work I simply mean activity of any kind.

The Soul of Man under Socialism, Oscar Wilde.

In socialism work will become the ultimate form of art.

Art, Labour and Socialism, William Morris.

For the worker, the craft satisfaction that arises from conscious and purposeful mastery of the labour process, will be combined with the marvels of science and the ingenuity of engineering. An age in which every one will be able to benefit from this combination.”

H. Braverman, ibid.

The forecasts of some fanciful writers that in Socialist society everybody will be a lotus-eating sybarite, cossetted by robots, have minimal validity. In the words of Marx, work will be “darned serious” in Socialist society.

   The exchange of living labour for objectivised labour is the ultimate development of the value relation and of production resting on Value. But to the degree that large industry develops; the creation of the real wealth comes to depend less on labour-time—whose effectiveness is out of all proportion to the direct labour-time spent in their production, but depends rather on the general state of science and the progress of technology . . .  Labour no longer appears so much to be included within the production process, rather the human being comes to relate more as watchman and regulator to the production process itself.
   No longer does the worker insert a modified natural thing as middle link between the object and himself . . .  he steps to the side of the productive process, instead of being its chief actor.
   In this transformation it is the development of the social individual which appears as the great foundation stone of production and of wealth.
   As soon as labour in the direct form has ceased to be the great well-spring of wealth, labour-time ceases to be its measure, and exchange-value ceases to be the measure of use- value.
    Production based on exchange value breaks down. The free development of individualities, not the reduction of necessary labour time to create surplus labour, but the general reduction of the necessary labour of society to a minimum, which then corresponds to the artistic scientific development of individuals in the time set free.
    The measure of wealth is then NOT labour time, but disposable time.

Die Grundrisse, Karl Marx, p. 709.

Divison of labour under capitalism will be transformed into multiplication (repeated additions) in socialism. Humans will become scientific, technical creative artists of production and will make their historic leap “from Necessity into Freedom”.

Horatio

Swiss bankroll (1980)

Book Review from the February 1980 issue of the Socialist Standard

Switzerland Exposed by Jean Ziegler (Allison and Busby, £3.50)

Here's an easy one. Which European country does nearly everyone think of as the home of neutrality, winter sports and the cuckoo clock? Obviously, it is Switzerland but what is significant is its importance in the world’s banking system. Swiss banking operates as the leading fence for capitalism’s more dubious transactions and this is why hundreds of banks, finance companies and the like are located there.

Swiss banking’s code of secrecy and protection for customers is the big attraction. Vast sums of money are constantly being sent to Switzerland to avoid paying tax in the countries of origin. The money is changed into Swiss francs, placed in numbered accounts, and then reinvested by the banks. The owners of the funds, besides paying no tax, benefit by having their money in inflation-free currency while the banks, who pay little or no interest because of the service they provide, reap the profits from the investments they make.

Strictly speaking, all this is against Swiss law but the law is never enforced and even if it were numerous ways exist to get around it. Even the wealth stolen by “Third World” heads of state and politicians is safe. Ex-Presidents Thieu of South Vietnam and Lon Nol of Cambodia and ex-Emperor Haile Selassie of Ethiopia all sent immense fortunes in gold and money to Switzerland and none of the new governments can recover a penny of it. More recently the Swiss government refused a request from the Iranian authorities to freeze the ex-Shah’s assets in Swiss banks (The Guardian 11.12.79). The Mafia, too, sends some of its loot to Switzerland to be “laundered” and then returned for reinvestment in legitimate enterprises.

All this information, and more, is given in the book Switzerland Exposed by Jean Ziegler (Allison and Busby, £3.50). Ziegler is a Social Democrat member of the Swiss Parliament and although he uses the terminology of Marxism he understands that subject less well than he does Swiss banking. His thinking is thoroughly idealist. For example, he imagines that if Swiss banking stopped handling this “dirty money” from the “Third World” then this would somehow benefit the poor people who live there. Of course, all that would happen is that the money would simply be sent elsewhere, with Monaco and the Bahamas as possible alternatives.

This blinkered view is due to the fact that Ziegler is another of those who are obsessed by the exploitation of the Third World by the “imperialists”. By these he means the industrialised West only and thinks that China, Vietnam, Cambodia and Cuba have freed themselves from foreign domination. He apparently hasn’t noticed that China is itself now an imperialist power ever seeking to extend its frontiers and influence, while Vietnam and Cuba, although rid of American domination, are now colonised by Russia instead. At present China and Russia are involved in a bloody struggle over Cambodia.

So Ziegler thinks that the West’s domination of the Third World is the big problem and wants to reverse this by giving the Third World a bigger share of the world markets in agricultural produce and raw materials through “international agreements”. This is merely tinkering with capitalism and can only help perpetuate it by diverting working class attention away from the real task, which is to abolish the capitalist system altogether.

An important part of Marxist theory is an understanding of the role of the state. Historically, the state is the public power created by a ruling class to defend its interests. Engels described it as

the state of the most powerful, economically dominant class, which through the medium of the state, becomes also the politically dominant class, and thus acquires new means of holding down and exploiting the oppressed class. Thus, the state of antiquity was above all the state of the slave owner for the purpose of holding down the slaves, as the feudal state was the organ of the nobility for holding down the peasant serfs and bondsmen, and the modern representative state is an instrument of exploitation of wage labour by capital. (Origin of the Family, Private Property and the State.)

Ziegler claims that the Swiss state has only “become” like this, which implies that it had once been impartial. He actually says that the state should operate in the interest of all Swiss citizens! And although he describes the existence of the Swiss army as “social violence institutionalised” he is not opposed to it and merely wants to see workers “reaching the higher ranks”. Could idealism go further?

The author’s suggestions on how to fight capitalism are absolutely disastrous. He wants workers to have “temporary alliances with the class enemy . . .  to further the anti-imperialist struggle”. For example, Ziegler advocates unconditional support to OPEC in its oil price-war with the developed world customers, and Swiss trade unionists are advised to ally themselves with the “national bourgeoisie in their struggle against the growing control exercised by the multinational companies over the nation’s production system. . .”. Such taking of sides in the quarrels of our masters does not weaken capitalism: it gives it strength by causing further division and confusion within the working class and holding back the advance of socialist knowledge.

Vic Vanni

Political Notebook: Normality (1980)

The Political Notebook Column from the February 1980 issue of the Socialist Standard

Normality

It is a cold winter’s night. The gloomy street is illuminated by municipal lamps which reveal the familiarity of a slum terrace. A man of 40, father of four small children, hurries along the deserted pavements. There is a series of sounds, not unlike a car backfiring. Immediately afterwards a car’s engine is thrust into gear and screams away. Nothing happens. Slowly one or two curtains are cautiously pulled back and nervous faces momentarily appear at the lighted windows. The wail of police and ambulance sirens is at last heard in the distance. The man is lying face down on the pavement, the street lamp shedding sufficient light to pick out an expanding pool of red. Still nothing happens. The man dies. After some considerable time the ambulance, police and army race into the street and take away the body. The televisions remain on in the now watching houses. A policeman calls at a house nearby to give some information to a mother of four small children. All part of a normal night in Belfast.

A few days later, the Northern Ireland Secretary issued an end of year statement to the House of Commons. It talked of great efforts to bring peace, of increased security, of lessening tensions, of the human concern of the Conservative Party for the people of Ulster. The scene will be repeated many times on other British streets before the year ends.

Better killers

Are the Conservatives the peace loving party they make out? Of course, they say they are opposed to workers being murdered in the Belfast streets. But one may be forgiven for wondering whether this is a general principle. Conservative (and Labour) Governments maintain, and when necessary use, far more efficient means of killing than the terrorists of either side in Ulster can possibly obtain. Almost the first thing Thatcher did when she came to power last year was to dramatically increase spending on the armed forces, the means of mass destruction. In the first eight months of government, the Thatcher administration did little but cut vital services for the working class. But when it comes to the repressive forces of the state, the means and instruments of wealth (and human) destruction, that’s another story.

Democracy

The Tories also claim to be democratic. That is, they say they are in favour of a form of capitalism where the workers are able, every so often, to choose their political masters. This involves a limited (though important) amount of free speech, freedom of assembly, ability to move from one part of the country to another and few political restrictions on workers’ ability to go abroad. (That most workers do not have the economic resources to go abroad other than their two weeks in the Costa Racket is another matter.) But in fact the Tories do not believe in even those principles.

In October last year, Chairman Hua visited London and other European capitals. The Guardian (27.10.79) reported that the British side wanted to raise the matter of the flow of Chinese emigrants (illegal of course—in China the workers are not allowed out even for holidays) into overcrowded Hong Kong. I was not at the meeting between Thatcher and Hua but I am reliably informed the conversation went something like this:

THATCHER: You’ve got to stop your people leaving China and flooding our colony of Hong Kong.

HUA: But I thought you were in favour of people being allowed to leave countries they did not like.

THATCHER: Don’t come the little innocent with us Hua. We want you to put on more guards, with more dogs. Build a Great Wall around the whole country if necessary. Keep your billion prisoners in prison. This is for real.

HUA: Ah, so you British are pretty similar to us after all.

Chinese capitalism

It is in fact the other way round. Chinese capitalism is becoming more similar to the older western capitalism every day. Following the overthrow of the remnants of the old faction of the Chinese Communist Party, the government is desperately trying to cultivate individual personal wealth in an effort to bring China up (that should read perhaps ‘down’) to the standards of late twentieth century western capitalism. In 1979 “the Chinese leadership, whilst emphasising that it intended to eliminate capitalism, decided that the bank balances of the national bourgeoisie should be restored. Rumours suggest that some have regained between one million and three million Yuan (£300,000 to £900,000)” (The Financial Times 31.5.79). A Shanghai official explained in best Orwellian terms as follows: “Our aim is to eliminate capitalists as a class. Giving them back their money is a step towards achieving this aim”. Latest reports from China indicate that the trend to encourage private wealth holding is continuing. The end of the conversation referred to above between Thatcher and Hua was:

THATCHER: Business as usual Chairman Hua?

HUA: Business as usual Mrs. T.

China, America and Russia

With the Russian invasion of Afghanistan last December it seems clear that China is concerned to prove that she is even more capitalist than the capitalists when it comes to international terrorism and war. China is making belligerent noises about Russia (though it has been doing that on and off for years) and proposes to join the “capitalist roadster” Uncle Sam in threatening economic and military retaliation against the Russian imperialists. The US Defense (sic) Secretary Harold Brown was in China in January of this year. Mr Brown while there said that the “Soviet Union was trying to subjugate the people of Afghanistan”. He went on to say that China and the USA would act together, which “should remind others that if they threatened the shared interests of the United States and China we can respond with complementary action in the field of defense as well as diplomacy. It should remind them that both the US and China intend to remain strong and secure and to defend our vital interests” (The Guardian 7.1.80).

That China and the US have “vital interests” in common should cause no surprise. The dividing and re-dividing of world markets and spheres of influence among the super-powers is part of “business as usual” of the capitalist world. This particular Russian foray has called forth a sickening display of indignation from the US, who have so recently fled from their own Afghanistan in Vietnam. Margaret Thatcher, no beginner when it comes to meaningless moralities, also weighed in with strong “moral” condemnation of the Russian intervention. It is too early to say whether the crisis over Afghanistan will blow up into a world war of unimaginable horrors. The dangers to the working class are obvious—as is the need to reject capitalism world wide.

Ronnie Warrington

Briefing lessons for the lecturers (1980)

From the February 1980 issue of the Socialist Standard

Back from the Christmas break many University lecturers found disturbing news to greet them. ‘Freeze on staff vacancies’, ‘compulsory early retirement’ and ‘redundancies’ were among the economy measures announced by their institutions to meet the shortfall in funds caused by the recent wave of government spending cuts.

This is a remarkable turn around since the early ’60s when the economy was booming and much money was being poured into the recruitment of university staff. ‘Redundancies’ was an idea which would have been laughed off by lecturers as being exclusive to less ‘dignified’ occupations further down the social and economic scale. They had comparatively well-paid jobs which were secure for life-or so they thought. Very few think that today, especially now that their salaries have been seriously eroded by inflation and, without the bargaining power to press their wage claims, they have fallen among the lowest paid of ‘professional’ workers. True their job still retains a certain degree of ‘social status’ but that is little compensation for the threatening shadow of unemployment.

What has happened is that the continuing recession in world trade is forcing governments (in Britain as elsewhere) to limit their investments (in this case investment in manpower) and the direct consequence of this is, as it always has been, unemployment among the working class. For, although they may not have known it in the past. University lecturers are just as much members of the working class as all other people who sell their mental or physical energies for a wage or a salary. Their imagined membership of some fictitious middle or professional class does not make their job situation any more secure than that of workers in “less distinguished” occupations. They are finding, as too for example are medical workers hit by the cuts in the health service, that their skills and status are no proof against a system which, by its very boom-slump nature, ‘decrees’ periodic bouts of unemployment among its workers.

No one knows how long the present recession will last but at the end of it, even if the job situation in Universities starts to ease, lecturers will—we hope—have learnt the lesson that socialists have been teaching for over 75 years—that in a world ruled by commercial considerations no profession is sacrosanct, no job is safe. Perhaps, too, they will see the validity of the socialist case which advocates replacing such a world by one which will not only get rid of job insecurity but will abolish the wages system completely and put human needs first in all departments of life.

Howard Moss

Running Commentary: No Tragedy, Cambodia (1980)

The Running Commentary Column from the February 1980 issue of the Socialist Standard

NO TRAGEDY, CAMBODIA

For years, Cambodia has been mauled over by the competing powers in South East Asia. Devastated by war, since 1975 four million people have died out of a population which was then eight million. Now tens of thousands make their desperate way along the refugee trail into Thailand.

Like ghosts they travel, limbs as thin as bamboo, ravaged by diseases of malnutrition - dysentery, tuberculosis, cholera. Skeleton-like mothers cradle children with swollen bellies, heads like skulls.

This is a situation beyond despair; it is estimated that, unless they get vast amounts of help, 2¼ million more Cambodians could die of starvation during the next few months.

There are many bitter ironies in this human hell. Cambodia was once a peaceful, fertile place. Infiltrated by the Victcong, it became the target of pitiless raids by the American bombers.

Then came the Khmer Rouge, with their policy of genocide. Now it agonises under invasion from Vietnam and an unrelenting guerilla war with what remains of the Khmer Rouge.

And this, for Cambodia is the grisly climax to the International Year of the Child, when capitalism vowed to pay special care to the wellbeing of children. And it came some time after Henry Kissinger had smugly accepted the Nobel Prize for supposedly bringing peace to the area.

Cambodia has been ravaged because it is in the middle of a typical power struggle of capitalism, involving some of the world’s great armed blocs. Capitalism habitually defiles, destroys, terrorises. Human beings are never of urgent account to capitalism and when the stakes in terms of material advantage are high enough they become worth little more than the mud they die in, among the refugee camps.

So Cambodia is not, as the media are so fond of calling it, a tragedy. A more correct description for it would be a symptom. In this case the disease is curable; only abolish capitalism and places like Cambodia will again be green and tranquil lands.

HOT AND COLD

Blood pressure in the best gentlemen’s clubs and the most refined drawing rooms must have been forced several notches upward by the recent debates on issues of poverty in, of all places, the letter columns of the Daily Telegraph.

There was a discussion about whether there actually was any suffering from hunger and other deprivation during the slumps of the Twenties and the Thirties. This is not, one might think, a matter over which anyone could dispute for long, unless history is rewritten to wipe out all those records of unemployment, ill fed and ragged children, mouldering slums.

Then there was a rather more refined debate, over the rights and wrongs—or rather the existence or non-existence—of hypothermia among the elderly. This was started by a letter from an orthopaedic surgeon in Glamorgan, calling workers who want to live in a warm home in the winter “softies” and advocating “ . . . more physical activity in the elderly . . .  a good breakfast of porridge . . . several layers of lightweight loose clothing . . ."

There are, of course, plenty of countries with a climate which normally provides living temperatures as comfortable as a properly heated English house. No surgeon suggests that people in those countries have gone soft or have lost the use of vital, heat generating organs.

In truth, the debate was about the living conditions, and the alleged extravagance, of only one social set. It is the working class, whose life depends upon their earning a wage, who suffer conditions like hypothermia. When a worker is too old to work there is only reliance on a pension, or on charity, which often means cutting back on essentials like heating.

It is old workers who die, in silent misery, from the cold of an English winter. After a lifetime of exploitation the indignity of that death is all that capitalism has to offer them. For an expensively trained surgeon to debate whether they need a warm home where they can stay alive is to add cold insult to sick injury.

PEP PILLS

As the proprietor of any Health Food Store will tell you, ginseng is the greatest thing since natural, hundred per cent stone ground, wholemeal, unsliced bread.

This product from the root of the ginseng plant is reputed to be both a tranquiliser and a stimulant (an aphrodisiac no less) which sounds rather like having your cake (or whatever) and eating (or whatever) it.

It is perhaps a measure of the desperation of what is left of the British car industry, that one of its firms is turning to the ancient Chinese medicament as a way of casing its problems.

This firm is about to launch a controlled medical experiment on the effects of ginseng upon production, feeding genuine doses of the stuff to one lot of workers and dummy tablets to another. Success or failure will be measured, need we add, not just by whether the subjects of the experiment are happier, healthier, have a more satisfactory sex life—but on whether production goes up or down.

This trial is not without precedent. Two Japanese car firms supply free ginseng to their workers, as does the great new Lada plant in Russia. This meeting of the minds, of the avowedly capitalist and the allegedly socialist, on the issue of the more profitable exploitation of workers, is instructive as to the common, capitalist, nature of society in both those countries.

But what happens, if all the car manufacturers throughout the world are feeding ginseng to their workers? Who then will be the unprofitable ones? Will British Leyland magically revive? Will capitalism suddenly stop being a society where wealth is turned out for sale and profit?

In fact, profitability does not in the last analysis depend on the state of mind of a workforce. Capitalism’s goods have to be sold in order to realise a profit, which means that its prosperity relies upon the market. Nobody has yet discovered a way to eliminate the anarchic nature of the market, which is why capitalism's booms and slumps are not susceptible to control or to forecast.

Workers in the productive process can have no effect on the market; under capitalism production takes place blind, in the hope that the goods can be sold profitably. If they can’t, then production shuts down. And for an unemployed worker, there is not likely to be even the consolation of tranquilising, stimulating ginseng; like most stuff sold in the Health Food stores, it is pretty expensive.

Letter From Europe: The French movement for abundance (1980)

The Letter From Europe column from the February 1980 issue of the Socialist Standard

In France, before and just after the last world war, a group known as the Mouvement Français pour I’Abondance (MFA) enjoyed some success, to such an extent that its theories are now referred to in most French dictionaries under the word abondance. The key figure in this movement, which still exists today though divided into a number of rival groups, was Jacques Duboin. Born in 1878 he had briefly been a junior Minister and a Radical Deputy in the 1920s. The slump which followed the 1929 Crash, however, set him thinking about economic and social matters and led him to elaborate a “theory of abundance”, first sketched in La Grande Releve des Hommes par la Machine in 1932, and to found a movement which after the war became the MFA.

According to Duboin, the 1930s slump represented the coming of abundance which capitalism, being based on the exchange of goods for profit, could not cope with since only goods which werc scarce had an exchange value and so were exchangeable. Abundance. Duboin taught, kills profits; which explained why capitalism had to try to suppress abundance in order to survive.

To give the flavour of the MFA analysis we translate below some passages from their pamphlets:

   In this regime [capitalism] which rests on exchange, the means of production are private property. Their owners draw a profit from them by selling what is produced at the highest price competition permits. People who possess nothing sell their labour as dearly as competition permits, and get wages, salaries or fees which allow them to buy what they need to live.
   It is clear that such a regime cannot exist with abundance since this suppresses profit. In fact, only products and services which have some value can be sold. But only scarce products keep their value and sell at a profit. Abundant products have no value: they are given and taken; they are not sold . . . It is thus a truism to say that abundance does not exist: it will never exist in the capitalist regime since production is not motivated by the desire to satisfy consumption but by that of realising a profit. When this profit becomes impossible, production stops. It is then said that there is a crisis, even if many consumers lack the bare necessities (Duboin, Economic Distributive de l'Abondance, 1946).          The magnificent scientific achievements of the 20th century have made abundance appear in all the industrialised countries, upsetting their economies from top to bottom, since these can only function with a “scarcity" of products and services. This obviously requires explanation: At the present time money is almost as indispensable to existence as air to the lungs. But money doesn’t fall from heaven; it is production as a whole which distributes it in the form of wages and profits. The pursuit of money being thus at the centre of our concerns, we do not grow corn to have corn, but to have money; for if we don’t gain any money then we don’t sow any more corn. Similarly all other agricultural, commercial and industrial enterprises are only viable to the extent that they succeed in bringing into their tills more money than they pay out. When abundance appears, workers are sacked since there is no more work to give them. But they then don’t buy the products and these, remaining at the charge of the producers. make their profits disappear: he who can't buy ruins him who wants to sell! People then complain about “overproduction", for this is what everything that cannot be sold is called. But chronic overproduction, is that not abundance? So goods are not produced in abundance quite simply because they would not be able to be sold (Bombe “H” ou economie distributive, 1958).

The first paragraph of these extracts contains some serious mistakes; on some points the analysis as a whole comes very near to currency crank theories like Social Credit, and in many ways Duboin can be seen as a French equivalent of Major Douglas. His solution to the problem of distribution, however, was different and more interesting. The exchange economy, said Duboin, must be replaced by an economy in which wealth is no longer produced to be exchanged but is produced instead simply in order to be distributed to human beings to satisfy their needs. This new economic system he variously called l'economie distributive (the distribution economy), le socialisme de I'abondance and le socialisme distributif.

Under this system the means for producing wealth were to cease to be the private property of individuals and to become the common heritage of all the members of society; the wages system was to be replaced by a “social service” in which every able-bodied person would work for a certain period in order to help produce an abundance of wealth; finally, every member of society would be credited, from the cradle to the grave, with a “social income” in the form of a monnaie de consommation (consumption money) which would be equal for those in equal circumstances and which would enable them to draw what they needed from the common store of goods set aside for individual consumption.

We will once again quote from “abundancist" writers to show the extent of their opposition to exchange:

   It should not be necessary to think very deeply to understand that from the moment when production has become the property of society as a whole, the economic process can no longer be carried out by a series of exchanges (which imply individual or group property of the products exchanged) but only by allocation (or distribution) (Pour batir le socialisme. Perspectives Syndicalistes. 1969).
   Socialism . . .  still calls for “the socialisation of the means of production and exchange". For the means of production they are right. But as far as the means of exchange are concerned, they are behind the times and unconsciously play the game of the capitalism they are fighting against by accepting to present the problem in the same terms as it. The real objective to pursue is “the socialisation of the means of production and the replacing of the means of exchange by means of distribution".

(Gustave Rodrigues, Le Droit a la vie, 1936 edition, p.108.)

This “distribution economy” described by Duboin in fact had more in common with the utopia described in Edward Bellamy’s Looking Backward (1888) than with Douglas’ Social Credit. But his proposal for “consumption money” attracted support from the same sort of people as in other countries supported Social Credit. There is however a difference. Major Douglas envisaged giving everybody a “social dividend” within capitalism; Duboin, on the other hand, assumes the abolition of exchange so that “consumption money" is a misnomer, especially as Duboin made it clear that this so-called “money” could only be used once and so would not circulate. Strictly speaking then, it would not be “money”at all but something similar to the “labour-time vouchers” which Marx once envisaged as possibly necessary in a very early stage of socialism. In fact “consumption voucher" would be a better term for what Duboin had in mind.

Any system of vouchers — and this applies to the labour-time vouchers mentioned by Marx as well implies as a counterpart that the goods for distribution have pseudo-prices. Under the labour-time voucher system these pseudo-prices were to be related to the time spent in producing particular goods. Under Duboin’s system they were to depend on how scarce a particular good was, holding out the prospect that, as abundance came more and more to be realised, goods would become “cheaper" and “cheaper", (able to be acquired by smaller and smaller numbers of vouchers) and eventually free. Indeed Duboin proposed that some services such as heating, lighting, transport, telephones and health treatment should be free from the start. Thus, as with Marx, so for Duboin the end to be achieved was the full application of the principle “from each according to their ability, to each according to their needs”—free access to goods and services according to what the individual person judges he or she needs.

If Marx, writing in 1875, may have had a case for saying that unrestricted free access to goods and services could not have been introduced immediately had socialism been then established, the same cannot be said of Duboin and his followers in the 1930s and certainly not today (Duboin died in 1973, at the age of 95). In fact there is something odd about a group calling itself “the movement for abundance" yet not proposing full free access as something that could be realised very rapidly. As we have pointed out in our comments on labour-time vouchers (see, for instance, Socialist Standard, April 1971), the fantastic development of the means of production in the twentieth century has made any system of rationing, however generous the rations, quite obsolete. This applies to labour-time vouchers as well as Duboin’s “consumption money’’. A consistent “abundancist” today can only be in favour of free access, of goods being freely available for people to take according to need from the abundance which is technologically possible now but which will only becoming socially possible once capitalism has been replaced by socialism.

The MFA is open to criticism on other grounds too. Duboin was an underconsumptionist who greatly exaggerated the impact of mechanisation and automation on employment under capitalism. He just looked at the labour displaced in the final stage of the production process while neglecting the extra labour required at earlier stages to invent and build the new machines. Certainly, the former is greater than the latter — otherwise the new machinery would not be introduced — but as a matter of observed fact productivity in manufacturing industry increases on average at the comparatively slow rate of 2 or 3 per cent a year, and certainly not at the fantastic rates sometimes implied by Duboin. But Duboin was not original in making this mistake, nor in making another in accepting the myth that banks can “create credit" whereas in fact they can do no more than lend what has been deposited with them.

The MFA also argues, sometimes quite vehemently, that its “distribution economy” could be established in just one country, preferably France. The arguments it uses to defend this view show that it has not fully understood what socialism is even if it has understood the need to abolish what it calls “the prices-wages-profits system". As the productive apparatus capable of producing an abundance of wealth is world-wide, it is clear that abundance can only be realised on a world scale and that socialism, the society that will permit its realisation, can only be world-wide too. Indeed at times the picture the MFA paints of what it calls socialism more resembles state capitalism. At one time in fact (when Russia was more popular than it is now) the MFA used to describe Russia as "scarcity socialism", though most French “abundancists" would not. Most French “abundancists" would now agree that the Russian system is a form of state capitalism.

What is interesting in all this is that, virtually unknown to us in the English- speaking world, a group of people in France came to the conclusion that the solution to todays social problems necessarily involves abolishing the exchange economy and the wages-prices-profits system, even if this insight was mixed up with all sorts of confused and incorrect ideas. It once again confirms that the spread of socialist ideas does not depend entirely on our own meagre propaganda effort.

Adam Buick (Luxemburg)

The lesson of Milovan Djilas (1980)

From the February 1980 issue of the Socialist Standard

Milovan Djilas was for many years—before, during and after the war—Tito’s closest associate and after the war, when Tito had seized power, he became one of the leading members of the government in Yugoslavia. Nothing special, you might think—a typical East European communist leader. However, this man did something remarkable. He broke with the party, the government and Tito—voluntarily, as distinct from all those “communist” leaders who never broke but were broken by Stalin and by little Stalins like Rakosi in Hungary or Dimitrov in Bulgaria, who made quite a habit of hanging their erstwhile comrades in arms in order to remove any possible competition for the job which they held.

Djilas was one of those rare specimens who, when he reached a position of power after many years of bloody struggle, saw that he was part of a new ruling clique, even harsher towards the working class than the villains they had replaced. He did not like what he saw and denounced the regime of which he was a shining light. By that stage (the early fifties) the Yugoslav regime had apparently had its fill of blood and Djilas was not hanged for his heresy but sentenced to prison (to which he was to return more than once). But Djilas did more than just resign. He was able to write a number of books and get them published in the West. In particular, he wrote a book called The New Class. This book provides the definitive answer to the common question: “But if Russia is a capitalist state, where are the capitalists?”, for it describes—from the inside, for a change—the power, wealth and privilege of those who rule over the proletariat in Russia and the other state-capitalist regimes. Only from the inside could one get an account of sheer gluttony and drunkenness under Stalin and the rest of the gangsters, often at times when the workers were literally dying of hunger.

To this extent, therefore, we owe a debt to Djilas—and we recognise the courage needed to make the break that he did. But the lesson which this article is minded to draw is something different based on a long interview with him which appeared in the December 1979 issue of Encounter. What Djilas says in this interview is of considerable interest and importance, but in particular what stands out all the way through is that although Djilas is a man of undoubted ability and courage, who seems to have read a good deal of Marx and has realised that the parties to which he devoted his great ability, are a snare and a delusion, he remains supremely ignorant. That may appear to be a harsh verdict. But it is clearly the lesson that runs like a thread through all the twenty pages which the interview takes up in Encounter.

And before we have a look at some of the interesting things he says (it would take a whole issue of the Socialist Standard to do justice to them all), it is necessary to make one thing clear. During all his remarkable career Djilas has never shown the slightest sign of knowing what socialism is. He will learnedly discuss Trotsky’s view that Stalin distorted the “pure socialism” of Lenin while still leaving Russia a “socialist country”, which apparently it remains to this day, despite all the horrors which Djilas knows about (none better). He has, apparently, been too busy all his life waging a struggle for “socialism” to have time to wonder what it is he’s been fighting for. And he is no nearer understanding now, at the end of his career, than he was in his romantic youth. Neither does he begin to imagine that there must be something odd in fighting for a cause when you don’t really know what it is—and when you’ve apparently won it, you don’t even know if you’ve got it or not. Such are the traps into which our “intellectuals” blithely fall. So now Djilas finds himself, sickened by the abomination that is Russia today, yearning for a new system which is “beyond capitalism and socialism, escaping traditional leftist dogma.” Well, we will agree on the need for the working class to shun leftist claptrap; but this society which is beyond capitalism and socialism—what on earth is it? It is no more than a figment of Djilas’s imagination. He knows that he has been utterly and desperately wrong—but he has not the remotest idea why.

Yet some things Djilas can see clearly enough. He knows it is impossible to derive from Marx anything like a Stalinist cult of personality and contrasts that with Lenin: “There is absolutely no contradiction between Soviet (socialist) democracy and the exercise of dictatorial powers by individuals”—a famous piece of Leninist twisting to prove that black is white, that dictatorship equals democracy. Djilas also quotes Lenin: “a personalised dictatorship of the proletariat is a hundred times more democratic than the rule of the bourgeoisie”. “In that backhanded way”, says Djilas, “Lenin was, if you like, a democrat.” (“If you like” is rather good.) “And indeed Lenin tolerated, until the 10th Congress, a certain amount of democracy within the Communist Party.” No doubt a cat is behaving with a certain amount of democratic justice when it allows the mouse to run around for a second or two. However, Djilas comes nearer to the real world when he goes on to say that “Lenin’s political practice consisted of a ruthless will to coerce and subjugate. Stalin’s terror and Stalin’s tyranny are unmistakably foreshadowed by Leninism.” Djilas is also fully alive to reality when he says that Russia is immune to “constructive criticism” from leftist professors and “well- meaning” fellow-travellers. “Communists with power and privilege to lose regard them as fools.” Which they undoubtedly are. And again: “I want to demolish the notion that the evils of Stalinism were due to Stalin’s character as put about by Soviet propagandists. In all political aspects, Lenin regarded Stalin as his rightful heir.”

Djilas then goes on to take issue with Marx by saying that the Communist Parties (and in particular the Yugoslav party) came to realise the importance of nationalism as compared with class, “whatever Marx may have said”. Workers of each land unite with yourselves! But then he also thinks that “any Communist social order necessitates the exclusive right to say what the individual may think and feel”. He sees hope in the fact that so-called Eurocommunists like Carillo of Spain and Berlinguer of Italy are imbued with patriotism. After all, he points out, at the beginning of the century socialists used to talk of a classless society but then they “all supported the war in their various countries and were distrusted no longer”. In fact, genuine socialists-in the Socialist Party of Great Britain and our companion parties abroad—opposed the war in 1914 and equally in 1939. Perhaps desperately, Djilas suggests that the communist parties of the West will probably change their names in due course. He offers: Socialist Workers Party! One wonders whether he appreciates the irony of this when he was, as he says, interviewed for the BBC by “a wordy representative of the extreme left (Paul Foot) who lectured me on the need to destroy parliamentary institutions”.

Djilas welcomed the Hitler-Stalin Pact in 1939 (which gave the green light for the outbreak of war) because, he says, he could see no difference between the Nazis and the western democracies. So much for all the propaganda of the various “communists” in favour of a United Front against fascism which fooled the entire Left (including, we now read, the Cambridge spies like Burgess and Maclean and Blunt). But then this is the same misguided “intellectual” who could once write: “Can there be any greater honour and happiness than to feel that one’s friend is Stalin? He is the bitter enemy of all that is inhumane, he is the wisest person, he nurtures human kindness”! (Borba, the Yugoslav Communist Party paper, 1942). But even today he says he has no sense of shame in recalling his own part in wartime atrocities. Such little matters as personally cutting the throat of an unarmed German prisoner—a worker—and then clubbing him to death. He refers to the actions of Eden, the “not- guilty Man of Munich” in leftist mythology, in connection with the return of civilian prisoners at the end of the war (after all fighting had ceased in Europe). Eden justified sending hundreds of thousands of these poor wretches to be slaughtered in cold blood by Stalin by saying that otherwise Stalin would not release British prisoners.

A spurious reason this, but one that, as Djilas says, does not apply to Yugoslavia. They held no British prisoners to use for blackmail; nevertheless Eden still sent 30,000 men, women and children from camps in Austria to the mercies of Tito who murdered every single one of them at once. Eden well knew the grisly fate in store for them. As Djilas says, Tito made it quite clear to a British mission what would happen to these utterly defenceless human beings. (And of course it would be absurd to imagine that Eden’s Prime Minister Churchill, and his deputy Prime Minister Attlee, soon to become Labour Premier, were not aware of what their own forces were doing. Should they not all have been tried at Nuremberg along with Goering and the other Nazis? And Stalin who, as Djilas makes clear—in case anyone doubted—slaughtered thousands of unarmed Polish prisoners of war in the Katyn Forest? And Djilas?)

That was all many years ago. And as one now sees what happens in Cambodia, Iran, Timor or Ethiopia, it is clear that all this inhumanity is integral to the present system which will change only when the working class decide they have had enough of horrors of all kinds in peace and war. But that will require, to begin with, a little clear thinking—too much to expect from Djilas.

L. E. Weidberg

Where we stand (1980)

Editorial from the February 1980 issue of the Socialist Standard

The Socialist Party of Great Britain stands solely for socialism—a system of society based upon the common ownership and democratic control of the means and instruments for producing and distributing wealth by and in the interest of the whole community. The object and declaration of principles of the Socialist Party were laid down in 1904 when a group of revolutionary socialists broke away from the Social Democratic Federation, a party which paid lip service to the idea of socialism, but saw fit to campaign for a programme of reforms of capitalism ‘in the meantime’. From the start the SPGB recognised the fundamental distinction between reformism and revolution: the former professes to eradicate specific symptoms of capitalism; the latter aims to wipe out the disease. The SPGB has never gone to the working class with a programme of reforms. Our message has always been clear: the capitalist system will never run in the interest of the working class; only socialism can solve the problems of capitalism. The seventy-five years, in which the SPGB has constantly stated this theme, are themselves testimony to the futility of trying to reform the present system. After three quarters of a century of welfare reforms workers still have to go out and sell themselves on the labour market for a wage or salary in order to live.

All this time after those few men and women left the reformist road and established a socialist party, capitalism still commands the support of the mass of the working class. Millions have died for want of food, millions have been slaughtered in wars, millions have suffered in Nazi concentration camps and Stalinist purges, Tory, Liberal, Labour, Social-Democrat, Christian-Dcmocrat, Communist and Fascist governments have been elected by workers to preside over this inhumane mess. None has made any fundamental difference. Dictatorship or political democracy, rich nation or poor nation, Christian or Moslem country, the vast majority of workers have willingly given the capitalist class the go-ahead. The SPGB has stood alone in condemning capitalism and proposing a workable political alternative.

In 1917 the myth was created of a working class revolution for socialism in a land where the working class was only a small minority of the overwhelmingly peasant population, where capitalism was still emerging and where socialist ideas hardly existed. The Leninism of the Russian Revolution and subsequent revolutions of its kind has done much to distort the workers’ ideas of socialism. It still remains, that socialism is an impossibility unless the majority of the working class is socialist. It is the SPGB which has correctly analysed the state capitalist regimes which pose as socialism.

The organs of capitalist propaganda, from the churches to the schools to the mass media, have told workers that they are naturally lazy, selfish, aggressive and unco-operative. Workers are told that owing to this natural inability they must accept political leadership by men of wealth and wisdom. Despite the collective intelligence of the church, the aristocracy and the politicians society is still in a hopeless mess. Could it be that, unlike sheep, human beings need critical thought and not leadership in order to make the world a fit place to live in? The SPGB has consistently argued that the working class is quite capable of understanding socialist ideas without leaders and of organising a co-operative society-without government.

Capitalism has set worker against worker. In time of war it whips up wild nationalist sentiments, deceptively trying to associate the interest of property less workers with that of the owning minority. When capitalism goes through its periodic crises scapegoat minority groups are singled out to be blamed for the problems. Capitalism breeds racial hatred. Through the institution of its family, the present system creates social differentiation between male and female workers. All of these things—nationalism, racism and sexism make the task of socialist unity much harder. The SPGB is unique in insisting upon the unity of interest existing between workers of all countries, colours, ages and sexes.

In every area of political debate the Socialist Party of Great Britain takes a principled position in favour of the interest of the working class. For three quarters of a century our principles have been maintained without compromise. What has happened during that time has not led us to believe that we are wrong. But correctness is not enough. Socialist ideas can only be put in force when the majority of workers understand and want socialism, not just at election time, but all the time.

Tarnished steel (1980)

From the February 1980 issue of the Socialist Standard

The bulk of steel production goes to a few big industries like building, engineering, shipbuilding and motor vehicles and to exports. Because of this, the industry is immediately affected by a decline of investment and production in those fields and has therefore always been regarded as the barometer of the state of trade.

The British steel industry’s present financial difficulties reflect the world recession, but in addition it faces a massive permanent reduction in the size of its operations.

Steel has a special interest because, more than any other industry, it has been subjected to “planning” by successive governments, including nationalisation by the post-war Labour government, denationalisation by the Tories, renationalisation by the following Labour government, with the prospect that some of its plants may now be denationalised yet again, it has also experimented with “worker-directors”.

The dependence of steel on the state of other industries was recorded in the Labour government’s National Plan in 1965:

Since the mid-fifties, steel consumption has tended to increase more slowly than the gross domestic product, mainly because the demand for steel in certain substantial sectors of use, such as coal mining, railways, shipbuilding and defence has remained stationary or has declined.

In its early years British iron and steel production had a commanding position. In the 1860s, using the cheap Bessemer process and helped by the ready availability of iron ore and coal, British steel production exceeded the combined output of the rest of the world. As other countries developed steel making the British industry lost its lead. In the USA steel production was speeded up to meet the big demand arising out of the civil war and in 1867 Carnegie, after a visit to this country to study the Bessemer process, began his great steel empire. By 1900 output in the USA was greater than that of Britain and Germany together. Many countries now have greater output than the British industry.

This did not mean that British steel output declined: in fact in 1970 it was larger than it had ever been, but growth was interrupted from time to time during world depressions. In 1884, in the middle of the Great Depression, Lord Randolph Churchill despaired of recovery:

Your iron industry is dead, dead as mutton; your coal industries, which depend greatly on the iron industries, are languishing . . . The shipbuilding industry which held out longest of all is at a standstill.

It was a false alarm and expansion was in due course resumed, only to be interrupted again between the wars. Output fell by nearly a half after 1929 and unemployment in the steel industry was running at 45 per cent in the early 1930s.

The present steel crisis differs from the earlier ones because the British industry no longer has the advantage of cheapness, its costs comparing unfavourably with those of the modernised steel industries in Germany, Japan and the United States. The steel-using industries in this country have declined so that there is no immediate prospect of demand for steel justifying present steel- producing capacity.

This massive over-capacity is largely the result of a new factor which came into play with the popularising, thirty years ago, of Keynesian ideas of “demand management” which the Labour and Tory parties both adopted, and of the Labour Party’s belief in government planning. Instead of the size of the industry being left to respond to market demand (as happened in the 19th Century) governments came to believe that they could bring about a condition of “full employment”, with the whole of industry working continuously at full capacity. It was in this mistaken belief that the National Plan in 1965 aimed at a big increase of steelmaking capacity, and the investment of hundreds of millions of pounds to bring it about. The Tories followed the same policy:

For the next few years a steel-making capacity of 20 million tonnes is likely to be more than enough for the British Steel Corporation. Yet in 1973 the last Tory government approved a development programme designed to achieve a capacity of over 30 million tonnes by the early 1980s. (Financial Times, 7 November 1979.)

Capitalism refused to respond to the planned expansion. Instead of “full employment” it produced a million and a half unemployed and production generally fell instead of rising.

So by the mid-1970s the Labour government, which had thought that all it had to do was to expand production, found itself planning a large-scale closure of unprofitable steel plant with tens of thousands of steel workers being cast adrift to find jobs elsewhere. The Thatcher government has speeded up the closures.

This has a lesson for steel workers, and other workers who shared the absurd belief that full employment and permanently busy industries are conditions that governments can command at will.

And the workers who supported nationalisation because they thought it would give them higher wages and permanent job security should by now realise that market demand, which determines how much can be sold and therefore how much is produced, takes no notice of whether the producer is a company or a nationalised industry.

There is also another cloud hanging over British steel. The present plans envisage a smaller but more competitive industry, but with the development of crude steel production in the developing countries at still lower costs it is being urged that basic steel should be imported, leaving the British producers to concentrate on the manufacture for export of “speciality steels” out of the imported basic materials.

If this is the line of development there will be more closures and redundancies in future years. A tragedy for thousands of workers, with perhaps whole towns devastated by concentrated unemployment. But a tragedy typical of capitalism, which places profits before people.

Edgar Hardcastle

Knowledge is Power (1980)

From the February 1980 issue of the Socialist Standard

The greatest weapon available to the working class in its fight against the system which oppresses us is knowledge. The wealthy and powerful capitalist class can destroy us with bombs, lock us up and ignore our poverty, but the one thing that they will never be able to beat or ignore is a politically conscious working class. To reach consciousness of our class position and what we can do about it requires knowledge. That is why every new member of the Socialist Party of Great Britain must show that he or she understands and wants the revolutionary objective to which our party is committed. It is not an objective based upon emotional appeal, but upon a rational comprehension of the nature of society. The chief task of the SPGB is to develop and spread knowledge about the world around us.

It is for this reason that Islington branch has decided to run an education programme which will cover some of the basic areas of socialist knowledge. The programme is primarily intended for members and sympathisers in the Islington-Haringey-Camden area, but we shall, of course, welcome interested people from any part of London. The classes will be in history, anthropology and economics and will provide introductory information, while at the same time providing an opportunity for critical discussion.

They will be held every Sunday evening at 8pm SHARP at the Latin American Bookshop, 29 Islington Park Street, which is adjacent to the Hope and Anchor pub in Upper Street and 2 minutes walk from Highbury and Islington tube station. We list below details of the education programme:

ECONOMICS Lecturer: E. Hardy. Dates: Feb. 3, Feb. 24. Mar. 16, Apr. 6, Apr. 27, May 18, June 8. (Subjects for each class to be announced at the first class).

HISTORY Lecturer: S. Coleman. Dates and subjects: Feb. 17. THE MARXIST PHILOSOPHY OF HISTORY, Mar. 9. THE EMERGENCE OF CAPITALISM, Mar. 30. THE INDUSTRIAL AND AGRARIAN REVOLUTIONS, Apr. 20. THE ASCENDANCY OF THE CAPITALIST CLASS, 1789-1871, May 11. THE POLITICAL ORGANISATION OF THE WORKING CLASS, 1848-1904, June 1. THE HISTORICAL PLACE OF THE SPGB, June 22. IS THE SOCIALIST REVOLUTION INEVITABLE?

ANTHROPOLOGY An Introduction to the Study of Pre-History. Lecturer: H. Walters. Dates and subjects: Feb. 10. General background and relevance of related sciences. The birth of the Earth, the organic period and the beginning of organic matter. Mar. 2. The succession of life through geological time. History of the primates and the emergence of the hominid line. Mar. 23. The evolution of mankind and the emergence of homo sapiens. Apr. 13. Darwin, Wallace and the theory of natural selection and the misrepresentations thereof (Social Darwinism). May 4. From hunter to farmer and the neolithic revolution. May 25. The natural division of labour and the subordination of women. Mankind the toolmaker. June 15. An appraisal: Is Human Nature a Barrier to Socialism?

All classes are free and will be open to any member of the public. It is intended to tape record all of the lectures; members wishing to obtain tapes should contact Cde. H. Walters. Further information is obtainable by visiting or writing to Islington branch.

ISLINGTON BRANCH