News in Review: Two classes (1963)

The News in Review column from the December 1963 issue of the Socialist Standard

At Home

Two classes

We are still, the government anxiously assured the voters in the recent by-elections, living in the Age of Affluence. Very well. As the Conservatives promise that their new government will bring in a more vital, more prosperous Britain, as the Labour Party bid for our votes with a vision of this country as a vast test-tube, what is the latest from the poverty and riches front?

The Co-operative Permanent Building Society reported that half the people who buy homes through them earn less than twenty pounds a week and that a quarter earn less than sixteen pounds a week. Two-thirds of the houses bought through the Co-op. cost less than £3,000. Anyone who has lowered himself into the perilous pit of working class house ownership will appreciate what these figures mean in terms of size and quality of houses and of struggle to pay off the loan on them. House owners are supposed to be among the most affluent of the working class but the Co-op's report shows that none of them live in a castle and that buying a house relieves nobody of the usual working class battle to get by.

Housing of another sort cropped in one more of those conferences—this time of the National Housing and Town Planning Council. Dr. Eric M. Sigsworth, lecturer in economic history at the University of York, said that there will be three million unfit houses or slums in this country by 1973. Now this is after the promised speed up in slum clearance. Perhaps they would clear more if they slowed down?

Many workers think that the road out of poverty, bad housing and the like, is one of loyal obedience to their employer. Among other firms, the Ford Motor Company have encouraged this idea. They give silver and gold badges to the men who have done long service, and who have kept essential machinery going when there was a strike on. They also give these men certain staff and pension privileges. But Fords are now in the midst of another efficiency drive and what account does that take of loyalty? The drive has meant that four of the gold and silver badge men have been sent back to the factory floor, which means that they have been demoted and that they have lost their privileges. If they did not like the way the company was repaying their long service, the lour men could have accepted dismissal. Which must have caused some hard, rueful, thinking in the loyal heads of Dagenham.

Everything very normal, in other words, for the working class. Nothing changing, either, for their social betters. The will of Sir George Usher, an industrialist who died last October, showed that he was worth over £2 million at the end of his life. Each of his sons inherited over a million pounds which must have come from somebody's hard work, but not theirs.

The Finance Accounts for the United Kingdom 1962-3 showed that it is still a paying business to be a figurehead for British capitalism. Annuities paid to the Royal Family amounted to £166,000 during the year. Not bad for reading out speeches which somebody else has written for you, shaking hands and generally doing as you are told.

Will the household budgets of any readers of the Socialist Standard be affected by the increase in the fees of Eton? Anyway, it is instructive to hear about them and to ask whether every child really has the equal chance in education the politicians are always promising. Eton has gone up to £554 a year. If you can't run to that you can try for Harrow or Winchester (both £498) or Charterhouse (£492). Or there is always the local Council Primary, which costs a little less and has other differences besides.

Getting to know you

It is a common fallacy that a Minister who is familiar with the problems which his department has to deal with is able to solve them that much more easily. And, of course, it gives a boost to people's morale if a Minister appears in their midst, looks at their conditions and clicks his tongue in sympathy. They forget that when he gets back to Whitehall he is so often quite powerless to do anything about the conditions.

So it has come about that successive Ministers of Housing have always made an early tour of the worst of the slums as if looking at them would make the slums go away instead of increasing, as they in fact do. And so it was that Lord Hailsham (as he then was), when he was put in charge of the unemployment problem in the North East, went straight off to tour the area—cloth cap and all. But any personal experience which Hailsham might have gained about the North East was wasted, because Douglas-Home replaced him with Edward Heath.

Now Mr. Heath is supposed to be a very astute man. Did he, then, abandon the pretence about the usefulness of a personal appearance? One of his first appointments was to fly off to the North East to see for himself what unemployed men and their families, and idle shipyards and factories, look like.

Labour and the TSR2

One of the latest babies of British capitalism, proudly wheeled out by its doting parents, is the TSR-2.

This aircraft, it is claimed, can do almost anything by way of airborne destruction. In its ability to perform the most horrifying deeds, in the range of its destructive power, in its diabolical versatility, the TSR-2 is something like a precocious, delinquent child.

These horrors are going to cost something like a couple of million pounds each. Commenting on this, Mr. Denis Healey, the Labour M.P. (who put the cost at £20 million each), asked what this sum represented in terms of schools, hospitals, and so on. This is a common complaint, whenever the amount of money which capitalism spends upon weapons is discussed. Yet what do the Healeys expect? Capitalism has a list of priorities to which it allocates its resources and human comfort is not near the top of it. This was as true under the Labour government which Mr. Healey supported as under the Tory one which he attacks.

Indeed, Mr. Healey showed how small are the differences between his own party and the Tories on the issue of armaments when he went on to say that the TSR-2 is a waste of money, which could better be spent on military helicopters and other transport aircraft and on the Buccaneer, a naval strike ’plane which is already in service.

The best, then, that the Labour Party offers us on the matter of armaments policy is to look after the purse strings more carefully than the Conservatives have done. They will try to make sure that every penny the British ruling class spend on their weapons gets value for money.

And perhaps they will succeed. Perhaps, under Labour, there will be no more Blue Streak fiascos. British capitalism will still have fearfully destructive armaments, the waste of human knowledge and resources will go on, but it will all be presided over by a Labour M mister of Defence who will make sure that it is done at the market price and not a penny over. Does this encourage us to believe the hypocritical Labour claim to stand for peace and progress? It does not.

Abroad

Guiana must wait

It was by something like a slick trick that Colonial Secretary Duncan Sandys brought the recent British Guiana constitutional conference, which was supposed to discuss ways of granting the colony independence, to a close.

The British government has rejected the idea of early independence for British Guiana. Instead, another conference will take place after fresh elections next year. The significant thing about the election is that they will be run on a proportional representation scheme which will probably break up the present party groupings. At the last elections the Peoples' Progressive Party, led by Doctor Jagan, got 43 per cent. of the votes, but 60 per cent. of the seats, while the opposition Peoples' National Congress, with 41.5 per cent. of the votes, got just over 36 per cent. of the seats.

This sort of result is common in the direct electoral system which British Guiana, and this country, has worked to. The fact that Mr. Sandys thinks that proportional representation is a good idea for British Guiana does not mean that he is thinking about advocating the same thing for Great Britain. The two big British parties do too well out of the present system for that.

The latest Sandys plan was, bluntly, a tongue-in-the-cheek trick lo impose Whitehall's own wishes upon British Guyana. Dr. Jagan described it as “ dastardly and unprincipled," which is just the expression which other people might have used about the Doctor's own action last year, when he called in British troops to suppress a rising in the colony.

In spite of Jagan's fulminating, the people of British Guiana seemed to have taken the news quietly. It would be good news indeed if this meant that they have come to understand that capitalism is full of diplomatic double-crossing and that in any case the Guianese working people have no more to hope for from independence than they had under British rule.

Sadly, this is unlikely at the present.

Jews in Russia

From the Soviet Union comes more indications of the recent trend there of persecution of the Jews.

The latest example comes in the October 20 edition of Izvestia which reports, and comments, upon the alleged crimes of a number of men but most prominently upon two called Shakerman and Roifman, both of whom are Jews.

These men are accused of embezzlement and bribery, of setting up a profitable racket in the produce of State factories and farms. The full story reminds us of the vast enterprise of Milo Minderbinder in Catch-22; they are said to nave been running a knitwear factory which embezzled machinery and with wool which they had diverted from collective farms. The produce, say the prosecution, was sold on the black market.

Izvestia is furious about these allegations, and raves that the men had amassed thirty million roubles in cash and a hundredweight of gold, diamonds and platinum. The paper has also assumed that the accused are guilty before their trial is complete.

Whether these men are criminals or not, there is mounting evidence of a campaign in Russia to use the Jews as scapegoats to excuse the country’s recent economic difficulties. This is a nasty subterfuge which has often been used in the past. Ignorant workers who are suffering the brunt of capitalism's problems are usually only too ready to blame some racial or religious minority for their troubles.

There need, then, be no surprise that this is happening in Russia. In any case, how is it that economic crimes arc possible in a country which is supposed to be Socialist? How can a country where everyone stands equally offer the chance for a criminal to amass enormous wealth while the rest of the people suffer hunger and other hardships? How can a society where wealth is owned in common have any sort of a market, black or white?

It is impossible to answer these questions, and to explain anti-Semitism in Russia, unless we face the facts. The Soviet Union is not a Socialist country—even supposing that such a thing as Socialism in one country were possible. It is a capitalist country and one where precious little democracy exists at that.

When we have got that straight, every thing else about the USSR falls neatly into place.

Business

Investment, profit, wages

The big mergers in Top Industry continue. Imperial Chemical Industries, who last May put up £10 million with Courtaulds to finance the acquisition of Tootal, have now lashed out another £13 million on Viyella International Ltd. Viyella have interests in spinning, weaving, dyeing and printing.

Viyella were not planning on any big capital investment in the near future but will obviously be able to use ICI’s money. ICI are probably interested in Viyella’s use of synthetic fibres, which now account for about half of its business. Industry is always seeking for ways of safeguarding its interests, but capitalism upsets its plans. Even a giant like ICI is no exception to this.

J. Lyons & Co. Ltd., the teashop firm, is another in the merger field. Its latest venture is in frozen food, the home market for which is estimated to be worth about 72 million a year.

Lyons are tying up their frozen food branch (Frood) with that of Associated Fisheries (Eskimo) and Union International (Fropax). This merger, it is hoped, will result in a combine which will initially command 16 per cent. of the market.

The move is presumably aimed against Unilever’s Birds Eye group, which at present claims two-thirds of the British retail market.

Capitalism is described, by its defenders. as an efficient social system. Yet it would be dillicult for them to find anything efficient or beneficial in the waste of the continual war which rival companies must carry on against each other over the carve up of a market.

The object of it all is, of course, bigger and bigger profits. A company which has succeeded in this past many expectations is Marks and Spencers, which since the war has been transformed from a rather dull chain store group into a bright, hard selling, and very profitable, concern. The very epitome, with its staff welfare schemes and its split second, split penny operation, of a “progressive’’ capitalist company.

The sales of M&S rose to £95.5 millions in the six months up to September this year. This was a record and with the Christmas rush to come, sales are expected to reach £200 million for the year —for the first time in the company’s history. To mark the occasion, shareholders got an extra 1¼ per cent, on their interim dividend.

And what about the people who make these sales, and mergers, and profits, possible? What do they get out of it? The wages of the working class are a constant worry to their employers, for the simple reason that higher wages mean lower profits, and vice versa.

That is why governments are always trying to control wages. Usually this control is described by a smooth phrase which is meant to persuade the workers that their wages are not being held down, and that nobody is trying to do so. Some industrialists, although they recognise their need for wage restraint, think that it should be done more subtly than has been the case in the past. This is what Lord Robens, Chairman of the National Coal Board, said on the subject when he spoke at last month’s Annual Conference of the Institute of Directors:

Whether we like it or not, the most sensitive spot in all our industrial relations is the size of Friday’s pay packet. That is why I deplore the continual use since the war of such phrases as "wage restraint,” "wage freeze,” and "pay pause" . . . .

A national productivity drive hasn't a hope of success if it is accompanied by phrases like that.

Their very sound puts a chill down a workman’s spine and they merely create ill-feeling and bitterness between management and men . . . 

Some sort of "guiding light” is essential if we are to rationalise the present chaos of wages settlement.

Inevitably, we must ask whether Lord Robens, when he was an M.P. supporting the 1945-51 Labour government—and later a member of that government—ever expressed so freely his dislike of the term ‘‘wage freeze”. He had plenty of chances too; it was the Labour government which invented it. Presumably, in the days when the Labour government was fighting to check wages, and using every euphemism in the book to do so, Alf Robens preferred to hold his peace.

Blogger's Note:

The aforementioned novel, Catch-22, by Joseph Heller, was reviewed in the November 1962 issue of the Socialist Standard by 'Ivan' (Ralph Critchfield).

News in Review: Mandela Speaks (1964)

The News in Review column from the June 1964 issue of the Socialist Standard

Mandela Speaks

In Pretoria Nelson Mandela has stood trial, with eight others, on charges of attempting revolution by violence. If he is found guilty—and he does not deny that he helped to organise acts of sabotage— Mandela could be sentenced to death.

It is inevitable, in the prevailing conditions and atmosphere in South Africa, that Mandela's case should arouse considerable sympathy. To many of those who resent the repressions and indignities which the coloured people of South Africa are subjected to, Mandela's admitted activities are anything but crimes. They are his people’s cries for help.

It is a truism that violent repressions are bound to provoke violent resistance. Because of this, a man in Mandela’s predicament can often come to be thought of as almost a saint. But history has shown how a saint under duress at one time, can be a devil in command at another. The past is crowded with men who have been imprisoned—and even sentenced to death—for their opposition to a repressive power and who, when they eventually themselves took over their country, proved to be no better than the power they had deposed. DeValera, Nkrumah, Ben Bella are only three like this who spring to mind. 

What of Mandela?

During his trial he set out his views in a four and a half hour speech. It is instructive to examine this speech, especially some of the more revealing passages in it.

We all (Ghandi, Nehru, Nkrumah, Nasser) accept the need for some form of Socialism to enable our people to catch up with the advanced countries of the world . . .

It is common for the leaders of rising nationalist movements to tag the name of Socialism onto the measures of state control they would like to impose to try to advance their country's economy. The correct description for these measures is state capitalism, which in large .doses has often led to the imposition of a dictatorship, and which in any case never offers a country’s workers a future any better than private enterprise capitalism.

But even more significant is another passage.

I approached this question (guerilla warfare) as every African Nationalist should do . . . I attempted to examine all types of authority on the subject. . . . covering such a variety as Mao Tse-Tung and Che Guevara on the one hand, and the writings on the Anglo-Boer War on the other.

The point in this, which Mandela’s sympathisers arc bound to miss, is that both Mao Tse-Tung and the Boers were once lighters against oppression. They used the same sort of arguments about human dignity and freedom which Mandela now uses. Yet in the end they have themselves imposed hard dictatorships, under the thrall of which Mandela and his friends have suffered.

What reason is there to believe that the African Nationalists, if they ever got power, would be any improvement on the Boers? The history of capitalism says that there is no reason whatever.

Spy exchange

Of all the dirty jobs which capitalism needs to have done, spying is one of the worst.

And not the least unpleasant aspect of spying is its calculated indifference. A spy knows the score. He knows that he is out on his own and that if he gets caught he must take what is coming to him. The government which sent him out will not—indeed cannot—help him. Except in the very rare occasions when their hand is forced—the U2 is an example—they will not ever admit that the man is a spy.

This was why the Russians never officially recognised Gordon Lonsdale as one of their agents. For the same reasons, the British government’s protestations, that Mr. Greville Wynne was just a harmless business man, should not be automatically believed.

What seems most likely is that Wynne was a small cog in the British espionage machine, perhaps convinced that he was only doing his patriotic duly by being a messenger boy. The freedom which the press were given, to interview him and to follow him around, when he returned to England suggest that he was anything but an important spy.

The striking thing about the affair was the grisly cynicism with which Wynne was used. The British government held off agreeing to the exchange until they were given a “humanitarian” reason for doing so. The Russians duly obliged by ill-treating Wynne, so that he came back an unrecognisable shadow of the man who went out.

Thus the newspapers were given sonic interesting photographs to take and some interesting stories to print and presumably someone, somewhere, was satisfied that all the niceties of international double-dealing had been complied with.

It never seemed to strike anybody—except the Wynne family—that they were playing with a man's life.

Ah, well, Capitalism has shown again and again that it has an order of priorities and that human welfare is nowhere near the top of it.

Ready for the Unions

More than ever convinced that they are a sure bet to win the next election, the Labour Party are turning anxious eyes upon the problems they are likely to meet when they take office.

One of these problems will be the size of our wage packets. Despite the airy assurances which the capitalist parties give at election times, all of them know that one of their knottiest problems is to hold wages in check while doing nothing which they think might affect the conditions which give rise to a heavy demand for labour.

The Tories have played this one pretty cool, but the Labour Party are convinced that they have a special advantage in meeting this problem. Their leaders never tire of telling us that only a Labour government, with its close ties with the unions, can effectively control wage claims. And now, as the autumn draws near, they are busily rallying the unions to accept the restrictions which lie ahead. 

Listen to these.

A Labour Government and trade unionists have shown how to work wholeheartedly for the same thing. Sometimes they will have to share uncomfortable responsibilities and consequences. [Who said that? Deputy Labour Lender George Brown.]

. . . unless the unions face the facts of life as they are in the late 1960’s, then in seven to ten years’ time the State will have to intervene. [Who said that? Labour's Shadow Minister of Labour Ray Gunter.]

The miners never had a better friend than Alf Robens. They would be in a mess if he had not come to the Coal Board in I960. [Who said that? Alf Robens, of course.]

These statements—and there are many others to choose from—have a nervously sanguine tone to them. Do the present Labour leaders remember the fights which the Attlee government had over wages? Do they remember the wage-freeze? The strikes, and how the Labour government did their best to break them? Do they fear that they will have to face the same battles, when they are the government?

And is that why they are so determinedly whistling in the dark?

Big time divorce

One of the fashionable tendencies in big business over the past few years has been to merge and to concentrate into gigantic industrial and commercial combines. We need hardly say that the drive behind this fashion has been the need to hold their own in the jungle war that is capitalism.

This tendency has accounted for firms which once seemed to be implacable rivals. An example of this was the merger between the Austin and Morris motor companies, which produced the British Motor Corporation.

These mergers have happened because the companies involved in them have been convinced that they stood to gain a lot by the marriage. And it is that same conviction that has persuaded ICI and Courtaulds apparently to go against the trend and to break up their partnership in the jointly owned British Nylon Spinners.

This divorce will entail Courtaulds surrendering their half share in BNS and ICI giving up their holding of 30 million Courtaulds shares which they were left with after their unsuccessful takeover bid in 1962.

Despite this big shareholding, ICl had no director on the Courtaulds boards, which meant that although they had a substantial amount of capital at stake in the company they did not have a commensurate amount of control over its day to day affairs.

This was one of the results of the strained relations between the two firms which came out of the great takeover battle.

At the same time, Courtaulds have become interested in Nylon 6, a new fibre which they are already producing in a few countries abroad. Dutch and American firms are starting production of Nylon 6 in this country (on the very day the ICI/Courtaulds divorce was announced Chemstrand, a subsidiary of the US Monsanto Corporation, gave out that they intended to build a £6 million Nylon 6 plant in Scotland), and Courtaulds, restricted by their interest in the BNS fibre Nylon 66, saw that they might be losing a trick.

By all the profit-conscious, competitive, standards of capitalism, then, the divorce was a logical move. But it does not mean that there is any reversal in the trend to concentrate.

Rather, in the manner of living cells, ICI and Courtaulds have divided only to become larger and to multiply. It is very much on the cards that one day in the not too distant future we shall see them in a head-on battle over the nylon market. That will be a contest with a horrible fascination all of its own.

Finance and Industry: A tax on wealth (1963)

The Finance and Industry Column from the April 1963 issue of the Socialist Standard

POLITICS

A tax on wealth

Time was when the Labour Party paid lip-service at least to the idea of dispossessing the capitalist class of its wealth. Only a few years ago they were pushing the panacea of nationalisation, that travesty of Socialism, though they were prepared even to dilute this by liberal helpings of compensation.

Now, nationalisation, even of this milk-and-water variety, has become a dirty word. The latest idea is a wealth tax—nothing too sweeping, you understand, an annual levy on say all wealth over £20,000 to bring in perhaps £200 million in extra taxation.

Mr. Callaghan, Labour’s shadow Chancellor of the Exchequer, was deputed to fly the kite. But he was careful not to go too far nor to frighten anybody. ". . . only one person in every 100 would be affected,” he said, pointing out that such taxes on wealth already operated in many countries, including Sweden, West Germany, Belgium, Norway, Holland, India, and Denmark—nothing at all ‘‘revolutionary ” about the idea in fact.

Of course, the idea is not revolutionary. But since when has anybody thought that anything emanating from the Labour Party has the remotest connection with revolution? And, even on the Labour Party's own shallow terms, what feeling can anyone now have, other than contempt, for its latest line?

INCOMES

Who earns what?

If only for the record, the latest income figures from the Inland Revenue deserve mention.

Last year, they report, the number of people earning more than £100,000 a year jumped from 63 to 81. There were similar increases in all the top income brackets. Here is the full table (number the previous year in brackets):

Contrast this with the bottom end of the scale where 1.3 million earned about £500 a year; 2.6 million, £600; and 2.2 million, £700. In addition, another 2.1 million earned hardly enough to pay income tax at all.

There are still people who believe in the myth that incomes are being equalised. These figures should shake them, for they show not the slightest evidence of a trend towards equality.

Of course, some will agree that the details relate to figures before tax and that it is only after this has been deducted that the comparison should be made. Agreed, the gap becomes narrower when this is done. But our “equalitarians” must really be simple people if they think this shows the true picture. Even as regards income, there are still many ways —and not illegal ones, either—of evading the tax net. “Expenses on the firm ” is only the most well-known device for doing this, there are others.

But let us come down to fundamentals. Income is any case dependent on wealth—it is ownership of wealth that really matters and all the wishful thinking in the world cannot wish away the fundamental fact that the pattern of wealth ownership has remained virtually unchanged. Roughly 10 per cent. of the population still owns roughly 90 per cent. of the country’s wealth.

And that is the fact that matters.

BUSINESS

Mergers and takeovers

There have been fairly frequent comments in these columns recently about the growing trend towards concentration in industry. Hardly a day goes by without an announcement somewhere of a merger or takeover. Sometimes the takeovers involve really big business, as with the abortive attempt by I.C.I. on Courtaulds; more often it is the big concerns swallowing up the medium and small fry, or the medium ones taking over their lesser brethren. Mergers tend to take place between equals, to avoid competition between themselves or to make themselves strong enough to resist bigger rivals.

All this is well-known. But just how far has the development gone? Exactly how much concentration is there in modern British industry?

The Conservative Bow Group has recently mads an effort to answer these questions in a pamphlet called Monopolies and Mergers. Taking the three biggest firms in each industry, they have calculated what proportion they account for of the total output. Some of the results can only be taken as broad guides, but here are their findings:

There are really no surprises in the list —artificial fibres, oil refining, tobacco, sugar, dyestuffs, margarine and soap, are all well-known as being mainly in the hands of a few prominent firms.

We should add that the figures relate to 1958 and some of the percentages may actually have risen since then as the result of further takeovers or mergers.

INDUSTRY

Stranger still

In last month’s Standard we mentioned that the French subsidiary of the U.S. Remington office machinery firm had recently been closed down and production transferred to the factory in Holland. This was followed, a few days later, by the closing of the typewriter side of the company in Glasgow and its transfer, again, to Holland. Altogether, a nice example of the international workings of present-day capitalism.

We also discussed in the same issue the surprise and secret takeover by U.S. Chrysler of the French car firm, Simca; adding that 25 per cent. of the shares in the Simca concern were actually owned by one of its competitors, Italian Fiat.

The latest development in the story is the news that the former Remington factory in France may soon be taken over by, guess who? Yes, you’re right. Fiat.

What Fiat intend to do with it if they buy it has not yet been disclosed. But whether it has to do with cars, or typewriters, or something quite different, we can be sure of one thing—there is the prospect of profit in it somewhere.

All we need to really complete the story, of course, would be able to say next month that the former Remington factory in Glasgow had also been taken over in its turn—by Simca.

Who knows? Capitalism is fast becoming nonsensical enough for anything.

Stan Hampson

Corrupt America and Pure England. (1928)

From the December 1928 issue of the Socialist Standard

In our October issue we left Mr. Baker gravely pointing out to a sullen House of Commons that there were many right honourable gentlemen, whose conceptions of what was right and honourable were inadequate. Doubtless the right hon. gentlemen will endeavour to put other conceptions of those qualities before Mr. Baker, before the Wireless and Cable Merger question goes off the stage. He went on to speak of some of the big people, as he called them, in the business. There was Sir Robert Kindersley, mentioned before, who was managing director of Lazard Bros., and also one of the directors of the Bank of England. His firm, Lazard Bros., were represented on the board of the Newcastle-on-Tyne Electric Supply Co. Lazard Bros, and S. Pearson & Sons, Ltd., were associated with the Whitehall Securities Corporation, Ltd., which holds half the share capital of Messrs. Pearson & Dorman & Long, Ltd., whose electric power interests in the Kent coalfield interlock with the County of London Electric Supply Co. S. Pearson & Sons completely controlled Whitehall Electric Investment, Ltd., along with the Power and Traction Finance Co. Ltd., in the Hungarian Trans-Danubian' Electrical Co., Ltd. Messrs. S. Pearson & Sons are associated with Metropolitan Vickers Electrical Co., the G.E.P. of Berlin and Callenders Cable and Construction Co. Mr. Baker expressed himself as puzzled at the attitude of The Times newspaper, in view of his previous feeling that The Times at least is a national newspaper. And then he made the discovery that the Hon. R. H. Brand, one of the directors of The Times, was also a director of Lazard Bros. Another director is Sir Campbell Stuart, who is a member of the Imperial Wireless Conference, which is settling the whole thing. After briefly referring to the ramifications of Hambro’s Bank, he next referred to Mr. Szarvasy. So far as is known, he was a mere shareholder in this country in 1910, but from 1912, became substitute director for Baron Springer, of Vienna. To-day he is managing director and chairman of the British, Foreign and Colonial Corporation, and a director of the Dunlop Rubber Co. When Lord Rothermere formed the Daily Mail Trust, it was through Mr. Szarvasy that the British Foreign and Colonial Corporation issued a mortgage debenture for £9,000,000. Mr. Szarvasy is also a director of the Danube Navigation Co., the Guardian Assurance Co., and Martins Bank. With the late Alfred Lowenstein, and Albert Pam, of J. H. Schroeder & Co., he is on the directors’ committee of the Hydro-Electric Securities Corporation of Quebec. This last belongs to the group of interests which control the power used by the Canadian Marconi Co., Ltd. Mr. Szarvasy is also chairman (and Lord Derby, president) of the Anglo-French Banking Corporation.

Proceeding with the big people, as Mr. Baker put it, there is Sir Charles Coupar Barrie, who is linked with Mr. Szarvasy on the directorate of the Danube Navigation Co. Sir Coupar Barrie is a member of the Post Office Advisory Council. There is Mr. F. R. S. Balfour, associated with Mr. Szarvasy on the Guardian Assurance Co., is also a member of the Bank of Montreal. Both these gentlemen have recently been added to the board of the Marconi Company. A third addition is Sir Frederick Sykes, who has been appointed Governor of Bombay. He was a director of the Daily Mail Trust, the Marconi Telegraph Co., the Underground Railways of London, the London Express Newspaper, Ltd., the Sunday Sketch and the Sunday Herald. And to-day he is Governor of Bombay. Of course as a Governor, he should give up his other jobs as director. But still, it is interesting, isn’t it: yesterday a Daily Mail governor, to-day a Bombay Governor!

There are a few more columns of similar engaging facts, and it will be well worth the while of anyone interested to obtain a copy of Hansard, for Thursday, August 2nd. It should be carefully read over two or three times between now and the next General Election. Then, when you are passively listening to the fervid oratory of the sleek, oily, persuasive gentlemen who are anxious to serve their country once more, permit yourself to reflect on the vast and intricate network of interlocked capitalist interests, and to wonder just where the orator before you, fits in. At the moment, it may be useful to remember that the catchword for the next Election has not yet made its appearance. Doubtless behind closed doors, what they will call the plan of campaign is now being carefully sketched out, including possibly Another “Red Letter,” or some similar fooltrap. But this can safely be prophesied. Each of the capitalist parties will assure you by all they hold sacred, that never in the whole history of the planet was there such a set of moral, virtuous, upright, self-sacrificing patriots as those now seeking your suffrages as so-and-so candidates. Likewise, never hitherto, has this burdened earth been required to support on its suffering breast such a vile, scurrilous, inept rabble as is comprised in the other party. You will be emphatically assured that between the one party and the other, there is fixed a great gulf, a yawning abyss.

But then, if you have read your Hansard, and your Socialist Standard aright, you will perceive that interlocking directorates and international capital make light work of any gulf. You will see your Melchetts and your Derbys, your Szarvasvs and Lowensteins, your French Bankers and German Barons, your Hungarian financiers and Canadian company promoters, all without distinction of race, religion, sex or creed, joined in one happy family whose name is PROFIT. It is for you to see behind the trickery of Elections, the pomp of ceremonial, the intoxication of oratory, to the reality beyond, capital exploiting labour. You will notice, if you listen to one of our speakers, that we do not divide our political opponents into good men and bad men, clever men and numbskulls, upright men and tricky men, rich men and poor men. No! We go deeper than that. We see society divided into two distinct classes, those on the one side who own our means of existence, and on the other, those who have to work for them and who are in consequence the slaves of the first. This system is an excellent one—for the Melchetts, the Derbys and the rest of them. One does not expect them to favour an alteration of it. Therefore, when they, or their friends, appear before you at Election time, a vote for them however obtained and however given, is a vote that society shall remain divided as at present, with a few very rich and a vast number poor. But the system is not an excellent one for you, and for me. It is necessary, therefore, that we band our greatly superior number together, and appoint our own representatives to Parliament who will not spend their time in delivering marvellous, flowery speeches, to sullen, bitterly hostile opponents, but who, when in a majority shall use the whole powers of Parliament to take our means of life from the hands of private profit-makers and convert them into socially owned tools of production. As Mr. Baker’s speech has revealed and as we have tried to make clear frequently in our columns, day after day, at amazing speed, capital is actively engaged in linking up the civilised world’s life-units into closely knit monopolistic trusts. There is only one alternative, Socialism, and there is only one party fighting for it, the Socialist Party. Capital is moving, rapidly, ceaselessly, remorselessly. What are you doing?

W. T. Hopley

Editorial: Mergers and Take-overs (1962)

Editorial from the February 1962 issue of the Socialist Standard

The air is thick with rumours of mergers and tales of take-over bids. The past year has seen more company amalgamations than ever before and the pace has become even hotter during recent months.

Within the space of a few weeks ICI has made overtures to Courtaulds. Mr. Gore has tried hard to take Saxone into his shoe empire, Mullard and GEC have joined up to make transistors, and there may be a technical link-up in the car industry between BMC and Rolls Royce. There have been almost daily reports of other such link-ups among firms not so well known.

The same development is going on abroad. The proposed ICI-Courtaulds link-up was a direct reaction to the recent merger of the French giant Rhone-Poulenc with another big firm Celtex which made it into one of the most powerful firms in Europe in man-made fibres. The Mullard-GEC tie-up scotched rumours that Phillips of Holland were out to take over GEC (Mullard is the British subsidiary of Phillips and presumably the new arrangement will satisfy its appetite for the time being). All over the Common Market there are amalgamations, subsidiaries being formed, pooling arrangements being made to exchange technical know-how.

It is the Common Market that has had a lot to do with quickening up this process, of course. With Britain’s application to join the Six the pressure is now hard on British industry to adapt itself more effectively to meet the challenge of European competition. British firms have been actively engaged for many months in getting footholds in Europe, setting up subsidiaries, and forming link-ups as hard as they can. Even the United States, which has been pouring money into Europe since the end of the war, has increased its activities during the past twelve months under the stimulus and threat of the Common Market.

In agriculture also the trend is towards bigger and bigger units. The day of the peasant proprietor is fast coming to an end. In Germany, France and Italy he is being deliberately eliminated. Farm holdings are being joined up into larger units, and the surplus farmers forced into the towns and industry. Even in Britain and America, where the farm population is only a fraction of the whole, the process still goes inexorably on,

The same thing is happening in the sphere of distribution. Supermarkets spread everywhere, with the bigger ones even at this early stage already beginning to swallow up their smaller brethren. We now have super supermarkets. A further recent appearance in this country has been the discount store, narrowing margins still further and squeezing the small man even harder. There may be half a dozen different names over the shoe shops in the local High Street, but if Mr. Clore’s attempted deal goes through they will all probably belong to the same firm.

Even among nations the same forces are at work The Common Market is itself the reflection in some degree of the pressures towards bigger and bigger units, the size of the new giants on the world scene—Russia, the U.S. and China.

This process of concentration is part and parcel of capitalism. Behind it lies the relentless drive for greater and still greater efficiency, and before it the all-important quest for profit. Marx saw it operating in its very earliest stages over a hundred years ago and foresaw that its effects would become more and more profound.

From the hectic pace of events today we know how right he was.

Finance and Industry: Partners in Progress (1968)

The Finance and Industry column from the January 1968 issue of the Socialist Standard

Partners in Progress

The fiftieth anniversary of the Bolshevik seizure of power in Russia was a boon to the Morning Star. Its special enlarged issue of 7 November had articles on the coup and on the changes that have taken place in Russia since. The advertising department had cause to be proud as a large part of the extra space was taken up with adverts from Russian and British industrial organisations. There was a full page effort by Courtaulds telling of their trade with Russia. But pride of place must go to a quarter-page taken by ICI headed “Partners in Progress”. It stated:

  ICI-Western Europe's largest chemical company-enjoys a thriving business relationship with the Soviet Union.

And went on to list some of its products exported to Russia and of plants being set up there under license from ICI. It ended on technical co-operation:

   Just over a year ago this form of co-operation reached a new stage when a five-year agreement was signed by ICI and the State Committee of the Council of Ministers of the USSR for Science and Technology. This agreement—providing for technical co-operation and the exchange of information in certain fields—was the first of its kind to be concluded between the Soviet Union and a British company.

For ICI progress means a thriving business relationship and technical co-operation. Socialists know that scientific development and increased trade do not necessarily constitute progress. In the context of capitalism, in both the ICI and Russian state versions, science is used to increase productivity with a view to extracting more surplus value from the working class. It is only in Socialism where the means and techniques of production belong to and are under the democratic control of the whole of society that the results of scientific research will be used for the benefit of all.

We know that the so-called Communist Party and their unofficial organ, the Morning Star, are confused as to the nature of society in Russia. Now it seems their attitude to ICI has changed. This is what John Gollan had to say at their 29th Congress in November 1965:

  Labour's Britain of the 1970's will still be the Britain of the ICI, the Prudential, Vickers, the Stock Exchange, Eton and Harrow, the House of Lords and Buckingham Palace. We Communists refuse to accept this future (Turn Left for Progress).

There is no doubt about their attitude in that statement. They say they refuse to accept a future Britain of the ICI and so on. Yet in 1967 they accept an advert from their old enemy which points out its close ties with the Russian state. One useful aspect, however, is that the faithful followers of the Communist Party who will only accept information coming from the Morning Star have it straight from the horse's mouth: the Russian state and ICI have enough in common to be considered partners. We have one small suggestion. The caption should have read Co-operators in Capitalism.

Big Deal

The recent take-over battle in which the General Electric Company (GEC) gained control of Associated Electrical Industries (AEI) publicised the main features of capitalism which the journalistic trivia over personalities could not disguise. The first point to note is that the issue was not decided by the 150,000 or so people employed by the two companies even though it is they who carry out all the varied tasks involved in running both set-ups. Nor was the population of Britain consulted in spite of all the talk of how Britain’s interest would be served by the deal. The AEI shareholders were the important people and each side addressed their arguments to them. It was for them to decide and the point at issue was profits.

The argument raged over which management would deliver the greater profit. GEC had its record of growth in profit during the past five years as a recommendation. While AEI, in view of the stagnation of profits in the same period, could only claim that recent reorganisation would bear fruit in increased profits in the next few years.

It was clear that improvements in profits were expected to come as a result of a ruthless cutting back in the workforce. GECs record has shown what can be done for their shareholders through more intensive working of their staff; Moves included shutting down 35 regional offices and reducing head office staff from 2,000 io 200. AEI had been going in for the same sort of thing. The Financial Times of 6 November reported:

  Manpower has been reduced by nearly 9.000 and 12 major establishments closed with no reduction in manufacturing capacity . . .  but these actions alone reduce annual costs by about £7m.

Since the take-over the process continues. Cuts have been announced in AEI head office staff and more may follow elsewhere. The point to note here is that the drive to economise is inherent in the system and does not just occur when there is a merger or take-over.

Another feature of modern capitalism that the take-over publicised was the amount of common interest the parties involved had. Large shareholders were held in both firms by major institutional investors such as the Church Commissioners, the Prudential, the Co-operative Insurance. Not only did AEI and GEC have shareholders in common but they also shared investments such as the 18 per cent each had in C.A. Parsons, the leading supplier of generating equipment to the CEGB. Their interests involved agreements with firms in such fields as domestic appliances, lighting, telephone equipment, radio and television, electronic components and nuclear power stations. The take-over demonstrated how that holy cow competition works nowadays. The pressures generated by free, unbridled competition lead to its opposite where marketing and licensing agreements are entered into to try and bring some order into the anarchy of producing for sale with a view to profit. But capitalism does pave the way for Socialism in that even it needs large-scale co-operation. Its great stumbling block is of course that it is based on private property so that production solely for use, the logical outcome of socialised production, cannot be achieved.

Another publicised factor, the size of the resulting unit, is also important but it must be emphasised that the whole exercise was not concerned with increasing size for its own sake. The advantage of large groups is in the economies in design, research and marketing which large-scale production allows. In fields where AEI and GEC were competitors, duplication of design and research are cut out. The same goes for overseas sales. It is estimated that GEC-AEI will have annual sales of approximately £450m, which will make them seventh in the world league for the electrical industry. Even then they will be small in comparison with their American rivals of the same name. General Electric, whose annual sales are in the region of £7,000m. So that, in world terms, the going will be tough. In fact this was one of the pressures that led to the takeover. It is a case of running faster in order to stay in the same place. This is why mere size or the GEC Board's record are no guarantee of future success in profit making. ICI, whose management used to be the idol of the supporters of capitalism, has stagnated. BMH, in spite of mergers and rationalisation, has still found the going tough. Quality of management and size are only subsidiary factors to the main regulator—the condition of the market.

Mergers concern the owners or shareholders involved in that they hope to safeguard their investments through larger industrial units. The workers' role lies in producing the wealth from which the profit is made. Mergers take place due to the increasing competition within capitalism, but they do not guarantee any better profits as in general they are only keeping up with industry as a whole. For workers the lesson of mergers is an exercise in how the capitalist class protect their interest. They should take a hint from their masters and organise the biggest take-over of all—the take-over of the world's means of production for the benefit of everyone.

Joe Carter

The Review Column: Trawlers In Distress (1968)

The Review Column column from the March 1968 issue of the Socialist Standard

Trawlers In Distress

There is no quick solution to the tragic deaths in the deep sea fishing fleet—nothing that will appeal to any official inquiry, nor to zealous newspaper men, nor even to protesting relatives.

The fishermen would be safer in bigger and better ships, and with a mother ship to provide immediate help. The trawler owners are reluctant to invest in this kind of equipment, and are fighting against government restrictions on winter fishing, because they say this would damage the economics—in other words the profitability—of the industry.

For those who support capitalism, with its wealth production based on profit, that is a powerful argument.

But this is not a case of coffin ships being sent into impossibly dangerous waters. The fishermen themselves often take risks with their own safety; they penetrate into dangerous seas, they are reluctant to give their position away to other trawlers and do not, therefore, report regularly by radio, they often run before a storm instead of heaving to and riding it out because they want to be first into port with their catch.

They take these risks simply because they are paid on what they bring back. There is nothing new in workers, under this kind of pressure, putting their lives at hazard. An inspection of almost any factory or building site would reveal many cases of safety precautions being evaded in the chase after a bonus schedule or higher piecework pay.

Perhaps, if they were asked, the workers—including the trawlermen—would say they would not have it any other way. But what would that prove? 

That some workers depend on their wage almost to the point of desperation. That sometimes they will accept appalling conditions, because they can see no alternative to the system which makes them. That capitalism’s morals of acquisitiveness have hardened some workers to the point where even their own lives are cheap.

#    #    #    #

Vietnam

The latest flare-up in Vietnam showed that not only the Americans are capable of escalating the war there. It also showed that, in spite of all the bombing, which Washington always insisted was aimed at the North’s supply lines, the Vietcong can still infiltrate in strength and can still equip their forces behind the lines.

Will this latest offensive be followed by the Americans stepping up their war effort? The working class have been well prepared for this and the newsreels and photographs of the recent fighting, including those of the outrages committed by both sides, will have stimulated those who advocate the use of nuclear weapons.

There is no reason to think that retaliation would not follow, perhaps from China. It is the blood-chilling work of capitalism’s strategists to evaluate such perilous situations and to make their speculations in death and injury and destruction.

Another possibility is that the Vietcong attack was intended to strengthen their hand at any peace talks which may be in the offing.

This in itself says a lot about the nature of any such negotiations as may take place. It reveals that they will not be about peace but about conflict and that they will be, in their way, as much a trial of strength as any war.

It reveals that the people of Vietnam have nothing to hope for from negotiations and that even if the current war is brought to a halt the Far East will continue to be an area where irreconcilable interests clash over which group of capitalists shall have access to which markets, oil fields, rubber plantations . . . 

Vietnam is simply another of capitalism’s conflicts. In its protraction, its atrocities, its morals of violence and its frightening possibilities it is no more than another page in a fearsome history.

#    #    #    #

Mergers

It would be exceedingly difficult, in face of the greater and greater mergers which are taking place in industry, to keep up the once-popular myth that this is the Century of the Common Man.

The two latest headliners—of GEC and AEI and of British Motor Holdings and Leylands—were classics of their kind.

All four companies were already huge and had been built up after a series of previous mergers and takes-over. There are, it seems, no limits to the field of monopoly; size is no restriction and neither is competition as deadly rivals readily sink their differences in the new combines.

One of the driving forces in this is the hope that the mergers will bring economies in production and administration—including in the people who work in these.

It did not take GEC long to announce some of their cuts, in particular their plan to close the old AEI factory at Woolwich. The workers there reacted with stunned indignation; some of them have been at AEI for a very long time, many with their families.

But of course capitalism does not employ people as a benevolent service; nobody has a right to a job. People are employed if it is profitable for an employer to do so; if it is not, or if there is more profit to be made from sacking them, they will not be employed.

These facts are harsh, but facts nonetheless. If mergers do nothing else, they show workers their degrading place in capitalist society—as entries on an accountant’s balance sheet, as faceless units in production to be analysed, coded, evaluated and, in some cases, dispensed with.

The employers, for their part, can only trust that the merger’s economies will solve their problems. But the markets of capitalism remain untouchably anarchic. Perhaps the workers in the combines are not the only ones who are in for some shocks.