Major Douglas in Alberta (1935)

From the August 1935 issue of the Socialist Standard

An interesting situation has arisen in Alberta with the acceptance by Major Douglas of post as adviser to the Government. The Government in the province is in the hands of the Party known as the United Farmers of Alberta, whose hold on the electorate has been seriously undermined by the rapid growth of a local Social Credit League run by a Mr. Aberhart. Fearful of being defeated at the next elections the Government, in the words of the Canadian correspondent of the Economist, “hit upon the idea of importing Major Douglas himself, the parent of Social Credit, to confound Mr. Aberhart” (Economist, June 29th).

Major Douglas and Mr. Aberhart have said some harsh things about each other, and each claims that his particular scheme is the genuine article, so that it seems highly probable that the move of the Alberta Government will succeed in splitting the Social Credit vote. Major Douglas is not giving his aid for nothing. He is to have a “generous fee.” According to the Vanguard (Toronto, June 1st, 1935) he gets a retaining fee of 5,000 dollars and a further payment of 2,000 dollars for every visit to Alberta.

He has recommended the formation of a coalition Government which shall seek a mandate for the following four “fundamental objectives” (Economist, June 29th).

A drastic reduction of taxation, particularly upon property.

A maintenance dividend as of right, probably small at first, and graded so as to be at the maximum after middle age.

Measures designed to produce a low price level within the Province with adequate remuneration to the producer and trader.

Development of internal resources based upon “physical capacity rather than upon financial considerations.”

It will be noticed that these objectives might be accepted easily by any Liberal-Labour Party anywhere. Where they are definite they are in line with capitalism. Where they are vague they are good vote-catching devices.

What is important about the Alberta episode is that it exposes the real nature of the Douglasite gospel. Major Douglas and his followers are most emphatic that their scheme is not inflation of the currency, but that, in fact, is precisely what it is. The whole Douglas theory is based on an ancient myth about a supposed deficiency of purchasing power. There is no such deficiency, and consequently the issue of Social Credit in the form of the payment of an allowance to all citizens, since it is not to be provided by increased taxation, could only be done by inflating the currency and thus causing the price level to rise. Major Douglas is most anxious to deny this because experiences of inflation in France, Germany and elsewhere have shown how useless that is except for the problems of certain sections of the capitalist class. Now we find him acting as adviser to the United Farmers of Alberta, one of the planks of whose programme, adopted at a conference two or three years ago (see Canadian Annual Review, 1933), is inflation of the currency to bring the dollar down to the level of the wheat-producing foreign competitors of the Alberta farmers! Like certain English economists who have been prepared to give conditional support to the Douglas scheme, the Alberta farmers will be willing to do so simply because it involves currency inflation which they believe will help to reduce the burden of their indebtedness to the Canadian banks, mortgage companies and insurance companies.

Douglas – Defender of Capitalism

Before leaving Major Douglas it may be worthwhile to remind those misguided workers who support him how essentially capitalistic is his movement. He is himself an unrepentant anti-Socialist. In his Monopoly of Credit (Chapman & Hall, 1931) he describes the relationship between capitalism and workers as “a perfectly equitable arrangement” (p. 34) and in his Draft Social Credit Scheme for Scotland he emphasised that there was to be no ” interference with existing ownerships, so called,” and there would continue to be profits, wages and capitalist ownership (see appendix to Social Credit, revised edition, 1933, Eyre & Spottiswoode). He constantly puts forward the absurd theory – but a very useful one to the industrial and commercial capitalists in hoodwinking the workers – that capitalists and workers are both exploited and impoverished by their common enemy, the banker. One of the journals which espouses his cause, the New English Weekly, tells us (May 26th, 1932) that Douglasism could be introduced only under two forms of government

“A dictatorship … or a Patriotic largely and predominantly composed ‘Tory aristocrats’…”

On January 26th, 1933, the same paper had the following frank admission about the aims of the Douglas movement:

“… if by capitalism is understood the system of competitive production for profit, it can be said that the required change would not involve its destruction but only its regulation.”

Edgar Hardcastle

The True Antidote. (1907)

From the December 1907 issue of the Socialist Standard

The true antidote to revolutionary Socialism, said Lord Milner to the Surrey Unionists on October 30th, is practical social reform, and he counselled his hearers to be more and not less strenuous in removing the causes of the revolutionary propaganda, while resisting it to the utmost. Commenting upon his speech, the Daily Chronicle asserted that revolutionary Socialism must be opposed by Liberal and Conservative alike. Quite so, but “social reform,” such as old age pensions, better housing, town planning, sanitary conditions of labour, the extinction of sweating, the physical training of the people, continuation schools, and other items constituting “an excellent program,” should be pushed forward by all parties opposed to Socialism, in order to remove the causes of the revolutionary propaganda ! Most of the items quoted above are found in the programs of the S.D.F. and I.L.P., and thus the capitalists will assist these bodies to carry them into practice knowing that they are “the true antidote to revolutionary Socialism.” Surely such an avowal should open the eyes of the organisations referred to and lead them to discard a policy which is helping the master class and which is supported by the master class because they know it will head back revolutionary Socialism. The owners of the means of wealth production do not fear Social Reform because it will leave them in possession of the power to exploit, but they do fear Socialism because that will deprive them of the power to exploit. To the Socialist then, the course is clear: advocate Socialism and leave its opponents to push reform.

A Middle-Class Utopia. (1907)

Book Review from the July 1907 issue of the Socialist Standard

Modern Thraldom.—A New Social Gospel, by Dr. W. Hampson, M.A. London: Wells Gardner, Barton & Co. Paper covers, 162 pp., 1s. 6d. Net.

The early portion of this book describes the servitude into which “borrowed” tools, houses, and land are supposed to have thrown the “labouring classes,” the “clean clothes classes,” and also the tradesmen, small manufacturers, and farmers. The evidence in the book, however, really shows that the poverty of the workers and the crushing of the small capitalists are due to the concentration of wealth and industry into fewer hands turning increasing numbers into propertyless hirelings of the possessing few. But to put it thus involves Socialism as the solution, so our author prefers to attribute the situation not to the inevitable march of industrial development, but simply to credit in some form or other. 

The most interesting part of the book is that dealing with agriculture, where many reasons are given for the decrease in number and increase in size of farms, but where the most important reasons such as the development of agricultural machinery which cannot profitably be employed on small farms, the general economies of operations on a large scale, and the development of the machinery of transport which brings other climes into more acute competition, are missed. This, however, is of a piece with the fact that Dr. Hampson nowhere realises the force of the economic trend.

From his point of view of the small property-holder, the author is much troubled by the question of the rates, but his own evidence shows it to be a question that does not concern the workers or even the tenant farmer. He says, p. 46: —

“At the time of the great depression in land values and profits from land, it became impossible for farmers to continue paying their former rents, and a percentage was remitted in most cases, so as to bring the amount payable each half-yearly rent day just within the limits of the possible. If a season were exceptionally bad, so as to involve the farmers in inevitable loss, a larger percentage of rent would be remitted. If times improved in some way, the remission would be less. Thus when the Agricultural Rating Act was passed, to relieve the farmers of a portion of their rates, a smaller percentage of rent was remitted the next half year.”

The middle class of course has its schisms and the author tilts against modern radicalism and against that municipal enterprise which is such a blessing to many middle-class investors, and also against the officialism that provides easy positions for their sons ; but Dr. Hampson’s attitude is nevertheless essentially that of the class between the devil and the deep blue sea. He protests against rings and combines, but is specially vehement against working-class trade organisations, and states that trade union action, by restricting free competition in labour “means a reduction of wages and in the standard of living,” while on p. 28 it is further urged that:—

“All combining, negotiating, organised advising and warning, striking, picketing, and other proceedings intended to restrict the freedom of the labour market, ought to be regarded and treated as criminal, so as to restore complete freedom to the man who wants to sell labour and to the man who wants to buy it.”

There is also on p. 12 a curious defence of the exploitation of labourers—exploitation by the middle class of course. It is stated that the shareholders having the necessary plant and materials or equivalent wealth—

“Lent them to the officials and working men and women of the factory, on condition that the latter, having borrowed them and worked with them, should pay to the lenders a part of the profits earned by their labour, namely, all that was over after they had been paid a subsistence wage depending, among other conditions, on the recognised minimum standard of living in the district at the time. Now this was a perfectly open bargain, well understood by all the parties to it, and the shareholders, who in fact lent the factory and appliances, have a right to claim that they shall not have hard words thrown at them, as capitalists, because they are taking a part of the profit earned by other men’s labour.”

In the description of the Utopia that is expected to follow the adoption of the author’s suggestions there is nothing but glorified middle-class conditions, with the middle class predominant in wealth and power. It is prohibited to live in hired rooms and houses, and all credit is forbidden except the capital of limited liability companies, of which all shareholders are required to be also occupied in connection with their company, while no shareholder may own more than five times the smallest allotment of shares. A kind of Single Tax is instituted (in spite of the author’s ideal of free internal trade) in the nature of a poundage on every cash transaction. This tax (which the author says is not a tax, and which is to be levied without officials) is to enable the one man government to supply such of the citizens as have deposited £250 in the State Bank, with a further £250 on their marriage for the purpose of buying house, furniture and allotment. There are to be no boards, committees, councils or parliament. National government is to be run by an elected president and local administration by a manager ; while no one can vote unless he owns, among other things, a bicycle !

There is still to be wage-slavery in the new Utopia, but the workmen are supposed to be able to get higher wages through the absence of trade organisations, and through being forbidden to hire rooms, so having to buy a room or rooms outright. The labourer is to give six hours industrial labour per day and put in the rest of his time on the land. The thrashing, winnowing and grinding of corn is to be done at home in small hand machines because :

“However little it may cost to grind in a steam driven mill, it costs less to do it at home in the time that used to be spent in the evening at a public house. It costs nothing at all, but actually saves the money that was once spent in drinking to while away the time.”

How typically middle class ! 

Even the great domestic servant question is almost solved in this Utopia. The author says :

“And are mistresses no longer the slaves of their servants ?

In this respect also there is great improvement. We have now no large class of excessively rich, keeping large houses full of ‘pampered menials,’ and so setting before other servants a false standard of lavishness, luxury, ease, pilfering, and ‘perks.’ On the other hand the middle-class ladies, having given up imitating the luxury of the rich, have themselves become as good practical housekeepers as their husbands are practical business men and cultivators. They can, if need he, manage their houses in many cases without outside help, and so, when they have that help they know how to keep, without petty domineering, the position of mistress in their own homes.”

The Doctor’s Utopia illustrates both how completely class interests as they are recognised mould a man’s views, and how narrow is the mental vision of the middle class.

For the realisation of this Utopia an association called the Land and Labour League is to be formed and to be endowed by a few charitably disposed millionaires for the purchase of property, the tenure of which is to be sold to League members who in turn are not allowed to give any of their property as security for a loan. Leaguers will pay “no rates or taxes,” these will be paid by the League out of proceeds of a receipt stamp tax to be levied on all members.

The League, says the author, is to be a co-worker with the garden city schemes at Bourneville, Port Sunlight, York, Letchworth and other places, so it is very small beer after all.

The League will, when funds allow, put £250 to the selected member’s on his marriage for the purchase of house and grounds that are to remain technically the property of the League—a sort of glorified building society in fact that is supposed to grow snowball like, until it absorbs the whole of Society.

But what of the, working man ? How is he to save the necessary £250 in order to participate in this paradise ? The author has told us that to-day “The lowest salary which will supply the bare living must be accepted by each applicant lest another cut in and take the place,” also that “conditions make it practically impossible for an average man to rise out of the labouring ranks in which he was born.”

The odds therefore appear to be rather long against the workers being able to save the requisite £250 each, indeed, they do not stand even an outside chance. But the author of the “New Social Gospel” has a most simple plan. It is to tax immigrants heavily and put an almost prohibitive tax on imports. Then, says the doctor:

“When all the production for the English market is secured for the English producer, there will be for a time an era of prosperity seldom equalled before. Demand will overtake supply for a time. The price of labour will rise higher than ever before; the unemployed and, under such tempting conditions, many even of those who are now unemployable, will be earning money ; and the workers being rich, the prices of common articles will rise also, though not in the same proportion as wages.”

Truly a simple plan—for simpletons. The workman knows that labour-power is the last to participate in a rise in prices, so that the problematic rise in wages will not be proportionate to the rise in general prices. The worker will also see that if prices rise, then the price of house and land rises also, thus the amount to be saved rises proportionately, leaving the possibility to the workman of saving at least as remote as before.

Further, restricted immigration is no new thing, and where instituted has made no appreciable difference to the workers. It is not the alien, but capitalist development that creates the unemployed, and the same process is going on in every country ; new inventions and processes, greater concentration and more efficient organisation decrease daily the proportion of wage workers required by the masters to produce for the market. Large numbers of workers are thus thrown on the streets while the owners of the instruments and materials of labour reap the whole of the benefit.

And with regard to a prohibitive import tax, owing to the very nature of international exchange, the import trade of the country cannot be destroyed without causing havoc in the export trade and the consequent ruin (under capitalist conditions) of those producing for export. We have also object lessons the whole world over of the futility of fiscal juggling as far as the workers are concerned. Capitalist conditions breed working-class poverty everywhere, and must do so long as the workers are the hirelings of the possessing few. But even supposing that by some miracle all wage slaves managed to save £250 and so live rent free ; is it not a fact that capitalism (whether under small or large manufacturers) turns the very thrift and temperance of the workers into weapons of offence against them ? and does not Dr. Hampson himself prove this ? Speaking of allotments he says :

“Suppose the profits from a plot of land to be equal to two shillings a week. Then a man and his family can live in the same moderate degree of comfort as before on a wage of fourteen shillings instead of sixteen if need be.

It is the professed object of the promoters of improvement on these lines that the improvement shall become general. Suppose them to succeed to the full extent of their hopes. Suppose that practically all the labourers increase their wages by such means to the equivalent of eighteen shillings, so that they could, in case of necessity, continue their present style of living on an actual money wage of fourteen shillings. The farmers would not be long in making the discovery that their labourers were able to live on two shillings a week less. And the next week they would require their men to prove their ability.”

Such, indeed, is the mainspring of the welcome that has greeted the present Liberal Small Holdings Bill. And its undeniable truth destroys at one blow Dr. Hampson’s Utopia as far as the workers are concerned. Whatever cheapens the cost of living of the workman, as soon as it becomes general, reduces his wage, competition compelling him to sell himself for a mere subsistence. Yet Dr. Hampson dares to say that if the worker did not have to pay rent he would be enabled to exact a higher wage ! The small capitalist is essentially reactionary, and his only possible ideal is one that runs counter to every economic tendency. And our author, voicing the interests and ideals of this class, has reckoned without his host, the financial magnate, who now rules the capitalist roost, and without, also, the army of the workers, who can only go forward, to industrial democracy,—not backward, to the infancy of capitalist society. Unlike the middle class intellectuals, the scientific Socialist, has outgrown the Utopian stage. Our author, however, evidently imagines that men figure the society they want and then make it to order ; so he thinks that if the public find his Utopia good they will set themselves to make one like it. The scientific Socialist does not erect a fanciful Utopia, but analyses actual Society, its economics and its history, and tracing its laws of development sees whither the basic factor, the development of wealth production, tends, and derives therefrom, not a detailed picture of the future, but the broad direction of economic evolution and the essential principles of the society foreshadowed by the present. And by the study of men’s actions, motives and history, he is enabled to discover the essential principles of the action that must be taken to render the transition speedy and beneficial.

Dr. Hampson has not done this, therefore his reforms are upon all counts a snare and delusion to the middle class in their struggle against the inevitable, while to the working class they offer at best nothing but a shuffling of masters by no means to the better.

F. C. Watts

Debate. The S.P.G.B. versus The Tory Party. (1933)

Party News from the January 1933 issue of the Socialist Standard

A Debate organised by West Ham Branch was held at Stratford Town Hall on Sunday, November 27th, 1932, between the Socialist Party of Great Britain and the Conservative Party. 

Comrade E. Hardy—for Socialist Party of Great Britain.

Mrs. E. Tennant—for the Conservative Party.

Comrade E. Hardy commenced his case for Socialism by stating two points on which the two parties would probably be in agreement—firstly, the imperative need for a solution to the problems of poverty, unemployment, preventive illness and death, war, and industrial strife; and secondly, that individual action was inadequate, the needs of the present situation requiring that the working class shall take organised political action by means of the vote to secure their emancipation from these evils.

He pointed out that the Socialist case is based on the principle that human beings are dependent on the material conditions which surround them, and that the programmes of other political parties proved that they also recognised that favourable economic conditions are necessary to a happy and satisfactory life.

He then defined the two classes which make up capitalist society: —

The working class, which comprises all those who, not having property incomes, have to sell their services—their mental and physical energies—their labour power, in order to live, the alternative being charity, robbery or dependence on the State; emphasising at the same "time that these are the wealth producers; and

The capitalist class, made up of those who live on property incomes—rent, interest and profit—who own the means of production and to whom the wealth produced by the workers belongs.

He showed that, arising out of these conditions, the capitalist is able to get a return over and above the sum of money he invests for the simple reason that out of the wealth that the working class produce but do not own they only receive in the shape of salaries or wages a fraction. And further, that this fraction, speaking generally, is based on the cost of living of the worker according to the particular trade, industry and country, and under the conditions prevailing at any given time.

The speaker then proceeded to lay stress on the need for the establishment of Socialism. He said that a Socialist understood the evolution of society and the necessary place that capitalism occupies in that evolution. In its early days it had enabled society to develop to an enormous extent its productive powers. It had broken down national barriers and exclusiveness, it had modernised the backward nations, it had destroyed the isolation of rural life and freed the subject class from being tied to land and locality. It had developed the money system of exchange, and facilitated the division of labour. Now, however, capitalism prevents the workers from gaining the benefit of the development of the productive forces.

The Socialist’s solution to present-day problems was not therefore utopian, nor based on class hatred, but on the need to solve the social problem by instituting common ownership of the means of production and distribution. It was on these grounds alone that the Socialist Party of Great Britain invited the support of the working class.

Mrs. Tennant (a Conservative Parliamentary candidate), speaking on behalf of the Conservative Party, made it clear during her first remarks that she was under the impression that she was opposing a party which supports the Labour Party, and therefore made little serious attempt to state a case against Socialism and the S.P.G.B.

After saying that it was always easy to legislate and make a perfect plan on paper, Mrs. Tennant stated that the Conservative Party were the first people to become alive to the industrial horrors of the 18th and 19th Centuries, and went on to mention in detail the various reforms for which the Conservative Party were responsible, for example:—

The placing of the first Factory Act on the Statute Book in 1802; the Combination Law in 1824, giving rise to the Trade Union Movement; the Ten Hours Act, 1847; the first Act for Compulsory Education, 1876.; Workmen’s Compensation Acts; Pensions Acts, etc.

She also gave the Conservative Party credit for having reduced unemployment during the years 1924-1929, for improving this country’s trade balance by £63,000,000, and for having built a record number of new houses.

And just when “things were looking a little brighter" the country returned a Labour Government, because, she stated, they promised a new heaven and a new earth. They promised to clear the slums and cure unemployment (then about one million) in three weeks. But they did none of these things. The “Socialist" M.P.s agreed to nine-tenths of the cuts adopted by the National Government, and unemployment increased. She was now afraid that the “Socialists'" new programme of nationalisation for the banks, industry, agriculture and transit would be dangerous to the workers because it would stampede capital and order. It would cause increased unemployment, higher food prices and greater taxation.

She said that Karl Marx had inaugurated the Class Struggle, and cited Russia as an example of the low standard of life to which this country would sink if the “Socialists” had their way.

Comrade Hardy, replying, regretted in the first place that his opponent had mistaken the Socialist Party of Great Britain for a party supporting the Labour Party. He pointed out the consistent opposition of the Socialist Party to the Labour Party ever since that party’s formation in 1906 (two years later than the formation of the Socialist Party of Great Britain), and denied emphatically that the Socialist Party gave the slightest support to nationalisation.

He pointed out that it is absurd to say that the Conservative Party were the first people to realise the horrors of industrial capitalism. The working class had, of course, been well aware of them for years, and the Conservative Party's factory legislation, for what it was worth, was generations late. He pointed out that some of the reforms claimed by the Tories were also claimed by the Liberal Party. He was prepared, however, for the sake of argument to give the Tories credit for them all. The very need for reforms was the condemnation of capitalism. The Tories have to “protect the workers”—against capitalism. The only remedy was the abolition of the wages system.

It is not true that Karl Marx had “initiated the 'Class Struggle.” He had merely pointed out that it existed, and that it arose out of the basic contradictions of capitalist society.

Speaking of housing, Comrade Hardy said this problem, after having been “solved” in turn by Tories, Liberals and the Labour Party, was still with us. According to Sir E. Simon, in a letter to The Times, February 12th, 1931, “ the position of the slum dwellers is worse than it was ten years ago.” There was, properly speaking, no housing problem for the working class. What did exist was a poverty problem which could not be solved within capitalism. The Tories said they gave the workers the vote in 1867. Why 1867? Fifty years earlier, in 1819, the workers demonstrated peacefully at Peterloo to ask for the vote. A Tory Government killed and wounded numbers of them.

Proceeding to deal with the historical case against capitalism, he pointed out in some detail that capitalism after first developing the power of production was now making frantic efforts to restrict it again, and having brought the rural population to the towns, capitalist reformers talked of solving unemployment by sending them back again to the country. There was even an attempt to return to barter in a large number of countries at the present time.

Capitalism was unable to use its resources to the full, and had outlived its usefulness to mankind.

Mrs. Tennant’s final remarks were to the effect that it was easy for the Socialist Party of Great Britain to sneer at 95 years of Government experience, and she submitted that when the Socialist Party of Great Britain was in power there would be many disillusionments. Karl Marx had never governed so much as a puppy-dog, “so it was all paper legislation.” She again referred to Russia as an example of Socialism. Russia had failed to feed her people, which was a very serious accusation to bring against a country. She was afraid this beautiful system of Socialism would not materialise until human beings were perfect.

In reply, Comrade Hardy stated that Russia was not a Socialist country, but one in which industry was run through the medium of private and State Capitalism. It was still a backward country, suffering from the legacy of inefficient Czarism. Why not look at the spectacle of poverty in rich U.S.A. The Daily Telegraph had recently quoted the American Federation of Labor that 60 millions, one-half the population, will be on the verge of starvation this coming winter. America, he pointed out, was not a backward country, but one of the most highly developed capitalist countries in the world.

He said his opponent had put the only case possible for the Conservative Party, that of social reforms. These had been tried and found wanting. He reiterated that there was only one solution to the problems confronting the working class, and that was to establish the common ownership of the means of production and distribution by the method advocated by the Socialist Party of Great Britain.

The debate was well attended. There were about 800 present and many were turned away owing to lack of room. A collection was taken of £5 10s. and about 27s. worth of literature was sold.

Blogger's Note:

In all probability the Conservative Party representative, Mrs E. Tennant, was Eleonora Tennant. 

Eleonora Tennant was a Tory parliamentary candidate in the East End of London (Silvertown) at the 1931 and 1935 General Elections and, let's be honest, women being so under-represented in politics in the 1930s, what are the chances of there being two Mrs E. Tennants' in the Tory Party active in the East End of London at this time? If you click on her wiki page you'll go down a rabbit hole of far right and anti-semitic politics which covers both Britain and Australia.

A Socialist Searchlight. (1930)

From the December 1930 issue of the Socialist Standard

An “intellectual” on Marx.

“To avoid any confusion in the reader’s mind it must be explained that at the time when this Manifesto was given to the world, what we know to-day as Socialism, was generally referred to as Communism. Karl Marx was therefore attempting to forecast the evolution of Socialism towards world power. That being so, and considering his confident prediction of class conflict, how can anyone honestly uphold Marxism while in the next breath accepting the theory of Parliamentary evolution as opposed not only to revolution but also to direct action in any form.

It is true that the ballot-box and the doctrines of Marx do not mix very well together.” (H. H. Tiltman, in his Life of Ramsay MacDonald, p. 31.)

Such a mass of confusion in one paragraph shows the shallowness and stupidity of Marx’s “critics.” Class conflicts didn’t happen, but Marx predicted them ! This from a writer who spends many pages dealing with the miners’ lock-out and the General Strike ! Mr. Tiltman, full of regard for the sanity of MacDonald, scorns Karl Marx. He does it by erecting a bogey. Any reader of the Communist Manifesto can read Marx’s own statement, that the first step in the emancipation of the working-class is the conquest of political power—the winning of the battle of democracy. MacDonald’s biographer does not tell us where Marx opposed the use of “the ballot box”—because he can’t.

The insinuation that Marx was the apostle of “direct action” clearly shows how little Ramsay’s admirer knows of Marx’s conflict with Bakunin and the other believers in direct action. Mr. Tiltman evidently conceives of revolution as a drama of knives, noise, fireworks and barricades. The use of Parliament by revolutionaries is unknown to these men who “make their own history.”

* * *

How Great Men don't make revolutions.

THE BLOKE IN THE SIDE STREET. 

“The course of revolution, like the course of true love, never did run smooth. All revolutions have some features in common. They are born, not made. They never run to programme, and they can he led down a side street hy a great man. It is never possible to have the mass so drilled or imbued by common ideals that a combined push for an agreed goal can be made.”

This picturesque view of history, more like a six-reel film than actuality, appears in “Forward,” the I.L.P. paper (July 19th). It is the brain wave of John P. Hay, M.A., of the I.L.P., and Workers’ Educational Association. Picture the revolution being led down the alley by the great man ! These people think every attempted uprising is a revolution. They never explain why leaders are able to shepherd their ignorant flock ; nor do they explain why this great man fades out and another supplants him. Our “great man” philosopher wrote the above while reviewing the situation in China. He tells us that “the revolution happened too soon,” and refers to “the frequent splits and divisions among the revolutionaries” there. The great men who make history, according to the hero-worshippers, surely ought not to let little things like starting in advance of the conditions, or meeting with other great men, stand in their way.

Mr. Hay, who always likes to sneer at the Marxist, supplies the knock-out to his own theories in the same article.

FACTORS IN SOCIAL CHANGE.

“The Manchu dynasty fell, not on account of a powerful push from the rear, but simply because it could stand no longer. The use of telephone, telegraph, and railway, foreign pressure from the international money lenders, were factors which induced an increase in the number of Chinese with an outlook on the fate of their country. The return of foreign educated Chinese with ideas of the run of history and economics in the West, gave a powerful impulse to the searchings of heart among the thoughtful.”

That’s what comes of being an opponent of the materialist conception of history. No powerful push by a great man lurking in the rear, but all the factors of modern development are brought in to explain the rise of revolt.

He next tells us that “the lump of national go-as-you-please was too big to be leavened for the economic change.” The “great men” could not lop off the “lump,” to use the scientific language of our Master of Arts. Sun Yat Sen, he tells us, had to teach economics in order to win support for his policy. Economics comes in, you see, even with the gift of being able to lead revolutions down side streets. Borodin, the Russian Communist, Mr. Hay tells us, could not work a Russian pattern into the Chinese material, conditions again defeating leaders making plans for coups and triumphs.

Mr. Hay, M.A., presents just as sad a picture trying to upset Marx’s Materialism as he does when trying to upset Marx’s Economics.

* * *

The German Fascists.

It is interesting to notice how the German Fascists, led by Hitler, outmanoeuvred the reformist parties, the Labour Party and the Communists, by promising reforms of capitalism more drastic than either of them had thought of.

According to the News Chronicle and Star (17th October), Hitler’s programme, now embodied in Bills before Parliament, includes the following reforms : Limitation of interest rate to 5 per cent., of which 1 per cent. is to be taken in taxes ; incomes of company directors to be drastically reduced ; and all banks be taken over by the State without compensation to the shareholders.

Hitler’s attempt to outbid the reformists was so successful that some of his most spectacular successes were in working class constituencies, where formerly the Labour Party or the Communists had been strong. So much for the Labour-Communist theory about leading the workers to Socialism by dangling reforms like carrots in front of their noses. They overlook two things of importance, first, that the workers occasionally want to bite the carrot, and, second, that rival reformists can always step in with sweeter-looking carrots.

Adolph Kohn

Tory Reform—The Old, Old Story (1944)

From the June 1944 issue of the Socialist Standard

A group of Conservative Members of Parliament, over forty of them, have drawn up a Statement, and formed themselves into the Tory Reform Committee. As a result, they say, of joint work on a number of separate issues, like the Beveridge Report, Post-War Reconstruction, the Catering Bill, Civil Aviation, War Pensions, Education, and so on, they have found “that there exists among us a common outlook on the principles which should govern the conduct of political affairs.”

We are therefore dealing with a considered written statement by an influential group of prominent Tory M.P.s—(Forward! by the right; a Statement by the Tory Reform Committee)—giving some indication of their estimate of the shape of things to come, and their reaction to them.

They start off with what will probably be the main theme of the Armistice and post-war years : —

“The spirit of National Unity, developed in war and consecrated on the battlefields, must be preserved in the period of reconstruction.

The chief task of statesmanship will be to maintain that unity, and carry that spirit on into the years of peace.

There must be give and take between all classes of the community, between employers and workers … if the national objectives are to be obtained.” (p. 2.)

We can certainly agree with Viscount Hinchingbrooke there. As usual, we the workers will give, and they, the Tory employers—will take.

We are very promptly informed in the next point what the spirit of national unity is for : —

“The standard of living of this country can only be restored and improved if maximum production is regarded as the joint responsibility of capital, management and labour, working as partners.” (p. 3.)

The next bit is almost word for word what we read in Mr. Arthur Deakin’s articles in the Transport Workers’ Record : —

“We consider that a man who invests his skill and labour in an industry should feel an interest in and exercise an influence over that industry, equal in degree, if not in kind, to that exercised by the man who invests his savings.” (p. 3.)

So that’s where the Hon. W. W. Astor and Sir Alfred Beit got their wealth—they saved it up.

“To this end we welcome the extension of Production Committees.” (p. 3.)

After saying that Trade Unions will help in the future towards “increased efficiency,” they pronounce against the retention of war-time controls—”management must be given full and unhampered freedom.”

Two further great reforms are income-tax collection on current earnings and “a prosperous agriculture.” Then comes Compulsory Military Service.

“We regard Compulsory Military Service as an essential part of our democratic system.” (p. 4.)

The reason for Compulsory Military Service (Conscription) is given in the next spasm : —

The Principle of Empire Unity.

“Only as a United Commonwealth can we play our proper part with America, Russia and China in any international organisation which may be devised for world security. (p. 5.)

It will no longer be sufficient to say that each part of the Empire is primarily responsible for its own local defence unless at the same time adequate Imperial forces of all arms are so disposed throughout the world that they can be moved in sufficient time to defend any threatened points. (p. 5.)

“We recognise the need to ensure that British industry is at least as well equipped as that of its industrial rivals,” they say.

They require the maintenance of high standards of “industrial efficiency” (p. 8). They hold a substantial increase in our export trade to be essential “if this country is ever to regain the standard of living to which it has been accustomed.” which can only be achieved “if industry is enterprising in the quest for markets” (p. 9). They want the birth-rate to be increased (Family Allowances).

"There must be “state ownership of certain monopolies,” and a revival of “a widespread healthy and vigorous private enterprise.” (p. 10.)

A point for the Labour Party : —

“The nationalisation of the Bank of England would therefore make no practical difference.” (p. 12.)

Finally, they say on Demobilisation and Resettlement : —

“At the end of the last war, carefully prepared plans had to be abandoned because the Services did not understand, and therefore would not accept them. (p. 14.)

Summing up.

No Socialist ever expected the Conservative Party, not oven its Reform Committee, to have any proposals whatever for the solution of to-day’s social problem.

We have cited the actual written words of their own publication on policy, to show that their only possible idea at the conclusion of this war is to start all over again, still more scientifically, with Conscription, the Beveridge Report, increased efficiency, better education, greater export trade, larger share of the market, increased armaments—the same old game of a dog chasing its own tail, which leaves the worker in the same position as before.

Stupid workers who are led away by this sort of rubbish, or the feeble imitation of it called the Labour Party, or the I.L.P., cannot expect anything else than hard work, low wages and insecurity until the next war, when a new Tory Reform Committee will issue “the old, old story that is ever new.”

Horatio.

What price reform (1958)

From the September 1958 issue of the Socialist Standard

Many a social reform since embodied in legislation became law not because the ruling class or its political representatives were moved by the plight of certain sections of the population, but primarily because advantages accrued to capitalism. Not benevolence but the profit consideration was the motive.

A great deal of evidence is available to substantiate this view, and that it actually accumulates almost daily is evident from what follows. In two days’ issues of the Manchester Guardian were found the following three examples.

One: Speaking of the position of young widows with children and the inadequacy of their Widows' Allowances so that “ they simply had not enough money to live on ” and were being forced to put their children in nurseries and go out to work, Dr. J. C. Heenan, Roman Catholic Archbishop of Liverpool, commented: “It need hardly be said that it costs the country more to maintain nurseries than it would do to give widows adequate allowances.” (March 27th, 1958.)

Two: On the 25th of March the Maintenance Orders Bill was before the House of Commons. Now, this Bill is ostensibly designed to ensure that any man who deserts his wife and has had a Court Order for maintenance made out against him will not be able to bilk payment by simply moving about from place to place. The method by which it is hoped to ensure this is by an attachment of the man’s earnings, a form of P.A.Y.E. The essential point here is not the advantage that there may be for the women, but again the L.S.D. motive. Mr. Renton, Joint Under-Secretary to the Home Office, moving the third reading of the Bill, stated that the Bill dealt with the problem of a woman who could not get maintenance and a man who drifted into prison because he had failed to keep up regular payments more by incompetence than by malice. Continuing, he said: “More than 3,000 prisoners were now sleeping three in a cell. Prisoners are costing us (sic) nearly £6 per week per head and we ought to try and avoid sending thousands of men a year to prison for defaulting payment.” (March 26th, 1958.)

And, three: In 1955 a Committee was appointed by the Minister of Labour to investigate “industrial health.” The Report of this Committee’s first survey was published on the 26th of March, and it was given some prominence by the Manchester Guardian devoting an editorial to it, headed, “ Keeping Well at Work.” Among other things, the editorial informed us that in over one in four of nearly 800 workplaces visited in Halifax (employing some 7,700 people) washing facilities and general cleanliness were considered unsatisfactory. And Halifax was chosen not because its regarded as particularly unhealthy in any way but because it is “a concise industrial town with a fair diversity of industries.” The editorial’s summing-up paragraph is a little masterpiece of simple, lucid Guardian language. “ It is both more profitable and more sensible to spend money on keeping people well than to grant sick leave; and the best work is usually done in the best-kept places.” (March 26th, 1958.)

And there you have the Holiest of all Holy Trinitys— Church, State, and Press—lamenting the plight of young widows, deserted wives, and the working-class in general; yet withal their reforming zeal and burning fervour against injustices never leaving out monetary calculations, but all the time carefully weighing the price of one reform against another.

Chris Walsh

Do you see what Cecil, K.C., sees? (1911)

From the April 1911 issue of the Socialist Standard

Among the many “topics of the moment” may well be included the question of co-partnership, or profit-sharing. The matter has been dealt with in these columns on several occasions, but the appearance of the following paragraph in the Evening News of 12.11.10 makes it opportune to again direct attention to the tricky purpose behind the specious wording of the phrase co-partnership.

“The West London Parliament will meet to-night in the Council Chamber of Marylebone Hall, when Lord Robert Cecil, K.C., will move : 

‘That in the opinion of this House, the fair division of the profits of industry, as between capital and labour, is of supreme importance, and can only be secured by the adoption of co-partnership ; that being the only effective alternative form of industrial organisation to Socialism.'”

I do not know the result of the debate, but anyway, that is unimportant. The discerning reader will draw quite a number of conclusions from the paragraph as it stands, but I would ask him more particularly to consider the last few words. The only alternative to Socialism is co-partnership, according to Lord Robert Cecil. Good ! I hope the toilers can see it equally clearly.

Observe there is no hypocritical reference to Socialism destroying family life, religion, initiative, etc.; to it being the “end of all,” the creed of the chronic grumbler, or piffle of that description. With refreshing candour the fact is specifically admitted that Socialism is a form of industrial organisation. Grant that and you have the unique spectacle of one of the Cecils, with a pedigree as long as a poker, inferentially preaching Socialism.

Prove it ? Set your thinking apparatus in motion. Look here, if co-partnership be the only alternative to Socialism, logically the bankruptcy of the former leaves you but one course. In that the noble lord concurs. Co-partnership has been proved in these columns to be a fraud. It has proved to be a failure wherever it has been inflicted upon the workers—notably quite recently in the shipbuilding industry, where it was installed with a nourish of drums and sounding of brasses, but only to demonstrate that the wealth producers would still obtain but a mere fraction of their product.

Out of capitalism nothing but its effect can be expected. The method of wealth making that we call capitalism depends and rests upon the fact that the class that makes all wealth gets only a small portion returned to it in the shape of wages. Any juggling with the proportions of the total product of labour, and calling the process the profit-sharing or bonus system, does not alter the central and fundamental fact that the people who make it do not get it. They only receive a portion of it. And yet there are people who talk of a fair division of wealth between those who make it and those who don’t. K.C.s may be able to see it, but workers cannot —there is a difference.

Wilfred.

50 Years Ago: We have heard it all before (1967)

The 50 Years Ago column from the May 1967 issue of the Socialist Standard

Fifty years ago The Times published articles urging the adoption of a five point "New Industrial Charter“ as a means of securing industrial peace, increased production and increased profit.

“Prevention of Unemployment”

“The government shall undertake to prevent the occurrence of unemployment in the same sense that it prevents the occurrence of cholera”.

“This can be done, as soon as the government chooses, by nothing more recondite than a systematic rearrangement of the necessary works and orders of the government departments and local authorities over each decade as will maintain approximately level from year to year ... the aggregate wage-total of the kingdom”.

“The Maintenance of Standard Rates” 

“The standard rate, it must be remembered is never anything but a minimum. No employer is prevented from paying more and. in fact, there are always some who do pay more, whilst no workmen is prevented from asking for more”.

“A Constitution for Factory and Industry”

“The third clause of the Charter . . . suggests details of a Constitution ranging from the appointment of a Shop Steward, to a National Council for the whole Industry, the latter body to consider . . . such matters as Technical Training and Apprenticeship and Publicity”.

“No Limitation of Output”

“What is most vital to National efficiency, as it is to the employers' hope of profit, is to get rid fully and permanently, of the workmen’s tendency silently to restrict his output . . ”

“Freedom for Every Worker”

“Once unemployment is prevented, and an effective guarantee for the maintenance of the standard rate is conceded . . . The government may fairly ask from the trade unions complete freedom for the employer for engaging any person whatever, for any sort of work; complete freedom for any person to do any task or carry out any process; and complete freedom for the introduction of any machinery or process”. 

From the Socialist Standard, May 1917.

Telegraph gets it wrong (1985)

From the March 1985 issue of the Socialist Standard

The Daily Telegraph ran a two-day feature last January putting forward a "cure" for unemployment. This wasn't promoted with quite the same vigour as bingo in the Sun or Mirror, but within the constraints imposed by its upper class image the Telegraph mounted a reasonable advertising campaign. The views expressed were scarcely of working-class origin, yet they are held quite widely, by workers as well as capitalists. So in offering a critique of what the Telegraph says we are in fact examining misconceptions. for it became clear after only a few lines that these articles were not going to live up to their billing, despite the 23 "experts" consulted by the three staff members who did the actual writing. An editorial in the issue of 29 January stated: "While Western Europe as a whole has succumbed to the disease known as 'Eurosclerosis', the United Kingdom has consistently done worse than its near neighbours in terms of either unemployment or inflation and for most of the 1970s in both at the same time".

The inflation question did not figure in the advance publicity and its inclusion hints that the paper's real concern is not unemployment but regret that the British capitalist economy appears to it to have lost out to its competitors over recent years. In such circumstances we can expect unemployment here to rise more sharply than elsewhere. We therefore need not be surprised to find that the solution offered (eight specific proposals were put forward) are designed to increase UK competitiveness in the hope of regaining lost markets. Even if successful in this (and to accept even this would be an act of faith) the most to be expected is a slight decrease in British unemployment at the expense of a corresponding rise elsewhere. This is no gain; the total unemployment problem has not diminished one iota. The gainers are those capitalists able to resume operations.

Reluctantly the Telegraph editorial did at least acknowledge that unemployment is currently endemic across Europe. But the use of the term "Eurosclerosis" indicates that they have not appreciated the worldwide character of the present slump. Despite overwhelming evidence, nowhere is the existence of a similar problem in America noted and part of the presentation of the 29 January entitled US Experience of Employment exaggerated minor differences between American and British economies almost to the point of suggesting that the former had "cracked it”. Similar notions were expressed by the ageing Earl of Stockton in the first televised Lords debate. These were in no way the product of his ninety-plus years for Harold Macmillan was just as confused in his economic thinking when he was in his prime as Supermac.

A further interesting Telegraph comment was that "Many people view unemployment as akin to a natural disaster — we are unwilling to accept the pessimism — unemployment. like inflation is a soluble problem". On the first point, no doubt many workers believe that unemployment is here to stay but it is barefaced cheek for the Telegraph to talk like this. From the end of World War II right up until the current recession was well developed, the Telegraph, and all of Fleet Street, supported by a host of economic "experts", told us almost daily that the “bad old days" were gone, that unemployment was a thing of the past and that we must change our ideas accordingly. Militant trade unionists were told to forget their old "class war shibboleths" and unite with the capitalist enemy to build a new paradise of prosperity, class co-operation and peace. Even in 1985, when the flimsy premises of these arguments have long since been destroyed this claptrap can still be heard and has perhaps had some success in discrediting sound ideas by branding them as out of date.

In saying "unemployment, like inflation, is a soluble problem", however, the Telegraph is right even if for entirely the wrong reasons. Unemployment is soluble, but only by abolishing the capitalist system which spawns it. Under capitalism labour power will be utilised only if more can be extracted from it than is paid out in wages — in Marxist economic terms if the surplus value embodied in the finished product can be converted to actual profit through sale. In contrast the Telegraph has found itself unable even to recognise, let alone tackle, the world wide unemployment problem. Inflation, although also a problem of capitalism — or at least of money economies is different. Inflation is caused by governments increasing the supply of inconvertible paper money (in earlier times debasing the coinage served the same end) without a corresponding change in the total value of the goods in the economy. The remedy is therefore to cease this practice, as has been done successfully on a number of occasions (one was by Lloyd George in 1919-20). The Telegraph however propagates the fairly common myth that there is a relationship between unemployment and inflation, claiming that there is a "natural rate" of unemployment which was at the 200,000-300,000 level in the 1950s and 1960s but has risen significantly since because

  welfare benefits increased by 30 per cent in real terms and the labour market rigidified under the influence of incomes policies and increasing union power.

Here the Telegraph in effect says that if unemployment is below a certain level workers are more easily able to increase real pay. This is of course often the case. However they come close to admitting that when this situation arises governments often react by deliberately increasing inflation in order to steal back these gains through higher prices. This is certainly a plausible explanation of the inflationary policies pursued by many governments, particularly since the last world war, although it is not the sole motivation. Here the reduction of real wages emerges as the main plank in the Telegraph's "solution", the argument being that if wages and other costs were lower employers would see more potential profit in expanding production. The example of America is cited, where real wages have been falling for some time and unemployment has fallen slightly. However the net effect is small, especially remembering the falling standards of those in work.

Clearly we cannot expect any sensible analysis to come from such sources, but for the record here are the Telegraph's eight suggestions. We have heard such ideas many times before and expect to hear them a few times yet. possibly as part of the 1985 Budget Speech.

1. Cutting the tax on jobs. This is merely cosmetic and very old hat.
2. Easing the Unemployment Trap. The unemployment trap means situations where the going rate is so low that the worker is nearly as well off on the dole. As the idea is to reduce real wages there are no prizes for guessing that the suggestion here is to cut "benefits". To a large extent this proposal is post-dated, as the authors themselves point out that benefits have been cut since 1979 so that the "trap" is much less common nowadays than in the 1950s or 1960s.
3. No Penalties for Part-Time Work. Yet another way to shove wages down. The idea here is to encourage the jobless to take cut rate part-time work to the disadvantage of those who still have jobs.
4. Reforming the Unions. This offers further ideas to back up those already embodied in actual or projected legislation with a view to weakening the unions' efforts to protect living standards.
5. Training to the age of 18. An extension of the old idea of raising the school leaving age. coupled with complaints that young workers' wages are too high.
6. Community Work. Another cheap labour scheme. In the 1930s a few swimming pools and similar projects were carried out at cut-price rates in this way.
7. New Work Patterns. More of the same. Wage rates to be reduced by encouraging existing trends towards part-time and more flexible working arrangements generally.
8. Profit Sharing. A hoary old chestnut. The idea this time is to cut employers' costs and make staff more profit-conscious. What will shareholders (the real ones) say about this, as there will be less profit for distribution among them.

A last example of the Telegraph's lack of perception is that they recognise only two explanations of economic crises. Firstly, the neo-classicist, where the cause is believed to be excessive real wages as seen from the employers' viewpoint as part of production costs. Secondly the Keynesian, which contends that the cause is insufficient demand and the cure increased government spending. Although the Telegraph's experts are able to point out the shortcomings of these two theories, they are quite unable to offer any alternative.

The true alternative model is the Marxist which has been in existence for about 120 years but unfortunately for the Telegraph and its allies it tells us that these problems cannot be solved within the framework of capitalism. However it also gives us genuine cause for optimism. The Marxist model also shows us how society can be re-shaped on a co-operative basis so that all the present social ills will disappear.

E. C. Edge

Utopia or Bolshevism? A New Way Out For An Enterprising Government. (1920)

Pamphlet Review from the October 1920 issue of the Socialist Standard

"The Problem of Healthy Towns and a Healthy Industrial System."  By Captain J. W. Petavel, Lecturer on the Poverty Problem, Calcutta University. Reprinted from "The Englishman," Calcutta, for the Calcutta University Poverty Problem Study Fund. 1920.

In this pamphlet Captain Petavel is chiefly concerned with the physical deterioration of the workers as revealed by official documents compiled for recruiting purposes. He says : "As a matter of fact the well recognised causes of this evil are absolutely removable ones ; and though it indeed came to us with our industrial system, and owing to certain conditions that arose with it, these conditions need not have arisen, and could be removed."

What the World Waited For.

But if the Captain's plan is the only solution, the fact that it had to wait for him to discover it disposes of his contention that the evils need never to have been. Obviously the remedy could not be applied until the man was born who discovered it and persuaded those in power to adopt it.

Unfortunately, although referring to the causes as being "well-recognised," the Captain does not explain what they are, and as every party, reformer, and quack has "well-recognised" causes of his own, to fit each particular creed or philosophy, we cannot rectify the omission, and must examine his scheme as he presents it: "a plan to modify our industrial system in order to prevent the appalling physical deterioration for which it is responsible."

The Captain's Muddled Mixture.

This is distinctly unfortunate because the only sensible way to approach any such question is first to trace the evils to their cause and then examine the possibilities of removing the cause.

A further disadvantage is the writer's confusion on the subject of Socialism. First he says that "Socialism, as conceived by its more intelligent advocates, is a plan, not to abolish our industrial system, but to purge it of these evils, " which is what he proposes to do himself by means of his plan. Secondly he points out that "if the propertied class does not promptly deal with the evils they will be giving the workers every excuse to try Bolshevism, Socialism, or whatever plausible plan is suggested to them." But if Socialism is what he previously described it to be why should anybody object? In his mind Bolshevism is evidently something bloody and terrible, and Socialism can be the same—if it is only plausible.

Our reformer's most amusing statements about Socialism, however, are the following.

The Queer Side.

On page 1 he says: "As, however, we are not prepared to accept Socialism, what is wanted is an enlightened public opinion, free from party and class spirit, to demand just what measures are necessary to remove them " (the evils). That again is a repetition of his definition of Socialism together with a statement that we are not prepared to accept it; therefore the only thing left is, to get on with it.

On page 12, after a lengthy explanation of his scheme—which is calculated to achieve what the "more intelligent Socialists" have for their object—the Captain suggests that as there are still likely to be people who are not satisfied with the system and demand Socialism, they should be given the opportunity to establish Socialist communities on a small scale, being provided by the Government with the necessary machinery to carry oat their experiment. But this, he says, "would not really be Socialism, but would be better described as State organised co-operative production." So that what he first describes as Socialism he afterwards denies to be Socialism by providing for Socialism within it, which in its turn is not Socialism but something else !

A Travesty of Socialism. 

Two pages of this work are devoted to "Guild Socialism," which the writer describes as "one of the most picturesque institutions of the past." His description of the way it would work shows the absurdity of this remark. "The Guild undertakes work and divides it among its members, so that all have their share of it and of pay. When there is a great deal of work, all work long hours, when there is less, all work a short time; the more work there is the more money there is coming in, and the guild pays everybody proportionately more."

Nothing is said as to what should determine the numbers to be admitted to each guild ; it being obviously to the interest of every member to keep out new-comers, in order to keep the share-out higher. On a small scale this idea is already in operation in many factories to-day, where the working day is shortened or lengthened in accordance with the state of trade. It is no solution to the working-class "problem." It is not even an improvement, because there is no more to divide than previously. The product of labour is still shared between the capitalists, who do not share in its production, and the workers, who get the meanest and poorest share.

To the latter every plan must be unsatisfactory that includes any provision whatever for a class that rules, yet does not justify its existence.

Capitalists could Ruin—Themselves.

Having seen how confused Captain Petavel is on the subject of Socialism, we shall not be surprised to discover that his ideas on capitalism and capitalists are none too clear, On page 18 he says : "A democratic government has it in its power absolutely to ruin town landlords. It could, on the perfectly sincere plea of public health, acquire large tracts of cheap land away from the towns, and let them out for building at fixed rates, making the railways convey the people to and fro for the smallest coin in circulation."

A democratic government could do these things and many more : but would they ?

Captain Petavel's scheme depends for its finance on a system of heavy taxation of land values ; which he says, by the way, would be no hardship to the landlords, since they could have full compensation.

How this is to be effected and the money still be available to finance the scheme does not appear, unless it is by the same method that the Jersey Corporation adopted when it proposed to build its market hall for nothing. Captain Petavel is enamoured of this scheme, though he tells us why it failed. "The money lenders put the law into operation against it and had it stopped, so that the full advantage was not realised." They evidently saw who would be at a disadvantage, though even now the Captain fails to see that anybody could suffer from a scheme so apparently innocent.

Unconsidered Trifles.

Captain Petavel's scheme is mainly concerned with the material basis of the present industrial system. Social relationships, interests, and class antagonisms are slurred over or altogether ignored. The re-arrangement of towns according to a settled plan, and the improvement of transport are the biggest items on his programme. His idea of town-planning is that the big business houses should occupy the centre of the towns, and that the roads should radiate outwards like the spokes of a wheel. These roads should be wide, with fenced-in tramways and elevated stopping places to bring the cars rapidly to rest and re-start them. Books of tickets should be issued to the workers at rates varying according to the rents they paid, thus ensuring a cheap and rapid service.

These main roads could be occupied by business concerns, stores, etc., while behind them, in the angles formed by the roads converging toward the centre, could be residential dwellings with open spaces, small near the centre, and larger toward the outskirts.

A Bit Late.

Like all town-planning schemes in this country, however, this one is invented after the towns have grown up, and the cost of alterations, together with the serious interference with capitalist interests which it would involve prevents anything being done on a large scale. To meet this difficulty Captain Petavel proposes a tax on land values, every site to be taxed according to the profit made on it, or according to its proximity to the centre of the town. Some would pay the tax and thus provide the cost, while others would take the cheaper sites further out and thus enable the authorities to re-arrange the towns on the new plan.

In towns planned in this way, the space between the roads would, of course, be greater as the distance from the centre was increased. This space could be used for recreation grounds or for agriculture.. The chief advantage, says the Captain, would come to the workers by this arrangement; they could occupy the outlying districts, where vacant land would be plentiful. They could then produce the bulk of their food-stuffs for themselves. Their food would thus be fresh, and it would only be necessary for them to work a very few hours in the factories per day.

The towns would thus be healthier, the workers would spend most of their time in healthy occupations, and only a very short time in the poisonous atmosphere and monotonous tasks of the factory.

The grounds on which the Captain pleads for his scheme are the health and efficiency of the workers. Better health and greater efficiency make for greater production, and therefore higher profits for the capitalist class. It is quite obvious, therefore, that the workers would still be wage-slaves, exploited by a class above them, a class that owns the means of wealth production.

Captain Petavel puts his plan forward as an alternative to Socialism. If he succeeds in persuading the capitalist class to adopt it, the evils of the capitalist system will still remain, because they are bred by the system, and the system remains.

Whatever changes or reforms the ruling class may decide to introduce, the duty of the workers is to organise politically for the overthrow of capitalism and the establishment of Socialism. They must refuse to be side-tracked by reformers, Bolshevik wild men, or Utopians.

F. Foan

Friedman, Keynes and Marx (1978)

From the December 1978 issue of the Socialist Standard

The capitalist system operates according to definite economic laws which governments can neither change nor overcome; to the extent that they try to they generally make matters worse or create some new problem.

This view is quite at variance with the prevailing economic and political orthodoxy, which holds that government intervention in the workings of capitalism can ensure crisis-free growth and continuous full employment (Keynes) and that government action can eliminate poverty, bad housing, poor schools, inadequate health services, pollution and so on (reformism).

Fortunately not all teachers of economics are content to repeat parrot-fashion the theories of Keynes. Some have been prepared to examine the real world and so have not been able to avoid noticing the manifest failure of government intervention to do what the Keynesians and reformists said it would. This has led to a reaction, with a growing number of economists now arguing that the trouble stems from too much government intervention and calling for a return to what their mentor, the American Professor Milton Friedman, calls “competitive free enterprise capitalism”. Even Margaret Thatcher and Sir Keith Joseph have been toying with this suggestion.

They are wrong, of course. Pure private enterprise capitalism would be no better than the mixture of private and state capitalism we know today. But these economists can claim to have a better understanding of how capitalism works than the Keynesians and reformists, since they at least recognise that it operates according to economic laws which governments can’t change. As one advocate of laissez-faire capitalism, Nathaniel Branden has put it:

  All government intervention in the economy is based on the belief that economic laws need not operate, that principles of cause and effect can be suspended, that everything in existence is "flexible” and “malleable”, except a bureaucrat’s whim, which is omnipotent; reality, logic, and economics must not be allowed to get in the way (in Ayn Rand Capitalism: The Unknown Ideal, p. 79).

We couldn’t express it better ourselves! After all, it was Marx who spoke of “the natural laws of capitalist production” as being “tendencies working with iron necessity towards inevitable results” (1867 Preface to Capital).

Milton Friedman is the new star in the firmament of capitalist economics—he was awarded the Nobel Prize for Economics in 1976, effectively for having demolished the theories of Keynes—but there is nothing especially original about his work. All he had done is to observe how capitalism works and so has noticed that it doesn’t work in accordance with Keynes’ theories.

Take the question of inflation, for instance. Although Keynes at one time stated that over-issuing an inconvertible paper currency would inevitably lead to a rise in the general price level he later came to attach little importance to monetary policy, seeing its role as merely to ensure that enough money was available to finance the government spending which the tax and investment policies he advocated would involve. He thus provided an ideal theoretical justification for governments to finance their activities by recourse to the printing press. Which is what they have been doing in all countries since the war, with the inevitable result that prices generally have been constantly rising.

Friedman has merely done a bit of historical research to show the relationship between unwarranted increases in the money supply and rises in the general price level, enabling him to conclude that rising prices was bound to be the result of Keynesian policies and will continue to be as long as they are applied. In doing this “monetarists” (so called because they disagree with Keynes’ view that “money doesn’t matter”) like Friedman have rediscovered what Marx (and other economists of his time) had stated over a hundred years ago as being the inevitable result of over-issuing an inconvertible paper currency.

Keynes was also something of an “underconsumptionist” in that he thought that capitalism needed government spending to keep it going. His followers have favoured inflation, or more exactly government spending financed by inflating the currency, as a means of trying to reduce and avoid unemployment. But that inflation can reduce unemployment has proved an illusion, as the artificial inflationary boom gives way to the sort of "stagflation” or "slumpflation” we now have, where widespread unemployment and a high rate of price rises exist side by side.

Observing this phenomenon, Friedman has applied a bit of logic and come to the conclusion that the business cycle of boom-slump-boom-slump is independent of inflation, that inflation is not a way of ensuring a permanent boom but merely results in prices rising in all stages of the cycle, during the slump as well as during the boom. Thus the choice is not, as we are always being told by government ministers, Labour and Tory, between inflation and unemployment. The level of unemployment is governed by factors other than inflation, which is essentially a monetary phenomenon independent of the real economic forces which cause unemployment to exist and to rise and fall. This "discovery” of Friedman’s has long been known to socialists though no one thought of proposing us for a Nobel Prize! Even Friedman’s general conclusion on Keynesianism—that the monetary mismanagement it involves has probably aggravated rather than stabilised the capitalist business cycle — was anticipated by Marx, who recognised that monetary bungling could aggravate a crisis originally caused by other factors.

In his book Capitalism and Freedom (1962) where he expresses in simple language his philosophy of “competitive free enterprise capitalism”, Friedman shows how reformist policies aimed at trying to abolish poverty, equalize incomes, eliminate bad housing, have failed just as miserably as Keynesianism:

  Which if any of the great ‘reforms’ of past decades have achieved its objectives? Have the good intentions of the proponents of these reforms been realized? (. . .) An income tax initially enacted at low rates and later seized upon as a means to redistribute income in favour of the lower classes has become a facade, covering loopholes and special provisions that render rates that are highly graduated on paper largely ineffective (. . .)
  A housing program intended to improve the housing conditions of the poor, to reduce juvenile delinquency, and to contribute to the removal of urban slums, has worsened the housing conditions of the poor, contributed to juvenile delinquency, and spread urban blight (. . .)
   Social security measures were enacted to make receipt of assistance a matter of right, to eliminate the need for direct relief and assistance. Millions now receive social security benefits. Yet the relief rolls grow and the sums spent on direct assistance mount.

After mentioning some exceptions of where he thinks government intervention has led to some improvement (such as building roads, providing basic schooling, public health measures) Friedman concludes:

  If a balance be struck, there can be little doubt that the record is dismal. The greater part of the new ventures undertaken by government in the past few decades have failed to achieve their objectives.

Up to this point Friedman is saying much the same as we have done: that social reforms don’t work. But Friedman is not a socialist and does not draw the conclusion we do: that this proves that capitalism is a system which does not work and cannot be made to work in the interest of the wage and salary earning majority. He thinks that if there were less government intervention then capitalism would work to everybody’s benefit!

This conclusion is of course mistaken and arises from recognising as inexorable only one of capitalism’s economic laws: the law of profits, which decrees “no profits, no production”. People like Friedman can easily see that anything that interferes with profits, generally or in a particular industry, will inevitably lead to a drop in production, so making maters worse. But there is another economic law of capitalism which the advocates of private enterprise capitalism ignore: the law of wages, which decrees that the consumption of the class of wage and salary earners is determined by what is necessary to keep them in a fit state of work and to enable them to raise and maintain a family, and that everything they produce over and above this is appropriated as profits by those who own and control the means of production and distribution. Capitalism is thus based on the exploitation and restricted consumption of the working class and, whatever the degree of government intervention, can never work in their interests.

There is another fundamental difference between Friedman and socialists. Although recognising the failure of social reforms he is himself a sort of reformist in that he is proposing changes in capitalism as it exists today in order to achieve his ideal of a "competitive free enterprise capitalism”. The concern of socialists, on the other hand, in the field of economics is to understand capitalism, to “lay bare the economic law of motion of modern society” as Marx put it, and not at all to prescribe economic policies for governments to follow.

The rise of Friedmanite economics, for all its faults and shortcomings, does however represent a return towards the more realistic view of the way capitalism works. Before Keynes, this view was held by a number of capitalist economists, and the demonstration that planning and social reforms don’t and can’t work may be unpalatable for economic “experts” and reformist politicians.

Adam Buick

A Gloomy Professor. (1920)

Book Review from the May 1920 issue of the Socialist Standard

The Unsolved Riddle of Social Justice, by Stephen Leacock. London : John Lane, the Bodley Head, Vigo St., W.1. 5s. net.

This book, written by a professor of Political Economy at McGill University, Montreal, is one of the numerous attempts made to explain the "labour unrest" throughout the world, and to propose some remedial measures for it. To be, and remain, a professor at a University necessarily means that one must not put forth ideas or statements that are injurious to the interests of the master class. Should one do so one very quickly loses one's chair, and is forced to seek employment in another direction.

This does not prevent certain guarded criticisms being made, especially when "unrest" reaches a troublesome stage, but the edge of the criticism is always turned in the end against one or two "exceptional" employers while the majority are shown to be virtuous, hard-working, self-sacrificing benefactors of mankind.

Thus the present volume opens with several important admissions on the conditions existing today. On page 14 we are told.

  With all our wealth we are still poor. After a century and a half of labour-saving machinery we work about as hard as ever. With a power over nature multiplied a hundred fold, nature still conquers us. And more than this : There are many scenes in which the machine age seems to leave the great bulk of civilised humanity, the working part of it, worse off instead of better.

This point is further emphasised on page 76 where he says:

  Labour-saving machinery does not of itself save the working world a single hour of toil; it only shifts it from one task to another.

In the third chapter the author attempts to disprove the usual theories on Value and Price. Especially does he object to the views of Adam Smith and Ricardo that the quantity of labour governs value. After referring to the stock illustration of the primitive savage he contends:

  But in the complexity of modern industrial life such a calculation no longer applies; the differences of technical skill, of native ingenuity, and technical preparation become enormous. The hour's work of a common labourer is not the same thing as the hour's work of a watchmaker mending a watch, or of an engineer directing the building of a bridge, or of an architect drawing a plan. There is no way of reducing these hours to a common basis.

The falsity of this statement is proved by everyday experience. Engineers, Architects, trained Technicians, etc., make elaborate and close calculations to show how the time they have to spend in acquiring their special knowledge and training has to be taken into account when their remuneration is being fixed. Directly or indirectly these multiplications are always applied to the unskilled labourers' standard as the basis of the calculation. Thus in the agitation carried on to-day by the school teachers, many of the speakers are taking the dustman or coalman as a basis for their calculation of what the salary of the teacher should be. A striking illustration of this fact is given in places where technical and professional education is partly or wholly supported from the national taxes. This reduces, or in some cases abolishes the fees that were paid formerly by the students, who are then expected to take lower salaries because their training has cost them less. Chemists in Germany were a front rank instance of this.

It is quite true, as Mr. Leacock says later on, that the payments at a given moment are the outcome of "economic strength." But "economic strength" only determines the range of the "fluctuations," it does not fix the line about which these fluctuations take place. That is determined by the cost of production based upon the average unskilled labourer.

Having admitted so much of the evils of the present system the author turns to remedies. Apart from his own nostrums he only refers to one other proposed remedy, namely, Socialism. This is impossible—"Socialism is a beautiful dream, possible only for the angels" (p. 22). Still he objects to the proscribing and persecution of Socialism, and claims that "It will languish and perish in the dry sunlight of open discussion."

But what is the "Socialism" that Mr, Leacock combats? In this second decade of the twentieth century, sixty-one years after the publication of Marx's Critique of Political Economy, "a critic of Socialism, not an ignorant Christian Evidence ranter, or a Tariff Reform charlatan, but a full-blown "professor" of Political Economy, takes as the standard work on Socialism Edward Bellamy's Looking Backward! The laws of social evolution are not even mentioned. The stage of development that present society has reached, and the only alternatives before us are passed over and a philanthropic sentimentalist's dream of a future state of society, with all its details fully worked out, is put up to be shot at, while the scientific analysis of capitalism and the discovery of social laws by Marx, Engels, and Morgan are carefully ignored.

Even then what is the author's main objection to Looking Backward? It is to the elected managers. They, in his opinion, must work as angels. "Now," he says (p. 106) "Let me ask in the name of sanity where are such officials to be found?" And he answers that they cannot be found anywhere.

What, then, is to be done? For evidently something must be done to avert chaos.

  The time has gone by when a man shall starve asking in vain for work; when the listless outcast shall draw his rags shivering about him unheeded of his fellows; when children shall be born in hunger and bred in want and broken in toil with never a chance in life. If nothing else will end these things, fear will do it. The hardest capitalist that ever gripped his property with the iron grasp of legal right, relaxes his grasp a little when he thinks of the possibilities of a social conflagration. (P. 119.)

Mr. Leacock's remedies can hardly be described as heroic. "Work must either be found or must be provided by the State itself," he says, and points to the undeveloped lands of Canada, United States, and Australia as being capable of absorbing the labour of generations. Whether this means compulsory emigration we are not told. It is interesting to note in passing that he says much to discredit the Malthusian doctrine.

  Put into the plainest of prose, then, we are saying that the government of every country ought to supply work and pay for the unemployed, maintenance for the infirm and aged, and education for the children." (P. 130.)

The two great measures to be applied to this end are the establishment of a minimum wage and the shortening of the hours of labour. Even eight hours a day at a mechanical task is considered too long by our author. These measures are to be brought into operation gradually by the combined means of legislation and collective organisation.

It needs but a superficial examination to show that even a rigorous application of these measures would not affect more than the fringe of the subject. Despite the so-called shortage of commodities, General Haig has been appealing in vain to the employers to give work to hundreds of thousands of demobilised men and officers who are unemployed. Gibing at certain of the trade unions is mere clap-trap as these unions point to the number of unemployed already in their ranks. Above all this, however, is the over-riding constant factor of improving machinery and means of production. These grow far faster than the effective demands of the market can absorb their products. Hence, apart from certain times of fluctuation, the number of unemployed is not only maintained, but is bound to increase.

Against this great fact Mr. Leacock's puny measures are as useless as Mrs. Partington's broom against the sea.

And even then, with unconscious humour, our author turns his own arguments against Socialism upon his own case when he says :

  Yet it is clear that a policy of State work and State pay for all who are otherwise unable to find occupation involves appalling difficulties. The opportunity will loom large for the prodigal waste of money for the undertaking of public works of no real utility, and for the subsidising of an army of loafers. (P. 128.)

A terrible outlook, truly! And how can it be met? By the very means that our author declared impossible.

   Clearly enough a certain modicum of public honesty and integrity is essential for such a task; more, undoubtedly, than we have hitherto been able to enlist in the service of the commonwealth. But without it we perish.

Then perish we must, for Mr. Leacock has already stated that such people cannot be found.

The Socialist—a student of social evolution— has no use for either the well-meaning Utopias of the Bellamys or the despair of the Leacocks. He knows that the development of the powers of production, their increasing size and complexity, the steady concentration of the means of life into fewer and fewer hands, with its increasing slavery of the workers, will force the problem before mankind:—Either social ownership of the Means of Life, or Destruction.

The unrest, the rumblings, the strikes, are all signs that the working class are beginning to kick—still blindly, it is true—against the effects of this system. That restlessness, turned into right channels due to the education the conditions give, aided by the propaganda of the Socialist, will ensure that not destruction, but Socialism, will prove the solution of the problem.

Jack Fitzgerald