The Douglas Credit Scheme Exposed. (1924)

From the December 1924 issue of the Socialist Standard

A Review of Douglas and Orage's Credit, Power and Democracy.

From the days of Marx and Engels, Socialists have pointed out that the improvements in the instruments of production added to the continual increase in the applications of science and discoveries to industry, were resulting in the means of production out-running the effective demand for and consumption of products. The periodical crises of the nineteenth century that resulted from these facts brought forward various "remedies," many of a financial character. One of the best known of these was "Bimetalism," or the double standard, which we were told would ensure "stability," in spite of the fact that countries that had adopted the scheme were just as unstable, if not more so, than those with a single standard. But the great favourite idea was the one of supplying "cheap" credit to the small producer or capitalist who was being beaten in competition by the large capitalist. As this "credit" could not—for obvious reasons—be obtained through the usual financial channels, the municipality or the State was called upon to supply it.

The Great War brought about an immense acceleration in the improvements of instruments of production and the applications of science to industry, and a great increase in combinations among capitalists reaching in many cases to the Trust stage. While the huge destruction of products by the war continued accompanied by the withdrawal of millions of men from industry, these means of production were kept occupied. When the war ended a twofold increase in the old problem faced the master class. First, the great demand for products for war having ended, large numbers of workers were thrown out of employment and plants were standing idle. Second, the demobilisation of the huge armies threw another immense number of men upon the streets. At first the cry went up for "mass production" of peace commodities, a cry backed up by the Labour leaders, and war factories were converted as speedily as possible to this end. The result was, of course, easy to foretell. After a short feverish "boom" in production of goods for which there was no effective demand, a fearful slump followed with larger numbers than ever thrown out of employment.

Of course, numerous remedies, old and new, were put forward to deal with this enormous problem, and among them our old friends the money and credit cranks turned up again. Some advocated the abolition of the gold standard. Others the inflation of the currency. And, of course, the question of "cheap" credit cropped up once more. The great point common to all these schemes was that they promised to preserve capitalism while offering enormous benefits to the workers. As the facts mentioned above show this is a contradiction in terms. While capitalism lasts the tendency is for further improvements in the means of production and extended application of science to industry. Not only so, but these improvements and applications proceed far faster than the growth in markets, with the result that the markets are filled up in a shorter time than before and unemployment spreads faster and farther as a consequence. There is no escape from this position, nor any solution of the problem while the private ownership of materials and instruments of production remains. At present the capitalist class is "staving off'' the worst effects of the enormous unemployment by extending Unemployment Insurance, inaccurately termed "the dole."

The work now under consideration is one of these attempts to save capitalism from catastrophe by means of "credit" manipulation. This statement may surprise those members of the I.L.P., etc., who have been mystified by its confused exposition into supposing that its object was to provide a scheme to benefit or even to emancipate the workers. In fairness to the author it must be stated that he makes no such claim himself, for while he says capitalism is breaking down, he proposes the scheme to save society from crashing into chaos. The workers are to remain workers and the capitalists are to continue to be capitalists.

Major Douglas takes about 150 pages to expound his scheme, and Mr. A. R. Orage of the New Age kindly adds another 60 pages of commentary to "explain its general meaning." There was certainly great need for this, but it is doubtful if the object has been accomplished. The author exhibits little knowledge of economics and hardly more of industry. His various and confusing uses of the word "credit" makes it difficult for the non-technical reader to follow his argument, while the student of economics is merely irritated at the mis-statements and misunderstandings of capitalism shown in the exposition. Thus on page 6 we are told that the fundamental policy of a capitalistic manufacturing enterprise—

  is to pay its way as a means to the end of maintaining and increasing its financial credit with the banks.

The most elementary student of economics knows that under capitalism the "fundamental policy" of a concern is to produce profits for the capitalists, and its "financial credit" is only one of the factors in that policy. The first sub-heading to chapter I is entitled "The Fallacy of Marxianism." Yet there is not one word of Marx nor a single statement of Marxianism in the whole chapter. According to pages 22 and 26 Major Douglas imagines that all increases of capitalisation consist of bankers' overdrafts, and it actually is made a part of his scheme. This absurd notion leads to the further fallacy that the banker not only decides what shall be produced, but also the prices at which the articles shall be sold (pp. 32 and 46.). "Credit" is used at one time to mean instruments of production, while later on it is defined as "the correct estimate of the capacity of a community with its plant, culture and labour, to deliver goods and services" (p. 101). Financial credit it the issue of money as overdrafts, etc. Mr. Orage explains on page 192 that "consumable goods plus capital goods and imports make up between them the sum of the real credit produced," but on page 197 he defines real credit as given on page 101. Further confusion is shown in dealing with capital. On pages 28-29, we read that "capital represents potential production of ultimate commodities," while on page 34 it is described as "tools, factories, intermediate products." In the same paragraph it is asserted that the prices of ultimate products turned out in a limited time includes the total cost of tools, factories, etc., although the latter may continue to give service for years after. The fact is, of course, that the average life of a machine, tool or factory is taken and its cost split up among the number of articles produced during that life, and therefore the "prices of ultimate products" for any period less than this life will not contain the whole of the capital cost. While it is admitted on page 42 that the "individual entrepreneur" has been superseded by the limited liability company, both Major Douglas and Mr. Orage retain and repeat the superstition that the capitalist "administers" industry.

Numerous other fallacies are scattered throughout the book but we must pass them over to examine the scheme proposed.

Major Douglas avoids numerous difficulties and questions by laying it down that everything economic is "credit." Raw materials, instruments of production, and finished products are all "credit." This credit is the creation equally of consumers and producers because without the consumer the goods produced would be useless. Consumers and producers appear in their joint characters as "members of the public." The first point to be grasped clearly is that the capacity of our means of production is far greater than our actual production. The total capacity to produce, or "the correct estimate of ability to produce and deliver goods as and when and where required " (p. 189) is called our "real" or "national" credit. When giving an illustration, however, some further confusion is introduced by sometimes limiting "real" credit to means of production. Whatever definition may be taken, the object of the scheme is to distribute the margin between the amount of consumable goods produced and the amount of real credit, among the consumers. It is estimated that the present production of real credit is four times greater than the production of consumable goods. The scheme proposes to distribute this difference or margin by regulating the price of consumable commodities in this ratio. That is to say, that consumable goods would be sold at one-fourth the total cost of production, thus distributing to the consumer his share of the national credit at the moment of purchase. For the purpose of illustration the coal industry is taken and the scheme worked out in some detail on that product. Coal besides being a consumable good is also used as a means of production, but, as here, it increases the "capacity to deliver goods and services out of all proportion to the 'cost' of raising it" (p. 119) the manufacturer is already in possession of his margin, or rather more than his margin, and he is to pay over this excess in the form of an increased price—"an agreed percentage"—above the cost of production. The question of coal for export would be decided by our need of coal and the conditions of the world market. We thus have "domestic" coal sold at a quarter its cost of production, "commercial" coal sold at "an agreed percentage" above the cost of production, and "export" coal at a price determined by the world market. It is assumed as probable that the total of above prices will not equal the total cost of production. Then what is to become of the poor coalmine owner? Quite simple. The margin between the total prices and the total costs of production—including interest, dividends, etc.—will be made good to the coalowner by the Government in Treasury notes issued against the National Credit. The larger the amount of National Credit the lower will be the price of domestic coal, and the lower the cost of producing coal, the lower will be the prices of goods into the production of which coal enters. This is where the coal miner is considered. As he is a consumer of numerous articles of the latter kind, it will be to his benefit to produce coal as cheaply as possible so as to lower the prices of the articles he requires. Further, as these articles will be consumable goods their price will be regulated by the ratio between their cost of production and real credit, as in the case of domestic coal. Hence another inducement to the miner to increase real credit, so far as coal forms a part of it by working hard and cheap.

Such is the proposal, and its application to all branches of industry producing consumable goods will, presumably, follow the same line. What would happen in the industries that only produce "intermediate products" as machines, engines, ships, railways, factories, etc. we are left to guess.

The next point is how the scheme is to be brought into operation. The object to be attained is that "the public acquire control of credit-issue and price-making." On page 86 we are told "There is no hope whatever in the hustings." Yet the second clause of the scheme, calls in the Government to enforce the scheme upon industry. And clauses 1—2 and 6 of Part 2 call in the Government to carry out important details.

A producers' bank is to be established in each industry. The Government shall recognise this bank as an integral part' of the industry and representing its credit. It shall ensure its affiliation with the clearing house.

The shareholders of the bank shall be all the persons engaged in the industry, who shall have one vote each at a meeting. The bank as such shall pay no dividend.

The directors (of the industry) shall pay all wages and salaries to the producers' bank in bulk and the bank shall allocate to each employee's account his wage or salary.

Once the bank is in operation all subsequent expenditure on capital account shall be financed jointly by the colliery owners and the producers' bank in the ratio which total dividends bear to salaries and wages. The benefits of such financing done by the producers' bank shall accrue to the depositors.

The capital already invested in the mining properties and plant shall be entitled to a fixed return of, say, 6 per cent., and, together with all fresh capital, shall continue to carry with it all the ordinary privileges of capital administration other than price-fixing.

The Government shall reimburse to the colliery owners the difference between their total costs incurred and their total price received, by means of Treasury notes, such notes being debited, as now, to the National Credit Account.

In the case of a reduction in the costs of working, one-half such reduction shall be dealt with in the National Credit Account, one-quarter shall be credited to the colliery owners, and one-quarter to the producers' bank.

Other clauses deal with the questions of prices, accounts, etc., that need not detain us here.

The first point that sticks out from the scheme, like a column on a plain, is that the capitalist and capitalism are to remain. Public control of credit issue and price-making is to result merely in the capitalist being guaranteed his dividends from the National Credit. "But prices will be lower for all consumers," we will be told, "and therefore the workers will benefit as consumers." The remark is fallacious, for while every producer is a consumer, every consumer is not a producer. Those consumers who live, without producing, on profits—whether in the form of interest or dividends—will, first, have their profits guaranteed to them, and second, their purchasing power enormously increased by the fall in prices. But the worker remains a wage-slave and his wages will be determined by his cost of living, modified by the pressure he may be able to exert through his Trade Union. Mr. Orage claims that under the scheme "the exclusively proletarian Trade Union ceases to be necessary." On the contrary they will be required more than ever for an employer whose dividends are guaranteed is in a far stronger position than one who has to use his dividends in a fight with the workers.

Thus the workers will be called upon to work harder and produce more in order to cheapen consumable goods for the capitalists, while the workers' own position will be worse relatively, and even absolutely. Major Douglas says quite definitely that if the demand for the product falls off "the industry would produce the same amount of real purchasing power for distribution among its members through the agency of dividends with less work, wages and salaries" (page 124, italics ours). In other words the exploitation of the workers would increase under the conditions mentioned.

It may be objected to this that under the scheme every worker in the industry would be a shareholder in the bank, and could draw "dividends" on his portion of the shares the bank holds for credit advanced for capital expansion. Or, as Major Douglas puts it:

  So that as improvements in process displaced men from industry the purchasing power they had helped to create would be available in the form of dividends. (P. 125.)

Under the illustration given in the book the ratio of wages and salaries to dividends is estimated as 9 to 1; so that it £100,000 were required for an extension of the industry, £90,000 would be advanced by the producers' bank and £10,000 by the owners of the industry. But this clause is sheer farce. It may astonish the ignorant Major Douglas and his followers to know that many industries extend their business out of revenue without any fresh capitalisation at all. The big banks have been doing it for years. Even where capitalisation takes place later on, it is usually done to hide large profits. The owners of an industry under this scheme need not ask for a single £1 note from the producers' bank, but could carry out their extensions as "expenses of business" and the amount would be guaranteed by the Government. Even if it suited the owners' interests to call upon the producers' bank, the amount called need never be large enough to balance the owners' shares, while to argue that the few shillings—at most—that would be the share of each of the hundreds of thousands of workers in the industry, would maintain a man out of work, is absurd.

It is thus easy to see that the scheme was drawn up with the object of preserving the economic position of the small capitalist and dividend drawer from the result of what Major Douglas thinks is an impending collapse. The workers are to be deceived into fancying they are capitalists or sharing in the control of industry by a few shares collectively owned through a bank, just as many are misled by the "profit-sharing" schemes in operation in so many industries to-day. But the scheme will fail to find general acceptance because the large capitalists and financiers are not interested in it, nor even in Major Douglas' cry of "chaos coming," while the smaller capitalists do not possess the power to put it into operation.

The portion of the book written by Major Douglas is written in the bombastically ignorant and offensively arrogant style of a youth from a so-called Public School. Mr. Orage, as an older and more experienced propagandist, is far more careful as he sees the necessity of converting or hoodwinking the workers into accepting the scheme before it can be tried.

But its fallacies seem too glaring even for his hopes.

The book is priced at 7s. 6d. The publishers should have made it £7 6s. to prevent any worker who might have made a bit of overtime one week from wasting money upon its purchase.

Jack Fitzgerald

Letter: Currency Illusions. (1922)

Letter to the Editors from the June 1922 issue of the Socialist Standard

To the Editor,

Dear Sir,

I am writing on a somewhat perplexing subject, that of Currency. The views of Noah Ablett which I present here, are in my opinion not Marxian, and I shall be obliged if you will give your comments and endeavour to throw some light on the question.

In Easy Outlines of Economics on pages 49 and 50, under the heading "The Paradox of Paper Money," he states the following theory :—Given a certain amount of commodities the quantity of gold which can remain in circulation is definitely limited; but if gold is replaced by paper, the quantity of paper money which can circulate is not limited. Consequently, if the quantity of money required in circulation is one million sovereigns, and two million pound notes are introduced instead, then the commodity previously valued at £1 will want two one pound notes in exchange; if another million notes are introduced the £1 commodity will want three notes in exchange and so on. Ablett explains this by saying that the laws of currency have been violated. Now I understand him to mean that the prices of commodities are determined by the excessive number of notes in circulation, which to me appears to be a negation of the labour theory of value, on the basis of which alone I had thought prices understandable.

To illustrate this, let us take any two dissimilar commodities; for instance, a pair of boots and a bicycle. We know that both are useful and have shape, weight, and colour, but when we put them in exchange relation we find that none of the above attributes can determine how the value of one corresponds to the value of the other. Examination however shows that they have one thing in common, they are both the products of human labour. This provides the rod with which to measure their value, just as distance is measured with a foot rule.

The use of a universal equivalent, e.g., gold, as a measure of value, enables all commodities to express their value in exchange, in one substance; that is, it gives their price in money terms. This serves instead of expressing the value of each commodity in so many hours of labour time necessary for their production. If in our example a pair of boots cost £l, and a bicycle £8, it is at once seen that these different prices represent different values.

Now, if on the introduction of an excessive issue of notes we have to give £2 and £16 for boots and bicycle, where previously we gave £1 and £8 respectively, what will have happened? One of three things must have taken place. Either (1) the value of the boots and the bicycle have increased; also the value of the sovereign measured by Treasury notes, but the value of boots and bicycle to a far higher degree, or (2) the value of gold has fallen, while the values of the boots and the bicycle are the same, thus necessitating more gold in circulation and a higher price for the boots and the bicycle, or (3) the value of gold is the same, but the value of the boots and bicycle have increased.

While I agree that only a given quantity of gold can circulate, I do not see how an unlimited quantity of notes can remain in circulation. An excess of notes, like an excess of sovereigns over the quantity required for circulating the commodities, would lie idle in the banks.

Anyway, if the high cost of living is a result of the so-called excess of notes in circulation, how is it that the Treasury note will buy as much as the sovereign? Again, in the United States of America, where there is a gold medium, we find the cost of living as high as it is here.

Finally, I am told that Marx in Capital, volume I., page 144, (Kerr), under the heading of "Coins and Symbols of Value," deals with Noah Ablett's point .in this way :—If the quantity of paper money issued be double the amount required, then as a matter of fact, £l would be the money name, not of a quarter of an ounce, but of one-eighth of an ounce of gold. The effect would be the same as if an alteration had taken place in the function of gold as a standard of price. Those values that were previously expressed by the price of £l would now be expressed by the price of £2. I ask for information on this point : What does it all mean?

Yours for Socialism, 

Edward Littler.

Reply:
In no subject, except perhaps that of religion, is mankind so prone to accept statements without enquiry or examination, as in the matter of money. As Marx says, "the wildest theories" prevail upon the question. An illustration from present circumstances will show how easy it is to mislead people on this matter.

When prices were at their height, shortly after the war, one of the "explanations" put forward by the Capitalist Press, and repeated by Labour College writers and members of the Labour Party, was that the rise in prices was largely due to "the inflation of the currency." In both articles and correspondence in the Socialist Standard, we have pointed out the falsity of this claim, and have shown that, both from the quantity of currency notes issued compared with prices, and from the fact that the "Bradbury" is convertible, no inflation has taken place.

Money as a measure of value and a medium of circulation, is a necessity under a system of commodity production on a large scale. It is the "universal commodity," set aside for the above purposes in a system where private ownership of the means of life is the ruling factor. Hence, the futility of all the schemes that attempt to solve the social evils by juggling with one item, the currency, while leaving the others intact. As money is a result of the private ownership of the means of life, it is obvious that it cannot be abolished until the cause is removed.

The commodity in general use as money, in the western world, is gold. On the average, the amount of gold exchanged for a given commodity is the quantity that has taken the same amount of social labour time to produce as the commodity has taken. To guarantee the unit of money as to quality, weight, etc., it is issued under Government control.

Inside any national boundary where social conditions are fairly stable, it is easy to replace gold with tokens or symbols for purposes of circulation. In fact, in every country with a "gold standard," metal tokens, usually silver or copper, are used for purposes of small change. Paper notes may also be substituted inside a particular country. In general, this paper is issued under one of two systems.

In one system, such as prevails in this country to-day, the notes are "convertible" into gold upon demand at some central institution, like the Bank of England. It is easily seen that, so long as the promise to pay gold holds good—or is believed to hold good—the notes will exchange at their face denomination, and no inflation of such a currency can take place.

Under the second system, the notes are issued as "legal tender," without any promise to redeem them in gold. This is called an "inconvertible" issue. Inside the national boundary, and for home produced commodities, these notes function similarly to the "convertible" ones, and their issue has no particular effect upon prices under normal circumstances.

Outside of the country issuing notes, the position will depend upon certain other factors. First of these is the confidence of the outsiders in the promise to pay gold in the case of the "convertible" notes. Where there is full confidence in this promise, the notes will circulate at their face denomination, less the amount required to cover the cost of carrying gold to the country in question. If this confidence is lacking, the degree in which it falls below "full" will be shown by the rate of exchange.

With "inconvertible" notes, the matter is somewhat more complicated. These notes will be taken at their power to purchase gold or goods in the world's markets. It is at this point that a great confusion of thought exists on currency matters.

An examination will show that the power of purchase possessed by these notes is based upon the resources of the country issuing them. If the notes are issued in such quantities that their face denomination exceeds these resources, their power of purchase abroad will fall in a similar ratio. This brings forward the factor that has confused Mr. Ablett and so many writers in the Capitalist Press—the factor of Credit.

When Mr. Ablett states (p. 50): "Governments may easily inflate the currency by printing pieces of paper," it is a pity he does not state what they could do with this paper when printed. Moreover, he has been refuted in principle, as long ago as 1682, when a certain writer stated :—

  If the wealth of a nation could be decupled by a proclamation, it were strange that such proclamation have not long since been made by our Governors.

This writer was the famous William Petty, and the above quotation from his work is given on p. 73 of Capital. (Sonnenschein.—ed.)

As Mr. Ablett, probably for quite good reasons, fails to give any description of the functioning of a paper currency, a short account may be useful here.

If the government of a country with an inconvertible paper currency requires certain commodities, such as guns or battleships, it may order firms in its own country to build them, or it may order them from abroad. In the latter case, it may offer to pay in its own currency—if necessary, printing the notes for this purpose—but this would not be inflation, as the currency would only be issued to the amount of the prices to be paid. To the firms supplying the commodities, the notes would be useful only so far as they would purchase gold or goods in the world's markets at their face denomination. If the government were to order goods beyond the capacity of the taxes to meet the bill, then their credit would fall, and their notes—as they stood, without printing a single one extra—would fall below their face denomination outside of their own country. The printing of more notes to meet this fall would not alter the situation, or the price level of the notes. It is this extension of credit that the would-be experts confuse as an "inflation" of currency.

The government in question might purchase gold with its notes, to pay the bill, but of course the more usual way is to issue bonds for the amount, on the taxes of the country, and pass these bonds through the banks and financial houses.

The huge increase in demand, accompanied by an enormous extension of credit, that has taken place between governments and firms, during and since the war, has been the great cause of the rise in prices. Such rise has necessitated a large increase in the currency to' meet the demands of business. This obvious fact has been inverted in the minds of the shallow apologists for Capitalism, who claim the rise in prices has been due to "the inflation of the currency."

Jack Fitzgerald

A Ray of Hope — For the Capitalist. (1922)

Book Review from the April 1922 issue of the Socialist Standard

"Wages, Prices and Profits." The Labour Publishing Company, Ltd., 6, Tavistock  Square, W.C.1. Price 6s.

At a moment when the capitalist Press and apologists are shrieking to the workers that "business is being ruined" by the huge wages paid to the employees, when drastic wage cuts and longer hours are being enforced in every industry, it will be comforting and refreshing, as well as reassuring, for those workers to turn to the pages of this slim volume.

In its 110 pages the workers who are greatly worried by "the serious difficulties" of the employers, and who wonder how the masters can stand the strain of "high wages" and "bad trade," will find balm and solace for their harassed feelings. A wave of relief will surge through their minds when they find that, after all, there are a few gleams of hope—for the masters —and even a fragment or two of resources left to them to tide over the present "time of terrible strain."

The book consists largely of tables and figures dealing with wages, prices, profits, capitalisations, etc. These tables are compiled almost entirely from "official" sources—that is, sources provided by the masters themselves in various Government Departments. It is well known, however, that Government officials are terribly busy men, and thus some of the information they supply is sometimes deficient in certain details. The compilers of this book have endeavoured to make good such deficiencies from other sources.

The essential reason for the existence and continuance of capitalism is Profit— of course, "Fair" Profit—so we will take one or two points from that section first.

The vast majority of business undertakings to-day are in the form of joint stock companies. When these are public companies, they must issue a balance-sheet each year. A useful account and analysis of these balance-sheets, and how they are "arranged" to conceal the truth, is given on pages 31-36 of this work. On these sheets the nominal profits made during the year are shown. These profits are usually tabulated as a percentage of the capital of the company, and here one of the gleams of hope shines, through the somewhat mystifying figures of the balance-sheets.

The ordinary uninstructed person would imagine that the "capital" shown on the balance-sheet was the amount of actual cash invested by the shareholders. Fortunately for the shareholders, this need not be so, and in many cases is far from being so. Sometimes the shareholders are given shares, called "bonus" shares, for which they pay nothing, but on which they are entitled to draw dividends. Thus a company with £200,000 capital might distribute "bonus" shares in the ratio of one new share for every two original shares. This would increase the "paid-up" capital—so called—to £300,000, and the profits would now be reckoned against this new figure, although the shareholders had only provided two-thirds of that amount.

If the profits made in a year were £20,000, this would be entered as 10 per cent, on the original capital, but the same amount of profit would only represent 6.6 per cent, on the new "watered" capital.

On page 92 the following table is given of the Bonus shares issued in 1920, as far as these are obtainable :—

The totals show that bonus shares were distributed over all the industries mentioned, in the ratio of two new shares for every three original ones held; but in certain cases—as Tea and Textiles—the bonus shares distributed exceeded the original capital—in the latter case by over £4,000,000. In some cases bonus shares are paid for, but always at a price below the market rate prevailing at the time. Some instances are given on page 94 :—

  "The Imperial Tobacco Co., for instance, issued in 1920 new £1 shares to its ordinary shareholders in the proportion of one new share for every three held, at the price of 40s. ; immediately after this operation the shares were quoted at 55s. 6d., thus enabling the shareholder to sell out his holding and pocket 15s. 6d. per share on the transaction, and enabled the company to increase its reserve (generally entitled 'share premium account ') by 20s. on each share issued."

Further on we are told :—

   "The Aerated Bread Co., for instance, in February, 1920, issued 63,750 £1 shares to its shareholders at the price of £4. The premiums derived from these shares were put to reserve. In the next month, however, the company capitalised these premiums, together with certain other reserves, and issued fully paid-up bonus-shares to its ordinary shareholders in the proportion of one new share for every share held, the new shares ranking for dividend as from March 28th of that year." ....
   "Thus the Shell Transport & Trading Co, issued 6,433,852 £1 shares at par to its ordinary shareholders. The price of the ordinary shares, immediately after this operation, was quoted at £6 ; at this price consequently by selling all these shares, the shareholders would have been able to. make a profit of £38,603,112."

While on page 100 we read that the coal firm of William Cory and Son "distributed a bonus in April, 1919, of two new shares for every one held."

Not so bad. Quite a few contingencies could be met from these little emoluments. The worried workers who were so anxious about how the poor employers could exist in the present state of affairs may now breathe more freely. The resources of these employees would seem to at least compare with the funds of the Amalgamated Engineering Union.

Another table is given on page 101 wherein it is shown that the nominal capital of new companies registered in Great Britain (Black-and-Tans are not given in this list) in 1920 was £593,189,032. It is thus evident that those wonderful high wages did not extract every penny from the employers' pockets.

The "concentration of wealth" theory of Marx has been disputed at various times by more various people, but a table on page 101 supports this contention. The number of Joint Stock Banks has decreased from 43 in 1913 to 20 in 1920—or by more than half. This has been due to amalgamation. The Capital and Reserves, however, have stood the strain fairly well, as they have increased from £83,068,000 in 1913 to £128,154,000 in 1920. Another factor that seems to possess moderate stamina is that of Deposits, which have risen in the same period from £809,352,000 to £1,961,527,000, or 142 per cent.

This is only part of the story. Of the above 20 Banks there are five (the "Big Five") that hold £1,628,375,000 of the deposits, or, roughly, 83 per cent, of the total.

Numerous other tables are given that are of great interest to the workers, and certain features are shown more clearly by means of charts at the end of the book. We have only room for two further quotations. Referring to war bonuses, we read :—

  "Nor did the workers succeed by this means in keeping wages fully abreast of prices, but the advance always followed behind, and never went before, the rise in the cost of living " (page 14).

While with reference to wages and prices we are told :—

  "There is, moreover, no necessary connection between wages and prices. It is significant that the drastic reduction of wages to which the miners were subject at the end of the coalowners' lockout, was immediately followed by a rise of 3s. per ton in the price of domestic coal " (page 43).

A most comforting and valuable book. The only regret is that it has not been found possible to issue it at a price within the reach of every worker. Still, even at 6s., it is well worth buying—if one can spare the cash—for it shows that, even without Reparations, the capitalists of this country can still hold out a little longer against the "bad times."

Jack Fitzgerald

Some Errors of A Syndicalist. (1920)

Book Review from the March 1920 issue of the Socialist Standard

My Second Country, by Robert Dell. John Lane, The Bodley Head. 75. 6d.

Written with sympathy and insight, and in a taking style, this book gives one of the best descriptions of conditions in France that has appeared since the war.

Beginning with an examination of the French character, the author then describes the political Constitution, tracing its developments from the Revolution, and afterwards looks into the economic conditions.

One conclusion that he draws from his survey is that France is bankrupt, and must either repudiate her National Debt or

Face a Revolution.

But Mr. Dell holds out no hope of the former solution, for he believes that while the French Bourgeoisie cannot agree to repudiation, neither will they submit to a heavy capital levy, nor to the huge taxation that would be necessary to tide over the difficulty even temporarily. "These people are quite willing to

Let their Sons be Killed,

said an eminent Frenchman two or three years ago, "but you mustn't ask them for five francs." (P. 191.)

The way in which the French capitalist class have resisted the increase of taxation during the war on the claim that "Germany will have to pay in full," is well described. Now the fact emerges that Germany cannot "pay in full," but no serious attempt is made to meet the situation, and hence Mr. Dell thinks a revolution is inevitable.

He shows the grip of the big financial interests upon the political machine, and thinks the political corruption in France is greater than in England, but as he admits that the thing is done more openly there than here, anyone who has looked at affairs that have been exposed in England during and since the war will be more inclined to hold the view that the difference, if any, is small, and that it is only a matter of how much more is concealed here.

Combined with this corruption there is a host of forms and methods connected with Politics and Administration that are obsolete and

A Considerable Hindrance

to the smooth working of the machinery. The resentment against these methods and results, coupled with the corruption, leads the author to the conclusion that Parliament as a whole is discredited.

How erroneous is this conclusion is clearly shown by the increased number of people who take part in the elections and still more by the huge struggle between the "interests" for control of Parliament. Among many instances that the author gives is one of the metallurgical industries, of which he says "there is good reason for believing that they prevented the bombardment of the mines of Briey when the latter were held by the Germans." (P. 61.) This action would have been impossible without

Control and use of the Parliament.

The author's study of the economic conditions prevailing in France is, in general, excellent, though a few points call for criticism. Moreover, as it is a question seldom seriously examined by ordinary writers, its treatment adds considerably to the value of the volume.

Mr. Dell claims, and gives good evidence to support the claim, that the ideas engendered by small property or "petty bourgeois" conditions are the prevailing ideas in France. This accounts for the readiness of the people to subscribe for Government loans and similar "safe" securities, and their reluctance to invest their money in industrial undertakings at home, though wild cat schemes abroad have strong attractions for them. Hence France is a great lending nation, and this explains the vast control of affairs by the

Purely Financial Interests

as distinct from the industrial ones.

In dealing with the practice of family limitation, a practice French people have carried further than any other nation, Mr. Dell says:

  If families have been too much restricted in France that is the result of the economic system. In a capitalist state of society a man without property, who brings into the world a large number of children, is exposing them to the risk of a life of misery.
  The limitation of families in France is not due to the selfishness of parents but to their desire only to have children to whom they can give a decent chance in life. (P. 46.)

Now capitalist states of society exist in England, Germany, and other countries as well as in France, yet limitation of families is not practiced to anything like the same extent in those lands. Mr. Dell has failed to note the condition that is, in the main, responsible for the greater limitation of families in France than elsewhere. The reason is to be found in the land system established by the Revolution.

Under this system a proprietor of land cannot leave it to his eldest son, or any other child alone, but must allow it to be divided

Equally among the Children.

The plots, as first shared at the Revolution, were sufficiently large to maintain one family, but were quite inadequate to support two or three. The experience of a generation drove this fact home, and the peasant-proprietors began to limit their families to prevent their plots from being cut up into pieces too small to support a family. The population passing into the towns from the country carry these ideas with them and make the practice prevalent.

In this connection it is certainly surprising to find so acute an observer as Mr. Dell supporting the exploded lies of Malthus, written to justify the misery caused by capitalism in its early days, when, on p. 48, he says: "the world can support in comfort only a certain number of people," and "Malthus only formulated in a theory the conclusions of ordinary good sense.

The former remark simply begs the question —What is this "certain number"? None of us know, except that under Socialism it could be far greater than the present population, even if one only considered that the millions at present engaged on useless labour or in destruction would then be employed upon productive work. Yet in the same section in which he lends support to the Malthusian sophistry, the author calls for an increase of the population in France when he says:

  France can only be saved by a large immigration of adult men, or by a large number of illegitimate children, or both. (P. 51.)

and

  The only solution to the problem is the endowment of motherhood whether legitimate or illegitimate. The endowment should be limited to three children. (Pp. 47-48.)

Similar measures were openly advocated in this country during the later stages of the war when the wholesale slaughter of the male population began to deplete seriously the ranks of the wage slaves. Malthus then, and since, was

Pushed into the Background,

where, doubtless, he will remain till the question of unemployment looms large enough to bring him forward again.

If the French bourgeoisie will not submit to the confiscation of part of their wealth to meet their huge liabilities, what form will the inevitable revolution take? It is here that the author loses a large part of his grip upon essentials.

His admiration for Voltaire is so great that Mr. Dell holds the France of Voltaire as "the great, the true France." This is idealism of the type that looks to the past for its inspiration and guide, and fails to realise that each age must solve its problems with its own materials, and that attempts to revive the dead past must end in failure. Voltaire voiced the views and expressed the ideas of the then new rising class, the bourgeoisie. Those views and ideas do not fit the existing conditions; neither are they any guide to the class now rising to control the social forces, the working class. This class must work out its own salvation from the basis of

Its Own Conditions and Desires,

without any regard for past forms, or blind following of previous systems.

Under the influence of this idealism the author, who announces himself a Socialist, and says "I hope not only to live to see the dictatorship of the proletariat, but also to have the honour of assisting in it" (p. 274), is led to ignore the very facts he so clearly described. He is so obsessed with that insane thing, Syndicalism, that would pit unarmed men against machine guns and aerial bombs, that he advocates the abandonment of political action because it is, he contends, quite useless. He declares: "A Socialist Parliament, with a Socialist Government, could not establish Socialism." (P. 260.) If the reader should be rude as to ask why, the only pretence of an answer is found on pages 279-3, where it is said:

  Capitalism can never be abolished by Act of Parliament. Seeing the enormous pull the monied interests must always have in an election in our present social conditions, if only because elections cost so much money, I doubt whether a majority would ever be obtained at the polls for the abolition of capitalism.

Even the meanest intelligence should be able to understand that people who are not prepared to vote for Socialism will not take infinitely more troublesome and dangerous methods to establish it. Hence the only conclusion that can be drawn from his statement is—that Socialism is impossible.

But what alternative to political action does our author offer? The following:

  The modern revolutionary method is the general strike, not barricades in the street. That is the form that direct action will take, and if the general strike be properly organised, and the strikers hold, it can accomplish in a few days without bloodshed or violence what it would take years or generations to accomplish by constitutional methods, if they could ever accomplish it. (P. 277.)

We have exposed the glaring fallacy of this on numerous occasions, but it will bear repeating.

The first point to note is that for the General Strike to come into operation it is necessary that practically the whole of the workers must have agreed to the strike and its object. Compared with the work and time necessary to obtain this result, the convincing of a majority of the workers of the wisdom of

VOTING for Socialism

would be child's play.

Secondly, the immediate result of a General Strike is the stoppage of the production of foodstuffs. Moreover, the distribution of the foodstuffs existing is prevented.

What, now, are the conditions? This. On one side are the huge numbers of the working class, including the wives and children, whose total means of subsistence consists of the tiny stocks in their cupboards.

On the other side are the relatively small numbers of the capitalist class, whose well-stocked larders will keep them alive long after the workers' stores have vanished.

Result—mass starvation.

But what of the foodstuffs in the stores and granaries? it may be asked. The answer is simple. As the workers have left political power in the hands of the masters, the Government would pass a decree in about ten minutes "commandeering" all available foodstuffs "in the national interest." These stores would be guarded by soldiers and their contents used to keep the capitalist class and their supporters alive while

The Workers Starved.

"Could not the food producers stay at work and continue to produce food?" it may be argued. Quite likely, and as soon as it was produced it would be seized by the soldiers to feed themselves and the capitalists. Even this does not exhaust the methods open to the masters. When the French railway workers went on strike in 1910 the strike was broken by M. Briand mobilising the men—most of whom were on the Army Reserve—under military orders and then sending them to run the trains as soldiers. What is there existing that would prevent the masters, through the Government, calling upon the workers in the food industries and sending them to produce food, as soldiers, for the master class? Nothing—except the resistance of the unarmed men against the machine gun and the aeroplane.

Mr. Dell claims to be a follower, or acceptor, of Marx's teachings. What distinguished Marx and Engels throughout their career was their clear grasp of the importance of political action. All through their writings runs the slogan—"Every class struggle is a political struggle." Their famous Materialist Conception of History shows how every new rising class, in society had to seize the political machinery of its day for the purpose of destroying the old system and establishing the new.

Only when they had conquered this power and were thus able to

Control the Armed Forces

were they in a position to build up the constitution and social methods in harmony with the productive forces of society.

The modern proletariat cannot escape from the conditions that confront it. Until it has wrested the powers of control—the political machinery—from the hands of the master class it cannot own the raw materials, it cannot organise production for its own purposes, it cannot retain the things it manufactures. Whatever differences of opinion may exist as to the particular forms under which Socialism will operate or the details of any interim period that may come, these all fade into insignificance before the two great factors that must first be achieved.

The first is that a majority of the working class must have reached an understanding that social ownership of the means of life is the remedy for the social evils.

The other is that before they can put any form of social ownership into operation they must seize the power necessary to take control.

To the workers who have had actual contact and conflict with the powers wielded by the master class, it seems astonishing that men of the professional section who take up the study of social conditions should be so blind to these facts. The workers, in the main, are being converted to Socialism by the pressure of the class war, and not by the immature theories of the "intellectuals." Thus while granting praise for so much acute observation, presented in good they will reject the misunderstanding by the author of the lessons to be drawn from the facts.

Jack Fitzgerald

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

Correspondence: Those Misrepresentations of Marx Turn Up Again. (1920)

Letter to the Editors from the October 1920 issue of the Socialist Standard

To the Editors.

Dear Sirs,

I have formed certain conceptions concerning the nature of a proletarian revolution which are somewhat critical to the position you adopt, and my reason for writing is to get you, if possible, to reply to, or to deal with, what I conceive to be the Marxian position concerning same, a position which opposes yours.

From my reading of Marx and Engels I find that on the question of Parliament you antagonise the Marxian position, even though you claim your organisation to be Marxian.

We accept Marx and Engels, of course, only in as far as their position can be accepted upon its merits, and I assume, therefore, that, as you claim to be Marxian, you will find me quite in order if I did a little quoting from Marx and Engels in opposition to your attitude toward this question.

Under the circumstance of your Marxian claim, how do you reconcile the following statements by Marx and Engels with your declarations, as well as those of your speakers, that Parliament is the political machine that will be used for the purpose of emancipating the workers? In the preface to the "Communist Manifesto" Marx and Engels quote from Marx's "Civil War in France" to the effect that "the working class simply cannot lay hold of the ready-made State machinery and wield it for its own purposes." Does this not run counter to your statement (to quote J.F. in last month's issue of the "S.S.") "when they"—(that is the working class previously mentioned by J.F.)— "agree with Socialism, they will send Socialists" to Parliament ? There is no statement that that mode of procedure on the part of the workers would be wrong, but rather does the writer make the terms Parliament and Power synonymous. He indicates as well what would be to him an obvious reply to his question when he asks why the workers "did not vote themselves into power" by voting for Parliament, which serves again to show that, by direct statement and inference you regard Parliament to be the political instrument for working-class emancipation.

From your conception of the political struggle one would conclude that the struggle occurs only at election times, whereas "every class struggle" being "a political struggle" ("Communist Manifesto"), the political struggle is being prosecuted now and at all times. Again, Marx wrote referring to the Paris Commune that "the Commune was to have been not a parliamentary but a working corporation," and in the same passage he derides the Parliamentary corporation by comparing how the "working corporation" operated "instead of deciding once in three or six years which member of the ruling class was to 'represent' and repress the people in Parliament." (Quoted by Lenin. "State and Revolution.") Then again in reference to the Commune Marx says : "its true secret was this. It was essentially the government of the working class—it was the political form, at last discovered, under which Labour could work out its own economic emancipation" (ibid). I would, if the question was discussed on its merits, say that if constitutional Parliamentary action will emancipate the workers, then it will be a departure from the historic fact that there can be no such thing as a constitutional social revolution.

In conclusion I will refer you to the proud concluding passage of the "Communist Manifesto," which is quite different to "a-cross-next-to-his-name-and-into the-ballot-box-revolution." "The Communists disdain to conceal their views and aims. They openly declare that their ends can only be attained by the forcible overthrow of existing social conditions. Let the ruling class tremble at the prospects of a Communistic revolution." I contend that as parliamentarians you conceal your views and aims—if you are Communists ; or else you are not Communists, in which case why are you parliamentarians ?

From the Marxian standpoint there is only one conclusion, namely, that Parliament is part of the bourgeois State which stands in the way of working-class emancipation, and it follows, therefore, that during the proletarian revolution the bourgeois State machine will not be utilised but broken, and in its stead another State erected—the dictatorship of the proletariate.

Yours faithfully,

H. Dight.

THE SOCKS.

So far is Mr. Dight from having read Marx and Engels, that, as the above letter shows, he has not read even the work of Marx that he tries to quote from. Nor is his reading of Lenin's pamphlet either full or clear, or he would have seen how flatly Lenin contradicts his (Dight's) attempt at a case.

Our correspondent says that we make the terms "Parliament" and "Power" synonymous. Had he read our Declaration of Principles and articles in the Socialist Standard, he would have seen that we stated that Power is dependent upon the control of the political machinery and that Parliament is the central organ of that machinery. Hence to obtain Power, control of the political machinery is absolutely essential. How Lenin agrees with this fact is shown in the pamphlet Mr. Dight mentions—"The State and Revolution." On page 29 we read:

  The exploited classes need political supremacy in order completely to abolish all exploitation, i.e., in the interests of the enormous majority of the people and against the tiny minority constituted by the slave-owners of modern times—the landlords and the capitalists.

On page 30 Lenin says:

 The proletariat needs the State, the centralised organisation of force and violence, both for the purpose of crushing the resistance of the exploiters and for the purpose of guiding the great mass of the population—the peasantry, the lower middle class, the semi-proletariat — in the work of economic Socialist reconstruction.

On page 33 it is stated that the general lessons of history set out in the "Communist Manifesto" :

  bring us to the necessary conclusion that the proletariat cannot overthrow the capitalist class without, as a preliminary step, winning political power, without obtaining political supremacy.

When Mr. Dight has read Lenin's pamphlet that he quotes from he might compare the above statements with Clauses 6 and 7 of our Declaration of Principles.

Mr. Dight's great point of what he fancies is opposition to our policy is the statement from Marx's "Civil War in France" that the working class cannot "simply lay hold of the ready made machinery of State and wield it for its own purposes."

As Mr. Dight has not read this work he is unaware that the context of that sentence totally contradicts the interpretation he tries to put upon it. The sentence is taken from section III., which opens as follows:

  On the dawn of the i8th of March Paris arose to the thunder burst of "Vive la Commune." What is the Commune, that Sphinx so tantalizing to the the bourgeois mind? 

  "The proletarians of Paris" said the Central Committee in its Manifesto of the 18th March, "amidst the failures and treasons of the ruling classes, have understood that the hour has struck for them to save the situation by taking into their own hands the direction of affairs . . . They have understood that it is their imperious and their absolute right to render themselves masters of their own destinies, by seizing upon the governmental power.'' But the working class cannot simply lay hold of the ready made State machinery, and wield it for its own purposes. 

  The centralised State power, with its ubiquitous organs of standing army, police, bureaucracy, clergy, and judicature—organs wrought after the plan of a systematic and hierarchic division of labour —originates from the days of absolute monarchy, serving nascent middle-class society as a mighty weapon in its struggles against feudalism. Still its development remained clogged by all manner of mediaeval rubbish, seignorial rights, local privileges, municipal and guild monopolies and provincial constitutions. The gigantic broom of the French Revolution of the 18th century swept away all these relics of bygone times, thus clearing simultaneously the social soil of its last hindrances to the superstructure of the modern State raised under the First Empire, itself the offspring of the coalition wars of old semi-feudal Europe against modern France. During the subsequent regimes the Government, placed under parliamentary control—that is under the direct control of the propertied classes— became not only a hotbed of huge national debts and crushing taxes ; with its irresistible allurements of place and pelf and patronage, it became not only the bone of contention between the rival factions and adventurers of the ruling class ; but its political character changed simultaneously with the economic changes of society. At the same pace at which the progress of modern industry developed, widened, intensified, the class antagonism between capital and labour, the State power assumed more and more the character of the national power of capital over labour, of a public force organised for social enslavement, of an engine of class oppression.

I have given this long quotation from the "Civil War in France" to show how Marx has been misrepresented by the use of a phrase torn out of its context, and to show what Marx himself meant when using the phrase. Here, as even a "Communist" might have understood had he read the work, Marx is referring to the workers' position after they have seized this power.

It is when Mr. Dight attempts to quote Marx on the functions of the Commune that he shows conclusively that he has never read Marx's work. Mr. Dight says :

  "Marx wrote referring to the Commune that "the Commune was to have been not a Parliamentary but a working corporation," and in the same passage he derides the Parliamentary corporation by comparing how the "working corporation" operated, "instead of deciding once in three or six years which member of the ruling class was to 'represent' and repress the people in parliament."

It is true that the two phrases quoted above are given by Lenin (p. 47), with other matter, in one paragraph between quotation marks, thus misleading the reader not acquainted with the original into believing that Marx put it in that form. Actually the first phrase occurs in the seventh paragraph of section III., while the second one appears in the tenth paragraph of the same section. Moreover, although Lenin gives the full sentence containing the first phrase, Mr. Dight only quotes a part of it. Why? Because the second part, though only consisting of seven words, destroys the interpretation he tries to place upon the phrase he quotes. The full sentence is: "The Commune was to be a working, not a parliamentary body, executive and legislative at the same time." (Italics mine.)

The words italicised show clearly that the Commune was to perform parliamentary as well as the other duties imposed upon it.

Paragraph ten of section III. details the work of the rural Communes and contains the following important sentence :

  The few but important functions which would still remain for a central government were not to be suppressed, as has been intentionally misstated, but were to be discharged by Communal and therefore strictly responsible agents.

while further on occurs the phrase Mr. Dight tries to use against our case :

 Instead of deciding once in three or six years which member of the ruling class was to represent the people in Parliament, universal suffrage was to serve the people, constituted in Communes, as individual suffrage serves every other employer in the search for workmen and managers in his business.

How the quotation from the twelfth paragraph, describing the Commune as "the political form, at last discovered," etc., helps Mr. Dight, who is opposed to political action and policy, I fail to see.

His statement that it is "a historic fact that there can be no such thing as a constitutional social revolution" merely exposes his ignorance of even modern history, for Japan carried through "a constitutional social revolution" in 1871 when feudalism was abolished.

The nonsense chattered by the "Communists" against "constitutional" action is flatly contradicted by Lenin's own words and actions. It was only by "constitutional" action that the Bolsheviks obtained control of the Duma and carried through their revolution, while on page 27 of Lenin's pamphlet "The Proletarian Revolution," where he refers to the people who control parliaments he says :

  "This, of course, does not mean that bourgeois parliamentarism ought not to be made use of; the Bolsheviks, for instance, made perhaps more successful use of it than any other party in the world, having in 1912-14 captured the entire Labour representation in the fourth Duma."

Crushing as this statement is against his own followers, it is surpassed by the views of one who Lenin himself would admit was far greater than any Russian Communist:

  "The irony of the world's history places everything upon its head. We, the "revolutionaries," the overturners," we succeed better with the legal means than with illegality and force. The self-named "Party of Order" goes to pieces upon the legal conditions created by itself. They despairingly cry with Odilon Barrot "Legality is our death," while we from this same legality gain strong muscles, ruddy cheeks, and the appearance of eternal life."

These words are from Engels' last work—the introduction to Marx's "The Class Struggle in France"—written in the year in which he died, 1895.

When Mr. Dight reads Marx's and Engels' writings, he may grasp the substance of their teaching. And when he condescends to read our Declaration of Principles and our Party Organ he will see the utter falsity of his statement that we conceal our views and aims.

Jack Fitzgerald

What about it? (1920)

Editorial from the October 1920 issue of the Socialist Standard

A short while ago "Plum" Warner, the old Middlesex cricketer, bid farewell to the public, and seized the opportunity to deliver through the Press, an admonition to the miners under the title ; "Miners, play the game !" (It does not seem to strike him what a vast difference there is between the game he wants the miners to "play"and the game he has been playing the best part of his life.)

On Oct. 3rd appeared in "Lloyd's Sunday News" an article urging the workers to "Work, Produce!" and, again the incongruity of it, the writer was that indefatigable worker and stupendous producer, Lord Moulton.

A day or two ago the "Daily Chronicle" had an article headed "What Every Woman Knows," and drawing moving but obviously true pictures of what is going to be the experience of the women of the working class in the event of a miners' strike maturing, and again it is one of those people of such wide first-hand knowledge of empty cupboards and the sufferings of poverty—a lady of title—who does the writing.

It is meet to ask, at a time when your "betters" are setting you such an example of class-conscious propaganda in the class struggle, what you are doing in the same class struggle: Are you working for the enlightenment of your fellow working men and women ? Are you even studying for your own enlightenment ? Are you talking about Socialism ? Are you pushing Socialist literature ? Every word you read of the right stuff, helps, and every word you speak with knowledge and understanding. So what about it?

Rear View: Oh No, Not Again! (2019)

The Rear View Column from the October 2019 issue of the Socialist Standard

Oh No, Not Again!

‘’Colombia was on edge on Thursday as the top peace negotiator for the country’s Marxist guerrillas announced that he was resuming armed conflict, promising to re-start the Western hemisphere’s longest-running civil war three years after a peace deal was signed’ (telegraph.co.uk, 29 August). Socialists welcomed the end of the five-decade-long war, which killed more than 220,000 and displaced millions, as well as the mendacious mass media calling FARC Marxist. But, bringing an end to one such conflict in a capitalist world where war and misinformation are endemic is like a murderous game of Whack-A-Mole. ‘Farc was formed in 1964 as a Che Guevara-inspired Marxist group claiming peasant land rights’ (op. cit.). FARC declare themselves to be Bolivarian and call for ‘Colombia for Colombians, with equality of opportunities and equitable distribution of wealth and where among us all we can build peace with social equality and sovereignty’, rather than for Marx’s call for workers of all lands to unite for the overthrow of all existing social conditions. Marx during his lifetime was implacably opposed to political terrorism. Marxist socialists oppose terrorism, individual, group or state, guerrilla ‘armies’ and so-called national liberation struggles. Instead we organise for and propagate worldwide common ownership, democratic administration, control of the land, means of production and transportation and the abolition of the wages system.


Fighting the wrong war

‘Of course, there are other reasons why the West cannot get any of its adversaries to kneel. One is – that the toughest ones are left. Russia, Cuba, China, North Korea (DPRK), Iran, Syria and Venezuela are not going to run away from the battlefield’ (Suddenly, Western “Regime” Changes Keep Failing, off-guardian.org, 28 August). Andre Vltchek’s and others of his ilk continuing support for one group of capitalist countries is no doubt of great comfort to the imprisoned trade unionists in Iran, for example. Sadly it comes too late for the many thousands who have already been executed, including minors, under a theocratic dictatorship where those convicted of adultery, alcohol consumption, blasphemy, burglary, homosexuality, pornography and prostitution, along with, of course, political dissidence, as well as many other ‘crimes’, can pay the ultimate price. We must not forget the state sanctioned use of juveniles as troops during the mass slaughter that was the Iran-Iraq war or oppression of women. Add chronic corruption plus obvious class division and we can say the 99 percent certainly did not vote for this. No war but the class war!


In Space as on Earth

‘Donald Trump: New Space Command will “ensure US dominance” of final frontier. Space has become a focus for the Trump administration due to concerns over the vulnerability of US satellites to China and Russia’ (news.sky.com, 30 August). Long before the first aeroplane flew or mining the Moon’s riches left the realm of science fiction, British politician Joseph Chamberlain made this candid comment with regard to war and its economic causes: ‘All the great offices of State are occupied with commercial affairs. The Foreign Office and the Colonial Office are chiefly engaged in finding new markets and in defending old ones. The War Office and the Admiralty are mostly occupied in preparations for the defence of these markets and for the protection of our commerce’ (from a speech to the Birmingham Chamber of Commerce in 1890). Time and time again evidence has demonstrated that war stems from capitalist struggles for markets, trade routes, sources of raw materials, and places of strategic importance.


Ferengi-free future

If we want a future that is more Star Trek than Star Wars, we must first replace capitalism with socialism and bring about a world where war, wages and want have been eradicated. Given this it is somewhat surprising to find a Financial Times journalist describing Star Trek: The Next Generation as ‘. . . optimistic, moving and wise’ (ft.com, 28 August). Whether or not you prefer the post-capitalist society of Trek or Iain Banks’ Culture over the bucolic, craft-industry-based utopia of William Morris’ News from Nowhere (1890), our first concern should be the making of socialists. Morris put it well: ‘one man with an idea in his head is in danger of being considered a madman; two men with the same idea in common may be foolish, but can hardly be mad; ten men sharing an idea begin to act, a hundred draw attention as fanatics, a thousand and society begins to tremble, a hundred thousand and there is war abroad, and the cause has victories tangible and real; and why only a hundred thousand?’ (Art Under Plutocracy, 1883).

Pathfinders: Capitalism’s Holy Grail (2019)

The Pathfinders Column from the October 2019 issue of the Socialist Standard

Here’s an easy question – what’s your view of censorship? If you’re a socialist and a democrat, you’re probably against it. After all, you argue, the only really effective way to combat bad ideas is to bring them out in the open and put them up against good ideas, and you can’t do that if the bad ideas aren’t allowed to circulate in the first place.The battle of ideas must be fought in public or it becomes totalitarianism.

So how fares this public battle today? Not well, actually. Everyone knows that society has changed rapidly in the last two decades. The mass-market passive consumerism of the twentieth century has given way to the individualistic, two-way street of the internet. But instead of this opening up debate it seems to have done the opposite. Very few people would include a public political meeting as part of their normal week’s activity. Street-corner debates are a distant memory for the oldest among us. Now ideas don’t normally challenge each other in large open auditoriums. Instead they exist in largely separate and closed worlds where each person sees what they want to see.

This is not to say that the concern over social media echo chambers should be overstated. Social media groups tend to reflect the organic composition of friendship networks, which don’t typically consist of one exclusive type of belief or idea. Sure, you may not be besties with a Tory, but you probably know one or two, and you may have friends or relatives who think differently from you on a lot of issues. Social networks are like Venn diagrams, overlapping each other in a multi-dimensional nest. Comfort zones they may be, but most people don’t want or expect them to be hermetically sealed. At least, not reasonable people.

But in the pressured depths of the web where reasonable people don’t go there are unmoderated groups where something quite different is going on. Here the most one-dimensional views are expressed, and there are no dissenting voices to challenge them. Here is where a macabre game of Dare is played out. Far-right bedroom trolls take over a forum and use it as a playground to make violent death threats against black people, Hispanics, Moslems, Jews, gays or some other minority. It’s just talk at first, but the feedback loop ramps it up as each participant tries to outdo the last. Finally someone ups the ante to the limit, thereby winning the kudos and respect of all participants. What is this limit? Carrying out the death threat in reality.

This is what is thought to have happened on the 8chan discussion forum prior to the shootings in El Paso in August, when 22 people were killed and 24 injured, and the next day in Dayton, Ohio, where nine people were shot dead and 27 injured. 8chan was also used by the shooter in April’s Poway synagogue shooting in California, and in the mosque massacres of Christchurch, New Zealand, in March, where 51 were killed and 49 injured, and where the shooter live-streamed the massacres on Facebook.

Let’s take a moment to revisit that ethical question on your view of censorship. Given the track record of 8chan, if it was in your power to close it down by pressing a big Kill button, would you do it? Or would you defend 8chan in the name of free speech, saying as some US Republicans did at the time, that’s the price you pay for liberty?

Of course there was no shortage of hackers keen to take 8chan down. One easy way to do that would have been to launch a Distributed Denial of Service (DDoS) attack on it by bombarding it with traffic until its servers ground to a halt. But this wasn’t possible because the site was protected by online security firm Cloudflare. After the Dayton shootings however, the owner of Cloudflare finally pulled the plug, saying: ‘8chan has repeatedly proven itself to be a cesspool of hate. They have proven themselves to be lawless and that lawlessness has caused multiple tragic deaths’ (BBC News, 5 August – bbc.in/2lX1r6T).

8chan duly went offline almost immediately, however its users will certainly migrate to a different forum and continue as before. Even if you agree that ‘free speech’ has limits and such sites need to be stopped, the question is how. The internet is just too big.

Artificial Intelligence is held up as the great unbiased censor, the thing that might save society from its own worst nightmares, however the hype around AI is a good deal more advanced than the technology itself. AI is good in situations with finite options and clear rules, which is why it can beat the world’s top game-players. But ask it to make a value judgment or an ethical call, and it won’t have a clue.

Εven so, it’s good enough to ‘benevolently’ censor you. AI manages what you see on the GAFA big four (Google, Apple, Facebook and Amazon), sifting your data to serve up what it thinks you will like and hiding what you won’t. That’s why two people doing the same Google search will get different results. Meanwhile YouTube’s algorithms attempt to keep users on-site by serving up material on a ‘same-but-even-more-so’ basis. With an estimated 500 hours of material loaded every minute, YouTube can’t possibly keep track of its content. Thus, right-wing extremists end up being offered ever more extreme right-wing material, so that the site may be upping the ante in the same way as 8chan. Some people are demanding that it changes its algorithms in favour of more balance, while others are calling for it to be shut down altogether (New Scientist, 24 August).

There is, though, another reason to be highly resistant to any kind of censorship. What if they turn it on us? In China open dissent is impossible. People have to use secretive Virtual Private Networks to hide their identity when accessing forbidden western resources like Wikipedia. No wonder Hong Kongers are fearful. Who’s to say other states wouldn’t adopt Chinese tactics if it saved them money and created more docile populations?

What’s worrying about certain one-dimensional internet trends and also calls for more censorship is their general intention to disable the human critical faculty. They’re not interested in debate, they are engaged in whiter-than-white brainwashing, and never mind the victims or the collateral damage. In a way that’s the holy grail of capitalism too. It aims to create the perfect customer, even at the cost of the perfect storm.

Paddy Shannon

Material World: Indonesia: From Anti-Imperialism to Imperialism (2019)

The Material World Column from the October 2019 issue of the Socialist Standard

In August, East Timor (Timor Leste) celebrated 20 years independence from Indonesia. The 1974 left-wing coup in Portugal led to the dismantling of its colonies including what was then called Portuguese Timor. Indonesian forces commenced covert attacks, then invaded in 1975. An estimated 100,000 conflict-related deaths through the entire period 1974 to 1999, including 18,600 violent killings. Indonesia was held responsible for 70 percent of the killings.

With the armed resistance largely crushed Indonesia held civilians in detention camps where there were 84,200 deaths from disease and starvation. In 1976 Indonesia declared East Timor the country’s 27th province. Many countries looked the other way. In 1979 Australia became the only western nation to recognise the annexation of East Timor and quickly sought a treaty with Indonesia to divide the spoils of East Timor’s sea-bed so both could access the off-shore oil resources.

On 30 August 1999 78.5 percent voted for independence. Festivities were short-lived. Indonesian-backed militia groups terrorised the population. A three-week campaign of violence killed 2,600 people, nearly 30,000 were displaced and as many as 250,000 were forcibly relocated into Indonesian West Timor after the ballot.

August also saw a resurgence in the unrest in occupied West Papua with government troops being deployed. When Indonesia gained independence in 1945, the Dutch government declined to cede control over West Papua arguing that it was to be given the freedom to determine its own future. In 1961-1962 West Papua was invaded and annexed by Indonesia. An estimated 30,000 Papuans were killed up to its incorporation into Indonesia in 1969, after a sham referendum.

According to an article in Red Pepper :

  ‘… The occupation of West Papua receives little attention in the UK. This is, in no small part, due to Indonesia’s ban on foreign journalists and its outlawing of West Papuan social movements who try to speak out internationally. However, West Papua has not been forgotten by international corporations, including companies from the UK. For them, Indonesia’s brutal occupation of West Papua provides lucrative opportunities for profit.’ 

The article by Egret and Anderson details how mining companies exploit West Papua’s vast wealth. US company Freeport-McMoRan operates the Grasberg mine in Papua – the largest gold mine and the third largest copper mine in the world. It is Indonesia’s biggest taxpayer, making billions of dollars for the Indonesian government every year. TIME stated that ‘In 2015 alone, Freeport mined some $3.1 billion worth of gold and copper.’

BP profits from the occupation through its massive liquified natural gas fields in Tangguh, BP’s biggest operation in SE Asia. Papuan communities are also being evicted from their land for palm oil. In addition, Papua boasts timber resources worth an estimated $78 billion.

Indonesia is an ethnically diverse country, made up of 17,000 islands, with around 300 distinct native ethnic groups and 700 local languages. The country’s official language is a variant of Malay. Indonesia can be described as an invented nation-state that having been subject to colonialism has become itself imperialist.

In the pursuit of profits and administrative control, the Dutch imposed the authority of the Dutch East Indies on an array of peoples who had not previously shared any unified political identity.

The name ‘Indonesia’ is derived from the Greek (Indian islands) and was employed by an 18th century English naturalist to classify the ethnic and geographic area. ‘Indonesia’ was seized upon by nationalists as a word to imagine a unity of people. By the twentieth century, the Dutch had formed the boundaries of a colonial state that became the precursor to modern Indonesia. During the 1920s and 30s, a small elite began to articulate a growing anti-colonialism and nationalism, striving to carve out a place for themselves. In 1928, the All-Indonesian Youth Congress proclaimed the Youth Pledge (Sumpah Pemuda), establishing the nationalist goals of: ‘one country – Indonesia, one people – Indonesian, and one language – Indonesian.’ After the surrender of Japan, Sukarno proclaimed Indonesian independence. The Dutch attempted to re-establish their rule, and an armed struggle ensued but in 1949, the Dutch recognised Indonesian independence.

The Socialist Party rejects nationalism as anti-working class because it has always tied the working people to its class enemy. Nationalism is the ideology of an actual or an aspiring capitalist class. It is of the practice of native capitalists that when imperialism prevents them for building their own independent capitalist state, they lead resistance against it. Sooner or later, successful anti-imperialism then becomes imperialism.

ALJO