Adam Smith: capitalist icon? (2007)

From the January 2007 issue of the Socialist Standard

Mention of the name Adam Smith calls to mind the “invisible hand” of the market, free trade, even capitalism itself. And money makes this capitalist world go round. So the Bank of England’s decision to feature Smith’s face on its twenty-pound notes, starting this spring, certainly seems appropriate

The Bank’s Governor, Mervyn King, says that Smith reminds us of how “openness to trade with others” allows us to “seize opportunities to specialize” that result in higher “productivity, incomes and standards of living for citizens of all countries.” To drive this point home, the new banknotes will have an engraving of a pin factory, which Smith used as an example of how the division of labour increases productivity, with the caption: “and the great increase in the quantity of work that results.” King hopes the new banknotes will encourage visitors to Britain “press their own politicians to support the opening up of trade, which has been at the heart of the British Government’s efforts to reform the world economy.”

The image of Smith presented on the banknotes, while not incorrect, is certainly one-dimensional. It ignores those aspects of his investigation of capitalism that run directly counter to some of the cherished beliefs of his followers.

That is not to suggest, however, that Smith was an anti-capitalist. Some like Noam Chomsky have flipped through the pages of The Wealth of Nations to uncover ideas critical of capitalism, but this effort seems misguided and unhistorical. Smith undeniably had faith in capitalism, but this view arose naturally from living in an ascendant capitalist system that had yet to fully reveal its contradictions. Compare this to the contemporary cheerleaders for capitalism who can only maintain their belief by denying reality. In late 18th century Europe, there was no socialist spectre haunting the sleep of burghers like Smith. If anyone had insomnia it was aristocrats worrying about the rising bourgeoisie. With the peace of mind that this situation afforded him, Smith pursued the sort of disinterested study of capitalism that could only be carried out a century later by critics of capitalism, such as Marx.

A labour theory of value

Smith’s great interest in the “specialization” of production, which the new banknotes emphasize, naturally led him to ponder what regulates the commodity exchange that mediates this division of labour. In other words, he wondered what determines the “exchangeable value” of commodities. In using this term, Smith already makes an important distinction from what he calls “value in use.” Smith notes that something with great utility, like water, has no exchange value at all, whereas a diamond is of little real use but has great exchange value. Smith thus sets aside the issue of use-value, to instead “investigate the principles which regulate the exchangeable value of commodities.” The answer he arrives at later came to be known as the “labour theory of value.” That is, he identifies the labour necessary to produce a commodity as the factor that regulates its exchange-value.

This view is presented in chapter six of The Wealth of Nations, where Smith says that “the proportion between the quantities of labour necessary for acquiring different objects seems to be the only circumstance which can afford any rule for exchanging them for one another” He offers the example of “a nation of hunters” where it usually costs twice the labour to kill a beaver” than “it does to kill a deer.” The result is that “one beaver should naturally exchange for or be worth two deer.” In other words, “produce of two days or two hours labour” would naturally “be worth double of what is usually the produce of one day’s or one hour’s labour.”

Smith goes on to point out that more difficult or complex labour would naturally be worth more than simple labour: “If the one species of labour should be more severe than the other, some allowance will naturally be made for this superior hardship; and the produce of one hour’s labour in the one way may frequently exchange for that of two hours labour in the other.”

This view is expressed in such a simple and straightforward way that it may seem inconsequential. But the significance of Smith’s idea that commodities have intrinsic value, based on the labour “embodied” within them, becomes clearer if we compare it to other explanations of value.

The most common “explanation” of value, which most people would offer without thinking twice, is that a commodity’s value is the outcome of supply and demand. But on closer consideration, it becomes clear that this can only account for why the price of a given commodity might fluctuate higher or lower; it cannot explain why a price fluctuates around a certain level. Supply and demand might account for why the prices of 4x4s fell compared to hybrid vehicles, when oil prices soared, but won’t tell us why cars have far greater exchange value than, say, bicycles.

Another related theory is the idea that a commodity’s value is determined subjectively according to its utility. But, again, this does not answer the car-versus-bicycle question. Many people find bicycles infinitely more useful than cars, but that does not mean they are willing to pay dearly for them. A subjective theory can explain why a person dying of thirst in the desert would gladly exchange a diamond ring for a glass of water, but this does not help us understand everyday commodity exchange.

In addition to these explanations, there is the theory of value that claims a commodity’s “value” is determined by the price of producing it (“cost price”). But this is a tautology that does not explain what determines this price.

Only a labour theory of value, which locates the intrinsic source of value, offers a way to move beyond these superficial explanations.

Dangerous implications

Capitalists have been vehemently opposed to the labour theory of value for good reason. A theory of intrinsic value leads towards an understanding of the source of profit, which capitalists are eager to obfuscate. If a commodity has no intrinsic value, and its price is only determined in the actual process of being exchanged, then profit is likewise something that arises out of thin air.

Smith’s idea that value is based on the labour embodied in a commodity, leads him to better understand where profit comes from. In the same chapter in which he presents his labour theory of value, Smith offers the view that profit is a “deduction” from the intrinsic value of a commodity. In other words, first we have the existence of value (determined by labour), and this is then broken down into the revenue of the various classes (i.e. profit, rent, and wages).

He writes: “The value which the workmen add to the materials [means of production], therefore, resolves itself in this case into two parts, of which the one pays their wages, the other the profits of their employer upon the whole stock of materials and wages which he advanced.” And this same explanation is offered to explain the source of rent: “[The landlord’s] rent makes the first deduction from the produce of the labour which is employed upon land.”

There are still many unanswered questions here regarding the exact source of profit, but by generally locating it in the value created by workers, Smith is not far from a theory of surplus-value. He is certainly head and shoulders above the view, still common today, that profit arises from “buying low and selling high.” This explains nothing, really, because the gain on one side is a loss on the other. The end result, as far as society is concerned, is zero. Or, as Marx famously said, “the capitalist class as a whole cannot defraud itself.”

According to Smith’s argument, instead of profit arising ex nihilo from the process of exchange, it is a slice of the value originally created by the labour of workers. This is a very dangerous idea as far as the capitalist class is concerned. It implies that the interests of workers and capitalists are fundamentally opposed. Smith is not afraid to bluntly describe this reality. He says that the interests of the two classes “are by no means the same,” because “the workmen desire to get as much, the masters to give as little as possible.” There is no “win-win” situation in Smith’s mind. And he brilliantly depicts how, in industrial struggles, the workmen “are desperate, and act with the folly and extravagance of desperate men, who must either starve, or frighten their masters into an immediate compliance with their demands,” while “the masters…never cease to call aloud for the assistance of the civil magistrate, and the rigorous execution of those laws which have been enacted with so much severity against the combinations of servants, labourers, and journeymen.”

This realistic view of class struggle, so distant from the platitudes of Mervyn King, flows naturally from an understanding of the source of value and a “deduction” theory of profit.

A step backward

Smith was unable to consistently adhere to a labour theory of value, however. He concluded that this principle is only applicable to commodity exchange in pre-capitalist societies (the “early and rude state of society”). But if we examine why Smith abandoned this theory, we can appreciate how seriously he struggled to understand capitalism.

When he turns from pre-capitalist society (depicted as being made up of independent commodity producers who own their means of production), to examine the situation under capitalism, Smith is perplexed by a case of unequal exchange. This is the exchange between capitalist and wageworker, where the worker is paid a money-wage that contains less (embodied) labour than the (living) labour carried out in return for the wage.

Smith does not realize it, but in making this observation he is tantalizingly close to identifying the precise source of surplus-value. Marx was able to reveal this great secret of capitalist society by clarifying how surplus-value arises from the difference between (a) the value of the labour-power (or labour capacity) a wageworker sells as a commodity to the capitalist and (b) the new value created in production by the actual use of this labour-power (i.e. labour itself), with the latter being greater in value magnitude than the former.

Smith fell into hopeless confusion because he did not make this distinction between labour and labour-power, instead using the same the term “labour” to refer to both. Once this crucial distinction has been made, however, it becomes clear that the exchange between wageworker and capitalist is not unequal. The capitalist pays for labour-power according to its value, which is determined by the value of the commodities the worker consumes to “reproduce” this capacity to labour. What is unequal is not the exchange itself, but what happens next, in the production process, where the worker’s labour generates a greater magnitude of value than the value of the labour-power exchanged.

Far from contradicting the labour theory of value, it is only on its basis that this exchange between wageworker and capitalist can be adequately explained. But Smith, fixated on the very real inequality of the outcome, concluded that another theory of value was needed to explain capitalism. He turned away from the “deduction” theory of value, to embrace the opposite, “composition” theory where value is explained as the sum of profit, rent and wages. What this does not explain, of course, is what determines these three component parts.

Even here, though, Smith’s views are not without basis, since under capitalism commodities are sold at their “production prices,” rather than their values, and this is a composed price (cost price plus average profit). But Marx explained the relation this composed price has to intrinsic value, whereas Smith merely described it.

Smith’s thought was this mixture of science and a mere cataloguing of external phenomena. Defenders of the capitalist system draw on the latter, and love to quote from his superficial descriptions of the marketplace, but socialists can thank Adam Smith for taking an important step towards an understanding of what makes capitalism tick.

Michael Schauerte

The Theoretical System of Karl Marx (1968)

Book Review from the  1968 - number 3 issue of The Western Socialist

The Theoretical System of Karl Marx by Louis B. Boudin, Monthly Review Press, $7.50

The reprint of this book, sans introduction and hence free of possible reader misdirection, should be warmly received by all students of Marxism not having the good fortune to possess a long out-of-print copy. For verily this book may be deemed a Marxist classic, and belongs in the library of every socialist desiring a unifying understanding of Marx. It is indispensable reading for students of socialist fundamentals. 

Its primary role is that of serving as a somewhat advanced but lucid introduction to the study of the Marxian system with its "accent on the system, that is the relation of its different parts to each other and the unity of the whole." And this structural wholeness, this interdependency of its different parts cannot be overemphasized for one seeking a fuller grasp of Marxism. 

Written in the first decade of this century by a Marxist of exceptional originality and deeply penetrating perception, this invaluable book consists of "an exposition of the teachings of Marx" in their systematic relatedness and wholeness and a depth analysis of the various criticisms — pertinent to the specific subject matter under chapter discussion (Materialist Conception of History and Class Struggle, Value and Surplus Value, Economic Contradictions, and the Passing of Capitalism, etc.) — which blossomed following the deaths of Marx and Engels and which, then as now, manifestly attest to the eminent position of Marxism and the nascent apprehensions of the bourgeois. 

"The Theoretical System of Karl Marx" is a book to be read and reread and certain parts reread again; and then conveniently shelfed next to Capital to be referred to frequently in the face of present day anti-Marxists. 

The reader will note at the outset that there is one factor held in common by most, if not all, critics of Marxism, and that is that none 

"openly defend the theories which Marxism has supplanted. Almost everyone admits expressly the justifiability of Marx's criticism of the theories which predominated before his advent, and that Marx's theories were correct at the time they were first stated and a proper generalization of the data then at hand. What they claim is, that latter developments have shown that they were based on insufficient data and that our present knowledge requires the revision of some of his tenets . . . Hence, the name Revisionists, under which most of newer Marx critics are known, and the term Revisionism applied to their writings and teachings." 

The Revisionists, exemplified by their don, Eduard Bernstein, a leading theoretician of the German Social Democratic Party and one time intimate acquaintance of Engels, but who for reasons examined in Boudin's book was moved to a critical frame of mind, criticized the Hegelian background, the labor theory of value, "the exploitation theory," the doctrine of increasing misery, etc. 

As will become clear to the attentive reader, the Revisionists skimped on their homework. For they not only fail to prove their general criticisms but fail to prove the particulars in their particular indictment of Marxism. Since the "problems" raised by the Revisionists were vague and poorly formulated in their own minds, they were unable to get below the surface of the problems. Being vague as to what the problems actually were, being victimized by compartmentalized reasoning, as it were, their vision allowed them only glances at disconnected facts here and there and they lost the large and enveloping scene altogether. Because of this reliance on isolated statements or expressions and their disregard of the interconnected and inseparable interrelations of the Marxian system as a whole, they tail to get to the crux of the issues raised and consequently their satisfactory resolvment but rambles on in an aura of uncertainty and perplexity. 

There definitely was a problem — the problem of harmonizing a new factor which had entered the picture (that of corporate methods of doing business) which, on the surface, tended to vitiate the Marxian prognosis. Clearly and thoroughly formulating the issues raised by the Revisionists and others, Boudin provides within the framework of Marxism the needed harmony. 

In addition to the Revisionists, there is dealt with an anti-Marxist group who, in the opinion of Boudin, an opinion, it is safe to assert, shared by all scientific socialists, "conclusively establishes not only the preeminent position occupied . . .  by Marxism as the recognized doctrine, but also the fact that there is no doctrine capable of competing with it for establishment or even dividing honors with it . . . " This group holds

"that the whole system must be thrown overboard as unscientific . . . These . . . critics of Marx do not dare accept in its entirety any other system, wholly or partly original with its authors, which would be capable of taking the place of Marxism as an explanation of social phenomena, They almost all, therefore, fall into what may well be termed Nihilism, that is to say, they are led to deny the existence, nay, even the possibility, of any social science. In other words: Marxism is so much the scientific doctrine in its sphere (which covers all the life of humanity in organized society, including all its social and intellectual manifestations) that you cannot destroy it without at the same time destroying all scientific knowledge of the subject." 

Carried to its utmost extreme, Nihilism explains the underlying cause of much contemporary historico-philosophic writings of obfuscation, pessimism, mysticism, and the seemingly complete abandonment of reason on the part of its practitioners. Forsaking "the scientific doctrine," denying or refusing to recognize its existence and validity, and devoid of any substantial substitute, these despairing representatives of the capitalist class, who would infuse in the working class the failure and hopelessness of the capitalist class to further promote social advancement and progress, who in their desperation deny any social science and hence any hope for mankind, perforce wander up and down the corridors of darkness, confusion, and negativism. 

Boudin groups the critics of Marx according to their treatment of him, though this grouping is by no means rigid. Disregarding the overlapping of the groups, they are: 

"First, the philosophers, who dwell principally on Marx's philosophic system; secondly, the economists, who examine his economic theories; and thirdly, the sociologists, that is to say those who concern themselves chiefly with Marx's theories of laws which govern the development of the capitalist system." 

As the reader will soon discover, these critics for the most part are prone to suffer an ailment diagnosed by Boudin as "Confusion of Terms and Ideas." This mentally retarding and truth-concealing ailment lead Marxist critics, those of today as well as those treated by Boudin, to substitute their own terminology for that of Marx's, and to ascribe to Marx (and his disciples) all sorts of things which he did not say or, having said, in a larger context conveying an entirely different meaning than his critics would have their readers believe. Not only does this ailment afflict those relatively ignorant of Marxism, but less understandably, infects those who otherwise allow no doubt of their knowledge of Marxism. Were it possible overnight to cure this apparently contagious malady with some miracle drug, there would immediately follow a vast lessening of anti-Marxism, and that remaining, legitimately raised and clearly marked, could be satisfactorily disabused. 

The book contains several amusing criticisms of Marx. For example: Was Marx a philosopher and is Marxism a philosophy? Grave and profound dissertations were written on this, for it was considered of revealing import by certain critics of the time. It apparently never occurred to them, as it does not occur to many present day critics, to examine the works of Marx and Engels to ascertain what they had to say on the subject in conjunction, of course, with the teachings of the system as a whole. Had they done so they would have found Marx and Engels expounding the opinion that philosophy had reached its zenith and demise with Hegel, "that henceforth the place of philosophy is taken by science." Quoting Engels, Boudin writes: "This conception (the materialist conception of history) puts an end to philosophy on the historical field, just as the dialectic conception of nature makes all natural philosophy unnatural and impossible." No, in the words of Boudin, "Marxism is no abstract philosophy. It is just the reverse, it is concrete science, and therefore the heir and successor of all philosophy." 

Another amusing criticism of Marx was occasioned by the supposed contradiction between the first and third volumes of Capital — and this despite the fact that "most of the third volume, and particularly those portions of it which are supposed to modify the first volume, were actually written down by Marx in its present form before the publication of the first volume!" 

One Russian Marxist of some prominence was so moved by his inability to reconcile the seemingly opposing doctrines laid down in the first and third volumes that he questioned the latter volume's genuineness and practically labeled it a fraud — and this he did notwithstanding Engels preface to the third volume which leaves no doubt as to its authenticity. It seems that even friends of Marxism can contribute to its misunderstanding for reason of their personal inadequacies. 

The supposed contradiction in the first and third volumes took its classic form in Bohm-Bowerk's "Karl Marx and the Close of his System." It was a favorite theme of the Revisionist, who held that 

"Marx's theoretical ideas had passed through an evolutionary process, the main tendency of which was from 'unscientific,' hard and fast monistic dogmas, at the outset, to mild and loose eclectic 'science' at the conclusion. This they applied equally, and with equal justification, to the whole Marxian theoretical system, to his historico-philosophic and his economic theories alike." 

Had the Revisionists been content to limit their criticism to Marx's historico-philosophic ideas they might have stood a fair outside chance of getting away with it (despite its absurdity in face of the written order of Capital), since these views of Marx are not codified in any treatise, but "are strewn over the whole mass of his writings in a more or less fragmentary condition, and it requires an intimate acquaintance with his theories to see the improbability of this claim." 

But the Revisionists were not content or were inherently unable to limit their criticisms of the supposed contradiction to Marx's historico-philosophic views, but included as well his economic views. This lack of discrimination was their undoing, for the economic views of Marx ring loud and clear in most all his writings. On this issue, Boudin could not let the matter go unexamined and unchallenged, for, he writes, "if there really is such a contradiction, and if the doctrine of the third volume is virtual abandonment of the labor theory of value, it makes, of course, very little difference when the different portions of Marx's book were written, or what he thought of one portion when writing the other, except, of course, as an interesting study of a great aberration of an extraordinary mind." Hence, Boudin undertakes a tightly reasoned analysis of this bugaboo of the Revisionists and other critics and completely vanquishes it. 

Boudin's book in its relatively intense brevity (286 pages) is of immense scope and rich in historical interest. Notwithstanding the death thrust and burial given the anti-Marxist arguments by Boudin, their topicality is still very much with us as evidenced by the not infrequent sallying forth of contemporary anti-Marxists with pretty much the same opposing arguments as their long dead progenitors. 

REN

Editorial: The class war is not over (1999)

Editorial from the November 1999 issue of the Socialist Standard

"The class war is over," Blair proclaimed at the Labour Party Conference in Bournemouth last month. "The 21st century," he went on "will not be about the battle between capitalism and socialism but between the forces of progress and the forces of conservatism."

The class war—as the struggle between those who own productive resources for profit and the rest of us—is far from over. It can only end with the dispossession of the owning minority and the consequent disappearance of classes and class-divided society. In other words, with the establishment of the common ownership and democratic control of productive resources that is the basis of socialism.

Blair probably wouldn't disagree that the end of the class war means the disappearance of classes. Only he claims that this is what has already happened: that the vast majority of us are already classless. This is not the case, neither in the facts nor even in people's minds. A minority still monopolise productive resources and live in luxury off the profits they derive from this, and most people still consider themselves members of the working class—some 55 per cent according to an ICM poll published last September (surprisingly high given the barrage of propaganda for the view that "we're all middle class now").

Those who proclaim that "we're all middle class now", "goodbye to the working class", "the class war is over" are not stating a fact. They are putting forward a political programme. They want us to think that we are all just isolated classless individuals who can only improve our lot by our own individual efforts. It is an attempt to disarm the working class ideologically, to get us to give up the idea of collective struggle, whether on the industrial front or to replace capitalism with socialism.

At the moment—as a result of the continuing economic crisis and the defeats of the 80s—things seem to be going their way. People do seem resigned to trying to improve their lot only individually. But the class struggle is a matter of structure not ideology. It is built-in to the capitalist system, based as this is on the extraction of surplus value from the work of those who are forced to sell their mental and physical energies for a wage or salary (and that includes the mythical "middle class"). In other words, on exploitation. And wherever there is exploitation there will be struggle, first to lessen it and then to bring it to an end.

The 21st century will prove Blair wrong. As governments continue to fail to solve problems, as profits continue to be put before needs, as exploitation continues, "the battle between capitalism and socialism" is by no means off the agenda. The class war is not yet over.

The Relevance of Marxian Economics Today (2014)

From the April 2014 issue of the Socialist Standard

Interview with Andrew Kliman, author of a number of books on Marx’s ideas.

How did you come to be interested in Marxian economics and socialism?

I was 12 years old in 1968, a moment of tremendous radical ferment, and I immediately identified with all of the forces struggling for freedom. I don’t remember whether I immediately identified with socialism, too – in the environment of the time, immediately linking the two would have been rather natural – or whether that took a bit of reading and thinking.

I used to argue with people about capitalism, and I’d be told, ‘you don’t understand supply and demand.’ I realized that was true, and a main reason why I decided to major in economics in college was to see if my views would survive confrontation with ‘the law of supply and demand.’ Eventually, I decided to go to graduate school in economics and focus on radical economics. My knowledge of Marx’s writings, on economics and in general, was still rather limited. I had tried to read Capital, but my eyes kept glazing over and I kept dozing off. But in my first year of graduate school, I took a year-long course that consisted of a close reading of the three volumes of Capital. It was quite a struggle, but slowly I began to understand and to be convinced. The irrationality and corrupt nature of the resistance to Marx’s ideas, even among ‘Marxist economists,’ and the sterile and non-revolutionary alternatives they offer, have strengthened my conviction. So have the Great Recession and its ‘new normal’ aftermath.

I don’t think of myself as a ‘Marxist economist.’ The people who trash Marx or cannibalize his work to further their own ideas and careers have appropriated the term for themselves, and they can have it, as far as I’m concerned.

In ‘The Failure of Capitalist Production’ you claim that the underlying cause of the last global economic downturn was a persistent fall in the average rate of profit which had never fully recovered since the late 1970s. Do you think the falling rate of profit is always the deciding factor in regard to economic crisis or can it be explained by other features of capitalism such as the disproportionate growth between different sectors of the economy?

I say that the fall in the rate of profit was a, not the, key underlying cause. That’s not the same thing as a ‘deciding factor.’ I think a variety of conditions need to be present in order to produce an economic downturn and financial crisis, especially ones as severe as those we’ve experienced. That was Marx’s view as well. In particular, as I stress in the book,

‘Marx’s theory holds precisely that a fall in the rate of profit leads to crises only indirectly and in a delayed manner. The fall leads first to increased speculation and the build-up of debt that cannot be repaid, and these are the immediate causes of crises. Thus, the timing of the current crisis and the sequence of events leading to it do not contradict the theory, but are fully consonant with it and lend support to it.’

Clearly, the main immediate causes of the Great Recession were the bursting of the bubble in the US housing sector and the financial crisis that resulted. But pointing to these events isn’t adequate. If they were the only problems, the economy would have rebounded smartly once the US government quelled the panic; but that was five years ago, and the malaise persists. The recession, and to some extent the financial crisis, were also the product of several other, underlying conditions. A persistent fall in the rate of profit led to sluggish investment in production, which in turn led to a rising burden of debt; and the US government responded to these conditions by throwing even more debt at them. The government policies delayed the day of reckoning, but also made the crisis worse when it finally did erupt. These underlying conditions still persist for the most part, and the future of the Euro area and Chinese economies is quite uncertain, so the malaise persists as well.

During the housing-sector bubble, home prices and financial activity grew faster than the rest of the economy. One can, if one wishes, call this ‘disproportionate growth between different sectors of the economy.’ In this specific sense, the financial crisis and recession can be characterized as a ‘disproportionality crisis’ (but only with regard to immediate causes, not longer-term, underlying ones). But since ‘disproportionality’ generally refers to something different – an imbalance between production of means of production and production of consumer goods and services– use of the term is liable to cause confusion.

What is your attitude towards those that claim government spending and/or increasing working class consumption is a way out of the crisis?

Of course, the government could borrow more, and thus provide more of a temporary boost, but there’s a definite limit to the amount by which governments, even the US government, can run up their debt before the credit market gets spooked and lenders demand so much interest in compensation that running up the debt becomes counterproductive. Even more importantly, running up the debt provides only a temporary fix. It doesn’t set off a perpetual-motion machine of economic growth. Once the stimulus money ends, the stimulus it provides ends as well – and let me emphasize that this is what standard Keynesian theory itself says.

Although underconsumptionists claim that redistribution of income from wages to profits was an underlying cause of the Great Recession, that isn’t true, at least not in the US case. Between 1970 and 2007, employees’ share of net output was stable in the corporate and total-business sectors. So was the share of output that the working class could buy with its income, ie. without going deeper into debt. (Please see my pamphlet ‘Can Income Redistribution Rescue Capitalism?’ which you reviewed in January Socialist Standard, for data and sources).  Since upward redistribution didn’t cause the crisis, it’s not plausible that downward redistribution would solve it. Moreover, any serious downward redistribution would reduce profit and thereby tend to destabilize capitalism even further. After all, profit is the fuel on which the system runs. The underconsumptionist theory of crisis denies this, it tells us that the problem is too much profit, but I think there are fatal logical flaws in that theory. I can’t go into them here, but I do so in the pamphlet and in my book.

Similarly, what is your attitude towards those that claim that banking/monetary reform can improve conditions for the working class as well as preventing future crisis?

Financial regulation, like regulation in general, has a very weak track record. Businesses and investors are always able to find ways around the regulations, and the new regulations that are drawn up are always designed to ‘fight the last war.’ Also, regulation itself can be a cause of financial crisis. One of the biggest financial crises to date, the collapse of the savings and loan (building society) industry in the 1970s and 1980s, was caused by very strict regulations on the interest that the savings and loans could pay and charge, together with the inability of ‘Keynesian’ policies to stem the spiraling inflation problem of the time.

It’s possible to set up a government-handout agency that one calls a bank, funnel borrowed  money through it, and improve conditions for the working-class in that way – temporarily and within strict limits, of course. But if we’re talking about genuine banking functions – attracting funds and lending them out –it’s not possible to turn banks into institutions that operate for the benefit of working people or that pursue public-policy objectives. The capitalist system has its own laws, economic laws that are independent of the intentions of the people who happen to be running it. State-regulated banks, and even state-run and worker-run banks, are still banks. They have to try to maximize profits, just like every other capitalist firm. If they don’t, they won’t be able to provide investors and lenders with a decent return, so the investors and lenders will go elsewhere, and the banks won’t get the funds they need to operate. They’ll fail or, at best, remain tiny, insignificant islands in the sea of profit-maximizing finance.

You have made criticisms of the view expressed by Richard D Wolff (and others) that workers co-operatives are the way to socialism (or even are socialism). Could you briefly outline your position on this issue?

This issue here is really the same one I just discussed. It doesn’t matter whether we’re talking about banking or some other industry. Indeed, Wolff has applied his general view to the case of banking, calling for worker-run banks which, he claims, would operate for the benefit of working people. Why? Merely because workers have different interests than regular bankers, so they would supposedly make different decisions.

    

But the road to bankruptcy is paved with good intentions. Worker-run banks, and cooperatives within capitalism generally, would fail or remain tiny islands if they decided to sacrifice profit in order to enhance the well-being of their members or the majority of the population. Wolff just fails to deal with this problem. The only co-operatives that can survive are the ones that operate in accordance with the laws that govern capitalism. The result, as Marx put it, is that the workers in these cooperatives become ‘their own capitalist’; they end up exploiting themselves. In order to keep the prices of their products low and remain competitive, they have to keep their pay low, speed-up production, ignore workplace safety and health issues, and so on, just like every other capitalist.

Let me emphasize that the above comments are just about co-operatives within capitalism and as a ‘way to socialism.’ I’m not objecting to co-operatives as a form or even the dominant form of organization of production within socialism.

The assumptions of neo-classical economics have increasingly come under a lot of criticism since the financial crash of 2008. This criticism seems to have made significant inroads into the main stream yet the bulk of it comes from a behavioural economics or Keynesian /post-Keynesian viewpoint. Do you think this development can be harnessed by those seeking to promote a Marxian perspective and if so in what ways?

I’ve devoted a lot of effort to fighting the suppression of Marx’s body of ideas, including the suppression of them by the Marxist and radical economists. But fighting to allow Marx’s ideas to be heard is one thing; promoting a Marxian perspective in the academic-careerist turf-battle sense is another. I’m not interested in that. I’m interested in understanding and transforming reality, and for this, openness to dialogue and to new findings and ideas – from wherever they come – is essential.

I think Hyman Minsky, a post-Keynesian, had some insightful things to say about speculative and Ponzi finance. Irving Fisher’s debt-deflation theory of business cycles is also interesting. He was a neo-classicist, but some post-Keynesians have returned to his theory. And Vernon Smith and his colleagues have done what I regard as tremendously important work in behavioral economics, on the causes of asset-price bubbles. They’ve demonstrated conclusively that misinformation and lack of information isn’t the problem.

I agree with you that mainstream economists are engaged in some genuine rethinking. I also agree that Marx’s ideas don’t play any real role in that rethinking. This lack of interest in Marx isn’t due to dogmatism, but to the fact that these economists are agents of capitalism. Their job is to try to figure out how to solve the economic crisis and how to prevent future crises or at least make them less severe. So I can’t think of a thing that Marx has to offer them. His theory of capitalist crisis isn’t about the defects of any particular set of institutions or any particular form of capitalism. It’s about defects that are inherent in every form of capitalism and are inextricable from it. So I don’t think it offers anything to people trying to alter the system while keeping it intact.

Many groups that have shared the Socialist Party’s definition of socialism as a classless, stateless and non-market society have insisted that the working class should abstain from parliamentary activity. The Socialist Party has always maintained that as the state only exists to preserve the position of the property owning minority and that as socialism can only come about through majority understanding and participation, the democratic process should be used in order to win control of parliament for the purposes of preventing the state machine from being used against the socialist majority and to ensure the transition from capitalism to socialism can proceed in as ordered a manner as possible. In what ways would you agree or disagree with this position?

I wouldn’t insist that the working class abstain from parliamentary activity. As a Marxist-Humanist, I support (sometimes critically) all genuine freedom struggles, whatever the form they happen to take at a particular moment. But in the US, where I live, they’ve taken an electoral form only rarely, for instance in the Mississippi Freedom Democratic Party 50 years ago. I think that’s largely true elsewhere, too. The institutionalized labor and left electoral parties, even in the best cases, have rarely been vehicles of mass self-activity; and that’s one thing I do insist on, as did the First International: ‘the emancipation of the working classes must be conquered by the working classes themselves.’   

‘Property owning minority’ is too narrow – the top bureaucrats in the USSR, China, etc. haven’t been owners in the usual sense. I do agree that the state exists to preserve the capitalist system and that socialism can only come about through majority understanding and participation. However, I simply don’t see how the rest of the sentence follows from that.

Questions of logic aside, I don’t think anything can prevent the state machine from being used against the socialist majority. Governments can and will suspend our rights and ignore laws passed by parliament when push comes to shove, and they often have constitutional authority to do so. I think that what would offer the most protection against this, and the best chance for a revolution without mass bloodshed, is, first, a large majority in favor of socialism. Second, clarity about who its allies and who its enemies are – this is something that has been lacking far too often. Third, serious work to bring draftees and enlisted members of the armed forces over to the side of the people. If they decide to point their weapons in the opposite direction, that will do far more to enforce the will of the majority than parliamentary decrees can.

But getting rid of the old order is only one aspect of social transformation; the other is the creation of new social relations, rooted in a new mode of production that’s not subject to the economic laws that govern capitalism. No amount of political will, whether expressed by parliamentary or extra-parliamentary means, can bring this about. It’s not a matter of issuing directives, passing laws, or whatever. Unless and until a new mode of production is established that uproots the economic laws that govern capitalism, these laws will continue to nullify parliamentary laws, decisions of workers’ councils, and what have you.

"Ten Forty-Five". (1938)

A Short Story from the March 1938 issue of the Socialist Standard

He stood in the queue, huddled close to the wall, staring broodingly in front of him.

His thin, sallow face was lowered into the upturned collar of his overcoat as protection against the cold drizzle. His hat, badly out of shape, with its brim thrust down, made his nose almost the only feature visible. His hands were stuck deep in his pockets. While most of the crowd were chattering animatedly, he stood silently, ignoring even the jostling that took place from time to time.

A raucous voice, that of a policeman, startled him out of his reverie:

"Show your cards, please; ten-thirties only!"

Those at the head of the queue began to push through the narrow door marked "Men," holding out their "Signing-on" cards for inspection. Shoving, pushing, jostling, the rest of the queue moved forward in shuffling gait.

When Sallowface had almost reached the door he stopped, and then edged to the side, holding up several men who were behind him.

"Whatcher trying to do," asked one of them, a burly, red-faced fellow, "get froo a winder?"

"That's all right," he replied, "you get in; I'm 'ten-forty-five.'"

Red-face muttered something whilst disappearing through the entrance.

Sallowface looked after him with a sneer.

"Bloody fool," he hissed almost soundlessly through clenched teeth. His thoughts continued the sneering curse.

"Typical of the lot. No ideas, no mentality, no imagination. He hated them. Hated them as much as he hated the rich, the capitalists. Perhaps more. If it wasn't for them, would he have to suffer all this misery, this poverty?

"They could change things, change the system, if they only had the brains and the guts. Ah, it made him sick! What was the good of it all? They'd never learn. Listen to them now."

"An' I think he played a better game last time out. That save he made in the second 'arf—"

"Not 'arf he didn't!"

"He's a grand player, he is—"

Sallowface cursed silently.

"Give them football," he thought, "it's all they're interested in. No idea of life, as it could be lived, as it was lived by their rulers, their masters. Leisure without worry, luxury all round, travel—"

He sighed.

"Ah, travel! How wonderful to be able to travel. To travel to lands where there was sunshine and warmth even in the winter! To escape this weather, this climate, this fog that made breathing a pain, this rain that soaked through worn-out soles and gave you perpetual colds."

"He'd have to get his shoes mended. No matter if it left them broke. He daren't risk any more colds. They were wearing him out. But where was the money coming from? His wife hadn't paid the milkman for three weeks. She'd have to give him something when he called next. But suppose this rain lasted? How could he look for work with the inside of his shoes full of water?"

His lips compressed into a thin line. Couldn't he try a "screwing-job"? He played with the idea for a while.

To get hold of a few pounds, what couldn't he do with the money! But how was he going to set about it? And where an opportunity? He dismissed the thought in disgust. He wasn't cut out for that sort of thing, anyway. He didn't have the nerve. His wife had often railed him about it.

"You, with your Socialism. That won't get you anywhere! You're supposed to have brains! Always reading those books about economics! Why don't you find out how to get some money? Do a smash-and-grab raid, like some of them! But you ain't got the pluck!"

"Bah," he thought, "what did she know about it. That sort of thing doesn't help you. You're sure to get caught. And then they mark you for life after you leave prison—."

"Prison," he shuddered inwardly, "terrible. Freedom, that's what he wanted. Freedom to live, to enjoy the good things of life. Like those parasites he'd read about in this morning's Daily E—."

"Lord and Lady —have left for Majorca. They expect to be away until next April."

What price patriotism? Buy British, eh? We'll take Britain's wealth and leave you the weather! What humbug! But how he envied them. No worry. They had security—. Security! That was it! They were secure from economic worries. The world was theirs. It belonged to them. That wonderful world, that beautiful sky, the flaming sun, the mountain air, that azure sea, all theirs, theirs to play about with. They weren't free, that sun that browned your body as you lazed about the beach for weeks and months, that air that made your lungs feel as if they'd had a spring-cleaning and gave a sparkle to your eyes and cheeks. They were as inaccessible to people like him as the wealth and leisure needed to go after them.

An uncontrollable impulse seized him. He'd put an end to himself. He couldn't go on like this, his whole existence was a hell, a hell made a thousand times worse by those maddeningly tantalising glimpses of heaven. Why didn't the others feel like that, he wondered. Were they blind to the display of wealth around them, was there not a twinge of jealousy, of envy, amongst them when luxury was flaunted before them? His own wife, even, could not conceive of life other than one limited by working-class means. Sluggish brains and blood! Only yesterday he'd shown her a picture from the Daily M—: "Lady C— saying good-bye to her little son before leaving for the West Indies on a long holiday."

Holiday from what? From the strenuous work of giving parties and dining at hotels? Wish his wife could leave the kids so easily. They were a constant source of worry, nagged her skinny in fact.

He remembered his wife when he'd first met her. Pretty she'd been. Neatly dressed, too, and full of life. Look at her now. An old coat, her cheap stockings darned. She was ageing quickly. Furrows had appeared recently on a hitherto smooth forehead. He thought of of her fondly. Memories crowded in on him, memories of her, of delightful moments. But lately she had always been in a bad temper. So difficult to approach. And nagging: he couldn't bear her nagging. It was terrible, the way she carried on. "Bloody out-of-work, that's what you are! Works two weeks in the year—."

That always made him furious. "Damn you," he would shout, "can I help it? There's no work about, you know it's slack."

"Some slack," she would reply, "getting longer every year! Can't you try something else? But you're too lazy for that. You see the children going without boots and it does not worry you a bit! What have I got from my life!"

Then she would cry, and he'd storm out of the house and tramp the streets, cursing.

"Lazy out-of-work," he would mutter, "I'll give her."

But then his temper would subside and he'd feel sorry for her. Perhaps he was getting lazy. Long stretches of unemployment made you feel like that. He didn't look forward to finding work again. He knew he should, but he didn't. He dreaded work in a way. Bound to a depressing, often insanitary workshop for ten or eleven hours a day, he hated it. Going in when the day was just beginning and finishing when the day had vanished. Slavery, that's what it was. And when he started paying everybody and buying all those necessities they'd gone without for so long, there was precious little left for an occasional luxury. And how he had to work. Piece-work, his trade was. Getting paid per output. And you had to seat and hurry your guts out to keep pace with those you were working. And then the slack season came again, before he had a chance to get clear of debt. The same old round time and again. No escape—.

But he must not let it get him. He must not let it pull him down. He'd got to keep his head up. he had a part to play, if not in the immediate future, but sooner or later the time was sure to come. Things couldn't go on like this for ever. The masses must "tumble," in the end. Poverty wasn't a necessary evil any more. No one need be poor to-day. Things could be produced in such abundance, none need go short. Why, even now, when the actual productive work was done by less than half of the population, there was what was called "Over-production."

What a farce, what a tragedy! Over-production! Millions of people had never known what it was to have even their most elementary needs satisfied—.

He pulled himself up. There he was again, thinking about Social problems, when he could not solve his own. But his own were inseparable from the lot. He knew that.

It wasn't quite satisfactory though. His wife was right. He ought to see to himself first, himself and his dependents. They came first. They were his own, individual responsibility. Why should he be concerned with the others, those dull-witted, stodgy, lethargic fools. They weren't concerned with anyone but themselves.

And when you tried to explain to them, enlighten them, they weren't even interested, thought you cranky. Why should he care then? He'd turn his back on them, blast them. They were not worth it—.

But he knew he would not do that. Once you knew, once you understood, there was no turning back. Something inside you, something stronger than your immediate material interests, drew you back into the struggle. There was a fascination about that battle for Workers' Freedom, fatal though it might be for him. No escape, it was Destiny.

His head sunk still lower, with dull eyes he stared down, his lips moving soundlessly: "It's no use—. I can't get away from it."

"Why did I ever get to know about Socialism"? he thought; "I'd have been better off without it—."

A feeling of despair settled on him. He was through, he had no more strength left to carry on—.

But he knew that when it came his turn to speak to-night at their usual street-corner meeting he would be there and mount the platform again. And then he would talk, haltingly at first, and later, when he had warmed up, he would shout to overcome the noise of the traffic.

And there he forget everything, his troubles, his wife and his children, all was forgotten, as he poured out words—, biting, flaming words; all his bitterness welled up in him. It was a glorious forgetfulness, it made him feel a different person, important—he mattered after all. He was a fighter for The Cause, the greatest cause the world had ever known. And what did he care about his poverty! Greater men than he had sacrificed themselves in the Struggle.

And who knew, perhaps The Day was not so far off, the day of Victory, of Freedom.

"Come along there, you're holding up the line," someone shouted. Mechanically he moved forward.

"Ten forty-five only; show your cards," bawled the policeman.

Sallowface disappeared slowly through the door.

Sid Rubin

Too right-wing (2001)

Book Review from the June 2001 issue of the Socialist Standard

Reasons To Be Cheerful. By Mark Steel, Scribner, 2000.

"Shame he's a trot", was the recurring thought permeating through my mind as I read Mark Steel's otherwise pleasurable Reasons To Be Cheerful. Packed full of anecdotes and witticisms about his twenty years as a political activist, it's something any long standing Socialist Party member can relate to.

Throughout the book, Steel clearly comes across as someone who is genuinely moved by the horrors of global capitalism but unfortunately this potential socialist joined the anti-working class Socialist Workers Party which is an integral part of capitalism's left-wing.

After rejecting the Communist Party for being "too right wing", the main attraction of the SWP was that one did not have to suffer the indignation of defending the USSR as it was "state capitalist" - a theory pioneered in this country by the Socialist Party. Of course, it would be asking too much for any recognition but it is a shame that Steel's political development ended so prematurely.

From here we are taken on an amusing tour of some of the most significant political events of the last two decades of which Steel played "an extremely minor role". Highlights include getting caught up in the Brixton riot - returning to his boring office job to tell his politically uninitiated colleagues that he had got up to "nothing much" at the weekend and his recent Socialist Alliance candidature for the Greater London Assembly where he feared he would hear the words "Mark Steel - 103".

Such jollities notwithstanding, Steel continually spouts leftist poison such as equating socialism with full employment and referring to "old" labour's "socialist clause four". Not surprisingly, he does not even mention the SWP's non-existent internal democracy nor the fact that they intend to preside over a one party state. Even so, if you fancy some light political reading which gives the occasional belly laugh. you will not be disappointed.

Dave Flynn

Letter: 'Not Socialist enough' (1965)

Letter to the Editors from the September 1965 issue of the Socialist Standard

Dear Sirs,

Today I listened to a SPGB speaker at the Mound, Edinburgh's centre of informal political discussion. This speaker criticised and denounced the whole British Labour Party in politics as well as its whole organisation. Why? Because it is not Socialist enough, he argued.

Now, I gather from your aims, published in the Socialist Standard that you are for political as well as economic democracy. The only means of political democracy is an elective, representative house, and this means "politics" in its most common meaning.

This is the stumbling block—temporary though it is—to the progression of Socialism from the direction of the Labour Party. It is all very well for the SPGB to criticise the Labour Party but in our political democracy, Socialism must at times be suspended for reasons of political expediency. Otherwise Socialism in politics is crippled, and the day for which we struggle no nearer.

This is the reason for the Labour Party's slow, actual movement leftwards. In theory it is as Socialist as your Party, but for the fulfilment of and the progress towards the Socialist aim through the machinery of politics, its progression must be necessarily slow.

The SPGB does a great job. It must be constantly winning supporters if not members, of the Socialist cause. But it would be mistaken of you, I think, to challenge the Labour Party in politics. We must have a united British Socialist movement, for this is the quickest way to success. The SPGB's purpose should be to won members and supporters, and to influence the Labour Party policy in all its aspects. Political rivalry is the quickest, surest way to Socialist disunity—rather the quicker path of Socialist unity to our common goal.

Of course one can criticise Labour short term  and current policy, but your speaker implied that he and you disagreed with Labour's long term, overall plan. What are your views?

Fraser Grigor

Edinburgh, 10.

Reply:

Of course our speaker "criticised and denounced the whole British Labour Party". Why should he do otherwise? The Labour Party is more a Socialist organisation than the Conservatives or Liberals. It seeks votes on a programme (long term and otherwise) of administering and reforming capitalism and must therefore earn our condemnation as much as the others—including those leaning "leftwards" like the so-called "communists".

If our critic thinks we are being unjust, it is up to him to produce evidence that the Labour Party is Socialist; all we can say is that we have studied the Labour Party for the well-nigh sixty years of its existence, and it is obvious that the membership have not the foggiest idea of what the word Socialism means. Mr. Grigor thinks that Socialism must be suspended at times for reasons of political expediency, which is condemnation enough of the Labour Party's activities when it is remembered what over half a century of "suspension" has meant in terms of working class misery and the horror of two enormous wars (both Labour supported).

Incidentally, it amazes us how, even after only a short dose of the present Labour administration, our correspondent can think that they have the slightest interest in a classless, moneyless world of common ownership and democratic control. Imports and exports, wages and prices, god and dollar reserves, etc.—these are their obsessions. They are in fact up to their necks in the mire of capitalism.

We are told—and how many times have we heard it—that we should not challenge the Labour Party, but try to influence its policy instead. Presumably this means we should act as a ginger group, either boring from within or nibbling from without, but for what earthly purpose? As members, we would run the risk of expulsion and either way we would earn the hostility of the Labour rank and file. Certainly we would stand no chance of swinging the organisation over to Socialism—we might just as well try our luck with The Primrose League.

Our party learned this lesson from its inception, when some of our founder members were expelled from the old Social Democratic Federation for trying to preach Socialist ideas. We saw then that a Socialist Party must be completely independent of and hostile to all other parties, and must have Socialism as its sole aim. Only in this way have we been able to keep the idea alive—not an easy task and one which has not been made any lighter by the confusion and misunderstanding caused by the Labour Party.

Socialism is the only answer to the problems of the world today and we work ceaselessly for the time when the working class of the world will unite to achieve it. Far from agreeing that it should be shelved for any reason, the need for it grows more urgent with every passing day.

Editorial Committee.

Mixed Media: The Ayn Lady (2015)

The Mixed Media Column from the August 2015 issue of the Socialist Standard

The Ayn Lady written and performed by Emma Kilbey, with Lennard Sillevis was produced at the Oval House theatre in Kennington, South London last year. Kilbey and Sillevis play three roles each: as Barker and Larkin, 'objectivist' management consultants attempting to crack through the Russian-doll layers of Ayn Rand, also as Ayn Rand and her husband Frank O'Connor and also as Rand apostles Nathaniel and Barbara Branden. Kilbey is mesmerizing in all three roles.

Rand is notorious as the author of Atlas Shrugged which promoted her 'objectivist' philosophy which boils down to: individuals need to pursue their own self-interest and their own happiness, that is their moral duty. She was anti-altruism, anti-self sacrifice, anti-welfare, big on laissez-faire capitalism, deregulation of the markets, and zero empathy. She wrote that the individual should 'exist for his own sake, neither sacrificing himself to others nor sacrificing others to himself' and extolled egoism as 'the virtue of selfishness.' The play shows how personal relationships suffer in the absence of empathy when Rand and Nathaniel Branden begin an open affair with the reluctant permission of their spouses. Kilbey also includes statements from Tory politicians such as Boris Johnson and former prime minister Margaret Thatcher which resonate with Ayn Rand's philosophy.

One of Rand's apostles was Alan Greenspan who would later become Chairman of the US Federal Reserve 1987 to 2006. In the 1980s Rand became the Reagan administration's 'novelist laureate', and her ideas influence today's economic world stage. The Tea Party in the USA was described by Ben McGrath in The New Yorker as a collection of 'Atlas Shruggers', and in fact according to an American survey, Atlas Shrugged was ranked second only to the Bible as a book that had most influenced their lives.

Gore Vidal in his review of Rand's book New Intellectual in Esquire in July 1961 had warned that 'the muddy depths are being stirred by new monsters and witches from the deep. Trolls walk the American night. Caesars are stirring in the Forum. There are storm warnings ahead.' Vidal dissected Rand's rancid philosophy as 'attempting to give a moral sanction to greed and self-interest, and to pull it off she must at times indulge in purest Orwellian newspeak of the 'freedom is slavery' sort. She has a great attraction for simple people who object to paying taxes, who dislike the 'welfare' state, who feel guilt at the thought of the suffering of others but who would like to harden their hearts. For them, she has an enticing prescription: altruism is the root of all evil, self-interest is the only good, and if you're dumb or incompetent that's your lookout.' Vidal concludes that Rand 'has declared war not only on Marx but on Christ' and he believes 'altruism is necessary to survival.'

Anarchist Communist Peter Kropotkin in his work Mutual Aid: A Factor in Evolution concluded that cooperation and mutual aid are the most important factors in the evolution of the species and the ability to survive. Kropotkin wrote 'the mutual-aid tendency in man has so remote an origin, and is so deeply interwoven with all the past evolution of the human race, that is has been maintained by mankind up to the present time, notwithstanding all vicissitudes of history.' He also writes that in The Descent of Man Darwin 'pointed out how, in numberless animal societies, the struggle between separate individuals for the means of existence disappears, how struggle is replaced by co-operation, and how that substitution results in the development of intellectual and moral faculties which secure to the species the best conditions for survival.'

For Rand the best social and economic system for realising human potential is capitalism. But as the Socialist Standard pointed out in December 2010, it is a 'not really-existing capitalism, more a utopian vision of what a free market, laissez faire future might be like if only people acted rationally and according to their own interest, and the state got off people’s backs. Marx's Capital shows that capitalism, even when it is operating perfectly well, without corruption or unnecessary state interference, must necessarily produce misery and exploitation; and that the state, far from standing in the way of free markets, was an absolutely essential tool for creating and maintaining them.'

Steve Clayton

Obituary: William Logan (1984)

Obituary from the April 1984 issue of the Socialist Standard

It is with deep regret that we report the sudden death of William Logan—"Loge" to all who knew him. "Loge" was one of the founder members of Edinburgh Branch in 1968, and a driving force in its early dynamic days. He was an entertaining speaker and a prodigious literature seller. One of his greatest contributions to the Party was his interest in silk screen printing, which enabled Edinburgh Branch to produce their own inimitable posters, which sprang up all over the city. A visitor to one of our meetings in the late sixties, remarking on the number of SPGB posters he saw, thought that the cultural revolution had spilled over into Edinburgh; you could not turn a corner without seeing a poster. The death of "Loge" at the age of only 35 is a grievous loss; his enthusiasm, drive and humour will be sadly missed.

L. A. Craig

Edinburgh Branch

Materialism and ideas (1985)

From the July 1985 issue of the Socialist Standard

Historical Materialism is the reasonable view that new methods of production and forms of economic organisation arise, with appropriate ideas, as classes in communities seek to further their interests and satisfy their needs in given social situations. A contrary view was argued by Max Weber in The Protestant Ethic and the Spirit of Capitalism. Weber denies the strong claim of Marx that social existence determines consciousness by illustrating how the ethos of capitalism predated capitalist society. He proceeds by focussing on certain religious communities in reformation Europe and particularly on Calvinists, as their doctrines were readily cast in the form of maxims governing daily activity.

The Calvinist maxims are varied, but two are crucial for Weber's thesis: that you should work hard and adopt an ascetic mode of life. Thus hard work and frugality as maxims led the early Calvinists to set up as entrepreneurs, exploiting the small force of free labourers, reinvesting most of their profits because their religion forbade them to dissipate wealth in personal consumption.

The general conclusion to be drawn from Weber is that an adequate account of the rise of capitalism must allow ideas to have a dynamic of their own, in conjunction with material factors. Weber is an eclectic compromise between materialism and idealism, favoured by liberal historians and sociologists.

Commercial divines 
Weber's position is that consciousness determined social existence — but only in the case of some Calvinists. The first difficulty is to explain why some Calvinists became employers and some did not. A general theory which holds that some people's actions are determined by their ideas and some are not, is clearly vacuous. Even if we allow the potency of ideas in a few special cases, there is still a contradiction at the heart of Weber's analysis; for those few whose actions were most determined by their ideas, were also those few who set aside their previous ideas to invent or accept Calvinist doctrines. So those whose actions were most strongly determined by their ideas were, paradoxically. those who were  not. Innovative ideas and cultural change are permanent puzzles on Weber's account.

The strong part of Weber's case is the interesting claim that ascetic protestantism and the Calvinist maxims of hard work and frugality helped to build up an ethos that lubricated the passage to capitalist production relations in several areas traditionally governed by guilds of craftsmen. If you ask modern capitalists for the source of their wealth they may say hard work and frugality and deny that they exploit workers. Weber argues not that this is now true, but that it was once, for a few divinely inspired commercial Calvinists of the seventeenth century

Religious revolutionaries
Unfortunately for Weber, Calvinists had maxims for conduct other than frugality and hard work and some of them do nothing to foster capitalism, or they have the opposite effect. Prime among Calvinist notions is the idea that believers must submit to the clerical authority of the democratic council of elders, who in the early days ruled that usury should be abolished. Moreover the history of two key tenets of early Calvinism is fatal to Weber's argument. The first is the idea of predestination: Calvinists were, at birth, already allocated their places in heaven or hell and their subsequent worldly activity (good deeds) were irrelevant as far as their final destination was concerned. Neither of these ideas remained unchanged as Calvinism and capitalism developed. This is the key to an understanding of the relationship between Calvinist ideas and rise of capitalism.

The early Calvinists were reacting against the luxury of the papal and royal courts, the great wealth of landowners and the monopoly power of trading centres like Venice. They drew up a code of life where all were levelled down to basic condition of uncertainty as to whether, in the eyes of god, they were of the elect of not. The rich were further levelled down to the poor by the injunction to work hard and live frugally, while the irrelevance of worldly activity meant that the rich could not buy places in heaven with their charity; the abolition of usury was a direct attempt to level differences between rich and poor. Round this off with the democratic election of the council of elders by all member of the church and a picture emerges of a small popular movement in revolt against feudalism, catholicism and the counter-reformation. The speeches of Calvin back up this interpretation, for he couched his theory in terms of revolution against the old order and was often wildly cheered in the reformed churches where he preached.

So the ground of the Calvinist church was one of the areas of consciousness in which people could identify their interests and fight for a society that would realise what they wanted. Explained in this way, the strong part of Weber's thesis collapses into the theory of Marx and historical materialism, while the subsequent history of Calvinism is even more illuminating.

The unknown power
The doctrine of the irrelevance of worldly activity to the predestination of the individual Calvinist was the first to undergo change. In the course of a century the faithful came to look on success in world activity as a sign that they were of the elect. As Calvinism and capitalism evolved there was great concern with the acquisition of wealth on the part of those whose ascetic moral code did not permit them to dissipate that wealth in consumption. Thus, if Weber's account were unmodified, the conditions which fostered the most rapid accumulation of capital during the rise of capitalism (wholesale enclosures, lengthening of the working day, speeding up of production -  and the enforced degradation of people into labourers dependent on employers) would be an unlooked-for consequence of a church which came into existence with the intention of democratising religion.

So, even if Calvinist ideas did promote the growth of capitalism, they could only be said to do so quite opposite to the way intended. For the early Calvinist father would have been appalled by the rampant exploitation in the early years of the industrial revolution. Yet Weber asserts that capitalism is the accidental consequence of those who cherished Calvinist maxims. A much more plausible interpretation of this whole business is possible of religious ideas are relegated to their proper place.

Calvin's original doctrine of predestination, having become theologically insignificant, was corrupted through the desire of the faithful to give cosmological significance to what they were already doing. The wealth they were busily acquiring was given a religious rationalisation and made into a sign that they were of the elect. But feeble though this rationalisation is, much can be done with it if it is stood on its feet in the ground where it emerged.

In the uncertain conditions of early capitalism, before market patterns became established, traders were bewildered by events. At one time they threw piles of commodities onto the market, saw the lot purchased and made handsome profits; at other times nothing was saleable. So the Calvinists among them reasoned the social situation into their religion. The following quotation expresses the relationship between the ideas of ascetic protestantism and capitalism more clearly than Max Weber ever did:

Calvin's creed was one fit for the boldest bourgeoisie of this time. His predestination doctrine was the religious expression of the fact that in the commercial world of competition success or failure does not depend upon a man's activity or cleverness, but upon circumstances uncontrollable by him. It is not of him that willeth or of him that runneth, but of the mercy of unknown superior economic powers . . .

(Marx and Engels, Selected Works, vol.3, p.104, Moscow, 1973)

The history of Calvinism illustrates how those who now advocate the reform of religious, political or social institutions should beware. The most sophisticated reforms may be turned against their advocates by the operation of an incorrigible social system.

Calvinists may have helped bring capitalism into being; we have to bring it to an end.

B. K. McNeeney

From the WSPUS Radio Series: The Yom Kippur War (1973)

From issue number 6 (1973) of The Western Socialist

There are several ways of looking at a problem, depending upon one's point of view. Take an example such as the latest Arab-Israeli War, the so called Yom Kippur War. The case for the Arabs rests upon their assertion that Israel is a nation of Europeans and Americans that has taken possession of Arab territories in the Middle East and has dispossessed and driven Arabs from their former homes. Further, that the present nation of Israel should be abolished and a new, secular state instituted that would give equal authority to all resident peoples regardless of religion. At least that is their story. 

The Israelis and all who support them, on the other hand, argue that the Jewish people have a right to exist as a nation; that their homeland rightfully must be located in what is called the Holy Land; and that the State of Israel must continue to exist. They insist that this is all they ask and that if their borders have expanded beyond the original ones of 1948 this is not because of imperialist activity on their part but because of Arab defeats in the previous wars against them and the need for Israel to maintain buffer territories against further Arab aggression. And that is their story. 

There are, to be sure, variations on this general theme. Those who see the Arab world - at least that part of it which proclaims itself socialist - as a Third World progressive force against the capitalist west and the so-called communist bloc in the east are able to see through Israeli hypocrisy and correctly view it as a puppet of U.S. Imperialism. The friends of Israel, on the other hand, and there are many professed socialists among these, too, see the Arab nations as mere puppets of the Soviet Union and a force for reaction, rather than progress. 

The main problem with most of the analysts is that they fail to see the entire picture because they are either ignorant of the fact that society is divided into rival economic classes or, knowing it, fail to apply such knowledge in this instance. There is no homogeneous Israeli people with common interests. Nor is there an Arab people in that sense. The Israelis are divided on the basis of a tiny owning class and a vast class of propertyless wage slaves and there is not one single nation in the Arab bloc - nor any place else in the world - where the same division does not exist, In the Arab world there are even conflicts among rival national ruling classes that pit them against one another in open warfare. 

True, in a large sense, all of the nations of the Middle East are puppets of one or the other of the super powers despite the clout same of them carry because of their oil deposits. After three earlier wars and now this latest one, it should be apparent that neither Israel nor any of the Arab nations can afford to carry on late 20th Century warfare without continual supply from the U.S.A. or the U.S.S.R. And it is equally apparent that neither the U.S.A. nor the U.S.S.R. is ready to relinquish control of the strings. But this in no way justifies the argument that the workers in the Middle East, or any place else in the world, have any real stake in saving Israel from the Arab nations are saving any of the Arab nations from Israel. 

For about three quarters of a century the Zionist movement has pleaded the case for a Jewish Homeland as the answer to the problems of Jewish working people everywhere. After 25 years of this Homeland, those who have settled there have been subjected to continuous warfare, violent "incidents," and continuing poverty - unless they happen to have friendly and wealthy relatives. Arab nationalists have given and still give out the same nonsense to their working people. The World Socialist Movement has but one answer: 

Workers of the world unite far world socialism. You have a world to gain.