Letter: Socialism versus Religion (1957)

Letter to the Editors from the September 1957 issue of the Socialist Standard

Socialism versus Religion

To the Editorial Committee.

In the August issue Mr. John Wyatt, in answer to the criticism of the report of the debate on "Socialism versus Religion,” as reported in the June issue, writes: "If the New Testament is read right, one can find very much to support Socialism.” In so far as our understanding of Socialism is concerned, it arises out of capitalism through the class struggle. There is no "turn the other cheek” about it. Many of the teachings of Christ were devoted to telling the people (the slaves) to put up with the conditions in which they lived for treasure to come in heaven. We are determined to wage a struggle against labourites and alleged Socialists as well as avowedly capitalists—so different from the pacifism of the New Testament.

Mr, R. Smith writes—quoting the report of the debate above: “The existence of religion presupposes a belief in the existence of God.” Then he takes me to task because I asked my opponent for proof of the existence of God. What's wrong with this? Nobody will doubt that religious people believe in God, but because they believe in God this does not prove that He exists. Socialists believe in Socialism, but that does not prove that Socialism exists.

H. Jarvis.

50 Years Ago: A Warning to Irish Workers (1957)

The 50 Years Ago column from the September 1957 issue of the Socialist Standard

There can be no relief for the oppressed Irishman in changing an English robber for an Irish one. The person of the robber does not matter—it is the fact of the robbery that spells misery. National divisions are a hindrance to working-class unity and action, and national jealousies and differences are fostered by the capitalists for their own ends.

The crowd of hungry “intellectuals” clamouring for jobs both within and without the Irish parliamentary party do not represent the interests of the working class in Ireland. They do not, indeed, profess to favour other than capitalist interests, provided that the landlord or capitalist be Irish, but the Irish capitalist is in no wise more merciful than the English exploiter. The national sentiment and perennial enthusiasm of the Irishmen are being exploited by the so-called leaders in the interests of Irish capitalism, and the workers are being used to fight the battles of their oppressors. The Irish capitalist rebels against the English capitalist only because the latter stands in the way of a more thorough exploitation of the Irish workers by Irish capital. Let the thieves fight their own battles!

[From an article on 'The Sinn Fein Policy', Socialist Standard, September 1907.]

SPGB Meetings (1957)

Party News from the September 1957 issue of the Socialist Standard

This Month's Quotation: Socialist (1934)

The Front Page quote from the September 1934 issue of the Socialist Standard

"Socialism is impossible without democracy. The Socialist Party is democratic in structure, method and aim."

Notes by the Way: Parliament as a Working Machine (1934)

The Notes by the Way Column from the September 1934 issue of the Socialist Standard

Parliament as a Working Machine

Much ink and lung power is being wasted at the moment by half-baked critics of things as they are, who attribute our ills to the defects of the Parliamentary machine. Parliament, they say, is too slow, it creaks and obstructs, scrap it for a really fast-moving dictatorship or sub-committee of the Socialist League.

All this criticism misses the point. Parliament moves as fast or as slow as those who control it want it to move. If the present Conservative majority does not introduce social reforms desired by the opposition, that is not because Parliament won't let them, but because they do not want to introduce these particular reforms. But let capitalist interests require some fast work and then see what happens.

On June 14th, 1934, Germany announced its intention of defaulting on some bonds held by English investors. Six days later (June 20th) Parliament took the first, or purely formal reading, of the Debts Clearing Offices and Import Restrictions Bill, enabling the Government to seize monies due to Germans for goods sold in England.

The second reading was on June 25th; the Committee hearing and third reading on June 26th; the acceptance of a House of Lords’ amendment on June 28th; and the Royal assent on,the same day.

The Lords had dealt with the Bill in one day, June 27th.

Here we see a piece of legislation vitally affecting widespread interests of capitalist traders and investors, dealt with in three or four days of Parliamentary time. From Germany's announcement to the Royal assent took only fourteen days! Holland and Switzerland, with Parliamentary government, were equally prompt.

While we are on this subject, let us look at a piece of information published in The Times on July 21st. Fascist speakers have been heard to ask whether such an incident as the year-long hold-up of Waterloo Bridge could happen in Fascist Italy, where ”talking-shops” (i.e., democratically elected councils) are supposed to have been replaced by smart, one-man, dictatorial direction from above.

Milan, according to The Times correspondent, also has its traffic problems, and tube railways have been agreed as the solution. That scheme “has been under consideration for many years,” but, says the local dictator, ”it is not likely for many reasons to take practical shape for a long time yet.” So they have decided, ”for a long time yet,” to do without the tube railways, which they are agreed is the solution, and in their place to build the tunnels and run tramcars through them. Even so, the work on this temporary and partial solution will not begin until next year, and will take up to three years What price dictatorship ?

A Question to Mr. Attlee

Mr. Attlee, M.P. , wrote an article in the Daily Herald (August 14th) in which he tried to discuss what another Labour Government would do regarding wages, and in particular the wages of Post Office workers and other Government employees. His views are of some importance in the Labour Party, because he was P.M.G. under the last Labour Government, and is now Deputy Leader of the Parliamentary Labour Party. These qualifications help him to speak with authority, but they also no doubt account for his very guarded utterances.

First, he candidly admits that the “Post Office is not an example of Socialism but of State capitalism”—something the S.P.G.B. has been trying to ram into the thick heads of the “Mr. Attlees” for thirty years. Perhaps, too, it was not so candid as it appears to be. It may very well have been introduced here just to serve as a convenient excuse for the failure of Mr. Attlee and the Labour Government to do anything material for Post Office workers when in office. It is not a case of Mr. Attlee having dropped “Post Office-ism” in order to take up Socialism. What he did was to back up Mr. Morrison's “Public Utility ism,” and the one has as little to do with Socialism as the other.

Mr. Attlee observes that Post Office employees complain of “scandalously low rates of pay and other evils.” He does not say that the complaints are justified—that would provoke questions as to why the Labour Government did not do something about it—nor does he say that the complaints are not justified—that would annoy some of his readers—who happen to know the facts. Then he goes on to lay the blame on the hard-hearted Chancellor of the Exchequer, whose department, or so says Mr. Attlee, ”is to the Post Office just what the shareholders are to a private company.”

That is as good a defence as Mr. Attlee is likely to find; that is, it is no good at all. It breaks down because the Labour Government (or any Government) is just as much responsible for the policy of the Chancellor of the Exchequer as for any other Department under its control. The fact is that many thousands of Post Office workers were and are paid at rates on which it is impossible to live in anything like decency and comfort. Mr. Attlee and his Labour predecessor at the Post Office, Mr. Lees-Smith, knew all about this but did nothing.

In spite of repeated protests they allowed Post Office and civil service pay to be reduced to the lowest level it has reached since the War. Now—in spite of a further fall in the cost of living since the Labour Government went out of office—the present Government has agreed to raise the level of pay slightly.

Will Mr. Attlee tell us why he consented to Post Office pay being reduced to this low level, seeing that the present P.M.G., Sir Kingsley Wood, has been able to get the Treasury dragons to allow some small improvement, and has, moreover, admitted publicly that hardship exists?

When They are In Office, and when They are Out

Mr. Attlee had a few words to say on the “national minimum wage” as a method a Labour Government would adopt to raise wages. The proposal (although, of course, useless as a remedy) looks so beautiful in its simplicity, can it be that nobody has thought of it before? And can there be people who, having accepted it, subsequently find reasons for not applying it? Mr. Attlee has to admit that there are these villainous people, but their “arguments against a national minimum wage must now be abandoned.”

Who were they? Why, none other than Mr. Attlee’s party, when they were last in office. For years they had preached the need for a national minimum wage. Then, in November, 1930, when in office, they were asked by Mr. Kirkwood if they would introduce a bill to make wage reductions illegal. The Labour Prime Minister replied as follows (Hansard, November 26th, 1930; col. 1338): —

Wages, either real or nominal, cannot be fixed by legislation for the wage-earners generally. The Government’s policy is to maintain standards of living and secure as equitable a distribution of wealth as is possible.

This will not prevent Mr. Attlee’s party from playing the same trick once more if they ever get into office again.

Not Interested in the Last War

On August 16th one of these lucky employees of the Post Office, a temporary postman, aged 47, was imprisoned for stealing postal orders. His wage was 34s. a week. The Chairman of the Bench, a Capt. A. Eve, when told that the prisoner had a good character, "served in the War and was discharged after being wounded and gassed,” said: “We don’t want to hear that. It is ancient history.” (Daily Herald, August 17th,)

Of course, it is ancient history to talk about the victims of the last war at a time when our rulers’ attention is fully occupied with the possibility of another.

Labour “ Socialism ”

Before leaving Mr. Attlee, it is worth while placing on record his quaint notions about Socialism. It will at least serve to prevent Labour Party readers of this journal from writing to us telling us that this time the Labour Party really does mean by Socialism what Socialists mean.

Mr. Attlee discusses what a future Labour Government would do about wages. First, in the "transition period,” it would determine in relation to the national wealth “what wages should be paid to the workers in industry.” Then civil servants and industrial workers “must stand together in their demand for a higher standard of life.” (Mr. Attlee forgets to say what the workers are to do if a future Labour Government, like the last one, hears the workers "demanding” these things, but answers "No!”)

Then, after the "transition period,” a beginning is to be made with "socialisation” (Mr. Herbert Morrison’s name for Public Utility Corporations). Then, says Mr. Attlee, the "problem of fixing remuneration will become acute,” and the remedy is that "Socialists must aim at equalitarianism, although it may not be completely attainable for a considerable time.”

Our progress, so far, may be summarised thus: First, a Labour Government, then an inquiry into how much wages the workers can be given, then "a considerable time” during which efforts will be made in the direction of equalitarianism, and of diminishing property incomes.

After this we might hope that Mr. Attlee will expect to have arrived at the desired goal, but what we find instead is that there will still be a wages system, and still, apparently, property incomes, albeit "diminished.”

Mr. Attlee’s followers, who have spent the past twenty or thirty years chasing after Post Office "Socialism” only to discover that it is "State capitalism,” will spend another considerable span of life chasing after "socialisation,” only to discover that it is Public Utility Corporations, and that the wages system and capitalism in general are still there.

It is a sure thing, if the workers allow this to happen, that when that further stage is reached, Mr. Attlee will be writing articles in the Daily Herald of that day, discovering new variations on the old theme.

The Hard-Faced “Daily Herald”

Labour propagandists are fond of saying that the incursion of the publishing firm of Odhams into the Labour world (was it an incursion or an annexation?) has revolutionised propaganda. It is certainly possible that the Daily Herald's rise to the position of the world's largest circulation, over two million copies a day, will help the Labour Party to round-up votes as never before, but there is a thorn to every rose, and one little thorn in the side of Labour Party propagandists is the fifteen per cent. dividend paid by Odhams. In the past the Labour Party has been able to denounce wicked bankers and hard-faced business-men for making an “unreasonable" profit. What will they say now? When the Daily Herald was from a profit-making point of view a flop it was all very well to throw stones, but fifteen per cent. is well above the average rate of profit of industrial and commercial concerns. It is more than most of the banks pay, and far higher than many of them.

Incidentally, Labour Party adherents of Major Douglas, who believe that the banks have it in their power to pay dividends of hundreds per cent., might explain how it is that most of them pay far less than Odhams.

A Penny Bun for a Good Wage-Slave.

It is when our bosses are kind to us that we see what sort of cattle they think we are. On Saturday, August 18th, some charabancs were to be seen passing along the Thames embankment draped with huge posters, from which we learned that the animals inside were the salesmen of a certain textile firm who had come out top in a "trip-to-the-mills" contest. A present for white-collared Clarence Dubb for being a good boy, to go and inspect his strong-armed brother, Henry, in the mills. Then each group will be expected to derive satisfaction from not having to do the work done by the other, and both will return more contented to the task of making profits for the shareholders.

Five, Ten, Fifteen, Twenty.

Somebody ought to make an inquiry into the methods by which the rulers in the various countries keep the workers more or less contented while giving them little else but promises of post-dated blessings. In particular, what is the merit of the five-year period that it should have found favour in so many countries? First, there are the five-year Parliaments in Great Britain, it being found that five years is about the longest period a British worker will tolerate the non-fulfilment of a promise of prosperity by any given gang of politicians—after five years he insists that it shall be unfulfilled by a different gang. Then there is little Father Stalin, whose great contribution to civilisation was the discovery that, if it is put over in a lot of pseudo-Socialist jargon, the five years can be extended to two five-years, and the patient Russian can be kept docile with the promise of carrots, not after the first, but after the second five-year plan. If Professor Laski (an admirer of the Bolsheviks who has just visited Russia) is to be believed, the trick works with large numbers of the workers there. He writes (Nation, New York,’ July 18th): —

I doubt whether an unemployed English worker on the dole has a standard of life as low as lower-paid categories of Russian workmen in full employment. On the other hand, I was assured not only by Russians themselves, but by newspapermen who had lived in Russia for many years, that conditions are definitely better than at any time since 1917. . . .

Russia is a land of hope. The masses have no doubt that the sacrifices of to-day will be justified by the achievements of to-morrow. The mental climate is one of intense exhilaration, of a buoyant and optimistic faith I have never before encountered . . .

Hitler looked across the frontier and is now going one better than Stalin. My German oxen, he says, are even more patient than your Russian ones. In the early days, before and just after the. conquest of power, he promised to introduce Socialism almost immediately, and was asking to be crucified if he did not deliver the goods in five years. A year later, having seen that quite a lot of people are already asking for tangible results and may want to crucify him, he puts forward a plea in his election speech of August 17th for fifteen years in which to justify himself. After all, as Hitler says, the Social Democrats and other parties which shared in the Government of Germany since 1919 got away with it for fifteen years between them, why shouldn't he?

Mussolini appears to have worked on a different theory of kidding the workers. Having discovered in the Italian "left-wing" Labour movements how attractive to the average violent reformist are speeches about “ACTION," he worked out a formula which, so far, has never let him down. He proclaimed the dethronement of talk about theory, and enthroned in its place talk about action. After twelve years, a decreasing but still very large number of Italian workers are contented with it.

But black as it is, the outlook might be worse. We have not yet found a politician able to win an election on a programme of "Prosperity for Posterity: The Millennium in 150 years."

Mr. Selfridge on Myths.

Every day in The Times and certain other papers there is a half-column of great thoughts inserted by Selfridge & Co., Ltd., and written by "Callisthenes." On August 16th "Callisthenes" discussed "The Great Equality Myth," and regretted that the doctrine of the equality of men is not declining as it ought to be. It would be unfair to hold "Callisthenes" responsible for all the views expressed; doubtless he has to write what he thinks will please his employers. May we, first of all, however, disabuse him of the notion that the basis of the Socialist case is a belief that “all men are equal," and that “all people should work the same number of hours per week and get the same amount of money in return, the same amount of honour, the same number of the constituents of 'happiness' ” Strange as it may seem to “Callisthenes,” if he listened to a member of the Socialist Party for a month he would hear never a word about any of these doctrines. Socialists are occupied with a very different matter, that is, the ownership and control of the means of production and distribution, including, of course, the stores, vehicles, plant and stock of Messrs. Selfridge & Co. What we want and are determined to get, not one day later than need be, is the abolition of the private ownership and control of these things, and their conversion into the common property of society. We shall then be as little concerned as “Callisthenes” as to whether A and B are each 5ft. 9ins. and measure 34ins, round the waist. When “Callisthenes” puts forward his employer’s view about the nature of existing society, these ideas are as remote from reality as are his ideas of Socialism. There is, he tells us, a fundamental quality about men which gives each one “the capacity for earning money .... in different degree.” It is this, we are told, which accounts for economic inequality. This is, of course, not an original view. It is, on the contrary, very old, and it can be shown to be absurd by one simple feature of capitalism that may be observed every day. If Mr. Selfridge’s wealth is due to his superior capacity for earning money (and not to his participation in the capitalist-class ownership of the means of life which compels propertyless workers to submit to exploitation at his hands), why is it that he and every other capitalist hangs on like grim death to his property and will never on any account risk his alleged superior capacity in competition with the workers? Why, in other words, does not Mr. Selfridge come out from behind the rampart of property which protects him and gives him privilege, and pit his brains against those of the lesser men?

The answer (not for publication in The Times) is that Mr. Selfridge is not such a damned fool as all that. He knows full well that a capitalist deprived of his property, even though allowed to keep his “superior brains,” would be a shorn lamb defenceless against the cruel winds that assail the worker looking for work. Mr. Selfridge knows how much pleasanter it is to stick in the ranks of the privileged, where he never has to come into direct and brutal contact with the bread-struggle he finds so bracing for others, where he is flattered, guarded and coddled by servants and secretaries, every one of whom has to smile and jump to it because he or she will otherwise get the sack. If Mr. Selfridge should some day meet his dear fellow members of the great firm on an equal footing, he might hear one or two blistering remarks about his canting “Callisthenes” and his playboy bugler who toots his wage-slaves on and off work morning and evening.

Edgar Hardcastle

Blogger's Note:

For more background on Harry Gordon Selfridge and "Callisthenes", check out this article.

Letter: The Collapse of Capitalism (1934)

Letter to the Editors from the September 1934 issue of the Socialist Standard

The Collapse of Capitalism

Attitude of the S.P.G.B.

A correspondent (C. L., Victoria, Canada) states that a speaker of the Canadian Co-operative Commonwealth Federation asserts that the attitude now adopted by the S.P.G.B. on the question of the so-called collapse of capitalism is not the attitude adopted before the War. The speaker asks when we changed our view.

First, we ought to explain that the term "collapse of capitalism” is itself used with widely different meanings. Some people have used it as a colourful way of describing the periodical crises into which capitalism falls. So long as it is made clear that nothing more is meant, this use of the phrase is not open to any serious objection. It happened, however, during and after the Great War that the phrase was popularised with a very different meaning. The American writer, Herman Cahn, in his “The Collapse of Capitalism” and “Capital To-day,” revived and elaborated the theory that capitalism, through the development of its own contradictions, would reach a stage of final, devastating physical collapse. The particular feature Cahn seized upon was the growth of the cheque system, and the war-time currency inflation which he saw going on in various countries. He not only forecast the collapse of capitalism but was rash enough to give it a date.

Writing apparently in or about the year 1917, he said: —

Its. (i.e., capitalism’s) downfall, root and branch, will be positively assured by a continuation of the war for, say, another year. That downfall will then be like an act of nature, and not dependent on the mental and moral preparation of the peoples of the world for a new form of society which must, perforce, be completely social. (Page 38, “Collapse of Capitalism.”)

He did not, however, tie himself down to the continuance of the War, but added (page 118) that, war or peace, the “days of the rule of gold are numbered,” and with it the days of capitalism also. If war went on, capitalism’s downfall would be early and sudden. If war ended, there would be a “lingering death struggle.”

The broad idea that capitalism in one of its periodical crises might come to a point of collapse in the sense of chaos or a complete stoppage of production, is a very old one. Its principal danger (apart from its misreading of crises and the ability of the capitalists to muddle through) is brought out strikingly in the point which Cahn strongly emphasised. Throughout his writings, and in the writings of leading Communists in the early post-war years, the point is constantly made that the early and inevitable collapse had made Socialist propaganda and the conversion of the majority, to Socialism unnecessary and useless. The catastrophe, they said, was already about to break over us. There was no time for educating the workers. All that we could do was to! seize the “psychological moment” when it came, and lead the blind masses to Socialism with or without their knowledge and consent. In the cant phrase of 'the time the revolution was (and still is) just round the corner.

With that preliminary explanation we can now answer the questions about the S.P.G.B.’s attitude. On the major question, the impossibility of achieving Socialism without first convincing a majority of the population, the S.P.G.B. has never at any time held any view but the one it holds now. Right from the first issue of The Socialist Standard, that, more than almost any other point, divided the'S.P.G.B. from the other parties calling themselves Socialist. Never at any time did the S.P.G.B; accept the notion that Socialism could be forced on a non-Socialist population by leaders taking advantage of discontent during a crisis. See, for example, the answer given in The Socialist Standard in August, 1905, to a correspondent who had said that the S.P.G.B.’s attitude could be summed up as, “Preach economic considerations as the sole factor in social development, and wait until the crash comes.” The reply given to him was that this was “decidedly not the policy of the S.P.G.B. . . . It is inevitable that economic development will bring things to a crisis, but whether from out of this crisis will arise the Socialist Commonwealth depends upon whether sufficient of the working class have been made Socialists, and have been class-consciously organised.”

Whether or not the phrase ”collapse of capitalism” was used by writers in The Socialist Standard in the pre-war years, we are unable to say. If it was used it would always be against the background of the above contention that there could be no Socialism without an organised Socialist working-class; for that point was always being made and it is certain that no writer could have held any other view. What is possible is that some members of the S.P.G.B. in the early years had never had occasion to consider closely the question whether or not a crisis of capitalism could properly be called a “collapse,” in the sense used by Cahn and the Communists later on. That being so, there may be expressions used in early articles, which reflect the writer’s lack of definiteness on the point. We have, however, not been able, so far, to find any. It must be remembered in this connection that the S.P.G.B. does not claim that, with the formulation of its Declaration of Principles in 1904, it had reached definite and final conclusions on all the aspects of capitalism and Socialism. All that was aimed at was the indispensable minimum which would constitute a sufficient basis for a Socialist Party. Nothing has occurred to warrant departing from the Declaration of Principles, but the members of the Party, in the course of years, have been able to clarify and extend their knowledge over a much wider range of subjects, for they have had the advantage of the knowledge of the men who formed the Party, and have been able to study many phases of capitalism (e,g., a world war) which had not occurred within the lifetime of the founders. 

It was not until the end of the War that the idea of a catastrophic collapse had its rebirth and popularity, and it is therefore only natural that the present member of the S.P.G.B. knows more of these theories and is better informed and more definite as to their fallacies than was the average member before the War. If, however, the question had been raised before the War in its post-war form, there is no doubt whatever what the answer would have been.

ED. COMM.

Blogger's Notes:

I'll take an educated guess that "C. L., Victoria, Canada" was Chris Luff. If it was him, he was still politically active well into his 90s. He's mentioned in a report of two SPGBers visiting comrades in North America, which appeared in the March 1977 issue of the Socialist Standard.

At first glance there's not a lot of information about Herman Cahn on the internet. No wiki page, no material over at the Marxist Internet Archive. However, I did find the following brief biographical sketch about him over at Libcom:

"Not much is known about the forgotten Marxist theorist Herman Cahn. He probably lived somewhere between 1850–1930. He migrated from Germany to the United States as a young adult. He was a founding member of the Socialist Party in 1901. His daughter Anita C. Block (1882–1967) helped found the socialist New York Call. He was on the leftwing during the war (i.e. not a pacifist). Cahn's book Capital to-day; a study of recent economic development (1918) was called by Mary Marcy 'the most momentous contribution to an analysis of capitalist society since Marx' . . . 

. . .  It is like an American version of Hilferding's Finance capital; a study of the latest phase of capitalist development. He further wrote The collapse of capitalism (1919). His theory of money was clearly inspired by Hilferding's (which was a revision of Marx's)."

News from companion parties (1934)

From the September 1934 issue of the Socialist Standard

“The Western Socialist”

Published by the Socialist Party of Canada is obtainable from the Socialist Party of Canada, Manitoba Hotel, 194, Market Avenue East, Winnipeg, at five cents a copy; or at 42, Great Dover Street, London, S.E.1, at 2d. per copy (2½d. post free).

“The Socialist Review.”

Published by the Socialist Party of New Zealand is obtainable from T. ]. Phillips, 16, Hawea Road, Point Chevalier, Auckland, W.3., or at 42, Great Dover Street, London, S.E.l. Price 1d. per copy (1½d. post free).

THE WORKERS' SOCIALIST PARTY (U.S.A.)

Readers in U.S.A. are invited to communicate with the Workers' Socialist Party at 132, East 23rd Street, New York City, where the Socialist Standard is obtainable.

THE SOCIALIST PARTY OF CANADA

Readers in Canada are invited to communicate with the Socialist Party of Canada at 194, Market Avenue, Winnipeg, where the Western Socialist and Socialist Standard are obtainable.

THE SOCIALIST PARTY OF NEW ZEALAND

Readers in New Zealand are invited to communicate with the Socialist Party of New Zealand. Secretary, T. J. Philips, 16, Hawea Road, Pt. Chevalier, Auckland, W.3, where the Socialist Review and Socialist Standard are obtainable.

THE SOCIALIST PARTY OF AUSTRALIA

Readers in Australia are invited to communicate with the S.P.of Australia at Box 1440 P.O., Elizabeth Street, Melbourne, where the Socialist Standard is obtainable.

Lectures every Sunday night at 8 p.m. 122 Bourke Street, City. All welcome. Questions and discussions.

NEW SOUTH WALES

Readers in N.S. Wales are invited to communicate with the Secretary, 11 Wangee Road, Lakemba, N.S.W., for Socialist Standards and information.

SYDNEY.

Sydney branch meets alternate Mondays at Room 523, Rawson Chambers. Pitt Street, 7.30 p.m., for Branch business, followed by a lecture, questions and discussion. Meetings on 27th August, 10th and 24th September, etc.

Education Course for Party Members (1934)

Party News from the September 1934 issue of the Socialist Standard

This winter, instead of classes solely in Economics, we are organising a comprehensive course of study covering a wide field of Socialist knowledge. Our aims in presenting this series of classes on co-ordinated subjects are; (a) to offer a complete course of study to those wishing to take the Speakers’ Test; (b) to provide a starting-point for those wishing to make a more detailed study of any branch of Socialist thought; (c) at the same time to supply ample material for future lectures in the various Branches.

It is to be hoped that students of the course—which is intended for Party members—will be able to repeat some at least of the Lectures to Branches, and that ultimately several Branches will offer complete courses simultaneously. The principal object of the classes will be to provide the Party with an adequate supply of well-equipped speakers.

The classes will be held at Head Office on Sundays, beginning on September 23rd, from 4.0 to 6.0 p.m. Tea will be obtainable from 6.0 p.m.

TITLES OF LECTURES.

Sept. 23—How to Study.

         30—Materialism. 

Oct.    7—Primitive Society.

         14—Slave Civilisations.

         21—Feudalism.

         28—Merchant Capitalism. 

Nov.   4—The Reformation and the Puritan Revolution.

         11—The Industrial Revolution.

         18—The French Revolution.

         25—The Paris Commune. 

Dec.    2—Causes and Consequences of the World War.

           9—The British Empire.

         16—American History.

         23—History of Parliament.

         30—History of Trade Unions. 

Jan.    6—General Strikes.

         13—The Internationals.

         20—Ancient Religion.

         27—Modern Religion. 

Feb.    3—Science.

         10—Art.

         17—Psychology.

         24—Theories of Value before Marx. 

Mar.   3—Marxian Theory of Value.

         10—Division of Surplus Value.

         17—Money.

         24—Banking.

         31—Crises. 

Apr.   7—Revision.

         14—Revision.

All members of each class will receive copies of the outline of the current lecture. Every endeavour will be made to encourage each member of the class to contribute to discussion at every lecture.

The active and enthusiastic co-operation of all Party speakers and Branches in London is, of course, vitally necessary to the success of this scheme, both in encouraging regular attendance and in helping to provide fruitful discussion on all subjects.

M. Cameron,

Organiser of Classes.

SPGB Meetings, Rambles and Dances (1934)

Party News from the September 1934 issue of the Socialist Standard

Pessimists Note (1934)

From the September 1934 issue of the Socialist Standard

It is sometimes urged against the Socialist movement that the majority of people are so apathetic that the possibility of accomplishing the end is well-nigh hopeless. Those who take this pessimistic view forget that a very good reason for the existence of this apathy is the lack of effort on the part of the pessimists. If all those who claim to accept the Socialist point of view pressed this view forward with vigour, the apathetic attitude of the majority would rapidly diminish.

The Conduct of Public Meetings (1934)

From the September 1934 issue of the Socialist Standard

With reference to the editorial “ Reason or Violence?” in the July Socialist Standard, the Secretary of the British Section, International Socialist Labour Party, writes to say that that organisation, like the S.P.G.B., allows questions and open discussion at all propaganda meetings.

Blogger's Note:

Via the excellent Splits and Fusions blog, an article by Mark Shipway on the history and background of the British Section of the International Socialist Labour Party.

Open Air Meetings - September (1934)

Party News from the September 1934 issue of the Socialist Standard

Blogger's Notes:

If the information - and wording - below looks familiar, it's because a lot of it was posted on the blog last year for the July 1934 issue of the Socialist Standard. I have made some additions below where the speakers for July and September did not overlap.

Interesting that Speaker's Corner/Hyde Park isn't listed. I guess it was just taken as read that the Party would always have speakers there at the weekend.

As mentioned previously on the blog, I really wish I could include all the speakers listed in the label section but it's just not doable. Outdoor speaking was so central to the Party's activity and identity in the first fifty years of its history that it's unfortunate that it cannot be properly represented on the blog. Looking at the names listed, here's a wee bit info about some of those speakers:

• Tony Turner: The pre-eminent SPGB outdoor speaker for twenty plus years. Originally joined the Southwark Branch of the SPGB in July 1931. Resigned in April 1955 over the Forum dispute. His obituary appeared in the April 1992 issue of the Socialist Standard. He appears on the front cover of the June 2004 centenary issue of the Socialist Standard.
• Gilbert Manion: A former member of the Social Democratic Federation, Manion originally joined the SPGB in November 1928 and was a member of the Party on three separate occasions between 1928 and 1953. Originally a member of the Camberwell Branch of the SPGB he was also a member of Hackney Branch. He was still a member of the Party when he died in 1953. There was no obituary for him in the Standard.
• Jimmy Banks: A member of Battersea Branch, he joined the SPGB in May 1915 and was still a member of the Party  when he died in December 1966. A class conscious objector during the first World War, he was sent to Dartmoor Prison for his principles. Sadly his obituary from the February 1967  issue of the Socialist Standard is brief to the point of ridiculousness for someone who was an active socialist for over 50 years.
• Henry Russell: The Russell listed amongst the speakers was probably Henry Russell. Joining Southwark Branch of the SPGB in September 1933 he was a member of the Party until his membership was lapsed in November 1952.
• Bob Ambridge: One of the mainstay members in the history of the SPGB, Bob Ambridge joined the Battersea Branch of the Party in September 1927 and was a member of Swansea Branch when he died in February 1980. His obituary appeared in the April 1980 issue of the Socialist Standard.
• Claud Godfrey: Sadly, another longstanding member with an all too scant obituary in the pages of the Socialist Standard (April 1972 issue). Godfrey originally joined Tottenham Branch of the Party in July 1926, and was a member of Haringey Branch when he died.
• Jack Butler: Another stalwart member of the SPGB, joined West Ham Branch of the Parry in 1910 and served the Party both as a speaker and as a behind the scenes member. At the time of his premature death in 1944, he had been the Party Treasurer for 20 years. 'Gilmac' (Gilbert McClatchie) wrote a warm and personal obituary for Jack Butler in the September 1944 issue of the Socialist Standard. 
• Nathan Isbitsky: Joined the East London Branch of the SPGB in July 1930. He's briefly mentioned in Barltrop's The Monument, but there is no record of when he left/resigned from the SPGB.
• Sid Rubin: Another member who joined the Party via East London Branch. He joined the Party in July 1931 and was an incredibly prolific speaker and writer through the 1930s and 1940s, until he had to resign his membership in April 1949 as he was moving abroad. As 'George Camden', he wrote the novel 'My Time, My Life'.
• F. Walker joined the SPGB via Southwark Branch in April 1934. He resigned his membership in August 1948 because of the "apathy of the working class".
• Frank Grainger was originally known as 'C. Ginger' in the SPGB. He was originally a member of Tottenham Branch, joining the party in July 1909. Grainger was one of those SPGB members who joined the Party more than once. He originally left the SPGB to join the Herald League during World War One. (See Ken Weller's book). He eventually rejoined the SPGB in the 1930s, and was actually selected as the Party's parliamentary candidate for the East Ham North constituency, which the Party was planning to contest at the probable 1940 General Election. (WW2 intervened.) According to Ken Weller, after he resigned from the SPGB, he later lectured for the Economic League.
• 'Reginald' was the party name of Augustus Snellgrove, a retired headmaster who had originally been an early party member - not a founder member -  and who had resigned over the WB of Upton Park affair. He rejoined the SPGB in 1933, and was an incredibly active speaker and writer. He is mentioned with affection in Barltrop's The Monument, and it's a crying shame that there was no obituary for him in the pages of the Socialist Standard.
• Solomon Goldstein who, by all accounts, was both a brilliant speaker and writer, joined the East London Branch of the SPGB as a teenager in September 1931. He remained a socialist for the rest of his life, though he was not always a member of the Party because of personal circumstances. His obituary appeared in the October 1994 issue of the Socialist Standard.

About socialism (1988)

From the September 1988 issue of the Socialist Standard

1. What is the Socialist Party of Great Britain?

It is a political party, separate from all others, Left, Right or Centre. It stands for the sole aim of establishing a world social system based upon human need instead of private or state profit. The Object and Declaration of Principles printed in this introductory leaflet were adopted by the Socialist Party in 1904 and have been maintained without compromise since then. In other countries there are companion parties sharing the same object and principles, and they too remain independent from all other political parties.

2. What is capitalism?

Capitalism is the social system which now exists in all countries of the world. Under this system, the means of production and distribution (land, factories, offices, transport, media, etc.) are monopolised by a minority, the capitalist class. All wealth is produced by us, the majority working class, who sell our mental and physical energies to the capitalists in return for a price called a wage or salary. The object of wealth production is to create goods and services which can be sold on the market at a profit. Not only do the capitalists live off the profits they obtain from exploiting the working class, but, as a class, they go on accumulating wealth extracted from each generation of workers.

3. Can capitalism be reformed in our interests?

No: as long as capitalism exists, profits will come before needs. Some reforms are welcomed by some workers, but no reform can abolish the fundamental contradiction between profit and need which is built into the present system. No matter whether promises to make capitalism run in the interests of the workers are made sincerely or by opportunist politicians they are bound to fail, for such a promise is like offering to run the slaughter house in the interests of the cattle.

4. Is nationalisation an alternative to capitalism?

No: nationalised industries simply mean that workers are exploited by the state, acting on behalf of the capitalists of one country, rather than by an individual capitalist or company. The workers in nationalised British Leyland are no less the servants of profit than workers in privately-owned Ford. The mines no more belong to "the public" or the miners now than they did before 1947 when they were nationalised. Nationalisation is state capitalism.

5. Are there any “socialist countries”?

No: the so-called socialist countries are systems of state capitalism. In Russia and its empire, in China, Cuba, Albania, Yugoslavia and the other countries which call themselves socialist, social power is monopolised by privileged Party bureaucrats. The features of capitalism, as outlined above, are all present. An examination of international commerce shows that the bogus socialist states are part of the world capitalist market and cannot detach themselves from the requirements of profit.

6. What Is the meaning of socialism?

Socialism does not yet exist. When it is established it must be on a worldwide basis, as an alternative to the outdated system of world capitalism. In a socialist society there will be common ownership and democratic control of the earth by its inhabitants. No minority class will be in a position to dictate to the majority that production must be geared to profit. There will be no owners: everything will belong to everyone. Production will be solely for use, not for sale. The only questions society will need to ask about wealth production will be: what do people require, and can the needs be met? These questions will be answered on the basis of the resources available to meet such needs. Then, unlike now, modern technology and communications will be able to be used to their fullest extent. The basic socialist principle will be that people give according to their abilities and take according to their self-defined needs. Work will be on the basis of voluntary co-operation: the coercion of wage and salary work will be abolished. There will be no buying or selling and money will not be necessary, in a society of common ownership and free access. For the first time ever the people of the world will have common possession of the planet earth.

7. How will socialism solve the problems of society?

Capitalism, with its constant drive to serve profit before need, throws up an endless stream of problems. Most workers in Britain feel insecure about their future; almost one in four families with children living below the official government poverty line; many old people live in dangerously cold conditions each winter and thousands die; millions of our fellow men and women are dying of starvation — tens of thousands of them each day. A society based on production for use will end those problems because the priority of socialist society will be the fullest possible satisfaction of needs. At the moment food is destroyed and farmers are subsidised not to produce more: yet many millions are malnourished. At the moment hospital queues are growing longer and people are dying of curable illnesses; yet it is not "economically viable" to provide decent health treatment for all. In a socialist society nothing short of the best will be good enough for any human being.

8. What about human nature?

Human behaviour is not fixed, but determined by the kind of society people are conditioned to live in. The capitalist jungle produces vicious, competitive ways of thinking and acting. But we humans are able to adapt our behaviour and there is no reason why our rational desire for comfort and human welfare should not allow us to co-operate. Even under capitalism people often obtain pleasure from doing a good turn for others; few people enjoy participating in the "civilised" warfare of the daily rat-race. Think how much better it would be if society was based on co-operation.

9. Are socialists democrats?

Yes: the Socialist Party has no leaders. It is a democratic organisation controlled by its members. It understands that Socialism can only be established by a conscious majority of workers — that workers must liberate themselves and will not be liberated by leaders or parties. Socialism will not be brought about by a dedicated minority "smashing the state", as some left-wingers would have it. Nor do the activities of paid, professional politicians have anything to do with Socialism — the experience of seven Labour governments has shown this. Once a majority of the working class understand and want Socialism, they will take the necessary step to organise consciously for the democratic conquest of political power. There will be no Socialism without a socialist majority.

10. What is the next step?

Many workers know that there is something wrong and want to change society. Some join reform groups in the hope that capitalism can be patched up, but such efforts are futile because you cannot run a system of class exploitation in the interests of the exploited majority. People who fear a nuclear war may join CND, but as long as nation states exist, economic rivalry means that the world will never be safe from the threat of war. There are countless dedicated campaigns and good causes which many sincere people are caught up in, but there is only one solution to the problems of capitalism and that is to get rid of it, and establish Socialism. Before we can do that we need socialists; winning workers to that cause requires knowledge, principles and an enthusiasm for change. These qualities can be developed by anyone — and are essential for anyone who is serious about changing society. Capitalism in the 1980s is still a system of waste, deprivation and frightening insecurity. You owe it to yourself to find out about the one movement which stands for the alternative.


If you agree with some or all of the above, please contact the Socialist Party with your questions and ideas about what you can do to help speed the progress towards Socialism.

Running Commentary: Bad news (1988)

The Running Commentary column from the September 1988 issue of the Socialist Standard

Bad news

After all the efforts of Oxfam, Bob Geldof and the rest, nobody now needs to be told about the terrible effects of drought on human communities. Without rain crops do not grow; cultivated land becomes a barren desert and people starve to death by the thousand. To enterprises like Band Aid and Comic Relief, these are natural tragedies — acts of God, as evasive insurance companies like to say. The inference of this is clear: drought happens outside of human control and we are powerless to do much more about it than put money into collecting boxes.

But questions need to be asked: about why a world which is capable of feeding its population should periodically watch millions of them die because they don't have enough to eat; about why, as famine rages in one part of the world, in other parts food is left to rot and farmers are paid not to produce the life-giving stuff

The answers to these questions — and to some others have been revealed by recent events in America, where there has been a severe drought. Many agricultural areas have been desperate for rain as soaring temperatures turned the soil into blackened powder, crops withered and animals could not breed. But while the American farmers were getting desperate, the people who make money out of selling their produce were in rather better shape. Shortage means rising prices, which in June reached record levels. So a nice profit could he made from buying farm produce and, as the drought continued to affect production, watching the selling price rise with the temperature.

This comfortable situation was exposed in all its fragility in July, when the weather forecasters suddenly began to talk about the approaching end of the drought. The reaction of the commodity dealers was decidedly not relief; they panicked at the thought of better crops and what this would do to their profits In their frantic efforts to unload what they had bought they pushed prices down further, by record amounts.

Anyone whose heart aches at the plight of these brokers in human needs may take comfort from the fact that the government has a price policy, which came quickly to the rescue like the US cavalry. Prices were stopped from falling too far and. in any case, it did not rain as much as the farmers had hoped and the dealers had feared.

This sordid episode illustrates that food is produced, not to feed people but to be sold with the object of profit. That is why farmers suffer in a natural disaster while the people who market their produce benefit. It is also why masses of people starve when there is absolutely no reason for them to do so. The activities of Oxfam, Geldof and the rest obscure this fact, but until we have a society based on satisfying human needs it will continue to bedevil their well-meant efforts It will not, like the drought-stricken soil, blow away.

Blue Blood

If, as the Democrats say, George Bush is a wimp he can at least claim to be a royal wimp — of which, as we know, there is already no shortage. No less an expert in irrelevance than the senior genealogist for Burke's Peerage has traced a Bush connection to every European monarch (not that there are many of them left now) As far as the British royals go. Bush is a 13th cousin twice removed to the Queen, a 13th cousin once removed to the Queen Mother and he is linked to, among others, the Princess of Wales and the Duchess of York

It might be thought that the most surprising thing about this is that there are so many people prepared to spend so much time in research into such meaningless trivia. Does it matter if the ruling class can be shown to be one vast, international hot-bed of incestuousness? But the story did provide a little publicity for Burke's, which does not enjoy a readership to compare with Mills and Boon. It also contributed to the mystique of ruling class origins, which asserts that they hold their superior position through some process other than the exploitation of the majority of people.

The assumption is that "royal blood" is also noble blood — that being in the aristocracy proper presupposes an especially gallant personality. This romantic nonsense is not supported by history, which reveals the roots of the British nobility in mediaeval episodes of banditry and bloodshed. True to this type, another of the Bush relations is Lord Lucan, long absent from this country since the police announced that they would like him to help in their enquiries into the murder of his children's nanny.

It will not be known for a while whether all this will win or lose votes for Bush; his opponent. Michael Dukakis, makes much of his humble, plebeian origins. American workers. much like those in other countries, tend to vote on issues other than the candidates ancestors, which does not mean that they concern themselves with anything more relevant or pressing. They will give their support to the man who in their opinion will be less inept in grappling with the problems of American capitalism

Wimpish Bush or Workaholic Dukakis is no real choice. Come November, it will be equally futile to vote for or against royal connections.

Blow out

As the smoke cleared from the wreck of Piper Alpha a number of sordid but instructive facts began to emerge. There has been no lack of experts to tell us that the design of the rig was defective. It is fair to ask what the experts were doing when the rig was being designed and built. At that time the North Sea oil boom was just getting under way; it was no time to delay things with footling doubts and questions about safety. It was all excitement then; there was going to be a British oil field, to rival the Middle East. In the rush to get the rigs built and into position, a little detail like placing the workers' living quarters over a potential bomb was either hardly noticed or noticed and ignored.

In those heady days we were sold that North Sea oil and gas was a massive break through the long awaited entry into a trade which would bring boundless prosperity to us all (there was little mention of what it would do for people like Armand Hammer). Workers on the rigs were glamorised into an elite, agents of a modem technology which could triumph over the elements, earning big money in the storms far out in the cruel sea so that we could benefit.

It was a similar story at BP's terminal at Sullom Voe, which was designed to handle half the British output from the North Sen but which, after only six years of full operation, has serious problems of corrosion. At least one technician at the plant says that these are due to the pressures of time and profit which were being applied as the terminal was built.

Piper Alpha has been described as an accident but it is hardly correct to use this word in a case where the risks should have been so clearly foreseeable but were so deliberately built into the design to increase the rig's chances of profitability. That this is accepted now — if tacitly — is shown by the sordid process of arguing for compensation, which has attracted a whole clutch of lawyers including some from America, where they are accustomed to what is called ambulance-chasing after a disaster. When a worker is killed their family often suffers the added burden of financial stress, and it is right that they should try to ease it by claiming compensation from the employers. What should sicken every worker is to see how this exposes their standing in capitalist society. The compensation which each family receives will be adjusted — perhaps by a court — according to what is judged to have been the dead worker's earning capacity. The higher paid their job, the longer their expected working life, the higher the compensation.

Whatever our job — however tedious or glamorous tt may be — our status as wage slaves, living through the sale of our working ability, reduces us to factors in the investment process. We represent a type of capital, to be expended to produce profit and to contribute to the accumulation of yet more capital by our employers We are living beings but before that we are items on a balance sheet.

Blogger's Note:

The August 1988 issue of the Socialist Standard carried a standalone article on the Piper Alpha disaster.

Where is Russia Going? (1988)

From the September 1988 issue of the Socialist Standard

Russia has — and at no time since the 1917 revolution ceased to have — a capitalist economy characterised by the existence of commodity-production, wage-labour and capital accumulation. What has changed, and is changing again under Gorbachev, is the way in which economic decision-making within this system is organised.

Capitalism is a class society in which those who do the actual work of production, whether manual or intellectual, are separated from the means of production and have to live by selling their mental and physical energies to those who monopolise the farms, factories, mines, warehouses, offices and other places where wealth is created.

What distinguishes capitalism from other class societies is the fact that the great bulk of wealth is produced by wage-labour, for sale on a market. It is a society where all wealth is produced with a view to being bought and sold, which is what Marx meant when he spoke of capitalism as involving generalised “commodity production”. A commodity is an item of wealth that has been produced for sale and, as Marx put it in the opening line of Capital: “The wealth of societies in which the capitalist mode of production prevails appears as an immense collection of commodities”.

Commodity-production in Russia

Wage-labour has never been abolished in Russia; on the contrary it expanded massively as more and more peasants were transformed into wage-workers for developing industry. The existence of wage-labour as the predominant form of productive work has been in itself sufficient proof of the capitalist nature of the Russian economy. But what about commodity-production? Can this too be said to have always existed in Russia since 1917?

There has never been any argument about consumer goods in Russia being commodities; they are quite obviously produced with a view to being sold and are just as obviously bought for money. In Stalin’s time, however, the official Russian position was that producer goods such as raw materials, machinery and other elements of production were not commodities.

The case for denying that producer goods, called “means of production” in the debate, were commodities rested on the nature of the system of central planning instituted in Russia in the 1930s. Under this system, the factories and other places where wealth was produced received strict instructions from the central state, not only about what to produce but also to whom they should deliver their products and from whom they should get their supplies. Factories were in effect supplied by the central state with the materials and equipment they needed for production.

Stalin argued that, as this amounted to a system of direct supply in kind, the products involved were not commodities but simply useful things being physically transferred from one unit in the productive system to another. As he argued in 1951 against a certain Notkin who, apparently, had dared to argue that producer goods in Russia were commodities:

“A commodity is a product which may be sold to any purchaser, and when its owner sells it, he loses ownership of it and the purchaser becomes the owner of the commodity, which he may resell, pledge or allow to rot. Do means of production come into this category? They obviously do not. In the first place, means of production are not “sold” to any purchaser, they are not “sold” even to collective farms; they are only allocated by the state to its enterprises. In the second place, when transferring means of production to any enterprise, their owners – the state – does not lose the ownership of them; on the contrary, it retains it fully. In the third place, directors of enterprises who receive means of production from the Soviet state, far from becoming their owners, are deemed to be the agents of the state in the utilisation of the means of production in accordance with the plans established by the state.” (Economic Problems of Socialism in the USSR)

In other words, according to Stalin the central state was simply engaged in transferring wealth it owned from one of its factories to another; just as, for instance, the Ford motor company did when parts produced in one of its factories were transferred to another for incorporation into the final product.

Faced with this argument those in the Marxist tradition responded with a number of possible, and not always compatible answers. One was to accept that Russian producer goods were not commodities and that therefore Russia was not capitalist but some new form of exploiting class society.

Another was to accept the analogy with Fords and argue that Russia was a single, giant capitalist firm operating within the context of the world capitalist system.

A third argument was that the products Russian enterprises transferred to each other were commodities because they had to be paid for, the receiving enterprise having to transfer a sum of money from its account to that of the supplying enterprise. So what the central planners in Russia were planning was not the simple physical transfer of productive resources between productive units but the exchange of commodities among commodity-producing enterprises.

This last was undoubtedly a correct analysis as the central planners not only had to plan the physical transfer of producer goods from enterprise to enterprise but also to fix prices’ generally. Since the death of Stalin the Russian authorities have come to accept that producer goods in Russia are commodities (which leaves a few die-hard orthodox Trotskyists as the only defenders of Stalin’s position).

The following, then, is a more accurate description of the system of imperative (that is, compulsory, binding) central state planning in Russia, an understanding of which is essential to a comprehension of the changes proposed by Gorbachev under the name of perestroika:

“In the Soviet Union some three-quarters of total production is made up of means of production. In a Western type commodity-capitalist economy production and exchange takes place through market relations established directly between enterprises, i.e. in a decentralised way. In the Soviet system, on the other hand, production and exchange relations between enterprises are not directly established horizontally but take place via a vertical centralisation. It is the system of material supply that controls and plans the circulation of commodities. Herein lies the fundamental element of the originality of the Soviet economy. The enterprise receives orders not only on what it must produce and in what amounts. It also has precise instructions on the destination of the commodities it produces: their buyers and users are laid down by the planning authorities. And, above all, the origin, amounts and specifications, and delivery date of their own supply of raw materials, semi-finished products and equipment – the input of their production – are similarly planned. Thus the major part of inter-enterprise exchanges are controlled and organised by administrative apparatuses situated outside and above the units concerned.”  (B. Chavance, Le système économique soviétique).

To which must be added that, as indicated, the prices which enterprises must pay their suppliers and must charge their customers are also fixed centrally.

In other words, what the central state in Russia has been planning from Stalin’s time to today has not been the simple physical transfer of wealth between the various productive units it owned but the exchange of commodities between them. Productive units in Russia produce wealth to be sold (commodities), even if they have not been free to decide to whom to sell and at what price. But despite this state control there is still commodity-production by wage labour, and so therefore capitalism.

Failure of central planning

The aim of production in Russia, as in any capitalist country, is to maximise the amount of surplus value extracted from the class of wage and salary earners. To do so requires some measure of the rate of exploitation of wage-labour, of the surplus produced by workers over and above the value of their wages and salaries. This can only be provided by a price structure in which the prices of resources used in production accurately reflect their cost of production plus the average rate of profit (what Marx called their “price of production”).

In Western-type capitalism such a price structure is brought about more or less spontaneously through the operations of market forces. In Russia the central planners had to try to work it out themselves. For various reasons they failed, as has been admitted by Academician Abel Aganbegyan, one of Gorbachev’s top economic advisers and a leading theorist of perestroika, when he writes in his recent book The Challenge: Economics of Perestroika (Hutchinson, £8.95):

“The existing system of prices does not give a true valuation because prices do not reflect social costs and the efficiency of production. Up to now this common denomination has been lacking in the Soviet Union.”

This has meant that the Russian ruling class has been deprived of an accurate measure of the rate of extraction of surplus value at enterprise and industrial branch level as well as at the level of the economy as a whole, and so hasn’t been able to calculate properly where to invest new capital so as to make the most profit and achieve the highest possible average rate of profit over the whole economy.

Although central planning has been successful in developing one or two specially selected industrial sectors; in ‘particular the military (for such a comparatively backward country economically, Russia’s advances in weaponry and space research, whatever else may be said about them, represent a considerable technological achievement), it has proved a failure for the rest of industry .

This is not just the consequence of an inability to develop a coherent price system, but also because it could not provide a substitute for competition as a spur to enterprises increasing labour productivity through technological innovation and advance.

This failure has been evident to the Russian rulers since the late 1950s and various reforms have been introduced to rectify things, but all to no avail. In Khrushchev’s time, the economist Liberman proposed that enterprises should be allowed more freedom to seek and retain profits. Experiments in this direction were made but were never extended to the whole economy, as this would have demanded the complete dismantling of central state planning. As reform after reform failed, and the Russian economy continued to stagnate in terms of productivity and technological advance (it is not for nothing that the Russian rulers refer to the 20 years of Brezhnev rule as “the period of stagnation”), this question had finally to be faced. Which is what Gorbachev has done and what perestroika, or restructuring, is all about.

Perestroika and market forces

The restructuring that perestroika involves is precisely the abandoning of central state planning of commodity production and exchange in favour of allowing enterprises to buy and sell directly from each other at prices fixed by the market.

As explained by Aganbegyan, the first step towards this has already been taken in the “Law on Socialist Enterprises” passed in June 1987 and operative on 1 January this year. Under this law individual enterprises have been granted their independence from the state:

“Enterprises and associations are to become independent, self-accounting, self-financing and self-managing. These four characteristics all involve the responsibility of the enterprise, and imply a completely new economic situation for the basic production units in the Soviet economic system. Only in these conditions can the working collective of an enterprise really be master, owner and director of the resources of production available to it.”

Since such independence is being guaranteed by a law enforceable in the Courts this amounts to a virtual “privatisation” of these enterprises. This time it is not just a question, as it was in a previous law passed at the time of the Liberman experiments in 1965, of allowing enterprises to retain some of their profits as an incentive to get them to carry out the central state’s orders and instructions efficiently. Enterprises are to become autonomous legal and economic units dependent for their income on the sale of the commodities they produce.

“Enterprises are changing over to full self-accounting, in which all expenditure must be covered by income. What does full economic accounting mean? It may be contrasted with partial economic accounting. Currently enterprise income covers only running costs, while at the same time a significant part of capital investment of the enterprise comes from centralised resources. Full economic accounting, above all, implies that there are no subsidies so that the income of an enterprise from production covers both its running costs and its capital expenditure.”

In a later chapter Aganbegyan expands on what this will mean:

“Enterprises will receive their earnings from the sale of their output. The gross revenue of enterprises will be formed by these earnings after material input expenses have been met (on raw materials, finishing, and even amortisation). From this gross revenue an enterprise makes payments for resources used (natural resources and labour, and the use of capital stock), makes contribution to the budget, local authority rates and to ministry funds, pays off bank credit and any fines 10 contractors and makes any other payments due. The remainder is self-managed income at the full disposal of the enterprise’s working collective, determining its well-being and further development. To receive a large self-accountable net income more goods must be sold, through increasing both the quantity and quality of production, and by trying to get higher prices. For this a competitive edge will need to be maintained against other similar enterprises and higher quality and a better technological level of output will need 10 be attained. All this is a precondition for a larger self accountable income. The self-accountable income also depends on production costs. The lower the fuel, energy and raw material consumption, the larger the enterprise’s income.”

In other words, the enterprises are going to be expected to behave in the same way as private and state enterprises do in the openly capitalist West: to seek to maximise their retained profits (“self accountable income”) both by minimising costs and increasing sales.

Their relationship to the banks is to be similar too. “It will be advantageous for an enterprise”, writes Aganbegyan, “to draw on credit and this will increase its self-accountable income if the credit is well used so that the profit is increased at a greater rate than the interest paid on the credit”.

The next step in perestroika after this granting of legal and economic independence to enterprises will be to allow them to choose their own suppliers and customers and to agree among themselves the prices of the goods they trade with each other. Aganbegyan does not disguise the fact that this will have to involve the dismantling of the old system of central state planning described above, under which enterprises’ suppliers, customers and prices were fixed centrally:

“Up to now the market in the Soviet Union has been both restricted and deformed. Most means of production have been centrally allocated by the state through a material and technical supply system. They are not freely bought and sold . . . During perestroika market relations in the USSR will be deepened and broadened. Above all the market is set to more than double in size thanks to the transition from centralised material and technical supply to wholesale trading in means of production, including direct commercial links between enterprises. In this way a well-developed market in means of production will be created, and the proportion of centrally set prices will be retained only for the most essential products, to control their rate of growth and to stave off inflation. At the same time the scope of contracted and free prices will grow significantly.”

The abolition of “centralised material and technical supply” (as described above by Chavance) and “centralised pricing” which have been features of the Russian economy since the 1930s would represent a really radical change in the organisation of the Russian economy, but the timetable for this has already been laid down. By 1990 60 per cent of all production is to take place through wholesale trading, rising to 80-90 per cent in 1992. Similarly, the number of prices set centrally is to be reduced so as to cover only the more essential products (such as fuel, electricity and certain raw materials and steel products). The rest are to be determined by market forces and even then the prices of those commodities which remain centrally fixed are to be linked to their world market price. Planning will still remain but be indicative — providing global estimates of market demand — rather than imperative.

Return of the bondholder?

If it is implemented — and it remains to be seen whether or not this reform will suffer the fate of previous ones — perestroika will represent a fundamental change in the form of capitalism that has existed in Russia until now. It will represent a transition from centrally planned commodity production and exchange to a more competitive system in which the competing units would be, as in the West, legally and economically autonomous enterprises. The economic laws of capitalism will come to operate in Russia through competition rather than through the State which, Aganbegyan admits, has proved to be an inadequate substitute.

Other changes can be expected to follow. In his book Aganbegyan dismisses the idea that a stock exchange could develop in Russia. Other advisers to the Russian rulers are not so sure, according to a recent newspaper report:

“A senior Communist Party official yesterday predicted that the Soviet Union could eventually have its own stock exchange under reforms promoted by Gorbachev. Mr Evard Figuranov, of the Party’s Central Committee’s economic department, said creation of an exchange was the logical extension of new forms of stimulating use of savings introduced over the past year. “It is not under consideration yet, but I think it will be in the future”, he said at one of a series of news briefings, organised to coincide with the current Party conference in Moscow . . . Over the past year, small, state-owned enterprises around the country have begun offering shares to employees and bonds for specific development projects as control by ministries in Moscow has been relaxed. Mr Figuranov said a bond market could arise alongside a share market for the construction of social projects like kindergartens and sports complexes.” (Daily Telegraph, 2 July 1988)

This would indeed be a logical extension of perestroika, and not just kindergartens and sport complexes. For, if enterprises are to be allowed autonomy to seek to maximise their so-called “self accountable income”, why should they be obliged to go to the banks when they want money to pay for some development project? Why shouldn’t they be allowed to offer bonds and shares for sale to the general public? It should not be imagined that there are no rich people in Russia. There are – the children of scientific and artistic prize-winners who have inherited wealth from their parents, for instance, as well as the top members of the nomenklatura and their families, and black marketeers past and present – and many of these would be only too keen to invest their wealth for profit.

Adam Buick

Next month we look at the consequences for Russia’s paper commitment to be working towards a moneyless society of Gorbachev’s acceptance of so-called “market socialism”.