Editorial: Voting Against Austerity (2012)

Editorial from the June 2012 issue of the Socialist Standard

The people of Iceland did it first. Twice. In two referendums they rejected a deal their government had negotiated with international creditors. They even put a former prime minister on trial. It didn’t make any difference. Now they have been followed by voters in France and, more dramatically, in Greece. It won’t make any difference there either. Because, in capitalism in a slump, there is no alternative to falling living standards for the majority.

Nobody wants their standard of living to be reduced, whether as cuts to their wages or their pensions or as the reduced income unemployment brings. But that’s what they get, even though they might vote against it. It’s understandable that, given the chance in an election, people should vote to reject austerity. At least it shows they are not prepared to accept things lying down. For the people of Greece to have voted back those promising yet more austerity would have been to brand themselves as gutless.

To imagine that electing another set of politicians is going to make any difference, though, is an illusion. It assumes that governments control the way the capitalist economy works whereas in fact they have to govern on its terms of ‘no profit, no production’. They have to give priority to profits and profit-making. In a slump that means imposing austerity.

Henry Ford is reputed to have said that you can have a car of any colour so long as it’s black. Capitalism in a crisis is like that. You can elect any government, but that government will impose austerity. Even if Greece defaults and withdraws from the euro, the cruel fact is that any government, even one elected on an anti-austerity basis, would have to do this.

The fuel that drives capitalism is profits. A slump means that capitalist businesses are investing less than before because it’s not so profitable. The only way capitalism can get out of this is if profitability revives. This happens spontaneously in a slump. The assets of failing and bankrupt firms pass cheaply to others, who can therefore use them more profitably. Interest rates fall, allowing firms that borrow money to invest to keep a larger proportion of their profits. Increased unemployment exerts a downward pressure on wages, increasing the share of profits in new production.

Left-wingers and trade union leaders think that the way out of a slump is to increase spending. Get the government to spend more, they say, and that will get production going again. But it won’t. For the simple reason that the increased wages or government spending would have to be at the expense of profits; which would make things worse. Some governments may start off trying to do this but they are very quickly obliged by the economic laws of capitalism to effect a U-turn and impose austerity.

That’s the way capitalism works, and it’s the only way it can work. Capitalism is a system that puts profits before people and cannot be reformed to do otherwise. The only way forward is not to vote for a change of government policy or to reform some aspect of capitalism, but to act to replace capitalism with socialism so that the Earth’s resources really can become the common heritage of all and used to serve human welfare.

Rising in the Valley (1980)

Book Review from the April 1980 issue of the Socialist Standard

The Merthyr Rising by Gwyn A. Williams (Croom Helm)

By 1831, forty per cent of the pig iron produced in Britain was being made in South Wales. The centre of the industry was Merthyr Tydfil which, with a population of some 27,000, was the largest town in Wales. Merthyr was dominated by four great iron companies, which together employed at least nine thousand workers, who lived lives of wearisome toil, grinding poverty and nagging insecurity. These workers carried out an insurrection that spread its shock waves well beyond their native valleys, left over two dozen of them dead, and provided Wales with its first working class martyr. The insurrection is chronicled by Gwyn Williams in a vivid and detailed book now available in paperback.

From 1829 there was a severe economic depression in the Merthyr area, as the market price of bar iron fell drastically, and the employers were forced to cut wages and lay people off. This led to many working-class families into debt with shopkeepers and thus into the clutches of the Court of Requests, a special local institution whereby bailiffs were entitled to confiscate a debtor's property and sell it in order to pay the shopkeeper.

The economic crisis coincided with the agitation over the Great Reform Act of 1831. A leading local advocate of Reform was William Crawshay II, owner of the giant Cyfarthfa iron-works. Crawshay mobilised the iron workers and miners he employed into action against his Tory opponents, only for them to discover that Reform by itself could not abate the depression. For while he spoke of Reform and democracy, Crawshay was giving notice of wage reductions and lay-offs.

On May 30 1831, a great working-class rally was held outside Merthyr at Waun Fair, ostensibly in favour of Reform. But it was a meeting with many strands and many influences, the more so as there were no obvious "leaders". One motion demanded the abolition of the Court of Requests, and one speaker demanded that the Court be brought down. The next day saw the first defiance of the law and act of rebellion; people in the village of Penderyn used physical force to stop a Court of Requests  distraint on one of their neighbours, Lewis Lewis, who was to become prominent in the insurrection and its aftermath.

It was on the morning of 2 June that the insurrection proper broke out. A crowd moved through Merthyr from house to house, locating goods that had been sequestered by the hated Court of Requests and returning them to their original owners. The action continued in the afternoon, and in the evening the workers sacked the house of the Court's President. Faced with such attacks on private property, the local magistrates, traders and employers could not stand idle. They installed themselves in the Castle Inn in the High Street and sent for soldiers.

About eighty Argyll and Sutherland Highlanders arrived from Brecon on the morning of the following day and halted outside the Castle Inn, where a crowd of up to ten thousand gathered. After a fruitless attempt at negotiation, the crowd became restless and were ordered to disperse. From an upper window, Crawshay offered to redress his employees' grievances if they would send delegates to see him in a fortnight. Angered, the crowd surged forward and seized the muskets of the front rank of soldiers. After further skirmishes, the soldiers were ordered to fire. They did, again and again, right into the crowd. By the time the street was cleared, some twenty-four workers had been killed.

The masters realised that they were prime targets for revenge and so removed to Penydarren House, just outside the town, and sent for more soldiers. By the evening of 3 June, Merthyr had been abandoned to its workers. A full-scale insurrection was now under way, with workers arming themselves, setting up road blocks in an attempt to isolate the town, and sending spokesmen to Monmouthshire to gain support. Some of the soldiers trying to get through to Penydarren were intercepted, disarmed and sent packing.

Of course it could not last. The efforts to spread the insurrection elsewhere were fruitless and gradually the military - numbering about eight hundred by now - regained the initiative. On 6 June the movement collapsed: crowds dispersed, men buried their weapons and returned to work. The prominent rebels were arrested; by the end of June, twenty-six of them were housed in Cardiff jail.

The Home Secretary decided to avoid provocation and not prosecute any of them for treason, and in the event only four cases came to trial. But that was enough for four sentences of transportation and one of the death penalty. The latter was on Richard Lewis (otherwise known as Dic Penderyn), a miner, who was found guilty of wounding a soldier at the Castle Inn confrontation on 3 June. Despite a petition to the king for mercy, and the extremely flimsy nature of the identification evidence against, Dic Penderyn was hanged at Cardiff on 13 August. The government had been determined that someone should die for what had been done at Merthyr. In choosing Dic Penderyn they murdered not a leader but a man who was, and represented, the ordinary worker. In Williams' words:

"it was not any 'leadership' which made him a martyr; it was his very innocence, his innocuousness, his sense that he 'was only doing what thousands of others did'. He did literally 'die for thousands'."

Unrest did not cease with the putting down of the rebellion or the execution of Dic Penderyn. In August 1831 the first trade union lodges were formed in South Wales. Two of the large Merthyr ironworks demanded that workers leave the union on pain of dismissal, and began lock-outs. It took until November for the workers' will to be broken and the union smashed. Merthyr ended 1831 still under military occupation.

The Merthyr Rising deserves a place on every worker's bookshelf, just as the event merits a place in any working class history. The insurrection must not be built up out of proportion, for it was not and could not be the beginning of a revolution. There was no way in which the Merthyr rebels could have "won". But that does not stop us noting their solidarity in the face of vicious ruling-class brutality and saluting their courage.

Paul Bennett

Labour capitalism (1989)

Editorial from the October 1989 issue of the Socialist Standard

The Labour Party is not and never has been a socialist party. As we record in this issue, most Labourites have seen "socialism" as either nationalisation or some milder form of what exists in Russia. They have, in other words, confused socialism with state capitalism. Some, it is true though more in the past than in recent times, have like us wanted a society based on common ownership, democratic control and distribution according to need, except that they saw this as coming about through a series of piecemeal reforms introduced by Labour governments.

This attempt to introduce within capitalism what will undeniably be features of socialist society - such as free public services and the abolition of unearned income from shares - was bound to fail as it took no account of the fact that capitalism cannot be reformed to work other than as a profit-making system governed by blind economic laws. The economic operation of the capitalist system has meant either that these reforms have eventually been undermined or that they have had unintended side-effects. At the same time Labour governments, having come into office under capitalism, have had no alternative but to preside over the running of the capitalist system in the only way that it can: as a system in which profit-making takes priority in all fields over meeting needs.

Aneurin Bevan once described the National Health Service as "pure socialism". He was wrong, but for the right reason. Wrong because you cannot have bits of socialism within capitalism, but right because health care in socialism will be free. The free NHS began to be dismantled, under economic pressure of capitalism, even by the Labour government that had introduced it, and the free aspect has been whittled away ever since as successive Tory and Labour governments have introduced more and more charges.

Earlier Labour theorists, such as R. H. Tawney, saw Labour's role as to suppress unearned income, correctly regarded as a tribute levied by property-owners on the rest of society, by gradually taxing it out of existence. As, once again, socialism will indeed be a society in which shareholding will have no place, the higher taxes on unearned income by Labour governments were sometimes presented, wrongly, as a step towards socialism.

Now such pretences are to be dropped. The Policy Review document to be adopted at this month's Labour Conference shows that the Labour leaders, eager to get their hands on the reins of office, are preparing to accept capitalism as it has evolved in Britain -  a profit-driven market economy providing unearned income for those who own the means of production - and to abandon the attempt to impose on it isolated features of a socialist society.

The document has to be read to be believed. It opens with an introduction by Kinnock in which he states that Labour's aim is to help "make the market system work" and goes on to talk about Labour's priority being to establish "an internationally competitive economy", achieving "success in the marketplace", and creating "a new partnership with business".

This does not represent the abandoning by Labour of its socialist principles (that would be difficult since it never had any), but rather the tacit recognition by Labour of the failure of the strategy of gradually trying to reform capitalism out of existence which, at an earlier period, was accepted by many in the Labour Party. Not only have the actions of Labour governments not brought socialism one step nearer, but instead of Labour gradually changing capitalism it is capitalism that has gradually changed the Labour Party.

As socialists who predicted this failure, we draw the lesson that the only way to get to socialism is to work to build up a political movement dedicated to ending capitalism by bringing all the means of production, in one go and without compensation, into common ownership by all the people. For us, the failure of gradualist reformism vindicates the need for a social revolution, to be carried out by essentially peaceful, democratic means, from class ownership and control and production for profit to common ownership, democratic control and production for need.

The Labour leaders, opportunist politicians that they are (but then, as professional politicians, their main ambition in life has to be to achieve ministerial office), have typically drawn a different conclusion. They want to abandon the failed reformist strategy, but in favour of accepting capitalism as it is, market, unearned incomes and all.

This is not a development that need surprise since ideology can always be expected to sooner or later come into line with practice-and Labour's practice when in office has always been to accept capitalism and its logic. Every Labour government has worked with private business and has accepted that capitalists must be allowed to make profits (indeed, has taken steps such as freezing and restraining wages to ensure that they did). It is just that at this year's Labour Party Conference we shall be witnessing the precise point in time at which the gap between ideology and practice which has existed up to now will be closed, with Labour accepting a new ideology that conforms to what has long been its practice.