Saturday, December 28, 2013

The passing of a brain-sucker (1919)

From the September 1919 issue of the Socialist Standard

On the 12th of August the death of Andrew Carnegie was reported, and all the capitalist newspapers united to diffuse an odour of sanctity around the man whose fortune—like all other great fortunes—was built up by the sucking of other men's brains.

It was on the shoulders of others that Carnegie climbed to affluence. Unscrupulous, alike in his dealings with his fellow capitalists and his workmen, he crushed out all who stood in his path, until he came up against a more powerful combination than his own, then he stepped quietly down and out of business, leaving Morgan, Rockefeller & Co. a clear field.

Carnegie came at the first flush of the era of speculation and "high finance" in America, and the tide swept him along with it. The keystone of his success was his ability in appropriating the product of other men's brains (as well, of course, as the product of their hands), or, as he himself repeatedly expressed it in relation to his managers, finding better men to look after his interests.

The man who is set up as a model of "self-help" was helped by others all his life. The only direction in which he exercised self-help was in helping himself to the the product of the work of others.

A quotation from the full-page effusion on Carnegie's life in the "Daily Telegraph" (Aug. 12th) gives in a nutshell the story of his life and the cause of his success.
He began the world without a penny. He retired from business sixty years after one of the richest men in the world—to put it no higher—with a fortune of some £90,000,000 . . . It was won by a man who had no training for his life-work. The greatest of iron masters knew nothing of metallurgy.
(Italics mine.) No money—no knowledge of iron—yet the greatest iron master! How did he do it?
To the progress of the industrial revolution, to the stupendous development of mechanical and scientific methods in manufacture, Andrew Carnegie owed his millions.
Here we have it. Carnegie's wealth was built up by the ingenious brains and hands of working men. In other words, the departed saint stole the product of others' toil. And what of the workers and thinkers whose discoveries brought about the industrial revolution? The main figures in it—Crompton, Cartwright, Stephenson, Kay, Jacquard, Harrington, Lavoisier, Koening, Roberts, Trevithick, Gutenburg, Cart, Bourseul, and a host of others, either died in poverty after lives of struggle against starvation, or—in the case of a very few—gained a niggardly recognition when they were on the brink of the grave.

Now let us see where the self-help came in. Carnegie's first "start" in life was due to another person. To quote again from the "Daily Telegraph":
And now came the tide in Carnegie's life which, taken at the flood, led on to fortune . . . It was Col. Scott who first taught the youth how to make money earn more money . . . His mother mortgaged their house, into which had gone all the family savings. With the $600 thus raised Andrew bought Adams Express Stock, on his astute employer's advice.
Of course the stock paid well: Scott was in the "swim."

Carnegie's next step was to introduce to the Pennsylvania Railroad, through the agency of Scott (who was president of the company) T. T. Woodruff's invention of a sleeping berth (the forerunner of the Pullman car). He borrowed the money for his shares, and was "let in on the ground floor," "but the cars afterwards paid handsome dividends!" "Thus," he wrote, "did I get my foot on fortune's ladder. It was easy to climb after that."

Thus did he vindicate the glorious principle of self help! I may add that I find no record of Woodruff's name as one of those who got their feet on fortune's ladder. No doubt he went the usual way of inventors.

During the Civil War Carnegie's pal Scott (now Assistant Secretary for War) found him a lucrative job in the service of the Northern wage slave owners, and at the conclusion of the war he utilised the wealth he had acquired to go in for oil and "struck it rich."

Like Mr. Rockefeller, he was in at the start. In 1862, with several associates, he purchase the Storey Farm, on Oil Creek, Pennsylvania for $40,000. It proved what prospectors call a bonanza, and in one year paid $1,000,000 in cash dividends.

Having gained the early plums of the oil trade, the "self-made man" in the making turned his attention to steel. On a visit to England he saw the steel rails that were the result of the new Bessemer process (a process discovered by one of Bessemer's workmen whose name even is  not known!) introduced them into America, and another chunk was added to his fortune.

The process of the Trust in which Carnegie had the preponderating influence was largely due to the valuable patents which they controlled. The men who were responsible for the subjects of these patents, however, were but pawns in the hands of the financiers.

Working men have proverbially short memories, yet the name "Homestead" should suffice to recall to the mind the bludgeoning and shooting of working men that took place at Carnegie's works during the "Homestead" strike, when Pinkerton and his gunmen were called in. Though daily waxing richer Andrew the philanthropist (!) was not satisfied, and laid plans to increase the working hours. The men organised to resist the project, so he retaliated by refusing to employ any but non-union workers. According to the "Telegraph" "the strike was soon the crux of one of the ugliest scenes in all the bloodstained history of American labour quarrels." The military (to the number of some 8,000 soldiers) were eventually sent to the vampire's assistance "to restore order"! And such was the man who professed to be the ardent anti-militarist and apostle of peace, and who presented to the world the "Palaces of Peace." Like others of his kidney, he did not want war when it interfered with his accumulation of wealth, but when it suited his purse (as when he took part in the Civil War) his objections vanished.

By the irony of circumstance, the same day the papers were applauding the incarnation of self-help and genius in the shape of Carnegie, they devoted a few lines to recording the tragic death of poor Blakelocke, the American landscape painter. His life "was the story of genius doomed to poverty," says the "Evening News" (13.8.19). His greatest works were sold by him for a few paltry pounds to keep his wife and family from starvation. The same works were afterwards sold for hundreds of pounds. The same paper further states: "Worry and the hard struggle for existence eventually produced a break-down, and he was removed to an asylum."

Blakelocke is now looked upon as one of the greatest landscape painters of America, but his genius only brought him poverty and the lunatic asylum.

What a contrast! The unscrupulous and slimy Carnegie dies in the midst of vast riches, while the fine artist dies in the asylum! Self-help, forsooth!

After officially stepping out of business (although still drawing his dividends), Carnegie set out to make a name for himself in a new direction. He made arrangements to distribute libraries in various places to assist in the education of working men. It appears strange that one who was such a determined antagonist of his employees should suddenly blossom forth as their benefactor. The strangeness, however, disappears as soon as we look below the surface. Carnegie and his class require workpeople who have sharp brains and a good technical knowledge, as these make the most efficient wage-slaves—hence the library stunt.

Since 1901 Carnegie has been throwing millions away and doing his damnedest to spend his money, but all to no purpose: he dies worth nearly as much as in 1901! What a power of wealth this one man must have robbed the workers of, and yet they try to kid us that we do not produce enough!

Away with dreams and delusions; let us wake up and produce for ourselves. Perish the parasites and vampires.

Running Commentary: 'Communism' on the stock exchange (1982)

The Running Commentary Column from the January 1982 issue of the Socialist Standard

'Communism' on the stock exchange

Among other effects of the coup in Poland was the sudden change in various prices in the West. Shares of various companies which had connections in Poland suddenly fluctuated. The dollar and the mark fell drastically on international currency exchange markets. Various metals, particularly copper, rose in price, some to all-time high spots.

"Gold", one financial commentator said, "was expected to shoot up in price in the event of anything like this happening in Poland, but surprisingly its price has not changed by anything like what everyone expected."

What can be concluded from this? Firstly, it demonstrates how capitalism is an interlinked, worldwide system, the various countries being components within it. It is not the case that each country has a separate economy, only superficially connected with other national economies. 

Secondly that Poland, without any doubt, is part of that worldwide capitalist economy.

Land of the free?

In 1979 one of the few unions to support Ronald Reagan's presidential election campaign was the American Air Traffic Controllers' Organisation (AATCO). They smiled at Ron and Ron smiled at them. As government employees the members of the AATCO had individually signed contracts of employment which made it illegal for them to strike. However, a prolonged campaign to have their pay improved and more importantly their hours reduced from 40 to 32 (the extraordinarily strenuous nature of their work was injurious to their health if sustained for 40 hours a week, casing heart disease and premature retirement) was so fruitless that in August 1981 they decided to strike.

Ron stopped smiling on those workers as soon as they started asking him to deliver the goods and at this stage he dug in his heels and promptly sacked all 12,000 striking controllers. Five strikers were gaoled, in the Land of the Free, one in leg irons and shackles, and 17 others were arrested for defying court orders. The strikers were also punished with a three-year ban on them taking up any Federal employment. Now, Ron is trying to re-introduce a smiling image of mercy and sweet reason. It was reported (Guardian 10/12/81) that although the sacked workers will not be permitted to resume work at the Federal Aviation Administration, they will be permitted to sell themselves to other branches of the Federal state machine. What a decent gesture. Drew Lewis, the American Transportation Secretary, announced that Ron now believes the workers should have a "fair and equal opportunity to compete for any Federal job for which they are found to be qualified". The motive behind this "compassion" is likely to be that as these workers have been quite highly trained the state may as well use their skills.

Fragile China

As we pointed out in the Socialist Standard last year (August 1981) millions of workers in China are now exploited on a piece-rate basis (paid not by the week or month but by the quantity of goods produced, although payment will still necessarily be less than the value of what is produced!)

The Chinese People's Daily, at the end of last year, reported that official unemployment would soon be reaching the "intolerable" level of between six and seven million and in a bid to remedy this problem, the Central Committee of the Chinese Communist Party and the State Council have introduced reforms which will, among other things, end the state monopoly on urban employment, granting workers the right to contract their own exploitation. The reforms will also end discrimination against those employed as collective or private enterprises, giving such employees equal treatment with state workers.

The Guardian reported (25/11/81) a front page editorial of the People's Daily which admitted that the state can no longer provide jobs for all urban workers in its enterprises, and as the economy becomes more troublesome for the employing class to manage and heightened pressure is put on the workers, it is interesting to learn that Peng Chong, Vice Chairman of the National People's Congress is reported to have told a visiting Italian politician that "a small number of young Chinese want to form free trade unions along the lines of Poland's Solidarity because they are dissatisfied with China's docile state-run unions" (Guardian 11/12/81). This development will afford the Chinese workers greater resistance against the encroachments of the state against the level of their wages.


The trend in China away from the strict state ownership of industry and towards the models of capitalism operating in the West—in order to inject more vitality into the economy—is also apparent in the Russian Empire where Tzar Brezhnev has recently condoned a strategy of New Economic Policies. Managers (yes, they have them in Russia, along with banks, five-star hotels and all of your old favourites) are being encouraged to reduce numbers of employees and increase productivity. The redundancies and screwing the workers for more profit will be described as "conditional freeing from jobs" and efforts to "increase the surplus social product".

In Russia there is officially no unemployment or profit. Reports in the Russian official Communist Party Economic Gazette (quoted in the Guardian 3/11/81) indicate that new pay scales are to be brought in permitting exceptionally hard workers (tough luck for the weak and disabled) to receive wages up to 50 per cent above the average and patent royalties are to be awarded to those who can invent techniques to improve production processes which could make some of them rouble millionaires! The reforms particularly encourage financial rewards for those who save energy, and factory managers have been authorised to distribute part of the savings in bonuses. What next? Gold-plated coffins for those workers who agree not to eat any food if it can be profitably sold abroad to further enrich the Russian ruling class?
Gary Jay

Political Notebook: Double standard (1979)

The Political Notebook column from the October 1979 issue of the Socialist Standard

Double standard

As the days get shorter you may care to be reminded of last winter. Remember the crocodile tears shed by the Tories over the sick who were endangered because of the strikes in the NHS, the hypocrisy over schoolchildren who could not continue their studies, the nauseating cant spewed out over the dead who were not being buried because of the grave-diggers' strike, the simulated sympathies they whipped up for the OAPs and claimants who were unable to collect their weekly pittances because of civil service strikes? The humanity shown by the Tories was truly impressive. Now they are in office several people, including some union leaders, have noticed something odd. Those same humane Tories, so concerned over the young, the sick, the old and the dead, are now ruthlessly trying to reduce government expenditure with the result that services for these groups are going to be hit far worse than by any of last winter's strikes.

For example, education spending is being slashed, and long term prospects for the young in education are thus becoming far worse than anything that might result from a few short strikes. With a savage nineteenth century anachronism like Rhodes Boyson in charge (as much use as swine fever to agriculture, as one Labour MP put it), the Tories are laying about higher education like Samson in the Temple. The NHS is being drastically cut too. So workers who are suffering from illnesses (many caused by capitalism anyway) will have even less chance of being admitted to hospital, and will get even poorer services when they get there. Where are the crocodile tears now? The Tories are looking after the profit system; the tears will look after themselves.

Of course, it was not only the Tories who suddenly pretended to be concerned about working class living standards in last year's show of union strength. Their twin brother, the Labour Party, also have their share of people who can say black when they mean white. The Labour government were as concerned as any to try to get workers back to work. And, as few fireman would have forgotten, their ruthlessness in breaking strikes was quite impressive. Is it too much to hope that union members will see through the party that the trade unions created and realise that the Labour Party, just like the Tories, when faced with the realities of capitalism promise one thing but always do another.

It seems that at least one trade union leader is coming round to the point of view that unions only exist to struggle to improve the working conditions of their members and ought not to be concerned in supporting capitalist political parties. The August and September ITV strike brought forth the following from Alan Sapper, leader of the ACTT:
"We are a capitalist trade union", says Mr. Alan Sapper, leader of the biggest of the ITV technicians' unions. "We are selling the labour of our members for the highest and best price, using any and every related reason to get it. That is what a trade union leader does. He is not a philosopher or a socialist writer. I am a trade union negotiator and I am selling a product." (The Guardian, 23 August 1979.)
We have been saying something similar for seventy-five years. But the realisation that workers sell their mental and physical energies in a market for the highest price possible is only half the story. What follows is that the actions of trade unions are limited by the forces of capitalism itself, with the result that however high a price the unions negotiate for the sale of their members' abilities, every wage deal is a 'sell-out'. This is because no capitalist will employ workers unless he is going to get a profit out of the deal. That means he is going to get something for nothing. If he cannot get that, production is stopped.

Up in smoke

Sections of the left have claimed to be able to bring exploitation to an end by the use of the co-operative. There are several variants on this particular version of slavery run in the interests of the slaves. The basic idea is for workers to combine with management to run a factory in the interests of the employees. It is of course a pipe-dream, and as the realities of capitalism break in on the cooperatives, their ideals go up in smoke. In the 1970s this particular dream has been pushed hard by the pipe of Tony Benn. In a smoky fog of euphoric confusion, this Labour Party answer to Noddy in Toyland helped create the Meriden motor cycle co-operative. The workers were going to run the factory, and the problems of production for a ruthlessly competitive market were to vanish. They did not. The co-operative has had to lay off workers and is under intense pressure to repay the interest due on the original loan made by the then Labour government to enable it to start.

The final irony is not that the capitalist system has defeated another Utopian scheme. The co-operative is almost certain to be shut down because it cannot pay its debts to the local Coventry Council. Coventry gave the co-operative ten days in which to pay the outstanding rates of £72,000 (The Guardian, 22 August 1979). If the co-operative does not pay (it almost certainly can't), the Council will bring court proceedings which may be the end of Meriden. The Coventry Council is Labour.

New slums

Another Labour Party pipe-dream was the post-war 'new towns' and local authority high-rise developments. The idea this time was to try to improve the workers' housing conditions. Millions of pounds were spent on these prestigious new developments. And now some of the most expensive attempts to take workers out of the slums have resulted in merely producing different types of slums. Six of the new towns — Corby, Harlow, Stevenage, Bracknell. Sedgefield and Peterlee — are facing particular difficulties. They are trying to get the Department of the Environment to pay the bills of millions of pounds that will now have to be spent to make their new slums inhabitable.

Generally the houses have a multitude of faults. So far everything from leaking roofs to rotting timbers and cracking walls have been detected. It seems that in the great rush to build the houses to establish the new towns, a certain amount of caution was thrown to the wind. (The Guardian, 20 August 1979.)

Peterlee, a new town of some 26,000 inhabitants in a mining community in County Durham, has problems that no doubt sound familiar to many of our readers. "The flat-roof houses in Peterlee have caused enormous problems. Many of them leak badly, walls are cracking, wall tiles are corroding, gable ends are deteriorating, and windows and doors are rotting." If anything, the high-rise flat movement has been even more of a disaster. For example, the pride of the Liverpool Corporation development in Everton has been abandoned completely after the developments became uninhabitable. The locals called the developments 'The Piggeries'.

Housing for the working class has always been cheap and nasty. In the rush for low cost production, it is not so much caution that is thrown to the wind but the interests of workers that are thrown to the dogs or, in this case, frequently the rats that often invade these new developments. However, design faults and poor building are not the result of technical inability. These faults are the inevitable outcome of production for the bottom end of the market. In capitalism, the new workers' homes of one year are the slums of next year. Sometimes the interval between prestige development and embarrassing unhabitability is remarkably short.

Out-of-date swinger

Another fabrication that does not always last the pace is the protesting folk singer. Remember the swinging sixties and Bob Dylan? He was going to bring the revolution by strumming a guitar and stringing together a few rhyming couplets. Well, this hero of the protest movement, who still has a large following of ageing mums and dads and over-30 teenagers, has become a 'born again Christian'. He has joined that select group, including revolutionary hero President Jimmy (I'm alright God) Carter, who call themselves the brothers and sisters of Christ. (The Guardian, 31 August 1979.) Instead of lyrics that make the youth of America steam up to protest about Vietnam or some other horror of late twentieth century capitalism, the lyrics now include lines like: "God don't make promises that he don't keep". No doubt the new album will sell well at services and Sunday schools. We might be entertained by trendy vicars leading with Dylan's songs instead of hymns from the pulpit. Dylan's financial staff will face such a prospect with equanimity. Meantime, the real revolutionary task goes on, and Dylan is just another has-been who wanted to change the world without doing anything about it.

Cooking the Books: Producers and Predators (2011)

The Cooking the Books column from the November 2011 issue of the Socialist Standard

Producers and Parasites was the title of a 1935 pamphlet by the Scottish-born American Marxist John Keracher. On the face of it Ed Miliband’s distinction in his Labour Party Conference speech between “producers” and “predators” seems more radical. After all, aren’t predators worse than parasites? But this is only on the face of it, as what Miliband meant by producers was quite different from what Keracher did. Nor were his “predators” the same as Keracher’s “parasites”.

Keracher was explaining Marx’s theory of surplus value which starts from the observation that wealth can only be produced by humans applying their mental and physical energies to materials that originally came from nature. Under capitalism these producers are exploited in that the difference between what they are paid as wages and salaries and the value of what they produce is appropriated by those who own and control the means of production. These capitalist employers and their hangers-on are “parasites”, argued Keracher, living off the unpaid labour of the “producers”.

Miliband’s distinction is not between wealth-producing workers and those who live off profit, interest and rent, but between two types of capitalist. It’s a distinction between Keracher’s parasites. According to Miliband, there are good capitalists who invest in providing goods and services and jobs (the “producers”) and those who are out to make a quick buck through asset-stripping and financial wheeling and dealing (“predators”).

There are two things wrong with this distinction. First, it accepts the capitalists’ impertinent view of themselves as wealth-producers (in Stock Exchange circles they even call mining companies “miners”); whereas all wealth is produced by those who work with their hands and brains, not those who invest for profit. Second, all capitalist firms are predatory in that their aim is to grow bigger by winning the battle of competition against their rivals and absorbing them through take-overs. That’s what all the big capitalist firms of today have done, including Rolls Royce, which Miliband cited as an example of a good capitalist.

For some reason, commentators interpreted Miliband’s speech as a turning to the left by the Labour Party. Certainly it was a piece of demagogy that went down well with his audience of councillors, would-be councillors and trade union bureaucrats. But in essence it was no different from Ted Heath’s 1973 denunciation when Tory PM of Tiny Rowland and Lonrho as “the unacceptable face of capitalism.”

Actually, the speech was an open recognition of what has always been the Labour Party’s practice – accepting capitalism and trying to smooth off the rough edges of capitalism, to humanise and moralise it. Cameron employed the same approach when, in opposition, he spoke of the Tories standing for “compassionate capitalism.” (It’s a different story now.)

It’s a pipe-dream of course. Capitalism is a system based on the exploitation of the real producers which can only work in the interest of the parasites, whether predatory or passive, who live off profits. It can never be made to work in the interests of the majority, as the experience of the present Coalition government and the immediately preceding Labour government is showing. In fact, as the experience of all governments everywhere has always shown.