A Great Thought for To-day (1931)

From the August 1931 issue of the Socialist Standard

Mr. J. H. Thomas, in a speech at the annual dinner of the National Union of Seamen ("Daily Herald," 21st July):—

"Divine Providence put us in office . . . I conscientiously believe that it is a divine Providence that has ordained that a Labour Government and a Labour Prime Minister should face this problem."

But why the formality of a general election if the result is thus settled direct between a "Divine Providence" and its humble servant J. H. Thomas? And what chance will the Socialist Party have now that we are fighting not only the Tories, the Liberals and the Labour Party, but also Mr. Thomas's God?

Why we need World Socialism (2000)

Editorial from the March 2000 issue of the Socialist Standard

Most people throughout the world believe that socialism has been tried and failed. They refer to the former USSR, China and Cuba. But these were—and are—capitalist states.

So what is socialism? It is a world where goods are produced to satisfy social needs rather than for profit; a democratic world system in which each person contributes their abilities to society and takes what they need to live in comfort. No borders or frontiers; no social classes or leaders. No buying or selling, no money or wages. A world of free access.

It's clear that this type of social system has never yet come into existence. Numerous people, such as Marx, Engels, Morris, etc, who developed the theory of socialism, would have stood firmly opposed—as real socialists do today—to those who describe socialism as anything less than what is outlined above.

Obviously the cynic and reformer will think socialism is a utopian dream. However, it's those who believe the manifold problems we face today can be solved under the auspices of capitalism, whatever cloak it wears, who are the utopian dreamers.

Why are thousands living on the streets when there's a glut of empty houses and thousands of unemployed building workers? Why are people allowed to suffer and die waiting for hospital treatment while there's no shortage of resources being allocated to the armed forces, which exist to kill people, not to cure them. Why is food locked way in cold storage or dumped as garbage while around the world over 40,000 children under five die daily of hunger and disease?

The UN and WHO have both reported that food, clean water and medicine could easily be available to all except for the constraints placed upon producers by the demands of the capitalist system.

Total world military spending, as always, is increasing in prepartion for war. At present it stands at £750 billion; equivalent to the annual incomes of the world's poorest people. Wars have causes—power struggles, trade routes, markets and spheres of influence; alienation, environmental and ecological destruction are all effects with a capitalistic cause too.

Is capitalism the social system that you want to live under? That you want your children to inherit? That you think cannot be changed and is the best that there is or can ever be? Socialists do not. "Imagine' there's no countries" as John Lennon sang. "Nothing to kill or die for". Imagination only needs consciousness for it to become reality.

In many countries throughout the world, ordinary people have formed the World Socialist Movement. There are no leaders, and decisions are arrived at through fully democratic means, rather than the sham that all capitalist politicians call democracy today.

If you know a better alternative than this, please tell us. If not, join us!

Most people throughout the world believe that socialism has been tried and failed. They refer to the former USSR, China and Cuba. But these were—and are—capitalist states.

So what is socialism? It is a world where goods are produced to satisfy social needs rather than for profit; a democratic world system in which each person contributes their abilities to society and takes what they need to live in comfort. No borders or frontiers; no social classes or leaders. No buying or selling, no money or wages. A world of free access.

It's clear that this type of social system has never yet come into existence. Numerous people, such as Marx, Engels, Morris, etc, who developed the theory of socialism, would have stood firmly opposed—as real socialists do today—to those who describe socialism as anything less than what is outlined above.

Obviously the cynic and reformer will think socialism is a utopian dream. However, it's those who believe the manifold problems we face today can be solved under the auspices of capitalism, whatever cloak it wears, who are the utopian dreamers.

Why are thousands living on the streets when there's a glut of empty houses and thousands of unemployed building workers? Why are people allowed to suffer and die waiting for hospital treatment while there's no shortage of resources being allocated to the armed forces, which exist to kill people, not to cure them. Why is food locked way in cold storage or dumped as garbage while around the world over 40,000 children under five die daily of hunger and disease?

The UN and WHO have both reported that food, clean water and medicine could easily be available to all except for the constraints placed upon producers by the demands of the capitalist system.

Total world military spending, as always, is increasing in preparation for war. At present it stands at £750 billion; equivalent to the annual incomes of the world's poorest people. Wars have causes—power struggles, trade routes, markets and spheres of influence; alienation, environmental and ecological destruction are all effects with a capitalistic cause too.

Is capitalism the social system that you want to live under? That you want your children to inherit? That you think cannot be changed and is the best that there is or can ever be? Socialists do not. "Imagine' there's no countries" as John Lennon sang. "Nothing to kill or die for". Imagination only needs consciousness for it to become reality.

In many countries throughout the world, ordinary people have formed the World Socialist Movement. There are no leaders, and decisions are arrived at through fully democratic means, rather than the sham that all capitalist politicians call democracy today.

If you know a better alternative than this, please tell us. If not, join us!

A Professor Smashes Marx's Theories (1929)

From the February 1929 issue of the Socialist Standard

Professor Thomas Nixon Carver, who has held the chair of Political Economy at Harvard University for twenty-six years, "smashes" Marxism in the usual style in the American "Current History" magazine. In his contribution to the debate on "Marxism To-day," he starts his attack by referring to Marx, thus: —

The most complete exposition of doctrines based on this fundamental premise is found in the writings of Karl Marx, particularly in "Das Kapital," He was a philosopher and capable of reasoning clearly enough, and he had the courage, which many lack, to follow his reasoning to its ultimate conclusions. The difficulty is not with his reasoning. It is with the assumption with which he starts. Any one who accepts that assumption must follow him to the bitter end. If we start with a different assumption and reason with equal accuracy, we reach a very different set of conclusions.

What this "assumption" is we are not told. And consequently Prof. Carver leaves the issue untouched.

As a general argument against Marx, we are told that "prosperity is more widely diffused in capitalistic countries that in non-capitalistic countries," and that "capital is a means of earning wealth by adding to the wealth of others."

The prosperity of capitalist countries compared with others is due to the rapid development of industry on a large scale. This industry is operated by the working class. And the so-called prosperity is that of the owners, while the wage-working producers remain poor as a class in every country.

Prof. Carver apparently thinks that Socialists object to Capitalism as a mistake or monstrosity, whereas we recognise its place in social evolution as a pre-condition for the coming of Socialism. The very development that led to modern Capitalism, so ably sketched by Marx, is childishly used by this "great" American professor as an argument against Marx!

The Professor says that the concentration of wealth can go along with diffused ownership. How much diffused? Instead of showing that in actual life concentration and diffusion proceed together, he leaves this task and accuses Marx of laying down an "iron law of wages." He says:—

"There is, of course, even according to the Marxian theory a lower limit to the poverty of the masses. They must be given enough to enable them to work and to reproduce their kind, at least in sufficient numbers to stick the labour market. Even livestock, including slaves, must be given that much of the owners are to make anything out of them. What the Marxian calls "wage slaves," and what others call "free labourers," can never get any more under the capitalistic system. This is the so-called iron law of wages. The labour cost theory of value is not Marxian, but was taken over from the economists of the eighteenth century."

This great idol of Individualists in America with a big reputation as an economist has the nerve to attack Marx without reading him. In "Capital" as well as "Value, Price and Profit," Marx showed that the workers must struggle continually with the employers over hours and wages to prevent their standards sinking. Nowhere did Marx state an "iron law of wages"; in fact, in his criticism of the Gotha Programme he specially set to oppose that so-called law which was the pet idea of Lassalle. The iron law of wages of Lassalle said that wages cannot fall or rise for long above bare subsistence, because of wages increased for any time the wage-workers would have more children, and if wages fell continually for some time the workers would have much fewer offspring. So the increase or decrease of competing workers would adjust wages once again to the iron law. Marx, on the other hand, while showing that on the average the workers obtained the cost of their subsistence, only got this by means of struggle. He pointed out that historical and social factors entered into changing standards of living and that the idea that you cannot raise wages held by Malthusians like Citizen Weston (in Value, Price and Profit) was opposed to the facts of economic life.

The "iron law of wages" theory might be called a mixture of Karl Marx and Marie Stopes.

Finally, the Professor says: "Capital is not predatory; it is productive. It equips industries," etc. The equipment is capital, Mr. Carver states. If so, who produces the equipment? Not the owners, but the working class. Who operates the equipment? Again, the workers.

Is the Capitalist productive? Most modern Capitalists are shareholders in concerns where the entire work is carried on by hired workers, plainly showing the parasitic nature of the owning class.

Prof. Carver never attempts to show that there is no exploitation of the workers, but indulges in weak evasions and misrepresentations like those referred to. So Marx is "smashed" again by the "hot air" of an economic professor.

Adolph Kohn

Cooking the Books: People’s QE (2015)

The Cooking the Books Column from the October 2015 issue of the Socialist Standard

In his successful bid to get elected Labour Leader Jeremy Corbyn advocated a ‘people’s’ instead of a ‘bankers’’ quantitative easing. This, apparently, as the way to end austerity. It is true that what has been called ‘quantitative easing’ has been aimed at benefiting capitalist firms, by lowering the rate of interest at which they can borrow.

In Britain its official name is the ‘Asset Purchase Facility’. Under it the Bank of England buys government bonds off banks, paying for them by increasing the reserves which the banks are required to hold with it. This has two effects. It helps liquidity within the banking system and allows banks to convert some of these reserves into circulating money. And it raises the price of government bonds, so lowering their ‘yield’, i.e. the ratio of the amount of interest (which is fixed) to their price. This is supposed to affect interest rates generally, so making it cheaper for capitalist firms to borrow to invest.

The term ‘quantitative easing’ is one academic economists coined to describe this policy. Over the years governments and their economic advisers have had recourse to various theories and practices to try to manage the way the capitalist economy works. When one fails, another is thought up. The current dominant theory is that the way to control capitalism is by manipulating interest rates. The idea is that in a boom the government should try to increase them to slow it down or even choke it off; in a slump it should aim to reduce them. However, when they are so low – close to zero or negative – as they are now, the way to do this, so the theory goes, is through pushing up bond prices by the government buying them and ‘easing’ its monetary policy and increasing the ‘quantity’ of money to pay for this.

Increasing the quantity of money by the government creating more electronically to buy bonds is the only thing that so-called ‘people’s QE’ has in common with conventional ‘bankers’ QE’. The big difference is that the bonds to be purchased will not be government bonds but bonds issued by a new State Investment Bank to raise money to invest in infrastructure and green projects. The aim would not be to influence interest rates and liquidity in the banking system but to finance economic activity.

But why doesn’t the government simply ‘print’ more money directly and hand it out to government departments to invest or spend? Good question. The answer is that this is not the way it needs to be done in modern capitalist countries with a sophisticated financial system. That’s only done in places like Venezuela and Zimbabwe. It would also be against EU rules, and ‘people’s QE’ is being offered as a way round them.

It’s not likely to be tried. It might be Corbyn’s preferred choice but is unlikely to be adopted by the Labour Party even with him as Leader. Labour has learned the hard way that, in an economy driven by business investment, the government has to be business-friendly or provoke an economic downturn. But suppose that the next Labour government did adopt it, what would happen?

While conventional QE has only caused a rise in the price of financial assets, people’s QE may well cause a rise in the general price level. Which in turn would make exports less competitive, and it would soon be back to the balance of payments crises of the 60s and the double-digit inflation of the 70s. And eventually a return to austerity.

The cruel truth is that no government can make capitalism work for the ‘people’.