Letter: Socialism and Insurance. (1925)

Letter to the Editors from the May 1925 issue of the Socialist Standard

Reply to a Correspondent.

Miss Hilda Brock (Leyton) writes asking us to explain a passage which occurred in a recent article on ”Socialism and the Middle Class.” The passage is: “What need of insurance clerks in a world where risks are borne by society instead of by a special section with a view to making a profit.”

Miss Brock is of the opinion that under Socialism insurance and bank clerks will simply be transferred to the service of the State, which will take over these institutions, and that there will consequently be no labour set free for productive work.

It is evident first of all that Miss Brock falls into the common error of supposing that Socialism is merely an extension of State ownership. In fact, State Capitalism and Socialism are irreconcilable, and the Socialist Party accordingly opposes parties which advocate the former, such as the Labour Party.

Capitalism is continually producing insecurity for individuals, both capitalists and workers. Insurance companies make profit for their shareholders by insuring these individuals against some of the effects of that insecurity. Where profit cannot be made, the State (that is, the capitalists as a whole) is compelled to step in, and must in the last resort, maintain destitute workers to prevent mass starvation.

When private ownership, which is the cause of the workers’ poverty, is abolished, there will be no need to protect them against insecurity which will no longer exist. There will be no room for any kind of profit-making, and therefore no private banks, insurance companies or other capitalist concerns.

Society will organise the production of goods and their distribution to those places where the members of society want to consume them. Clerks will be needed to keep records and make estimates of wealth production, but they will not be needed to waste their labour, making private profit for insurance shareholders out of the misfortunes of individuals arising from the disorganisation of the social system.

Ed. Com