Letters to the Editors from the August 1980 issue of the Socialist Standard
"True' Socialism from France
To the Editors
I read with pleasure that the Socialist Standard had discovered our untiring efforts to show how socialism could be created and live. But I think it is good that all readers learn that ALB’s article, published in February, contains some serious mistakes or misunderstandings.
“Consumption vouchers” and, far more, “labour vouchers” are inapt words to describe the social income, as they contain an idea of scarcity. They have been used in war conditions, when you were given vouchers to get only 100g of bread a day; but they are not appropriate to Jacques Duboin’s consumption money, which has to be proportional to an abundant production. As there is no better word than the capitalist word of “money”, we keep this notion for other reasons: it shows that your income gives you the complete choice of what you think you need. The dealers have to keep accounts to allow the consumers to decide whether production has to be increased or not. (Do not forget that without profit there is no more advertising and ail its consequent misleading choices.) The necessity of keeping pseudo-prices, at least at the beginning, results not only from the desire to avoid wastage (a danger that will decrease as the sense of individual responsibility increases) but also from the fact that the consumer must be informed about the remaining difficulty to achieve what he wishes — about the raw material this production requires, its effect on the environment and the pollution it involves. No good choice may be made unless you have the most complete information and price is a good and rapid means to supply it. The most important thing you must emphasize about consumption money is that it cannot carry an interest, cannot be hoarded or loaned, and that it loses its value when it has been used once. This pseudo-money, then, has nothing to do with capitalist money in that it puts an end to that awful law which tells that “money goes to money”, widening the gap between rich and poor. This is the absolute condition without which socialism cannot live. He who calls himself a socialist and does not realise this necessity is a dreamer (remember Allende).
Free access to goods as well as worldwide socialism are our final aims, but we claim that a period of adaptation is necessary during which people’s mentalities will progress more and more rapidly as they will be free from the “prices-wages-profits” economy. Do not forget that J.Duboin was a convinced world citizen, as I and many of his followers. But if we could convince our neighbours and set up the true socialism in France, why not try? Is it not the best way to convince the others and achieve world-wide socialism?
ALB blames my father (he uses the word “mistake”) for exaggerating the impact of mechanisation and automation on employment under capitalism. This impact, nevertheless, appears easily when you look at the official data: in any western country and for several decades it has appeared obvious that production increases while employment decreases. This is the reason why he stated that income must become independent of labour. And production can now be realised with fewer and fewer workers. Evidence of this is given by the drift of labour from the first to the second sector, then from the second to the third, while the production of each sector has kept increasing. Productivity in the third sector is about to be boosted in the coming years as a result of computerization. It must overall be kept in mind that official statistics will take into account all useless, nay harmful jobs that the capitalist consumption society has created.
The most surprising criticism published by the Socialist Standard is that Duboin made a mistake in “accepting the myth that banks can create credit”. It is no longer possible, for socialists, to ignore a fact of so important consequences. May one forget where the power is? If there were some naive readers who had to be convinced, let the answer come from the House of Commons, that had appointed a committee to report on this affair; this gave Mr.McKenna. Chairman of the Midland Bank, the opportunity to declare: “Banks create deposits, but I am afraid that the man in the street should not be happy to learn that banks create and destroy money, yet this is the truth”. Let now the Governor of the National Bank of Canada state during an official inquiry: “It is the very office of banks to make money, exactly as steelmills make steel”. Colin Clark, an Australian economist and financial adviser to the Queensland government wrote: “In business circles, one could still find people trying to deny that banks create or destroy credits; I doubt however that those people could find one single genuine economist to share in this strange point of view”. If all this were not sufficient, just have a look at the Encyclopedia Brittanica (1954 edition volume III, p50) where you will read that: “Banks do not lend their money, nor their customers money: they create credits as deposits on which their customers may draw checks”. Do not forget that J. Duboin had been a junior Minister, in charge of the French Treasury; this gave him the opportunity to measure the power of banks. From this knowledge he could predict how dangerous this power would be if socialism ignored or tolerated it. World-wide Socialists cannot afford to make such a mistake.
As our aims seem really to be much the same, I would sincerely be happy if this could help to achieve our common purpose. As I have endeavoured to continue, chiefly through the publication of his newspaper, my father’s fight since his death (which occurred not in 1973 but in March 1976 at nearly 98), I do wish there will be the best mutual understanding between writers and readers of the Socialist Standard and those of La Grande Releve.
Le Vesinet, France
M-L Duboin’s letter unintentionally confirms the point we were trying to make in the article she criticises: that, in the movement inspired by the ideas of her father, mixed up with the correct insight that the “prices-wages-profits” system must be abolished are all sorts of confused views, often bordering on currency crankism.
1. She objects to us saying that what her father called “consumption money” would better have been called “consumption vouchers”. She feels that this latter term suggests too much the ration cards of the war and immediate postwar period. Not necessarily. Even the “labour-time vouchers” Marx mentioned would have been “proportional to an abundant production” and would have allowed the individual a free choice of the various goods available for personal consumption. But this is not the real point. Under both the system mentioned by Marx and that proposed by Duboin, individual consumption would still be rationed, being restricted by the number of vouchers a person had. Our point is that today, given the tremendous development of the means of production since Marx’s time, society could, on the basis of common ownership and democratic control, apply the long-standing socialist principle “from each according to his ability, to each according to his needs”; in other words, institute free access to goods and services according to individual need.
2. M-L Duboin argues against the immediate introduction of free access on the ground that people are not yet ready for it. “A period of adaption is necessary”, she claims, “during which people’s mentalities will progress”. What exactly does she mean here? Can this be the old objection that, if goods were free, people would grab more than they needed so that shortages would soon re-appear? If so, it is a peculiar objection from someone claiming to stand for a society of abundance. We don’t think this problem would arise because, if people can be assured (as they will be able to be) that the stores will always be adequately stocked with what they need, then there is no point in grabbing or hoarding. To do so would be to behave in a quite abnormal way. Grabbing is a product of scarcity and insecurity, not of abundance. In any event, socialism is not something that will be introduced from above for a population which will not know what to expect; it is something that will have been introduced by a majority which wants it and understands its implications. A “sense of individual responsibility” will thus already have developed before socialism is established.
3. We don’t really see the relevance of the reference to Allende. Perhaps M-L Duboin is trying to say that his fate is a warning as to what awaits anyone who tries to introduce “socialism” while retaining the present monetary system. But Allende was not a socialist, nor was he trying to introduce socialism. He was a reformist trying to extend State capitalism in Chile. His experience is thus irrelevant as far as the establishment of socialism is concerned, though of course we agree that socialism cannot be established without abolishing money.
4. Socialism cannot be established just in France or just in Britain or in any one country alone for the simple reason that capitalism, the system socialism will replace, is already a world system. The developed means of production which make possible a society of abundance only exist on a world scale and as an integrated world-wide network. A society of abundance in one country is therefore just not possible.
5. We did not say that the trend referred to by Jacques Duboin for machines to replace living labour does not exist, but only that he tended to exaggerate it. When he says, for instance, in his Economie distributive de l'abondance that “hundreds of examples could be given of a machine replacing 10, 50, 100 and often more workers” (3rd edition, 1946, p.16), this is misleading. If you just look, as Duboin is doing here, at the labour displaced at the last stage of the production of a particular commodity by the introduction of a new machine, then you get a one-sided picture. For the labour displaced at this stage will have only been made possible by the extra labour employed in earlier stages to design, construct, install and maintain the new machine. There is of course an overall displacement of living labour but of the order of a few percent and not of the fantastic figures sometimes found in Duboinist literature (and, to be quite frank, sometimes too in our own!). A further reason why overall productivity only increases at a relatively slow rate is that a new invention is never applied in one fell swoop in all the workplaces producing a particular commodity, but only slowly as competition gradually forces all the producers to adopt it. We hasten to add that we fully accept that in socialism, where the profit and labour-cost considerations that apply under capitalism will no longer exist, mechanisation and automation will really come into their own as means, not only of producing abundance, but of eliminating dull, boring, repetitive and dirty jobs.
6. Duboin thinks that her belief about the banks’ supposed power to “create deposits” must be regarded as proved because certain individuals she names have said so, notably the members of the MacMillan Committee 1931 (Committee on Finance and Industry). What she fails to realise is that, for every “authority” she quotes supporting her belief, there is another denying it.
Thus she quotes the Governor of the National Bank of Canada. But Mr. Jackson Dodds, the General Manager of the Bank of Montreal, retorted: “Now, banks are given well defined powers under the Bank Act, but the power to create something out of nothing is not one of them.” She quotes Colin Clark as saying that he knew of “no genuine economist” who denied it. Edwin Cannan, Emeritus Professor of Political Economy in the University of London provided an argued case against the belief. (An Economist’s Protest by Edwin Cannan, pages 256-266). As also did Professor Gregory, who was a member of the MacMillan Committee. Then there was Mr. Walter Leaf, Chairman of the Westminster Bank and President of the Institute of Bankers:
“The banks can lend no more than they can borrow—in fact not nearly so much. If anyone in the deposit banking system can be called a ‘creator of credit’ it is the depositor; for the banks are strictly limited in their lending operations by the amount which the depositor thinks fit to leave with them."
Duboin quotes in support of her belief Reginald McKenna, who was a member of the MacMillan Committee. When Major Douglas, founder of the Social Credit movement drew from that Committee’s report the quite logical conclusion that it meant that “new money has been created by a stroke of the pen”, McKenna wrote: “There is nothing to justify the claim by Major Douglas that I agree with his view on the creation of credit”.
What Duboin should do is to examine critically the astonishing case put by the MacMillan Report on para. 74. It was blatantly rigged. It worked out a series of ten successive loans to depositors, extending over a considerable period, but while it assumed the deposit of cash by a depositor, no depositor or borrower in their Alice in Wonderland bank ever withdrew cash. Duboin really should not go on believing that the fact that a committee is government appointed is a guarantee that it won’t utter nonsense. Incidentally, when members of the Committee were approached about para. 74, several of them disowned it.
M-L Duboin can rest assured. Socialism will neither “ignore” nor “tolerate” the banks. Together with the rest of the paraphernalia of buying and selling, they will quite simply not exist in Socialism. We combat mistaken ideas about mythical powers supposedly possessed by banks because they lead people to imagine that the solution to social problems lies in monetary reform rather than a change in the basis of society.
E.P. Thompson and CND
A well-known historical figure, with whom I am sure the Marxist historian E. P. Thompson is acquainted, once said that when history repeats itself the first time it is tragedy, but when it does so a second time it is farce. Thompson, in calling for a “campaign for a bomb-free Europe” (Guardian, 28.1.80), lecturing under the title “Protest and Survive” and supporting demonstrations against American Cruise Missiles in Britain, is attempting another farcical repetition of events, fated to follow the same path as did the Campaign for Nuclear Disarmament and Bertrand Russell's Committee of 100.
We must ask ourselves if these utopian popular movements have helped to bring about nuclear disarmament, or even decelerated nuclear stockpiling. The answer must be “no”. Indeed, despite the existence of such groups, hideous wars have continued throughout the world, using not “the Bomb”, but the more conventional instruments of torture and disablement. Do Thompson and his followers wish to reenact past “peace” movements; to initiate yet another naive grass roots campaign?
Alas, it is the same old story. Thompson is seeking to eradicate one particular instrument of war, while ignoring the reason for such instruments; indeed, the very cause of war. Surely war is the inevitable outcome of individual nations striving to protect or extend their respective markets and spheres of influence, to the benefit of their economic and political rulers; that is, the product of capitalism and its inherent rivalries. The pressing need is to extirpate the cause of war, not its tools.
I am sure many would agree that E. P. Thompson is a very talented writer of history: learning its lessons, however, demands a different sort of talent.