Thursday, February 18, 2016

Freedom — The Old and New Joke (1957)

From the July 1957 issue of the Socialist Standard

There has been a rumpus in Parliament over the tapping of a barrister's telephone conversation with a solicitor and the passing on of the transcript to the Bar Council.

In defending the action the Home Secretary stated that this power is used "solely in cases involving the security of the State or for the purpose of detecting serious crime.” And who is the judge? The Home Secretary, of course, who has to give the permission. What a lot can be covered by “security of the State”! The opening of letters, for instance, for the alleged purpose of seeing if dollars are being smuggled, or tickets for the Irish Sweep.

But this is a “freedom-loving country,” as free as it always was. In the middle of last century the correspondence of Mazzini, the Italian patriot, was opened on the same plea. But we can go further back still.

On the 26th April, 1817, The Scotsman had an editorial article, from which we have extracted the following
"In this island, we have no inquisition to make out lists of books which it is unlawful to read. Our Ministry, although it seems to have the wish, has, fortunately, no power to imitate the example of these Holy Fathers and Familiars, with ropes about their waists. It has not yet got the stock of national reflection put under lock and key; nor can it take its stance before the storehouse of literature, and deal us out ideas and information by the ounce, and the drachm, and the scruple; or repulse with a tyrannical frown such as appear discontented with the small pittance of mental food allotted to them. Thought is here free, and has been so long free, that it can never be gathered in, or monopolised any more. The mind cannot be stripped of its acquirements, nor ideas prevented from generating other ideas, unless it was possible to blast the whole nation with a sudden stupidity.”
Now, that sounds good, doesn’t it? But wait a minute. In other columns of the same issue of the paper there were complaints about the incidence of the Seditious Meetings Bill, and a report of proceedings under this Bill, in which a debating society was refused a licence to hold debates, although it was pointed out that these debates on literature and philosophy had been carried on peaceably.

As a further instance of the freedom to put forward ideas the same paper for May 17th, 1817, is also interesting. Here is an extract:-
"On Thursday the important question was to be put to Ministers, whether it is their intention to move for the continuing the suspension of the Habeas Corpus Act. The answer will produce the most lively sensation in the country; for, in comparison with this, all other topics are of little account. It is in vain to say that the country is disturbed. All pretences of a domestic nature are done away; for there are not signs of sedition, but clamorous beggary, the result of distress, or of pillage from despair. The Spencean system (by which is meant the division of lands and goods among all classes of the community) is rapidly taking place, by the reduction of the higher classes to the middle state, and the middle to pauperism. The process is gradual but unremitting. Every day brings us all nearer to one level; and if we continue in the blind policy of applying such remedies to the national evil as the suspension of the Habeas Corpus, and enacting the gagging laws, the result cannot be mistaken.—We must sink into common ruin.”
The boasted freedom of thought seems to have been taking a walloping!

The latter part of the quotation is almost an echo of what we bear to-day. The rich are becoming poor—well, apart from its millionaires, the attenders of luxurious banquets and "coming-out" parties, the patrons of luxury cruises, and the like. After all, a Rothschild who has just died only left £11,000,000.

Maggie and Mikhail: A meeting of minds? (1987)

From the May 1987 issue of the Socialist Standard

Most political commentators, because they have for decades obstinately refused to see Russia as anything but "communist", now don't quite know what to make of what they themselves have dubbed the "Gorbachev revolution". Russia is still "communist" and intends to stay that way — we have Gorbachev's own word for that. So what are we to make of glasnost and perestroika — the Russian words for "openness" and "restructuring" that now trip off the tongues of TV news readers as easily as "communist threat" once did?

That there are reforms — both in the economic and political spheres — taking place in Russia at the moment is beyond question. In political terms, we are told that there is going to be "democratisation". This does not mean that Gorbachev and other members of the Politburo are going to stand for election or that rival political parties are going to be able to put forward candidates for election to political office. What it does mean, if Gorbachev gets his way, is that Party officials will have to compete for certain key posts and submit themselves for election to the next lowest tier. There may also be a requirement that industrial managers will have to be elected by their workforce (an introduction of an element of democracy to an area that has mostly been immune from it in the so-called democracies of the west).

There does appear to be some increase in the civil liberties enjoyed by Russian citizens. The more liberal political climate has meant that there is greater openness in the Russian media: criticism of certain aspects of Russian life is now not only permitted but officially encouraged. However it is important to notice that criticism is only tolerated when it is directed towards those areas which Gorbachev himself has indicated are legitimate targets — bureaucratic ineptitude, economic inefficiency, low productivity and corruption in particular. It is highly unlikely that political criticism of the system itself will be permitted. In the arts and cultural life there has been some liberalisation: literature, music, films and plays that were previously banned or at least heavily censored are to be made available, although "freedom of expression" still does not exist. Things are still under the watchful eye of the state censors; it is just that now they have widened the parameters of what is permissible.

Some political prisoners have been released, especially those like Sakharov, who have been the focus of western media attention. And while it is unlikely that there will be a general amnesty for political prisoners, there is an official commitment to release more. Similarly we are told that Jews wanting to leave Russia for Israel will have their cases reviewed but we are not likely to see much "freedom of movement" for Russian people in general.

In economic terms the reforms have mostly focused on two major problems the Russian leadership have been grappling with for decades: low productivity and the poor quality of the goods produced. In an attempt to revitalise the economy, Gorbachev has introduced greater private ownership and various incentive schemes. In an effort to overcome the problems of delay and inefficiency caused by the cumbersome, centralised, bureaucratic machine, managers of some factories are being given greater responsibility for decision-making so that all decisions are not automatically referred upwards to officials. In the service sector some small businesses are being reorganised as cooperatives. Managers are encouraged to run their businesses more cost-effectively by the state granting them a fixed wage fund. If they can then reduce their workforce and also maintain productivity then all will earn more money. There have been changes in rural areas too. Farmworkers have been organised into teams who are given responsibility for specific fields which they work in return for a guaranteed basic wage. When the crop is harvested they will then get a bonus which will be determined by the quantity and quality of their produce. In other words some Russian workers are being paid by results in an attempt to both increase quality and productivity. They will have to work harder in order to maintain or improve their living standards.

The media soap opera that was created around Thatcher's recent visit to Russia focussed on whether there had been a "meeting of minds" between the two leaders; whether Gorbachev really was a man who Thatcher could "do business with"; whether they could bridge the "ideological gulf" that separated them. Such questions were only possible because of the myth that the media has itself so long fostered. That myth is that the system in Russia is in some fundamental way different from that in the west; that Russia is "communist" and the west is "capitalist" — as different as chalk and cheese.

But the truth is that Russia and the west are not. and never have been "worlds apart" and so a "meeting of minds" between Gorbachev and Thatcher was not the quantum leap that it was made out to be. For Russia is a capitalist country: just like any other capitalist nation it produces for profit and not need; goods and services are exchanged on the market for a price; a minority control the wealth that is produced, while the majority sell their labour power in return for a wage or salary. The only significant difference between Russia and the west is that the state owns rather more of the wealth and means of production, distribution and exchange than do private entrepreneurs. And even this is not as significant a difference as it might first appear: many countries which would not be described as "communist" vest considerable ownership in the state and in Britain too there have been periods when there has been considerably more state ownership than is the case today.

So Gorbachev’s limited economic reforms — more private ownership and payment by results — do not mean that Russia is becoming "more capitalist". The current reforms represent no more of a fundamental change than does Thatcher's policy of privatisation of what were once state-owned industries.

In political terms the Gorbachev reforms are potentially more significant. But again they should not be misinterpreted as meaning that Russia is becoming less communist — it has never been communist. Capitalism — as an economic system — can contain a wide variety of very different political systems: the "liberal democracies" of western Europe, America, Australia and New Zealand; undemocratic and authoritarian systems such as that in South Africa; the fascist governments of Italy and Germany during the 1930s and 1940s; the one-party states common in parts of Africa; military dictatorships like those in some South American states; and the one-party states of Russia and eastern Europe.

In the political sphere as was the case in the economic, it is a question of degree. Just as there can be disagreements about the best proportions in the mix of state and private ownership without the fundamental nature of capitalism being affected, so too, exactly how coercive and repressive the state is, will vary. But in all capitalist countries the main function of the state machine is the same — to protect the interests of the owning class. How it goes about doing that is likely to depend on the economic and political conditions that exist in a particular country at a particular time — how secure the owning class feels its control to be and how divided it is. To maintain a highly coercive and repressive state machine, with all that entails for civil and political liberties, may be thought to be politically necessary but it can also have negative effects economically and politically.

In economic terms coercion is expensive: to maintain a large police force, internal security services, prisons and so on, is very costly. If the owning class can maintain its power by other, subtler and less expensive means then they may well decide to take the risk and loosen the reins a little. The risk, of course, is that workers may make use of their new-found political freedoms to press for more fundamental changes. On the other hand to maintain rigid, repressive state control is also risky: workers who are stamped on too hard are likely to feel disaffected, resentful and uncooperative. And. as Gorbachev has recognised, if workers feel that they have no stake in the system then they may well choose not to work very hard.

So what we are seeing in Russia at the moment is a regime that feels sufficiently secure politically to loosen the reins of state control and is aware of the economic benefits that can be won by conning workers that they are "free" and have a stake in the system. It's no wonder that Mikhail and Maggie got on so well — after all they have so much in common.
Janie Percy-Smith

Should the Film Industry be Nationalized? (1975)

From the March 1975 issue of the Socialist Standard

The following letter was sent by a member of the Socialist Party of Great Britain to the “Borehamwood Post”, stating the Socialist attitude to a question which appears from time to time.

Your correspondent, Mr. A. J. Carnall, in a letter to your paper of January 23rd 1975 makes a plea for the take-over, by the Government, of the Film Industry. His main argument in support of this seems to be his opinion that (contrary to the belief held by some people) the Government in this event would not dictate what kind of films would be produced and that creative and artistic freedom would not be restricted. He then goes on to give what he claims are examples of this in those areas where the Government are at the present time in control.

Under the conditions of the present-day capitalist society the principal object for the production of films or, for that matter, the production of almost everything else in other fields of human endeavour, is to make a profit for that group in society who own the means of production, the capitalist class. Mr. Carnall says that the entertainment industry is a necessary social service. With the same kind of logic so is every other industry including, for example, the arms manufacturing industry, which, although it performs a social service, does not produce anything useful to society, on the contrary it produces harmful weapons of destruction. It is, of course, a matter of personal opinion as to whether the Film Industry falls into this category.

The reason for government nationalization of certain industries in those countries like Britain where capitalism is operated under what is referred to as a mixed economy, is not for the purpose of providing a better social service, as such, but to ensure that the surplus-value-producing machinery of the whole national capitalist class continues to exploit the working class with the maximum possible efficiency.

The Labour Government of 1945 had this in mind when they nationalized the railways and mines etc. Whether or not they were successful depends upon the individual opinion and attitude of those who attempt to make an assessment. Most certainly it did nothing to fundamentally change the social position of the workers employed in those industries, or for the working class generally.

Mr. Carnall says that the Arts Council administers millions of pounds in subsidizing opera and ballet. Quite true; this is an area of human endeavour which the Government considers to be useful in creating a good international image, like the monarchial institution which is maintained for the same reason. However it does not alter the fact that the people who are engaged as dancers and singers who have to attain, over a period of intense training of about ten years, a very high degree of performance, receive wages which, apart from a few star performers, and in spite of the efforts of Equity, and the pretensions of the government-sponsored administrations, are abysmally low by any standards.

Mr. Carnall implies that the BBC exercises little or no discrimination in relation to programme content, strange implication to make when even the mighty leader of the Labour Party claimed that they did — in spite of the fact that the Labour, Tory and Liberal spokesmen were hardly ever off the BBC during the last election. The fact is that minority political parties get little, or no time, on the BBC even during election times.

In relation to the restriction, by governments, of artistic and creative freedom, the classic examples of this are to be found in those countries, like Russia, where state capitalism predominates. Some of us have read other literature besides Soviet Weekly, and most people are aware of the incidents of defection, and what led up to them, by the Nureyevs, Panovs, etc., from the state-controlled Kirov and Bolshoi ballet companies.

Mr. Carnall makes no mention of this, which is understandable, since he is a member of the Communist Party, an organisation which ever since they formed in 1920 has slavishly applauded and apologized for everything the Russian government did.

Of course sections of the capitalist class in Britain, and elsewhere, teetering on the edge of a possible world-wide stagnation, with some of them facing bankruptcy are only too pleased for the Government or the workers to “pull the chestnuts out of the fire” for them. Even the Tories, who over the years
have falsely claimed to have had some objection in principle to nationalization, would not be opposed to that.

Nationalization of the entertainments industry, or of any other industry, will do nothing to solve the problems engendered by capitalist society. If Mr. Carnall was really concerned about the problems created by capitalism, of which the crisis in the film industry is only a small part, then instead of making a plea for state capitalism he should be advocating the introduction of world-wide Socialism, a classless, moneyless system based upon common ownership and production for use, democratically controlled by the whole of the world’s population. But then this solution would be inimical to his Party line with its blind support of the Russian ruling class, and would necessitate him doing some real thinking on this matter for a change. This, however, would probably be too much to expect from a man of his generation.

H. D. Walters 
(Employed at E.M.I. Elstree Studios)

Note: The third and fourth paragraphs from the end were omitted when this appeared in the “Borehamwood Post”.

The Communist International (1939)

Front cover of the 1962 edition.
Book Review from the February 1939 issue of the Socialist Standard

"The Communist International," by F. Borkenau. Faber & Faber. 12/6. 442 pages

A by no means insignificant reason for the lamentable condition of the international working-class movement is to be sought in the baneful influence of events in Russia. Hypnotised by its mythical Socialist character, bull-dozed by its offspring, the Communist International, thousands of militant workers have fallen victims to its spell. Fortunately, numbers of workers everywhere, under the hard blows of reality, are beginning to come to their senses. Anything that tends to hasten this process can only be welcomed, and therein lies the importance of this book. Written by a former official of the German Communist Party, it is a painstaking and scrupulous attempt to reveal the origins of Russian Bolshevism and its influence, through the Comintern, on the world Labour movement.

Dr. Borkenau is of the opinion that the Communist International has served three main purposes during its history. In its first years it was “mainly an instrument to bring about revolution"; later it was “mainly an instrument in the Russian factional struggles”; and at the moment it is "mainly an instrument of Russian foreign policy." A safe generalisation, and one not necessarily conflicting with the author’s view, would be that the Comintern at all times was subordinated to the needs, either real or imagined, of the Russian State. For even during its early and "heroic” period, when, possibly, the Soviet leaders did sincerely desire and work for revolution elsewhere, attempts at revolution were always encouraged for the advantage it was thought they would bring to the newly- launched State.

Although the Communist International did not formally come into existence until March, 1919, the Germany of the January of that year was one of the countries where Russian influence first made itself felt. Under the influence of the Russian events and its chief protagonist in Germany, Radek, a small group of militant and romantically-minded workers, known as the Spartacists, rose in armed revolt. Rosa Luxemburg, a member of this group, and those closely associated with her, strongly advised against this senseless act. Inevitably, this heroic, but unbelievedly muddle-headed, attempt to seize power was drowned in blood. One of the tragic aspects of this pitiable farce was the death of Rosa Luxemburg, whose ghastly murder was a great loss to the German working-class movement  in particular, and to the international working class in general. Dr. Borkenau pays a moving tribute, marred only by a colossal piece of masculine conceit, to this truly remarkable woman. The sharp differences between Luxemburg and Lenin, particularly on the question of leadership, where Luxemburg, the Socialist, opposed the essentially bourgeois "Jacobin" revolutionary, Lenin; Luxemburg's critical attitude towards the Russian Revolution; her whole life and work, no less than the manner of her death, make the " Lenin-Liebknecht-Luxemburg” commemoration meetings, and the Communist claim that "Luxemburg" belongs to them, an insult to the memory of one of the finest individuals who ever championed the cause of the working class.

In Hungary, Finland, Germany in 1921 and 1923, and in China in 1927, the tale of intrigue, duplicity, treachery and disastrous incompetence of the Communist International unfolds itself. The description of the fantastic escapades fostered by the self-appointed "revolutionary general staff” would simply be unbelievable were it not for the factual evidence which Dr. Borkenau so abundantly provides. We must content ourselves with selecting as "high spots" the 1921 rising in Germany, and the catastrophe known as the Canton "Soviet" of 1927.

In 1921, Bela Kun, a leading Hungarian Communist, arrived from Russia, where he had witnessed at Kronstadt the bloody suppression by Lenin and Trotsky of the last remnants of Soviet democracy. Convinced of the desperate situation of the Soviet regime, he persuaded the Central Committee of the German Communist Party to stage a rising, the outcome of which he hoped would assist the Soviet Power to maintain itself. Completely isolated from the workers, the Communists sat down to work out the details of the "rising." As the German workers proved completely unresponsive to calls for an armed revolt, it was decided that a little "assistance" would not be misplaced. Hence we have, for example, the Communists of Breslau deciding to start the "Revolution" by blowing up their own party premises, to stage the explosion in the toilet, and, moreover, seriously debating whether to blow up the toilet when occupied or not! Fortunately, commonsense(!) prevailed. The toilet went up in the air without a victim. During this time the Communists also called for a General Strike. But the German workers didn’t want to strike! Were the Communists dismayed! Not a bit of it! They simply mobilised their unemployed members and set them to literally drag the employed workers out of the factories. Paul Levi, one of the few independent spirits connected with the German Communist movement, commenting in a pamphlet, Our Road, on the fist fights between Communist unemployed and the employed workers, stated that: "Even more pathetic reports arrived from Berlin. We learn that it was a terrible  thing to watch how the unemployed, crying loudly at the pain of the thrashings they had received, were thrown out of the factories." Levi was excluded from the party, and although the Communists were subsequently forced to admit the accuracy of his indictment—and this was upheld by Lenin—he was never reinstated.

Already before the senseless attempt to form a "Soviet" at Canton in December, 1927, the Chinese Communists had been bloodily defeated ; by Chiang-Kai-Shek. As Dr. Borkenau says:  "The root of the . . . catastrophe in China lies in this duplicity, in this child-like conviction that your adversary will not understand your intentions, though you express them quite openly, that he will continue to co-operate with you as long as you want it, and allow himself to be overthrown when it suits you." The Chinese Communists thought they could use Chiang; instead he used them, and then mercilessly destroyed them. Stalin, who was for the most part responsible for this disastrous policy of double-dealing, was faced with the criticism of the opposition in Russia. To retrieve his prestige, a German Communist, an unscrupulous, daring and irresponsible careerist by the name of Heinz Neumann, was sent to China, where, with the support of the remnants of armed Chinese Communists, he staged the Canton "Commune." Formed amidst the general indifference of the populace, this " Soviet" lasted 58 hours, important sections of the workers taking up arms against it. At the end of this adventure, a frightful massacre of Communists took place, involving the whole of the Chinese Communist leaders. Only Heinz Neumann escaped. It is perhaps one of the minor ironies of history that Neumann escaped death then, and later, at the hands of Hitler, only to be shot by his Russian "comrades" at Moscow in May, 1937.

Dr. Borkenau supplies what is to us one of the most convincing reasons for the never-ending purges, denunciations, jailings, shootings and persecutidns that have decimated the ranks of many Communist parties, in particular the Russian Party. The Communists, in spite of the lip-service they pay to "objective reality," are, in fact, incorrigible  "subjectivists." If social reality conflicts with what the latest dogma from Moscow says it ought to be—well, so much the worse for reality. Living in a world of their own, perhaps the most dangerous illusion ever held by them is that the working class is simply bursting with revolutionary ardour and only restrained by the nefarious tactics of treacherous Labour leaders. But if the workers do adopt a policy of which the Communists approve, and disaster, nevertheless, results, then the leaders have not fully understood, were not really " Bolshevised," or have misapplied, sabotaged or betrayed the infallible directives given by infallible people in Moscow. Therefore—off
with their heads! If the "workers’ State" has finally been achieved, as in Russia, and, nevertheless, paradise obstinately refuses to make an appearance, are the causes to be sought in a mistaken appraisal of social conditions? Of course not! It must lie the treachery of some of the leaders. Consequently, we have the spectacle of men who have grown old and broken in the services of the Revolution being dragged out from political obscurity and butchered to satisfy the need of a scapegoat.

Perhaps one of tlie most interesting and revealing chapters in this book is the one entitled "The Structure of the Communist Parties." The instability of the membership of the Communist parties is well known, and in Germany it reached such proportions as to justify the use of a technical term, "fluctuation," a term which was subsequently applied to all the non-Russian parties to describe the staggering influx and exit of members. Basing himself on a careful analysis of the available statistical material, Dr. Borkenau concludes that in the German party a nucleus of only five per cent. remained faithful, whatever happened. And since, as he says, "the Germans have a well-justified reputation for the stubbornness with which they stick to allegiances once established,” there is no reason to suppose that any other Communist Party is any better in this respect. The social composition of the parties varies as to the policy pursued, whether "right" or “left." It is a noticeable fact that, in Great Britain, the Communist Party has, at the moment, attracted many who formerly they would have dubbed "middle- class elements." In Spain the process has gone so far that the party there has almost lost its proletarian character.

Summing up, Dr. Borkenau reaches the scathing conclusion that "an iron guard, unshakable, integrating the experience of a generation of revolutionary fighters, is the official ideal of a Communist Party. Shifting masses, imbued with a deep hatred of the old mass organisations and their humdrum activities, but without any stability or fixed conviction of their own, are the reality."

Apart from the fact that the author talks of the specious economic arguments of Karl Marx without in any way attempting to justify such strictures, the book also contains one or two minor inaccuracies. That these latter have been seized on so avidly by Communist apologists, in an attempt to discredit the book as a whole, merely serves to demonstrate the weakness of the Communist case. Dr. Borkenau also asserts that the workers in the majority have hitherto shown no desire for Socialism: a statement with which every Socialist will readily agree. But when he goes on to conclude that they never will do, he assumes the role of a prophet, and we, as Socialists, will do our best to see that, in due course, experience will confound him.

Nevertheless, this remains an extremely valuable book, which all workers ought to read. Propagandists for Socialism will find it invaluable when faced with Communist opposition. As far as members of the Communist Party are concerned, if blind devotion to a myth has not entirely impaired what critical faculties they ever possessed, we can only implore them to get hold of it at all costs. We freely concede that in the ranks of the Communist Party are to be found many workers abounding in enthusiasm, energy, capacity for self-sacrifice, and devotion to a cause which they quite sincerely identify with the cause of the working class. But these very qualities, which could be of inestimable advantage to the working class, are transformed into a veritable curse because of the blind, uncritical, unquestioning devotion to an illusion. This book should go a long way towards dispelling that illusion.
Arthur Mertons

Karl Marx and his critics: Do profits grow on thistles? (1928)

Book Review from the January 1928 issue of the Socialist Standard

The Economic Theory of the Leisure Class," by N. Bukharin, (Martin Lawrence, 7/6 net.)

Since the days when Marx analysed the Capitalist system of producing and distributing wealth, laid bare the secret of value, and demonstrated how surplus value is obtained, the agents of the master class have been engaged in numberless attempts to “explain” why the Capitalist is entitled to his profits. A legion of Professors of Political Economy have entered the lists against Marx, with disastrous results to themselves. Journalists and publicity writers have tried their hands where the experts have failed, with even more lamentable results.

One of the most boomed of the Marxian critics, whose general work on Economics ranks, perhaps, higher in Capitalist estimation than that of any other economist of modern times, was Böhm-Bawerk, head of the “Austrian” School of Economics. He was not only a Professor of Economics, but also Austrian Minister of Finance for some time. Thus, to his theoretical knowledge lie added experience of practical affairs, and this would lead one to expect in him a most formidable opponent. Many years ago he loudly proclaimed the discovery of a “great contradiction” between the first and third volumes of “Capital," but the “discovery’" caused hardly more than a flutter before it died.

His two best-known works are his “Theories of Interest,” where he claims to show the failure of all the attempts to explain interest by previous economists, and his “Positive Theory of Capital,” in which he sets out to state the source and reason of interest.

To reach this explanation it was necessary to state a law of value which, incidentally, would expose the hollowness of Marx's theory on the same subject. Here, however, the famous Professor was unable to do anything better than come to England and borrow the late Stanley Jevons's theory of “Final Utility,” published in 1871. A few minor alterations were made, and the title changed to “Marginal Utility,” and then the theory was announced as a brand-new solution of the tantalising problem of value. It is this theory of value that Bukharin criticises in the volume under review.

According to the Marginal Utility theory, value is determined, not by the ordinary utility of any article, but by the utility of the article sold by ”marginal” pair of buyers and sellers that effect a sale in a given market. This is explained as follows. Sellers come into the market, each with a different price in his mind that he is prepared to accept rather than not sell at all. Buyers also come into the market, each with a different price in his mind that he will pay rather than go without the article. It is clear that if the highest price of the buyers is less than the lowest price of the sellers, no sale will take place. Also, if the highest price of the sellers is below the lowest price of the buyers, it is clear that all the articles will be sold. In practice, it is assumed that the lowest selling price will be below the highest buying price, and the actual point of contact will lie somewhere between these two figures. This point of contact forms the ”marginal” price and determines the price of all the other articles of the same kind and quality in that market. In this theory the different prices demanded are taken as representing the different degrees of utility the articles have for the different buyers. Therefore the price at which the actual sale takes place—the "marginal” price—expresses the "marginal” utility of the articles and so determines their value.

It is easy to see that here there is complete confusion between value and price, a confusion that runs throughout the whole of Böhm-Bawerk’s writings; whilst two other points in the theory strike the reader at a first glance. One is that we are here given our old friend, "Supply and Demand," in a slightly different dress, as the explanation of price, for the “marginal" pair are the same couple who effect a sale under the theory of Supply and Demand. The other point is that value, according to this theory, is entirely a question of individual estimates, or, to use the technical term, it is subjectively determined.

On the first point, it is plain as a pikestaff that this “marginal" theory has no connection with the facts. As far as the vast majority of the articles produced for sale are concerned, the prices are fixed beforehand and there is no question of bargaining at all. One does not go into a modern store and start arguing what price one shall pay for an article. The price is there already "marked in plain figures" for the customer to see. Moreover, it would be absurd to suppose that the “marginal” utility or "subjective valuation" of a given article will be alike at different places at the same time. But the prices are the same. And there still remains the criticism that was used against the older theory, namely: When Supply and Demand equal each other, what then determines the price? When the prices of the "marginal” buyer and seller are equal, what determines that price? This question is not even mentioned, let alone an answer attempted, by the Austrian School.

On the second point, that value is a “subjective" question, it is evident that as each individual’s “subjective" estimate will be different from the others, we have here no actual basis of general value at all. Such an “explanation" is a good illustration of the mental bankruptcy of the apologists of the Capitalist class. But it is on the question of interest that this bankruptcy is most clearly seen, and for good reasons.

Capitalists' profits form the danger zone of orthodox economics. It is useless to deny, however “subjectively,” that profits exist. So they must be "explained.” But how? Every apologist answers differently, until Böhm-Bawerk feels impelled to write a large volume to show that they all are wrong. Then what is his explanation? Truly wonderful.

The Capitalist has resources and can buy raw materials, machinery and other plant necessary for the production of articles for sale at some future time. The worker has only his labour-power to sell, and as he is without resources he cannot wait till that  "future time" when the articles will be sold. Moreover, in common with other people, the worker places a greater value upon a present satisfaction or utility than on a future one. The difference between the present and the future valuations is the source of the Capitalist’s interest, and the justification for that interest is found in the time the Capitalist waits before receiving it. An illustration may make this point clear. For the sake of simplicity we will only deal with the worker’s part in production, leaving on one side the question of raw material, plant, etc.

Let us assume that it takes a month from the beginning of the manufacture to the selling of a given article, and that the article sells for 20s. As the worker cannot wait for a month, he would consider the present value of a smaller sum—say 15s.—as equal to the future value (a month hence) of 20s. So the Capitalist, who is a thought-reader, advances the worker 15s. to-day for work that will produce 20s. a month after. There is, of course, no robbery, as the worker is quite ready—nay anxious—to take the 15s. to-day rather than wait a month for 20s. If the worker could wait the month, he would receive the 20s., and interest and profit would vanish!

Why does he not wait? Because he has no resources, says Böhm-Bawerk. Exactly. But why has he no resources? Here Böhm-Bawerk becomes suddenly shy and offers no explanation. The answer is simple. It is because he is forcibly prevented from obtaining any resources by the power in the hands of the Capitalist class.

It is not a question of the worker’s "subjective” valuation of either present or future utilities at all. It is the fact that the only alternative he has to accepting the Capitalist’s terms is starvation. As the worker is forcibly restrained from any access to raw materials or machinery and tools to work upon that material, he is unable to accumulate any resources and must therefore sell his services day by day. It is the difference between the value the worker produces and that value that he receives, that forms the source of surplus value. Interest and Profit are parts of this surplus value, and hence are the result of the robbery of the worker by the Capitalist.

These and several other questions, such as the “abstinence” of the Capitalist, and whether he “advances" the wages of the worker, are dealt with very fully by Bukharin in this volume. The book, however, is one for the student rather than for popular reading. German writers, as is well known, are very fond of cumbersome words and long and involved sentences. Böhm-Bawerk’s writings follow the national model, and Bukharin, apparently, enjoys using the same sort of phraseology, with the result that the book presents a somewhat fearsome appearance to the lay reader. As a technical criticism of the Austrian School, the book can be fully recommended to all who refuse to he frightened by the terminology used.
Jack Fitzgerald