Why they want more unemployed! (1966)

From the November 1966 issue of the Socialist Standard

No one would deny that the theories of the late Lord Keynes had a big influence on the views of economists, the programmes of political parties and the policies of governments and their financial institutions. For 30 years they were nearly all Keynesians, or so intiminated by the fashion that they would not or could not challenge it—all except those like the Socialist Party of Gt. Britain who remained convinced that the very different approach of Karl Marx was the sound one.

More recently Keynes has been more and more criticised by those who first followed him and the ironical thing is that just as unemployment gave Keynes his opportunity so unemployment, though in an inverted sense, is proving his undoing.

Keynes was studying and writing in a period of heavy and prolonged depression. He, like many other observers of capitalism, thought it absurd that people should be in want while there were idle men and idle machines waiting to be used. He also saw how politically dangerous it was. Through inability to abolish or seriously reduce unemployment governments were thrown out, political parties undermined and reputations ruined and, as he saw it, this situation helped to encourage the rise of dictatorship exploiting discontent and bent on war.

He argued that it was possible for governments to have positive policies for increasing production and maintaining more or less full employment, and under his influence it has become normal for the political parties, Liberal, Labour, Tory and Communist, to proclaim “full employment” as a priority aim.

Keynes was well aware of the way capitalism had, for a century or more, gone through successive phases of boom, crisis, depression and then boom again. What in effect he claimed was that if a government had full information of what was going on in industry and marketing it could always find the appropriate action to take to avoid all but minor fluctuations: in effect it was a claim that boom conditions could be made permanent.

To many admirers of Keynes the course of events, particularly after the Second World War, seemed to be positive proof that Keynes was right in theory and that his theories were politically practicable. They pointed to the generally low level of unemployment in Britain and to the way particular crises were handled, apparently with success.

The “proof’ however, is a hollow one. In the first place low unemployment has not been continuous even in Britain; it reached over 900,000 early in 1963 and no one could say that that was full employment: In many countries very heavy unemployment has gone on for prolonged periods: indeed according to the latest annual report of the International Monetary Fund (Daily Mail, 6 September)

virtually all industrial countries have been enjoying high levels of employment for the first time since the war.

And the I.M.F. is, as the Mail points out, gloomy about the future of world trade.

It is also unproved that the relatively high post-war levels of employment have been due to the Keynesian policies of governments. As Enoch Powell has pointed out (with reference to governments of his own Tory Party) the evidence is that events took their normal course irrespective of government policy: the setbacks endured for a while and disappeared just as they would have done anyway.

And a prominent American Keynesian, Professor Hansen, argues in his book, A Guide to Keynes: “full employment was, however, primarily the result of the war and post-war developments, not of conscious policy.” He was referring to the early post-war years, but some of the developments he had in mind have continued and have been added to by the vast industrialisation schemes in the new countries of Africa and Asia.

But in many countries, especially in Britain, doubts about Keynes have sprung not from heavy unemployment but from the problems of full employment and in a way that is proving disastrous for the Labour government.

The Labour Party has always claimed to have a special interest in avoiding unemployment. They believed that it ought not to exist and need not exist. For the 1959 election, when the late Hugh Gaitskell was party leader, they published a glossy pamphlet The Future Labour Offers You, which contained a scathing criticism of the Tories.

   The great ideals of jobs for all first became a peace-time reality under the 1945 Labour Government Under the Tories fear of the sack has returned. Tory ministers have now had to admit publicly that they deliberately caused the sharp increase in unemployment. In the Tory view, unemployment is the remedy for soaring prices.
    Labour totally rejects the repugnant idea that the nation's economic troubles can only be cured by throwing people out of work. The first objective of the Labour Government will be to restore full employment and to preserve full employment. This is the prime purpose of our plan for controlled expansion.

With the newspapers now full of reports of the thousands of men and women being declared redundant or put on short time, as a result of the government’s credit squeeze and other measures, the Selective Employment Tax designed to induce employers to get rid of workers in the service industries and government statements that they expect their policy of “redeployment” to produce not more than 450,000 unemployed it is not necessary to labour the point that Gaitskell’s attack on the Tories has been a boomerang.

But a wider question is involved. The Keynesians (and the Prime Minister) had habitually scoffed at the Marxian view of the way capitalism works, especially Marx’s view that capitalism needs unemployment, “an industrial reserve army.”

In the past, when some Tories and spokesmen for the employers declared that capitalism needed more unemployed, the Labour Party called it a natural exhibition of contempt for the workers. Now, when Sir Gordon Newton, Editor of the Financial Times, writing in the Director (August, 1966) declares, “I doubt myself whether anything which does not produce a level of unemployment of two per cent—will be adequate,” he is but echoing the Labour Prime Minister.

Marx wrote about unemployment in Capital, Volume I (chapter XXV) and argued that unemployment is, “a condition of existence of the capitalist mode of production." It helps of course to keep down wages and to make the workers in employment work harder than they would if not threatened with unemployment. Also, as Marx put it, the capitalist, in order to take advantage of the sudden opening up of new markets, must have “the possibility of throwing great masses of men suddenly on the decisive points without injury to the scale of production in other spheres.”

Observing the agitated “policies” of the Labour Government to “redeploy” labour so that exporters shall be able to get the men they need to take advantage of foreign markets it is obvious that they are trying to grapple with exactly the kind of situation Marx described—and the only way they can find to do it is, in the last resort, nothing more than the traditional, capitalist way. Those who believed they could run capitalism without unemployment end up by trying to create some.

Marx was right after all, and the moral for the workers is not more delving into Keynes (who did not even claim to have the answer to this particular problem) but to concern themselves with getting rid of capitalism.

Edgar Hardcastle

The wages system (1966)

From the October 1966 issue of the Socialist Standard

The basic fact of social life today is the ownership of the materials and instruments of production by a small class. The rest of us depend on this class for a living. To live we have to work for those who own. The places where we work are not ours; nor is what we produce. We are needed by the owners because we can work. The ability to work is, to all intents and purposes, our only asset. We cannot use this ourselves of course since we have no materials or instruments of production. But it is of use to those who do own the places of work. Without it their factories, farms, mines and mills cannot be operated. For selling our ability to work to these people we are paid a price, variously called a wage or salary.

Wages (salary is just a fancy name in keeping with a silly distinction among us) are thus a price—the price of human energy. While potatoes are sold by weight and petrol by volume human energy is sold by time. Houseroom too is sold by time. The buyer pays for the use of some rooms for, say, a week. The buyer of human energy likewise pays for its use for a certain time, perhaps an hour, week, month, year or an even longer period.

We live, then, by selling our energies. Our standard of living depends on the size of our wage packet or salary cheque. It is thus worth finding out what it is that fixes the price of what we sell.

After working, that is using up our energies, we are tired. Before we can work again we must recover. This is a biological process for which we need food, clothing and shelter. The cost of living is the cost of keeping ourselves in efficient working order. It is the sum of the costs of buying the food, clothing and shelter we must have to be in a fit state to work. There is also the cost of keeping a family. A man can only work for so many years. The cost of keeping a family is like the depreciation fund for a machine. With this fund a new machine can be bought when the old one is worn out. So our children replace us when we are worn out.

What we can produce in a week is worth much more than it costs to create our energies for a week. This, of course, is why those who own the instruments of production buy our energies. The difference between what we cost and what we make is the source of their income.

But, are there not greater differences between the wages of workers; some get only £10 a week while others get £50? Why is this? Just as there are various qualities of apples so there are various types of human energy. Some of the many different kinds of human energy are more costly to create and keep than others. So they tend to sell at a higher price. Any cost of training, that is of improving the quality of the human energy, increases the value of that energy.

But, over time, don’t the wages of workers of the same skill vary? This is true. As with other things that are bought and sold the price of human energy varies with supply and demand. These changes take place around the value of the particular type of human energy.

There is, however, one peculiar feature of wages that doesn’t apply to other prices. The demand for human energy depends on the prospect of profits. If the owners don't think they can sell what we produce at a profit they won’t employ us. If, on the other hand, they think the chances of profits are good there will be a strong demand for workers, which will tend to raise wages. But because profits are made out of our unpaid work there is a limit to the level to which wages can rise. If wages rise too high profits are threatened and the demand for workers falls off. This is why the ups and downs of wages coincide with those of the business cycle.

The influences given so far—cost of living, training, the business cycle—might suggest that the general level of wages is fixed by iron laws over which we have no control. These influences are decisive but they are not the only ones at work. We can affect our standard of living in a small way by union, by joining with others to try to raise wages and get better conditions of work.

In fact, the system under which we live forces us to do this. It makes us struggle over the price of our energies. But this struggle is not just a dispute over a price or a contract of sale. It is far more than this. It is part of the struggle which is going on all the time, between those who own and those who work, over the division of wealth. Trade unions, employers’ organisations, collective bargaining, strikes, States of Emergency, wage freezes and the like are expressions of this struggle over how much of the wealth that is and has been produced should go to each class. Trade unions are one of our weapons in this class struggle. Persistent trade union action is necessary to keep a given standard of living and, when the unions are used as such, they have the full support of the Socialist Party of Great Britain.

Just as our unions are weapons we can use in the class struggle so the state machine which the owners now control is one of the weapons they can use. The present wage freeze will show this. The power of the state is being used to counter the pressure of the unions.

Economic union is not our only weapon in the class struggle. The vote could be a far more powerful one. For when we see through the present system we can use the vote to send our delegates to take control of the state. We can then use it in our interests to force the owners to hand over the materials and instruments of production to the democratic control of the whole community.

The wages system is a system that lowers our working ability to the level of mere things bought and sold. It is a system that shows up our dependence on others to live. It is a system that deprives us of what we, together, produce. But it needn’t last for ever.

When once the materials and instruments of production belong in common to and are democratically controlled by everybody, then classes will have been abolished. With this will go also the buying and selling of human energy. All will be socially equal. All will have free access to the things they need to live and enjoy life. The wages system will be replaced by the free co-operative work of everyone to make what people need, as individuals and as a community.

Adam Buick

A Few Words on Fascism (1934)

Editorial from the April 1934 issue of the Socialist Standard

The cause of the triumph of the groups that have gone under the name of “Socialist” in the years immediately following the war, and the reason they failed to hold the support of the people afterwards, has not yet been properly appreciated by those who aspire to lead the labour movement. Labour leaders of one kind or another attribute their declining influence to what they look upon as a peculiar, powerful and savage bogeyman, “Fascism,” and do not ask themselves what Fascism really is and why it claims adherents so rapidly even among working men. The savagery attributed to the various Fascist movements is by no means new, it has been a common characteristic of the social struggle for ages and is not a particular and pernicious post-war growth.

Capitalism was born and flourished on brutality, both at home and abroad. As far as England is concerned, what a record of brutality is contained in the history of the treatment of its factory and agricultural slaves during the last century, of the treatment of the Irish peasant, the African and the Hindu. What recent proceedings have surpassed in brutality the wiping out of the Communards in France sixty-three years ago ?

Apart from other considerations the point to be kept in mind is that all privileged classes, from the beginning of their existence in the distant past, fight savagely against all attempts that they believe will encroach upon their privileged position and, where the means are available, they will continue to do so. In modern times the privileged groups are neither capable enough nor numerous enough to do the work of suppression themselves and  so they beguile sections of the oppressed into the belief that the interests of all are identical with the continuance of privilege and they endeavour to weaken the movement for change by setting other sections at loggerheads.

Such being the position the only thing that will combat capitalist movements is clearness of understanding—the spread of knowledge among the workers. Temporary expedients that give a movement size without solidity only raise false hopes and leave the way open for the inevitable collapse. The desertion by workers from the labour parties of England, Italy and Germany was, to a great extent, due to the compromising policies of those parties. On the other hand, had those parties been soundly based, had compromise been excluded, the parties in question would have been smaller, but solid; they would have raised no false hopes nor brought to many the despair they have done.

While parties claiming to be Socialist ally themselves with capitalist groups to gain temporary ends, working men will not draw a line of fundamental distinction between any of the groups that solicit their support. While their suffrages are asked for in support of reforms that do not make any fundamental difference in their social position, the workers naturally tend to support the group that makes the most enticing promises, whatever be the label—in fact, the newer the label the better. Those who do not fulfil their promises are temporarily deserted. The capitalists know this quite well, hence their misuse of the term "Socialist” so much lately.

That is all there is to it at the bottom, and Fascism is no more permanent than the other reform movements that have been used to stave off the inevitable abolition of capitalism.

Whatever happened to Free Trade? (2003)

From the January 2003 issue of the Socialist Standard

One of the illusions that modern capitalist governments like to foster is that they are in favour of “free trade”. Mr Bush, Mr Blair and just about every political leader in Western European countries, thunder on about its wondrous benefits. They pose as champions of liberalisation, of tariff busting and global freedom of trade. The reality is somewhat different.

“The past year has been lousy for free trade. The Americans have ratcheted up farm subsidies and slapped new import duties on foreign steel. A European summit made little progress towards reform of the common agricultural policy (CAP); indeed, the French managed to secure agreement to preserve CAP spending at present levels. Poor countries are despairing over the outlook for the Doha round of trade negotiations, which was intended to benefit them. Just this week, negotiations between rich and poor countries over access to patented drugs through “compulsory licensing”, a big aim of poor countries, stalled” Economist, 30 November.

So how do we explain this apparent contradiction? The politicians are all for anti-protectionism and yet at the same time we get more and more trade barriers, more trade quotas and more restrictions on imports According to Mr Bush's trade representative Robert Zoellick all this can be changed. He is a man with a plan and he states his plan in a very concrete fashion.

By 2010, WTO members would reduce all tariffs to below 8 per cent, and scrap altogether those that are now less than 5 per cent. By 2015, all tariffs on manufactured goods would be reduced to zero. Splendid free trade rhetoric you may think; but of course it is all about manufactured goods. Mr Bush's trade representative remains strangely silent about the farming industry. For a very good reason.

“Sadly absent from the plan is any more discussion of farm goods, which form the basis of the poorest countries economics. Admittedly in July Mr Zoellick put forward a proposal to scrap many farm subsidies, but there is little sign that American farmers will support this. Rich countries' tariffs on factory goods are already low – typically less than 5 per cent – while their subsidies and tariffs on farm goods are in general far higher.”

So let us get this quite clear. Some members of the owning class, whose wealth is dependent on the exploitation of a highly skilled industrial work force, are in favour of free trade in such goods that they can sell cheaper than their competitors, but opposed to free trade when they fear that their competitors may undersell them. Politicians are just so many hired hands, hired to be in favour of free trade one minute and opposed to “dumpimg” the next, depending on their master's whim.

As a member of the only useful class in society – the working class, don't you think it is time to get rid of your exploiters and their apologists?

Richard Donnelly

The myth of "the nation" (1997)

Editorial from the August 1997 issue of the Socialist Standard

How is one nation distinguished from another?

What makes somebody a member of one nation and somebody else a member of another? Is it the language they speak? Their culture? Where they live? Where they were born? Where their parents were born? Nobody has even been able to come up with a coherent definition, certainly not the political commentators and sports journalists who are always mouthing the word.

The nearest sensible definition is that a nation is made up of those who are either the subjects of some already-existing state or the future subjects of a state that some political group wants to set up. In other words, that it is an artificial, political division imposed on people by the fact that under capitalism those who own and control the worlds resources are organised geographically into separate states.

Far from the nation being a pre-existing grouping which finds expression in a separate state, it is the other way round. It is the various states into which the world is artificially divided that create nations, by inculcating into their subjects the idea that they are a separate human grouping with interests separate from those of the rest of humanity. Nationalism is the ideology of ruling classes, actual or would-be.

Under capitalism there are indeed groups which do have separate interests: precisely the ruling classes which control these states. But this doesn’t apply to us, the subjects of these various states. A worker in Britain or India or Russia or South Africa does not have a separate interest from workers in France or Pakistan or Germany or Argentina or anywhere else.

The true situation is that each so-called nation-state is divided into those who own and control the means of production (the ruling class) and those who don’t and have to work for them (the rest of us). While different ruling classes do have separate interests—which lead them to equip their states with the most destructive weapons they can afford and whose clashes of interest over raw materials, markets, trade routes and investment outlets are the cause of modern war—we, the workers, do not.

We are the international working class and we have a common interest. To unite against ruling classes everywhere and to establish a world community based on the Earth s resources being the common heritage of all humanity where every human being will no longer be a subject of one or other artificial state but where, wherever we live or work or whatever our language or culture, we will all be citizens of a united world.

I'm not interested in politics (1966)

A Short Story from the September 1966 issue of the Socialist Standard

The inexperienced young speaker had been on the Socialist Party platform for about ten minutes. Most of that time had been spent talking to thin air, and he was becoming disheartened. In desperation he called out to someone of about the same age who was passing by.

“Excuse me, do you mind coming over here and chatting for a bit? I’m getting rather lonely up here. 1 shan’t keep you long—I only want to talk to you till I’ve got an audience, anyway.” Surprisingly, the passer-by obliged.

"Who's this mob you're speaking for?” he asked.

"The Socialist Party of Great Britain,” replied the speaker, “not to be confused with cheap imitations.”

“Well, you're wasting your time with me. I'm not interested in politics.”

“That’s O.K. Neither am I.”

“What are you doing up there, then?”

“I’ll explain. I’m up here because I happen to think life’s pretty scabby.”

"You sound very bitter. What makes you say that?" 

“Well, certain things I think we might agree about. Work’s the biggest moan for a start. I don’t suppose I’ve been going to work any longer than you, but I'm fed up already with the way my life revolves around it. 

"Up we get at some uncivilised hour when the alarm clock goes off, and after that the whole day is regulated. Some stuffy office till the best hours of the day arc gone—in winter you don’t even see daylight except through the window. I spend the majority of my waking hours doing something I'm not interested in, and my own life can only begin in the few hours when I’m not at my job. Even then my activities are limited because I'm constantly aware that I must be up in time to go back to work the following day.

“And that’s not the worst of it. You and I are going to have to do this five days a week, 50 weeks a year, for the next 40 years or so. And if you want to know what the result of the process is just look round at our parents. I sometimes look at my own father and wonder what he's got to show for a lifetime’s hard work. Answer: a mortgage round his neck, callouses on his hands, and me—hardly a great accumulation. You might as well say he's ended up with what he started out with—nothing.

"But on the other hand he's been through two world wars and a slump, so a whippersnapper like me can't tell him anything. Whether our generation ends lip with this big-headed attitude remains to be seen."

"Well, you haven't told me anything yet. I do agree that life’s pretty rotten in the ways you’ve said. But that doesn’t explain what you’re doing up on that platform. I thought you would consider your time too precious to waste.”

“I’d like to explain, but I don't want to keep you out late. I expect you’ve got to go to work tomorrow yourself.”

“Of course I have. So has everyone else.”

“Well not quite everyone; Some of those people who are so wealthy they don’t need to work, probably won’t for a start.”

“You mean the bosses?”

“Yes. Not the managers, who probably put in more hours, unpaid worry included, than you or me. 1 mean the people who actually own all the industries in the country. They are few in number—about 10 per cent of the population— and for that reason are very rich.

“Now don’t you feel slightly peeved that there are people in this privileged position? They don’t have to put up with the same dull routine as we do.”

“I suppose so, but I can’t do anything about it, can I? And anyway, good luck to them, they must have worked some time to have got what they have."

“No. First, it’s not strictly true that members of this privileged class must have necessarily worked to own all they do. A great deal of their wealth is inherited. But in any case, let’s ask ourselves how these fortunes are made in the first place. After all, they’re so huge it seems unlikely that they are made simply by living a frugal life.”

“You tell me then."

“Well, what I want to suggest is that these fortunes are made out of mugs like you and me.

“In any industry, the workers produce more in terms of wealth than they receive as wages—because they are not paid for what they produce, but just enough for them to live at a certain standard of living. This is then used up and then back we go to work again the following week. In other words, it’s because wages, on an average, only provide us with enough to keep alive and healthy—plus enough to reproduce sufficient offspring to carry on the job of piling up more wealth than we ever see—that we have to perpetuate the agony in the way I've described. And it is the difference between this amount and the amount actually produced by workers which accounts for the profits of the owners. So we also perpetuate our compulsory generosity at the same time.”

“But even if all this is true, it doesn't get us very far. After all. these people do own everything, and even if I agree that their position depends on exploiting us, we can’t do anything about it by shouting our heads off on a soap-box."

“This is the other point you made a moment ago, and I must say I disagree with you. For a start it depends on how many people listen to what you say on the soap-box.

“Now the present system, and the way it is run. depends entirely on the effort of people like us, who have to work. We run the whole show from, lop to bottom. For that reason, if all of us united together, it would be in our power to set up a system where there would not be the rat-race that exists at present.”

“What do you suggest—shooting all the owners or something!"

“No. Even if that were a practical possibility it would only result in other people taking over their privileged position. What I do seriously suggest is a complete and fundamental change in the way we run our lives at present. I suggest that we set up a system where we all co-operate to make necessary work as pleasant as possible and our conditions of life the best possible, too. This, in turn, I suggest, can be done by establishing a society where all wealth is owned in common.”

“It sounds marvellous. How are you going to do it?"

“No. How are YOU going to do it. 1 can’t do a thing on my own, and neither can the Socialist Party. What is needed is a majority of people like us to do something.

“And this brings me back to what 1 said about not being interested in politics. 1 joined this party only because I realised that my own interests are identical with the interests of 90 per cent of people in society; and that all of us can only achieve an appreciable improvement in our position by political action.

“This doesn’t mean going into Parliament and forming a government. Rather it means going into Parliament to end the need for a Parliament at all! As far as the hours spent there by the professionals concerned, I find it about as boring as you do. But for all that it’s very important. It is from Parliament, you see, that the system of private ownership is ultimately run. The government of the day deals with affairs which affect the owners of industry as a class rather than as individuals. Hence all the time spent on finance, influence and control over whole industries, and so on. All this will go when private ownership goes.

“Now one day, we hope, this is a task for which the Socialist Party can be used. It doesn’t run for office, as all the other political parties do, since they clearly don’t want to abolish property society. It exists as a vehicle which the population can use for ending property society, if it decides to, by sending the party’s delegates to Parliament for that purpose.

“This is the reason, and the only reason, the Socialist Party contests elections. We always lose, but that doesn’t mean to say we’re wasting our time. We expect to lose elections until enough people have accepted the arguments for the radical change I’ve been talking about. And by contesting elections we help to propagate these ideas. So at this stage we are mainly a propaganda organisation; that explains what I’m doing on this platform.”

“But your party can’t be very powerful. I hadn’t even heard of it before tonight."

“Well, we’d be very fortunate if that was all that was wrong! But I find myself in the following position, and I suggest that whether you realise it or not, so are you. I can see that there can only be a radical change in the way I must lead my life if there is a corresponding radical change in society. I recognise that this must be done ultimately by a majority of the population bringing about the kind of change I’ve indicated.

“Now I agree with you that the task seems almost hopeless. But there is a slim chance, and so far as I'm aware the only organisation which gives voice to these ideas is the Socialist Party of Great Britain.”

Keith Graham