Not enough gold? (1963)

From the December 1963 issue of the Socialist Standard

We are being asked to concern ourselves with another crisis, caused this time by the decline in the American gold reserve and by the steps the American Government proposes to take to stop the loss.

The alarm was sounded in an article in the Economist of July 27 of this year, and the problem has since been discussed at conferences attended by financial authorities of ten leading industrial countries at Washington in October, followed by meetings in Paris last month.

A natural reaction of those who are unfamiliar with the intricacies of the problem is to leave it to the experts to tell us what to do. Unfortunately for that view the “experts” are unable to agree on the solution, or even on the problem. As recently as a year ago the late Per Jacobsson, Managing Director of the International Monetary Fund, speaking in Washington, said there wasn't anything to worry about. The Daily Telegraph on September 18, 1962, reported him as saying that “there were indications the world was approaching a state of economic equilibrium solid enough to withstand monetary tension." In particular he believed that it would be possible "to assure a stable exchange rate structure without altering the price of gold," and that "the ample monetary reserves of individual countries, together with central bank credits, and the increased facilities of the Fund, provided formidable lines of defence against any pressures that might arise.”

But the Economist article, referred to above, denies everything that Dr. Jacobsson said and demands early action to do the things he said were not necessary. It also threw in the interesting titbit that the banking experts do not know their job at all—"The difficulty lies with bankers all over the world who still do not really understand modern monetary economics.” (It will be interesting to look later at some of the odd economies of the Economist),

The Financial Times on September 9th added the further observation that the central bankers (who according to the Economist don't understand what they are doing) cannot ever agree among themselves. It pointed out that while the bankers of the Bank for International Settlements "dismissed the problem of international liquidity as artificial,” the other lot in the International Monetary Fund "takes a very different line," and the paper calls on governments to take action to stimulate demand. The Financial Times actually quotes the late Dr. Jacobsson as having urged courses the reverse of those he was advocating in September, 1962. So much for the experts.

What then is the problem? It is a truism to say that the exports of goods and services of all the countries in the world balance the imports of all the countries in the world: two ways of looking at the same thing. But in practice any one country may at a given time be exporting insufficient to pay for its imports, or may be exporting more than enough to pay for its imports: again, the total “surpluses ” of exports over imports balance in amount the total "deficits."

What then happens to a country which is importing more than it can pay for by its exports? If it had large gold reserves or reserves of dollars or other currencies it might use them to pay for the excess of imports. Or it might pay for them out of loans or gifts or capital investments from one of the countries running an excess of exports over imports: the United States is such a country, in spite of which it is in difficulties. American exports do exceed its imports, but the amount of American money spent abroad in aid, loans, investments, tourist spending and the maintenance of armed forces has been so great that the huge American gold reserve has been running down at the rate of $3,000 million to $3,500 million a year, and the American Government proposes to cut its foreign spending deficit by that amount. The Economist admits that in theory this should not matter because other countries running a surplus of exports could themselves step up their own foreign loans, investments and did to the countries running a deficit. "But everybody knows that the pattern of deterioration will not work itself out with this marvellous neatness, and that all the finance ministries of the world are not sufficiently enlightened to react to it with absolute logic."

Instead, thinks the Economist, the developed countries which could step in to fill the gap will not do so but will start cutting their imports and production to protect their own reserves of gold, etc.; and the underdeveloped countries will have to cut their own development programmes because the capital they need from outside will not be forthcoming. Then there could be a general world lessening of trade, with an increase of unemployment as has happened so often in the past century and a half.

To Socialists this is just another demonstration of what an anarchic, unstable and wasteful system capitalism is, and of the need to end it and get the world operating on sane lines. Not so to the Economist and the rest of the experts. For the writer in the Economist, “the best and most idealistic method” is not the commonsense one of ending a system which does on repeating crises of this kind but the idea of establishing "some new international central bank that would create some $3,000 or $3,500 millions a year of new deposits with itself which it could put to the credit of underdeveloped countries."

This makes sense to the Economist because they believe that it is all due to there not being enough money, but while the Economist waits to form still another bank to offer to lend still more money, the Guardian city editor on September 30 was reporting that one of the existing two international bodies, the World Bank, is facing the dilemma of having money to lend but not being able to find borrowers to whom it is safe to lend it:

  The problem is not a lack of money but rather a lack of borrowers—at least of borrowers who can meet the stiff terms on which the bank has so far always insisted when making loans.

Despite this the Economist believes that there is not enough money about and that this is due to scarcity of gold:
 There is at least some element of truth in the ridiculous thought that if some aged prospector in Australia in the last century had made a luckier strike in the outback, or if the ancient Egyptians had given the first mystical monetary significance to some commodity which had subsequently proved to be more easy to produce than gold, we would not now face quite the same danger of unnecessary restriction of world production and trade as we face today.

Which goes lo show how little the Economist understands about the capitalist system which it defends so stoutly. During the past 150 years capitalism has boomed when gold production was rising and when it wasn’t, and slumped into depression when gold production was rising and when it wasn’t. And in the course of history governments have indeed tried some other commodities, including silver, without in any way avoiding booms and slumps.

What the Economist does not recognise is that the exchange rate between commodities, including gold and silver, depends basically on their values. The total world output of silver, measured by the tonnage produced, is six or seven times the output of gold, but the value of gold (on the current price relationship) is about 28 times the value of silver, ounce for ounce. So if the world used silver for its reserves instead of gold, or if gold were so plentiful than an ounce of gold could be mined as cheaply as an ounce of silver, the gold or silver reserves of the world would need to be something like 28 times as large by tonnage as they are now, the price of each ounce being one twenty-eighth of the present price of gold. The Economist would consequently still be saying, during recurrent balance of payment difficulties, that it was all due to the insufficiency of the then not-so-precious metal.

In the meantime, the Russian Government is helping to lessen the immediate problem by using the hundreds of millions of dollars of its gold reserve to buy wheat in Canada, U.S.A. and elsewhere because of the failure of the Russian harvest. This throws light on the real nature of the problem. Vast quantities of wheat and other foodstuffs have been produced in those countries and held in store because it was surplus to market demand and could not be sold profitably.

Russian gold has been there all through the years that the American Government has been holding the unsaleable stocks, and the Russians could have bought if they had wanted to. They didn't want to because they, too, had surplus foods in years of good harvest. And all the lime, side by side with private hoarders who hold enormous quantities of gold, there have been hundreds of millions of people (including some in America and Russia) who would have been glad to have more food but lacked the money, and they lacked the money not because of a mistake by the ancient Egyptians but because capitalism divided the population into owners and non-owners, into rich and poor.

The ideal and only practical solution to a problem that capitalism cannot solve (except in the temporary fashion of each expansion of production and trade being followed by a contraction) is to get rid of production for profit and for the market.

Edgar Hardcastle

What is Socialism? (1963)

From the December 1963 issue of the Socialist Standard

The Socialist Party is often criticized for not being “practical ” or for not putting forward any proposals for today. But this is not the point.

The Socialist Party does not exist to campaign for petty reforms within the capitalist system. It is the instrument which the working class can use to gain control of the machinery of government. Once in control the workers can use this machine to dispossess the capitalist class by declaring all the means of life the common property of all society. This will allow the workers to take over the industries and to keep production going in the ways they will have worked out beforehand.

As soon as the last capitalist has been dispossessed then classes will have ceased to exist. It will no longer make sense to speak of a working class and a capitalist class. Everybody, including the ex-capitalists, will have the same status as free producers. Not that things will immediately be startlingly different from what they were before. Production will have to be kept going. Although such jobs as bank clerks and ticket inspectors would disappear, engineers would remain engineers and, perhaps, railwaymen, railwaymen.

The main point is that we today don’t know and can't really imagine what conditions will be like immediately prior to the capture of political power so that we can't say exactly what the problems that will have to be faced afterwards will be. But we earn say this. The conversion of the means of life from the private property of an exploiting class to the common property of society will establish the framework within which can be solved once and for all the problems which the working class face today precisely because they are the working class. Even today we can see that the world is quite capable of producing enough for everybody if only production were arranged with this object in mind. Socialism will allow this to happen.

The economic problem which Socialist Society will have to solve is that of organizing those able and willing to work to produce the food, clothing, houses and all the other articles men need to live. This problem is by no means small and it is important to realise what the problem involves. It has three aspects:

First, what articles are to be produced? Clearly there will be room for a wide choice here. Socialist society will have to decide what it needs most.

Second, how shall these articles be produced and by whom? There is also a wide range of possibilities here: mass production, handicraft and the many combinations of both.

Third, how shall those articles produced be divided among the world’s population?

Though capitalism faces the same problem these questions are not consciously asked and the answer has always been provided by the impersonal workings of capitalism's laws. Socialism will allow society to ask and answer these questions consciously. This is what planning means. Men will have control over the means of production to use them as they think fit. Under capitalism there can be no genuine planning as the market is the real king. Firms turn out goods and hope the market will absorb them. Socialist society will estimate what will be needed in advance and then produce it. Allowances for changes in taste and natural disasters can be made by producing more than is needed as a kind of insurance.

One of the most important problems to be faced is how much of production should be articles to be consumed directly by the people and how much should be devoted to renewing and expanding the factories and places where the other articles are produced. The point is this: the same problems which the laws of supply and demand and capital accumulation arc supposed to solve under capitalism will still have to be faced by society under Socialism. However, the abolition of private property and the conversion of the means of life into the common property of mankind will allow society to set about tackling questions of economic organisation in a scientific way. This emphasis on planning means that the information available will have to be the most accurate possible. Social planning will also raise the question of how much social control should be exercised from the centre and how much from the locality. This is a further problem Socialist society will have to meet. Socialism will not, of course, be a static society. Changes in ways of producing things, ways of living and behaving will continue. Just as living patterns have changed under capitalism in the last fifty years or so with the invention of television, wireless and the like so will there be similar changes under Socialism.

As soon as the capitalist system has been abolished distribution will be direct. This means that money will not intervene. It will have become redundant as soon as common ownership has been established.

How articles are distributed will to a large extent depend on how many articles and of what sorts there are to distribute. It may well be the case that for a short time it will not be possible for people to take as much of every article as they think they might need. The reason for this is simple, it takes time to produce articles and even longer to build factories and cultivate fields so as to be able to produce more. In this situation it would be for people to adjust their requirements to what was available, recognising that such shortages were temporary anyway and that eventually production would match up with distribution as the new society progressively removed the obstacles left over from capitalism.

Another change will be in the field of “government." Government of people will disappear. This means that those parts of the government machine which actually make it a government machine, namely, armed forces, law courts, etc., will disappear as soon as possible after the capture of political power. This does not meant that all administration will disappear; on the contrary; the idea of social control is essential to Socialism. It just means that the coercive government machine will have been transformed merely into a clearing house for settling social affairs. This clearing house will be a part of the administrative machinery through which the economy will be managed.

With the disappearance of politics and the political state will disappear also political parties. This does not mean there will be no disagreements; of course there will. Men and women will directly participate in discussing and organizing production for what they consider to be their own benefit. This is why the Socialist Party insists that you cannot have Socialism without the great majority of people desiring it and understanding its implications. The working class will establish Socialism themselves; they cannot rely on leaders and “experts." So, in addition to common ownership. Socialism means that there will be democratic control of the means of life. Democracy is just as much a fundamental part of Socialism as is common ownership.

This, then, is the Socialist alternative to capitalism. Socialists are not Utopians. We know that such a system is possible. Everything necessary is present save one thing: a desire on your part to have such a system.

Adam Buick

Branch News (1963)

Party News from the December 1963 issue of the Socialist Standard

As in the past, we are making an urgent appeal to Members and sympathisers, to ensure that as many people as possible obtain and read the Socialist Standard. This special appeal is made each December and the subscription form in this issue is a simple way in which to fill in names and addresses, and send off to Head Office with the appropriate postal order. Many of us have saved a few extra shillings to spend, as most workers have some days off at the end of the month. Why not spend some of the savings by sending somebody a years supply of the Standard? It is hoped that new readers will not only pass on their copy, but will order copies to be sent elsewhere. It is well worth trying.

Mid-Herts Group are holding two meetings—one on Thursday, December 5 and Thursday, January 2. Details with Meeting Notices. Recently the Group held a meeting attended by the Central Organiser. It was decided not to form a branch at present, and to attempt to increase activities, e.g., fortnightly meetings (instead of monthly), alternating between Stevenage and Welwyn Garden City, perhaps with the assistance of Wembley Branch members.

Belfast Branch (WSP) has agreed to contest at least five seats in the Municipal Elections to be held next May. Candidates have been selected for three wards—Duncairn, Shankhill and Pothinger. Two other Wards are under consideration. Shankhill and Duncairn have been contested by the Party before, but this will be the first attempt at Pothinger—a Ward where a lot of effort has been concentrated and where Socialist Standard sales are very good. There will be Labour, Unionist and Communist opponents and the Party will take the opportunity of putting the Socialist alternative to all the reformist groups. The campaign has already started with literature sales drives and the distribution of leaflets.

Open-air meetings in Customs House Square are well established with audiences averaging 50 each Sunday. Questions are good and the meetings continue until dark. This behoves well for the Spring and Summer when the party hopes to hold week-night meetings there. The Sunday meetings now commence at 3.30 p.m. Despite weekly challenges, none have been accepted by the Labour or Communist Parties. The local organiser of the N.C.L.C., Mr. Andrew Boyd, has agreed to a Public Debate in the New Year-- "Which Way to Socialism? " Further details in January.

Swansea Branch is active, more so now that several members are settling in the vicinity which makes it easier for the work to be done. Comrade Harris recently gave a talk to the Students of Swansea University College on "Why Socialists should Oppose the Labour Party.” Several articles have appeared in students magazines, written by Party members. Comrades Mellor and Brain recently attended an open-air meeting of the Nazi-Panzer Group and distributed Socialist Party literature. It is hoped, in the near future, to combine a talk in the University with a public meeting in the town. All in all the Comrades in Swansea are optimistic and looking forward to much future activity.

Phyllis Howard

In Youth is Pleasure (1964)

A Short Story from the December 1964 issue of the Socialist Standard

It was on Empire Day, I remember, that I realised Miss Davies' face reminded me of a loganberry.

It was not so much that it was the colour and the shape of a loganberry, nor that it was creased and segmented into countless purple drupes. As I looked up at her that day, I noticed that her long chin was covered in fine silver down which gave it the same musty look as the loganberries which my father grew on the allotment which helped to eke out our frugal budget.

That was a long time ago, in the year when Miss Davies was my class mistress at the cheerless council school which seemed to be built entirely of dark green tiles and chocolate-stained wood, and where the smell of old books and varnish was almost as intimidatory as the cane. Miss Davies was a faded spinster, who clung with a patient obstinacy to the symbols of her sobriety—to her long, plain clothes and her mirror-shined, sensible shoes. Almost certainly she is now dead and I have no wish to be unkind to her memory, for of the race of teachers which inhabited that school she was one of the gentler and more sensitive.

Some of those teachers were little short of vicious in the physical and psychological extremes to which they subjected their pupils. One of them often punched us in the back or the chest. And more than once I sat in hot misery as another of them mocked one of the children for his ragged clothes or his broken shoes.

We never hit back. That school was not in what they called a Depressed Area, but many of our fathers were chronically unemployed. Perhaps some of our parents' docile apathy had seeped into us. Miss Davies seemed to sense our plight—she was careful not to notice a pair of patched trousers and I am sure she felt for us when on Monday morning it was time to pay for the third of a pint of milk we drank each day. Children whose fathers were unemployed got the milk for nothing, and some of us endured tortures of embarrassment as we stayed in our seats while the others lined up with their money.

I for one appreciated her kindness. But children are children. It was a loganberry Miss Davies reminded me of, as she smiled down that Empire Day at the Union Jack which lay on my desk. She must have realised that it was a pitifully cheap thing, but she also probably divined what it had meant to buy it.

It was the custom at that school to hold a parade in the playground each Empire Day, and for this we were encouraged to bring a flag. The local shops saw their opportunity; I had bought mine for a halfpenny at the local cut price drapers. It was made of the shoddiest cloth, roughly coloured, stiffened with dressing and tacked onto a short stick.

I had wrung that halfpenny from my mother, who was then absorbed by the conjuring trick of feeding and clothing several children on a dole of seventeen and sixpence a week. It could not have been easy for her to part with the money. Perhaps she gave it to me so that I should not feel out of things at school. But I fear there may have been other reasons. For although she often did not know where the next meal was coming from, my mother had unbounded pride in the British Empire.

So I got the Union Jack, and I carried it proudly to school, and I took it with me when we spilled out into the black asphalt playground for the morning break. But mine was not the only flag. There were bigger and better ones, and one boy in particular had what seemed an enormous Union Jack.

He began swishing it backwards and forwards in the air, until the other children became gripped by a strange frenzy and went roaring around the playground in a long line, hooting and waving, with the big flag at the front. Years later I recognised the hysteria which caused Simon to be beaten to death in Lord Of The Flies; at the time I only knew that I was uneasy at those frantic children. I pressed my shoulder against the rough brick wall and nervously gripped my cheap little flag.

When, later in the morning, the teachers marshalled us into the parade, some of them admired the big flag, so that the boy who carried it smiled and flushed with pleasure. I held mine tremblingly aloft, and they herded us into the assembly hall for the headmaster to rant at us on the virtues of patriotism and the glorious oppressions of the British Empire.

That headmaster was perfectly suited to the staff he controlled, outdoing them all in pomposity, sourness and cruelty. I am sure that the bitterness of his speech was intended to spoil our half holiday. I went home still clutching my Union Jack, properly browbeaten and reflecting upon what I had been told of the great profit gathering enterprise which had splashed so vast an area of pink across the map and which had, in truth, built so many vast fortunes on such an enormous burden of suppression.

There were other celebrations in that school. One of my earlier memories is of the party on the Silver Jubilee of George V. This happened to fall on my birthday and I can remember wondering why they were serving us lemonade and buns, and trying to convince myself that it was nothing to do with me.

Then there was the annual dirge of Armistice Day, when we were drawn up, just before eleven o'clock, in the gloomy hall to take another dose of our headmaster's hypocrisy. He had survived the Great War and was watching with sterile bitterness as Europe moved inexorably towards 1939. He had nothing of hope or of valour to offer us—only a grating curse upon us, upon Europe, upon the world and the human race.

The staff ushered us back to the classrooms, the chill November afternoon closed in and it was almost dark when we went home. If the woman next door had been generous, there might be some stale seed cake for tea.

It is easy for an adult to be over protective to children and to under-estimate their resilience. My gorge rises when I remember that school, what it imposed upon its pupils and the pernicious nonsense on which it fed us. How many of us survived, in the sense that we have not become race-maniacs, or religious neurotics, or apathetic zombies ?

The bitter fact is that when those teachers were so enthusiastically organising their cheap little parades of cowed children we were all—staff and pupils alike—suffering under capitalism at its oppressive worst. The male teachers were composed of some who had come through the Great War and those who were to be called up in 1939/45. The world was still spinning up and down in slump, when a politician could claim that the problem would be solved when the unemployment figures got down to one million.

The great crash, with its cuts in dole and in teachers' pay was still a recent memory. The staff clung desperately to the gossamer threads of their employment which kept them out of the Labour Exchange. They could afford to wear a suit every day, to take a holiday; the headmaster even ran a very small car. But theirs was an insecure, degraded existence. They too were caught up in something which they detested but did not understand. They had little to thank capitalism for.

The teachers could do nothing about some of the propaganda they put over. They had to give us our Scripture lessons; they had to dish out the official, fatuous version of history (even supposing that any of them were aware of any other). But it is harder to excuse them for the glee with which they organised the patriotic demonstrations. It is hard to excuse the teacher who regularly, before the class, saluted a portrait of the King and Queen. It is difficult to excuse the admiration of the boys' big Union Jack.

For why should an unemployed man, or his children, have saluted the flag? Why should a man who had come through the trenches, and lived to see the politicians promises exposed, be proud of his nationality? Did we not, in our penury, have everything in common with the families of the unemployed in America, or Germany, or France? Was there not something wrong with a social system which created places like that school, with its defenceless children and its warped, frightened, bullying teachers ?

These questions are unanswered now, and they were unanswered that Empire Day as I looked up at Miss Davies. There was deep suffering in the land but the king was on his throne, the pound was worth a pound and the Tories were in with a comfortable majority.

There was no foretelling, then, that the wounds inflicted inside and outside that school might take seed, and one day blossom into a consciousness that we can build a world where children are not oppressed, nor pilloried, nor misled but are allowed to be children while they learn to grow up into co-operative, creative human beings.

Ivan

Who's Against Monopoly? (1964)

From the December 1964 issue of the Socialist Standard

If the pollsters organised a canvass of the electorate on the question “are you in favour of monopoly”? they would get an almost unanimous “no.” But it would mean no more than would a poll asking “are you in favour of right against wrong” or some such loaded question. Monopoly is defined to mean, an “exclusive trading right in a certain commodity or class of commerce or business.” All the political parties declare themselves to be against it. In the recent General Election the outgoing Conservative government claimed merit for what it had done against monopoly and what it was prepared to do “to stimulate the forces of competition which make for efficiency and bring down prices.” The Labour Party didn't think much of this and promised to tackle the problem “at its roots” and to get at “monopoly and semi-monopoly price fixing.” The Liberals, too, are on the side of competition against monopoly, or so they say.

Here we have our first mystery. If three big parties are all against monopoly and have been so since the beginning of the century how is it that there is any monopoly to be tackled? The explanation is to be found in the nature of the social system in which we live. All manufacturers, traders bankers, shipping lines, aircraft companies and so on are in business to make a profit by selling something. The most distressful situation for any one of these organisations is to find that it cannot sell its product because a competitor is in the market with a cheaper one. Faced with declining sales and the threat of bankruptcy the companies that are being driven out will consider banding together for self-protection against the successful rival. He for his part will be expanding rapidly and out of the ensuing struggle there will emerge a smaller number of larger firms, possibly a very small number on the way to establishing a near monopoly. In the years since the war mergers and take-overs have eliminated thousands of manufacturing and retailing businesses. The latest wave has washed away a lot of grocery wholesalers. In an article “Wholesalers Combine or go under” the Financial Times (13 November 1964) states that in the last decade the number of wholesalers in the grocery trade “has tumbled from some 1,200 to just over 700 today.” This has happened as a direct result of competition, first from multiple and chain stores which have their own wholesaling arrangements and were taking business away from the independent shopkeepers (and thus from the grocery wholesalers) and secondly from the increasing practise of manufacturers selling direct to retailers and by-passing the grocery wholesaler altogether.

Concentration of the control of wholesaling and retailing will go further but it has a long way to go to reach the condition of such industries as chemicals, man-made fibres and steel.

The development towards monopoly in any field always provokes complaint that as competition disappears prices will be pushed up, and the demand that the government should do something about it This is not just a problem of this century. For hundreds of years the ceaseless efforts have been going on of sellers to control the supply, and of the authorities to prevent prices being pushed up as a result. It was however accompanied by the formation of monopolies by the government itself as a means of raising revenue. At first this took the form of the government, in return for payment, allowing individuals to have the monopoly of supplying some article or other; later the government operated some services itself, likewise as a means of raising revenue, as in the Post Office. In our day the government raises vast sums through its control of the import production and distribution of alcohol and tobacco; first creating the restrictions behind which monopoly prices can be charged, then skimming off as customs and excise duties the bulk of the monopoly price paid by the consumer.

When private monopolies or semi-monopolies are operating it depends on the kind of product and the extent to which it is in common use, whether the outcry against the monopolies will produce action by the government, to break it up or otherwise nullify it. About the middle of the last century railways were the only quick means of Transporting raw materials and manufactures from manufacturing areas to markets and ports. They were increasingly able to charge monopoly prices. Against this the manufacturers and trades generally had a common interest—it was a situation which often develops, the capitalists generally being held to ransom by a particular section of capitalists. The government, under the initiative of Gladstone, at that time a Tory, got Parliament to pass an Act giving the government power to nationalise the railways. It was a threat to the Railway managements, either curb your rapacity or be taken over.

Similar causes explain the early nationalisation of Telegraphs and Telephones, the setting up of the various Port authorities, and later the nationalisation of electricity. (In a rather different category was coal nationalised and the taking over of the steel industry. Here it was rather a question of large-scale and integrated organisation being needed for modernisation, to save industries falling behind technically and unable to solve their problems themselves in reasonable time.)

The attitude of the general body of capitalists towards a private monopoly operating a service such as transport or telephones is direct and immediate. Likewise if the product is some material such as steel or chemicals entering largely into manufacture and building. Having to pay monopoly prices raises general costs of production and reduces the profits of the capitalists who have to buy from the monopolists.

The effect of monopoly is sometimes indirect but no less harmful to the general body of capitalists: that is if the monopoly is in some product such as food which enters largely into the workers’ cost of living. Higher prices of these articles induce workers to press for higher wages; to the detriment of profits if they succeed, to the detriment of their own standard of living if circumstances are against them.

Once it is realised what gives rise to monoplies and the way they help those who own them and injure others, it will be readily understood that there cannot under capitalism be a consistent and logical attitude towards monopoly. All that can be said of the great majority of people is that each group is against other people’s monopolies, and the sectional groups change their attitudes with changing circumstances. Karl Marx in a letter written in 1852 criticised a writer who had declared that the aristocracy are on the side of monopoly and the capitalists against it. Marx pointed out that in the eighteenth century the English aristocracy had been all for the freedom of trade, but in the nineteenth century they were defenders of the corn laws which filled their pockets, and opponents of the manufacturers who had become free traders and believers in the benefits of “competition.” The manufacturers wanted the abolition of the protective duties on imported corn because they saw in cheap food the certainty of low wages for their workers and consequently higher profits for themselves.

At the present time the manufacturers who buy steel are somewhat divided about re-nationalising the steel companies. On the one hand they don’t like being dependent on a private semi-monopoly and recognise that with reorganisation and concentration the costs of producing steel might be lowered, but they are not confident, in the light of experience, that nationalisation will serve the purpose.

Just for the record we can make it clear that the SPGB, alone among the political parties in this country, really is against monopoly. But for us it is not a problem of private profit-making or nationalisation, high prices or low prices, high wages or low wages because socialism will have no place for profit, or prices or wages—simply production solely for use.

Edgar Hardcastle

Soho Square (1964)

Party News from the December 1964 issue of the Socialist Standard

Successful meetings are being held every Sunday evening at 2, Soho Square, London W.l. (Near Tottenham Court Road Tube Station.) The Bloomsbury Branch have arranged these meetings, their first in Central London for many years. Prior to, and during the war, regular meetings had been successfully held and the Branch have been searching for a suitable Central London venue with a view to re-commencing indoor propaganda. The hall at 2, Soho Square, is comfortable, warm and pleasant, and already the attendances have been very good.

As is usual with all SPGB meetings our visitors are invited to discuss, and ask questions. The hall is available from 7.30 and meetings commence at 8 p.m. promptly. For a forward list of meetings please refer to details under “ Meetings ” column in this issue. A small plan gives directions of the situation of the hall

"The Observer” and the SPGB (1964)

From the December 1964 issue of the Socialist Standard

The following is an extract from The Observer (Oct. 9) to which the Party wrote in protest at the reference to the SP.G.B.

Everywhere around Glasgow, the contrast in political styles is striking. On the Left, they speak with tongues of the old Clydeside fire, preaching a new society, teaching their audiences a total view of socialist justice and democracy. All have something of the Trotskyite poster in Woodside which snarls at the citizen “Don’t vote for the S.P.G.B. (Socialist Party of Great Britain) candidate unless you understand and want Socialism.”

We publish, without comment, the Observer’s reply:

The Observer, 29th October, 1964.
Dear Sir, 

I have now heard from Neal Ascherson, to whom I referred your letter of October 11. After helping us in covering the election campaign he returned to his post as our resident Correspondent in Germany; hence there was some delay in reaching him. He writes:

“I think I should apologise without reserve to the members of the S.P.G.B. for calling them Trotskyite, I was mixing them up in my hurried head with the Socialist Labour League, and there is no excuse for that. I still think that “snarl” expressed the shock of hostility experienced by a reader of the S.P.G.B.’s fiercely honest and uncompromising poster."

I’m very sorry we can’t clarify this point now in our correspondence columns —it would be rather out of date and there is room for so few of all the letters— but we will take care not to make any such mistake again. 

Yours faithfully,

(Signed) Charles Davey, 

Assistant Editor.

Christmas, past and present (1965)

From the December 1965 issue of the Socialist Standard

The festival we know as Christmas is far older than Christianity. It is one of the institutions that the early Christians adopted from, their pagan rivals.

During its teething years it was touch and go whether Christianity survived or succumbed to its foremost rival, Mithraism. The Mithraists were sun worshippers and they combined a solemn fertility ritual with aspirations after moral purity and a hope of immortality. The main Mithraic festival was held at the winter solstice, that time from which, each year, the days began to lengthen and the sun to arouse from its winter rest with the promise of a fertile springtime. The focal point of the ritual was a portrayal of a virgin giving birth to a new sun.

The Christian gospels give no hint of the date of the birth of their Christ and, accordingly, the early Christian Church did not celebrate it. The Christian priests were severe men and woman who urged their followers to live equally severe lives of work, abstinence and charity. But they found that many of their adherents took part in the solemnities and festivities of the Mithraists and, if they wished to win and retain converts, they would have to pander to peoples’ hearty liking for festivity and pageantry. Accordingly, the Christians of Egypt came to regard January 6th (by the Julian calendar) as the date of the nativity of their Christ and the custom of commemorating his birth on that date spread until, by the beginning of the fourth century, it was widely adopted in the east.

The western Christian church, probably influenced by the Roman festival of Saturnalia and the northern Yule, was the first to adopt December 25th, the day of the winter solstice, for their Christmas celebrations. The idea spread until, at an assembly held at Antioch in the year 375 A.D., the eastern church accepted the same date and officially changed from January 6th to December 25th.

As well as taking over the date of the pagan festival the Christians absorbed many of the heathen rites and symbols, such as the virgin birth, the burning of candles and the use of seasonable greenery for decoration.

By the middle ages Christmas was firmly established as the foremost annual Christian festival. The period of ritual and celebration extended over the whole twelve days from December 25th to Epiphany. It was a time of feasting, music, dancing, mumming, boisterous fun, and horseplay with the religious significance prominent in, but not dominating, the festivities. The twelve days ended with a ceremonial return to work on what was then known as Plough Monday.

A number of religious symbols from different parts of the world had become grafted on to the Christmas ritual. The mistletoe, considered a sign of fertility in some areas, became part of the Christmas festivity. The yule log, originally cut from the oak tree on which mistletoe was supposed to grow prolifically, became the traditional fuel for the occasion. Saint Nicholas of Russia, who died in 350 A.D., was eventually adopted by the Greek church and legends illustrating his benevolence and good nature were handed down to create the image of the Santa Claus of later generations.

The sixteenth century saw a growth in early capitalist industry and the first pressures being applied to abridge the period of Christmas festivity. Early restrictions had little effect in agricultural areas but it was easier to keep the poverty-stricken wage workers of the towns with their noses to the grindstone. For them a long holiday meant unbearable privations.

In England, effective political action to subdue Christmas festivities came with the Puritan revolution of the seventeenth century. During the period of the so-called Commonwealth fun and frivolity was severely frowned upon and even the churches were closed on Christmas day.

The next two hundred years witnessed the complete commercialisation of the festival. Capitalism drew each aspect of the institution into its maw. The spontaneous games and recreations were gradually replaced by organised entertainment; the amateur religious players and mummers made way for paid entertainers; communal self-help dried up and a smug, dignity-destroying charity took its place.

Nineteenth century sentimental writers, like Dickens and Kingsley, focussed attention, on the pitiable plight of the working class after the Industrial Revolution. They were of the “change-of-heart” school of reformers, urging employers to be a little more charitable to their employees. Dickens best depicted the attitude in his A Christinas Carol wherein he portrays a mean and grasping employer,' scared by a bad dream into becoming a charitable man on Christmas day and a little less mean one in the days following, to the benefit of his happiness and at the expense of his bank account.

Practically all of the Holy days of the middle ages have been eliminated. May day, as a workers' holiday, has been moved to a Sunday in May where it does not interfere with the working week, but the tradition of Christmas, shorn of most of its religious significance, dies hard. It lives on because it offers an attractive expansion of the market for innumerable goods. Workers save up for much of the year to have a spending spree and some festivity over the Christmas period. New symbols are introduced from time to time to attract these hard earned savings into different pockets. Christmas trees were an innovation, developed in this country from a German custom, during the reign of Queen Victoria following her marriage to Albert of Saxe Coburg. Christmas cards are also a comparatively recent profit making introduction.

The attitude of capitalist politicians to the festive season is often amusingly contradictory. In 1939, with a war getting under way, the Chancellor of the Exchequer broadcast a plea to save money to keep prices down, a minister at the Board of Trade called for a little spending to keep trade on the move, a state Forestry official announced that plenty of Christmas trees would be available as usual, firms with gift goods to market advertised them up to the hilt, and writers in the press urged people not to bankrupt patriotic business men who were doing their best to pay the costs of the war.

Social institutions are measured by their adaptability to a commodity producing society and are fostered or discouraged according to their usefulness to a profit making system.

Noble sentiments are prostituted and even the charity advocated by Christians is harnessed to the capitalist cart and whipped up with the gift-giving pleas and advertisements at Christmas.

W. Waters

Peace and Goodwill (1965)

Editorial from the December 1965 issue of the Socialist Standard

Peace on Earth and Goodwill to all Men.

This Christian slogan, which we hear so often at this time of year, may give some comfort to those who are susceptible to it.

But what is it worth ?

Peace On Earth. This year has had no Cuba, no Berlin crisis, nor any other comparable event to make us fear that we were coming to the brink of the third World War. By the standards of modern capitalism, 1965 may seem to have been a peaceful year.

Peaceful, that is, if we ignore the minor outbreaks like the fighting in Dominica, the Congo, Aden and a host of similar places. Peaceful if we forget the flare-ups in the Rann of Kutch and Kashmir. Peaceful if we take no account of the bloody struggle in Vietnam.

What is the cause of these wars? A lack of goodwill? We live in a social system in which competition—-between companies, between countries, between groups of countries—goes on all the time. It cannot be avoided—and neither can its consequences. Periodically international competition has to be transferred from the conference halls to the battlefields, adding another war to capitalism's history of bloodshed.

People may protest against this, as many of them have protested against the war in Vietnam. But the protests are futile. Modern war is caused by the nature of capitalist society and the only effective protest we can make against it is to change society into one where the conflicting interests which give rise to war are absent.

Goodwill To All Men. This year we have had the riots in Los Angeles, with their background of simmering revolt against racial oppression. We have had the conflict over Rhodesia, underlaid with clashing economic interests and racial intolerance. We have seen the ever-tightening screw of immigration control in this country, as the Government tried to appease an awakening racism among the British working class. We have had the usual bouts of strikes and other symptoms of social disharmony.

There have, of course, been people to regret this situation.

But again, their protests are futile. Racial theories among the working class can in large part be attributed to their insecurity and to their poverty—to their housing difficulties, their fears for the future of their jobs. It can also be partly explained as a reaction when workers see an easily identifiable minority using already inadequate hospitals, schools and other so-called social services, and to an ever-present desire to find a scapegoat for the problems of life in capitalism.

The competition between one worker and another over a job, or a house, and the strikes and other disputes which go on year after year, are nothing more than a symptom of a basic feature of capitalism—the fact that the vast majority of people have to sell their working abilities in order to live.

In these conditions, the slogan Goodwill To All Men is meaningless.

It is useless to wish that human beings would not behave in anti-social, non-co-operative ways as long as the working class support a social system which encourages, sometimes even forces, them to act in those ways. After all, many of capitalism’s most respected leaders have got where they are by displaying anything but goodwill.

The world is in an agony .of dispute. Only by a basic change in society—by a social revolution by the world working class to end capitalism and replace it with Socialism—can this agony be ended.

When that revolution comes we shall have lasting peace and goodwill will no longer be a pious slogan, but an established and accepted part of human existence.

No Mystery About Banking (1966)

From the December 1966 issue of the Socialist Standard

Banks have been in the news, with the failure of the Intra Bank in Lebanon, the largest in the Middle East and a bank in Detroit, the Public Bank of Detroit.

Both banks claimed to have assets more than sufficient to pay depositors eventually, but neither had the cash available when the depositors took fright and wanted their money back. The Intra Bank is reported to have invested much of the £86 million deposits (some of it from oil-rich Arab clients) in such varied properties as a West End Hotel in London, docks in France and properties in Paris and America. As the Sunday Telegraph (23 October) remarked:– “This is dangerous banking practice – office blocks cannot be sold overnight to repay depositors”.

The Detroit Bank, which had deposits of $117 million at the end of 1965, had got heavily involved in financing “home improvement” work.

It was the biggest American bank failure in thirty years.

It was the familiar story, recalled by the failure of a small British bank a few years ago, when the manager complained sadly that “depositors were taking the money out faster than they were putting it in”.

The outcome has been that the Detroit bank has been taken over by another American bank, and the Intra Bank, with Government and other aid, has re-opened. Among those who propped it up were the Maronite Patriarch of Antioch, with that the Times described as “the not inconsiderable resources of his Church”.

But what is of more lasting interest is the light such bank failures throw on the absurdities of the banking theories held by what the late Professor Cannan called the “Mystical School of Banking Theorists”.

Before their ideas gained their present widespread acceptance economists and bankers, though they disagreed about other things, had no doubts about the basic principle that what a bank lends or invests is placed at its disposal by depositors.

Marx for example wrote: –

A bank represents on one hand the centralisation of money-capital, of the lenders, and on the other the centralisation of the borrowers. Its profit is generally made by borrowing at a lower rate of interest than it loans (Capital Vol. 111. P. 473).

And a banker, Mr. Walter Leaf, Chairman of the Westminster Bank, wrote: –

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. (Banking. Home University Library 1926.)

But the mystical school (which included Keynes) would have none of this. They saw by experience that a prudently conducted bank, having the confidence of depositors, could rely on them to leave the bulk of their deposits in the bank, so that the latter could safely invest about twelve to fifteen per cent, keep about 20 per cent in a form of lending which they could call on immediately, keep about 10 per cent in cash in their tills or at the Bank of England, and use about one half to make advances to customers. From this they make the topsy-turvy deduction that out of the 10 per cent cash (it is now down to 8 per cent) the bank had “created” the rest.

The Committee on Finance and Industry (The Macmillan Committee) in its report in 1931 claimed that “the bulk of the deposits arise out of the action of the banks themselves, for by granting loans, allowing money to be drawn on an overdraft or purchasing securities a bank creates a credit in its books, which is the equivalent of a deposit”.

They went on to give what they called a simple illustration. First they assumed that all banks had been merged into one bank. Then they described what they said would happen if a depositor deposited £1,000 in cash, the bank relying on past experience that it was only necessary to keep £100 of it in cash. The bank, they said could now make loans (or purchase securities) up to a total of £9,000 “until such time as the credits created . . . represent nine times the amount of the original deposit of £1,000 in cash”. They were of course assuming that when each borrower drew on his account to make payments the cheques would come back into other accounts in the bank.

Two things they overlooked or obscured. In the real world there are quite a lot of separate banks and in the nature of things most of the loans made by each bank are used to make payments, not to customers of the same bank, but to customers who have accounts in other banks. So if for the moment we accept the assumption that the banks by making loans have created deposits they are doing most of it not for themselves but for their rivals. More important, their simple illustration is too simple. If their argument is sound it could be applied to a bank just being formed just as well as to a bank already functioning. (They were silent on this.)

But as soon as it is put like that its absurdity becomes apparent. A newly formed bank with no deposits except the £1,000 cash just handed in would, on the past experience which the Macmillan Committee itself accepted, invest £150, have £200 on call, £100 in cash and make advances of £550. Thus its total of investments and advances would be, not £9,000, but £900. It would only need one borrower of £1,000 to draw a cheque paying it to an account in another bank, for the first bank’s £1,000 cash to be reduced to nothing.

The same principle applies to an existing bank; for example if we take total deposits £100,000, with £15,000 invested, £20,000 on call, £10,000 in cash and advances of £55,000. For the existing bank would only have been able to expand to the £100,000 level by treating each additional deposit of £1,000 cash in the same way, with investment and advances totalling £900 out of each £1,000, not the mythical £9,000.

The members of the Committee were soon faced with a problem. Taking their words at their face value the late Major Douglas concluded that this power of “creation” meant that a bank “acquires securities for nothing”, creates new money “by a stroke of the banker’s pen”, and that the banks “are the potential or actual owners of everything produced in the world”.

Faced with this, members of the Committee who were asked about it, including the late Reginald McKenna, Chairman of the Midland Bank, had to repudiate Major Douglas. The fact remains however, that Major Douglas was only taking them to the logical conclusion of their own mystical theory of banking.

Edgar Hardcastle