The Capital Levy. (1924)

From the January 1924 issue of the Socialist Standard

Ramsay MacDonald Supports Our Case.

In previous issues we have dealt with the Labour Party’s scheme for a levy on Capital to pay off part of the war debt. It was explained why the levy is merely a matter for the consideration of the capitalist class, who have to decide on purely financial grounds whether the levy is advisable in principle, and secondly whether it would be wise to institute it so long after the war and in a period of depression. In the main they decided against it, because, apart from mere prejudice, they were of the opinion that the problems of the capitalist system were not pressing enough to warrant such a difficult measure. Moreover, that section of the capitalists which stands to gain most from it, the financiers, were unable or unwilling to come out vigorously in its support at an election. It was, therefore, from a vote-catching point of view, probably a mistake for the Labour Party, to make it their main plank. But for that they would have received the valuable support of the section of the Conservative Party which centres round the Observer. These people believe that two things are needed to maintain Britain in her world position, and to safeguard the dominance at home of the ruling class.

These are industrial reconstruction to regain and extend our foreign markets; and an advanced programme of social reforms to increase the efficiency and stifle the discontent of the workers.

But the Conservative Observer was strongly against the levy on account of the undoubted disturbance it would cause (serious even if only temporary) in the British financial world.

  We are perhaps nearer to them on international questions than to the older parties! If Labour had confined itself to a drastic programme of practical reconstruction—for electric power, transport, and the general development of the resources of the country—we would have been disposed to lend it a hand. (Observer, 25th November, 1923.)

The leaders of the Labour Party were, of course, not blind to the political situation, but, unfortunately for them, it was too near the date of the election (December 6th) to do anything very effective. Mr. Snowden had only a week or so earlier tried to find a way out by proclaiming that while the levy was good, the time was not quite so opportune, and that the proper moment was just after the war. And then, on Saturday, November 24th, Mr. Ramsay MacDonald went considerably further, and in fact admitted explicitly what we have always said : that the levy was a device to stabilise the capitalist system. He was making a last-hour endeavour to overcome the hostility of the industrial capitalists who could see in the levy only the certain danger that they would be put still more at the mercy of the banks. These are MacDonald’s words in the Free Trade Hall, Manchester :—

  Referring to the Capital Levy, Mr MacDonald said he found it a most popular topic. It was not a special Labour proposal. Some people imagined they wanted to use it as a malign or magical leverage for the complete change of society. If he were a Capitalist and opposed to Socialism, he would support the capital levy. . . .  He supported the capital levy, not as a Labour man but as a Scotsman. (Observer, 25th November, 1923.)

Those who have followed MacDonald’s career will be impressed by the frequency with which his Scotch nationality has overwhelmed his socialist principles.

During the same week he spoke at Northampton and at Bristol, and showed again how little the levy had to do with the workers.

  The Capital Levy proposal did not come from the Labour Party in the first instance. It came from business men, economists, university professors, and others, and the Labour Putty had not taken it up until they had enquired in to it.
  When the Labour Party had educated the people, it [the Capital Levy] would become popular and would be applied by other parties. (New Age. 29th November.)

It is, I think, quite plain that if the levy did mean helping the workers at the expense of those who exploit them it would not have come "from business men, university professors and others," nor would it ever become popular with the "other parties.”

But the Labour Party’s chances of getting the Astor millions behind it in the election, were doomed to disappointment for the reasons I have mentioned above. The Observer had already decided upon its attitude. There was, however, an amusing sequel. While it was all very well for MacDonald to make such a speech disclosing the levy’s real object, it would have been decidedly unwise to print it in the Daily Herald, where it would be read by the militant trade unionists who only fight for the Labour Party because they believe that it means to take really drastic action against the employing class.

Accordingly, we find that although the speech is reported in the Daily Herald of November 27th, and the same amount of space is given to it as in the previous day’s Observer, the remarks about the levy are left out

By a curious coincidence the same issue of the Herald contains an indignant letter from a worshipper of MacDonald, complaining that the British Broadcasting Company does not broadcast his speeches!

The Editor of the Herald was no doubt privately thanking God that the B.B.C., doesn’t; and hoping that they never will.

Edgar Hardcastle