Wednesday, July 31, 2019

Labour’s plans for capitalism (2019)

Video Review from the July 2019 issue of the Socialist Standard

For the 2019 local elections, the Labour Party released a video claiming ‘It’s just common sense.’ The video was entitled ‘Five people verses a billionaire’ (see: LINK.). Shares on social media proclaimed the video to be a better education in economics than most university classes.

The video depicts the difference between ‘giving’ money to ordinary people, via a pay-rise, a pension, disability benefits or a small business loan with giving the equivalent amount to a billionaire in the form of a tax cut.

The video then depicts all the five people spending their extra money, generating more business, economic growth and higher tax returns in their area: essentially, making the argument for a multiplier effect, whereby increasing consumer resources generates more wealth than would be spent in pay pensions and benefits.

The video asks the billionaire what they did with their money, and tellingly, he airily declares he forgot about it, but will probably send it to the Cayman Islands with the rest.

There are many problems with this short video. Firstly, the idea that economic growth is driven simply by having more commodity exchanges on the market. Circulating the wealth faster and faster does not create new wealth. Stimulating ‘demand’ by making more money available only generates growth if more wealth is produced to increase supply. Capitalist firms could just raise prices to capture more of this new demand, rather than increase production.

It neglects that the money to pay pay-rises, pensions and benefits has to come from somewhere. Of course, many Corbynistas argue for Modern Monetary Theory (MMT) which says that money can just be created out of thin air (much like the old social credit fantasists of the 1930s). Money not backed by real wealth, though, is just tokens. Government must lay a claim to a share of the wealth that has already been produced in order to have tax money to spend.

A government can theoretically tax any existing wealth: all it needs to do is identify the source of wealth and apply force to claim control of it. The only limit to expropriation is the need for political support to be maintained for the government and the operational efficiency of the laws and bureaucracy of the nation.

Expropriation of wealth and monetising it can increase the value realised in an economy, in the form of windfall profits. A modern government could raid hidden pots of wealth, but this would take money out of the capital cycle which would disrupt the economy, and, at the least, be unpopular (if not actively counter-productive). Governments in a capitalist economy can only tax new wealth, to take a share of the profits generated, if they want to be sustainable. That is, they can only tax within the limits of profitability.

If the tax rates are too high, then investors will be deterred from turning their wealth into capital, and an economic crisis would ensue. The threat of a capital strike is an effective tool for the masters in the class war, and one that is largely hidden as a ‘natural’ fact, rather than a social act of self-interest. Labour’s video fails to expose this, instead simply conveying that billionaires naturally hoard wealth, rather than dutifully spending it.

Any spending done with tax will return less in new profits than the sum extracted from profits through taxation (because any of that spending will have to give a share to wages or paying for capital invested already in goods and services).

The government could instead borrow money from the wealthy, this, however, acts in much the same way as taxation, directing wealth away from the capital investment cycle, and reducing the production of new output. It further adds to the capitalists’ control over the economy, since the state is now committed to paying them back, and it can only carry out policies that will securely honour its debts.

In the specific instance of where the capitalist (the billionaire) would prefer to export their wealth rather than spend it in the country, taking this money and spending it would increase the sum of domestic demand. However, the reason the billionaire would be declining to invest and instead export their wealth is because there isn’t enough profit in the market to induce them to invest in new production. Taxing the profits of the billionaire reduces rather than increases their incentive to invest.

This is just a return to the Keynesian fantasy that the economy can be ‘pump-primed’ by taking idle wealth that is uninvested, and turning it into consumer demand. Even worse, it is the mirror image of the Tory line that a ‘well-managed economy is vital to the delivery of public services’ (i.e. that stringent government restraint to allow firms to grow leads to tax revenue and money to spend on services).

In both cases, human need is subsumed to the need to successfully exchange commodities in a market place. They both rely on a systemic logic that puts the owners of commodities in first place within the economy, and makes everyone else dependent upon fulfilling their interests. Put another way, for all the radicals proclaiming Labour finally coming out in favour of the ‘multiplier effect’, this video radically disarms the electorate, and the working class.

The knowledge that wealth is produced by our labour, and the interests of the property owners hinder it being put to the service of our needs leads to a very different set of conclusions: that we need to take ownership of the productive wealth for ourselves, and bypass the market entirely.

The propaganda of the Labour Party under Corbyn is as much a barrier to spreading the message needed for working class self-emancipation as it ever was under Blair. The Labour Party, far from progressing the interests of the working class, is about trying to use state power to make the market work in favour of people, and that is like trying to put a mad bear to work in a shop. 
Pik Smeet

Political Aesthetics (2019)

The Wood for the Trees Column from the July 2019 issue of the Socialist Standard

It is relatively easy to comprehend the politics involved in cultural aesthetic sensibilities. In this issue you can read about the colonial background that still informs India’s conception of female beauty. There exists no universal or cross-cultural consensus as to what constitutes beauty, good taste or even art itself. This is not to say that aesthetics are purely subjective since we can trace these values as they evolve through history; the politics involved within this process are revealed by an understanding of class, power and cultural dialectics. But can politics itself possess an aesthetic dimension? Would it be appropriate, or even possible, to speak of a socialist aesthetic?

Since it is the case that even mathematics is considered by some of its more esoteric practitioners to be an art rather than – as you might think – merely the absolute manifestation of cold logic, it would seem that no human activity is totally free of aesthetics. Perhaps this is partly what ‘humanises’ any discipline. To find pleasure in work (all labour, not just the so-called creative arts) and its results in terms of form, rhythm, pattern, catharsis and insight etc. is for most of us a high point of existence. For this to become available to everyone we must, of course, eliminate wage slavery and its alienation. Perhaps this understanding of freedom is the foremost socialist aesthetic. If we can find no pleasure in work then the revolution is pointless.

This conception of aesthetics is, unsurprisingly, contrasted with that found within contemporary bourgeois ideology which focuses on icons of escapism, individualism and power. We are informed that it is possible to enjoy the music of Wagner, the films of John Ford, the philosophy of Nietzsche and the poetry of T. S. Eliot purely aesthetically without reference to their reactionary politics. Perhaps so, but without an awareness of the underlying messages of racism, violence, misanthropy and despair it would be politically naïve to embrace their work uncritically. Aesthetics can be used in the service of both reaction and progression – loving someone doesn’t make them a good person.

Perhaps because music is the most abstract of the arts it is the easiest to subvert politically. William Blake’s poem Jerusalem and Edward Elgar’s Nimrod have become icons of English nationalism – a fate very different from the original intentions of the composers. Even the Red Flag and the Internationale have been corrupted by their association with the Leftist dictatorships of China and Russia. In a final horrible irony the British Labour Party sing both Jerusalem and The Red Flag at the conclusion of their annual conference; a synthesis implying a kind of ‘national socialist’ agenda which emphasises the danger of the mixture of idealism and romantic patriotism.

It is also informative that the avant-garde futurists were aesthetically at the forefront during the making of the Russian Revolution but succumbed quickly to the obscenity of ‘socialist realism’ once the Bolshevik bureaucracy was safely established. The personification of the perfect ‘Soviet man’ in this perverted propaganda exactly parallels the Aryan ‘superman’ of German fascist art and reveals their common bourgeois authoritarian historical origins.

Political philosophy also has its aesthetic dimension. The German tradition of dialectical analysis was subverted and then bequeathed by Karl Marx to the service of socialism. To its practitioners there is no greater theoretical pleasure than reconstructing the sectarian deconstruction of knowledge made by the ideologues of capitalism. One of its great post-Marx enthusiasts was a philosopher called Theodore Adorno. As a member of the ‘Frankfurt School’ he wrote many interesting dialectical tracts that can be appreciated purely in terms of the use of language and their structure and rhythm – especially his aphoristic essays.

Paradoxically in his distress at the commodification of the arts in the hands of the bourgeoisie, what he called the ‘culture industry’, he can justifiably be described as something of an intellectual elitist. Traditionally the ‘high arts’ were defined by an established cultural elite who looked down upon the ‘naïve folk art’ of the lower classes. Although the bourgeoisie aspired to artistic pretention this was always subservient to profit. Initially resisted, the music of black American culture was unstoppable both in its popularity and so in its profitability. Undoubtedly this kind of commercialisation contributed to a democratisation of the arts (including, of course, cinema, sports, theatre and literature) but it has also led to an aesthetic dilution courtesy of consumerism.

Because socialism is not ‘ideological’ (being fully aware of historical class context and therefore it needs no religion, intellectual dogma or prejudice to mask the underlying political reality) its call for liberation is a cri de coeur for all humanity. Any profound rejection of capitalism will incorporate, however unconsciously, a level of the socialist aesthetic. If you doubt this just listen to the song Weak Fantasy by the rock band ‘Nightwish’. Although the band is associated with the promulgation of the ideas of Richard Dawkins and environmentalism no socialist could demur from the song’s angry denunciation of the escapism, consumerism and lying propaganda of our present culture. Given the band’s synthesis of symphonic opera and heavy metal rock perhaps even Adorno might have had to rethink his disdain for popular culture.

Huawei: Is it really just cybersecurity? (2019)

From the July 2019 issue of the Socialist Standard

Competition for markets, sources of raw materials and the control of strategic routes is the lifeblood of capitalism. This competition inevitably translates into rivalry between nation states, which serve the capitalist interests within their borders. Trade wars ensue with all the skulduggery that governments can muster and can lead to bloody conflict. We have seen this in the twentieth century, where rivalry between an expansionary Germany and the established powers, Britain, France and Russia gave rise to two world wars.

After the Second World War, the United States and Russia emerged as the dominant powers and both competed to control global markets. This ‘cold war’ continued until the collapse of the Soviet bloc in the nineteen-nineties. As nature abhors a vacuum, so it is with capitalism which cannot survive for long without some kind of international rivalry taking place. We have recently witnessed a resurgent Russia challenging the Western capitalist powers. China is also emerging as a global economic player in world markets. The response of the American state has been to slap increased tariffs on Chinese imports and China has retaliated in kind. Huawei, China’s leading technology company, has become a focal point of this trade dispute.

Founded in 1987, Huawei supplies telecommunication equipment and sells electronic gadgets including smartphones, tablets and laptops. It employs about 188,000 staff worldwide and operates in more than 170 countries. It is a leading provider of 5th generation (5G) technology. This is the next generation of wireless technology which will deliver much faster download speeds for mobile phones, and promises greater connectivity between devices allowing for the emergence of driverless cars, ‘smart’ homes and driverless drones. The company has helped to build IT systems and infrastructure in Africa, Russia and other countries. It claims to be a private company owned by its employees.

However, many, including the United States government, dispute this and insist that the company is controlled by the Chinese government, and that its products contain ‘backdoors’ to allow the Chinese state to carry out surveillance and cyber attacks. That the founder, Ren Zhengfei, was a member of the People’s Liberation Army at the time of the company’s foundation and has links to the Chinese Communist Party is held as proof of this. Others point to the 2017 National Intelligence Law which requires Chinese companies to assist the state in their intelligence investigations and that every Chinese company is required to have a Communist Party Committee. Huawei played down these links and insisted that it is an independent company dedicated to serving the needs of its customers. In January 2018, allegations emerged that, over a period of five years, data was being transferred from the computer systems of the African Union headquarters in Addis Ababa, Ethiopia to servers based in Shanghai. Huawei was the main supplier of their information and communication technology systems. The company denied any culpability. It is also accused of intellectual property theft from other tech companies, including Nortel, Cisco Systems and T-Mobile. In the latter case, a Huawei employee allegedly stole a robotic arm used for stress testing smartphones.

Whatever the truth of these allegations, they were the pretext that the US state need to have Huawei in their crosshairs. On 1 December last year, Meng Wanzhou, the company’s Chief Finance Officer and daughter of the founder, was arrested in Canada in Vancouver at the behest of the US authorities and is facing extradition to the US on charges of defrauding banks and using a subsidiary to break sanctions against Iran. On 15 May Donald Trump signed an executive order barring US companies from employing foreign telecommunication equipment that is deemed to pose national security risks and the US government added Huawei to the list of companies that require a licence to trade with US companies. Google responded by suspending dealings with Huawei, so their smartphones will not be able to receive updates to Google’s Android operating system. The US government has urged other nations not to use Huawei products. In a sense they should be worried, as Edward Snowden has revealed, that both the US and UK states have used internet technology to spy on other countries.

However, this is more than about protecting vital IT infrastructure. John Naughton noted (Guardian, 2 June) that targeting Huawei’s smartphone and laptop businesses has little to do with IT network security. Technology is the key to global commercial success, and the US capitalist class are jealous of safeguarding their dominance in this field. They don’t wish to see their technology corporations such as Microsoft Apple and Google being overtaken by Chinese companies such as Huawei. What the US state also fears is that Huawei’s and other Chinese companies’ successes in the global marketplace will pave the way for Chinese domination of the global capitalist economy. The fact that Donald Trump appears to be using the fates of Meng Wanzhou and Huawei as pawns in trade negotiations with China appear to bear this out.

This dispute is generally seen as the work of Donald Trump playing the tough guy and is trying to impress his electoral base. But the American ruling class have been worried for some time about the rise of Chinese capitalism. It is not just the Republicans, but many Democrats support taking a strong stance against China. However, things are not as straightforward as they seem. US companies that trade with Huawei will be adversely affected. Many US technology companies, such as Apple, have their products, such as their iPhones, assembled in China (so much for their concern for cyber security).

The stance of British capitalism is more ambiguous. Although the British state shares the worries about security issues and are wary about the rise of Chinese capitalism, nevertheless they are interested in developing closer economic ties with the latter. This will be particularly important if the UK leaves the EU. The government is also keen to build its 5G infrastructure as soon as possible, so as not to fall behind British capitalism’s competitors, which could have a negative economic impact. As Huawei has the expertise and can do the job efficiently and relatively cheaply, the UK government is considering engaging it in its 5G infrastructure project. However, not all government members are happy at such co-operation with Huawei, as the recent leaking of a National Security meeting showed. The US government has threatened to withhold sharing intelligence should the UK government so ahead with these proposals. The Chinese government has threatened to pull out some of its UK investments if the UK caves in to US pressure and not approve the deal with Huawei.

As always, workers will be called on to take sides. Patriotism will be invoked on both sides, and in the West this dispute will be portrayed as a struggle between democracy and an authoritarian state. This is nothing of the kind, it is just a squabble between rival groups of capitalists. The working class, both in China and the West, have no interest in this trade war. Their real interest is to establish a global socialist society of common ownership where there will be no nation states and everyone will have free access to the world resources.

On a final note, the Chinese government describes itself as ‘communist’ and ‘Marxist’. It goes without saying that we do not agree with this description. China is a capitalist power like all the others. It is encouraging that nobody apart from the Chinese government suggests otherwise.
Oliver Bond

Summer School 2019 (2019)

Party News from the July 2019 issue of the Socialist Standard

Our political views are shaped by the circumstances we find ourselves in and how we relate to our situation. How does a socialist understanding of capitalism and the aim for a free and equal world compare with other political stances and belief systems? Why should we have a socialist viewpoint? And how does it impact on our lives? Our weekend of talks and discussion looks at what it means to have a socialist outlook in the 21st century.

Fircroft College How to Find Us
Full residential cost (including accommodation and meals Friday evening to Sunday afternoon) is £100. The concessionary rate is £50. Day visitors are welcome, but please book in advance.

E-mail enquiries should be sent to Book a place online, or send a cheque (payable to the Socialist Party of Great Britain) with your contact details to Summer School, The Socialist Party, 52 Clapham High Street, London, SW4 7UN.

Friday 2nd August

From 17.00: Arrival

18.30 – 19.00: Dinner


Be Realistic: Demand The Inevitable
– Edmund Griffiths

This talk will look at the notions of the impossible and the inevitable in a range of belief systems, including (but not limited to) socialism and other political belief systems. Why are people attracted to ideas that seem to be either impossible or inevitable? Or put off by them? What does it mean to campaign for something that might be impossible, or inevitable? What happens when assessments of impossibility or inevitability change? How do people believe that an impossible thing is true anyway? Or that an inevitable thing may never happen?

Besides socialism, the talk will hopefully address impossibility and inevitability in contexts such as liberalism, capitalism, flat earth, the end of the world, extraterrestrial life, Scottish independence etc.

Saturday 3rd August

7.30 – 8.45: Breakfast

10.00 – 12.00:

Living In Capitalism As A Socialist
– Janet Surman

Profit is the backbone of capitalism and profit is made from a plethora of resources, the greatest and most easily attainable of which is the global human resource, to be found in any village, town or city anywhere on the planet. The capitalist system is well known for waste as a necessary part of maximising profit and there is no greater waste than that of the human potential trapped in non-productive, non-useful work.

This session will take a look at the human misery attached to jobs, to work that many don’t really want to do but have to do to survive and will also look at the opposite position when human potential can be fulfilled to the satisfaction, and pleasure even, of billions of individual human beings.

“A map of the world that does not include Utopia is not worth even glancing at.” Oscar Wilde

12.30 – 13.15: Lunch

13.45 – 15.45:

Team Human’: Can You Live A ‘Socialist’ Life In Capitalism?
– Howard Moss

Someone recently wrote a book called ‘Team Human’ which emphasised that humans are social creatures who are most happy and fulfilled when working together for common goals. But how do we stay human in the vast antihuman infrastructure that is capitalism which constantly undermines our capacity to work together and connect with one another?

Despite the powerful forces that set us against one another (employment, nationalism, monetary gain), people are at their happiest when associating together in, for example, clubs, societies, family groups and social and political activities, which involve working with and helping other human beings. Socialists do this too. They belong to local clubs, community groups and trade unions. But how do they – or should they – react to being asked to go further and be associated with campaigns which involve, say, lobbying governments to improve conditions in particular areas, signing petitions calling on political parties to support certain changes in the law, or being members of or giving money to charities which seek to remedy deficiencies in social provision (e.g. housing, health care) or to save people from the consequences of sudden disasters, natural or man-made?

The Socialist view is that time spent in attempts to reform capitalism is time wasted. But on a human, day-to-day level, Socialists often find it difficult just to stand by and do nothing. So how do we cope with the constant dilemmas thrown up by wanting to spend our time helping to create a truly associative social system, yet constantly being called upon to help patch up the contrary arrangements fundamental to capitalism?

18.30 – 19.00: Dinner


Socialists Synonymous – An Evening Of Personal Stories
– Carla Dee

As socialists, we see and understand the world in a very particular way and what is once seen cannot be unseen. How did we get here, and how has this affected our lives, our families and friends? Has being a socialist been a source of frustration, confrontation and disappointment or has the party case been an enlightenment and given us a sense of clarity and sanity? Or all of these things? Sometimes, thinking the way we do can be a lonely business.

Members and sympathisers get together to share our stories.

Sunday 4th August

7.30 – 8.45: Breakfast

10.00 – 12.00:

 ‘Ye Olde Worlde Revolution’
– Bill Martin‘

In 1264 the Baron’s war (which historian Adrian Jobson characterises as the First English Revolution) saw a wide-scale attempt to inhibit the power of the monarchy. It was a revolt in which the burghers (bourgeoisie) of London played a significant role. This struggle saw the birth of the English Parliament, but it would be a further 400 years until the final constitutional curbing of the power of royalty lead to the social dominance of the capitalist class in England.

This talk will look at the life and activity of the bourgeois revolutionary Thomas Fitzthomas, who led that primitive revolt against the English monarchy. It will look at how the bourgeoisie developed as a revolutionary class, and how they struggled within a still vigorous feudal system. It will address how the knowledge of the capitalist revolution arms the imagination of the socialists of today, but also haunts the ideas many have of revolution. It will look at the role of ideas and self-image in the making of a revolutionary class, and the role of ongoing class struggle in the cause of revolution.

12.30 – 13.15: Lunch

13.30: Close

People are welcome to just attend the talks, but need to book a visitor place in advance by emailing; there is a charge for any meals.

Cooking the Books: Monbiot sees the light (2019)

The Cooking the Books Column from the July 2019 issue of the Socialist Standard

Writing in the Guardian (25 April, also on his blog, George Monbiot revealed that he had come to realise that ‘the problem is capitalism’:
  ‘For most of my adult life, I’ve railed against “corporate capitalism”, “consumer capitalism” and “crony capitalism”. It took me a long time to see that the problem is not the adjective, but the noun.’
This puts him way ahead, in terms of understanding, of the many left-wingers who rail only against neo-liberalism or Trumpism as they used to against Thatcherism and who want a more state-directed capitalism. It puts him ahead, too, of the Greens who want a return to a smaller-scale capitalism. It is, as he has come to recognise, capitalism, as a system of production for profit and the accumulation of more and more capital out of profits, that is the problem.

He indicts capitalism on two counts. First, that it is premised on ‘perpetual growth’:
  ‘Economic growth is the aggregate effect of the quest to accumulate capital and extract profit. Capitalism collapses without growth, yet perpetual growth on a finite planet leads inexorably to environmental calamity.’
This is true. Capitalism could not function without growth. Its economic imperative to give priority to making and accumulating profits is not only a threat to the environment (Monbiot’s main concern). It is means that production to meet people’s needs also takes second place. It’s capital accumulation before butter.

Monbiot’s second indictment of capitalism is ‘the bizarre assumption that a person is entitled to as great a share of the world’s natural wealth as their money can buy.’

This is true too, and it applies not just to natural resources but equally to the wealth that is fashioned from them. ‘Have Money, Can Buy’ applies to this too. The other side of this coin is ‘Can’t Pay, Can’t Have’, which explains not just world poverty and malnutrition but why, even in the developed capitalist parts of the world, people’s needs are not adequately met, whereas they could be if the waste and profit priority of capitalism did not exist. There is no need for any man, woman or child in any part of the world to go without adequate food, shelter, clothing, health care or education.

Monbiot has more or less correctly identified the problem with capitalism. That’s the first step. The next is to see what might be the alternative and how to bring it about. He says he doesn’t have a complete answer (and doesn’t think any one person has), but he does see a ‘rough framework emerging’. He mentions various ecological thinkers and goes on:
  ‘Part of the answer lies in the notion of “private sufficiency, public luxury”. Another part arises from the creation of a new conception of justice, based on this simple principle: every generation, everywhere shall have an equal right to the enjoyment of natural wealth.’
Both of these would require that the Earth’s resources, industrial and not just natural, should have become the common heritage of all humanity, and could not be implemented gradually or piecemeal within the framework of capitalism.

Homelessness: A 21st Century Scandal (2019)

From the July 2019 issue of the Socialist Standard

Homelessness: another reform doesn’t work.
By the time the Homelessness Reduction Act came into force in April 2018, it had become the most prolonged and costly Private Member’s Bill to be implemented. As far as legislation goes, it seems to be a decent enough idea – it aims to reduce homelessness by placing a duty on local authorities to try and prevent people losing their home, whereas previously councils only had to assist when some people actually became homeless. The Act pledged £72.7million to be paid out by central government to local councils in England over three years. However, since it’s been enacted, councils have been swamped by applications, and two -thirds of them believe this funding isn’t enough, rising to 86 percent of London boroughs (New Local Government Network, 4 April).

Good intentions aren’t enough to counter the economic reasons behind homelessness, nor the bureaucracy of getting council assistance. People approaching a council are assessed according to the five tests of homelessness, which as well as determining whether or not they are at risk of or have already lost their home, also confirm their eligibility for assistance, ‘priority need’, ‘intentionality’ and ‘local connection’.

Legislation such as the Homelessness Reduction Act and the Housing Act 1996 dictate how council staff work, and who they can assist. Whether someone will get help from the council depends largely on what documents they have as evidence of their situation. Proving homelessness or the threat of it isn’t always straightforward. While a valid eviction notice or even a letter from friends or family someone is staying with temporarily will usually be sufficient, most rough sleepers won’t have such paperwork proving why they left their last settled address, even if they could trace this back. A sleeping bag in a shop doorway isn’t proof of homelessness, for a council.

As well as proving their housing situation, applicants have to confirm their identity, and it has to be the ‘right’ identity. British citizens and refugees are eligible for assistance, and asylum seekers are housed temporarily by other branches of the state, but it can be confusingly complicated to determine which other people can be helped. Those with ‘no recourse to public funds’ are not able to get assistance from a council’s housing department, and include failed asylum seekers and some people from Europe who aren’t employed. Then, the length of time they have worked and the reason they left their last job are looked into, and proof is needed to see if they meet the criteria. Europeans who left their last job voluntarily would not retain what’s called their ‘worker status’ and would not ordinarily qualify for state assistance.

For example, a Spanish woman who resigned from her job and then became homeless after fleeing domestic violence would get no help from the housing department. Nor would she be eligible for benefits, meaning that she can’t pay for a space in a refuge, or any other accommodation. Being ineligible almost makes her an un-person, which she will remain until she finds employment, near-impossible given that she’s homeless and at risk. It’s perfectly acceptable for councils to discriminate against people lacking employment and not having the ‘right’ nationality. While in many ways, prejudice against some groups, such as gay people, is being eroded, discrimination according to where someone happened to have been born is enforced by the state.

If a council housing worker deliberately or mistakenly provides assistance beyond general advice to someone who isn’t eligible, then they are likely to get censured by management. Only if someone with no recourse to public funds has very severe health issues or their household includes children would social services instead have a duty to assist, including emergency housing.

Eligible people who aren’t yet homeless, but are likely to be within the next 56 days are now able to get more assistance from the council than before. Many households threatened with homelessness are those who have received ‘Section 21’ eviction notices from a private landlord. A ‘Section 21’ notice allows landlords to evict tenants almost on a whim, by only having to give a reason such as that they want to renovate the property. A ‘Section 8’ notice is used less often, to evict tenants who have broken the terms of the tenancy, usually by getting into rent arrears. The whole eviction procedure can take many months before tenants finally have to leave, usually having been charged several hundred pounds for court costs. In theory, this allows them time to find other housing.

People threatened with homelessness who approach a council go into the ‘prevention’ stage of a homeless application, meaning that they can receive advice and support with trying to avoid becoming homeless. This could include clarifying if the eviction is legal or help with maintaining or finding other accommodation, including grants to pay arrears or deposits and rent in advance for a new tenancy. Staff are likely to have to dispel clients’ hopes of getting a council or housing association owned property, and instead point them towards private sector housing, which comes with its own difficulties.

If an eviction can’t be prevented and the household becomes homeless, or if they are already homeless when they approach the council, then they go into the ‘relief’ stage of their homeless application. Whether or not the council provides emergency temporary accommodation depends on if it is decided they are in ‘priority need’, or more vulnerable than an ‘ordinary’ person. Households which include dependent children, teenagers leaving the ‘care system’, people fleeing domestic violence and some people with serious health issues would be in ‘priority need’. The council would then place them in temporary or ‘interim’ accommodation, which could be a room in a hotel, bed-and-breakfast, hostel or even a self-contained flat or house. These self-contained properties tend to be owned by private landlords who charge more in rent to the council to use them as temporary housing than they would if the properties were rented with longer-term tenancies.

The Homelessness Reduction Act was intended to save money by lowering the number of households going in to temporary accommodation. The reasoning was that if more evictions could be prevented, then there would be fewer households becoming homeless. However, nearly two-thirds of councils reported that the number of people housed in temporary accommodation had increased, and they were staying there for longer (, 25/3/19). In 2018, 82,310 households were living in temporary accommodation (Big Issue, 17 April), a 71 percent increase since 2010.

Temporary accommodation is often of poor quality, especially B&Bs, where vulnerable people with complex needs are housed with insufficient support. B&B staff, untrained and unregulated, have to manage as best they can. Most single people or childless couples would not meet the ‘priority need’ threshold to be granted temporary accommodation. Instead, they would have to try and find a hostel or private sector shared house if they can’t stay with friends or family. If nothing is available, then they will have to sleep rough.

If long-term housing hasn’t been found 56 days after someone has been confirmed as homeless by the council, then their application will be reassessed. Then, the reasons why they became homeless are looked at closer to see if they are ‘intentionally homeless’. No-one wants to lose their home, but someone would be judged to have made themselves homeless if their actions or inactions led to their situation. If, for example, someone was evicted for rent arrears, then they are likely to be deemed ‘intentionally homeless’ if they could afford their rent. Or, if they lost their home after being sent to prison, the crime they committed would be seen as the intentional act which led to them being homeless.

The applicant’s ‘local connection’ would also be clarified. A ‘local connection’ to a council area is determined by factors like how long someone has lived there or whether they are employed there. Someone without a ‘local connection’ may get referred to the council of an area where they do have links, whether they like it or not. If they are judged intentionally homeless, not in priority need or without a local connection, the council will end their assistance, including emergency accommodation.

The decision made on a homeless application determines what priority the applicant has on waiting lists for council and housing association properties. Households who have passed the five tests – who are homeless, eligible, in priority need, unintentionally homeless and with a local connection will go to the top of the list. But there could still be a long wait for long-term housing. Larger households face the most difficulties in being rehoused, as there are even fewer three- and four-bedroom properties than there are smaller ones. And when they finally find a suitably-sized house it may not be affordable if they are subject to the ‘benefit cap’, which limits how much is paid as benefits. So, they may be stuck in temporary accommodation for years waiting for a property. The cost of this to local councils for one family could run into hundreds of thousands of pounds, more than the cost of buying an appropriately-sized house.

If and when a household finds long-term housing, whether from a council, housing association or private landlord, then their case will be closed, as a success. ‘Long-term’ here can mean housing likely to remain available for only as little as six months. If the applicant refuses their one offer of suitable housing without an acceptable reason, then the council will end its assistance and they will have to make their own arrangements, somehow.

Loads of cases
Council staff track the progress of each homeless application on their caseload, and many local authorities use the ‘Jigsaw’ database to maintain client records. According to the firm which produces it, ‘Housing Jigsaw is not simply an IT product, it is a housing options solution based on an IT platform’ ( In reality, maintaining the Jigsaw database (along with all the other spreadsheets and logs) dominates the working day, leaving little time for staff to help their clients find secure housing.

Staff are likely to have many dozens of people on their ever-growing caseloads, so won’t be able to spend much time on each. The Jigsaw client records count down to the expected date of homelessness or when the relief period ends, and if the records aren’t updated on time, then alerts flag up on reports. Rather than this being a helpful reminder, it’s more likely to lead to pressure from management. As with any capitalist organisation, bureaucracy becomes more prominent, or even more important than helping people.

Even if staff had more time available to directly support their clients with finding somewhere to live, there aren’t enough homes within reach of many people. In a survey by the Local Government Association published on 25 March, 90 percent of councils who responded were ‘seriously concerned’ that they couldn’t access enough housing for those in need. Shelter is calling for 3.1 million more housing association or council homes to be built over the next two decades (Shelter, 31 January), but it’s not going to happen.

Housing market
The housing market isn’t led by need, but by whatever practices are likely to be most profitable for landlords and property developers. Cheaper, basic housing brings in less money than building swanky flats and townhouses, so more expensive and more profitable housing tends to get built. This prices many people, especially those reliant on benefits, out of much private rented housing, and also means that qualifying for a mortgage isn’t a realistic option. In fact, the housing shortage benefits private landlords. When demand outstrips supply, landlords can be choosier about who they rent to, and can charge rent at the highest that someone will pay for it.

The term ‘affordable housing’, usually to denote properties owned by housing associations or councils, tacitly admits that other housing isn’t affordable to most people. The root cause of homelessness is in how property is owned in capitalist society. When someone else owns where you live, your rights to the property only last for as long as you can afford to live there or until the landlord changes their mind. We’re alienated from something as personal as our own home, if we have one.

Any good intentions behind the Homelessness Reduction Act or the efforts of council staff can’t resolve the housing shortage. And nor can this reform – or any other – address the economic reasons behind it. Councils, like any other organisation, are limited to what they can do within their circumstances. And which people get assistance is decided by putting them into categories – eligible, in priority need, intentionally homeless – and rationing support accordingly. The notions of ‘deserving’ and ‘undeserving’ poor are at play here, with the dividing line often being just what bits of paper people have. While staff will try to find some leeway, it’s a cold, alienating way of dealing with other people. Whether or not someone qualifies for assistance is more important than their genuine need of somewhere to live.
Clive Hendry

Tuesday, July 30, 2019

The Great Crash of 1929 (1969)

From the October 1969 issue of the Socialist Standard

The events of October 1929 which have become known as the Great Crash have been written not only into capitalism’s history but also into the system’s mythology. There are still plenty of people living who remember it, who recall with bitterness the seemingly endless unemployment, the contemptuous clerks at the Labour Exchange, die indignities of the Means Test. Many political prejudices were set solid in those dark days, forty years ago.

The economists also remember and promise us that 1929 will never happen again—which might have more force, were it not for the fact that in 1929 the economists were confident that the Crash could not happen in the first place. The promise, in any case, is always conditional on our doing as the economists say, with 1929 held over our heads much as Napoleon held the threat of Jones' return over the animals in Animal Farm. This, for example, was Harold Wilson’s warning to the 1966 TUC about what would follow a rejection of the government’s policy of wage restraint:
  . . . one false, careless, regardless step . . . could push the world into conditions not unlike those of the early Thirties.
Wilson is here making the familiar claim that the economy is now under control, even if sometimes it needs drastic measures like wage freezes and devaluations to remind it of the fact. And behind this lurks the notion that the economists of capitalism have learnt something from the Great Crash which they will never forget.

As 1929 started, the world was not entirely empty of optimism. Since the last great depression of the 1890’s there had been many developments in fields like electricity, the motor car and telecommunications and these were widely assumed to be bringing in their train greater freedom and equality. It was true that in Britain there was a chronic unemployment problem but the United States was in the midst of a prolonged stock exchange boom which convinced millions of people that mass production, credit trading and private enterprise were among the best things ever invented by man.

At the year’s opening the Conservatives in Britain were looking back with satisfaction on the work Parliament had just finished on amendments to the Book of Common Prayer; if there was an unemployment problem, they were confident they had dealt with it in their Derating Bill and Tory politicians toured the country telling everyone that prosperity was on the doorstep. This hilarious tone was kept up by Stanley Baldwin during the general election that year, when he managed to forget that basic industries like coal, steel and shipbuilding were depressed and pointed joyfully to the unmistakable signs of recovery to be found in the export of Cornish broccoli to Europe. Perhaps it is not surprising that the Tories lost the election.

The unpalatable fact was that Britain’s economy had been in decline for something like sixty years and in particular had emerged from the war to find the tendencies which had previously undermined British dominance — foreign competition, tariff barriers and the growth of home industries in former markets abroad-—were all accentuated. Soon after 1918 there was a surprise boom, largely due to the replenishment of war-depleted stocks. Prices shot up to impossible heights and, despite the demobilisation of 4 million servicemen, there was virtually full employment. But as raw materials which had been held up by the lack of shipping began to come onto the market the boom collapsed. By early 1922 prices had been halved; in 1921 unemployment exceeded 2½ million.

The slow recovery from this recession was probably due to the British government’s decision, in 1925, to return to the Gold Standard. The government were aware of the possible effects of this, but they found themselves in something of a cleft stick, having to choose between slowing down a possible recovery and risking contamination by the inflation which was destroying so many European currencies. (At the end of that inflation, prices in Poland had risen 2½ million times their pre-war level; in Russia 4,000 million times; in Germany one million million times.)

In America, where the Great Crash was first heard to rumble, things were rather different. The American capitalist class had had a lot to win in the 1914/18 war and came out of the peace talks as an exceedingly strong power. Their exports were increasing in trades which were expanding—in contrast to those of Britain, Which made most ground in declining trades. America suffered a few short recessions during 1920/21, 1924 and 1927 but always recovery followed quickly and taken as a whole the period from 1922 to 1929 was one continuous boom.

These conditions were of course registered on Wall Street, where the New York Times index of 25 industrial stocks rose in a smooth curve from 110 in early 1924 to 338 in January 1929. Just before the Crash, in September, it reached 452. This was the sort of evidence which persuaded many people, anxious to make their own paper fortune, that eternal prosperity had arrived. The monetary authorities seemed to be alone in their concern at the hectic activity on the stock exchanges —on one day just before the Crash over 12 million shares were traded and during the period 1927 to 1929 the bank borrowings of stock brokers rose from $3,500 million to $8,500 million—and when the slide started in October they welcomed it, in mistake for a minor adjustment which would quickly be followed by another bout of expansion.

Early in the New Year there was indeed a slight recovery and the experts announced the recession’s end. But then agricultural and raw material prices nosedived and this was followed by three waves of bank failures between the end of 1930 to mid 1932 which destroyed deposits, caused a panic-stricken contraction of bank loans and finally brought paralysis in the winter of 1932/3.

The bank failures revealed a new and poignant aspect of the Crash. Now it was not only the unemployed industrial and agricultural workers who were queueing and begging; they were joined by small businessmen, shopkeepers and stockholders who had seen their life savings disappear and who, when ruin stared them in the face, sometimes chose to end it all with a bullet or a jump from an apartment window.

The American government, following the customary policy of treating symptoms rather than deal with causes, tried to force prices up by cutting back production and restricting competition. In many cases this policy was superfluous; producers who were faced with a glutted market needed no official prompting to destroy food, and industrialists who found that they could not sell their goods had no alternative to closing their works. From the point of view of capitalism, it was all very logical but it meant that the world was presented, in what was supposed to be a great age of freedom and prosperity, with the spectacle of millions of underfed people while wheat was being burned; of men searching desperately for employment while factories were shut, while the winding wheels stayed still at the pit shafts and the great cranes hung silent and motionless in the almost tangible gloom of the shipyards.

Yet even these drastic and inhumane measures did not work. Tom Johnston, who was one of the Labour ministers given the job of ending unemployment in Britain, spoke about them with grim realism:
  It is in vain that the United States keeps 250 million bushels of wheat, or contact wheat, off the market in an endeavour, by a limitation of supplies, to peg or to stabilise prices. Only the other day wheat sold in Liverpool at a lower price than it has been sold since the days of Charles II. lower than it had been for two and a half centuries. (House of Commons. April 16 1931).
The Great Crash, and the slump which followed, have been subjected to innumerable autopsies and inquests. Perhaps the most familiar has been the theory of overproduction, that the world had simply made much more than it needed. At the time, some experts believed that the developing productive techniques were held back from exerting their full effect by the 1914/18 war, and afterwards made themselves felt in a more concentrated manner. As a result of these developments, productivity increased faster than real wages—one estimate for new manufacturing industries was three times as fast—which led to a surplus of goods on the market with no wages to buy them. (It is worth commenting that nowadays the explanation for economic crises is exactly the opposite — real wages increasing faster than productivity.)

Undeniable as it is that people without money cannot buy anything, the overproduction theory does not explain the fact that the “surpluses” existed while people were literally starving and only too anxious to consume more. It is a theory which only meddles with the symptoms of the crisis and does not touch the cause, nor the stupidity and inhumanity of it.

Then there were the financial theories, which blamed the Crash onto the wild antics on Wall Street and the subsequent slump onto a loss of confidence in investing in production, public works and so on. These ideas cannot tell us why it affected so many countries, whether they had had a stock exchange spree or not; they do not explain why an investment flood should so mechanically bring an investment drought, nor why both these opposite conditions should be blamed for having a similar effect. It is true that capitalism's financial machinery, which is supposed to be such a model of efficiency and such an aid to production can often aggravate a recession. But it cannot produce one—at the most a stock exchange, like a barometer, registers conditions but does not alter them.

What the Great Crash did illuminate was the impossible anarchy of capitalism, the basic contradiction in a system where wealth is socially produced but privately owned. The Thirties might have been years of productive advance but they turned out to be a decade of collapse and stagnation, when capitalism was in the throes of a crisis which hit all states, whatever surface differences there were between their political and economic organisations and whatever remedies they tried.

The political results of the Crash were varied. In some countries the working class opted for what they thought was change; in others they turned for assurance to the more traditional parties. In America, Roosevelt defeated Hoover in the 1932 election by the staggering margin of 472 electoral college votes to 59 and the Democrats won large majorities in both House of Congress. Roosevelt’s New Deal was later given much of the credit for the end of the slump but in fact it was a matter of luck. He had campaigned on a promise to cut Federal spending by 25 per cent and to balance the Budget. But he was as impotent to control events as anyone else and when a policy of deficit financing was forced upon him this happened to coincide with the beginnings of the recovery.

In the same way, the Nazis were lucky in Germany. The recovery started as they came to power, allowing them to spend on armaments and communications and this was enough to convince many people that Hitler also had a magic formula, which included replacing parliamentary democracy with a “strong man” dictatorship and crushing the trade unions.

In Britain the workers took shelter with the established parties. One of the first acts of the 1931 National coalition was to cut unemployment pay but this did not prevent the working class gratefully voting for them in 1935, running up big Tory votes in industrial centres like Manchester, Liverpool, Newcastle and Sheffield.

The Great Crash, then, did nothing to undermine capitalism and it did not. as many left-wingers expected, cause the system to collapse. It merely contributed another chapter to capitalism’s mythology, in which one set of politicians were stubbornly blind to remedies which were obvious to another. And this leads on to the other myth—that the new enlightened experts have learned how to control the system and we should all be grateful to them and if we’re not—why, then, we will have Jones back and 1929 will happen all over again.

As if those were the only two choices.

[In a future issue we shall be serialising an abridged version of our pamphlet "Why Capitalism Will Not Collapse." This pamphlet, which w'as published in February 1932, examines the after-effects ,of the Great Crash and showed what influence they had on capitalism,]

Letters: More on Squatting (1969)

Letters to the Editors from the October 1969 issue of the Socialist Standard

My letter, (July Socialist Standard), was written in order to find out whether you have a coherent party line on reformism. Your reply suggests that you have not, and reveals a deep confusion as to how you think a worker should behave under capitalism.

You say that you “support the efforts of workers to improve their housing conditions under capitalism—even by squatting”, and yet you are “opposed to all reformist movements.” Your reason for thinking there is no inconsistency in this position is that "squatting is no more a reform than stealing.”

But it is. For example, although the East London Squatters encourage homeless people to occupy empty dwellings they do this as a means to the reformist end of persuading local authorities to change their housing policy. It just so happens that there you have a reformist movement which uses direct action instead of the orthodox political channels. So if you support people squatting then you support their engaging in reformist activities. This, I agree, is not the same as supporting a reformist movement, but since when did the SPGB support the workers in being reformists? To put your dilemma another way, if you support people in squatting but are opposed to all reformist movements would you allow a member of the East London Squatters to join your party?

You ought to, of course. For what is the difference between getting what you can out of capitalism by joining a trade union and doing the same by joining the Squatters or a Tenants' Association? The only difference I can think of is that possibly Marx would have approved of the first of these but not the other two. But I am sure you will agree as scientific socialists that this fact on its own is worthless (After all, Marx approved of support for bourgeois revolutions).

To sum up: it would be convenient if you could simply register opposition to all attempts at reform, right across the board. But apart from the sheer inhumanity of such a position, you are precluded from adopting it because of your views on trade unions and the vote. To draw the line here looks suspiciously arbitrary and anyway from what you say about squatting it looks as if you don’t draw it here. So where do you draw it? You think that workers should get what they can out of capitalism. So suppose a man could do this by joining the British Humanist Association (because this would give him contacts for a job offering more pay for less labour-power). You would then, prevent him from adopting it because of your views on something of which you approve.
W. Warwick, 


I am intrigued by your reasoning in your reply to Mr. Warwick. I pass over the use of somewhat ill-chosen emotive terms to compare squatting with stealing, for there is no certainty that stealing will lead to greater equality of wealth, and in most workers’ minds the term suggests the bank robber carrying off not the bank’s wealth but the workers’ savings.

When you say that in supporting squatting you are not supporting reforms — is this because you give generalised support, but do not intend to take part in any attempt to help squatters do the squatting?As besides the workers involved a number of politicoes are there to help, redecorate the house, hand out leaflets explaining the case, print those leaflets, argue with and resist bailiffs and police and so forth. The family who squat, are certainly engaged in a day to day struggle to defend their living conditions, but what of their sympathisers and supporters?

In Ilford as in many other instances part of the support has meant that leaflets have been distributed explaining that as an immediate possibility such and such houses are empty, will be empty for some years as the council has not yet permission to undertake the scheme under which they are to be pulled down and does not anyway intend to tackle this part of Ilford until 76 and so on . . . Arguments are put that lack of housing is the product of the profit motive and not any intrinsic impossibility as to building; but specific demands are made for the here and now.

Some years back one of your members in an article condemning anarchists argued that syndicalism was reformist—reformism by blows, but reformism nevertheless — this would appear to be the case of squatting; I would prefer to use the phrase gradualist revolution, but if the argument is true of the one then it is true of both. 
Laurens Otter, 
Thornton Heath

Our coherent policy on reforms and reformism is set out briefly here:
  1. We are opposed to reformism, or the futile policy of trying to make capitalism work for the good of all.
  2. We are opposed to political groups which pursue reformist policies.
  3. We are not opposed to all reforms of capitalism.
  4. We do not advocate or propose reforms. .
  5. Reforms will be offered by capitalist governments when the Socialist Party grows stronger.
  6. We urge workers to resist the downward pressures capitalism always exerts on their living standards.

Since it is this last point which worries Mr. Warwick let us go into it further. We appreciate that as long as workers are not socialists, this resistance will often be carried on in a disorganised and ineffective way usually involving support for reformist policies and parties. As long as socialist numbers are small (as now) there is little we can do to remedy this save urging workers to recognise the futility of reformism and to become socialists and wage the class struggle in an organised and conscious way.

There is a difference, which we are sure Mr. Warwick can see, between giving support to the general aim of working class resistance to capitalism and giving support to any and every specific method a non-socialist working class might use. We only endorse those methods which we consider to be in the interests of the working class, e.g., some aspects of trade unionism. We oppose those methods which we consider do not measure up to this standard, e.g., reformism.

Now, where does squatting come in? Obviously we should have made it more clear what we meant by ’’squatting” when we said it was the kind of action a worker could take to improve his housing conditions under capitalism.

Originally the word meant to occupy land without title and has come to refer also to occupying empty houses. When we referred to ’’squatting” in the April Socialist Standard and in our July reply to Mr. Warwick we meant the simple act of a homeless family moving into an empty house, i.e., the act of an individual, family trying to get better housing. We are not opposed to, and will not criticise, workers for doing this. We did emphasise also that this was not the way to solve or even palliate the working class housing problem.

However, it is true that ’’squatting” also has a broader meaning: the sort of policy outlined by Mr. Otter with the aim, as Mr. Warwick says, of ’’persuading local authorities to change their housing policy”. This we are opposed to and to organisations like the “East London Squatters” whose reformist policy Mr. Otter was outlining.

Mr. Warwick is obviously unaware that SPGB members are in tenants associations, student unions, parent-teacher groups as well as in trade unions. This is not part of their Party activity but part of their activity as workers, who are tenants or students or parents and who are trying to resist capitalist pressure. This has long been our attitude. We refer Mr. Warwick to the Socialist Standard of January 1932 where a correspondent was told that “members of the SPGB are permitted to belong to certain of the organisations of the unemployed”. The emphasis was put on certain because some of these and other organisations are merely fronts for reformist groups. We would say this is true for the various so-called Squatters campaigns which serve the ulterior motives of assorted anarchist and trotskyist groups. Obviously an SPGB member could not join an organisation of this type.

Our policy on trade unions has been worked out in the light of modern industrial and political conditions. While we recognise that the socialist movement owes a great debt to Marx who first put its theory onto a scientific basis, we have registered our disagreement with the attitude he took up on a number of points (war, nationalism and even reforms).

Finally, we only drew a parallel between squatting and stealing to show that we were not worried that squatting was illegal. The law only exists to protect private property and who are we to respect it?
Editorial Committee

Monday, July 29, 2019

Equality and the Wages System. (1931)

From the September 1931 issue of the Socialist Standard

The changes in the administration of some of the State industries of Russia, recently announced with the usual pomposity by Stalin, have given the capitalist press another chance to extol the alleged economic superiority of capitalist methods of production over what they mistake for Socialism.

Actually, these changes merely make more clear the essentially capitalist character of the Russian State industries, frequently pointed out in these columns.

Piece-work is to be extended, and many of the "worker-administrators” are to be sent back to the factories. The specialists and managers are to be given greater powers of control, and be more liberally treated. These changes, however, involve no new principle. Ever since the introduction of the New Economic Policy ten years ago things have been moving along this direction, albeit spasmodically and inconsistently. 

Nevertheless, we have the "Manchester Guardian” seizing upon the occasion in its weekly issue of July 10th to expound a little capitalist economics. Speaking of the workers in the factory, the editorial scribe asserts that, "He may work slowly or badly but he will draw his wages just the same unless there is some system of fines or piece rates." It would seem that this brilliant journalistic gem dwells in a world where the "sack” is unheard of.

Wages are paid only in order that employing concerns may squeeze out of the workers that profit which it is the object of their existence to obtain. This applies whether the workers are on piece rates or not. Piece rates have the advantage, however, in those industries where the system can conveniently be utilised, from the capitalist point of view, of reducing the need for supervision to keep up the pace of production; a fact which led Marx to declare, “that piece-wage is the form of wages most in harmony with the capitalist mode of production,” "Capital,” p. 567 (Sommenseheim).

Stalin and his supporters, however, claim to be "Marxists.” They declare that, "it is necessary to organise a system of a sliding scale of wages which would take into account the difference between skilled and unskilled labour . . . Marx and Lenin say that this difference will exist also in Socialist society even after the abolition of classes; that only in a Communist society will this difference vanish. Therefore, wages, even under a Socialist regime, must be regulated in accordance with the work accomplished and not the need felt.”

Then they proceed to condemn "those trade unionists and economists who are in favour of equal wages” as being opposed to Marxism and Leninism.

To take the last point first, Marx certainly exposed the absurdity of the demand for "equal wages,” a demand which figured prominently in the propaganda of a section of the Communist Party in this country (in the "Workers’ Dreadnought” particularly) in its early days.

On page 31 of "Value, Price and Profit,” Marx says, "Upon the basis of the wages system the value of labouring-power is settled like that of every other commodity; and as different kinds of labouring powers have different values, or require different quantities of labour for their production, they must fetch different prices in the labour market. To clamour for equal or even equitable retribution on the basis of the wages system is the same as to clamour for freedom on the basis of the slavery system.” (Italics Marx’s.)

It is obvious enough that Marx is referring here to wages under capitalism, but where did he speak of wages under Socialism? Stalin does not tell us. Wages, whether equal or unequal, are ‘part and parcel of capitalism, i.e., a system based upon the ownership by the master-class of the means of living, and the consequent enslavement of the working class by whose labour alone all wealth is produced. Or, as Marx himself put it in his criticism of the Gotha Programme, "The system of wage-labour is therefore a system of slavery and a slavery that becomes more and more arduous as the socially productive forces of labour develop, and independently of the question whether the labourer is better paid or worse.” (Section II, par. 5.)

The wage-labour system in Russian State industries, like the system' here and elsewhere, is a system of Slavery. The spread of piece-work will intensify the slavery; it will enable the "Communist” rulers to squeeze more surplus-produce out of Russian workers, just as it has helped the Conservative and Liberal capitalists of this country. Alleged “quotations” in support of it from Marx merely brand Stalin & Co. as hypocrites and their followers as ignorant dupes. The Russian Government must make a profit in order to pay interest upon its loans if for no other reason, and this fact alone is sufficient to explode the myth that Russian State industry is run on Socialist lines.

The Russian Government has to borrow money to run its industries, like any other capitalist concern, because it has to pay for machinery and raw material, because its employees have to pay for the food, clothes and houses they need; because, in a phrase, all the means by which these requirements are produced are private property. It has not established an oasis of Socialism in a capitalist desert. Had it tried to do so it would have been speedily annihilated.

Does this then prove that capitalism is the only possible economic system, as the “Manchester Guardian” would have us believe? Is the equality, which the Socialist Party fights for, incompatible with productive efficiency? In order to answer these questions it is necessary to be clear as to what we are to compare capitalism with, and also exactly what we mean by equality. If we compare capitalism with the forms of society which preceded it, we find that it has resulted in an enormous and unprecedented increase in the produce of labour; but it has also resulted in the concentration of the bulk of this produce in the hands of the few.

The gulf between the workers of to-day and their capitalist masters is greater than that which separated the peasant-serfs from the robber barons or the chattel-slaves from their patrician masters. Before the increased productive power of modern labour can become an advantage to the whole of society the instruments of production must become common property. They are socially operated; they have yet to become socially owned and controlled.

This of course involves the abolition, through political action, of the “rights” of the capitalists to own and control the land, factories, railways, etc. It implies the conscious assumption by the working- class, organised for the purpose, of complete control of the machinery of government so that they may obtain control of the entire industrial resources of society.

This abolition of classes is the equality at which Socialists aim (not a mathematical equality of income which is fantastic and unwanted); but an equality of access to the means of living and of obligation to contribute to their production. Such an equality would render the term “wages” a meaningless one, for no one would be in a position to buy the services of others in order to make a profit, just as no one would be in the position of having to sell their energies in order to obtain a bare subsistence.

Under such a system it would be to the interests of all to expand the material resources of society as rapidly as possible in order to increase the common stock of Necessities and amenities. For so long as these resources are fettered by capitalist ownership, whether in the form of private capitalism or nationalisation, the workers will be restricted to the consumption of such a quantity of goods as is sufficient to enable them to go on producing a profit. Hence we find everywhere that the capitalists, faced with a quantity of goods which cannot be sold, are compelled to take steps to restrict production.

Socialism will abolish the need for such restriction and while, even with the present resources of production, it would immediately increase the wealth available for the workers' enjoyment, it would also render possible a considerable expansion of those resources in order that the free development of every individual should be translated from a dream into a reality.
Eric Boden

The Great Fiasco: Contemptible "Labour" Government (1931)

Editorial from the September 1931 issue of the Socialist Standard

We have just witnessed the inglorious exit of the second “Labour” Government after more than two uneasy years of office—two years of deserted principles, political bargaining, and cowardice. During that time the cherished theories of the Labour Party have been tried, and every one found wanting, and abandoned.

The Labour Party was to be a “high-wage” party. More than four million workers have had their wages reduced since Mr. MacDonald became Prime Minister in June, 1929. The Government confessed its inability to prevent the reductions, and indeed played an active part in some of them—notably those affecting its own employees,

It was confident that unemployment could be reduced by means of its schemes of development. Yet we have seen unemployment mount to a record figure, 2,700,000; the percentage of insured workers on the unemployed register equalling the highest previous figure (23%), attained under Mr. Lloyd George’s Government in 1921.

Foremost in the Labour Party’s programme was the belief that the workers could be protected against the worst evils of the capitalist system by means of social reforms, and further that their standard of living could be supplemented and fundamentally raised by these additions to wages. In practice social reforms which reduce the necessary expenditure requiring to be met out of wages, have the effect of permitting corresponding reductions in the workers’ wages without detracting from their efficiency as profit producers for their employers. The Report of Lord MacMillan, who was appointed by the Labour Government to inquire into the wages of wool textile workers, accepted this as a matter-of-course, and recommended lower wages on this very ground, that the social services had relieved the workers of expenditure on unemployment, on medical attention, and on maintenance during old age.

The Labour Party for the whole of its existence had preached Nationalisation. Then, when they came into office on this occasion, their spokesmen calmly abandoned that doctrine and put in its place the advocacy of public utility corporations of the kind introduced by Liberals and Conservatives in the Port of London Authority, and the Central Electricity Board. Mr. Herbert Morrison frankly accepted these as the model for his proposed London Passenger Transport Board. Neither Nationalisation nor public utility corporations would solve any working class problem, but the Labour Party, until it took office, professed to believe in the former as a panacea, and rejected the latter.

One of the principal arguments put forward for nationalisation was that state employees would be better paid than the workers in private industry, and thus the standard of living as a whole would be lifted by the nationalisation of one industry after another. Yet the seven Labour Party supporters on the Civil Service Commission, three of them Labour M.P.’s, signed the report rejecting this doctrine in its entirety. They declare that Government employees must not be paid more than is being paid for comparable work by private employers. They recommend lower pay for certain Government clerks for no other reason than that private employers are getting similar types of workers for a lower wage.

The sum total of all the Labour Party schemes of reform was to be a process of conversion by the example of practical works. The Labour Government would give the workers one after another of its sheaf of beneficent reforms, rousing more and more of them to a pitch of enthusiasm, until a majority would be led to vote for Labour Government.

The events have been far different.

The enthusiasm of even the staunchest Labour voters has been undermined by instance after instance of successful attacks on their wages and working conditions, carried through without a word of protest from the Labour Ministry. How, indeed, could they protest while they were reducing the low pay of their own Post Office and other workers, and while the co-operative societies were doing the same ?

The general defence of the Labour Cabinet was that they were the victims of an “economic blizzard.” But it was precisely because they professed to be able to protect the workers against such blizzards that they went into office. No words can disguise their failure. “Economic blizzards” are a normal and recurrent feature of capitalism. It is an illusion to suppose that capitalism can exist without these crises of over-production.

Their promise to give the workers “something now” in the shape of reforms was not only unfulfilled, but they ended up by proposing to make a direct attack upon the existing social reforms.

The “Daily Herald” in its issue for Monday, 24th August, admitted that a majority of about 12 members of the Cabinet, out of a total of 21, were in favour of reducing unemployment pay in order to meet the wishes of the Conservatives and Liberals and the banking interests. This was the cause of the final crisis. The “Herald,” in its Editorial, admits that the existing scale of unemployed pay is “barely sufficient to keep them in a state that will enable them to step back into industry when the time comes.”

We are told that heavy taxation and the size of the Budget have brought the country to a critical position, and that economy is the only way out. Yet we observe that taxation was heavier in 1920 and 1921, and the Budget nearly twice as large. Is it that the crisis has been exploited with the object of forcing reductions on unwilling workers?

Alongside its other principles the Labour Government also shed the last vestige of its boasted independence. It took office on Liberal votes, just as it did in 1924. It carried on constant discussions and negotiations with the Liberal leaders in order to keep their support. At the end the negotiations were extended to include the Conservatives also.

Now we observe that Mr. MacDonald is to be Premier in a new Cabinet containing Mr. Baldwin, Mr. Snowden, Sir Herbert Samuel, and other Liberal, Labour and Tory Ministers. It is expected that Mr. Snowden will be Chancellor of the Exchequer. The reason for the inclusion of Labour Party Ministers was foreseen and disclosed by the “Western Morning News” (4th August, 1931) :
  Labour interests, which are bitterly hostile to economy in any form, may be brought by a Labour Government to recognise the facts and the unpleasant consequences which will result from ignoring them. They will take from Mr. Mac-Donald and Mr. Snowden what they would not accept from a Conservative Premier and Chancellor of the Exchequer, and for that reason, if no other, it is desirable to keep Labour in power.
The Labour Government failed to do this, but the Labour Ministers in the National Government will serve the same purpose. So the Labour Party’s supporters are now confronted with the humiliating spectacle of their leaders being once more—as during the war—part of a great capitalist coalition to solve the problems of the capitalist industrialists and bankers.

The “Daily Express” and “Manchester Guardian” reported (24th August) that the Labour Government’s last miserable effort to cling to office was the submission of its economy proposals to the banks for their approval! The Labour Party stands now divided and discredited. Its Cabinet has fought no battle for Socialism. It has lived dishonestly and dies meanly and unlamented.

Where We Stand.
It is an opportune moment to restate the position of the Socialist Party. We contend that there is no solution for the workers’ problems except Socialism.

It is not possible for the Labour Party or any other party to administer capitalism in such a way that the workers’ problems can be solved within the framework of the existing system. The failure of the Labour Government is not an accident. It is not due to mistakes in tactics, or to the failure of the personal element.

When they entered office Mr. J. H. Thomas declared on their behalf that they were going to do what they could to reduce unemployment while ”accepting the present order of society” (see “Daily Herald,” 6th July, 1929). That was an attempt which was bound to fail, and what is true of unemployment is equally true of the poverty problem in general.

We dealt in our issue of June, 1929, with the certain failure of the Labour Government. Our words will bear repeating. Our confident prophecy is being fulfilled.
 We deal elsewhere in this issue with the failure of Labour Government in Queensland. We prophesied that failure and with absolute confidence we prophesy the similar failure of Labour Government here. No matter how able, how sincere, and how sympathetic the Labour men and women may be who undertake to administer capitalism, capitalism will bring their undertaking to disaster. As in Queensland, those who administer capitalism will find themselves sooner or later brought into conflict with the working class. Like their Australian colleagues, the Labour Party here will find themselves in a cleft stick. Having no mandate to replace capitalism by Socialism, they have pledged themselves to solve problems which cannot be solved except by doing the one thing for which they have no mandate.
The reference to the Queensland State Government, although made in 1929, is relevant now because the Australian Federal Government—a “Labour” Government with a parliamentary majority, is at this moment carrying through a policy of reducing wages and of cutting social reforms exactly like the economy scheme of our own “National” Government.

Knowing that Socialism is the only solution and that it can be brought about only when the electors become Socialists, we have consistently opposed the Labour Party and its affiliated party, the I.L.P., which practise the dishonest political manoeuvre of seeking election on a programme of reforms of capitalism. It is dishonest because those who do it know that the reforms will not solve the problem. Their dishonesty has on this occasion soon been exposed. The logic of events has called their bluff. They fought the last election on the promise of an improved standard of life for the workers. The end of their inglorious tenure of office finds them hand-in-hand with their erstwhile opponents chanting the slogan of “sacrifices for all.”

Again we urge the workers to abandon these illusions and make their choice against capitalism, including its Labour Party supporters, and for Socialism. The Socialist Party of Great Britain is the only party in this country that has never betrayed the workers’ interests by supporting reform programmes or capitalist parties.