In the latest round of never-ending struggle of governments to even out the ups and downs of capitalist production and trade Mr. Callaghan has produced the Selective Employment Tax. It carries a stage further an idea put forward under the Churchill Government in 1944 and aired again by Selwyn Lloyd as Chancellor of the Exchequer in 1961—when Wilson and other Labour Party spokesmen could find nothing good to say about it.
The declared purpose of the tax is both to tighten up production generally but also to induce workers to leave the “service” industries and go into manufacturing and thus encourage the latter to produce and export more. All employers will pay for each worker a tax of 25/- a week for men, 12/6 for women and boys and 8/- for girls. But, whereas the employers in building, distribution, finance and other services will receive no refund, employers in manufacturing will receive from the Government a larger weekly payment than the amount of the tax, a “bonus” of 7/6 for men, 3/9 for women and boys and 2/6 for girls.
A third group of employers, those in agriculture, public transport, central and local government and Nationalised industries will get back what they pay out. It is expected that large numbers of workers will be sacked from group one and find jobs in group two; which all depends on how long trade continues here and in world markets to enable them to sell the additional output profitably. When the inevitable turn-down comes we shall no doubt be presented with yet another absolutely new and infallible cure for the incurable.
In a leading article on Sunday, 8th May, the Observer gave its cautious approval, but included one remark of particular interest. The editor did not like the way Mr. Callaghan has made use of the division of industries into 24 groups (or “orders" as they are called), a division which was originated for statistical purposes in connection with the industrial and occupational censuses of the Ministry of Labour wage information. “Potentially." said the Observer, “there are dangers in this approach. There is the risk of fostering the old-fashioned and nonsensical Marxist idea that the creation of services is unproductive and that only the creation of goods is truly productive.”
In the Observer, as in most other newspapers, the silly season for comments on Marx and Socialism never lets up. The first absurdity about the remark quoted here is the implication that the Labour Government does what it does because Marx told it to do so. Nothing could be less likely and even the Observer’s editor ought to know this.
The second is the assumption that Marx did in fact say this. If the editor believes it, perhaps he will be good enough to tell us where the statement may be found in Marx's works.
Of course Marx did not fall into so elementary an error. After he had, in the opening paragraphs of the first volume of Capital, first described a commodity as “an object outside us, a thing that by its properties satisfies human wants of some sort or another . . . whether they spring from the stomach or from fancy,” he later dealt with commodities which are not “goods” but “services”, the very word that the Observer thinks he did not use. He wrote, for example, about the transport industry which has the feature that “its services (change of place) must be consumed at the same time that they are produced ... transportation as an industry sells this change of location” (Capital, Vol. II, page 62).
He also dealt in Chapter XVI of Volume 1 of Capital with the extension of meaning of the term productive labour. In the elementary stage the manual labour of an individual worker is “productive labour.” Later on “the product ceases to be the direct product of the individual, and becomes a social product, produced in common by a collective labourer, i.e., by a combination of workmen.” In this stage “in order to labour productively it is no longer necessary for you to do manual work yourself; enough if you are an organ of the collective labourer, and perform one of the subordinate functions.”
He instanced the early builder who was his own architect, and the later separation of the architect from actual building work. Lastly, as Marx points out, capitalism has given a new meaning to “productive.”
“Our notion of productive labour becomes narrowed. Capitalist production is not merely the production of commodities, it is essentially the production of surplus value. The labourer produces, not for himself but for capital. It no longer suffices therefore that he should simply produce. He must produce surplus value. That labourer alone is productive, who produces surplus value for the capitalist, and thus works for the self-expansion of capital . . . a schoolmaster is a productive labourer, when he works like a horse to enrich the school proprietor. That the latter has laid out his capital in a teaching factory, instead of a sausage factory, does not alter the relation” (P.558).
That Mr. Callaghan has muddled ideas may well be true, but that he got them from Marx is an absurdity.