Wednesday, February 6, 2019

The Review Column: Out of Control (1967)

The Review Column from the January 1967 issue of the Socialist Standard

Out of Control

Politicians are fond of depicting themselves as men who have capitalism firmly under control.

They talk of capitalism as if it were a car, which needs only a touch on the brake or the accelerator to keep it humming smoothly along to prosperity. Or, like Richard Crossman last November, as if it were someone with a minor illness:
  For if it is vital not to let up until the medicine has really worked, it is equally important not to endanger the patient's recovery by the kind of overdose which could transform a carefully calculated cutback into an unplanned crisis of confidence and a collapse of private capital investment.
This sounds as if the politicians really know what they are about, as if the economy can be cured without a lot of difficulty.

It might be more reassuring if it were not for the fact that from the start the Labour government have said they had the situation under control, only to be hit by repeated crises which, they confessed, took them unawares.

It might be more reassuring were it not for the long history of unpredictable economic ailments which have come upon capitalism—the Slumps, the Recessions, the Great Crashes.

And again if it were not for the long list of politicians who have gone down in confusion after telling us, like Crossman, that as long as they were at the bedside there was nothing to worry about.

Capitalism cannot be controlled, no matter how refined and delicately calculated its politicians' policies may be. The system runs the politicians, not vice versa.

Perhaps Crossman knows this. One thing he certainly knows. Whatever the situation, a capitalist politician must always keep up appearances; he must never admit that the system has beaten him and even though the patient dies there must never be any verdict other than accidental death.

How to Build Houses

Labour's election manifesto last March said “Our first priority is houses." It asserted that in 1965 a total of 383,000 houses had been built and promised. "In the next five years we shall go further . . . we intend to achieve a . . .  target of 500,000 houses by 1969/70."

What progress is being made?

The latest available figures—for October last year—show a fall in houses built of 3.252 compared with the same month in 1965. In the first ten months of 1966, there were 245 fewer houses built than during the same period in 1965. The Daily Telegraph reported “Much bigger falls are forecast for the first half of next year . . ."

Does this mean that the need for homes is declining?

A new organisation, a National Campaign for the Homeless—Shelter it calls itself—says that there are three million families in Britain living in slums, near slums or in grossly overcrowded conditions. London has 7,613 homeless people in hostels; Glasgow has 78,524 families on its waiting list; Liverpool has 73,733 unfit houses.

Is there then a shortage of building materials?

As the building figures go down the stockpile of bricks goes up; over 700 million are in stock now, enough to build nearly 50,000 homes. The President of the National Federation of Clay Industries, Mr. Kenneth Timperley, describes the recession in brick demand as “. . . quite the worst I have experienced in 30 years. . ."

Does it make sense?

More people in desperate need of a decent place to live, less houses being built, more building material being stockpiled.

An inhuman muddle, but it does make sense in terms of the economics and the priorities of capitalism, whether it is capitalism under a Tory government or Labour.

Bonn-Crisis Over?

The political crisis in Bonn was averted by the formation of a coalition government made up of the Christian Democrats and the Social Democrats.

As a result Willy Brandt, Mayor of West Berlin, became Foreign Minister and Kiesinger’s deputy. Seven other Social Democrats joined the Cabinet.

Some people may wonder that parties which were once so hostile to each other can suddenly form an alliance. They may wonder that a party which calls itself Socialist can sit in the same Cabinet as one which openly stands for capitalism.

In fact the German Social Democrats, far from standing for Socialism or indeed any political theory, are one of the most adaptable parties in existence. Before they joined up with the CDU, it was strongly rumoured that they were about to throw in their lot with the other main German party, the Free Democrats.

This would also have been a painless business: the Guardian's Bonn correspondent reported on the marked similarity between the two parties and said the Free Democrats had ". . . published a policy statement . . ."

All capitalist political parties are basically the same and, when the occasion demands they have no difficulty in closing ranks with each other. They have little respect for what they profess as principles and for the meaning of the very words they use. All of them are after political power, and will do any sort of deal to get it.

The flavour of capitalist politics is international. It is also extremely unpleasant.


In the Commons debate on Rhodesia on December 8 last. Harold Wilson said:
  The present situation in Rhodesia faces Britain with the greatest moral issue she has had to face in the post war world.
On the same day in the House of Lords, Tory Lord Ferrier was assuring the government:
  I and millions like me could never be persuaded to open fire on our kith and kin in Rhodesia.
In Salisbury, lan Smith has said all along that he stands for a settled, civilised way of life against barbarism.

In other words, however much both sides may disagree on other matters, they are at one in presenting their struggle with each other as a moral issue.

There is of course nothing new in this, although it is something of a mystery, why politicians think it is always necessary. There is no evidence that working class support for capitalism would decline, if they were told the truth about its power struggles.

Capitalism has many conflicts, all of them basically economic in origin. There is no morality involved in them, no human interests, no distinct division between right and wrong.

Wilson’s professed moral indignation against Rhodesia, for example, does not at present extend to South Africa, which has never made any secret of its support for the Smith regime.

The reason for this is plain. South Africa is too valuable a trading partner for Britain’s Labour government to want to upset.

The African states in the Commonwealth may protest at this, and they also use moral arguments to support their case.

Behind all this fog of confusion and official lies, the processes of capitalism grind inexorably on. They recognise no morality and the only issue they are interested in is a healthy balance sheet.

Concentration of Industry (1967)

From the January 1967 issue of the Socialist Standard

Under capitalism wealth takes the form of capital. Wealth is used to produce more wealth not to satisfy human needs but to make profits. Most of these profits are re-invested and in this way capital accumulates. What forces the capitalist to re-invest his profits (rather than consume them all in riotous living) is competition. Each capitalist competes against other capitalists for a share of the market. This means he must run ever faster to stand still. He must use his profits to buy machinery that will cheapen his costs. This has certain technical effects: it leads to an increase in the size of productive units. This competition between capitalist enterprises is the motive for increasing productivity.

But competition has another result. It tends paradoxically to reduce the number of competitors. As the technical process becomes more complex and costly only large enterprises can survive. The weak and inefficient go under and their wealth passes into the hands of those who survive. Thus industry becomes controlled by fewer and fewer enterprises.

This whole social process makes Socialism a practical possibility. Ever-increasing productivity makes a society of abundance possible. Socialised methods of production make the private ownership of socially-produced wealth outdated—and worse, a fetter on production. As control of industry is centralised into fewer and fewer enterprises democratic social control becomes possible. Thus does capitalism prepare the technical basis for Socialism.

Marx, the man who did so much to put socialist theory on a scientific basis, when he was studying capitalism over a hundred years ago discovered this tendency towards the concentration of industry.
A recent study of this subject was published in The Journal of the Royal Statistical Society in 1965 by Alan Armstrong and Aubrey Silberston under the title “Size of Plant, Size of Enterprise and Concentration in British Manufacturing Industry 1935—58”. For this study they used the 1958 Census of Production and previous studies. Their conclusions were:
  Output has risen greatly since 1935, but the number of plants has risen much less, and in recent years has been falling. There has been a movement towards fewer, larger plants in most industries . . .  Further the average size of the largest plants, measured by employment, has in general increased, and large plants now account for a higher proportion of total employment in nearly all industrial groups than formerly. The same is true of their share of total output. Finally, plants are, in general, being operated by fewer enterprises, and the extent to which many industries are dominated by a few “giant” enterprises seems to be increasing.
(By plant is meant “premises under same ownership or management at a particular address”; by firm “one or more plants under the same trading name”; by enterprise “one or more firms under common ownership or control”.)

One of their tables, reproduced here, is particularly revealing.

A further table shows the percentage of workers employed by the largest three enterprises in some “industries” (as defined by the Census).

Employment is used rather than output as it is easier to measure. But as the larger enterprises will tend to be more efficient the concentration in terms of output will be greater than the figures given here. For oil refining the percentage is 84; for man-made fibres 81; for sugar between 70 and 91; for Tobacco between 66 and 85; for watches and clocks 70; for margarine between 59 and 75; for steel tubes between 49 and 79; for asbestos 63; and for soap, detergents and candles and linoleum both 60. The top four enterprises in dyestuffs employ 88 per cent of those in the industry and in cement between 71 and 85.

Although both Tories and Labourites praise competition and denounce monopoly they have long since ceased to tilt at the windmills on this point when in office. They accept—and even encourage —the concentration and the centralisation of control of industry. A White Paper put out in January 1966 spoke of setting up an Industrial Reorganisation Corporation just to encourage concentration. The White Paper stated:
  The need for more concentration and rationalisation to promote greater efficiency and international competitiveness of British industry, which was emphasised in the National Plan, is now widely recognised.
and went on:
  There is no evidence that we can rely on market forces alone to produce the necessary structural changes at the pace required.
Hence the IRC. There’s no talk of protecting the small man here.

On this point no defender of capitalism can deny that the early Socialists were right, though they will of course deny where it leads: the social ownership and democratic control of the means of production.
Adam Buick