Answer To Correspondents: "Bank Loans and Deposits" (1930)

Letters to the Editors from the March 1930 issue of the Socialist Standard

"Bank Loans and Deposits"

Mr. Nicholls (London, N.4).

We see no reason to believe that the late Mr. Walter Leaf meant anything but what he said. His words are quite plain—“The banks are strictly limited in their lending operations by the amount which the depositor thinks fit to leave with them.” ("Banking" p. 102.) And, "the banks can lend no more than they can borrow—in fact not nearly so much ” (ibid). There is nothing in the context to indicate that he could possibly have meant anything else. You ask, “is it possible to make any normal person believe that there is a moneyed class in this country willing to remain depositors in the Big Five to the extent of upwards of £1,000 million.”

If you will look up the latest balance-sheets of the "Big Five” banks you will see that their deposits total well over £1,600 million. The total of their loans and advances is only £880 million.

The relationship of gold to deposits is a quite different question. Banks pay interest on deposits not merely on the amount of gold they happen to hold. 

Ed. Comm.

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Mr. F. L. Rimington.

See reply to Mr. Nicholls. Ed. Comm.

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Mr. Edwin Wright.

You based your case on a statement ("every bank loan creates a deposit ”) which you attributed to Mr. McKenna. We did not attempt to meet the point merely by quoting a different opinion expressed by the late Mr. Walter Leaf, but gave as well the evidence on which he based his opinion. We notice that you ignore this evidence.

Mr. McKenna's present views and the practice of the bank of which he is Chairman, certainly do not correspond with the theories which you say were held by him. At the Midland Bank annual meeting (22nd January) Mr. McKenna made the following statements in his address (See Times, 23rd January):—

  It is a common notion to judge from speeches and letters in the Press, that the banks have an inexhaustible power of lending money to industrial enterprises, and that any industry suffering from general depression could be restored to prosperity if only what is termed a more generous policy were adopted by the banks. (Laughter!) A moment’s reflection, however, will show that the banks have no inexhaustible fund to draw upon. The sums they lend are balanced by amounts due to depositors, who would certainly not rest content unless confident that their money was being wisely used and could be repaid to them at any time.

According to the theory which you say Mr. McKenna held, the banks ought to be able to create deposits at will and thus draw upon "an inexhaustible fund.” It is evident that Mr. McKenna, like the late Mr. Walter Leaf, does not share your view.

Ed. Comm.

Do You Know? (1930)

From the March 1930 issue of the Socialist Standard

That an Examiner in the Bankruptcy Department of the Civil Service, who was fired on the 18th February for accepting a bribe, was paid the munificent rate of £4 5s. 0d. per week? And yet you are urged to support Government ownership!

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That according to Fenner Brockway, London M.P., and member of the National Council of the I.L.P., "The present tendency is that, despite a Labour Government, Capitalism is being strengthened.” And yet the I.L.P. urge you to support the Labour Government!

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That Baron Rothschild and his friends, "in a six weeks' trip . . . bagged five lions, five buffaloes, two rhinoceros, and five antelopes.” They did it from an aeroplane because it was safer! And yet one and a half millions of workers cannot find a job, and the rest are urged to accept reductions because industry "cannot afford to pay” a decent wage to all!

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That British motor-car producers (in the interests of free competition!) threaten to "force British agents to sell only British cars . . . It is the intention in future contracts, it is understood, to change the wording to enable the supply of cars by any British maker to an offending agent to be stopped at once. All producing firms in the British motor industry have agreed to this.” And yet the hypocrites who rule us complain and threaten war when the Chinaman or the Hindu suggests "supporting their home industries” !

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That the Labour Party are only administering Capitalism, like the previous Governments, and therefore cannot make any appreciable difference in the number of unemployed, because they cannot force the self-acting doors on the tube railways to bring back the discharged porters, the automatic machines to bring back the booking clerks that are superfluous or all the other improvements in machines and organisation—in Government departments as well as outside—that "save labour” to suddenly bring back the workers that have been rendered superfluous. All sections of the International Capitalist class are engaged in a mad rush to obtain markets by cheapening production, i.e., by reducing the number of workers employed to produce given quantities of goods.

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That Ramsay MacDonald has found from his practical experience of "Government” that his earlier ideas were too "advanced”? That’s what comes of wearing a top-hat and going to dinner with "the people that prey.”

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That "the Angel of Mons were motion pictures thrown upon 'screens' of foggy white cloudbanks in Flanders by cinematograph projecting machines mounted on German aeroplanes which hovered above the British lines,” that the British Command was aware of the trick and turned the vision to their own benefit? No means are too despicable for employment in modern wars, because the latter are the product of one of the most despicable instincts—profit-seeking.

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That Lord Beaverbrook’s new party is only the latest stunt to keep the worker’s mind off the real cause of his troubles—the private ownership of the means of production. One can prophecy with a fair amount of confidence the line the next General Election will take: On the one side, Conservatives, and on the other Liberals and Labourites arguing about the incidence of this or that item of taxation, and the worker’s slave position will be obscured by the smoke screen of useless argument. Whether there are high taxes, low taxes or no taxes, the worker remains a slave to the owners of the means of production, who, at the same time, are the rulers of society today. And until the worker turns a deaf ear to all kinds of stunts he will remain a slave.

Gilmac.

Karl Marx On The Suffrage. (1930)

From the March 1930 issue of the Socialist Standard

(Reprinted from "Labour Monthly," Dec., 1929.)

  "We now come to the Chartists, the politically active portion of the British working class. The six points of the Charter which they contend for, contain nothing but the demand of universal suffrage, and of the conditions without which universal suffrage would be illusory for the working class : such as the ballot, payment of members, annual general elections. But universal suffrage is the equivalent for political power for the working class of England, where the proletariat form the large majority of the population, where, in a long, though underground, civil war, it has gained a clear consciousness of its position as a class, and where even the rural districts know no longer any peasants, but landlords, industrial Capitalists (farmers) and hired labourers. The carrying of universal suffrage in England would, therefore, be a far more socialistic measure than anything which has been honoured with that name on the Continent.
  "Its inevitable result here, is the political supremacy of the working class.”

—("N.Y. Tribune,” Aug. 25th, 1852.)

The Labour Party and The City. (1930)

From the March 1930 issue of the Socialist Standard

Mr. Snowden and Mr. MacDonald have recently received the Freedom of the City of London. Addressing the bankers, stockbrokers and city business men gathered at the Guildhall on the occasion, Mr. Snowden said :—

   The Prime Minister and he perhaps held different views from those who had been given the honour before. "That illustrates," said Mr. Snowden, "one of the finest traits of British life —a toleration of opinions with which we differ— and it shows still more that the political controversies which divide us are petty and trivial compared with the vital things which unite us.” —("Edinburgh Evening News," 19th Dec.)

Yet there are people who describe the Labour Party as a class party—a Working Class Party.

C.

SPGB Meetings (1930)

Party News from the March 1930 issue of the Socialist Standard

News in Review: Freedom Riders (1961)

The News in Review column from the July 1961 issue of the Socialist Standard

Freedom Riders

Nobody need be surprised at the reception which was given to the Freedom Riders in Alabama. Race hatred, with its violent undertones, still festers in The Deep South. When we remember this, the 'sit in' victories seem to have been too easy.

Neither should we wonder at the brutality of the Montgomery mob. Colour bars cannot be justified by scientific argument, because there is no evidence to support them. Violence is simply a substitute for reason. Here is fertile ground for the ignorant, vicious mobster to flourish unhealthily.

We should remember that many of the Southerners who are fighting so hard to keep the Negro down also fought not so long ago in a war which, we were told, was for racial freedom.

We can see now what that assurance was worth. Racial freedom cannot be safeguarded by the military victory of one capitalist state over another. It depends upon the ideas of human beings.

Capitalism, with its anomalies and insecurity, breeds many brutal and inhuman ideas. Race hatred is one of them. The Freedom Riders are tackling something which may be bigger than they think.


Kennedy calls

President Kennedy is certainly mobile. His top level visits showed that, after the years of dispute, the American capitalist class still concern themselves deeply with European affairs.

Even after the wars which were supposed to eliminate them, there are still enough conflicts of interest in Europe to start another international blood bath. There is no reason to think that a third world war need begin anywhere else.

Kennedy did not see Macmillan until after his important talks with de Gaulle and Khruschev. Was he reporting on what had been decided, whether Macmillan liked it or not? Was his call at London merely a face-saver for British capitalism?

Certainly, it showed that the days are gone when Britain's gunboat word was law and that international capitalism has new bosses to sort out its problems.

Do summit talks help in this? Experience says no. Eisenhower was one of the latest of the exponents of top man-to-top man chats, but when he left office the world was as far from a secure peace as ever.

In truth the representatives of the ruling class rarely, if ever, talk peace. They talk commerce, strategy, compromise; sometimes threats. Sometimes war. If Kennedy can be taught anything in this, he is probably learning fast


Lord Home in Portugal

Lord Home; according to the people who know him, is a most charming and amiable fellow. A master, perhaps, of tact. An expert at disguising any inner feelings which may embarrass his host. Just the chap, in fact, to send out to be chummy with a dictator.

Lord Home must have needed all of his resource during his Portuguese visit. If at any time he touched on the massacres in Angola, it was doubtless with the greatest of delicacy.

There is no reason to get het up about this. The Foreign Secretary did not go to Portugal to discuss ways of expanding democracy. He went to talk about the usual things: economic interests, strategic zones and bases, exchanges of weapons and so on.

These are the real interests of the nations of capitalism. Beside them, high flown concepts like democracy are insignificant. True, some governments—like the British—profess a deep concern for freedom. But their actions expose their hypocrisy.

Diplomats are the administrators of this hypocrisy. We may sometimes wonder at their cynicism, but we would be wrong to blame them for the faults of an entire social system. Nobody should support capitalism with one hand, and hold up the other in horror at its brutality and suppression.


Stick to your business

Mr. Walter Padley, President of U.S.D.A.W., made the headlines recently for his statement at the Bournemouth Conference of his Union. “Passionate speech brings triumph to Mr. Padley'’ they said.

Was his passion for a £1 a week rise, or for shorter hours? No, he was pleading the cause of the Leader of the Labour Party—of which he is an M.P.—in opposition to the Unilateralists.

The conference spent a whole day discussing Unilateralism. What has this got to do with Trade Unions? Trade Unions were formed long before the Labour Party, with the definite object of fighting encroachments on their members' conditions of work and standard of living by the Capitalist Class, not to solve the problems of a Capitalist Party like the Labour Party. Although the prime aim of the Trade Unions when they formed the Labour Party was to get representatives in Parliament, we now find the tail wagging the dog.

In our view, the sooner the dog has a tail amputation the better. Then perhaps Trade Unions will discuss at Conferences what they are really there for.


New Cunarder

This month, the invitations to tender for the contract to build a replacement for the Queen Mary will go out to the shipbuilders.

There seems to be little prospect that the new Cunarder will be very profitable. The government are sinking £18 million in the venture to keep British shipowners in the scramble for the transatlantic sea traveller.

Cunard argue that the best way of doing this, and of boosting British prestige, is to build a 75,000 tonner. Other shipping companies have their doubts about this.

Some workers may object to the government’s subsidy because they think that it comes out of the income tax and other taxes which they grumble about so much.

Let us set that one at rest. However much the State takes from a worker's wage packet—and however much they leave in it—he still receives, on average, about enough to live on.

The burden of taxation is borne by the capitalist class, which is as it should be. They can afford taxes, and it is their State machine.

The attitudes which the political parties have struck about the new Cunarder may cause some surprise. Why should the Tories be justifying a State subsidy for such an eminent private enterprise? Should not Labour be pleased that the government is helping to build a British prestige winner, and giving work to depressed shipyards to boot?

This is not the first time the requirements of capitalism have persuaded political parties to abandon what they call their principals.


A New Market For Russia

The involvement of the Russian bloc in Cuban affairs must be seen in the context of their desire to penetrate a Latin American economy which hitherto had been the exclusive preserve of Western Capitalism. But even with their huge increase in commerce with Cuba itself, their share in Latin American exports and imports last year was still only about 2 per cent of the area’s total trade, as against 47 per cent for the United States and 29 per cent for Western Europe. However, Russia has embarrassingly large exportable surpluses of petroleum and her highly industrialised satellites, East Germany and Czechoslovakia, urgently require outlets for manufactured goods and capital equipment. Meanwhile within Russia there is a growing demand for foodstuffs such as sugar, coffee, beef and bananas.

Most Latin American countries are utterly dependent upon the export of one or two main crops or raw materials only. Yet it is just these commodities that have suffered a prolonged decline in price in recent years bringing about a continent wide economic crisis. An important factor contributing towards this decline has been the hardening of U.S. tariffs against so many of the products that she herself produces. An even more significant factor, perhaps, has been the increasing competition from the emergent African states and Portuguese colonies. Because of their closer ties with Africa and the somewhat shorter distances for freight the Common Market has many advantages in further developing trade with Africa. We can expect, therefore, that Russian capitalism will seek to profit from this situation with increasing vigour and success.

To strike or not to strike? (1961)

From the July 1961 issue of the Socialist Standard

“If I had my way,” said the gent in the bowler, “I’d chuck the lot into gaol.” “A bunch of layabouts, if you ask me; afraid to work. They don’t give a damn for the country’s exports, either. Do you know, I heard a case the other day . . . ” He was talking (need we say?) about strikers. .

This is fairly typical of the irritation which strikes provoke. When they occur frequently in one particular industry, irritation turns into exasperation. In the last London dock strike, the City's commercial interests made a strong demand for government action against the strikers. There were not many stiff collars in the coffee shops around Leadenhall Street who could be found to disagree with this demand.

This last fact is rather depressing, because it indicates a lack of class interest among a section of the working class. (Tell Stiff Collar that he is a member of the working class and watch him splutter over his coffee!) But those interests exist and sooner or later they operate, whether they are openly recognised or not. Stiff Collar is often compelled to do battle (well-manneredly, of course) for a rise in pay. He sometimes manages to screw a little extra out of his job in expenses, free entertainment and the like. Yet tell him that this is exactly what the docker, with his militant attitude and his little fiddles is doing, and you will find yourself in argument with an angry man.

So let us try to put this strike question in its place. Strikes are inconvenient: we know that. Transport strikes, for example, can cause a lot of suffering to the workers whom they leave stranded. But the strength of a strike is often measured by the inconvenience which it causes: there would be no point in coming out if the strikers’ labour was easily dispensed with. The strike, in fact, is a weapon. If conditions make a weapon necessary, then there is every reason to make sure that it is the most powerful that is possible.

Is there, then, any need to have such a weapon? Are strikes really necessary, or are they just the work of disgruntled and childish layabouts? We all know that we go to work because we must have wages in order to live. Stiff Collar needs them. So does the docker and the dustman. Our employer does not give us our wages as a favour, or because he thinks we have done a good job. They are the price of something we have sold to him; they are the price of our working ability. Whenever something is sold, there is immediately set up a mutually antagonistic relationship of buyer and seller. The buyer’s interests are in paying as little as he can for whatever he is buying and the seller's are in getting the highest price he can. This applies to the sale of a worker's labour power; it expresses the division of interest between employers and employees and the unity of interest among the working class. This is what forces Stiff Collar to ask for his rise, and to work his expense account. This is what brings the docker to strike.

But, says Stiff Collar, some workers are always coming out on strike—and for such silly reasons; does it do anybody any good, to use a weapon so indiscriminately? He has a point there, For, apart from the tactical requirements of a strike—that it should be solid, short and simultaneous—workers should make sure that they only strike for a worthwhile reason. They should strike only for something which is of value to them as workers.

Unhappily, this does not always happen. There are strikes by one set of workers against another, often over trivial disputes. We have all heard of the demarcation strikes in the shipyards, when men downed tools over who should bore holes or who should chalk lines. There have been strikes by ’’white” workers against the employment of ”coloured” workers. Last October, for example, the dustmen of Westminster City Council threatened to strike because a Jamaican had been promoted, so that instead of emptying the dustbins into the dustcart he would be driving the cart. Such strikes are deplorable, because they are aimed against other workers instead of against the employers, and because they ignore the unity of interest which all workers, everywhere, have with each other.

The most recent example of this sort of strike—or threat to strike—came out of the application of the Steel Company of Wales for an import licence to import American coal. S.C.O.W. wants the coal because it is at present about sixteen shillings a ton cheaper than Welsh coal. We might have expected the National Coal Board to contest the application; it is a threat to one of their big markets. But Mr. Robens was dead-heated in his protest by the leaders of the National Union of Mineworkers, who also had strong words to say on the matter. “ So long as we are able to produce all the coal we need at home, imports are unnecessary," said Mr. Will Whitehead, president of the South Wales N.U.M. The next day, a delegate conference at Porthcawl passed a motion which threatened to use the miners' “industrial strength” to prevent the importation of the American coal.

We may appreciate the fact that the Welsh miners are anxious to keep their jobs, which they fear will be jeopardised by the cheap American coal. But this, at best, is to see only one side of the coin. For every export from one country is an import into another. What if American car workers struck against the import of British cars into America? Over 130,000 such cars went to the States during 1960. Or if the miners in the countries which import British coal came out on strike in protest? A monthly average of 455,000 tons—including bunkers—went out during 1960. And what about the steel workers in this country? Most of them probably agree with the theory that cheap coking coal means lower steel prices (it doesn't), which means that more British steel may be sold and that their jobs may become more secure. What if they struck in favour of the import of cheap coal from the States?

There is a simple way out of this maze The working class throughout the world, whatever their job or colour of skin, should realize that only one sort of strike is worthwhile. That is one which is aimed at protecting or advancing their interests against their capitalist employers. Such strikes are worthy of wholehearted support from all sections of the working class. Strikes which are directed against other sections of workers can only damage working class interests as a whole, because they attack the very unity in which workers must find their strength.

There is even more to it than that The miners who are resisting the imports of American coal are lighting their employer’s battles. The National Coal Board want to protect their markets, and at the same time they would like to take over the markets which are exploited by the coal industries in other countries. They would also like to control the market for fuel in this country—witness their smart advertising campaign and the financial inducements they offer, in competition with the oil companies, to householders who are thinking of installing central heating. In this, they are just like any other capitalist concern. Certainly, they are no different from the steel companies, who are all in favour of making their own product as cheaply as possible and exporting as much of it as they can but who, as Mr. Whitehead cannily points out, would not like to see cheap Japanese steel pinching the market in Great Britain.

Capitalism is rife with divided interests. The working class, who depend for their living upon selling their mental and muscular energies, should ignore them all, save one. That one is their own interests as a subject class. When they have come to grips with that, they will get down to some fundamental questioning of society. We shall see them all at it. The miners will be doing it, and the steelworker. So will Stiff Collar and the gent in the bowler.

Ivan

The Passing Show: Democracy (1961)

The Passing Show Column from the July 1961 issue of the Socialist Standard

Democracy

We make no apology for returning to the subject of Sir Thomas Moore, the Conservative M.P. for Ayr Burghs. Sir Thomas is the man who advocates a return to flogging and more frequent hanging as the answer to our troubles. But he only supports these punishments in cases of petty violence. Where a dictator is able to carry out a long and widespread campaign of violence, then Sir Thomas (provided he agrees with the tyrant’s brand of politics) is all for it. In the early days of Hitler's regime he was an outspoken supporter of German Nazism; and he is still a loyal champion of Spanish Fascism. On June 7th he wrote to The Times defending General Franco's regime, on the grounds that he imposed "law and order" on the country when, in the thirties, Spain was threatened with "communism on the march to impose its usual stranglehold on freedom”.

Only a week earlier, on May 31st, there had been the news of the sentencing of thirty-two agricultural workers to terms of up to 15 years' imprisonment by a Madrid military court, on the charge of "spreading communist propaganda" (a blanket term which, in Spain, covers any criticism of the regime). This is only the latest of a long series of trials of political opponents which Franco's courts have held since he—having shown himself more successful at violence and killing than his opponents—came to power in the Civil War. These thirty-two farm workers, and the thousands of others in Franco's political jails, would no doubt be interested to learn of Sir Thomas’s contention that Franco seized power in order to forestall an attempt to put a "stranglehold on freedom" in Spain. To defend Franco on these grounds is like giving a medal to a man who saves a child from drowning, only to stab it to death immediately afterwards.

Democracy

But, of course, political freedom need not be Sir Thomas's concern. If the Communists were in power in Spain, they would probably (not necessarily, of of course, as Yugoslavia shows) ally themselves with Russia—which is now the main overseas enemy of the British ruling class. Franco and his Fascists, on the other hand, would come in with the British ruling class in any war against Russia. So Sir Thomas supports Franco, and Mr. Butler goes to Spain as Franco's guest, saying it is a shame that Franco Spain has been left out of things for so long. What do they care for the fact that the Spanish people are deprived of democratic freedoms? Democracy is a useful catchword in time of war: but if the interests of the ruling class demand it, democracy is shrugged off without a second thought.

Borgwards

Just as state control was applied here to rescue the coal and rail shareholders from the complete loss of their investments, so nationalisation—or municipalisation—is used for the same purpose in other countries. A news item from Germany in The Times (7-6-61) ran:

  Dr. Johannes Sender, who took over the direction of the Borgward car manufacturing company in February, said today that the firm would have to cut its staff by another 2,500 people. In March the board empowered the management to dismiss up to 2,500 workers. Borgwards was taken over by the Bremen municipal authorities earlier this year after it ran into financial difficulties.

The local Social Democrats would find the sacked five thousand workers a troublesome audience, if like the Labour Party here, they tried to persuade them that municipatisation was really for their benefit.

Raw material

An advert aimed at capitalists has recently been appearing in the more expensive newspapers. It tries to persuade industrial concerns to move to Durham, or at least to open new works there. Headed “All the workers you need in County Durham," it goes on “good hard workers, ready and willing to learn new skills".  It gives a picture of a crowd of them.

This offering of human beings as promising raw material to employers bent on the extraction of surplus value is surely degrading both to the men themselves and to those who planned and those who read the advertisement. One might advertise cart-horses in much the same way. One of the many advantages of Socialism is that human beings will be considered as human beings, not simply as so much factory-fodder.

Expense accounts

The next time you read figures showing the gross inequality of incomes— after tax—in this country, the next time you hear of the handful who get £120 and £140 per week after tax, compared with the millions who get less than £20 and the millions more who even get less than £10, remember that this is by no means the whole story. The directors' fees, the share dividends are only part of the real income of the owning class Besides the actual money, which is taxed, there are the large allowances on the expense accounts, which are untaxed. So excessive have some of these junketings on expense accounts become in America that the American Treasury investigated the position, and has now released some evidence showing what has been happening. “Safaris in Kenya, lavish living in Las Vegas and in the Caribbean and the maintenance of yachts have all been tax deductible " (The Times 8-5-61). An insurance man was allowed 97,500 dollars for “personal expenses ”. The president of a dairy went on a six-month safari, and took his wife with him: he was allowed $16,443. A corporation which owned luxurious facilities on a sub-tropical island, including its own fishing cruiser, and aircraft to take its executives and their guests down there, was allowed $375,000. A supply firm had its own yacht, ranch and hunting lodges, and was given a tax-allowance of £473,140 to cover its expenditure on them and on night club entertainment. If we can be sure of anything, it is that the ordinary workers in these firms never saw these sub-tropical islands, or the hunting lodges. These devices are simply ways in which owners of firms obtain the means of luxurious living without having to reveal too enormous personal incomes. For to confess their real incomes (apart from the extra tax) would show too clearly to the workers the vast gap which separates the upper from the lower class.

Alwyn Edgar

Finance and Industry: Capitalism's Sensitive Spot (1961)

The Finance and Industry column from the July 1961 issue of the Socialist Standard

Capitalism's Sensitive Spot

It has long been noticed by observers of capitalism that among the crimes it punishes most savagely is anything which affects the sanctity of the currency, In Britain the maximum penalty for counterfeiting gold and silver coins (which includes the current cupro-silver substitutes) is penal servitude for life. Nothing more clearly highlights the essentially capitalist nature of the Russian social system than the news that the extension of the death penalty in that country includes the offences of uttering or passing forged currency or securities, and there are sentences up to five years and confiscation of property for speculators.

According to David Floyd (Daily Telegraph, 2.6.61) a big case is now before the courts of speculators who are alleged to have made 20 million roubles in a year (2½ million at the official Russian exchange rate) by illegal dealings in foreign currencies and gold.


European
 Common Market

In an interesting article on why British capitalism ought to join up with the Continental group (Germany, France, Italy, Belgium and Luxembourg and Holland) to form a solid unit with 250 million population, the City Editor of the Sunday Times recently argued that in no other way can capital be found large enough to meet the needs of the coming world grouping There will, he says, be four dominant World Powers, Russia, America, Europe and eventually China; and unless Britain joins in, British capitalism even with government aid will not be able to provide the vast capital needed for large-scale industry, automation, and military developments including rockets. He expresses the opinion that Russia has been spending on rockets as much as the total British cost of arms and armies.

In the 19th century and up to 1939, British capitalism could keep abreast of the development of costly techniques, but can now no longer do so.


The Employers’
Attitude

Because under near "full employment", it has not been quite so easy for employers to discipline the workers as it was before the last war, it is often claimed that worker-employer relationships have undergone a fundamental change. Mr, Appleby, Chairman and Managing Director of the Black and Decker power tools firm, in an interview published in the Evening Standard (29.5.61) expressed a point of view that reads just like any past declaration that the capitalist is in business to make profits, and does so by a mixture of stick and carrot: "Bob Appleby runs the Black & Decker concern here on one main principle which he explains quite bluntly, ’ We are in business to make profits', he says. The more pressures and incentives we can exert on people, the better we shall succeed.' "

Everyone in the factory, from managers downwards, is paid on a basis that includes a considerable element for increasing output.

It seems to have been very for the firm as its profits have gone up in ten years from £260,000 to £575,000.


The Cost
 of Advertising

Though advertising costs are sometimes very high for particular articles, especially when a new product is being launched or there is fierce competition for the market, the total cost of all advertising is not as large as might he expected.

According to an estimate of the expenditure on all forms of advertising made by Dr. Mark Abrahams and published in the Observer (19.3.61) the total in 1960 was £455 million. It has however been rising fast and is expected to touch £500 million this year.

Edgar Hardcastle

The Cost of Living Crisis (2014)

From the February 2014 issue of the Socialist Standard

Labour Party politicians at national and local level are going around talking about a ‘cost of living crisis’. Presumably their spin-doctors have told them that this could be a vote-winner. They could be right as it’s true that over the past few years the cost of living has being rising faster than wages and welfare benefits (except the state pension). But what can Labour do about this? Basically, nothing. They are not even promising to do much. It’s just a ploy to give the impression that they care about people’s concerns.

The cost of living is the cost of buying the things people need to keep themselves fit to work or, in the case of welfare recipients, to maintain a minimum standard of living. It goes up all the time these days as maintaining a 2 percent rate of currency inflation is deliberate government policy. But, with inflation, wages, which are also a price, go up too. As long as they go up at the same rate or more than the price of the things wage and salary workers need to buy then there is no extra problem,  no ’cost of living crisis’. There’s still the problem, of course, that they are never enough for a decent standard of living and that employers reap a profit from their work.

Wages at least keeping up with prices is what normally happens in the upswing phase of the capitalist business cycle, due to the law of supply and demand and trade union pressure. During the downturn phase, on the other hand, the increased unemployment exerts a downward pressure on wages which the unions are not always able to counter, and wages rise less than other prices. In this case, there is an additional ‘cost of living crisis’. Which is the situation today and which the Labour Party is trying to exploit for vote-catching purposes.

In theory there are two ways of dealing with this: either increase money wages more or freeze prices. In the dim and distant past the Labour Party would have promised to increase people’s incomes as the way-out. But not today. Experience of being the government has taught them that under capitalism priority has to be given to profits and profit-making as this is what makes the system go round. Increasing wages at the expense of profits is a non-starter.

As to increasing benefits, there’s absolutely no question of them doing this since they are anxious to get rid of their once attractive image as ‘the welfare party’. Their spin-doctors have told them that, so successful has been the media campaign to present welfare recipients as ‘scroungers,’ this is now a vote-loser.

So, price control is the only option left. But, even here, they are not being serious. All they are promising is a two-year freeze on gas and electricity prices. But what about all the other bills for everyday living expenses? These are not going to be frozen as Labour know, once again from the experience of being the government under capitalism, that price controls don’t work, at least not for any length of time and not without causing other economic problems. And they’re nothing to do with Marxism as the Daily Mail claims. That’s about getting rid of prices  – and wages and profits –altogether.

The promise to freeze energy prices for a while is just a gesture designed to give the impression that they care. Unfortunately enough people seem to have been taken in to put Labour ahead in the opinion polls. To counter this, and give the impression that they too care, the Tories have floated the idea of an increase in the minimum wage. In real terms this is 10 percent lower than it was before the slump broke in 2008. The ulterior motive here is clear. It’s a move to save on government spending as it will reduce the amount paid out as ‘tax credits’, the subsidy to low-paying employers introduced by the last Labour government. Those on the minimum wage would get an increase in what their employer pays them, but a decrease in what the government does.

Faced with these cynical vote-catching ploys, most people won’t really think it makes much difference which party or parties form the government. They are right. Whatever the politicians say to get elected, governments have virtually no control over the relationship between wages and other prices. This depends on which phase of its business cycle capitalism is in. Governments have not much choice other than to go along with what capitalism throws at them. That’s why they are always betraying their promises. Not because they are necessarily dishonest, but because in promising measures to make capitalism work in the interest of wage and salary workers they are promising the impossible.

For socialists there is also a wider question. Why is there a ‘cost of living’? Why do we have to pay for the things we need to live and enjoy life? Given the level of productivity achieved today, we could go over to a socialist society, based on the common ownership and democratic control of the means of production, where people could have free access to what they need in accordance with the principle ‘from each according to their ability, to each according to their needs’. Then nobody would have to worry about where the money to pay the next bill is to come from as they wouldn’t be charged for access to essentials such as heating and lighting.

Adam Buick

Mixed Media: The Threepenny Opera' (2014)

The Mixed Media column from the February 2014 issue of the Socialist Standard

The Threepenny Opera
Last year there was a semi-staging by director Ted Huffman of Bertolt Brecht and Kurt Weill’s 1928 Die Dreigroschenoper (The Threepenny Opera) at the Queen Elizabeth Hall on London’s South Bank. This performance was sung in German with English subtitles and had a linking narration specially written by Brecht for concert performances such as this.

The Threepenny Opera is an adaptation of John Gay’s 1728 ballad opera The Beggar’s Opera which is a satire on the corruption of the Walpole government in the aftermath of the financial crash of the South Sea Company. John Gay had a relish for low life, an affinity shared with Brecht who set The Threepenny Opera in a Soho of the lumpenproletariat of thieves, beggars, and whores.

Max Hopp as the Narrator sang Die Moritat von Mackie Messer (The Ballad of Mack the Knife). Max Hopp recently had a leading role in the William S Burroughs-Tom Waits ‘musical fable’ The Black Rider at the Theater Basel.

Low-Dive Jenny performed by Meow Meow sang Seeräuberjenny (Pirate Jenny): ‘you toss me a penny, and I’m always quick to thank/Even though you see my rags/And fifty canons/Will fire at the shore/My Sirs, there your laughter will stop/Because the walls will fall/And the city will be level with the ground.’

Mark Padmore as Macheath and Nicholas Folwell as ‘Tiger’ Brown, the corrupt police chief duet on the Kanonen-Song (Cannon Song): ‘young men’s blood goes on being red/And the army goes on recruiting.’

Macheath and Jenny duet on the materialist II Dreigroschenfinale, Denn wovon lebt der Mensch? (Second Threepenny Opera Finale, What Keeps Mankind Alive); ‘Food is the first thing: morals follow on/You gentlemen who think you have a mission/to purge us from the seven deadly sins/ Should first sort out the basic food position.’

The Threepenny Opera is notable for Weill’s music which was scored for a jazz dance band drawing on the rhythms and idioms of the dance music of the time. Weill’s music is a reaction to the bourgeois genre of operetta. He emulates John Gay in his use of vernacular musical styles.

Brecht aims his satire at the corruption, hypocrisy, greed, self-satisfaction of the capitalist class, the venality of aspirations to bourgeois respectability and what the bourgeoisie had in common with ruthless criminals. Macheath says ‘What is the burgling of a bank to the founding of a bank?’

Theodore Adorno judged it the most important event since Berg’s Wozzeck and Brecht later wrote ‘young proletarians suddenly came to the theatre, in some cases for the first time, and then quite often came back.’

Steve Clayton

Pathfinders: Dirty Secrets (2014)

The Pathfinders Column from the February 2014 issue of the Socialist Standard

The post-Savile paedophilia purge is continuing to create headlines not seen in the UK since the year 2000, and this time without the poison stirring spoon of Rebekah Brooks and the News of the World.  Experience then showed that it didn’t take much to whip up a lynch mob, and lo and behold, vigilante groups are now operating on the streets of Britain. In September last year one such group, called Letzgo Hunting, lured a Leicester man into a meeting and then publicly branded him a paedophile, after which the man hanged himself. In October it was reported in Bristol that a disabled gardener, attempting to photograph youths attacking his plants, was denounced as a kiddy-fiddler and promptly battered and burned to death in the street. This is significant, as burning is what you do to witches. Significant also that the newspapers universally described him as ‘innocent’ of the charge of paedophilia, the implication being that the murder would have been excusable otherwise.

The wave of moral outrage has been further fuelled by the appalling case of singer Ian Watkins, who described his 13 child sex charges, including an attempt to rape a one year old baby, as ‘mega lolz’. Meanwhile one after another crumbling octogenarian is manhandled out of the grave and into the dock to answer charges committed half a century ago in a swinging sexist society that did everything to encourage such behaviour.

On the modern assumption that all men are potentially paedophiles, schools have turned into fortresses. The intended effect is that paedophiles no longer have easy access to children, but instead covert child sex trafficking has become big business. So too has online child porn, a fact not lost on many Filipino families who, it was reported last month, have been hiring out their children for online pay-per-view sex and rape sessions.

Last November an online sting involving a 10-year old Filipino girl called ‘Sweetie’, who supposedly engaged in sex acts with adults while online viewers paid a fee, helped to collar over 1,000 paedophiles around the world who flocked to the alluring Sweetie like moths to a flame. What was clever about this sting was that it was created in a Dutch computer laboratory. ‘Sweetie’ was a computer graphics construct, not a real child. What was stupid about the paedophiles is that they didn’t even try to cover their tracks, which makes one wonder how many smart paedophiles remain undiscovered. Watkins’ computer porn, for example, was so deeply hidden that the police had to call in GCHQ to decrypt it.

With the witch-hunting mania in full spate reason is cowed into reticence and constructive debate hardly seems likely. What should socialists say, if asked about this problem?

Paedophilia is defined as adult sexual attraction to prepubescent children up to the age of 11. Sex with a person under 16 in the UK is defined as statutory rape, for which the offender is placed on the sex offenders register. In the popular press this makes them a paedophile and a rapist by definition.

The problem with this is that the age of consent is an arbitrary line in the sand. A recent proposal to lower this to 15 had David Cameron running away in shivers, yet Europe-wide the statutory age varies from 13 in Spain and 14 in Italy and Germany through to 18 in Turkey (in 19th century Britain it was 12, in some American states 10, in Delaware 7).

Another problem is that capitalism has no qualms about sexualising childhood in order to sell products to young wage and pocket money earners. Remember the Peek-a-Boo Stripper Pole Dancing kit (age 6+) sold in Tesco’s toy section? And let’s not forget the push-up bra (age 7), the Playboy Bunny school merchandise or Bratz Hooker Babies (age 9), dolls made up as prostitutes with high heels and leather thongs.

Notwithstanding any of this, what society wants is not to accommodate or contain or neutralise or even understand paedophilia but to destroy it root and branch, as it once did (and still does elsewhere in the world) with homosexuality. Whether that’s possible, medically speaking, is an open question. The scientific research into paedophilia is not as extensive as public concern would seem to demand. Various causes are identified and various treatments proposed including cognitive behavioural therapy (CBT), hormone treatment, and physical castration. Such treatments are limited because much child abuse is not caused by sexual impulses but by other motivators such as anger or a desire to control. In addition, it is the opinion of some doctors that a cure has not been found because scientists aren’t really looking. In capitalist terms, the market isn’t there. Nobody wants to cure witches, as the disabled Bristol gardener found out.

Might there be paedophiles in socialism? At present the science can’t tell us. Paedophilia is a broad spectrum condition, with biological as well as social factors in play. Whether any of these biological factors have a genetic base remains unestablished, but even if they did, genetic factors never work alone but always interact with a particular set of social conditions.

What we can say with more confidence is that those many forms of sex and child abuse based on obsessions with power would find no nourishment in socialism because the structures of oppression, dominance and impotence would no longer exist.

Be that as it may, if a problem existed socialism would have to deal with it, and the first priority would be to protect children. Studies suggest that many paedophiles have no desire to hurt children but a minority do, and there seems little room for doubt that in socialism dangerous paedophiles would, like any dangerous and out of control individual, have to be kept under restraint for the common good, though not for the purpose of punishment but in order that a successful and humane treatment could be found. For the rest, there would have to be a democratic debate about what was acceptable sexual preference and what was unacceptable medical condition. It could have implications for civil liberties, freedom of movement, sexual licence, levels of supervision of children, equality status of individuals. We can’t say today how it would proceed or how it would turn out, but it would be an informed hunt for solutions, not an inflamed hunt for witches.

Paddy Shannon

Voice From The Back: Another Example Of Exploitation (2014)

The Voice From The Back Column from the February 2014 issue of the Socialist Standard

Another Example Of Exploitation

Capitalism distorts everything it touches. It even distorts the English language. The use of the term ‘earned’ is a case in point. ‘Jonathan Ruffer, the philanthropic fund manager, is believed to have earned close to £12m last year after another bumper performance by his boutique investment firm. Pre-tax profits at Ruffer Management rose 6% to £115m’ (Sunday Times, 22 December). How did Ruffer ‘earn’ a million quid per month? He didn’t of course. He exploited men and women of the working class by that staggering figure. That is the basis of the capitalism system.

Economic Recovery?

A slight fall in the unemployment figures has led to politicians talking about an economic recovery, but for large parts of the British population this is a complete myth. ‘Advisers at the homeless charity Shelter are taking 500 calls a day from distraught people. … The anxiety and emotion that pours into the headsets of crisis advice workers in this crowded fifth-floor Sheffield call centre offers a snapshot of the UK’s worsening homelessness crisis. Advisers at Shelter’s helpline are processing more calls than ever. Last year there was a 15% increase in the volume of calls – a reflection, staff think, of the degree to which people are struggling with rising house prices, soaring rents, cuts to housing benefit and the long shadow of the recession’ (Guardian, 23 December). Perhaps a shift answering these desperate calls to the Shelter helpline would help politicians to get a better picture of the real situation for thousands of homeless workers.

Amassing A Fortune

At a time when millions of people are trying to survive on the equivalent of $2 a day it is worthwhile looking at the immense wealth of the super-rich. ‘Warren Buffett spent most of 2013 amassing fortunes of over £23 million a day through investments into food manufacturing giants like Heinz, which he bought earlier this year. The investor topped the Wealth-X ‘gainers’ list for 2013, having made a staggering £7.7 billion since January to bring his estimated net worth to a cool £36 billion’ (Independent, 25 December). At least the Independent did not insult its readers by claiming he ‘earned’ £23 million a day but used the term ‘amassing’.

Upper Class Arrogance

The arrogance of the owning class knows no bounds. Take the case of Yevgeny Chichvarkin the Russian reputed to have a fortune of £150m, who now lives in London and has opened a wine store in Mayfair for the super-rich called Hedonism. He currently offers a bottle of wine priced at £120,000 and has on offer a bottle of 55-year-old Glenfiddich whiskey at around £123,000. He blithely boasts of his customers. ‘It’s a present for somebody who has seen everything in this world. For some people who have been rich for a long, long time. It is quite hard to make an impression’ (Guardian, 28 December).

Mind That Gap

At a time when many workers are concerned about losing their homes nothing better illustrates the gap between them and the owning class than the housing market. ‘The Bishops Avenue in Hampstead, or ‘Billionaire’s Row’ as it is commonly known, has been named by Lloyd’s Bank as the second most expensive street in England and Wales – the average house price of £6.2 million still, incredibly, putting it below Egerton Crescent in Kensington and Chelsea, where houses sell for an average of £7.4 million’ (Times, 31 December). Not much concern here about the ‘bedroom tax’ or difficulties in meeting the mortgage payments unlike these unfortunates. ‘Rising bills and high costs are pushing many household budgets ‘to breaking point’, with one in 11 people worried they will not be able to afford their rent or mortgage this month, according to research from Shelter’ (Guardian, 3 January).

The Profit System’s Awful Cost

The development of capitalism grows at breakneck speed in China, but at a terrible human cost. ‘Between 350,000 and 500,000 Chinese die prematurely each year because of the country’s disastrous air pollution, says China’s former health minister. The equivalent of the population of Bristol dies each year in China because of lethal air pollution, according to Chen Zhu, who was the country’s Health minister until last year’ (Daily Telegraph, 7 January). In the mindless drive for bigger and bigger profits for the owning class the working class have to pay in ill health and premature death.

Repudiation (2014)

Book Review from the February 2014 issue of the Socialist Standard

State Capitalism and World Revolution. By CLR James. PM Press. 2013

CLR James will perhaps be better known for his book on the slave rebellion in Haiti during the French Revolution, The Black Jacobins, and for his writings on cricket, but at one time he was a leading Trotskyist.

Originally an internal document circulated in 1950 within the so-called ‘Fourth International’ which Trotsky and a handful of his followers had set up in 1938, State Capitalism and World Revolution was a contribution to a discussion on its future political orientation, and it has been republished here. The ‘orthodox’ majority wanted to stick to Trotsky’s own view that Russia was still a ‘workers state’ because of the state ownership and planned economy that existed there and so was better than capitalism and deserving of working class support.

James showed that state ownership and a planned economy was not socialism and that it was absurd to describe as belonging to the ‘workers’ a state in which the workers were oppressed and exploited. He went further and argued that this type of state capitalism was the future of capitalism and that in supporting it the orthodox Trotskyists were in effect supporting capitalism. This was true then and it is still true today.

James was wrong about full state capitalism being the next stage of capitalism (but in the 1940s he was not alone in making this mistake) and also  about still regarding the Bolshevik coup as a ’proletarian revolution’. In the preface to the 1956 re-edition (reproduced here), however, he explained:

  The political conclusions of this economic analysis can be summed up in its total repudiation of the Leninist theory and practice of the Vanguard Party for our era.

State Capitalism and Revolution is in fact a total repudiation of Trotskyism and worth reading for that.

Adam Buick

Political Vocabularies (2014)

From the February 2014 issue of the Socialist Standard

  ‘How should governments react to winning the lottery? For example, the UK / Norway find oil in the North Sea. Australia finds various minerals and then also gas that they can export. Specialist skills are required to extract the resources. Should the government sit back and let industry do their stuff, whilst skimming off some tax? Should the government take control? Should the people take control?’

This is a question I received from a friend on Facebook a little while ago. It is, perhaps, an example of a political vocabulary which originates in ‘popular’ media sources. A socialist would never use such phrases as ‘Australia finds…’ or ‘Should the government take control’. Not because we agree or disagree with the associated ideas but because these phrases in themselves only serve to obscure political reality. The last part is, of course, the $64,000 question. Sometimes I believe that we socialists get isolated in our own political vocabularies – steeped as we are in the study of politics, history and economics. After several years within a socialist community a specific vocabulary develops; particularly as a response to the same questions we get asked again and again. In any political analysis we always seek to emphasise ‘class’ as a designation of social organisation because, in part, it serves to deconstruct the very words that seek to deny its existence i.e. government, nation, industry and even ‘the people’. Because of this, the use of the word ‘class’ for non-socialists, is deemed as controversial or even anachronistic! In the light of this let’s re-examine the question:

When asked how should the governments of nation states react to the discovery of natural resources within their borders there is only one answer – they will react the way all governments in capitalism must. They will seek to exploit the resource so that the maximum profits will be attained by the parasitic class that they represent. This means the employment of companies who make the best ‘bid’ for the rights to exploit. All kinds of corruptive techniques used by lobby groups will press for different sectors of the capitalist class to acquire this right from the government. Occasionally the state might take natural resources into ‘public ownership’. This is done either to prevent a monopoly which might cause high prices to other sectors of the capitalist class or because the politicians themselves wish to retain ownership and the ensuing wealth. Thus concepts of ‘Norway’ or ‘Australia’ acting in the interests of the majority of the population within those geographic locations is nonsensical.

‘Specialist skills’ are, of course, essential to extract such wealth and it is the socialist contention that it is this labour (intellectual and physical) that gives the oil (in this case) its exchange value. It is not, as many bourgeois economists would have us believe, the rarity of a commodity that gives it value but the labour needed to extract it. There are many rare entities that have no value (whether utility or exchange) at all i.e. four leaved clovers, river pearls, wisdom, rainbows, three legged dogs etc, etc. It is only the difference between the value of the labour (wages) and the products it creates that makes vast profits. Some of these profits are paid as tax which goes toward the payment for infrastructure of the state. Again it is debateable whether this acts in the interest of the majority since wages in the ‘public sector’ are notoriously low and the resources created are of the poorest quality allowed by law (to maintain low tax rates). Now let’s examine the concept of ‘the people taking control’.

Again the question of vocabulary arises. ‘The people’ could refer to all of the humans in the world, the population of a nation state or merely adults with some kind of democratic franchise. Socialists do not use this designation because, we would contend, it does not correspond to a political category. Politics, in the final analysis, is about power. This power is derived from the relationship of a group or individual with the means of production (origin of wealth). In politics we can only define people in this way – as classes. Not to do so would not constitute a political analysis (in any meaningful sense). Any objective economic study reveals that a tiny minority of the population live exclusively on dividends derived from profits while the rest of us are obliged to sell our labour to them to live. This majority or ‘working class’ needs to take control of natural resources and the means of production to rationalise and democratise society. Only when this is done can we speak of ‘the people’. It is the liberation from class society that socialism seeks to achieve. Only when we are liberated from being defined by our relationship with production can we become truly human and justify any culture’s inhabitants with the designation of ‘the people’.

It is usually instructive to analyse the type of language used in any political question before making an attempt to answer it. Experience allows the answerer to frame his response in a language most likely to be easily understood. Invariably this will initially contain a brief deconstruction of the words and concepts used to frame the question – which, in my experience, can frustrate the questioner. To him or her this can sound like prevarication since they usually have no concept of how politically loaded language is. However, this must be attempted because not to do so would mean using the same word with different definitions; rendering communication impossible. If the questioner is unwilling to indulge you in this quest to communicate my advice is to change the subject and attempt a subtle subversion of their language on another topic which, ostensibly, is unconnected with politics. Failing that, get another beer in.

Wez