Strikes, Strikes, and More Strikes (1957)

From the May 1957 issue of the Socialist Standard

When are people going to fully realise that the old ruling class stunt of “Divide and Rule” is operating today—much more fully than it ever did in years gone by?

The train driver gets his mean and petty one, five, or perhaps ten shillings more than his fireman; and for this he sells his peace of mind. They can hardly be comrades, under these conditions.

According to the News Chronicle of March 21st, 1957, the “Queen Mary” sailed at 1.35 a.m. She was permitted to do this, ONLY BY THE HELP OF ONE SECTION OF THE WORKING CLASS whilst another section said: “No. She must not sail.”

Why, oh why do not workers realise that, while they back a profit, or money system, this sort of action is, and will be in order? The men operating the tugs will doubtless be “sent to Coventry” or “blacked” in one way or another. The whole business is utterly stupid, when the answer is so clear, if workers would only accept clear-cut thinking, by themselves, for themselves.

The miners gain a temporary advantage over the transport operators, or dock workers, so temporary that, by the end of a year, the whole business of strikes starts again. Money, more Money, and still more Money, is needed, to try to keep up with the cost of living.

Money. Some workers are now being paid with £5 notes; pay envelopes have to be made larger and larger. We may soon require a sack to take the wages home to the wife—and still she will look at it, and wonder if there is enough to buy little Johnny a new coat.

One thing is abundantly clear, when you study the world around you—your wages, salaries, fees, commissions, or whatever you call them, are the price of your labour power. Though you must struggle to increase them, they will never represent more than a meagre standard of living, compared with what will be possible when we decide to run the world by civilised standards.

Your masters will struggle with you over a few shillings more or less per week. Then, when you have gained your point, they may let the purchasing power of the £ fall, or devalue it deliberately, as they did by 40 per cent. in September, 1949. They know that, whilst you are struggling to make ends meet, and to gain a “victory” of a few more shillings, you will not be devoting your attention to a study of Capitalism itself—the economic system that keeps you poor in a world of potential plenty.

When are you going to change your approach to this international social scandal? It is no use leaving it to your masters, or to those members of the Labour, Liberal, Tory, or Communist Parties, who are committed to the maintenance of Capitalism, in one form or another. (Whatever form it takes, it will still keep you—the majority, poor).

We, the working class, now run the world for the benefit of the Capitalist class. Why not run it for ourselves? The leaders who are constantly exhorting or cajoling you, are not beings with superior brains. One comes to quite the opposite conclusion when one studies their words and actions’ carefully. It soon becomes obvious, however, that they are merely performing actions, and saying things that reflect the needs of the Capitalist class.

We, the working class, with our wages, salaries, fees, and commissions, are really quite clever. We run a complicated, world-wide economic system, from top to bottom. But then we cease to be clever. We give the bulk of the wealth we create and distribute to the small minority who own the means of wealth production—the land, factories, railways, etc.

Friends, let us be really clever, and make a study of the social system under which we live. Let us all discover what a pleasant world to live in this can be, if we give leaders of all types the sack, and start producing wealth for the benefit of all mankind, instead of the profit of a few.

Contact your local Socialist Party Branch, and join their Discussion Group. Knowledge is the answer— knowledge of our present economic system. Then, and then only, can we change it, to the advantage of all.

When we say “Socialist Party” we mean just that. The Labour Party and Communist Party will use pseudo-Socialist language, but they do not stand for Socialism— merely the reform, or adjustment, in some way or another, of the Capitalist system. You cannot reform a bad egg —you throw it in the dustbin. The same applies to Capitalism—it will never be of any use to you.

E. L. McKone

Should Irish Workers Support the I.R.A.? (1957)

From the May 1957 issue of the Socialist Standard

With the recurrence of I.R.A. activity, attention is again focussed on the “Irish Question.” The familiar tragedy of young workers dying for “The Cause” is again being re-enacted.

There are those who would tell us that as Irish workers we must be in the vanguard of the “National Struggle.” Coming from the I.R.A. this means that we should join that organisation, procure arms, and train ourselves in their use. If called on, they say, we will attack the armed hirelings of the State, regardless of whether or not we fall in the fray, dangle on the hangman’s rope, or find ourselves condemned to long years of imprisonment. The militant Republican assures us that we owe it to “our” country; that we must be prepared to sacrifice everything for “The Cause.”

Now if a man considers “The Cause” (either that of the “Republic” or of “Ulster”), to be worthy of his, or his comrades’, blood, then surely its social implications, in relation to the position in society of its protagonists, must warrant much careful consideration.

To think rationally on these matters it is necessary at the outset, to divest ourselves of all will-o-the-wisp notions; all airy legends of the past. We must leave the mythical Ireland of Echoing Glensides and green-clad columns of valiant men, and return to the earthy Ireland of a million-odd slum-dwellers, of 130,000 unemployed, of mass immigration, of T.B. and other poverty-diseases, and of thousands be-devilled by the candour of their wage-packets.

Yes, fellow-workers, this is the Ireland we know; surely the logical starting-point for our researches.

The Real Struggle

Our purpose is to show both the “Nationalist” worker, and his “Unionist” counterpart, that the struggle “for” or “against” the Border does not materially affect his lot as a worker; that the “freedom” much-talked of on both sides, is but the right of a minority class (the Capitalists) to exploit the mass of the people. We would make bold to assert that the Border is but the bastard child of the sectional interests of Capitalism in this country, and that the real struggle of the workers, in Ireland, North and South—as elsewhere in the world— should be against that more evil border that divides the workers from the Capitalists.

Sinn-Fein

To the Republican, Sinn-Fein are hallowed words, indeed; but the workers of Ireland have nothing for which to revere this organisation. It is worthy of note that when formed in 1905 its demands went no further than the claim for recognition of Ireland as a separate Kingdom, hereditary to the British Crown, with “King, Lords and Commons for Ireland.”

Sinn-Fein represents the demands of Irish Capitalism, and the primary purpose of its struggle was to free the native Capitalist class from the yoke of its English competitors. It is true that lip-service was paid to a “National Re-awaking,” but dare our masters ever reveal their true intent?

In the bitter struggle which raged in Ireland in the years 1919—1922 the workers, as always, were called upon to give their blood in the cause of “Mother Ireland!” With the culmination of that struggle, and the ensuing Civil War, the Irish worker was faced again with the reality of existence under Capitalism. On public buildings, police barracks, etc., the Tricolour proudly fluttered, and street names began to appear in Irish. The lot of the wage-slave, however, was no better than before— even if he was a hero-returned. The proud Tricolour flying over the Labour Exchanges was cold comfort to the mass of unemployed workers. The Irish and British Capitalists still loafed idly on the profit, rent and interest, extracted from the Irish workers.

Some will assert that, at least, the British Army had been driven from part of the national territory; certainly the Irish farm workers of the period, who went on strike for better wages and living conditions, knew this to be true—for it was the new Irish Army which the new Irish Government used against them!

Yes, the British were gone; but they were not too long out of Dublin when the new Irish Postmaster-General called on them to send “blacklegs” to help him break the strike of Post Office workers in 1922.

We have not digressed on the “principle” of “freedom”; neither, we are sure, did the thousands of unemployed in 1926 when they heard “their” Irish Government disown them with the callous declaration that unemployment was no concern of the State.

It is true that the sea-green incorruptibles among the Republicans maintained that this was but mock freedom. Their indignation, however, was not because the lot of the worker was as before, but because the Six Ulster Counties were still “unfree.”

They need not have worried, for though the workers of Northern Ireland still existed under the Union Jack, their conditions were similar to those of their class-brothers in the new Irish Free State. The record of both States, and their respective Governments, is one of callous disdain for the lot of the working-class. Both are the handmaidens of Capitalism, and are, consequently, bent to the will of Capital.

The Lot of the Worker

The life of a worker, after he has received whatever education Capitalism deems necessary to equip him as an efficient wage-slave, starts with the search for a job. In Ireland, North and South, with an aggregate total of 130,000 unemployed, this is no mean task, indeed! In most instances the childhood dream of “…. I’m going to be—when I grow up” goes by the board (unless the child, for morbid reasons, wants to be a policeman—for which there seems to be a constant demand in Ireland!). Capitalism does not cater to our talents, much less our whims.

On finding a job the young worker becomes acquainted with the reality of the class-struggle: on the one side the Masters with the porridge—on the other the Olivers, perpetually with just enough to “keep body and soul together,” and only occasionally with enough courage to ask for more.

Whether you are paid wages or salary, you depend for your living upon selling your mental and physical abilities to an employer. There exists a constant struggle between you and your employer over your wages and conditions. Never would you dare to think that as wealth is produced from the resources of nature, by the application of human labour-power, it should wholly belong to those who, as a social class, produce it.

In other words, you accept the class ownership of society; you are prepared to let a minority class (the CAPITALISTS) own and control the means whereby you live. As a consequence of their favoured position these Capitalists can live in any part of the world they choose; they can sell, barter, or gamble away, the VERY MEANS WHEREBY YOU LIVE, AND THE NATIONALITY OF THE NEW OWNER IS NONE OF YOUR BUSINESS.

Such an economic set-up makes nonsense of the claims made by Republicans, Unionists, or any other political party, that the people can control their own destinies, by raising this flag, or lowering that. The problems that beset us in Ireland to-day do not originate in our capacity for colour appreciation, in the qualities of Green and Orange. They are problems inherent in the Capitalist system—that system which has the blessing of both Governments in Ireland; that system which would continue to afflict us if the I.R.A. concluded a successful struggle to-morrow.

The Socialist Solution

In Ireland, North and South, we live to-day within the framework of the Capitalist system, and this decadent system would still obtain if we lived in an All-Ireland Republic. “Freedom” for the broad masses of the people, under Capitalism, is but the freedom to choose between wage-slavery and starvation. The English, French, American or Russian workers, with “their own” national governments, are no more free than we in Ireland. Capitalism, with its wages-system, and its class structure, is the common enemy; our common weapon is Socialist knowledge.

To us of the working-class, Capitalism means the continuation of all the rotten, miserable conditions under which the mass of the people suffer. No amount of reforming can change the basic nature of the system, and its effects are not mollified by a flag. It matters not which party administers Capitalism, whether it is Republican, Unionist, Labour or Communist. Each may apply the screw of policy; bless it, curse it, nationalise or de-centralise; the effects, as far as the working-class are concerned, are the same—poverty, insecurity, slums, ignorance, depressions, and wars.

We Socialists affirm that there is but one solution to the problems confronting the working-class; that solution is SOCIALISM. By Socialism we mean the common ownership and democratic control of the means of production (the factories, land, mills, mines, transport, etc.), by, and in the interests of, the whole community, without any distinction whatsoever. No wages system, no exchange, no buying and selling, but instead, the application of the principle; from each according to his ability; to each according to his needs. That is Socialism, and the way out for the workers of Ireland, and the world.

When Can We Have Socialism?

One of the objective conditions necessary to the establishment of Socialism already exists; viz., the development of the machinery of production to the point necessary for supplying the needs of humanity in a free society. The second objective condition depends on us of the working-class: it is a readiness to understand the social implications of Socialism, to accept them, and consequently, desire to make the change to a Socialist society.

And when we do desire to make the change, NO POWER IN THE WORLD CAN STOP US!

Richard Montague

Is Capitalism Really Changing? (1957)

From the May 1957 issue of the Socialist Standard

If the parties of reform cannot call the tune to Capitalism they can at least call it by fancy names. Tories and Liberals rather like the sound of “The People’s State,” “Progressive Industrialism,” or simply “The Welfare State.” With unconscious irony the Labour Party in this never-never or hire purchase age, refer to it as yet a further instalment towards getting Socialism, while the ingredients for their recipes are the same each rival party seeks to sell its programme as a proprietary brand and the label assumes greater significance than the contents. Word magic then becomes an essential feature of political art and future historians may note that the differences among the reform parties were at bottom semantic differences.

Last Days of Pompeii

Mr. Strachey’s book, Contemporary Capitalism, is yet another verbal variation of the current situation. Dramatically he names it, the last stage of capitalism. For all its relevance to actuality he could have called it. “The Last Days of Pompeii.” Mr. Strachey deals with capitalism in terms of its symptoms, not the malady; which is as futile as a physician treating measles in terms of its spots or malaria in terms of its shudders and shivers.

Mr. Strachey in diagnosing the body politic and economic discovers by certain signs that capitalism has changed, is changing, and will continue to change—for the better. Mr. Strachey lists the signs as evidence for this, in the separation of ownership from management—which we shall deal with in a separate article—the increase in State activity, the appearance of the Welfare State and even the new method of setting out the national accounts. If all this is coupled with the atrophy of competition, which, says Mr. Strachey, is the essential regulating and controlling mechanism of capitalism, then a new kind of capitalism is being produced. A new kind of capitalism which in Mr. Strachey’s view, it will in the foreseeable future be an abuse of language to call capitalism. It is the ending of what he calls unrestricted competition that is the basis of, to use another term of his, the mutation of capitalism.

Capitalism and Competition

Mr. Strachey by treating competition as the essence of capitalism is able by invincible logic to establish the proposition that as unrestricted competition is no longer with us, neither is capitalism, or at least only its last stage. The weakness of identifying capitalism with laissez-faire, i.e., individualistic competition and an absolute minimum of State interference in industry is that such a state of affairs corresponded only with the coming to maturity of English capitalism, while the development of capitalism in England went through a “free trade” phase, in the U.S.A. it went through an opposite phase—protection again in Germany, Japan, Italy, etc., the early stages of capitalism so widely departed from the classic English development as to say that a laissez-faire free trade capitalism was peculiar to, England. We might add that Soviet capitalism has never known anything remotely connected with laissez-faire.

What can be said is that laissez-faire and free trade were components of 19th century capitalist ideology, but its actual economic practice only came into operation under certain conditions. Also, if trusts, cartels, etc., are à la Mr. Strachey, evidence of a last stage capitalism, then U.S. and German capitalism must have come to it in the alleged traditional fashion of the Chinese by going through the last stage first, for such things were features of the early capitalist development of the above countries.

On historical and factual grounds it can be shown that individualistic competition and non-intervention by the State in matters industrial, although they corresponded to the growth of English capitalism were not features basic to the maturing of capitalism elsewhere. Laissez-faire and capitalism cannot then be regarded as synonymous terms. Even on purely logical grounds Mr. Strachey is guilty of a howler unpardonable in a high school student. Thus, if there is a last stage monopoly capitalism and a first stage competitive capitalism, and the species is still extant and recognisable, then competition cannot be the essence of capitalism. There must be some basic factor common to both stages.

The Nature of Capitalism

What that basic common factor is. Mr. Strachey never really attempts to explain. The nearest he gets to it is a casual observation (page 92) that “Marx showed that wealth is not due to capitalist abstinence but wealth and capital accumulate because workers produce much more than they consume.” But this does not tell us what makes capitalism tick or show its essential differences from other exploitative social systems.

It is not that the worker merely produces a value over and above his own upkeep—surplus value, but that this surplus value constitutes the warp and woof of capital accumulation, and it is capital accumulation on an ever-expanding scale which is the dominant objective of the owners of capital. For capitalists the most essential thing is the magnitude of capital under their control and its most desirable characteristic the ability to expand indefinitely. The fundamental urge of capitalist society is the same now as it was in all its yesteryears.

Nor is capitalism crucially altered because owners of capital fight in the massive formation of firms, corporations and cartels instead of rushing into battle single-handed with the cut-throat sword of naked competition, as was the wont of their early and mid 19th century counterparts. Capitalism is still a battleground of rival concerns, each trying to obtain the greatest possible spoils in their efforts to realise the greatest amount of surplus value for themselves. It is true that Agincourt was fought with bows and arrows and armed horsemen, but it was no less a battle than Stalingrad, which was fought with tanks and high explosives.

Capital accumulations have not ceased

If capital accumulation is the cardinal feature of capitalist society, then it is precisely here that Mr. Strachey should have directed his efforts, to show that capitalism is changing in some significant way. He should have sought to reveal that accumulation of wealth is no longer capital accumulation, but becoming social accumulation and that the means and instruments of wealth production are ceasing to become capital, that is, means of exploitation in the hands of individuals or groups of individuals, but were in the process of being invested in the democratic control of the community. If Mr. Strachey could have demonstrated this, then he surely would have proved that when he states that capitalism has undergone a mutation he is using the word in its correct sense. On the contrary, Mr. Strachey implicitly and at times explicitly shows that wealth accumulation still takes the form of capital accumulation.

Nor are the compulsions of capitalism any less compulsive than they were in the 19th century. The process of capital accumulation is not something over which capitalists can exercise a personal choice, to ignore it would be to invite elimination from the ranks of the owners of capital. Capitalists, and here we include management, although they are agents of capital, are not free agents. Capital is an historically conditioned form of wealth, expressed in the class ownership of the means of production and for that reason the motive and aims of the owners of capital are prescribed for them by this form of control. It is in the light of this that we are to understand Marx’s statement when he says in the preface to volume one of Capital that “he treats of landlord and capitalist as personifications of economic categories, embodiments of particular class relations and interests.”

Because reformist policies are themselves, the outcome and implementation of capitalist development the political parties in order to justify their existence seek to rationalise this development in terms of significant changes. But it is a mistake to suppose that development as such is synonymous with change in some transformative sense. Muscles may be developed, but they are still muscles. A plant may in its life cycle undergo change of form, but it is subject to an intrinsic pattern of development. Capitalist development may modify certain features of the system, but it does not alter the essential nature of the beast, any more than sawing off the legs of a Wolfhound if it were possible would make it a Daschund. It would still remain a Wolfhound with short legs.

The acid test of Reformism

It is because the conversion of capital accumulation of wealth to social accumulation provides the acid test to any genuine change in society that Mr. Strachey’s political litmus paper not only fails to turn red, but even parlour pink. In Mr. Strachey’s future society there will still be class ownership of the instruments of production and hence accumulation will continue to be capital accumulation. What will be necessary will be that the rate of investment must be kept as high as possible and in that case Mr. Strachey sees no objection why the economic mechanism cannot be left in private hands. Since, says the arch-revolutionary Strachey, the owners of the means of production or management cannot be ordered they must be induced not to let the level of investment drop. This can be achieved by public works investment and a whiff of inflation.

In Mr. Strachey’s social mutation there will still exist all the characteristics of the old species, capital accumulation, private ownership, profits and wages. And so the more capitalism is changed the more it is like the same thing—only even more so.

Mr. Strachey, a little self-conscious, perhaps, that his mutation looks suspiciously like the old species writ large, implies that owners and management are becoming socialistic because the profit motive is today not the only motive. But if profits are not made owners and those who constitute management will go out of business. For capitalism it remains the golden rule of success and capitalists must play the game in accordance with that rule. Whatever other motives inspire the entrepreneur they are all subordinated to that one and whatever other rules are broken that one is the one which they can least afford to break.

We are all Socialists now

Mr. Strachey puts forward the threadbare apologia that those who direct and control investment do or can play a useful social role. That their job is one of those specialised jobs they do on behalf of the community and in taking profits they are merely being recompensed for their trouble like any other workers. No doubt under Mr. Strachey’s future economy, capitalists will murmur with pride and equanimity, “We are all Socialists now.”

Competition as fierce as ever

Mr. Strachey, who in the matter of politics is the best second-hand dealer in the business, offers the commonplace of fifty years economic theory that competition has declined. It is an over-simplification amounting to falsification to say that price competition between the bigger concerns no longer operates. There are periods in various spheres where price stabilisation is achieved by agreements, but such agreements are temporary in character and have been broken time and time again, and so far as cartels being something new in capitalism they are almost as old as capitalism itself. In fact, the history of capitalism is replete with cartels, both national and international, coming together and falling apart.

Sometimes the conditions of the markets are such that price competition has to be resorted to. When the battle has reached exhausting limits, non-price competition, i.e. selling agencies and advertising take its place. But the antagonism between rival producers is as fierce as ever. Price competition or non-price competition are then merely forms of social antagonism inseparable from such a society as capitalism.

For someone who cannot define capitalism it is hardly to be expected that he can define Socialism. And this turns out to be so when Mr. Strachey gravely utters the nonsense that the outstanding difference between last stage capitalism and Communist societies is political rather than economic. It is the difference between democracy and dictatorship. On such a classification, Nazi Germany, Fascist Italy, the Argentine, and even Spain, are nearer to “Socialism” than England.

One can only say in conclusion that the height of Mr. Strachey’s absurdity is equalled only by the depth of his ignorance.

Ted Wilmott

Further Reflections on Crises (1957)

From the April 1957 issue of the Socialist Standard

Because the pattern of a particular crisis is influenced by the concrete circumstances of the time no crisis is merely a repetition of those which have preceded it. While there are elements common to all crises we cannot say in advance how these elements will interact in a specific situation or what is the relative strength of other factors associated with it. Consequently to understand all the relevant details of a particular crisis, we can only be wise after the event.

Nevertheless we can say that all crises are intimately connected with two fundamental features of the system, viz., “anarchy of production” and “disproportional industrial development.” These two features are again intimately bound up with each other.

By anarchy of production we do not infer economic chaos, on the contrary capitalism is a system ruled by laws and compulsions of its own. What is meant is that Capitalism is not a system consciously regulated by social aims. Capitalists do not meet beforehand to harmonise production in accordance with social ends. Capitalism being profit motivated production, capitalists invest in industry for no other motive and without regard for and little knowledge of other investments being carried out at the same time. But capitalist production is social production and the different branches of industry form an interlocking whole. It can be seen then that the different yet integrated industrial spheres, governed as they are by autonomous decisions being made simultaneously, there exists in the system an inherent bias towards uneven development between the various branches of industry. When this disproportionality reaches a certain level the possibility of a crisis emerges.

To put the matter concretely we can begin by saying that the market for any product is dependent on the volume of production in other spheres and therefore cannot be accurately gauged. Now if we assume that Capitalists in a particular industry have over-estimated the demands for their product and so produced more than the market can absorb at a remunerative price and if we take it that other industries have not similarly expanded, then it can be said that this particular industry has over-expanded relative to other industries, i.e. a disproportionality of industrial development has taken place.

This relative over-expansion of industry will, however, generate cumulative effects. Not only will the industry affected cut investment and hence production but in doing so it reduces its demands for commodities, including labour-power, to those industries linked to it. They in turn will cut their orders to other concerns and so on. As a result a widespread decline in production will occur.

If the initial over-expansion is big enough it may permeate the entire economy and precipitate a crisis. Large scale unemployment will appear, purchasing power suffer a sharp decline and surplus products will then begin to appear on the market as a matter of course.

It can be seen then that over-production in one branch of industry brings elements of over-production in other branches of industry, and by rupturing the conditions of equilibrium, initiates relative over-production, which is indistinguishable from general over-production. All crises then are crises of relative over-production. An industry can only over-expand in relation to other industries although the effect which this produces is, as has been already stated, indistinguishable from general over-production.

Crises, as Marx pointed out, do not arise through a lack of paying consumption of the mass of the population. They arise because disproportional development in one industrial sector leads to a curtailment of investment (and so production) which by upsetting the balance of the different industrial branches brings about a general slowing down of production. It is this disproportional development which starts the downward spiral of wages and employment with its corollary of shrinking purchasing power. The lack of paying consumption is then a consequence not a cause of crises.

To elucidate the point further we might add that the effect of a boom is to generate rising levels of purchasing power, and further that wage payments seem to increase more rapidly in the latter stages of the boom than at the beginning. But rising wages tend to reduce profit margins. Further, when an over expansion of one industrial sphere has been big enough to start a downward spiral of investment, and profits, there comes into existence a volume of capital investment too great to be consistent with former profit levels. As Marx says, “Since production depends on investment [such a situation] constitutes an over-production of capital which takes the form of an over-production of commodities.”

From the standpoint of the employers one of the prime factors for ending boom conditions is that wages are too high to make increasing investment desirable. Any return to a new stage of profitable investment depends then on labour-power becoming cheap enough to increase profit margins to the point which makes an expansion of production worthwhile.

A crisis is made possible in Capitalism not because the workers have too little purchasing power—in fact as already stated their purchasing power is at its height prior to the boom breaking—but because of the antagonistic class distribution of income inherent in a system of antagonistic class relations of production. Capitalists cut back investment because there is an unsatisfactory income distribution for them, in that profit margins are too small and wage levels too high. They are not concerned with some abstract purchasing power but in the concrete fact that the purchasing power in the form of wages is too high for the existing volume of capital to earn a given return.

To say, as under-consumptionists say, that crises are caused by too much of everything being produced is not in accordance with the facts. A crisis does not mean there is a total deficit of purchasing power unable to buy back an absolute over-production of consumers goods. The decline in purchasing power of the workers in a crisis situation is the outcome of an unfavourable distribution of income as the result of the system failing to expand proportionally and so bringing about elements of over-production in the various sectors of industry whose net effect is general over-production. It is this that originates a falling spiral of wages and employment and makes inevitable the appearance of market “surplus stock” in the shape of articles consumed by the working class. There is still, nevertheless, plenty of purchasing power in the pockets, holdings, banks, etc., of the Capitalists, to buy this surplus stock but of course they do not choose to spend their money that way.

Muddle-headed theorists have argued that crises could be assuaged and even cured, if at the first sign of a slump, the Capitalists went in for increased personal consumption, buying more Rolls Royces presumably and having nightly champagne parties. But it is forgotten, or is not known by these theorists, that boom or slump, the accumulation of capital i.e. the self-expansion of capital is still the basic urge of the Capitalists. At least the Capitalists are realists who know that they must husband their resources and even increase them as far as conditions permit, if they are to successfully ride the crest of the next boom wave. Like the workers they tighten their belt’s even though the belts are larger and the stomach more capacious. In more theoretical language it can be said that the primary motive of Capitalists is the expansion of exchange value not the production of immediate articles of consumption.

Marx himself took the view that the system in relation to human needs does not produce too much but too little. He held it to be a system of organised scarcity. In Vol. 3 of Capital he states, “It is not a fact that too much wealth is produced. But it is a fact that there is periodical over-production in its capitalistic and contradictory form.”

Which brings us to Mr. Strachey again. In the 1930’s he wrote a much hailed book, The Nature of Capitalist Crisis. Nowhere in it did he provide any coherent account of crises. One could detect, however, the over-tones of an under-consumptionist view of crises. Thus on (p. 248) we are told “that the essence of every capitalist crisis is that the population is unable to purchase the ever-growing quantity of consumers commodities which come pouring on to the market.” One page 289 he adds, “the under-consumptionists were not wrong in one sense but they were wrong in thinking that the payment of high wages was the solution to crises.” All of which shows the confused nature of Mr. Strachey’s thinking on the subject of crises.

What was more serious was his attempt to link what Marx termed the tendency of the law of the falling rate of profit to crises and to establish it as the crucial cause. It is true that Marx had listed a number of tendencies which worked in an opposite direction and Mr. Strachey dutifully enumerated them. But in The Nature of Capitalist Crisis he contended that ” they can check but not overcome the main downward tendency of the rate of profit.” P. 264).

This view that the tendency of the law of the falling rate of profit is the main agency for encompassing the downfall of capitalism can be briefly stated. It is held that the rate of profit falls in a continuous downward curve and finally reaches a point which provides no further impetus for capital accumulation, just as the steady drop in potential of a power source would reach a point where it could no longer supply a driving force to machinery.

Not only would the falling rate of profit as it reached a new low level precipitate a crisis but as a result each crisis would become more catastrophic. Bound up with this view is the belief of some ultimate breakdown of the system. This mechanistic and fatalistic view of capitalism was fashionable for years among Communist theorists and Mr. Strachey fashionably followed it.

Marx’s own formulation of the tendency of the falling rate of profit can be briefly enumerated, Marx divided capital outlay into two parts, one part he called constant capital, which consists of tools, machinery, etc. The other part he termed variable capital constitutes wage payments in order to buy labour-power and set it to productive activity. It is this active labour power which alone produces value and a value greater than its upkeep. It is thus the sole source of surplus value and hence profits.

Nevertheless, a marked trend of capitalism is the increasing mechanisation of the process of production. This means that as capital outlay grows, a proportionally greater amount will be spent on means of production than on wage bills. But as we have seen, variable capital provides the sole source of value and hence profit. It follows then that as capital grows and with it the ratio of constant capital to variable capital, then less value and profit is produced in a given unit of capital. And the rate of profit which is computed on the total capital outlay must fall.

We can illustrate this by assuming that a given capital outlay of £10,000 is divided into £5,000 constant and £5,000 variable and that the rate of exploitation is 100%. In that case the profit will be £5,000 and the rate of profit 50%. If, however, the capital grows to £30,000, of which £20,000 is laid out in constant capital and £10,000 in variable capital and the rate of exploitation is 100%, then the profit will be £10,000. Thus proportionately less value—and profit has been produced on the larger capital and the rate of profit has fallen from 50% to 33½ %

But Marx was quick to enumerate counter tendencies for keeping the rate of profit up. The main ones being, increasing productivity of labour due to the increasing efficiency of mechanisation. The cheapening of the elements of constant capital, resulting from increased productivity, which means that although the physical volume of constant capital increases, the value composition does not increase at the same rate. Then there is the existence of an industrial reserve army which acts as a reservoir of cheap labour-power and stimulates the setting up of new industries with a low ratio of constant to variable capital and hence a high rate of profit. The averaging in these higher profit rates with the lower profit rate of the older industries raises the overall rate of profit.

Thus the tendency of the rate of profit to fall is merely a tendency among counter tendencies. Marx’s own analysis of the matter gave no grounds for supposing which, if any, tendencies would prevail. Indeed for Marx to have advanced some economic law in abstraction to which capitalism must conform would have been contrary to his empirical method. For him such tendencies or counter tendencies could only be relevant to the concrete circumstances of any given stage of capitalism. It was left to Communist theorists and the facile Mr. Strachey to elevate this mere tendency to some law of social gravity.

In actual fact there is no direct evidence of some steady decline in the rate of profit over a long period. There are, of course, several profit rates in capitalism and a decline or drop in one of them is not necessarily a cause or even a factor for precipitating a crisis. And even if there did exist a tendency for the rate of profit to fall due to growth of the ratio of constant to variable capital, over a long period, it would be very slow and could not account for the sharp decline in profit levels and the widespread curtailment of investment associated with crises. Again the idea of what constitutes a profit norm for capitalists can undergo change and the norm of one period might be lower than the preceding one. Thus a lower rate of profit would constitute no disincentive for investment which is characteristic of a crisis situation. There is not the slightest reason for supposing that some alleged long term tendency of a falling rate of profit is organically connected with crises and ultimately the demise of capitalism. Such views are not propositions of Marx but projections of Communist politics.

Mr. Strachey in combating the false assumptions he once held, believes he is combating Marxism whereas it is the present Mr. Strachey quarrelling with the past Mr. Strachey without understanding what the quarrel is really all about.

We might add Mr. Strachey makes no reference in his latest book to his past errors. To these “errors” it seems we must also add, sins of commission and omission.

Ted Wilmott

Should We Join the Labour Party? (1957)

Editorial from the April 1957 issue of the Socialist Standard

When it was decided to form the Socialist Party of Great Britain fifty-three years ago those who made that decision did so against the advice of many individuals and groups that claimed to know a better way of getting Socialism—by joining the mass organisation, the Labour Party (known at that time as the Labour Representation Committee). The L.R.C. was, they frankly confessed, not a Socialist Party in any sense, only a trade union organisation formed to look after trade union interests in Parliament, linked up with a number of people anxious to push their pet schemes of social reform. All the more reason, our advisers said, why genuine Socialists should get inside where they would have a wide and receptive audience for Socialist propaganda. Some of those who said this did so with tongue in cheek—all they wanted was an excuse to further their careerist ambitions. Others could not preach Socialism in or out of the L.R.C. for they knew nothing about it. But there were some who meant what they said and tried to do what they promised. And for some time events gave the appearance of justification to their view. It was possible in those days to talk and write about Socialism within the ranks of the Labour Party and to argue the Socialist case with Labour supporters who were at least familiar with the works of the Socialist pioneers. They didn’t accept the Socialist case but they were aware what that case was. Their most plausible line was to argue that Socialism is the only worth-while aim but that, the workers being what they were, the only practical policy was the triple one of making capitalism better through reforms and through eradicating war; of introducing nationalisation as an administrative stepping stone to Socialism; and of preaching Socialist principles to raise the level of understanding among the workers.

They builded worse than they knew

And what has it all achieved apart from the carving out of dazzling careers for many Labour leaders? Has it raised the level of knowledge in Labour Party ranks? In a not-intended sense it has. In and around Labour Party headquarters and among the M.P.s there is now a vast accumulation of knowledge and experience. They know all about winning votes and influencing electors. They have an encyclopedic knowledge of some of the intricacies of government and administration. They can compare with the Tories in a grasp of the pros and cons of joining the European free trade area, they can discuss income tax and purchase tax with the experts, they can hold their own in the wire-pulling and double talk at United Nations, and have proved in a series of wars that they can organise destruction as to the manner born. In short they have passed their apprenticeship and become so statesmanlike as to be barely distinguishable from their opponents the Tories. But where, oh where is the Socialist influence that was to permeate the ranks of the Labour Party?

Where are the “Pinks” of yesteryear ?

The Daily Mail (8/3/57) had an editorial of a kind that is becoming more and more frequent in the capitalist Press. Its theme was that things are in a mess, that the features of the mess change but it is just as much a mess as that between the wars, that literally everything has been tried but without success, and nobody can understand just what is wrong and how to put it right.

Any Labour Party supporter will say that he is not a bit surprised that a Daily Mail journalist should write in this vein, but what has it to do with the Labour Party and Socialism? It has quite a lot to do with it. When the Daily Mail says that everything has been tried, forgetting that Socialism has never been tried, it does but echo what is written in the Daily Herald, Tribune, and other Labour journals. They are full of ingenious schemes for settling Capitalism’s problems but never on any occasion do they put the Socialist alternative to Capitalism or show a Socialist understanding of the nature of the problems.

Challenge to Labourites

And if any member of the Labour Party thinks this is not true let him meet the challenge and show us when he has seen the Socialist case in the columns of the Daily Herald or the other journals, or heard it on a Labour Party platform (except from an S.P.G.B. opponent of the Labour Party) or at a Labour Party Conference.

The Socialist case is not heard in Labour Party ranks and if it were the man who put it would be regarded as a crank or an oddity not to be taken seriously. Far from being influenced by Socialist propaganda inside its ranks the Labour Party has now forgotten what little it once knew. It cannot now even argue against Socialism for it does not know what Socialism is. It no longer possesses what was once its sole attractive quality, an aimless but enthusiastic spirit of revolt against the iniquities of Capitalism. It is now a highly organised political machine for handling the affairs of British capitalism in between Tory administrations.

We still receive the same advice, as was given to the S.P.G.B. when it was formed, “get inside and influence the Labour Party.” Then it was sufficiently plausible to merit argument; now it is a bad joke.