Monday, October 14, 2019

£1000 Fund (1922)

Party News from the December 1922 issue of the Socialist Standard

"Plebs" and Pounds. (1922)

From the December 1922 issue of the Socialist Standard

When the temporary boom that followed the Armistice began to decline, the capitalist class instructed its agents in Press and on platform to give forth “reasons” for prices remaining high in this country, despite the wage reductions that were being enforced in all directions. One of the favourite "reasons” put forward to explain this apparent puzzle was "the inflation of the currency.” Tory and Liberal politicians, as well as economists from Cassel to J. A. Hobson, repeated this parrot cry without offering the slightest evidence in support of it.

The Labour Party conducted a so-called investigation into the matter of high prices and borrowed, without examination, the assertion of “inflation,” and gave it as one of the chief causes of those high prices.

An article appeared in the July, 1920, Socialist Standard, which, among other things, made a brief reference to this point of ‘‘inflation.” This called forth some correspondence that was dealt with in the September and November, 1920, and April, 1921, issues. The question was raised once again by a correspondent in the June, 1922, Socialist Standard, and answered in the same issue.

This answer has evidently upset some of the self-styled experts, as two issues of the "Plebs” Magazine (July and September, 1922) have been forwarded to us, that contain the complaints of certain correspondents about the "Plebs” repeating, parrot-like, the stupid assertion on "inflation.”

We have never accused the statesmen of the Labour Party of being guilty of any economic knowledge—Marxian or other— but the "Plebs” claims to be a journal for the spread of Marxian education, and it is the "organ of the National Council of Labour Colleges.” If their treatment of this question of "inflation” is a sample of their knowledge, it certainly shows the value of Labour College "education.”

In attempting to discuss any question, the first thing to be done is to settle the facts of that question and then use those facts to build up one’s case. In the question under discussion obviously the first point to be settled was “Has there been an inflation of the currency in the United Kingdom? ” The inquirer will be astonished to find that neither the Labour Party nor the "Plebs” have made the slightest attempt to examine—let alone settle—this fundamental point. Such is the slovenliness of the "Plebs” in dealing with statements devised to deceive the working class. In these circumstances a brief re-statement of the case will be useful.

The currency of a country consists of the article, or articles, that are chosen by general consent and experience to act as measure of value and medium of exchange. At first this is usually an ordinary commodity that is in general use. When the number and complexity of the exchanges grow to .a certain point the need for some guarantee of the invariable quality and weight of the medium of exchange is felt. This duty, sooner or later, devolves upon the Government of each country, and is usually done by stamping the articles concerned with some special device. The stamped article now takes up a new position in the commercial world and is removed from the place of an ordinary commodity to function exclusively as the measure of value, medium of exchange, etc. It thus becomes the currency of that country. Once the main use of a currency is understood the “problems” connected with it will be easily understood.

As the currency is used as a medium of exchange, it is evident that the amount of currency required at any given time will be determined, first by the total of the prices of the commodities exchanged at that time. This quantity of currency will be modified in practice by the amount of credit given by the sellers, which defers payment to some future date; by the number of payments falling due for articles previously sold; and by the speed at which the currency circulates. Thus, if £1 makes 52 moves in a given period—a year—it will circulate £52 worth of commodities in that time. Cheques, bills of exchange, etc., all add to the factors modifying the quantity of currency required, but these do not alter the main argument. Each country finds by experience the quantity of its own currency required to cover the total of the exchanges and transactions during a given period. This quantity will vary from time to time, particularly in the relative sense, but under normal circumstances these variations are easily met.

Previous to the declaration of war by England upon Germany in 1914, the quantity of currency used in the United Kingdom was £214,000,000. One immediate effect of the declaration of war was a sudden increase in prices of numerous commodities. Before any alteration of the currency was considered, let alone carried into effect, this increase of prices made an increase of the currency necessary to carry on business. Every increase in prices since has called either for an increase of currency or for some financial readjustment. In no case has the currency of this country been issued in excess of the business requirements. Yet this simple, glaring fact has been ignored both by the Labour Party and the "Plebs,” although it is fundamental to the question under discussion.

The new currency issued took the form, mainly, of Treasury notes. But mark here an extremely significant point. The Act authorising the issue of these notes says :—
  (3) The holder of a currency note shall be entitled to obtain to demand, during office hours at the Bank of England, payment for the note at its face value in gold coin which is for the time being legal tender in the United Kingdom.
And this portion of the Act has remained unaltered up to date.

Any student of economics knows that a convertible paper currency cannot be inflated by reason of its convertibility, and this fact alone shows that the statements of the "inflation” mongers are entirely false. But even those who are not students of economics can find proof of the fallacy of "inflation” in another way. That is to compare the increase of prices with the increase in the quantity of the currency. As shown above, an increase of prices, apart from the modifications mentioned, will require an increase of currency. What has happened in this country? According to the Government Report on "Currency Expansion, Price Movements, etc.” (Cmd. 734), the following changes in prices and currency have taken place in the United Kingdom. Both prices and currency in 1914 are taken as 100, and the increases on that figure on March, 1920, are given thus:

The retail prices of food were under Government control, and thereby prevented from rising as high as market conditions would otherwise have allowed.

These figures show that so far from any "inflation” having taken place there has actually been a relative decrease in the quantity of the currency. Perhaps the quidnuncs of the "Plebs” will try their skill in explaining that little fact? But how do they answer the questions already put to them by their correspondents?

In the first case they say:—
  If our comrade would like a summer holiday as the guest of His Majesty she has only to change her £1 currency notes into gold sovereigns, smelt them or sell them by weight for export. If she did succeed in doing this secretly she would find that a gold £1 outside of England bought more than a paper £1. Even inside England she would find people who would give her more than 20s. for it.—(Plebs., July.)
This "answer” is such a sheer evasion of the question that it is difficult to believe it can be other than deliberate. It is on a par with suggesting that an inquirer should commit a burglary in France for the purpose of finding the cause of the fall of the mark in Germany! For, as even the editor of the "Plebs" might know, it has been illegal to melt down currency coins all through the centuries that Coinage Acts have been in existence. Moreover, it is illegal at present to export gold from the United Kingdom without a Government licence. This is also the case in America. But the second statement clinches the position, as it shows that the "Plebs” editor realises he is unable to show any "inflation” in this country and so has to advise his correspondents to go abroad to test the matter. And where in England, may one ask, can more than 20s. be obtained for the Gold Sovereign? Only among illegal thieves and receivers of stolen property. In all the enormous mass of normal trade and commerce of this country the £1 Treasury note will purchase just as much as the gold sovereign. Which is another fact completely disposing of the tale of "inflation” here.

But now a more serious query, of the absurd position of the "Plebs,” is sent in, this time from a Social Science class apparently connected with the Labour College.

The tone adopted in the second answer is distinctly different from that used in first one. A whole class is, seemingly, a more serious proposition from a business point of view than a single reader, though the same display of ignorance occurs when we are told :—
  If enough currency notes were issued then they would exchange precisely on the basis of the socially necessary labour needed to reproduce them. —(Plebs., September, 1922.)
But why are they not exchangeable on that basis now? Immediately because of their convertibility. And once more the correspondent is referred abroad to find out if “inflation ” has occurred here !

The answer in the June, 1922, Socialist Standard is mentioned, and we are told :—
  The Standard writer, instead of simply answering a question, recites his little piece about how the S.S. has always denied inflation; and it is his remarks apparently which have worried the Bentley class.—(Ibid.)
The above is not quite correct, for we have not merely denied “inflation” here, we have proved it had no existence. Then follows a paragraph in the “Plebs” admitting almost all our arguments as being correct, though they had denied them by implication previously, but trying to save the wreck of-their case by saying:—
  But increase in credit and increase in currency react upon each other and it is certainly wrong to deny that inflation of currency was not a factor behind high prices in our own country. The fact that the “Fisher” is convertible does not prevent inflation for it is only convertible in theory.—(Ibid.)
How does the “Plebs” editor know that the Fisher is “only convertible in theory? ” He does not say, and for the simplest of reasons; because he has not a tittle of evidence to back his baseless assertions. The reader can be left to judge the value of the “Plebs’ ” unsupported word when pitted against an Act of Parliament.

Note how the bombastic assurance of the first reply, with its jeering suggestion to the single correspondent to commit a couple of illegal acts to prove an empty assertion, has given way to an admittance that the bulk of our case is correct, and only the weak—nay, childish —remark “it is certainly wrong ” to deny “inflation,” in the second answer. “Wrong to deny” a statement proved to be false ! What logic?

As a matter of fact, it was for those who postulated “inflation” to have given proof of their contention. Not one of them attempted to do so. Instead they merely repeated like parrots the unsupported assertions of the agents of the capitalist class. And as a specimen first of bombastic ignorance and then of a shuffling crawl, the “Plebs' " answers on currency take front rank. 
Jack Fitzgerald.

The Principles of The Socialist Party. - Part 4 (1927)

From the February 1927 issue of the Socialist Standard

Part IV
Beneath the workers there lies no further class. Neither from above nor from below can we look for assistance in the hour of social revolution. Labour is the most fundamental of social functions; consequently, the emancipation of the labourers will free every social function from the character of prostitution which clings to it under the regime of Capital.

Science and art to-day are the hired mistresses of Capitalist interests. Adulteration and advertisement of articles of sale, these are their most obvious functions. The elaboration of instruments of murder and plunder, and the idealisation of such processes on a national scale, are others.

With the freeing of the workers, science and art will acquire new meanings; they will become vested with a social purpose. Knowledge and beauty will be embodied in the actual material environment as well as the brains and bodies of mankind.

Women will no longer be under the necessity of providing heirs for property nor embryo hirelings for the labour market. Secure in a social heritage they will no longer need to offer their sexual attractions in return for the means of subsistence. Common property in the means of production will involve, therefore, the disappearance of both vice and virtue, dull respectability and its garish complement, monogamy and prostitution.

Thus every human being from birth onward will acquire a new social status. His or her own development will provide the basis for the maximum degree of social efficiency. The interests of society and individual are only antagonistic under a system based upon private property. Consequently the ethical conflict which forms the basis of moral codes will likewise disappear. Where the interests of each and all. are identical, abstract moralising will be simply so much waste of time. The object of existence will be to be happy, the place to be happy will be here, and the means of happiness will be to hand for all. Hence none will need to seek in the realm of shades for the forces with which to guide their lives. A life hereafter will no longer offer consolation for non-existent misery; while ghosts and gods will become as meaningless as fairies and hobgoblins. A rational outlook will accompany a rationally-ordered social life.

There remains to be considered the central power of the Capitalist, i.e., the State; its seizure by a revolutionary working-class cannot fail to alter its entire character. From an instrument for maintaining private property it will become the agent of its abolition. Wrenched from the control of their present masters, the armed forces will be reserved only so long as any danger of counter-revolution remains. As the reorganisation of society proceeds, the need for repression of anti-social elements, the relics of the dying order, will gradually disappear. The political character of society, that is, its organisation for the purpose of government, will give way to economic functions. The administration of things in the interests of all will render unnecessary the constant supervision of personal relations by the public power. Once these personal relations lose their pecuniary basis and become purely voluntary, their arbitrary regulation by an outside force becomes absurd. Hence it is clear that the entire organisation of society as we know it to-day will be sprung into the air with the uprising of the working-class. What will take its place we can only express in the most general terms. The mission of the workers is to destroy the existing obstacles to their own development. For that purpose we call upon them to organise into a political party in opposition to all forces assisting to maintain the present social order.
Eric Boden


The Principles of The Socialist Party. - Part 3 (1927)

From the January 1927 issue of the Socialist Standard

Part III.
Many people who profess to agree with the first three clauses of our declaration either fail to see the logic of the remaining clauses or decline to follow that logic in practice. They assent to the statement that the workers are slaves requiring emancipation, but ridicule the notion that they will emancipate themselves by means of the political machine. Yet a little reflection should show that there is no logical alternative.

The interest of the master-class leads them to resist any attempt at changing the social order. Consequently such a change necessitates a force strong enough to overcome such resistance. It requires an organisation sufficiently widespread to supplant the representatives of the interests of capital at every salient point.

In spite of this fairly obvious fact, however, we find numerous self-styled champions of the interests of the workers who profess to be able by one means or another to inaugurate a new social order by “leading" the mass of the politically ignorant and unorganised; and who deride the idea that Socialist education in the scientific sense is either necessary or even possible within reasonable time.

Such an attitude indicates (where it is honestly held) a serious lack of knowledge or failure to appreciate the lessons of history. It is frequently alleged that previous social changes have been effected by minorities, and that is, of course, largely correct; but the point is seldom considered that the changes so effected have been in the interests of minorities and not in the interests of the mass. Thus when the Capitalist majority overthrew the feudal minority in the French Revolution, the result was that the workers merely changed their masters. They merely secured a change in the form of their servitude.

To-day we are faced with the necessity of abolishing servitude, of shattering every institution by which privilege and exploitation are upheld. Such a change implies, by its very nature, the conscious self-assertion of the mass, the workers themselves. Beneath the whole question lies the character of the productive forces at the present time. No mere minority can run the intricate industrial mechanism. That task obviously requires the active co-operation of the disinherited millions. So long as those millions are content to accept their enslaved state, so long as they are prepared to go on piling up wealth for their masters, those masters can afford to smile at the ravings of fanatics who fancy themselves as dictators.

On the other hand, once the mass awakens, once it realises its social power and importance, those same “leaders” will be swept away as chaff before the wind.

The mistake made by those who pour scorn on the educational work of the Socialist Party arises from the metaphysical habit of looking only on the resources of the propagandists as the sole force helping the Party’s work. The influence of the social environment in shaping the outlook of the class, preparing it as a soil for the Socialist seed, is ignored. The inertia of the mentality of the mass is insisted upon almost as a religious dogma. A psychological miracle is postulated. We are asked to believe that the human mind in the mass is an organism which fails to act according to the laws of its own development.

The Socialist reviewing history sees that as each class in turn has been thrust to the surface by economic evolution, that class has acquired a consciousness of its identity and interest. It has developed its own political organisation necessary to smash the institutions which stood in the way of its advance and to establish others which favoured it. By degrees the workers to-day are losing the illusions which bind them to their masters’ interests; they are groping (not for a lead as we are often told) but for knowledge which will enable them to dispense with "leaders.” It is the task of the Socialist Party to spread that knowledge.
Eric Boden

(To be continued).

The Principles of The Socialist Party. - Part 2 (1926)

From the December 1926 issue of the Socialist Standard

Part II.
Is Socialism necessary? This question can only be answered by considering the nature of the forces at work in present-day society. In a previous article it was shown that history has been the record of class-struggles based upon the development of the means of production and of various forms of property.

The present-day means of production are capital, the modern form of property; that is to say, they are used by their owners, a small class in society, for the purpose of obtaining profit.

The capitalist, owning a certain sum of money, uses it to purchase machinery and raw material with a' view to selling the product at a profit. For this purpose he needs to buy a special commodity, labour-power, which, applied to the raw material and machinery, produces useful articles of a value greater than that of the combined, value of the original factors. The value of the labour-power used is determined by the time socially necessary to reproduce it. This applies to all commodities. Labour-power, however, plays the active part in the creation of value, and consequently of surplus value, which is that part of the value created which is kept by the employers. Surplus value is that part of the product left over after paying for labour-power and the cost of raw materials, wear and tear, etc.

Now, how comes it that the capitalist finds this extremely useful commodity, labour-power, to hand? The labourers have no means of living except by the wages they can earn. The land, factories, railways, etc., are owned by the capitalist class. The majority of members of society to-day are propertyless. In order to live, therefore, they must sell the only commodity they possess, their own energy.

The separation of the labouring class from their means of life was a prolonged process in history. The enclosure of common lands, the forcible ejection of the peasantry, the introduction of large-scale workshops, and later on of machine-factories, all played their part in making the workers dependent upon their present-day masters. At the same time, all other classes but these two have vanished from social life. Of the aristocracy and middle-classes of the mediaeval world, nothing is left but their titles and prejudices. The capitalist class preserve both as a means of displaying their power and duping the workers.

To-day, therefore, the social stage is set for the struggle between the last two classes to emerge in.the course of social evolution. The patricians and the plebs (of Rome) alike went down before the barbarians of the North of Europe. The feudal nobility were vanquished by the upstart burghers of the towns. Beneath them lay the slaves and serfs, occasionally rebellious but doomed to defeat by the undeveloped state of the economic conditions of their life. The isolation of the peasant groups based upon the backward character of their mode of life prevented them rising to the level of a ruling class.

To-day, however, the means of production unite the workers-in vast world-wide organisations. In the effort to cope with the effects of the capitalist system the workers develop a measure of solidarity undreamt of under the systems of former ages. Railways, post, printing press and platform enable ideas to spread with greater rapidity than ever.

The struggle between the capitalists and their wage-slaves over the wealth produced by the latter results in ever-worsening conditions for them. Every improvement in machinery or methods strengthens the owning class by increasing the number of unemployed and the competition for jobs. This competition enables the capitalists to push wages down ever nearer to the physical limit, the bare subsistence level.

Investigators such as Charles Booth and Seebohm Rowntree long ago showed that the wages of roughly one-third of the workers left them with insufficient to maintain normal health and vigour.

Since their works were published the standard of life of the workers generally has been reduced still further. The acceleration in the pace of machine development during the war resulted in an unheard-of level of unemployment, and wholesale cuts in wages which had already failed to rise to the same extent as the cost of living.

After a century of Trade Union effort the workers find themselves grappling with the same problems in an aggravated and chronic form with less success than ever before. All the victories of the past are rapidly losing their value in face of the modern organisation of capital, and the share of the workers in the product of their labour grows constantly less. The very process by which the workers create a mass of wealth much greater than they are allowed to consume heaps up in the hands of their masters one of the means by which the workers are beaten.

For the workers, therefore, there can be but one hope—a complete change in the ownership of the means of production and in the motive for which industry is carried on. The interests of the capitalist class lead that class to fortify their position by every means in their power. The interests of the workers demand that they shall attack that position.

The very nature of the means of production at the present time renders any form of individual ownership by the producers out of the question. In order to produce wealth to-day each worker must co-operate with his fellows; he cannot act alone. Social effort is the very essence of modern industry. Private ownership is, therefore, out of harmony with the means and methods of production in their present stage of development. Common ownership must take its place. The antiquated legal form must yield to economic progress.

The mature social character of modern industry has rendered poverty unnecessary and a drag upon further development. The capitalist class own and control forces which they cannot fully utilise, forces which flood the markets with goods that the workers cannot buy.

In order to solve their problems the master class can think of two alternatives : either to lower wages still further and thus render still more goods unsaleable, or to I introduce more machinery and by intensifying production increase still further the amount of commodities seeking purchasers.

These solutions ran only help individual capitalists against their competitors. They cannot help the capitalist class as a whole. They cannot prevent the thinning of the ranks of that class. They can only hasten the concentration in the hands of the few of the total capital and the reduction of the many to bankruptcy. The scramble for profit can have no other result than to prepare industry for its transfer to the workers. Concentration paves the way for socialisation.

With the abolition of private ownership the profit-seeking motive will cease to operate. This is what our capitalist opponents mean when they say that there will be no incentive under Socialism. They can conceive of no other incentive. The workers, however, will still need food, clothing and shelter, and, having in their hands the necessary means, will go on producing these things in greater abundance than ever. The productive forces, freed from control by competing interests, will be utilised by society as a whole in accordance with a common plan, democratically determined in the interest of all.

If this brief summary has carried with it the reader’s conviction, he will agree with the first three clauses of our Declaration. Consideration of the others will form the subject of further articles.
Eric Boden

Link to Part 3

Conditions of Membership. (1926)

From the December 1926 issue of the Socialist Standard

A sympathiser, who is unable to become a member, writes to point out that there may be others like himself who, while prevented from joining the Party, would nevertheless like to make regular contribution of an amount equal to that paid by members. We would, of course, welcome such financial assistance. In stating that the contribution is 3d. per week, we must, however, particularly emphasise that there is no financial barrier whatever attaching to membership of the Socialist Party. Every member who is unable to make this payment is entitled by rule to have it waived.

Sting in the Tail: Nothing to brag about (1996)

The Sting in the Tail column from the August 1996 issue of the Socialist Standard

Nothing to brag about

When the Labour Party wheels out its showbiz supporters at the general election, songwriter/singer Billy Bragg will not be among them.

He has left the party which he thinks is scarcely different from the Tories. He had thought that workers would be better off with a Labour government but sees little chance of that now.

Bragg has seen that much, but his political naiveté is evident from his belief that Mrs Thatcher was responsible for working-class misery in the 1980s. He doesn’t see that it’s capitalism itself, and not governments or individuals, which creates the misery.

Where does Bragg go from here? His sympathies now are with anti-road and veal-crate protesters and he would vote for Arthur Scargill’s party if there was proportional representation, but in the meantime, and despite all his denunciations of it, Labour will still get his vote.

A hollow victory

The Joint Council for the Welfare of Immigrants are hailing the Court of Appeal ’s decision to outlaw the withdrawal of welfare benefits to asylum-seekers in this country as a famous victory.
  “Lord Justice Simon Brown said: 'Parliament cannot have intended a significant number of asylum-seekers to be impaled on the horns of so intolerable a dilemma: the need to either abandon their claims to refugee status or, alternatively, to maintain them as best they can but in a state of utter destitution' " (Independent, 22 June).
But the government do not share the Council’s view. If the government has acted illegally in starving them back to the countries they had fled, it has a simple solution. They will just change the law to make their regulations lawful.
  “Roger Evans, the social security minister, said yesterday that the government would press ahead with the benefit changes—designed to save £200m—despite the ruling. ”
If this is what the Tory Party means when it claims to be the Law and Order party?

Caring capitalism

The Wiltshire Health Authority have come up with a scheme to deal with some of the 2,500 suicide attempts in the area.
  “A spokesman denied it was a cost-cutting plan. 'It is to the benefit of some patients not to be admitted. It is pioneering work to get them treated in the community rather than in accident or emergency wards’” (Observer, 30 June).
So the WHA are to return a quarter of attempted suicides “into the community”—that is refuse them admission to psychiatric wards.

This move will save them £250,000 per year but that is incidental, isn’t it?

Message from a patriot

British workers, rejoice! A recent survey tells me that Britain’s labour costs are lower than every other EU country except Portugal.

This proud boast can only be made thanks to your selfless, if somewhat reluctant, acceptance of low pay, cuts in health and safety regulations, etc. The survey adds that our other EU partners are becoming less competitive, so their workers will have to follow your splendid example.

But wait, another survey claims that Britain has fallen from 15th to 19th place in the global competitiveness league and now lags behind Chile!

Those foreigners cannot be trusted and have been craftily improving their position at our expense. British workers, your duty is clear: you must resolutely accept even more cuts in pay and working conditions if our national pride is to be restored. Go to it!

Poverty of a millionaire

Katina Dart is the ex-wife of one of the world’s wealthiest men and she wants an increase in her divorce settlement.

She told the Court of Appeal in London that she requires “an absolute minimum of many, many, many tens of millions” to maintain her lifestyle. She lost, and will have to scrape by on a pitiful £8.8 million (Guardian, 3 July).

Her solicitors said the judgment will mean that “her private jet will have to go”, and as she has already lost two Porsches and a Ferrari in the divorce settlement, well, by her standards the lady faces a grim future.

And yet Peter Lilley, the Social Security Secretary, doesn’t think poverty is relative. Katina Dart could put him right.

Tougher for some
  “Things are not as easy once you are actually in power, ” says one. The second agrees: ‘It is a question of what is achievable, what your priorities are, where sacrifices will fall. Tough choices have to be made ' ” (Guardian, 24 June).
These are two members of South Africa’s new black elite explaining away the contrast between the ANC’s pre-election promises and its subsequent performance in government.

What it has delivered since the end of apartheid is a sharp fall in the economic inequality between white and black, but growing inequality within the black population. The black elite now enjoy the good life, once the preserve of rich whites, but the vast majority of blacks still live in squalor.

Yes, now that the ANC is presiding over South African capitalism tough choices and sacrifices do indeed have to be made, but it is very clear that those who make the choices will not be making the sacrifices.

Goodbye to the "Middle Class" (1996)

From the August 1996 issue of the Socialist Standard
Socialists are more than familiar with the old nonsense concerning a "middle class". Such people have always been nothing more than relatively better-paid wage slaves, just as susceptible to the vagaries of capitalism's boom and slump economics
A spectre is haunting America— the spectre of the middle class. Ever since Alexis de Tocqueville proclaimed the US to be a “middle-class country”, North Americans have anxiously sought to moralise and ennoble their notion of class struggle:
  “Most were regular employees of major corporations like McDonnell Douglas, Grumman and Hughes Aircraft. If they didn't go to work, they risked losing their livelihoods, their houses and their cars. They were, in fact, not middle-class at all in the Marxian sense of the word. They were working-class, but, unlike similar people in Britain or Germany, they called themselves middle- class” (‘Who Killed the Middle Class?’ John Cassidy, The New Yorker, 16 October 1995).
But by some evil design of fate, this middle class seems to have died at the hands of the Reaganauts and the Bushmen according to Cassidy: “Living standards have fallen or stagnated for the majority of Americans, while a small minority have enjoyed a bonanza. These trends appear to be intensifying regardless of which political party is in office.” The rich have of course got richer (the top one percent of families were worth 78 percent more in 1989 than they had been ten years earlier, according to the Census Bureau). No guesses out of whose hides it came: “Twenty years ago, the typical chief executive officer of a large American company earned about 40 times as much as a typical worker did. Now he cams 190 times as much, according to Graef Crystal, an expert on executive compensation.” The not-so-invisible hand of the economic system may have put on a velvet glove for college graduates but has shown a mailed fist to those who have gotten no further than high school, while it has, with a typical capitalist sense of fairness, ruthlessly put the squeeze on dropouts and recent immigrants.

Naturally, not everyone is wringing their hands over this development:
   “Many experts argue that this is just what the doctor ordered . . .  if companies are using their new-found profits to fuel a capital spending boom rather than pay artificially high wages to a workforce that views itself as entitled, what better way to keep the US competitive in a cutthroat global economy? . . . Corporate America is once again in fighting trim, able to compete with the best of the world’s producers” (‘The Wage Squeeze’, Aaron Bernstein, Business World Week, 17 July 1995).
All of this “good behaviour”, as Business World Week calls it, derives partly from capital’s shedding of assets to promote a recovery and partly from a self-serving capitalist belief that “re-engineering” promotes productivity, which in turn will (someday) push wages up:
  “Already, shareholders are enjoying a juicy stream of dividend payments and capital gains. Historically, efficiency improvements have led to real wage and income gains for the average employee. ‘In the long run, labor productivity will rise, and eventually, this will put upward pressure on wages, ’says former Federal Reserve Board Governor Wayne D. Angell. ”
Only if workers regard a given rate of profit as “natural” can they swallow the assertion that their wages are “artificially high”. “The rise of global competition may have encouraged managers to break unions and invest in computer technology,” argues John Cassidy in The New Yorker. “Similarly, the threat of corporate relocation and the growth of cheap immigrant labor may have contributed to the weakness of labor unions.” Given such interactions, however, who is kidding whom about wages following productivity up? If “cheap immigrant labor” and corporate relocation to low-wage countries are themselves all about the desirability of reducing capital’s “wages bill” for the sake of profit margins, why should managers overlook the other obvious opportunity of breaking unions that promote “artificially high” wage levels? Wages are simply supposed to stay low no matter what any sweet-talking economist may say about them.

Strangely enough, this doctrine that wages follow productivity up (like the expectation that it should have started happening already) does not seem to include anything about the “plummeting” of wages (New Yorker, 16 October 1995). Unless the elementary rules of mathematics have been revised, ordinary addition and subtraction ought to show that wages which have gone down (as they have) and then are supposed to rise again can hardly show a significant net gain (if any). Or is it that only the wages of productive workers are supposed to follow increases in productivity up the scale? In that case, the declining numbers of production workers in the United States would tend to inhibit any overall net increase in wages for workers in all sectors.

Falling wages
But when all is said and done, the concept itself is really nothing more than a propaganda device to prove that workers don’t need unions. The whole productivity-wages relation argument in effect rigorously excludes the need for the action of any “external” agencies like trade unions. Embarrassment over the failure of wages and salaries to rise as predicted seems nevertheless to have made no dent in the thinking of corporate execs. To the capitalist class it is all just a matter of “corporate restructuring” for the sake of “economic efficiency” in securing an “open economy” and “free trade”. As a spokesman for Mobil Oil acidly put it: “There’s a very intense determination in executive suites across America not to give away hard-fought improvements. It may be a long time before this shakes through and wages rise” (Business World Week, 17 July 1995). Meanwhile, “in the past three years, wages have continued to fall while productivity, profits, and stock prices have all soared”.

With inimitable Yankee aplomb, the writer of the Business World Week article assures us that “longer term, of course, the argument is that as economies grow overseas, they will buy more US-made goods, creating more jobs and demand here. Over a truly extended time frame, overseas wages will rise to meet ours”. But overseas wages will, only “rise to meet ours” if overseas workers can impose some much-needed restraint on their employers’ appetite for profits by organising effective trade unions. Businessmen can accept this during the boom phase of the business cycle; but to the extent they ultimately succeed in busting unions (as they do when the “longer-term” rate of profit threatens to sink), they will be quite happy to settle for that, too.

Historically, the changing patterns of capital investment follow an international curve, and the fortunes of the working class change with them. From Latin America to Asia new working-class populations have been integrated into a multi-nationalising world economy. ‘This is not an aberration, it’s a permanent trend,” says Dean Witter’s [Joseph G.] Carson, who believes global competition and technological change will keep the pressure on wages” (Business World Week, 17 July 1995).

Describing all this as “an unprecedented redistribution of income toward the rich” (New Yorker, 16 October 1995) shows only how narrowly—if not how nationalistically—some writers like to have their history. Capitalism is by its very nature a system for “redistributing income toward the rich”. Profit (surplus value) is the economic translation of the unpaid labour of which the working class is robbed at the point of production. What has been happening since the 70s is unprecedented only in its scale; it has been a reality since the very beginning. The early economists, speaking for their colleagues in the capitalist class, certainly understood it.

During and after the Second World War’s flood of artificially high profits, real unions turned into company unions that talked down to their own members and limited themselves to conveying management’s wishes to them. A new breed of leaders stifled whatever there was of the grassroots or the democratic in organised labour.

Management got this opportunity to expand the market only at the price of “artificially high" wages: but once the competition got tougher internationally, the Uncle Tom outfits that unions had become started looking like too much of a luxury, so capital set about “busting" them (although they were already spontaneously decaying on their own). Wages had no place to float to but back to where they had come from originally. Thus it is not so much that income is being “redistributed" as that capital is seeking to return wages and salaries to pre-Depression levels (in current values) to shore up a sagging long-term rate of profit. In this sad little world made by capital, it would appear the period of mid-century prosperity was really only a fluke after all. 
Ron Elbert
(World Socialist Party of the US)

50 Years Ago: Palestine, the Arabs and the Zionists (1996)

The 50 Years Ago column from the August 1996 issue of the Socialist Standard

The Principal Rabbi of the Federation of Synagogues. Kopul Rosen, writing to the Times (13/7/46). claims that those who work for the return of the Jewish people to Zion, "whether they be Zionists or non-Zionists. are fulfilling not a secular ambition, but the Divine will as revealed in the visions of Israel’s prophets." Moslem Arabs can, of course, invoke a like Divine mission.

The spokesmen of some Zionist groups talk in a less fantastic but more threatening tone. In August. 1944, David Ben-Gurion, a Zionist leader, made the following belligerent declaration:-
  "We shall go to Palestine in order to become a majority there. If need be we shall take the country by force. If Palestine proves too small. . . .  her frontiers will have to be extended."
Such threats to crush Arab resistance and to annex neighbouring territory can, of course, be paralleled with statements of a like belligerency by some Arab nationalists. Like all stirring-up of nationalist antagonisms, these statements hinder development towards Socialism, the world’s only line of progress (...)

On the vital question of the welfare of the working class and the Socialist Movement, we urge all workers, Jewish. Arab and others, to recognise their common interest in standing together as a class for the overthrow of capitalism. There are no circumstances justifying working-class support of capitalist governments or movements, including those that masquerade under the name of nationalism.

(From the editorial in the
 Socialist Standard,
 August 1946)

A lot of people should know that (1996)

“not a lot of people know that”
From the August 1996 issue of the Socialist Standard

The Guardian Weekend supplement has for some time run a “Digitations” column—a compilation of facts and figures gleaned from various information bulletins and documents.

For the average reader—the Michael Caines of this world—they provide a momentary and quickly-forgotten eyebrow raiser; the kind of facts and figures you pop into the conversation at the local pub along with the refrain: “not a lot of people know that”.

To some, perhaps most, such information is trivia. To socialists, they help fuel our argument that capitalism is an insane social and economic system and one not fit for humans to thrive in. Our refrain on chancing on such facts is: “not a lot of people know why”.

What, for instance, is trivial about the fact that “UK family doctors tranquillise anxious people at the rate of at least 800,000 doses a day” (23 March) or that “in Bangkok, the homes of 98 per cent of the population are not linked to a sewer system”? (Ibid).

Here the stress of daily life for workers in an advanced industrial capitalist nation is juxtaposed with a similar economic system unable to provide the vast majority with the basics of life.

“Digitations” not only help to fuel our argument that capitalism does not operate in the interests of the world’s majority, they also help us dispel the arguments of our opponents.

We are often told the world is over-populated and that food and energy resources cannot keep pace with the demands of an increasing world population. However, “twice the world’s population could stand in the county of Devon” (4 May) and “in one season, French peasant co-ops were paid to destroy fruit and vegetables the weight of 17 Arcs de Triomph” (13 May).

Add to this the already widely known fact that landowners arc paid vast sums of money not to produce food and the problem of feeding the world’s population quickly diminishes.

As for energy? “Supplying solar powered electricity to 1,000 million people in poor developed countries would cost less than 0.3 per cent of annual military expenditure over 20 years” (30 May).

Time and time again the root cause of the problems facing humanity is the drive to make profit. Indeed, the vast majority of the problems we face are social problems, not natural ones. It is not logical to produce an abundance of fruit and vegetables under the laws of capitalism because an excess in supply invariably leads to a decline in prices and consequently profits. Similarly, solar powered electricity docs not generate the return on invested capital that coal and oil do. And the reason why “non-biodegradable plastic used in western Europe in a year would outweigh a line of Eiffel towers 32 km long” (6 April) is because biodegradable plastic is costlier to produce.

Socialists often refer to such alarming facts as these as the contradictions of capitalism. They include the fact, already mentioned, that millions of tons of food is destroyed while tens of millions starve; the fact that countless factories and machines stand idle while tens of millions are unemployed, the fact that millions of buildings stand vacant while millions sleep rough on the streets of the world’s cities. These are all social problems, not rooted in nature or sanctioned by the will of some god.

Marx once said that humankind only poses itself problems it is already capable of solving. Nothing could be more true. We live in a world in which we constantly face the threat of war, famine, disease and environmental destruction. Our society is plagued by crime, poverty, unemployment, homelessness, racism, sexism and every other type of ‘ism’. These are problems familiar to every country on earth, not just the poorest. And as in every country of the world the real cause remains the same.

Our problems stem from the way in which we organise ourselves for production—production for profit, not social use.

The means for the production of abundance, the technology and resources to comfortably feed, clothe, house and educate the world’s people already exists. They would, in fact, be enhanced were the artificial constraints to productive wealth— not profit—removed.

All that is lacking is a global desire for social change. Only when a majority of the world’s people voice disapproval of the system that impoverishes their lives and organise for world socialism can we get down to producing “digitations” to be proud of—how many new homes have been built, how many more mouths fed, how many solar energy panels installed, how few hours needed to be worked by the average individual. These will be the “digitations” that prove that socialism works.
John Bissett

  • More than 1 billion people live in absolute poverty, surviving on £175 per year.
  • 400 million people consume less than 80% of their basic food needs.
  • 13-18 million people die of hunger every year.
  • Every year an area of land the size of Ireland is turned into desert.
  • $1,000,000,000,000 is spent annually on weapons of war and destruction.