Robbing the Thrifty
Elsewhere in this issue (Fifty Years Ago) two contrasting quotations are given, the first relating to the vast army of people who, forty years ago, were dependent on the Poor Law and the second a quotation from Colin Clark about the 1,700,000 now receiving National Assistance. As he says, the so-called Welfare State has done little more than change the name from Poor Relief to National Assistance.
His main point is, however, the way in which Labour and Tory Governments, by steadily raising the cost of living—60 per cent. since 1947—have whittled away the purchasing power of savings and fixed pensions.
“While the social services are handing out benefits to some, the Government, through its financial policy, has been robbing the meagre savings of the humble and the weak and driving them back on to the bread line. Not a record to be proud of."
While this was happening to the humble and weak the rich and powerful had great opportunities for adding to their wealth through the rise of prices of company shares and properties of all kinds. Many great new fortunes have been made under the “Welfare State,” while the governments, the Trades Union Congress and the National Savings Committee were preaching thrift to those who could least afford it, and deploring the growth of gambling and football pools.
The Savings Racket in Russia
If the Labour and Tory governments in Britain have whittled away the value of savings by their policy of raising the cost of living, the government in Russia has achieved the same end by much more drastic methods.
In 1947, when they revalued the currency, issuing new currency in place of the old (but much less of it) they cancelled one-third or one-half of all deposits in Savings Banks above 3,000 roubles (about £143), and cancelled two-thirds of the face value of most State bonds. Thus, the worker who had invested £100 found himself owning only £33.
Earlier this year a still more drastic action was taken, particulars of which were given in Soviet News (10th April, 1957). published by the Russian Embassy in London. (See also Economist, 20th April, 1957.) The announcement was made by Mr. Krushchev. He stated that the total amount of loans outstanding was 260,000 million roubles (about £24,000 million), so that the cost of the tax free lottery prizes paid out on the bonds in place of interest must have been nearly £900 million a year, an amount much bigger than the cost of interest on the British National Debt.
Mr. Krushchev blandly explained that the Russian government has decided to raise no more loans, and as this could not be done “unless the payment of winnings and redemptions on the previous loans was suspended at the same time,” the government also proposed to postpone the payment of winnings for a period of 20 to 25 years.” Instead, they would repay the 260,000 million roubles at the rate of about 13,000 million roubles a year (about £1,200 million), but without interest or lottery prizes until the end of 25 years.
Mr. Krushchev did not say that the Russian government was going to do this: they were merely proposing it. and would only carry it out if the Russian workers approved! The same issue of Soviet News reported that the Russian workers had approved.
The suggestion of the Economist as to the reason for this move is that the size and cost of the debt had become so large (nearly half the annual budget) that it had become “a real burden” on State finances. The British Chancellor of the Exchequer must be envious of his Russian opposite number's freedom of action.
The Elusive "Middle Class” Again
In the Observer (1/12/57) Mr. Alan Day had an article on “Inflation and the Middle Classes,” discussing whether it is true, as some Tories say, that “the middle classes” have suffered more harshly from inflation than have other people.
He agreed that “one section” have undoubtedly been badly squeezed—"the pensioners and other retired people living on fixed-money incomes." He also agreed that the same is true of “the elderly working classes," but with the difference that the former have been on a higher standard of living and therefore have farther to fall before they can qualify for national assistance.
Apart from this, Mr. Day believes that the "middle classes" as a whole have not been badly hit, though some of them (he mentions "classics masters” as an example) have suffered because they are less in demand than they used to be. The others have had their salaries raised with the cost of living, though, as Mr. Day points out, it is done with less publicity than the raising of wages of railwaymen. dockers, etc.
But what is of more interest is what Mr. Day means by "middle classes." He deals in the main with people who sell their mental and physical energies, just like dockers, but who call their pay salaries instead of wages. In short, they are members of the working class, and the name "middle class" is inapplicable.
Mr. Day admits this. He confesses that he cannot define the term and writes:—
“The only possible definition is that people are in the middle class when they think they are.”
But surely the remedy is too simple. If people can belong to a non-existent class merely by thinking that they belong to it, all they have to do about their problem of low pay is to think that their pay isn’t low. Or, since they think the working class are better off, why not think themselves into the working class? Or, better still, why not "think" instead of day-dreaming? Think about capitalism and their working class status in it; then think about Socialism, in which they would be able to live and work as intelligent members of a free society, no longer hag-ridden by notions about class.
One in Ten Americans is a Slum Dweller
Under the above heading the Daily Mail reports a survey made in America by the magazine "Fortune."
“To-day, some 17,000,000 Americans live in dwellings that are beyond rehabilitation—decayed, dirty, rat-infested, without decent heat or light or plumbing.”
The Daily Mail says that, according to the survey, in America’s biggest and richest cities like San Francisco, Cincinnati, Pittsburgh and Houston, the number of people crowding into slums is growing proportionately faster than the population of the city as a whole.
The major reason for the slums is said to be "prosperity itself,” because, as jobs are to be had, people come in from small towns and farms, the South, and Puerto Rico.
Horizontal Alcoholics
Many writers have used the theme of a visitor from another planet as a means of taking a fresh look at the imbecilities of our world. Naturally, he cannot see any more or any deeper than his creator and most of the creators, being accepters of the present structure of society, have seen the odd little evils and missed the accustomed big ones. All the same, a visitor from another planet which had a developed capitalist system, and who was blind to the major evils of capitalism, might well blink at some of the crazier activities of official and unofficial legislators and moralisers. A latest example comes from Washington, U.S.A., and was reported in the Daily Telegraph (30/11/57).
Because the local legislature believes "that people are liable to drink more standing up," they made a law requiring that people who want to drink in public must do so sitting down.
The local Restaurant proprietors do not like this and want the few repealed. They point out that, to escape the law, drinkers pop over into Maryland, "where they can drink standing up. This means they can escape tipping."
Until some years ago there was another law which ruled that drinks had to be mixed out of sight of the customers, "so that non-drinkers would not be tempted. It was changed when some bartenders were found making Martinis with olives which customers had left in their glasses."
It recalls the Defence Regulation that at one time made it illegal to treat other people to drinks. (Or is it one of those many laws that exist still but are ignored?).
Does the Washington law allow the customers to take their drinks lying down?
New York Stock Exchange and the British Labour Party
The Daily Herald in a leading article (25/11/57) smugly reports that the President of the New York Stock Exchange—“no Socialist he”—has borrowed from the British Labour Party the idea of government investment in company shares, for that is what he is advising the American government to do "for small firms that need money to grow bigger.”
According to the Herald this proves that "the temple of private enterprise in Wall-street ” has been forced to go in for "public enterprise,” "because it is necessary for the efficiency of industry.”
We are not much concerned with the Herald’s belief that boards of directors will be more efficient and careful when handling government money than when handling shareholders' money, except to say that it is difficult to think of any single reason why it should be so.
What interests us more is that the Herald should so easily manage to get the thing upside down. When the temple of capitalism borrows an idea from the Labour Party all it shows is what queer ideas the Labour Party has, and how much the Herald has changed since its early days when it would have scoffed at the proposal.
A Straw in the Wind
The General Secretary of the Communist Party, Mr. John Gollan, in his report to his executive committee after his visit to Moscow, referred to the question of "Unity of the Socialist Parties and the Communist Parties.” (Daily Worker, 2/12/57.)
Mr. Gollan and the British Communist Party will now and for as long as the instruction holds, describe the British Labour Party as a Socialist Party, likewise the Labour parties in other countries. It was not always so. In 1929 the Communist Party’s election programme "Class Against Class” had this of the Labour Party
“This Party is the third capitalist party. It lays claim to the title of Socialist Party, but has nothing to do with Socialism.”
At other times they have called the Labour Party social fascists and similar abusive names. Is it that the Labour Party keeps changing? Not at all. It merely means that the Russian government wants a new tactic to be employed towards the Labour Party so overnight it becomes a "Socialist party.” Who knows what it will be called by the end of 1958.
Edgar Hardcastle
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