Thursday, March 4, 2021

The Monopoly of Wealth (1967)

From the March 1967 issue of the Socialist Standard

The basis of present-day society is the class monopoly of the means of living, that is, the land, factories, railways and so on. Accumulated wealth is monopolised by a privileged minority. The rest, separated from the means and instruments of labour, are forced to work for those who own them. This inequality, poverty and slavery is capitalism.

In Britain the capitalist class own the means of production through having paper titles such as bonds or shares which are backed by the law and enforced by the state. So that from these titles an estimate of the concentration of wealth ownership can be made. One of the results of the 19th century struggle between the industrial and landed property-owners was Estate Duty, a tax levied on the wealth of those who died. The figures of the collections from this tax are published every year in the report of the Board of Inland Revenue. The various figures in this report, together with mortality rates from the Registrar General, have provided the basic data for all the estimates of the concentration of wealth that have been made over the years.

It so happens that one of the first of such estimates was made at the time the Socialist Party of Gt. Britain was founded. For 1905 Sir Leo Chiozza Money came to this conclusion in his Riches and Poverty:
  About one-seventieth of the population owns more than one-half of the accumulated wealth, public and private, of the United Kingdom.
Money's calculations were no doubt crude by modern statistical standards. Yet every study since has shown a similar inequality, despite the reign of two governments committed to redistribution in favour of the poor—the Liberal of 1906 and the Labour of 1945.

Take a few of the recent estimates: On 8 April 1962 the Economic Editor of the Observer spoke of “this fantastically unequal distribution of wealth”:
   Judging by the latest Inland Revenue estate duty figures, fewer than 200,000 people (about ½ per cent of the adult population) own a quarter of total personal wealth, worth over £50,000 million. Nearly half of this total personal wealth is held by the top 2 per cent owning more than £20,000 each.
On 15 January 1966 the Economist, using amended investment income figures from the Inland Revenue report, estimated that in 1959-60, fifty-five per cent of personal wealth was owned by 2 per cent of taxpayers, while 88 per cent owned on average just over £100.

On 13 January 1967 the Financial Times wrote of figures showing that in 1960 the top 1 per cent owned 42 per cent of personal wealth (the top five 75 per cent and the top ten 83 per cent), that although there might be some exaggeration “it still remains true that the bulk of the population own very little personal property”.

A more scholarly study for 1945 appeared in the Bulletin of the Oxford University Institute of Statistics in February 1961. The authors, H. F. Lydall and D. J. Topping, noted that “Personal wealth is very unequally distributed in this country”. They wrote of one of their tables:
   In broad outline these figures suggest that total personal net capital in early 1954 was about £40,000 million. Of this nearly £31,000 million was owned by three million persons possessing over £2,000 each; and the remaining £9,000 million was owned by the other 32 million aged 20 and over. In the top capital group there are 20,000 persons with more than £100,000 each and an average holding of over £250,000; in the bottom group there are 16 million persons with less than £100 each and an average holding of less than £50.
And, of another table:
  These estimates suggest that in 1954 the top one per cent of British adults owned 43 per cent of total net capital and the top 10 per cent 79 per cent.
Comparing their figures with those for previous years, they wrote that “over the past twenty years there has been some reduction in the inequality of personal wealth in Britain”.

Not all who have studied the figures agree with this conclusion. For one of the disadvantages of using the death duty figures is that they miss those who manage to avoid paying them and, over the years, the wealthy have evolved quite sophisticated ways of doing this. J. R. S. Revell, in an address to the British Association in 1960 (discussed in the Socialist Standard of November 1960), mentioned a few: distribution within families and especially the discretionary trust:
   Under that form of property the trustees had the discretion to pay income to any of a specified class of persons and to distribute the capital when they thought fit. When the person who had been receiving the income died, the trustees merely nominated another person from the specified class, and there was no passing of capital which could attract death duties.
R. M. Titmuss, in his Income Distribution and Social Change (1962), studied the supposed trend towards equality of incomes and showed how the Inland Revenue figures were not a reliable guide. Titmuss explained in detail some of the dodges to avoid surtax and estate duty. While pointing out that there were no really accurate and reliable figures he suggested:
  There is more than a hint from a number of studies that income inequality has been increasing since 1949 whilst the ownership of wealth, which is far more highly concentrated in the United Kingdom than in the United States, has probably become still more unequal and, in terms of family ownership, possibly strikingly more unequal in recent years.
Whichever way you look at them, these figures bear out the validity of the first clause of our Declaration of Principles. What, then, do Socialists suggest? In the past we were accused of wanting equal sharing and to divide up amongst the poor the wealth of the rich. This, of course, was a lie. What we do advocate is the social ownership and democratic control of the already socially-operated means of living. Ironically, it is the open defenders of capitalism, the Tories and Liberals, who talk of a “property-owning” or a “share-owning” democracy. Which is as much an illusion as is the Labour promise to redistribute wealth more equally through taxes. All such attempts have failed, and will fail, because the very basis of capitalism — the system they accept —is the concentration of the ownership of the means of living in the hands of a few and the resulting poverty and degradation of the rest.
Adam Buick

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