“Economic Power.” (1920)

From the April 1920 issue of the Socialist Standard

Vague and misunderstood, or meaningless, phrases have proved useful weapons to the ruling classes, or would-be ruling classes, throughout history as means to rally to their support the mass of the population. Every class that has risen to power has exploited its own particular catch phrases to blind and mislead the rest of society.

The American smugglers and slave traders had as their watchword  “the inalienable rights of man.” When they had achieved their end it became evident that the people whose inalienable rights were to be safeguarded were the American exploiters of black and white labourers. The French bourgeoisie worked themselves into a frenzy over ”Liberty, Equality Fraternity”—the liberty, equality, and fraternity of the rising capitalists in the exploitation of the labour of the French workers. Throughout the 19th century the working portion of the population of Europe were ruthlessly suppressed and massacred in the name of “Law and Order”—the law and order of the exploiting class.

These historical incidents make it imperative that all phrases and catchwords should be carefully analysed in order that a true understanding of the expressions used may be arrived at, and the habit of giving blind adherence to pet phrases eliminated. Words have a tendency to take the place of ideas, particularly in revolutionary movements, with ruinous results.

A misunderstood phrase that has been bandied about a good deal of late, has acquired a mysterious potency for the advocates of so-called Industrial Action, is the expression “Economic Power.” Those who give allegiance to this phrase set out with the false premise: “Political power is based upon Economic Power.”

Let us examine the premise a little closer.

An investigation of history shows that political power generally reflects a certain stage in economic development, but all the elements necessary for the next stage in economic development are already in existence, and operating to a certain extent, before the political control corresponding to the previous stage is overthrown. Until the political control is overthrown the class at the political helm enjoys the fruits and emoluments resulting from the partially developed new stage.

A class develops into an important economic position in society, and feels the pinch and oppression of the existing laws and regulations before the idea of overthrowing the prevailing system arises in the minds of the oppressed class. This class feels the incidence and hardship of the shackling regulations and gradually reaches the understanding that these regulations must be overthrown. Hence political revolutions occur and new classes alter the constitution of society to suit their particular interests.

Political power does not necessarily infer economic importance, as instance the fact that economically important classes have supported useless classes in possession of political power for generations before the political supremacy of the parasitic class was overthrown, and often the former were swept away by the class in possession of political power.

In France the monarchical group lived like leeches on the French capitalists for generations before the French Revolution. They subjected the rising commercialists to a variety of methods of extortion, and the latter were powerless to check the diversion of a large portion of their wealth into the pockets of the ruling class until they had obtained control of the political machinery. Indeed, so frail was the “economic power” of the rising capitalists before they had captured political power, that the ruling class could, and frequently did, not only repudiate debts owing to them, but even dispossessed them altogether at a moment’s notice, as in the celebrated case of the Huguenots in the 17th century, when, according to Buckle (“History of Civilisation in England,” Vol. II., p. 145) half a million manufacturers and artizans were driven out of France.

From the 11th to the 14th century wool was the principle article of commerce in England, and the woollen industry grew to relatively large proportions. The individuals concerned in this trade became the commercial backbone of England. But political power centred in the hands of the sovereign, and the woollen merchants were drained of their wealth to provide luxury for the monarchical party and to finance foreign wars. The woollen traders were compelled to apply to the Jews and the Italian bankers for financial assistance, and the taxes were also farmed out to the latter groups. In fact, the Jews and Italians obtained such a hold that the carrying on of industry and the wars of the period largely depended on their financial aid. Their wealth and economic importance became immeasurably greater than that of any other section in the country. But they had no share in political power, and consequently the Jews and Italians were in turn bled by the royal power, and were finally ruined, imprisoned and driven from the country.

Referring to the position of the Jews H. de B. Gibbins writes :

  Their general financial skill was acknowledged by all, and William II. employed them to farm the revenues of vacant sees, while barons often employed them as stewards of their estates. They were also the leading, if not the only, capitalists of that time, and must have assisted merchants considerably in their enterprises, though only upon a heavy commission. After the death of Henry I., the security which they had enjoyed was much weakened, in proportion as the royal power declined in the civil wars, and in the twelfth and thirteenth centuries they were in a precarious position. Stephen and Mathilda openly robbed them, Henry II. (in 1187) demanded one fourth of their chattels, and Richard I. obtained large sums from them for his crusading extravagance. From 1144 to 1189 riots directed against them became common, and the Jewries of many towns were pillaged. In 1194 Richard I. placed their commercial transactions more thoroughly under local officers of the Crown. John exploited them to great advantage, and levied heavy tallages upon them, and Henry III. did very much the same. They were expelled from the kingdom in 1290, and before this had greatly sunk from their previous position as the financiers of the Crown to that of petty money-lenders to the poor at gross usury.—”Industry in England,” pp. 103-4.

Such was the fate of an economically important class that was excluded from political power — material for the wielders of the supreme power to prey upon.

In the twelfth and thirteenth centuries the Italian bankers grew powerful.

  “Between 1297 and 1330 the country developed steadily in spite of the troubled times of Edward II. The Italian bankers grew more and more powerful and rendered increasingly important services to the Crown. The tin mines, the parliamentary grants, and the customs were constantly farmed out to them.”—”The Financing of the Hundred Years War,” Schuyler B. Terry, p. xviii.

The English woollen manufacturers were opposed to the Italians, partly because the latter were getting control of the wool trade, and partly on account of the debts they owed the Italians. When the latter had served the purpose of Edward III., the English monarch repudiated his debts and withdrew his support. Consequently they could not collect the other debts owing, as they had no power to enforce payment. The result was that they got into difficulties and eventually failed. After Edward’s support had been withdrawn they suffered from the persecution of the English merchants, and were confined in the Tower of London and other prisons for various periods.

Their economic “power” had proved a sorry weapon when they had no political force to back them.

From the foregoing it will be seen that economic “power” is a myth until political supremacy is attained. Correctly speaking, “economic power” as defined by the misguided Industrial Actionists, is a figment of the imagination. The ideas and conclusions derived from the phrase are the result of a complete failure to digest the lessons hammered home history.

The employing class of to-day do not rule because they have possession of the means of production, but conversely, they have possession of the means of production because they rule. The employer who spends his time wandering over the globe cannot retain possession of the wealth produced merely through the legal form—the legal form must have the power behind it, the power that enforces acceptance of the existing legal paraphernalia; and wild words, empty stomachs, or brickbats, are not effective combatting forces.

Capitalist private property differs from previous forms of private property, particularly in its present highly developed form. The capitalist of the present day does not privately own a factory, a mine, or a mill. He owns a number of shares in several mammoth corporations. The handling of the whole business of these corporations—even to the buying and selling of the shares—is in the hands of individuals receiving wages, or, in the case the more dignified but none the less oppressed, salaries. In other words, the whole of business is conducted by wage slaves. The function of the capitalist is, generally speaking, restricted to the spending of the continually increasing bank balance.

This illustrates the fact that, at the present time the working, or wage-slave, class is the most important economic class in society. Yet in spite of this the capitalist lives like a parasite on the industry that is run by others. The only way a useless class, divorced from production, can do this is by having supreme power and the supreme power is the governmental machinery.

Therefore it is necessary to wrest from them the only power they possess. The only way this can be done is by the workers organising politically for the capture of political power, which is centred in the Parliamentary machinery.

“Economic power” is but another of the delusions and shadows the workers must clear out of their heads, along with the other cobwebs, in the march to emancipation.

Gilmac.