Running Commentary: Thatcher and Socialism (1987)

The Running Commentary Column from the April 1987 issue of the Socialist Standard

Thatcher and Socialism

On January 31 1987 it was reported in the Daily Telegraph that Margaret Thatcher had made a remarkable statement. She hoped for a further term of office so that she could finally eradicate socialism from Britain. Knowing Thatcher's track record we see in this utterance a deliberate attempt to mislead the electorate. Socialism, as we are continually pointing out, has never existed anywhere and, in any case, it could not exist in one country. It has to be worldwide.

Thatcher always tries to give the impression that she is thoroughly honest and sincere, but we are not impressed for this is all part of the plan to hoodwink the voters. What we have is capitalism and socialists are doing their best to persuade the working class to get rid of it and replace it with a worldwide system of common ownership.

Capitalism, by its very nature, cannot run smoothly. It is teetering on the edge of another war. The EEC are at loggerheads with one another and with America. The wars in Iran and Afghanistan are helped along by outside nations anxious to sell their latest war equipment and to test its efficiency in the same way as during the Spanish Civil War. States not at war see battlefields as opportunities for making a profit.

Gorbachev has stated that he prefers the capitalism of Thatcher to that of her Labour opponents. Will we now see a split in the Thatcher-Reagan camp and a closer relationship between Thatcher and Gorbachev? Strange things happen in the world of capitalist economics. Understanding the nature of capitalism suggested during the last "war to end" war that economic friendship might result between Britain and Germany; after the war we saw German troops training in Wales and the British supplying the German Air Force with the top secret Tornado fighter-bomber.

All this chicanery has nothing to do with the working class except that we are called up to defend this ridiculous system when the economic struggle develops into war.

The solution to this is in the hands of the working class. All that is needed is the political knowledge to apply it.

Bed and Breakfast

Sorry— but you're probably too late for this year.

No, we're not referring to two weeks in Blackpool or Ramsgate. As package tours abroad are now often cheaper than holidays in Britain, you're probably still OK for your summer holidays.

Unless you're heavily into wheeling and dealing in shares, you won't know that "Bed and Breakfast" is in fact a way of making a quick buck. The law allows you to take a tax free profit of £6,300 on shares and unit trusts; after that tax is payable at 30%. Therefore the wise ones sell shares/unit trusts tonight, making their tax-free profit, and buy them back in the morning — hence "bed and breakfast". You can carry on like this indefinitely. The only slight risk you take is the (unlikely) possibility of a sharp rise in the price of those shares/unit trusts between the evening of selling and next morning when you buy them back. Mind you, there is another snag. Allowing for a return of, say, 20 per cent, to make that tax free £6,300 you need to have £31,500 to invest in the first place. "Bed and breakfast" prices are, we are sure, a problem which does not bother many of our readers.

Wanna Buy Some Shares?

Anyone who achieved a distorted concept of their class position through sinking a couple of hundred quid — which in many cases they had to borrow — into shares in privatised state industry could learn from the great Guinness scandal what it actually means to be a member of the other class in society.

The Sunday Times of 8 March 1987 published an account by Ivan Fallon — who has written a book about the affair — of the sort of money which changed hands during the Guinness takeover battle for Distillers:

• Gerald Ronson, owner of the Heron group, invested £25m in Guinness shares, for which he was to receive a "fee" of £5m from Guinness.
• Ronson's "adviser", Tony Parnes, got a "fee" of £3m. Jack Lyons, another "adviser", got £2m.
• A subsidiary of Ephraim Marguiles bought 2.8 million Guinness shares and another subsidiary was paid nearly £1.5m for "work" in connection with the Distillers takeover.
• The Bank Leu in Zurich bought £50m worth of Guinness shares, apparently with money supplied by Guinness.
• The American Meshulam Riklis bought £30m worth of Distillers shares and invested £60m in Guinness shares.
• Lord Spens bought £75m worth of Guinness shares for clients of the merchant bank Henry Ansbacher.

Distillers was seen as ripe for a takeover because as it was organised it was not exploiting its workers, or applying the capital accumulated through their exploitation, to the maximum benefit of its shareholders. It was failing to meet an essential requirement of capitalism — maximised profit. It needed the sort of regime which Ernest Saunders had introduced into the Guinness empire; in his first two years as Chief Executive he sold or closed down 140 companies which Guinness had taken over in a vain effort to staunch the fall in its profits. The potential profits from a revamped, asset-stripped Distillers were enticing enough to attract some huge investments and some very rich capitalists.

Beside this operation, the scale of working class share buying is seen in its true proportions. Workers are not the authentic investors; they are not the owners of capital. That is the role exclusively of the capitalist class, who exploit the workers, who assert their privileged standing through capitalism's laws and its coercive state machine but who are prepared to break those laws if they see it as being to their immediate advantage to do so.

They pay richly to those who have the job of managing their operations. Ernest Saunders, before he was exposed and fired, was "earning" £370.000 a year and living in a country house worth £500,000. He is reported now to be exhausted. There is no information about the condition of the employees of the companies involved, whose labour was responsible for amassing the huge sums of money which were so skilfully deployed.

Aids for extra profits

One way you might like to consider making that tax free £6,300 is to invest in Japan. However, according to Warburg Securities, just any old investment won't do if you really want to get rich quickly. As "we expect awareness of Aids in Japan to continue to increase sharply” their recommendation is simple: buy Sagami Rubber and Fuji Latex — used, of course, to make condoms. "We expect unit growth should pick up as the Aids threat becomes apparent": strong demand "may also facilitate price increases" — the law of supply and demand operating . . .There are also strong recommendations to buy Sumitomo Chemical and Inabata Sangyo. who distribute Wellcome's AZT drug, and Fujirebio. who start marketing their diagnostic kit in April. These “should be the continuing focus of investor interest as further Aids victims inevitably come to light". So now that you know, there is no excuse for you not to make that tax free £6.300. After all, if you want to get rich quickly you can’t have scruples or consider the finer ethical niceties.