The Stock Exchange
The Stock Exchange has spent some time over the past years in trying to improve its public image, which was so badly mauled by the slumps between the wars. About eight years ago a Visitors' Gallery was opened, from which anybody can watch the Exchange at work. The Secretary's department is eager to answer any enquiries and will send a list of brokers on request. And now. although they have always frowned firmly and finally upon any broker advertising himself, the Stock Exchange is itself launching out on a publicity campaign.
The Stock Exchange has spent some time over the past years in trying to improve its public image, which was so badly mauled by the slumps between the wars. About eight years ago a Visitors' Gallery was opened, from which anybody can watch the Exchange at work. The Secretary's department is eager to answer any enquiries and will send a list of brokers on request. And now. although they have always frowned firmly and finally upon any broker advertising himself, the Stock Exchange is itself launching out on a publicity campaign.
The theme is that the work of the Exchange vitally affects us all and that without it we would all be a lot worse off. "Without investment,” says one advertisement, “ British commerce would just cease to exist. And without the Stock Exchange, investment would be next to impossible.” Vintage ad-man's stuff, this. Capitalism always took care to develop the machinery which its property basis needed, but that does not make that machinery socially desirable or useful. The Stock Exchange was developed to organise some of Capitalism's investments, but even without it there would still have been a Capitalist class who would have grown very rich from the work of the rest of us. So when the Stock Exchange pats itself on the back they are making a social virtue out of an anti-social necessity.
Who are the advertisements intended to influence? Presumably the Capitalists, who have the money to invest, already know all about the Stock Exchange. This must also apply to the trustees and the funds' organisers whose job it is to invest other people's money. Could the ads. be aimed at the worker who has a little money which he would normally put aside in the Post Office, for his holiday or something similar? A small gamble in stocks and shares would be enough to convince many workers that they were Capitalists and so make them loyal supporters of Capitalism. But many workers who play the shares find that for everyone who wins on the Stock Exchange somebody else must lose and that, although the Capitalists can take these losses, to lose is a different matter for them.
So we exclude ourselves from the scope of the advertisement's claim, that the Stock Exchange is ". . . helping us all to live as we want to.” Socialists want lo live in a free world, which is owned by its people. The Stock Exchange does not help us to live that life: in fact, it does just the opposite. By misleading workers into accepting Capitalism as a dynamic, logical, beneficial system it prevents us all from living not just the lives we want but the lives we desperately need.
How few own how much?
There are certain essential facts about Capitalism upon which we have always based our case against it. However the system may change in small ways, these facts are as relevant today as they always have been.
One of them is that the overwhelming mass of the world’s wealth is owned by only a small proportion of its population. That, like all property societies, Capitalism is made up of a small number of owners and a vast majority who own nothing or virtually nothing.
Equally important is the fact that this pattern has remained fundamentally unchanged over the years.
As long ago as 1904. Sir Leo Chiozza Money showed that about one-third of the country's total income was taken by only 3 per cent. of the population. In 1908, he estimated that about half was taken by 12 per cent.
In 1913, Sir J. C. Stamp calculated that no more than 36,000 owned about one-third of the total national wealth and that 400,000, or a tenth of the population, owned two-thirds of it. Another investigation by Daniels and Campion showed that in the same year one per cent. of the population owned 70 per cent. of the total capital and that 5 per cent. owned between 85 and 90 per cent.
The same investigators estimated that in 1924 one per cent. owned 60 per cent. of the national wealth and that 5 per cent. still owned 80 per cent, of it.
How has this position changed at the present time? In spite of all the talk of the "affluent society" and "you’ve never had it so good,” hardly at all.
The Economic Editor of the Observer has recently calculated that 27 per cent. of total personal wealth is accounted for by one-half of one per cent. of the people; 35 per cent. by one per cent: 42 per cent. by 1½ per cent.; and 52 per cent. by 2½ per cent. He adds that all these calculations probably under-estimate both the total of wealth and the inequality of its distribution since most of its owners have already taken steps to avoid the full effects of death duties (his figures are based on Inland Revenue estate duty figures).
And in the United States.
As chance would have it, a similar enquiry about the position in the United States has just been published. It reveals that in 1953 a minority of 11 per cent. owned 60 per cent. of the total American assets. These figures are again based on estate duty returns and would appear to under-estimate the true proportions as with the U.K. figures.
We hope to get hold of the book in due course to see what other information it gives about wealth ownership under American Capitalism, but even the sparse details quoted above make it clear that the position is basically similar to that in Britain.
Omission.
The paragraph on the railways in last month's issue unfortunately omitted to mention the amount of interest still paid out yearly on the £1,000 million of government stock handed over to the former railway owners by the Labour Government in 1946. The figure is £30 million.
Almost £500 million has therefore since been paid out in interest by a concern which is now so deep in the red that nothing will apparently save it. And this interest will continue lo be distributed year in and year out unless the government should one day decide to redeem the stock. Should this happen, the lucky bondholders will be paid out at par to the tune of the full £1,000 million.
No doubt about it. Whatever our Labour Government did not do, they certainly did the railway owners proud.
Stan Hampson
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