Sir John Anderson is very unhappy (1944)

From the July 1944 issue of the Socialist Standard

A large part of Sir John Anderson's Budget speech was devoted to the question of subsidies, wages and prices. As he so very clearly explained it, the trouble is that whereas as a result of the subsidisation of most of the essential commodities, prices have only risen by 28 per cent., wage rates had risen by us much as 40 per cent. He said : — 

  We had aimed at maintaining a reasonable stability in the cost of living, partly by means of an intensive and successful rationing system, and partly by subsidising costs. Here again our policy had been fully successful, but he could not claim that in this field the position was so satisfactory that he need do no more than leave well alone, for he was not altogether happy about the present trend of events. (The Times, 26/4/44.)

The whole of his remarks is worth reading, but we selret the following: —

  When the stabilisation policy was first introduced, wage rates had risen 6 per cent. less than the cost of living, but today they showed a rise of 11 per cent. more than the cost of living. It would place the stabilisation policy in an altogether false perspective, and the purpose of it would be to a large extent be stultified if the Government were to continue blindly pouring out subsidies to keep the cost of living down rigidly to a predetermined level without regard to the current level of costs and wages.

In considering Sir John Anderson's statement, it should be borne in mind that he was speaking on behalf of the Government (the executive committee of the British capitalist class), whose main concern is to protect the interests of the British section of world capitalism, to keep the British workers and fighters in a proper frame of mind, and to make sure that the war does not cost them a penny more than they can help.

If there were ever any danger of the British Government continuing "blindly" to pour out subsidies to keep prices stable, Sir John Anderson can at least claim the merit of having opened their eyes. However, he is the Chancellor of the Exchequer, and that is his job.

To explain all this pother from a purely capitalist angle, it is this. The capitalists had their eye on the post-war period; they wanted to keep the workers in a happy mood, and in order to avoid the conflicts likely to arise from a continued rise in the cost of living, they decided to stabilise the price of most of the essential commodities. This, they thought, would also enable them to avoid the possible post-war conflicts when a full in prices would have to be met by a corresponding fall in wages. But the economic laws of capitalism have a bad habit of defeating the most ingenious schemes to get around them, and so, due to other factors, wage rates have actually gone up by "as much as" 10 per cent.

Most workers have short memories, but those whose recollections go back to the pre-war period must surely remember that the one eternal conflict with the employer was the question of wages. If you went after a job, you never dared to ask for more than you could live on, because you knew the other fellow would surely ask for no more, and equally you could not ask for less, because thus you could not carry out your job efficiently. And didn't the boss know this too? Similarly the trade unions in their negotiations with the employers always harped on the "cost of living." Now that, as a result of the urgency of war, there has developed a system of state controlled capitalism, the state has taken a hand in this question of wages and prices (cost of living).

To get down to rock-bottom facts, the position is that present-day society is divided into two classes, an owning class—the bunch who own the factories, mines and transport systems, etc., in the British Empire—and the other lot, the workers, some with white skins, others black and yellow, some with snub noses, and others with crooked ones, who do all the dirty work, physical and mental, including quite a spot on the organising side, all for wages, or, as they are sometimes euphemistically termed, "salaries.” The same conditions apply in the other bits of the world which are controlled by rival groups of capitalists, but in these other cases, owing to certain geographical and historical circumstances, there is not the same variety in pigmentation, though noses have a habit of repeating themselves all the world over. Between the two classes there has always been, and, so long as capitalism lasts, always will be, a conflict. The workers want to get their wages up, the capitalists want to keep them down. Combining the fruits of much experience, however, the capitalists have now evolved more than one process of controlling wages. Under war time controls they can reduce subsidies and cause prices to flow upwards a little faster than wages, and if it goes too rapidly for their liking, they can again subsidise the more important articles figuring in the workers' standard of living. There is the third and last and most inconvenient resort, of forcing the workers to accept lowered wages when prices fall. It is clear, therefore, that from the workers' point of view, the only thing that basically concerns them is their standard of living, and low wages or high wages, low prices or subsidised prices, high taxes or no taxes, it is only from this angle that they can logically view the matter.

The capitalist class rule the roost; they want to win the war as cheaply as possible; they have to pay for it, anyway, despite all the camouflage of income tax, beer tax and all the other taxes, and hence any possibility that the workers are going to get away with something while they have to foot the bill is an immediate cause for alarm. Hence the unhappiness of our friend Sir John. But he is a smart fellow, and so he told the assembled representatives of capitalism how he proposed to get over the difficulty. It was not proposed for the time being to continue to increase subsidies in line with increasing world prices . . . "he felt that for the ensuing year a range for the cost of living index of 30 to 35 per cent, over pre-war should he substituted for the 25 to 30 per cent, laid down by Sir Kingsley Wood in 1941."

As stated above, the principal immediate concern of the workers should be with their standard of living. Yet the fact is that, however much they try to keep it up or put it up, the workings of Capitalism are such that in the long run they cannot, materially improve it. Where the standard of living is higher, it is accompanied with a higher rate of exploitation. This explains the higher standard of living of the workers in U.S.A. as compared with Britain, while in this country, due to the exceptional circumstance of the war, the workers have been induced to accept a lowered standard of living with a higher rate of exploitation, the mirage of income tax and post-war credits having blinded them to the real situation. For the post-war period the ruling class envisage both a higher standard of living and. a greater intensity of production. Sir John Anderson says: —

  The plans which my colleagues and I are preparing for the days after the war are based on the assumption that we shall be in a position to import the raw material necessary for active employment and sufficient food to maintain a standard at least a little better than what we are enjoying now. It is right that this should be our assumption, for we intend to make it good.

The News Chronicle (27/4/44) comments: —

  Our capacity to sell our goods abroad depends on our industrial efficiency. British industry will have to make a fresh start. It must modernise its methods; bring its equipment up to date—indeed, if possible, keep a little ahead of its competitors—apply in peace time some of the dynamic energy that has been developed for war production, and utilise all that we have learned and all the physical assets we have acquired in the years of war.

It requires but little perspicacity to see from all this that what we are in for after the war is intensified competition for the world’s markets and intensified exploitation of the workers—in short, a repetition of the conditions which brought about the present armed conflict. As the News Chronicle states : —

  We shall be faced, after the war, with strenuous competition. America’s vast resources will be pitted against ours. Russia will be making her way felt. The whole of Asia will in course of time become industrialised. No one is going to buy British products from philanthropic or sentimental motives.

This is the picture of things to come. A world of giant capitalist nations struggling for world markets and control of the sources of raw material. Even when there is no positive desire for additional territory, bases, etc., the necessity of defending existing possessions implies the continuance of “defence” forces, and who knows what spark may light the next conflagration? And meanwhile the workers will be subject to the same ruthless operation of capitalism, despite Beveridge or anything “better than Beveridge,” for no form of unemployment relief will allow workers a decent standard of living—how many would want to work if this were so?—and the “policy of full employment’’ will be found to be but a rainbow, diffusing before the storm of trade depressions, and even in the “good times" of capitalism, unattainable.

One further aspect of Sir John Anderson’s speech may be noted. Up till now the budget has been mainly a matter of looking round for sources of revenue to meet the cost of administration, armed forces, etc., and of adjusting tariffs to keep out certain competitive commodities. The present budget, however, develops to a new point. Now taxation is studied from the point of view of furthering the interests of the ruling class in all spheres. Taxation reliefs are offered for scientific research, for the modernisation of equipment, and on the excess profits duty, while farmers are promised loans at cheaper rates for the modernisation of farm buildings. etc. The interests of the chemical industry are to be studied, so that they shall not be handicapped by tariffs in obtaining cheap oil as raw material. All this is in line with the logical development of capitalism. The intensification of competition for markets means that the state must be integrated more and more with capitalist industry. The worker, the cog in the machine, is promised “full employment."

But while the worker’s immediate interest, under capitalism, can only be with his standard of living, he has a further and more far-reaching interest. That is to devote a little time to the study of past and present societies, and to ascertain whether there is not some alternative to the capitalism which provides him with poverty, insecurity, worry, unemployment, occasional wars, and a premature old age.

Ramo.