I am rather puzzled by one thing for which there may be a simple explanation. Inflation, it seems, is caused by the issue of too much inconvertible money in relation to low productivity. Yet a capitalist crisis is supposed to be caused by overproduction and a consequent recession. I realize, of course, that capitalism will supply only those goods which can be sold — not necessarily enough goods to satisfy human needs. But if there is this massive potential production it should be mopped up by the issue of more money. Then with greater purchasing power and more goods there should be more for everybody without inflation. So why inflation?
Before dealing with the particular question of inflation considered as means of achieving greater production it is necessary to summarize briefly the Marxist explanation of inflation. (It was described more fully in the Socialist Standard for September 1974.)
Inflation is the general rise of the price level caused by debasement of the currency. The currency is debased if inconvertible paper money is issued in an excess amount; that is to say, if there is more paper money than “the amount of gold coins of like denomination which could actually be current”. In given conditions of production and trade, and in relation to the legal definition of the unit of currency (in the nineteenth century the pound sterling was fixed by law at about one-quarter ounce of gold), a certain total amount of gold would be required as currency, representing a certain total mass of value. If the gold is replaced by inconvertible paper money and the paper money is issued in excess, prices will rise correspondingly. This has invariably happened. The average retail price level in this country now is more than eight times what it was in 1938, and by far the largest factor is debasement of the currency. With total production little more than doubled, the currency in circulation has increased from under £500 million to nearly £6,000 million.
The price level can rise or fall by moderate amounts apart from inflation, as it did in booms and depressions in the hundred years before 1914 when there was no inflation. The present world depression has kept commodity prices from rising as much as they otherwise would have done.
The idea that issuing excess paper money ought not to debase the currency because it would cause total production to increase, and the excess would be “mopped up”, is a very old one. John Law the Scottish banker-speculator set it out in detail in the eighteenth century. (See, for example, the article on John Law in the International Encyclopaedia of the Social Sciences.) It did not work for Law, and his private bank in France and the French state bank he organized both collapsed. It does not work now, as a look at the years 1970 to 1975 will show.
The currency circulation in 1970 was £3,101 million. It is now nearly £6,000 million. The wage and salary total for 1970 was £26,830 million. In 1975 it will have approached £60,000 million. Total consumer spending in 1970 was £31,472 million. In 1974 it increased to £51,670 million and in 1975 will probably have reached about £65,000 million.
So according to the plausible, but fallacious, inflationist theory all the conditions were set for a great boom in production and capital investment and for a fall of unemployment. What happened? Official figures of the index of industrial production for the third quarter of 1975 show it at 100: exactly the same as in 1970. According to Mr. Varley, Secretary for Industry, industrial investment this year, after allowing for price increases, “could be at its lowest level for 12 years” (Financial Times, 14th January 1976). And unemployment, which averaged 618,000 in 1970, rose to 885,000 in 1972, and fell to 631,000 in 1974, reached an average of 1,013,674 in 1975 and is expected to go higher in 1976.
There remains, of course, the one solid achievement of inflation. The retail price level rose between 1970 and December 1975 by over 100 per cent!
The idea that an inflationary price rise stimulates total production is put into proper perspective when it is realized that the total value of production in this country in the twenty years 1870 to 1890, expressed as an amount per head of the population, rose by at least as much (about 50 per cent.) as in the twenty years 1950 to 1970. In the first period the average retail price level fell. In the second period it was rising all the time.
Religion & Resources
A couple of points from the December ‘Standard’ on which I feel that you are avoiding the real questions.
The first arises out of the correspondence about religion. I think there is some confusion about the distinction between organized religion—which is certainly a social phenomenon for maintaining conformity to the system—and metaphysical or philosophical theories relating to the nature of life and the universe.
It is reasonable to refute the worship of an all- powerful God, since human problems can clearly only be solved by human beings. You are right to distinguish between materialism and idealism, but to accept the interplay between social systems and religious ideas does not absolutely disprove the possibility of existence of a “God”, in the sense of some power, force or intelligence which is beyond our comprehension.
You constantly uphold the rationality of a scientific and materialist outlook, but every scientist knows that the tiny physical size of the human brain in relation to the whole universe means that certain things must always be beyond our comprehension. Among these things you cannot dismiss the possibility of “supernatural forces”—it is entirely unreasonable and unscientific to do so.
My second point concerns the population question, which arose again in “Poverty Anonymous”. There is no known factual and scientific basis on which you can claim that the world is able to materially support any level of human population. In fact, with any given material standard of living there must obviously be a limit to the size of human population sustainable on this planet.
I accept that food production is severely repressed in the capitalist system, but this does not refute the argument but merely raises the upper limit of population, above which “over-population” will exist. Of course, this limit must be calculable by scientific methods, but until this is known you can only question the sustainable level of population and cannot deny the existence of such a limit.
Following from this you also cannot scientifically state the average standard of living which the earth can support for a given total population. It might well be that an equitable distribution of the world’s resources would necessitate a fall in the average standard of living of workers in the “developed” nations. You are merely expressing wishful thinking to imply that this would not be so. You can only express a belief until the scientifically based facts are available.
Although you do not go into detail about the particular metaphysical or philosophical theories you have in mind, if they foster belief in the idea of God, they are the same theories subscribed to by organized religion, which you agree helps maintain capitalism.
Who are the scientists to whom you refer, who know that the size of our brain prevents our comprehension of certain things in the universe? What correlation is there between the size of the brain and what it is able to comprehend? Science proceeds upon the opposite assumption, that nothing is unknowable. Countless things commonplace in our lives today, were thought beyond our comprehension a hundred or so years ago.
Your attitude is not only unscientific, it is a denial of the social nature of human knowledge. No one man, or group of men comprehend the total of what is known today, but it is known to mankind as a whole.
It is not for us to disprove the existence of gods. It is for those who believe in them to prove they do exist. Likewise with your supernatural forces. Gods and other supernatural ideas were conceived by primitive men to explain things that were mysterious to them. We do not need to comprehend the universe to be able to dismiss them. We merely need to understand man’s history.
You are a one for making wild assertions and then claiming scientific knowledge as your ally. The article “Poverty Anonymous”, did not claim “that the world is able to materially support any level of human population”. Your alleged fact, that "with any given material standard of living there must obviously be a limit to the size of the human population sustainable on this planet”, is meaningless. For example primitive man who only numbered a few million spread thinly over the earth, only had the means to scratch the crudest existence from nature. His world could materially support only a tribal existence on a day-to-day basis. Today there are approximately 4000 million people which modern technology sustains at a vastly different level. Yet, when primitive man starved it was because of the physical impossibility of finding food. Today, human beings starve while mountains of food are destroyed in many parts of the world. As technology (man’s knowledge) grows so does his capacity to provide his needs.
You repeat the fallacy warned against in the article about equitable distribution meaning a fall in the standard of living in the “developed” nations. You are projecting “nations” into Socialist society, or as we said, looking for solutions within capitalism which creates problems. It is capitalism with its cost considerations and profit motive, that holds back the rational application of modern technology in the under-developed areas. Also, you forgot about the millions of poor and hungry people in a technically advanced Britain and America which the article dealt with: how do you explain them apart from the anti-human economics of capitalism?
“Standard of living”, is itself a very misleading phrase. Whose standard? That of the unemployed or the old age pensioner, or that of Paul Getty and the Duke of Edinburgh? Do you include in your standard of living, only those things your wages enable you to afford, or do you include the quality of life imposed by wider social factors? These factors must include living in a world with Hydrogen Bombs, where waste and want co-exist on a scale unsurpassed in history.
Our case is that the technical capacity for world abundance exists. You call this wishful thinking until scientifically based facts are available. We refer you to world authorities, who have carried out exhaustive scientific studies on the subject. Nutritionists like Lord Boyd Orr and Josué de Castro, also Dr. B. R. Sen and the team who produced the UNESCO publication Courier, Special Issue on Hunger (July-August 1962). One of that team, Professor Michel Michel Cépède, after assessing the facts, writes
But this is precisely the scandalous situation of our time and one which it is useless to seek to disguise: that in a world capable of properly feeding 35,000 million human beings and containing only 3,000 million, at least 2,000 million suffer from hunger.
and he concludes,
. . . ignorance is responsible and not the ungenerosity of nature or the number of people on earth—ignorance and problems of economics.
Why not agnosticism?
Atheism is surely disbelief (not non-belief) in the existence of God. It takes the absolutist view that there is no God. It assumes implicatively that the atheist has ransacked the universe for support for his assumption.
One can only prove the non-existence of something by systematically examining the entire context in which it can logically be expected to occur. But we are confronted with a startling array of contradictions. If we don’t know what constitutes evidence how can we prove or disprove God’s existence? The context is surely universal knowledge, which as we know is expanding with the deeper insight of man and the intercourse of ideas, belief and technology.
Agnosticism, not atheism, is incontrovertible. It considers the question of whether or not God exists as irrelevant as we are not equipped with the means to arrive at a sound conclusion. Agnosticism is the simple suspension of belief and embraces two opposite tendencies: there might be a God and there might not be.
Surely what is more pertinent is to what extent and purpose the “God concept” is utilized. Christianity applies a “carrot-and-stick” policy and sanctifies capitalism. It truncates social awareness by a spurious claim to a relativistic morality. The systematic pursuit of rational evidence which is not forthcoming is to no avail but can never be a closed question. I am conscious of my conditions. I know what I want. And I know the only solution to this impasse — Socialism!
Socialists describe themselves not as atheists but as scientific materialists. Occasionally we invoke Engels’s phrase for agnosticism, “shamefaced atheism”; in Engels’s day “atheism” meant “without belief” — the meaning you attribute to “agnosticism” — but has now come to mean an active anti-god view.
We do not accept the proposition that one is disbarred from taking a standpoint without having combed the universe for evidence: it would be an excuse for never making any decision. Gathering evidence means making lists, and it is impossible to make a list without a hypothesis. Nor is the idea of having a completely open mind sustainable.
However, as the end of your letter shows you understand, Socialism is not a philosophical debate but is about society. We do not consider that we have to disprove all the supernatural beliefs of the world; our case is that these have not only social effects but social causes. Discussion of this or that god might lead to the "ask me another” conclusions you indicate, but isn’t the point.
Why does, say, the modern Scandinavian believe in Christ instead of Odin, and the modern Egyptian in Islam instead of Osiris? These changes reflect changes in the structure, and consequently the idea- systems, of society. The evidence concerning each belief is to be found not in the solar system but in the society from which the belief sprang and in which it is accepted.
Our suggestion is that you leave both “atheist” and "agnostic” as sterile words, and concentrate on “intelligent social awareness”.
A barrage of questions
I have read your specimen literature and in principle agree with you. I should like to ask some questions concerning the Party and its policy.
First, I would like to know about the structure of the Party. How is the Executive Committee elected? What are its plans for the future? I should also like to know the whereabouts of the Scottish group of “Impossibilists”, the Socialist Labour Party, if they still exist.
Although correctly condemning nationalization as state capitalism you do not specify how industry will be run in a Socialist society. Surely it should be run on a co-operative basis, if the workers themselves do not control industry then Socialism will have no more economic democracy than capitalism.
I have noticed that your Socialist philosophy is not very different from the Soviet government’s Fundamentals of Marxism-Leninism 1961 in which they envisage production for use and the withering-away of the state as the ultimate stage of communism. In their set-up the party would remain “the guiding and dominating force in society”, in other words a society where through the abolition of the legal system the individual would have no protection from abuse of power by the CP’s public committees. Would the Socialist Party wish to pursue a similar role? I am an independent socialist who believes that when such groups exist we enter the realms of “power politics”.
While agreeing that the church must be disestablished and its prerogatives removed I believe that those with religious beliefs (who could also be Socialists) should be free to compete for public interest. An attempt to suppress religion by force as in the Soviet Union is anti-democratic and therefore anti-Socialist. I personally am an agnostic, having insufficient evidence on which to come to a conclusion.
Who, in a society based on production for use and free access, would decide what is to be produced and what each person will be entitled to consume? Won’t everybody want a big house and a new car, and what will happen to art treasures, architectural monuments and other “priceless” objects?
Marx declared the need for a “dictatorship of the proletariat” to prevent the capitalist class from regaining power. This anti-democratic theory provided Lenin with an excuse for the Soviet dictatorship. Does the Socialist Party see a need for establishing such a dictatorship, even for temporary purposes?
Finally, how does the Party define the term "working class”. Who is "working-class” and who isn’t? And does the Party have full-time salaried officials?
The answers to your questions are numbered for easier reference.
1. The Party’s Executive Committee is elected each year by a ballot of the entire membership, the nominations having been made by branches.
2. Our plans for the future are to carry on propaganda for Socialism until the majority of the working class understand and want it.
3. The Socialist Labour Party has had only a sporadic existence since 1920, when a section of the membership it had went into the Communist Party.
4. Industry in Socialism will be run by the community as a whole. “Workers” as a category will no longer exist.
5. Don’t believe a word of the Russian government’s and CP’s anti-working-class nonsense. All political parties stand for class interests, including the Socialist Party which expresses the interests of the working class. When classes no longer exist, nor will parties. We have no idea of existing as a “guiding and dominating force”, or existing at all, in Socialism.
6. We make no suggestion of suppressing religion. Our case is that it will die out once people understand society and control their own lives; if any still desire it for personal consolation they will no doubt be thought of as harmless chumps. On your agnosticism, see the reply to Robin Cox.
7. “Free access” means exactly what it says: that each person will be able to take all he needs without paying or asking permission. Socialism will unfetter production and enable it to meet these needs adequately. Any decisions and choices will be made by all the people involved, in contrast with what happens under capitalism. Why do you suppose everyone will automatically “want a big house and a new car”? Big houses have largely ceased to be wanted under capitalism now that regiments of domestic servants no longer exist; but anyway, you are projecting into Socialism the way people think under capitalism.
8. The immediate change to Socialism was not economically possible in 1848, and Marx and Engels envisaged a period in which the working-class party held political power and legislated for the change. They saw the situation alter in their lifetimes, and it does not apply in the 20th century. The establishment of Socialism will be immediate.
9. Class is relationship to the means of production. Under capitalism there are two classes only, owners and non-owners. The owners are, of course, the capitalist class. All the remainder — about nine-tenths of the population — are forced to sell their labour-power, i.e. to work for wages, to live: hence, they are the working class.
10. The Socialist Party is a voluntary organization and all its work is done by members. The various administrative jobs in it are filled by election each year; none of them is salaried. There is no position carrying prestige or special influence, or where an individual may make decisions over the heads of the membership.
I am just recovering from a serious illness and would ask you for your tolerance for this somewhat captious note.
For about six years before I joined the Party in 1935, and for many years after, I waited with impatience for the Socialist Standard — not only for myself but for the workers I had got interested, almost all of whom had left or escaped from an elementary school at fourteen, like the writer.
Rarely were they puzzled with the language used. The then Editorial Committee reproved me severely in my meagre list of articles for the S.S. for using the word ‘“montage” (saying they could not find it anywhere) and using the word ‘"miasma”. Reflecting now, I was guilty of pretentiousness.
Now then, in recent years and indeed in the current issue I see words used in our journal — read by ex-elementary schoolboys, at least in Glasgow — that are comparable, if not worse, with my literary crimes. E.g. “detente” — what precisely does that mean? I can guess from the context. The same goes for "embarras de richesses” — Jesus H., as the Yanks say!
A few years ago, “syndrome”, a medical term, was used in connection with Hyde Park and the Soviet Union and is nowadays used in all kinds of contexts. “Escalate”, “viable”, “meaningful discussions” are the order of the day.
If you find time, convey my views to the writers. More power to their elbows.
T. A. Mulheron
We note your remarks carefully. Will all contributors to the Socialist Standard please pay attention to them?
L. S. Chell (Brighton): There is a distinction between vigorous criticism and abuse. In our opinion your letter does not achieve it. If you care to state your views temperately, we will reply.