Editorial: The American Loan and the Gold Standard (1946)

Editorial from the February 1946 issue of the Socialist Standard

Much ado about very little

Most people are frankly mystified about the intricate details of currency, banking, credit and international trade and consequently do not understand the issues involved in the controversy about the American loan and the gold standard. This includes many of the politicians who speak on the subject so that those who support one side or the other frequently cannot even agree about the facts let alone the desirability of taking one or the other course of action. The members of the Labour Party and the Conservative Party are divided among themselves. Even those in both parties who supported the American loan arrangements admit that they do so with great misgivings and without any assurance that things will work out as planned. Many who support the loan would like to join Lord Beaverbrook’s group in opposition but cannot convince themselves that his case for the British Empire to stand as a unit more or less independent of U.S.A. is practicable. They therefore take the view that no other course is open than to accept the loan and with it the conditions laid down by American capitalism. The Manchester Guardian puts it thus:—

   "The plain case in favour of the American loan is that we cannot do without it. We have got into a position . . . from which we cannot escape without hardships which would rend the political fabric of this country. . . . The idea that we cap turn down the American offer because we are shocked at the conditions they have extorted is simply childish." (12 Dec., 1945.) 

The immediate factors that determined the offer and the acceptance of the loan of £1,100,000,000, to be repaid at 2 per cent. over fifty years beginning in 1952, are the following. On the one side British Capitalists, during the war, lost the bulk of their export trade and foreign investments (the latter had to be realised to pay for imported food and war supplies) and are now so denuded of certain goods that they must get a loan from U.S.A. in order to pay for needed imports, pending the turnover to full-time peace production and the export not merely of the pre-war volumes of goods but a greatly increased volume. On the other side the loan was offered not on philanthropic grounds but because American industry is producing at such a rate that big business is already scared at the thought of the slump that will occur if markets cannot be found. Much of the loan will be used to buy American goods for shipment to the British Empire and the Continent. As The Times says, "The current objectives of the United States are not disguised. Like greyhounds in the slips their salesmen are ready. . . . American productive capacity has been much multiplied by the war. When civilian demand replaces military, there will be surpluses—and the prospect of considerable unemployment. The accepted solution is to employ the workers and dispose of the surpluses on oversea orders.' (Times, 7 Dec., 1945.)

Apart from repayment of the loan and payment of interest the American authorities imposed other conditions, in particular that the pound sterling shall remain at the present exchange rate with the dollar (4.03 dollars to the pound) and that the British Government shall enter into world banking and trading arrangements proposed by the U.S.A., the declared object of which is to get all the Powers to agree to establish "freer trade relations" unfettered by tariffs and preferences, import restrictions. State subsidies. State trading cartels and other types of trade barriers—in short, to make the world a vast market open for American exports.

The attempt to keep the paper pound at a fixed relationship to the dollar is a roundabout way of keeping it at a fixed relationship to gold, though the Labour defenders of the agreement point to the provisions which will enable the British Government to alter the relationship in certain circumstances, i.e., to fix it at, say, 3 dollars to the pound. Because of this “escape clause" the Labour Party maintains that it is not committed to being "on the gold standard." The difference is, however, only one of degree and of form. Before 1914 and from 1925 to 1931 the sovereign was by law fixed at a certain weight of gold, and corresponding to that relationship it was worth 4.86 dollars. Under present arrangements the paper pound, in effect, is equivalent to a smaller amount of gold than before 1914 and also the way is made easier to reduce that amount still more, within the limits of the agreement with U.S.A.; in other words the present arrangements are more elastic than before 1911 and the relationship between the pound and gold is altered.

The controversy about the amount of gold to which the paper pound (or the currency of any other country) should be related largely represents the rivalry of different sections of the capitalist class. A British firm engaged on the production for export of articles made out of home-produced raw materials has an interest in reducing the gold equivalent. This is because the foreign buyer, e.g., an American who at the old rate had to pay 20 dollars for £5 can at a reduced rate get £5 for, say, 16 dollars. This encourages exports from Britain; but at the same time it discourages imports to Britain. The British importer of foreign raw materials or finished products has an opposite interest, since he must now pay more paper pounds than before for an article costing 20 dollars.

It should, however, be noticed firstly that the effect of any change in the relationship of the paper pound to gold or to the dollar is only temporary since costs and prices adjust themselves; secondly, it helps one capitalist group at the expense of another without increasing total production even in the country concerned; and thirdly, all countries can play the same game—as for example, the recent devaluation of the French franc.

Overriding all these purely currency questions, which are of secondary importance; is the major fact that there is no solution—short of abolishing capitalism—for the endless crises and depressions, unemployment and trade rivalries of the system. Those who take the superficial view can state what looks like a convincing case whichever side they support in the controversy. The Labour Party, which opposes having the pound rigidly fixed to gold by Act of Parliament, can point to the poverty, unemployment and trade depressions that existed before 1914 and between 1925 and 1931. This, they say, proves that the rigid gold standard is bad. Likewise their opponents can point to exactly the same evils that existed after 1931. Both are right in saying that the evils exist, because they always and necessarily will under capitalism, whether adherence to the gold standard is rigid or elastic, at one ratio to gold or to a higher or lower ratio. They are also both wrong in thinking that currency factors are the cause of the evils or that, the evils can be remedied by currency manipulation. The Times, for example, holds out the hope that international agreement may lead to “ the restoration of the system of world trade which prevailed in the heyday of British free trade a generation ago." (Times, 7 Dec.) That "heyday" was, for the workers, a time of poverty, insecurity and unemployment just like the subsequent period. All through the 19th century, when the gold standard was said to be functioning well, crises and working class misery were in evidence. The "over-production" of capitalism, meaning the production of vast quantities of goods for which the workers lacked purchasing power is a result of the private ownership of the means of production and the resulting fact that the goods produced belong to the capitalist class and that class can and does curtail production when the goods cannot be disposed of at a profit.

One point, for the benefit of those who cherish the illusion that the gold standard has ceased to exist, is the recent heavy buying of shares in gold mining companies. The City Editor of the Daily Telegraph (24 Dec.) commenting on this, writes : 

  ". . .  the acceptance of Bretton Woods has removed any nervousness there may have been as to the status of gold in post-war international monetary arrangements. The metal remains the world standard of value, and those who produce it will be marketing a universally acceptable commodity."

In conclusion, it is a safe forecast that the agreements with U.S.A. will not work well for the working class. Nor would any alternative arrangement within the capitalist system. W. J. Bryan's declaration that mankind is crucified on a cross of gold, a flamboyant fallacy that still finds credence in Labour circles, should be re-written: the working class are crucified on a cross of capitalism; which is just as true though the cross now bears the Labour Party label, " Nationalisation.”

Working Class — who isn’t? (1946)

From the February 1946 issue of the Socialist Standard

  "Again I ask what is the difference between working and non working class? Is it financial? If so, where do you draw the limit? Is a man a member of the working classes if he gets, say, £6 a week, but a non-worker if he gets £10 or £9 15s. 6d.?

  Or is it educational? 1 was not at Eton like Dr. Hugh Dalton ... or at Winchester like Sir Stafford Cripps. But I don’t think I regard them as non-workers . . . on that account.

   Is it purely manual work that counts? When I see, as I sometimes do, Mr. Aneurin Bevan, the Minister of Health, leave his charming house in Cliveden Place, in Belgravia, enter a large saloon car, and being driven by a chauffeur to his ministry, I don’t think I say, 'Ah, there he goes, you can see he’s not a member of the working classes. Look at the car and chauffeur. . .’ 

   The 'Nye’ Bevan, who is striving to provide houses for the people, is just as much a "worker” as ever he was, when he was at the coal-face. . . .

   The truth, I think, is that to-day the phrase has no meaning whatever. We are all workers. . . . The old bad gap between the extremely rich and the miserably poor is rightly being steadily and inexorably narrowed.” 

—Mr. Edward Denny, Evening News, 21 Nov., 1945. 

The phrase "working-classes,” says Mr. Denny, is inverted snobbery, with "no place” in "the hard-working, classless State we are creating.”

Mr. Denny asks a number of questions. We answer these before going on to his unproven assertions.

First, "working-classes ”: Mr. Denny does not understand the meaning of the term "class” in the social sense.

In political economy, a class is a body of people united by economic interests.

Therefore there cannot be two, or more, working-classes. Those linked by the common material interest are the class. There is just the working-class—that’s all.

It is quite logical for the man who starts, like Mr. Denny, by talking about the "working-classes” to conclude that there is no "working-class” at all.

Second, how is the working-class defined? "Society today is divided into two classes: one of which is called the working-class, because its members have to work for their living.” —"Socialism,” p. 3.

It follows, therefore, Mr. Denny, that if the necessity of work defines a member of the working-class—the converse denotes a member of the other class—capitalists do not HAVE to work for a living; some do work, but they could live opulently without.

Therefore, all Mr. Denny’s saloon-bar chatter about whether Dalton was at Eton, or Bevan at the coal-face, has no bearing whatever upon the social problem of what is the working-class.

In so far as Cabinet Ministers participate in some sort of administrative work—they are working; this does not necessarily make them members of the working-class—neither is it possible to define the class position of every single individual.

Mr. Denny evidently has some vague suspicion of this. After having posed his silly questions about £6 or £10 a week, and whether a beer-drinker is a worker, or a whisky-drinker not (according to this erudite classification most Fleet Street journalists are workers and non-workers at the same time), whether a "white collar is the hall-mark of a drone” and so on; he goes on to his real contention—that classes have disappeared in "this little island” where we have "all got to work hard” in "the hard-working classless State we are creating.”

The ground for this claim that classes have disappeared ("we are all workers' ”) is that the "gap between the extremely rich and miserably poor is narrowing.”

Inextricably mixed up with all this is Mr. Denny’s claim that the so-called middle-classes "are the working and worrying classes.” Determined to be right, whatever happens, Mr. Denny backs it both ways! "There are no classes ('we are all workers’). The middle-class (undefined) is the working class (‘hard-working class ’).”

It will be noticed that Mr. Denny carefully writes "the gap between the extremely rich and miserably poor is narrowing.”

If this means that there are fewer very rich and very poor people it is also untrue.

What "miserably poor” is, is undefined. The Oxford Dictionary defines poverty as "want, deficiency, indigence.”

Some are frightfully poor, yet very happy. This kind of happiness is usually a mental hallucination, based on some religious view which makes suffering a virtue, leading eventually to an ideal existence of comfort and ease.

It does not help in investigating the social problem of poverty one iota.

We are quite willing to assess as "miserable poverty" those living below the minimum income estimated by authorities like Sir Wm. Beveridge, Sir John Boyd-Orr and Mr. Rowntree, as indispensable to reasonable health and efficiency.

"Sir John Orr found that 10 per cent. were in poverty in 1936. Mr. Rowntree found that 31 per cent, were below his estimated poverty line and 14 per cent, in extreme poverty.” York, 1936.

—Facts for Socialists. Fabian Society.

It is quite true that the advent of the war brought employment and relative prosperity to this "extreme poverty” group.

While there cannot be any statistics of normal capitalist conditions for a year or two. Socialists nevertheless contend that "extreme poverty” will increase.

Mr. Bernard Harris, City Editor of the Sunday Express, gave on September 16th, 1946, a few facts about " extremely ” rich men:—

Henry Ford . . . £158,000,000

Pierre Du Pont           . . . £143,000,000

John D. Rockfeller    . . . £100,000,000

Andrew Mellon         . . . £100,000,000

Don Simon Iturbi Patino  £100,000,000

Sir John Ellerman            £1,000,000 a year 

Duke of Westminster       Probably the same

These vast fortunes among the largest the world has ever known, are growing at a great rate.

Thus the subtractions made by Death Duties, on their present scale, has been more than offset by the additions, which the opportunities of the capitalist system make possible, to the wealth of the fortunate minority. The Death Duties do not, as yet, arrest the process of the continuous concentration of wealth in few hands. They only slow it down. The rich in Britain are still growing richer.

Mr. Dalton, Chancellor of the Exchequer, wrote the following in 1935: — 

   "Over the last ten years the total net capital value of estate liable to Estate Duty rose from £442 millions in 1923-4 to £538 millions in 1929-30, fell to £517 millions in 1930-1 and to 467 millions in 1931-2, rising again to £516 millions in 1932-3.

     In 1933-4 all previous records for a single fortune were broken by the monstrous estate of Sir John Ellerman, which exceeded £17 millions.

     The wealth left by millionaires alone has averaged over £31 millions a year during this period, and the number of millionaires dying each year has varied from three to twenty-two, with an average of just on twelve a year.

    Yet the great majority of those who die leave property so small it is not worth the while of the Inland Revenue to value it.”

—" Practical Socialism for Britain.” p. 338.

It is still true that the great majority of those who die possess no property worth mentioning and so it will remain while capitalism endures, notwithstanding that Mr. Dalton is now Chancellor of the Exchequer and a Labour Government is running the system.

Horatio.

By The Way: Socialists—and Jokes ! (1946)

The By The Way Column from the February 1946 issue of the Socialist Standard

Socialists—and Jokes !

Mr. Ernest Thurtle, M.P., embellishes the pages of the Sunday Express with a column of Parliamentary chatter each week.

Writing of possible “revolts” in the Parliamentary Labour Party he says, in passing, “as a Socialist," Mr. R. Stokes (Labour M.P.) “is a joke.” (16.12.45.) “Technically in view of his party membership, he might be described as a ‘ collectivest-anarchist.' ”

What “collectivest-anarchism” is Mr. Thurtle does not explain! Only a party like the Labour Party can have Parliamentary representatives who are “technically” one thing, and actually something different.

In any case, why sort Mr. Stokes out? As Socialists the whole Labour Party are “a joke”—jokes are usually somebody else’s tragedy. The Labour Party are—for the workers.

“All animals are equal—but some animals are more equal than others.”

—Mr. Geo. Orwell, “Animal Farm" p. 87.

* * *

Another Great "Socialist" Victory

“Shares up on Coal Bill Hopes.”

“Formal first reading of the Coal Mines Nationalisation Bill resulted in rises in colliery shares on hopes of favourable terms. Bolsover were better at 96s. 9d."

—Daily Herald, 21.12.13.

* * *

"Socialism" for Bankers

Lord Catto, Governor of the Bank of England, has informed the Select Committee on the Nationalisation of the Bank of England Bill, that he has only received ten letters from stockholders (17,000)) opposing the Bill.

The Third Reading of the Bill went through the House on the 19th of December in a Christmas spirit of light-hearted good humour.

“Several members spoke of the occasion as historic, but the Christmas spirit was so strong and the speeches from all parts of the House so light-hearted that a casual visitor would have had great difficulty in realising that he was in the presence of art epoch-making development in our political history.”

—News Chronicle, 20.12.15.

By the terms of the Bill the stockholders get £58,000,000 in 3% Bonds which Sir Cyril Radcliffe declared for the Government was “most benevolent.”

—News Chronicle, 21.12.15.

Best of all was the Herald's report of the speech of Lieut.-Col. Hamilton of Sudbury (Labour) who taunted the Tories with the fact that “after all, Mr. Churchill himself had agreed that nationalising the Bank was a reasonable step.”

—20.12.15.

* * *

Coal Mines Nationalisation Bill

“The Board will, out of its working, have to pay interest and sinking fund on the money provided by the Treasury.” 

—Daily Herald, 21.12.15.

One small correction, the interests (profits) will be, as usual, paid out of the coal miners' working.

Nationalisation will change the name on the shop-front.

* * *

National Gas Plan

The Gas Industry Commission set up by the Coalition Government has now reported. Its report is almost identical with the plan of the Labour Party. The Conservative Times and the Labour Daily Herald commented in similar terms : — 

  “It is a pertinent comment on current political controversy that an expert committee appointed by a Coalition in which Conservatives predominated should recommend complete public ownership of a major industry, and should combine this proposal with a decisive preference for a form of management—the public-corporation—invented by a past Conservative Government and exemplified by the B.B.C., the Central Electricity Board, the London Passenger Transport Board, and the British Overseas Airways Corporation—all public concerns that have been wholly or mainly Conservative creations. The present Government . . .will naturally welcome the Heyworth report.”

—Times, 6 Dec., 1945.

    

   "On the eve of the Tory censure motion on the Government for its policy of nationalisation a report last night by a committee of independent experts appointed by the Coalition Government recommended complete nationalisation of the gas industry. The Government . . . has . . . broadly accepted the scheme put forward. . . . The five members, headed by Mr. Geoffrey Heyworth, chairman of Lever Brothers and Unilever, Ltd., decided that nationalisation is the only way out of the present confusion and to provide cheaper gas for all.”

—Daily Herald, 5 Dec., 1945.

* * *

"United Nations”

“The foreign policy of a Government is the reflection of its internal policy. Imperialism is the form which Capitalism takes in relation to other nations. A Capitalist Government in Britain thinks of the League of Nations as a means of preserving peace, because peace is a British interest, but still more it thinks of it as a means of preserving the British Empire and British Imperialist interests/'

—C. R. Attlee (“Labour Party in Perspective," 1935. p. 226.)

* * *

"Adequately"

  “A Labour Government would plan this country in such a way as to ensure that, every man, woman and child was adequately fed as a prime duty of the State.”

—Ibid, p. 236.

* * *

Workers Worse Housed than Animals

Mr. Yates (Lab., Ladywood) told of how in Birmingham 80,000 people, most of them ex-.Service, are now in rooms waiting for houses.

“I represent,” said Mr. Yates, “ the ordinary people of one of the wealthiest cities in the world, a city whose proud boast it is that it has a thousand trades. Yet in that city thousands of people are stabled worse than animals.”

—Daily Herald, 27 Nov., 1945.

Capt. G. R. Chetwynd (Lab., Stockton-on-Tees) believed there was no problem at all for the well-to-do.

 “I have tried to find a house for myself in London, and in the space of 20 minutes could have bought 30 houses at £2,000 upwards.

  “I would say that not one brick and not one workman shall be diverted from the provision of houses to let until such advertisements as we see of houses at £2,000 and £3,000 have completely disappeared." (Cheers.)—News Chronicle, 27 Nov., 1945.

Horatio. 

Russian Foreign Policy (1946)

From the February 1946 issue of the Socialist Standard

Russia, like the other powers, is now following the traditional capitalist policy of putting pressure on her weaker neighbours for concessions (oil in northern Persia), or territory (Turkey), thus departing from the treaties entered into in 1921. The following extract from the Communist Palme Dutt’s “World Politics, 1918-1936” (Gollancz, 1937, p. 317) is typical of the line the Communist?, used to take on such manifestations of imperialism : —

   “The treaties with Persia, Afghanistan and Turkey in 1921, as with China in 1924, gave direct expression to the break with the principles of imperialism, in renouncing all rights and claims enforced by Tsarism, and establishing relations of friendship and equality."

Now it is a different story.

After This Crisis . . . ? (1976)

From the February 1976 issue of the Socialist Standard

The world capitalist economic and political system is in crisis. The signs are so obvious that the mere statement of fact is almost superfluous. The system is beset by not one crisis but several crises. These are separate entities, but inter-related and from the same root cause.

The three major economic problems for all industrialized countries, and the primary producing countries of the so-called Third World, are: inflation, the five-fold increase in oil prices since 1973, and a recession. If the previous cycles of commerce ending in slumps could be referred to as capitalism’s “anarchy of production”, the present situation is chaos. A few press headlines from a single day, 7th September 1975, bear witness to this.

Japanese Bankruptcies at a Peak.

Inflation Rises in U.S.

French Reflation Scorned.

TUC Expecting Autumn Reflation to Cut Jobless.

The “French reflation” was the proposed use of £3,300 million by the French government to try to stimulate the economy, and the dissatisfaction was expressed by the trade union movement and others. M. Georges Seguy of the CGT, the Communist-dominated trade-union organization, said the plan did not alter “the disastrous situation in which our country finds itself”. The French "Socialist” Party said the plan "did not meet needs on employment and prices”.

The TUC’s hope was voiced at the recent conference in Blackpool where a majority had decided in favour of the Labour Government’s £6-a-week wage-restraint policy — a condition of acceptance being the expectation of measures to bring down unemployment. Len Murray, the TUC General Secretary, said that backing the wages policy would “make it easier for the Chancellor to start judicious and selective measures to reflate the economy . . . We shall be looking for action this Autumn to project jobs.” (His word was “project”, not “protect”!)

Trade-union leaders and politicians are, of course, whistling in the dark. The Labour government’s efforts to create jobs are as unrealistic as its other attempts to control capitalism. A sizeable proportion of the unemployed are young people who have been unable to find jobs since they left school last July. In a recent speech in Edinburgh, Edward Heath spoke of a danger that disillusioned youngsters might reject political democracy if the problem were not solved.

Laid Off

Earlier last year, in the writer’s experience, workmates and fellow trade-unionists were not over-concerned at the situation. Something was wrong, there were problems, but things would sort themselves out. The same attitude was found in the audiences at Socialist Party meetings. Now it is different. People up the road are being laid off, “shaken out”, and “surplus to requirements”. Examples in South London are the closure of Decca Radar at Battersea, due to the decline in the sales of colour TV, and the proposed shut-down of the Telephone Manufacturing Company at West Dulwich.

The latter is due chiefly to the cut-back in Post Office orders. The Company’s work is to be centralized at an existing factory in Wiltshire. Two larger companies are also affected by the Post Office cut-back: Plessey’s and the General Electric Company, with 20,000 predicted additions to the numbers of unemployed. In the case of TMC the redundancies include many West Indians and Asians from the Brixton, Herne Hill and Croydon areas. Some long-service employees are jobless: the writer knows one who has been with the Company since he left school in 1938.

The editorials and city columns are full of strident talk about “overmanning”, lack of “mobility of labour”, and “natural wastage”. The writers (employees themselves, of course, and presumably members of the National Union of Journalists) wish other workers to travel obediently at a moment’s notice. This insistence on a “Have tools, will travel” outlook appears only when it suits — or seems to suit — capitalism. Perhaps the ideal situation would be an “Unemployed Disposal Unit” into which workers and their dependants could be fed when not required.

There have been numerous comparisons with the crisis of 1931. There are two economic phenomena from the past which haunt capitalism — the German inflation of 1923 and the “Wall Street Crash” of 1929. At the Durham Miners’ Rally last summer Harold Wilson said we were “facing the worst recession since the 1930s, because the world was in the midst of the most serious decline in trade for over forty years”. We have a slump — because we have a slump!

The President of Australian Council of Trade Unions, Bob Hawke, stated at the CTU Conference in Melbourne that Australia “faced an economic crisis unprecedented since the 1930s”; and “the entire Western world was in a state of economic crisis, and it was naive to blame the Labour government for Australia’s economic difficulties”. (Hawke is also the federal president of the Australian Labour Party.)

Comparison with the nineteen-thirties is interesting in more ways than one. It is not only that the scale of the present recession is the most widespread since that period, but that the proposed solutions are remarkably similar. At the TUC conference, what was most noticeable was the sheer poverty of ideas. The so-called “left”, arguing against the £6-a-week policy, said it would intensify the depression by further reducing workers’ purchasing power: bigger wage increases would increase the workers’ ability to buy goods and services and so make things better.

This is a variant of the simplistic theory that crises occur because the working class cannot buy back what it has produced. Of course it is true that the workers cannot buy the total product of their labour: not only during a depression, however, but at all other times, including periods of expansion and “recovery”. Marx dealt with this in Capital, Volume 2:

  [that the workers] receiving too small a portion of their own product, and the evil would be remedied by giving them a larger share of it, or raising their wages, we should reply that crises are precisely always preceded by a period in which wages rise generally, and the working class actually get a larger share of the annual product intended for consumption. From the point of view of simple commonsense, such a period should rather remove a crisis.

Once a slump is under way, things happen cumulatively. Workers are laid off, their purchasing power decreases, and a chain reaction sets in affecting other industries and other workers. Simultaneously, this helps promote the capitalists’ “loss of confidence” and their cut-back in investment. But the idea that the situation can be remedied by advancing wages is unrealistic. This is unpalatable for Socialists to state, and workers often resent it, but it cannot be ignored.

Searching for Answers

Equally dangerous, but more reactionary, are the continual calls for import controls. This type of economic nationalism in the nineteen-thirties produced restrictions and counter-restrictions, tariffs and further tariffs. The slump and attempted national solutions at the expense of other capitalist states was a contributory factor to dictatorship in countries particularly "hemmed in” by these policies.

There are still demands for further nationalization as the supposed cure for the problems produced by capitalism. This is happening in sections of the motorcar industry. Such is the magnitude of the recession that Coventry, a centre of car production, has been transformed within a couple of years from a high-employment and high-wage area into one with unemployment figures comparable with the depressed areas of Northern Ireland and North-east England. According to the Sunday Telegraph (10th September 1975) car production has fallen to 44 per cent. of its capacity, and studies conducted by McKinsey & Co. (American management consultants) estimate that a further cut of 25 per cent. is necessary ‘“to ensure a profitable future” for the industry.

Part of the objection to the government’s putting money into the Chrysler company was that it would prejudice the recovery of Leyland. The McKinsey report blames “overmanning” and low productivity for the problems of the car industry, and of course this is the cry with regard to British capitalism generally. The proposition is that if only British workers were as profitably employed as workers in other countries — “our competitors” — all would be well. The flaw in this analysis is the recession and high unemployment in those other countries: the Japanese bankruptcies mentioned earlier, the 8 million unemployed in the United States, the numbers in Germany and France.

Under the heading ‘“Shipyards fight undercutting” the Daily Telegraph (2nd October 1975) had a report:

  The desperate hunt for new orders is leading European shipbuilders being undercut by Far East yards that are trying to tempt British and other shipping companies to give them contracts.

It went on:

  The slump in international trade means there is vast over-capacity in shipbuilding, with the bulk of it in Japan and the emerging nations such as South Korea. Japanese yards fear they will be down to only 25 per cent capacity in about two years’ time, and have been pressing for Government help to retain their 50 per cent share of world shipbuilding.

  Now European shipbuilders are starting to urge the Common Market to draw up a shipbuilding policy that will thwart the Japanese ideas.

It must be obvious that neither low productivity nor high productivity in capitalist society is the answer.

Frank Simpkins

Bliss is Ignorance (1976)

From the February 1976 issue of the Socialist Standard

The other day my wife was pounced on in the street by a robed figure. She put up a brave fight, but was left standing with a piece of literature called “Back to Godhead”, the magazine of the Hare Krishna movement. Actually it was worth the couple of bob for an insight into the way religious organizations such as Hare Krishna are hard at work maintaining all the evils they wish to eradicate, or say they do.

The Statement of Principles in the magazine tells us “we can be free of anxiety and come to a state of blissful consciousness in this lifetime”, and “we are all brothers”. Fine. So how is this to be done? The main article takes the form of a conversation between His Divine Grace A. C. Bhaktivedanti Swami Prabhupada, the founder of the Hare Krishna movement, and his personal secretary. It sets out to show that Marx was entirely wrong and that God must be “the centre of a truly classless society”.

The article warrants attention, despite much inaccuracy and plain silliness, because it is a good specimen of the thinking and teaching of several organizations which have attracted many idealistic but politically disillusioned young people in the past few years. It churns out many of the familiar cliches of misunderstanding and confusion common in a far wider section of society—cliches upon which capitalism relies greatly for support.

The main plank of the article is a series of pronouncements by His Divine Grace, presumably tipped- off by God: “Men naturally fall into different classes”; “There must be one class who are the enjoyers and another class who are the workers. This system is natural.” We discover how conveniently this fits in with his own circumstances: “In our organization, I am sitting in a chair and you are offering me garlands and the best food because you see a perfect man to follow. Everyone is able to say, here is a perfect man. Let him sit in a chair and let us all bow down and work like menials.”

Of course, Russia is dragged in as proof that Socialism cannot work. Indeed, the Master’s opinions on Russia, taken without regard to what they are supposed to prove, cannot be disputed: “The Russians have not created a classless society. There is no real difference between Russian Communism and other systems in operation. There is as much exploitation there as in other countries. They are creating slaves—the working class.” But this is all precisely because they do not have Socialism in Russia!

Prabhupada asserts that, though we must have leaders and “enjoyers”, we shall not work willingly and contentedly nor be free of problems unless we think of the work we do as being for God rather than for the people who really benefit from it (the enjoyers). The article comes to the nonsensical conclusion that the classless society is only possible when all classes, “high and low”, stop worrying about their inevitable natural exploitation, with all its inevitable natural injustices, and work for God. A plain enough summary of the teaching of all religions through the ages.

Socialists are not hoodwinked by statements that classes and exploitation are “natural”. The ploy of setting worker against worker by propagating the myth of many social classes traps many of those who begin to get fed up with the enjoyer-worker set-up. Not quite knowing which of the mythical classes to accuse of being the actual “enjoyers”, they are sidetracked into assuming that Socialism is all about a fairer distribution of money. Whereas Socialism means replacing the whole system of capitalism with a system in which everybody owns in common, and democratically controls, the means of producing and distributing wealth. “Wealth”, in this case, does not mean money: in Socialism, everyone will have free access to what he needs.

What will happen to “inevitable” exploitation then? Classes are the relationships of groups of people to the means of living. With common ownership, there is only one relationship: different classes cease to exist. So therefore does exploitation, which is only possible when one class owns the means of living and another doesn’t. It will open up for humanity a new world in which achievement and happiness have clear roads instead of a jungle of obstacles. It will mean an end to starvation, war, homelessness, and being trained to accept the shoddy and artless. What have our over-fed, over-accommodated spiritual superiors got against that?

Would there not be more “good” in that state of affairs than in all the disgusting hypocrisy and viciousness and waste of human potential that religious leaders now defend? Prabhupada says “material improvement isn’t everything”—but what else can capitalism offer, except God? Prabhupada has already said that even then, envy and exploitation are inevitable: just try to think about God and your troubles will not seem so bad. Surely it is better to find the way to get rid of those troubles. Saying this is impossible, he points to Russia which was never Socialist.

To anyone who may be in danger of succumbing to the Oxford-Street tinkling of Hare Krishna, or to the double-talk of any religious organization: why seek blissful unawareness of the cause of the condition of humanity, or try to rationalize it with the irrational? That is not consciousness, but oblivion.

Vic Stevens

Cold Comfort (1976)

From the February 1976 issue of the Socialist Standard

A doctor has sent the following two items to us. First, a cutting from the Daily Mirror of 22nd December 1975.

  A thousand babies are doomed to die this winter — because their parents can’t afford the cost of heating their homes. This “slaughter of the innocents” has already begun with the deaths of 212 babies aged less than a year. This is on top of the normal infant mortality rate. The babies are dying of infections caused by the cold — mainly bronchitis and pneumonia, says the charity Child Poverty Action Group, in a report out today. The charity’s director, Mr. Frank Field, said yesterday: “Infant deaths are swinging wildly up . . . Recent huge increases in fuel prices are to blame. Thousands of people can’t afford to heat their homes. Mass disconnections are taking place.”

Second, a letter to the doctor from Beecham Research Laboratories, headed “Hypothermia: A complimentary aid to diagnosis.”

   This potentially fatal condition needs to be identified promptly . . . Many authorities are now calling for the routine use of special wide-range thermometers that operate throughout the hyporthermis and pyrexic range (75°F-105°F). We are very pleased to be able to offer you one of these wide-range thermometers with our compliments, and we are sure it will prove to be of value to you in your practice.

   The elderly also number amongst the patients who are ‘at risk’ from infection. Many doctors have found Magnapen to be particularly well-suited to the treatment of the more worrying infections such as seen in patients with acute-on-chronic bronchitis, cellulitis and otitis media . . . Please sign and return the enclosed reply-paid card and we shall ensure that you receive a wide-range thermometer with additional data on both hypothermia and Magnapen.

The doctor’s note to us says: “It’s an ill wind, isn’t it?”