Briefing: Luddism rides again (1981)

The Briefing Column from the April 1981 issue of the Socialist Standard 

“It is not just a question of encouraging investment but also of encouraging disinvestment”, declared Viscount Etienne Davignon, European Commissioner in charge of steel, at a press conference in Brussels on 25 February. And a document he sent to the Common Market Council of Ministers for their 3 March discussion on the steel crisis speaks of “disinvestment incentives”.

Let’s be clear what lies behind this bureaucratic terminology: steel enterprises are to be paid to dismantle steel plants. After the paying of farmers not to grow food, or to kill their cattle, or to grub up their orchards, industrial capitalists are now to be paid to smash up their machines and factories!

This time it is not “excess” food that is to be destroyed, but “excess” capacity to produce a key industrial product. Actually, this sort of thing is not new to capitalism; it happens from time to time. The same thing happened in the Lancashire textile industry in the 1960s (and may happen again), and is an apt illustration of how capitalism is geared to profit-making rather than to serving human needs.

Davignon’s document estimates that in the Common Market

  capacity utilisation fell from about 80% in 1974 to about 55% in 1980. On this basis there may now be some 40 million tons of excess capacity for crude steel production. On present plans in 1983 even under the most favourable assumptions regarding demand there would still be more than 25 million tons of surplus steel capacity, for which there is no market at present cost levels.

There you have it! “No market at present cost levels”; in other words, no profitable market. This is true but, in relation to human needs, there is no “excess capacity” at all. Just think of all the railways, tractors and other machines which need to be produced to help eliminate poverty, ignorance and hunger throughout the world. But of course this is not taken into account because production is geared to producing wealth to be sold on a market with a view to profit.

And this is how it has to be under capitalism. On this system’s value, the Davignon Plan to eliminate steel-producing capacity is ruthlessly logical. Why keep steel works open when the steel that would be produced cannot be sold at a profit? So close them down and throw the workers on the streets, paying them a handout to keep them going for perhaps a few years:

  The prospect is for a very difficult employment situation in the industry. The number of jobs in the steel industry, which was increasing up to 1974, has been falling from 792 thousand in 1975 to 605 thousand in December 1980. Although it is difficult to predict future employment, because it depends on the actual decline in capacity and on the increase in productivity, it is clear that the industry will continue to face heavy job losses.

The closures and redundancies will go on until the “excess” capacity is eliminated. There is nothing, within capitalism, that can be done to prevent them. To pretend otherwise would be to raise false hopes. “No profit, no production” is the economic law of capitalism which those who take on the responsibility for running capitalist enterprises (including nationalised, state capitalist ones like the BSC) are obliged to apply whether they like it or not.

Letters: Road to socialism? (1981)

Letters to the Editors from the April 1981 issue of the Socialist Standard

Road to socialism?

Dear Editors

On page 35 of the February Socialist Standard, ALB states that the majority working class must be organised for the subsequent running of socialist society. Socialist society in practice, however, would at least need temporary delegate bodies. The- democratic machinery needed for electing the temporary delegate bodies of a whole society could not itself be set up arbitrarily by an unelected body; it would have to grow with some functional purposes over a period of time; and ALB does not show how this evolution of democratic machinery preceding socialist society might possibly come about without any existing function 

H. Smith

Bristol

Reply

The working class will be able to make use of some of the existing institutions of capitalism in order to indicate the democratic decision to set up socialism. In this country it will make use of the elaborate parliamentary machine, together with the various forces of the state which it controls. The SPGB urges workers to elect socialist delegates in local and national elections, not simply as a propaganda exercise, but in order to gain democratic control over the machinery of the state. The growth of the desire for socialism can practically and effectively be demonstrated via the ballot box. In most capitalist countries this “democratic machinery” does exist, at least in constitutional theory. What is lacking is a working class which has decided to use constitutional democracy for the purpose of creating socialism.

The best model of how a democratic organisation of men and women can work is the SPGB. We do delegate responsibility to people within the Party, but only on condition that the delegates do what the members want; should they prove to be unsatisfactory they are removed. Socialist society will be the same. Electing delegates does not, of course, ensure that those elected will be the best people for the job in question, but it will mean that the majority can decide how things are done, and, once they have decided, ensure that their will is not ignored.

Membership of the Socialist Party (in Britain or any other country) is an important training in democracy. In the last century, Marx pointed out membership of a trade union helped to prepare workers for democratic action. In short, the job of working for socialism is itself the best means of preparing workers for a democratic future. If anyone wants proof of that, they should attend the SPGB Annual Conference at Conway Hall, London, between April 17 and 19. There they will see for themselves that democracy does work and that when everyone wants the world to be run democratically they have only to put their political strength behind it.

Editors.

Real answers, please

Dear Editors,

Arising out of the letter from Jean Ure (Jan. 1981) and your self-righteous reply to it. The SPGB is strong on the whats and whys of socialism, but weak on the hows. What is socialism? It is a wageless, classless, stateless social system. Why socialism? Because it will give people a better, more secure life. How will socialism come about? Firstly, when the majority want it they will vote for it democratically. Secondly, it must be introduced simultaneously throughout the world. This leaves some unanswered hows:

1. How to persuade the House of Lords to accept the decision of the elected chamber. How to persuade the military to accept the decision. 
2. How to persuade the civil service to accept the decision.
3. How can it be voted for throughout the world when most of the world is illiterate?
4. How do you persuade people to choose socialism when all they car. think about is their empty bellies?
5. How do we prevent ourselves from being blown to kingdom come while we are waiting for socialism?
6. When we have socialism, how do we persuade people to empty dustbins, dig roads, mine coal, dive in the North Sea, without the wage incentive?
7. Without the machinery of state, how is socialism to be administered?

Unless it comes up with some real answers to real problems, the SPGB must be regarded as a religious sect rather than a political party.

Arthur Spender 

Weston-Super-Mare

Reply

1. Socialism will only be established when a majority of workers understand and want it. The workers constitute the vast majority of society. How many of the military are non-workers? How many civil servants are anything other than wage or salary slaves? (Not many, if the recent CPSA strike is anything to go by). How many journalists are able to operate without the aid of their fellow workers who print and sell their pro-capitalist propaganda? Once a majority is organised for socialism there is no reason to think that these groups will not be part of that majority. As for the unelected House of Lords, which is largely made up of members of the capitalist class, once the working class has decided to opt for socialism do you really think that anyone will care what a few unrepresentative old aristocrats have to say about it?

2. The gaining of the franchise by the working class tends to be a consequence of the development of industrial capitalism. Where democratic facilities do not exist, it is the message of the Socialist Party of Great Britain that workers must combine their struggles for such rights with a political struggle for socialism.

3. At the moment it is not only the illiterate who support capitalism; the literate workers are often equally taken in by their masters' propaganda. It is experience of capitalism which makes people think about socialism and the more this crazy system goes on the more likely it will be that workers will realise their real interest. Capitalism is rapidly eradicating illiteracy because the bosses need a literate workforce. In so educating workers the capitalist class is producing the gravediggers for their system.

4. Socialism is the immediate solution to “empty bellies" because production for use is the only alternative to the market anarchy which lets people starve if profit cannot be obtained. Can Mr. Spender think of anything better for starving people to think about than the urgent abolition of the system which deprives them of food?

5. If Mr. Spender cares to tell us how to avoid war other than by removing its cause we may be able to answer him. If he wants us to march up and down asking governments to ban the bomb we advise him to consider the more serious proposition of not electing the governments in the first place. If you wait for socialism to fall out of the sky. do not expect the SPGB to tell you how to spend your time.

6. In a socialist society work will be carried out for the common use of humanity. If people in socialism want a job done they will have to organise to do it. If machines can be employed to do jobs that humans do not want to do, then they will. The incentive in socialism will be that needs will be the primary concern of social organisation,

7. See reply to H. Smith of Bristol.

Mr. Spender has had his “real answers to real problems”. If he is unsatisfied he can come back with more. If, however, he is unwilling to accept the SPGB’s case, preferring to stick rigidly to the idea that the establishment of socialism is impossible, then who is being religious, him or us?.

Editors.

Wrong economics

Dear Editors

Having read a few issues of the Socialist Standard I find that, although mostly correct, certain of your statements on economics seem rather foolish.

Firstly, the statement that as wages are a price (of labour) a rise does not cause inflation. Wages may be a price but they are also a cost (i.e. a “variable” cost to the capitalist), and a rise in this cost will mean that to maintain profit the price of the commodity to the consumer must be pushed up. Secondly, the statement that a lower minimum wage would not increase employment is not thoroughly explained. The reason it would not is because the lower wage would reduce the worker’s spending power and thus cause unemployment in other industries and the recession-depression cycle would recommence. I think that these attacks on orthodox economics, although tempting to us socialists, are self defeating. May I strongly recommend all the editors to read Paul Baran’s Political Economy of Growth, which is an excellent Marxist book on economics and could provide the basis for better attacks on capitalist economics.

Another thing which concerns me is the repeated attacks on the once-socialist Labour Party. You would be better served by trying to persuade the socialist element (there must be one!) to join in your campaign instead of alienating them. As with the Labour Party, so with the SWP, IMG and Solidarity: a united socialist movement is far better than a divided one squabbling about tactics. These criticisms, I must stress, are concerned with your tactics rather than your aim and the majority of the Socialist Standard is excellent and lively leading. But the way in which you attack fellow socialists as much as capitalists is over-harsh—they are well-meaning and sense the correct way ahead if not the right path.

Finally, keep up the good work, for there are far too few of us socialists about. This I have discovered in the debates of the Grammar school sixth form which I attend. It is literally me versus the rest.

David Stubbs  

Sharples, Bolton

Reply

Marx considered the view that wage increases cause a general price rise to be an “antiquated and exploded fallacy”, and dealt with the question in his address to the General Council of the International Working Men’s Association in 1865 (available in pamphlet form as Wages, Price and Profit). Very briefly, profits are not settled by tradition, custom or the will of the capitalist; there is no ideal or “normal” price for a commodity. The capitalist sells his product at the maximum price that the market will bear and cannot therefore raise it at will. To accept the contrary would conflict with the labour theory of value — conceived by Marx and accepted by the Socialist Party of Great Britain — and leave us with the absurd notion that prices (of labour power) determine or regulate prices (of other commodities). Inflation, incidentally, is not synonymous with rising prices: we use the word to refer specifically to the issue of paper currency by governments in excess of that needed for the circulation of commodities.

The trade cycle of booms and depressions is not a consequence of workers being unable to afford to buy what they produce, of there being “too little” money. This is merely the superficial appearance. The present recession is confirmation that capitalism is operating as it always has: anarchy in production leading to the withdrawal of investment from industries in which the prospect of profit has diminished. Production for the market with a view to profit cannot by anything but a system of chaos.

Paul Baran is not a writer we would recommend, since he confuses socialism with state capitalism—in Monopoly Capital, written with Paul Sweezy, he describes the Soviet Union as a “backward and undeveloped socialism” (p. 15, Penguin edn.)—and was not noted for his opposition to Stalin’s economic policies in the 1920s and 1930s.

Our opposition to the Labour Party and left-wing groups generally is not based upon a difference of opinion over “tactics”. The Labour Party was formed as a trade union pressure group in parliament and had no socialist pretensions. In 1918 it adopted a new constitution which included the now notorious Clause Four, a commitment to nationalisation or state capitalism. Nationalisation is not of benefit to the working class or a step towards socialism; and by pretending that it is the left wing make the work of socialists that much harder. We advocate the abolition of the wage labour and capital relationship and its replacement with a world society of voluntary cooperation and free access to wealth. Labourites and left wingers do not share this objective.

Finally, don’t be put off by strong opposition to socialist ideas: we have faced it for more than seventy-five years but are just as determined as our founders.

Editors.