Letters: The Profits of Building Societies (1957)

Letter to the Editors from the April 1957 issue of the Socialist Standard

The Profits of Building Societies

A reader (M. H., Monmouthshire), asks about the profits of building societies:—

"The Marxian Socialist position is that Rent, Profit and Interest is derived from Surplus Value. In toe case of Building Societies, however, the Interest paid to their shareholders is obtained directly from the extra monies, over and above the cash purchase price of the property, paid in by the buyer from his wages or salary. How then can it be said that Building Society Profits and Interests are derived from Surplus Value."

Reply:

The answer is that the three items, interest on borrowed money, rent and profits, all come out of surplus value and all surplus value arises out of the exploitation of the workers, the wages they receive being less than the value their labour adds during the production of commodities.

If the individual Capitalist worked entirely on his own capital, owned his own land and did his own wholesaling and retailing he would not have to share the surplus value with the landlord, the banker, the merchant. As he cannot in any event realise the surplus value in the commodities he owns until they have been sold it often suits him to make use of these other agencies, in which case they receive a return on their capital more or less proportionate to the size of their capital; and what they receive is in fact part of the surplus value created in production.

The building society is an intermediary between the builders of houses who want to sell them, not let them, and house buyers who cannot afford to put down the purchase price. The building society makes it possible for the builder to sell his property and get paid at once, and for this the builder gives up to the building society some of the surplus value created in toe building industry. The owners of houses that are not new can also sell with the aid of a building society.

Editorial Committee

Slow Progress of the Socialist Movement

A reader (M. H., Monmouthshire), asks the following:-

If the S.P.G.B. concept of Socialism and Socialist organisation is the correct one and is thus the view which will eventually have to be embraced by workers in all countries, if they are to achieve Socialism, how is it that no other country in the world can show an organisation based on the same Socialist principles as the S.P.G.B.? The questioner is aware of the existence of the "Companion Parties" but notes that these flourish in English speaking areas only, and at best these bodies seem to be no more than tiny discussion groups adhering to the S.P.G.B.

Reply:

It is not easy to understand what exactly our correspondent is driving at. Socialism can only be achieved by the organised political action of a Socialist working class and the factors making for the growth of the Socialist movement operate in all countries. But nobody has ever suggested that all conditions (economic, political, climatic and geographical) are identical in all countries and therefore the growth of Socialist parties must be at identically the same rate everywhere. These present variations are of little importance, and as the Socialist movement grows stronger they will probably decrease since the numerically stronger sections of the international Socialist movement could help the others to overcome some of the difficulties.

Our companion parties are not “tiny discussion groups," but political organisations carrying on propaganda for Socialism and based upon the same principles as the S.P.G.B.

The Socialist Labor Party of America

A correspondent (M. H., Monmouthshire), who is a seaman just back from U.S.A. notes the S.P.G.B. view in an article in the November Socialist Standard that the American workers had no interests at stake in the recent Presidential and other elections and asks:—

Why does this article ignore the existence of a Presidential Candidate put forward by the Socialist Labor Party of America? Since this candidate, together with the other candidates put forward by "the S.L.P. stood for a programme free from social reforms and one which called for the abolition of the wages system and its replacement by a society based on common ownership of the means of living, such a society to be inaugurated by the democratic method and by a class-conscious proletariat, what advice would the S.P.G.B. have given to American workers who felt that their votes should have gone to the S.L.P.?

Reply: 

The article did not refer to any but the Democratic and Republican candidates, for the reason that it was based on reports in the English Press which did not give information about the candidates of small organisations.

Our correspondent gives his version of what the S.L.P. candidates stood for in such terms that the reader of his question may conclude that here were candidates fighting an election on S.P.G.B. principles. With due respect for our correspondent's choice of words in which to describe the S.L.P. platform we, knowing the past activities of the S.L.P., do not suppose for one moment that it really was identical with the S.P.G.B. position. We await from our correspondent (or anyone else who can help) copies of S.L.P. election literature from which this can be verified.

In the meantime may we point out that the S.P.G.B. does not “give advice" to workers how to vote. Those who are Socialists will know how to vote and those who are not Socialist could only vote for a Socialist by mistake and we naturally would do our best to prevent that mistake being made.

Editorial Committee.