Even more Superfluous
A common defence of capitalism is that now-a-days millions of people are investors, directly or indirectly, in industry. Pension funds, insurance policies and unit trusts are cited as examples. The suggestion is that wealth is more evenly distributed. Harold Wincott, in the Financial Times of 7 March, in discussing a survey on how big business gets its hands on our savings, puts it this way:
And, finally, a word on the alleged enormous discrepancies of wealth in this country we are always being told about How does one reconcile the recurring calculations that x (a tiny) per cent of the population owns y (a vast) per cent of our wealth with Dr. Richebacher’s figures of the massive and continuing movement away from private hands into the hands of institutions which hold them in trust for the people?
If Wincott thinks that the calculations showing “enormous discrepancies of wealth” are wrong it’s up to him to show where. In fact these calculations do take into account pension schemes, insurance policies and unit trusts. Wincott asked a question and got his answer from a correspondent who made the simple point:
The short answer may be to ask why one should attempt it. Surely the types of assets owned can vary without affecting x and y.
In fact the whole argument bears all the marks of a public relations trick to gain popular support for Big Business and the Stock Exchange against any measures they feel might harm their interests.
A study by the London Stock Exchange, How Does Britain Save?, was published last May. It shows 33.5 million out of the 36 million adults in Britain save in one way or another. These savings are broken down:
The two-and-a-half million share owners (only 7 per cent of the adult population) are further broken down (some have more than one type):
There has been a shift from individual to institutional investors on the stock exchanges though not all these institutions hold shares “in trust for the people.’’ The insurance companies and banks are profit-making bodies whose own shares are traded on the stock exchange. In any event, the wealth of institutions can be traced back to individuals in the end and this is done to get estimates of the concentration of the ownership of wealth.
It is difficult to see how the growth of institutional investors is a justification of capitalism. In fact it makes the basic absurdity of capitalism—social production yet sectional ownership—even more obvious. When the joint-stock company appeared a hundred or so years ago, Marx wrote that in separating management from ownership it meant that “the capitalist disappears as superflous from the productive process." Engels was less polite. He spoke of “parasites”.
Now the last in the long list of social functions the capitalists imagined they had has gone: as individuals they can no longer claim to be the main source of finance for industry. Even this function, only necessary under capitalism, is now carried out by anonymous institutions. The individual capitalist — one-time alleged abstainer, organiser and risk-taker —is shown to be superfluous even in the realm of finance.
The savings of wage and salary workers, such as they are, are mainly funds to use when not employed. Having a few hundred or even a few thousand pounds worth of savings doesn’t turn anybody into a capitalist. Even the slaves in Ancient Rome had a fund called a peculium, collected from tips, which they could use to buy their freedom when old. A capitalist is someone who has enough wealth to live without having to sell his mental and physical energies.
Accepting that shareowners are now
functionless, Labour theorists argue that ordinary shares should be abolished and all investors receive just a fixed rate of return. Callaghan, the present Chancellor, told the 1952 Party Conference:
Instead of making the Ordinary shareholders residuary legatees of all profits that are made, let us make the workers the residuary legatees. Let the shareholders be content with a fixed dividend. Let us abolish Ordinary shares.
The government has brought in a new Companies Bill but, needless to say, even Callaghan’s suggestion is now too radical. Not that converting equities into fixed interest stocks will end the exploitation of man by man or abolish the right of property-owners to a property income.
The real solution should be obvious: convert the already socially-operated means of wealth-production into the property of the whole community. Then production can be organised for use without the restrictions of profit-making, finance and commerce.
Adam Buick
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