Letters: Socialists and Social Credit (1987)

Letters to the Editors from the October 1987 issue of the Socialist Standard

Socialists and Social Credit

As a member of the Green Party, I was greatly impressed with the August issue of the Socialist Standard, particularly with the fair and balanced interview with Jonathon Porritt. At least on this occasion you seemed to have dropped the customary "we have an answer to everything" boast which has turned so many otherwise sympathetic potential socialists away from the SPGB before now. I was sent the August issue by a union colleague who is a SPGB member, and if this change is not just a one-off, I may become a regular reader or even subscribe.

The article on Ireland was similarly refreshing in its balance, but Ivan's piece on Parliamentary Rituals was an absolute classic. It should be distributed outside the TUC and Labour Party conferences as a leaflet, and at the next General Election. Great stuff. And now my question. What is your attitude to social credit? You must be against it because everyone else seems to be. Even the Green Party will not mention it by name. I am assuming that you know what it is as the SPGB pre-dates it by sixteen years.

Bill Whitbread 

London N22.

Reply.

We are pleased that Bill Whitbread enjoyed the August Socialist Standard and we hope that he will not only take out a subscription but decide, as a person who is concerned for the future of the world and its population, that his place is with us socialists in the work to replace capitalism with socialism.

Social Credit was a proposal by a Major Douglas to pay everyone a "social dividend" to make up for the chronic lack of purchasing power which, he alleged, was built into the financial mechanism of capitalism. It was one of a number of "under-consumptionist' theories that flourished during the 1930s.

All such theories assert that not enough money is distributed to enable people to buy all that has been produced. If this were true, capitalism would be in a permanent state of depression, whereas in fact it goes through alternating periods of boom and slump; indeed it would be difficult to see how capitalism could ever have come into existence in the first place.

While the Green Party does not mention Douglas by name, their manifesto for the last election bears evidence of the influence of his mistaken ideas;

The Green Party would take steps to end the monopoly of private banks over money creation (. ..) Community banks would be encouraged, subject to licence and with the power to create money, a power which would be withdrawn from private banks. Community banks would invest local savings in local enterprises, and invest newly-created money in those enterprises.

Closed factories alongside mass unemployment suggest that if only people had more money to spend boom time would return. But at no stage of the business cycle is there a shortage of purchasing power; there is however a difference between having the power to buy something and actually using that power. In a slump some capitalists choose not to invest all of their money in productive activity, as they would in a boom. Rather than being hoarded it is lent out at interest on the money market. This is the situation today and explains the paradox of the growth of financial institutions — evident from a stroll down any High Street — in the middle of a depression.

Douglas also believed that the banks had the power to create purchasing power, in the form of credit, by the stroke of a pen. If they had this power, why would firms ever go bankrupt, or make losses, or resist wage claims from their workers? Banks are in fact one of a set of financial institutions which make a profit out of the difference between the interest they charge borrowers and the interest they pay their depositors. The amount they can lend is thus limited by the amount they borrow from depositors as also applies (and nobody contests this) to building societies. In fact, due to the need to hold some money as ready cash, banks can only lend less than their deposits.

The solution to problems like unemployment does not lie in the reform of capitalism's monetary system but in the abolition of capitalism with its class ownership and production for profit, which involves the complete disappearance of money, banks, credit and all the rest of the financial system.

Editors.

"Writing as an ex-member . . . "

Dear Sirs.

Writing as an ex-member of your party who has recently taken out a subscription to the Standard I think I will derive very little pleasure at what I have to say, nevertheless, having lived for 62 years I am now coming to terms with "the facts of life" and endeavouring to learn to live with them.

Like "the old days" you have some very forthright and amusing writers. Steve Coleman seeming to be a leading light; and his June 1987 article about "Post Election Blues" was in the usual format, excepting for the last sentence. Predicting that June 12th would be "a bloody miserable day" (and it was!) Comrade Coleman concludes by writing — "and for none will it be more miserable than for those who know how easy it would be to change the whole rotten set-up and establish a society fit to live in".

Apart from the serious error of grammar, whether one is of the chosen few (i.e. members of the SPGB) or the abysmally ignorant majority it is a gross exaggeration to state that any change from the capitalist system to a socialist society would be easy!

May I quote the General Election figures for Islington South and Finsbury? Tory 8,482, Labour 16,511, SDP 15,706, Greens 382, Humanists 56, SPGB 81. It is a reflection of the idiocy of human beings that only 56 people voted for a party which has more sense in one of its little leaflets than in the whole Conservative and Labour manifestos, but the fact that out of a total of 41.218 Islington and Finsbury electors only 81 voted for the SPGB merely proves that what the renowned Robert Tressell wrote over 70 years ago. is as true today as it was then. I have formed the opinion that the working class are more dumb than Dumbo ever was. There is far more insanity outside than inside "mental institutions" and on the whole human beings are much more obsessed with erotica and religious myths than their well-being and happiness. "Look at them". Robert Tressell's character said, with a contemptuous laugh. "Look at them! The people you are trying to make idealists! Look at them! Some of them howling and roaring like wild beasts, or laughing like idiots, others standing with dull and stupid faces devoid of any trace of intelligence or expression, listening to the speakers whose words convey no meaning to their stultified minds, and others with their eyes gleaming with savage hatred of their fellow men, watching eagerly for an opportunity to provoke a quarrel that they may gratify their brutal natures. Can't you see that these people, whom you are trying to make understand your plan for the regeneration of the world, your doctrine of universal brotherhood and love are for the most part — intellectually — on a level with Hottentots? The only things they feel any interest in are beer, football, betting, and. of course — one other subject. Their highest ambition is to be allowed to Work. And they desire nothing better for their children. They have never had an independent thought in their lives . . .!" And so the brilliant monologue goes on. and. like a surgeon's scalpel cutting into a cancerous growth it reveals the monumental task that the changing of society involves.

I work in a small post office-cum-general stores and apart from the usual vast majority of customers who can see nothing beyond their daily dose of Murdoch's law (i.e. the Sun). 20J.P. (i.e.. coffin, or is it coughing, nails) and a bar of Cadbury's for the weekend. I was appalled at the time of the General Election by the amount of people "on the Social" who voted Tory!

When I informed one elderly gentleman that I was a Socialist and would not be voting in my constituency, he told me to "get back to Russia" On June 12th he came up to my counter to draw his pittance of a pension triumphantly wearing a cheap blue rosette and sneered. "Well. I suppose you're laughing the other side of your face now that we've beaten you!”

I conclude with Robert Tressell's immortal words which sum up my feelings towards The Socialist Party of Great Britain. Although you are light years behind the razzamatazz of the Labour and the Tory parties and you are probably right in your analysis of society (based, of course, upon Karl Marx's) "your party persists in regarding people as rational beings, and that is where you make your mistake. Labour are just learning, the Tories knew long ago the sort of people they have to deal with; they know that although their bodies are the bodies of grown men. their minds are the minds of little children. That is why it has been possible to deceive and bluff and rob them for so long." (The Ragged Trousered Philanthropists, 1905)

And please do not accuse me of arrogance. Anger, contempt, scorn — I plead guilty to these, but I make no claims to be proud of the fact that I belong to a species that will burn, blind and torture innocent animals for the sake of making a profit and kill and maim fellow humans in times of war.

Reg Otter 

Shepperton, Middlesex.

Reply

Before turning to the very real and understandable reasons for our correspondent's lack of hope, let us spell out what defeatism means. It means that you come to terms with a social system which you know to be exploiting you, restricting you, impoverishing your lifestyle and, with increasing ferocity, threatening you with destruction. Not only is capitalism doing that to you, but to your friends and family — people who you care for and want to help. And to millions you have never met. capitalism is doing even worse things. As a defeatist you accept that this is the way life must be. You give up on the struggle to transform society.

Reg Otter is clearly not a complete defeatist. He still tells fellow workers that he is a socialist. He no doubt argues with workers and may well be underestimating his ability to change the way some of them think. Our fellow workers do not always tell us directly when they have found socialist ideas convincing but we would not be surprised if there are a few workers scattered about who would say, "You've got to hand it to old Reg Otter, he talks a lot of sense about the problems of society".

What our correspondent most certainly does underestimate is the intelligence of the working class. After all, these creatures who are "more dumb than Dumbo ever was" make a pretty good job of running the trains, producing all the wealth in the factories, operating on bodies in hospitals, teaching children to read, delivering letters — and the thousands of other important and intelligent tasks which we, the workers, perform. Yes. plenty of workers are laughing like idiots and seem to have dull and stupid faces and appear to have eyes gleaming with savage hatred for their fellow men. Socialists do not romanticise the working class: we are of that class and know just how degraded the system can make wage slaves. But — and Reg Otter will know this very well — the human animal is highly adaptable. In a jungle s/he will behave like a beast. Given an incentive to leave the jungle society of capitalism workers could co-operate. Just as they are doing every day when it comes to producing and distributing wealth, just as workers are always doing when it comes to voluntary efforts to help make other people's lives better. Workers are not naturally programmed for capitalism; nor are we naturally programmed to forever reject the cooperative option of socialism.

Our correspondent is right if he is saying that now, in 1987, the political minds of the workers of the world are in a frightful mess. He is right if he says that this is dispiriting. He was right to feel miserable on 12 June. He is entitled to be angry, although it will do him little good. But should he dismiss the efforts of The Socialist Party as a waste of time? We perform an enormously important task in putting to workers the only alternative to the dangerous chaos of capitalism. We succeeded in persuading Reg Otter to join us and even though he later decided to leave, because he is not arrogant he will accept that there was nothing special about him which made him able to work for socialism while other workers could not understand. Every time we win one new worker to our cause it is proof that we could win a thousand more. And. in practical terms, each new member provides us with access to several workers who know him or her.

The 81 votes for socialism in Islington South and Finsbury was disappointing. We would like to have recorded all 41.218. We ran a great campaign in the area, as many workers living in Islington (even if they do not support The Socialist Party) will testify. Unlike any other party in the election, we consistently asked voters not to vote for us unless they agreed in full with our ideas. That 81 did vote for us — in a constituency which was a key Labour marginal, and in which the Green Party were there to take away the mere protest votes — is something to get working on. If we could persuade those 81 socialist voters to join our Islington Branch we would be very happy. Similarly in Swansea, where we recently recorded 50 votes in just one ward.

Of course, we could regard 81 and 50 votes as good reasons to give up and learn to live with capitalism. Well firstly, capitalism may not allow us to live with it for that much longer, because it is set to put an end to the live-in arrangement, and secondly society will one day change from production for profit to production for need and we are not going to waste a moment's time or withhold any energy to hasten that revolution. We are not defeatists and neither, perhaps, is Reg Otter: maybe he has made the comments which he has so that we can give him the answer he is waiting for. Get into the movement for socialism and do your bit to make history

Editors.