From the June 1927 issue of the Socialist Standard
Readers and sympathisers in New York are invited to communicate with the Socialist Educational Society at 557, Amboy Street, Brooklyn, New York.
Saturday, May 7, 2022
Does capitalism reward inventive genius? (1927)
The recent celebrations held in Lancashire to commemorate the memory of Samuel Crompton, a Bolton weaver and inventor, who died 100 years ago, call to mind a question often asked of the Socialist. How about the inventor under Socialism?
Ironical as it may seem, it is such inquiry that throws a lurid light upon the treatment that Capitalism has meted out to genius and ability. When this is understood, the position of all under Socialism will present no difficulty. We do not claim that exceptional ability can exist apart from the social conditions which give it birth. We propose to show that it is those who can exploit such ability to-day who reap the reward which the labour of others makes possible. Without the discoveries in the remote past of such now apparently simple things as the wheel, the lever, the ratchet, all the machinery of to-day would be unthinkable. Without the skill and dexterity of the workers, past and present, all the inventive genius ever born would have remained sterile. The cotton industry of to-day is one to which a number of fundamental inventions have been applied during the last century. Their application, with its operatives, has increased its productivity far beyond the effective demands of the world’s markets, but under the present system these operatives live in poverty and suffer years of short-time working through their very productivity. What insanity ! And what of those who did so much to make such output possible. One of these was John Kay, inventor of the “Fly Shuttle,” one of the most important inventions made toward the improvement of the loom. He was a man of whom it was said he invented “everything.” But his ideas were shamelessly stolen, and he died in poverty and obscurity somewhere in France. Another, James Hargreaves, saw a spinning wheel overturned which caused him to reflect upon certain improvements. He invented a machine as a result of which 20 to 30 spindles could be attended by one person. He died in Nottingham Workhouse. Richard Arkwright invented the water-frame. He appears to be one of the few who gained financial reward, yet, strange he is one about whom there are doubts as to his originality. He was assisted by Kay, who declared “the water-frame was no device of Arkwright’s,” but of another obscure individual. Whether this was true or not he, like others, had to contest his patent rights, and had at one time as many as nine law-suits going. Samuel Crompton invented the “mule,” a combination of Hargreaves spinning jenny and Arkwright’s water-frame, which, with Watts’ steam-engine revolutionised the cotton industry. He was a man of gentle and sensitive nature, made a violin, taught himself to play, and earned eighteen-pence a night in a Bolton theatre while working in his spare time on his invention. His machine was such that any mechanic who saw its finished condition could carry away its leading features ; crowds gathered round his house, and he was often afraid to go out lest it was stolen. A few months, he says,
“Reduced me to the cruel necessity of destroying my machine altogether, or giving it up to the public. To destroy it I could not think of, to give up that for which I had laboured so long was cruel. I had no patent, nor the means of purchasing one. In preference to destroying it I gave it to the public.” (National Dictionary of Biographies, Vol. XIII.)
For using his invention, 80 firms and independent manufacturers gave him a document possessing no legal validity, in which they agreed to pay him certain sums. As a result, he received the handsome reward of £67. Sir Robert Peel offered him a partnership, but he declined. Like so many of his type, he possessed little business acumen. Making fortunes possible for others, he reaped little or no pecuniary reward himself, and died in poverty, embittered with his experiences. A like fate has awaited in the past composers, artists, scientists, poets, writers, public performers, etc. It is the Capitalist reward and fitting tribute to a rotten system. Mankind will ever crave to approbation of his fellow-man. When, with the coming of Socialism, security and a full life is made possible for all, those who show exceptional ability will not need to give of their talent to serve the profit of the idle few, but will add to the comfort of the whole race —whose best interests will be identical with their own.
W. E. MacHaffie
The budget, taxes and prices. (1927)
In the April “Socialist Standard,” we showed briefly that the wages the Workers receive represent only the sum total of the prices of the things required to reproduce them. They cannot, because of that reason, contribute toward the growing expenditure of Capitalist bureaucracy. Though the Press always tells the worker that “he pays,” that is to conceal the truth that the great bulk of their product forms the subsequent wealth of their masters. The introduction of the Budget provided an opportunity to unearth this mouldy illusion. This is how it reads :—
“The broad truth remains that taxes on commodities tend as by a law of nature to be passed on to the consumers.” (Daily Chronicle, 18/4/27.)
Even upon the basis of their own reasoning, this would not be much consolation to our masters, who, by a Capitalist law of surplus value, consume nine-tenths of labour’s product. The statement is really made to hide this ugly fact by the veiled inference that the Workers loom large as consumers. The Budget, in money terms, has risen from 194 million in 1914 to 825 million in the present year, and if this expenditure can be shifted on to other shoulders by the wealth-owners, why the howls that went up from the “business” men of the day? In the “Westminster Gazette,” 5/4/27, bold headlines informed us that “Industry warns the Chancellor,” and of “Trade Leaders’ anger.” Sir Hugh Bell, director (on paper) of a dozen large concerns, bemoaned that :
“Really the country is bankrupt. It will not mend until public expenditure is lowered, taxes reduced and the costs of industry diminished ” —Ibid.
What becomes now of passing on taxes “as by a law of nature” ? But enough, this tripe is only for the workers. In “Business Organisation” (April), is an article by H. A. Silverman, B.A., addressed to “those who maintain high income-tax is prejudicial to the interests of industry and trade.” Those interested in profits get, of course, the facts, though it seems absurd to doubt that they don’t already know them. For those who are only the human raw material in producing those profits any old bunkum will do. Compare this with the statement quoted from the “Chronicle ” :
“… to increase the price is to risk a serious contraction of the market. . . Where competition prevails the seller will hesitate to add the equivalent of the tax to his prices lest his rivals should continue to charge the old price and so capture the market.”—Ibid.
Though prices of commodities are determined at the time of sale by supply and demand, they are ultimately governed by their value, and it is this value that the up-to-date Capitalist is always trying to reduce in order to lower his prices and thus increase his market. The falsity of the raising prices, argument is often a deadly weapon used against the workers when endeavouring to secure wage increases in order to maintain their standard of living. It is argued that such increases will be passed on to them as consumers. A little reflection will show that argument false, for why should the sellers of commodities wait upon such increases? Were they previously taking a lower price than they could have charged? The advice given to the traders supports our contention, they tell them,
“and this is the crux of the matter, that they are, as a rule, already charging the highest prices consistent with maximum profits . . . The case of the “benevolent Monopolist who has been deliberately and consciously charging less than his strict financial interests would permit, but under the stress of income tax is compelled to raise his prices, is so rare that we may disregard the effects on the general position.”— Ibid.
All the ups and downs of prices matter little to the workers in the long run. To understand the cause of poverty they must realise that it is as producers and not consumers that they are kept poor. It is to production that they must look if they would understand how the great thieving trick is done.
W. E. MacHaffie
Editorial: The Socialist View of the Trade Union Bill. (1927)
The Government, to please the “Die-hards” in the Conservative Party and the more unthinking of its supporters generally, has chosen this moment to produce a Bill containing very drastic amendments of the law as it affects the trade unions. The chief provision may be summarised as follows :—
Certain sympathetic strikes and strikes for non-trade union purposes are to be declared illegal. Picketing is to be restricted. Civil Servants and unions are to be cut off from contact with outside trade unions and political parties, and local authorities are to be forbidden to give preference to trade unionists in their employ. Lastly, the member of a union who wishes to contribute to the political fund must individually express his desire to do so, instead of, as now, the onus being on the non-contributor to express his unwillingness.
Whatever the future may bring forth, the immediate effect has been to stir the officials of the trade unions to a frenzy of denunciation. It is said by many, and believed, that this is a deliberate and calculated endeavour to smash trade unionism ; and to cripple the finances of the Labour Party. Believing this, the labour leaders who feel their jobs in danger will doubtless fight with more genuine enthusiasm than they displayed last year, for instance, in the attempted General Strike.
If, however, we consider the matter calmly, it is obvious that the Government’s action is not capable of so simple an explanation. Hotheads there may be in the Conservative ranks, but the big industrial and financial capitalists whose interests the Government represents, would never want trade unionism smashed, however much they may desire the removal of certain—for them —unpleasant features. The trade unions have become an integral part of the industrial and administrative machinery of Capitalism, and the fear that the proposed legislation may be pushed too far by the Tory “Diehards” has quickly induced many Conservative newspapers as well as the bulk of the Liberal press to issue a call for a less provocative attitude on the part of the Government. Both the “Daily News” (April 19th) and the Conservative “Observer” (April 17th) have particularly stressed the opposition which is being displayed to the Bill by influential employers. They can see something which should be obvious. The employing class and their Government are quite strong enough to deal with any strike, sectional or general, without altering the law. Legal changes will not increase the power of the ruling class, and will needlessly exasperate the workers. The number of strikes will not be diminished, and they may well be accompanied by an increased bitterness which may endanger Capitalist property. Votes will be lost to Conservative candidates, and the only important gains will be to the lawyers, who will net big fees by assisting the Courts to understand what the Bill means. The Bill will certainly hamper the trade unions in various ways, and will please some very vociferous Conservative supportersv but as the employers generally will probably, on balance, reap no advantage, it seems fairly certain that the Government has no intention of pushing it through as it stands, or alternatively, they do not intend to enforce it too rigidly when it has been passed. It is possible, as has been suggested, that the Bill’s purpose is to distract attention from the Government’s activities in China.
Of one thing we can be certain. If the workers ever feel moved again to come out on strike as in May last year, a mere declaration of the illegality of their action will not prevent them.
On the question of the Political Levy, our position has often been stated. As we oppose the Labour Party, and do not believe that it will or can solve the major problems of the working-class, we do not want to contribute to Political Funds to finance the Labour Party through the trade unions, and we are not perturbed at this proposed alteration in the law. Members of the Socialist Party habitually decline to contribute and will continue to do so. Furthermore, we are convinced that it would be better for the trade unions if they confined themselves to definitely trade union objects. They must necessarily accept to membership Liberals, Conservatives, Labour Party supporters and Socialists, as well as people with no political allegiance. They would increase their fighting strength if they dropped their support of one Party, and thus removed a cause of apathy and disloyalty among all those who have other or no political views. The trade unions would then become more effective in struggling against the effects of Capitalism. When the workers become Socialist, they will organise politically to establish Socialism. Neither for that purpose nor in the present task of resisting the encroachments of the employers is anything gained by supporting the Labour Party.
The fact that this Bill should have provoked a more bitter political fight than we have seen for years, is itself an adequate condemnation of the Labour Party’s policy. Had that party ever made Socialism the issue, it would have found itself engaged in an unceasing death-struggle with the parties defending Capitalism. Because its aim is not Socialism, but merely the reform of Capitalism, its fights have all been sham fights; it has been an honoured member of coalition governments (as during the War), and was placed in office in 1924 by Liberal votes to do specific pieces of Capitalist work. What a commentary on a political party that the first serious battle of its existence occurs because of an attack on the funds which pay the salaries and election expenses of its politicians !
Letter: Is the franchise a fraud? (1927)
Below we print a letter from a correspondent. The points contained in it are dealt with in our reply which follows. For convenience we have numbered the different sections of the letter.
To the Editorial Committee :
(1) While as yet my investigations are incomplete, I have established the fact that a person can exercise two Parliamentary votes provided that he or she possesses property in two divisions or holds a University degree or rank in the army or navy.
(2) Evidence points in the direction that the privilege goes beyond two votes, taking into consideration the multiplicity of the headings which qualify the capitalist class to exercise the vote and the many disqualifications that attend that of the working class, it is exceedingly doubtful if a candidate could be returned in any division to whom the Capitalist Class seriously objected. The object of this letter is to make the above public knowledge, as I have found that the common impression is that we have a franchise based upon one man one vote. The issue at stake vitally affects working class representation, and I am raising the question for discussion.
(3) I forgot to add that a person may vote by proxy, another revelation. These things make our Electoral system smell. Just imagine to yourself a large concern with multiple shops, etc., and the chance to put in votes for each one by proxy, provided that they are in separate divisions. A handful of Directors with their dependents, could exercise thousands of votes under such circumstances.
4) I know one local instance of a family in Leicester who qualify in the three Leicester divisions for twelve votes. Now I see the reason for the Redistribution Act of 1918.
F. L. Rimington
—————–
Our correspondent has raised again a matter which has been dealt with in these columns before. It is important, not because of any so-called “democratic principle” it involves, but because of its bearing on the question of the use of the vote in order to obtain working class political control. There are anomalies in the existing franchise, but we are not concerned with them as such. We are not busybodies nobly searching for “injustices” to put right. We want Socialism and are interested in the franchise as a means to that end. If the anomalies prevent or materially hinder the workers in gaining power, then it is necessary to expose them and work for their removal. If, on the other hand, the anomalies have no practical importance, it is contrary to working class interests to waste time on them and divert valuable energy which might more profitably be given to Socialist propaganda.
(1) Taking Mr. Rimington’s first paragraph, we find that his information is not quite correct. The position is that a man, 21 years of age, may be registered as a voter on three grounds (a) 6 months’ residence in a constituency whether as householder or lodger ; (b) 6 months’ occupation of business premises or land of which the annual value is not less than £10; (c) possession of a university degree.
A woman of 30 may be registered (a) by virtue of her husband’s qualification; or (b) by 6 months’ residence as a householder; or (c) by 6 months’ occupation of a shop or workroom or other business premises of not less than £5 annual value ; or (d) by possession of a university qualification.
In a general election a man may vote in two, but not more than two constituencies. If he is registered in more than two constituencies he may vote in all of them in bye-elections. A woman can only have two votes in a general election, if one of them is a university vote. In bye-elections she can vote wherever registered. Rank in the army or navy does not give two votes. It enables the voter, however, to vote once only by post as an “absent voter.”
(2) Mr. Rimington says that “evidence points in the direction that the privilege goes beyond two votes …” This is true only of bye-elections, as shown above. He speaks of the “many disqualifications that attend . . . the working class,” but does not specify these many disqualifications, or show their importance. As will be illustrated below, the overwhelming majority of the workers are, in fact, not disqualified from voting. His further surmise that a candidate could be prevented from being returned as a result of these “disqualifications” is incompatible with the facts. This also is dealt with below.
(3) Mr. Rimington evidently misunderstands the proxy vote. Only those persons may vote by proxy who (a) are already on the absent voters’ list and (b) make a statement in the prescribed form that they will be at sea or out of the United Kingdom at the time of the election. The proxy must be named in the statement. The provisions for the absent voter and for proxy voting enable seamen and other persons whose work compels them to be away from home, to register their votes. Mr. Rimington’s hypothesis of “the handful of directors and their dependents” is nonsense. The proxy would enable a director, if he had two votes, to use both of them in a general election, but, as he could vote twice in any event, the position is not changed by that special provision for absent voters.
(4) Mr. Rimington instances a family who qualify for 12 votes in the three Leicester divisions. Unfortunately he does not say how many members there are in the family, but, as I have already pointed out, each could only vote at most twice in a general election, and at most three times in the unlikely event of three successive bye-elections in the three divisions.
Let us now examine the actual figures and see what these anomalies amount to.
In 1921 the number of males of 21 and over in England and Wales was approximately 10,500,000, and the number of females of 30 and over was 9,500,000. (See statistical abstract of Board of Trade, 69th number, 1926. Page 244). This gives a total of roughly 20,000,000 persons entitled to qualify in respect of age. To obtain a similar figure for 1925 it is necessary to add l/40th, which represents the approximate estimated increase in population during the interval. (See Registrar General’s Statistical Review, 1925. Page 80.) The total for 1925 is then 20,500,000.
In 1925, the total number of voters registered in England and Wales, excluding university voters and voters with the business premises qualification, was 18,898,409. Thus we find that including inmates of prisons, lunatic asylums, workhouses, etc., and those persons omitted from the voters’ list, and those who fail to qualify for any other reason, only a little over 1,500,000 persons out of the 20,500,000 of qualifying age are not registered as voters. The bulk are women who fail to qualify as householders. This disposes of the greater part of Mr. Rimington’s case.
We next come to the question of university votes and business premises votes. The total of men registered for business premises qualification in 1925 was only 217,509 for the whole of England and Wales (Registrar General Statistical Review, Page 81), and the number of university voters, men and women, only 51,357.
Our correspondent mentioned the three Leicester Divisions. Out of a total for the three of 120,596 voters, there are only 1,995 men registered on the business premises qualification (Page 86).
We have thus shown that the anomalies are of quite negligible effect. Only in a handful of exceptional areas like the City of London, is the business premises vote considerable. (22,769 out of 43,891).
We now come to the much more important question of the distribution of votes between members of the capitalist class and the working class respectively.
The population of voting age amounts to 20,500,000. How many of these are members of the capitalist class? It is impossible to obtain any very precise estimate, but an approximate idea can be obtained in a slightly roundabout way.
In “Fabian Tract,” number 5 (13th Edition, 1926. Page 18), it is estimated that the proportion of the population with incomes over £250 per annum, together with their dependents, amounts to about 13 ⅓ per cent. of the whole population. (This estimate is adapted and brought up to date from that made by Chiozza Money in “Riches and Poverty.”)
It is true that below the £250 line are many shopkeepers and small property owners, but against these may be set many persons in the better paid technical and managerial positions, who earn more than £250, but are none the less members of the working class, in that they must sell their services to an employer and are wholly or mainly dependent on their earnings.
Let us further assume, in order to be on the safe side, that all members of the capitalist class of voting age are actually registered, and that all of the persons of voting age without votes are workers.
13⅓ per cent. of 20,500,000 gives us 2,730,000, add to 2,730,000 capitalist voters, 270,000 business premises and university votes. This gives us approximately 3,000,000 capitalist votes in England and Wales, out of the total of 19,167,275 on the voters’ list in 1925. We find then that there are more than 16,000,000 working class votes to 3,000,000 capitalist votes in England and Wales. We can afford to make ample allowance for any possible margin of error in the assumptions on which we have worked, and yet be certain that the working class have an overwhelming majority of the votes in this country. They are not prevented from registering their wishes by electoral anomalies. When they want Socialism they can vote for it. If at present defenders of capitalism are returned it is due only to the fact that the mass of the workers want capitalism and either vote for capitalist candidates or do not use their votes at all.
In these circumstances, there is no need to waste time on red-herrings like the demand for proportional representation, or the abolition of electoral anomalies. The work of getting Socialism is impeded only by the lack of Socialists, not by the existence of a handful of double votes.
It is interesting to notice in passing that the present Government has pledged itself to give the vote to women of 21 and to remove the chief barriers which at present debar many women over 30 from possessing votes. It is estimated that the proposed measure will add 5,000,000 women voters to the electoral register of Great Britain and Northern Ireland. (Note that the calculations given earlier in this article refer to England and Wales only.) Of these 5,000,000 it is stated that about 2,000,000 will be women of 30 and over at present unable to qualify. The great majority of the 5,000,000 will be members of the working class, although, of course, they may be expected, like their brothers and husbands, to vote for some form of capitalism.
Edgar Hardcastle
Letter: The Inflation Question again. (1927)
To the Editor, Socialist Standard.
Dear Sir,
Your reply to my letter on the money question, for which I thank you, has made clear that the differences which appear to mark off your school of thought on this subject from that of other Socialist parties, are more apparent than real.
For example, you accept credit-inflation as an incident of the war period.
You do not dispute that the period was an abnormal one.
Your indignation at the introduction by me, as you insist, of an “emphasis” in relation to the formula stated by you in the December issue, would indicate that you are less rigid in your adherence to a formula than I at first thought.
The real point of difference is, I think, to be found in the last paragraph of your reply. You state : “Gold was not permitted to function freely until the gold standard was restored in 1925.” That is misleading ; gold functioned freely on the open market from 1919, and it is on the open market only we can adequately measure the degree of credit-inflation by the depreciation of the circulating credit-units.
If credit is issued in excess of that justified by the goods produced at a given time, such goods assumed to be in direct contact with the newly-mined gold for exchange, then a state of inflation is made evident by the premium on gold.
If, however, gold is not permitted to measure itself against other commodities, at a time when metal is displaced by paper as legal tender, inflation and deflation become largely a matter of conjecture.
During the war period the Bank of England paid for the standard gold brought to it, by its notes, and at the rate of £3 17s. 9d. per ounce. That this price in paper did not give the gold magnates a value in commodities equivalent to that obtainable under conditions of normal barter, is obvious from the involuntary closing down of the less productive mines during that period.
That the currency-note was for the first time made inconvertible in 1925, is considered by you as “enormously important.” Would it not also convey to one the unimportance of its “convertibility” previous to that year?
It is of no importance whatever to those anxious to delve below the superficialities involved in the best methods likely to ensure the smooth working of the gold standard, and which were embodied in the “Gold Standard Act, 1925.”
The question of convertibility or inconvertibility of paper into coin is entirely beside the point and absolutely useless as far as a correct understanding of this problem is concerned. The thing that does matter is the right for any individual to do what he likes with a coin in his possession. That he shall have the right to melt or even to deface or diminish, provided the intent is not present of passing it on as current coin. Deny a person the right of laying a coin at “rest,” i.e., of assuming its commodity form as a piece of metal, and you have denied him the possession of a measure of value. The principal function of money as a universal equivalent is missing, and from that moment a quantitative determination of prices will be possible, and the qualitative determination of the price-level will be relegated to the background.
I am, Sir, Yours faithfully,
William Nicholls.
Reply to W. Nicholls.
In his previous letter, Mr. Nicholls admitted, in fact, that our contention with reference to the so-called “inflation” of the currency during and since the war, was correct.
His letter above deals with what are really side issues that leave the main point alone. When he talks of our difference from “other Socialist parties,” his remark is meaningless, as there are no “other” Socialist parties in this country. Neither were we “indignant” at his introduction of an emphasis and adding it to our statement. We suggested a reason for his action, and Mr. Nicholls does not deny this suggestion.
He now states that the real point of difference is over the “free functioning” of gold on the open market. Mr. Nicholls claims that this began from 1919. This statement has no bearing on the question unless Mr. Nicholls means to say that the “open market” included this country. Mr. Nicholls is careful not to say this because, as he knows, there was no “open market” for gold here till 1925. The alteration of the arrangements made between the British Empire Gold Magnates and the British Government during the war, did not affect matters here, as gold could not be exported from this country without a special permit. Hence, as stated in our previous reply, the “unpegging” of the exchange with America in 1919 did not touch the essentials of the question we were discussing.
In his paragraph beginning “If credit is issued in excess,” etc., Mr. Nicholls talks of goods being in direct contact “with the newly-mined gold.” Why “newly-mined”? As a matter of fact all the gold available will be considered in this relation — not merely the “newly-mined.”
He also asks whether our view that making the currency note inconvertible in 1925 was enormously important, would not convey the impression that its previous convertibility was unimportant. Exactly the contrary. The “Plebs” editor considered it so important that he tried to deny the existence of this convertibility till faced with the Act of Parliament.
To say that “convertibility or inconvertibility of paper into coin is entirely beside the point” is to ignore both economic theory and historical experience. The abstract “right” of a person to “do as he likes with his own” has always to be countered by the “rights” of others. The great disadvantages caused by tampering with the currency — as clipping, sweating, etc. — caused the passing of the Coinage Acts to protect the general body of traders from the depredations of the swindlers.
Like all other laws, these Acts necessarily restricted somebody’s “rights,” but the advantages are found, in practice, to overwhelmingly outweigh the theoretical points of abstract “rights” thereby lost.
It may be said in passing that a coin can be treated as a piece of metal in the exchange relation, without defacing or tampering with it; and as a matter of fact this is done daily in gold transactions where coins are taken at their weight instead of by tale.
As stated before, all these questions are beside the question at issue. That question was whether the high prices prevailing during and after the war were due to inflation of the currency. We denied this excuse of the “Plebs,” the Labour Party and other misleaders of the workers, and pointed out the facts. Neither they nor Mr. Nicholls have been able to show any error in our case.
Editorial Committee
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