Money — not workers — will be redundant (1978)

From the March 1978 issue of the Socialist Standard

At first sight it may seem inconceivable that any advanced economic system could function efficiently without the use of money. Money has existed as far back as the history books go and the economists endorse the supposed advantages of a money system. Indeed, some economists go even further than this, as R. G. Lipsey does in a widely used introductory textbook on economics where he says,

It is not without justification that money has been called one of the great inventions contributing to human freedom. (An Introduction to Positive Economics).

Lipsey here overlooks the fact that money is ‘liberating’ only for those who have money. For those who have no money, or insufficient of it, money is the form of bondage and oppression, not liberation. Thus, in praising a system that is ‘liberating’ for only a few, Lipsey is here, quite accidentally, revealing the class nature of economics as it is generally taught, and is showing that it constitutes mere apologetics for the capitalist system.

On the question of the functions of money in an economic system, the one generally regarded as the most important is that of a medium of exchange. In discussing the function of money as a medium of exchange Lipsey says,

Without money, our complicated economic system, which is based on specialisation and the division of labour, would be impossible, and we would have to return to a very primitive form of production and exchange.

Lipsey is right in saying that without money “our complicated economic system,” i.e. capitalism, would not be possible, but he is wrong to say that only a primitive form of production would be possible in the absence of money. Lipsey’s mistake lies in his thinking that exchange is a necessary characteristic of all societies, and that therefore in a moneyless world exchange would have to be carried out by the cumbersome method of individual barter. This fault is common to all bourgeois economists, notably to Adam Smith with his idea of man’s innate “propensity to truck, barter, and exchange one thing for another”. (The Wealth of Nations). This notion is typical of the way the bourgeois economists take the specific features of a particular society either as given eternal truths that must exist at all times or as emanations of an unchanging human nature (or both).

Exchange is possible only where the product of labour is privately owned. For example, in petty commodity production the product is directly owned by the individual who makes it and it is sold to acquire goods for his immediate use, while in capitalism the product is owned by the capitalist who then sells it in order to realise a profit. We can see from these examples nor only that exchange of products derives from property in these products, but also that the form of exchange is determined by the general nature of production in society. Contemporary capitalist exchange processes are characterised by the presence of large stores with an international range of commodities for sale, credit facilities of various sorts and extensive advertising, in order to increase the volume of sales and reduce the period of turnover of the commodities. These forms of exchange would have been quite inappropriate, say, in a feudal economy where output was on a smaller scale and intended primarily either for immediate use or for the local market.

But in a socialist society there will be no property in the means of production — the land, machinery, raw materials and power sources. The concept of property will have become redundant. Hence the product of society will be available for everyone to take from it freely what they require. Thus as property relations become redundant, so will the accompanying exchange relations and so too will money. In capitalist society we exchange the one commodity that we possess, our labour-power, for a wage or salary (if we’re lucky enough not to be unemployed), and then exchange this money for commodities. In socialist society we will participate directly in the process of production and then will take what we require from the common store of goods.

Thus to some extent Lipsey is correct in seeing a link between production and exchange. With the primitive form of exchange, i.e. barter, that he envisages in a moneyless world, the only form of production that would be possible would be a very unspecialised one where each domestic unit would try to produce for as many of their needs as possible in order to minimise their dependence on barter. In this situation overall production would be low and Lipsey is right to regard this as a retrogressive step. But what Lipsey doesn’t see is that in a world which has freed itself from property and exchange relations, production will also be free to develop without the fetters imposed on it by property society. It will be free to expand production without the fear of insufficient money demand, it will be free to develop the best possible products rather than having to minimise costs as is the case under capitalism, and it will be freed from having to produce the waste of capitalism such as armaments.

Redundant

Clearly then, money will be redundant in Socialism. But perhaps there are other functions that money performs apart from that of exchange that will still be required in socialism and will therefore necessitate the use of money in socialist society? Lipsey basically lists three functions of money. In addition to that of a medium of exchange, he also lists the functions of a store of wealth and a unit of account. By a store of wealth he is basically referring to a future claim on someone else’s goods, in other words, a medium of exchange with a time dimension attached to it. An exchange will have no meaning in Socialism, similarly future exchanges will have no meaning either. Just as we won’t need money to get the goods we need in the present, so we won’t need to save money to get goods for the future. (Which of course is not to say that society as a whole will not have to “save” for its future requirements.)

The notion of a unit of account is more complicated. Fundamentally it is related to the need of the capitalist to be able to quantify the production process in such a way that he can calculate the profits from any given investment. Secondarily it is related to the need for governments to have some overall idea of the movement of the economy in that it allows the government statisticians to aggregate over a range of commodities and compare different sectors of the economy. But in order for people to have some way of measuring productive activities, it is not necessary to have an actual system of money prices. Statisticians can invent any method they like of measuring or evaluating goods, e.g. in terms of labour input, energy used up, social usefulness, and these values can then be imputed to the goods in question for purely accounting purposes without using these imputed values as actual prices or exchange-ratios. Thus the need for a unit of account does not necessitate the use of money. In addition, the type of accounting done in a socialist society will be quite different from that in a capitalist society, and it may even be found that it is not necessary to have a universal unit of account of this sort.

Price System

Apart from listing the various functions of money in a capitalist society, the bourgeois economists advance another defence for a money system. They argue that a price system serves to allocate goods in a decentralized system to the areas where they are most required. This allocation takes the form of a production decision, viz what, how much and how to produce, and a distribution decision, viz for whom should these goods be produced. The price system solves these problems by ensuring that only the most profitable goods are produced in the most profitable manner, and that only those people who can afford to buy these goods should have the use of them. Some economists are less enthusiastic about the virtues of such a system than they used to be, but most endorse this form of organisation to a greater or lesser extent. Socialists, however, criticise an economic system organised on these lines and argue that a socialist society would in fact be far more efficient. In Socialism production would be regulated by people’s needs and distribution secured by free access. The necessary information for this could be secured from surveys, and the ‘take-up rate’ for the various items, to mention only the most obvious. This information could be processed on computers and passed on to those responsible for production. This system of communicating information could in fact be far more efficient than the price system which even the bourgeois economists have to admit is far from perfect in achieving the objective they ascribe to it.

The one function that the price mechanism does fulfil and which the economists do not understand properly, is that of a rationing device. Apart from the other problems that capitalism produces, it also produces scarcity, in spite of its tremendous potential for abundance. In a situation of scarcity, the price system serves as a rationing device where a £1 note serves the same function as a ration coupon with only the difference that a person can choose his rations (but not whether he/she is rationed). This rationing device allows the working class to receive only a fraction of what it has produced. This situation will not exist in socialist society. Without the fetters of capitalist profit-making and the concomitant wastefulness of capitalist production, there is no reason to suppose that social production will be inadequate to the task of satisfying people's needs. Hence there will be no rationing of the world’s wealth. And there will be no need for money.

B.

An Open Question (1978)

From the March 1978 issue of the Socialist Standard

In February, 21.000 new adult undergraduates began their studies with The Open University. This is the eighth year of its teaching operation, and there are still twice as many applicants as places very year. It uses over a thousand hours of broadcasting each year and despatches more than 30,000 packages of correspondence teaching material every week. Whether people like it or not—and there are some who do not —the OU has radically altered the pattern of adult education in this country.

There are some who see it as a powerful agent for more fundamental social change, and so, ever since it was granted its charter in 1969, it has had its critics. Those on the ‘left’ have hammered it for not catering for ‘the working class’. Those on the ‘right’ have spread alarms about ‘marxist bias’ in its courses. Those who went to ‘real’ universities have asserted that, whatever else it might be, it could never be a university. And those whose experience at school taught them to be suspicious of ail education have ignored it. Harold Wilson, who claims the idea for its establishment as his own, has stated that the formation of The Open University is the achievement for which he would most like to be remembered.

So how should socialists evaluate it? Like every other capitalist institution, the OU embodies a number of contradictions and tensions, and it is worth looking into some of these.

Unlike other universities in Britain, the OU is financed directly by the Treasury on the decisions of the Department of Education and Science, and this puts it into a direct relationship with the government of the day. All its printed courses are available for sale to the public, and all its broadcasts are on open channels so that, quite unlike other universities, anyone can know what is being taught at any time. These are two strong influences towards conservatism. The third main conservative force is exerted by its students who, in the large majority, are looking not for social change at all but social mobility. They want a ‘respectable’ degree which will be accepted by employers, professional institutes and other educational institutions.

Pioneering Venture

In spite of these quite powerful forces, there is, in fact, a tendency for OU courses to be socially critical. The teachers who were attracted to the University when it seemed to be a pioneering venture tended to be those with a desire to change education. There were those who called themselves marxists, some who called themselves christians, and a much larger body who felt only that education should be much more relevant to daily life. What has happened it that the peculiar Open University process has taken them over and produced an amalgam of all their efforts that has been described as ‘pale pink’. It is this “pale pink’’ course material that has been supplied, not only to OU undergraduates and associate students, but also through Open University Educational Enterprises Ltd. to bookshops all over this country and is being marketed in many other countries in the world, especially the USA.

In this and a number of other ways, the OU is a blend of the commercial and the educational — very different from either the commercial correspondence college on the one hand or, say, a polytechnic on the other. In the matter of fees, for example, the OU student is much worse off than the person who can secure a full-time place at an ordinary university. He cannot get the same sort of grant. He pays his own course fees. This year these are £52 for a full credit course. On top of this he may need set books worth about £20, and if there is a summer school in the course this will cost £50 plus travelling expenses. Most Local Education Authorities have been awarding grants for all or part of the summer school fee and expenses, but OU students have been among the first to suffer in the last two years as local council spending has been cut.

Commercial Approach

Although the OU began by setting up as full a programme as it could afford of undergraduate studies, an important part of the original idea was the provision of post experience courses for people who simply wished to up-date their knowledge in a particular field. The number of people taking single courses in this way as associate students has been steadily growing over the last two or three years in spite of the fact that they pay considerably more, often for the same course, than they would if they were undergraduates. There is no government subsidy of associate students, and there has in the past been considerable acrimony within the University about the rather ruthless commercial approach that was adopted towards these students. This argument was typical of hundreds that have gone on in countless committee meetings throughout the last eight years. The same academics who were pledged to delivering “meaningful” higher education to everyone who wanted it, and to using all the aids of modern technology to this end, also found themselves committed, by the structure and financing of the University, to the minimisation of the cost of higher education to the state. Every innovation therefore, like the marking of assignments by computer, teaching by telephone, or the provision of home experiment kits, has to be justified on economic as well as educational grounds.

Failure Rate

One of the confident predictions of the early critics was that the failure rate among students would be enormous, and that this would offset any apparent financial saving. When one looks at the educational background of OU students and the circumstances under which they study, the prediction seems realistic. Anyone over 21 resident in the UK can apply for a place, regardless of previous education, and places are offered on a first-come-first-served basis. For undergraduates there is even a limited amount of financial assistance for those unable to pay the fees. They study at home from correspondence material which arrives by post. They listen to radio and watch TV broadcasts associated with their course, and they can attend a local study centre for help and advice from their tutors and counsellors. If they study at the rate of one full credit a year, which is normal, they will need to spend about fifteen hours a week aside from their job and their home and family for about forty weeks in the year. During this time they will submit about ten written assignments by post to their tutor and about the same number of pencil-marked forms to be assessed by the computer at Milton Keynes. In early November they will sit a three-hour examination, and the marks from this and their assignments are put together to produce a grade for the course. They need six of these credits for an ordinary degree and eight for an honours degree.

It is a hard way to get a degree, and some students are still working their way slowly through the system. Nevertheless, by 1977, 27,102 had graduated, and it is becoming evident that the rate of failure is not nearly as high as was expected. To begin with, there was a very high percentage of teachers taking degrees, and these might be expected to succeed. As the educational preparedness of applicants falls we can expect to see a fall in the success rate. But it is still astonishing to teachers brought up on a selective system of education to see how well ordinary people manage to cope with quite rigorous degree studies.

One of the recurrent criticisms from the ‘left’ is that OU learning, because of the mass production methods, is rigid and prevents questioning. The people who make this sort of criticism have usually got research degrees themselves. They forget how little opportunity there is for undergraduates at any university to question what they are taught. In the OU it is, if anything, the students themselves who avoid questioning. For too many of them the degree is simply a means to an end, and they simply want to know which are the ‘right’ answers so that they can get the degree as quickly as possible. It is the writers of the courses and the tutors in the study centres who try to persuade them to look all round a question. Over a period of six years or more, this is bound to have some effect, but it is a bit like working against the pull of gravity.

Illusion

When they apply to the OU many people have the illusion that a degree is a passport to higher pay, a better job, and increased social prestige, and the University spends a considerable amount of time and money in trying to convince them that this is not necessarily so, especially if, like the majority, they are already over thirty.

The fact is that having a degree of any kind, is no guarantee of a better job—or even of any job at all. It does not change the graduate’s status as one compelled to sell his labour power to earn a living.

The Open University has the following aim written into its charter ". . . to advance the educational well-being of the community generally”. Education — the spread of knowledge and understanding — can only be beneficial to the spread of socialist ideas.

Ron Cook

Blogger's Note:

This article was written under Ron Cook sometime pen-name of 'S. Stafford'. I think in this case that name was used because Ron himself was an Open University tutor.

What the papers say — and what they don’t (1978)

From the March 1978 issue of the Socialist Standard

Many readers will be aware of a regular B.B.C. radio feature called What The Papers Say. It is a digest of the most important articles in the day’s press. For those of us who can’t afford/can’t stomach to read every daily newspaper it provides a useful summary of what they are saying. It has often seemed that a rather more enlightening feature would be What the Papers Don’t Say or, even better, Why the Papers Said What They Did. The idea implied by calling a newspaper The Daily Mirror is that the press works on a reflective basis, i.e. the publication in written form of the facts as they really happened. This is far from the case. In fact, the press works on the principle of selecting what events are suitable for public consumption, deciding how the ‘story’ is to be told in accordance with ‘editorial policy’ (which is a journalistic term for political bias) and making sure that the ‘facts’ are not likely to contradict illusions created by the advertisements. The role of the press is more to do with implanting views than spreading news. Indeed, when a news event interferes with the image that the editor wants perpetuated, then it must either be not referred to or else distorted, in such a way so as to back up rather than contradict the political line of the newspaper.

Editorial Selectivity

Workers in Britain are brought up to believe that we live in a free country. We are told that Britain is democratic because there is a ‘free press’. It is an illusion to believe that the press in a capitalist society can be anything but the propaganda tool of the minority class whose social survival depends on the political ignorance of the masses. That is not to say that newspapers are part of some kind of capitalist conspiracy to brainwash the working class. An important distinction must be made between conscious political indoctrination and more subtle editorial selectivity. Indoctrination requires a captive audience, i.e. one which has only one source of news which is controlled totally by the State. The press in countries where capitalism takes a more liberal form of work on the basis of giving support to the status quo, but criticising the leaders of capitalism on matters not likely to lead to fundamental social change. A clear comparison between the two methods of capitalist propaganda can be seen by looking at the press in Russia and in this country.

Undemocratic

Russia, despite its claim to be socialist, is one of the most brutal and undemocratic capitalist regimes in existence. The press has been developed by the ruling Communist Party as an elaborate and complex apparatus designed to shape the thinking of the Soviet working class. Krushchev, in 1956, said to a gathering of writers and artists

The press is our chief ideological weapon. It is called upon to rout the enemies of the working class, the enemies of the toilers (sic). Just as an army cannot fight without weapons, so the Party cannot successfully carry on its ideological work without such a sharp and militant weapon as the press. (Printed in Kommunist, no. 12, August 1957)

To ensure that the Soviet media carry out their task of indoctrination there exists a Department of Propaganda and Agitation, a Ministry of Culture, a Ministry of the Radio-Technical industry as well as a Press Commission. There are over 7,000 Soviet newspapers reaching over 100 million readers. All newspapers are controlled centrally—editorials are written by Communist Party officials and circulated for publication. All newspaper editors are appointed by the State and are subject to strict contiol from Moscow: each Soviet periodical must have the mark of authorisation from Glavslit, the government censorship agency.

Despite such attempts by the Soviet dictatorship to control the media, they have learnt that running a system of indoctrination presents problems:

there are serious chinks in the Soviet propaganda armour. The agitators, for example, are caught between the direct pressures and hostilities of the population from below, and the constant pressure of the Party from above demanding that they exhort and goad on the population to still greater efforts and sacrifice. As a result thousands each year abandon their work as agitators. Editors must constantly be reprimanded for ideological ‘deviations’ in their newspapers . . . And the regime is in many respects a prisoner of its own system. For, insofar as it wishes to judge the state of popular thinking, it must rely either on the secret police or on the reports of the agitators and the newspaper editors. (Developments in Soviet Mass Communications in Social Change in Soviet Russia, A. Inkeles, 1968)

The evolution of the British press has been along different lines because of the historical circumstances in which it emerged. It was created by the rising British capitalist class in the Eighteenth Century as a weapon in their struggle against the feudal State. The battle to publish parliamentary debates, to criticise the government and even to criticise the King, in the case of John Wilkes, was won by the capitalist class. Freedom to criticise is a tradition of the press which grew out of the division within the ruling class. Until the last two decades of the Nineteenth Century the press in Britain was independently owned, often by family concerns relying primarily on classified advertisements and regular sales. It was not possible for any one section of the ruling class to control the press as no one section owned it. It was the so-called Northcliffe revolution of the 1880’s which transformed the role of the press, for it was then that the previously independently owned newspapers were taken over by corporate press houses which were dependent on expensive, block display advertising. From then on newspapers became the province of large, capital intensive corporations, such as Beaverbrook, which endeavoured to direct editorial policy towards winning support for their class interest. The press in Britain is, therefore, free in that peculiar sense that freedom exists under capitalism: they are free to lie, distort, slander, publish trivia and exclude serious issues. Nevertheless, there does exist the freedom to publish alternative ideas, which is vital to the growth of the Socialist Party.

But the press under capitalism is not free in the Socialist sense, for to be so anyone would have access to the control of newspapers instead of a small group of businessmen or bureaucrats more committed to self-preservation than to providing useful information. How, then, can the aim of a free press be realised? One argument is that those who produce newspapers — editors, journalists, office staff, printers — should democratically participate in running them. The attempted ‘workers control’ of the Scottish Daily Express showed the unpractically of such reform within a society which places advertising revenue above democratic principles. Another argument, often advocated by the “Left”, is for the nationalisation of the print industry. As can be seen from the Russian example, State control of the means of communication, while politically benefiting those parties which are politically in agreement with the government of the day, can lead to discrimination against those seeking changes which are unwelcome to the State.

In fact, there is no way within capitalist society that the press can be made fully democratic. Capitalists will always provide newspapers with money for two reasons: to buy space to advertise their commodities to the workers who read the newspapers and to ensure the perpetration of capitalist ideology in a popular form — just as their great grandfathers supported the pulpit; they rely on huge sales to members of the working class. It is in the interest of all members of that class, whether they read The Times or The Sun to reject the lies and illusions of the capitalist press and support a journal which stands for their emancipation from the unfree society.

Steve Coleman

An Appeal For Funds (1978)

From the March 1978 issue of the Socialist Standard

We have been appealing in the Socialist Standard for funds to help us meet the printer’s bill for the new edition of ‘Questions of the Day’.

We find that in addition we need at least £500 per month just to “keep the Wolf from the door’ and we are calling on all concerned to send the very largest donations possible direct to the Treasurer at 52, Clapham High Street. London SW4.

Readers are also urged to favourably consider arranging through their own banks to pay a regular monthly amount into the SPGB Special account No. 02823446 at the National Westminster Bank, Clapham North Branch (50 21 00) and advise the Party Funds Organisers. This can easily be arranged by your local Bank, or we will send you a Banker’s Order form upon request.

(Attention Len Murray) (1978)

From the March 1978 issue of the Socialist Standard

"If it were in the power of the capitalist producers to raise prices of their commodities at will; they could (and would) do so, without waiting for a rise in wages. 

The capitalist class would never resist the Trade Unions, since the capitalists could always avail themselves of every rise in wages to raise their prices, and thus pocket greater profit."

Capital, Vol. II, p. 392

SPGB Meetings (1978)

Party News from the March 1978 issue of the Socialist Standard