Notes by the Way: The Contradictions of Nationalism (1955)

The Notes by the Way Column from the October 1955 issue of the Socialist Standard

The Contradictions of Nationalism

While Capitalism lasts so will its class and international economic struggles, many of them taking on a racial, religious or nationalist appearance whenever this suits the needs of some interested group. Socialists do not support these manifestations of prejudice. But the supporters of Nationalist Movements make use of two plausible arguments. One is that it is a good thing to have a National Capitalist Group in power in preference to Capitalist rule by foreigners because the former are more progressive, and the other is that by winning national independence you get rid of preoccupation with Nationalism and thus make it easier to get down to Socialism.

There is nothing in either argument. In comparatively recent times Egypt, India, Burma, the Middle East Arab States, Hungary, Poland and South Africa, have emerged from greater or less degree of foreign rule and their absence of progress in any sense that matters, is matched by their extreme preoccupation with nonsensical Nationalism.

It has been noticed by many newspaper correspondents in India that there has been in recent years, not a decline, but a growth of Nationalism and now Indians are complaining of growing intolerance towards themselves shown in the countries of South East Asia. Mr. S. K. Patil, one of the chiefs of the Indian Congress Party, has returned from a tour of Burma, Siam, Malaya, and Singapore, “where, he said, dangerous and poisonous Nationalism, if allowed to develop, would result in intolerance for Indians and other foreigners.”—(Times, 17/9/55.)

Nationalism inevitably has its ridiculous side because in the world as it is today the dreams and pretensions of the Nationalists (all of them, including the British, Russian and American) so frequently will not fit into the facts of Capitalism.

The Irish Nationalists may dream as much as they like about ancient myths and glories but the Irish Government is now inviting German Capitalism to come into Ireland to develop the textile industry (Financial Times 13/9/55) so that it can sell more in the British market; though at the same time it is “banning the import of cheap shirts from the Far East in order to protect the jobs of Irish textile workers" (Daily Express 20/9/55.) Doubtless some of the Irish Nationalists would like to live in a really Irish Ireland but in the real world they can’t get the Irish to speak their own language and they need foreign markets and foreign capital, and by a curious arrangement the British Post Office publication “Post Offices in the United Kingdom” contains not only the Post Offices in Britain, but also those in the Irish Republic. With so many Irish workers working in this country the Irish Government doubtless finds it convenient to have easy means provided for Irish emigrants in Britain to send correspondence and remittances to their relatives.

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The Trade Battle across the Iron Curtain

A year or two ago there were two propaganda drives going on, one to expand British exports to U.S.A. and Canada and the other to popularise the idea that Russia could offer an attractive market for British exports.

The first has received a jolt lately since some big contracts in U.S.A. have been awarded, not to the lowest tender, coming from British firms, but to American firms quoting higher. And, according to the Daily Express (1/9/55) British exports to Canada are not looking too good;

Trade men in America say that Western Germany is making an all out drive to rob Britain of her place as the world’s second largest exporter of engineering goods—next to the U.S.

Main “ battleground" is likely to be in Canada—where already British sales of engineering goods are losing ground to the Germans.

And it appears that Russian competition is a factor in certain lines. The Daily Express of the same date reported the following:—

Dumping of matches in Britain by Russia and other Iron Curtain countries has forced the giant Bryant and May match combine to close one of its plants.

The “Brymay” boss, Sir Anthony Elkins, says this morning that the Red competition is “severe."

That is a masterly under-statement. For imports of Russian matches have leaped from 72,000 gross boxes in 1953 to a current rate of 774,000 gross boxes.

For the statistically minded that is 111,456,000 boxes of matches a year.

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Religion and Morals

A favourite side argument of religionists has always been that if there were no religion moral standards would decline. While they readily admit, and indeed make a point of asserting, that the real basis of religion is “faith” not behaviour they nevertheless find it convenient to buttress the case for religion by maintaining that the two are linked and that one falls with the other.

Now some American churchmen have had to allow that events in U.S.A. do not support the argument. They say that while religion is booming “ morality seems to be on the decline.”

The following appeared in the Observer (London, September 18, 1955):—

A record increase in Church membership in the United States is reported in figures to be released this week by the National Council of Churches of the United States. It shows a total of more than 97 million, an increase of over 2,500,000 during 1954.

There are 57 million Protestants, 32 million Roman Catholics, 5,500,000 Jews and two million Eastern Orthodox Church members. Among Protestant Churches the Baptists, with 18,500,000, have the greatest number of adherents. The Methodists are second with nearly 12 million.

Whether the present “religious boom" in the United States is deeply seated in religious conviction is doubted by Dr. Eugene Carson Blake, this year's president of the National Council of Churches. In a comment on the figures Dr. Blake says: “ Morality seems to be on the decline at the moment when there appears to be a religious boom. Preachers in this industrial age are finding modern man's anxiety for his job is just as acute as primitive man’s for a good harvest"

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Dividends and Wages; and those who get them

As a propaganda move against wage claims, Sir John Braithwaite, Chairman of the Stock Exchange, recently issued a statement on the relative increase of dividends and wages since 1947. His statement, published in the Manchester Guardian (29 August, 1955) contained the following:—

The total of wages and salaries for the year ending December 31, 1954, was £9,265 millions, as against a total of £1,122 millions for interest and dividends on securities quoted on the Stock Exchange, or over eight times as great.

Wages and salaries have advanced since 1947 by 69.2 per cent. (£3,790 millions) against an increase of 32.1 per cent. (£273 millions) in interest and dividends (of winch ordinary dividends constitute 39.6 per cent). That is to say that the rise in wages and salaries is more than double the rise in interest and dividends by percentage, and nearly 14 times as much by volume.

Socialists of course are not believers in the Labour Party notion that Capitalism would be all right provided the Capitalists received rather less and the workers rather more. And one or two of the more objective defenders of Capitalism have pointed out that on the basis of the Tory argument for the free play of economic forces there is no sanctity about the division that existed in 1947 or any other year—each side gets what it can when it can.

There is, however, a useful corrective to apply to the figures. It is simply this: While “wages and salaries” cover something over 20 million workers, not to mention their still larger number of dependents, the number of shareholders is relatively a very small body. Mr. Harold Wincott, writing in the Unilever Journal “Progress” (Spring 1955, page 161) had this to say:—

“In this country, it has been estimated that out of a population of 50,000,000, only some 1,250,000 to 1,500,000 people are shareholders. Even in the more capitalistic United States, a recent inquiry by the Brookings Institution produced an estimate that shareholders numbered only some 6,500,000 out of a population of 160,000,000.

Of course, included in these apparently exclusive bands of investors are a relative handful of institutions—insurance companies, pension funds, investment trusts, and so on—investing vast sums of money on behalf of a great multitude of indirect investors. But the policy holder and the contributor to a pension fund do not generally speaking regard themselves as being identified with the course of stock market prices. Theirs is a very remote and indirect link. With only three persons in every 100 in this country and four in each 100 in the United States holding shares in their own right, it is not surprising if the events in the world’s stock exchanges are normally things apart from the man in the street."

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Muddle about Socialism

The Manchester Guardian (17/9/55) had a leading article deploring the confusion and ill-feeling that arise because not many of us “recognise the kind of society in which we are living.”

“American Conservatives are angry if told that their economy, far from being based on the free play of market forces, is almost as Socialist as the British system. The Russian Communists are infuriated if told that their Stakhonovite arrangements, with high wages for exceptional workers and coercion for the ordinary men, are less Socialist than much of the "British system."

The reader will have read enough of the article to see that the Manchester Guardian is doing nothing to remove the confusion. Its conclusion, a masterpiece of muddle, is that “in short our system is neither Capitalist nor Socialist, but a mixture.”

In another Journal (Tribune, 16 September, 1955), a Labour M.P., Mr. Ian Mikardo, adds his contribution. Writing under the heading “Don’t Tell Me this is Socialism,” he makes the discovery that the French system of having the nationalised gas industry and the nationalised electricity industry using jointly the same non-competitive showroom is Socialism, but the English system of having them in competition and using rival showrooms is not. 

Whoever it was that told Mr. Mikardo that either of them has anything whatever to do with Socialism, it cannot have been a Socialist And one wonders what Mr. Mikardo was telling his readers in the past when he supported the Electricity and Gas Nationalisation Acts.

According to his odd test a nationalised industry is “Socialism” if it has a monopoly. Well the Post Office has a monopoly in most of its services but Mr. Attlee long ago described it as “the outstanding example of collective Capitalism” (New Statesman, 7/11/31).

This is the first piece of light so far, and with its help we can put Mr. Mikardo, the Guardian the Americans and the Russians on the right road—that is if they want to be on the right road.

It all boils down to private Capitalism and State Capitalism and indeed on this basis and this alone America, Britain, Russia and all other countries are a mixture— but without any Socialism.

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When will the Boom End ?

The economist, Mr. Roy Harrod, set out to answer this question in the Financial Times (10 September, 55). He thinks that “recession” will come in the autumn of 1956 or somewhat earlier. His reasons are that the wave of expansion of factories and equipment that began about October, 1954, will be more or less completed in two years that it was excessive in amount; and that it may be found that it cannot be fully operated. He writes:—

“In 1956, we shall be faced with the problems of recession. This might merely take the form of a welcome decline of orders to engineering industry. But it might also be found—which would be more serious—that during this period of expansion we had created, in some lines at least, excessive capacity in relation to markets or to manpower available to operate it Matters would be still worse if some recession in our export markets began to manifest itself at about the same time."

It will be noticed that though he starts off very firmly about the demonstrable feet that the 1954 spate of new orders for factories, etc., will be running out in 1956, and less firmly anticipates a recession then, he becomes quite non committal about the other factors and indeed is not sure that he knows whether there will be factories without factory workers or factories with workers, but without markets.

He remembers no doubt the many other attempts by economists, including the advisers of the Labour Governments and the present Government, to forecast from one year to another what is going to happen.

The Editorial of the Financial Times, commenting on Mr. Harrod’s article, is rather more definite than he is. The Editorial says:—

“He makes what is no doubt a sound case for the view that the investment boom is the major cause of current balance of payment difficulties, and then goes on to suggest that this may lead in turn to an excess of supply in the autumn of next year. The risk is a real one, but not perhaps a very serious one. In the past it has proved the characteristic of long-term periods of rising prices, such as the 1850's and 1860’s, to have major booms and minor recessions. In fact, the United States has absorbed three minor recessions since the war, and we have already absorbed one."

One other point made by Mr. Harrod is of interest in yiew of the current argument by employers and politicians that economic difficulties are due to wage increases and “buying sprees.” Mr. Harrod maintains that the excessive expansion of factories (encouraged by the Government when they ought, according to him to have been discouraging it) is the predominant disturbing factor.

“Other factors making towards inflation—wage increases of 7½ per cent.; consumption increase of five per cent—are trivial by comparison."

Edgar Hardcastle