(Continued from January issue.)
The property holdings of the “middle class,” unlike those of the capitalist, do not free their possessors from worry, and do not give them command over the lives and destinies of other men. They represent deductions from present income for future needs; they are therefore not capital in the sense of being “wealth used for the purpose of gain” (the definition of capital used by a Conservative, Sir William Ashley), the receipt of a return on them being only incidental, and not the object of their existence. Unlike Topsy, they have not “just growed.” On the contrary, these reserves, for the future of themselves and their children, can only be accumulated by deliberate and self-denying effort. Failure to make such saving against the future is followed by a fall to a lower level of life, either in this or the succeeding generation. The effort to retain their “nest egg” occupies so large a part of their lives that it becomes the basis of the political philosophy of the more highly paid workers, and, like the bird in the Mediaeval romance, they are so busy sitting tight on their eggs so that they shall not be stolen, that they do not see they are being robbed by the opening of the nest from below. To secure their savings from “predatory Socialists” who are supposed to have raiding designs on their women and children, they hitch their wagon to capitalism. But what security does capitalism offer even for their savings ?
Savings can be held in one of the following forms—in currency or in bank balances which represent claims to a definite amount of currency, in government bonds, or in titles to property of various kinds, such as title deeds of land, shares in industrial and commercial undertakings, etc. Of the two main kinds of shares, debentures represent a claim to a fixed annual interest and the repayment of a definite sum of money. Therefore debentures, government bonds, currency holdings, and bank balances can be lumped together as being holdings of money, and it follows that the value of these holdings depends on “the value” of money. But there is no guarantee under capitalism that the value of money measured in the commodities it will purchase for its possessor will remain constant, or even that it will fluctuate only within narrow limits. Wherever there has been money economy there have been violent fluctuations. (For an example in the Ancient World, see Gibbons’ “Decline and Fall,” Chapter 11.) The recent happenings in Europe provide an instructive illustration of the lack of security in all currency holdings. In Germany the value of money has fallen to such a degree that the internal debt has been wiped out. In France pre-war holdings of Government Stock have lost seven-eighths of their real value; in Italy, eleven-twelfths; and in England, one half.
“Throughout the Continent pre-war savings of the middle class, so far as they were invested in bonds, mortgages, or bank deposits, have been largely or entirely wiped out” (“A Tract on Monetary Reform,” J. M. Keynes, page 16).
Mr. Keynes adds :
“What was deemed most secure has proved least so. He who neither spent nor ‘speculated,’ who made ‘proper provision for his family,’ who sang hymns to security and observed most straightly the morals of the edified, and the respectable injunctions of the worldly-wise—he, indeed, who gave fewer pledges to Fortune, has yet suffered her heaviest visitations” (page 17).
And this lack of security proceeds not from natural causes such as make uncertain the life of the savage—that is, famines, plagues, earthquakes, floods, etc.—but from a defect in the organisation of society based as it is on money economy. If it be argued that these fluctuations were the product of war, which is an abnormal condition, it need only be pointed out that where there is production for profit there will be struggles for markets and raw materials, and where there is a clash of interests there is an ever-present danger of war. And, moreover, price fluctuations before the war were considerable over a period of years. Here it is sufficient to note (see Keynes) that between 1896 and 1914 the capital “value of the annuity of any investor in Consols fell by about one-third, and the purchasing power of his income from them by about the same amount.” Consols are chosen as representing a class of investment free from ordinary speculative risks of trade, and therefore affording the best index to changes of the kind we are here concerned with.
There is, then, no permanent security in that class of savings which represent titles to certain sums of money. Titles to land and ordinary shares remain to be dealt with. But, first, two possible criticisms must be anticipated.
Economic Insecurity.
It may be objected that lack of security affects the capitalist as well as the small saver. It certainly does, but as all authorities admit, not nearly to the same extent. The capitalists as a class are not ruined by changes in the value of money, though some individual members may be. Their economic domination is not ended by fluctuating prices, any more than the subjection of the workers is lessened by either stable or changing prices. This is because capitalists hold goods, factories, mines, and commodities of all kinds, and not money, which is only a means to the obtaining of goods. To quote Keynes again : “Small savers have most to lose by currency depreciation” (page 66). But even if it were true that the capitalists are also insecure, this would not disprove our contention that capitalism fails to provide security for the “middle class,” and it would be additional evidence of the decay of the system.
The other objection which might be raised is that there could never be complete security under any system. This is obviously true as regards natural catastrophes like plagues, crop failures, earthquakes, etc., whose effects we can at present not guard against entirely, but it has no bearing on the kind of insecurity which is an effect of capitalism and which can be removed with capitalism.
Now let us consider titles to land. This kind of “middle class” property needs little attention, because it hardly exists. Some own their own houses, and a few own other houses as well as the one in which they live. Those that are held on lease are not a form of permanent revenue, thus only freehold house property remains, and the capital and rental values of this are by no means certain. The decay of industry in a particular neighbourhood may completely destroy the value of house property in it. Even since the war, and in spite of the Rents Restriction Acts, there have been local falls of the value of house property, and before the war fluctuation in value of house property was notorious.
As for ordinary shares, they are a type of investment not in favour with those people now under discussion. They play for safety and avoid investing in industrial shares whose fluctuations are so wide and unpredictable. Only the favoured few experienced persons “in the know” are aware of impending movements by which money can be made, and they are not members of the so-called “middle class,” whose savings, moreover, are not large enough to be widely distributed so as to minimise the risk of loss. The recent happenings in Dunlops will serve to drive home our point. Adverse trading conditions resulting in a loss of ten and a half million pounds have involved the reduction of the ordinary £1 shares to 6s. 8d. each. Yet Dunlops was regarded as one of the safest companies in that trade. Crosse and Blackwell’s, and Burberry’s, other perfectly “safe” concerns, have had to carry through similar re-organisation schemes.
There is certainly no security for small property ; is there any more security attaching to the employment of the “middle class”? The following London banks have collapsed since the war, and many of the staff are still looking for work, to be met always with the reply, even where vacancies need to be filled, younger men or boys will do:
Sir Robert McGrigors, Bart., and Sons; Hannevigs Bank Ltd. ; Alliance Bank of Simla, Ltd. ; Boulton Brothers. If it be said that these were not first-class firms, that objection cannot be raised against the Austrian Discount Bank, of Vienna, or against the Banco Disconto in Italy, or Alperin, Kisch, and Schiff, of New York—all of them first-class, old-established banks or banking companies which have recently failed. Shipping and insurance companies which have failed during the last few years and thrown thousands of men out of employment are too numerous to mention. Recall the affair of Bevan. He was a financier who gambled in a way that his kind do every day. But he was unlucky, and went to gaol, and an associated firm, the oldest-established stockbrokers in the City, was ruined. As a result, clerks of over forty years’ service found themselves suddenly out of a job.
As Mr. R. Tawney puts it (“Acquisitive Society,” page 204): The brain workers, like the manual workers, find that
“Their tenure of their posts is sometimes highly insecure. Their opportunities for promotion may be few and distributed with a singular capriciousness. They see the prizes of industry awarded by favouritism, or by the nepotism which results in the head of a business unloading upon it a family of sons whom it would be economical to pay to keep out of it, and which, indignantly denounced on the rare occasions on which it occurs in the public service, is so much the rule in private industry that no one even questions its propriety.”
Enough has been written to show that there is no section of the working class without its problem of unemployment, and that the problem is the same for the whole class without distinction of sex or colour of skin or working coat. The problem, moreover, is not one of mere numbers. To reduce the number, as the Labour Party and other capitalist quacks seek to do, does not solve the problem. It is an effect of the social system that it cannot provide its members with the opportunity to labour in support of themselves. The only guarantee the present system gives is that certain privileged members shall be able to live in sumptuous idleness on the backs of their fellows. They do this by exploiting those they employ, and the latter, if alive to their own interest, would end the system which is based on exploitation.
The Inefficiency of Capitalism.
If the “middle class” are more foolish than the so-called manual workers, and instead of looking at social problems from the point of view of their own self-interest they wish to measure everything according to the standards set by the ruling class, they must still condemn the present system because it is grossly inefficient.
Is it efficient to have millions of workers seeking employment while the machinery of production is standing idle? Is it efficient to put checks on Nature because she yields too generously of her bounty? And yet this is what happens in the production of rubber, tea, jute, etc. Is it efficient to have trawlers dumping cargoes of fish into the sea in order to keep prices up? Is it efficient to fatten and pamper a select and useless few while half the people are on the verge of starvation? Is it efficient to be doing jobs which are not necessary for the ordering and use of society? Yet nearly the whole of the clerical profession are thus occupied. What need of insurance clerks in a world where risks are borne by society instead of by a special section with a view to making a profit. Solicitors’ clerks, what need of them except to haggle over private property? Abolish money economy, and what a reserve labour is made available for production from the ranks of the bank staffs. Whichever way you look at it, this system is rotten, inefficient, and destructive of the best potentialities in man. Social progress demands its overthrow, a task which only the working class can perform. The workers alone can break the chains that bind them, and replace a class system based on production for profit by a classless system producing for use. Chains are still chains though they are gilded, and the “middle class” being in reality merely a section of the workers, must join with the rest of their class in breaking those chains.
A. L. T.
(Conclusion.)
Blogger's Note:
'A.L.T.' could have been Albert L. Torr, who joined the Manchester Branch of the SPGB in October 1916 (alongside a William Torr). It makes sense that a bank clerk, a 'brain-worker', would seek the anonymity of a pen-name in the pages of the Socialist Standard.
